The new salary offer for TransLink’s next CEO is out and as expected, members of the public are complaining non-stop about a number that is being described by media as “massive” and “fat” as it is north of $300,000.
Now that the new CEO salary figures are out and everyone is once again relentlessly complaining, I decided to run the numbers again to see where TransLink is now against Canada’s major cities. The base salary is now in line with that of Toronto’s TTC and Montreal’s STM, but not when a bonus of up to 30% is considered:
But, when you consider all of the transit agencies servicing a metro area, the executive payment in this region is comparatively minuscule:
Our region has 1 transit operator with 1 CEO; others have many different operators and multiple CEOs. It’s a concept that’s so simple and easy to understand, and it is absolutely crucial that we familiarize ourselves with it.
When TransLink’s context of a single, region-wide transportation authority is considered against what the region-wide setup is in Canada’s other metropolitan areas, Metro Vancouver actually has the lowest per-capita CEO salary of any major city in Canada. Even if our CEO receives a full 30% bonus.
We now pay about 17.5 cents per capita if the CEO earns a 30% bonus; whereas the people of greater Toronto pay between 1 and 12.5 more cents more for their executives (depending on what you would include as greater Toronto’s transit operators), and the people of greater Montreal each pay between 6 and 12.5 cents more.
We will also be paying our new CEO less for every revenue hour of transit service they manage, even if the CEO receives a full 30% bonus:
The revised, lowered CEO salary will put a maximum of 5 cents back into people’s pockets and would not even pay for buying a single bus. Despite the relatively minimal benefits to Metro Vancouver’s citizens, attracting a new CEO will be a more difficult task with a lower offer, and TransLink should be commended considerably if and when they are able to do so.
The response a TransLink spokesperson offered in Jeff Nagel’s recent report for the Surrey Leader pretty much sums up why TransLink can’t be considered a “transit operator” in the usual vein:
“It needs to be a competitive salary,” Moore said, adding the challenge with comparing TransLink to other transit authorities is there is nothing similar in North America.
“The No side in the plebiscite wanted to compare the CEO of TransLink to one of nine CEOs in Seattle or one of eight CEOs in Toronto,” Moore said, referring to areas where multiple separate agencies do the work of TransLink. “Nobody else has an integrated rail-bus-road infrastructure.”
But, I don’t think most people are ready to understand this – it’s probably easier to think that our transit operator is a transit operator like any other, regardless of the serious differences in the way we are organized. It’s clear that much of the “NO” vote in the recent referendum was motivated by an unfavourable view of executive salaries, which were not being looked at in a proper context.
If anything, this should have an effect on how the provincial government interprets the “NO” vote altogether. At this point, the only way that the misinformation around executive salaries in this region can be offset is for someone to take leadership and recognize the serious flaws in how people have been informed on this matter.
Here’s an interesting collaboration I did with Kyle of 257vancouver over a Twitter conversation. After he posted a few charts with preliminary data, I asked him plot the below chart showing how the referendum YES vote correlated with the commute mode-shares for public transit and driving:
Notice on how the top set of grey dots, there are more dots up where the driving mode share percentage is higher, closer to the left where the yes vote percentage was lower. The opposite is generally true for those who rely on public transit.
To me this is a rather unsurprising but a very important trend to pay attention to. With at least a part of the “NO” vote outcome coming not necessarily as a result of choice of funding method or a distrust of TransLink, but as a result of any opposition to the details of the Mayors’ Council’s transit plan, I think this really says something about how we need to be looking to plan big-ticket transit expansion here in Metro Vancouver. That is, at least, if we want it to get more support for it from the public.
But first, I’m going to have to call into question whether we really know what “efficiency” is.
The big supporters of the “No TransLink Tax” campaign for the upcoming transit referendum have always relied on (and continue to establish) a perception that TransLink needs to improve its efficiency game. I think we’ve pretty much heard all the insults: TransLink is unaccountable, inefficient, doesn’t make good use of taxpayers’ money – and with every time we hear it from them, some sort of particular example is attached of money not being used as well as it could be.
