Growth through Partnerships

Transcription

1 Growth through Partnerships Long Term Investments in Regional Transportation Infrastructure for Economic and Environmental Sustainability April 2013

2 Growth Through Partnerships 1 Executive Summary TransLink provides the 21 municipalities, one First Nation and one Electoral Area of British Columbia s Lower Mainland with an integrated transportation system to move people and goods in support of federal, provincial and regional economic, transportation and environmental objectives. Since 2002, federal and provincial government partners together with TransLink have invested billions of dollars in an unprecedented capital expansion of the regional transportation network. This investment created immediate jobs throughout construction, improved commute times and productivity, reduced road congestion, and has reduced vehicle emissions. Senior government partnerships continue to enable TransLink to deliver what it otherwise could not. Effective and efficient transportation systems are necessary for modern economies to function; they provide access to services and jobs thus facilitating economic growth, while promoting a healthier environment and improved quality of life. The capital costs of transportation systems, from roads to transit or bikes and walking paths are expensive and generally not sustainable solely on a user-pay basis. Transportation networks are a public good that require some significant form of subsidization or long-term funding formula. Surety of funding is essential to TransLink s legislated planning process. TransLink heralds the establishment of a permanent Gas Tax Fund, and a new Long Term Infrastructure Plan to replace the Building Canada Fund. TransLink is confident that continued investment in transportation infrastructure through these funds will enable transit and transportation authorities to best achieve federal, provincial and regional economic, transportation and environmental objectives. Background The Lower Mainland of British Columbia is Canada s major trade hub in the Asia-Pacific Gateway, and a region geographically constrained by mountains, rivers, the Pacific Ocean, and the U.S. border. The dramatic geography is beautiful but presents significant transportation and development challenges. The South Coast British Columbia Transportation Authority, commonly referred to as TransLink, provides the region s 21 municipalities, 1 First Nation and 1 Electoral Area with an integrated transportation system to move people and goods in support of federal, provincial and regional transportation and environmental objectives, and support s Metro Vancouver s economic development and its Regional Growth Strategy. Created in 1998, TransLink has increased transit ridership in the region by 57% between 1999 and 2011 to a total of 359 million boarded passengers per year. TransLink s services are delivered through subsidiary companies and contractors, including: Coast Mountain Bus Company Ltd., West Vancouver Blue Bus, BC Rapid Transit Company Ltd. (SkyTrain), West Coast Express Ltd., MVT Canadian Bus (HandyDART), and the Transit Police. TransLink gets its authority from the South Coast British Columbia Transportation Authority Act (SCBCTA Act). TransLink is unique in North America; no other agency operates such a diverse and fully integrated network that includes bus and rail transportation systems, passenger ferries, HandyDART custom transit, walking and cycling pathways, a 2,400 lane-kilometer Major Road Network, five bridges, an Intelligent Transportation System, transit police, and programs such as AirCare vehicle emissions testing and the TravelSmart transportation demand management program. BC s Lower Mainland The Lower Mainland is often compared to other large metropolitan areas such as Toronto or Montreal, but like any other major centre the challenges here are different. Greater Vancouver has a population of roughly 2.3 million people and a population density of 1720 people per square kilometer (versus Toronto with a population of four million people and a density of 2848 people per square kilometer). Characteristics that define this area and serve as a source of pride and identification for many, such as large rural tracts

