Table of Contents 1. Executive Summary ...................................................................................................................... 3 2. 2017 Financial and Operating Summary ........................................................................................ 6 3. Key Performance Indicators and Drivers ....................................................................................... 8

Financial Indicators ................................................................................................................................. 8 Operating Indicators ............................................................................................................................... 9 Key Drivers ............................................................................................................................................ 11 Assumptions ......................................................................................................................................... 12

4. Consolidated Revenues .............................................................................................................. 13 2017 Budget Comparison to 2016 Q2 Forecast ................................................................................... 13

5. Consolidated Expenses by Segment ............................................................................................ 15 Bus Operations ..................................................................................................................................... 15 Rail Operations ..................................................................................................................................... 21 Police Operations ................................................................................................................................. 25 Corporate Operations ........................................................................................................................... 27

6. Investment in Capital Assets....................................................................................................... 32 2017 New Capital Program ................................................................................................................... 33 Active and Approval in Principle (AIP) Projects Underway .................................................................. 35 Capital Infrastructure Contributions .................................................................................................... 38

7. Changes in Financial Position ...................................................................................................... 39 Financial Assets .................................................................................................................................... 39 Liabilities ............................................................................................................................................... 39 Non-Financial Assets ............................................................................................................................ 40

8. Liquidity and Capital Resources .................................................................................................. 41 Cash Flows and Liquidity ...................................................................................................................... 41 Restricted Funds ................................................................................................................................... 41 Net Debt ............................................................................................................................................... 42

Appendix I – Consolidated Financial Statements ............................................................................... 43 Consolidated Statement of Financial Position ..................................................................................... 43 Consolidated Statement of Operations ................................................................................................ 44 Consolidated Statement of Changes in Net Debt ................................................................................. 45 Consolidated Statement of Cash Flows ................................................................................................ 46

Appendix II – Allocated Costs between Divisions ............................................................................... 47

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Caution Regarding Forward-Looking Statements From time to time, TransLink makes written and/or oral forward looking statements, including in this document, and in other communications, in addition, representatives of TransLink may make forward-looking statements orally to analysts, investors, the media and others. Forward-looking statements, by their nature, require TransLink to make assumptions and are subject to inherent risk and uncertainties. In light of uncertainty related to financial, economic, and regulatory environments, such risks and uncertainties, many of which are beyond TransLink’s control, and the effects of which can be difficult to predict, may cause actual results to differ materially from the expectations expressed in the forward-looking statements.

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1. Executive Summary A PLAN FOR MORE TRANSIT AND BETTER ROADS TransLink is a large, complex organization with a wide-ranging mandate. Of the world’s major cities and regions, only Metro Vancouver, London and Paris integrate public transit and road planning under one central authority with its own streams of revenue. TransLink delivers a wide range of services and programs to plan and provide for the transportation needs of Metro Vancouver residents and businesses. This includes bus, SeaBus, HandyDART, three rapid transit lines (SkyTrain), and a commuter rail service. TransLink also owns and maintains a subset of the region’s bridges, and shares responsibility for the region’s Major Road Network with local municipalities. It is the largest transit service area in Canada, spanning 23 municipalities/electoral districts/First Nations areas in Metro Vancouver. Metro Vancouver is known for its livability, including a highly functional, integrated transportation network. But our region faces challenges, including overcrowding on our transit system, congestion on our roads, and another one million new residents expected to move to Metro Vancouver over the next 30 years. To meet the challenges of growth and congestion in a way that is affordable and fair, in June 2014 the Mayors’ Council on Regional Transportation developed the 10-Year Vision for Metro Vancouver Transit and Transportation (10-Year Vision). Founded on years of planning, the Vision identifies the new transportation services the region will need over the coming decade. Phase One of the 10-Year Vision is focused on increasing transit services and improving roads, cycling and walking infrastructure across the entire region. This Plan is the largest transit service expansion in the region since 2009. This is an important first step in creating the transportation system our growing region will need to meet future demand. The 2017 budget represents the first year of Phase One of the 10-Year Vision. With guiding principles to maximize ridership and encourage long-term ridership growth, the investments in the 2017 Business Plan, Operating and Capital Budget are supported by three priorities with the aim of increasing customer satisfaction, safety and service reliability. Investments are needed to support our aging system and maintain our reliable service; to prepare for population growth to ensure a livable region and to keep improving on our customer’s experience. PRIORITY ONE: ENSURE STATE OF GOOD REPAIR TransLink will proactively manage and maintain all assets in a state of good repair to ensure safety and reliability, optimize lifecycle costs, and enhance the customer experience. Objective 1: Continually improve the current record of safe and secure operations We will proactively manage our assets and activities in order to ensure safe, secure and resilient operations for our customers and employees.

Initiatives: 1. Implement an Asset Management (EAM) system for the enterprise 2. Develop and implement CMBC Safety Management System 3. Develop and implement an Enterprise Emergency Response Plan (EERP)

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4. Design, procure and build a new Pattullo Bridge in accordance with the Mayors’ Vision 5. Replace rail on Expo and Millennium Lines

Objective 2: Investing in the future of Rail Services We will focus resources on the continuous improvement of our people, business tools and structure to ensure a safe and reliable system.

Initiatives: 1. Implement the remainder of the recommendations of the 2014 Independent Review of

SkyTrain 2. Modernize systems and processes 3. Develop and implement a workforce plan to enhance the capacity and skills of employees

PRIORITY TWO: MOBILIZE MAYORS’ VISION We will successfully deliver the capital projects, service expansion and policy initiatives necessary to mobilize the Mayors’ Vision. Objective: Deliver regional transportation priorities We will successfully roll-out the Mayors’ Vision by implementing the early priorities (years 1-3) in the 2017 Investment Plan and establish the ground work for subsequent phases.

Initiatives: 1. Implement the early roll-out of the 10-Year Vision, both operating (all modes) and capital

(planning and delivery) 2. Initiate foundational work for the next phase of the Mayors’ Vision 3. Develop a Mobility Pricing Plan

PRIORITY THREE: IMPROVE CUSTOMER EXPERIENCE & PUBLIC SUPPORT With a customer first approach, we will build public trust and confidence in TransLink by focusing on growing ridership, engaging stakeholders and delivering the Mayors’ Vision. Objective 1: Improve TransLink’s Reputation We will build trust and confidence in TransLink through active customer and stakeholder engagement and a commitment to consistent, high quality service with an emphasis on safety.

Initiatives: 1. Develop and implement a comprehensive external Customer Experience Strategy 2. Deliver enhanced Compass experience through delivery of the next phase 3. Implement outcomes of Access Transit Service Delivery Review 4. Develop and implement Transit Police’s enhanced Public Safety and Community

Outreach initiatives 5. Develop and implement a brand strategy

Objective 2: Increase Ridership We will attract and serve more customers, meeting more of their mobility needs on both the existing and expanded transit system in order to support the regional objectives.

Initiatives: 1. Develop and implement a comprehensive Ridership Growth Strategy 2. Complete a Fare Policy Review 3. Expand mobility options to the region through rideshare, cycling, travel planning

services, and a possible pilot program for vanpooling

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Objective 3: Develop Employees We will empower our workforce to meet our customer service standard and corporate objectives.

Initiatives: 1. Develop and implement a consistent customer service program across the enterprise 2. Implement growth and development opportunities for potential successors through

succession planning 3. Develop and implement an enterprise wide E-Learning strategy

To deliver the priorities set in the 2017 budget, additional funding will be obtained through; Public Transit Infrastructure Fund (PTIF) funding, increased transit fares, increased property taxes, and the gain on sale of surplus property. The risk associated with these much needed funding sources include; timing of PTIF funding, higher than expected elasticity resulting from the planned fare increase, as well as our capacity to deliver on service expansion and capital projects.

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2. 2017 Financial and Operating Summary TransLink receives approximately 31.1 per cent of its revenue from continuing operations from transit fares, with the remainder coming primarily from fuel and property taxes. This means that as TransLink expands its services, an increasing amount of funding from fares, taxation and other sources are necessary. Operating costs include expenditures related to the day to day delivery of bus, rail, SeaBus and Access Transit services; as well as maintenance and administration of our multi-modal transportation system. Expenditures include labour, contracted services, fuel, maintenance and materials, and administrative expenses.

The 2017 budget results in a $308.3 million surplus on a Public Sector Accounting Board (PSAB) basis. Excluding gain on disposal, the surplus is budgeted to be $158.6 million.

While total revenues are expected to increase by 14.3 per cent over the second quarter forecast of 2016, the funding generated from government transfers and proceeds from sale of surplus property are largely restricted for capital infrastructure investments. Operating revenues are expected to increase as a result of anticipated growth in ridership, tolled bridge crossings, a planned fare increase in July, property tax increases and fuel sale volumes.

Total expenses are expected to increase $124.9 million (8.3 per cent) over 2016 second quarter forecast mainly due to higher operating costs resulting from bus and rail service expansion including the

CONSOLIDATED REVENUES AND EXPENSESTwelve months ending December 31 2015 2016 2017($ thousands) ACTUAL Q2 FORECAST BUDGET Incr/(Decr) %

RevenueTaxation 772,722 805,298 833,028 27,730 3.4%Transit 511,445 536,565 558,910 22,345 4.2%Government transfers 228,943 222,505 281,904 59,399 26.7%Golden Ears Bridge tolling 48,444 52,197 55,744 3,547 6.8%Investment Income 34,381 39,054 37,712 (1,342) (3.4%)Amortization of deferred concessionaire credit 23,273 23,401 23,337 (64) (0.3%)Miscellaneous 6,102 5,535 5,464 (71) (1.3%)Sub Total Continuing Operations 1,625,310 1,684,555 1,796,099 111,544 6.6%Gain on disposal 2,340 17,148 149,677 132,529 772.9%

Total Revenue 1,627,650 1,701,703 1,945,776 244,073 14.3%

ExpendituresBus Division 643,484 654,074 691,289 37,215 5.7%Rail Division 268,311 265,604 300,010 34,406 13.0%Transit Police 33,136 33,630 36,921 3,291 9.8%Corporate operations 80,866 91,814 101,158 9,344 10.2%Roads & Bridges 71,246 74,895 103,244 28,349 37.9%Amortization of Capital Assets* 168,290 185,020 209,286 24,266 13.1%Interest* 167,902 170,417 176,301 5,884 3.5%Sub Total Continuing Operations 1,433,235 1,475,454 1,618,209 142,755 9.7%Corporate - onetime 32,053 37,150 19,290 (17,860) (48.1%)

Total Expenditures 1,465,288 1,512,604 1,637,499 124,895 8.3%

Surplus for the year 162,362 189,099 308,277 119,178 63.0%

* Amortization and Interest shown separately to facilitate analysis

Change

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Evergreen Extension. Also included in the 2017 Budget are costs related to contractual labour increases, inflation, state of good repair improvements, and costs related to investment in our key priorities.

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3. Key Performance Indicators and Drivers

Financial Indicators

TransLink’s unrestricted cash and investment balances reflecting accumulated funding resources available for supporting operations, are budgeted to increase by $35 million compared to the 2016 second quarter forecast. Planned capital spending during 2017 will result in a net increase of $367.2 million (7.5 per cent) in capital assets. Significant projects include conventional bus replacements, rail fleet expansion, station upgrades, rail infrastructure projects, and procurement readiness work for the Millennium Line Broadway Extension and the South of Fraser Light Rapid Transit (LRT) rapid transit projects. Net direct debt increases by $174.7 million (8.1 per cent) in 2017 to $2.3 billion due to increased long-term borrowing to finance capital assets including bus fleet replacements, SkyTrain fleet expansion and Station upgrades. Indirect P3 debt relating to the Canada Line and the Golden Ears Bridge contractor liability decreases by $26.8 million due to amortization and principal payments. The gross interest cost as a percentage of operating revenues remains consistent with the 2016 forecast, and is well below our policy level of 20 per cent.