The “No” campaign relies on many of these small-scale examples to feed their perception and drive their agenda. They can be real or manufactured: the examples may vary from a small TransLink funding contribution to the infamous “Main St. Poodle” public art display, free coffee for staff, or even a security failure in 2010 that would likely be best attributed to one or more people but not the entire organization.
There’s a whole list on the campaign website – and a new example gets published every day. It seems that “no” campaigners will look for any excuse: even relics from before TransLink’s creation – such as an upgrade that was denied to the SkyTrain system in the pre-TransLink, B.C. Transit era – are among the list of TransLink criticisms. Obviously, no one’s going to like the notion of a few hundred thousand dollars being dedicated to art when some SkyTrain stations don’t even have escalators. But at the end of the day, it really shouldn’t be too hard to notice that “No” critics have been only looking at the little picture while largely ignoring the big one.
Why does this matter?
When another blogger crunched the ‘TransLink Waste’ numbers featured on the No TransLink Tax website, he found that the primary “inefficiencies” amount to approximately $1.9 million in annual savings. Cutting those costs, no matter how (un)reasonable it would be to do so, would not give us enough money to run a new bus route for a year. In fact, it would provide less than 1% of the funding needed to provide the upcoming transit referendum’s outcome: a $7.5 billion investment plan for transit expansion and other transportation improvements over the next 10 years.
Look at the facts. The facts say that TransLink is already identifying inefficiencies, and there’s not much left to find. Even if all of the identified cruft and waste is trimmed (and that’s not realistic), that only gains you 0.13%, which is miniscule. Put it this way: if you make $25/hr, and you suddenly get a 0.13% raise, do you know how much you make? $25.03. An extra quarter a day.
Does that sound like an “extremely wasteful organization”?
That’s not to say the “No” campaign hasn’t tried to look at some sort of “bigger picture” and reference it for their campaign. You may have noticed the occasional circulation of this chart, which comes from a TransLink efficiency review a couple of years back:
It would be easy for someone to look at an image like this posted by an anti-TransLink source, come to a quick conclusion that TransLink is behind in the efficiency department, and leave with a negative impression of the organization. But, at the end of the day, the context is out of the picture.
This audit (read here) noted in its conclusion that it had found TransLink to be a “well run organization that manages its costs” – pointing to efficiencies that had already been performed before the audit took place. And inside it, on another page, cost-efficiency – as opposed to what this chart is about (cost-effectiveness) – is clearly defined as something else:
The unfavourable result of the above chart (cost-effectiveness) is most likely a result of TransLink being the only operator on the chart that services a multi-city, decentralized metropolitan region. The poor cost-effectiveness is not a result of any “waste” by TransLink, and is an inevitable problem we deal with, partly because of the way our region has been built out and how we have to get around it. Here’s a chart that shows what I mean:
Not having as many revenue passengers per bus is an inevitable result of the area serviced. For example: Vancouver scores as first, because it is laid out in a standard urban grid that was developed around transit corridors, and has had transit longer than any other city; all of this has proven advantageous for upkeep of the city’s transit cost-effectiveness. You shouldn’t expect the same kind of cost-effectiveness in South Delta – which is far away from any major city centres (resulting in longer, more expensive transit routes), and was not built around transit services.
Since “Yes” campaigners don’t seem to be that interested in answering the “No” campaign, we’ve been left with a situation where either side is allowed to believe what their campaigners say, and everyone can get away with lies. The “no” side has been let away with their over-use of the little things and their mess-up of the bigger picture. I don’t think this is a sound way to conduct a decision that will affect all of us for years to come all, and yet it shockingly is what it is.
The missing link is a proper “big picture” context. There just isn’t one established yet that offers a proper, fair breakdown of how cost-efficient our transit system is. It’s not even a complicated matter: one would just need to take the amount of funding being put into our transit services (operating cost), and compare that with the actual amount of transit service provided (service hours).
It struck me that these numbers wouldn’t be hard to find – and when I realized that I had already collected most of the statistics I needed during research for my last “Referendum Myths” write-up (TransLink and Executive Pay), I decided to go right on ahead and put together the big picture myself.