3 Growth Through Partnerships 2 Growth Since 2002, TransLink and its federal and provincial government partners have invested billions of dollars in an unprecedented capital expansion of the regional MONTREAL transportation network. This investment created immediate jobs throughout construction, improved commute times and productivity, reduced road congestion, and has reduced vehicle emissions. Additionally, the establishment of viable transportation options has led to building densification along transportation corridors, resulting in significant modal shifts away from private vehicles to more environmentally friendly and efficient transit options, helping to reduce loads and demands on road and bridge infrastructures. Proximity to transportation corridors has become a recognized incentive for developers, who have TORONTO recognized this trend in modal shift. Those who do need to drive now face less congestion, improving mobility for service providers and the movement of goods. In fact, 10 per cent fewer cars now enter the core of Vancouver than a decade ago, and traffic volume growth on other regional roads has substantially slowed. Overlays of geographic service areas demonstrate the challenges of a large service area with lower overall population density per square kilometre. Settlement patterns in the Lower Mainland present disparate pockets of density separated by tracts of agricultural land. This coupled with wide travel patterns leads to high infrastructure demands and high transit costs per passenger. The completion of major infrastructure such as the rail rapid transit SkyTrain Millennium Line and the Canada Line (which garnered world adulation during the 2010 Winter Olympic and Paralympic Games) has significantly improved the ability to move people throughout the region without private vehicles, of protected agricultural land, 21 unique municipalities with with each train moving the equivalent of a full 747 every 90 disparate population centres - present their own infrastructure seconds during rush hours. The $1.4 billion Evergreen Line and service challenges, with significant infrastructure needs project is currently underway, scheduled for completion in and high per-passenger transit costs It will extend the existing SkyTrain network at Burnaby east to Coquitlam and Port Moody and is expected to By 2040 the population of Metro Vancouver is expected significantly reduce road congestion and improve commute to increase by one-third to more than three million people, times across the entire service area. with about one-quarter of those residents aged 65 or older; these changes could greatly increase pressure on existing The Golden Ears Bridge, which crosses the Fraser River transportation infrastructure and systems. between Langley and Pitt Meadows, was built as a PublicPrivate Partnership. It has shortened commute times and improved the efficiency of people and goods movements across the region, saving many road users 30 minutes or more in travel time and resulted in lower fuel and operating costs.

4 Growth Through Partnerships 3 Clockwise left to right: 2013 Evergreen Station naming announcement, 2009 Federal Gas Tax funding announcement at the SeaBus Maintenance Centre, 2011 Surrey Transit Centre Expansion Ceremony, 2012 launch of the new 555 bus service over the Port Mann Bridge, 2009 Evergreen Line Project announcement TransLink s other major road investments also make it easier for people and goods to move around the region efficiently. Over $357 million has been invested to build or improve regional roads, including facilities such as the Fraser Highway, Coast Meridian Overpass, Mount Seymour Parkway and David Avenue, $272 million for the material asset rehabilitation of TransLink s 2,400 lane-kilometers of Major Road Network, and $42 million to make cycling better by funding upgrades to municipal bike paths, new facilities such as the Central Valley Greenway, and building a pedestrian and bicycle bridge over the Fraser River. Senior government partnerships continue to enable TransLink to deliver what it otherwise could not. Investments from both levels of senior government are currently being used to improve SkyTrain station platform safety and efficiency, including better accessibility for seniors and those with mobility challenges, and the installation of new Compass smart cards and fare gates which will reduce fare evasion loss, and provide invaluable data to inform TransLink s management of the system and improve the customer experience of its patrons. Federal Gas Tax Fund money received has enabled the material asset rehabilitation of TransLink s vehicle fleet, giving customers one of the youngest, fully accessible and environmentally friendly bus fleets in North America, as well as enabling the replacement of its two aging SeaBus ferries, the second of which is scheduled for delivery in TransLink currently leads North America in transit ridership growth; it has increased the capacity of its transit services across the region by 45 per cent since 2002, and moves nearly 80 per cent more transit customers. In 2011, TransLink provided more than 233 million moves on its transit network. Over 50 per cent of people in this region use transit in a typical month, reflecting the broad reach and quality of TransLink s services.

