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New Transit Funding Sources
- Thread starter denfromoakvillemilton
- Start date
W. K. Lis
Superstar
Some fund raising in area where the schools have "richer" families also improves the situation for some public schools.
TOareaFan
Superstar
The Port Authority of New York & New Jersey owns and operates the PATH rail system between New Jersey and New York City. See link.
However, it also owns real estate, from which it gets revenue to help subsidize its rail system. One of the real estate holdings is the World Trade Center in New York City.
From link.
Why does it seem that the TTC is forbidden to have real estate holdings from which it could get a revenue stream? Maybe the TTC should build an office tower, or towers, around the Scarborough Town Centre? Or is that a bad idea?
The TTC was to build a new headquarters building at York Mills Station, but that was nixed by the Ford administration, see link. So the site was sold for $25 million, see link.
Where would the TTC get the money to build the office towers you envision? What if it went wrong and there was a loss would that come from other TTC operating/sogr Funds? Does the TTC have in house development expertise?
Maybe the answers to those questions (in combination) led them to think....yeah, a $25MM profit without taking real estate/development risk....sounds cool!
W. K. Lis
Superstar
sixrings
Senior Member
CBC I believe owns or just sold their 20% share in satellite radio. They bought low and are or have sold high. I have absolutely no problem with this and think the tic should be using their land to leverage more money than what they are selling it off to developers or undercharging for parking.
W. K. Lis
Superstar
The main problem with the TTC (and the City) is that they see finances only in the short term. Usually, the minimum is around a year, to meet their annual budget, and the maximum is about four years, the length of the elected city council term.
Sometimes it lasts the length of a project (IE. Line 1 extension into Vaughan). There never seems to thinking about long term revenue sources or projects. Streetcars and subway trains are the exemptions, with their life expectancy lasting 30+ years.
TOareaFan
Superstar
Let's have a long term thinking TTC...
How do you think this will sell to the public.
-. TTC is going to build a $30MM building
-they are going to borrow $25,500,000 for the project
-So they will only be Investing $4.5MM of their own precious resources
-good news, if they can lease it up, the building will generate $1.7MM in NOI before debt.......and at a 5% cap rate the building will be worth $34MM so the TTC will gain $4MM (albeit, not money they can use to improve service as it is not "cash").
- debt payments of around $650k come out of the NOI so the TTC in each future . Once the building is open will generate +/- $1MM new cash per year...
.........so, say, after a 3.5 year construction peruod........and another 4,5 years (assuming nothing goes wrong) TTC recovers +/- the money they are diverting from service improvements this ye to investigate investigate thi project......8 years!
Obviously, I made these numbers up.......but they are roughly in li with current market.
The numbers change if:
-. Leasing does not go well
-. Costs inflate during construction
-. The real estate department of TTC has to grow by a few competent development folks to take on this new strategy........could be the first project never generates net/incremental cash just for th reason alone.
How do you think this will sell to the public.
-. TTC is going to build a $30MM building
-they are going to borrow $25,500,000 for the project
-So they will only be Investing $4.5MM of their own precious resources
-good news, if they can lease it up, the building will generate $1.7MM in NOI before debt.......and at a 5% cap rate the building will be worth $34MM so the TTC will gain $4MM (albeit, not money they can use to improve service as it is not "cash").
- debt payments of around $650k come out of the NOI so the TTC in each future . Once the building is open will generate +/- $1MM new cash per year...
.........so, say, after a 3.5 year construction peruod........and another 4,5 years (assuming nothing goes wrong) TTC recovers +/- the money they are diverting from service improvements this ye to investigate investigate thi project......8 years!
Obviously, I made these numbers up.......but they are roughly in li with current market.
The numbers change if:
-. Leasing does not go well
-. Costs inflate during construction
-. The real estate department of TTC has to grow by a few competent development folks to take on this new strategy........could be the first project never generates net/incremental cash just for th reason alone.
TOareaFan
Superstar
^excuse the typos.....small screen weak wifi here in Iceland
W. K. Lis
Superstar
WislaHD
Superstar
Tangently related blogpost by @simval on different taxes cities can levy. Good overview for those unfamiliar on the topic!
City taxes as urban growth policies: choosing the taxes that get you the city you want
http://urbankchoze.blogspot.ca/2016/07/city-taxes-as-urban-growth-policies.html
I am a fan of Toronto incorporating a Land Value Tax.