This time, I’m comparing TransLink against all of Canada’s large metropolitan areas with established rapid transit systems. To keep things fair, I have compared all the given transit operators in a metro area and I have also dug into each operators’ financial reports and subtracted costs for amortization, or deprecation of capital assets. It’s not fair to compare these differing assets (many of the individual cities have not yet invested in rapid transit or are just starting to do so), plus it allows me to keep the focus on the efficiency of operations.
I hypothesized that given a proper context, TransLink’s actual “cost efficiency” wouldn’t be as bad as others have made it out to be. My expectations were far, far short of this:
When compared against the 5 other metro areas, TransLink and Metro Vancouver come out as the most efficient operators. Or more simply said, believe it or not, TransLink is the most cost-efficient public transit operation for a Canadian metropolitan area.
For every $1 million in TransLink’s annual operating budget for transit, we get 7117 transit service hours. That means no matter how much money TransLink is “wasting” due to apparently bad spending decisions, we still get more transit per dollar here than at Canada’s 5 other largest cities. The other cities are just not there yet in terms of operating efficiency, when the metropolitan area average is considered. They just don’t provide as many service hours per dollar.
But that’s not all. In my research I made another important discovery…
TransLink also comes out ahead in the “service hours per capita” metric – with Metro Vancouver getting 2.58 service hours per capita, versus an average of just 2.1 in Greater Toronto and 2.43 in Greater Montreal. TransLink isn’t just providing more transit for every dollar we spend – it provides more transit for every person living in our region, than any other region has in Canada. That, to me, says that we’re in the hands of a very, very efficient organization.
That’s not to say this is an excuse for us to stop expanding transit, because we’re above the average. There’s obviously still an imbalance in service levels in our region (I’m especially talking about the South of Fraser) and individual issues that we’ll need extra funding to sort out. If we can support the means to go further, I say we should do so and thus be leaders for other cities in Canada.
At the end of the day, congestion costs money, and remains an issue in every Canadian city. I’d like to see our region take the leap ahead and be the leader in this nation. We’ve taken the first steps, making it a lot less difficult to go the rest of the way.
What I think this goes to show is the success of Metro Vancouver’s public transit operations model.
Whereas cities like Toronto and Montreal do not have coherency and may have multiple transit operators servicing the metro area (Toronto has 9 different authorities, some of them with overlapping responsibilities), we have one and it has been this way throughout history.
The B.C. Electric Railway provided rail and bus service as a single operator – so did B.C. Hydro when they were in charge… and then B.C. Transit’s Greater Vancouver division when that was incorporated. TransLink has continued the same advantageous, simple model – but expanded it by not just taking charge of transit but also taking charge of regional roads, bridges, pedestrian and cycling facilities, and other infrastructure throughout our region.
Who knows what kind of superior efficiency in all aspects of transportation we’ve been having as a region with a single, regional authority like TransLink in charge. Unfortunately, no one is willing to either discuss it or launch some sort of proper comparison – and that’s disadvantageous when TransLink’s model gets put into the spotlight. We simply take our regional model for granted, and we really shouldn’t be when it’s uniquely advantageous.
While I think it’s imperative that the “Yes” vote prevails in this referendum, I do recognize that there are legitimate, understandable reasons you would want to vote “no” to a sales tax for transit. Maybe you don’t think it best done as a sales tax. Maybe you want to send a message to the provincial government for how they’ve handled the matter. Or perhaps you weren’t a fan of the idea of a referendum. An illegitimate basis on which to base your vote on, however, would be the one being pushed by the “No” campaign where your vote becomes a vote against TransLink.
Secondly, as I just pointed out, the “No” side has got it all wrong on TransLink’s inefficiency – and they’re probably not going to apologize for the sheer consequences of this. They’re just too proud of how many people they have fooled for the sake of politics.
To you out there reading this, now it’s time for you to do your part. If you managed to read this far and liked this, spread the word, SHARE this article. If you got here because someone told you to read this, spread it some more. E-mail your friends. Send this to the newspapers, TV stations, etc. Surely you’d agree that we shouldn’t allow the region’s transit future to be determined by a completely unjustified revenge vote based on rather false premises around inefficiency. If you have a couple of friends who want to vote no to vote against TransLink and you know it – now is the chance to turn them around.
