January 13, 2005 Report

McCarthy : ".we were talking at transportation meetings in Flamborough that we would be negotiating, that the staff would negotiate with Burlington and our HSR on providing some transportation to the Flamborough area. I know that you're talking about increased service 2005, but I just wondered how those talks are progressing." Hull : ".No discussions have started as of yet, although that commitment I'd have to defer to Scott [Stewart] on that." Stewart : "I think we picked up some of those conversations through the city-wide transportation that links into Waterdown. And again, we're looking at, if you were to get into transit, what transit. Would it be Burlington transit, would it be City of Hamilton transit? So where are the commuters going and that will all come back with the transportation study." McCarthy : .because the GO station is right in Aldershot , there's a big demand during peak times to .get down to the GO station. And I was wondering, since we're talking gas tax and things like that, if there's some flexibility. Could you bring it back for possibly this budget. I know you anticipated for 2005. But I would like to see some movement in this project for some kind of service." Hull : ". the one thing that I should draw your attention to is that with transit being area-rated, you'd be aware that that entire cost would be added to the levy in Flamborough." McCarthy : "Yes, I'd like some discussions from the Burlington transit to see what the added costs would be - them versus us." Stewart : ".as part of the transportation study that's taking place, Burlington is at the table as is Halton as is Hamilton . Part of the issue, as much as we'd like to move, and you made that link between Waterdown and Aldershot, now we get into escarpment crossing issues, and as you know, none of those roads, Highway 6 aside, would be conducive to any kind of transit movement. So we're reviewing it with Burlington . I think it would likely be premature for 2005 because you have to get over the whole how do you move the bodies ." Hull : "To end on a positive note, councillor, in terms of application of gas tax, although the rules are an evolving document and will tighten up over time, I can say with almost certainty that this gross initiative would be a gas tax initiative because of my awareness that the province is very keen on interconnecting the municipalities in the GTA and Hamilton, so I would see that being very well received by the province with respect to their portion of the funding under gas tax." McCarthy : "That would be good news for us.".

Ferguson : "What would this page [budget] look like without the provincial gas tax money?" Hull : "Without the provincial gas tax, our initial budget,just three lines alone, fuel, insurance and compensation would have had our budget at about an 11% increase. I think our budget was at about an 11% increase before consideration of gas tax." Ferguson : "So of the 4.362 how much of that is provincial gas tax?" Hull : "Actually, I had forgotten that line, sir. Appreciate it you bringing it to my attention. That $4.3 million is made up of $2.6 million for the service enhancement is represented. And that would come in entirely through gas tax money. And then there's the $1.47 million which we referred to in the gas tax report as our stabilization investment. And then we, as a result of ridership growth, we've budgetted for an additional $215,000 in additional fare revenue through the fare boxes in the HSR programme and $47,000 through increased revenue in the DARTS program. So the bulk, majority of that revenue would be derived from gas tax."

Ferguson : "Advertising revenues. is that still soft? Hull : "Advertising revenues: we renewed both contracts last year and the city issued an RFP. Both contracts expired - the shelter contract and the bus advertising contract. They were previously in the order of magnitude of a million dollars with a bonus clause for each contract. They renewed at, I believe, it's $300,000 minimum annual guarantee for the bus advertising contract, and $275,000 for the bus shelter contract. Both have a bonusing provision so that should the advertising market recover, we would share in that recovery. So I think what's budgetted in our 2005 budget is a total of $575,000 in mimimum guaranteed revenues before any bonusing options." [ 1:43 ] Ferguson : ".so compared to two years ago, advertising revenue is half of what it was?" Hull : "Yes. It's a soft market worldwide ever since 9/11. It is showing signs of recovery. In fact the contractors were complaining early in the contract renewal that they wanted to revisit the contract and we would not revisit the contract at the time. They both claimed that they were losing money on the contracts. But I can advise that at a snapshot in time at this point in time they appear to be in at least sufficient recovery that they've covered their costs through our minimum guarantees."

Collins : "I'm looking in the operating budget, page 213 in the budget book, I think it's the same slide that's up here. The vehicle expenses of 8%, the $732,000 - I'm looking back at the 03 budget and maybe the 02 budget. What's that trend been in regards to vehicle expenses?" Hull : "That's almost entirely fuels. It's fuels, lubricants, anything organic compounds. Oils, lubs, fuel, almost entirely fuel." Collins : "Don, has that number changed every year based on your fuel, the actual" Hull : ".changes every year. So that would be to provide the same level of service in 2005 that we did in 2004. That is 100% attributable to increased costs of fuels and lubricants." Collins : "And the contractual $394,000. Can I get that again?" Hull : "That's within a few dollars attributable to the DARTS contract increase. Their drivers being the same as the HSR drivers - insurance, fuel, compensation, energy.the four main drivers." Collins : ".how many variances do we have in the organization within that division?" Hull : "We're anticipating a year end variance .of a little over $100,000 for a year end negative variance" [Another staff person offers Hull a correction] Oh yes, the combined variance would be $300,000. The HSR variance is coming in at $127,000 [more advice off mic] Oh yes the complete settlement - and the balance would be in the DARTS program overrun. Sorry, I neglected the DARTS overrun."

Collins : "Vacancies last year, how many would you have had?" Hull : "We have three and all are in the process of being filled right now. One is a senior project manager, business applications, and that goes directly to a presentation that staff made a week or so ago on the internal audit findings. One of the antiquated software packages that we have is in our fare and revenue section. It's many years beyond it's expected life. And this position is to take stewardship of all of our applications software and to ensure an orderly change to the software because some of it in its current state certainly places the organization at some risk in terms of the services we deliver. The second is the supervisor of our fare and revenue division was recently vacated. The individual moved onto the city of Brampton , and the third position is a buyer position which goes to councillor Whitehead's question and that position would be to focus on the $5 million in inventory we turn over every year. That would be a dedicated position to (a) to analysis on all the fleet operations, and (b) to manage our parts acquisition in the most cost-effective manner."

