SUPPORTS ITEM NO. 3
T&T COMMITTEE AGENDA
JULY 29, 1997
POLICY REPORT
TRAFFIC AND TRANSIT
Date: July 4, 1997
Dept. File No.4101
CC File No.: 5500
TO: Standing Committee on Transportation and Traffic
FROM: General Manager of Engineering Services
SUBJECT: Funding and Governance of the Regional Transportation System
RECOMMENDATION
A. THAT the statement of principles for transportation governance
and funding, as shown in Appendix B, be endorsed.
B. THAT the Greater Vancouver Regional District (GVRD) be
requested to develop further the co-operative model of
governance.
C. THAT the GVRD be requested to give a higher priority to
communicating with the general public in its consultation
program.
COUNCIL POLICY
Vancouver, unlike other municipalities in British Columbia, owns
its own street rights-of-way outright
Council policy with respect to the organization of a Regional
Transit system is extensive and listed in Appendix A. The
consistent policy direction is that the system should be locally
controlled and supported by adequate funding.
Council approved the regional Transportation Plan, 'Transport
2021', in principle. This plan described the principle of the
collection of fees from the users of the local transportation
system which would be spent on the maintenance and development of
that system irrespective of mode.
PURPOSE
The GVRD has entered into negotiations with the Province on the funding
and governance of the regional transportation network for all modes. The
purpose of this report is:
to document the historical development of Council policy on this
issue
to document the negotiating principles
to provide the status of the current negotiations
to propose certain models for discussion
BACKGROUND
There is a long history of negotiations with the Province on the funding
and governance of the local transit system which is documented in
Appendix A. These discussions date back from the time when BC Hydro
passed the responsibility to operate the local system to the Province.
Council has consistently recommended that the Vancouver Transit system
come under local control and that adequate funding be identified.
With respect to roads, the City has been much more self sufficient.
Larger projects, such as the Cambie Bridge, were funded with the assent
of the voters, from long-term borrowing. Minor capital projects such as
left-turn bays and street reconstruction are similarly funded from
borrowed capital or annual operating sources. In the past, the Province
assisted in minor capital work through Revenue Sharing, but this source
has since disappeared. Other, smaller projects, such as sidewalks or
local lane construction where benefits are more locally targeted, are
shared by adjacent property owners.
More recently, the Province and the Regional District have entered into
negotiations on the funding and governance of the local transportation
system. These negotiations are in progress. They will encompass all
aspects of planning, development, financing, administration, and
operation of roads, cycling and pedestrian facilities, transit services
and Transportation Demand Management.
CONTEXT
It is now almost four years since the regional transportation plan
'Transport 2021' was completed. Limited progress has been achieved. The
intent was that two new LRT lines would be operating by 2006 and that
the bus fleet would double. Instead, the planning for the first LRT line
has not yet begun and there have been few additions to the bus fleet. In
the meantime, the population of the City has increased by 30,000 to
522,000 and the Region has increased by over 140,000 to 1,880,000.
Transport 2021 introduced the concept of user-pay as a new source of
revenues. Changes would be applied to auto drivers so they would pay a
greater share of the true cost of operating a car, and fund transit.
These sources, including additional gas taxation, parking taxation
applied on a regional basis and tolling were forecast to fund the $10
Billion required in the Regional Plan had they been gradually
implemented when the plan was approved in 1993.
Revenues would be collected by a Regional Transportation Authority.
These funds, together with transit fares, existing levies and Provincial
contributions, would finance the Authority, support transit, and
maintain a system of regional roads.
Past studies indicated there is public support for this dedicated method
of funding if:
all funds collected are spent on the transportation system
tolling and other user fees are collected on a system-wide basis so
that no geographic bias is introduced
NEGOTIATING PRINCIPLES
The negotiating principles, mutually agreed by the Province and the
GVRD, are described in Appendix B. The objective is to reform the
governance of the regional transportation system in such a way as to:
improve customer service
increase transportation choices
discourage dependance on the automobile
support the regional land use strategy
support regional air quality and greenhouse gas objectives
Specifically:
provide an integrated decision-making process
provide adequate and appropriate funding
provide accessible and accountable governance
provide good management
provide fair treatment for existing employees
These negotiating principles would appear to cover the range of issues
that need to be addressed in the development of two new governance and
funding structure.