I might have one or two more “Referendum Myths” articles up my sleeve, depending on whether some vague ideas in my head end up making sense written out. But, my blog posts from here onward will likely focus on transportation systems as well as my travel experiences in Japan. If you’ve got some cash to spare, I’d love a donation. As great and convenient the transit (particularly rail) systems in Japan are, they’re often not cheap (and I have a lot to say about that soon on this blog).
To make matters worse, there’s a positive aspect we’ve been largely ignoring: there are great things TransLink does for us that we don’t tend to give much credit for, and often give no credit for at all. Perhaps it’s a result of negative willies in the “vote no” side wanting to make sure there’s no possible way to think positively of TransLink, but those reasons are still there. Regular readers will recall that I’ve been pointing them out occasionally with posts in my “No Credit for TransLink” series.
One of them is the bond credit TransLink issued last year that no other transit agency in Canada uses, which last year saved taxpayers in this region $130 million.
Wait, wait, you didn’t hear about this? Well, the thing is, you probably didn’t. When TransLink made mention of this in a media release, the only significant media outlet that covered this unique deal TransLink made was the Vancity Buzz, and even there it did not receive the same attention that other Buzz articles have (judging by the amount of “shares”):
For whatever reason, no one else – not a single newspaper reporter or even a columnist, not a TV or a radio station, and pretty much no one in the transit issues discussion community as of yet – has bothered to take note of this very awesome thing that TransLink has been doing for all of us, so that they wouldn’t have to constantly whip out our gas tax funds to pay for projects that keep the regional transportation system in good working order.
As a bond issue, it’s not take-away money that’s been raised and it does eventually have to be repaid over the long run. However, without these low-risk bonds, we wouldn’t be able to proceed with these projects unless taxes are raised significantly in order to pay by traditional means. This is particularly relevant considering how much disagreement there’s been throughout the years regarding the raising of taxes to keep our transportation network in good, working order – it’s why we’re facing a referendum, after all.
Projects that see this money invested include the maintenance of regional roads, bus fleet renewals and the ongoing rehabilitation of major SkyTrain stations. These are great investments that save us money in the long run because they keep the transportation system reliable for its users.
Without this money, commuters in this region would still be dealing with issues such as old buses that are prone to breaking down, pot holes on our roads, and overcrowded SkyTrain stations that are not built for today’s passenger loads. If not needed immediately (and out of our own pockets), we would still have to make these investments and fix these issues eventually – and they would cost more to do so later and by traditional funding means.
It’s noteworthy that being able to do this requires the maintenance of a positive and stable credit rating, which TransLink must maintain year after year. That’s an achievement for which I do not recall TransLink has ever gotten any meaningful credit for at all.
“The demand for our bonds reflects TransLink’s solid financial position, and it shows strong investor confidence in the organization,” said TransLink CEO Ian Jarvis in a statement. “This access to capital helps keep Metro Vancouver’s transit and road network moving and contributes to the maintenance of transportation assets so they serve the region for years to come.”
The bonds do give us additional debt, but it should be noted that this is something TransLink has had no problem making them a part of the budget as it did manage to make a surplus last year, despite bond repayments.
And, to think that this was done under the leadership of Ian Jarvis. Perhaps if people knew about his efforts to secure unique funding that collectively made us $130 million richer last year, they would have been a little less sour about his six-figure salary. If we total up all the funding TransLink has collected this way, we’ve been $1 billion richer, in the form of well-maintained roads as well as new and renewed transit assets, since 2010.
As Canada’s only transportation agency to raise funds directly through Canadian debt capital markets, TransLink has raised more than $1 billion since 2010.
With transit issues in Metro Vancouver having been the spotlight for essentially the past month and running, I’m sure the bulk of you have been waiting for me to make a comment or put something up on my blog. Now that I’ve had time to put together some data, let’s talk about TransLink and executive pay.
It’s one of the main targets of the relentless “No TransLink Tax” coalition lead by the Canadian Taxpayers’ Federation and BC director Jordan Bateman. The coalition have wasted no time designing their website to capitalize on riders’ sentiments and paint TransLink as a wasteful organization, and the CEO’s high salary is at the front of the criticism.
