1998 Wheel-Trans Budget Update

 The Strategic Policies and Priorities Committee recommends the adoption of the recommendation in the following transmittal letter (July 14, 1998) from the Budget Committee:

 Recommendation:

 The Budget Committee on July 13, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, that the Toronto Transit Commission maintain its unaccommodated rate at 2 to 3 percent and report back to the Budget Committee meeting scheduled for November 10, 1998 on a source of funding to cover the increased costs resulting from a higher demand for Wheel-Trans service.

 Background:

 The Budget Committee on July 13, 1998, had before it a transmittal letter (July 13, 1998) from the Urban Environment and Development Committee regarding the 1998 Wheel-Trans Budget Update.

 Councillor Howard Moscoe, Chair, Toronto Transit Commission, appeared before the Budget Committee in connection with the foregoing matter.

 --------

 (Transmittal letter dated July 13, 1998, addressed to the

Budget Committee from the

Urban Environment and Development Committee)

 Recommendation:

 The Urban Environment and Development Committee on July 13, 1998, recommended to the Budget Committee, the adoption of the recommendations of the Toronto Transit Commission embodied in the attached communication (June 19, 1998) from the General Secretary, Toronto Transit Commission, regarding the 1998 Wheel-Trans Budget.

 --------

 (Communication dated June 19, 1998, from the

General Secretary, Toronto Transit Commission)

 At its meeting on Wednesday, June 17, 1998, the Commission considered the attached report entitled, "1998 Wheel-Trans Budget Update."

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

 "It is recommended that the Commission approve:

 (1)increasing the 1998 Wheel-Trans Operating Budget of $38.2 million by up to $625,000.00, and the workforce complement from 380 to 383, as set out below:

 (a)increasing the Sedan Taxi service by up to $400,000.00 to accommodate unbudgeted costs associated with increased trip demand;

 (b)increasing the Wheel-Trans maintenance costs by $75,000.00 as a result of decreasing Orion bus reliability and thereby delaying the planned reduction of the Wheel-Trans Maintenance workforce;

 (c)allocating the legal costs associated with the current Canadian Charter of Rights and Freedoms Challenge of the Wheel-Trans application process and eligibility criteria, in the amount of $150,000.00 to the 1998 Wheel-Trans Operating Budget;

(2)increasing the current purchase order upset limits of the Sedan Taxi Contracts by up to $400,000.00 in order to provide for these additional trips; and

 (3)forward this report to the City of Toronto requesting City Council approval, through the City Budget Committee, of a draw from the Corporate Contingency Account in the amount of $625,000.00, bringing the 1998 Budget to $38.8."

 The foregoing is forwarded to City of Toronto Council for the necessary approval, as detailed in the report.

 --------

 (Report No. 5 from the meeting of June 17, 1998,

of the Toronto Transit Commission)

 Recommendations:

 It is recommended that the Commission approve:

 (1)increasing the 1998 Wheel-Trans Operating Budget of $38.2 million by up to $625,000.00, and the workforce complement from 380 to 383, as set out below:

 (a)increasing the Sedan Taxi service by up to $400,000.00 to accommodate unbudgeted costs associated with increased trip demand;

 (b)increasing the Wheel-Trans maintenance costs by $75,000.00 as a result of decreasing Orion bus reliability and thereby delaying the planned reduction of the Wheel-Trans Maintenance workforce;

 (c)allocating the legal costs associated with the current Canadian Charter of Rights and Freedoms Challenge of the Wheel-Trans application process and eligibility criteria, in the amount of $150,000.00 to the 1998 Wheel-Trans Operating Budget;

 (2)increasing the current purchase order upset limits of the Sedan Taxi Contracts by up to $400,000.00 in order to provide for these additional trips; and

 (3)forward this report to the City of Toronto requesting City Council approval, through the City Budget Committee, of a draw from the Corporate Contingency Account in the amount of $625,000.00, bringing the 1998 Budget to $38.2 million.

 Funding:

 The 1998 Wheel-Trans Operating Budget did not provide sufficient funds to accommodate the increased demand, accelerated decline of Orion fleet reliability, and costs associated with the Challenge under the Canadian Charter of Rights and Freedoms. Therefore, the additional funding of up to $625,000.00 is an unbudgeted expense.

 Background:

 Demand:

 The 1998 Wheel-Trans Operating Budget provided for a trip demand of 1,415,000. The TTC Accessible Transit Services Plan 1998-2002, which utilized Metro Planning Department demographic studies as well as actual Wheel-Trans experience during 1997, and the Transit Accessibility Needs Study prepared for the Metro Council Advisory Committee to the TTC Task Force on Accessible Transit, predicted Wheel-Trans demand would increase by about 3 percent per annum. However, the 1998 Wheel-Trans trip demand was increased by approximately 6 percent in order to reflect full year impact of the significant registrant growth throughout 1997 combined with an additional 2 percent projected registrant growth in 1998 and a trip utilization rate increase of 1 percent.

