City Council decided last week to focus efforts on securing the remaining funding needed for the construction of the Valley Line LRT – Stage 1 (Mill Woods to City Centre) from our provincial and federal partners.
This was an important affirmation of the commitment to the LRT expansion.
In 2009, Edmonton City Council adopted a Long-term LRT Network Plan. This plan saw LRT extend from South Campus to new stations at Southgate and Century Park in 2010, the expansion of a North LRT line to NAIT (currently nearing completion), engineering of a Southeast to West line from Mill Woods to Lewis Farms (now underway), and future build out options.
Edmonton has already committed $800 million to the total $1.8 billion cost of the Valley Line from Mill Woods to City Centre. But sharing the cost with other orders of government is critical. For every dollar in taxation Edmonton households pay, less than 8 cents goes to the City. The rest goes to the Province and the federal government. This helps show why the City can’t fund the project alone.
LRT expansion projects cost more than any other City project, but LRT remains a top priority for the City because the value is worth the investment. LRT helps Edmonton meet the public transportation demands of its residents and visitors. The Valley Line urban low-floor LRT system also allows us to foster “Transit Oriented Development.” Benefits include:
The City is optimistic negotiations over the next few months will secure commitments from other orders of government to share the costs for the Valley Line because it is vital infrastructure in the Alberta Capital, and a benefit to one of Canada’s economic powerhouses.
Every LRT project the City has built or plans to build relies on partnership funding from the federal and provincial governments. For example, the City received $597 million from the federal and provincial governments for the Metro Line (North LRT) that is nearing completion. The City has already secured $250 million in funding from P3 Canada, a federal agency, for work on the Valley Line.
The City recognizes the financial challenges faced by other orders of government, but a commitment to start funding in 2015—when the federal government has committed to balance its budget—would fit with Edmonton’s planning and cash-flow needs.
Council will meet again on November 20, 2013, to determine next steps. Administration is ready to proceed immediately with the project upon receiving further direction from Council.
LRT Funding and Arena Funding are Not Related
It is important to respond to some erroneous comments about project financing. The downtown arena project and the Valley Line LRT project are not competing for the same funds and decisions about the LRT project are not related to the arena project.
The funding model for the downtown arena does not have an impact on spending on other City projects. LRT projects and the downtown arena project are funded from different sources.
Of the City’s portion of funding for the arena, $80 million will come from incremental revenue growth (i.e. increased parking revenues) as a result of the arena, and by reallocating the current subsidy paid to Northlands for Rexall Place. Another $120 million will come from the Community Revitalization Levy (CRL).
It is important to understand that the arena is a catalyst project that will spur future development. Through the CRL, the growth in tax revenue from that future development is used to pay for the original catalyst project (the arena itself), as well as other projects in the downtown.
More importantly, this funding model means Edmontonians’ property taxes will not increase to pay for the arena. It also means the arena will not use provincial infrastructure money, such as Municipal Sustainability Initiative (MSI) funds, which leaves those funds for other City projects.
Both LRT expansion and the arena development are important investments in our city’s future. City Council and Administration are committed to advancing transformational projects that advance our ability to offer citizens a high quality of life and continue to attract investment, business and talent to Edmonton.