July 17, 1998

Mr. W. Munden

Commissioner Corporate Services - Clerk/Treasurer

City of Mississauga

300 City Centre Drive

Mississauga, Ontario

L5B 3C1

Dear Mr. Munden:

At its meeting on Wednesday, July 15, 1998, the Commission considered the attached report entitled, "58 Malton - Service To Pearson Airport And In Mississauga."

The Commission approved the recommendation contained in the above report, as listed below:

"It is recommended that the Commission:

1.Approve a change in the fare collection procedure for the 58 MALTON bus route, so that customers travelling between Toronto and the Pearson International Airport pay only a single TTC fare, noting that:

• This change will be for a six-month trial period, beginning Sunday, July 19, 1998;

• This change will make the fare collection procedures at the Pearson Airport area consistent with the fare collection procedures on other TTC routes at locations close to Toronto's boundary;

• This change is expected to result in a net loss of revenue to the TTC of approximately $40,000 each year, but it will make TTC service to the airport significantly more attractive for Toronto residents and visitors, and is expected to increase TTC ridership;

2.Approve the continued operation of the current TTC service and fare collection procedure on the 58 MALTON route in Mississauga west of the airport, pending discussion with the City of Mississauga regarding revenue sharing on this section of the route. If negotiations with that municipality on the cost recovery issue are not satisfactorily resolved by September 30, 1998, the service west of Pearson Airport be eliminated, effective Sunday, January 3, 1999; and

3.Forward this report to the City of Mississauga, the City of Toronto, the Greater Toronto Airports Authority, and the Office of the Greater Toronto Services Board."

The foregoing is forwarded to the City of Mississauga, the City of Toronto, the Greater Toronto Airports Authority, and the Office of the Greater Toronto Services Board for information.

Sincerely,

Vincent Rodo

General Secretary

1-64

Attachment

Copy:Ms. N. Wong, Clerk, City of Toronto

Mr. S. Shaw, V.P. - Strategic Planning, Greater Toronto Airports Authority

Mr. A. Tonks, GTA Moderator, Greater Toronto Services Board

TORONTO TRANSIT COMMISSION

REPORT NO. 23

MEETING DATE:July 15, 1998

SUBJECT:58 MALTON ! SERVICE TO PEARSON AIRPORT AND

IN MISSISSAUGA

RECOMMENDATIONS

It is recommended that the Commission:

1.Approve a change in the fare collection procedure for the 58 Malton bus route, so that customers travelling between Toronto and the Pearson International Airport pay only a single TTC fare, noting that:

CThis change will be for a six-month trial period, beginning Sunday, July 19, 1998;

CThis change will make the fare collection procedures at the Pearson Airport area consistent with the fare collection procedures on other TTC routes at locations close to Toronto's boundary;

CThis change is expected to result in a net loss of revenue to the TTC of approximately $40,000 each year, but it will make TTC service to the airport significantly more attractive for Toronto residents and visitors, and is expected to increase TTC ridership;

2.Approve the continued operation of the current TTC service and fare collection procedure on the 58 Malton route in Mississauga west of the airport, pending discussion with the City of Mississauga regarding revenue sharing on this section of the route. If negotiations with that municipality on the cost recovery issue are not satisfactorily resolved by September 30, 1998, the service west of Pearson Airport be eliminated, effective Sunday, January 3, 1999; and

3.Forward this report to the City of Mississauga, the City of Toronto, the Greater Toronto Airports Authority, and the Office of the Greater Toronto Services Board.

FUNDING

Funds for the continued operation of the 58 Malton route outside of Toronto are currently included in the operating budget. The elimination of the second fare for Toronto residents travelling to and from Pearson International Airport would reduce annual revenues to the TTC by approximately $152,000. This is projected to be offset by approximately $112,000 in additional fare revenue received from new customers attracted to the service because of the lower fare. This would result in a net loss to the TTC of approximately $40,000 each year.

BACKGROUND

TTC service outside Toronto

The TTC operates eleven routes which cross the City of Toronto boundary and operate into the adjacent municipalities. Ten of these routes operate in the City of Vaughan or the Town of Markham, and the operation of these routes has been the subject of co-operative cross-boundary transit agreements with these municipalities for a number of years. Under the terms of these agreements, Vaughan Transit or Markham Transit determine the service levels, routings, and fare levels in their municipality. The TTC operates the service and collects the fares. The contracting municipalities pay the TTC for all operating costs outside Toronto, and receive a credit from the TTC for the fares collected in their municipalities. Customers travelling between Toronto and either Markham or Vaughan pay both a TTC fare and the appropriate Vaughan or Markham fare; customers whose entire trip is within one municipality pay only the fare that applies in that municipality.

This arrangement has been successful in encouraging increased transit usage in both the adjacent municipalities and in the City of Toronto. Because the TTC buses that operate in Vaughan or Markham provide a continuous journey into Toronto and connect with subway or RT stations, more customers are carried than if Vaughan Transit or Markham Transit operated the routes with their own buses only as far south as the municipal boundary. The TTC-operated routes in Vaughan and Markham are among the routes with the highest cost-recovery ratio in those municipalities. The arrangement has no effect on the TTC's operating budget, as the full costs of operation are paid by the contracting municipalities.

