Subways

by

The Mythical Private Sector Subway

The Ford Administration and its followers at City Hall would have us believe that transit developments in Toronto can be had essentially free of public cost and that the private sector, whatever that means, will pony up the investment to build the subway.

Almost as soon as the scheme for a privately financed Sheppard Subway was announced, the wheels started to come off the plan.  Actually, “come off” assumes that it had wheels to begin with, and statements by the Fords showed clearly that they had not worked through the details.

Oddly enough, their hands were out for any public sector funds that might be available including $330-million or so originally earmarked by Ottawa for the Sheppard LRT, up to $650m in “left over” funding that might not be needed for the Eglinton tunnel project by Queen’s Park, and whatever investment could be pried loose from Ottawa’s “PPP Canada”.  Additional money might come from a quick sale of waterfront lands by the City to would-be developers.

The scale of the Sheppard project may well shrink to only the eastern leg from Don Mills to Scarborough Town Centre so that the total cost stays in the $2-billion range.

Recently, I learned that Queen’s Park had offered $2b toward the Sheppard Subway provided that the Fords would allow the eastern part of Eglinton to remain on the surface, but this was turned down flat.  So intransigent is the Mayor on the subject of incursion by transit into road space that the possibility of substantial funding for his pet project was not an option worth embracing.

You may have noticed by now that there isn’t a lot of private sector money in this story, except for the buy-out of waterfront lands, and that’s a sale of public assets, not a private sector investment in transit.

Meanwhile, we hear a lot about private sector investment elsewhere, usually with little context.  Vancouver’s Canada Line comes up now and then, including in comments on this site, and some people think it’s a private sector show all the way.  In fact, various public agencies have over $1-billion in the project, more than half of the total cost.  Even the “private” partner, a joint venture, includes investment agencies that manage public funds including pension plans.

Probably the most successful example of investment-supported transit is in Hong Kong, but this must be seen in the context of local conditions.  Not only is Hong Kong an extremely dense city, it is one in which the land ownership and planning are firmly in public hands.  Private buildings abound, but they sit on land leased from the public sector which reaps the benefit of land development.  (For an extensive look at the Hong Kong system’s financial and planning development, see Rail+Property Development by Cervero and Murakami [14MB]).

Leaving aside whether Toronto would ever support densities such as those found in major Asian cities like Hong Kong, there are important issues that do not get discussed here.

  • Who profits, and how soon?  If land is held in the public sector, the profit from  appreciation thanks to transit construction remains there too.
  • Will the City simply hand over land to developers to do with as they please, or will there be a recognition that city building involves us all?
  • Will new neighbourhoods to be planned both as attractive, pedestrian-friendly spaces where people will want to live even at high densities, or will we see a continuation of the tower-in-a-parking-lot so common in many developments?
  • Will we build car-oriented suburbs, generating even more congestion, along what is supposed to be a major transit corridor?
  • Will the Sheppard line be funded only with development along its corridor, or will other parts of the city, such as the waterfront, have development revenues siphoned off leaving them bereft of transit?
  • How much of the scheme depends on the City fronting the initial construction cost in the hope of future development revenues to pay the capital and operating expenses?
  • Will Council be allowed to perform, in public, a full review of the terms of any arrangement, or will we sell our transit system’s future in a back room deal?

PPPs are notorious for requiring careful structure of contracts, performance criteria, penalties and ongoing management.  Toronto’s political culture prefers to walk away from such responsibility in the public sector.

One way or another, Toronto will commit a pot load of money to a Sheppard subway of dubious value, and force Queen’s Park to bury the entire Eglinton line at great cost.  Billions will disappear into these projects while other parts of the transit system beg for funding.

The private sector may wind up funding some portion of the Sheppard project, but transit overall is still very much a public issue.  Long term funding will depend on public revenues.  We cannot avoid the debate on fares, tolls or taxes, with the assumption that magically money in the private sector will build, operate and maintain our transit system.  Somewhere, the public will spend more, or sell assets, or give away benefits as a tradeoff.  Nothing is free.

by

TTC Meeting for April 2011 (Update 2)

Updated April 6, 2011 at 7:20 pm:

I forgot to mention in my earlier update that there was talk going around the meeting that only half of the Sheppard Subway scheme (the eastern half) might be pursued in the short term (the next decade) to keep the cost down to $2 billion and change.  This echoes a comment by Vice Chair Peter Milczyn in yesterday’s Toronto Sun.

Updated April 6, 2011 at 5:00 pm:

At the Commission meeting, very little happened.

