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Oct 8,2008 Tri City News
|TransLink eyes new fees to fund expansion|
By Jeff Nagel
TransLink faces a serious cash crunch that could mean new fees for transit users and vehicle drivers alike to maintain and expand the system.
TransLink's impending cash crunch has forced it to contemplate everything from jacking the price of monthly transit passes to imposing a vehicle levy in the years ahead, internal documents obtained by Black Press show.
The reports, provided in response to Freedom of Information requests, also show senior staff and the TransLink board have looked at shelving major new projects promised across the region.
The picture that emerges is one of a transportation authority that will soon be unable to afford to maintain even current operations – let alone embark on an aggressive expansion needed to fight climate change – without major new cash injections.
TransLink so far has not revealed what extra funding streams it will pursue.
But internal reports suggest regular transit users who buy monthly passes may have to pay more.
"Reduce discount on FareCards" is one potential measure staff calculate could generate an extra $15 to $20 million a year.
Also under consideration is a levy that would charge either a flat $100 per vehicle in the region, or an average of $100 that would vary depending on either the distance driven or the vehicle's fuel efficiency.
Another option: Jack the sales tax on pay parking – now at seven per cent – to the maximum 21 per cent allowed by TransLink legislation.
A regional tolling system or congestion charge is also under consideration.
TransLink already has the power to raise fuel taxes in Metro Vancouver three cents a litre, and raise property taxes and cash fares by two to three per cent a year.
But officials intend to ask for other new sources of revenue not yet approved in order to expand services.
TransLink's current surplus is forecast to become a serious deficit after 2012, in part because it must start paying off the debt for the Canada Line and cover rising operating costs.
CEO Tom Prendergast said $150 million a year extra needs to be found to simply maintain the current system and cover existing commitments.
"That's bare-bones minimum," he told Black Press. "That's just to sustain us where we are today."
Much more is needed to fund TransLink's tentative expansion plan, in line with the Provincial Transit Plan, that would add 1,000 more buses, extend SkyTrain lines and add a RapidBus network – all of it aimed to get more people out of cars and cut greenhouse gas emissions.
Altogether – and Prendergast stresses the spending includes goods movement, road and bridge upgrades, cycling and pedestrian improvements – an extra $300 to $500 million per year is needed.
That's a huge jump from current revenues of $1 billion a year, drawn mainly from fares, property taxes and fuel tax.
Over the next several months, TransLink will embark on extensive consultations to try to build a regional consensus around both the spending plans and how to raise the needed revenue.
"You have to have a dialogue," Prendergast said. "You have to make sure you're in alignment with what the appetite of the public is, not only for the money but for the willingness to pay for those kinds of charges."
Prendergast wants several different new sources of money, rather than relying on one big one.
Gas taxes, for example, funnel 12 cents of every litre of fuel to TransLink, but that source is expected to plateau or even fall as cars get more efficient, people conserve more and, eventually, plug-in electric vehicles arrive.
A car levy would be less vulnerable.
"It's one of the sources," Prendergast said. "There is one in Toronto. There is one in Montreal."
U.S. transport authorities lean heavily on local sales tax, but Prendergast noted that source can shrink in a recession.
He is acutely aware of the balancing act that's ahead.
"There are very, very strong feelings on the part of some people on some things," he said.
"We have got to take a hard look at those revenue sources. And also take a hard look at if we don't get all that we need, where do we trim back?"
TransLink's board must pass a new 10-year plan by next July.
Prendergast said the strategy to fund the system going forward must be hashed out by then.
"If it's not resolved, all of us are kidding ourselves, because there comes a point in time when the piper has to be paid. You can't keep putting off to another day that which is difficult to decide today."
The internal reports detailing TransLink's financial state are peppered with words like "unsustainable" and float a variety of options to cut spending if necessary.
For instance, the Evergreen Line to Coquitlam could be axed, saving TransLink around $40 million a year from 2015 on.
Plans to buy hundreds more buses and community shuttles could be shelved and bus service hours could be drastically curtailed.
Other potential program cuts, spelled out in scenarios presented to the TransLink board in June, include:
• Planned SkyTrain station upgrades;
• TransLink funding for the Murray-Clarke Connector in Port Moody;
• Construction of a new transit depot in Burnaby to take pressure off overloaded depots elsewhere;
• Construction of a new Maintenance and Transportation Training Centre in Maple Ridge where major overhauls of the bus fleet would take place.
A key question is when to start cutting service if new funds aren't approved.
One scenario TransLink weighed would maintain current service levels only until the 2010 Olympic Games are over.
Little appetite to pay: Survey
A TransLink online survey conducted in February found overwhelming support for service expansion, but little appetite to pay for it.
- 96 per cent said the expansion priorities are important;
- 30 per cent wanted no increases to current funding mechanisms;
- 36 per cent want any increases held to the rate of inflation;
The Provincial Transit Plan lays out $10 billion worth of upgrades in Metro Vancouver by 2020, including rapid transit expansions, a doubling of current SkyTrain capacity, seven RapidBus lines and a frequent bus network delivering good bus service to currently underserved areas.
Big property tax bite possible
If TransLink wants to tap one of the extra funding sources transportation minister Kevin Falcon made available, it may have to sharply increase property taxes.
Legislation remaking TransLink alllowed it to raise gasoline taxes here an extra three cents a litre (from 12 cents to 15 cents) but only if a matching amount of revenue comes from other sources.
A staff report suggests it may be impossible to raise fares – already considered unaffordable – by more than two per cent a year.
That could force TransLink to lean more heavily on property owners to match the gas tax hike.
The report suggests property taxes charged by TransLink would have to climb five per cent a year, pushing the annual TransLink property tax on a $500,000 home up from $184 now to $300 by 2018.