Will the Real Steve Adams Please Stand Up

Apparently our councilor (candidate) has two different flyers. With two sets of plans for our future. I’m confused.

Edmonton bust

Metro Transit faces $900,000 deficit ? Try 9 Million instead!

On March 13, 2012 Council released ATU Contract Negotiations Update (Declassified Report – 520 Kb)  claiming that there was a surplus BEFORE THE STRIKE of $200,000

In previous post we questioned that $200,000 surplus mystery. Was this a case of bad math or bad faith?

Just today, Council released a Memorandum from Acting Director, Finance and Information Technology dated March 9, 2012 re: Third Quarter 2011/2012 Financial Report (4.4 Mb) that clearly states that  “Metro Transit Services projected a deficit of $3.5m primarily due to increased overtime and higher than budgeted fuel and maintenance costs; costs related to expansion of Community Transit and increased debt costs.”

Therefore, we calculate that, in absence of further information, the Metro Transit Deficit AFTER THE STRIKE is likely over 9 Million

Now, Metro Transit probably saved some additional operational costs because the buses weren’t running and consuming fuel, but this would not even account for Two Million (as about 93,000 service hours were saved, and if each hour consumed $20 of fuel, which is an aggressive estimate, this would be another $1.86 Million in savings.) And let’s not forget that management was still working and the facilities still had to be maintained, so there really wasn’t any opportunity for other operational savings.  If we add this 1.86 Million in projected fuel savings, this still leaves a deficit of well over $7 Million!

Maybe they found other savings, but if so, why haven’t they reported what these savings numbers are and where they came from.  All we know is that they started with a huge deficit of 3.526 Million, lost 1/6 of the projected fare box recovery for the year (which comes in at 5.27 Million), made an unplanned up-front $2.4 Million payout to the union in the settlement offer, and expect ridership to drop 4% to 5%, which will cost another $1.2 Million against the projected fare box recovery for the year.  Adding all this up, that’s a loss of over 12.6 Million against a savings of $2.8 Million from suspended wages during the strike and a potential fuel savings of 1.86 Million (on the outside).   This math does not work out to a 900,000 deficit anyway you look at it.

What are the real numbers?  Why aren’t they telling us?  And why is the media reporting these numbers without any verification or research? This is supposed to be public information!  Why don’t we have it, and why can’t the media get it through Nova Scotia Freedom of Information?

Fare Increase Propaganda or The Case of Selective (Sloppy) Journalism?

“Metro Transit fares may be on the rise” laments the CBC

“Currently, a single fare to ride the bus or the ferry in HRM is $2.25 for an adult, and the monthly pass is $70 — one of the lowest rates for transit across the country.” They even attach a data table from unidentified source.

But is it really the case that we have one of the lowest rates for transit across the country? As a basis for comparison, let’s compare the fare cost between Halifax and Edmonton

The average single trip cost from a cash fare might be higher in Edmonton, but the average single trip cost using a ticket is about the same (2.28 in Edmonton vs. 2.30) and, more importantly, the cost of travel for our seniors is SIGNIFICANTLY MORE than in Edmonton.   Does Metro Transit do anything similar for its seniors?  And Edmonton has a deep discount for seniors with low annual income.  Does Metro Transit?  NO!

One could try and argue that the service in Halifax might be better, and therefore Halifax is cheaper? But I’m not sure I would buy this argument.  Furthermore, while I have never been in Edmonton, the quality of information on their transit website beats ours hands down. It even looks like it was created this decade!

….

Lets look at Winnipeg

and how about Seniors ?

Bonuses are not the problem, Stupid !

There is something fundamentally wrong with the entire Metro Transit organization, and yet the public is fixating only on the $4,000 bonus given to union members in the current agreement. While the bonuses will cost 2.4 Million this year, this is a fraction of the deficit for Metro Transit we are projecting, and a drop in the barrel compared with other workforce related costs that Metro Transit has.

For example, did you notice that yearly benefits are almost $9 Million  or $45 million over five years?

We need more information on the entire compensation package, but it is safe to say that, in the private sector, nobody gets 18.5 sick days! (If abused) That’s another 3.5 weeks of vacation a year!

Happy St Patrick’s day, enjoy your weekend, and try not to get sick !

MT deficit where did you go ?

CBC on March 2, the Metro Transit strike savings were supposed to equal the 2011 deficit. Specifically, CBC said that “the strike has now lasted 30 days — 22 of those were weekdays –so by the end of this week (which we will assume to be Sunday, March 4), Metro Transit will have saved approximately $2.5 million, which is equal to last year’s transit deficit.

However, we are also told that “The saving of the $2.5 million, which is the money we would’ve saved daily in wages to this point in the strike has nothing to do with a deficit” by Lori Patterson, a spokeswoman for Metro Transit.

 

Question: Where the 3 million deficit go ?

Metro Transit faces $5 million deficit

Calculating savings and deficit according to MT

“Metro Transit faces $900,000 deficit” screams CBC news, but it would again appear that nobody takes the time to verify or even question the Metro Transit numbers.

First of all, we know that Metro Transit was saving an average of $85,000 per day, each weekday, and a little bit less on weekends by not having to pay striking worker salaries.

Then, as per CBC on March 2, the Metro Transit stike savings were supposed to equal the 2011 deficit. Specifically, CBC said that “the strike has now lasted 30 days — 22 of those were weekdays –so by the end of this week (which we will assume to be Sunday, March 4), Metro Transit will have saved approximately $2.5 million, which is equal to last year’s transit deficit.