FINANCIAL INDICATORS2015 2016 2017

($ thousands) ACTUAL Q2 FORECAST BUDGET Change %

Unrestricted cash and investments 1 310,470 231,600 266,564 34,964 15.1%Capita l assets 4,606,623 4,906,331 5,273,583 367,252 7.5%

Net di rect debt 2 (1,989,934) (2,144,905) (2,319,640) (174,735) (8.1%)Indirect P3 debt 3 (1,623,309) (1,597,898) (1,571,097) 26,801 1.7%Tota l net di rect debt and indirect P3 debt (3,613,243) (3,742,803) (3,890,737) (147,934) (4.0%)

Gross interest cost as a % of operating revenue 4 12.4% 12.0% 12.0% (0.0%) (0.3%)

1 This represents the accumulated funding resources as calculated under the SCBCTA Act and is the amount of resources available to fund future operations.2 Includes Translink's direct debt, net of TransLink sinking funds and debt reserve deposits3 Includes Deferred concessionaire credit for Canada Line and Contractor liability for Golden Ears Bridge4 Operating revenue includes transit, taxation, GEB toll revenue, operating transfers from Provincial government and miscellaneous income.

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Operating Indicators

Scheduled Transit Service

The targeted overall performance rating is to reach 8.0 within three years with improvements of 0.1 per year. Conventional system service hours are projected to increase 372 thousand hours. This includes the impact of the Evergreen Extension and bus and rail expansion service to reduce overcrowding and improve service reliability. The cost recovery ratio is expected to decrease by 1.3 per cent due to the cost of expansion service that takes time to achieve full ridership. The operating cost per capacity kilometre is expected to decrease 3.5 per cent due to increased service capacity resulting from Evergreen Extension and additional service expansion. Access Transit Service

Access Transit trips are planned to increase by 44 thousand trips (3.5 per cent) to provide increased service for passengers unable to use conventional public transit without assistance.

OPERATING INDICATORS2015 2016 2017

Twelve months ending December 31 ACTUAL Q2 FORECAST BUDGET Incr/(Decr) %

Scheduled Transit ServiceOverall Performance Rating (out of 10) 7.5 7.6 7.8 0.2 2.6%Service Hours 6,254,648 6,351,577 6,723,506 371,929 5.9%Cost Recovery Ratio 51.8% 52.5% 51.8% (0.7%) (1.3%)Operating Cost per Capacity Km 1 $0.084 $0.086 $0.083 ($0.003) (3.5%)Complaints per million Boarded Passengers 94.2 82.1 76.1 (6.0) (7.4%)

Access Transit ServiceNumber of Trips 1,204,788 1,243,889 1,287,500 43,611 3.5%Operating Cost per Trip $40.64 $40.10 $39.81 ($0.29) (0.7%)Number of Trips Denied 1,613 1,763 1,500 (263) (14.9%)Operator Complaints as a percentage of trips 0.04% 0.04% 0.05% 0.01% 24.3%Service Complaints as a percentage of trips 0.07% 0.07% 0.07% - -

Golden Ears BridgeCrossings (thousands) 12,695.9 13,117.5 14,069.9 952.4 7.3%Average Toll per Crossing 3.65 3.72 3.75 0.03 0.8%

Ridership (thousands)Boarded Passengers 364,261 381,277 392,753 11,476 3.0%Journeys 2 n/a 233,339 240,469 7,130 3.1%Average Fare per Journey 2 n/a $2.30 $2.32 $0.02 0.9%

1 Includes operating costs of Bus, SeaBus, Expo & Millennium line, Canada Line, West Coast Express and Police, and excludes depreciation and interest expense2 In 2016, a new ridership estimation methodology was introduced, therefore comparative historic figures are not available

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Golden Ears Bridge

Golden Ears Bridge crossings are expected to increase 7.3 per cent over the second quarter forecast due to increased Vehicle Kilometres Travelled (VKT’s) in the region. The average toll rate per crossing is expected to increase 0.8 per cent due to a bylaw inflationary increase in July. Ridership

With Compass data now available, Journeys replaced revenue passengers as the new ridership metric; therefore comparative 2015 actual figures are not available. A journey is considered to be a complete transit trip using Compass fare media or other proof of payment, regardless of the number of transfers. Journeys are considered a better metric than Revenue Passengers due to improved actual data (Compass) and reduced dependence on assumptions in the new ridership estimation methodology.

The average fare per journey is expected to increase from the 2016 forecast by approximately 0.9 per cent from $2.30 to $2.32, due to a planned fare increase on certain products in July 2017.

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Key Drivers Ridership Ridership is assumed to grow 3.1 per cent based on increased service hours, elasticity impacts of fare increases, fuel prices and employment growth. Evergreen Extension ridership expectations for 2017 and beyond are expected to increase over the first five years. In 2017, the Evergreen Extension contributes approximately 1.5 per cent of the 3.1 per cent growth anticipated in 2017. Households Household projections are based on estimates from BC Stats. BC Stats provides annual household estimates for the Metro Vancouver region. The number of households in the Metro Vancouver region is expected to grow by 1.7 per cent in 2017 when compared to 2016. Household growth impacts both fare revenues, and taxation revenues. Interest rates Interest rates for the budget are based on forecasts from major Canadian chartered banks and TransLink credit spread and issue costs. The 2017 short term and long term interest rates are similar to the 2016 second quarter forecast. Inflation Consumer Price index (CPI) growth assumption for the 2017 budget is 2.0 per cent based on the BC Ministry of Finance. Taxable fuel consumption Fuel consumption volumes are used to estimate fuel tax revenue. Fuel volume projections are developed using a Provincial forecast modified for specific characteristics in the Region. Fuel volumes are forecasted to grow by 2.3 per cent over the 2016 second quarter forecast. Current low prices in combination with a weak Canadian dollar and a surge in automobile ownership are believed to be driving a short-term increase in regional consumption. Hydro cost Electricity rates increased by 4 per cent in April 2016 per BC Hydro, and will increase by 3.5 per cent in April 2017 for an annualized rate of 3.63 per cent in 2017. Hydro costs impact propulsion power for SkyTrain and Trolley Buses along with facility utility costs. Rate increases take effect in April of every year. Gasoline and Diesel prices Fuel prices affect operating costs for buses as well as West Coast Express Trains. Fuel prices are estimated using US Energy Information Administration forecasts adjusted for Canadian prices, taxes and price differentials. Fuel cost includes the futures volumes and rates locked in through April 2017. Revenue Vehicle insurance Bus fleet insurance rates are expected to increase by 5.5 per cent on April 1, 2017 based on the expected annual increase from ICBC.

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Assumptions The following table highlights the financial impact of changes in key assumptions used to develop the 2017 budget:

ASSUMPTIONS SENSITIVITIESRATE / Impact

VOLUME Change ($ mi l l ions)

RevenueRegional Fuel Consumption mi l l ions of l i tres 2,262 1 per cent +/- 3.8Ridership mi l l ions of journeys 240.5 1 per cent +/- 5.6Golden Ears Bridge Cross ings mi l l ions of cross ings 14.1 1 per cent +/- 0.5

ExpenseDiesel cost dol lars per l i tre 1.08 $0.10 +/- 4.0Operational Diesel Use mi l l ions of l i tres 39.73 1 per cent +/- 0.4

Interest rate Short term 1.5% 0.5 per cent +/- 0.9Long term 3.5% 0.5 per cent +/- 1.5

Inflation Genera l 2.00% 0.5 per cent +/- 0.3Materia ls 2.00% 0.5 per cent +/- 0.4Electrici ty 3.63% 0.5 per cent +/- 0.1

Col lective Agreements Uni for 1 per cent + 2.9COPE 1 per cent + 0.6CUPE 1 per cent + 0.8TPPA 1 per cent + 0.2

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4. Consolidated Revenues TransLink receives its revenue mainly through taxation, user fees and government transfers. Total consolidated revenues for 2017 are expected to be $1.9 billion, an increase of $244.1 million over the 2016 forecast. This increase is mainly due to sale of surplus property and government transfers, which are largely restricted for investment in capital infrastructure. Taxation, transit, and toll revenues are expected to increase by $53.6 million over the second quarter forecast.

2017 Budget Comparison to 2016 Q2 Forecast

Taxation Taxation Revenues is comprised of fuel tax, property and replacement tax, parking rights tax and hydro levy. It accounts for 46.4 per cent of total revenues before gain on disposal. Fuel tax revenues for 2017 are estimated to increase $8.6 million (2.3 per cent) due to an anticipated increase in Vehicle Kilometres Travelled (VKT), offset by more fuel efficient vehicles and fuel leakage outside of the region. This growth trend is consistent with information from third-party retail sources. Property tax revenues are expected to increase 4.6 per cent. Revenues include an annual 3.0 per cent increase in property tax revenue from existing properties as well as property tax revenue from development and construction growth estimated at 1.9 per cent. The replacement tax portion remains at $18.0 million. Parking Rights taxation revenue for 2017 is budgeted to increase $3.0 million (4.5 per cent) over the 2016 forecast, reflecting increased VKT within the Metro Vancouver region, driving parking volume increases.

CONSOLIDATED REVENUESTwelve months ending December 31 2015 2016 2017($ thousands) ACTUAL Q2 FORECAST BUDGET Incr/(Decr) %

TaxationFuel 356,834 376,000 384,564 8,564 2.3%Property & Replacement 332,489 341,540 357,333 15,793 4.6%Parking Rights 63,334 67,359 70,387 3,028 4.5%Hydro Levy 20,065 20,399 20,744 345 1.7%

Transit 511,445 536,565 558,910 22,345 4.2%Government transfers 228,943 222,505 281,904 59,399 26.7%Golden Ears Bridge tolling 48,444 52,197 55,744 3,547 6.8%Investment Income 34,381 39,054 37,712 (1,342) (3.4%)Amortization of deferred concessionaire credit 23,273 23,401 23,337 (64) (0.3%)Miscellaneous 6,102 5,535 5,464 (71) (1.3%)Revenue Before Gain/(Loss) on Disposals 1,625,310 1,684,555 1,796,099 111,544 6.6%Gain on disposal 2,340 17,148 149,677 132,529 772.9%Total Revenue 1,627,650 1,701,703 1,945,776 244,073 14.3%

Change

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Transit Transit Revenue makes up 31.1 per cent of total revenues before gain on disposal; which includes fare revenue, program revenue and other transit revenue. Fare revenue consists of cash fares, discounted Stored Value purchases, as well as Day and Monthly Pass products. Program revenue includes Government of BC Bus Pass and U-Pass BC revenue. Other transit revenue includes advertising, rental, parking lot fees and fare infraction. Total transit revenue is expected to increase by $22.3 million (4.2 per cent) from the 2016 forecast. Fare revenues are expected to increase due to an increase in ridership from service expansion, the full year impact of fares gate closures which had a positive impact on fare revenue collected, and a planned increase in fares in July 2017 which have not been raised since 2013. The fare increase is 5 to 10 cents for single use products, 25 cents for day passes and $1.00 to $2.00 for monthly passes. Transfers from Government Transfers from government include funds received from Greater Vancouver Regional Fund (GVRF), Canada Line funding, Building Canada Fund, Public Transit Infrastructure Fund, and other miscellaneous programs. The total revenue from these funds is expected to increase $59.4 million (26.7 per cent) compared to the 2016 forecast mainly due to increased expenditures eligible for GVRF being undertaken during 2017 and the new Public Transit Infrastructure Fund. Golden Ears Bridge Tolls TransLink receives tolling revenue from vehicles crossing the Golden Ears Bridge. Tolling revenues for 2017 are budgeted to increase $3.5 million (6.8 per cent) over the 2016 forecast due to increased volumes and an inflation increase in July 2017. The increase is determined by the value of the all items consumer price index for Canada which is expected to be 2.1 per cent. Crossing volumes are expected to increase by 7.3 per cent based on historical observations of volume growth, vehicle registration data and economic trends. Investment Income The lower investment income is due to lower expected returns on sinking funds and unrestricted investment balances, although this is somewhat tempered by higher sinking fund balances. Risks and Challenges Risks related to transit fares include achieving ridership targets and customer behaviour for purchase of various fare products. With the proposed fare increase in July, there is a risk of higher elasticity resulting from; price and service quality with customers expecting more frequent and reliable service. Fuel tax volumes are unpredictable, as suppliers have up to 48 months to recover tax paid on exempt volumes or fuel resold outside the transit region. Market change in the price of crude oil, the USD/CAD exchange rate and the cost of transportation can also impact the amount of fuel tax collected and remitted to TransLink. The property tax budget includes new revenue from development and construction growth; the rate for 2017 is estimated at 1.9 per cent. If the 2017 actual rate is lower, a lesser amount of incremental property tax revenue will be received.

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5. Consolidated Expenses by Segment TransLink is responsible for delivering transit services, owns and operates five bridges, and provides operating and capital funding for the Major Road Network (MRN) and cycling in Metro Vancouver. With the anticipated increase in service across all modes, operating costs will increase accordingly. Total expenses are expected to increase $124.9 million over the 2016 second quarter forecast mainly related to bus and rail service expansion as outlined in the 2017 Phase One of the 10-year Vision, integration of the Evergreen Extension; road, public infrastructure and state of good repair improvements; and contractual labour and inflation increases.