5 Growth Through Partnerships 4 Operating Funding TransLink traditionally collects 80 per cent of its operating revenues from transit fare boxes, property tax, and regional fuel tax. Sudden declines in forecasted fuel tax revenues in 2012, reluctance by local government to increase property taxes, and increasing demands for expanded service all led to a high degree of public scrutiny of TransLink s finances through a review by the TransLink Commissioner as well as a provincial audit, and a demand to find significant cost efficiencies. In finding the requested efficiencies, management maintained its focus on ensuring the system was in a state of good repair, and instigated several structural changes, the sale of some properties and a review to optimize current service delivery. Though TransLink was criticized for being conservative, it maintained the confidence of private financial markets and maintained its AA+ credit rating. Capital Funding Effective and efficient transportation systems are necessary for modern economies to function, providing access to services and jobs thus facilitating economic growth, while promoting a healthier environment and improved quality of life. But the capital costs of transportation systems, from roads to transit or bikes and walking paths are extraordinarily expensive and generally not sustainable solely on a user-pay basis. Transportation networks are a public good that require some significant form of subsidization or long-term funding formula. TransLink has been able to leverage roughly $2.2 billion in federal capital funds on a variety of capital projects through to This has been through several different federal funding programs, to the benefit of the region and the national interest, including: 2 Projection through 2017 is based on anticipated completion of funding agreements Federal Program ($Millions) Assets/value to system Gas Tax Fund $676 (UBCM transfers to 2012) Contributed to the replacement of 841 vehicles, refurbishment of 114 vehicles and acquisition of 324 vehicles to expand service Public Transit Agreement $41 Expansion 34 Mk 2 SkyTrain cars and 21 community shuttles Building Canada Fund $109 Upgrades to 7 SkyTrain stations, fiber optic system, additional rail cars, modernization of Surrey Maintenance Facility and implementation of the new Faregates system Canadian Strategic Infrastructure Fund Western Economic Diversification $450 $10 Canada Line Rail Rapid Transit Canadian Strategic Infrastructure Fund $350 Public Transit Capital Trust $67 Transit Secure $14 Evergreen Line Rail Rapid Transit ($417 million) Risk assessments and upgrades to security management, video recording and monitoring technology, training and other sec Urban Transportation Showcase $9 Shorten pedestrian crossing times, improve pedestrian safety, and enhance the vitality of the streetscape; Retrofitted two buses with hybrid engines Infrastructure Stimulus Fund $21 Knight Street bridge seismic upgrade and a park and ride facility. Roberts Bank Rail Corridor $75 Road/Rail Interface Study; Nine grade separations in Delta, Surrey, the City and Township of Langley will be implemented by Note: Numbers reflected were rounded and provided for purpose of illustration; provincial and other sources not reflected.

6 Growth Through Partnerships 5 Additionally, these funds have been leveraged against just over $1 billion in provincial commitments, some of which flow to 2040, primarily through the Provincial Transit Plan, and provincial contributions to the Building Canada Fund and the Infrastructure Stimulus Fund. Two of the aforementioned federal funding programs remain in effect in 2013: The Gas Tax Fund, and the Building Canada Fund. In 2005, the federal budget announced the government s intent to provide the provinces and territories with an amount equivalent to a portion of the federal excise tax on gasoline (funding commonly referred to as Gas Tax), in order to provide local governments with a source of stable, predictable, long-term funding for environmentally sustainable municipal infrastructure to help them address their infrastructure needs and meet sustainability objectives. In 2011 the federal government announced the Gas Tax Fund would be made permanent. The Honourable Jim Flaherty, Minister of Finance, introduced the Keeping Canada s Economy & Jobs Growing Act in October 2011, which included the annual (national) investment of $2 billion in a permanent Gas Tax Fund. The Act was passed in the House of Commons in December, In BC s context, the Gas Tax Fund (GTF) is also the moniker given to the current Canada-British Columbia-Union of British Columbia Municipalities Agreement on the Transfer of Federal Gas Tax Revenues under the New Deal for Cities and Communities The GTF agreement was signed September 19, 2005, and expires March 31, Three subsequent amendments added funding, clarifications and amended project categories. GTF revenues in BC are administered by UBCM and delivered to local governments through five separate programs across three tiers (Metro Vancouver is Tier 3): Greater Vancouver Strategic Priorities Fund; Innovations Fund; General Strategic Priorities Fund; Regionally Significant Projects Fund; and, Community Works Fund. Only the Greater Vancouver Strategic Priorities Fund and the Innovations Fund apply to Tier 3 (Metro Vancouver). On January 27, 2006, Metro Vancouver, TransLink, and UBCM signed a Strategic Priorities Fund Agreement for Greater Vancouver, under The Agreement on the Transfer of Federal Gas Tax Revenues under the New Deal for Cities and Communities. Under the terms of this agreement, Metro Vancouver agreed to commit 100 per cent of the region s federal Gas Tax Fund revenues earmarked for the Greater Vancouver Strategic Priorities Fund towards public transportation from There have been two subsequent amendments that have committed funds to TransLink for years 2010/11 and 2011/12, and UBCM, Metro Vancouver, and TransLink are currently reviewing an SPF amendment for the 2012/13 funding year and GTF funding is confirmed for 2013/14, but is not committed to TransLink at this time, pending administrative approval. TransLink projects seeking funding through the GTF/Greater Vancouver Strategic Priorities Fund are submitted by TransLink and approved by application to the Gas Tax Fund Management Committee; the Committee must also approve any subsequent changes to projects. Funds are received after successful application, and held in a restricted federal account. Funds are transferred into TransLink s general funds for use after the costs for the project have been incurred. Interest earned is also restricted to approved projects, and funds are audited annually by external auditors. TransLink reports out on projects annually to UBCM and Metro Vancouver. New Governance Structure A change in TransLink governance in 2008, introduced a multi-tiered governance structure that includes the Board of Directors, the Mayors Council on Regional Transportation and the Regional Transportation Commissioner. The Mayors Council is represented by each of TransLink s 21 municipalities, Electoral Area A and the Tsawwassen First Nation. The Mayors Council approves plans prepared by TransLink, including the transportation plan, and regional funding and borrowing limits, and appoints the nine independent directors that form TransLink s Board of Directors (which oversees TransLink s management and policy) and the TransLink Commissioner. Projects submitted for GTF consideration are prepared by staff, which identifies eligible projects as part of a Supplemental

