Staff Report #14
August 28, 2024
To All Commissioners
Re: Financial Update – Conventional Transit Services – Operating Budget – July 31, 2024
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 seven-month period ending July 31, 2024. The statement sets out actual to budget performance for the period.
London Transit Commission Statement of Operations – Conventional Transit Services Seven Months Ending July 31, 2024 (000’s omitted)
| Description | Actual | Budget | Amount Better (Worse) | Percent Better (Worse) | |
| Revenue | |||||
| Transportation | $ 22,160.7 | $ 22,159.6 | $ 1.1 | 0.0 % | |
| Operating | 1,774.7 | 1,165.6 | 609.1 | 52.3 % | |
| Transfers from reserves | 773.9 | 935.4 | (161.5) | (17.3)% | |
| Province-provincial gas tax | 6,223.8 | 6,533.5 | (309.7) | (4.7)% | |
| City of London | 26,272.4 | 26,272.4 | – | 0.0 % | |
| Total revenue | 57,205.5 | 57,066.5 | 139.0 | 0.2 % | |
| Expenditure | |||||
| Personnel cost | 36,055.8 | 36,501.4 | 445.6 | 1.2 % | |
| Direct bus maintenance | 5,546.8 | 5,377.7 | (169.1) | (3.1)% | |
| Fuel | 5,509.9 | 6,061.9 | 552.0 | 9.1 % | |
| Facility costs | 2,129.0 | 2,275.2 | 146.2 | 6.4 % | |
| Insurance | 3,828.9 | 4,049.1 | 220.2 | 5.4 % | |
| Contribution to reserves | 782.3 | 436.8 | (345.5) | (79.1)% | |
| All other material expense | 2,516.9 | 2,364.4 | (152.5) | (6.5)% | |
| Total expenditure | 56,369.7 | 57,066.5 | 696.8 | 1.2 % | |
| Net favourable/(unfavourable) | $ 835.8 | $ – | $ 835.8 | 1.5 % | |
As indicated in the above table, the conventional service has a net favourable operating budget performance to-date of 1.5% or $835,800. An explanation of the variances is set out below.
Revenue
- favourable operating revenues of $609,100 due mainly to higher interest income earned, noting $345,500 relates to interest earned on reserve funds and is highlighted below as an unfavourable contribution to reserves;
- unfavourable transfers from reserves of $161,500 as the required contribution to cover insurance claims is $161,500 less than budgeted, noting this decrease is offset below within the favourable insurance cost; and
- a reduction in projected provincial gas tax requirements at this time, noting a full analysis of reserves and reserve funds, including provincial gas tax, will be completed at year end.
Expenditures
- favourable personnel costs of $445,600 due primarily to the timing of filling vacant positions;
- unfavourable direct bus maintenance and servicing costs of $169,100 due mainly to the continued outsourcing of MTO inspection work required due the vacant positions in Fleet and Facilities;
- favourable fuel costs of $552,000 due mainly to lower than budgeted diesel fuel prices;
- favourable insurance costs of $220,200 due to lower than budgeted claim costs ($161,500) and a favourable 2024-2025 insurance program renewal ($58,700); and
- unfavourable contributions to reserves of $345,500 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 Seven Months Ending July 31, 2024 (000’s omitted)
| Description | Actual | Budget | Variance | % Variance | 2023 Actual | % Variance |
| Total Passengers (000’s) | 11,195.2 | 11,038.3 | 156.9 | 1.4 % | 10,085.9 | 11.0 % |
| Average Fare | $ 1.979 | $ 2.013 | $ (0.034) | (1.7)% | $ 1.956 | 1.2 % |
| Revenue Service Hours | 408.5 | 409.3 | (0.9) | (0.2)% | 389.7 | 4.8 % |
| Rides/Rev Service Hour | 27.4 | 27.0 | 0.4 | 1.6 % | 25.9 | 5.9 % |
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