Governance Models
A number of models have been generated to meet the above objectives.
Each has advantages and disadvantages. Indeed, there may be no 'right'
way. Regardless, governance should be local and accountable, and
adequate and secure funding sources should be identified.
Three governance options have been identified:
regional
municipal
co-operative
The "regional" authority centralizes control. Representation could be
one of:
nominated elected municipal politicians (similar to the GVRD
Board), OR
non-elected appointees OR
a separately elected political body
The "municipal" models have each city independently pursuing its own
transportation objectives.
The "co-operative" model is a combination of regional and municipal
governance whereby the regional body provides co-ordination and
planning, and distributes funding according to agreed formulae. The
municipalities would continue to own, control and execute projects.
TRANSIT - GOVERNANCE AND FUNDING
Existing Organization
The Vancouver Transit system is managed locally through both the BC
Transit Board of provincially nominated appointees and the Vancouver
Regional Transit Commission of nominated elected municipal politicians.
The BC Transit Board obtains and controls the Provincial funding
contributions and is responsible for labour bargaining. The Vancouver
Regional Transit Commission allocates the service within the constraints
of the funding that is available.
Several problems with the existing framework have been observed over the
years:
The staff of BC Transit ultimately report to the BC Transit Board
and are guided by Provincial policy objectives.
There is the problem of balancing service allocations. Recently
the Five Year plan favoured building on Transit s ability to better
serve the more densely populated inner cities. In the past, this
has not been the case as service expanded to keep pace with
regional growth, mostly in low-density environments, which
exacerbated Transit s cost recovery problems
The existing transit funding formula was re-negotiated between the
Province and the Transit Commission in 1988. The Transit
Commission negotiated to obtain greater responsibility (and
financial risk) of the local bus system in exchange for the
Province taking on greater responsibility for rail transit.
However, the Commission has still not been able to achieve many of
its objectives (except by paying 100% of the cost) because the
Province has been unwilling to provide its more limited share of
the cost.
Governance Models
Alternative models are shown in Appendix C. Of the three options, the
idea of each municipality running its own transit system has been
dismissed as infeasible. Many elements of the present, successfully
integrated transit system could be lost. As well, capital
requirements for transit are so great that economies of scale can only
be achieved through sharing.
The resulting choice is between a regional authority with full
responsibility for delivering all transit services or the looser,
"co-operative" model of a regional agency which oversees the significant
elements of the system but allocates funding to municipal or
sub-regional boards along with the responsibility of providing more
localized services.
A regional authority could be modelled after the Toronto Transit
Commission, for example. It would combine the functions of the existing
BC Transit Board and the Regional Transit Commission. This model would
have the advantage of centralized and quicker decision-making. However,
it would also be required to make decisions on local issues, perhaps
without full knowledge of the implications. It would still be required
to rule on such politically sensitive and technically complex issues
such as how to balance service between the suburbs and the core
metropolitan area. (This is where service design guidelines are so
important.)
The co-operative model has some advantages in the Vancouver context.
Clearly, a regional authority would still have responsibility for
delivering regional services such as Sea Bus, SkyTrain, any future LRT
additions and certain express routes. Beyond this, the regional
authority could allocate funds to individual municipalities, (as West
Vancouver) or sub-regional boards for the delivery of basic local
transit service, and transportation demand strategies,etc.
One arrangement is to have Vancouver City manage the trolleys and other
services within its jurisdiction or set the level of service for these
routes. Another is that Vancouver join Burnaby and New Westminster to
administer the core of the existing system.
Individual cities or sub-regional boards could allocate transit service
according to their own priorities. For example, they could 'top up'
basic levels of service provided by the regional authority, by tapping
their own tax bases. Such an arrangement could foster experimentation in
providing different types of service.
Transit Funding
The existing transit cost-sharing arrangement is shown in Appendix F.
Costs are shared between the Province and the local Vancouver Regional
Transit Commission. Overall, the Transit Commission pays about 65% of
the day to day operating costs and 31% of the capital cost. SkyTrain
debt is over one quarter of the budget. New LRT lines will be expensive:
approximately $1 Billion per line.
