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TransLink property sell-off plan startles region's mayors

A SkyTrain travels into downtown Vancouver, on Wednesday April 11, 2012.

Darryl Dyck For The Globe and Mail/darryl dyck The Globe and Mail

Facing plummeting gas-tax revenues and other financial woes, TransLink says it will likely be forced to sell off some of its property holdings just to cover operating costs over the next three years.

TransLink CEO Ian Jarvis startled mayors at their monthly meeting Tuesday with the news. It's an option that the mayors see as a last resort, akin to burning down your own house to stay warm.

But, they say, they can see the regional transportation agency is in an impossible position.

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"In municipal operations, you usually can't fund operations by selling assets, by cannibalizing yourself," said TransLink council chair Richard Walton, District of North Vancouver mayor. "When organizations in the private or public sector have to do this, it's a bad sign."

But he said he can understand why TransLink is looking to sell off the former Oakridge bus garage and other properties, expected to bring in around $200-million, just to pay the operating bills.

Vice-chair Peter Fassbender, City of Langley mayor, said it's a "slippery slope" for TransLink to head down, selling its assets to pay the bills for running buses and SkyTrain.

But he, too, agrees the agency is in a no-win position until TransLink, the mayors, the board and the province can agree on a long-term, sustainable funding formula that everyone can support.

As it is, the region's beleaguered transportation agency is facing drastic revenue shortages for a number of reasons.

Mr. Jarvis pointed out that gas-tax revenues are going to be about $120-million less over the next three years than what TransLink had projected when it devised its three-year plan last summer.

Gas-tax revenue shows all signs of being tapped out, he said – one of the biggest shocks to the TransLink system.

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The last two-cent-a-litre tax increase that went into effect in April isn't bringing in any new revenue because people are buying less gas: they're riding the bus, carpooling, buying more fuel-efficient vehicles, or driving out of the region to buy gas.

"This takes gas off the table as a future revenue source," said Mr. Walton.

As well, in the past two months, TransLink has had the door shut in its face on three other revenue sources.

Premier Christy Clark said she wouldn't support a vehicle levy or other new tax to come up with the $30-million a year needed to pay for big rapid-bus improvements in the region's suburbs south of the Fraser River.

Instead, she ordered an audit to find efficiencies, which she said might cover that $30-million bill.

Then, the mayors said they would not allow a property-tax increase to find the money if the audit could not uncover enough savings.

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And finally, in April , the province's transportation commissioner, Martin Crilly, turned down a request for a substantial fare increase that was supposed to bring in another $20-million a year.

The province and Mr. Crilly said the agency should become more efficient. But Mr. Jarvis pointed out in his presentation to mayors that the agency's budgets for the next three years had already factored in $86-million in savings through more efficient operations.

Mr. Jarvis said the agency has been planning since 2009 to sell the Oakridge bus garage, currently assessed at $70-million but likely worth much more if the agency can get the city to rezone the land.

However, under better circumstances, that money would have gone to building new facilities, not simply paying for operations, he said.

Meanwhile, the Tuesday meeting also saw division on the mayors' council over the province's decision to put two Metro Vancouver mayors on TransLink's appointed board of directors. That was hailed by some civic leaders as an important step in fostering accountability. Others, however, saw it as a divide-and-conquer strategy intended to cripple a united council.

The appointment of Mr. Walton and Mr. Fassbender is intended to help improve communication and strike a balance between TransLink and the mayors' council, said Transportation Minister Blair Lekstrom after the meeting.

"[The mayors' council]asked for an opportunity to have more input on the board," Mr. Lekstrom said. "This is a very good step toward that, having both the chair and the vice-chair from the mayors' council - who were elected by the mayors around that table - to go sit on the board."

Mr. Fassbender said their presence would bring "a whole different lens to the discussions," and he would work to open closed-door talks to the public.

But Burnaby Mayor Derek Corrigan views the move as a strategic attack on the council by the province.

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About the Authors
Urban affairs contributor

Frances Bula has written about urban issues and city politics in B.C.’s Vancouver region, covering everything from Downtown Eastside drug addiction to billion-dollar development projects, since 1994. More

News reporter

Based in Vancouver, Andrea Woo is a general assignment reporter with a focus on multimedia journalism. More

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