Finance

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Paying the Piper

Now that Metrolinx and, presumably, their masters at Queen’s Park have determined that we will build a network of four LRT lines in Toronto, we can turn to the larger question of paying for “The Big Move” and the “Investment Strategy”.  Some Toronto Councillors are already talking about the need for dialogue with neighbouring municipalities in the 905 for a co-ordinated strategy on transit funding.  This is long overdue.

Once upon a time, the Metrolinx Board actually contained politicians, the very people who would undertake this sort of debate and who, when the going got rough, would have to stand up at public meetings defending the plan and dodging the rotten tomatoes.  Nobody on the current Metrolinx Board has to get elected even as dog catcher, much less as a mayor, and the staff are even further insulated by the fact that almost all of Metrolinx’ business takes place in the refined, quiet space of private meetings.

This is no way to build public support for anything.

The term “Investment Strategy” has a comforting feeling that plays to those who like to wrap public works in the mantle of private enterprise.  We will “invest” in the future of transit and of our region.  That’s fine as far as it goes, but “investment” implies capital, something notoriously absent from government accounts in part due to the economy, but in part to the fact we are loathe to tax ourselves for the services we want.  (Or slightly more accurately, we don’t want to pay taxes for services somebody else wants, but we think we will never use.)

One way or another, somebody has to pay to expand and improve transit service given decades of disinvestment in that field.  Toronto likes to think of itself as a “Transit City”, but in fact stopped investing at a rate needed to keep up with population and travel growth decades ago.

The Investment Strategy is often portrayed as something we have to study, to examine, to fathom the depths of public financial options, but, no, the numbers have been available for everyone to see for years.  Metrolinx produced its first report (one without the word “Draft” stamped on it) in June 2008.  It contained the following table showing the types of revenue stream that Metrolinx might tap.

ISTable2008

This was back in the days when we were only looking for $2-billion annually over 25 years for a $50-billion Big Move.  Since then, the actual budget has grown thanks to inflation, the recognition that some project estimates were low, the need to factor in operating costs and the likely demands to fund local transit agencies as part of the grand scheme.  We now hear numbers in the $75-100b range, and that will take a lot of tolls or taxes to pay off.

A more recent version of this table was produced in 2011 for the Civic Action Summit, but the changes lie mainly in the size of the numbers, not in the types of revenue.

TCSATable2011

The important work Metrolinx must perform is to produce the menu of projects and spending options for which any new revenue streams might be imposed.  To that end, the publication of an updated “Big Move” (not expected until late 2012) and the incorportation of spending options to support local transit are essential.

Moreover, Metrolinx must address jurisdictional issues between GO Transit and the TTC to reconcile demand and capacity problems for the core area.  If we are to collect billions in new taxes, they should not be wasted trying to stuff every available passenger into the Yonge Subway.  Some belong on a Downtown Relief Line (and a real relief line, one that goes north at least to Eglinton, not just to the Danforth subway), and many more belong on the many existing and potential GO rail corridors leading north out of downtown.

The GTA must understand what the real cost of bringing transit up to a competitive level where it will actually make inroads into car traffic in the 905, the sources of funding which might be used, and the limitations (financial and operational) on what can be done.  This type of integrated planning is glaringly absent from Metrolinx work over the past years.

The question of new taxes (by whatever name) is on the table, and the discussion must move into the political arena.  This is not a job for anonymous bureaucrats or a board of unknowns meeting in secret.  Indeed, any decision on the provincial side will be taken at Queen’s Park by the Cabinet and the Premier’s Office with Metrolinx providing a comforting rubber stamp and a patina of independence.

Toronto Council should take this debate not just to its own voters, but to the 905 regions so that we can all have an informed debate and build political support for improving transit.

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Metrolinx Resurrects Transit City (Updated)

Updated April 26, 2012 at 1:10pm:  This article has been updated to reflect discussions at the Metrolinx Board meeting of April 25, the press scrum following that meeting, and correspondence between me and Metrolinx to clarify some issues.

