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So You Want To Own A Subway …

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The madness that passes for political policy in Toronto continues in the provincial election with a proposal that a Tory administration under Tim Hudak would transfer control of the rapid transit system to GO Transit as a regional asset. The conventional wisdom is that the subway on its own would be “profitable”, and that Toronto would be stiffed for the money-losing surface network.

Quite bluntly, any claim that the subway makes a profit and could be uploaded at no net cost to Queen’s Park is pure bunk, and it says something about the quality of Hudak’s advisors that they don’t seem to know this (among many other fiscal facts of life). Just like the operation of a house or a car, two things many voters must deal with day-to-day, there are two budgets:

  • Operating: Here we have the bills that roll in regularly such as taxes, utilities, insurance. Unless we are renting out our homes or vehicles, there is no offsetting revenue, but in the case of the subway, there are fares and other much smaller sources of income.
  • Capital: Now and then, major expenses come along such as a new roof or foundation repairs, a new furnace or other appliances, fixing the plumbing and electrics, building that nice new patio you always wanted. These don’t happen often, and the expense covers an asset that should last decades, but some level of capital spending is unavoidable.

I have omitted mortgage costs here because they do not have a direct equivalent in transit budgets where the cost of borrowed money is not visible. If this were included, then capital-intensive modes like the subway would have a higher operating cost with the debt service charges included.

Capital Costs for the TTC

The TTC has a 10-year rolling budget projection for capital costs (see 2014-2023 Capital Budget). The appendices contain a detailed breakdown by area and project with a summary in Appendix A and the details in Appendix B. Those who have a real appetite for mind-numbing detail can browse the two volumes of the “Blue Books”, all 1,800 pages or so, that are available for review on request, but by personal visit, not online.

TTC_2014_Budget_Breakdown_By_Mode

This table subdivides the areas within the 10-year budget by mode. The allocation to each mode has been done as follows:

  • Where an item is clearly for a single mode (such as “purchase buses”), the cost is allocated 100% to that mode.
  • For a few large items that contain many projects (notably “Buildings & Structures”), I delved into the line items to determine how they should be allocated. The percentage split reflects that breakdown (details not included here).
  • For other lines, I allocated costs based on my understanding of the relative portion of the asset related to each mode. Some will quibble with the values I chose, but it is important to note that these are not major budget lines, and shuffling the percentage splits will not have a big effect on the totals by mode.

The TTC’s capital plans (including the so-called “below the line” projects for which they do not yet have funding), total about $8.6-billion over the 2014-2023 period. This breaks down as:

$-billion Percent
Subway 4.5 53
Bus 1.7 20
Streetcar 2.2 25
Wheel Trans .164 2

The streetcar amount and percentage are high because this part of the capital plan includes the complete fleet replacement and the initial stages of expansion not to mention the construction of a new maintenance facility. Spending on these budget lines will not continue at the same level into future decades.

Similarly, some subway costs such as the new signal system and fleet replacement do not recur at the same level decade-by-decade.

That said, it is clear that over half of the TTC’s capital budget, with no provision for system expansion, goes to the subway network at an annual cost of about $450-million. If Queen’s Park takes over the subway, they must also take over this capital expense.

The only long-term capital funding from Queen’s Park today is the gas tax revenue at an annual rate of about $71m (Toronto receives more, but directs the rest to the operating budget). Ottawa kicks in about $154m in gas taxes bringing the total from this source to $225m. However, only about half of that can reasonably be “uploaded” to Queen’s Park as part of a subway takeover, and so there is only about $113m in gas tax that should shift to the province as part of the transfer.

This would leave a net additional cost to Queen’s Park of $337m per year for capital maintenance.

The Operating Budget

The TTC’s Operating Budget covers all modes and does not break out the subway system as an explicit cost centre, although this breakdown has appeared in the past. On a broad scale, the budget looks like this:

$-billion $-billion
Fare Revenue 1.101
Contract Services 0.017
Advertising 0.026
Rent 0.010
Parking 0.010
Other 0.002
Total Revenue 1.166
Total Expense 1.601
Subsidy 0.434

Although the TTC does not publish subway and RT operating costs, we can get a sense of their magnitude by working backwards from the costs assigned to the surface routes.

Taking the reported daily cost and factoring by 300 to get an annual estimate (this treats weekends as the equivalent of one weekday), we can figure out the “leftover” costs that must be due to the subway. Note that 2012 costs are used here because these are the most recently published on a route-by-route basis.