The new, but not yet official, Chief Customer Service Officer was introduced and he made a few remarks about his hopes for the new position.  He has a real challenge in front of him.  Customer Service may be the kind of thing Commissioners love to smile brightly and gush about, but wait until we start talking money, or the negative effects of cutbacks on the perceived quality of the system.

As expected, the proposed split of the 12 Kingston Road bus so that half of its service would run via past Variety Village (via Birchmount and Danforth) was approved.  This will begin operation on May 8, but the community shuttle bus (run by Wheel Trans) from Main Station will continue to run until Victoria Park Station (route 12’s terminus) becomes accessible later this year.

Unlike the previous meeting, Commissioner Minnan-Wong did not belabour the public session with inquiries about contract cost changes.  Some of these questions should be asked, but without implying that every change is a sign of waste and incompetence.  Whether he was equally silent in the private session before the main meeting, I don’t know.

However, in what must be the greatest example of how petty the new Commission (and the Ford regime) can be, there was continued discussion of the fact that former Chair Giambrone overspent his 2010 expense allowance by approximately $3,400.  The issue will come back to the May Commission meeting, and there were dark hints that more serious measures would be taken.  Considering that for many years, none of the Commissioners or Chairs has used all of their expense budget, this is really small potatoes.  However, it’s more important than worrying about how to pay for a $4.2-billion subway with magic beans.

The big issue, relatively speaking, was the new Toronto Transit Infrastructure Limited report.  This company, renamed and resurrected from an older, inactive TTC subsidiary, will be used as a home for work on the “Toronto Subway Project” (the official name for the Sheppard Subway extensions in the Memorandum of Understanding with Queen’s Park).  It has $160,000 sitting in the bank from the original setup capital out of TTC when it was created, and retained earnings from work performed years ago.  This nest egg will allow it to operate without any funding approvals for the short term.

We learned that Gordon Chong, a former Councillor and Commissioner, has been retained at $100k/year as President, CEO, Secretary, Treasurer and Co-Chair.  The other directors and officers who are members of Council will not be paid for their work on TTIL.

A rather convoluted motion was passed by the Commission stating that it would approve paying invoices on TTIL’s behalf provided that a mechanism was set up for Council to fund them.  Presumably this would be required once they burn through their $160k nest egg.

Former Vice-Chair Mihevc spoke as a deputant, and raised a number of issues about the Sheppard Subway notably the lack of detailed information on the way it will actually be funded, what the effects will be for ongoing system subsidy requirements (as compared with the Transit City LRT lines originally proposed), and what type of service would be offered to those areas where the LRT plans have been cancelled.

A report on what to do with Finch West is expected back later this year, and the 2012 budget review will include provision for whatever is recommended.  Obviously, this won’t involve any significant construction such as a BRT lane and stations.

The Commission swatted these requests aside, and Vice Chair Milczyn said that “we don’t need to know what future subsidies might be” because in every past case the TTC has always just opened new lines and absorbed the cost.  The desire to not debate the wisdom of the Sheppard proposal, which hasn’t been approved by anyone yet other than the Mayor, was quite clear.  After the meeting, a press scrum with Chair Karen Stintz was notable for its evasiveness.  In the end, it all comes back to “the Mayor wants it”.

As long as Council has enough cheerleaders who let Mayor Ford get away with this sort of thing, it’s hard to understand why we even bother holding public meetings.

The original post from April 2 outlining major agenda issues (most of which were not discussed at all), follows the break.

Continue reading →

by

Subway City? (Update 3)

Updated April 2, 2011 at 6:30 am: Additional details about the plan have been provided by Metrolinx.  The dialog below has been slightly edited from email exchanges, but preserves the sense of the conversation.

Q:  The Memorandum of Understanding (MOU) refers to both Black Creek and Jane as western terminals for the Eglinton line.  However, these are over 1km apart.  Where will the line actually end?  How will the line connect with the GO corridor if it ends at Black Creek?

A: The exact terminus for the Eglinton line, which is in the Mt. Dennis area, will be determined through a future additional study due to the vertical and horizontal alignment (how steep the grades can be climbing out of the tunnel and which side of the road we will be on to approach the yard) between Black Creek Drive and Jane Street. The objective is to make the connection to the GO rail corridor.

Q:  When does Metrolinx expect to have a preliminary design proposal for the section of the line east of Leaside that will now be substantially underground?

A:  We are meeting with the TTC now to discuss the timing for the preliminary plans and profiles for the underground segment.

