Office of the Chief Executive8/5/16 1:30 PM
NOTICE TO ALL TTC STAFF
TTC 2017 Budget
By now, many of you have read or heard media reports about the TTC’s 2017 Operating Budget. I think it’s important I write to you and explain where we’re at with our budget as many of you, no doubt, have questions.
The City of Toronto asked us to provide them with a preliminary look at where savings might be achieved next year and how we might trim 2.6 per cent from the subsidy the TTC receives from the City – with no impact to frontline service. That is what we did this week.
As you know, our budget is made up of fares, plus subsidy. More than 70 per cent of our operating budget comes from fares, the balance from the City. With a 2.6-per-cent budget reduction from the subsidy, obviously that means no additional money for us in 2017 from the City. The difficulty with that, of course, is our costs rise each year. In 2017, we have PRESTO implementation costs, TYSSE costs, collective agreement costs and other costs that simply rise and must be addressed in a way that fares, alone, don’t cover.
So, when we step back and look at ridership projections, service levels, maintenance costs and committed programs for 2017, our budget at this stage – operating, including Wheel-Trans – has a deficit of $231 million. The TTC must balance its budget – it cannot carry a deficit.
I cannot stress enough that this figure is preliminary – it is a work-in-progress.
It is most unfortunate that someone felt the need to leak this preliminary work to the media. I assure you, that leak did not come from TTC staff. Every year we start the budget process with a deficit. Making public this work that the City requested was unnecessary and unhelpful.
There is no question that 2017’s budget is a very difficult one. I am determined that we will not cut service – that is counter intuitive to how we build a transit system that makes Toronto proud. And cutting transit service is not what great cities do – something the Mayor, Chair and I all agree on. I am equally determined to protect the performance improvements that we have made over the last five years as part of our five-year TTC modernization plan.
External benchmarking has shown that the TTC is already a very efficient organization. That said, we must play our part in helping the City address a large budget gap for 2017. We have found some savings already, including the 2.6 per cent requested of us, but we are still $148 million short of the target we have been given. Some creative solutions and difficult choices are going to have to be made. This is something our Board will need to turn their minds to, but only after we’ve done all the work we can as staff.
My Executive and I – many of whom are relatively new to the TTC – are hard at work, using their wealth of experience in running world-class transit systems, to find savings, review processes and programs, and ensure we’re doing all we can to meet the direction we’ve been given to find more savings.
I am confident that solutions will be found. While some may be unpopular, they will be solutions, nonetheless, that will allow us to get on with delivering the service we’ve been mandated to deliver. We provide an essential service to this great city. The TTC is an intensely proud organization, with committed and professional public servants.
Thank you for your continued dedication to the TTC and for your ongoing hard work. We have made huge strides over the last five years and I am determined to keep the TTC on the right track. I will keep you posted on developments.
Chief Executive Officer
August 5, 2016
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