Collins : "How long does it take to fill those three positions, Don? When did you post those positions?" Hull : "They were posted in the latter part of 2004." Collins : "September, October?" Hull : "September, October, yes." Collins : "And when do you expect to have those filled?" Hull : "We did the first round of interviewing just before Christmas for the senior project manager, business applications. The supervisor fare and revenue left just before Christmas. That's just been submitted for request to fill the vacancy, for approval to fill the vacancy. And the buyer position is presently under review. We've met with the workforce, and the workforce would like us to look at an alternative to filling that position. Perhaps filling the position internally as opposed to filling it corporately, so we're in discussions with the inventory group in the garage on that particular job." Collins : ".how long does it take for you to fill positions from the time you post it to the time the position is filled?" Hull : "Well certainly that turnaround time has extended in the past year . I guess three months, four months into filling the senior project manager position. And we're probably a month away from a final decision, so 5 to 6 months wouldn't be unrealistic." Collins : "And even for drivers?" Hull : "Operators moves along a little quicker because we have a blanket approval to hire bus operators. So we're in a constant hiring, and we have been since 1999 we've been hiring bus operators at the capacity of the school. And have had an attrition rate I think in the order of about 140 operators since 1999. So the school has been operating non-stop. We've been hiring at full capacity ever since about 1999. A little different arrangement when it comes to bus operators."

Braden asks about bulk fuel purchases, and whether the price is fixed for a whole year. Hull says they purchase internally from Central Fleet and refers question to John Mater who explains price is set and changes from month to month based on the price of crude oil. Braden : "For areas like mine that I don't think in my lifetime are going to have public transportation, is the city interested in looking at a sort of a hybrid model. South of the Mexican border.they have something that in English I think we call 'public cars'. So on your way to work, you have a licence in your car so you can pick up people and charge them like a quarter, if you don't deviate from your normal route. So it provides a form of transportation, the city doesn't pay a nickel for, but the city controls. And it gets cars off the road and it gets people to work or to wherever they're going. Do we have an opinion on either promoting that, or discouraging it." Hull : "I can give you a little bit of information. I know that the city is partnering with some western GTA municipalities and it's spear-headed by Gerry's group in capital planning, and they're operating under a federal showcase grant, and the initiative is called transportation demand management to look at just those kind of things, like a jitney, and carpooling and those kinds of initiatives. The other is the study that was conducted a couple of years ago on should we reintroduce public transit in any form back into Flamborough, that the consultant recommended at the time that it be a hybrid of conventional transit and DARTS transit, so this service would carry both clients on a single service."

Braden : "I don't mean to push the point, but in the meantime, if I or anybody else was to offer this service, is the city going to come after me?" [ 1:53 ] Hull : "In the city's official plan, the city has sole operating authority of public transit, with the exception of school busing, and the city is free at any time to broaden that to include any operator the city feels might be of benefit to the city. Obviously the plan is written . to exclude operators from coming in and essentially scooping the profit runs and leaving the city with the deficit runs. So as long as it were an overall better benefit to the city, then it may well be a viable initiative." Braden : "The premise is to serve the area outside the area being serviced, so it can't do any scooping because there's nothing " Hull : "Well if you're outside the council's defined urban transit area, by all means. The city has no jurisdiction or interest from my way of thinking outside of the defined urban transit area."

Whitehead : Purchase of fuel - cost saving by bulk purchases? Staff: Already bulk purchase, can't get much additional savings. Whitehead : "So that rules out central fuel depots for serving municipalities." Is fleet using biodiesel? Hull says not available at this time. Whitehead suggests doing research so HSR could use this in future perhaps produced in Hamilton . Hull : ".council's policy is still for the HSR to purchase low-floor natural gas buses. We did get exception as you know for 2004 and 2005. I have an increasing belief that the technology we'll be purchasing, most of the country will be purchasing in 2006 and beyond, will probably be a hybrid technology . diesel hybrid we've already done some of the research. It appears that even under the diesel hybrid model, the diesel could handle a very low concentration of biodiesel. So you could end up potentially . hybrid, diesel, supplemented with some biodiesel." Chris (staff) notes further info on use of biodiesel is available in recent literature.

Hull goes on with presentation of capital budget summary - $4.7 million fully funded from reserves or gas tax money ".all of the expansion of the fleet would come from gas tax monies.. Service level standards . foundation of building the budget. . There is an opportunity here for council to consider increases in the transit service level, so it seems an opportune time to bring our service level standards forward to council. . The population of Hamilton has been increasing, but service levels have remained relatively constant. Ridership has been growing modestly, and available capacity - we have had the available capacity to absorb much of the increase. However in some key areas of the city demand regularly exceeds supply and it's starting to manifest itself in the form of a negative image on the community. The announcement of the gas tax subsidy introduces for the first time to consider service level improvements to respond to those hot spots in the system. . mission statement . connects directly to our annual customer satisfaction survey. . we are through the eyes of the public meeting our mission statement. . performance measures . services. Trans-cab in Stoney Creek , and Trans-Link up in Glanbrook is a modified version. It's a flexible route service operated out in Dundas . We still do charters. We do a lot of school extras. We have a beeline express in the corridor between Eastgate and McMaster . Accessible Transit System (ATS) is made up of the DARTS program, the Taxi-scrip program and accessible low-floor buses . presently the city's fleet is at about 60% low floor, and on the current plan we would be fully low-floor within about 6 to 8 years ." Service area slide "where the HSR serves only the lighter blue area, and those boundaries as a result of the amalgamation bill in 2001 are set by council on an annual basis. So in terms of our service level report, it's a good practice to periodically review these policies . the particular policy we're here to talk about today is the service standards policy - it's more of a guideline than a policy . and the reason for it being here today is a number of things have changed in our environment - most notably amalgamation, and the introduction of provincial gas tax, and continued growth south of Rymal Road, economic development and the hope to expand transit services to both the airport and downtown to waterfront, any change to the area-rating formula, rapidly growing demand for specialized transit services, and most recently, council's consideration of the transportation master plan. The second column indicates some of the key policies that governs the deliverance of the transit program and we simply highlighted - I won't go through the list, but you can see the service levels standards on the top of the list. And then if you further break down the service level standards into the components of that policy or standard, the two key components are how long does the bus run and how often does it run when it's out there. So frequency and duration are the two key components of a service level standard."

