Ken Yam's Blog

So the City has proposed a series of service cuts effecting 47 bus routes across town to save a meagre $3 million. This marks the second winter in a row that the patients of riders are being tested. Riders will remember that at the same point-in-time last year, Ottawa was in the middle of the longest transit strike in the cities history. These service cuts couldn’t come at a worst time. The City has already proposed a property tax hike of 3.9%. Just to top it off, they are also proposing to hike transit fares by 7.5%.

Riders and taxpayers are basically being asked to pay more for less. In the long-term, these service cuts will hurt the cities transit ambitions. City Councillor Alex Cullen, the Chair of the cities Transit Committee has estimated that these cuts can potentially cost OC Transpo 597 000 riders. Nearly all proposed service cuts will significantly impact the rush-hour commuter crowd. For example, the express route 69 is used extensively during the morning commute and the proposed cut of the 66 will completely remove service on Moodie Drive between Bells Corners and the Nortel campus.

As residents continue to debate the $2.1 billion Light Rail Transit (LRT) plan, the City ought to consider the impact of potentially losing half-a-million riders, riders that could feed the proposed LRT system. By cutting these routes, riders impacted would be forced to find alternative solutions (ie: purchase a vehicle). Transit riders tend to be creatures of habit. Once these riders get out of the habit of using transit, they will not likely return, regardless of whether the LRT is built or not.

For a complete list of the proposed service cuts: http://www.alexcullen.ca/PDF/Proposed_OC_Transpo_Service_Cuts-revised.pdf

After much doubt, the Province has announced that it is willing to pay its share of the $2.1 billion LRT in Ottawa, including the underground portion downtown. The Federal Government has already pledged to provide its share, with the caveat that the Province must be on board. Assuming that the 1\3rd funding rule applies, the three levels of government should be able to raise a total of $1.8 billion.

That would be $300 million short of the proposed budget. While the city can scale back the project or come up with the money through tax revenues, a third option exist. A consortium of local entrepreneurs can be the fourth financing partner. Of course, private sector financing can come in various forms, and with shared risk comes shared reward. Public Private Partnerships  come in various forms, for Ottawa’s needs, the following proposals maybe feasible

NCC Real Estate & Rail - Some of the land that the LRT is expected to cross are National Capital Commission (NCC) owned. Assuming that the city can work with the NCC (which may prove to be difficult), private financing can include an agreement whereby unused NCC land can be leased to the consortium partners. In return for financing the LRT project, the NCC\City can sign a rent-free lease agreement with consortium partners on NCC land for a set period of time, with an option to extend the lease agreement at market rate.

The benefit of the land agreement for the private consortium, would be the value of the land. Based on lessons learned from other major cities in Canada, the LRT would help raise the profile of land along its corridor, particularly near LRT stations. The value of commercial real estate near the LRT line would increase which allows the private consortium to profit off of favorable sub-lease agreements.

Sell Ad Space -  The primary challenge of the lease agreement is the involvement of the NCC. As is the case with planning the LRT and the Lansdown projects, the City and NCC do not always work well with each other. Yet, the ad space on trains and LRT stations are property controled by the City. In an effort to raise the additional funds needed for the LRT project, the City can sell permanant ad space to a private consortium. The City can set aside 50% of the ads on trains and LRT stations for the purpose of selling to the private consortium on a permanant basis. This would be the primary benefit to the private consortium , in that, they would be able to use the ad space to rent them out to generate a profit. The City would continue to own the other 50% of ad space.

Reference

http://www.ottawacitizen.com/news/Province+kicks+600M+Ottawa+light+rail+project/2356367/story.html

As the City of Ottawa released its proposed plan for the Ottawa LRT including a tunnel through the downtown core, the issue of funding has yet to be addressed. While the City of Ottawa has committed its share of the funding, the proposed plan is dependent on the Federal and Provincial governments each paying 1/3rd of the cost.

