City debt level will still be low with light rail project
Posted Jun 17, 2010 By Peggy Feltmate
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Tweet ThisEMC News - Plans for funding light rail are intended to ensure the city holds onto its AAA credit rating from Moody's Investors Service and AA+ (stable) credit rating from Standard & Poor. These plans are also intended to ensure property taxes do not need to be raised to cover constructions costs.
Provincial legislation restricts the amount of debt a municipality can incur. Under provincial restrictions, municipalities cannot incur debt commitments that will require more than 25 per cent of property tax revenues to meet.
The City of Ottawa's policy is a lot more conservative. Council imposed cap on debt of 7.5 per cent of revenues.
With the debt required for light rail, the city will still be below its own cap on debt.
Use of debt means those who benefit from $100 million a year savings from light rail will fund it
Light rail in a tunnel will make it possible to reduce OC Transpo's operating costs by $100 million a year compared to what they would be otherwise. This is possible because of the higher capacity of a light rail tunnel and because we will not be paying the costs of buses delayed by congestion in the downtown.
For people travelling downtown, light rail will mean more reliable service as the problems of buses lined up waiting to get to stops or delayed at intersections will be removed.
While light rail in a tunnel is the cheapest solution over the long term, construction costs are higher. Where we will see the benefit is after light rail starts operating in 2019.
Because it is people commuting and paying taxes in 2019 and later who will see the benefit, it makes sense that they be asked to help pay for the light rail project. Using debt to finance part of the cost means that will happen.
Work on downtown Transitway stops means they will be relocated
for the summer
This summer OC Transpo will be temporarily relocating five downtown transitway stops to allow construction work to take place.
The stops on Albert and Slater between Bank and O'Connor will be moved west to between Bank and Kent. The stop on Albert between Kent and Lyon will be moved west within the same block. The stop on Slater between Kent and Lyon will be moved west to between Lyon and Bay, while the stop on Slater between Bay and Bronson will be moved east within the same block.
Work being done at the transitway stops is intended to make service more efficient. At peak hour it is not possible to run more buses along Albert or Slater so measures are needed to make the maximum possible use of existing capacity to get us through to when light rail starts operating.
Working full-time for Kanata South
I appreciate the chance to hear from you about issues affecting our community. You can reach me at 613-580-2752 (office), 613-580-2762 (fax), www.feltmateforkanata.com or peggy.feltmate@ottawa.ca.
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