Friday, April 08, 2011

World of debt

In last month's "State of the City" address, Waterloo Mayor Brenda Halloran said that "finances remain the city's biggest challenge, with a $5-million dollar debt over RIM Park still to pay off", according to local news sources.

Not long ago, five million dollars seemed like an awful lot of money... after all, that $5M debt has restricted city spending across the board for many years and it will restrict spending for many years to come. Sports, arts, community programs, children's programs, parks... everything has taken a hit because of that RIM Park debt.

But now that LRT is on the table, a $5M debt is laughable. When the Region builds a rail route through Waterloo, the city of Waterloo is going to have to pay many times more than $5M just for downloaded capital costs. The Region expects the municipalities to pony up for:
  • Building parking garages next to LRT stations
  • Resurfacing roads torn up by LRT construction
  • Moving hydro vaults, utility poles, lamp posts, fire plugs as needed for LRT
  • Rebuilding curbs and sidewalks torn up by LRT
  • And who knows what else...

But wait, there's more! Cambridge Mayor Doug Craig has estimated that LRT will cost $23M per year in operating costs, all of which will be paid by regional taxpayers. Yes, that's right: that crippling RIM Park debt that it's taking Waterloo decades to pay off - Waterloo taxpayers' portion of LRT operating costs will be more than that every year... forever!

All that is in addition to increased regional taxes to pay the roughly $500M that will be the Region's portion of LRT construction costs.

Then there's the rest of the region's Master Transportation Plan, which staff estimate will cost $3.75B (yes, that's billion) over 20 years.

When I write about LRT, I tend to focus on problems with the route, inconvenience, inaccurate ridership projections, inability to meet stated goals, and things along those lines.

But cost is also a vital element of all this.

Here's one scenario that's looking pretty realistic about now: Taxes are going to rise so much in Waterloo, Kitchener and Cambridge that, far from creating flourishing downtown cores, LRT will cause masses of people to move out to the townships (which won't pay into LRT and so will have much lower taxes) and commute long distances on area highways.

Having LRT tracks running through our commercial corridor, combined with the need to run buses on the same routes because LRT stops so infrequently, will result in so much congestion that everyone will avoid the core like the plague.

The LRT won't be empty though; it will be full of University of Waterloo students who use it as a student shuttle to zip past the empty storefronts.

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13 comments:

Michael D said...

"When the Region builds a rail route through Waterloo, the city of Waterloo is going to have to pay many times more than $5M just for downloaded capital costs."

I've heard zero about downloading of capital costs, except on your blog. Citation needed.

"Cambridge Mayor Doug Craig has estimated that LRT will cost $23M per year in operating costs, all of which will be paid by regional taxpayers."

The Region's reports are $14M net operating costs (net of revenue), decreasing to $9M by 2031. The total annual Grand River Transit subsidy is about $54M right now, for comparison.

Yappa said...

Re downloading, I got it confirmed by two senior municipal managers and two current mayors.

Re costs, Doug Craig gave that figure on our T4ST election survey. At this point I don't assign any credibility to the region's numbers. But even $14M for one route is just outrageous

Michael D said...

I'm pretty sure the overall operating cost (not net) for just Route 7 and the iXpress is at least $20M, after taking into account this year's frequency increase. So I see nothing outrageous about a similar figure for a system that can carry far more riders, and with economies of scale.

(A GRT service hour costs around $120. Then it's a matter of counting up the number and duration of trips for each route.)

Yappa said...

Hi Michael,

Just interested... does the enormity of the cost, given our difficulty in paying off RIM Park, give you any pause at all? Are you at all concerned about the impact on our city of this enormous debt? Are you at all concerned with the negative impact on Waterloo of the route?

I appreciate your comments a lot, but you always seem to seize on one tiny detail and you seldom (if ever) comment on the bigger picture.

Are you planning on staying in the area after you finish university? I only ask that because you may be less concerned with the community if you're planning to move on.

Ruth

Michael D said...

The cost does not give me pause, particularly since taxes actually will be increased to pay for it. Relative to the costs of... say, owning an extra car, it's pocket change.

I'm not worried about impacts of LRT in uptown Waterloo, as I don't think they will be negative. Even after having read all of your explanations for why you think they will be.

My thoughts on the big picture have been written up on my blog, in The Record, and on the TriTAG blog. I comment on the details because I don't think our perspectives can be reconciled in a comment thread.

I plan to stay in the area and raise a family here, but we may reconsider if Waterloo Region decides to be short-sighted and fails to move forward with light rail.

Michael D said...

Incidentally, I find your attitudes toward student opinions insulting. Do you really think I've spent so much of my time over the last several years on this and other issues in the community if I'm not concerned about the community?

And that's quite apart from your assumptions that most young people who support LRT are students, and UW students at that. It's just not true, and since you then proceed to dismiss their opinions as student opinions, it's also quite insulting.

Yappa said...

Hi Michael,

You're right... I shouldn't do that as there are some non-students who are for LRT, but increasingly as this debate continues it seems that students are the most vocal group.

As you're a student, I think it's fair to ask if you're sticking around. But on the other hand, you're right that you have proven yourself to be serious about our community and you're obviously a thoughtful person.

The cynic in me suspects that the region chose the route it did (which does very little for encouraging density nodes in Waterloo) precisely to mobilize students to support it.

Frankly, I'm frustrated. Better transit: great. aBRT: great. But a billion dollars on one route that is designed to create traffic jams... we're in scary territory here. And as I've said elsewhere, the cost of LRT is just part of the huge cost of the master transportation plan, so the region is once again being quite deceptive in its figures on tax implications.