Bus Operations Coast Mountain Bus Company (CMBC) oversees the operations of Conventional and Community bus service, SeaBus and Access Transit. CMBC currently operates a fleet of 1,450 Conventional and Community vehicles. SeaBus is also a key component of Metro Vancouver’s transportation system carrying over 6 million passengers per year or on average 23,000 passengers per day. Within the Bus Division, CMBC administers the contracts for HandyDART, West Vancouver Blue Bus and the contracted community shuttle operators. Initiatives: Ensure state of good repair In 2017, CMBC will undertake the following initiatives to ensure safe and secure operations and keep our transit infrastructure in a state of good repair:

• Continue to develop the Safety Management System (SMS) through 2017 and into early 2018, at which time it will be fully implemented across CMBC. Implementation in the Maintenance Division is expected to be complete by June 2017, after which the focus will shift to the Operations Division and remaining corporate areas. SeaBus successfully implemented SMS in 2015 as part of their regulatory requirements.

CONSOLIDATED EXPENSES BY SEGMENTTwelve months ending December 31 2015 2016 2017($ thousands) ACTUAL Q2 FORECAST BUDGET Incr/(Decr) %

Bus Division 643,484 654,074 691,289 37,215 5.7%Rail Division 268,311 265,604 300,010 34,406 13.0%Transit Police 33,136 33,630 36,921 3,291 9.8%Corporate operations 80,866 91,814 101,158 9,344 10.2%Roads & Bridges 71,246 74,895 103,244 28,349 37.9%Amortization of Capital Assets* 168,290 185,020 209,286 24,266 13.1%Interest* 167,902 170,417 176,301 5,884 3.5%Sub Total Continuing Operations 1,433,235 1,475,454 1,618,209 142,755 9.7%Corporate - onetime 32,053 37,150 19,290 (17,860) (48.1%)Total Expenses by Segment 1,465,288 1,512,604 1,637,499 124,895 8.3%

* Amortization and Interest shown separately to facilitate analysis

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• Following up on the 2015/2016 transit operator barrier pilot involving several protection barrier designs, CMBC and other stakeholders will evaluate the feasibility of barriers from safety, maintenance and customer service perspectives.

• Complete safety reviews at five major bus loops/exchanges. • Undertake ongoing Power Smart initiatives to reduce costs, extend facility life and provide

better staff working conditions. CMBC will continue to evaluate its operations for energy and cost savings opportunities and where feasible and cost-effective, retrofit projects such as LED lighting and waste heat capture will be pursued cooperatively with BC Hydro and FortisBC.

• Replace the existing outdated electronic fareboxes with more cost efficient technology. • Replace key operational equipment such as trolley poles and wires, buses, hoists, facility roofs

and support vehicles subject to capital program approvals and GVRF funding where available. • Carry out SeaBus facility and infrastructure retrofits. • Implement CNG fueling at Surrey Transit Centre and take delivery of more fuel cost-efficient

CNG buses to replace retiring diesel buses. • Participate in and support key business system upgrades including:

• Operator holiday signup system replacement • Daily Operations Management System (bus operator tracking and payroll) replacement • Transit Management and Communications’ bus radio system replacement • MyTime payroll data collection upgrade.

Mobilize Mayors’ Vision Through the Mayors’ Vision and investment plan, 2017 will see the first phase of the transit service increases with the implementation of annual service expansion for Conventional bus, Community Shuttle, SeaBus, West Vancouver, Contract Community Shuttle and Access Transit services.

For Conventional bus and Community Shuttle, the Bus division will implement over 200,000 annual service hours in phases over 2017. This will alleviate overcrowding and pass-ups and provide for improvements of bus service across the network. The 2017 budget provides for the following preparations:

• Expanded service requires the doubling of transit operator recruitment and training efforts. Aside from the average annual attrition of approximately 150 operators, an additional 100+ operators will be required with seasonal sheet changes through 2017.

• Short term use and deferred retirement of older buses to increase the bus fleet for expanded service. This involves the costs of storing, handling and maintaining these vehicles to keep them in service until they can be retired and replaced over the next 12 to 18 months.

• Acquisition of additional vehicle onboard equipment for the expanded fleet including radios, Compass validators and fareboxes. The procurement must take into account the time from ordering through delivery and final installation on the fleet.

• Hiring of additional support staff such as mechanics, service people, other associated trades and supervisory and administrative staff to support the expanded service.

• Improved SeaBus service to deliver 15-minute/two boat service on Sundays year-round starts January 2017 and expanded hours of 15-minute service every day starts in September 2017. The fall increase will require additional crewing staff, repair inventories and safety training. The increase of 1,200 annual service hours equates to an 11 per cent increase in service levels.

• Access Transit services will increase by 45,000 hours, equating to approximately 85.5 thousand additional trips over 2016 budget levels.

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• The Mayors’ plan for additional future service increases requires initiation efforts in 2017 to acquire new fleet to replace the vehicles with deferred retirements and acquire a new third SeaBus. There is a time lag of up to 18 months to order and receive new buses and over two years for a new SeaBus.

Improve customer experience and public support In 2017, CMBC will undertake the following initiatives in support of the customer experience:

• Improve wayfinding signage and schedules to provide customers with quicker and easier information access. CMBC will work toward displaying route name and numbers at all bus stops system-wide, as well as providing enhanced schedule information through Transit Information Panels at key bus stops, loops and exchanges.

• Fine tune the integration of bus service with the Evergreen Extension. • Assess the viability of “double decker” buses and fully electric buses. • Complete a Bus Service Performance Analysis to more reliably deliver bus performance

measurement and KPIs. • Continue the revised policy of installing Automatic Passenger Counters (APC) on all new

replacement and expansion buses and deriving better information to further compliment the compass data.

• Pilot luggage racks on buses that serve BC Ferries terminals. • Conduct regular bus and SeaBus interior cleaning inspection programs to ensure appropriate

conditions for employees and customers. • Fully implement a Resiliency Plan to provide alternate fueling facilities and facilitate the

movement of buses and staff in the event of a major event or service disruption. • Deliver a revised employee recognition program for length of service, safety and performance. A

modern and flexible online points-based rewards service will form the basis of CMBC’s Employee Recognition Program, allowing for timely and meaningful positive reinforcement of corporate goals.

• Conduct a comprehensive Access Transit Policy and Service Delivery Model review to identify opportunities to improve accessible or custom transit service delivery.

• Access Transit will review the customer complaint process, provide more training to taxi operators, review Trip Denials and implement an account-based Compass card for HandyDART customers.

Risks and Challenges Service expansion will increase workforce planning, recruitment and training to fulfil new staffing requirements in addition to offsetting retirements and other attrition. The expanded service introduced through the year will require more transit operators, maintenance staff and SeaBus crewing at the appropriate times plus have impacts on maintenance and service support areas for running a larger fleet with more kilometres. Difficulties in hiring certain key positions and skillsets continue to be a risk.

The early rollout plan requires using retired or scheduled to be retired buses in the short term to provide the required fleet and the timely procurement of additional on board equipment.

CMBC has a diesel fuel management strategy to attempt to mitigate market price changes and achieve budget stability by locking in up to 75 per cent of expected monthly fuel volumes for future months. West Vancouver purchases their fuel through the city and their municipal fuel supply arrangements. The other transit contractors participate in our fuel supply arrangement. Natural gas price supply agreements including locked-in volumes are currently in the procurement process. CMBC will be

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operating new CNG replacement buses in 2017, lowering diesel fuel demand and generating fuel cost savings over 2016. The known BC Hydro electricity rate increases for 2017 are built into the budget.

Abnormal inclement winter weather conditions and weather pattern variability could result in snow clearing, salting and other vehicle maintenance costs significantly beyond planned expenditures, which are based on long range average costs. CMBC’s locations include 35 loops, seven transit centre lots, SeaBus administration and three HandyDART locations. Each snow day can cost $125,000 for salting and snow clearing against an annual budget of $600,000.

Service Assumptions

The 2017 budget includes the first phase of the transit service increases of the Mayors’ Vision and Investment Plan. The 2017 service increase is over 200,000 annual service hours for conventional transit services including SeaBus and Contracted transit services and will require approximately 80 revenue vehicles. The 2017 service hour change of 138 thousand shown in the schedule above represents the

2015 2016 2016 2017CONVENTIONAL TRANSIT ACTUAL BUDGET Q2 FORECAST BUDGET Incr / (Decr) %SERVICE HOURS

CMBC Operations 4,687,022 4,770,418 4,770,442 4,901,828 131,386 2.8% Conventional Bus 4,187,049 4,264,474 4,273,498 4,378,050 104,552 2.4% Community Shuttle 489,040 494,983 485,953 512,199 26,246 5.4% SeaBus 10,933 10,961 10,991 11,579 588 5.3%

Contracted Transit Services 236,910 238,659 237,986 244,237 6,251 2.6% West Vancouver 134,306 135,265 134,684 138,792 4,107 3.0% Contract Community Shuttle 102,604 103,394 103,301 105,446 2,144 2.1%

Conventional Transit 4,923,932 5,009,077 5,008,428 5,146,065 137,637 2.7%

SERVICE KILOMETRES

CMBC Operations 92,044,250 93,758,835 93,503,531 96,178,226 2,674,695 2.9% Conventional Bus 81,960,814 83,308,088 83,340,835 85,420,886 2,080,051 2.5% Community Shuttle 9,935,644 10,302,562 10,014,122 10,600,814 586,692 5.9% SeaBus 147,792 148,185 148,574 156,526 7,952 5.4%

Contracted Transit Services 5,122,037 5,196,644 5,176,326 5,280,000 103,674 2.0% West Vancouver 2,748,359 2,802,432 2,794,652 2,877,200 82,548 3.0% Contract Community Shuttle 2,373,678 2,394,212 2,381,674 2,402,800 21,126 0.9%

Conventional Transit 97,166,287 98,955,479 98,679,856 101,458,226 2,778,370 2.8%

Change

2015 2016 2016 2017ACCESS TRANSIT ACTUAL BUDGET Q2 FORECAST BUDGET Incr / (Decr) %

Service Hours 557,144 550,000 564,445 595,000 30,555 5.4%

Service Kilometres 8,868,485 8,745,500 8,991,574 9,520,600 529,026 5.9%

Total Trips 1,204,788 1,202,000 1,243,889 1,287,500 43,611 3.5% Trips - HandyDART 1,104,937 1,100,000 1,119,938 1,185,500 65,562 5.9% Trips - Taxi Supplement 99,851 102,000 123,951 102,000 (21,951) (17.7%)

Change

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current year fiscal impact which is lower due to the timing of when the actual service will be implemented. The other major impacts to service levels include:

• The additional deadhead (pull in/pull out) for the full year of 2017 as a result of the opening of Hamilton Transit Centre (HTC) and the closure of North Vancouver and Oakridge Transit Centres in September 2016, and the reassignment of service to HTC and other depots.

• Annual service variations are based on the number of weekdays, Saturdays and Sundays in a calendar year, with scheduled service levels differing based on the day of the week. 2017 has one less day than 2016 (a leap year) and one less Saturday, partially offset by one extra Sunday, a net result of less total service.

• Other non-expansion service adjustments for 2017 which contributed to the increased service levels include the reconfiguration of Burnaby’s Metrotown Loop and bus movements plus additional running time for general traffic congestion.

2017 Budget versus 2016 second quarter forecast

The 2017 Bus Division budget overall is $37.2 million higher than 2016 second quarter forecast; CMBC Operating is $33.6 million higher, the other contracted bus services is $1.5 million higher, Access Transit is $1.3 million higher and corporate allocated costs is $0.9 million higher. For CMBC Operating the 2017 budget increase is a result of economic increases relative to the existing service as well as the costs of the expansion service. Contractual labour increases, higher employer-paid benefit costs, higher vehicle insurance rates and predicted fuel costs and applicable general and parts inflation equates to a $15 million increase. The expansion service accounts for another $15 million increase over the second quarter 2016 Forecast including the one-time vehicle road worthy repair costs, operator and other employee recruitment and training and additional maintenance, insurance and fuel for the added service kilometres. • Wages, salaries and benefits increased $21.2 million, which includes:

o $9.4 million of contractual increases for Unifor and MoveUP (COPE) and other step and merit pay progression increases

o $1.7 million related to the full annual cost of deadhead and operator travel time from the opening of Hamilton Transit Centre (HTC) in September 2016

o ($3.2) million decrease in overtime related to one-time route training in 2016 for the opening of HTC.

o $8.4 million for additional operator and other staff wages and salaries related to service expansion.