The eleventh TTC route which operates outside Toronto is the 58 Malton route, which provides service in the City of Mississauga. This route has been operated by the TTC since 1955, and differs from the other routes operated outside Toronto in that the City of Mississauga has never participated in a cross-boundary transit agreement for the operation of the service. Until the end of 1997, the Ontario Ministry of Transportation (MTO) had a cross-boundary service agreement with the TTC, which functioned the same way as the agreements with Markham and Vaughan, with the exception that the provincial government, and not the City of Mississauga, covered the TTC's operating costs on the 58Malton route in Mississauga. This arrangement ended on December 31, 1997, because of the province's withdrawal of financial support for public transit in Ontario. Since that date, the TTC has received no outside financial support for the operation of the route in Mississauga.

Provincial legislation relating to the City of Toronto requires that any service operated by the TTC outside of the City of Toronto cover all of its operating costs from either fare revenue or from contract payments by a municipality or other contracting party. This report discusses changes to the fare collection arrangements which will continue to meet the legislative requirements of operation outside Toronto, but which will increase TTC ridership, and improve transit service to the airport for Toronto residents.

In December 1997, the TTC wrote to the City of Mississauga to formally request that they assume the costs of operation of the 58 Malton route in Mississauga. To date, no response has been received from Mississauga.

This report is being presented because the TTC must take action to protect its financial interests and comply with provincial legislation regarding TTC operation outside of Toronto.

Service levels and fares on 58 Malton

The 58 Malton route operates between Lawrence West Station, Pearson International Airport, McNaughton Avenue, and Westwood Mall. The attached map, Drawing No. 11298, shows the route. Depending upon the time of day, between one-half and two-thirds of the buses have their western terminus at Pearson Airport, just west of the Toronto-Mississauga boundary, where the buses turn around at Terminal2 and return east to Toronto. The remaining buses operate farther west into Mississauga, to either Westwood Mall (Monday to Friday) or McNaughton Avenue (Saturdays and Sundays). These buses do not operate through the airport, but run on Airport Road past the airport. A summary of service levels on the 58Malton route is shown below.

A higher level of service is operated in Toronto than in Mississauga, because of the higher customer demand for travel in Toronto on Dixon Road and Lawrence Avenue.

The present fare zone boundary is on Airport Road/Dixon Road at Highway 427. Customers boarding a westbound 58 Malton bus in Toronto pay a normal TTC fare, and must pay a second fare if they stay on the bus past Highway 427. In the eastbound direction, customers boarding in Mississauga pay a fare, and then must also pay a TTC fare if they remain on the eastbound bus past Highway 427. The zone boundary and fare collection arrangements apply to all 58Malton buses, whether they are travelling to or from Pearson Airport or Westwood Mall/McNaughton Avenue. The applicable fares for travel on this route are shown in the table below. The fare levels and the type of fares which are accepted were effectively determined by the MTO as part of the previous agreement.

DISCUSSION

The gross operating costs of the 58 Malton route in Mississauga, west of Highway 427, are approximately $1.3-million per year. The majority of these costs, approximately $825,000 per year, are incurred by the relatively frequent service which is operated for the short distance in Mississauga between Highway 427 and Pearson Airport. The remaining gross costs, approximately $480,000 per year, are the costs of operation of 58 Malton buses west of Pearson Airport to and from McNaughton Avenue and Westwood Mall.

Service to Pearson Airport

The $825,000 annual gross operating costs between Highway 427 and Pearson Airport are costs which are effectively unavoidable. It is necessary to turn back buses at or near the Mississauga/Toronto boundary, in order to operate the required level of service on both the eastern and western parts of the route. Pearson Airport is the only practical location to turn back these buses, as there is no off-street loop available, and on-street loopings in Toronto would require more running time than it takes to operate to Pearson Airport and would, therefore, increase operating costs. It is also commercially unacceptable to turn back buses near to, but not at, Pearson Airport, which is a major travel destination for Toronto residents and can be a substantial source of transit ridership.

Turning around TTC buses just beyond a municipal boundary is done on other TTC routes, in locations where there is no practical alternative location, or the routing increases TTC revenues with no additional operating cost. At the west end of the 32 Eglinton West route, buses use an on-street loop just inside Mississauga, as buses cannot safely exit an off-street loop at the Toronto-Mississauga boundary at times of heavy traffic. On the 53 Steeles East route at Markham Road, TTC buses use streets in the Town of Markham to turn around, as there is no off-street loop. On six other routes, TTC buses use off-street bus loops located in the Town of Markham, just north of Steeles Avenue. In all these cases, there is no external subsidy provided to the TTC for these services, and regular TTC fares are charged.

