General Issues Committee:
Jan 27, 2017
HSR budget presentation and response
2017 01 27 GIC on transit budget
Partridge in chair thinks HSR director only been here two months.
Absenteeism – rate went up in 2015 and slightly down in 2016
“Our revenue is below target. Budgetted ridership has not materialized as expected. Fare increases and lower gas prices may be contributing to this situation which has occurred in other jurisdictions as well. The growth anticipated in the budget did not materialize. 2017 revenue numbers have been reduced by $860,000 to address this. Staff will continue to monitor ridership, apply the service standards, and service improvements as proposed in the ten year local transit strategy. [13:12] Regarding ridership, when we addressed the deficiency, it was anticipated that ridership would grow, but adding capacity to reduce passbys the result was not a significant increase in ridership, but an improvement in our customers’ experience. This along with other factors mentioned earlier, also contributed to our ridership fall of approximately 400,000 rides.”
Moving 30 buses to Wentworth
[Slide 19] “This table illustrates Hamilton’s transit contribution as compared to other municipalities of similar size. As can be seen here, Hamilton’s average increase from 2013 to 2015 was the second highest as compared to the peers for that same time.”
[Slide 20] Trips per capita is the annual ridership divided by the urban transit area population. In simple terms it can be described as the number of transit trips per person annually. As you can see from this comparison, ridership is down in other locations as well. … [Slide 21] This is a breakdown of our comparators as of Dec 2016.
Hamilton’s fares are below average in all categories despite the approved fare increases. I’m now going to walk you through an update of our 10 year local transit strategy.” [17:03]… as part of the strategy council also approved new service standards and the second part of the strategy is to address this. Then invest to pace city growth… final step is to achieve modal split objectives by the BLAST network. Over the ten year period the plan would result in approximately a 50 percent increase in service. In 2017 identified service gaps would be addressed and keeping up with growth. To support the plan $250 million in capital improvements were identified … [slide 32] This graph shows the improvement realized to all routes where we improved or added service in the last few years. The trend line is going down which for this measurement is the trend line that we want to continue on. [slide 33]… we consider a bus to be on time if it is no more than two minutes early or five minutes late. Can manage early bus arrivals, but for late “it is in most instances uncontrollable for various reasons – weather, traffic, special events, accidents.” Shows graphs on pass-bys for several areas. Says reliability has increased.[slide 45] shows budget ask – five buses and 26 FTEs in order to deliver approximately an additional 34,000 annualized service hours. This would result in a net levy increase of $2.45 million … fare increase of 10 cents. [slide 47 shows where expansion will take place in 2017] [slide 49] … the most critical is another maintenance and storage facility. To fund operating expenses a balanced approach to fares was proposed whereby transit users and property taxpayers share in the burden since transit provides value to both through reduced congestion and delays, positive health, environment, community impacts, economic development and social equity. [28:05]
Collins: I think what you’ve highlighted is that we’ve made significant investments locally. If you read some of the recent articles that you will find on-line or some emails that councillors received you’d think we haven’t made any investment in the HSR in a hundred years. So I think you’ve highlighted the fact that we’ve made significant investments even compared to other municipalities in Ontario which council should be commended for. We still have some of the lowest fares in the province, and we’re doing this – excuse the preamble before I ask my questions because I just want to put them into context. We’re doing this in the context internally – everything that’s happened at the HSR isn’t happening in almost every area of the organization. So we’re corporately reducing staff and you’ve given us really historic investments related to new staff complement, not just this year but in prior years, and of course the investments we’ve made from a capital and operating perspective that continue to go up, and we don’t see those investments in most areas of the organization. So HSR and transit have really been an anomaly in the last couple of budget years. And so I want to focus on the operating cost if I can. Notes LRT and A-Line which may impose costs on Hamilton. Do we have cost pressures or beyond related to this. Seem to deal with them one-off basis. What are the cost pressures for each year going forward on the operating budget. Starts with federal monies already announced and there is likely going to be a second round then. Cost pressure for 2018? Fare increase made two years ago And we were hoping that the fare increase would accommodate all or a large portion of the investments that we’re going to make for the service enhancements. HSR refers to slide 26 – net levy impacts on an annual basis. Collins- $2.4 million this year? Yes. Revenues down over $800k – impact? HSR: It has been revised. So 2.4m this year enhancement. Asks about DARTS $600k short says McKinnon. Collins: cost pressures this year? McKinnon: entire budget in front of you. C: LRT maintenance agreement costs when. McKinnon: unclear, impact when construction begins. C: A-line same? Yes. When you add them all up many of those costs are going to fall on the shoulders of the former city of Hamilton because of area rating. Certainly there would be a cost depending on where they are located is there an opportunity to look at ALL those costs. Complains about feds and province not consulting before giving monies. We’re making good progress in making investments in transit, but haven’t yet seen fruits of our labours because passenger numbers have ‘flatlined’. Unprecedented. Need to know what we’re buying into. Will have motion later.