If you look at the image above, you can see Ian Jarvis’ salary is being compared to the salary of CEOs of other transit operators. How is it not disconcerting? An unelected in-charge, making over $450,000, earning this taxpayer-funded salary while managing a taxpayer-funded authortity, is not an attractive prospect by any means.
But it shouldn’t be as simple as that. By that, I mean to look at the context of the comparison, which just might be hidden between the lines. It may not easy to realize that there’s something missing and questionable in this picture. Like, for example,
Why is Seattle being represented exclusively by Sound Transit?
Sound Transit is a name you might see when you drive into Seattle from Vancouver, because it operates the bus rapid transit routes and stations you see while driving on Interstate 5. They operates numerous express buses and some rail lines, but it’s not the largest transit operator in the Puget Sound nor by any means the one carrying the most ridership. That would be King County Metro, which operates Seattle’s inner-city buses and carries 4x the daily ridership that Sound Transit does.
This is partly because Sound Transit and King County Metro are just two among the 10 different transit operators servicing the Puget Sound. With transit providers split up and each of them smaller in the Seattle region, to put the pay rates up side by side with Metro Vancouver’s should not and does not result in a fair comparison.
Now, I’d like to focus on Toronto as another example of what I mean.
In Toronto, there’s the TTC, which operates the subway, streetcar and bus routes inside Toronto city. Its CEO is Andy Byford, and he gets paid $150,000 less than Ian Jarvis. You could take that number for granted and think – “why do we need to pay our CEO that much more than Toronto pays its CEO?”. But what the CTF doesn’t tell you is that Andy Byford isn’t the only CEO of a transit authority in Greater Toronto. He’s actually one of nine CEOs.
Every other city in Greater Toronto operates its own transit agency – i.e. Mississauga (MiWay), the York Region (YRT), Burlington (Burlington Transit), Brampton (Brampton Transit) – and they each require a separate CEO and administration team.
There is also a long-distance commuter rail network, but it’s maintained by a separate operator (GO Transit) with a separate fare structure and a separate CEO. On top of everything, there’s a TransLink-like authority called MetroLinx that’s responsible for: GO Transit, a region-wide tap-card payment system (like Compass), and decisions on capital-intensive rapid transit projects. There is, again, a separate CEO.
Sounds complicated, doesn’t it?
Well, that’s one of the things the “No” side has failed to account for in its claims. In other cities in Canada, the moment you cross a city border and head into another city suburb, you need to transfer to different operator’s bus (which may even require an additional fare to ride).That hasn’t ever been the case in Metro Vancouver, as the transit administration model we’ve adopted is centered around consolidation and thus simplicity. You ride on TransLink whether you’re in Vancouver or in Surrey. You might have to pay for zones during some parts of the day, but you don’t ever have to pay two fares for two different systems.
Here in Metro Vancouver, we’ve had a single operator in charge of operating transit for the entire region throughout history. The B.C. Electric Railway provided rail and bus service as a single operator – so did B.C. Hydro when they were in charge… and then B.C. Transit’s Greater Vancouver division when that was incorporated. TransLink has continued the same advantageous, simple model – but expanded it by not just taking charge of transit but also taking charge of regional roads, bridges, pedestrian and cycling facilities, and other infrastructure throughout our region.
I personally think it’s because this is what we’ve been used to for pretty much forever, that we take it for granted and never really consider or account for the benefits of this model. TransLink has become, to everyone else, just like any other transit agency – and when our CEO is being paid on the higher end of a six-figure salary, that’s considered in a very negative light even though we perform with 1 CEO what other metropolitan areas perform with 4-9 of them.
So I have compared the transit systems serving Canada’s four largest metro areas (Toronto, Montreal, Vancouver and Ottawa-Gatineau). When you add it all up (and I do mean ALL of it up), this is how we actually compare to other major cities in Canada:
Here’s the full spreadsheet data. The top-in-charge CEO salary numbers are up-to-date and were tracked down by various means (organization report, news report, etc.). Population counts are using more recent estimates by the city rather than the Census. Data is as of the year 2013.
