Adam Vaughan's specious "$300 million" headline

It has been some time since the words “Adam Vaughan” have appeared on this blog, and I know you’re all grateful (see prior representative post “And Adam Vaughan wants to be Toronto’s Mayor?” Nov. 30-12) for that.

However, thanks to his flurry of scolding last week, I wanted to help you understand the tactics that Mr. Vaughan utilizes to get his way at City Council. And they are as formidable as they are specious! I know that some of you find it odd that a man who has a hard time telling the truth has no trouble being able to squeeze his name into the paper whenever the topic is the Billy Bishop Toronto City Airport; let’s just say that he’s quick with the quip, even if the facts suffer, but that still draws the media’s attention just the same.

I suppose that’s why he won’t join the Twitterverse. It’s just too dangerous a forum for someone who might be tempted to be constantly fibbing; at least that’s what these 13 letters on the theme would lead you to surmise.

Last November, the City of Toronto released a staff report outlining the work of the City’s independent consultants regarding the Porter Proposal to bring new technology jets to Billy Bishop. In that report were a series of what I’ll call “gating items” that City staff believed had to be addressed before they could recommend that Toronto City Council support Porter’s proposal. For the past 60 days, the TPA team has worked with City staff to address these many points. If it’s of interest, you can review the pages upon pages of detailed answers here, that flowed from the City’s Nov. 21/13 report.

One key element of the City Staff Report involved infrastructure improvements that the City’s staff and independent consultants believe are necessary for Eireann Quay, as well as Queen’s Quay West, the Canada Malting development site and Ireland Park, for the Porter Proposal to succeed. Given the quantum of dollars involved, and that the funding was for City infrastructure, rather than airside upgrades, the TPA wrote to Ottawa and Queen’s Park last Monday to bring this to everyone’s attention.

A range of groundside and even some dreamy TTC infrastructure improvements were considered in the City’s Report. It is natural for folks to dream when given the chance, and there may have been a bit of that at work as you’ll see shortly. Based upon discussions with City staff and the actual recommendations of the Nov. 21/13 Report, the TPA came away with the impression that up to $100 million of groundside infrastructure improvements could be sensibly deployed on the City-side to optimize the flow of people, vehicle traffic and transit routes in and around the BBTCA’s immediate neighbourhood. So far, so good. But this was complicated by the fact that the TPA’s government-approved borrowing limit is currently $52.1 million, and part of that is already used by earlier investments.

The cost ($75-$100 million?) of the construction of the required 200 metre runway extensions (including the end safety area component) of the Porter Proposal would be in addition to the groundside infrastructure undertaking called for in the City Report. The TPA believes that the PV of that project financing can be managed via a P3 strategy, but not both the City and Airside components.

The City has made it clear that the TPA, as the airport’s operator, needs to arrange for the financing of these two key elements of the proposal to enhance the airport’s utilization levels.

As a self-financing government business enterprise, the TPA’s financial resources are finite, and the Federal government has not granted the TPA sufficient borrowing capacity to undertake all of the work associated with the City Report. Airport revenues are generated through i) fees (such as landing fees or rent) from carriers, charter operators and the general aviation sector, and ii) the current $20 Airport Improvement Fee (“AIF”) that is paid by all departing commercial passengers and can only be used for capital expenditures related to the airport; although the AIF is cheaper than the $25 fee paid by Pearson passengers, the operation is substantially smaller, too.

Thus the dilemma.

It’s not that things aren’t going well on the financial front at the TPA. For fiscal 2012, TPA earned a net income of $19.6 million; to put that in perspective, in 2007, the year the Federal government began to make changes to the composition of the TPA Board of Directors, the TPA’s operating loss was ~$1.8 million. A $20+ million earnings turnaround in the space of five years, despite a global recession in the midst of this period, is something to be proud of. That said, the agency does not have the financial capacity to pursue this project on its own, should it eventually receive a “green light” from City Council.

There is great pride in the fact that the TPA’s self-financed $82.5 million P3 pedestrian tunnel project was undertaken without tax dollars. It is being paid for entirely by airport passengers via their $20 Airport Improvement Fee. And, yes, you saw some OOH ads last year to that effect; we thought that our passengers and customers deserved to be acknowledged for their self-sufficiency.

