Public in dark on west LRT cost: auditor
Calgary’s top transportation executive said council always knew how much it was adding to the $1.4-billion west LRT budget and why, even if there wasn’t a full paper trail for auditors to follow.
Council may have gotten some indication the numbers were going up as public demands for enhancements rolled into the project, but there’s little sign those warnings made their way to the public, who were told at the outset Calgary was building a $700-million project.
Transportation general manager Mac Logan defended his department’s handling of the west LRT file Thursday to the audit committee, which heard there could have been fuller information to council as the project ballooned in scope.
The initial amount didn’t include borrowing costs, which would grow later on. Several additions to the project, demanded by constituents, also pressed the budget skywards.
The city auditor’s report noted it wasn’t clear if council knew costs for necessary land along the LRT route would more than triple from the initial $50 million aldermen approved in 2007.
“It was pretty clear in the presentation that it wasn’t the final land number, but what I didn’t see in the presentation — and I wasn’t in the room — was: did they give council an estimate of how much, how big that number might be,” Logan said.
Council’s audit committee gave transportation staff the lightest of grillings over the audit. Aldermen praised the project for coming in on time and to council’s specifications — even if that did super-size the budget.
Many are also confident that budget estimates have improved in recent years, including on the $295-million airport tunnel.
“If I know how to build a house up to the ceiling, I should know that the roof is included,” Ald. Shane Keating said.
In 2007, then-mayor Dave Bronconnier first raised the LRT extension’s $700-million cost during his re-election campaign, and bureaucrats put a project with that budget to a council vote the following month.
Back then, the council debate was on alignment and other design elements communities were demanding, rather than on how reliable the cost projections were.
“At the time I thought that it was a bad idea to have a brand-new council make such a big decision in its very first meeting, and they needed time to really consider what they were doing,” said Mayor Naheed Nenshi, who replaced Bronconnier after the budget was set. “It is, after all, the largest public works project in Calgary’s history. I think it deserved a bit of better thought.”
Part of the increase was land costs and extra borrowing costs when the province’s grants came in more slowly than promised. But other increases came when other pre-budgeted items such as the Sarcee interchange were added, and when politicians approved upgrades including better sound walls and a trench along part of 17th Avenue S.W.
“When the public maybe goes, ‘Oh, it’s blown up,’ wait a minute here: this is very much a result of public consultation,” Logan said.
Council did get a full briefing in 2009 on all the scope enhancements and approved budget changes, the GM noted.
But that presentation was given in private because it included some sensitive real-estate transaction data, and council ordered it sealed from the public until 2015.
A full breakdown didn’t come out until 2011, after Bronconnier’s last term.
“There was a very different flavour of that council versus Mayor Nenshi,” Logan said. “Mayor Nenshi, I think, has been much more transparent and inclusive in those kinds of communications.
Ald. Gord Lowe maintains the costs and potential increases were made somewhat clear to council in 2007. He figures aldermen would have approved it if told from the outset it would top $1 billion.
“If it had been laid out as a complete cost estimate as we get nowadays, I would think yes,” he said. “It was the next line to go, and at the time we had the money.”
Keating, who joined council in 2010, said he thinks the city over-corrected in estimating total costs of the future southeast LRT to his ward — $2.7 billion. Developers have told him they could build it for half that.
“On one hand, I think we’re being overcautious by saying we don’t want to get into the same scenario we did with the west LRT,” Keating said.
“On the other hand, industry may be saying this because they want the project.”