Notice how when I put up the per-capita measurement for the TTC’s CEO only, it comes up as a lot lower than TransLink and looks like a lot of a better deal. This is what I mean about it being a matter of perspective. If you compare the TTC (the inner-city transit operator) only, it definitely looks great. But that’s because you’ve left out GO Transit’s commuter rail service into Toronto; you’ve left out Metrolinx; and you’ve left out all the other transit operators in the suburbs that surround Toronto city.
At this point, it’s not just a matter of who’s got more influence on the general public, but also about how they’re exercising that influence. For one, the leaders behind the “No TransLink Tax” effort have decided to tell us one thing and not tell us the other. They’re trying to convince us that TransLink is even comparable to Toronto’s TTC, Montreal’s STM and other individual city transit agencies when that is simply not the case. They’re outright lieing to us, and we don’t even know it because the concept of TransLink as a unique, single, region-wide entity – and advantageous because of it – has not been established with the voter base.
In case that wasn’t enough, here are some of the other misguided claims that “No TransLink Tax”, the Canadian Taxpayers’ Federation and other proponents on the “No” side have used to portray TransLink and transit expansion in an unjustified negative light that I would like to expose:
The CTF has criticized TransLink for excessively having 6 different ‘boards of directors’ within its structure. But, other metropolitan areas in Canada can have 6 or more different transit operators, each with one or more ‘boards of directors’ within them.
The CTF has criticized TransLink for an “excessive” amount of staff making salaries over $100,000. About 430 people on TransLink make salaries of over $100,000. By comparison, Toronto’s TTC alone has nearly 1400 employees making salaries of over $100,000 – and there are more such employees at GO Transit, Metrolinx, and Greater Toronto’s other transit operators. At Montreal’s STM, 252 employees on senior-level staff alone are earning six-figure salaries – notwithstanding security inspectors and non-executives, as well as employees at Laval (STL), Longeuil (RTL) and the regional AMT, who may also be earning six-figure salaries in greater Montreal.
The CTF has criticized TransLink for having 66 of its 177 transit police officers make over $100,000. By comparison, Toronto doesn’t have a dedicated Transit Police force, but of the city’s civil servants who share the responsibility of patrolling transit along with the TTC’s transit special officers force, more than 40% make salaries of over $100,000. That’s 2983 police officers.
The CTF has claimed that the amount of costs TransLink can cut will pay for the improvements outlined as the referendum outcomes. Proceeding with taming the CTF’s alleged “inefficiencies” would raise only about $1.9 million annually, less than 1% of what is needed to proceed with the $7.5 billion, 10-year plan.
The CTF has claimed that we don’t have to worry about revenue sources because revenue growth among TransLink, Metro Vancouver and the 21 municipalities is projected to increase at 4.8% a year over the next decade. If the expenses being borne by the region – which the CTF seems to have ignored completely – weren’t also projected to rise at this rate or faster than, then there wouldn’t be a need for a transit referendum in the first place.
I’m honestly not sure, considering how much leverage the “TransLink is wasteful” message has on the public, how many people would be tempted to believe it if I were to say that TransLink is actually the most cost-efficient transit agency in all of Canada. Especially with the breaking news that TransLink is now paying two CEOs as Ian Jarvis has resigned, but is continuing to earn his existing salary as an advisor (notwithstanding that he won’t even be getting a severange package). Fuel into the fire for the no campaign.
But, the numbers as I have presented above just do not lie. Even when interim C.E.O. Doug Allen’s pay is also counted, residents of Metro Vancouver are paying less per capita for their top-in-charge than residents of Canada’s other large cities. And under normal levels we pay our CEO less than the other operators do per amount of transit service they manage.
In CEO pay per capita, Metro Vancouver and TransLink are thoroughly outperforming Greater Toronto and Greater Montreal, even if you don’t include the separate operators of the commuter rail lines heading into the city from suburbs.
Many sources have already jumped on board the efforts to debunk clearly misleading numbers released by the CTF, “No TransLink Tax” and Jordan Bateman. Which had me raising a question of what the “No” side might have done in response to them, and how they might respond to this article.
Anyway, I really, really wanted to get this blog article out earlier but with trying to balance my blog efforts with my abroad study life and other issues, it took me about 1 month to gather all the data. Look forward to more referendum involvement from me and this blog soon, though! Your continued support and maybe a donation (link above) would help me keep things up!