This report provides a status update on the technical and planning an*lysis underway for priority transit projects, and seek City Council approval to enter into agreements with the Province of Ontario and Metrolinx for cost and revenue sharing for key transit initiatives (the "Agreements"). The report also outlines a recommended funding and financing strategy for the City's share of costs.
Technical and Planning an*lysis
In July 2016, City Council advanced key projects currently in the planning and early design phase that comprise Toronto's 2031 transit network plan. In particular, City Council made the following decisions:
- Approved a SmartTrack/Regional Express Rail (RER) integration scenario with six new stations on the Stouffville/Lakeshore East GO Corridor (Finch East, Lawrence East, Gerrard, and Unilever) and the Kitchener GO Corridor (Liberty Village and St. Clair West);
- Approved an Eglinton West LRT extension with 8 to 12 stops between Mount Dennis and Renforth Gateway and five potential grade separations;
- Removed a three-stop Scarborough Subway Extension (SSE) option from further consideration and supported an express SSE option with final alignment to be confirmed following the completion of a third-party review of cost estimates;
- Approved funding to develop the Eglinton East LRT extension to 5 percent design; and
- Supported the first phase of the Relief Line along the Pape-Eastern-Queen alignment, subject to an a**essment of an alignment west of Pape on Carlaw Avenue (between Gerrard Street East/ the GO rail corridor and Queen Street East).
The SmartTrack project includes the SmartTrack/RER integration with six new stations noted above, and the Eglinton West LRT extension from Mount Dennis to Renforth Gateway ("SmartTrack" and the "SmartTrack Project").
On June 28 2016, the Metrolinx Board approved the SmartTrack/GO RER integration scenario with six new stations at the locations noted above. The Metrolinx Board also requested that municipalities commit to funding SmartTrack, through Council resolution, by November 30, 2016.
Additional work has been undertaken by the City of Toronto and the Toronto Transit Commission (TTC) in partnership with the Province of Ontario and Metrolinx to advance planning and technical an*lysis on all projects. An update on each project is provided in this report.
Cost and Revenue Sharing with the Province
In July 2016, City Council also authorized the City Manager to negotiate cost-sharing and intergovernmental agreements with the Province of Ontario for shared costs a**ociated with several transit projects, including: SmartTrack/RER integration, Eglinton West LRT, operating and maintenance on Metrolinx-Toronto LRT projects, municipal utility and infrastructure within Metrolinx-owned rail corridors, and any other outstanding transit-related matters.
City and provincial staff have prepared a term sheet between the parties on cost and revenue sharing for key initiatives as directed by City Council (the "Summary Term Sheet") which is included as Attachment 1 to this report. Subject to City Council approval the Summary Term Sheet shall form the basis of the Agreements between the parties.
The proposed terms reflect the partnership of the City and the Province in constructing, operating and maintaining Toronto's expanding transit network. The Summary Term Sheet has been negotiated to seek an equitable distribution of costs among the parties based on the roles, responsibilities and governance arrangements overseeing each a**et throughout the lifecycle. Principles of the Summary Term Sheet include a shared objective of maximizing the investment in transit in Toronto and the region to increase mobility and choice. It also ensures Toronto's contributions are incremental to existing Provincial commitments, such as the Province's $13.5 billion (2014$) Regional Express Rail Program, and the Province's $8.4 billion (2010$) capital commitment to the Metrolinx Rapid Transit Program in Toronto.
This report recommends that City Council adopt the Summary Term Sheet and direct the City Manager to finalize the intergovernmental negotiations through a phased approval process described in this report and in Figure 1 of Attachment 1 to this report (the "Stage Gate Process"). A summary of the key terms is provided below.
Summary of Terms
SmartTrack
The Province has agreed to integrate the six new SmartTrack stations into the RER program. This report recommends the City commit to funding 100 percent of the SmartTrack stations capital costs, subject to key conditions, and the incremental operating and maintenance (O&M) costs resulting from SmartTrack on the Kitchener and Stouffville GO corridors. The Province would own the stations and be responsible for the lifecycle maintenance costs.