Notes from the Board Meeting and Press Scrum:

Chair Rob Prichard asked about the status of unrecoverable losses due to the diversion of Metrolinx effort from the original Transit City plan to the Ford transit Memorandum of Understanding.  Less that $10-million has been spent on preliminary engineering for the Eglinton tunnel east from Laird Station.  Potential extra costs from Bombardier for the vehicle supply contract are not yet known.  If these were simply inflationary increases, then the Metrolinx funding (which includes inflation) should cover this.  However, Bombardier may also claim additional expenses related to the delay.  Prichard urged staff to “negotiate” away as much of such claims as possible.

This issue came up again in the press scrum.  Metrolinx has always said that “others” must bear any extra costs due to the Ford delay, but the identity of this party is unclear.  Elizabeth Church from the Globe noted that Karen Stintz has pointed out that since the Ford MOU was never approved by City Council, the city can hardly be held responsible for the delay.

Both Rob Prichard and CEO Bruce McCuaig dodged around this and other questions related to Metrolinx’ role in pursuing the Ford plan in the absence of Council support, especially considering that Metrolinx hangs its return to LRT on Council’s clear vote for the original Transit City plan as the City’s definitive policy statement.  The Star’s Royson James described Prichard as being good at “ragging the puck”, but never managed to pin him down to an answer.

Prichard hopes that the value of the “extra cost” will be reduced to zero making this a moot point, or at least one small enough to fit under any nearby rug without most people noticing the lump.

Director Lee Parsons asked about the possible funding from P3 Canada and what this might enable.  Bruce McCuaig suggested that it might be possible to add to the scope of work with the additional money available through this federal program, but the dollar value is not large and Metrolinx must still pitch their projects to the P3C board.

Director Richard Koroscil asked what the differences were between the plan proposed here and the previously approved 5-in-10 scheme.

Jack Collins (Vice President, Rapid Transit Implementation) replied that these are mainly the slippage of Sheppard’s completion out to 2018 and the shift of the SRT completion back from 2020 to 2019.  The design team and project manager for the Sheppard project were disbanded when work stopped just over a year ago and a new team must be assembled.  Moreover, the project will now be delivered through Infrastructure Ontario (IO) as an Alternate Finance and Procurement (AFP) scheme, and this adds time for production of the contracts related to managing this process.

In the case of the SRT, the section of the route north of McCowan Station will be built while the existing SRT is still operating and this allows work to start sooner than planned on that line.

Director Rahul Bhardwaj asked about the requirement that the TTC implement the Presto smart card as a precondition of having these projects funded by Queen’s Park.  Bruce McCuaig replied that a proposal from TTC staff for an agreement with Metrolinx and the rollout of Presto will be going to the TTC board at its meeting of May 1.

Director Joe Halstead asked about the roles of three agencies — Metrolinx, the TTC and IO — in these projects.  Metrolinx will be the project owner.  IO will be the procurement agency.  The TTC will provide the design criteria, manage the design consultants and technical details of the projects, and will eventually operate the lines.

Halstead also asked about lessons learned from the St. Clair project.  Collins replied that Metrolinx will maintain a presence in communities to keep them informed as the projects evolve, and noted that the neighbourhood office for the Sheppard LRT that had been closed because of the Ford MOU would have to be reopened.

Director Doug Turnbull asked where Metrolinx stands on the role of subways.  Bruce McCuaig replied that Metrolinx supports subways such as the Spadina extension now under construction, and noted that “The Big Move 2.0” includes both the Richmond Hill extension of the Yonge line and the Downtown Relief Line.  Metrolinx will continue to support subways in this context.  Rob Prichard noted that Toronto Council had asked city planning staff for studies of a Sheppard West connection to Downsview and a Bloor West extension to Sherway.

Turnbull asked whether TBM 2.0 affects any of the four LRT lines up for approval.  Bruce McCuaig replied that the 2.0 document will review progress to date and incorporate new initiatives such as the GO electrification.

During the press scrum, Metrolinx clarified that The Big Move 2.0 will be published at the end of 2012.

Director Stephen Smith asked for a clarification of the AFP bidding process and the meaning of the term “Financial Close” in the project chart.  Jack Collins explained that the procurement would have several stages.  First, bidders would be invited to qualify to bid on the work.  Based on this, three would be chosen, and they would be given funding to prepare a more detailed proposal.  From that work, IO would make its evaluation and select a winner.  At that point, the overall contract and financing details would have to be nailed down, and this would be the “financial close”.  IO will rely on Metrolinx, the TTC and technical consultants for evaluation of the proposals.

