Some St. Albert city council members are not pleased the local costs of the new regional transit network are continuing to climb and shared their frustration during a council meeting last week.
The Gazette reported last weekthat St. Albert will need to spend $1.45 million more than originally budgeted for public transit next year after the Edmonton Metropolitan Transit Services Commission's (EMTSC) approved their 2023 operating budget on Nov. 17.
The $1.45 million added to the city's total transit spending results in a proposed 5.6 per cent property tax increase for 2023, an increase from the 4.6 per cent tax hike city administration originally calculated when the proposed budget was released last month.
During the Nov. 22 council meeting, the CEO of the EMTSC, Paul Jankowski, gave a presentation on the commission's budget and 2023 operating plan, and council had the opportunity to ask questions about how St. Albert will be affected.
Speaking first, Coun. Ken MacKay said he was very concerned about how much St. Albert needed to spend as a result of the operating plan.
"This scares me," MacKay said.
"There's just a fear that we're going to be contributing much more than we thought we would have in the past, and not get the same results," MacKay said in an interview on Nov. 23.
"My concern is that we have so many unknowns," he said, adding, "I buy the argument that many of our economic benefits come from being a regional partner and a player, but the pandemic, combined with decisions that really aren't in our control that occurred with Edmonton city council, significantly caused the requisition to go to almost $1.5 million."
Jankowski told council that in March of this year, while the commission was developing the opening day transit schedule, Edmonton's city council "weren't prepared" to make changes to their existing local transit network, and therefore the commission had to make changes to the operating plan.
"It is fair to point out, and I don't believe that [Edmonton] administration or council would quibble with this ... [that] the overall size of that contribution from the City of Edmonton is substantially smaller than what was identified in the original business case," Jankowski told council.
"After meeting with the City of Edmonton council in March, 2022 and hearing their concerns, our board approved a service plan that balances the needs and concerns of all eight members and allows integrated regional transit to move forward," Jankowski said in an email.
Cost recovery was also a main topic of discussion during the Nov. 22 council meeting as the EMTSC has budgeted a cost recovery rate below 15 per cent, with an estimated $3.9 million generated through fare and non-fare revenue.
Council heard that St. Albert Transit's current cost recovery rate is around 30 per cent, and before the pandemic it was about 35 per cent. In an email, city spokesperson Molly Bujold told The Gazette that St. Albert Transit's 2022 budget was nearly $11.2 million, including employee wages and benefits.
"The standard cost recovery objectives for highly urbanized transit do not apply in this kind of a situation," Jankowski told council, adding, "certainly we'll be looking at increasing ridership over time, but it's not a realistic financial objective for this type of service."
"Had we been operating the entirety of all of the urban services in all of these eight member municipalities that cost recovery ratio would be a lot higher."
St. Albert, Spruce Grove, Stony Plain, Leduc, and Fort Saskatchewan are the member municipalities who will be transferring oversight of local transit services to the commission in 2023, while Edmonton, Beaumont, and Devon will retain oversight of local services.
Prior to the pandemic, Edmonton's Transit Service (ETS) had a 40 to 41 per cent cost recovery, according to Sarah Feldman, the director of business integration and workforce development for ETS. Feldman did not say what ETS' cost recovery currently is, but said the city has a policy-determined cost recovery target of 40 to 45 per cent.
As increasing ridership would improve the network's cost recovery, Jankowski said the commission's operating plan is designed to align transit services with where the need exists. "That's what this current plan starts to do," he said. "It starts to provide that convenient access."
In an email on Nov. 18, Bujold said St. Albert Transit's year-to-date total ridership was 445,900, which she said was about 28 per cent below pre-pandemic numbers. Bujold was unable to provide ridership numbers for St. Albert Transit's commuter routes, which will run around three times more frequently during peak hours under the commission's operating plan in 2023.
Coun. Shelley Biermanski had doubts about the commission's plan to strengthen ridership, and in response to Jankowski's explanation she said, "I guess we'll see."
"For any service industry you provide service for what's needed, you don't create the service and then try and find people to use the service, you provide good service to people that need it." Biermanski said in an interview.
Coun. Wes Brodhead, who is St. Albert's representative for the EMTSC, as well as the chair of the commission, says ridership data that will be available through the recent implementation of the Arc card fare-payment system will give a clearer picture of transit demand in the region, as well as data to show the demand for specific routes.
"What that does is gives us origin and destination of those who get on the bus," Brodhead said in an interview. "Now you know not only who is on the bus, but where they got on and where they get off, not (just) ridership numbers."
Brodhead added that this data will allow changes to be made, if necessary, to the cost allocation for each municipality in the commission's future budget.
In 2023 St. Albert will be paying 90 per cent of the cost for three specific regional routes, all of which are similar to the current commuter routes, and 45 per cent of a new regional route, which travels from Clareview LRT station to West Edmonton Mall. Next year, for the four routes combined, St. Albert will pay $6,491,123, as part of their total costs.
Jankowski told council that the reason St. Albert is contributing to the Clareview and West Edmonton Mall connection route is because St. Albert transit riders will be able to transfer directly from the regular commuter routes, to routes bound for the LRT station and the mall.
Brodhead said he wasn't surprised to hear that his fellow councillors were disappointed in the cost presented to St. Albert for the regional network and understood the concern, but added that the commission has done the best they could to alleviate costs for each municipality.
"Still firmly believe in regional transit"
In an interview, Mayor Cathy Heron said she is "very disappointed" in the costs St. Albert faces for the regional network next year, although she believes regional delivery of services like transit are effective long-term cost-saving measures.
Without Edmonton's full participation in the regional network, Heron said, St. Albert will struggle to realize the benefits.
"I don't know if they realize how much their decision to run parallel routes and not upload all their other routes and all their hours of service is affecting not just the region but St. Albert specifically," Heron said.
"I still firmly believe in regional transit, and so when ... and I'm not going to say if, because I'm going to be optimistic, when Edmonton fully uploads their entire transit department, (that) is when you'll see the efficiencies."
In an email, Jankowski told The Gazette that "the original business case always assumed a phased approach, with local service integration for the City of Edmonton occurring later in the process, not for opening day."
Similarly to Mayor Heron, Coun. Natalie Joly said she was frustrated and disappointed to see the cost for St. Albert's share of the regional network, but she knows "that St. Albert's going to be best served by regional transit because of those long term cost savings and access to locations throughout the Edmonton region."
"It's going to take longer than we'd hoped, which is disappointing," Joly said, adding, "the upside is that we're moving forward with regionalization."
In the commission's 2020 business case report prepared by Ernst and Young it states that "total estimated savings from operational efficiencies per year at maturity in 2026 remain positive at $3.9 million."
However, the business case was written prior to Morinville and Parkland County voting not to join the commission.
Coun. Sheena Hughes told The Gazette she's not hopeful the long-term cost savings as promised by the commission will materialize.
"Unfortunately it is clear in their budget that not only is it going to cost us $1.5 million more than if we hadn't been a part of it, but it's also clear in the budget that it's going to cost us even more the following year and even in the year after that," Hughes said.
"The amount that we're paying to be part of this commission is only increasing and the promised savings that we were told were going to materialize are never going to happen."
Included in the EMTSC's 2023 budget is a 2024 and 2025 estimated budget total, but the estimated cost for each municipality in those two years are not stated.
The commission's total 2023 budget, which only accounts for April 30 to Dec. 31, is slightly more than $29 million, and the 2024 estimate, which covers a full calendar year, is $41.7 million.
The 2024 increase includes $8.6 million funded through the eight member municipalities, however a breakdown of each municipality's estimated contribution is not included in the budget.