Q:  The SRT replacement is described as ending at STC. Does this mean that McCowan will be abandoned as a station? Will the proposed right-of-way beyond McCowan to Sheppard and Malvern be protected to allow for future extension of the route? Is there any plan for an eastern yard so that trains would not all have to be based at the Black Creek yard?

A: The Scarborough LRT would follow the same route as the existing SRT and will include McCowan Station. At this time, there are no plans to close McCowan Station. We do see value in potentially re-using the McCowan yard for at least a layover site and we will need to study this further.

Q: Although the MOU states the number of stations on the Toronto projects, it does not mention this with respect to Eglinton.  The press release specifies 26 stations.  When will Metrolinx produce a station plan for the new line?

A: The exact number and location of stations for the Eglinton-Scarborough Crosstown LRT project will be finalized as part of the environmental assessment amendment process.

We expect the Eglinton project will have about 26 stations along a 25-kilometre stretch, and we’re pleased to provide this as a single-seat trip for residents from Scarborough to the Mount Dennis Area.

Since the new Eglinton project has changed from the previous concept, the working assumption now is that the station spacing across the route is approximately at 1 kilometre.

We want to make certain that residents get the best use from the Eglinton line, so we are taking more time to study the specifics of the project to determine the exact number and best locations for the stations along the Eglinton line.

The finalization of the Eglinton line and the locations of the station will be part of the preliminary engineering and Environmental Assessment, which is expected to be completed in the coming months.

Comment: The 26-station count includes not just Eglinton but also the SRT.  There were 26 stops on the Transit City version of Eglinton, not including Kennedy, and 6 more on the SRT.  The new combined route will have to go on a diet, and the roughly 1km average spacing implies that some stations will be dropped.  Throughout the Transit City debates, Metrolinx consistently wanted fewer stations on Eglinton, although at the time the underground section was shorter.

Q: Although the MOU makes reference to “LRT”, for certainty does this mean “Light Rapid Transit” as in the Flexity cars recently ordered from Bombardier, or is Metrolinx contemplating a return to ICTS Mark II technology once proposed for this route? This is an important decision as it affects the ability of the line to be extended.

A: On June 14, 2010, Metrolinx announced a $770M purchase of Light Rail vehicles from Bombardier, which included vehicles for the SRT upgrading project. We expect that we will need about 130 LRTs for the adjusted plan, but we will have to sit down with Bombardier and discuss the details. At this time, we do not plan to change from LRT to ICTS MARK II technology.

Comment: “At this time” are three little words that could do a world of damage to future LRT expansion in Toronto.  Metrolinx owes us a definitive answer in the context of their Big Move plan.

Q: The Sheppard East LRT’s costs to date are chargeable to Toronto, but one piece of work already underway is the Agincourt Station grade separation. Is this going to proceed independently of the LRT project as a GO improvement? If so, will it be built with room for a future LRT right of way if that scheme is resurrected?

A: At this time, there are no plans to change the current design for the Agincourt grade-separation. The grade separation construction work that is currently underway at the Agincourt GO Station to separate the GO tracks from Sheppard Avenue will proceed independently of the former LRT project.

It is important to note, though, that this grade separation construction work is an important safety improvement for GO commuters and drivers that use Sheppard Avenue. This grade separation is a project that has benefits to GO’s operations and traffic.

Continue reading →

by

Finally! A Dundas West GO Connection (Updated)

Updated March 24 at 9:00 pm: Metrolinx has published the materials from the Open House.  Of particular interest is the presentation which shows the proposed changes to the area around Bloor GO Station and Dundas West TTC Station.

In the first phase, the north sidewalk of Bloor Street would be redesigned to widen and otherwise beautify the access to the GO level from the sidewalk in the underpass.  Also, a connection from Dundas West Station would be added at the east end of the platform.  (Page 33 of the presentation shows details of the subway to GO link.)

In later phases, the streetcar loop at Dundas West would be redesigned so that all access was from Edna Avenue with traffic signals.  This could be a mixed blessing given the level of transit service at this location.

Original post below:

Metrolinx has announced an open house for the Dundas West-Bloor Mobility Hub Study.

Date: Wednesday, March 23, 2011
Time: 6 p.m. to 8:30 p.m.
Venue: Lithuanian House
1573 Bloor Street West

Further background can be found in The Star.

