There seems to be a consensus that somehow the authority that is responsible for our transit system (among other things) is somehow out of control, a bloated behemoth that flings money around in wild abandon. That all it needs is an accountant with a sharper pencil and somehow all will be well again. It is of course largely nonsense – and politically motivated nonsense at that. Transit in BC – actually in North America in general – has for long been a whipping boy, a favourite target of right wing pundits who see expenditures on public services as wasteful and unnecessary. The discussion is always about “taxpayer’s money” and how it is being wasted on unnecessary things.
A very unpopular right wing government has decided to deflect some of the animosity it is feeling against a popular target – in the hopes that by NOT making a decision it will be relieved of responsibility. The Minister of Transport has told the Mayors that they cannot have any new source of revenue until they find one that is popular and not until after the ministry’s bean counters have trolled through the books. As a sop to their self esteem he throws them the bone of a couple of seats on Tanslink’s board. That announcement comes on the same day that Martin Crilly (the Translink Commissioner) announces that he is not going to approve the fare increase – or at least not that part of it that he can say no to, which means there will be some fare increase, just not as much as Translink asked for. And to back that up he produces a report written by Shirocca Consultants in the last three months that seems to have identified significant savings in the way Translink does things.
This all came out this morning – and already people are pronouncing upon it. Councillor Geoff Megs was first out of the gate, with predictions of service cuts and possible labour strife. Translink has its response ready, of course, saying that it does not have to cut service (for now) and that it thinks the report says it is a well run organization and at least as good as the others it was compared to. Indeed it seems to welcome the criticism from Crilly’s consultants as the sort of thing it was looking at already. No turmoil here!
The consultants report is long and very detailed – but you can get the entire 104 page pdf file to read yourself. Who are Shirocca Consulting? I must admit that name was new to me, but its principal wasn’t: Teresa Watts – her name appears on the later Memo on Cost Savings. She was a former employee of BC Transit and its predecessors – and worked for various consultants, mostly notably on the Millennium Line project. She is also married to Glen Leicester, former VP of Planning at Translink – (just in case you might think I have an axe to grind) my last boss at Translink. He also turns up in Google searches speaking to other agencies who have employed Shirocca. Although his name is not on the “Efficiency Review” his fingerprints are all over it. In one sense it does make sense for Crilly to employ people who know their way around Translink and the somewhat arcane field of comparative transit statistics. Because much of the report relies on the data (performance indicators) that CUTA collects (and Leicester himself used to provide) from transit agencies in order that their performance may be compared. The bulk of the report is built around these statistical comparisons – and the reasons why Vancouver might be somewhat different to other agencies.
There are some things that I found quite notable. But the most obvious are the things that are not examined. Translink is an agency with an unusually broad reach – but there is hardly anything said about the Major Road Network. The Golden Ears Bridge and its disappointing record of toll revenues being the exception. But even here it is dismissed as “beyond the agency’s control”. No other transit agency in Canada has such responsibilities – and in the case of GEB arose from a decision by the province to download the Albion free ferry. Translink decided that it should replace the ferry with a toll bridge – mostly because it could. It was supposed to have been financed privately and would therefore not require taxpayer support, or approval since it was a new facility and thus fitted within the very limited straight jacket of provincial policy. Except the revenue risk was not transferred to the builder/operator. Nor was it on the other notable P3 – the Canada Line. While bus operations are the largest element of transit expenditures (~$600m) rail accounts for about a third of that (~$200m) [Table 3-1] yet the report is silent on SkyTrain, the Canada Line and West Coast Express. Most of the attention is directed at CMBC, though it must also be said that HandyDART comes in for some stinging rebukes.
The major restructuring of TransLink’s custom transit program in 2008 has resulted in cost increases (70.4%) far in excess of the rate of service expansion (14.3%) and inflation.
The restructuring and consolidation of custom transit into a single regional operator in 2009 has not yet resulted in expected cost efficiencies or improvements in service effectiveness. Instead, slippage has occurred. The public subsidy per passenger carried in 2010 exceeded $30.00.
HandyDART is one of the few components of the bus service that is contracted out. The other was supposed to be Community Shuttle
No new contacted operators have entered the field since 2002 and virtually all new service has gone to CMBC on a first right of refusal basis. If the role of the private sector was to keep growth in costs at the public providers in check, this has had mixed success.
You may recall that the right to contract out service was the casus belli of the last transit strike. Translink won – it has the ability to contract out in its legislation – yet has decided on the whole not to use that, possibly as a way to preserve peace with the bus operators’ union.
Given all of that, it is a bit surprising to read in the conclusions
The transit industry is inherently expensive and complex. It is both labour and capital intensive as well as highly unionized. In much of the western world, it operates within a government financed environment, generally absent of market forces that compel efficiency and productivity for economic survival, where the only external pressure is the availability of funding.
But the bits that were supposed to be exposed to market forces – the competitive tendering process for the Canada Line, The Golden Ears Bridge, HandyDART and even the odd Community Shuttle – seem to perform worse than the rest. Indeed the experience in the “western world” with transit privatization has been generally negative, and quite contrary to what its proposers originally claimed as its benefits.
