What will it cost local taxpayers to run a Hamilton LRT?

It's the mystery bill that has threatened to derail Hamilton's on-again, off-again LRT for years.

What would it cost local taxpayers to run a light rail transit line from McMaster University to Eastgate Square?

Despite $3.4 billion promised by provincial and federal governments to resurrect the previously cancelled line, some city councillors say they need to know more about local costs before accepting - or rejecting - the largest wad of infrastructure cash in Hamilton history.

The Spectator has learned they'll finally get a chance to ask questions in June, when provincial transit officials have offered to attend a virtual city committee.

I want to know how much it will cost, how this will be paid for, which taxpayers will be affected," said Coun. Lloyd Ferguson, an early LRT supporter who is leery about how past public cost estimates differed dramatically from private government budgets.

Will the real number stand up, please? We've been waiting for answers to these questions for a long time."

Part of the problem is the original LRT was cancelled in 2019 before consortiums bidding to design, build and operate the project had a chance to submit detailed estimates on the cost of running the 14-kilometre line.

But a startling range of past cost estimates doesn't help, either. For example:

• In 2017, provincial transit agency Metrolinx gave the city a confidential operations estimate of $17.5 million a year;

• In 2018, city staff suggested the net" cost of running the system - ie. factoring in fare revenue and savings from buses taken out of service - could be between $5.2 million and $13.7 million.

• In 2019, the province cancelled the original LRT, in part, based on a Turner & Townsend consulting study that pegged operating and maintenance costs at $950 million over 30 years, or an average of $31 million a year.

Detailed breakdowns have never been provided for any of those estimates.

But Metrolinx told The Spectator this week the province's $950 million figure accounts for inflation over 30 years and represents gross expenses." That means it does not factor in fare revenue or other savings.

That's worth knowing, since the city runs four bus routes along the Main-King LRT corridor. Removing, rather than redeploying, some of those buses could save costs.

That B-line transit corridor is also the city's busiest - and therefore yields the most fare revenue. Project ridership studies from 2016 suggested annual boardings for the HSR could double by 2031 to 60 million if a six-minute peak frequency LRT was added to the corridor.

Metrolinx said it is updating a Hamilton LRT business case to confirm new operating estimates - but it expects the eventual number to be in line with" the 2019 provincial consulting report.

Mayor Fred Eisenberger has stressed a detailed operating cost estimate won't be available until new project bidders crunch the numbers. But don't expect that to happen fast, even if council endorses LRT 2.0.

Just ask Mississauga, which is still negotiating details of an operating and maintenance agreement, including local taxpayer contributions, more than a year after construction started along the $4.6-billion Hurontario LRT line.

Regardless, Eisenberger and other project supporters have long argued the city will recoup any additional operating costs from new property taxes and economic uplift" benefits along the LRT corridor.

Tom Galloway argues that has already happened in Waterloo Region, which saw a long-planned ION light rail transit service kick off in June 2019. Ridership exceeded expectations to start, which is good," said the Waterloo regional councillor. But intensification and development along the route, that has just skyrocketed."

The annual operating and maintenance bill for the 19-stop LRT through Kitchener and Waterloo was pegged at $8.5 million to start. Regional taxpayers must also pay financing, life cycle and some capital costs - unlike Hamilton.

The region also invested in better buses and redrew its service map to improve the overall transit system.

All told, the average resident now pays about $132 per year for transit service compared to $95 before trains started rolling, according to the Waterloo Region Record. The region helped cover local LRT costs with an incremental tax increase dating back to 2011, as well as fare revenue.

Galloway said ridership exceeded early projections in the fall of 2019, with regional transit revenues $1.2 million higher than budgeted at the time. Those revenues should grow with ridership, he said - but the pandemic has delayed any evaluation of a normal year of service.

Regardless, he argued the cost of running the trains is outweighed by the incredible" value of transit-spurred development, including $2.7 billion in construction along the LRT corridor since the region locked in on the route.

Matthew Van Dongen is a Hamilton-based reporter covering transportation for The Spectator. Reach him via email: mvandongen@thespec.com