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Robert SiddallChief Financial Officer

Metrolinx Fiscal 2011-12 Budget Plan

Presentation to the Board of DirectorsApril 28, 2011

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Operating Budget for Fiscal 2011-12

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Forecasted 2011/12 Operating Budget ($ millions)

Budget 2011-12 Budget 2010-11

RevenueCommuter Revenue $321.4 $308.6Sundry Revenue 16.8 13.0

Total Revenue $338.2 $321.6

ExpenseOperations $127.0 $128.9Labour & Benefits 156.3 142.1Facilities & Track 68.0 62.7Equipment Maintenance 55.1 52.5Supplies & Services 21.0 19.0

Total Expenses $427.4 $405.2 _____ _____

Excess of Expenses over Revenue $ 89.2 $ 83.6

Deduct - Proceeds from Sale of Assets ( 2.0)

Add - Net Service Enhancements 3.8_____ ______

Net Operating Requirement From Province 91.0 $ 83.6 ===== ======

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Forecasted Revenue

2011/12

Fares 323.8M

Sale of Assets 2.0M

Sundry 16.8M

2010/11

Fares 308.6M

Sundry 13.0M

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Key Assumptions for Fiscal 2011-12Fare Revenue

Commuter revenue was originally expected to grow by 2 per cent in fiscal 2010-11 with an expected ridership forecast of 56.7 million for the year. Ridership growth over the last six months significantly exceeded expectations with an estimated increase of 1.1 million riders bringing the total number of riders for fiscal 2010-11 to 57.8 million.Ridership is expected to continue to grow during fiscal 2010-11 as the region’s economy continues to grow. The average revenue per passenger also increased during fiscal 2010-11 from $5.46 to $5.53 per passenger ride as more parking became available at stations at or near the end of each corridor. This increase in average revenue is expected to continue in fiscal 2011-12.The budget assumes a conservative estimate of continued ridership growth of 2 per cent for fiscal 2010-11 based on the assumptions above. Revenue assumptions do not include a fare increase.

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Forecasted Operating Expenses

2011/12

Supplies & Services21.0M

Operations 127.0M

Equipment Maintenance

55.1M

Facilities & Track 68.0M

Labour / Benefits 156.3M

Net Service Enhancements 3.8M

2010/11Supplies & Services

19.0M

Operations 128.9M

Equipment Maintenance

52.5M

Facilities & Track 62.7M

Labour / Benefits 142.1M

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Key Assumptions for Fiscal 2011-12

Expenses

Expenses have been generally budgeted at an expected growth of 2 per cent over the previous year except for certain costs, such as diesel fuel, which is expected to increase by more than 2 per cent during the year. Both sundry revenues and operating expenses have been adjusted to reflect the decrease in access fees paid to CN and to increase the access fees to be now paid by VIA as a result of the recent purchases of the Lakeshore Corridor from CN over the past two years. The Corporation completed a detailed review of each area of its operations as part of the budget process with the objective of moving resources to key areas to continue to support its efforts to improve and maintain customer service and to enhance its ability to deliver an expanding capital program in the upcoming year.Salaries and wages are based on Provincial guidelines and collective agreements in effect for the fiscal year. The current ATU agreement expires in June 2011.

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Possible Risks to the PlanKey cost drivers are the price of diesel fuel, repairs and maintenance of the bus and rail fleet, labour, rent, and property taxes.

Unexpected or greater than expected changes in these cost drivers could adversely impact the Corporation’s ability to meet its budget targetsEarlier or later than expected introduction of new services can also impact the Corporation’s ability to meet its budget targets

Management has implemented an Enterprise Risk Management (ERM) system designed to monitor all types of risks including financial, operational, etc.

Management develops risk mitigation strategies to address these risks.

A key risk for 2011-12 is fluctuations in the price of diesel fuel.The price of diesel fuel has recently risen due to geopolitical changes in the Middle EastThe price is expected to return to the levels accounted for in this operating budget if stability returns to the region.

Risk mitigation actions (assuming no fare increase) could include: Delay the introduction of service enhancementsExpenditure restraint for items not impacting customer service

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Key Deliverables for Fiscal 2011-121. Deliver quality projects on time and on budget

Significant progress is expected to be made during the year on the VIVA Bus Rapidway and the Eglinton/Scarborough Crosstown LRT projects;Work continues on the Union Pearson Rail Link (ARL) and Georgetown South Corridor (GTS) as these projects move forward to their scheduled opening for the PanAm Games in July 2015; Significant progress is expected on the major grade separations at Strachan, Denison, Weston and the West Toronto Diamond Project; Continued work on improving and maintaining GO Transit’s existing capital base including the state of good repair for the existing infrastructure; moving to system-wide 12 car platforms/trains; andContinued work on the design work of the East Rail Maintenance facility and construction start of the East Bus Maintenance facility.