Whitehead : ".you always get several calls in a year that is disgusted that they see the buses running empty. I know that on our major . you run those buses so that you have reliability. I can appreciate that. I see sort of primary relatively and then I see secondary runs in my own mind. Is that how you define .?" Hull : "Well the empty bus syndrome is worth a couple of comments. Most often the empty bus syndrome will surface near the end of the line where the bus should be empty. On the way out it's picking up and dropping off, and by the time it gets to the end of the line, it should be empty. When it leaves the end of the line, for a period of time it will have very few passengers on it, as it picks up and drops off more people. So the geographic location of where you experience the empty bus syndrome is absolutely crucial. The other is that - and I'll get into it in more detail later in the report - is the distribution of the city of Hamilton services. The city of Hamilton has historically taken a very social view in terms of the distribution of its service hours for public transit, and you'll see through future slides here that we have a tendency to have more base period service on, and more harmonized service, as opposed to a large peak and a modest base. And that's to serve more of the social demographic that's here in Hamilton, predominantly seniors. . So ridership will be lighter in the off peak, and there will be some empty bus syndrome in the off peak, in the early morning and the late evening. But those are there because of the social decisions that council has made over the years with respect to transit. I can assure you that there are no trips out there with no one riding. Those trips have long since been taken out of the system."

Whitehead : "Maybe I'll, in terms of something more specific we can deal with collectively and that's runs in my particular ward. There was a frequency, and I'm not getting into the . frequency of trips, the loaded buses versus the empty buses . trips, not leaving or coming, where there's actually one person on the bus - so are we suggesting those are social decisions?" Hull : "Well we take counts twice a year. We take both on board and on-off load counts, and we take what's called cordon counts. And the cordon count really amounts to someone standing at a street corner trying to estimate the number of people on a bus as the bus passes. The other is the on-off count where they simply ride a full trip and they count everybody that gets on and everybody that gets off. And we do the entire system when we do that, so we have a lot of data with respect to who'se riding the system and when, at what times. And yes, its very definitely in the very late evening we may have round trips with load counts as few as five people. But I think what we have to look at is council would have to consider on the flip side of that equation is the consequence of not having that trip. If the individuals on board that bus are people working minimum wage jobs who if in the absence of transit can't afford to take a cab and can't afford to drive a car, they will default to the social services system which is a much more expensive alternative than keeping that trip out there. Even though you have to cope with that empty bus syndrome."

Whitehead : "But you would agree that the bulk of transit is not a taxi system, meaning that we, understanding the public transit schedule, should perhaps change where we can - there are examples like workers and their schedule - our schedules to try as well, I mean intermeshing the balance, to set the timing" Hull : "There's always changes going on." Whitehead : "individuals shifting their schedules to accommodate those particular schedules. Otherwise you could end up having. If you try to please every individual, you can have buses running 50 times a day with 2 or 3 people on them." Hull : "It's often the case that we'll solve a problem over here only to have it surface over here, but we get constant feedback from the operators, and we're doing subtle changes all the time. A factory will change its open and closing hours, a school will change its dismissal hours, and we'll respond to that accordingly." Whitehead : "So we are talking budgets here, so I'm trying to understand then, acknowleding that there's social issues, in respect to, we're not trying to run public transit at a profit, no one questions that, but we try to get as much efficiences out of the system as possible, trying to strike a balance." Hull : "Council tries to strike, through setting service standards policies, tries to strike a balance between the financial equation and the social equation. And I think we're going to provide a comparison a little farther along between ourselves and the city of Mississauga . You'll find quite a dramatic difference in the allocation of service hours in Mississauga to Hamilton , and I'll try to explain the different philosophy, social philosophy in Mississauga ." Whitehead : "Thank you."

Hull : "This is the service standard guidelines that we're last updated and are included in the report. It's not a very complicated document or complex document. It essentially says that within the old city of Hamilton service is generally provided Monday to Saturday on a 30-minute frequency, Sunday and holidays on a 60-minute frequency, and that we'll be within 90% of the population and have a maximum walking distance of 400 metres. We also have a stipulation that is generally adhered to that says revenue cost recovery is less than 50% only peak period will be provided, and that's most common in the former area municipalities. . the report provides more details on where we would be in surplus of the guidelines, and where we'd be in deficit of the guidelines. This is a chart . transit has long been a benchmark industry. We've been benchmarking for well in excess of 25 years so this is one of many statistical reports that we report to. We report to the Canadian Urban Transit Association, and now with the advent of the gas tax, we'll also have to report to the province. . Hamilton is the smallest of the large municipality association group - all the municipalities in the country grouped in small, medium and large - and it's just be coincidence that Hamilton is the smallest of the large municipalities . large municipalities classified as those with populations of over 400,000. . our service hours per capita when compared to 10 years ago are down about 6% where our population is up 7% in that same period, so that's what's giving rise to some of the current pressures we're experiencing with respect to demand. So Hamilton will be at the low end of the average in terms of service hours per capita and passengers per hour, although we're in the norm, very much within the norm for ridership levels relative to service levels. And it's imperative for council to be aware that this is not an indicator of poor performance as we'll see from the next slide. Hamilton has been very financially focused on its transit system. In fact we've been very financially focused on all of our services over the past decade, and the offset to our lower service levels is that, as it should be, in that Hamilton has a lower average fare than the Canadian average. We also have a lower average vehicle operating cost per hour. It's $72 an hour versus the national average of $96 per hour. So our performance today is reflective of a program that's had a financial focus for more than a decade, and for good reason. Ridership until recently had been in decline. We also have probably one of the highest vehicle utilizations - we get the best mileage out of our fleet of any fleet in the country. But also council needs to be careful when looking at any statistical representations. They are statistics. They can be interpreted in a number of different ways. We need to be very careful when interpreting statistics. They're simply an indicator. They're never absolute. It's important to note in Ontario , for example, the averages are skewed up by the results in Toronto and Ottawa , being that they are such large properties relative to the rest of the municipalities in the province, that they skew the statistics upwards. This gets to councillor Whitehead's question. In Hamilton , for example, distributes, we're on the norm for other municipalities our size, but we're lower than Mississauga because we . tend to distribute out our service hours over the base period. We have a higher level of base period coverage than say Mississauga . Where Mississauga concentrates its service hours in the peak to deliver primarily to the commuter and the school market. So we're serving two different markets. That's done by design, but you can see the cost in service implications as a result of that. Higher peak period service will lead to higher ridership per hour, but on the flip side of it, it tends to result in deficiences in the off-peak and on the weekends, where Hamilton tends to concentrate more of its services to serve the unique demographic in the city of Hamilton.

