Ottawa city councillors got an apology from the head of OC Transpo on Wednesday after his team neglected to clearly communicate that city had paid the LRT system‘s maintenance contractors for September 2019 service.
That recent news upset many councillors and members of the city’s transit commission who said they’d been under the impression that the Rideau Transit Group (RTG) hadn’t received any monthly maintenance payments since the light-rail Confederation Line launched mid-September, due to repeated mechanical and electrical issues that have disrupted train service since early October.
“We thought we had fully informed council, but obviously we did not. And for that, I sincerely apologize,” said John Manconi, the city’s general manager of transportation services.
Through RTG’s 30-year maintenance contract with the City of Ottawa, the company is entitled to be paid between $4 million and $5 million each month for maintenance work on the LRT system.
Councillors and media had been told repeatedly since the fall that the city was withholding those monthly payments and would continue to do so until rail service stabilized.
After news broke over the weekend that the city had indeed paid RTG $4.5 million for September, city manager Steve Kanellakos sent out a memo saying the project agreement “effectively required the city to pay the full amount for the first contract month of service irrespective of the contractor’s performance during that month.”
Manconi told councillors Wednesday that he remembered mentioning the “mandatory” September payment to reporters during a scrum on Dec. 3, 2019.
During that scrum, Manconi mentioned that he believed RTG had received a payment for the “tail end of September” because of how “the payment mechanism works” but that information was never communicated at the council table or before transit commission, nor was it widely reported by local media outlets, including Global News.
Other senior transit officials, meanwhile, made statements at different times that suggested RTG had never received a monthly maintenance payment.
Kanellakos confirmed that the city’s hasn’t paid RTG for October and November work “due to the accumulation of performance deductions in September and October.” Deductions for November and December are still under review, Kanellakos’ memo said.
Later during council’s meeting on Wednesday, Manconi said RTG is challenging some of the deductions and withheld payments.
On Monday, Ottawa Mayor Jim Watson asked the top city manager to provide “a comprehensive overview” of why the city was compelled to pay RTG for September maintenance work.
Because the LRT system’s performance isn’t yet where the city wants it to be, council on Wednesday discussed the risks of extending a freeze on transit fares past March 31.
Councillors voted on a motion from Coun. Allan Hubley to let Kanellakos and Manconi decide what date OC Transpo will implement the scheduled 2.5 per cent fare increase — once LRT service “has improved to the city’s satisfaction.”
The city would lose out on $340,000 of fare revenue per month should the freeze continue. The city treasurer warned council, however, that foregoing a fare hike altogether this year would have “a compounding effect” for future budgets, to the tune of $300 million.
The municipality says it intends to recoup lost fare revenue through “the financial and performance provisions” in its contract with RTG.