Calgary Mayor Jyoti Gondek said that city taxpayers will have to cover cost overruns on the Green Line because the province isn’t being a “good faith” partner.

The mayor was responding to comments made by Alberta Transportation Minister Devin Dreeshen Thursday morning on the CBC Eyeopener, where he suggested that much of the city’s projected overage isn’t related to the actual construction of the now-approved Green Line.

Dreeshen told CBC Eyeopener host Loren McGinnis that when the province dug into the project, there were a lot of unrelated costs included.  The City of Calgary had estimated adjacent costs related to an elevated line to be $1.3 billion with the approved project.

“When we start to dig into, look back to an apples to apples comparison of what their Green Line would have been, tunneled only to Lynwood Milliken, and what an elevated alignment through downtown, going all the way down to Shepard … and crunch those numbers, working with the city, we’re confident that for the same budget that was approved back in July, which is over $6 billion that this Green Line can be built with an elevated alignment,” he said.

“Because additional lands in other parts of the city that aren’t involved with the Green Line, they’re obviously assets and can be used by the city for other things. So, they’re unrelated to the cost of the Green Line.”

Dreeshen said that the City of Calgary is ready to tender the Event Centre to Shepard part of the line. He said we’ll see shovels in the ground this spring.  The engineer of record, WSP, will continue design work for the downtown section as well, Minister Dreeshen said.

Right now, the downtown portion is only at a five per cent design stage.

Ancillary costs of the Green Line?

Mayor Gondek said she hopes that Minister Dreeshen understands that possible litigation, due to a train “hammering past their businesses and homes” is definitely a part of the Green Line alignment the province is forcing on the City of Calgary. Building owners, commercial real estate operators and the downtown business community expressed other concerns this week, including the impact to property values and thus, assessed value – which would impact Calgary’s tax base.

“The city only has the ability to recover any costs related to this project, if our partners are good faith partners, and if they are willing to share in the risk of delivering this big of a project,” she said.

“(The province) will not take on any more risk, and it must be elevated. So, it is quite interesting that as the partner who is funding almost half of this project, that’s us, the municipality, we have zero say in anything, because, as I’ve said before, our overlords have decided what the design will be, and we must fall in line and do what they wish.”

While Minister Dreeshen dismissed those costs as unrelated, he said any potential cost overruns should also be the City of Calgary’s responsibility – like they would for any project.

“The Green Line is just like the Blue Line, or Red Line, or any other LRT project where it’s the city that’s responsible for tendering the contract and keeping costs mitigated, and then, obviously it’s up to the city to make sure that any cost overruns are the responsibility,” he told the Eyeopener.

Mayor Gondek said she hopes that as functional planning work progresses, if the projected cost exceeds the funding envelope that’s available, both partners will step to the table to help.

“I would really hope that within the business case, it’s clear to all three parties that if this becomes untenable because of the cost, either all three parties will have to come up with greater funding, or we need to step away,” she said.

Taxpayers are likely to bear the added costs, Mayor says

The mayor said the functional planning is underway and a downtown, elevated line will be delivered.

“That leaves us on the hook. It leaves you and me as Calgarians and taxpayers on the hook for a dream that’s only five per cent thought through,” she said.

“This is the problem with this project, and I hope Calgarians understand that it would have made sense to build the south line. We all agree on that, but they are tying us to a downtown vision that is not costed out and making us responsible to pay for it. It makes no sense.”

Mayor Gondek said that the city can’t carry a deficit, and that they can collect only enough property tax to pay for the budget that they approve annually.

“If that budget blows up, because this provincial government is not a good faith partner in sharing the cost of a downtown vision that they’re creating, then, yes, Calgarians, you will be facing increases, probably to your property taxes, because we’re on the hook for a dream that is not ours,” the mayor said.

Ward 1 Coun. Sonya Sharp said she found the mayor’s comments interesting, given that much of the downtown alignment is still in flux.

“I’ll be completely honest, taxpayers would have been on the hook if we also killed the project,” she said.

“Not everybody is happy. This isn’t perfect. So, we had one side of the coin saying, OK council, let’s not move forward completely,’ and we would have lost billions of dollars, which would have been on taxpayer money.

“Or, let’s see if we can move forward on something. Let’s lay some track. Let’s move forward. We have some money, and if there’s cost overruns, let’s see what that looks like before we get all excited on who’s paying for it.”