Daily ($-million) Annual ($-billion)
Bus System Cost (2012) 2.9
Streetcar System Cost (2012) 0.6
Surface System Cost (2012) 3.5 1.050
Inflation to 2014 @ 2% 1.090
Total Budget (2014) 1.060
Net Subway Cost 0.510

(If someone at the TTC wants to challenge this estimate or correct it, I would be more than happy to see numbers that, for some reason, disappeared from the route-by-route allocations years ago.)

A common refrain is that there are millions to be saved by conversion of the subway to automatic operation, or even to unattended trains. I wrote about this in my critique of the Neptis Metrolinx review. The total number of subway operators is only about 605 out of a 10,700-strong workforce (2012 data). Some savings would be possible, but these would be offset by the cost of roving passenger assistance agents and security staff.

(The subway has a large fixed cost associated with the operation and maintenance of its complex infrastructure and stations that is independent of actual usage or level of service.)

When we combine the operating and capital maintenance costs together, we get:

$-billion  $-billion
Operating Cost 0.510
Capital Maintenance 0.425
Total Annual Cost 0.935
Current Capital Subsidies 0.225
Subway Subsidy Share (50%) 0.113
Net Cost of Uploaded Subway 0.822

However, the total revenue obtained by the TTC is only $1.17b, and roughly half of that “belongs” to the surface network. (There are actually more riders on the surface network than  on the subway although many trips involve both networks.) If the subway actually is “owed” half of the revenue, $508m, this would roughly balance the annual operating cost with nothing left over to fund capital maintenance (or to pay a “dividend”).

Cooking the Books

The subway can be made to appear profitable simply by changing the revenue model, notably by splitting it off as a separate fare zone. Even if a dual fare were granted to riders who start out on a TTC bus or streetcar (rather like the co-fare provided to GO riders who start their trips on a local bus system), the effect would be to increase fares for all riders whose travel uses both modes.

We can have a robust debate about whether the subway should be priced this way, and given the projected operating losses of extensions into York Region, the idea of a subway surcharge is superficially attractive. However, this goes directly against the design responsible for the TTC’s success as the city grew — providing a single fare ride with free transfers between routes — and also risks penalizing those riders who cannot organize their lives to avoid the subway system.

A long-delayed policy discussion at the TTC should examine the practicality and effects of moving to a new fare system such as zones or a time-based model. It does not matter which one we choose or how we tweak the scheme, some riders will pay more and some will pay less. After all, the talk of “regional integration” is at its heart a desire by riders who must cross the 905-boundary for a lower combined fare on their journeys. “Integration” is not simply a matter of having one card that would pay for all travel but with an unchanged tariff.

The effect of rebalancing fares can be offset either by raising subsidies, or by accepting that some riders will pay more. This discussion would be central to uploading the subway to Queen’s Park because there must be some way to decide how fares are calculated and revenues are split between the systems.

Another crucial issue is that of service standards. We have seen this battle in Toronto. Some believe that transit should be available at reasonable crowding levels and good service frequency throughout the day. Others hold that service should only be operated when it does not lose too much money, and that vehicles should be stuffed full as the standard and target for service levels.

Nobody ever talks about the subway service operated with nearly-empty trains to the ends of the system until 2:00am every day. Would GO Transit provide such generous service on its rail network, and would the TTC’s frequent off-peak subway service be a victim of uploading? A Hudak government can hardly be expected to run “gravy trains” out into the suburbs for only a handful of riders when a bus would do just as well. That is, after all, the GO Transit model.

Whenever there is talk about “integration” or “uploading”, we never see a full explanation of just what is proposed. This can leave voters and transit riders hoping for their ideal world such as a single TTC fare for trips well beyond the 416 into downtown or a reduced cost of trips including GO and other systems. What they actually get may be a surprise that pandering politicians would rather not discuss, presuming they even understand that issue.

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mcorcoran
3569 days ago
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‘Not your average’ Toronto condo sells close to asking

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New countertops, backsplashes and appliances set unit apart
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mcorcoran
3931 days ago
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Slow news day, or something I missed?
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Common misquotations

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John Green from Mental Floss corrects 50 common misquotations. I must say, I’ve misquoted at least a dozen of these. Let’s not have any of these on this site, or at least any of these distorted or misattributed!


