Outrage Or Fairy Tale? The $8.6-Billion Transit Hole

If this $8.6-billion transit shortfall is real, Ottawa residents should be marching on city hall.

Does this include the cost of the confidential Trillium Line settlements? Don’t know. They’re confidential. If true, no wonder Mayor Mark Sutcliffe wants help from the federal and provincial governments to pay.

Or maybe Sutcliffe never got the run of the deal on LRT. Feds $600 million. Province $600 million. City … all the rest.

Yes, hard-pressed Ottawa residents might do the same when they can’t pay the credit card bill. Cry to the feds and Queen’s Park for help. Fat chance of getting that.

Anyway, this is the July 27 memo that called for taxing private parking but, in fact, contains shocking figures such as the aforementioned $8.6 billion. Is that real or were finance people’s pocket calculators taken away in a cost-cutting measure at Ottawa City Hall.

The memo is below with Bulldog editor Ken Gray’s comments in boldface. Be shocked.

To / Destinataire Mayor and Members of Council

From / Expéditeur Cyril Rogers, Interim General Manager, Finance and Corporate Services Department and Chief Financial Officer

Isabelle Jasmin, Deputy City Treasurer, Corporate Finance

Subject / Objet Transit Long Range Financial  Planning – Update

Background

Date: July 26, 2024

Council approved an affordable Transit Long Range Financial Plan (LRFP) in February 2019 as a companion report to the Stage 2 Light Rail Procurement, which included revised operating and  capital cost projections over 30 years to 2048. Since that time, staff have continued to update the  transit affordability model reflecting the impacts of the pandemic, inflation and experience from  operating rail for the last several years.

In September 2023, a technical briefing was provided to Councillors to present the latest updated  projections for the Transit LRFP, which by then had become unaffordable due to a variety of  factors, but primarily due to the reduction in ridership caused by the COVID-19 pandemic, an  increase in the cost of operating rail, and an increase in construction costs worldwide (sort of forget a few things there, the abject failure of the light-rail project, a loss of faith in the system due to dangerous derailments, artificially slowing the system due to safety concerns, an inability to fix chronic problems with the system. and the butchering of the bus system through unreliability plus the buses had to depend on an often-out LRT system). The  briefing described the key pressures and changes from 2019 to the revised 2023 estimates, making the transit funding model unaffordable and identifying a funding gap of $6.6 billion over 30-years (the city is estimating over three decades? Might something go wrong? You know, another pandemic? … Environment Canada is never sure of the accuracy of a seven-day forecast), which is now $8.6 billion (where did that figure come from? OC Transpo was short $1 million a month, now it’s $8.6 billion? Really? Does that include capital costs? The money from the secret settlements on the Trillium Line? If so, no wonder the city wants to keep them secret? This figure is either the most shocking information to come out of the LRT fiasco or the biggest whopper in municipal history. Hey, councillors. Can I get you a deal on part of the Alexandra Bridge or what?). The technical briefing identified several levers that Council could adjust to support the financial sustainability of transit services, such as:

• Transit levy;

• Capital contributions;

• Transit fares;

• Operating Costs;

• Stage 3 light rail;

• Development charges; and,

• Transportation Master Plan updates for other future light rail, bus rapid transit and transit  priority projects.

In November 2023, Council approved motion (ACS2023-OCC-CCS-0153) recommending that an  “internal working group be made up of City staff from the relevant departments, working with the Mayor, as well as the Chairs of the Transit Commission, Transportation Committee and Planning  and Housing Committee.” The group was given the task of exploring all mitigation levers and  options discussed in the technical briefing and some additional ones, including but not limited to:

• Feasibility of bulk pass purchases;

• Sustainability and equity lens review of passes (What is an equity lens? Is that a type of glasses that makes deficits look as though they are growing incredibly quickly?);

• Exploration (To what purpose?) of Urban Transit Area (I think Champlain explored that in 1613. Check his records. No need to do the same exploration twice);

• Other sources of revenue, such as, municipal vehicle registration fees (shouldn’t taxpayers be outraged by the same outfit that screwed up light rail now coming to us to pay for their mistakes … and not mentioning those mistakes in the list of LRT reasons for shortfalls above), ride-hailing fees (Are we not trying to encourage ride hailing?), private parking levies (This is just an outrage. Are our properties not taxed enough already? Let’s double-tax the driveway. Will we pay taxes on the bicycle lane mandated for each of our driveways? Might a cyclist pay a fee or tax? Yes, tax the only form of transportation that actually works in Ottawa. Maybe we could make LRT work? Maybe that would cut its deficit?), land value capture (What exactly is that? Are we attacking other cities for their land? When do we invade Gatineau?), sale of development rights at transit stations (Is there a market for that or is this just blue-skying, again?), road tolls (Yes, let’s increase the value of everything by paying tolls on things like food transportation), cordon (area) charges (How much money will this produce?), and mobility charges (What is this? If it moves, the city taxes it? Where is the equity in that? Doesn’t that discriminate against moving things? Shouldn’t we tax things that don’t move or have we taxed them already?);

