TransLink 2010 budget maintains services levels cuts costs
TransLink’s Board of Directors has approved a 2010 budget that will preserve its roads and transit program. Revenue increases and cost cutting initiatives have eliminated the structural deficit and TransLink will maintain services and keep equipment and facilities in a state of good repair. Funding levels do not allow TransLink to proceed with further expansion of the transportation system in 2010.
In his report to the Board, CEO Ian Jarvis said the focus in 2010 will be to maintain the existing road and transit program while following through on initiatives to contain and reduce costs. Jarvis said providing transit services during the Olympics will be one of the more exciting challenges next year, as the transit system looks to handle a sudden spike in demand when ridership hits an expected 1 million people per day during the Games.
TransLink will mobilize most of its office staff to be street-level ‘hosts’ providing assistance to commuters, visitors an Games spectators using the Transit system.
Operating costs, debt servicing and capital repayments will total an estimated $1.225 billion. Revenues in 2010 are forecast to be $1.146 billion, with the $79 million difference covered by TransLink’s reserve fund.
Revenues:
Revenues in 2010 are expected to be $146 million higher than in 2009, mainly as the result of the Mayors’ Council approval of $130 million in new revenue from an increase in transit fares, the motor fuel tax and the sales tax on off-street, paid parking.
The proposed increase in transit fares for FareSaver tickets and monthly passes next April, coupled with an expected 7.4 per cent lift in ridership, is expected to increase fare revenues by $42 million to $43 million.
The Regional Transportation Commissioner must approve the FareSaver ticket increase before it can be implemented.
TransLink’s total fuel tax revenue is projected to increase by $55 million as a result of the 3 cent per litre increase in taxes scheduled to be applied early in the New Year.
Part of the $130 million in new revenue was to have come from an increase in the sales tax on off-street, paid parking that would generate $31 million more per year. While the province will rescind that tax with the July 1, 2010 implementation of the Harmonized Sales Tax, it has committed to providing TransLink a revenue source to replace it. TransLink will collect $23 million in the first six months of 2010, from the parking sales tax, which includes the $15.5 million impact of an increase from 7% to 21% to the sales tax rate.
Property tax revenues will increase by three per cent, or $8 million -- as permitted by legislation (representing two percent inflation and one per cent for growth). The Golden Ears Bridge is to raise $29 million in tolls during its first full year of operations.
Expenditures:
Next year’s total budget for operations at TransLink, its subsidiaries and contractors will be $916 million , $43 million higher than in 2009. Transit accounts for most of the operations due to the additional ‘full-year’ operating costs for the Canada Line and Golden Ears Bridge, and the Canada Line concessionaire capital payment, and new buses and the 48 new SkyTrain cars. After $23 million in cost cutting, the 2010 transit operation budget has been set at $843 million.
TransLink will increase the roads and bridges operating budget, which provides municipalities with funding to operate and maintain Metro Vancouver’s major arterial road network, by close to $2 million to $48 million. The Golden Ears Bridge operating budget is $13 million.
TransLink’s major road capital program in 2010 will include allocations of $10 million to the project to widen the Fraser Highway in Surrey and Langley, $6 million for the Coast Meridian overpass in Port Coquitlam and $9.1 million to help fund a series of road overpasses along the Roberts Bank Rail Corridor through Langley, Surrey and Delta.
TransLink’s budget, which covers transportation planning, financial and capital management functions as well as public consultation and informational programs, has been cut by 18 per cent ($10 million) with a reduction of 23 staff positions over the 2009 – 2010 period. The Transit Police budget will remain at the 2009 level of $28 million.
The 2010 budget forecasts $251 million in debt service payments on money borrowed for transportation capital projects to upgrade and expand the road network, the transit fleet and facilities.
Budget Cutting, Savings and Efficiencies
2010 will mark the third consecutive year of significant cost cutting and efficiency efforts at TransLink and its operating subsidiaries. In total, TransLink has cut $33 million from their budget requirements next year while preserving road and transit services.
In 2008, TransLink’s forecast deficit of approximately $8 million at mid-year was turned around into an $8 million surplus by year’s end. In 2009, the deficit is now expected to be approximately $77 million, $26 million lower than originally budgeted.
For 2010, TransLink has used wage and hiring freezes to cut $10 million from its budget compared to 2009. The Coast Mountain Bus Company reduced its proposed budget by $20 million, BC Rapid Transit, trimmed $3 million off its 2010 budget request while the Transit Police have achieved a $1 million reduction.
CEO Ian Jarvis said further streamlining and efficiencies are a priority. “We will complete a major internal efficiency review within the next few months and begin re-aligning processes at TransLink and the operating companies”, Jarvis said.
“In addition we will examine transit services for efficiencies and act on opportunities to generate additional savings while minimizing impact on customer service. This remains a priority because, in spite of the new revenues and all of the cost cutting measures so far, TransLink will again have to draw on its financial reserves in 2010 to fund its transportation services.”
Jarvis added, “The good news is that we’ve avoided service cut backs that would have been a real blow to Metro Vancouver’s sustainability and quality of life. Our challenge is to build consensus around how we can make the road and transit investments needed to support our regions growth."