The local share of the system in 1997/98 is $289.7 Million of a total of
$550 Million. The total cost, according to the Transit Five Year plan,
will rise to $625 Million in 2002. To achieve the targets spelled out in
Transport 2021, the total funding requirement would need to be $721
Million by 2002.
The Vancouver Regional Transit Commission relies on fares and other
non-user sources of funding to meet the local obligations to operate the
system, as described in Appendix F. The gas levy, at $.04/litre, also
encourages a change from the auto mode. However, the effect is
diminished by the proximity of cheap gas in the United States. The
hydro levy and non-residential property tax are not related to the
transportation system, although the property tax is a common way of
paying for transit in other jurisdictions.
The additional funding required to meet Transport 2021 targets would
come from the existing transit funding sources and other sources
identified by the Region (parking tax, tolls, etc.).
ROADS - GOVERNANCE AND FUNDING
Existing Organization
Unlike other municipalities in the Greater Vancouver Regional District,
Vancouver owns all its own roads and funds maintenance and improvements
through traditional sources. Last year the Provincial Government
proposed declassifying several provincial highways in other
municipalities. Although this proposal was later withdrawn and referred
to the governance discussions, it had an immediate effect on the
neighbouring municipalities of focusing on the cost implications and
what the nature of a regional road network would look like.
To support the governance process, the Regional Engineers Advisory
Committee of the GVRD began to explore the notion of a major regional
road network. The committee defined criteria for the selection of such
roads, which are presented in Appendix D. Applying these criteria
produced a map of 'regionally significant' roads as shown in Appendix E
(only Vancouver shown).
This network does not have any immediate implications for Vancouver.
The streets shown are a subset of those previously approved by Council
in the Transportation Plan, and their designation does not require any
further development or change of use. However, a framework of regional
roads may prove useful since forthcoming traffic management projects
like Richmond Rapidbus in the near term and the emergence of the
"Intelligent Highway System" in the longer term will require a certain
amount of regional co-ordination.
Governance Models
The different governance models described above could be used to
administer the major regional roads. First, a regional authority could
be appointed or elected. This body would receive the necessary funding
to maintain and operate major roads throughout the region, including
Vancouver. The body could also retain certain planning and construction
functions as well as control of access to abutting land uses.
A second model is to have municipalities individually maintain and
operate these roads, such as Vancouver does now. This would be a concern
of smaller outlying municipalities if the Province proceeded to
declassify roads and no new funding sources were available to them.
The third, or co-operative model would be have the cities continue to
own and develop roads as individual Councils wish, but also participate in projects of regional significance. This would seem to be the most
advantageous to the City of Vancouver.
Funding
The cost of maintaining a system of Regional roads is still being
refined, but it is estimated to be in the order of $12,500 per
lane-kilometre annually for a twenty-five year cycle. The total cost
would be about $40 Million per year. A modest program of regional
roadway improvements would cost in the order of $100 Million per year,
including roads in developing areas, left-turn bays, etc.
New funding sources for this network will be discussed as part of the
governance and funding negotiations.
FUNDING COMMENTARY - TRANSIT AND ROADS
Local municipalities only have the property tax as a revenue source to
pay for major transportation improvements. All other major revenue
sources, including the gas tax, tolls, and other road pricing sources,
are Provincial and require Provincial approval.
Additional Regional transportation responsibilities will mean additional
funding responsibilities. The Region is unable to assume any additional
transportation responsibilities without the commensurate funding sources
(tolls, etc.) from the Province. Should the Province be unwilling to
provide such funding sources then the Regional municipalities have no
recourse other than the property tax. It is unlikely the municipalities
would be prepared to use the property tax to this extent, unless the
Province reduces the burden on the property tax by assuming an
equivalent responsibility (say school or hospital funding).
CONCLUSIONS
The negotiations on funding and governance are now well underway.
Although they are not yet ready to be finalized, it is appropriate for
Council to begin indicating its preferences for the direction of the
outcome.