City taxes as urban growth policies: choosing the taxes that get you the city you want
http://urbankchoze.blogspot.ca/2016/07/city-taxes-as-urban-growth-policies.html
I am a fan of Toronto incorporating a Land Value Tax.
ssiguy2
Senior Member
I've ways thought gas taxes {along with other such as land value and parking taxes} were a very good way to go. They are simple and fair..........the more you drive the more you pay. This has the added benefit or smaller cars polluting less and getting better mileage so it encourages eco friendly alternative vehicles or smaller engine ones.They encourage people to use less gas and this encourages people to live closer to their work and shop more locally. Also the higher the gas price, the more appealing the transit ticket looks.
I don't like the idea of road tolls except on new infrastructure. I think it's patently unfair where one person drives free today and tomorrow has a toll for no other reason that she/he happens to live along a route they feel like tolling. It's unfair that some poor slob has to take a 2km tolled DVP/Gardiner and gets stung with a toll but someone commuting from Malvern to Hamilton or Oshawa to Kitchener everyday pays squat.
I don't like the idea of road tolls except on new infrastructure. I think it's patently unfair where one person drives free today and tomorrow has a toll for no other reason that she/he happens to live along a route they feel like tolling. It's unfair that some poor slob has to take a 2km tolled DVP/Gardiner and gets stung with a toll but someone commuting from Malvern to Hamilton or Oshawa to Kitchener everyday pays squat.
W. K. Lis
Superstar
Except if everyone decides to use an electric car or a hybrid car, a gasoline or diesel tax will become a less reliable revenue tool. They'll have to go the toll road or parking tax as revenue tools, else increase the provincial motor vehicle registration fees, to cover the loss from a fuel tax. We can expect to see better mileages on motor vehicles, as government regulations for better mileage kicks in. See link.
ssiguy2
Senior Member
I do appreciate that the more successful the gas program is in making people use transit or alternative/low fuel consumption is a tax of diminishing return as Vancouver has found out.
It will however take a long time before you see a serious switch to low consumption gas cars or electric and in the mean time it can be a very solid source of income. The tax can also be raised to maintain revenue as gas consumption falls. Toronto also doesn't have Vancouver's dilemma of being up against the US were people go to as up.
Everyone hates paying more tax but it is a fair one.........the more you drive the more you pay. Parking taxes are a good method as well but I don't agree with tolls on existing infrastructure. It is patently unfair that someone travelling 2km pays a toll while someone travelling a hundred of more pays squat. Road tolls also have the habit of pushing traffic onto side & arterial streets as people change their route to avoid the toll. They push traffic onto roads that weren't designed to handle the traffic and onto smaller local roads as well.
It will however take a long time before you see a serious switch to low consumption gas cars or electric and in the mean time it can be a very solid source of income. The tax can also be raised to maintain revenue as gas consumption falls. Toronto also doesn't have Vancouver's dilemma of being up against the US were people go to as up.
Everyone hates paying more tax but it is a fair one.........the more you drive the more you pay. Parking taxes are a good method as well but I don't agree with tolls on existing infrastructure. It is patently unfair that someone travelling 2km pays a toll while someone travelling a hundred of more pays squat. Road tolls also have the habit of pushing traffic onto side & arterial streets as people change their route to avoid the toll. They push traffic onto roads that weren't designed to handle the traffic and onto smaller local roads as well.
W. K. Lis
Superstar
TTC chief won’t endorse ‘unpalatable’ budget cuts
CEO Andy Byford doesn’t approve of such cost-cutting measures as eliminating all fare discounts.
A battle royal is coming between Tory and Byford. See link.
That 2.6-per-cent target will actually be be more, when you add on inflation cost increases.
From this link,
Adding the June rate of inflation (1.5%) to the 2.6% target, that means cuts of 4.1% is being expected from the TTC and all other departments in the city.
CEO Andy Byford doesn’t approve of such cost-cutting measures as eliminating all fare discounts.
A battle royal is coming between Tory and Byford. See link.
Meeting Mayor John Tory’s request for budget cuts next year would require the TTC to take “unpalatable” steps like eliminating all fare discounts, cutting service, and delaying the opening of the Spadina subway extension, according to the transit agency’s CEO.
TTC chief Andy Byford made that case in a letter this week responding to the mayor’s directive, approved by council last month, for 2.6-per-cent budget reductions at all city departments. According to a copy of the document obtained by the Star, measures the agency has identified to meet the goal include a 10-cent fare hike next year — the sixth increase in as many years — but those measures would still fall millions of dollars short of reaching Tory’s target.
In the letter, which is dated Aug. 2 and addressed to the city’s chief financial officer, Byford wrote that in its search for savings the TTC looked at “everything short of impacting service.”
