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1997 Annual Report

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1997 Annual Report T-1-8- 28 1997 TORONTO TRANSIT COMMISSION 1997 ANNUAL REPORT Toronto Transit Commission Chair Vice-Chair Paul Christie Howard Moscoe Commissioners Shirley Eidt Slake Kinahan Case Ootes Joe Pantalone Alan Tanks Letter from the Chair DATE: June, 1998 TO: MR. MEL LASTMAN, MAYOR, AND COUNCILLORS OF THE CITY OF TORONTO lt is with great pleasure and with pride that I present this 1 997 Annual Report on behalf of the Commissioners and employees of the Toronto Transit Commission ("TTC"). This report describes a year full of important achievements, not the least of which is an increase in ridership, for the first time in six years. At the same time, I recognize that this Commission, the last under the banner of The Municipality of Metropolitan Toronto ("Metro"), can take pride in handing over a service-oriented, productive and fiscally trim TTC to the new Commission, convened under the new City of Toronto. let me list a few of the TTC's 1997 accomplishments: • ridership was 379.9 million, 9.8 million over budget and 7.5 million over 1996; • more than 80 per cent of TTC's operating budget was funded from the farebox, a significant increase from the 65.7 per cent recorded just four years earlier; • TTC Transit Security Investigators were granted Special Constable status, permitting them to arrest, search and release persons suspected of criminal acts on TTC property; • access became easier, as elevators were added to Queen and St.George stations; and • 162 six- and twelve-year-old buses were rebuilt in the TTC's own facilities; the rebuilding of 18-year-old buses began, with 13 compieted. Delivery of 50 low-floor Orion VI buses began at the end of the year. Orders were placed for 52 RTS lift buses and 52 New Flyer low-floor buses, with .. deliveries beginning in 1 998 and continuing into 1999. A single Nova low-floor bus was received for testing. The fleet of newT-1 subway cars increased to 80, while the first H-1 cars were retired after more than 30 years of service. Growth and renewal also continued in 1997, as the Sheppard Subway twin tunnel boring machines, named "Rock" and "Roll" in a community contest, began burrowing towards Yonge Street. The Spadina Streetcar line was opened in a great neighbourhood celebration along the length of the street. As the theme of the day stated, Spadina is "A Grand Avenue Renewed". The backbone of the TTC continues to be its maintenance of a state of good repair. To this end, the $68.8 million Greenwood Yard project, completed and opened in the fall, was a milestone. lt houses additional work pits and car hoists, a new electrical substation to supply traction power for the Yard, and expanded facilities for the overhaul and repair of trains. My sincere thanks go to Vice-Chair Howard Moscoe and Commissioners Blake Kinahan, Case Cotes, Joe Pantalone and Metro Chairman Alan Tonks for their dedication to the betterment of public transit in this community. My special thanks go to Commissioner Shirley Eidt, who joined the Commission upon the death of our respected colleague Brian Harrison. Serving as the Chair of the TTC has been an enormous honour. The TTC is one of the defining institutions of our megacity. As we embark upon a new era in municipal governance, the importance of the Commission's services to our collective well-being should not be understated. On behalf of us all, I welcome the new Commissioners and, as they make the transition from Metro to the City of Toronto, I wish them every success. Paul Christie Chair • Financial Statements of TORONTO TRANSIT COMMISSION Year ended December 31, 1997 ... Deloitte& Touche METRO Jeffrey Griffiths, C.A Acting Metropolitan Auditor AUDITORS' REPORT April 2, 1998 To the Chair and Members of the Toronto Transit Commission We have audited the balance sheet of the Toronto Transit Commission as at December 31, 1997 and the statements of operations and accumulated equity and of changes in financial position for the year then ended. These financial statements are the responsibility of the Commission's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these financial statements present fairly, in all material respects, the financial position of the Commission as at December 31, 1997 and the results of its operations and the changes in its financial position for the year then ended in accordance with generally accepted accounting principles. Chartered Accountants Acting Metropolitan Auditor Toronto, Canada Toronto, Canada