Dundas West Station was built before GO existed, much less had service on the Weston corridor, but a connection could be built from the east end of the platform to what is now Bloor Station on the rail line.  However, a major development, the Crossways, was not on top of the subway when it opened in 1966, and any connection must deal with this building.

by

TTC’s “State of Good Repair” Funding Crunch

In past articles, I have reported the growth in TTC capital spending and the concurrent problem in funding for the system.  Over coming months, the City of Toronto and its agencies, including the TTC, will struggle to create a viable financial plan for 2012 and beyond.  This will include a five-year projection on both the operating and capital sides, an exercise that will (or should) frighten those concerned with the survival of public services.  However, it should also bring some discipline to year-over-year budgets and project approvals by demanding better accuracy in projections and clear justification for “surprise” projects in the out years.

The TTC capital budget is a formidable document with details in two binders of over 1,600 pages.  The summary form is tens of pages long.  Parts of the public presentation are so dense that one page brought a laughable comment from Vince Rodo, the TTC’s General Manager — Executive:  “You’re not supposed to be able to read that”.  A joke, yes, but a sad comment on the level of detail the Commission and the public see when confronted with a multi-billion dollar budget.

I have already written at length about the 2011 Capital Budget, and in this article I will focus on changes to the budget as it passed through the City’s approval process as well as the outlook for 2012 and beyond. Continue reading →

by

Understanding TTC Project Cost Creep

The recent TTC meeting saw Commissioner Minnan-Wong digging into questions about rising costs on two TTC projects, the design of Finch West Station and the resignalling of the south end of the Yonge subway.

Reports asking for increased spending authorization come through the Commission quite regularly, and Minnan-Wong has raised the question of “out of control spending” at Council on past occasions.  Just to declare my political leanings, I have never been a fan of the Councillor, even though there are certainly legitimate questions to be asked when project costs rise unexpectedly.

Unfortunately, Minnan-Wong tends to approach these issues as if someone is trying to pull the wool over his eyes and implies outright incompetence as the starting point for discussion.  This approach brings more confrontation than information.  Let’s have a look at the two projects in question and consider how information about them (and their many kin in the overall budget) might be better presented.

Continue reading →

by

Metrolinx Contemplates Ford’s Subway Plan

The Metrolinx Board, not the most talkative bunch at their infrequent public meetings, took the unusual step yesterday of discussing possible major changes in their regional transportation plan.  Rob Ford’s subway plan can hardly be ignored, and Metrolinx directors need to engage in this debate lest they become irrelevant through inaction.

Both Chair Rob Prichard and President/CEO Bruce McCuaig went out of their way to speak positively about Ford’s scheme, while other directors were less inclined to accept the proposal.  In this article, I will recap the discussion and then conclude with thoughts of my own.

Continue reading →

by

Ford Proposes Privately Built Sheppard Subway (Updated)

Updated February 17, 2011 at 10:00 am:

Councillor Doug Ford talked to Matt Galloway today on Metro Morning.  Listen to how he slides all over the place without giving specifics of how the money would be raised and simply says that such schemes have worked elsewhere.  No details, but the usual put-downs of “nay sayers” as if anyone with the nerve to criticize is a foe of progress.  Sounds very 50’s to me.

In a separate interview, MPP Greg Sorbara, former Minister of Finance and heavyweight proponent of the Spadina Subway, explains that, while the proposal may look interesting, the devil is in the details, and at the end the public pays.

Original article from February 16 at 16:44:

Mayor Ford’s office has proposed to Metrolinx that the Sheppard subway be extended west to Downsview and east to Scarborough Town Centre as a private sector deal with the City according to articles in the Globe and the Star.

The expansion would be privately financed, but owned by the City with the cost to be repaid out of development charges and tax increment financing.

What is unclear at this point is the amount of development that would be needed along the extended line to actually pay for its construction without adding to the City’s debt, nor is it clear how much of the proposed Provincial and Federal contributions to the Sheppard LRT would be available for a Sheppard Subway project.

This scheme leaves a number of other projects up in the air including:

  • the remainder of the Sheppard LRT’s scope from Kennedy (where the subway would veer south to STC) to eastern Scarborough and, possibly, to the UofT Scarborough Campus
  • the replacement of the SRT as either an LRT line (part of any remaining LRT-based Transit City network) or as a BD subway extension
  • the status of the proposed Eglinton and Finch LRT lines, although the former as an LRT subway hybrid seems fairly certain to be built

A long term plan to finance a subway using future revenues presumes that the money to pay for its construction, debt financing and developer’s profit will actually materialize.  This begs the question of station location and spacing because there would be little development on land far from stations spaced widely as on the most recent extensions to the subway.  Enough land and development potential must exist to pay for the subway over time, and the locations must be sufficiently attractive to would-be builders that they will pay a premium to locate their buildings on subway sites.