In terms of general principles, it is suggested that the governance
structure should:
be accessible and accountable to the public
have secure, long-term funding
derive its revenues from transportation sources to the greatest
extent possible
These principles are embodied in the GVRD s statement of principles, and
it is recommended they be endorsed.
In terms of specific structures for governing the transit and road
systems, the GVRD has outlined a range of options, which are not yet
fuly developed, but appear to outline the range of possibilities. There
are inherent concerns over systems that are too centralized (e.g., the
existing transit system) or too dispersed (which can lead to lack of
co-ordination and parochial decisions). The co-operative model, though
not yet fully developed, attempts to avoid these extremes, and is worthy
of further development.
Finally, in terms of communication, the pulic is generally unaware of
the negotiations underway. The GVRD has just released a program of
public communication, which should be supported.
However, this program gives relatively low priority to dealing with the
public directly. (It describes them as a 'tertiary audience'.) A more
comprehensive program of communicating with the public should be
considered.
* * * * *
Appendix A
Council Decisions with respect to Transit Governance
In a Manager's report dated July 5, 1988 the previous decisions of
Council were summarized:
1. A primary objective of the organization should be to provide the
best possible transit service at the lowest cost to users and
government. The organization should be relatively immune to other
political pressures, such as provision of welfare services, land
use planning, and numerous other governmental functions, which
could detract from efficient and cost-effective transit service.
2. There should be a single authority which is perceived by the public
to be clearly responsible for all transit functions. Shared
responsibility between several authorities, as is the case now,
should be eliminated.
3. The organization should be responsible for a clearly definable part
of the Vancouver Region only - not the entire Province with its
great diversity of needs...
4. Members of a board or commission controlling the organization
should be drawn only from this area, so that they will be
knowledgeable of local needs and competent to deal with them.
Exceptions could be board members representing the Province
directly.
5. Representation on the controlling board or commission should be
commensurate with financial contribution of each municipality
involved, both in terms of fares and of taxation.
6. The organization should be given authority to plan, operate and
maintain all aspects of the system, including provision of rolling
stock.
7. The authority should be given adequate revenue-rasing powers for
this purpose and these should include fares, gasoline tax, hydro
surcharge and property tax ...
8. The organization must have its own staff to carry out its
responsibilities, including planning, operations and
union/management relations. The current arrangement of staff
serving three entities is not effective.
9. There must be a mechanism (such as an effective technical
committee) to permit ongoing interface with municipal Councils and
to provide technical assistance to the organization relfecting
local government needs.
On July 8, 1988, in consideration of the above history, Council approved
these the following recommendation:
THAT Council reaffirm its previous endorsement of a single transit
authority for this region. [and]
THAT this single authority take the form of a board/commission, with
representation from all municipalities over 10,000 population, with
weighted voting reflecting funding contribution and ridership. The
representatives should be the Mayor of each municipality, or
his/her designate, and the Chairman should be an elected
representative, preferably appointed by the board itself.
On November 22, 1991, in consideration of a GVRD report on transit
organization Council approved the following recommendations:
THAT Vancouver City Council endorse the proposal contained in the GVRD
report entitled "Vancouver Regional transit System: A Proposal for
Improving the Structure and Accountability of the Transit
Service",[October 1991](Transit as a GVRD Function), and encourage
discussion with the new Provincial Government to bring about the
proposed changes. [and]
THAT the Provincial Government be requested to establish a Regional
Transit Authority, with a mandate to develop a Regional Transit
Plan.
APPENDICES B and C on file in City Clerk's Office
APPENDIX D
Criteria for Selecting Regional Roads
The following criteria are considered in defining a network of regional
significant roads:
Access from Gateways
International Airport, Port facilities, bus and train terminals
Access to Activity centres
the downtown, major industrial areas, major educational institutes
Inter-municipal travel
connect municipalities
carries minimum of 70 percent of trips overs 10 km AND has a volume
of greater than 800 vehicles per hour
Transit corridor
minimum of ten through buses per peak hour-direction
Goods movement
minimum of 800 trucks per day
Emergency response
key element of the Greater Vancouver Emergency Routers Plan
Network Continuity
APPENDICES E AND F on file in City Clerk's Office
* * * * *