As part of the approved SmartTrack concept, the City is responsible for the costs of advancing the planning and design of the Eglinton West LRT to the Renforth Gateway. This report recommends City Council request the City of Mississauga and the Greater Toronto Airport Authority (GTAA) to indicate their commitment to extending this project to Pearson Airport.
Stage Gate Process
In order to facilitate future required decisions for SmartTrack and an a**essment of City conditions, the City and Province will establish a Stage Gate Process. This Process allows City Council to make key decisions at pre-defined stages of the SmartTrack project. If City Council decides to cancel or alter the Project scope, the City will be required to make the Province whole for costs incurred to-date. Importantly, City Council will be provided the opportunity to review key City conditions, such as the outcome of fare integration, prior to advancing to subsequent stages of the Project. This report recommends City Council make a firm funding commitment to the planning, design and procurement preparation costs, and a conditional commitment to the full cost of SmartTrack.
Regional Express Rail
Metrolinx has also identified five grade separations required for RER. Under the proposed terms, the Province will be responsible for 85 percent of the costs of these grade separations and the City will contribute the remaining 15 percent. The City's contribution to these RER grade separations is estimated to be approximately $62 million.
As part of the Regional Express Rail (RER) program, the Province has identified two new stations at Spadina and Bloor-Lansdowne. In addition, Metrolinx is undertaking upgrades to existing stations across the entire GO network in Toronto to facilitate RER. The Province has requested the City contribute towards the capital costs for these projects. The proposed terms commit the City's outstanding payment in respect of its GO Transit Growth Related Capital Costs (GO Growth) obligation, $60 million, as payment for these RER expansion projects. Furthermore, the City's GO Growth obligations to 2024/25 will be fulfilled by the City's contributions to SmartTrack.
Operating and Maintenance Costs of the Metrolinx Light Rail Transit (LRT) Projects
The Province has committed 100 percent to the capital costs of the LRTs under the Toronto Metrolinx LRT Program Master Agreement. As the owner of the a**ets, the Province will also be responsible for lifecycle maintenance costs a**ociated with the LRTs. It is important to note, the Master Agreement requires an operating agreement to be finalized at least two years in advance of the launch of revenue service for any of the Metrolinx projects. The Master Agreement did not contemplate which party would fund the operations and maintenance of the LRT program. In Budget 2016, the Province formally requested that all municipalities benefiting from rapid transit investments contribute to the operating and maintenance costs of the projects.
The proposed term sheet commits City Council to fund the operating and day-to day maintenance costs a**ociated with the LRT Program (Crosstown, Finch, and Sheppard), and in exchange:
- The Toronto Transit Commission (TTC) will operate the LRTs
- The City/TTC will set the fare and service level, in consultation with Metrolinx; and
- The City/TTC will retain fare revenues and non-farebox revenues.
The gross costs will be partially offset by reductions in bus operating and maintenance costs on these routes and also by increases in fare revenue as a result of increased ridership. The principles applied to the operating, maintenance, operations and ownership of the LRT Program, would also apply to the proposed extensions of the Crosstown project (Eglinton West LRT and Eglinton East LRT).
Georgetown South Project
In March 2015, City Council considered as part of item EX3.4, 4ai "Financial Issues Involving Metrolinx: Georgetown South, GO Transit Capital Expansion Contributions, and Union Station" a tentative agreement between the City and the Province/Metrolinx for costs a**ociated with the Georgetown South Project. The proposed terms and rationale are outlined in the confidential attachment to the report (Attachment 6). This report recommends City Council approve the terms of the tentative agreement and contribute $95 million towards the upgrades in this corridor.
Utility Relocation
The Summary Term Sheet also proposes City Council approve the cost-sharing principles tentatively agreed by the City and Province in March 2015 with respect to utility relocation costs, included in the confidential attachment (Attachment 6) of this report. The principles will inform how costs incurred for utility relocations and/or replacements on Metrolinx lands in order to implement the GO RER program will be apportioned between the City and Metrolinx going forward.
City Funding and Financing Strategy
Finally, this report recommends a funding and financing strategy for the City's share of costs in accordance with the proposed terms, and outlines the required contributions from other governments and third parties on key projects.