The high profile airport tunnel was first started in 1935 by the government of the day, before being cancelled a few months later. After a bit of elbow grease post-2009, here were are in 2014 with construction more than half complete. But the financial burden of that important infrastructure asset creates a financial reality as the remaining (i.e. non-tunnel) portion of the AIF can only prudently support the runway extension-related infrastructure upgrades associated with the Porter Proposal, should it be approved, plus the ongoing capital expenditure needs of the airport’s operations. Think: additional noise barriers and so forth.

There’s the challenge: the TPA does not have the financial capacity to unilaterally finance the most sensible of the proposed groundside infrastructure improvements sought by the City of Toronto’s consultants. We can tackle some of it, and have already offered to do so. But, once it became clear that the project is unlikely to proceed without the support of one of more other levels of government, the $100 million request was made given that it fit with the mandates of the Building Canada Fund, the Gateways and Border Crossings Fund, P3 Canada Fund, etc. These are funds that have already been set aside by governments to fund these types of projects. The various governments funding envelopes will be spent somewhere and on something; the question for officials and their Ministers is: what?

According to the most recent January 2014 poll by Ipsos Reid, the Porter Proposal has retained the support of 61% of Torontonians, while opposition has dropped to 35% (from 37% last August).

The TPA’s infrastructure funding request wasn’t unique, as governments of all levels are forever looking these kinds of projects. From BMO Field to the Crosstown project to the Scarborough subway or the Union Station upgrade.

Remember the Skydome? Funded largely by governments at the time (almost $1B was spent on that project in current dollars), I don’t recall anyone saying it was a subsidy of John Labatt Ltd. And its not just big projects. The hockey arena at St. Michael’s College is undergoing renovations thanks to Federal infrastructure funds, for example.

It may well be that the proposed Billy Bishop groundside infrastructure improvements won’t make the grade at Ottawa or Queen’s Park, and that’s the kind of choice that governments have to make each and every day. Appropriately so.

At the same time, continued popular support for the Porter proposal matters, as I outlined in my speech to the Toronto Region Board of Trade last October. If the public didn’t support the concept, there wouldn’t be much of a business case. Not to mention the analysis of the City’s own consultants (pg. 8), who believe the Porter Proposal would generate “significant positive economic impacts” totalling $175-$300+ million annually, if approved. Who in business wouldn’t invest $100 million to generate that kind of return on capital each and every year thereafter?

Adam Vaughan, for one, believes his time as an Assistant Manager of a bar gives him the private sector cred to make these types of decisions on your behalf. He could be right. I once waited on tables for a summer at a Pearson Airport bar, so at least we have that in common.

For the folks who want to close the airport, such as Vaughan, the are constantly trying to distract the public from any rationale discussion. “Pave the lake!” The fact that 90% of Torontonians told Ipsos Reid last year that Billy Bishop is “an asset to Toronto” appears not to matter. For Vaughan, the idea that other governments would help enhance this “asset” by improving the airport’s access, rather than close it down — or frustrate it (as he does at every opportunity) — is anathema as he told The Toronto Star’s Vanessa Lu last Friday:

$100-million “doesn’t even come close” to addressing the traffic congestion problems around the island airport now, let alone if the expansion were approved.

“A hundred million dollars sounds like a lot of money, but it’s a drop in the bucket for what the city needs to even think about….

Really? What thin reed does Vaughan rely on for this claim? Let me explain. Here are some examples of what the city’s transportation consultants (BA Group) came up with as things we all could do down there at BBTCA. Think of it in the classic “Goldilocks” approach to giving advice to government:

– modification to the Dan Leckie Way / Lake Shore Boulevard intersection: $1 million (pg. 5)
– extend the TTC streetcar line to a new underground mainland terminal: $135-$165 million (pg. 16)
– extend BBTCA underground pedestrian tunnel north to Queen’s Quay and Bathurst: $250-$300 million (pg. 16)
– extend BBTCA Pedestrian Tunnel North to A New Entrance at Corner of Queens Quay / Bathurst to Provide Improved Connection to Existing TTC Streetcar Stop: $30-$45 million (pg. 16)
– Dan Leckie Way road network improvements: $50-$60 million (pg. 16)
– BBTCA underpass: $110-$135 million (pg. 16)
– extend Martin Goodman Trail via a wide ‘land bridge’ over Eireann Quay: $50-60 million (pg. 21)

Lots of good ideas there, and a few that surely aren’t, but the list definitely serves to stimulate your thinking about what might be both practical and useful to improve the flow of people and traffic at the bottom end of Bathurst Street — in the event that City Council approves some form of Porter’s Proposal. This laundry list is the source of Vaughan’s “$300 million” headline, which seems to be taken at face value by most journalists who don’t have time to actually read the report (but not The Globe’s Marcus Gee, who went through the staff document in detail last month).

