Annual Report 1996
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T.'I.B-27 - ANNUAL REPORT 1996 uiV~ TORONTO TRANSIT COMMISSION 1996 ANNUAL REPORT Toronto Transit Commission Chair Vice-Chair Paul Christie Howard Moscoe I l Commissioners Brian Harrison Slake Kinahan Case Ootes Joe Pantalone Alan Tonks Letter from the Chair DATE: June, 1997 TO: MR. ALAN TONKS, CHAIRMAN, AND COUNCILLORS OF THE MUNICIPALITY OF METROPOLITAN TORONTO (Metro) This 1996 Annual Report is presented on behalf of the Commissioners and employees of the Toronto Transit Commission (the "Commission"). The Commission began 1996 eager to chart a steady course for the future. Clearly, severe subsidy cuts and the tragic Russell Hill subway accident in 1995 had set exacting markers. At the heart of the matter was the need to secure government commitments to the $1.97 billion 1997-2001 Capital Program and to provide the Coroner's jury, enquiring into the subway accident, with a thorough and critical self-examination. A detailed, prioritized budget for the State of Good Repair /Safety program and the hiring of new, technically qualified management won the essential, five-year government funding. The Coroner's jury incorporated the 218-item Due Diligence Checklist into its recommendations. Indeed, this checklist has become a pillar in the Commission's plan to put the system into a state of good repair and safety. In addition, the Commission continued to renew itself ... • Commission employees rebuilt 200 six- and twelve-year old buses to "good as-new" status; as each is completed, it is returned to service; • 32 kilometres of streetcar overhead wire were replaced; • almost 45,000 feet of track were replaced, to maintain subway safety and rei iabi Iity; • new, clear lines of responsibility were established within senior operational management; ... to expand its services ... • buses equipped with lifts, for people who use wheelchairs, scooters or other mobility aids, were introduced on eleven routes; • elevators for easier access to the subway were installed at three stations: Union, BloorjYonge and Downsview; ... and to grow ... • the Spadina Subway Extension, 2.25 kilometres from Wilson Station to Downsview Station on Sheppard Avenue at Alien Road, opened for service on March 31, 1996; • the Exhibition Loop was opened in its new location in June 1996, to service Exhibition Place and the new National Trade Centre; and • construction continued on the Spadina Light Rail Transit (LRT), which will return streetcar service on Spadina Avenue after an absence of more than 30 years. And, finally, Metro reconfirmed its funding of the Sheppard Subway Line - Metro's first new subway line since the Spadina line opened in 1978. Construction on Sheppard is underway now. My sincere thanks go to Vice-Chair Howard Moscoe and Commissioners Blake Kinahan, Case Ootes, Joe Pantalone and to you for your commitment. In the past few days, our dear colleague, Metro Councillor and Commissioner Brian Harrison, has died. We are grateful for his sincere and valued contribution to this Commission and this community. He will be sorely missed. On behalf of all the Commissioners, I extend our thanks to the Commission management and employees for their efforts throughout a challenging year. Paul Christie Chair Rnancial Statements of TORONTO TRANSIT COMMISSION Year ended December 31, 1996 Deloitte& Touche METRO Allan G. Andrews C.A. · Metropolitan Auditor AUDITORS' REPORT April 3, 1997 except for Note 14, as to which the date is April 21, 1997 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, 1996 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, 1996 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 Metropolitan Auditor Toronto, Canada Toronto, Canada TORONTO TRANSIT COMMISSION . Balance Sheet December 31, 1996 1996 1995 ($000s) ASSETS Current assets Cash and short-term investments 14,164 17,274 Accounts receivable The Municipality of Metropolitan Toronto 94,343 90,769 Other 7,746 9,693 Inventories 38,864 32,767 