The Toronto Transit Commission Board will meet on February 24, 2014.  Items on the agenda include:

• CEO’s Report
• Customer Satisfaction Survey
• New Streetcar Contract Amendments
• Auditor General’s Report on Bus Maintenance and Warranty Administration

CEO’s Report

The CEO’s Report contains the usual collection of performance statistics with little new information compared to the January version.  Results for 2013 are reported, and there is no commentary on system operations during the extremely cold weather of January 2014.

Riding for 2013 was 2.4% above 2012, although it was slightly below budget due to severe weather on two occasions during the year.

System reliability was already taking a hit in late 2013 with the cold weather, especially the streetcar fleet whose reliability and availability dropped.  Dissatisfaction with streetcar service shows up in the Customer Satisfaction Survey which was conducted before the worst of winter set in.  It may suit the TTC to blame its problems on the weather, but this excuse wears thin as late winter and early spring bring better conditions for surface operations.  Streetcar service reliability has been on a constant decline since September 2013.

Streetcar Reliability Index from CEO’s Report

Customer Satisfaction By Mode of Travel

Customer Satisfaction by Frequency of Use

Satisfaction is dropping on the streetcar system not just because of recent bad weather, but because the service is becoming less and less reliable.  Moreover, the system-wide average ranking by riders holds up only because casual users think things are not too bad, while for regular users, they are falling through the floor.  The spread of values between these groups is extremely troubling, especially if the TTC uses casual user rankings to mask the fall among its most important customers.

Yonge-University-Spadina subway reliability continues to fall and, for December, was at its lowest point for two years.  Although the weather (December’s ice storm) contributed to this, there are also continuing unspecified problems with the new TR fleet.  Service reliability also fell on the Bloor-Danforth line, but not as severely as on YUS.

Comments elsewhere in the CEO’s report imply that TR reliability issues are under control, and yet this continues to be cited as a source of service problems.

The SRT line is reported to continue performing well, but this description begs the question of why the ice storm, which closed the line for two days, did not have more of an effect on reliability stats when it so seriously affected the rest of the system.

The statistical measures of reliability have not yet been updated, and there is no mention in the report of proposed new “journey time metrics”, nor of any detailed reporting of by time of day or route segment.

Leslie Barns

Construction of the new carhouse at Leslie & Lake Shore continues to run behind schedule with an expected opening date in early 2015.

Spadina Subway Extension

Construction at some stations, notably Steeles West, continues to run badly behind schedule.  The revised opening date of fall 2016 is “facing a serious schedule challenge”.

New Streetcar Contract Amendments

This report includes details of amendments to the contract for supply of 204 new streetcars.  The original Board authorization included $117-million for “specified options and potential contract changes”, of which $22.6m has already been drawn for various modifications including:

• wheel flange lubrication system for wheel-rail noise mitigation,
• training cab simulator,
• pantograph current collector for part of the fleet (60 cars), as well as
• technical options or design changes for matters such as accessibility improvements.

Three new changes will draw on the authorization:

• changes to support Presto implementation on the new cars at $5.9m,
• changes to the ramp controller and a related lighting system at $2.5m, and
• inclusion of pantographs on the remaining 144 cars in the fleet at $4.5m.

This is an example of a Presto-related cost that is carried in a separate contract from the main Presto agreement.  Will there be more as Presto rolls out to other parts of the system and vehicles?

The ramp system for wheelchair access has been problematic from the outset given the vertical distance from the car to the roadway.  Recently I learned that use of the ramp will require the operator to alight from the cab and assist a rider onto or off of the car.  This will provide an added level of safety so that wheelchair users do not have to roll out into traffic just to activate the ramp request, nor will they be solely responsible for wheeling themselves up and down the ramp.  I do not know what the procedure will be for loading from platforms such as on Spadina, and will pursue this with the TTC for clarification.

It is intriguing that the TTC’s original intent was to install pantographs on only part of the fleet given that even the “LRT” type streetcar lines’ cars traverse other parts of the network regularly.  The move to convert fully to pantograph operation appears to be a fairly recent decision, certainly one taken after the order was placed in 2009.

Bus Maintenance and Warranty Administration Audit

In 2013, the City’s Auditor General reviewed the TTC’s bus maintenance program, and the audit report was reviewed by the TTC’s Audit Committee on February 11, 2014.  The report is now before the full TTC Board.  This review covers maintenance for the conventional bus fleet, and a separate audit will deal with the Wheel-Trans and non-revenue fleets.

Recent media attention highlighted the audit’s finding that the Commission is losing the value of warranty claims on its fleet by $4-5 million per year representing about 70% of the possible claims. This is not small change, but much larger costs loom in other parts of the maintenance budget, notably in the ongoing cost of hybrid buses.

