The service efficiencies and cost savings expected to come from a regional transit network are appearing further away than initially thought for local municipal leaders.
A combination of recent decisions made by Edmonton's city council and fewer participating municipalities caused significant changes to the regional transit operating plan set to begin next year, Paul Jankowski, the CEO of the Edmonton Metropolitan Transit Service Commission (EMTSC), told council on Nov. 22 during a meeting.
In March, Jankowski said, Edmonton's city council expressed concerns about the level of commitment required from Edmonton in the original regional network business case, and "indicated that they would not follow through, or that this council was not inclined to follow through on the notion of modifying existing services in order to build a regional network.”
Jankowski said that the commission, "with the board's direction," proceeded to modify the operating plan so that Edmonton's transit network remained unchanged.
"They're keeping 100 per cent of the cost of the existing service and they're being asked to actually add service," Jankowski said, referencing Edmonton's $10.3 million requisition for 2023, which includes the city's share of 12 new regional transit routes set to begin service next year, a base fee for the commission's operations, and Edmonton's share of the commission's debt.
Edmonton's desire to preserve their existing transit services and keep the operation of it in-house, for at least the near future, has cast doubt on the viability of a regional transit network to achieve cost-savings. The regional system's fiscal appeal was due to the possible efficiencies achievable through consolidation of service delivery.
“Without our biggest regional player involved in a bigger way I think it's going to be very hard to get into a true cost savings mode," Coun. Mike Killick said in an interview.
"The participation of Edmonton has been scaled back for their own reasons, which was totally Edmonton's right to do that, but without Edmonton being a bigger partner in it, the savings aren't there."
The Gazette contacted the City of Edmonton to ask why council wanted to leave the city's transit service unchanged, but did not receive a response prior to deadline. However, CBC reported in March that Coun. Anne Stevenson and Coun. Karen Principe were concerned that the regional transit system would result in decreased service levels for Edmonton's residents.
In the CBC article, Jankowski is quoted as saying "it is not our intention to bring forward any recommendations that significantly impair or reduce service."
"When Edmonton made their decision, it really forced us to pivot,” Mayor Cathy Heron said in an interview with The Gazette last week.
“I feel that as we grow as a region that we have two options: we can amalgamate into one giant municipality or we can do regional service delivery, which saves money."
Jankowski told council that when the original business case was published, the idea was for Edmonton's transit service to fully amalgamate into the commission in four or five years.
"At this point in time, those discussions have not progressed," Jankowski said.
Changing business case
In a 2020 business case published by Ernst and Young for regional transit in the Edmonton area, the report's authors stated that a consolidated transit system with one oversight body would be more efficient, and therefore financially beneficial for the municipalities who make up the consolidated system.
As multiple municipalities currently offer similar transit routes in Edmonton, the Ernst and Young report says, a regional transit system would be able to combine those routes, and remove duplicated services.
“Service efficiencies gained through the consolidation of the service delivery model can be classified into two categories: revenue hours [and] non-revenue hours. Revenue hour service efficiencies are best described as those resulting in the consolidation of routes, thus reducing the service hours required to deliver the same service. Non-revenue service efficiencies are a function of synergies that are realized through the consolidation and reorganization of the service delivery model," the report says.
The original business case estimated that 1,538 hours of savings could be realized through a regional transit system with 13 municipalities participating. However, in June of 2020, the commission published an amended business case in response to the onset of the COVID-19 pandemic, and the decisions made by the county councils of Sturgeon, Strathcona, and Leduc not to join the commission.
Despite the three municipalities not joining the commission, Ernst and Young estimated that 1,256 hours of savings could still be found through regional transit delivery.
An estimated hours of savings number is not included in the EMTSC's 2023 approved operating plan, however the commission's regional transit schedule for 2023 is still in development, Jankowski told council on Nov. 22
The 2023 operating plan also excludes Parkland County and Morinville, who voted not to join the commission in 2020 after the amended Ernst and Young report was published.
St. Albert's rising share
In the business case that included the 13 municipalities, St. Albert's estimated overall share of the EMTSC budget for the first year of service delivery was 19.2 per cent, which was the third largest share behind Edmonton and Strathcona County. Following Leduc, Strathcona, and Sturgeon County's decision not to join commission, St. Albert's estimated overall share rose to 28.6 per cent.