However, we are also told that “The saving of the $2.5 million, which is the money we would’ve saved daily in wages to this point in the strike has nothing to do with a deficit” by Lori Patterson, a spokeswoman for Metro Transit. Which makes no sense since deficit equals expenses minus revenues when the expenses exceed the revenues. And since salaries are expenses, they do play into the calculations.

Lets revisit the numbers: 2.5 Million / 30 days = 83.3K day

The strike was 43 days, hence the total savings are roughly 43 * 83.3K = 3.58 Million

Metro Transit is calculating 1.5 Million of lost revenue. The strike lasted 43 days, so they should lose 43/365 = 11.8 % of the estimated fare recovery for this year. Since the fare recovery was 32 Million, they should lose 3.77 Million from not running during the strike. 3.77 Million of fare losses minus 3.58 Million of salary savings is a 0.19 Million deficit. This is neither the 1.5 Million they claim nor the 900,000 CBC claims.

Of course, they are also offering free transportation until the end of the month, so there’s another 16 days of losses. That’s another 16/365 = 4.4% loss on the 32 Million, or another 1.4 Million. Now we are up to 1.59 Million. This is close to their number …

… but wait! Historically ridership will drop 4% to 5% after a strike, and since there are 9 months left in the year, that’s a 5% loss on the roughly 274 days remaining in the year, which should account for roughly 24 Million of the 32 Million of fare recovery that was planned, and this comes to an estimated loss of 1.2 Million!

Uh-oh! We are now up to 2.79 Million. That’s almost twice as much as the 1.5 Million that Metro Transit is calculating and three times as much as the CBC.

Furthermore, while it’s true that the 32 million was only the estimated fare recovery and is hard to predict ridership to the penny, the reality is that if ridership were to drop more than expected, losses could mount quickly. And this could easily happen. For example, in 2009 Mero Transit made similar mistake and lost 3 million in revenue by wrongly assuming that ridership will not drop after a fare increase.

Furthermore, according to Peter Kelly, only $30 million in revenue is expected from transit fares. In this scenario, the losses would be 4.85 Million on lost fares in February and March and 1.125 Million on the ridership loss for the rest of the year. That’s a total of 5.975 Million against a savings of 3.58 Million for a loss of only 2.395 Million, which is a loss that is still 60% greater than MT is reporting and 166% greater than what CBC is reporting, as per the table below.

If we add in the 200K surplus, we get a loss of either 2.59 Million or 2.195 Million, depending on whether fare revenue was supposed to be 32 Million or 30 Million, which is still quite a bit off from their 900K.  Furthermore, if you add in the 2.4 Million one-time lump-sum payment to the union members, this number balloons to 4.99 Million or 4.595 Million, and this is huge!

Furthermore, as we still do not know how the Cost of Year 1 settlement with fiscal offset is derived to be $2,400,000 based on table below, the losses could still be mounting and could exceed 5 Million!

We should demand accountability and an audit.  The numbers still don’t add up!

Metro Transit: If you cannot do elementary school math, then please give me real data!

Dear Metro Transit,

If you want to inform transit users, please try to inform them rather than confuse and mislead them. The sloppiness present in your news releases, FAQs, and quotes only creates mistrust and gives one the feeling that you want to hide something. For example, in your recent release, your rounding is wrong. Not only should it add up to 100%, and not 102%, but based on your numbers, two of your three percentages are rounded wrong.

“What is the compensation for the managers vs. ATU members?
In this FAQ, the 2011/12 compensation budget (excluding overtime) for all Metro Transit staff is given as $42 million. The core management team of 10 managers and 1 Director are said to account for 2% of the total compensation budget at $808,300.

ATU members are said to account for 84% of the compensation budget at $35 million. Then you say that the remaining 16% of the budget (when, in fact, only 14% is left with your numbers) is allocated to other staff positions in operations (service supervisors, employee service supervisors, fleet foremen) and administration staff.”

Our Calculation:
Assuming 42 Million, 808K, and 35M, then Director & staff is 1.9% and Union is 83.3%, for a total of 85.2%, leaving 14.8%.

Hence, the correct rounding is:
Dir & Staff:    2% ($808K)
Members:  83% ($35 million)
Staff :             15% ( $6.192 million)

And this adds up to 100%.

But this isn’t the only math problem.

After reading the MT FAQ, one still does not know what is the total number of “other” staff positions.

33 non-union Service Supervisors and 5 non-union Employee Services Supervisors cannot cost  6.192 mil unless the average salary is $163,000, which is well above the given salary range for a supervisor of $60,000 to $80,000.

ATU states that there are 98 total Management Positions with a Salary range of $6.0Mil -$7.0Mil

To be continued …

Metro Transit PR and Math

Feb. 24, 2012: “We gave the union a good offer worth $14 million with a deal that will also save HRM $8 million over five years,”

March 15, 2012 – 12:30 pm: “We didn’t spend a cent more than what was offered to ATU Local 508 on February 23.”

March 13, 2012: “The new collective agreement includes a wage package worth $14.5 million over five years as well as efficiencies and offsets that will save $8.9 million, for a net increase of approximately $5.6 million (or 3%) on the Metro Transit wage budget over the five-year term.

http://www.halifax.ca/metrotransit/strikeinformation.html#whatdoesitmean
http://www.halifax.ca/mediaroom/pressrelease/pr2012/newtransitagreement.html
http://www.halifax.ca/metrotransit/strikefaqs_000.html
http://www.halifax.ca/mediaroom/pressrelease/pr2012/untitled.html