Staff Report #6
June 28, 2023
To All Commissioners
Re: Financial Update – Conventional Transit Services – Operating Budget – May 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 five-month period ending May 31, 2023. The statement sets out actual to budget performance for the period.
London Transit Commission Statement of Operations – Conventional Transit Services Five Months Ending May 31, 2023 (000’s omitted)
| Description | Actual | Budget | Amount Better (Worse) | Percent Better (Worse) | |
| Revenue | |||||
| Transportation | $ 14,422.7 | $ 14,473.4 | $ (50.7) | (0.4)% | |
| Operating | 1,382.1 | 1,108.8 | 273.3 | 24.6% | |
| Transfers from reserves | 3,333.7 | 3,353.7 | (20.0) | (0.6)% | |
| Province-provincial gas tax | 3,696.3 | 3,696.3 | – | 0.0 % | |
| City of London | 12,472.5 | 12,472.5 | – | 0.0 % | |
| Total revenue | 35,307.3 | 35,104.7 | 202.6 | 0.6 % | |
| Expenditure | |||||
| Personnel cost | 23,101.9 | 23,340.2 | 238.3 | 1.0 % | |
| Direct bus maintenance | 3,396.0 | 3,217.4 | (178.6) | (5.6)% | |
| Fuel | 3,905.6 | 4,215.8 | 310.2 | 7.4 % | |
| Facility costs | 2,143.9 | 2,205.1 | 61.2 | 2.8 % | |
| Insurance | 447.8 | 467.8 | 20.0 | 4.3 % | |
| Contribution to reserves | 690.1 | 440.9 | (249.2) | (56.5)% | |
| All other material expense | 1,237.6 | 1,217.5 | (20.1) | (1.7)% | |
| Total expenditure | 34,922.9 | 35,104.7 | 181.8 | 0.5 % | |
| Net favourable/(unfavourable) | $ 384.4 | $ – | 384.4 | 1.1 % | |
As indicated in the above table, the conventional service has a net favourable operating budget performance to-date of 1.1% or $384,400. An explanation of the variances is set out below.
Revenue
- net unfavourable transportation revenue of $50,700 due to slightly lower than budgeted average fare (impacted by differing ridership mix), offset by slightly higher than budget ridership, noting the 2023 budget was updated to reflect the post-COVID trends that had been emerging since last September; and
- favourable operating revenues of $273,300 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.
Expenditures
- favourable personnel costs of $238,300 due primarily to the timing of filling vacant positions;
- unfavourable direct bus maintenance expenditures due mainly to the timing of engine repair work as well as outsourced repairs required to maintain MTO inspections during labour vacancies;
- favourable fuel costs of $310,200 due mainly to lower than budgeted diesel fuel prices; and
- unfavourable contributions to reserves of $249,200 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 Five Months Ending May 31, 2023 (000’s omitted)
| Description | Actual | Budget | Variance | % Variance | 2022 Actual | % Variance |
| Total Passengers (000’s) | 7,561.1 | 7,523.8 | 37.3 | 0.5 % | 4,644.0 | 62.8 % |
| Average Fare | $ 1.911 | $ 1.924 | $ (0.012) | (0.6)% | $ 2.379 | (19.6)% |
| Revenue Service Hours | 278.6 | 279.6 | (0.9) | (0.3)% | 257.8 | 8.1 % |
| Rides/Rev Service Hour | 27.1 | 26.9 | 0.2 | 0.8 % | 18.0 | 50.7 % |
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