Smith asked whether pricing would be affected by the level of activity in the construction market.  Collins replied that preliminary indications from the international market are good because work is drying up overseas.  Also, experienced resources now committed to the Spadina extension will be freed up starting in late 2015.

The report was approved by the Board, and most of us adjourned to the press scrum which was attended by Rob Prichard, Bruce McCuaig, Jack Collins and the usual bevy of Metrolinx communications staff.

After the discussion about “extra costs” noted above, questions turned to the location of the Eglinton tunnel.  It will definitely not go under the Don River because this would involve tunneling through bedrock.  The tunnel boring machines are designed for softer conditions (soil, clay, etc), not for hard rock, and this work would be very expensive.  The line will go under Don Mills Road and will provide for a future connection to a north-south route.

Questions returned to the role of Metrolinx and “the need for a clear and supportive partner” as they put it.  Elizabeth Church asked about the Mayor’s opposition to the LRT scheme.  Bruce McCuaig noted that Council had voted, and had delegated authority to the City Manager to execute contracts for these projects.  Rob Prichard observed that the Mayor and his brother speak for themselves, and that there is a broad consensus for the LRT plan.  Metrolinx won’t stand in the way of debate, but they have lots of room for working with the city.

John Lorinc asked whether Metrolinx is concerned about being “the meat in the sandwich” in the 2014 election?  Prichard replied “no”.  He observed that political actors have strong ideas, and we shouldn’t try to take politics out of transit.  However, we should keep our eyes on the main goal of better transit and less congestion rather than just fixating on four projects.  There will be a contract with the city for these four, and other projects may come.  Metrolinx should be steady in its execution of the projects and although there will be elections along the way, the recommendation is that these projects should be completed.

A few questions on the vehicle contract came up.

Would other cities outside the Metrolinx planning area be able to procure LRVs through the Metrolinx contract?  Jack Collins replied that this decision would be up to the local municipality (e.g. Kitchener-Waterloo or Ottawa).

Given the extended period between vehicle delivery and start of service on the first line (Sheppard), what will Metrolinx do about the warranty that could expire before the cars begin revenue operations?  Bruce McCuaig replied that this would form part of the discussions with Bombardier and final approval of the terms would come from Queen’s Park.  There will be two pilot cars built for Metrolinx but no dates are set yet for their delivery.

Royson James asked about Metrolinx’ role — are they simply following the political path of least resistance, or can we “take their recommendations to the bank”?  Bruce McCuaig replied that Metrolinx would give its best advice regarding regional transportation systems, and that they are the keeper of the long term view.

James asked why Metrolinx keeps changing its mind.  McCuaig replied that there are choices between technologies, and it’s not always a black and white decision.

Rob Prichard chimed in saying that there had also been changes in preference on the City’s side for Eglinton’s technology.  The Ford MOU had tradeoffs — a longer Eglinton tunnel was a gain at the expense of losing the Finch LRT (and the eastern part of a Sheppard line).  Metrolinx need to build projects that make sense, and they are “respecting democracy”.

Elizabeth Church noted that Metrolinx has changed its “expert opinion” especially on Eglinton, and this is frustrating to those who seek technical advice.  Prichard replied that between 2006-08, the original vision for Eglinton was all underground, a faster line attracting more riders.  However, the tradeoffs between costs and benefits led to a subway-surface arrangement.

This exchange led me to write for clarification because at no time did the City of Toronto endorse an all-underground Eglinton line, particularly not once Transit City was announced.  Even before, Eglinton was flagged as a corridor for improved transit and surface priority treatment, but not for a subway.  Prichard is mixing the Metrolinx planners’ fantasies of an all-underground Eglinton with official city and TTC policy decisions, and Metrolinx can hardly claim to be following the City’s changes in policy when in fact the drive for an Eglinton subway came from Metrolinx itself.

I wrote to Metrolinx:

At the media scrum, Rob Prichard talked about the to-and-fro of the city’s position on an Eglinton all-underground line.

It’s worth noting that several reports dating from 2005-6 including the City’s Official Plan and the TTC’s “Building a Transit City” showed Eglinton as a potential transit corridor, but talked much more of surface transit priority than of a subway. ‪

Yes, there was an older proposal for a subway west from Mt. Dennis to Renforth, but the projected demand was quite low and it was not taken seriously.

