(This article first appeared in the Vancouver Sun, March 24, 2009.)
TransLink, the government organization that runs Metro Vancouver's public transit system and roads, has once again displayed its insatiable appetite for other people's money. When TransLink's CEO Tom Prendergast proposed a litany of possible tax increases, overtaxed Lower Mainland residents were predictably outraged. It's time to drive the beast back into its lair and give nimbler competitors a chance to do what TransLink seems unable to do: move people from point A to B at a cost people are willing to pay.
As if TransLink doesn't already bite a large enough chunk of change from taxpayer's pockets, Mr. Prendergast, hired last year from the US, proposes to bring back the $100 per car levy that died before the 2001 election. But that’s not all. He also wants higher property and gasoline taxes, a cut from the property transfer tax, a parking tax, a tax on cell phone calls, and – showing a complete lack of understanding of where he now lives – a tax on shipping containers.
In 2007, TransLink collected $569-million in tax revenue; of which $247-million came from property taxes, $22-million from parking site taxes, $17.6-million from hydro taxes and $14.7-million from parking sales taxes. TransLink also takes 12 cents tax on every litre of gas, for a total of $268-million in 2007, but even that's not enough. New legislation gives TransLink the ability to levy a new three cent per litre gasoline tax in Metro Vancouver.
Granted, TransLink has to cover the cost of its part of the government's Cadillac transportation plan somehow, but TransLink has other big cost increases to attend to, and they don't involve more busses.
For instance, during the first secret meeting of TransLink's new board of directors, they gave themselves a 500 percent increase in meeting fees, a 150 percent increase in the retainer paid to the chair, and a new $25,000 retainer paid to each director. The cost to the taxpayer for TransLink's new board of directors will be a minimum of $437,200 for 2008, more than three and a half times the 2006 cost.
What about executive salaries? According to information garnered from Freedom of Information requests by the Canadian Taxpayers Federation and Vancouver Sun reporter Chad Skelton, salary increases for TransLink's top executives ranged from between eight and 41 percent. Former TransLink CEO Pat Jacobson's salary rose by 21 percent, from $297,468 in 2006 to $360,595, in 2007. Bob Paddon, the Vice-President Corporate & Public Affairs saw a hefty 41 percent increase in salary, from $149,114 in 2006 to $211,628 in 2007.
And let’s not forget how TransLink executives – the people responsible for running and promoting Vancouver’s public transit system – spent more than $154,000 on car expenses in 2006.
There has to be a better way, and, in fact, there just may be. TransLink has a structure similar to that of a municipality, so perhaps a solution found at the municipal level would also work for TransLink. The City of Indianapolis, looking for an end to an ever-increasing property tax burden, implemented a system known as activity-based costing.
The city's financial system told how much was spent by function and department, but didn't say how much it actually cost to provide each city service. The city put together a task-force to develop activity-based estimates to capture the true cost of providing a single service. This estimate included every labor hour, each piece of equipment, and all facility costs, materials and overhead dollars. The city then showed that information to municipal workers and encouraged them to develop new cost-saving measures by allowing them to submit their own bid to provide that service in competition with private operators.
For example, Indianapolis found that costs associated with plowing a mile of snow in one area were $39.96, compared with $117.59 in another. By breaking down the cost components the city was able to reallocate resources to save money.
TransLink says it costs an average of $104.59 per hour for bus service. To get that figure, it adds up the operating costs for the entire bus system then divides it by the number of service hours. If TransLink were to establish activity-based costing, it would give its employees the opportunity to find route-by-route cost savings and allow private sector operators to compete to provide some or all services.
Without competition, Translink's appetite for tax dollars will never be satisfied and why should it? There is no incentive to rein-in spending. But if TransLink cannot move people from point A to B at an affordable cost, it's time to try something new. Public transit expansion must stay within the ability of riders to pay for it, and be able to resist political meddling. TransLink must be run for the people it is supposed to serve, not for politicians, and not for its management.
Maureen Bader, BC Director, CTF,
E-mail:
bc.director@taxpayer.com
