LRT will cost Hamilton between $6.4M and $16.5M per year to operate, new report says

The citysays running a light-rail transit (LRT) system in Hamilton would cost somewhere between an estimated$6.4 million to $16.5 million per year, depending on ridership changes and how many buses are removed from the route.

City council's general issues committee will examine areport breaking down possible operating costs on Wednesday. So far, councillors are mixed on the proposed project.

If ridership grows and more buses are removed,the report says, the 14-kilometre LRT line would cost less to operate.

Two weeks ago, Metrolinx and the Ministry of Transportation spent nearly six hours pitching a $3.4-billion offer from the federal and provincial governmentsto build LRT in Hamilton tocity councillors.

Vote on advancing withMOU expected Wednesday

Mayor Fred Eisenberger planned to movethat staff negotiate a memorandum of understanding toformalize their commitment, but the vote was deferred to Wednesday, June 16.

The plannedroute would stretch from McMaster University to EastgateSquare, running alternately on King and Main streets.

While the deal would cover capital costs, the City of Hamilton would still have to pay to run the system.According to Metrolinx,the estimatedgross annual cost of operating and maintaining the LRTin 2019 dollarswould be $20 million.

Councillorswanted more time to decidewhether the city would take its first step in moving forward with the offer, and directed staff to get information on the net operating costs.

Given the time constraints, staff said, the cost estimates in the report are "high level" and only focus on a "few key factors."

The low end of the range

In the first scenario, HSR would remove the B-Line express and cut the operating hours ofthe #1 King and #5 Delaware bus routes by one third.

This equates to removing 29 buses from the system. The city's initial estimate was18 buses, but an increase in LRT operating hours has increased that number.

No growth in ridership would mean the LRT would cost $10.4 million to run. But if ridership grows by eight per cent, it would cost $6.4 million.

But Eric Tuck, president of Amalgamated Transit Union Local 107 that represents HSR workers, says directing staff to cutbuses and operatorsis "completely irresponsible and cause for serious concern as we cannot sacrifice HSR to pay for LRT."

"We need to ensure that the addition of LRT to our transit portfolio isn't a drain on the rest of the system and negatively impacting our financial ability to provide vital transit service to all Hamiltonians today, and into the future," he said in a media release.

Cost depends on ridership

The union saysthe BLAST network routes across the city designatedfor rapid transit must be built out to increase ridership. If not, the union said, "we are basically saying the rest of Hamilton isn't important and is not deserving of equal dedicated transit service."

Both the federal and provincial government, each offering $1.7 billion, have said this money is only available for LRT.

In the second scenario, only the #10 express bus is removed. That equates to 13 buses.

If ridership stayed the same, LRT would cost $16.5 million. If ridership grew by eight per cent, it would cost $12.5 million.

The methodology for the cost estimates comes from a Rapid Ready report thatrecommended LRT, which council approved in 2013.

Didn't take into account levy impacts, fare increases over time

The estimates were recalculated to use 2019 figures from HSR operations, as well as the estimatedgross annual cost of operating and maintaining the system.

Staff say they didn't take intoimpacts to the levy a 2017 analysis estimated a non-transit levy impact of $2 million because of costs like winter maintenance and waste collectionincreases in fare over time or increased costs with Presto, if either were to occur.

The Ministry of Transportation previously said that the Ontario would retain ownership of the LRT and pay the constructionandlifecycle costs.

Staff are also presenting a report that looks at development along the corridor, which includes 120 plan amendments, zoning applications and site plan applications since 2010, and an average of over $95 million in private sector construction costs per year.

The previous Ontario Liberal government committed $1 billion to the project in 2015. ButMinister Caroline Mulroney's PC government cancelled it in December 2019, saying that the costs were too high and Hamilton couldn't afford them.

In February, Ontario said it would offer $1 billion if the federal government pitched in too.The $3.4-billion deal was announced in May.

Hamilton EastStoney Creek MP Bob Bratina has asked theparliamentary budget office to review his own federal government's contribution.

The meeting on Wednesday starts at 9:30 a.m., and the city will stream it online.