Staff Report #8
October 25, 2023
To All Commissioners
Re: Financial Update – Conventional Transit Services – Operating Budget – September 30, 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 nine-month period ending September 30, 2023. The statement sets out actual to budget performance for the period.
London Transit Commission Statement of Operations – Conventional Transit Services Nine Months Ending September 30, 2023 (000’s omitted)
| Description | Actual | Budget | Amount Better (Worse) | Percent Better (Worse) | |
| Revenue | |||||
| Transportation | $ 24,731.7 | $ 24,720.5 | $ 11.2 | 0.0 % | |
| Operating | 2,576.0 | 1,815.4 | 760.6 | 41.9 % | |
| Transfers from reserves | 5,772.9 | 6,035.7 | (262.8) | (4.4)% | |
| Province-provincial gas tax | 6,653.9 | 6,653.9 | – | 0.0 % | |
| City of London | 27,281.7 | 27,281.7 | – | 0.0 % | |
| Total revenue | 67,016.2 | 66,507.2 | 509.0 | 0.8 % | |
| Expenditure | |||||
| Personnel cost | 43,138.8 | 43,402.5 | 263.7 | 0.6 % | |
| Direct bus maintenance | 6,277.5 | 5,607.2 | (670.3) | (12.0)% | |
| Fuel | 7,170.5 | 7,770.9 | 600.5 | 7.7 % | |
| Facility costs | 2,671.2 | 2,810.3 | 139.1 | 4.9 % | |
| Insurance | 3,649.8 | 3,826.0 | 176.2 | 4.6 % | |
| Contribution to reserves | 1,345.7 | 714.6 | (631.1) | (88.3)% | |
| All other material expense | 2,420.8 | 2,375.7 | (45.1) | (1.9)% | |
| Total expenditure | 66,674.2 | 66,507.2 | (167.0) | (0.3)% | |
| Net favourable/(unfavourable) | $ 342.0 | $ – | 342.0 | 0.5 % | |
As indicated in the above table, the conventional service has a net favourable operating budget performance to-date of 0.5% or $342,000. An explanation of the variances is set out below.
Revenue
- favourable operating revenues of $760,600 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 $263,700 due primarily to the timing of filling vacant positions;
- unfavourable direct bus maintenance expenditures of $670,300 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 $600,500 due mainly to lower than budgeted diesel fuel prices; and
- unfavourable contributions to reserves of $631,100 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 Nine Months Ending September 30, 2023 (000’s omitted)
| Description | Actual | Budget | Variance | % Variance | 2022 Actual | % Variance |
| Total Passengers (000’s) | 13,181.9 | 12,781.4 | 400.5 | 3.1 % | 9,006.0 | 46.4 % |
| Average Fare | $ 1.876 | $ 1.934 | $ (0.058) | (3.0)% | $ 2.265 | (17.2)% |
| Revenue Service Hours | 504.8 | 507.6 | 2.8 | 0.6 % | 456.6 | 10.5 % |
| Rides/Rev Service Hour | 26.1 | 25.2 | 0.9 | 3.7 % | 19.7 | 32.4 % |
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