$1M a month revenue shortfall 'not a huge concern' for OC Transpo head

OC Transpo is starting the year with its fare revenue falling about $1 million a month below budget, but its general manager says the shortfall is not yet a huge concern.

Ottawa's transit services budget forecast$13.7 million in fare revenue for January and $13.8 million for February, but faresactually accounted for $12.2 million and $12.8 million respectively.

Those estimates were set as OC Transpo struggled to fill a massive hole in its finances, pulling from reserves and cutting jobs.

There's little cash left in the rainy day fund should revenues continue to disappoint in the months ahead.

Rene Amilcar, the city's general manager of transit services,said the main revenue challenge stems from weak sales of adult monthly passesas commuters working hybrid schedules continue to stay home part of the time.

At $3.80 a ride if paying by card, it takes adults about 34 fares to reachtheirmonthly pass price of $128.75.

"We have to review the way we forecast the revenue, because we know that customers have changed their behaviour," Amilcar said. "Those who used to buy monthly passes, maybe now they don't."

Wary of hybrid pass

At a transit commission meeting on Thursday, Knoxdale-Merivale Coun. Sean Devine questioned Amilcar about what OC Transpo is doing to present attractive fare options to hybrid workers.

"If the average customer that we are seeking is only needing to come into work two to three times per week, I think we're just going to continue bleeding a million dollars per month until we present them with a viable alternative," Devine said.

Devine asked whether OC Transpo is considering any compromisebetween a monthly pass,which might not be cost-effectivefor hybrid workers, and individual fares.

"There's no incentive for them to buy, because that pass will expire and they will not have ever needed to use it that much for work," he said.

The committee has debated theidea of a special hybrid pass, but it hasso far gone nowhere. Amilcar told Devine she still doesn't see it as a solution.

The budget projections assume ridership will reach three-quarters of pre-pandemic levels by the end of thisyear. For the first two months of 2024, it averaged out around 70 per cent.

Following the committee meeting, Amilcar told reporters it's too early to panic over the numbers.

"I'm not very worried, for now, with one million, because it's still early and we still have time to see a bigger ridership that will compensate there," she said.

"It's not a huge concern," Amilcar added."We have it on our radar."

Hoping for relief from above

Asked what OC Transpo will do if fare revenue does not recover, Amilcarsuggested careful management of discretionary spending and hiring practices could continue to provide some breathing room.

She did not clarify whether service cuts will be on the table to avoid sinking into a deficit.

Transit commission chair Glen Gower said the city will need support from higher levels of government, and not just for capital expenses.

"We're going to continue to have challenges with our operating budget due to our continuing recovery from the pandemic and changing transportation patterns," he said.

"We do need support from the provincial and federal levels of government for operating funds to help us, not just to run the system we have right now, but to continue to expand and offer better service in the future."

Both Gower and Amilcar said they're hoping OC Transpo will get a helping hand from the upcoming federal budget.