'The Chicken Little attitude': Keating says Green Line financing jitters won't end the project
Keating said if the city uses their entire budget on construction, then financing will have to come from somewhere else
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The sky is not falling for the Green Line, according to council’s transit buff, Shane Keating.
“Everyone’s jumping the gun,” said Keating. “The jitters are out there…it’s a little bit of the Chicken Little attitude.”
On Monday, councillors who had just been shown how expensive the debt servicing for their Green Line financing was were in shock; some suggested it was a matter of whether or not they would do the mega project at all.
“The Green Line is in jeopardy if we don’t find a way to fund the financing costs,” said Coun. Druh Farrell.
"The situation is critical. We’re at Defcon 1 when it comes to whether or not we do the Green Line. I’m not ready to make that decision until we get all the information in June.”
During a tax room debate, where council wondered what to do with $23.7 million in provincial tax room, City manager Jeff Fielding called all of council into a secret meeting. He wanted them to keep that money for the Green Line.
Even Mayor Naheed Nenshi told reporters in June there would be an on-ramp or off-ramp decision for council.
On Wednesday he elaborated.
“It’s a lot of money, so council was quite concerned because we don’t have timelines on the provincial funding, and because the city’s own funding has been over a 30-year timeframe that we really had to have a good strategy to pay for the interest,” said Nenshi.
“As we’re learning, especially with the downtown and beltline design direction, it’s going to be expensive, so we’re going to need the full budget to pay for the construction and we’ll have to find a way to pay the interest somewhere else.”
Coun. Shane Keating said from what he understands, if the city took out a lump sum of $4.5 billion all at once financing would eat up about 30 per cent of the cost.
But he made one thing clear: the city won’t be taking a lump sum out all at once, and they haven’t been told exactly how much financing might cost.
“It’s difficult to say what the actual financing charges will be,” said Keating.
“It comes down to what will our construction costs be pegged at? What phase? What amount would we build? Where would be build?"
The bigger conversation has to be around changing expectations. Keating said if the city only spends $3.5 billion on construction, then the budget works. But all these tunnel add-ons are creating a “sky is falling” financing situation for the city.
“It’s bringing a lot of people’s perspective to reality,” said Keating. “Because the city’s has gone down the path of saying ‘if we’re going to do it, let’s do it right’ and in some situations if we want to do it right we’ve chosen the most expensive model.”
Jeff Binks, president of the LRT on the Green Foundation pointed out the city has already sunk at least $100 million into the project, and secured the biggest federal grant in the province’s history, but there are still question marks about the provincial commitment.
"Not moving forward with this, having any sort of ‘self destruct off-ramp option’ shouldn’t even be on the table," said Binks.
“The money we’ve spent, the time communities have invested in working towards this plan…the fact that they’re willing to leave all of that behind, and potentially getting cold feet is a major concern.”
Binks said the only conversation council should be having is how to complete the project in its entirety.