• Feasibility of development rights / air rights on City-owned land near transit stations  (Transitway and O-Train) (Oh this is rich. What is the value of thin air?);

• Updated ridership projection model (Yes, if this model doesn’t work, let’s change the model? Will that get us below $8.6 billion?);

• Service alignment review (Does that mean cutting more routes?); and,

• Advocate for additional funding from senior levels of government (Where have we heard this before?) and funding similar to  Metrolinx / GO Transit in the Toronto area (The same old saw. We’re treated so badly by the senior levels of government).

The internal working group was established and includes the following members:

Council

Representatives
Finance and

Corporate Services
Transit Services
Planning,

Development Building  Services
Mayor Mark Sutcliffe
Cyril Rogers
Renée Amilcar
Vivi Chi
Councillor Glen

Gower
Isabelle Jasmin
Pat Scrimgeour
Jennifer Armstrong
Councillor Jeff Leiper
Shawn Ferguson
Derek Washnuk
Deborah Lightman
Councillor Tim

Tierney
Joseph Muhuni
Matthew

Wolstenholme

The working group first met in January and has continued to meet every two to four weeks since that time (That’s the kind of hit-and-miss schedule we get waiting for a bus.)  In the first meeting, staff provided a backgrounder on the key issues impacting transit affordability and confirmed the list of levers to be analyzed in the immediate term in preparation  for the 2025 budget and some longer term items requiring more analysis but needed to be  resolved as part of the updated Transportation Master Plan, Transit Long Range Financial Plan  and next Development Charge Study planned to be completed in in the fall of 2024 and again  Q3/Q4 2025.

This memo is an update to Council on the progress of that work, in particular the levers that were  explored by the Working Group to date, and the analysis completed on the shorter-term solutions,  primarily as input to the 2025 budget, which include the following:

2

• Transit fares

• Sustainability and Equity Lens Review of Discounted Passes

• Transit Levy

• Operating Costs

• Urban Transit Area (UTA) (What about it? That says nothing.)

• Private Parking Levy

(Maybe we could save money by not writing the same thing twice in the same report? Or laying off the people in the BS department who wrote this useless report?)

Much of the work completed to date has been focused on diving deeper into each lever to get a  better understanding of the financial framework, analyze trends, and assess the impacts of various scenarios/options, supplemented by comparisons to other municipalities (In other words, not much. Furthermore, we’ve seen deep analysis used in the planning, building and operation of LRT? These guys couldn’t order lunch.). This analysis  has provided some critical insights for the working group (What? The $8.6-billion 30-year-deficit outrage or fairy tail?), and input to the 2025 Budget Directions report recommendations, particularly for transit fares, discounted passes and transit levy target (Let’s get money from all the old familiar places).  Staff continue to explore and assess operating costs and opportunities for greater efficiencies (Yes, we’ve seen how that turned out before? Maybe they could cut back on the number of wheel assembly breaks? That would mean fewer expenses and more reliable trains), to be included in the draft budget that will be tabled in November.

A review of the Urban Transit Area and a Private Parking Levy as an additional revenue option is ongoing, the results of which would be provided in future updates (More taxes on a system cocked-up royally by the same people who are asking them to trust their conjured remedies).

Next Steps

The working group will continue to meet on a regular basis (with the regularity to be determined by municipal standard time) to explore other levers and the financial implications of each as input to the 2025 budget and to address future, expected budget  pressures (What like executive wages increases?). These levers could be implemented within a year or two to solve the more immediate  financial pressures as staff continue to advance work on the longer-term solutions (Here’s a long-term solution. Finish the extremely late light-rail project, get it working and fix the butchered bus system). The group will also continue to identify areas for Council to advocate to senior levels of government for  additional funding or powers to implement new sources of revenue to ensure the financial  sustainability of Ottawa’s transit services (Ottawa barely has a train service and ex-commuters are voting with their feet and driving beaters to get to and from work).

We will continue to report on the progress of the working group to Council with an update memo later this year (International Glacier Standard Time).

If you have any questions, please reach out to Isabelle Jasmin at isabelle.jasmin@ottawa.ca.

Sincerely,

Cyril Rogers

Interim General Manager & Chief Financial Officer

(Oh look, another interim manager)

For You:

Our Myopic City Staff: BENN

Meehan’s No Pol But A Phenomenon: PATTON

Another Call For Chianello To Run For Mayor