“I instructed my chiefs to make the least damaging cuts first and then to progressively look at more difficult cuts,” he wrote. But he said the agency wouldn’t endorse cost reductions that would undermine the provision of public transit. “At no time would we recommend unpalatable reductions,” he said.
The TTC wouldn’t comment publicly on the letter, which agency spokesman Brad Ross stressed was a “work-in-progress” and not a final budget submission.
But Byford’s position could set him on a collision course with the mayor, who in an interview Wednesday raised the prospect of calling in a task force to cut costs at the TTC if the agency wasn’t able to. He said that approach had worked with the police department.
“If (the TTC) can’t do this themselves, and I’m confident they have enough good management there to find these ways of doing things better and differently, then I guess we could help them,” the mayor said.
Tory said he didn’t support reversing service improvements made under his term, but stated that the TTC could find more ways to reduce costs than Byford has already identified. “Perhaps the only people who would find them unpalatable would be those who want to preserve the status quo,” he said.
Trimming 2.6 per cent from the TTC wouldrepresent a clawback of roughly $16 million from the combined net operating budgets for the agency’s conventional service and WheelTrans. Byford’s letter suggests that amount would be manageable, but the bigger issue is that the agency is facing increased costs next year of $215 million in order to maintain current service levels.
That number includes a $184 million shortfall for the conventional service, which is higher than an earlier estimate of $178 million and includes increased costs associated with switching to the Presto fare card system, the opening of the Spadina subway extension in late 2017, vehicle maintenance, and decreased revenue as a result of lower than expected ridership this year. The WheelTrans funding gap is $31 million, and is driven primarily by what Byford called an “unprecedented” spike in expected demand next year.
The increased costs mean that in order to reach the 2.6-per-cent target, the TTC would have to find new revenue and savings totaling $231 million in 2017, out of anet budget of only $611 million.
Byford wrote that the TTC had already identified $17 million in unspecified “departmental expense reductions.” To further bridge the gap, the agency proposed raising $40 million by increasing fares by 10 cents, eliminating discounts on cash fares for seniors and students, and collecting more parking revenue. Controlling expenses related to Presto, diesel fuel, and employee benefits would save a further $7.5 million, and the TTC could make a one-time draw on a stabilization reserve fund for $15.4 million.
Taken together with a $1.8-million trim to the WheelTrans budget, the proposed measures amount to about $82 million in savings, a little more than one third of the $231 million needed.
According to a presentation attached to Byford’s letter, greater savings could be found by eliminating all discounts including for Metropass subscribers ($80 million), cutting service ($70 million), and deferring the opening of the Spadina subway extension to 2018 ($6 million). Byford deemed those options “unpalatable” and didn’t endorse them.
The CEO wrote that “none of the proposed cuts are easy and there is inherent risk in some of them.” He also warned that the cuts couldn’t be repeated in 2018 “without adversely impacting our ability to deliver a quality service.”
Councillor Joe Mihevc (Ward 21, St. Paul’s) said Byford’s letter is proof that the mayor’s office and council have no choice but to abandon the directive for a 2.6-per cent cut at the TTC.
“I do not see them demanding that this cut happen. That’s really the bottom line,” said Mihevc, who sits on the TTC board. “I cannot see a political universe in which that is possible.”
Mihevc also took issue with the proposed 10-cent fare increase, because he argued that the cost of transit is a major factor in why, after more than a decade of growth, the TTC’s ridership is flatlining. Fares have gone up every year since 2012 and since 2009 the price of a Metropass has increased by about 30 per cent, more than twice the rate of inflation.
The commission is expecting to carry about 545 million people this year, down from its originally projected total of 553 million. A preliminary budget summary attached to Byford’s letter shows the TTC is currently projecting 545 million rides again in 2017, which would mark the first time in 14 years that ridership has not increased.
Mihevc argued that to fund the TTC and offset the need for a fare increase, the city needs to find new sources of revenue. Council is expected to debate revenue tools in the fall, but the city manager has said it’s unlikely that new taxes or levies could be in place in time to provide financial relief next year.
Council is expected to approve the 2017 budgets for all city agencies and departments in February.
TTC chief Andy Byford made that case in a letter this week responding to the mayor’s directive, approved by council last month, for 2.6-per-cent budget reductions at all city departments. According to a copy of the document obtained by the Star, measures the agency has identified to meet the goal include a 10-cent fare hike next year — the sixth increase in as many years — but those measures would still fall millions of dollars short of reaching Tory’s target.
In the letter, which is dated Aug. 2 and addressed to the city’s chief financial officer, Byford wrote that in its search for savings the TTC looked at “everything short of impacting service.”