I have heard people claim since 1970 that any day now we would have to give up our cars due to rising fuel costs, and I no longer believe it to be true. But consider this: if gas rises to $2 a liter then we will certainly be thrown into a seriouis recession, and probably a depression. If that happens and we are saddled with half a billion dollars of debt, then life as we know it in this region will become really, really bleak.

The thing is, I live and work near proposed LRT stops and I can afford the tax hikes. I'm not fighting this because of personal interests. This is a really terrible plan for our city.

Michael D said...

"I shouldn't do that as there are some non-students who are for LRT, but increasingly as this debate continues it seems that students are the most vocal group."

You are wrong. You mistake people in their 20s and 30s for students; the ones speaking out are more likely to be working for local tech companies than they are to be students. (I should add that there are a number of supporters that have transitioned from being local students to working for local tech companies. Or I guess we should dismiss them as student voices?)

"The cynic in me suspects that the region chose the route it did (which does very little for encouraging density nodes in Waterloo) precisely to mobilize students to support it."

Oh, come on. Research in Motion and the University of Waterloo are the two biggest employers in the city, and are adjacent to each other. UW has 30,000 students. If the first Rapid Transit line in this city does not serve UW, then what is the damn point. Growth management is an important aspect, but the line still needs to go to the places that are the major destinations now.

"...one route that is designed to create traffic jams"

It's designed not to be stuck in them, which is rather different. What's the point of having an awesome aBRT bus if it is stuck in traffic? Dedicated space at more than just intersections is required to keep buses (or trains) moving. That same lane can carry far more people as a transit lane than as a regular mixed traffic lane.

"...if gas rises to $2 a liter then we will certainly be thrown into a seriouis recession, and probably a depression."

I don't buy that. And half a billion dollars in debt? Give me a break.

"The thing is, I live and work near proposed LRT stops and I can afford the tax hikes. I'm not fighting this because of personal interests. This is a really terrible plan for our city."

It's in your backyard, which you like as it is, and you are afraid of change.

Yappa said...

Hi Michael,

When I say we'll be thrown into a recession, I don't mean in Waterloo. I mean in the country and probably the world. It's an economic reality that a shock to oil prices causes mayhem in the economy.

When we go into a recession, jobs are lost and tax revenue plummets. My point was that in such a situation it will be problematic for local government if we are greatly in debt.

I work in the high tech sector and have close friends in several companies - by several, I mean more than four, including the biggest ones. I don't see any interest in LRT among high tech employees. Doubtless there are a few but I have not yet heard of anyone.

Furthermore, I haven't seen a single plan to connect the R+T Park station with Phillip Street. (You and I discussed that possibility a long time ago and I've been looking out for it.) I am not sure it is even possible given the ownership of land around the station. If there is no path to Phillip Street, then the hike from the planned R+T station to any RIM building is too far. For R+T Park buildings, many of which are a kilometer or more away from the station, a shuttle bus is planned, but I haven't heard anything about a shuttle bus to buildings outside the Park and I doubt it will happen. In the current plan, only one RIM building (the one in the Park) is serviced by LRT.

We can designate lanes as bus-only where necessary for aBRT and would still have a lot less traffic disruption than LRT or BRT, both of which take up a lane of traffic for their entire route. The current L/BRT plan, which stops infrequently so requires another bus to take people between stops, adn which does things like the disastrous plan for Erb Street, is the main reason to expect traffic jams.

I remain amazed how many pro-LRT people keep going on about how we're reaching capacity with buses. I have been driving down King from Columbia to William on a regular basis for the last few months in the hours between 3 and 6, and I never see more than three or maybe four buses. Look at a busy bus route in Toronto sometime.

I'm not afraid of change. I'm afraid of a poorly planned, overpriced non-solution that is going to severely damage my community, and I have good reason to be.

Michael D said...

"We can designate lanes as bus-only where necessary for aBRT and would still have a lot less traffic disruption than LRT or BRT, both of which take up a lane of traffic for their entire route."

The places where it would be necessary are precisely the places where it would create traffic disruption. If there's not enough traffic to get stuck in, changing a lane to being a high-capacity transit lane is not going to cause massive jams. If you're willing to accept transit-only lanes in the places where traffic is really bad, then it's pretty silly to object to it elsewhere.

"I remain amazed how many pro-LRT people keep going on about how we're reaching capacity with buses."

The capacity issues are not between stops, they are at stops. As a very extreme example, the single Lincoln Tunnel bus lane carries an ungodly amount of buses into Manhattan -- apparently 1700 AM peak buses. You can have a huge convoy of buses all moving together. But to get people on and off, you need capacity at stations and stops. In Manhattan, that means a multi-story, multi-block, massively expensive terminal. Otherwise you would have gridlock.

So if you really want to observe how close we are or aren't at capacity, you would do well to set up during rush hours at a busy stop, and see how much of the time there's a bus in front of the stop, and how often a queue forms.

"Look at a busy bus route in Toronto sometime."

You want us to look for solutions to a city that has reached capacity on many portions of its transit network and has been unable to do anything serious about it?

Yappa said...

I have lived and worked in both Toronto and Manhattan, which is why I know that we are very, very, very far from capacity. I used to commute on Manhattan's Second Avenue bus line at rush hour... lots and lots of giant articulated buses, no "multi-story, multi-block, massively expensive terminals", and a smooth orderly commute.

Since I've been driving home down King from Columbia to William to test the theory that we are awash with bus-jams (and have rarely seen a single bus, much less two together), I would notice if there was an issue at bus stops. Nada.

Anonymous said...

Michael D: You're losing guy. If you hang in there it's only gonna get worse. Better to cry uncle.

Anonymous said...

> I don't see any interest in LRT among high tech employees.

Jesus Christ. There is just no point in engaging you. Facts are irrelevant, you have a position that you are going to defend, even if you have to resort to sophistry to do it.