ADDED
Staff Report #9
February 26, 2025
To All Commissioners
Re: Assessment Growth Business Cases
Recommendation
The Commission DIRECT administration to prepare a communication to Municipal Council based on the information set out in this report.
Background
At the February 25, 2025 Strategic Priorities and Policy Committee meeting, a report outlining the 2025 Assessment Growth Funding allocations was received and during debate, a number of Councillors raised concerns that London Transit had not submitted a business case as part of the 2025 budget process. Civic administration indicated during the debate that LTC has been challenged with identifying appropriate metrics to support growth funding requests under this program.
Staff Report #1 dated August 28, 2024, when the 2025 Conventional Transit budget was prepared, administration held follow up discussions with civic administration with respect to whether any of the service improvements identified in the 2025 service plan would meet the criteria for assessment growth funding. The Five-Year Service Plan includes changes in frequency to two routes (routes 28 and 90) for 2025. The Planning department reviewed available data that would support the case that infill relating to population growth has occurred along these routes and none could be identified.
The following excerpt from the City of London Assessment Growth Policy details the expenditures that qualify for funding (full policy is set out in Enclosure I).
4.1.3. Business cases will be considered eligible for funding and prioritized by the following categories:
1) Operating or one-time capital costs directly linked to the extension of existing services to new development;
2) Operating costs associated with developer-constructed capital assets assumed by the City or new Development Charges-funded growth-related capital assets constructed by the City of London or associated agencies, boards or commissions;
3) Future lifecycle replacement capital costs for developer-constructed capital assets assumed by the City or new Development Charges-funded growth-related assets constructed by the City or associated agencies, boards or commissions;
4) Support services and activities required to support the delivery of services related to items 1), 2) and 3) above;
5) Operating or one-time capital costs related to pressures of a growing city (supported by appropriate metrics at the sole discretion of the City Treasurer or designate).
4.1.4. For greater clarity, the following requests will not be eligible for funding:
- Requests related to the introduction of a new service or program, either on a permanent or one-time basis;
- Requests for permanent funding of an existing program implemented temporarily (i.e., a “pilot program”);
- Requests related to the enhancement or expansion of existing service levels (i.e., service improvement);
- Requests related to the maintenance, renewal, or rehab of existing capital assets on a permanent or one-time basis.
As the excerpt clearly delineates under section 4.1.4, requests related to the enhancement or expansion of existing service levels are NOT eligible for funding. Any improvements to increase frequency, which in turn helps to address crowding and increased demand, are considered an expansion of existing service levels. The only type of service improvement that is clearly within the eligibility criteria in the Assessment Growth Policy would be the extension of transit service into a new development (not a development that has been in place for some time but is not currently served by transit).
When the Five Year Conventional Service Plan was prepared, detailed analysis of conditions on existing routes was utilized as a key input with the rationale being that improvements need to be directed at existing services in an effort to maintain existing riders prior to expanding services to attract additional riders onto already crowded routes. It is important to recognize the ridership on a new route or route extension into a new development area would in all likelihood need to transfer onto an existing route to complete their transit journey, and as such, increased pressure would be placed on those routes already experiencing difficulty. The limited available growth hours approved in the multi-year budget are not adequate to address all existing concerns on the current transit network. Implementing new services to areas of the city based on the manner in which it can be funded is inconsistent with transit planning practices that lead to an effective and efficient transit service that is designed to meet the needs of its riders.
In addition to the issues associated with the approach of expanding to new developments articulated above, service expansion of this nature was not an option for 2025 given the required expansions buses and the current delivery timelines for same being approximately 18 months from date of order (see Staff Report #1, dated February 26, 2025). Had a business case for 2025 been submitted and approved, the expansion buses could not be ordered until early March (subsequent to Municipal Council approval), delivery of which would be August 2026 at the earliest. Given bus preparation requirements, these buses would not be ready to be placed into service until October/November 2026. This approach would have resulted in Assessment Growth funding being allocated in 2025, the capital portion of which would not be required until fall of 2026 and the operating portion not required until 2027.
Notwithstanding the above, administration will review the Five Year Service Plan in an effort to identify recommended service improvements for a 2026 Assessment Growth Business Case as part of the 2026 budget process for Commission consideration. These recommendations will include the metrics administration has available to support the funding request as well as reference to the nature in which any approved allocation will be spent given bus delivery timelines.
Finally, as set out in the report recommendation, administration will prepare a letter to Municipal Council from the Chair detailing why an assessment growth business case was not submitted for 2025 as well as the plans going forward. It is anticipated this letter will provide greater clarity to members of Council with respect to why there was no submission of an Assessment Growth Business Case for 2025.
Enclosure
I – City of London Assessment Growth Policy
Recommended by:
Mike Gregor, Director of Finance
Concurred in by:
Kelly S. Paleczny, General Manager