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Pay freeze, land sell-off to help keep TransLink afloat

Express buses running over the Port Mann Bridge between Langley and Burnaby are one of the promised new services at stake as TransLink recalculates what it can afford to provide. - File
Express buses running over the Port Mann Bridge between Langley and Burnaby are one of the promised new services at stake as TransLink recalculates what it can afford to provide.
— image credit: File

TransLink is assuming its unionized workers will accept a pay freeze or at least a net-zero contract where the overall cost doesn't rise.

CEO Ian Jarvis also intends to raise $220 million by selling off property like the Oakridge transit centre in Vancouver and relocating operations to cheaper land.

And he's still counting on a just-denied fare increase being approved next year to take effect in 2014.

Those are just some of the big bets in TransLink's revised financial outlook that Jarvis presented to Metro Vancouver mayors Tuesday.

"We've got lots of risks that we're facing," he said. "I didn't want to come here and come across as whining. We will size our operations to match the revenues available to us."

The transportation authority is struggling to decide what bus service expansions promised in a plan approved last year can proceed in light of a series of budget challenges.

Besides the nixed fare hike and a challenge from its regulator to instead find $20 million per year in cuts, mayors last month rejected a two-year increase in property taxes, leaving another $30 million annual hole.

But Jarvis said TransLink's approved plan already assumes it will find $84 million in cuts, efficiencies or new revenue over the next three years.

The bulk of that – $55 million – is to come from much deeper "optimization" of bus routes and runs than TransLink has so far embarked on to pull in more fares at less cost.

That's expected to mean more pressure to scrap or curtail less used bus routes in growing suburbs – where service is heavily subsidized now to promote future ridership – and increase runs where existing demand is stronger and closer to break-even.

Coquitlam Mayor Richard Stewart said redeploying buses to the urban centre flies in the face of efforts by outlying cities to build transit-friendly neighbourhoods on the promise better service will come.

"We're selling the future of our transit-oriented neighbourhoods in the suburbs," Stewart said. "We're selling that out so we can operate more efficiently today. And I'm struggling with that."

Jarvis admitted the choices are not easy and promised there will be more consultation with affected cities.

"We're going to get into the tougher decisions," he said. "Those are the tradeoffs that we're going to have to make: finance versus reliability of service versus quality of service versus coverage."

Other mayors said they're troubled TransLink is selling real estate assets to fund operations, calling that unsustainable.

Finding still more savings – perhaps $40 million over three years – is achievable, Jarvis said, but not without more significant hits to service or staff working conditions.

Meanwhile, a decline in gas tax revenue – as people drive less or buy more fuel outside Metro Vancouver – means TransLink will take in $120 million less than it previously expected over the next three years. That estimate assumes the recent drop in fuel use plateaus and does not fall further.

Labour talks now underway with union representing bus drivers is also an area of uncertainty.

If TransLink signs a contract that lifts pay at the rate of inflation it would need to find a further $60 million in savings over the three years.

And if TransLink is unable to sell its surplus land in time, it could burn through its entire $188 million accumulated reserve by 2015.

Nor is the recent push to bust more fare evaders expected to help much.

Jarvis said TransLink's plan already assumes a $4 million improvement in fare collection thanks to tougher enforcement and new tools to collect fines could add "a couple million" more in fares and fines collected.

Some trends are in TransLink's favour.

Fare revenue is expected to rise steadily with a rising population and infilling new neighbourhoods. And TransLink expects higher toll revenue in future years from the Golden Ears Bridge, gradually erasing an $80 million accumulated operating deficit.

TransLink has frozen planned express bus routes on Highway 1 from Langley to Burnaby and down King George Highway in Surrey, but intends to decide within a few months whether some of the stalled projects can still proceed.

 

Mayors to keep pressing for TransLink cash

Area mayors vow they will continue to press the province to consider new funding sources for TransLink, despite being soundly rejected this spring.

Transportation Minister Blair Lekstrom has already ruled out a vehicle levy as a short-term option although he indicated the cities can continue to explore the concept of road pricing.

"We find ourselves back in the situation we were almost a year ago," said Mayors Council chair Richard Walton.

He said successive provincial governments have "pulled the rug" out from under cities by rejecting various funding mechanisms.

"We've tried and we've taken a significant amount of political heat – including proposing a two-cent gas tax a month before an election," he said.

"It seems like it's going to be years and years of struggle," added Vancouver Mayor Gregor Robertson. "There's no happy place that's even conceivable at this point."

Richmond Mayor Malcolm Brodie predicted the province will do nothing more for TransLink before the provincial election next spring, calling the government-led audit of TransLink now underway a stalling tactic.

Lekstrom has said the auditors must report before anything else is considered.

But TransLink Commissioner Martin Crilly rejected suggestions from some mayors that the TransLink model is doomed and destined to be manipulated by the province and reviled by local residents.

"I don't take it as the whole thing is a failure," he responded. "It is working and this is what it looks like."

Crilly said there's been incredible growth of the transit system over the past decade.

He said TransLink's long-range vision calls for even more growth and a massive shift from private to public transportation.

"It's a shift in the economic metabolism of the urban area," he said, adding it won't be easy.

"It's going to be a series of painful bites where you ask the public to pay more in taxation while making it possible for them to pay less for their private travel."

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