Jackson : [ 2:13:20 ] "About 60,000 people in Hamilton don't get public transit?" Hull : "That's correct."

Hull : Used to be 50% cost recovery. "A property of our size should be in the 55% cost recovery ratio. We had hit as high as 59 or 60 cents cost recovery on the dollar. We're down now to about 57 or 58 but it's been driven by those fixed cost drivers - the fuel, the insurance and the energy costs. Again I think in terms of performance if you evaluate the performance of our transit program, the public is generally satisfied. They'd always like to see more service out there, but given the level of service.the public is generally satisfied that we're providing good quality service. And comparing us to our peer properties, we've done, as has been our direction, a very good job in managing our costs over the years. . We're managing our costs well above the norm.

Braden : asks about CUTA figures, asks for comparison figures with other municipalities for about 14 factors including labour costs.

Hull : Describing service areas using maps. "you can see that in the east-west corridor is where the bulk of our service continues to be, and as you fan out from the CBD the service supply also thins out. .We take about 50 buses off the road in the off-peak . Live information system takes about 187,000 calls per year. Our automated system takes about 18 million calls a year. The public is quite happy with the information. . The public would always like to see more services both in frequency and duration, and access to all areas of the city.

Jackson asks about implementation timelines for DARTS changes. Hull notes "council has approved the changes related to the OHRC complaint and those services would be implemented upon final approval of the budget by council . they have to acquire the buses . presesntly reviewing bids . we hope to be in a position to award the bids within the next 4-6 weeks. Delivery of the vehicles would probably be 60-90 days out, so we're probably talking late summer, early fall . probably September we'd start to see the effect of the additional services." Will communicate this to DARTS users.

GAS TAX PLAN

Hull : Plan to create a Master Plan Steering Committee to guide funding in 2006 and beyond. Have received the 2004 monies. Recommendations in section (f) of the report. Notes "additional peak period services where demand currently exceeds supply, increased weekend services to accommodate shopping trips where demand exceeds supply, . additional services to McMaster University conditional upon us reaching agreement with McMaster through the task force chaired by councillor McHattie, and councillor Collins participate on. . improved mobility for persons with disabilities, and for people who currently fall between the gaps . and those are people with cognitive disabilities that neither qualify for the specialized transit program nor can, due to their functional disability, access the HSR program. And we also see some increased service hours to respond council's accessibility committee to increase their service hours to harmonize with the conventional transit program. . And finally, the recommendation is to allocate a portion of the gas tax to offset what we call a sustainabilty initiative, and that's to essentially use the gas tax to offset the unique cost increases associated with the transit program in the fuel, energy and insurance that we talked about earlier .

Whitehead : ".is there area's of this community, within the urbanized area, that are not getting service that we perhaps should be looking at." Hull : "Yes there is a long list of services that we are not being presented with today. The reason for these specific recommendations is because we feel these four initiatives are absolutely unavoidable . they simply won't go away. One is the Ontario Human Rights complaint settlement and the second is the expansion of the eligiblity criteria for people with disabilities. The third is the expansion of service levels in the HSR where the operators are simply incapable of managing it or the capacity or the running times at certain places in the system as a result of growth in demand, and the fourth is the McMaster corridor which we hope to achieve those improvements through a tripartite funding agreement.

Whitehead : So it's staff's position that it's more important to enhance service where there is already service to accommodate demand relative to providing a service where there isn't a service? Hull : "The staff's position is that these four initiatives must be dealt with by council in order to avoid either contractual, legal or very negative public consequences as a result of not responding to them. ( 2:25:55 ) Whitehead : ". particularly talking about what is there and what isn't there with respect to the peak period. I'm not arguing with the fact that it's not needed or we shouldn't be enhancing our peak period. What worries me is that what is not there is addressing areas that are not currently serviced." Hull : "What we could do, in your service levels report, you will see in the report in the detail, some high level detail where the service levels are deficient to council's existing policy. We could even provide more detail if you like through a project update to say specifically these are the lists of service requests that we have on file, and these areas are specific areas where we don't presently meet the minimum standards established by council. Those two things we could do for you through a project update if that's your desire."

Whitehead : "The problem is that I don't have enough information to make the case at this point, and I would prefer if ." Hull : "We could certainly provide some staff to develop just that. We did a study in Ancaster last year. We went through a full transit review . we did a study in Waterdown . we have staff to do just that. If you have a service initiative that you'd like us to look at, by all means, we have staff that we can dedicate to get you all the information you need to make a qualified decision." Whitehead : "I appreciate that. Unfortunately it may be too late for this particular recommendation, but thank you."

