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Regulator scolds TransLink property sell off as imprudent

TransLink already runs some compressed natural gas buses – last purchased in 2006 despite concerns over their costs and effectiveness – and the agency is now planning to buy more. - File photo
TransLink already runs some compressed natural gas buses – last purchased in 2006 despite concerns over their costs and effectiveness – and the agency is now planning to buy more.
— image credit: File photo

TransLink is being criticized by its independent regulator for its decision to inappropriately sell off surplus property to avoid transit service cuts or fare increases.

TransLink commissioner Robert Irwin issued that warning in his review of the transportation authority's new 2014 plan and outlook, but also noted the move is unavoidable because there's no deal yet with the province to approve new revenue sources.

"The sale of assets to support operations is not prudent fiscal policy," his report says.

"The only other recourse for TransLink would be fare increases or service reductions in the absence of additional funding sources."

TransLink has been drawing down its cumulative reserve on the basis new funding would be approved in time to avert cuts.

But the province's decision that there be a referendum in 2014 on new sources has delayed the expected arrival of sustainable funding and cast doubt on whether it will be approved.

TransLink envisions selling major unused properties to raise $40 million in 2016 and $110 million in 2017 to maintain its reserve at at least 10 per cent of its budget.

Mayors argue money from real estate sales should be set aside for new capital projects, rather than being bled away to keep the system running.

"It's just the worst strategy," Richmond Mayor Malcolm Brodie said. "All you're really doing is deferring a problem and increasing the downward spiral."

While transit service would be maintained at current levels under the plan, Irwin notes it will not keep up with the region's rising population, meaning riders can expect deteriorating conditions.

Transit service hours per capita are projected to decline back to 2007 levels by 2016 and to 2004 levels by 2020.

Irwin also flagged rising labour costs as a concern after a new three-year contract signed earlier this year lifted wages for bus drivers and other unionized staff.

TransLink's $1.44 billion in annual revenue comes mainly from fares, property taxes and its 17-cent-a-litre fuel tax.

Mayors have requested a new source, such as a vehicle levy, a small regional sales tax, a share of the carbon tax or, eventually, road pricing.

George Heyman, the NDP's critic on TransLink, said the government's insistence on a referendum on new sources will condemn transit riders to worse overcrowding and longer waits in the years ahead.

The commissioner also warned TransLink's bus replacement program may be derailed if Metro Vancouver politicians block the continued allocation to TransLink of 100 per cent of federal gas tax transfers, set to be renewed next spring.

That money can only be spent on capital projects, not operating costs.

Metro mayors have criticized TransLink's capital spending priorities in the past and have indicated they may seek to instead channel some of the federal gas tax money to municipal or regional projects, such as sewage treatment plant replacements.

TransLink plans to spend $367 million from the federal transfers to buy new buses and upgrade SkyTrain infrastructure.

Burnaby Mayor Derek Corrigan has challenged the recent choice to buy compressed natural gas buses, which he suspects is a politically motivated decision linked to the province's natural gas strategy.

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