Friday, March 25, 2011

Unknown Costs of LRT

We don’t yet know the Region’s preferred option for LRT, so we don’t have final estimates of capital costs or the increases to property taxes. But we know it will result in hundreds of millions in costs to Regional taxpayers.

Recently, it has become apparent that there may be more costs that haven't been made public so far, and that there are other issues around costs that are much too unclear. In particular:
  • Downloading – At a March 11, 2011 meeting of municipal Directors of Engineering, it supposedly came out that the Region intends for the municipalities to pay for a portion of capital costs related to LRT. These are costs related to moving hydro vaults and poles, resurfacing roads, rebuilding curbs and sidewalks, moving light posts, and so on. I have confirmed this information with two senior sources, but don’t know if it is completely settled yet.

  • Tax increases – A recent article in the Waterloo Chronicle revealed that property tax increases that have been publicized have been a bit misleading. The increases are cumulative, so a $20 increase means $40 the second year, $60 the third year, and so on. See Confusion over tax impact of rapid transit, March 15.

  • Land acquisition costs – Some local politicians have raised concerns about land acquisition costs, which could be much higher than expected because the Region will have to acquire a lot of land at one time. I have heard this issue described as "the big cloud hanging over LRT."

  • Costs of alternatives not known – The Cambridge Economic Development Advisory Committee has advised Cambridge City Council that rapid transit should not proceed until comparison costs for aBRT are known. In the Region’s February 15 eleven-option report, the only bus option was a “Cadillac” version of BRT that went to St Jacob’s market. We need to be able to compare realistic options: LRT, BRT, aBRT/expanded iXpress. (Note: aBRT is like BRT but merges in with regular traffic most of the time.)

  • Total transit costs not known – LRT is part of a transit solution that includes a lot of other transit enhancements. The cost of the Transportation Master Plan over 20 years is estimated to be $3.75B, according to Regional staff. It is disingenuous at best to tell us the tax effect of LRT without telling us the tax effect of the total transit solution.

  • The effect of cost overruns – A couple of years into construction, what will the Region do if there are large cost overruns? Will it ask the townships to pitch in? Will it ask the municipalities to kick in more? If all of the overrun is paid for by the regional tax base, how much might regional taxes rise?

We need objective analysis of all these issues – not more PR.

LRT should be deferred until all these cost issues are resolved.

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