Province and city at odds over BRT funding

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This article was published 05/06/2015 (3844 days ago), so information in it may no longer be current.

THE province’s plan on how they will contribute to Phase 2 of bus rapid transit has drawn concern from the city’s finance chairman.

It was revealed Thursday the province’s $225-million contribution to Winnipeg’s Southwest transitway project will come in the same form as Phase 1: the city will borrow the money on the province’s behalf, and the province will make the payments on the loan.

However, the city’s finance chairman, Coun. Marty Morantz, said this isn’t an option for the city, which can’t afford to take on more debt.

And the city cannot begin issuing requests for proposals for the project until the payment plan for the project is firmly in place, he said.

“We are stuck at this point and I want to get unstuck,” Morantz said Thursday.

“It is essentially an off-loading of debt, from the province to the city and city council has mandated certain debt ceilings… the ratio we are allowed to go to is 60 per cent (of our revenue) and that is where we are at right now based on our existing debt, so if the province decided to propose to do this, the same way they did it last time, that is a concern that I have.”

He questions the fiscal position it will put the city in and whether it will force them to raise the ceiling beyond 60 per cent of their revenue.

Infrastructure and Transportation Minister Steve Ashton confirmed Thursday that while negotiations are still in progress with the city, “We are using the same model that got the first leg done.”

“We are prepared to cover the full cost, recognizing that it is a city asset, so we cannot put it on our books and amortize it,” he told reporters Thursday afternoon.

The city’s transit director, Dave Wardrop, said discussions are ongoing with the province about the flow of cash, with an agreement expected to be finalized in the next few months, but a firm commitment to the cash flow would allow them to issue a RFP.

“We can’t issue a contract or ask contractors to bid on a project until we have that information,” he said.

He noted that if the province moves forward with plans to force the city to borrow the funds, it will require council approval, which could lead to delays.

“Certainly we heard from the chair of finance that it is a type of agreement that is not in the interest of council, and therefore it would certainly create a problem with issuing an RFP and delivering it on time,” he said.

 

— with files from Bruce Owen

kristin.annable@freepress.mb.ca