Warranty Repairs

The reasons cited for lower than expected warranty revenue were:

• Missing defective parts to return to manufacturers to support warranty claims
• Specific information pertaining to repairs eligible for warranty was incomplete, inadequate or not available.

A further $200k/year was lost for denied warranty claims for reasons including:

• Submitted defective parts were determined to be in working order by manufacturers, and
• Administrative issues such as delayed submissions, wrong parts submitted or non-authorized repairs.

When one digs into the details of the report, however, it is unclear whether these figures, particularly the $4-5m “loss” on warranties, really exist.  The auditor notes that TTC staff tended to pursue the more valuable of the claims, and this implies that the average value of those that were not filed might be lower than those that were.  There certainly appear to be issues with how warranty repairs and defective parts are handled in general.

The Auditor hopes to see much higher recoveries under warranties, and if the TTC is successful in their claims, it will be interesting to see whether this is reflected in higher pricing on future orders.  If the TTC has a history of low claim rates, manufacturers may price their warranties accordingly.  What is missing from the audit is a comparison of the moneys paid for warranties with actual claims.  Is the TTC overpaying for warranties relative to what they actually receive?

Maintenance Practices and Bus Rebuilds

Other recommendations relate to the effectiveness and efficiency in operations including reconciliation of the TTC’s preventative maintenance inspection intervals with industry norms, reduction of instances where the same repair is done on a bus repeatedly, and the need for updated, regular training programs for staff.

The audit recommended a detailed analysis of the cost of bus rebuilds by internal staff (as opposed to outsourcing) including costs such as materials handling (which might be buried elsewhere in departmental overhead) and failure rates of rebuilt vehicles.  The report notes that problems may lie not in the work done at central shops, but in how vehicles are maintained once they return to garages.

TTC buses stay in revenue service longer than the industry average (18 years for TTC versus 12-15 years for other properties).  This triggers additional costs for vehicle overhauls and a higher average age of the fleet.  The audit recommends a review of moving to a shorter lifespan.

This is quite ironic considering that the original TTC Capital Budget included such a proposal.  This was removed on the recommendation of the City’s Budget Analyst on the grounds that it accelerated the replacement of large chunks of the fleet without a demonstrable value in reduced maintenance costs.  The TTC is working on a business case analysis of a shorter bus life cycle for the 2015 budget round.

Hybrid Buses

Hybrid buses form a large part of the fleet, and their operating costs and reliability have not held up to expectations for the fleet in general.

Between 2005 and 2007 TTC procured over 690 hybrid buses with provincial and federal subsidies. Subsequent to acquisition, staff have been dealing with frequent and significant repair issues to these buses. As the warranty provisions on the hybrid buses expires in 2014, staff anticipate substantial increases in future hybrid maintenance costs. The hybrid experience underscores the importance of evaluating the reliability of new technologies in future vehicle acquisition. Going forward the Department needs to develop a plan to help minimize future financial impact from increasing hybrid maintenance costs.

Aside from the political attractiveness of anything remotely “green”, an important issue in the procurement of the hybrids was that the federal subsidy was only available for this type of vehicle.  67% of the vehicle costs were covered by provincial and federal subsidy, an unusually high value for surface vehicles.

In retrospect, it would likely have been cheaper just to buy and operate diesels, but that was not a politically acceptable stance at the time.  Moreover, the idea of “evaluating the reliability of new technologies” ignores political pressure to buy from the flavour-of-the-day option.

I cannot help mentioning how the TTC lost its environmentally friendly trolley bus system thanks to claims by the natural gas industry, the Ministry of Transportation, and a now-defunct Ontario bus-builder hungry for untendered business.

The real issue for the environmental benefit of transit is to get people out of their cars and provide mobility without the need for road or parking space, not to mention the relatively inefficient propulsion system of individual vehicles.

The hybrids will bring a significant future cost to the TTC:

The engine replacement costs for TTC’s hybrids have until recently been covered under the first 5-year warranty. As the warranty expires in 2014, staff anticipate a considerable increase in repair costs in the coming years. According to staff projections, the average annual maintenance cost per hybrid will rise from $45,000 after 5 years of service to over $90,000 after 10 years of service. The increases in future maintenance costs for a fleet of 691 hybrids will be in the tens of millions.

To put this in perspective, recent debates over fare and subsidy increases have turned on amounts in the $20-30m range.  It is likely that there will be a comparable increase in TTC costs simply to pay for the higher cost of bus maintenance.  Will this be covered by subsidies, fares, or by service cuts?

