New deal would give Metrolinx bigger share of Presto Card revenue
New ten-year deal goes to transit commission next week.
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Metrolinx will get three times more from the city as part of a deal to extend the use of Presto cards on OC Transpo.
In a deal the transit commission will be asked to approve next week, Metrolink will continue to provide Presto card service to OC Transpo for the next 10 years, but they will take six per cent of every fare instead of taking two
That increase will be phased in gradually beginning in 2018 and will be fully in place in 2021.
Pat Scrimgeour, the city's director of transit customer systems and planning, said if the new agreement is approved, the city would cover the costs as it always does.
“We are looking at those for future years budgets, to be offset by either reduced costs or to be offset by budget increases,” he said.
Scrimgeour said Presto is slowly becoming a much larger share of the city’s transit system and they expect that to continue.
“When people have moved away from paper passes and paper tickets it will be about two-thirds of all of our revenue process through the system,” he said.
In 2027, the last year of the new deal, the city expects to bring in $223 million in fare revenue through Presto and pay Metrolinx $13.9 million.
Coun. Marianne Wilkinson said she will have questions for staff next week, but since several grants are tied to the city’s use of Presto it will be difficult to avoid.
“We don’t have any choice,” she said. “The problem is of course that we are required to use the Presto card in order to get the grants from the province.”
She said all of the municipalities using Presto will have to take a unified stand to keep costs down.
“The different municipalities that use the system have to work together to be consistent.”
WHAT DOES THE NEW PRESTO DEAL MEAN FOR YOU?
What is happening with Presto cards?
The city’s transit commission will consider a plan next week to sign a new agreement with Metrolinx, the provincial transit agency, to continue using the Presto card system for OC Transpo, but at slightly higher costs.
Yes, currently the city pays Metrolinx two per cent of each fair paid with Presto cards, while that will stay the same next year under the proposal it will then start to rise. In 2018, it will hit three per cent of fares and then rise to six per cent by 2021 were it will hold until 2027.
For the city, this means that costs will gradually rise. In 2018, the city expects to collect $128 million in fare revenue through Presto and pay $3.9 million. By 2027, the city is expecting to collect $223.9 million in fares through Presto and pay Metrolinx $13.4 million.
The city eventually expects 65 per cent of revenue to come from Presto cards. It is unclear at this point if the higher fees will mean higher fares for users.
Can the city say no?
Councillors could say no and send city staff back to the negotiating table. The six per cent fee is higher than the city wanted, but lower than the 10 per cent Metrolinx was looking for.
The city also secured an agreement that if other municipalities secure a better deal with Metrolinx then Ottawa gets that better deal as well.
What about the U-Pass?
Metrolinx is considering a solution for U-Pass, but for now it’s not part of this deal. The city has also made clear that any solution for U-Pass can’t add new costs to the system.