Therefore to suggest that there was any serious support for an Eglinton line completely underground … is stretching the point.

Metrolinx replied:

As The Big Move was being developed between 2006 and 2008, a variety of transit lines and technologies were modeled and considered in developing the full integrated GTHA system of the future, including Eglinton as a fully-separated rapid transit corridor. The Big Move does not specify whether sections are below ground or above ground.

Also, as Metrolinx worked with the City of Toronto and the Toronto Transit Commission, and a more detailed Benefits Case Analysis was undertaken, Eglinton was confirmed as grade-separated through the central section, and at surface, east of Laird Ave.

It should be noted that the benefits of a totally grade-separated Eglinton were weighed against all other rapid transit projects across the GTHA on a range of issues, including future land use, location of employment, integration with local transit, GHG reductions, the ability to serve communities of higher social need, and travel time.

You can judge for yourself whether there was a city position on the vertical alignment of Eglinton that would support Metrolinx’ claim.

John Lorinc got in a good last word with the question “Will you still support this plan in 2014?”

To assist readers in keeping track of the shifting completion dates for the projects, here is a consolidated chart of the original plans, the revised “5-in-10” plan, and the new 2012 version.

2012.04.25_Project Staging Chart

The original article from April 24 follows below.  Note that some route-specific information has been updated on April 26.

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Los Angeles vs Toronto: Funding and Building a Transit Network

Something is definitely in the air in Toronto, and it’s not just the unusually early arrival of spring and tree pollen.  Suddenly, everyone is talking about transit expansion, and of paying for it with real money, not the fairy dust of “private sector” investment.

The latest installment comes thanks to Los Angeles of all places, a city-region with the political will and leadership to actually build rather than to whine endlessly about how they can’t afford to do anything unless some other government picks up the tab.

Back in early April, John Lorinc wrote in the Globe about the LA transit plan and the funding — a dedicated regional half-percent sales tax — that underpins the whole scheme.  Two weeks later, Richard Katz was in Toronto talking about transit funding.  Katz is an advisor to Mayor Villaraigosa, chair of the regional commuter rail system, Metrolink, and a member of the LA County Metropolitan Transportation Authority board.

Katz is an entertaining speaker, and his background as a California legislator responsible for important measures addressing transportation problems gives him a depth of experience with no equivalent in Toronto.  His presentation covered a lot of ground, although it ran into swampland toward the end trying to explain how the financing schemes would work.

A few key issues need to be mentioned up front:

  • Political leadership, transparency and inclusiveness are essential.  Without a major figure like Mayor Villaraigosa championing the program, transportation improvements and funding for them would never get the broad political support needed.  Plans have to be public and their benefits to a wide variety of communities well-understood.
  • Los Angeles didn’t start to focus on transit yesterday, but started its rapid transit program in the 1990s.  At that point, the work was ridiculed in some quarters as a waste of money, but it built the foundation for a broader network.
  • LA’s half-cent sales tax, the subject of much recent comment in Toronto, is only one of several revenue sources for both capital and operating dollars.  Indeed, there were two other half-cent taxes (for a total of 1½%) already in place, and the mechanism is familiar to voters.

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Service Changes for May 2012 (Updated)

Updated April 12, 2012 at 6:00 pm:

The TTC has announced that the track east of Spadina on Queen’s Quay will be shut down for repairs starting Monday, April 16 until Monday, May 7.  During this time:

  • 509 Harbourfront cars will operate between Exhibition Loop and Spadina Loop (at Queen’s Quay)
  • 510 Spadina cars will operate between Spadina Station and Spadina Loop

From May 6 onward, the 510 service is scheduled to only operate as far south as Queen’s Quay, and the 509 service will be the only route running through to Union.  This effectively means that the last day for 510 Union service is Sunday, April 15.

Preliminary information from Waterfront Toronto about the Queen’s Quay West project indicates that early utility work will start in May, and major construction in July.  WFT expects to hold a public briefing with details of the construction staging in early May.  Until now, the problem with nailing down the schedule has rested with utilities that were unwilling to commit to specific work dates.  (This is not unlike the situation we encountered on St. Clair.)

There is no information yet on how TTC service will operate during the construction period.