On March 17th, the City formally requested funding from both levels of government. The Federal Government has already committed $200 million towards the LRT Plan, however, this remains short of the 1/3rd requested by the City.  Ontario’s Municipal Affaires Minister Jim Watson raised key concerns about the cost-effectiveness of the plan and the LRT’s ability to attract an appropriate level of ridership. Until these issues are addressed, the Minister has refused to commit funding towards the plan.

A third option not considered by the City of Ottawa is the involvement of the Private sector in financing the plan. In the event that Federal and Provincial funding is not secured, the city ought to explore an innovative third option that involves the private real estate developers similar to a plan proposed by Vancouver’s Translink.

Background

The City of Ottawa announced a rough plan of the proposed LRT, despite the lack of commitment from senior levels of Government (Federal and Provincial). The proposed tunnel portion of the route is expected to run from Lebreton Flats (West) on the existing transitway and onto Albert, cutting through the downtown core and angeling slightly north at Kent until it reaches Sussex and Rideau. The LRT is then expected to head south along what is now the Transitway towards Campus Station on Nicholas.

Lebreton Station is above ground. The following stations are expected to be underground:

• Downtown West (Bay\Lyon & Albert)
• Downtown East (O’Conner\Metcalf & Queen)
• Sussex (Rideau & Sussex)
• Campus (Same as Transitway)

South East of Campus Station, the LRT will continue to run underground along the Transitway until it reaches Lees Station, where it is expected to reappear above ground and continue South along the transitway before turning east and ending at Blair Road. To the West, the LRT is expected to run above ground from Lebreton Station along the transitway to Tunney’s Pasture (Just past Parkdale).

Analysis

How does this plan measure up to the other options presented? 1. NIMBYists have long argued that prolonged construction in the tunnel portion of the LRT will disrupt traffic for a number of years and is not worth the short-term economic cost. However, doing nothing to alleviate traffic in this part of the city will not only create short-term congestion problems, it will cause further overcrowding in the already busy bus system in the long-term.

2. Another alternative suggested was the downtown bus tunnel. It was suggested that the bus tunnel will adapt well to the existing Transitway system, and will be cheaper to implement. It will also reduce traffic in the congested downtown core. However, the deisel powered buses would require ventilation, which would significantly increase the cost of the system, and the continued use of liquid fuel would create long term operation costs compared to electric rail. The downtown bus tunnel would not solve the long-term problem of growth in the Lebreton Flats and Blair Road areas.

The electric LRT option would reduce the long-term cost of fueling the vehicles, it has positive environmental benefits, and is considered high-order relative to the existing bus-rapid-transit (BRT) system. LRT has traditionally attracted greater local investment along the transit line than BRT, which can contribute to smart urbanization along the corridor.

The proposed LRT network will significantly reduce traffic congestion in the core caused partially by the number of transitway buses running along Albert and Slater. It will connect through a transfer point with the existing O-Train line at Bayview Station and take riders across town from Tunney’s Pasture to Gloucester.

Given the coverage of the proposed LRT line including the underground portion through the downtown core,  $1.4 billion is considered a steal in the context of Canadian urban transit. This is particularly the case since the downtown core is highly urbanized with significant underground infrastructure to build around.

If we compared the Ottawa LRT with Toronto’s proposed Eglinton LRT (that also includes an underground portion), the Eglinton LRT is expected to cost $2.2 billion and span 30 KM, compared to 16 KM in Ottawa. However, much of the Eglinton LRT tunnel will run in the northern inner-suburban communities with far less existing underground infrastructure to build around than the Ottawa downtown tunnel portion of the Ottawa LRT.

Window of Opportunity

While no funding commitments have been made from Senior Levels of Government, the Provincial Government’s announcement of the MoveOntario 2020 initiative in Toronto, and more recent economic stimulus infrastructure investments at both levels of government appears to have created a window of opportunity for the City of Ottawa. Mayor Larry O’Brien has stated that he expects Federal and Provincial funding announcements this summer.