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mcorcoran
3932 days ago
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In Toronto, the market’s sweet spot is the humble bungalow

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The popularity of the post-war bungalow holds strong, as many buyers go after it while other segments stagnate
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mcorcoran
3932 days ago
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Looks like great time to be selling a bungalow...
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Where the conflict really lies

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UPDATE: An alert reader has informed me that the Edge site also contains a “debate” (well, really more of a conversation) between Angier and David Sloan Wilson, which you can find here. Wilson doesn’t seem to care whether religion is true or false, maintaining that the only thing a scientist should care about is whether it originated because it inspired good behavior (e.g., whether it evolved by group selection). That’s a curiously blinkered view, because a). that question cannot be decided since the origins of religion are lost in the irrecoverable past, and b). the question at issue is whether religion is a good or bad thing now. And for a scientist, it should also matter whether religious claims are true. It’s interesting that truth seems to matter more to the science journalist than to the scientist!

_______________

Posting is going to slow down here as I’m busy writing a book, but, like Maru, I do my best. From time to time I’ll put up stuff that I encounter while writing, and the title of today’s “sermon” comes from a book (note—don’t waste your money) in which Alvin Plantinga notes that the real conflict isn’t between Darwinism (i.e., modern evolutionary theory) and religion, but between Darwinism and naturalism. That comes from Plantinga’s crazy idea that evolution could never have given humans the ability to discern things (like the fact of evolution) as true, because evolution only vouchsafes us behaviors that maximize our reproductive success. He =He posits, instead, that the ability of humans to discern truth comes from a sensus divinitatis installed by God. That, of course, gives us reason to trust our senses, not only about evolution but (of course!) about the reality and salvific properties of Jesus. The problems with this idea are too obvious to discuss.

But I digress. Here’s where the real conflict lies. This is a short excerpt fromthe best and funniest essay ever written on the incompatibility of science and religion: religion: “My God problem,” by science writer Natalie Angier. In just a few pages she does more than anyone else ever has to puncture the pretensions of people like Nick Matzke, Kenneth Miller, Chris Mooney, the National Center for Science Education (NCSE), theAAAS’s DoSER program, and every accommodationist who pretends that there’s no conflict between science and faith.

I’ve recommended Angier’s essay before, but if you haven’t read it, go do so now (it’s . (It’s on the Edge site). site; scroll down past the introduction to get to the essay.)

Here’s the big conflict:

So why is it that most scientists avoid criticizing religion even as they decry the supernatural mind-set? For starters, some researchers are themselves traditionally devout, keeping a kosher kitchen or taking Communion each Sunday. I admit I’m surprised whenever I encounter a religious scientist. How can a bench-hazed Ph. D., who might in an afternoon deftly purée a colleague’s PowerPoint presentation on the nematode genome into so much fish chow, then go home, read in a two-thousand-year-old chronicle, riddled with internal contradictions, of a meta-Nobel discovery like “Resurrection from the Dead,” and say, gee, that sounds convincing? Doesn’t the good doctor wonder what the control group looked like?

. . . I recognize that science doesn’t have all the answers and doesn’t pretend to, and that’s one of the things I love about it. But it has a pretty good notion of what’s probable or possible, and virgin births and carpenter rebirths just aren’t on the list. Is there a divine intelligence, separate from the universe but somehow in charge of the universe, either in its inception or in twiddling its parameters? No evidence. Is the universe itself God? Is the universe aware of itself? We’re here. We’re aware. Does that make us God? Will my daughter have to attend a Quaker Friends school now?

I don’t believe in life after death, but I’d like to believe in life before death. I’d like to think that one of these days we’ll leave superstition and delusional thinking and Jerry Falwell behind. Scientists would like that, too. But for now, they like their grants even more.

And I love this bit, clearly aimed at every mealymouthed accommodationist in America:

No, most scientists are not interested in taking on any of the mighty cornerstones of Christianity. They complain about irrational thinking, they despise creationist “science,” they roll their eyes over America’s infatuation with astrology, telekinesis, spoon bending, reincarnation, and UFOs, but toward the bulk of the magic acts that have won the imprimatur of inclusion in the Bible, they are tolerant, respectful, big of tent. Indeed, many are quick to point out that the Catholic Church has endorsed the theory of evolution and that it sees no conflict between a belief in God and the divinity of Jesus and the notion of evolution by natural selection. If the pope is buying it, the reason for most Americans’ resistance to evolution must have less to do with religion than with a lousy advertising campaign.

