Dec 3, 2009

Oshawa stands to lose $25-million transit depot

An Oshawa councillor says squabbling between the City of Oshawa and the Region of Durham could see Oshawa lose out on a $25-million transit depot and the jobs and tax revenue that would come with it.

Oshawa Regional Councillor Nester Pidwerbecki, who is also vice-chairman of Durham Region Transit, says the project could go to Whitby or Clarington, if Oshawa doesn't extend an olive branch.

"It would be a real blow to Oshawa if we lost this deal because people are being foolish," he said. "Other municipalities seem to be able to do things by the book, why can't Oshawa?"

At the root of the issue is a disagreement between Oshawa and the Region, over "unfunded liabilities."

In 2006, municipalities across Durham uploaded their individual public transit systems to the Region, creating an amalgamated system. Now, the Region is looking to Oshawa for $8.6 million to cover things such as employee pensions and benefits -- costs, the City argues, that should be the Region's responsibility now.

At the same time, the Region received an $82.3-million provincial grant as part of the Hwy. 2 bus rapid transit project.

The plan is to spend $25 million of that updating and expanding the existing transit depot on Raleigh Avenue in south Oshawa and build another depot in Ajax.

Ajax has already agreed to lease land to the Region for $1 a year and Oshawa was expected to follow suit -- until the debate over liabilities started. Now, the City is using that as leverage.

At its Nov. 9 meeting, Oshawa council passed a motion from Councillor Brian Nicholson that gives the Region an ultimatum: drop the fight for the $8.6 million and pay $1 a year to lease the depot property, or else pay market value for the land, about $440,000 a year or $10 million over the 25-year lease term.

Coun. Nicholson said his motion lets everyone walk away happy.

"If you want $10 million in free rent, give up your $9 million claim. Or, pursue your claim and pay for the property, I think that's fair," he said. "If they expect us to give them the $10 million in free rent and still pursue the other $9 million, that's a potential loss to Oshawa taxpayers of $19 million. I don't know how any councillor could justify that."

Regional Chairman Roger Anderson said there is a deadline to spend the provincial cash. If Oshawa won't work with the Region, he said other locations will be considered.

"We're adamant that they have to give the land to us for $1, we will not rent that property at market value," he said. "(Regional) staff have been instructed to start looking for sites. They are looking for land that is serviced and ready to go ... we know Clarington has some. Oshawa Mayor John Gray said Oshawa stands to lose $115,000 a year in tax revenue, and jobs, if the depot goes elsewhere.

"We're also going to be stuck with a vacant, derelict building on a brownfield site," he said. "Members of council are playing poker with this issue, and we're going to end up being the losers."

The motion from Oshawa council will be dealt with by the Region's finance committee on Dec. 9. | Oshawa stands to lose $25-million transit depot.

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