Let’s look at these proposals in detail.

Would you build an underground streetcar path from Queen’s Quay to the airport’s tunnel doorstep for $165 million to save transit users a one block walk? Would you extend the underwater airport pedestrian tunnel to Queen’s Quay for $300 million, when it cost just $82.5 million to build an 800 ft. connection 10 storeys underwater between the mainland and the airport terminal? Would you erect a “land bridge” over Eireann Quay for school kids and cyclists for $60 million, when the new vehicle underpass at Simcoe Street was constructed for less than $50 million? And that was built to withstand the weight of the Union Station train tracks overhead.

No, you likely wouldn’t do any of these things. Even the City’s consultant, having raised the land bridge idea in response to suggestions from folks like Vaughan, promptly dismissed it (pg. 39):

The estimated traffic increases that would be generated by BBTCA were reviewed in the context of the pedestrian volumes and the number of children that attend the Waterfront School. We have also undertaken several site visits during various times of the day to review the operation at the Queens Quay / Bathurst intersection.

Based on our preliminary analysis, it is our opinion that a grade separated crossing for pedestrians across Eireann Quay is not required on the basis of pedestrian safety. There are many examples of other elementary schools with higher enrolments on busier streets which are not being considered for grade separations simply on the basis of the number of vehicles and children crossing at any given time.

That pretty much sums it up.

The City Report made infrastructure improvements a key item to resolve, along with 29 pages of other points. Vaughan and I agree on one thing: $100 million is a lot of money. And, according to their own math, it will be sufficient to tackle the core, practical elements of the BA Group recommendations.

Torontonians support the Porter Proposal in every poll I’ve seen. That said, Governments deserve to have the opportunity to consider participating in its realization. If City Council doesn’t want the project to proceed, it won’t. If Council doesn’t want these infrastructure improvements as part of Porter’s Proposal, they won’t happen. If Ottawa and Queen’s Park have higher infrastructure priorities in the GTA, that is for them to decide as our elected representatives, in conjunction with the City’s own wishlist.

Deputy Mayor Norm Kelly says the Porter Proposal is a key priority for him in 2014. If Councillors Carroll, Davis, De Baeremaeker, Doucette, Fletcher, Fragedakis, Layton, McConnell, McMahon, Mihevc, Perks, Vaughan and Wong-Tam are right, and Toronto has other priorities which swamp this project, so be it. That was the approach this very same group took when they tried to veto the BBTCA tunnel easement in 2011, even though the proposal would clearly save City taxpayers more than $10 million in duplicative construction costs on upgrades to City utility mains under the Western Gap. Fortunately, a majority of Councillors had the wisdom to stop them. The irony was that even without the easement, the tunnel would still have been built — it was just have had to jog around a City dockwall at a cost of an additional $2.5 million. And the City would have had to spend $10 million more on its own Utility Main project; talk about spite.

That’s the democratic system. Which is why the TPA has said, from the start, that it is up to the elected representatives of Toronto to first make a determination on Porter’s proposal.

And while that’s all under consideration, the TPA, as the airport’s operator, is just doing its job to ensure the 45 people with a vote on Council have every opportunity to consider the topic. To quote Mr. Gee:

The airport is a valuable asset for Toronto. An ambitious city would try to overcome the concerns over introducing jets, not allow itself to be paralyzed by them.

Vaughan is just plain cross that the TPA is trying to work with City staff to resolve the Report’s gating items, whether they be large or small. He benefits from paralysis, which is why he continues to throw around this unsupportable $300 million infrastructure figure in the hopes that he can freeze you in your tracks.

MRM
(disclosure – this post, like all blogs, is an Opinion Piece. And, of course, reflects a personal view and opinion and is not meant to represent the views of the TPA, its Board/Staff or the federal government.)