Budget blowout for Green Line LRT to be revealed today

The $5.5-billion budget for the Green Line LRT project is getting a makeover. The question is: how high is that number going?

Earlier this month, the Green Line board overseeing the megaproject gave city council the new budget estimate and some recommendations.

Those key bits of information remain confidential for now. Following a closed door session, details are expected to emerge publicly during the council meeting that starts Tuesday.

Scrapping or delaying the 18-kilometre, 13-station LRT line doesn't seem to be an option. Pointing out that the funding partners for the Green Line include the city, the provincial government and the federal government, Calgary Mayor Jyoti Gondek said that if anything, it's time to get moving.

"It's an important decision.… It is absolutely a partnership," said Gondek.

"So, we need to get moving on the commitments we have made to Calgarians. We have three partners who really want to see this thing move, and that's what we're committed to."

But whatever happens, it appears it's going to be all on council's shoulders.

Last week, the Green Line board issued a statement outlining its recommendations to council, which would allow the project to move ahead within the city's current fiscal realities. The statement pointed out that council would have to do so "without additional funding from the Province of Alberta and Government of Canada for this phase."

Council members cannot say at this time what exactly is on the table in the confidential report. But they have been revealing elements that are likely to be up for consideration.

A Green Line supporter, Coun. Gian-Carlo Carra, said after years of delays, it's time to get on with it.

"The Green Line as currently conceptualized is the backbone of Calgary's best future," said Carra.

"It's just something we have to do, and I'm confident that we will stop the political wrangling and just do it."

He pointed out that the Green Line's proposed development is no different than Calgary's other LRT lines. After an initial building phase, the plan is that the line will be extended further and further at each end, as more money becomes available.

The provincial government has suggested Calgary could build more LRT with the current funding if council would drop plans for a two-kilometre downtown tunnel, featuring four underground stations.

Carra said that ignores the geographic challenges of running another train line through the core, one that needs to go under the CPKC main line, deal with short blocks between the tracks and the Bow river, and then be well placed to get onto a bridge over that river.

Despite cuts, budget has still grown

Years of work and $1.5 billion have already gone into the project. More than $350 million in land has been acquired and cleared, and $400 million has been spent on early works to prepare for construction. New light rail vehicles have been ordered from a company in Spain.

The Green Line board has already made major cost reductions through a process of value engineering. That has resulted in design changes and uses of different materials that cut $400 million off the budget during the first third of design work.

A tunnel boring machine will still be brought in, but money and time will be saved by using the cut-and-cover method of tunnel construction for two key sections.

Despite those reductions, the overall budget for the project has grown, and council has to figure out how the city will be able to absorb that cost.

Earlier this year, council voted to set aside $200 million to help address inflationary pressures on capital projects.

Property tax increases are one key method that council has for raising money. But Coun. Andre Chabot said he doesn't support going down that avenue again, given tax hikes in recent years.

Instead, he expects hard choices will have to be made about which future capital projects are scrapped to free up money for the Green Line.

"I'm suggesting we may have to look at possibly cancelling some of our current projects in order to make sure that we have enough money to move forward with our more critical ones," said Chabot. "We have limited financial capacity, and in my opinion, I think we've spent beyond our means."

What could be on the chopping block?

Another fiscally conservative councillor, Sonya Sharp, agrees that some capital projects could be put at risk in dealing with the Green Line budget situation. She said sometimes, it's best to cut your losses and move on. But that can't happen on the Green Line, as the price only goes up with each passing day.

"Cancelling this project would not be the best decision. It would be a last resort, put it that way," said Sharp.

"Everyone knows we need a Green Line. We need to move forward with this project. But what is that going to look like?"

One thing Sharp is not prepared to put at risk to pay for the Green Line is halting work on new growth areas of the city.

New communities cost the city tens of millions of dollars in infrastructure and operating costs (think new fire stations or libraries, for example) and she said in a housing crisis, she could not support putting the brakes on growth.

But make no mistake, it's a big decision for council to sort out what to do.

At a recent executive committee meeting where council members were briefed by the Green Line board, recommendations on how to proceed were approved 6 to 3.

Sharp, Chabot and Coun. Terry Wong voted against the nine recommendations in the confidential report.

Coun. Evan Spencer, who is expecting to see four Green Line stations built in his southeast ward, voted in favour.

But on the eve of the council discussion on what happens next with the megaproject, he said voting on the Green Line budget revision and how it should proceed will be some of the hardest decisions of his life.

"This is one going to be one of those decisions — I think regardless of which button I press — that I will replay in my head many, many times in the future."