Working funds and prepaid expenses 5,188 4,127 160,305 154,630 Long-term assets Investment in subsidiary (note 6) 13,677 18,994 Net capital assets (note 7) 107,560 108,484 281,542 282,108 LIABILITIES AND EQUITY Current liabilities Accounts payable and accrued liabilities 154,066 148,909 Deferred passenger revenue 23,810 27,310 Unsettled accident claims (note 9) 10,800 11,600 Employee benefits 6,375 7,000 195,051 194,819 Long-term liabilities Employee benefits 38,450 29,410 Unsettled accident claims (note 9) 21,600 19,200 Other 7,689 13,494 262,790 256,923 Accumulated equity 18,752 25,185 281,542 282,108 Commissioner TORONTO TRANSIT COMMISSION Statement of Operations and Accumulated Equity Year ended December 31, 1996 1996 1995 ($000s) Conventional Transit System REVENUE Passenger services 491,433 435,027 Property rental 11,215 10,785 Advertising 7,368 6,789 Miscellaneous 4,771 4,653 Total revenue 514,787 457,254 EXPENSES Wages, salaries and benefits 520,221 515,007 Materials, services and supplies 82,942 69,615 Vehicle fuel 22,705 24,242 Electric traction power 22,878 23,833 Accident claims 12,979 16,396 Depreciation 12,877 13,462 Property taxes 9,388 9,283 Total expenses 683,990 671,838 Net operating costs before write-down 169,203 214,584 Write-down of advances to subsidiary (note 6) 6,433 Net operating costs 175,636 214 584 Wheel-Trans System REVENUE Passenger services 1,615 1,312 EXPENSES Wages, salaries and benefits 25,523 25,599 Materials, services and supplies 6,758 4,799 Contract services 5,912 7,007 Vehicle fuel 1,236 1,190 Accident claims (195) 249 Total expenses 39,234 38,844 Net operating costs 37,619 37,532 Total net operating costs 213,255 252,116 Operating subsidies (note 4) 206,822 252,116 Net operating deficit 6,433 Accumulated equity, beginning of year 25,185 25,185 Accumulated equity, end of year 18,752 25,185 TORONTO TRANSIT COMMISSION . Statement of Changes in Financial Position Year ended December 31 , 1 996 1996 1995 ($000s) CASH (USED IN) GENERATED BY OPERATIONS Total net operating costs (213,255) (252, 116) Items not affecting cash and short-term investments: Depreciation 12,877 13,462 Unsettled accident claims 2,400 4,300 Long-term employee benefits 9,040 960 Other long-term liabilities (5,805) 4,215 Accrued interest on advances to subsidiary (1,116) (1 ,427) Write-down of advances to subsidiary 6,433 (189,426) 230,606 Changes in non-cash operating working capital (8,554) (9,803) (197,980) (240,409) CASH (USED IN) INVESTMENT ACTIVITIES Capital asset acquisitions (net of disposals) (329,055) (219,019) CASH GENERATED BY (USED IN) FINANCING ACTIVITIES Operating subsidies: Conventional transit system 169,203 214,584 Wheel-Trans system 37,619 37,532 Capital subsidies 317,103 210,480 Debenture debt repayment (1,272) 523,925 461,324 {Decrease) Increase in cash and short-term investments during year {3,110) 1,896 Cash and short-term investments, beginning of year 17,274 15,378 Cash and short-term investments, end of year 14,164 17,274 TORONTO TRANSIT COMMISSION Notes to Rnancial Statements Year ended December 31, 1996 :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 Wheei-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. These financial statements include the operations of Toronto Transit Consultants Limited ("TTCL"). However, they do not include the operations of Metropolitan Toronto Coach Terminal Inc. ("MTCTI" -note 6) and its subsidiary, TTC Insurance Company Limited (the "Insurance eo."- note 9). Rnancial statements for these entities are published separately. 2. SIGNIRCANT ACCOUNTING POLICIES The accounting policies followed in the preparation of the financial statements for the Commission are in accordance with generally accepted accounting principles and have been applied consistently. The significant accounting policies are outlined below. (a} Management's Estimates The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (b) Passenger Revenue Revenue is recognized when cash, tickets and tokens are used by the passenger.