Staff Report #6
September 25, 2024
To All Commissioners
Re: Financial Update – Conventional Transit Services – Operating Budget – August 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 eight-month period ending August 31, 2024. 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, 2024 (000’s omitted)
| Description | Actual | Budget | Amount Better (Worse) | Percent Better (Worse) | |
| Revenue | |||||
| Transportation | $ 24,656.8 | $ 24,689.3 | $ (32.5) | (0.1)% | |
| Operating | 1,981.9 | 1,330.6 | 651.3 | 48.9 % | |
| Transfers from reserves | 858.3 | 1,069.3 | (211.0) | (19.7)% | |
| Province-provincial gas tax | 7,112.9 | 7,466.8 | (353.9) | (4.7)% | |
| City of London | 29,913.4 | 29,913.4 | – | 0.0 % | |
| Total revenue | 64,523.3 | 64,469.4 | 53.9 | 0.1 % | |
| Expenditure | |||||
| Personnel cost | 41,411.1 | 41,877.7 | 466.6 | 1.1 % | |
| Direct bus maintenance | 6,246.2 | 6,105.0 | (141.2) | (2.3)% | |
| Fuel | 6,244.7 | 6,901.5 | 656.8 | 9.5 % | |
| Facility costs | 2,227.0 | 2,441.6 | 184.6 | 7.7 % | |
| Insurance | 3,872.7 | 4,142.5 | 269.8 | 6.5 % | |
| Contribution to reserves | 883.5 | 499.2 | (384.3) | (77.0)% | |
| All other material expense | 2,666.5 | 2,531.9 | (134.6) | (5.3)% | |
| Total expenditure | 63,551.8 | 64,469.4 | 917.6 | 1.4 % | |
| Net favourable/(unfavourable) | $ 971.5 | $ – | $ 971.5 | 1.5 % | |
As indicated in the above table, the conventional service has a net favourable operating budget performance to-date of 1.5% or $971,500. An explanation of the variances is set out below.
Revenue
- favourable operating revenues of $651,300 due mainly to higher interest income earned, noting $384,300 relates to interest earned on reserve funds and is highlighted below as an unfavourable contribution to reserves;
- unfavourable transfers from reserves of $211,000 as the required contribution to cover insurance claims is $211,000 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 $466,600 due primarily to the timing of filling vacant positions;
- unfavourable direct bus maintenance and servicing costs of $141,200 due mainly to the continued outsourcing of MTO inspection work required due the vacant positions in Fleet and Facilities;
- favourable fuel costs of $656,800 due mainly to lower than budgeted diesel fuel prices;
- favourable insurance costs of $269,800 due to lower than budgeted claim costs ($211,000) and a favourable 2024-2025 insurance program renewal ($58,800); and
- unfavourable contributions to reserves of $384,300 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, 2024 (000’s omitted)
| Description | Actual | Budget | Variance | % Variance | 2023 Actual | % Variance |
| Total Passengers (000’s) | 12,462.6 | 12,288.5 | 174.1 | 1.4 % | 11,306.2 | 10.2 % |
| Average Fare | $ 1.978 | $ 2.014 | $ (0.036) | (1.8)% | $ 1.950 | 1.5 % |
| Revenue Service Hours | 465.6 | 465.2 | (0.4) | (0.1)% | 446.4 | 4.3 % |
| Rides/Rev Service Hour | 26.8 | 26.4 | 0.4 | 1.3 % | 25.3 | 5.7 % |
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