OC Transpo costs could rise if Presto fees balloon by millions

OC Transpo fares could be under more pressure if the provincial agency that runs the Presto system is successful in charging Ottawa millions more to use the transit card.

Toronto-based Metrolinx currently administers a fee of two-per-cent of Presto fares on the City of Ottawa. In 2015, that totalled $1.5 million.

City hall sources told CBC News Metrolinx wants to charge the city 10 per cent — a five-fold increase — when its contract expires in October.

At the current rate of Presto use, that would mean the city would have to pay Metrolinx $7.5 million, or $6 million more than it did last year. But that's only if fares remain flat.

Once the LRT comes online in 2018, the U-Pass and single-ticket fares will be brought onto the Presto system, driving up the Presto revenues, as well as the amount the city has to pay to Metrolinx. 

Mayor calls request unreasonable

Mayor Jim Watson called Metrolinx's request unreasonable and vowed to become personally involved in the file. He told reporters Wednesday he's already had one meeting about the issue with Ontario Minister of Transportation Steven Del Duca. 

"Despite having some real bumps along the road to get Presto up and running, it's working very well now," Watson said, referring to the massive delays and cost overruns of implementing Presto in Ottawa starting in 2013.

"It does save people money, it's convenient, it gives us more data. But at the same time, we really are in a monopoly situation. We have no other choice, we have to use Presto. So it's unfair if the province comes in with a proposal that is really out of whack with what we and other municipalities can afford."

Presto is used in the Greater Toronto Area and Hamilton, as well as Ottawa. The province ties the gas-tax money it gives municipalities to the Presto card, making it virtually impossible for Ontario municipalities to opt for other kinds of fare-payment systems.

If the city is unsuccessful in keeping the Presto administration fee low — city officials are reportedly suggesting a four-per-cent fee — transit users could see their fees increase more than originally planned, or taxpayers would have to pick up more of the costs to operate the city's public transit system. 

The system was originally supposed to cost the province about $250 million when the contract was awarded to the U.S. consulting company Accenture in 2006.

However, in 2012, Ontario's auditor general found the cost had ballooned to more than $700 million.

Metrolinx working 'very closely' with city, minister says

"By the time it is fully developed, Presto will be among the more expensive fare-card systems in the world," then auditor general Jim McCarter said at the time.

The battle over how much Metrolinx wants to charge OC Transpo was raised in Queen's Park Wednesday morning.

After detailing the expensive problems of the Presto system, Niagara Falls MPP Wayne Gates — the NDP's transportation critic — asked Del Duca: "Why is Metrolinx forcing the Ottawa transit riders to pay for its own costly mistakes?"

The transportation minister said only that "Metrolinx and the team at Presto are working very closely with the City of Ottawa ... we are engaged in a re-negotiation with respect to the Presto contract."