So, on the issue of mainstream monotheistic religions and the irrationality behind many of religion’s core tenets, scientists often set aside their skewers, their snark, and their impatient demand for proof, and instead don the calming cardigan of a a kiddie-show host on public television. They reassure the public that religion and science are not at odds with one another, but rather that they represent separate “magisteria,” in the words of the formerly alive and even more formerly scrappy Stephen Jay Gould. Nobody is going to ask people to give up their faith, their belief in an everlasting soul accompanied by an immortal memory of every soccer game their kids won, every moment they spent playing fetch with the dog. Nobody is going to mock you for your religious beliefs. Well, we might if you base your life decisions on the advice of a Ouija board; but if you want to believe that someday you’ll be seated at a celestial banquet with your long-dead father to your right and Jane Austen to your left-and that she’ll want to talk to you for another hundred million years or more—that’s your private reliquary, and we’re not here to jimmy the lock.

Consider the very different treatments accorded two questions presented to Cornell University’s “Ask an Astronomer” Web site. To the query, “Do most astronomers believe in God, based on the available evidence?” the astronomer Dave Rothstein replies that, in his opinion, “modern science leaves plenty of room for the existence of God . . . places where people who do believe in God can fit their beliefs in the scientific framework without creating any contradictions.” He cites the Big Bang as offering solace to those who want to believe in a Genesis equivalent and the probabilistic realms of quantum mechanics as raising the possibility of “God intervening every time a measurement occurs” before concluding that, ultimately, science can never prove or disprove the existence of a god, and religious belief doesn’t—and shouldn’t—”have anything to do with scientific reasoning.”

How much less velveteen is the response to the reader asking whether astronomers believe in astrology. “No, astronomers do not believe in astrology,” snarls Dave Kornreich. “It is considered to be a ludicrous scam. There is no evidence that it works, and plenty of evidence to the contrary.” Dr. Kornreich ends his dismissal with the assertion that in science “one does not need a reason not to believe in something.” Skepticism is “the default position” and “one requires proof if one is to be convinced of something’s existence.”

In other words, for horoscope fans, the burden of proof is entirely on them, the poor gullible gits; while for the multitudes who believe that, in one way or another, a divine intelligence guides the path of every leaping lepton, there is no demand for evidence, no skepticism to surmount, no need to worry. You, the religious believer, may well find subtle support for your faith in recent discoveries—that is, if you’re willing to upgrade your metaphors and definitions as the latest data demand, seek out new niches of ignorance or ambiguity to fill with the goose down of faith, and accept that, certain passages of the Old Testament notwithstanding, the world is very old, not everything in nature was made in a week, and (can you turn up the mike here, please?) Evolution Happens.

The difference in the way the Cornell site treats religion and astrology underscores the respect that religion gets in America compared to other systems of delusional thought. Astrology and homeopathy bad; resurrection and virgin births okay.

I believe this essay was first published in, of all places, The American Scholar, but I may be wrong. You may recall that it was Angier’s laudatory review of Sam Harris’s The End of Faith that marked the beginning of public acceptance of The New Atheism in the U. S.


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mcorcoran
3934 days ago
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Interesting excerpts...

Dr. Kornreich ends his dismissal with the assertion that in science “one does not need a reason not to believe in something.” Skepticism is “the default position” and “one requires proof if one is to be convinced of something’s existence.”
...

The difference in the way the Cornell site treats religion and astrology underscores the respect that religion gets in America compared to other systems of delusional thought. Astrology and homeopathy bad; resurrection and virgin births okay.
...

Here’s where the real conflict lies. This is a short excerpt from the best and funniest essay ever written on the incompatibility of science and religion: “My God problem,” by science writer Natalie Angier. In just a few pages she does more than anyone else ever has to puncture the pretensions of people like Nick Matzke, Kenneth Miller, Chris Mooney, the National Center for Science Education (NCSE), theAAAS’s DoSER program, and every accommodationist who pretends that there’s no conflict between science and faith.

I’ve recommended Angier’s essay before, but if you haven’t read it, go do so now (it’s on the Edge site).
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NEWS : The prisoners dilemma

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mcorcoran
3940 days ago
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