Updated October 9, 2012 at 5:30 pm
Toronto’s Executive Committee considered a report on transit funding mechanisms today. In the following report, I have included only the most interesting or important of comments to give the flavour of the debate.
The proceedings were rather odd in that a presentation, cued up for City Staff, was never heard, but a “private citizen” managed to give a half-hour long deputation thanks to many friendly questions from Committee members. That “citizen” was Dr. Gordon Chong, former head of Toronto Transit Infrastructure Limited, an all-but-bankrupt subsidiary of the TTC used to conduct a study of the Sheppard East subway extension for Mayor Ford.
Chong liberally drew on his transit experience including years as head of the Greater Toronto Services Board, a provincial agency predating Metrolinx. Throughout his deputation, the highly misleading map of four cities’ subway system was projected to emphasize how little Toronto has done. (That map purports to show how little Toronto has in comparison with London, New York and Madrid while ignoring the fact that these were much larger cities, much sooner.)
A “glaring omission” from the collection of transit plans in the staff report, Chong said, was his own Sheppard report and the information produced by KPMG about tax increment financing (TIF). Chong clearly implied that the report was biased, but missed the fact that the Council motion directed the inclusion of “approved” plans for review, something Chong’s most emphatically was not. As for TIF, it is mentioned, but rejected as a funding mechanism as staff argue that such revenue is needed for general support of city services and should not be earmarked just for transit capital projects.
Councillor Michael Thompson pursued the scheme of a Scarborough subway with a BD extension that would loop back along Sheppard to close the loop at Don Mills Station. Chong replied that if Toronto could deal with the “money issue”, then there is no reason we can’t have the best in transit. Thompson observed that a casino might bring in $75-100m annually and could fund transit projects. The oddity here is that both treat any new money as a bonanza to be used for the best possible transit (where they want it) when fiscal conservatives might be expected to argue for careful husbanding of whatever loot might come their way. There is also the small problem that the municipal share of projected revenue for a Toronto casino is probably an order of magnitude lower than the Councillor’s claim.
Various Councillors mused about a regional agency to dispense transit dollars and decide which projects should be built. An underlying assumption was that, of course, the network of suburban Toronto subways would rank high on the list, and nobody seemed to contemplate that a 905-dominated agency might have other more pressing needs or think that the investment in all those subways was of dubious value.
Chong had only veiled contempt for the “expert panel” who reviewed his report and recommended, instead, for the LRT option on Sheppard. He strongly supports subway construction presuming the money is available, supported by the best possible feeder bus network. Councillor Norm Kelly asked whether the LRT plan was “an aberration”, and Chong replied that all previous TTC Chief General Managers had supported subways. Although he invoked the name of David Gunn, he neglected to mention that Gunn boycotted the opening ceremonies of the Sheppard line.
Next the Committee turned to questions of staff.
City Manager Joe Pennachetti explained the timeframe for the proposed public consultations. Through the fall there will be public meetings and online feedback (a dedicated website, social media) regarding the possible revenue tools and the prioritization process for transit projects. Staff will summarize the feedback during the winter and report to Council in April or May. The timing is intended to mesh with a June 2013 release of Metrolinx’ Investment Strategy.
One major issue still to be resolved is the division of any new revenue between regional/provincial projects undertaken by Metrolinx and the considerable need for local funding to operate and maintain the TTC, and to build major works that are not “regional” in nature (e.g. Waterfront projects). The first priority, according to Pennachetti, is to fund “The Big Move”, the Metrolinx regional plan. Then come the “local” projects.
Councillor Minnan-Wong, noted for his friendly reception of public input, worried that the consultation process would be dominated by “the usual suspects” and “special interest groups”. He wanted to hear from the “regular guy” and get “unbiased” feedback without “torquing results”. Obviously, the opinion of anyone who appears with an interest other than their local bus line or complaints about their taxes can and should be ignored.
Councillor Mammoliti spoke for his constituents who feel an LRT plan on Finch West is being forced on them by downtowners who don’t understand the ward and it aspirations, but who already have their subways and wish to deny them to others. He argued that LRT lines would be no faster than the buses they would replace.
Councillor Shiner talked about Development Charges which now levy about $11k against every new unit, but of which only about $3k goes to transit and road funding. He wants provincial caps on this funding stream removed, but chose to ignore the height to which the levy must rise or the number of units required to fund a project like the Sheppard extension.
Business now turned to speakers beginning with Councillors who are not members of the Executive Committee.
TTC Chair Karen Stintz noted that a regional approach will not get Toronto all it wants, particularly for local needs. It is naïve to expect that the 905 will agree to fund a Downtown Relief Line, and Toronto cannot count on Queen’s Park to fund the city’s plans. Riders’ expectations must be managed through the consultation process so that they don’t expect too much benefit.