BUS OPERATIONS BY CATEGORYTwelve months ending December 31 2015 2016 2017($ thousands) ACTUAL Q2 FORECAST BUDGET Incr/(Decr) %

Administration 13,692 15,992 14,948 (1,044) (6.5%)Contracted Services 68,407 69,757 72,382 2,625 3.8%Fuel and Power 50,181 44,791 50,169 5,378 12.0%Insurance 13,529 14,649 15,570 921 6.3%Maintenance, Materials and Utilities 58,824 61,252 69,346 8,094 13.2%Professional and Legal 2,226 2,474 2,580 106 4.3%Rentals, Leases and Property Tax 12,840 13,208 13,176 (32) (0.2%)Salaries, Wages and Benefits 423,785 431,951 453,118 21,167 4.9%

Total Expenses by Category 643,484 654,074 691,289 37,215 5.7%

Change

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o $4.0 million for higher employer-paid benefits as a result of contractual increases and service expansion.

• Materials and Services costs are $7.2 million higher due to work-plan major bus component life cycle increases, parts inflation and the extra service kilometres.

• The budget has a one-time $4.9 million repair cost to ensure the road worthiness of buses due for retirement that are being held short term for service expansion.

• Vehicle insurance is higher as a result of increased insurance rates for 2017 plus the additional service kilometres.

• Fuel costs increased $5.4 million due to expected higher 2017 fuel prices and the additional service kilometres.

For all Contracted Transit Services the overall 2017 budget is $2.8 million higher than the 2016 second quarter forecast. Access Transit is higher by $0.9 million due to contractual operator labour and maintenance increases plus the net financial impact of 2017’s additional services hours over the 2016 forecast service. Contracted Community Shuttle’s $0.3 million and West Vancouver’s $1.1 million increases are due to agreed contractor labour rate changes plus the expansion service hours impacting labour and vehicle maintenance costs. Key Performance Indicators

2015 2016 2016 2017PERFORMANCE INDICATORS ACTUAL BUDGET Q2 FORECAST BUDGET

Cost Per Service Hour excl FuelCMBC Operations 102.33 102.09 103.01 106.04 Contracted Transit Services 76.93 75.67 76.71 79.91

Cost Per Trip excl Fuel & Taxi SaversAccess Transit 37.86 38.37 37.67 37.20

Cost Per Revenue Hour excl FuelCMBC Operations 130.47 132.50 133.68 136.33

Cost Per Service Kilometres excl FuelCMBC Operations 5.21 5.19 5.26 5.40 Contracted Transit Services 3.56 3.48 3.53 3.70

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Rail Operations British Columbia Rapid Transit Company Ltd. (BCRTC), on behalf of TransLink, maintains and operates two of the three SkyTrain lines in Metro Vancouver — the Expo Line and the Millennium Line/Evergreen Extension (E&M), as well as the West Coast Express commuter rail service. In addition, BCRTC also manages the agreement with InTransit BC for the operation and maintenance of the Canada Line. The Expo and Millennium lines primarily operate out of BCRTC's Operations and Maintenance Centre in Burnaby. There is more than 900 dedicated staff who work in the areas of administration, engineering, maintenance, field and train operations to deliver this service. The Expo and Millennium lines connect downtown Vancouver with the cities of Burnaby, New Westminster, Surrey, Port Moody and Coquitlam. The Canada Line connects downtown Vancouver to the Vancouver International Airport (YVR) and the city of Richmond. The West Coast Express commuter rail service delivers trains that connect the cities of Mission, Maple Ridge, Pitt Meadows, Port Coquitlam, Coquitlam and Port Moody with Vancouver. The Rail division of TransLink currently provides 400,000 trips per day on 139 km of track, with a 95 per cent on-time performance rate. Ongoing investment in the rail network over the coming years will enable us to continue to meet the needs and expectations of our customers. With the Evergreen Extension to the Millennium Line opening before Christmas 2016, 2017 will be the first full year of operations with the new Expo & extended Millennium Line service pattern, making this the world’s largest automated train system. Initiatives The Rail division is committed to its employees, the ongoing improvement of customer service, and supporting TransLink’s critical role of planning and managing the region’s transportation network. Over the next few years, BCRTC will complete the ongoing investments in existing rail services, successfully integrate the Evergreen Extension and prepare for additional service expansions in Vancouver and Surrey to better meet the needs of our customers. The rail division has aligned its 2017 focus areas and objectives in its Business Plan with those of TransLink to support an integrated approach to meet the ever expanding needs of people in the Metro Vancouver region. Ensure State of Good Repair In 2017, BCRTC will focus on the following areas to continually improve the current record of safe and secure operations and invest in the future of rail services:

• Continually improve the record of safe and secure operations. o Develop and implement formal annual maintenance plans. o Implement asset management systems by the end of 2019. o Develop a ten year asset management plan for rail. o Improve and document maintenance standard operating procedures. o Improve performance reporting. o Update and transform safety management system to a comprehensive integrated

management system framework.

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• Invest in the future of rail services by focusing resources on the continuous improvement of our people, business tools and structure to ensure a safe and reliable rail service.

o Update existing information technology platforms to support core business processes. o Develop knowledge transfer options for rail. o Develop a long term space optimization and upgrade plan. o Review current product lines and management thereof. o Develop an internal apprenticeship program.

Mobilize Mayors’ Vision Provide the rail elements required to deliver the regional transportation priorities.

• Develop and update annual service plans for the rail group for 2017 service adjustments. • Procure and successfully commission MKIII vehicles. • Procure and successfully commission West Coast Express vehicles. • Work with Canada Line to define, procure and commission additional rail vehicles. • Support planning and design of identified, future line extensions and stations upgrades.

Improve customer experience and public support In 2017, BCRTC will focus on the following areas in support of the customer experience:

• Improve the TransLink reputation through delivering consistent high-quality rail services with an emphasis on reliability, safety and customer service.

o Appoint the Director of Customer Experience and Performance to the executive leadership team.

o Contribute to the revision of the Customer Service Charter. o Develop and implement a benchmarking program. o Develop a quarterly report on customer complaints, compliments and comments. o Create a performance reporting unit to integrate the rail group performance. o Develop and implement a meet the manager program. o Establish and implement customer service performance indicators for rail. o Implement an enhanced public safety and community outreach programs. o Review front line staff uniforms.

• Increase ridership by running a reliable, effective and efficient rail system that supports a great passenger experience.

o Using Compass data, access and alter service plans for off peak services for SkyTrain. o Debrief on all major service delays to identify issues and improvements to optimize

future service. o Explore creative and different options to bring non-users to the system.

• Develop our employees to meet our customer service standards and objectives. o Conduct a training review to design and develop a model and change management plan. o Implement inter-departmental Customer First working groups. o Develop a consistent customer service plan for all staff. o Develop succession plans. o Develop service level agreements with TransLink for certain shared services.

Risks and Challenges A full assessment of the life cycle impact on fleet and rail from the increased services is not complete. Additional maintenance or expedited capital funding may be required. In the 2017 budget, additional staff were added to support vehicle and rail maintenance, including planners and schedulers. In future years, and with the enterprise asset management (EAM) system, the impacts from service level changes should be better measured and understood to allow more accurate life cycle costing and forecasting.

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Due to the aging infrastructure, random asset failures may occur resulting in service disruptions, higher maintenance costs and additional overtime. The maintenance response team, planning and scheduling team, as well as additional maintenance staff will manage maintenance activities associated with such failures to minimize service disruptions. Cost to operate and maintain new assets associated with the Evergreen Extension could differ from those budgeted. BCRTC will ensure effective warranty management of newly acquired assets and manage its overall budget. BC Hydro’s 2015 Rate Design Application filed with the BC Utilities Commission, if approved, would result in changes in Large and Medium General Service accounts. As a result, hydro costs, including the Canada Line performance payment, could differ from budget. Service Assumptions Effective October 22, 2016, there were system-wide changes to the E&M Lines service patterns, headways and train types as part of preparations to open the Evergreen Extension to the Millennium Line in December 2016. Evergreen Extension service changes result in an increase of 6.6 million car-km (a 14.7 per cent increase) or 137,000 service hours and 817 million capacity-km, to the E&M Lines in 2017. The 2017 service plans for the rail division result in an increase in rail service of approximately 17 per cent compared to 2016 budget. The service kilometres and hours for each of the lines are as follows:

With the approval of the Mayors’ Vision, service level changes using the existing fleet will be implemented for all SkyTrain Lines in early 2017. This will be the first year since 2005 that customers will benefit from service expansion using the existing fleet:

• Effective January 2017, Expo & Millennium Line customers will see an increase in peak service operation by a total of one hour and 15 minutes per weekday as well as improved weekend midday and early evening service. These changes result in an additional 2.7 million car-km in 2017 (annualized 2.8 million car-km).

2015 2016 2017ACTUAL BUDGET BUDGET Incr/(Decr) %

SERVICE HOURS

Expo & Millennium Lines 1,095,946 1,111,634 1,335,911 224,277 20.2% Canada Line 194,880 197,391 203,668 6,277 3.2% WCE 39,892 42,504 37,862 (4,642) (10.9%) Rail Division 1,330,718 1,351,529 1,577,441 225,912 16.7%

SERVICE KILOMETRES*

Expo & Millennium Lines 44,166,622 44,798,879 53,837,212 9,038,333 20.2% Canada Line 6,275,136 6,355,984 6,558,090 202,106 3.2% WCE 1,576,858 1,586,413 1,411,511 (174,902) (11.0%) Rail Division 52,018,616 52,741,276 61,806,813 9,065,537 17.2%

*Service Kilometres are total (Revenue and Non-Revenue) car kilometres

Change

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• Canada Line customers will also benefit from improved AM and PM peak services that result in an additional 0.2 million car-km in 2017.

While there are no immediate changes to service for West Coast Express’ commuter rail customers, TrainBus service will cease in early 2017 due to the opening of the Evergreen Extension and bus route changes, one of them being an extension to Mission. It is anticipated that the additional SkyTrain and bus services will meet the needs of this customer group. 2017 Budget versus 2016 second quarter forecast

The Rail division’s 2017 operating budget is $300.0 million and is $34.4 million, or 13.0 per cent, higher than the 2016 second quarter forecast. The annualized staffing and net operating/maintenance costs related to the opening of the Evergreen Extension to the Millennium Line account for $16.1 million of the 2017 increase. Other contributing factors include:

• annualization of 46 new operating and maintenance positions (excluding the 120 staff for the Evergreen Extension) hired in 2016

• rising staffing costs, including higher employee benefit costs • additional staff and maintenance costs to support state of good repair maintenance and related

business analytics • 2017 SkyTrain service expansions using existing fleet • transportation contractual services increases related to Canada Line and WCE • anticipated increases in diesel fuel and hydro • other inflationary increases

RAIL OPERATIONS BY CATEGORYTwelve months ending December 31 2015 2016 2017($ thousands) ACTUAL Q2 FORECAST BUDGET Incr/(Decr) %

Administration 4,569 5,217 5,953 736 14.1%Contracted Services 116,765 119,400 122,072 2,672 2.2%Fuel and Power 12,752 13,174 16,465 3,291 25.0%Insurance 4,246 4,259 5,065 806 18.9%Maintenance, Materials and Utilities 33,654 36,731 41,334 4,603 12.5%Professional and Legal 3,586 2,804 2,898 94 3.4%Rentals, Leases and Property Tax 17,022 1,942 2,020 78 4.0%Salaries, Wages and Benefits 75,105 82,077 104,203 22,126 27.0%Provision for Asset Valuation 612 - - - 0.0%

Total Expenses by Category 268,311 265,604 300,010 34,406 13.0%

Change

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Police Operations Mandated by the Solicitor General as a Designated Policing Unit, the Transit Police preserves and protects the peace throughout the transit system. Working with local police services, each officer aims to prevent crime and offences against the law, aid in the administration of justice, and enforce the laws of British Columbia. The province established the Transit Police designated policing unit in 2005 as the first dedicated transit police service in Canada. Initiatives In 2017, the Transit Police will focus on implementation of its new Strategic Plan composed of three Strategic Goals:

• A safe and secure transit system; • Confidence in the use of public transit; • Regional services that enhance local policing and community safety.