[40:30] Whitehead: compliments report – total levy conventional transit cost is just over $46 m, yes. Yes. Ridership – new LRT down, across North America and even in Belgium – gas prices, financial risk, Toronto down 13million last year. What was our drop? HSR: 400,000 short of budgeted. Cost around $800,000. W: study in Toronto – anyone going over 15 minutes preferred to use their car. Gas prices impact. Threshhold is 15 minutes. Have we done this survey here? HSR: No. Province and feds do some. W: Need to understand needs of community first before “aggressive public transit plan”. Why no survey? HSR: 10-year strategy did that. W: presses. McKinnon: master plan done, and TTS survey. Could do local survey if council wants. W: not sure who does TTS survey, good for Toronto but not Hamilton. Never seen TTS survey results presented here in twelve years. McKinnon: haven’t done it but could. W: rely on it so staff need to examine it for our investments, so make a presentation. Also pressures concern. No one explaining why ridership dropping. Where is our study on risks on ridership numbers? McKinnon: we don’t do those type of studies annually. Love to do it, but not industry practice. W: yes, but used in other departments. Why not here? HSR: labour intensive to get passenger numbers, now can get some hard numbers, and then can use that. W: low gas prices may be risk, what other variables, think tanks identifying these. Putting taxpayers at risk. Need better understanding. HSR: don’t know why ridership down across the nation, lots of work going on about this. We don’t work in isolation so looking at that too. We are “perplexed” too. If we don’t achieve it impacts our levy. W: respectful but adding other risks. What assessment when we augment route and impacts on viability. Rymal example, frequency stops at one point. HSR: ten year strategy and service standards will assist in this analysis and show where service should be. W: need to understand implications. LRT Eastgate to McMaster will optimize ridership. Transit system should be understood too. HSR: Now getting hard data, so can analyze that now. McKinnon: optimization needs to remember that “we have two services here – one is a mass transit and the other is more of a community service we’ve provided historically for a long period of time. I expect if council gave us a target of 50 percent of cost revenue for all of our routes to optimize them, a lot of our routes would just completely disappear and I think that would obviously be problematic for the community. So when we talk about optimizing routes we have to remember it becomes an imperfect science. [58:05] W: Rymal doesn’t fall into that category – need to do better there. M: opposite of what I was saying. W: agreed. HSR: do assess routes, but labour intensive and anecdotal, but now can do much better. W: budget implications of transit on budget and LRT – Delaware, King continuing? HSR; Work in progress. W: I want to support the community. Only elimination is B-line express? HSR: Yes. W: DARTS not as robust info? HSR: Just update today, DARTS direction just whether they made savings demanded by council. W: reads from motion. If failed bring back into city control. Checked with lawyers. Did meeting $1 million target and 60,000 extra trips. HSR: Did meet these. W: Because of going to lower cost vans? Yes. Who purchased the DARTS vans? M: leases them. W: cost of getting them… M explains city doesn’t have direct control. … [1:10]ALL THE WAY to [1:38:50]
Ferguson: has to leave. $35m from city for capital to match federal funds. Over 10-year period about $23 million in operating costs. About half from fare box, so about half is impact on levy. “I’m petrified we’re going to fast on transit. We’ve got $1 billion for LRT. We’ve got a lot of skeptical people in the community and on council. Let’s step back before we start drifting into building A-lines.” Caught flat footed by announcement, eliminated safety valve for costs of LRT. Hate it. Should have been told first. Need to know the cost before approving it. Denounces 150 program – again not told and have to be done by March 2018- not even approved yet but have to spend $75 million on transit. “That’s ridiculous. We’ve got to stop. Let’s stop and just focus on LRT. Let’s do one at a time and get it right, rather than mess around with three different projects and screw it up. I want to shut this whole expansion down. There is absolutely nothing in here for the suburbs. And I get it that it’s area rated but I hear that side of the table saying we want to dismantle area rating next term and then it gets dumped back on the suburbs – this side of the table and there’s nothing in it for us. Zero. So we gotta make sure we think this thing through… We’ve had 30 years of exponential increases in assessments in the suburbs…. I will support nothing more with transit until we focus on one thing and get the one thing right. … all on the back of a napkin. So I will not support anything more with transit until we get the LRT right and put our energy into managing that thing and get it done correctly. You’d think that putting the LRT in it would release a lot of buses, all those running on the B-Line. I don’t see any of that here. All they want is 55 more buses. … [1:46:30]