Jackson : "So Don, just so I'm absolutely clear in summarizing: 3.1(a) report basically you are asking for just receiving of your service levels standards report; 3.1(b) is the funding strategy which you just outlined up on the chart. I don't want to count my chickens before they hatch, but it sounds like this time we should be avoiding and preventing any of the calls and petitions and delegations in terms of opposition to any form of hardship added to the cost of transit. So there's no seniors bus pass increase in 05. There's service level enhancements, McMaster bus pass enhancements, DARTS enhancements as well. And all funded through the provincial and possible federal gas taxes, and they're going to cover us for 2005. And I just need to hear as well that funding will not put us in a position similar to what the social services funding where we get the $19.5 million last year but we're fighting for it for each year thereafter. Is the gas tax sustainable year after year, in perpetuity? Can I just have Don respond ." Hull : "You're almost entirely correct (laughter). All the service improvements, all the enhancements contemplated in the staff recommendations, are fully funded through the gas tax. All we're asking council to do in their budget deliberations is to set aside an amount of money, so that should you approve that amount of money - and I need to go to my last slide to do that - there are next steps that have to happen before any of these services would be implemented. We have to go to - our 2004 implementation of gas tax money has been approved by the province. We have to go back to the province to approve the 2005 gas tax submissions. Council first has to set aside the money, approve the initiatives, then we'll go to the province and say 'will you approve these initiatives, will you support this with gas tax money'. And in a couple of cases, in the case of the eligibility criteria report, we have to come back to council with a recommendation on how to implement that funding. The second is we have to come back to council with the McMaster task force report saying we've reached an agreement - presumably we're going to reach an agreement - the funding's been set aside. Now that we have the approval of the three funding partners, we can implement. It's very important that council be aware that this exercise is only to set aside, to earmark the money, and it's all conditional upon approval of the MTO for the use of the gas tax for these initiatives. And in two cases we have to come back to council with a subsequent recommendation report on how to go about allocating those. That would be the eligibility report and the McMaster."

Jackson : "Thank you Mr. Hull. Mr Rinaldo wants to say something." Rinaldo : "If you get those approvals, the provincial gas tax is a sustainable source of funding. The province has committed to giving it to us over a number of years, so it's not a matter. Now, I have to tell you, as you know in any other governments, there's never a hundred percent guarantee." Jackson : "You're kidding, Joe." (laughter). Rinaldo : "But on the other hand they have dedicated the gas tax for transit and therefore it is going to be sustainable once you get all of those approvals in place.."

Jackson : So thanks Joe, and Don, I want to do the right thing in moving public transit forward and enhancing the service and keeping the fares at an accessible and affordable rate. I'm all for that. And I also want to be responsible to the overall taxpayers that support the system. So Don you're just saying basically you need some up-front money. Have you heard anything through your sources, that could throw any kind of a monkey wrench in what we want to do today?" Hull : "We need the financial commitment of committee and council before we can even talk to the province and review with the province what the initiatives are. I can tell from a conference call I had . with the provincial representative just before Christmas as we were finalizing this document is that they have in fact approved the allocation for 2004. They've also sent the cheque. They did indicate that they are receiving large numbers of phone calls from all the municipalities and their eligibility criteria is very much an evolving document. It's very much going to tighten up. They very much are going to scrutinize the 2005 applications, and in 2006 the applications are even going to be tighter. The requirements are going to be tighter. Certainly where I think he is going is I think they're positioning themselves to be the CAPITAL funding partner. That being that for 2006 and beyond, what I can tell from the snapshot at this point in time, is that they would provide the CAPITAL for 2006 and beyond for any operating initiatives the municipalities are going to take. And something that's really important to point out to council right now, and if you approve the staff document, would be to be very very cautious about how much of the gas tax you commit to in terms of operating increases, because once you commit to an operating increase, that increase is there forever. But to commit to a capital increase, for example to replace a bus, to build the downtown terminal. [ 2:33 ] .bus replacement doesn't carry an awful lot of operating cost with it and in fact carries no operating cost because it's built into our operating budget. Just like a terminal wouldn't carry a lot of operating cost with it. So if the money is used for capital, the fund will carry itself. If it's used for operating, it eventually will be all used up. So the other caution that the province gave us before Christmas is that they're going to look really hard at 2005, but they expect to have the door closed in 2006. They do not want the gas tax money used to offset economic increases in the budgets year over year. They want this money to be used for growth and infrastructure."

Jackson : "So Don to get to the provincial step, the next step, we need to approve 3.1(a) and especially 3.1(b)?" Hull : "You're approving on the condition that the province subsequently approves and in two cases we have to come back to you with an recommendation report." Scott Stewart points out that the intention is to present the information to council and "get a flavour of committee, because we are in committee and not council". "but if you give us a general direction today that you're in favour of what you've heard, between ourselves and finance staff we'll go away to the province and talk to the province and say 'how do we make the next step happen' so that both the approvals come back in a very timely manner." Jackson asks if they can just table the report and Stewart says yes. Hull : ".final comment. Whether these projects go forward or not, there would be no impact on the net levy. The proposal is to fund them all from the gas tax, so if none of them went forward, there would be no implications on the levy. If they all went forward there'd be no impact on the levy" interrupted by Jackson : "Don, you love HSR more than your family, don't you? (laughter)". Hull : "It certainly runs in my blood." Some off-mic discussion generating laughter.

Bruckler : "I'll try to be as enthusiastic as Don. Don knows that, certainly the residents of upper Stoney Creek , recognizing that as you've indicated in the service standard guidelines that we don't meet those guidelines. There's no evening service, no weekend service, and that's perhaps one of the most common and most frequent complaints which I get as a councillor - that there's a lack of busing service. We've got 20,000 plus more people up there and not to say we're isolated, but even the connections. So it's the fact that we do not have every weekend, do not have the evening service, and again one of the most critical things as well is that we do not have a direct service from upper Stoney Creek to lower Stoney Creek. And it takes, in order to do that, depending on your location and final destination, I think it can take you upwards of two hours to make that run. And the young people can walk that faster in that length of time, except that there's no safe way to get down from the mountain . who wants to walk highway 20 . you can't do it. .we're getting a more aging population, there's a lot of new families up there, and the last thing we want to encourage is more automobilies, so I know that we are working with staff and I certainly hope that that's perhaps one of the things, the strategies that we could look at in the coming year. because of the kind of concerns which I have and the residents represent, I would certainly be quite eager to participate on the master plan steering committee at this point in time to address some of those real critical issues with respect to the east end."