Transit Police capital requirements include funds for the replacement of 8 vehicles which are at the end of their useful life, and for the replacement of the current analog radios with “next generation” radios as a new radio system will be rolled out in 2017 by E-Comm (Emergency Communications for BC Inc.), making the current radios obsolete. These capital initiatives are in line with TransLink’s first priority of ensuring state of good repair to help maintain reliability and safety for customers and employees. Transit Police’s Evergreen initiative involves the hiring of eight additional constables in order to manage the anticipated increase in police workload created by the Evergreen Extension. This initial deployment of resources will help to ensure that policing service on the Expo/Millennium Lines isn’t negatively impacted in order to provide policing on the Evergreen Extension. Ongoing analysis regarding staffing levels will continue to determine what the impact of the Evergreen Extension is on public safety and demands for police services. The request for additional resources for the Evergreen Extension ties into TransLink’s third priority of improving customer experience and public support by providing a safer system. Transit Police will monitor its achievements against its current Strategic Plan by observing key performance indicators grouped by the following five themes:

• Reducing Crime • Strengthening Partnerships • Improving Safety • Increasing Productivity • Maintaining a Healthy and Diverse Organization

Risks and Challenges Maintaining sworn staffing levels in response to attrition and injury is a challenge. In the policing environment, there does not exist a casual pool of sworn officers available to fill vacant and injured positions. Hiring replacement officers is a lengthy process with the availability of suitable candidates varying greatly month to month. Unforeseen delays in hiring could lead to additional operational overtime costs. The opening of the Evergreen Extension will challenge current police staffing levels; a budgeted increase of eight officers will still require policing resources to be “spread thinner” on the rest of the Expo/Millennium Line in order for the Evergreen Extension to receive equitable policing services.

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2017 Budget versus 2016 second quarter forecast Police division costs have increased by $3.3 million mainly related to labour cost increases which include additional staff cost to support the Evergreen Extension.

POLICE OPERATIONS BY CATEGORYTwelve months ending December 31 2015 2016 2017($ thousands) ACTUAL Q2 FORECAST BUDGET Incr/(Decr) %

Administration 2,338 2,213 2,483 270 12.2%Insurance 36 40 45 5 12.5%Maintenance, Materials and Utilities 1,173 1,044 1,431 387 37.1%Professional and Legal 422 365 486 121 33.2%Rentals, Leases and Property Tax 1,912 1,982 2,059 77 3.9%Salaries, Wages and Benefits 27,255 27,986 30,417 2,431 8.7%

Total Expenses by Category 33,136 33,630 36,921 3,291 9.8%

Change

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Corporate Operations Corporate operations will continue to support the operating subsidiaries in 2017, with a focus on achieving enterprise priorities, including mobilizing the Phase One Plan and ensuring procurement readiness for rapid transit projects. The strategic objectives of each corporate division are summarized below. Planning Planning and Policy will lead the detailed system planning for the transit, cycling, walking and road investments included in Phase One of the Mayors’ Vision to ensure that the region’s residents can maximize the benefits of the expansion. Expedient resourcing and efficient process management will be key priorities to successful implementation. Planning and Policy will be leading the effort to approve Phase Two of the Mayors’ Vision which will include the rapid transit projects and Pattullo Bridge replacement. A key risk is securing adequate senior government capital contributions and regional funding sources to sustainably meet stakeholder and political expectations. To meet the evolving needs of the traveling public, Planning will be working on developing a new fare policy, advancing mobility pricing and improved travel planning. Engineering Services Engineering Services will oversee business cases, design, and implementation of infrastructure projects for the coming year. These projects feature state of good repair improvements on major assets across the transit system. In support of the 10-Year Mayors’ Vision, engineering staff will guide planning, design and procurement readiness for major projects including the Millennium Line Broadway Extension and South of Fraser Light Rapid Transit (LRT) rapid transit projects and the Pattullo Bridge replacement. An identified risk is the rising cost of construction material and labour, which makes project cost estimates a moving target. To ensure compliance with the 2014 Independent Review of SkyTrain, which identified causes of the major 2014 rail disruptions and provided 20 recommendations, Engineering Services will continue to lead those improvements. These recommendations will enhance the customer experience during transit service disruptions. Upgrades include rail operations, communications, safety systems, procedures and infrastructure. Nine of the 20 recommendations have been completed, with the remaining eleven being phased in over the coming years. Human Resources Human Resources will continue to provide BCRTC with best practices resources in change management, organization design, job classification and evaluation. This will support modernizing the rail company’s procedures in maintenance, operations and training. Recruiting additional employees to deliver on the projects identified in the Mayors’ Vision will be both a priority and a risk in 2017 if skilled specialists are not found locally. Engineers, planners and other technical experts will be required to support projects such as the Pattullo Bridge replacement. Transit and shuttle operator recruitment must also be increased for bus service expansion in Metro Vancouver.

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Human Resources will enhance their Succession Planning Strategy on training, professional development, mentorship, recruitment and retention. This will help ensure valuable knowledge and best practices in operations, customer service and other areas are transferred seamlessly to new managers and staff. Business Technology Services Business technology services will ensure an effective Enterprise Asset Management (EAM) tracking program is in place for SkyTrain network maintenance and refurbishment. Hardware and software components will be updated to sustain and extend current transit management and communications operations, prevent impact of system failure on daily bus operations and prepare for bus fleet expansion. To modernize our public channels and digital services, we plan to update the TransLink website foundation to deliver timely customer messaging in the event of service disruptions. Strategic Sourcing and Real Estate Our Strategic Sourcing & Contracts Management team will continue to plan for and acquire goods, services and/or construction work on our assets by third parties, through a fair, open, and transparent manner. We also ensure the supplier relationship is professionally managed with value for dollar achieved. Priorities for 2017 include real estate acquisition for current and future projects, as well as managing lease agreements, property tax administration and appeals, property assets and right-of-ways. One of our key risks is the fluctuation in property pricing which puts pressure on overall project estimates. While managing commercial real estate initiatives, we will focus on customer service, financial results and ridership. From parking management to advertising opportunities on our assets and retail vendors renting kiosks at stations, the end goals are to expand revenue-generation and enhance the customer experience. Legal Legal will be assisting with various capital projects (such as acquisition of new vehicles, transit exchange upgrades) and municipal funding agreements. As part of the Mayors’ Vision, Legal will support progress on the Millennium Line Broadway Extension and South of Fraser Light Rapid Transit (LRT) rapid transit projects, ensuring procurement, contract documents and Memorandums of Understanding are developed in time to meet the project schedule. Legal will also assist with development of future investment plans and potential legislative amendments to enable new or expanded funding sources. Another key priority for Legal will be supporting implementation of the Access Transit Service Delivery Review recommendations to improve the accessibility and experience of transit services for people with disabilities, seniors, new immigrants and young people. This work is guided by the feedback and needs of our customers.

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Communications and Customer Engagement Communications and Customer Engagement group supports every division across the enterprise, through internal communications to employees, the executive and board as well as externally: to passengers, the public, taxpayers, stakeholders and funding partners. We provide passengers and stakeholders with timely updates on major infrastructure projects across the system, such as station upgrades, rail maintenance, and implementation of the SkyTrain independent review or transit service changes. Clear communications about service impacts are conveyed with plenty of notice through all media, social media channels plus digital marketing, including our website and paid advertising. All public-facing marketing, communications and wayfinding material is clear, easy to understand and integrates stakeholder feedback for constant improvement. Our marketing and consultation group solicits public feedback to help prepare our customers for service improvements as part of the 10-Year Mayors’ Vision among other strategic priorities, such as the 2017 fare increase, Pattullo Bridge replacement and the two major rapid transit projects. A new initiative underway for 2017 launch is the Customer First Charter to provide optimum service levels to our riders and the general public. Building on the TransLink brand, we aim to consolidate our communications and storytelling to achieve higher public awareness of enterprise achievements. We will maintain a consistent, proactive and transparent approach to social media and media relations. Finance and Compass Operations Financial Services will be focusing on a number of initiatives that support the corporate priorities and deliver on our commitments in Phase One of the 10-Year Vision. These include, developing financial plans for the next phases of the Mayors Vision, monitoring and reporting the organizations performance against the plan including cash flow and financial stability, managing enterprise risk management for the organization ensuring risk mitigation plans are updated and risk is monitored appropriately, and managing investor relations to ensure TransLink is positioned well to obtain the financing required. With the completion of the Compass Project we are now in full operational mode and will be focused on maximizing the benefits and outcomes on the program. The compass operations team will be exploring future functionality for the Compass Card and delivering programs to enhance the customer experience. 2017 Budget versus 2016 second quarter forecast

CORPORATE OPERATIONS BY CATEGORYTwelve months ending December 31 2015 2016 2017($ thousands) ACTUAL Q2 FORECAST BUDGET Incr/(Decr) %

Administration 12,137 15,864 17,196 1,332 8.4%Contracted Services 5,934 12,500 13,028 528 4.2%Insurance 1,674 234 151 (83) (35.5%)Maintenance, Materials and Utilities 3,228 3,058 3,022 (36) (1.2%)Professional and Legal 8,987 13,304 15,935 2,631 19.8%Rentals, Leases and Property Tax 9,041 8,032 10,569 2,537 31.6%Salaries, Wages and Benefits 39,865 38,822 41,257 2,435 6.3%

Total Expenses by Category 80,866 91,814 101,158 9,344 10.2%

Change

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Corporate operating costs are expected to increase $9.3 million (10.2 per cent) over 2016 forecast primarily related to achieving enterprise priorities and supporting expansion including:

• developing an asset management program and supporting 2014 Independent Review of SkyTrain recommendations to ensure a state of good repair;

• additional resources to support management and delivery of the Public Transportation Infrastructure Funding projects;

• studies relating to Transportation Demand Management to mobilize the Mayors’ Vision; • Compass system improvements and maintenance to improve customer experience; and • contractual and inflationary increases.

Increases in staffing levels and investments to support TransLink’s extensive capital program are critical to delivering the projects and services to the region.

Continuing to invest in the Compass system, including website enhancements, is a priority as we listen to our customers and strive to improve their experience.

Rental expenses have increased in Corporate Operations mainly due to reallocated property taxes on closed transit centres. In addition, labour and contractual increases and additional computer system licensing costs contribute to increased costs.

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Roads and Bridges Total expenditures for Roads and Bridges in 2017 are expected to be $28.3 million (37.9 per cent) higher than 2016 forecast. The Major Road Network (MRN) program accounts for most of the increase in 2017 with $28.6 million higher contributions of which $22.5 million in funding has been added as part of Phase 1 of the 10 Year Vision: MRN Minor Capital Upgrades ($10.0 million); MRN Structure Rehabilitation and seismic upgrades ($6.5 million) and cycling infrastructure ($6.0 million). Roads and Bridges 2017 initiatives also include:

• a multi-jurisdictional permitting study to develop an understanding of best practices and increase efficiency of both public and private organizations in supporting the region’s goods movement study,

• public use policy and operating procedures for the BC Parkway, • Pattullo Bridge replacement consultation and design, and • contribution towards the establishment of a unified tolling back office for Metro Vancouver.

Amortization

Amortization is budgeted to be $24.3 million (13.1 per cent) higher than the 2016 forecast as a result of completing the Evergreen Extension and Hamilton Transit Centre projects in 2016; and conventional bus, HandyDART and community shuttle replacements, the rail fleet expansion, and the Commercial-Broadway station upgrade project being completed in 2017.

Interest

Interest expense is budgeted to rise $5.9 million (3.5 per cent) from the 2016 forecast, mainly due an equivalent reduction in interest capitalized during construction as a result of the Evergreen Extension going into service at the end of 2016.

Corporate – One-time

One-time costs in the 2017 budget are $19.3 million, consisting of rapid transit studies related to the Millennium Line Broadway Extension and South of Fraser Rapid Transit Projects ($2.0 million), software system replacements ($1.7 million), Trip Diary Planning ($1.5 million), other one-time projects ($1.2 million) including a comprehensive fare review, mobility pricing ($0.9 million), and a contingency provision per TransLink’s policy ($11.9 million).

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6. Investment in Capital Assets

Overview TransLink’s current priorities are to maintain existing service levels and ensure assets are in a state of good repair, mobilize the Mayors’ Vision and improve customer experience and public support. TransLink’s capital program ensures assets provide the most efficient and effective infrastructure required to serve its customers and stakeholders and delivers on the first phase of the Mayors’ Vision. Capital projects have been planned through an integrated enterprise system that measures impact on strategy, customer experience, stakeholder value, business effectiveness and other factors.