Stintz noted that P3s are not a funding mechanism, contrary to several Councillors, but are only another way to finance a project. She spoke of her “One City” plan as a list of priorities, but failed to note that in fact it is a shopping list of pet projects with no priorities attached. The hardest problem for anyone is to say “not now” or “no”, and long lists look impressive.
Councillor Josh Matlow took another approach urging that the City focus on what it wants, identify a few key projects and their estimated cost, and then go to voters to identify the tools that might be used to pay for them.
Councillor Doug Ford dismissed all the talk of new taxes which, to him, were the standard approach to any funding problem, and argued that the City should pursue P3 arrangements exclusively. He did not address the issue of how these would eventually be paid for and, presumably, thinks of them as self-financing.
Councillor Adam Vaughan asked whether Toronto’s goal was to build transit to create density or to serve riders. In other words, should we be addressing travel demand as it exists, or focus investment where we hope to see new development. This argument was lost in the shuffle and no other speaker picked up on the thread. However, it is an important issue because unmet transit need is not necessarily served by lines intended to stimulate growth where population and demand are now thin.
At this point, the Committee broke for lunch. Just before it resumed, the press cornered Mayor Ford on his return and asked about his position on the matter. Ford replied that Toronto should be using P3s for its transit projects, and that Torontonians are taxed to death. However, he felt that the consultation exercise would determine whether people wanted to pay more tax to support transit.
Councillor Cesar Palacio suggested that the backlog in road repairs should be included in the list of targets for new funding. He was concerned about internal bickering between departments and agencies, and argued for a unified plan.
Councillor Peter Milczyn moved that the recommendations be amended by adding:
The Executive Committee requested the City Manager to report back to Executive Committee in Spring 2013 on options to establish a Rapid Transit Planning Office with a mandate to assess and co-ordinate Toronto’s ongoing rapid transit needs, assign priorities, develop plans, lead and manage the ongoing expansion of rapid transit infrastructure in order to help reduce congestion and commuting times in Toronto. The Office will work cooperatively with City of Toronto Finance, Planning and Transportation Departments, the Toronto Transit Commission, Metrolinx, Infrastructure Ontario and Public Private Partnerships Canada, and other potential partners.
This amendment (together with others available here) passed. This maintains the TTC’s participation in rapid transit planning, but puts the overall responsibility in a new City office. Whether it will be populated with responsible, unbiased professionals or politically-motivated appointees remains to be seen.
Councillor Giorgio Mammoliti reiterated his concern that his constituents were being dictated to with the choice of LRT, bemoaned the alleged slowness of future LRT operations and argued that the presence of a maintenance yard on Finch West would further denigrate the Jane/Finch neighbourhood. He claimed that riders on the Yonge subway benefit from a line “built when there were just trees and woodpeckers” (a claim that is flatly untrue even in its northern reaches), and asked that Finch West residents be given hope they would see a subway too. The Councillor brought the debate to his accustomed level with a scatological reference to the way his ward is treated.
Councillor Norm Kelly observed that it is never good to follow children or animals on stage, but did not indicate which he might have in mind.
Budget Chief Mike Del Grande, speaking by analogy to the Los Angeles tax referenda, emphasized that there needs to be a package, a list of what the new money will pay for, to make consultation work. However, these decisions are in provincial hands. By implication, going to taxpayers without a firm plan will not work.
Councillor Paul Ainslie proposed that several other revenue tools be added to the list for the consultation exercise (see item 1 of the consolidated motions linked above). Many of these had been omitted in the City Manager’s report because the amounts of revenue were too small or because of difficulties with administration. During a press scrum later, the City Manager had no concern with this amendment saying that many of the proposals would have come from the public anyhow.
The whole issue now moves to public consultation to start later in the fall. A great challenge for City staff will be to present information on, in some cases, conflicting transit proposals and viewpoints on how projects might be funded. They will have to avoid the impression of bias, although any recommendations about best choices for projects and for funding tools are bound to attract political attention no matter which way the staff turns.
When information about this process is available, I will link to it here.
The original post from October 1 follows below.
Two reports coming before Toronto’s Executive Committee on October 9, 2012 deserve reading if only as a matter of general background on transit planning and the challenges of funding a larger network in the GTA.
First is the upcoming review of the Official Plan and its transportation component. Over the years, there have been many proposed transit networks for Toronto (the report contains a convenient set of maps showing most of them). Even the most recent are out of date thanks to evolving land use and population patterns, for example in the eastern waterfront where Council has now flagged an LRT connection as a priority project.
Second is a review of possible regional funding mechanisms. The main report and its detailed review of funding streams cover territory we have already seen in Metrolinx reports going back a few years, but updated with current dollar values and including comments we would be unlikely to see from the provincial agency.
These reports will make their way through Executive Committee and Council. Assuming that they are adopted in some form, city staff will launch consultations around Toronto on both the Official Plan components and on possible funding schemes.