 Experience in the first half of 1998 indicates the increase in trip demand by year-end will be in the order of 2 percent to 3 percent above the 1998 budget estimates. This translates into an additional 40,000 trips requested. In order to achieve the goal of a 2 percent unaccommodated rate for the remainder of 1998, the Wheel-Trans Operating Budget would have to be increased by up to $400,000.00. The additional trips would be provided by sedan taxi contractors because the available accessible taxi fleet will be used to capacity and the unreliability of the aging Orion fleet means they cannot accommodate the added demand.

 Legal Costs:

 Legal costs associated with the Canadian Charter of Rights and Freedoms Challenge regarding the Wheel-Trans eligibility criteria and application process are anticipated to be $150,000.00 for 1998. This Challenge was forwarded to the Commission in March, 1998 and therefore was not provided for in the 1998 Wheel-Trans Operating Budget.

 Orion Maintenance Costs:

 The declining reliability of our Orion bus fleet results in both customer inconvenience when trips are interrupted and additional cost to achieve Wheel-Trans budgeted service levels. In order to maintain the Orion service levels for the remainder of 1998, the planned maintenance workforce reduction will not be possible. Funding in the amount of $75,000.00 is required to provide for additional maintenance resources for the balance of 1998.

 Discussion:

The 1998 Wheel-Trans Operating Budget of $38.2 million is comprised of $36.2 million for service and $2.0 million to begin replacement of the aging Orion fleet scheduled to take place over the next five years. This Orion replacement plan was approved by the Commission in August, 1997 when the report of the TTC Task Force on Accessible Transit and Five Year Accessible Transit Services Plan were presented.

 In 1998, staff have taken action in order to maximize service within the funding available. Wheel-Trans has improved scheduling efficiency and productivity is up. New Zone Service has been introduced and consideration is currently being given to expanding this Zone service in early 1999 rather than later as originally planned. With the introduction of a new Cancellation Policy in 1997, the cancellation rate initially decreased to 9 percent, however, the rate has increased to 12 percent during 1998. This increase has had a negative impact on our ability to provide additional trips within the funds available. A report will be submitted later this year recommending changes to this policy in order to bring the rate of cancellations to an acceptable level.

 The increased 1998 Wheel-Trans demand is due to a combination of an expanding registrant base (currently 15 percent or 1,800 higher than the 1998 year-end target level of 11,600) and increased trip utilization by these registrants. The milder winter weather, improved quality of service, and positive response to the new Downtown Zone Service have all contributed to this increased utilization of the service and an overall increase in our trip demand. As a result of this increased demand, the unaccommodated rate has risen from 2 percent to 4 percent.

 Alternatives were considered to address this additional demand. One involves maintaining service with current funding ($36.2 million) which will result in an increased unaccommodated rate of 6.5-7.5 percent for the last six months of this year (overall 5.5 percent for 1998). This is not an acceptable option as it means the quality of service will continue to deteriorate to an unacceptable level.

 An alternative to use part of the $2 million dedicated in the 1998 budget for Orion bus replacement is not an option. This is not recommended as it will delay the replacement of the Orion fleet, a key component of the approved Five Year Accessible Transit Services Plan, required to reduce operating and maintenance costs and to improve service. Proposals for replacing the Orion Bus fleet will be tendered in July with the approval to award a contract anticipated in August, 1998.

 The recommended option is to maintain the 2 percent unaccommodated rate for the remainder of 1998 (currently 4 percent), by maximizing the level of service available from Orions and accessible taxis, and increasing funding by up to $400,000.00 to accommodate additional taxi trips to year- end. This additional funding would be drawn on as needed by adjusting contracted taxi purchase orders.

 In order to respond to the reliability problems with the Orions and maintain current levels of service, an increase of $75,000.00 is required for maintenance staff in 1998. It was anticipated in the 1998 budget that a reduction in maintenance costs could be accomplished, however, the reliability problems experienced to-date suggest cost reductions in this area are not realistic and could contribute to being unable to provide service at the levels required. Our peak hour vehicle allocation is now down to 115 vehicles while in 1997 it was still possible to schedule 117 vehicles for peak service.

 With regard to the legal costs for the challenge under the Charter of Rights and Freedoms, this item was not foreseen in the 1998 Operating Budget and, given the situation outlined above, this cost cannot be accommodated in the remainder of 1998. As such, a separate allocation should be established as part of the Wheel-Trans funding.

 Justification:

 It is appropriate for the Commission to authorize up to an additional $625,000.00 for the Wheel-Trans budget to address higher than budgetted demand, the inability to reduce our maintenance costs and the funds necessary for the legal costs associated with the Charter challenge.