Summary of Capital, by Program 2017 Capital Cash Flow Total Project Budget

($ thousands)GrossCost

Less:Funding *

NetCost

GrossCost

Less:Funding *

NetCost

2017 New Capital ProgramEquipment 23,866 (14,411) 9,455 67,005 (36,479) 30,526 Facilities 6,727 (3,919) 2,809 10,257 (3,260) 6,997 Infrastructure 183,899 (141,467) 42,433 366,967 (277,311) 89,656 Technology 14,744 (1,132) 13,612 31,647 (0) 31,647 Vehicles - Revenue 115,297 (96,032) 19,265 418,792 (361,450) 57,342 Vehicles - Non Revenue 601 0 601 601 0 601 Major Construction 0 0 0 0 0 0

Subtotal 345,134 (256,960) 88,174 895,268 (678,499) 216,770

Equipment 13,301 (1,567) 11,734 32,216 (4,500) 27,716 Facilities 3,788 0 3,788 16,870 (6,069) 10,801 Infrastructure 120,819 (14,342) 106,477 311,004 (99,882) 211,122 Technology 4,746 0 4,746 24,820 0 24,820 Vehicles - Revenue 195,896 (177,995) 17,901 309,544 (272,114) 37,430 Vehicles - Non Revenue 917 0 917 1,937 0 1,937 Major Construction 6,083 0 6,083 415,465 0 415,465

Subtotal 345,550 (193,904) 151,646 1,111,856 (382,565) 729,291

Total CapitalEquipment 37,167 (15,978) 21,189 99,221 (40,979) 58,242 Facilities 10,515 (3,919) 6,597 27,127 (9,329) 17,798 Infrastructure 304,718 (155,809) 148,910 677,971 (377,193) 300,778 Technology 19,490 (1,132) 18,357 56,467 (0) 56,467 Vehicles - Revenue 311,193 (274,027) 37,166 728,336 (633,564) 94,772 Vehicles - Non Revenue 1,518 0 1,518 2,538 0 2,538 Major Construction 6,083 0 6,083 415,465 0 415,465

Capital Program Total 690,684 (450,864) 239,820 2,007,124 (1,061,064) 946,060

Capital Infrastructure Contributions2017 New Program 38,333 0 38,333 45,882 0 45,882 Active and Approved in Principle 13,776 0 13,776 213,732 0 213,732

Total Capital Infrastructure Contributions 52,109 0 52,109 259,614 0 259,614

ALL PROJECTS 742,792 (450,864) 291,928 2,266,738 (1,061,064) 1,205,674

Active/Approved in Principle (AIP) Capital

* The funding sources include Federal Gas Tax, Build Canada Fund, Public Transit Infrastructure Program, City of Vancouver, BC Hydro

Page 33

The table above highlights capital projects grouped into asset categories and includes capital infrastructure contributions for which TransLink is authorized and mandated to address regional Major Road Network (MRN) needs. The budget for the 2017 new capital program is $895.3 million. The projected 2017 cash flow for all projects is $742.8 million, which is made up of $345.1 million for the 2017 New Capital Program, $345.6 million for existing capital programs and $52.1 million for Capital Infrastructure Contributions. The net cash impact to 2017 after senior government funding is $291.9 million.

2017 New Capital Program The 2017 New Capital Program projects advance the first phase of the Mayors’ Vision and maintain existing services and keeps the system in a state of good repair. TransLink’s 2017 capital budget is $895.3 million. Capital Projects supported by the Public Transit Infrastructure Fund total $638.0 million which include rail fleet expansion, upgrades to stations and exchanges and further work to advance expansion of the rapid transit network. Expansion of the bus network of $88.8 million is funded by the Greater Vancouver Regional Fund (Gas Tax). Other expansion projects include $22.5 million for transit priority improvements for new B-Line corridors. The remaining projects are for state of good repair. Anticipated senior government contributions total $678.5 million. The net capital spending for this program is forecast to be $216.8 million. The following table provides summary information on projects with a project budget greater than $2 million for each category. Table1:2017 New Capital Program ($ thousands)

2017 New Capital Program Project Details

Classification and Project Name Description Gross Cost Less

Funding TransLink Net Cost Gross Cost

Less Funding

TransLink Net Cost

EQUIPMENTDecoupling of Important Systems Improving systems for the rail network, per

McNeil recommendations6,800 (5,644) 1,156 6,800 (5,644) 1,156

ML Fire Life Safety System Replace the major components and subsystems of the Fire Life Safety System (FLSS) along the Millennium Line rail network

142 - 142 7,672 - 7,672

SkyTrain Physical Security System Project

Assess and upgrade security access systems for SkyTrain facil ities

1,622 - 1,622 7,900 - 7,900

TMAC Radio Replacement Upgrade TMAC Mobile Automated Vehicle Location (AVL) radio system

9,013 (7,480) 1,532 35,600 (29,548) 6,052

Other Six (6) other projects in this asset category 6,289 (1,287) 5,003 9,033 (1,287) 7,746

FACILITIESOther Fifteen (15) other projects in this asset category 6,727 (3,919) 2,809 10,257 (3,259) 6,998

INFRASTRUCTURESkyTrain OMC Upgrades Replace/relocate SkyTrain Control Rooms 25,000 (20,750) 4,250 50,000 (41,500) 8,500 BC Hydro Upgrades BC hydro upgrade early works for the Millennium

line Broadway extension 17,000 (14,110) 2,890 17,000 (14,110) 2,890

Bear Creek Replacement Bridge upgrade as part of early works for the South of Fraser transit improvements 5,170 (4,291) 879 6,070 (5,038) 1,032

Canada Line Station Upgrades Upgrades to stations on the Canada Line rail network 7,500 (6,225) 1,275 15,000 (12,450) 2,550

Edmonds OMC Capacity Upgrades Improvements to the SkyTrain Operations and Maintenance Centre (OMC) at Edmunds 4,500 (3,735) 765 9,000 (7,470) 1,530

Expo Line Station Escalators - Stage 4 New replacement program of all the escalators across the Expo Line rail network 10,250 (8,508) 1,743 27,431 (22,768) 4,663

2017 Capital Cash Flow Total Project Budget

Page 34

Table 1: 2017 New Capital Program ($ thousands) Cont.

2017 New Capital Program Project Details

Classification and Project Name Description Gross Cost Less

Funding TransLink Net Cost Gross Cost

Less Funding

TransLink Net Cost

Expo Line Upgrade Strategy - Burrard station: Design & Implementation

Design and upgrade Burrard Station for capacity and passenger flow 4,700 (3,901) 799 60,700 (50,381) 10,319

Guideway Intrusion System Upgrade Improving guideway safety for the rail network, per McNeil recommendations. 9,800 (8,134) 1,666 9,800 (8,134) 1,666

Guildford Exchange Guidford Exchange upgrades as part of early works for the South of Fraser transit improvements

5,168 (4,289) 879 5,168 (4,289) 879

Investments in transit priority on priority B-Line corridors

Improvements to the transportation corridors for new B-Line routes 5,594 - 5,594 5,594 - 5,594

Joyce Station Upgrades - Phase II Upgrade Joyce Coll ingwood Station to improve accessibil ity 3,707 (3,077) 630 13,089 (10,864) 2,225

Lonsdale Quay bus loop and SeaBus terminal upgrade

Design and implementation of improvements to passenger environment in bus loop and North SeaBus Terminus

- - - 8,000 (6,640) 1,360

MetroTown Bus Loop Refurbishment Refurbish Metrotown Bus Loop 2,500 (2,075) 425 5,000 (4,150) 850

MLBE Procurement Readiness Procurement preparation for the Millennium Line Broadway Extension project 22,987 (19,079) 3,908 23,000 (19,090) 3,910

Newton Exchange Upgrade Newton Exchange 6,009 (4,987) 1,021 12,017 (9,974) 2,043

Pedestrian Improvements: Walking Access to Transit

Improvements to pedestrian access around transit stations and exchanges 2,500 - 2,500 2,500 - 2,500

Phibbs Exchange Upgrade Upgrade Phibbs bus exchange for safety and customer and vehicle capacity 3,230 (2,681) 549 23,190 (19,248) 3,942

Road Widening Roadway upgrades as part of early works for the South of Fraser transit improvements 4,000 (3,320) 680 9,000 (7,470) 1,530

Roofing Replacements (#1&2) Roof replacements of facil ities along the Expo Line rail network 245 (204) 42 5,980 - 5,980

Running Rail Replacement Replace running rail that have reached the end of service l ife 1,716 (1,425) 292 7,128 - 7,128

South of Fraser Rapid Transit Project Procurement Readiness

Procurement preparation for the South of Fraser Rapid Transit Project 19,988 (16,590) 3,398 20,000 (16,600) 3,400

System Continuity Redundancies, Second BC Hydro Feed

Improving power supply continuity for the rail network, per McNeil recommendations 1,550 (1,287) 264 3,100 (2,573) 527

Translink owned investment in cycling infrastructure

Rehabilitate the BC Parkway to further integrate and improve cycling facil ities 2,300 - 2,300 2,300 - 2,300

Two Bus Exchange Upgrades Improve bus exchanges as part of region-wide transit facil ity upgrades 5,000 (4,150) 850 10,000 (8,300) 1,700

Wayfinding System Integration - Missing Signage

Install missing wayfinding signage on Expo and Millenium Lines 1,621 (1,345) 276 3,240 - 3,240

Other Thirteen (13) other projects in this asset category11,864 (7,304) 4,560 13,660 (6,261) 7,399

TECHNOLOGYBCRTC Enterprise Asset Management Implementation

Implement an Enterprise Asset Management (EAM) system to enable the effective control of SkyTrain system and maintenance processes.

1,364 (1,132) 232 11,760 (0) 11,760

2017 Capital Cash Flow Total Project Budget

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Table 1: 2017 New Capital Program ($ thousands) Cont.

Active and Approval in Principle (AIP) Projects Underway Capital projects already approved and underway have a total budget of $1.1 billion. Anticipated senior government contributions total $382.6 million, leaving the net cost forecast to be $729.3 million. Spending in 2017 on these projects is forecast at $345.6 million with senior government funding of $193.9 million for net spending of $151.6 million. The bulk of this spending is for bus vehicle replacement forecasted to be $187.2 million for 2017 and upgrades on four SkyTrain stations, forecasted at $73.4 million. The table below highlights specific projects with 2017 project cash flows greater than $1 million in 2017.

2017 New Capital Program Project Details

Classification and Project Name Description Gross Cost Less

Funding TransLink Net Cost Gross Cost

Less Funding

TransLink Net Cost

TECHNOLOGYCompass System Advancements Ensure the performance, functionality and

capacity of the Compass systems will meet those business and customer requirements that are identified to materially impact operational efficiency or customer satisfaction

4,676 - 4,676 9,500 - 9,500

IT Infrastructure Program 2017 Ongoing computer systems and infrastructure lease renewals and replacement 4,050 - 4,050 5,235 - 5,235

Other Eleven (11) other projects in this asset category 4,654 - 4,654 5,152 - 5,152

VEHICLES - REVENUE2018 Community Shuttle Vehicle Replacement (30)

Replacement of Twenty (20) Community Shuttle buses - - - 3,700 (3,500) 200

2018 Conventional Bus Replacement (92-40D)

Replacement of ninety two (92) -40 foot buses that have reached the end of their useful service l ives.

