Calgary Public Transit II

[MalcolmTucker]

Originally Posted by outoftheice

I'm curious where the $342 million/year figure comes from and how it relates to the construction of the 2 LRT lines?

$342 million is the yearly cost of financing $6 billion over 30 years. The document referred to freeing up $6 billion for other projects. All in charges for $6 billion now is $10.219 billion over 30 years (given the predicted rates from the provincial government of 3.890%).

Originally Posted by outoftheice

You are correct in your assumptions that the annual amount raised by a combined fuel and transit surcharge would not come close to raising that amount. According to the report, the projected annual revenue from a 7 cent/L fuel surcharge would equal $101 million in the first year. It is estimated that this would increase to $233 million annually by 2047 using a conservative method of prediction that is based on 60% of the historical increase in gasoline sales based on population growth. In total, a 7 cents/L fuel surcharge is estimated to raise $5.5 Billion by 2047.

I wouldn't increase the tax like that. 5 cents raised $90 million in 2003, and $100 million in 2010. The grant is now at $119.6 million. So 2.88% compounded. But growth has been lumpy. I wouldn't count out technological change holding that number back, even with population and miles travelled growth. Plus you need the revenue at the front end of a loan, not the back end. Unless you want to pay even more interest.

Originally Posted by outoftheice

In regards to the transit fare surcharge, the report estimates that a 30 cent surcharge will raise $22 million in the first year if applied to all non subsidized fares (seniors passes and low income passes would be exempt). This is estimated to increase to $123 million/year by 2047 raising a total of $2.1 Billion by 2047. The report quotes a 2011 Calgary Transit Fare Strategy report that concludes that a small increase in fares would have a negligible impact on transit ridership and uses this conclusion to support the case that a 30 cent transit fare surcharge would not deter transit ridership either.

The biggest issue with the fare surcharge is how to apply it to pass holders. 157325300 trips last year according to APTA. So a $0.14 per average trip. Again, the issue is you need the money near the front end, not the back end.

Originally Posted by outoftheice

Combined, the two surcharges would raise approx. $7.6 Billion over the life of the program (ending in 2047). Based on the estimates published in Route Ahead, the total cost of building the NC LRT to North Pointe and the SE LRT to Seton comes to $5.95 Billion. Therefore the total construction cost should be easily covered by the program. The long duration of the program is based on the fact that the Route Ahead plan has the 2 LRT lines being built in phases and estimating that it will be around 30 years before the 2 lines will be complete to North Pointe and Seton. The report takes the view that instead of relying on traditional funding and building start/stop in phases over the next 30 years, why don't we build the whole thing now and just take the next 30-35 years to pay for it. (The exact same philosophy behind buying a house now, raising your family in it and paying off your mortgage over the following years).

Just have to deal with the interest charges and cash flow issues.

Originally Posted by outoftheice

I'd also point out that the federal government just decided to contribute almost $700 million to subway construction in Toronto. Reading the press releases, the key to their contribution seems to be the fact that the Feds were waiting for the City of Toronto and the province to put up the money first. I think it's fair to assume that if the City of Calgary adopted this program, it wouldn't be long before the Feds offered a large contribution towards construction which could be used to reduce the amount of the surcharges or shorten the timeframe of the repayment program, or both. The key is we need to come to the table first instead of hoping that the federal government will just drop money in our laps.

The federal contribution was from the post 2014 Building Canada Fund. We will get this money anyways whether it is for waterworks, playgrounds, roads, libraries, or transit. Since the report points to freeing up $6 billion for other projects, you can't count the Building Canada Fund towards the total. Now with a P3 Canada contribution, that would be different.

Originally Posted by outoftheice

There is also the matter of the SETWAY. We're about to drop $667 million on a Busway that nobody in the city really wants... people are just willing to settle for it because they think construction of the SE LRT is impossible in the current funding environment (and they're right!). However go straight into building the SE LRT (and NC LRT) using an alternative funding structure and now the City has an additional $667 million to play with as it's no longer needed for the SETWAY.

I'm not sure that the SETway money would be found money in that sense. Since I bought a Jag I didn't buy a Civic! Now I can go spend $20 grand on a vacation!

Originally Posted by outoftheice

To me, the program makes a lot of sense. There is a quiz on the website that does a good job at putting things in perspective and testing just how much you know about where transit in this city is heading. It takes 2 minutes to do, I'd encourage people to check it out.

http://www.smartercity.ca/quiz.html

If their numbers worked, this is the way to go. Little reason to advocate something that on the first technical report to council will come in 35% over the proposed budget. Even if Transit City in Toronto is something like 1000% over at this point.