Regional Spending is Out of Control
No one honestly thinks the proposal before Council will come in even remotely close to the current cost estimates. On average, from recent past experience LRT’s built in North America were 40% over budget. Region struggles with the current budget including the following:
- Police budget 5.2% this year, 8.2% average annual increase year over year over the last 10 years before that.
- Assessment growth is down reducing the amount of new tax money anticipated in previous budgets to deal with increasing costs.
- Landfill revenues down by $4,000,000 this year.
When the LRT is built, the Region is counting on big ridership numbers to generate revenues to support the system. Assuming a typical fare of $3.00 per ride, if the per day ridership is half of what the Region is projecting, 13,500 riders per day, this could result in a revenue shortfall of over $14,000,000 annually, a 2% increase in Regional taxes alone.
Population does not support this project
K-W is a city of 350,000, not a city of 729,000, the number that is always quoted regarding the Regional population of 2031. The next largest city where a significant LRT investment has been made is 3 times our current size. In 25 years, based on the Cities potential growth, it will still be 2 times our size. There is no urgency to get this passed. I am not aware that there is any city in North America of our size that experiences any significant traffic problem.
The purpose of building the LRT has nothing to do with transit, where there currently simply is no problem. It is to promote reurbanization of the core area.
The outcome regarding the LRT choice has been predetermined by Regional staff from the beginning. The cart has been put before the horse on so many issues related to planning and development prior to a decision being rendered by Council on the LRT. This forces Council with only one alternative and that is to approve.
The public has not been formally engaged in the decision. The conclusions of staff from a few public open houses do not reflect the experiences of a number of the members of Regional Council who are sharing a far different view of the acceptance of the proposal from last falls municipal election. The only effective way to determine public support is through a referendum.
Ridership numbers are fantasy. Currently 9,000 on the spine, going to 27,000 the day it opens and 56,000 by 2031, more than currently use the system in Houston, Baltimore, San Jose, Minneapolis, etc.
Region concerned with costs
The Region is asking the Provincial Government to amend the current Development charge legislation to allow charges to be collected for the LRT. This is a clear sign that there are significant concerns with Regional staff about cost overruns and that the best way to reduce tax impacts is to have available the D/C option.
The Conestoga Parkway is a common argument used in support of the LRT. In the 1960’s many were opposed because “I will never use it”. Looking back those who built it were visionaries. There are 2 main differences. First, currently 3% use transit and 98% use cars, likely the same as it was in the 1960’s. Secondly, the Conestoga Parkway was built solely for one purpose, moving people in their cars, which over time it has done. The current LRT proposal has very little to do with dealing with transit needs or moving people. It’s primary purpose is for re-urbanization. This is a recipe for failure.
The Region claims that the review and approval of the LRT by a 3rd party “Peer Review Panel” validates that this is a sound proposal. Recently the Chair along with several other members of Council have declared a conflict because of a potential benefit received by them or their families if the system gets built. It should be noted that several members of the “3rd Party Peer Review Panel” are also in conflict as they have done work for the Region as consultants, assisting in developing the current policies towards growth and transit. It would be difficult to suggest that the opinion of this group is valid based on the obvious conflict of several of it’s members by doing work for the Region and by being paid by the Region to do this work.
Project over-budget not planned or considered properly
The Region is back tracking on having the required “feeder” buses in place with the opening of the LRT. In last Friday’s Record it was reported that the LRT cost is putting pressure on the Region being able to provide buses before 2017-2018 which will significantly limit the ability to get people to the LRT route to use it. This in turn will reduce ridership and directly affect revenues. The Region is only showing one financial impact summary based on unrealistically low capital costs (810M) and overly optimistic ridership targets (27K on opening day). They need to show what the impacts will be for every $50M of cost overrun and every 5K of ridership reduction in a matrix which shows a range of potential likely costs. Council and more importantly the public needs to understand the risk prior to any decision being rendered. I asked this question as recently as last week and the answer I received from Thomas Schmidt was the Region is confident with their budgeting and we need not worry.
Unclear whether proposed route is build-able
The Region has no idea if their proposed routing will in fact be build-able As recently as a couple of weeks ago Caroline Street routing was changed from one side of the street to the other because of concern with access to underground utilities. These kind of changes have cost impacts and draw concern as to the overall level of detail used to determine budgets to date.
Higher Property Taxes
The Region talks about increasing property values along the route as a result of it’s completion. Higher property values, relative to the basket of values in the overall community simply means higher taxes for those currently living near the route. So much for a 2% tax increase if your are fortunate enough to have your property go up in value by 20%. How about a 20% tax increase? Generally when property values increase significantly over a short period of time this is referred to as inflation. I am curious as to how this phenomenon, inflation, is viewed by the Region as being a good thing.