7 Growth Through Partnerships 6 Plan (normally introduced to identify new projects or service and related funding). Supplemental Plans are prepared in consultation with Metro Vancouver, presented for review to the Commissioner, and to the Mayors Council for approval. If approved by the Mayors Council, Supplemental Plans roll into our legislated annual rolling Base Plans (fully funded three year business plans and an additional seven year outlook to provide a 10-year planning view) the following year. TransLink s 2013 Base Plan shows that from 2012 to 2022 TransLink is forecasted to receive $847 million in federal funding for both Infrastructure and vehicle replacement/ refurbishment projects under the Building Canada and Federal Gas Tax funds. This breaks down as follows: Under the Building Canada Fund, TransLink is forecasted to receive $79 million in federal funding from 2012 to Projects include a number of station upgrades, fibre optics upgrades, implementation of the Compass faregates system at the stations and upgrades to West Coast Express cars and stations. The funding for Building Canada Fund projects is received after costs have been incurred and invoices submitted. TransLink is forecasted to receive $768 million in Federal Gas Tax funding between 2012 and The annual Federal Gas Tax is shown in the 2013 Base Plan as fully (or nearly fully) utilized through the 2016/17 fiscal year with the expenditures on the projects continuing through to Between 2017 and 2022, the 7-Year Outlook infrastructure projects are not well defined, so the funding has only been applied to fleet replacements and is not shown fully utilized. The following table outlines forecasted federal capital funding and related projects from 2012 through 2022, as outlined in TransLink s 2013 Base Plan Federal Funding in TransLink 2013 Base Plan (in thousands) GAS TAX Project Description Federal Funding # Vehicles HandyDart Vehicles $111, Propulsion Upgrade Expo Line $43,710 N/A Community Shuttles $104, Conventional Buses $350, SeaBus $23,080 1 Smartcard bus equipment $17,158 N/A SkyTrain refurbishment $42, Hamilton Transit Centre $75,855 N/A BUILDING CANADA FUND Project Description SkyTrain Station Upgrades Main Street Station Metrotown Station Scott Road Station Joyce Station Commercial Broadway Station New West Station Surrey Central Station SkyTrain Infrastructure Fibre Optics Upgrade Running Rail $768,407 1,639 Federal Funding $38,610 $1,339 WCE Station and Rail Cars $9,020 Faregates/Station Upgrades $30,000 $78,969 Federal Funding $847,376 Any future funding agreement for Gas Tax allocation within the Metro Vancouver area would need to be determined by Gas Tax partners. Although the Gas Tax Fund for the Metro area have to date been 100% pooled and transferred to TransLink, there are a number of other funding scenarios and investment categories which may be considered. UBCM and Metro Vancouver are holding a joint workshop