The operation of the 58 Malton route between Highway 427 and Pearson Airport is similar to the situation on the 32 Eglinton West and 53 Steeles East routes. There is no other alternative location to turn buses around, and the resulting cost of operation outside Toronto is intrinsically part of the cost of operating the TTC system. For this reason, the operation of the 58Malton route between Highway 427 and Pearson Airport should be included as part of the TTC system, and it is recommended that regular TTC fares apply on this part of the route.

This change would affect the revenue collected by the TTC and the ridership on the route. Currently, approximately 360 customer-trips each weekday are made on 58 Malton buses in Mississauga, between Highway 427 and Pearson Airport. Approximately $152,000 of fare revenue is collected from these customers each year, and this second fare revenue would be lost if these customers were no longer required to pay the second fare. There would be no change to the TTC fare revenue that is currently collected from these customers when they travel in Toronto.

The elimination of the second fare would increase ridership, and it is projected that 280 new customer-trips each weekday would be attracted by the substantially reduced cost of travelling on the 58 Malton route between Toronto and Pearson Airport. These new customers would increase TTC fare revenue by $112,000 each year. A further 675 customer-trips each weekday now walk from the Pearson Airport area to the fare zone boundary at Highway 427 to avoid paying the second fare, and these customers would have at least a five-minute shorter walk because they would be able to board the bus in Pearson Airport. There would be no revenue gained or lost from these customers, as they currently pay only the TTC fare, and would continue to do so, while receiving a much-improved transit service.

The elimination of the second fare for the short trip between Highway 427 and Pearson Airport would result in a net loss of revenue to the TTC of approximately $40,000 each year. This relatively small cost would result in a significant improvement in transit service for Toronto residents and visitors.

The fare zone boundary would be relocated from the stop on Airport Road/Dixon Road at Highway 427, to the stop on Airport Road at Jetliner Drive, the main entrance to Pearson Airport (see Drawing No. 11299, attached). The fare zone boundary change would take effect at 5:00 a.m. on Sunday, July 19, 1998. There would be no change to fare levels, service levels, routings, or the hours of operation. Because the busiest direction of travel to and from the airport is in the opposite direction to the overall busiest direction of travel on the route, to and from Lawrence West Station, sufficient capacity exists on the buses which operate to and from Pearson Airport to carry the projected increase in ridership.

The fare boundary change would be made for a trial period of approximately six months. At the end of the trial period, detailed counts of customers and an analysis of fares collected would be undertaken, and the results would be reported back to the Commission.

Service beyond Pearson Airport to Westwood Mall and McNaughton Avenue

West of Pearson Airport, the gross operating cost of the 58 Malton service to McNaughton Avenue and Westwood Mall is approximately $480,000 per year, on a fully-allocated cost basis. Approximately 1,100 customer-trips are made each weekday on this part of the route and, if the TTC received full fare revenue from these passengers, the service would generate a small surplus of revenue over the cost of providing the service. However, as part of the historical agreement with the MTO regarding funding for this route (which ended on December31, 1997), the TTC accepts Mississauga Transit fare media from nine percent of the customers on the route, but receives no reimbursement for these fares from Mississauga Transit. In addition, 15 percent of the customer-trips are made using the GTA pass, where the revenue is shared between the TTC and Mississauga Transit while the TTC pays the full cost of operating the service.

Staff have initiated discussion with Mississauga Transit staff to establish an equitable revenue-sharing arrangement which will ensure that the TTC obtains enough revenue to cover the cost of operating the service in Mississauga. Pending conclusion of these discussions, it is recommended that the TTC continue to operate the service west of Pearson Airport with the current fare collection arrangement.

The costs of operation in Mississauga, west of Pearson Airport, are entirely avoidable to the TTC. Unlike the service between Highway 427 and Pearson Airport, the TTC could stop running to Westwood Mall and McNaughton Avenue, and turn back all buses at the airport. This would reduce TTC operating costs, as one fewer bus would be used. There would be a loss of revenue, and inconvenience to customers, as they would have to use alternative Mississauga Transit services and then transfer to the TTC, or they would have to walk farther to TTC service. Such a change would make cross-boundary transit travel much less attractive for both Toronto and Mississauga residents. The TTC will continue to pursue negotiations with the City of Mississauga regarding an equitable revenue-sharing arrangement for this service. TTC staff will report back on the outcome of these negotiations. If a satisfactory agreement cannot be reached by September 30, 1998, all service west of Pearson Airport on the 58 Malton route will be discontinued, effective Sunday, January 3, 1999.

JUSTIFICATION

The withdrawal of provincial funding support for the 58 Malton route means that the TTC must take appropriate actions to ensure that route revenues meet avoidable operating costs. The changes described in this report recognize the unavoidability of some costs, and recommend a fare collection change which would increase TTC ridership and fare revenue to a major travel destination. This report also recommends a continuation of a portion of the route in Mississauga at least until January 1999, after which continued operation west of Pearson Airport will depend on a satisfactory revenue-sharing arrangement with Mississauga.

- - - - - - - - - - - -

11-105-57

July 23, 1998

Attachment: Drawing Nos. 11298 and 11299

FILENAME:COMREP/MALTON1.WPD