Farr: We had unanimous standing recorded vote on 10-year transit strategy. Requires two-thirds vote to overturn. Day and a half with Mr Dixon resulted in unanimous. Does this fall under the strategy? Definitely a challenge. Question about gas tax announcement. Zegarac: Fitting today. No analysis yet, but would double municipal share – phased in after 2018 April. 2.5 in 2019 up to 4 cents in 2022. More municipalities will be eligible, and based on ridership 70%, but it would likely represent 2.5m in 2019-20 and 2.5 more and then another $5 in 2022. Beyond the term of this government. Chair Partridge says “that’s an important caveat”. Farr: even this 10-year strategy could be removed after 2018. Transit monies only? Z: Yes. Farr: asks about A-Line LRT? Bus lines under review, when complete? Debbie: Not sure, linked to LRT. Farr: Slide 24 – modal split, why important? …Christine: About 7% now, goal is to put it to 12%. Farr: counterfit tickets problem? HSR: about 1 percent. Trying to curb it, seeing reductions. F: Cost? HSR: $100-150k.
[1:50:14] Pearson: Transit service to Stoney Creek increase – great news. Timing or frequency? Andy: improved frequency in late evening, and extending hours on Sundays and holidays. Pearson: Great news. Ridership numbers now accurate? Debbie: on 25 buses in fleet, part of federal monies for rest – 225 still to go. P: numbers could be better? Debbie: current 25 allow specific route numbers. P: shelters increase, excellent, and being used. Cost per shelter? Christine: $15k including installation of new pad, $10k if it’s there. P: appreciated Whitehead on DARTS. Will changes require 2/3 vote? Clerk: yes. P: gas tax announcement good. Whitehead: lots of ambiguity in DARTS motion. Chair: another meeting.
[2:06:03] Jackson: page 7 – overall increase is 4.1%? If we want 3% or 1% can you show us that?. Mckinnon: will try. J: have until Apr 30 to fully finalize. Page 9 on Presto, more coming? Debbie: negotiations with province first, then report. Uptake on Presto? Will report! Page 11 and 12. Student fare negotiations, bus shelter contracts, favourable for renewal? D: confident on U-passes, and others are revenue stream, should not be negative to the budget. J: so favourable for all. Pages 14-15. Revenue down and ridership down. Here we are pouring money into the system as has been requested by many transit activists within the community. Maybe we’ve been late to the game. I’ll accept my own share of the responsibility over the years … What’s your assessment as to why ridership is not increasing the way it should? Debbie: I don’t think we can point to just one thing… it’s the services that are important, frequency is the number one thing, … exciting for transit introduction of technology for planning our routes …. Why ridership is down, I’ve never seen nation wide drop in ridership…. No direct answer … customer experience to do the best we can. Jackson … we’ve heard the plea and cry of the transit activists … hoping for ridership and revenue up. Debbie: same hope. We are doing everything we can to be fiscally responsible, continuously improving, making sure service is best, hopeful that will help. Eisenberger intervenes about price of gas. Debbie: There was a dramatic increase in ridership when gas prices soared. People made different choices and left their cars at home … and now with the downturn in gas prices, there is a correlation there. It is not just gas prices. There are a whole lot of factors that go into that but it is one of the biggest drivers. Jackson: doesn’t want to favour higher gas prices. Praise for drivers. DARTS …[2;28] offers thanks for extending routes 21 and 22 – especially to quad pad arena. Page 50 – should we stay the course on fare increases, or delay this year? Debbie: in council’s hands. Ridership decrease but improving service so anticipation would increase – amount of increase is fair. Jackson: seniors advisory committee supported seniors increase if service enhanced. Provincial announcement on cancellation of spur – disappointed. A-Line – bus lane dedicated on King – Upper James main arterial across mountain – five lanes – If you make one lane dedicated it will be a nightmare in terms of vehicular traffic. Any thoughts on that? The king street experiment had mixed results and I can just see it’s going to be mind-boggling on the mountain. Debbie waiting for details. Jackson: if it’s dedicated it’s going to be a nightmare. If it’s somehow integrated like the B-Line downtown it might be do-able. … [2:34:23] Clerk explains DARTS direction. Did meet what was required by motion. Jackson then why considering transfer to city. Debbie agrees they met their target. McKinnon: we interpreted it differently. 2016 actuals made, 2017 budget doesn’t. Have to start RFP process or extend contract. Jackson confirms 2016 target was met. McKinnon says target included 2017 and it’s not being met. Clerk says resolution rules. Partridge suggests more follow-up.