“I instructed my chiefs to make the least damaging cuts first and then to progressively look at more difficult cuts,” he wrote. But he said the agency wouldn’t endorse cost reductions that would undermine the provision of public transit. “At no time would we recommend unpalatable reductions,” he said.
The TTC wouldn’t comment publicly on the letter, which agency spokesman Brad Ross stressed was a “work-in-progress” and not a final budget submission.
But Byford’s position could set him on a collision course with the mayor, who in an interview Wednesday raised the prospect of calling in a task force to cut costs at the TTC if the agency wasn’t able to. He said that approach had worked with the police department.
“If (the TTC) can’t do this themselves, and I’m confident they have enough good management there to find these ways of doing things better and differently, then I guess we could help them,” the mayor said.
Tory said he didn’t support reversing service improvements made under his term, but stated that the TTC could find more ways to reduce costs than Byford has already identified. “Perhaps the only people who would find them unpalatable would be those who want to preserve the status quo,” he said.
Trimming 2.6 per cent from the TTC wouldrepresent a clawback of roughly $16 million from the combined net operating budgets for the agency’s conventional service and WheelTrans. Byford’s letter suggests that amount would be manageable, but the bigger issue is that the agency is facing increased costs next year of $215 million in order to maintain current service levels.
That number includes a $184 million shortfall for the conventional service, which is higher than an earlier estimate of $178 million and includes increased costs associated with switching to the Presto fare card system, the opening of the Spadina subway extension in late 2017, vehicle maintenance, and decreased revenue as a result of lower than expected ridership this year. The WheelTrans funding gap is $31 million, and is driven primarily by what Byford called an “unprecedented” spike in expected demand next year.
The increased costs mean that in order to reach the 2.6-per-cent target, the TTC would have to find new revenue and savings totaling $231 million in 2017, out of anet budget of only $611 million.
Byford wrote that the TTC had already identified $17 million in unspecified “departmental expense reductions.” To further bridge the gap, the agency proposed raising $40 million by increasing fares by 10 cents, eliminating discounts on cash fares for seniors and students, and collecting more parking revenue. Controlling expenses related to Presto, diesel fuel, and employee benefits would save a further $7.5 million, and the TTC could make a one-time draw on a stabilization reserve fund for $15.4 million.
Taken together with a $1.8-million trim to the WheelTrans budget, the proposed measures amount to about $82 million in savings, a little more than one third of the $231 million needed.
According to a presentation attached to Byford’s letter, greater savings could be found by eliminating all discounts including for Metropass subscribers ($80 million), cutting service ($70 million), and deferring the opening of the Spadina subway extension to 2018 ($6 million). Byford deemed those options “unpalatable” and didn’t endorse them.
The CEO wrote that “none of the proposed cuts are easy and there is inherent risk in some of them.” He also warned that the cuts couldn’t be repeated in 2018 “without adversely impacting our ability to deliver a quality service.”
Councillor Joe Mihevc (Ward 21, St. Paul’s) said Byford’s letter is proof that the mayor’s office and council have no choice but to abandon the directive for a 2.6-per cent cut at the TTC.
“I do not see them demanding that this cut happen. That’s really the bottom line,” said Mihevc, who sits on the TTC board. “I cannot see a political universe in which that is possible.”
Mihevc also took issue with the proposed 10-cent fare increase, because he argued that the cost of transit is a major factor in why, after more than a decade of growth, the TTC’s ridership is flatlining. Fares have gone up every year since 2012 and since 2009 the price of a Metropass has increased by about 30 per cent, more than twice the rate of inflation.
The commission is expecting to carry about 545 million people this year, down from its originally projected total of 553 million. A preliminary budget summary attached to Byford’s letter shows the TTC is currently projecting 545 million rides again in 2017, which would mark the first time in 14 years that ridership has not increased.
Mihevc argued that to fund the TTC and offset the need for a fare increase, the city needs to find new sources of revenue. Council is expected to debate revenue tools in the fall, but the city manager has said it’s unlikely that new taxes or levies could be in place in time to provide financial relief next year.
Council is expected to approve the 2017 budgets for all city agencies and departments in February.
From this link,
Adding the June rate of inflation (1.5%) to the 2.6% target, that means cuts of 4.1% is being expected from the TTC and all other departments in the city.
nrb
Active Member
I think Byford is being way too nice in these negotations. He should give Tory what he wants.
Publically propose eliminating metropass discounts, raise prices, cut service, delay the extension. Say here you go John Tory, that's what you wanted. Wait for the public backlash.
Publically propose eliminating metropass discounts, raise prices, cut service, delay the extension. Say here you go John Tory, that's what you wanted. Wait for the public backlash.