Transit Commission awaiting draft budget specifics this week

An OC Transpo bus turns onto Elgin St. from Wellington St. in downtown Ottawa, Ont. in this undated photo. (Photo by Shubham Sharan on Unsplash)

Ottawa's Transit Commission meets this Thursday to discuss its 2023 draft budget, but some details found in the citywide draft are already raising questions.

The 2023 draft budget for Ottawa includes nearly $54 million in so-called "efficiencies", the majority of which, more than $47 million, comes from the public transit file, but when asked about specifics, Transit Services general manager Renée Amilcar referred questions to an upcoming meeting.

"Transit Commission on Feb. 9 will give all the information regarding the budget for this year for transit," Amilcar said, speaking to reporters after the council meeting on Wednesday.

Some details are known. City officials have said 117 buses that are beyond their useful life or are too expensive to maintain will be retired. Acting chief financial officer Cyril Rogers also said the adjustments in capital spending are pending a service review this year.

Mayor Mark Sutcliffe insists that the savings presented in the budget should not affect service.

Budget documents prepared for Transit Commission show $4.4 million in savings under bus and Para operations, including a projected savings of $1.5 million in overtime expenditures and $2.9 million in materials and services, defined further as a reduction in bus fleet size to match current service levels. The other $42.7 million that makes up the $47 million in transit efficiencies comes from a reduction in contributions to the capital reserve.

Delaying spending on long-term investments such as infrastructure has been part of OC Transpo's financial plan through the COVID-19 pandemic in order to maintain levels of service without requiring significant cuts. In past years, transit staff have discussed three plans, dubbed A, B, and C, which hinged on funding from upper levels of government, with Plan A being fully balanced through additional funding, B being delays to capital projects and C, the last resort, being service cuts.

The 2023 transit budget includes a $39-million injection from the provincial government, but staff acknowledge that the funding has not been confirmed.

"As senior levels of COVID-19 funding have not been confirmed at this time, apart from Public Health, all tax-supported COVID-19 pressures identified in the 2023 budget are assumed to be offset by provincial funding and the Tax Stabilization Reserve, if necessary," a report prepared for Thursday's Transit Commission meeting says. "Transit Services forecast COVID-19 pressures are assumed to be offset with the possibility that funding will be received from senior levels of government. If no funding is received, mitigations will be put forward as per the mitigation framework consistent with previous years approach during the pandemic."

Coun. Riley Brockington, who sits on the Transit Commission, told Newstalk 580 CFRA's CFRA Live with Andrew Pinsent on Sunday that capital deferrals may end up costing the city more in the end.

"At the end of the day, if you still have to build infrastructure, it's going to probably cost more in future years because of construction inflation and the overall increase in cost of everything we're seeing right now," he said.

He also said the $39 million line item based on assumed funding from other levels of government would need to be addressed at Thursday's meeting, particularly what will happen if that money does not materialize.

"In 2020, 2021 and 2022, upper levels of government have assisted public transit agencies with their struggles. We've been told in 2023 do not expect that," Brockington said. "Post-COVID, our revenues are not the same as pre-COVID. This is the lowest amount in the last four years, which is good, but it's still a $39 million deficit that we have to address."

The draft budget projects ridership at 70 per cent of pre-pandemic levels, meaning OC Transpo is expecting lower fare revenue overall, on top of a year-long fare freeze at 2022 prices, which staff estimate will cost an additional $5 million. In 2022, staff projected a ridership level of 85 per cent of pre-COVID norms, which was never achieved.

Brockington says transit users and taxpayers should pay particular attention to Thursday's Transit Commission meeting.

The draft 2023 transit operating budget is $706 million, or almost 16 per cent of the city's total $4.5 billion draft operating budget. It's an increase of just under $11 million from the 2022 transit budget. The 2023 draft capital budget for transit is $122 million, which is around $47 million lower than the 2022 capital budget. The four-year forecast summary is projecting more than $322 million in capital spending in 2024, followed by $129 million in 2025 and $186 million in 2026.

Sutcliffe told Newstalk 580 CFRA this week that there will not be an overall reduction in service, but he did say OC Transpo is reviewing routes based on service levels.

"That's the kind of thing OC Transpo has been doing for years. When there's less demand in a particular area… they stop or reduce the amount of service in an area and reinvest that money in another area," he said. "We're not talking about across-the-board cuts; we're not talking about major, major changes; we're talking about realigning the system to customer demands and Stage 2 of light rail."

RELIABILITY A KEY ISSUE

Brockington said tackling the issue of transit reliability will be a key issue for this term of Transit Commission.

"If all people hear in the city, who don't take public transit, is how unreliable bus service or LRT service is, what's the incentive for new people to come into the system?" he said.

"That has to be a focus and I do believe the transit commission has to be a lot more direct with the general manager about a very clear plan for bus reliability in this city. What are they key issues that are influencing or impacting consistent reliability in our bus service? Let's open that up, let's have a much better understanding of those root causes."

Brockington said system-wide service reliability statistics are good "on paper" but they obscure local levels with particular routes.

"If there are routes that are consistently challenged to remain on-time or on-schedule, and you add that into the pot of all the other runs at all times of the day, all days of the week, those type of stats get buried and you never see them," he said. "Is it a scheduling issue? Is the run's schedule unrealistic for the operator? Construction issues, the flow of traffic? Try to get into that."

Transit Commission meets Thursday, Feb. 9, at 9:30 a.m. to discuss the draft 2023 budget. The full city budget will be finalized by city council March 1.