Fare hike request nixed, hunt for TransLink savings intensifies
TransLink Commissioner Martin Crilly has vetoed a request for steeper fare increases next year, ordering TransLink officials to instead carve waste from the transportation authority.
It's good news for passengers, who overwhelmingly opposed the fare hikes.
But the decision knocks $40 to $60 million out of TransLink's assumed revenues over the next three years and increases the odds of a $23 property tax hike per average home next year to cover commitments to expand transit service.
Premier Christy Clark had already rejected area mayors' call for a vehicle levy – or any other new short-term funding source – to avoid the need for the extra $30 million from the property tax hike, instead vowing an audit will find savings.
Crilly said all the savings he is challenging TransLink to find – $15 to $28 million per year – should be achievable without cutting current or planned services.
"We believe this is possible for them to do without service cuts," he said. "We are deliberately increasing the financial pressure on TransLink and thereby encouraging it to minimize costs."
But Mayors Council vice-chair Peter Fassbender said if sufficient savings to offset both the fare and property tax hikes aren't found the mayors could consider revising the Moving Forward plan approved last year, eliminating or delaying promised service upgrades, many of them South of the Fraser.
They include a new Highway 1 bus rapid transit service over the Port Mann Bridge promised when the new bridge opens, a new B-Line express bus down King George Boulevard in Surrey, a new Langley-White Rock bus route, generally increased bus service in the region and upgrades to SkyTrain stations on the Expo Line.
"The issue becomes where do we go from here and do you cut back in the plan," Fassbender said.
"Does it make sense to open the Port Mann and not to have the dedicated buses to run on the dedicated bus lanes? If that happens there's going to be a huge hue and cry from South of the Fraser."
Crilly's ruling only rejects TransLink's plan to raise cash fares and FareSaver ticket prices beyond the rate of inflation. It is still free to raise monthly pass prices.
And cash fares will still rise – TransLink has the power to lift them two per cent each year without the commissioner's approval.
Since they haven't gone up since 2008, an increase of up to 10 per cent next year is still going ahead, lifting one-zone fares 25 cents to $2.75 and three-zone fares 50 cents to $5.50. FareSavers are to remain frozen as a result of the ruling.
Crilly noted TransLink is also struggling against other revenue challenges, including lower-than-expected cash flows from its fuel tax that pose a "threat from another flank."
Nor does it change the two cent per litre increase in the gas tax to 17 cents in Metro Vancouver that took effect April 1.
That increase was legislated by the provincial government last fall at the mayors' request, to generate $40 million a year dedicated to ensuring the Evergreen Line to Coquitlam is built.
The next step will be up to TransLink, which is expected to bring forward a new financial plan that takes into account the denial of much of its planned fare hike and soft gas tax revenues, which could bring in $100 million less than anticipated over three years.
Area mayors are also expected to decide within the next week whether they want to shelve some of the promised service expansion, if necessary, to avert the property tax hike.
Crilly said his review did not consider the fact TransLink is separately under pressure from the province to find another set of savings totalling $30 million.
"TransLink needs to work through its numbers again," Crilly said. "It's their job to manage the situation. They're going to have to work it out."
He said the search for new long-term funding sources for TransLink will need to continue to finance future transit expansion to serve a growing ridership and population.
Report targets bus system for savings, not fare cheats and 'fat cats'
Despite public complaints of "fat cat" executives, big corporate bonuses and fare evaders cheating TransLink blind, a new efficiency review suggests the bulk of savings come instead from tweaking the bus system.
TransLink Commissioner Martin Crilly released a 103-page report that makes little mention of the high-profile issues held up recently as evidence of TransLink waste.
Instead, it says key areas to cut include shaving slack time in bus schedules that are double industry norms, rethinking the increasingly costly use of community shuttles instead of conventional buses and sending more HandyDart passengers via taxi instead.
The commissioner directed TransLink to cut costs $5 to $10 million in 2013, $15 to $20 million in 2014 and $20 to $30 million in 2015.
Crilly is directing TransLink to find modest administration savings of two per cent in its head office and bus division to save $3 million per year.
Administration makes up 5.2 per cent of TransLink costs, up from 4.7 per cent in 2009, when a previous review ordered by the province suggested that was high. Crilly said his proposed cut would return it to 2009 levels.
Compared to other systems, he found, TransLink appears to have too much equipment and staff, even after accounting for its vast service area.
"Internal trends show increasing costs and declining productivity in labour and equipment utilization, as well as high overhead," he said.
Crilly also said TransLink budgets are overly conservative, and its $288 million reserve fund is excessive – areas that can be trimmed to save money.
The wages of TransLink's unionized bus drivers and other staff make up a huge chunk of its costs, but Crilly was reluctant to discuss those, saying he cannot interfere in labour negotiations.
Up to 10 per cent of HandyDart calls can be handed off to taxis instead, but Crilly said TransLink isn't fully using that option.
"The cost is $36 to carry one person on HandyDart on average now," he said. "It's gone from second best to second worst among Canadian peers."
He said community shuttles seemed to be a great innovation to handle thinly used routes, but said their costs have risen too fast.
Crilly also compared fares here to ones at other major Canadian cities, concluding two- and three-zone passengers here get a poor deal, and can travel farther for less money elsewhere.
He did not examine fare evasion because his review focused on reducing expenses, not increasing revenue.
Overall, he said, TransLink provides a "very high quality service" that has improved enormously over the years.
Mayors Council chair Richard Walton said he hopes the findings and that of a forthcoming provincial audit improve public confidence that the system is well run.
"Most of the communities in Metro Vancouver think they are subsidizing TransLink dramatically," Walton said. "Everybody can't be right. Therefore there needs to be far greater public understanding of the value for money, how public transportation is funded and how we compare with the rest of Canada and the world.