Transit under scrutiny as city eyes revenue streams
With budgeting tight, officials consider a few options to pay for one
Transit customers might feel like city hall owes them a break on fares in 2020.
There have been delays on the new LRT system and not enough capacity on bus routes.
Even before the Confederation Line opened on Sept. 14, the bus system was unstable as OC Transpo detoured buses through downtown without having any resources to bolster dismal service to some suburbs.
Rapid, frequent and local bus routes had a 60 per cent on-time performance between January and June, down four percentage points from the same period in 2018.
And now, the city isn’t providing any guarantees on the reliability of the LRT system because, managers say, Rideau Transit Group isn’t indicating when all the problems on the rail line will be resolved.
The draft 2020 city budget confirms Transpo wants to increase fares almost across the board starting Jan. 1. The three exceptions are the community and access passes and the EquiPass, all of which are proposed to remain the same price next year.
The planned increase would mean adults would pay $122.50 for a monthly pass — $3 more than what that pass costs today. When all the fare classes are considered, the average fare increase would be 2.5 per cent.
The fare hikes would bring in an extra $4.95 million in 2020, so if council members want to hold the prices, they need to find the same amount of money somewhere in the transit budget. It would first be a transit commission decision, but ultimately a council decision, on whether to freeze all fares next year.
Coun. Shawn Menard told the transit commission Wednesday that he’ll be working on a strategy to freeze fares, considering the problems with the transit service.
However, Coun. Jean Cloutier, vice-chair of the transit commission, said fiddling with one funding stream would inevitably impact others.
“As an accountant, it’s not rocket science,” Cloutier, a chartered professional accountant, said in his office Thursday.
So, rolling back an expected increase in revenue from fares would mean using more taxes to backfill the money, or reducing service.
No one would likely suggest trimming service when customers are begging for a better bus network.
Transpo has been trying to find more money to put back into the bus system to fix deficiencies.
Loading the cost of a fare freeze onto property taxpayers is politically problematic. The proposed transit levy on the 2020 tax bill is already 6.4 per cent more than 2019 and it’s hard to see a majority of council supporting raising the rate.
Transpo can’t simply dip into its operating reserves to cover lost revenue from a fare freeze, mostly because there’s not enough money in the account. In fact, there’s only $1.5 million in the transit operating reserve account, even though the city wanted it to have a minimum of $4.7 million by 2020.
The transit capital reserve, meant for improving transit infrastructure, is another source of funding, but using capital funds for operating costs is usually discouraged. That said, the city is proposing to transfer $3.5 million from the transit capital reserve anyway to help pay for operation improvements in 2020.
But when the $3.5 million is removed from the transit capital reserve, and all the planned capital expenses are taken into consideration, only about $9 million will be left in the reserve account at the end of 2020.
Pulling nearly $5 million more out of the transit capital reserve wouldn’t leave Transpo much money for needed infrastructure work in an asset portfolio with a value of about $2 billion, not including LRT.
Citizen transit commissioners like Sarah Gilbert-Wright and Anthony Carricato are interested in how Transpo can expand the fare freeze in 2020.
Carricato thinks there might be a possible funding source: pausing the $6-million electric bus pilot project, which has been expected to add two or three buses to the fleet in 2020. But Transpo has already started the research to procure the buses.
Wright- Gilbert said she plans to use her weekend to find money for a fare freeze.
It would be tough to squeeze any money out of operations, so the only option might be the capital budget to find one-time funds.
Can Transpo hold off on remediation work for the old Prince of Wales Bridge piers? What about delaying the replacement of operational support vehicles? Is there IT work that can be held over a year?
Councillors would need to hear a loud demand for a fare freeze for them to pay attention.
Cloutier said his constituents in Alta Vista ward want better transit service first, including a reliable LRT line. While he acknowledged 2019 was a “challenging year” for transit users, Cloutier said Transpo needs revenue to invest back into the system to make it better. jwilling@postmedia.com twitter.com/JonathanWilling