Braden : ".are we to understand that of the gas tax initiatives, 100% of them are going to be going to the official urban transit area?" Hull : "Actually the specialized transit initiative would serve the entire geographic area of the city. DARTS serves the entire city. But the conventional transit initiatives would serve the urban transit boundary as defined by council. So it's about 50-50." Braden : "So it will all go to a form of public transit?" Hull : "Correct". Braden : "One system or the other?" Hull : "That's correct."

Ferguson : " .the province gives the tax rebate . don't want that money to be used to replace municipal overhead?" Hull : "Well actually they are very favourable. In fact I think that's what they are going to stress going into 2006 and beyond, is that they want to be our capital partner. So you'll see on the list here - expanding the . building the downtown terminal could be fully funded from the gas tax, building some of the terminals that have been on the books for a number of years. So all of our infrastructure. Anything that's considered transit infrastructure would be gas taxable, and looked at very favourably from the province. Because the province is looking at containing their investment to one-time expenditures." Ferguson : "So they don't want to see it used to offset fare increases that would normally happen without the gas tax?" Hull : "They don't want to see it offset inflationary year over year inflationary increases going into the future. Things like fuel, insurance. They want to see it either go to real growth in the transit service hours or to infrastructure renewal, replacement buildings, replacement buses, or expansion of buildings." Ferguson : ".infrastructure drives operating costs as well. They will probably be sympathetic to" interrupted by Hull: "In many cases infrastructure investment will bring your operating costs down. If you keep your infrastructure new, it functions well. If you keep the average age of your buses down, your maintenance costs should drop over time. And one of the things we're going to be asking council . is accelerated conventional transit fleet replacement program to essentially bring us from an 18-year life down to a 12-year life, and that would have substantive favourable impact on operating costs over time because you'd be operating with a younger fleet, a newer fleet, a fleet that's under warranty for longer periods of time, so it would have a direct impact on operating maintenance costs - a favourable impact." Ferguson : "I guess my concern is the city should establish a cost, shouldn't if the province wants to see value added to transit.." Hull : "I think they're going to make themselves abundantly clear that 'we're completely flexible in 2004, going to tighten up in 2005, and by 2006 the accessibility. growth management plan referred to here, the obligation under the agreement is to have that plan to the province for provincial approval before January 2006."

Ferguson : "Can either you or councillor McHattie give an overview of the McMaster game plan? It's out of the box . how's that progressing?" McHattie : "We've had four meetings I think with the McMaster Student Union and the Graduate Student Association - there's two different associations at Mac that we have universal bus pass programs with - and the essence of the discussion has been we want to increase the service levels because there's lots of pass-bys, with the buses going by and not being able to pick up the students; and total numbers of passengers on any one bus so it also impacts on the bus drivers themselves. They're very upset with the current situation. So with those four meetings, we've done a couple of things. We've investigated improvements to the existing service. So more buses . we're tweaking it so we can move one way or the other in terms of the peak hours. We understand the peaks very very well with the studies that have been done. For example, we've produced a brochure that is targetted just at the students . every bus that goes up and down that line so they have a schedule for every bus. So not the general big HSR bus schedule, but specifically for McMaster students. And we've highlighted the spots where the problems are, the peak areas, saying you might want to avoid these areas if you can. Get up 10 minutes earlier, don't sleep in, get to your classes a little bit earlier, and avoid that peak and help us out. And we've also got little signs in the buses now that say 'to McMaster' because University 51, U51, bus is clearly going to the university, but there's four or five other buses that go to the university which some students may not quite understand. They actually go to the university, so they may be all waiting for that University 51 bus. So we've done some tweaking. I'd qualify that as tweaking. That's fair, Don? And the next step is that we clearly have problems with quantity, so we're looking at these three additional buses on the line and we've identified the cost of that to the students. And I believe it's about a $14 increase, beyond the $65 MSU and $102 GSA - anyways a $14 increase. So the other factor that we have is the contract that we have with the students is up next year. So rather than put a fare increase in now, and have to re-negotiate the contract again next year, the students have suggested 'let's re-negotiate the contract now so we only do that once' instead of going back to the students twice with discussions about public transit. We're just waiting for the students to come back to us to say that this is the strategy that they'd like to take, because any time we go beyond a 5% increase on the bus pass, they have to go to a referendum to the students, and they vote on whether they want to accept that increase or not. So we're just right now in negotiations on how to make that happen. But the prevailing view from the student association is that they're in favour of going ahead with the increase in service level. They think that's fair, I think. It's just a question of whether we go with that as a lump sum - a contribution of $14 in one pop which would be effective September 05, the new student year - or whether they want to phase it, whether they come back with another proposal. But generally very favourable.." Hull : .discussions have been very positive. I think there's an article in the paper that reflects that this morning. Maybe by way of final comment, just as councillor McHattie had asked about interconnectivity of transit, and the province's approach to that. The province is very very keen on the interconnectivity of transit, would like municipalities to look very closely at that. Another initiative that the province is very high on is multiple funding partners, so I would anticipate that this project would be looked at very very favourably in view of the fact that it engages multiple funding partners." Ferguson : "So you anticipate by September 05 you'll see an increase in service ." Hull : "That's our objective."