Green: [2:38:50] Some of the things that I’m hearing I’d like to address. Praises Eisenberger point on gas prices. Interesting trends. Car ridership important trend too. Since 1996 most of Hamilton’s working age groups have actually increased – between the ages of 20 and 44 those rides have actually increased … look at what the young people are doing today to make appropriate ten and 15 year investments. … The younger age group is continuing to increase in ridership. … Recalls excitement for provincial money for transit, city wide conversation, need to get it out to suburbs. When we did that, we committed to our community that we would raise the fares – which in my opinion is a bit regressive, affecting some of the most vulnerable people in our community – conditional on investing as a municipality. So that report was divided into A and B. And the B side which had our scheduled fare increase we committed to, and we did it, and now it seems like there’s some trepidation around actually funding it from the city side which for me is very problematic that we commit to our community that yes, you’re going to go ahead and pay more fares, but we’re going to increase the service. Because if we’re going to talk about economics, we’re going to talk about supply and demand, then we have to talk about price elasticity for demand as it relates to fares. If we continue to raise it and not improve the service, forget it, it’s going to be done. Nobody’s going to use it. So that was part of our commitment. And so when you look at that and you look at the cost of driving. I’m just going to share took my car off the road to save 8-10k a year. Only 28% of the 25-34 age group can afford to drive based on their incomes reports CAA. So we have to provide compelling alternative. We can also look at peak driving. Driving is declining as well. So if we’re going to use that logic to defund transit, then let’s use the same logic to defund infrastructure spending on roads. Let’s go ahead and do all those studies that were suggested earlier … We’re going to save a boat load of money if we find out that young people are not driving and there’s no need to invest $80 million a year in roads. Let’s save a bunch of money. … We can’t use this logical fallacy in one place and not another. … We’re not being honest with the public if we commit to funding this stuff, and we raise the rates, and we pick their pockets, then we come back and say, no, we’re going to hold off another year or so. And we have the choice to fund this stuff city wide. We just choose not to. There’s been opportunities for lines to go out to Redeemer, to Ancaster, and it’s voted down. … I have a difficulty sitting idle while these kinds of things are being thrown out there, because if we were to look at who’s paying for what, in the old city of Hamilton 7.5 percent of their tax bill is going to transit. In Ancaster it’s 2.5 percent, and in Flamborough it’s 1.7%. So if we’re going to have an equity lens … let’s do those things with a line of integrity, and let’s do it across the entire board for all of our budgets. …. If we look at our comparators regionally – City of Toronto federal gas tax, portion of it, 100% goes to transit. Region of York, 100% goes to transit. Region of Durham 100% goes to transit. City of Mississauga 60% goes to transit. City of Brampton 28% goes to transit. City of Burlington 19% goes to transit. City of Oakville 14% goes to transit. In Hamilton? – seven percent goes to transit. … It’s about priorities. You don’t have to tell me what your values are. Show me in your budget. So if we want to have an equity lens, if we want to treat everybody equally, and we want to consider this idea, guess what, people who take transit are taxpayers. And we already determined that renters are paying a higher per square foot tax rate, and we can get into the nuances of that later on, but they’re taxpayers too. So this for me seems a bit obscene that we’re going to tiptoe back away from our commitment to our community to fund what we said we were already going to fund. It was ambitious. We celebrated it. It was unanimous. We had consensus A-Line, BLAST, if you can go back to the people in your community and look them in the eye and say you’re going to raise their fares but not improve the actual transit system, then you are a different person than I am, because I can’t do that. I will not do that. So that is off the table for me. We have an obligation right now and we have a commitment to fund this program to continue down the line for future generations. … Within the next generation the first wave of baby boomers is going to turn 80 – yes they are more healthy, more vibrant. We are an age friendly city … we want to make sure we age successfully … And I haven’t even touched the ecological impacts of driving …
Eisenberger: [2:51:01] I’m with the last speaker. To keep changing makes planning hard. Asking for analysis of cost of more transit versus more roads like Waterloo. DARTS has done a wonderful job. Every year we debate it, so disruptive to DARTS management.
