York Region votes to help pay for subway shortfall

Council approves recommendation for additional $60 million to see subway come online faster.


Thestar.com
March 26, 2015
By Noor Javed

York Region councillors say they are willing to commit an additional $60 million to the Toronto-York Spadina Subway extension into Vaughan, if it means the project can be up and running sooner than later.

“It is disappointing to us that this project has slipped off schedule and that it requires more budget funds,” said York CAO Bruce Macgregor, who was co-chair of the executive task force overseeing the Spadina project.

He presented councillors with recommendations to move forward, including: supporting TTC CEO Andy Byford in his efforts to minimize delay and control costs, ask the federal and provincial governments for increased funding, and approving an additional funding of $60 million. All were endorsed by council.

York Region is responsible for 40 per cent of the municipal funding for the subway extension and has already committed $351.6 million dollars to the project. The region has also agreed to a “capacity buy-in” of $30 million to the TTC to cover costs of infrastructure upgrades to Downsview station.

When questioned by Markham councillor Jim Jones, Macgregor admitted he was aware of the delay and cost overruns since last July when the TTC hired an outside consultant to review the status of the project.

He was waiting for the revised budget numbers to be confirmed before bringing it to council, he said in an interview Thursday.

“I spent a couple of days last week looking over the entire record of meetings to see if we could have anything different,” said Macgregor.

The funds will likely come from development charges, and the rest will come through a tax levy, said regional treasurer Bill Hughes.

“In the 2016 budget, we will be looking at whether we have enough in the development charge reserves or whether we need to issue development charge related debt,” said Hughes, adding that the region had built in some contingency in the budget for cost over runs.

The chance of a taxpayers bearing the cost is unlikely, said Macgregor.

In addition to the $60 million, the region may also be on the hook for an additional $32 million from a provincial shortfall of projected earnings on investments, for a total of $92 million, said Hughes.

The province has committed over $1 billion to the project, and had put $890 million of the funds into the Move Ontario Trust, anticipating that investment earnings accrued would help to reach its funding goal. The revenue shortfall is currently estimated at $80 million to $85 million.

York will ask the province to cover the shortfall, not contribute to the cost overruns, said Macgregor.

Despite the ballooning costs, there was little of the drama seen in Toronto with most councillors saying the region should do whatever needs to be done to see the subway finally making its way into York.

“As you know the subway is an anchor, not only for the city of Vaughan, but for the region,” said Vaughan mayor Maurizio Bevilaqcua. “We need to show that we are fully engaged.”

Vaughan regional councillor Gino Rosati supported the motion, but pushed council to think why cost overruns on infrastructure projects have become the norm.

“Can these things be anticipated? If not, why not? We have seen it over the decades, there are always huge cost overruns,” he said.

“It’s very frustrating to go through this time and time again, and the public look at us and says you are the councillors, what did you do about it, why are there cost overruns, and why aren’t you managing it better?”

“We are accountable.”