Ferguson : "How's that filter down . is there an issue with . is that being looked at at all?" Hull : ".the pass program has been so universally successful that the demands for the program is growing beyond our ability to fulfill that demand. The city of Hamilton in 1996 entered into this pass program with the students' union. It was the third program in the country, and since that time this has become a universally accepted best practice throughout the transit industry, and now these pass programs exist all over North America. So we actually have two other student groups, we actually have the administration and the Mohawk nursing program waiting in the queue to negotiate with us for a pass program. Buy we have to resolve the current challenges that we have with our current contracts and get this service to the level of quality that we're comfortable with." Ferguson : "Sounds good. So you're reasonably pleased with the way things are going with Mac? This is not a carbon copy of Redeemer at all, is it." Hull : "All the pass programs are similar but different. The costing is all similar so that one can be validated against the other. We don't give one party a better deal than the other, but they all have their own nuances as well and no one gets a better deal. Redeemer College university is a separate contract, private sector contract, but the costing, how we arrived at the costing is the same methodology which we have used for any of the other pass contracts. We also have a bus pass contract with Columbia International College and various school boards. Different language but in essence the same contract." Ferguson : "So we're getting more cost recovery for the HSR with the Mac contract?" Hull : "No, it's not intended to be a method of cost recovery. The idea was it's cost sharing of the enhancement, and that cost sharing be distributed over. Instead of just being borne entirely on the city tax levy, that it be borne by the users, the students, and then funded the additional cost using our provincial partnership. So the city already has the base investment. It wouldn't cost the city any more for this. We'd be bringing in two new funding partners - the province through the gas tax and the university through our bus pass contracts."

Bruckler : ".tack this onto my previous question and I'm recognizing that the four enhancements that you talked about Don are pretty well mandatory or very high priority. Would there be additional fuel tax monies left as we go through the master plan to really look at and perhaps provide additional services for those areas which are either under-serviced or no service at all?" Hull : "This might be a good time for me to go to my final slide." Discussion off-mic.

Pearson : ".re McMaster.In the tweaking that was mentioned are we also looking at changing the levels of service and times of day? I just wanted to ask that question because I know there's a lot of ridership in the evening because there are a lot of evening classes." Hull : "What we're trying to do is address the hottest spots in the system as it exists right now. So the bulk of the service we've identified through ridership counts. We've . obviously to the peak periods. But we are supplementing evening service right now with an extra trip and on the weekends . how we cut the pie is up to all the stakeholders so McMaster will have an equal say in how we cut the pie. [off-mic, likely chair Morelli who rarely used his microphone during this discussion] Just to respond to councillor Bruckler, maybe to drive the point home, is that you can see across the top line [referring to powerpoint slide], Mr. Chairman, the allocation in 2004 is 1.467 million. We've received that. That allocation ramps up to $5.9 million in 2005 and so on and peaks at $12 million in about 2007, based on our current ridership and current population. That will change over time as our population and ridership changes. Should council never access the money for any reason, and every year thereafter an additional 11 or 12 million dollars would be added to that reserve. As I mentioned earlier, once you commit operating to it, the reserve is forever depleted. So if look across the four items, and under 2005, the $442,000 for the human rights complaint settlement, the HSR service level improvements, the HS service enhancement policy, and the McMaster bus pass program. If all of that money is expended - and I'm not talking about the $1.4 million at the moment - the commitment of the gas tax would be $3.9 million. So that's operating dollars that are forever committed. So should council approve the package as presented by staff, about 33% of the gas tax funding would be forever committed. But I refer you now to the bottom line. If you look along the bottom line you can see how as you move across from 2004 to 2007, if you commit operating dollars, those dollars are forever committed. If you commit capital dollars on the other hand, the . will recover because whatever you haven't committed in perpetuity will be replenished every year. So if in 2008 the province sends us another $12 million, it would be added to the $13 million at the bottom. So you can see if the projects are slanted towards capital infrastructure, the reserve will replenish itself and could get quite large over time. What council has to be ever conscious of is the split in commitment between operating and capital. Operating is forever; capital will replenish itself over time." [ 2:51:30 ]

Whitehead : " .you had mentioned about the $1.2 million saving, and the question I was going to ask . does that impact on the levy at all?" Hull : "Well, yes. What we're doing . transit commits . a little over $6 million through our operating budget - our capital budget has always historically been funded, a bit of a unique situation in transit, we're fully funded. Our capital is fully funded through operating commitments. So what we're essentially going to say, is in order to get us down to zero [increase in the 2005 budget] we're going to use $1.4 million of the gas tax, plus we're going to use an additional $1.2 million. We're going to reduce our contribution to reserves in order to support our capital by $1.2 million, and then rely on gas tax in the future to offset that $1.2 million operating expense reduction." Whitehead : "That's going forward then, you're talking about?" Hull : "Should you approve the package, that's what would happen. You'd be committing about 33% of the gas tax and you would achieve a zero percent budget increase." Whitehead : ". one of my colleagues talked about the service in the east end . we were talking about the priorities, you were talking about enhancement . and one of the issues in beginning those enhancement is because of the greater demand. I didn't want to put all my eggs in one basket because I really believe, and we just heard it from councillor Bruckler as well, that there's need, there's need in the community, there's need on the mountain. There are services that people need and demand that are not currently there. This is not addressing that." Hull : "This actually will. The line that's called HSR service level enhancements, proposed and contractual. That's an enhancement package that's being put forward as a result of our consultation with our union and our workforce, and as a result of the feedback we get from our annual customer satisfaction survey. Included in that allocation, should council approve it, would be new services on the mountain. There would be additional weekday services to the Mohawk route, and additional weekday services to Upper Ottawa , Upper Gage. So that money would be distributed out through the system. It just hasn't been blown up in full detail."