- - - 65,320 (60,800) 4,520

2018 HandyDart vehicle Replacement (46)

Replacement of forty (40) HandyDART vehicles that have reached the end of their useful service l ives

- - - 6,000 (5,605) 395

Bus-Vehicles Conventional 40 Procure new Conventional 40 foot buses - - - 66,740 (60,066) 6,674

Bus-Vehicles Conventional 60 Procure new Conventional 60 foot buses - - - 11,440 (10,296) 1,144

Canada Line Fleet Expansion Procure train cars for expanding service on the Canada Line rail network 44,000 (36,520) 7,480 88,000 (73,040) 14,960

Community Shuttle Vehicles Procure new Community Shuttles - - - 3,000 (2,700) 300

Equipment for Deferred Retirement Program

Additional equipment to keep retiring buses in service until expansion vehicles arrive 4,797 (4,317) 480 4,797 (4,317) 480

Expo Fleet Expansion (20 cars) Procure 20 new MKIII train cars for expanding service on the Expo Line rail network 40,000 (33,200) 6,800 80,000 (66,400) 13,600

Fleet Expansion (SeaBus boat) Procure a new SeaBus - - - 34,000 (28,220) 5,780

Handy DART Vehicles Procure new HandyDART buses - - - 2,795 (2,516) 279

Millennium Fleet Expansion (8 cars) Procure 8 new MKIII train cars for expanding service on the Millennium Line rail network 16,000 (13,280) 2,720 32,000 (26,560) 5,440

WCE Fleet Expansion Procure train cars for expanding service on the West Coast Express (WCE) rail network 10,500 (8,715) 1,785 21,000 (17,430) 3,570

Other Two (2) other projects in this asset category - - - - - -

VEHICLES - NON REVENUEOther Two (2) other projects in this asset category 601 - 601 601 - 601

Grand Total 345,134 (256,960) 88,174 895,268 (678,498) 216,770

2017 Capital Cash Flow Total Project Budget

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Table 2: Active and Approved in Principle (AIP) Projects Underway ($ thousands)

Active and Approved in Principle (AIP) Capital Program Details

Classification and Project Name Description Gross

Cost Less

Funding TransLink Net Cost

Gross Cost

Less Funding

TransLink Net Cost

EQUIPMENT Expo Line SCADA RTU Replacement Replace sixteen (16) Supervisory Control and Data

Acquisition (SCADA) Remote Terminal Units (RTU) at the Expo Line Propulsion Power Substations (PPS) including supply and installation of associated marshalling panels, cables/wires and communications

1,114 - 1,114 3,400 - 3,400

ATC Existing Equipment Replacement - Phase 2

Replace ATC equipment to improve system reliability and maintain state of good repair

2,006 (1,567) 439 5,100 (4,500) 600

Replace Rail Rotary Grinder 1 (incl Dust Collection System)

Replace Rotary Grinder 1 that has reached end of service life

3,063 - 3,063 3,750 - 3,750

ATC Existing Equipment Replacement on Expo Line

Replace ATC equipment to improve system reliability and maintain state of good repair

5,497 - 5,497 12,400 - 12,400

Other Four (4) other projects in this asset category 1,622 - 1,622 7,566 - 7,566

FACILITIES Brentwood Station South Elevator Facility

Design and construct a new elevator, canopy and stairwell facility on the south side of the Brentwood Millennium Line SkyTrain Station

2,355 - 2,355 3,655 - 3,655

Other Six (6) other projects in this asset category 1,433 - 1,433 13,215 (6,069) 7,146

INFRASTRUCTURE Running Rail Replacement Replace running rail that have reached the end of

service life3,313 - 3,313 392 - 392

Metrotown Station and Exchange Upgrade Design

Upgrade Metrotown SkyTrain station and construct new bus exchange

29,082 (3,573) 25,509 68,774 (34,800) 33,974

Commercial Broadway SkyTrain Station Phase 2 Upgrade Design

Design and construction of Phase 2 Commercial Broadway SkyTrain station development to increase capacity

20,521 - 20,521 73,095 (28,217) 44,878

SeaBus Terminals and Admin Building Envelope Upgrades-Design Stage

Upgrade SeaBus Terminals and Admin Building Envelope

5,179 - 5,179 12,443 - 12,443

Seismic Upgrade South Seabus and Skywalk - Construction

Upgrade of the South SeaBus Terminal structures to withstand a 1 in 475 year earthquake event

3,862 - 3,862 6,000 - 6,000

Surrey Central Station Upgrades Design Upgrade SkyTrain station facilities to increase capacity 11,513 (4,864) 6,649 17,550 (9,000) 8,550

Joyce-Collingwood Station Upgrade Design

Upgrade Joyce Collingwood Station to improve accessibility

12,241 (4,097) 8,144 25,978 (17,465) 8,513

Pattullo Bridge Rehabilitation Phase 2 Design

Design for structural seismic upgrade work on the Pattullo Bridge

3,333 - 3,333 32,711 - 32,711

STC CNG Facility Retrofit AIP - Retrofit the Surrey Transit Centre to accommodate CNG bus fuelling and maintenance requirements

8,038 - 8,038 15,000 (4,000) 11,000

TOH Metrotown Group Rectifier Replacement

AIP - Design and construct rectifier station replacements at Central Park, Willingdon East and Willingdon West rectifier stations

1,868 (1,606) 262 5,765 (4,725) 1,040

Replace Platform LEDs System AIP - Replace the existing red PLED panels at the Expo and Millennium Line stations

1,544 - 1,544 9,559 - 9,559

29th Avenue Bus Exchange Layover Improvements

New curb alignment of bus pick-up and drop-off bays and island to accommodate additional layover bays and passenger waiting/circulation space

1,360 - 1,360 1,815 - 1,815

2017 Capital Cash Flow Total Project Budget

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Table 2: Active and Approved in Principle (AIP) Projects Underway ($ thousands) Cont.

Active and Approved in Principle (AIP) Capital Program Details

Classification and Project Name Description Gross

Cost Less

Funding TransLink Net Cost Gross Cost

Less Funding

TransLink Net Cost

INFRASTRUCTURE

Expo and Millennium Line Signage and Station Fixture Replacement

Upgrade signage at 25 Expo and Millennium Line stations to support system operational changes, ensure code and regulatory signage compliance, and bring all stations up to TransLink Wayfinding Standard. This project is part of a multi-year program and is divided into three tiers of priority.

5,348 - 5,348 6,510 - 6,510

Fibre Optic System Upgrade Stage 3 Extend geographic reach of new BCRTC and TransLink fibre optic cables to Millennium Line stations from Lougheed Station to VCC-Clark Station, provides fibre capacity to ATC Equipment Replacement project and includes fibre capacity for the future UBC SkyTrain Line

2,586 - 2,586 4,290 - 4,290

Rail Clamping Retrofit Replace Expo and Millenium Line rail pads 1,859 - 1,859 4,800 - 4,800

Pattullo Bridge Replacement Design and construct new Pattullo Bridge 5,527 - 5,527 5,527 - 5,527

Other Thirteen (13) other projects in this asset category 3,646 (203) 3,443 20,795 (1,675) 19,120

TECHNOLOGY IT Equipment Replacement (370) Replacement of IT infrastructure equipment 1,162 - 1,162 7,015 - 7,015

SkyTrain Public Announcement System Replacement of Integrated Alarm Notification System at all Expo Line passenger stations, Expo Line propulsion power stations and the SkyTrain Operations and Maintenance Centre

1,035 - 1,035 6,375 - 6,375

Other Fourteen (14) other projects in this asset category 2,548 - 2,548 11,430 - 11,430

VEHICLES - REVENUE 100-400 Series MK I Refurbishment Project Refurbish the original 114 MKI SkyTrain cars to extend

service lives by another 15 years8,653 (6,987) 1,666 37,294 (24,360) 12,934

2015 Conventional Replacement Buses Procure new replacement 40’ and 60’ articulated buses to replace 1997 conventional buses that have reached the end of their useful service life

23,005 (22,075) 930 59,000 (54,800) 4,200

2016 Conventional Bus Replacement This project is to replace 111 conventional 40ft and 60ft buses that reached end of useful service lives with 25-40ft CNG, 60-40ft diesel and 26-60ft diesel buses

61,574 (52,220) 9,354 89,100 (78,824) 10,276

2016 Community Shuttle Replacements This project is to replace 20 Community Shuttles that reached the end of their useful service lives with 20 new Community Shuttles through exercising an option on the existing shuttle contract

8,895 (8,649) 246 4,200 (4,200) -

2017 Conventional Bus Replacement (54-40G and 52-60H)

Replace 52 articulated buses and 54 standard buses reaching end of useful service life in fall 2017

85,368 (81,099) 4,269 92,700 (86,700) 6,000

2017 HandyDART Vehicle Replacement (35) Replace 35 HandyDART buses expected to reach end of useful lives by 2017

4,163 (3,746) 417 5,600 (5,010) 590

2017 Community Shuttle Vehicle Replacement (20)

Replace 20 Community Shuttles that reached end of useful service life in fall 2017

3,766 (3,220) 546 4,100 (3,500) 600

Other Two (2) other projects in this asset category 474 - 474 17,550 (14,720) 2,830

VEHICLES - NON REVENUE Other Two (2) other projects in this asset category 917 - 917 1,937 - 1,937

MAJOR CONSTRUCTION Evergreen Extension Integration to Meet Current Standards

Project scope is to address safety/reliability issues, systems deficiencies, and current standards for bicycle infrastructure.

3,465 - 3,465 12,624 - 12,624

Evergreen Extension - TransLink Contribution

TransLink monetary and in kind contributions to the design and construction of the Evergreen Line by the Province.

2,618 - 2,618 402,841 - 402,841

Grand Total 345,550 (193,904) 151,645 1,111,856 (382,565) 729,291

2017 Capital Cash Flow Total Project Budget

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Capital Infrastructure Contributions TransLink provides capital infrastructure contributions each year to the municipalities to fund rehabilitation and minor capital work on the Major Road Network (MRN) and bike pathways. TransLink is increasing spending in 2017 for MRN upgrades and structure along with additional spending for expanding the regional bike network. For 2017, TransLink is budgeting capital contribution funding of $45.9 million to municipalities for road and bike infrastructure. Projects already approved and underway have a budget of $213.7 million, which with the 2017 capital infrastructure contributions, total $259.6 million. None of these projects are eligible for senior government funding. The table below provides information on projects with over $1 million in cash flow in 2017. Table 3: Capital Infrastructure Contribution Projects Planned for 2017 ($ thousands)

Table 4: Capital Infrastructure Contribution Projects Currently Underway ($ thousands)

2017 New Capital Infrastructure Contribution Details

Classification and Project Name Description TransLink Net Cost

TransLink Net Cost

INFRASTRUCTURE

Expanding and upgrading the network of municipal designated cycling routes

Funding for the expansion of the cycling network in the region 6,000 6,000

MRN Program Funding: MRNB Capital Program/Upgrades

Additional contribution to member municipalities for upgrades to the road network

10,000 10,000

MRN Structures - Seismic Rehab Additional contribution to member municipalities for seismic road network rehabilitation

6,500 6,500

MRNB Capital Program - 2017 Annual contribution program to member municipalities for pavement rehabilitation, and road and bike infrastructure upgrades

15,833 23,382

Grand Total 38,333 45,882

2017 Capital Cash

Total Project

Active and Approved in Principle (AIP) Capital Infrastructure Contribution Details

Classification and Project Name Description TransLink Net Cost

TransLink Net Cost

INFRASTRUCTURE

2010 MRN Minor Capital Program - First & Second Wave Program

2010 contribution program to member municipalities for improving the capacity, safety and connectivity of the Major Road Network

1,776 18,227

2011 MRN Minor Capital Program 2011 contribution program to member municipalities for improving the capacity, safety and connectivity of the Major Road Network

1,975 9,255

2012 MRN Minor Capital Program 2012 contribution program to member municipalities for improving the capacity, safety and connectivity of the Major Road Network

2,060 17,443

2014 Major Road Network and Bike Capital Program

2014 contribution program to member municipalities for pavement rehabilitation , and road and bike infrastructure upgrades

1,553 23,503

2015 Major Road Network and Bike Capital Program

2015 contribution program to member municipalities for pavement rehabilitation , and road and bike infrastructure upgrades

1,049 24,214

2016 Major Road Network and Bike Capital Program

Annual contribution program to member municipalities for pavement rehabilitation, and road and bike infrastructure upgrades

2,896 23,784

Roberts Bank Rail Corridor Program Contribution program to member municipalities for road infrastructure upgrades at Roberts Bank Rail Corridor

1,714 45,800

Other Six (6) other projects in this category 754 51,506

Grand Total 13,776 213,732

2017 Capital Cash

Total Project

Page 39

7. Changes in Financial Position

Financial Assets The restricted cash and investments primarily represent unspent government transfers and self-administered sinking funds. Liabilities Deferred government transfer represents the receipt of capital funding offset by the amortization and revenue recognition for government funding. The Golden Ears Bridge contractor liability decreased slightly as principal payments commenced during 2015 and will continue in future years. Deferred concessionaire credits represent the funding provided by the Canada Line Concessionaire. This balance is amortized to income on a straight-line basis over the operating term of the concessionaire agreement, which will expire in July 2040. The increase in employee future benefits, which represent post-retirement and post-employment benefits, is due to the annual estimated current service cost and related interest. The post-retirement portion of this liability will draw down upon retirement of the employees.