Bus Maintenance & Reliability

The bus fleet’s problems are not confined to the hybrids.  Bus maintenance costs are rising as a proportion of total bus operations, and this is linked to several factors:

• New buses coming off warranty with more complicated systems, such as kneeling capability, security cameras, and advanced electronic systems
• Warranty for bus engine turbochargers has expired
• Higher than expected engine and transmission failures as the bus fleet continues to age
• Expiry of warranty coverage for hybrid buses
• Increased seat replacement work

Many of these costs relate to the average age of the fleet which, in turn, is affected by the timing of bus purchases.  Over past decades, there have been swings between large volume purchases and periods of relative drought.  Some of this is simply an echo of past cycles, and some a result of policy decisions (increasing the fleet to improve service, cutting bus orders due to service reductions).  We see a similar issue with the streetcar fleet which is now quite aged, comparatively unreliable, and on the verge of replacement for more years than might be economically reasonable.

Some old buses may stay in service beyond their normal retirement dates as a stopgap while awaiting new vehicles to respond to new policies or to unexpected growth in demand.  There is always a balancing act between the need to provide service, and the constraints of the capital program that provides the vehicles.  Extra maintenance costs for older vehicles can be an unavoidable result especially if funding is constrained on the capital side of the budget.

The detailed audit reviewed many aspects of bus maintenance and used comparative information from seven other systems as a benchmark:  New York, Boston, Ottawa, Calgary, York Region, Brampton and Durham.

Although the audit recommends study of halving the number of preventative lubrication inspections from every 5,000km to every 10k, this recommendation is tempered by the acknowledgement that New York’s system uses this value for buses travelling on relatively slow routes (see table on page 13 of the detailed report, page 23 of the PDF).  The New York standard, although distance-based, implies that there is an element of time, not distance travelled, in the need for this inspection.

The audit claims that there could be “significant cost savings” but does not quantify this value.

Later in the report, the audit proposes savings possible from consolidation of overlapping standard inspections.  However, the projected saving in employees is quite small.  When this is distributed over a network of several garages and two shops, the actual saving per site may be too small to actually be achieved.

The audit cites cases where buses went through two separate inspections in close succession, but does not explain what proportion of the fleet inspections this represents.  Similarly, the audit raises the issue of brake relines being done at well under the planned 10,000 km frequency, but does not indicate what portion of the overall work this represents.

Without question better tracking of maintenance may eliminate or reduce some needless work, but the audit should have quantified not just the potential dollar savings, but the extent of the problem.  Any audit will find outliers, the “horror stories” of poor judgement or processes gone awry.  The more important issue is to find pervasive problems where major savings are attainable.

What does show up is a lack of management attention to reviewing available tracking data, or the use of outdated, ineffective systems to locate and correct problem areas.  The audit make frustrating reading because it implies a variation in work quality in the organization, but leaves the scope and pervasiveness of the problem to the reader’s imagination.

The question of outsourcing arises and concerns about potential problems are dismissed by noting that the Urban Forestry operations have been partly outsourced without problems.  This is a facile example that undermines the Auditor’s credibility.  There is a widespread market for arborists services for private homes and commercial properties, but the comparison for bus heavy maintenance is a stretch.

Effects on Service

Low vehicle reliability may trigger breakdowns in service, or may prevent a bus from even getting out the garage door.  This affects riders both due to interruptions and from missing runs in what should be the scheduled service.  It affects fleet planning because more buses must be on hand to ensure that enough are available.

The report warns:

Inadequate repairs contribute to “road calls” which are incidents of service delays while vehicles are in service. The Department’s internal analysis of 2010 to 2011 “road call” statistics found high frequency of “road calls” averaging nearly two mechanical related “road calls” per bus per month. Our analysis of 2013 “road call” statistics for buses at one garage coincided with the Department’s internal analysis results.

That is an extremely high number of road calls considering that the fleet number 1,857 buses.  We often hear about problems with streetcars, but bus reliability has clearly been an issue going back some years.

Like many other problems identified by the Auditor, this one needs more detailed statistics to understand what is going on.  For example, the hybrid buses are a known source of problems, and statistics for these need to be broken out as a separate vehicle class.  What proportion of breakdowns on the road are due to failed recent repairs as opposed to new problems?  What subsystems show chronic failure implying the need for an aggressive preventative maintenance?

More generally, service quality overall is affected by many factors some of which the TTC controls directly.  Any discussion of improved service must start with an understanding of these factors and the contribution each makes to the overall quality seen by riders.

Management Response

The management responses to the audit are generally in agreement, but the timelines for action stretch into 2015.  Some of this comes from the need for study of whether new procedures that are recommended will actually produce the benefits claimed.  The feedback from this audit bears watching, and I hope management will report regularly on the progress of their actions in the public agenda.

In particular, the need for better management of the whole process should not be shuffled off the table, and there should be demonstrable improvements in bus reliability and maintenance costs that can be directly tied to better information about the fleet and maintenance practices.