Original post from April 5, 2012 follows below:

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The Sheppard LRT Report (Part IV)

Now we come to what I must call “The Chong Dissent”, the reports prepared under the company “Toronto Transit Infrastructure Limited” (TTIL), a dormant TTC corporation resurrected for the purpose because it had $160k sitting in its bank account.  All this and more was spent to argue the case for a Sheppard Subway.

Council has already opted for an LRT line on Sheppard, but arguments originating from the TTIL reports continue to haunt the debate.  It’s time to expose their threadbare, self-serving nature.

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The Sheppard LRT Report (Part III)

Many background presentations informed the Expert Panel’s review of options for the Sheppard corridor.  This article is the first of two summarizing and commenting on this information.

There are six groups of documents:

  • Professor Eric Miller’s comments
  • Metrolinx presentations and reports
  • TTC presentations and reports
  • Toronto Transit Infrsatructure Ltd. (TTIL) presentations and reports
  • City of Toronto presentations and reports
  • Third Party reports

TTIL is the TTC subsidiary through which Dr. Chong’s pro-subway work reported.  Given the amount of material, I will deal with reports from TTIL, the City and Third Parties in the fourth and final article in this series.

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The Sheppard LRT Report (Part II)

In the previous article, I reviewed the three main options under study for Sheppard East as well as the comments of the City Planning and Finance departments on various related issues.

In this article, I turn to the Expert Panel’s evaluation of the options, their scoring system, and the question of bias in the process.

The analysis and scoring begins on page 39 of the Expert Panel Report.  The panel chose three broad areas for analysis, and subdivided each of these into three subcategories.

  • Funding & Economic Development
  • Transit Service
  • Sustainability and Social Impact

In each of the 9 subcategories, the highest possible score is 5 points for an overall raw total of 45.  However, the weights assigned to each group are different with Funding & Economic Development getting a weight of 3x, Transit Service 2x, and Sustainability and Social Impact 1.5x. Once the weights are applied, the total potential score is 95 points.  These values are normalized up to a “perfect” score of 100.

Table 15 on page 41 summarizes these scores.  In order that readers can see how the weights affect the outcome, I have recast these data to show the buildup of the weighted scores to a 100-scale. Continue reading →

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The Sheppard LRT Report (Part I)

On Wednesday, March 21, Toronto Council will consider a report recommending that the Sheppard rapid transit line be built as an LRT from Don Mills Station east, initially, to Morningside.  This is the same scheme that was on the table in the Metrolinx 5-in-10 plan, and approval of this recommendation will more or less put Transit City back on track where it was before the election of Mayor Ford.

There is a main report and many background documents, including an alternative subway proposal, what might be called the “Chong Dissent” from the otherwise pro-LRT conclusions of the panel.  This article provides a summary of material from many sources.  For the definitive word, please refer to the originals as I am not going to attempt to cover every detail here.

As a general observation, the materials present a review of the situation in considerably more detail than we see for many transit planning decisions, notably those surrounding recent budget debates.  With luck, and with a less transit-hostile TTC board, we might see the same level of interest turned to basic questions like “where’s my bus and why can’t I get on when it shows up”.

The pro-subway folks claim that the report is biased, that it is hogwash, and advance their own dissent purporting to show the superiority of a subway option.  The misinformation and factual errors in this dissent are disconcerting, putting it mildly, considering that billions in provincial spending and the future development of our transit network might have depended on such twaddle.  I will turn to this in detail later in a future article.

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Where Should We Go From Here?

Toronto Council’s vote to reconstitute the Toronto Transit Commission may give the new board a better political balance and break Mayor Ford’s stranglehold on transit policy, but that is only the beginning of the work facing our city.

First up will be the March 21 vote on the Sheppard East subway-vs-LRT issue.  Already, the Ford camp claims that it almost has the votes needed to spike the LRT scheme and forge ahead with subway plans.  Even if LRT prevails, a close margin could provide incentive for attempts to derail the project.  The “new” TTC will be in a tenuous position if the momentum of the governance vote does not continue through to the choice of technology.

The future of the TTC, its board and of transit in Toronto is much bigger than the Sheppard decision.  We have a “new” board, and later in 2012 it will grow by the addition of four “citizen” members.  What should this board be doing?

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