TransLink asks board for hike to borrowing limit
$1.5-billion increase would cover capital investments in 10-year transit plan
TransLink is asking Metro Vancouver’s board of directors to support a bid to increase its borrowing limit by $1.5 billion so the transit authority can pay for capital investments in its 10-year regional transportation plan.
TransLink’s chief financial officer and vice-president of policy and planning appeared before Metro Vancouver’s finance and intergovernmental committee on Friday to discuss the proposal.
TransLink’s borrowing limit is $4 billion, but that would need to be increased to $5.5 billion to cover the $1.8 billion regional portion of capital investments in the second phase of the 10-year transit plan.
“We’re not building a plan that builds a ton of cushion in it,” said the CFO, Rob Malli. “We’re trying to help get all of our resources most effectively to our investments while at the same time keeping enough policy limit room to make sure that we can withstand any reasonable deviations from that plan.”
Malli said when looking at extending the borrowing limit, TransLink stress-tested its model to make sure the limit was sufficient to cover any “reasonable volatility” that could occur, and the top of the range was $5.5 billion.
“These are major projects which have a lot of risk associated to them in terms of cost, timing, etc.,” Malli said.
Those projects include the Broadway extension to the Millennium Line, light rail in Surrey and more cars and station improvements on the existing SkyTrain system.
The Mayors’ Council and the TransLink board of directors are expected to vote on the investment plan at the end of June. But before they can approve an investment plan that increases the transit authority’s borrowing limit, TransLink must, under the South Coast B.C. Transportation Act, consult with the Metro Vancouver board.
TransLink doesn’t currently borrow through the regional district and Metro will not assume any liability. There is, however, about $1 billion in outstanding TransLink debentures that are backed by Metro Vancouver. The last of that borrowing through Metro matures in 2036.
“I’m actually quite pleasantly surprised that only 10 per cent of the debt that TransLink will have at that level is through the Municipal Finance Authority,” said committee member Richard Walton, who is mayor of the District of North Vancouver and vice-chair of TransLink’s Mayors’ Council.
In addition to the $1.8 billion in capital costs for Phase 2, TransLink will be responsible for $855 million in operating costs. The federal government is contributing $2.01 billion, while the province is kicking in $2.55 billion.
TransLink is proposing to pay for its share of capital and operating costs from fare revenues, property sales, internal savings, a two-per-cent fare hike, a threeper-cent parking tax increase, a property tax increase of $5.50 for the average household, development cost charges and revenue from transit-related commercial opportunities. These funding methods were announced in March.
Public consultation on the second phase of the plan ended on May 11. The TransLink board and Mayors’ Council will hear the results at a joint meeting next week.
TransLink also made a presentation to Metro’s regional planning committee earlier this month on the services and investments outlined in the plan and how they align with the regional growth strategy.
The transit investment plan will be considered at the Metro board meeting on Friday.