TORONTO TRANSIT COMMISSION Balance Sheet December 31 1 997 1997 1996 ($000s) ASSETS Current Cash and short-term investments 8,676 14,164 Accounts receivable The Municipality of Metropolitan Toronto 112,557 94,343 Other 14,070 7,746 Spare parts and supplies inventory 44,678 38,864 Working funds and prepaid expenses 5,234 5,188 185,215 160,305 Long-term Investment in subsidiary (note 6) 14,653 13,677 Net capital assets {note 7) 107,200 107,560 307 068 281 542 LIABILITIES AND EQUITY Current Accounts payable and accrued liabilities 157,450 154,066 Deferred passenger revenue 21,090 23,810 Unsettled accident claims (note 8) 10,000 10,800 Employee benefits (note 1 0) 7,285 6,375 195,825 195,051 Long-term Employee benefits (note 1 0) 47,225 38,450 Unsettled accident claims (note 8) 23,200 21,600 Other 7,237 7,689 273,487 262,790 ... Accumulated equity 33,581 18,752 307,068 281 542 TORONTO TRANSIT COMMISSION Statement of Operations and Accumulated Equity Year ended December 31, 1997 1997 1996 ($000s) Conventional Transit System REVENUE Passenger services 528,703 491,433 Property rental 19,990 11 ,215 Advertising 8,002 7,368 Miscellaneous 2,707 4,771 Total revenue 559,402 514,787 EXPENSES Wages, salaries and benefits 522,660 520,221 Materials, services and supplies 97,592 82,942 Vehicle fuel 23,342 22,705 Electric traction power 23,224 22,878 Accident claims 13,032 12,979 Depreciation 14,683 12,877 Property taxes 8,949 9,388 Total expenses 703,482 683,990 Net operating costs before write-down 144,080 169,203 Write-down of advances to subsidiary (note 6) 6,433 Net operating costs 144,080 175,636 Wheel-Trans System REVENUE Passenger services 1,697 1,615 EXPENSES Wages, salaries and benefits 23,790 25,523 Materials, services and supplies 6,168 6,758 Contract services 5,557 5,912 Vehicle fuel 1,284 1,236 Accident claims 23 (195) Total expenses 36,822 39,234 Net operating costs 35,125 37,619 Total net operating costs 179,205 213,255 Operating subsidies (note 4) 194,034 206,822 Net operating surplus (deficit) 14,829 (6,433) Accumulated equity, beginning of year 18,752 25,185 Accumulated equity, end of year 33,581 18,752 TORONTO TRANSIT COMMISSION Statement of Changes in Financial Position Year ended December 31, 1997 1997 1996 ($000s) CASH (USED IN) GENERATED BY OPERATIONS Total net operating costs (179,205) (213,255) Items not affecting cash and short-term investments: Depreciation 14,683 12,877 .. Unsettled accident claims 1,600 2,400 Long-term employee benefits 8,775 9,040 Other long-term liabilities (452) (5,805) Accrued interest on advances to subsidiary (941) (1,116) Write-down of advances to subsidiary 6,433 (155,540) (189,426) Changes in non-cash operating working capital (29,659) (8,554) (185,199) (197,980) CASH (USED IN) INVESTMENT ACTIVITIES Capital asset acquisitions (net of disposals) (379,240) (329,055) CASH GENERATED BY FINANCING ACTIVITIES Operating subsidies: Conventional transit system 158,909 169,203 Wheel-Trans system 35,125 37,619 Capital subsidies 364,917 317,103 558,951 523,925 Decrease in cash and short-term investments (5,488) (3,110) during year Cash and short-term investments, beginning of year 14,164 17,274 Cash and short-term investments, end of year 8,676 14,164 TORONTO TRANSIT COMMISSION Notes to Financial Statements Year ended December 31, 1997 1 . NATURE OF OPERATIONS The Toronto Transit Commission (the "Commission") was established on January 1, 1954 to provide conventional transit service for the municipalities comprising The Municipality of Metropolitan Toronto ("Metro"). The Commission is dependent on Metro and the Province of Ontario (the "Province") for both operating and capital subsidies. The Commission also operates Wheel-Trans, a transit service for people with disabilities, which is also subsidized by Metro and the Province (notes 4 and 5). The Commission is not subject to income and capital taxes and receives exemption from certain property taxes. The following notes relate to the year ended December 31, 1997 and continue to refer to The Municipality of Metropolitan Toronto and Metro, although the new City of Toronto came into being subsequent to year end (see note 12(a)). 2. SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation These financial statements are prepared in accordance with generally accepted accounting principles and include the accounts of the Commission and its subsidiary, Toronto Transit Consultants Limited ("TTCL"). However, they do not include the operations of its subsidiary, Metropolitan Toronto Coach Terminal Inc.
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