8 Growth Through Partnerships 7 Clockwise left to right: New 99 B-Line bus, Canada Line rapid transit, Pacific Breeze SeaBus in April 2013 with the Board of Metro Vancouver, TransLink, Mayors, and senior staff to review various funding scenarios that could potentially drive discussions with Canada and BC regarding a future Agreement. The Gas Tax Fund has to date represented the largest federal funding program yet available to TransLink with over $676 transferred from UBCM from the fund s inception projected through to the 2012 funding year. The GTF/Greater Vancouver Strategic Priorities Fund has enabled TransLink and the region to leverage $466 million in investments to secure $1 billion in assets, which in turn enabled TransLink to expand service by 22.6 per cent and gave the region the most modern transit fleet in North America. Over the remaining years of the program, TransLink plans to leverage $57 million of its budget to acquire an additional $513 million in fleet replacement assets, including conventional buses, Community Shuttles, and HandyDART buses. The Gas Tax Fund/Strategic Priorities Fund has been an effective mechanism for funding the material asset rehabilitation of TransLink s public transportation network. TransLink recognizes that while there is yet no new SPF agreement in place between UBCM, Metro Vancouver and TransLink (and thus no surety at this time that funds will again be pooled and directed to transit projects), it supports retaining this effective administrative model for the permanent GTF. TransLink encourages consideration for the expansion of the GTF mandate to include capital funding that supports active transportation (i.e. bicycle and pedestrian) infrastructure. Planning for Future Growth TransLink is required through its legislation to prepare annual rolling Base Plans with fully funded three year business plans and an additional seven year outlook. Thus, surety of funding is essential to TransLink s planning process. TransLink therefore supports the creation of a permanent Gas Tax Fund as well as the creation of a Long Term Infrastructure Plan to replace the Building Canada Fund. TransLink and the Greater Vancouver region are facing significant infrastructure challenges in the future. A growing and aging population, increasing fuel costs, increasing asset management costs, and regional and individual affordability challenges are just a few of the issues that TransLink plans to examine through its Regional Transportation Strategy dialogue in Future infrastructure demands in Greater Vancouver are significant; the region s vision already identifies billions required to expand rapid transit south of the Fraser River and

9 Growth Through Partnerships 8 through Vancouver s Broadway corridor, as well as to replace vital goods movement infrastructure such as the Pattullo Bridge that currently crosses the Fraser River adjacent to the Westminster Rail Bridge, and the full development of regional Rapid Bus services. In seeking dialogue around its Regional Transportation Strategy, TransLink sees an opportunity for Greater Vancouver to have a dialogue around our future transportation needs and what we can afford. This strategy will set that long-term vision by developing a regional consensus, with other plans setting out implementation. While the Gas Tax Fund has proven effective as a source of capital to maintain the current system in a state of good repair, on its own at current levels it is inadequate to also meet the future infrastructure requirements of the region. Additional funding through another Long Term Infrastructure Plan funding mechanism, such as that previously available through the federal government s $33 billion Building Canada Fund created in 2007 will be required when that program ends in Conclusion Surety of funding is essential to TransLink s legislated planning process. TransLink heralds the establishment of a permanent Gas Tax Fund and a new Long Term Infrastructure Plan to replace the Building Canada Fund. TransLink is confident that continued investment in transportation infrastructure through these funds will enable transit and transportation authorities to best achieve federal, provincial and regional economic, transportation and environmental objectives. The Lower Mainland represents a growing region in Canada, but one that is moving away from a reliance solely on personal transportation. This region has the opportunity to become a model community for the rest of the country and the world, with what can be accomplished through integrated and effective transportation planning and service delivery. An ongoing partnership with the federal government is integral to that success; it is beyond the scope of the region to do it alone.