Whether the subway would generate net new development or merely attract buildings away from other sites is hard to say given that major redevelopment of the older commercial/industrial strips in Scarborough and North York is not already underway.

Would existing neighbourhoods in which new stations (and their associated development) would be placed welcome a complete change in their density and character?  This may be viable on Sheppard, but not in other neighbourhoods with well-establish, stable residential land use.  Indeed, some routes, like a Downtown Relief Line, would be built as part of a wider network to spread demand and give access to new parts of the city.  Should the locations a DRL would pass through enroute to downtown pay the cost in redevelopment effects because that’s where a line is drawn on a map?

The extensions would cost $3.4-$4.4-billion according to the Star, and this would translate to an annual debt service cost of $200m at 5%.  That’s a lot of new tax revenue, although the amount would be lower depending on the amount of principal that can be paid off through development charges.

As with other private development schemes around the world, the real challenge lies in the details of any contract.  Who, for example, will be responsible for upkeep of the infrastructure and repair of any premature faults that appear over the period of the lease-purchase?

My reaction to this is mixed.  The Sheppard Subway may be the apple of some advocates’ eyes, but it is not the most important transit expansion project in the GTA.  Regardless of how it is financed or who builds it, this will divert considerable investment and attention from other projects and may well pre-empt any expansion of LRT service to the northeast.

On the other hand, we have been hearing about the wonders of privately developed transit for so long, part of me wants to say “put up or shut up” to those who would pursue this course.  Is the project really viable?  Will the city see the revenues needed to pay for the long term lease-purchase of the new line, or will future taxpayers be on the hook to bail out the project?

by

Subway Fleet and Infrastructure Plans 2011

The TTC Capital Budget contains many projects that address the renewal and expansion of the subway fleet, although this information must be collated from various sources.  When we discuss what might happen in the next decade on the subway network, it is important to know what is already provided for (whether it is actually funded or not) in the plan as opposed to what would become a “surprise” addition.

The largest component of the plan relates to capacity, especially on the Yonge-University-Spadina (YUS) line.  The YUS already suffers from at least at a 10% backlog between demand and the capacity actually provided, presuming that the service runs more or less to the advertised headway.  Bloor-Danforth (BD) is not as critical, but planned service expansion to 2020 will bring the scheduled headways to or below the level that can be operated with the existing terminal layouts and signalling.

The current plan does not include any provision for the effect of major additional demand caused by extensions other than the Spadina line to Vaughan, aka the Toronto York Spadina Subway Extension (TYSSE).  There is no provision for the effect of extensions on either end of the BD line.

As the fleet grows and headways decline, there are two immediate effects:

  • storage and servicing for a larger fleet require more yard space and maintenance capacity in carhouses
  • service must be scheduled and operated on timings with little room for delay, and no padding for recovery

These effects, or rather the TTC’s attempt to address them, show up in various ways in the overall plan.

Continue reading →

by

TTC 2011 Capital Budget

TTC management unveiled its Capital Budget and 10-year forecast on January 12 with a presentation to the Commission, and followed up with a presentation at the City’s Budget Committee on January 14.

Online information about the budget is incomplete.  More troubling, however, the “Blue Books” which contain the details of all capital projects have not yet even been issued to members of the Commission, let alone Councillors or, it would appear, the City’s Budget Analyst who is supposed to digest all of this on Council’s behalf.  Full consideration of the TTC budgets was held over to January 20 by the Budget Committee to await the Analyst’s Notes.

TTC Capital Budget Report

Appendix A: Ten Year Summary

Appendix B: Sources of Funding

Appendix C: Project “Packages” For New Funding Requests

Presentation to City Budget Committee (See Pages 49-70)

Meanwhile, the TTC presented a budget with previously unknown major capital projects and additions to existing ones, but with little explanation of why they are here.

Oddly enough, the City’s Executive Committee only yesterday was in turmoil over unexpected increases in the cost of hosting the Pan Am Games due to unplanned costs for soil remediation and the fact that the project estimate was in 2008 dollars.

The TTC would do well to understand that surprises in budgeting will not be warmly greeted by the City, and moreover that they can have a compounding effect of squeezing available funding for other projects.

In this article, I will give an overview of major points in the budget along with specific comments on a few major issues.  When the “Blue Books” become available (expected later this week) and I get a chance to review the full budget, I will write on major topics such as subway fleet planning and system expansion in detail.

Continue reading →