Notable by its absence, although not far under the surface, is any discussion of transit quality beyond the most obvious of rapid transit projects — how would transit be involved to accommodate shifts in the auto-transit modal split, increased population density in downtown neighbourhoods, and the challenges of handling travel between a wide range of locations in what are now called the “inner suburbs” (areas beyond the classic old City of Toronto, and parts of East York and York).
This focus on “lines on maps” continues the pattern of planners and politicians spending far more time proposing new infrastructure than they do on the day-to-day problems of running a transit system and providing good service. The funding report mentions the option of diverting part of any new revenue to municipalities (citing the example of 15% in the Los Angeles area), but does not examine the degree to which this would make a significant difference to transit service.
For example, assuming a new funding stream of $2-billion, a 15% cut would yield $300-million of which Toronto would be lucky to see half. This would cover less than one third of what Toronto now spends on TTC operations and none of the capital. If Toronto is going to see substantial improvements in transit service, this must come via Toronto-specific funding. We cannot expect to see regional revenue tools operating at the level needed to fund a “Toronto” level of service.
The Metrolinx “Big Move” was costed at $50b over 25 years, but these are out-of-date capital costs for projects that are years or decades in the future. An “as spent” number closer to $80b is more reasonable (although still probably inadequate), and that means a much higher demand for capital. Once a new line is built, there is the small matter of operating it. Finally there is the problem that new service territories and/or demands for significant service upgrades will appear within the 25-year timeframe of the plan. A few examples are Toronto’s waterfront transit, GO Transit’s electrification (itself a pre-requisite for high-frequency service), and the expansion of GO’s service territory beyond the original bounds of The Big Move.
Roll all this together — inflation, new projects, scope change, operating costs, municipal transit financing — and you have a very big price tag. When The Big Move was still in draft, it was a lot more expensive than $50b, but anything above that number was deemed unsaleable and the projects were cut back. Will Queen’s Park have the nerve to tell people what they really need to hear — better transportation will cost a huge amount of money — or will the politicians hide again and lowball the total costs?
Toronto’s Official Plan certainly needs some work along with the “official story” from the TTC. It is no secret that the long-ignored “Downtown Relief Line” should have been part of the transit network for decades, and that it is essential both to relieve the Yonge line in anticipation of a Richmond Hill extension and as a mechanism of providing diversity of travel options into the core area. Both TTC Chair Karen Stintz and CEO Andy Byford have publicly extolled the DRL’s importance. Meanwhile, the same CEO presented a 2013 Capital Budget that trots out the usual bilge about how we should stuff every rider possible onto the Yonge-University line and forget about the DRL for a few decades.
Funding and completing them [YUS enhancements] could put off the need for the $10 billion or so Downtown Relief Subway Line by 10 or 20 years at a fraction of the cost. [Page 5]
TTC management has never published a cost comparison of their scheme nor addressed the “soft” benefits of having multiple routes into downtown, not just “hard” capacity at Bloor-Yonge. Notable among many omissions is the absence of the much larger fleet and maintenance facilities needed to achieve a 40% capacity increase. (I will address TTC’s fleet planning in a separate future article.)
In a long overdue observation, the City Manager gives a clear-eyed view of private sector partnerships:
It is also important to note that Public Private Partnerships (P3s) have not been included on the list, despite the fact that the Province and Metrolinx generally seek to apply their Alternative Financing and Procurement (AFP) process, essentially a P3 approach, where ever possible.
The reason is that P3s are a “project delivery mechanism” intended to reduce cost and improve delivery timelines, not a source of funding. Even in cases where the private partner provides financing, the repayment stream inevitably comes from government controlled revenues, i.e. not private sector funding. [Appendix B, Page 11]
Later in the report, the City Manager observes that taxes levied at a municipal level (e.g. property tax) but used for regional purposes run into the centuries-old problem of taxation without representation:
… when municipalities are required to pay for a program, their taxpayers deserve some control over how the funds are spent (“pay for say”). Currently Metrolinx does not have municipal representation on its board, having removed them after the Big Move plan was adopted, in preparation for the project implementation phase. [Page 12]
Toronto already pays $20m annually toward the GO/Metrolinx capital program [page 13]. Without this payment, Queen’s Park would withhold gas tax revenues. In effect, there is a tithe on the gas tax money as it goes out the door supposedly in support of local transit spending. This program is currently slated to end after 2013, but I suspect this depends on its replacement by another mechanism such as the Metrolinx Investment Strategy.
Every recent report about transit financing and new revenue tools has stressed that public buy-in is essential. The “no new taxes” brigade will be out in force, and they will underpin their arguments with tales of public sector waste and claims that we can somehow do without large-scale spending beyond a few pet projects. That’s a recipe for another 25 years of do-nothing policies.
For their parts, both the City of Toronto and Metrolinx must be open about their proposals and the costs involved. Some projects may fall off of the maps, others may be added, but they must make a coherent, buildable network and revenue tools that will take effect in at most a few years.