[3:03] Conley…. Things change over ten years, shot at Green’s comments. Hard to catch up what you’ve lost. Bayfront used to be packed. Hate putting cars against buses. Never going to get rid of cars. Might drive themselves. People in my area need a car. 60 % of people moving in are coming from GTA and using cars. I’ll drive if I can afford it. Escarpment causes problems. Get a lot less service – on area rating. Have to fight to get a shelter. And 150 have been put in down in the city. I only get what I pay for. I’m not taking advantage of you – I just inherited the system. Area rating system made 20 years ago. We could increase gas tax to 50% and not gaining anything – just shifting pressures. 4.2% can’t afford it. Let’s work together instead of competing philosophies. Just makes problems. …
Aidan Johnson [3;10] agree that cars and buses not in conflict. I am the first councillor elected without a drivers licence. Just got one last year. Went without for reasons – mainly ecologically – but I need a car. Everyday I use the HSR – and it’s a great system. Ward one – need for service on Dundurn – needed for LRT, but hear about most from constituents. Greater service to McMaster from Locke St area. Many more living there. There is no good way to get to McMaster from the Locke Street neighbourhood. It requires a transfer and the relevant transfer requires a long wait most of the time and the result is people don’t take HSR from the nearby Kirkendall Locke Street neighbourhood to McMaster and that is just a gap. On staff’s radar, working on problem, exciting opportunity with LRT. LRT also about a renewed time for buses, and all modes of transportation. Taking over as chair of LRT subcommittee.
Skelly [3:14:30] A-line – go to Mohawk hub? Yes. Concerned about BRT dedicated lane. What access – Claremont or West 5th? Staff: Haven’t worked that out. Currently James Mt road to Mohawk hub. Skelly: shutting down West 5th access? Staff: subject to studies. Skelly: when? Staff: waiting for provincial announcement. Goal remains the same – options to extend A-Line, have to be looked at again. Skelly: how can province make an announcement without talking to us? Staff: Announcement starts process. No plan at the moment – start in 2024. Skelly: asks again about route. Staff: have to connect to Mohawk and GO Stations. All things on the table. Skelly: BLAST route? Staff: Express bus in mixed traffic – current route – James Mt Road. Skelly: Could be dedicated bus? Staff: anything possible, not put forward at this time. Can’t be in an announcement from the province. Collins: motion – reads – everyone wants to make city better – problem is the budget, Looking at $7 million increase this year for transit – historical unfavourable – every year over the last three years on HSR we’ve had an unfavourable variance … $1m in 2014 which is a lot of money, $1.6m in 2015 … and trending at $1.8 m for 2016. … Has to stop. Same with DARTS to a lesser extent for 6-7 years. We need a strategy to address this. Toronto budget trap of announcing projects without budget – have completely drained their reserves and I don’t want to fall into that position. I’m with councillor Ferguson – if it means shifting gears to get to 1.8% tax increase. Can’t suck and blow at the same time. Not sure where we are with ATS? Very reluctant to make changes there. Finance not part of the conversation. CARRIED no discussion.
Whitehead: Collins great job ….. Only way we can do this is by increasing taxes