The Review does of course follow the restrictions that were imposed on it by the Commissioner. He knew what he wanted, and that did not include diatribes on issues that were beyond recall. He wasn’t going to be able to open up the Canada Line contracts, for instance. Not much point rehashing why West Coast Express is expensive (which actually got as far as a parliamentary bill which died with the last federal Liberal government). So the conclusion might well have been written before the analysis
Compared to Canadian peers, TransLink exhibits an abundance of equipment and staffing levels that help to explain its generally higher costs and lower cost efficiency and effectiveness than most of the peers, even after taking into account the challenges of its large service area. Internal trends reflect increasing costs and declining productivity in both labour and equipment utilization as well as high overhead. Internal change in how service is delivered has not kept pace with external changes in customer demand and rail system expansion as well as technological advances in vehicles and equipment.
Given these trends, it is important that TransLink ensures that every dollar spent gets maximum value. To do so, it should tighten budgets to encourage fiscal tension and discipline in how it delivers its services. It needs to become more cost focused by placing higher priority on frugality and productivity in its decision-making criteria.
So the analysis is not so much what Translink does, as how its performance indicators look against those of some other Canadian systems. That also means that the consultant did not have to identify what Translink needs to do exactly, simply where there are differences in the cost and efficiency measures is where attention has to be directed. By the way, one of the reasons for the “abundance of equipment” is the failure to find funding for its operation. These buses could have been on the road relieving over crowding or even opening up[ new routes south of the Fraser, but for the impasse on sources of operating money.
Given the length of the report, it is only possible at present to pick out one or two recommendations for cost savings for comment. There will probably be more later. The one that Geof Meggs saw as problematic is on page 87 under what can be done to improve efficiency of bus service in the longer term
Restrictive and costly work rules, allowances and premiums that drive up costs should be reviewed with the goal of improving productivity. Some of these need to be modernized to better reflect the markets served by the bus system.
The one the report uses as an example is the premium on wages for working on Sunday. The rule book for the bus service is one of the largest documents I ever came across at Translink. It is one of the most difficult to understand, for an outsider, and has been steadily getting more complex over the years. In part this is due to the seniority system, which allows operators to chose their own work schedules, with first dibs going to those with the most service. A small group of very senior operators are on the “spare board” which means they have much paid time at the operating centre with very little to do. They also tend to be the people who get elected to union positions, and so spend much time discussing work rules. Over the years, a management that has been largely conciliatory in its approach to labour relations has resulted in a rule book that is not just hard to comprehend but nearly impossible to change in the direction that Crilly is pointing to.
In the developing parts of the region, where conventional bus service is less efficient and effective but demands for new and expanded service are the greatest, TransLink may need to consider changing how it organizes and/or delivers bus services.
Well that is a lot easier said than done. “May need to consider” avoids the need to come up with explicit proposals as to what such services might look like. I think they probably mean more contracting out – but like I said above, the record there has been pretty dismal – and not just in the Vancouver region.
When it comes to HandyDART the first short term recommendation is possibly the weakest
TransLink makes the lowest use of non-dedicated vehicles amongst the peer comparison group. Increasing the use of non-dedicated vehicles, such as taxis, could be done relatively quickly and would offer cost savings. While it is acknowledged there maybe concerns over service quality, these can be managed.
Taxis cannot actually be introduced quickly or cheaply. That is because of a provincial regulatory system that has been completely taken over by the taxi industry. The Vancouver region – like the rest of BC -is severely underserved by taxis. Every review that has been done has pointed to the lack of taxis here compared to almost everywhere else. The value of a taxi license (which is not what the City charges for them) is astronomical because of the artificially maintained shortage. The rewards for taxi drivers are very low indeed as all the benefits of the shortage of licences accrue to those who currently hold them. Wages and conditions are abysmal, and thus the training and customer service provided is low. People with disabilities who often have to rely on taxis have grave reservations about using the system as it is. But even a small increase in demand transferred from shared dial a ride to taxis would create pressure for more licence which are very unlikely to be issued, under the present system. “Concerns over service quality” are far too easily dismissed. For instance, if you are blind and rely on a guide dog, how do you feel when left standing at the curb by cab drivers who have a cultural aversion to dogs as “dirty”?
Given that Leicester and Watts both have a lot of familiarity with this territory, I rather think that this “Review of Efficiency” produced within three months is going to be be more thorough and understand the system better than an audit by civil servants from Victoria – who may well have to fit in this audit with other demands. I do not share the enthusiasm for audits, if only because so many successful fraudsters once caught show that they were able to get through many audits unscathed. It is not that there is a great crime hidden at Translink to be found anyway. Merely the accretion of a long run of decisions, often forced upon the organization by an unsympathetic and poorly understanding set of political masters who change with bewildering frequency and are never around to be held accountable for the results of their actions.
We know now that things will continue as they are – with very little change – until after the next provincial election. Which is the only horizon the Minister and Premier have in view. And after that it will be someone else’s problem.
POSTSCRIPT Well worth looking at what Gordon Price has been saying on this issue
I wonder whether Martin Crilly, the TransLink Commissioner, really understood what he was doing when he turned down the fare request on which the ‘Moving Forward’ supplement was based. It’s not just that he killed the momentum for transit expansion in the fastest-growing parts of Metro. What with the opening of massive new highway projects and the Port Mann Bridge, those municipalities to the south and east will be forced to lock themselves further into car dependence, having little hope that growth will be accompanied by other transportation options.
That’s not just sad. That’s tragic.