Whitehead : "One of the issues I hear a lot from parents with the Meadowlands and the theatre is that because of the frequency of the bus times, a lot of their kids either have to be picked up by their parents, or they're walking what they see as dangerous roads back into my ward, and can something be done to improve service on that line. ." Hull : "Those are all the kinds of service enhancements that could be considered in the future. We have a long list on record back in our database, plus should council elect to establish a committee . we would go to . and ask how they felt the future gas tax monies should be allocated." Whitehead : .the design transit terminals, urban and suburban, and I am looking at six of eight wards there's terminals that have been located .in the master plan." Hull : ".transit has a long term business plan and you can see here the area rated muncipalities and the demographic separation within the city of Hamilton . Essentially, if we were starting a transit service from the beginning, we'd start with our terminals, and this is where we'd either like to continue to support these terminals, build terminals at the Meadowlands and . park, and to build a terminal at McMaster so that the whole system, if we were constructing a system looking forward from scratch, we'd start with our terminals and everything would be based around the terminals. And the first leg of service you would put on would be to connect all the terminals through a very basic service, and that exists throughout most of the service right now. The corridor between 2 and 4 for example, that's Eastgate to Downtown and McMaster, what staff's recommendation . that corridor exists and is very well served with the Beeline and a number of other services, but it need reinforcement. It needs some more service between one and two. The section you're referring to, councillor Whitehead, is between 3 and 5. That service was first introduced in 2003 and obviously it's a basic level of service and should be enhanced over time. Again it goes directly to your question though - is this the basic network. If we had nothing else out there, you can get from terminal to terminal, you can get anywhere in the city. So we want to continue to reinforce those connections until such time as they met the consumers' expectations. Then you lay on the east-west services below the mountain [ Hull is using a powerpoint map here and adding routes as he speaks about them], the north-south services above the mountain, and a lot of these are already developed. And south of the mountain we continue to expand south of Rymal Road . And then over time we add our connectors interurban connectivity routes. Hamilton provides the one via Eastgate to Burlington . Burlington provides the one down York Boulevard . And then you put in the cross town routes. And to get back to the service level enhancements, the cross town route you see there, Mohawk, is in need of some reinforcement. The beauty of this is that this grid network on the mountain - what you really want to do is have a high enough level of service that someone can get off one bus travelling north-south and get onto another bus travelling east-west."

Whitehead : "The reason I'm asking the question because obviously there's no terminal located in ward eight period . I need to understand the criteria to determine where these services are going, number one, and two with the raft of institutions in ward eight with respect to long-term health facilities, Chedoke, the Y, there's a lot of . happening there and I know that the demand is increasing .they're actually really close together with respect to geographically." Hull : "Absolutely." Whitehead : "I'm trying to understand why there wouldn't be a terminal located somewhere in that location?" Hull : "Well frankly it's a result of how transit has developed in the city of Hamilton over the last 100 years and its related to when Hamilton consisted of the city of Hamilton and the former area municipalities, terminals were developed at the boundaries because service levels tended to drop off quite dramatically as you moved out of the city core where there are higher population densities towards the former municipalities where there'd be lower population density, and lower demand for transit. So the terminal locations have evolved over time. In the case of the upper west mountain, the benchmark or anchor that we see would be Meadowlands Mall. And so what that allows us to do is concentrate service coming into the mall from the city but also provide a different service level, a lighter service level, at the discretion of the area municipalities out to their respective municipalities. So it allows us to chop the service and provide one level of service on one side of the terminal and a different level of service on the other side of the terminal." Whitehead : "The reason why I had asked originally about the fact that there isn't great service between Meadowlands and east-west through the ward . lack of service, how can you rationalize the terminal?" Hull : "The service meets or exceeds the minimum standard. Obviously the public wants more and it's all a question of funding." Whitehead thanks Hull who says his presentation is completed. Chairman (off-mic) and councillor Ferguson (also off-mic) aren't audible. Some discussion about terminal three (Morelli?).

McHattie congratulates Hull on presentation that "really ties everything together. All of the questions I've had over the last year, and little incremental questions, have all really been answered in this one presentation. . all this is extremely influenced by our GRIDS process, so we need to look at how the upper Stoney Creek area is going to look like with the growth strategy over the next 30 years, or the shorter term and certainly transit is going to be a key part of that . talked about Glanbrook as we've gone through planning and economic development committee approvals over the last year . no transit, no transit, no transit, very frustrating but we need to get the densities up there in order to achieve transit so it's going to happen. . I'd certainly like to provide my support for Don taking this forward to the province to have the discussions about getting their approval for spending the gas tax in the way that we're suggesting."

Ferguson : "Don, you know, the Ancaster circuit bus it's a surcharge to the Ancaster taxpayers, they pay for that. With the gas tax rollout and the augmentation in service, is that, do you see a time when that supplement would not be required?" Hull : "What would not be required? I'm sorry." Ferguson : "The supplement, the add-on." Hull : "Well that's entirely at the discretion of council. We simply comply with the area rating policy that's dictated by council, so if council wanted to change the area rating policy that's entirely at your discretion." Ferguson : "Well if the gas tax is going to augment or improve the level of service, would that raise the bar, and therefore not require that extra funding?" Hull : "Well, again, in response to that Mr. Chairman, is that there's no mechanism in place for staff to address that question without council reconsidering it's current area rating policy. So you'd have to change the area rating policy to allow that to happen."

McHattie : "To clarify that, I think councillor Ferguson was maybe asking, if I can jump in, if the use in Ancaster continued where it is now and perhaps increased a little bit, can we look at providing service there that's not area-rated. It's actually service because service is required, under the ordinary way of providing service right across the city?" Hull : "It's entirely the discretion of council but that couldn't happen under the current area-rating policy. Our cost allocation is currently 100% mileage cost allocation, so we would require an amendment to the area-rating policy by council to allow us to address the allocation of funding." McHattie : "It would be great to get to the point in Ancaster where it's being used extensively and we could certainly support that, support that kind of approach."

Ferguson : "Just supplementary. Right now currently Ancaster taxpayers pay a surcharge for that. That's what I was trying to get away from." Jackson moves 3.1(a) of the report. That's carried. Jackson : "I'll take Scott Stewart's advice with the caveat that I'll move to receive it and refer it to the overall budget process but with the strong direction and indication to the staff and the province that we are very favourable to what we heard today." Carried. Whitehead thanks Hull for "very solid and comprehensive answers" and points out that he maybe delayed things by taking the opportunity to ask his detailed questions and that may have frustrated the chair (Morelli). Morelli replies.