A BRT Debate Post Mortem

Let me begin today’s post by thanking Council Jesse Helmer for joining me on this week’s BRT debate. I also want to express my gratitude to Craig Needles and the 980 CFPL team for kindly hosting the event. It was my first time engaging in such an exercise on-air and I enjoyed it very much. (If you have not heard our debate yet, you can listen here: https://omny.fm/shows/the-craig-needles-show/paul-paolatto-and-jesse-helmer-debate-bus-rapid-tr )

I hope those listening-in live or via the podcast found the exchange informative. This is a massive investment that deserves much attention. And while I am not sure Councillor Helmer or I influenced anyone for or against the system to ‘Shift’ their views, I do believe the additional information presented gave Londoners a better sense of the magnitude of the project and its potential impact on our city’s future.

In addition to the debate, I was very appreciative of the London Rapid Transit Implementation Working Group’s decision to invite a few transit experts from across the country to comment on our plans.  I found the Q&A session to be quite informative.

As a brief follow up to the debate, I wanted to share some additional thoughts and dispel some nagging perceptions.

First, I maintain that a comprehensive, independently-prepared cash flow analysis of the aggregate operating budget for Shift and LTC is both appropriate and necessary if our community is to understand this project, its costs, and its potential risks. While I never professed to have exact numbers in my previous blog given the limited information available, I feel now more than ever that such an analysis is necessary.  None of Councillor Helmer’s claims during the debate can be definitively substantiated either.   And any suggestion that:  (i) local property taxpayers will only contribute $12 million towards the capitalization of a $500 million system, and (ii) face negligible property tax increases due to the application of a higher provincial gas tax and growth assessment is both unsupported and nonsense.

Therefore, I still have the same questions now that I had when I entered the debate:

  1. What are the underlying assumptions and projected inflows and outflows for Shift and LTC each year over the life of this project?
  2. What is the risk profile associated with changes in ridership, development charges and construction costs? As a side note, in my opinion, there is not a wide enough deviation in current plan’s sensitivity analysis.
  3. What are the opportunity costs of proceeding and not proceeding as quickly?

Second, I take exception to the idea that I am relying on ‘scare tactics’ to make a point. A responsible review and debate of the risks associated with any investment of this size is not only prudent, it’s principled.  As evidenced in this Calgary Herald article (http://calgaryherald.com/news/local-news/budget-2018-details-of-transit-cuts-become-clear-on-second-day-of-budget-deliberations), several western Canadian municipalities and some regarded as progressive transit communities, are now struggling to maintain transit service levels in light of not just flat, but declining ridership due to a slow economy.  The choice between cutting service hours and addressing budget deficits in a slow economy must be incredibility challenging.   Fortunately, the City found reserve funds to preserve the service levels for 2018.  However, the 2019 budget looms, and in the absence of a startling turnaround in ridership, the choice between higher taxes and reduced service levels is not going to go away.

Similarly, Winnipeg is also struggling with projected revenues, in this case over the province’s continued contribution towards operating cost.  http://www.cbc.ca/news/canada/manitoba/bowman-transit-province-budget-1.4403129.  These decisions are not easy, and made more difficult when changes to the fiscal environment at the provincial level result in an unexpected negative consequence towards operating inflows at the local level.

My point is: once we build it, we own it.  Therefore it might make some sense to construct the system in manner that expands with ridership and revenue – a reasonable, business-like approach.

Finally, I am committed to getting answers to the above questions because I believe the absence of such information will only serve to enrage the debate and further divide the community.  If we are all committed to improving the public’s understanding of the investment and value proposition, then such an analysis should be welcome and prioritized by those on both sides of the debate.

I am prepared to sit down with anyone on Council or the Shift team to establish Terms of Reference for this undertaking and review my own analysis as it compares with theirs. Regardless of the outcome, the appropriate sharing of this detailed forecast and risk assessment will better inform our citizens, and create an opportunity to either build support for this project or justify its amendment.

In other words: win-win.