If the LRT opponents in the community and around the council table are honest, they will stop trying to frighten and misinform Hamiltonians about the 'unknown' LRT operating cost.
By Ryan McGreal
Published April 04, 2017
This article has been updated.
In an email to Council, City of Hamilton Light Rail Transit (LRT) director Paul Johnson has provided a factual response to the latest anti-LRT dodge of stirring up fear, uncertainty and doubt (FUD) about the operating cost.
Last week, Flamborough Councillor Judi Partridge guessed that LRT could cost $23 million a year to operate in a newspaper op-ed that stated her opposition, citing the operating cost of Toronto's Eglinton Crosstown LRT for comparison.
Johnson made the obvious - at least, to anyone seriously interested in an honest debate - point that the Eglinton Crosstown has "dramatically higher" capital and operations costs due to a large section of it running underground.
A better comparison for Hamilton's LRT is the Waterloo Region ION LRT system that is currently almost finished construction. Johnson wrote, "While longer than Hamilton's (at 19 km) it is more similar to Hamilton's project as it runs on the surface of the roadway. Waterloo has estimated its operations and maintenance costs at $8.5 Million annually (plus HST and inflation)."
Johnson noted that Waterloo has to cover its $8.5 million operating cost plus the lifecycle, financing and insurance costs. According to the Region of Waterloo LRT frequently asked questions page, Operations are $4 million, Maintenance is $4.5 million (that's the $8.5 million), Lifecycle is $8.7 million, Financing is $11 million and Insurance is $1.7 million.
In Hamilton, those other costs will be 100 percent the responsibility of the Province, which will own the system. (Waterloo Region owns its LRT system, having contributed some of the capital cost.)
Hamilton's LRT is 11 km in length. Assuming a linear relationship between length and operating cost, it would cost something on the order of $5 million to operate Hamilton's line if our cost structure is similar to Waterloo.
Johnson's letter also notes a 2013 estimate on a net levy increase for LRT operations and maintenance costs for the full McMaster-to-Eastgate corridor of $2.9-3.5 million, plus $8.7 million for additional corridor maintenance services, like garbage collection and snow clearing, which the city already performs.
Given that the fully-funded phase one LRT runs from McMaster to Queenston Traffic Circle, a comparator cost of the shorter phased route would be $2.3-2.8 million, plus $6.8 million, for a total of $9.1-9.6 million.
Right now, the City pays $18.2 million to operate the four bus routes that serve the B-Line LRT corridor. There will still have to be some local service along the corridor with LRT, but even if we conservatively assume that we will have to provide half the service, that still means $9.1 million a year in savings from LRT.
And all of that assumes no increase in ridership, which is absurdly pessimistic given how successful LRT is at attracting new by-choice transit riders and new transit-oriented developments that add new residences and jobs and increase the pool of transit riders along the corridor.
So even if the City somehow had to cover 100 percent of the operating costs for LRT, a terrible deal that no one seriously thinks will happen, we would end up no worse than we are today, but with a higher-order, higher capacity service that can steadily increase ridership and revenues without having to increase operating cost with more buses and drivers.
We would also be able to take advantage of new transit-oriented developments along this already-serviced corridor, paying development charges and significantly increasing the city's property tax base.
If the LRT opponents in the community and around the council table are honest, they will stop trying to frighten and misinform Hamiltonians about the "unknown" LRT operating cost.
Following is the full text of Johnson's email:
Further to your request, Mr. Mayor, I can provide the following information that I shared verbally at the General Issues Committee meeting last week.
The operations and maintenance costs of the Toronto LRT projects - and in particular the Eglinton project - are not a great comparison for the Hamilton LRT project. For example, the Eglinton LRT (called the Crosstown) is 19km long with a 10km underground section. As such the capital and operations costs are dramatically higher.
Hamilton's LRT project is 11km long and runs on the surface of the roadway only and as such a stronger comparison is the Waterloo ION LRT project. While longer than Hamilton's (at 19km) it is more similar to Hamilton's project as it runs on the surface of the roadway. Waterloo has estimated its operations and maintenance costs at $8.5M annually (plus HST and inflation). Waterloo has also calculated its financing, insurance and lifecycle costs but in Hamilton those costs are expected to be covered 100% by the Province as this is their asset. The Waterloo information can be found at:
http://rapidtransit.regionofwaterloo.ca/en/projectinformation/frequentlyaskedquestions.asp (see the ION Costs section)
In 2013 City finance staff also provided estimates on the operations and maintenance costs of the LRT as it was proposed at that time (McMaster to Eastgate). The increase to the net levy for transit was estimated at $2.9M to $3.5M (depending on ridership and frequency of service) and an additional $8.7M was estimated for additional costs related to maintaining the corridor (garbage, snow removal etc.). The 2013 information was provided to Council in the following report:
The above examples provide some context for the operations and maintenance discussion. The final figures for Hamilton will be part of the bidding process that will be completed in early 2018.
In order to maximize opportunities for new development along the LRT corridor, the City of Hamilton developed Transit Oriented Corridor Zoning in an effort to encourage new development and discourage uses that were not compatible with rapid transit.
Update: Updated to clarify that the Financing, Lifecycle and Insurance costs for Waterloo LRT are over and above their operations and maintenance cost. You can jump to the changed paragraph.
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