2. Deliver even greater customer focused public transit service exemplified by GOIncluding GO Service enhancements to bus and rail services on a number of corridors;Continued work on improving transit traveler information and the customer experience with heated shelters, platform snowmelt systems and additional parking spaces; andContinuing to develop a better understanding of our customers and their requirements through customer segmentation analysis, new customer “E-panel”, and mapping of customer touch points.

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Key Deliverables for Fiscal 2011-12 (contd.)

3. Continued development of an Investment Strategy, including interim advice to government, which clearly supports an irresistible promise of a transformative regional transportation system

4. Continued planning to ensure that the Big Move remains the relevant clear path for intelligent growth for the GTHA

5. Moving to providing transit users across the GTHA with a seamless and integrated fare collection system

Fiscal 2010-11 will see the complete rollout of the PRESTO fare system across the GO bus and rail system as well as the development of the next generation fare system for implementation in Ottawa.

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GO Service Improvements for 2011-12

Bus and Rail service enhancements for fiscal 2010-11 include improvements to both bus and rail on a number of corridors including:

Extension to Kitchener/Waterloo;Extension to Barrie Waterfront;Two additional peak period trips on Barrie corridor;Increasing the number of 12-car trains across all corridors during the year;Adding four shoulder peak trips on Lakeshore corridor; Responding to the needs for special event services; and Adding additional bus trips within the system to address areas of high demand.

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Metrolinx Capital Plan Fiscal 2011-12

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Capital Plan Priorities Metrolinx has developed a prioritization framework to ensure future capital investments maintain and grow the quality of transit services offered to the public. The key principles underlying this framework are:

Ensuring the safety of the system at all times is paramount;Maintaining the ability to provide existing levels of service by investing in the state of good repair of the existing system thereby ensuring reliability and customer service;Delivering on our promises including:

• Air Rail Link/GTS• VIVA Bus Rapidway• Eglinton/Scarborough Crosstown

LRTImplementing an integrated fare card across the GTHA (PRESTO);Optimizing the Province’s existing investment by increasing the productivity of the current system;Creating the foundation upon which future growth in both GO and regional transit can build on; and Moving forward with growing both GO and regional transit across the GTHA.

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Capital Investments

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Forecasted Fiscal 2011-12 Capital Allocation ($ millions)

2011-12Allocation

GO: State of Good Repair $316.3Georgetown South/ARL 294.1Rapid Transit Implementation 665.7Expansion 662.4

_________Total Capital Allocation $1,938.5

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Fiscal 2011-12 Capital InvestmentsGO State of Good Repair ($316 million)

Ensuring Safety, Reliability & Customer ServiceStation Rehabilitation – Clarkson, Burlington, Ajax, Exhibition, YorkdaleParking Rehabilitation – Dixie, Richmond Hill, AuroraTrack RehabilitationRefurbish locomotives, rail coaches & busesUnion Station Upgrades – Train Shed Roof, Track ImprovementsStation Signage ImprovementsMobility Hub DevelopmentUpgrade Communication and Information Technology

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Fiscal 2011-12 Capital Investments (cont’d)Georgetown South and ARL projects ($294 million)

Progress towards ensuring service is ready for 2015 PanAm Games

Rapid Transit Implementation ($666 million)Tunneling of the Eglinton/Scarborough Crosstown LRTContinue construction on York/VIVA BRT Corridors

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Fiscal 2011-12 Capital Investments (cont’d)Expansion ($662 million)

Increase number of twelve car trains• Extend station platforms, purchase additional rail cars

Start work on extension of Richmond Hill service to GormleySignals on Barrie & Stouffville corridors for reliability & additional serviceNew parking at Ajax, Clarkson, Cooksville, Erindale, Oakville, CentennialUnion Station start work on new concourse and new south platformDesign of East Rail Maintenance FacilityExpansion of Bus & Rail FleetsStart construction of East Bus Maintenance Facility Extend GO service to Kitchener (2 trains by Dec 2011)Continue work on Mississauga Transitway

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