On September 24, the commission endorsed a capital plan that contained $1.3 billion in unfunded future projects. Afterwards, Toronto’s city manager, Joseph Pennachetti, who is preparing the City’s capital budget, asked the TTC to rework its capital plan so that the City can reduce its debt projections and maintain its credit ratings. Pennachetti told the TTC that it had to cut $848 million and the TTC has decided to put $548 million of plans on hold.

TTC projects costing another $300 million remain on the books without funding. Taking another $300 million out of the TTC capital program may require it to cut bus routes and result in an overall decline in the system.

According to the Toronto Star, Councillor Adam Giambrone, chair of the Toronto Transit Commission, said the changes will not affect affect the TTC much in the short term, since its capital plans for 2010 and 2011 are coming in under budget. But 2012 and beyond are the problem, when the TTC must pay for major expenditures, including new subway cars and new streetcars.

The cuts that the TTC proposes won’t affect service in the next two years and won’t stop the the TTC from proceeding with projects like building Transit City light rail lines or extending the Spadina leg of the 1 Yonge - University - Spadina subway.

The Star explains that like most municipal agencies, the TTC has two budgets. The capital budget, about $1 billion in 2010, funds vehicles, tracks and buildings and other infrastructure. The operating budget, which TTC staff start discussing next week, covers staffing and other costs of doing business.

The Globe and Mail reports that, at issue is Toronto’s debt target guideline, which prohibits the city from spending more than 15 per cent - or about $460-million - of property-tax revenues on interest and debt repayment.

The TTC’s original capital budget would have put the city well above the threshold, a universal benchmark for credit rating agencies, said city manager Joe Pennachetti. A downgrade in Toronto’s rating by even one step would cost the city tens of millions in higher interest fees compounded over several years, he added.

The TTC has received billions from all the municipal, provincial and federal governments over the past five years. In the past, the city turned to Queen’s Park and Ottawa to make up shortfalls, but both levels of government have indicated the money tap is closed this year, he said.

The National Post lists the cost of some of the projects that the TTC proposes holding until more funding is available:

• $1.7 million for installing debit and credit card machines at ticket booths.
• $74.9 million for modernizing subway stations (although projects already underway at Dufferin, Pape and Victoria Park Stations would continue).
• $4.4 million for building transit shelters and loops.
• $25.6 million for paving.
• $24.2 million for developing bus rapid transit service along Yonge Street between Steeles Avenue and Finch Station.
• $6.6 million for expanding parking lots at Islington and Kipling Stations.
• $30 million for repaving elevated ramps and structures such as the elevated deck at Wilson Station.
• $10 million for maintaining bridges and overpasses.
• $52 million for upgrading fire ventilation systems.
• $60.2 million for installing elevators to make stations accessible.
• $4.5 million for improving washrooms in subway stations.
• $3 million for studying proposals to build a downtown relief subway line.
• $33.5 million for buying 40-foot clean diesel buses.
• $3.7 million for installing automatic passenger counters.
• $29.2 million for installing tranist priority signals as part of the Transit City Bus plan.