Consolidated Statement of Financial PositionAs at December 31 2016 2017($ thousands) Q2 FORECAST BUDGET Change

Cash and Investments 231,600 266,564 34,964 Accounts Receivable 105,494 108,659 3,165 Restricted cash and investments 543,715 669,530 125,815 Debt reserve deposits 34,966 32,838 (2,128)

Financial Assets 915,775 1,077,591 161,816

Accounts payable and accrued liabil ities 264,202 269,486 5,284 Debt 2,338,732 2,555,502 216,770 Deferred government transfers 1,051,706 1,067,868 16,162 Golden Ears Bridge contractor l iabil ity 1,048,903 1,045,439 (3,464) Deferred concessionaire credits 548,995 525,658 (23,337) Employee future benefits 122,499 134,222 11,723 Deferred revenue and deposits - - - Deferred lease inducements 12,499 12,259 (240)

Liabil ities 5,387,536 5,610,434 222,898

Net Debt (4,471,761) (4,532,843) (61,082)

Tangible Capital Assets 4,906,331 5,273,583 367,252 Supplies Inventory 58,135 59,879 1,744 Prepaid Expenses 12,070 12,433 363

Non-Financial Assets 4,976,536 5,345,895 369,359

Accumulated Surplus 504,775 813,052 308,277

Page 40

Non-Financial Assets Planned capital spending during 2017 will result in a net increase of $367.2 million (7.5 per cent) in capital assets. Significant projects include conventional bus replacements, rail fleet expansion, station upgrades, rail infrastructure projects, and procurement readiness work for the Millennium Line Broadway Extension and the South of Fraser Light Rapid Transit (LRT) rapid transit projects.

Page 41

8. Liquidity and Capital Resources

Cash Flows and Liquidity Cash and cash equivalents are expected to increase by $35 million due to net operating, investing, financing and funding activity. Liquidity is further supported by TransLink’s Commercial Paper program which is budgeted to stay at $240.0 million by the end of 2017. The following table shows TransLink’s unrestricted cash and investments net of those investments maturing in 12 months or longer.

Restricted Funds The Unspent Government Transfers are used to fund qualifying capital expenditures.

UNRESTRICTED CASH AND INVESTMENTSAs at December 31 2016 2017($ thousands) Q2 FORECAST BUDGET Change

Cash and cash equivalents 231,600 266,564 34,964

Total Unrestricted cash and investments 231,600 266,564 34,964

RESTRICTED CASH AND INVESTMENTS As at December 31 2016 2017($ thousands) Q2 FORECAST BUDGET Change

Unspent government transfers 322,940 264,592 (58,348)TPCC's investments 22,630 22,630 - Restricted proceeds of real estate sales 39,284 179,284 140,000 Self administered sinking funds 158,861 203,024 44,163 Total Restricted cash and investments 543,715 669,530 125,815

Page 42

Net Debt TransLink currently has three main sources of financing its assets: Net Direct Debt, Indirect P3 Debt and Senior Government Contributions. The latter is represented on the balance sheet as Deferred Government Transfer. Net Direct Debt is expected to increase by $174.7 million due to the budgeted $300.0 million (at 3.5 per cent) issuance of new debt in 2017 partially offset by sinking fund contributions. The issuance of new debt in 2017 is to help finance our budgeted capital spending net of senior government contributions. Although the Net direct debt and indirect P3 debt have increased by $147.9 million and remain high, this level is reflective of the high capital intensive nature of the organization and rapid growth to meet the transportation needs of region. This net debt level is well within our debt to revenue policy limit of 300 per cent at 256.8 per cent for the 2017 budget.

FINANCINGAs at December 31 2016 2017($ thousands) Q2 FORECAST BUDGET Change

Debt 2,338,732 2,555,502 216,770 Less: Self-administered sinking funds (158,861) (203,024) (44,163) Less: Debt reserve deposits (34,966) (32,838) 2,128 Net Direct Debt 2,144,905 2,319,640 174,735

Golden Ears Bridge contractor l iabil ity 1,048,903 1,045,439 (3,464) Deferred concessionaire credits 548,995 525,658 (23,337) Indirect P3 Debt 1,597,898 1,571,097 (26,801)

Subtotal Net Direct Debt and Indirect P3 Debt 3,742,803 3,890,737 147,934

Deferred government transfers 1,051,706 1,067,868 16,162

Accounts payable and accrued liabil ities 264,202 269,486 5,284 Employee future benefits 122,499 134,222 11,723 Deferred lease inducements 12,499 12,259 (240) Less: Accounts receivable (105,494) (108,659) (3,165) Other Financing 293,706 307,308 13,602

Total Financing 5,088,215 5,265,913 177,698

Less: Other restricted cash and investments (384,854) (466,506) (81,652) Less: Unrestricted cash and investments (231,600) (266,564) (34,964)

PSAB Net Debt 4,471,761 4,532,843 61,082

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Appendix I – Consolidated Financial Statements The following statements are presented in accordance with generally accepted Canadian accounting principles for local governments, as recommended by the Public Sector Accounting Board of the Chartered Professional Accountants of Canada.

Consolidated Statement of Financial Position

Consolidated Statement of Financial Positionas at December 31 2015 2016 2017($ thousands) ACTUAL BUDGET BUDGET

Cash 1 249,527 121,397 266,564 Accounts Receivable 102,421 101,708 108,659 Restricted cash and investments 439,770 407,310 669,530 Investments 83,573 83,661 - Debt reserve depos i ts 36,407 34,639 32,838

Financia l Assets 911,698 748,715 1,077,591

Accounts payable and accrued l iabi l i ties 241,766 196,533 269,486 Debt 2,144,102 2,285,560 2,555,502 Deferred government transfer 1,124,066 1,110,026 1,067,868 Golden Ears Bridge contractor l iabi l i ty 1,050,913 1,049,021 1,045,439 Deferred concenss ionaire credi ts 572,396 548,995 525,658 Employee future benefi ts 110,023 119,233 134,222 Deferred Revenue and Depos i ts 14,742 - - Deferred lease inducements - net 12,799 12,499 12,259

Liabi l i ties 5,270,807 5,321,867 5,610,434

Net Debt (4,359,109) (4,573,152) (4,532,843)

Tangible Capita l Assets 4,606,623 4,864,333 5,273,583 Suppl ies Inventory 56,442 55,683 59,879 Prepaid Expenses 11,719 11,209 12,433

Non-Financia l Assets 4,674,784 4,931,225 5,345,895

Accumulated Surplus 315,675 358,073 813,052

1 2017 figure has been reclassified to include Investments

Page 44

Consolidated Statement of Operations

Consolidated Statement of OperationsTwelve months ending December 31 2015 2016 2017($ thousands) ACTUAL BUDGET BUDGET

RevenueTaxation 772,722 784,532 833,028 Trans i t 511,445 508,272 558,910 Golden Ears Bridge tol l ing 48,444 50,641 55,744 Government Transfers 228,943 282,185 281,904 Amortization of Deferred Concess ionaire Credi t 23,273 23,337 23,337 Investment Income 34,381 36,172 37,712 Miscel laneous 6,102 3,537 5,464 Ga in (Loss ) on Disposa l 2,340 - 149,677

1,627,650 1,688,676 1,945,776

ExpensesBus Divis ion 643,484 656,865 691,289 Corporate 103,675 130,299 120,448 Ra i l Divis ion 268,311 263,091 300,010 Roads & Bridges 80,490 82,782 103,244 Trans i t Pol ice 33,136 33,847 36,921 Sub-tota l Expenses , before Amortization and Interest 1,129,096 1,166,884 1,251,912 Amortization of Capi ta l Assets 168,290 181,520 209,286 Interest 167,902 168,203 176,301

1,465,288 1,516,607 1,637,499

Surplus for the year 162,362 172,069 308,277

Accumulated surplus , beginning of year 153,313 186,004 504,775

Accumulated surplus , end of year 315,675 358,073 813,052

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Consolidated Statement of Changes in Net Debt

Consolidated Statement of Changes in Net DebtTwelve months ending December 31 2015 2016 2017($ thousands) ACTUAL BUDGET BUDGET

Surplus for the year 162,362 172,069 308,277

Acquis i tion of tangible capi ta l assets (267,619) (435,321) (578,144) Amortization of capi ta l assets 168,290 181,520 209,286 Ga in on disposa l of tangible capi ta l assets (2,340) - (149,677) Net proceeds from disposa l of capi ta l assets 2,642 - 151,283 Tangible capi ta l assets contributed to municipa l i ties 3,784 - - Wri tedown of tangible capi ta l asset 612 - -

(94,631) (253,801) (367,252)

Increase in suppl ies inventory (5,176) (1,622) (1,744) Decrease in prepaid expense 797 997 (363)

(4,379) (625) (2,107)

Decrease in net debt 63,352 (82,357) (61,082)

Net debt, beginning of year (4,422,461) (4,490,795) (4,471,761)

Net debt, end of year (4,359,109) (4,573,152) (4,532,843)

Page 46

Consolidated Statement of Cash Flows

Consolidated Statement of Cash FlowsTwelve months ending December 31 2015 2016 2017($ thousands) ACTUAL BUDGET BUDGET

Surplus (Defici t) for the period 162,362 172,069 308,277 Non-cash charges to operations (58,919) (106,668) (159,773) Net proceeds from disposa l of assets held for sa le 4,868 - - Changes in non-cash operating working capi ta l 28,054 7,215 11,735

Net changes in cash from operating transactions 136,365 72,616 160,239

Purchase of capi ta l assets (267,619) (435,321) (578,144) Net proceeds from disposa l of capi ta l assets 2,642 - 151,283

Net changes in cash from capita l transactions (264,977) (435,321) (426,861)

Decrease (Increase) in restricted cash and investments (78,261) 32,432 (125,815) Decrease (Increase) in investments 1,013 3,603 - Decrease (Increase) in debt reserve depos i ts (303) 1,300 2,128

Net changes in cash from investment transactions (77,551) 37,335 (123,687)

Debt Proceeds 180,750 270,000 300,000 Is sue costs in financing 8,461 - - Repayments of debt 1 (92,049) (88,587) (83,230) Repayments of Golden Ears Bridge Contractor Liabi l i ty (462) - (70,097) Lease inducements received - (430) (240) Government transfers received for capi ta l additions 130,255 122,446 278,840

Net changes in cash from financing transactions 226,955 303,429 425,273

Increase (decrease) in cash 20,792 (21,941) 34,964

Cash, beginning of year 228,735 143,337 231,600

Cash, end of year 249,527 121,397 266,564

Page 47

Appendix II – Allocated Costs between Divisions

Allocated Cost BreakdownTwelve months ending December 31 2015 2016 2017 Change($ thousands) ACTUAL Q2 FORECAST BUDGET Incr/(Decr) %

Shared ServicesBus Division 23,440 25,386 26,652 1,266 5.0%Access Transit 972 665 683 18 2.7%SkyTrain - Expo & Millenium Line 1,108 1,057 2,532 1,475 139.5%West Coast Express 70 68 83 15 22.1%Evergreen Line - 15 - (15) (100.0%)Transit Police 1,679 1,554 1,807 253 16.3%Roads & Bridges 11,446 12,985 9,428 (3,557) (27.4%)Corporate (38,715) (41,730) (41,185) (545) (1.3%)

Total Shared Services allocated - - - - -

Costs Administered by TransLink and allocated to subsidiariesBus Division 16,411 18,215 17,810 (405) (2.2%)SkyTrain - Expo & Millenium Line 4,770 4,536 5,154 618 13.6%SkyTrain - Canada Line 2,215 2,470 2,455 (15) (0.6%)West Coast Express 15,725 573 631 58 10.1%Transit Police 1,793 1,878 1,993 115 6.1%

Total Costs Administered by TransLink allocated 40,914 27,672 28,043 371 1.3%

Bus Division 39,851 43,601 44,462 861 2.0%Access Transit 972 665 683 18 2.7%SkyTrain - Expo & Millenium Line 5,878 5,593 7,686 2,093 37.4%SkyTrain - Canada Line 2,215 2,470 2,455 (15) (0.6%)West Coast Express 15,794 641 714 73 11.4%Evergreen Line - 15 - (15) (100.0%)Transit Police 3,472 3,432 3,800 368 10.7%

Total costs allocated to Subsidiaries from TransLink 68,182 56,417 59,800 3,383 6.0%