Despite the increased share, St. Albert's estimated requisition for the first year of service remained the same ($10.6 million) as the estimated budget for 10 municipalities instead of 13 was reduced in the amended business case.
In the EMTSC's approved 2023 operating budget, St. Albert's overall municipal funding share is 36.9 per cent, with a $9.3 million requisition for eight months of service. The approved budget does not explain what St. Albert's requisition for a full year of service would be, however the requisition requires St. Albert to add $1.45 million to the city's overall transit budget for 2023.
Molly Bujold, a spokesperson for the City of St. Albert, told The Gazette in an email on Nov. 18 that the city's 2023 transit budget, without the additional $1.45 million, stood at $11,977,400. This is a 7.2 per cent increase compared to the 2022 transit budget, which was $11,177,600, Bujold said. She added that the increase was "mostly attributable to fuel costs increases, parts and maintenance, and a new operator contract with our service provider."
Another difference between the previous business case and the 2023 approved budget is the formula used to calculate the member municipalities base fee, which is a relatively small levy imposed on each municipality to fund the non-service operations of the commission.
In the previous business cases, the base fee was calculated with a $50,000 fixed amount per community, and an additional $2.00 per resident. In the approved 2023 budget, the base fee is calculated with a $15,000 fixed amount, and $3.72 per resident. Using the original formula, St. Albert's base fee came out to $186,000, according to the amended business case, and in the approved 2023 budget, St. Albert's base fee is $269,074.
'Certainty of term'
In an interview, the Mayor of Strathcona County, Rod Frank, said the county's decision in 2020 not to join the regional transit commission was "because there wasn't a certainty of term."
"Just like any investment, if you're going to make an investment in the stock market, you want to know what that all means, you need to know the details upfront," Frank said. "This particular deal to Strathcona County didn't have enough detail.”
However, Strathcona County will continue to be open to regional cooperation in the future, Frank said, and will continue to work with Edmonton on transit as the County currently offers transit services to and from Edmonton.
“We look forward to further cooperation in the region on bus rapid transit, on transit generally and on economic growth," Frank said.
“Any topic that makes sense for us to tackle together we'll be there.”
Similarly, Lindsay Chambers, a spokesperson for Leduc County, told The Gazette that their council also had financial concerns about a regional transit system, which is why the county decided not to join the commission.
“After studying the business case provided by the commission’s consultant at the time (which was Ernst and Young) and talking through details like the voting structure, routing costs and the overall pace of the project, our council decided they could not justify the financial and decision-making impacts that joining the EMTSC would have on Leduc County and its residents," Chambers said.
For the Town of Morinville, the decision not to join the commission was due to the cancellation of a pilot project in 2020 that, once completed, would have analyzed the town's transit ridership and demand, according to town spokesperson Tracy Dalzell-Heise.
"Due to the COVID-19 pandemic we cancelled this pilot, which caused an inability to gain full understanding of ridership," Dalzell-Heise said.
"Financially it did not make sense to move forward [and] have board appointment on the [EMTSC] at that time without this project happening."
In an email, Sturgeon County's Mayor, Alanna Hnatiw, said joining the commission at the time didn't reflect community priorities as the county does not currently provide transit services to residents.
"Given the wide range of regional municipal initiatives, the county requested to participate in the regional transit initiative as a non-contributing associate member, as there is minimal application for the county at this time," Hnatiw said.
"We continue to monitor the progress of regional transit (along with other regional initiatives) to help identify when and if we should be involved.”
Coun. Wes Brodhead, who serves as St. Albert's representative on the EMTSC, as well as the chair of the commission, said in an interview that he hopes that the municipalities who voted not to join the regional network will change course in the future.
"The hope is in the future that they'll see it's worthwhile to work together to get this thing done as a region," Brodhead said. “I think there's indication that if this thing gets up and running than that will occur.”
"We'll go forward and we'll see what the eight partners do and if they all support it, then we'll continue on and if our big partner (Edmonton) chooses not to support then we'll have to deal with that when the time comes as well,” Brodhead said.
Edmonton city council has yet to approve the funding requisition from the EMTSC for 2023, and that decision will be made as part of the city's budget deliberation process, which begins on Dec. 1 and is scheduled to end on Dec. 16. City spokesperson Adrienne Cloutier could not say which day Edmonton's council will vote on the topic.