Staff Report #6
September 27, 2023
To All Commissioners
Re: Financial Update – Conventional Transit Services – Operating Budget – August 31, 2023
Recommendation
That the report be NOTED and FILED.
Background
Set out in the table below is the Statement of Operations for Conventional Transit Services for the eight-month period ending August 31, 2023. The statement sets out actual to budget performance for the period.
London Transit Commission Statement of Operations – Conventional Transit Services Eight Months Ending August 31, 2023 (000’s omitted)
| Description | Actual | Budget | Amount Better (Worse) | Percent Better (Worse) | |
| Revenue | |||||
| Transportation | $ 21,377.9 | $ 21,375.5 | $ 2.4 | 0.0 % | |
| Operating | 2,302.0 | 1,648.7 | 653.3 | 39.6 % | |
| Transfers from reserves | 5,214.4 | 5,365.2 | (150.8) | (2.8)% | |
| Province-provincial gas tax | 5,914.5 | 5,914.5 | – | 0.0 % | |
| City of London | 25,360.2 | 25,360.2 | – | 0.0 % | |
| Total revenue | 60,169.0 | 59,664.1 | 504.9 | 0.8 % | |
| Expenditure | |||||
| Personnel cost | 38,329.6 | 38,545.6 | 216.0 | 0.6 % | |
| Direct bus maintenance | 5,621.8 | 5,008.1 | (613.7) | (12.3)% | |
| Fuel | 6,218.3 | 6,847.1 | 628.8 | 9.2 % | |
| Facility costs | 2,585.8 | 2,672.1 | 86.3 | 3.2 % | |
| Insurance | 3,668.5 | 3,732.6 | 64.1 | 1.7 % | |
| Contribution to reserves | 1,176.6 | 649.7 | (526.9) | (81.1)% | |
| All other material expense | 2,266.2 | 2,208.9 | (57.3) | (2.6)% | |
| Total expenditure | 59,866.8 | 59,664.1 | (202.7) | (0.3)% | |
| Net favourable/(unfavourable) | $ 302.2 | $ – | 302.2 | 0.5 % | |
As indicated in the above table, the conventional service has a net favourable operating budget performance to-date of 0.5% or $302,200. An explanation of the variances is set out below.
Revenue
- favourable operating revenues of $653,300 due to the continued climb in interest rates, resulting in higher than budgeted interest income, noting this increase is offset below as unfavourable contributions to reserves; and
- unfavourable transfers from reserves as the required contribution to cover insurance claims is less than budgeted, noting this decrease is offset below as a favourable insurance cost.
Expenditures
- favourable personnel costs of $216,000 due primarily to the timing of filling vacant positions;
- unfavourable direct bus maintenance expenditures due mainly to the increasing cost pressures on parts as well as outsourced repairs required to maintain MTO inspections during labour shortfalls;
- favourable fuel costs of $628,800 due mainly to lower than budgeted diesel fuel prices; and
- unfavourable contributions to reserves of $526,900 due to the increase in interest income earned on reserves, noted above in operating revenue.
Ridership
The table below sets out actual to budget ridership performance as well as a comparison to the same period in the previous year.
Ridership Performance – Actual vs. Budget Eight Months Ending August 31, 2023 (000’s omitted)
| Description | Actual | Budget | Variance | % Variance | 2022 Actual | % Variance |
| Total Passengers (000’s) | 11,306.2 | 11,087.4 | 218.8 | 2.0 % | 7,399.5 | 52.8 % |
| Average Fare | $ 1.891 | $ 1.928 | $ (0.037) | (1.9)% | $ 2.326 | (18.7)% |
| Revenue Service Hours | 446.4 | 448.3 | (1.9) | (0.4)% | 404.2 | 10.4 % |
| Rides/Rev Service Hour | 25.3 | 24.7 | 0.6 | 2.4 % | 18.3 | 38.3 % |
Administration will continue to monitor the operating budget performance, including ridership, on a monthly basis.
Recommended by:
Mike Gregor, Director of Finance
Concurred in by:
Kelly S. Paleczny, General Manager