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City to pay region $6.2 million for transit liabilities

The results of a decade long legal battle between The City of Oshawa and Durham Region have finally been released.

According to a city media release, Oshawa will pay $6.2 million to the region to cover ‘unfunded liabilities’ spurring from the uploading of transit services to the region in 2004.

Oshawa will make a payment of $2 million to Durham Region on April 30 funded by the city’s tax rate stabilization reserve.

Beginning in 2019, the remaining balance will be paid in 10 annual installments of $420,000, which represents a tax levy increase of 0.29 per cent.

The liabilities relate to future benefits associated to active and retired employees of the now-defunct Oshawa Transit Commission, including health care, sick leave and WSIB costs. Pension costs were not part of the dispute.

As of Dec. 31, 2005, the unfunded liability was determined to be approximately $8.8 million.

In  addition to the $6.2 million settlement, the media release states the city has spent approximately $1.5 million in legal costs, funded in the city’s annual operating budget, on the matter since 2008.

The region did not include its final legal costs in a media statement released shortly after the city’s.

A staff report released in March 2017 stated Durham Region had racked up $720,000 in legal costs up to that point, but no updates have been provided since.

Had a mutual settlement not been reached, the two sides would have gone to arbitration earlier this month.

The city’s media release states had the city lost in court, costs could have potentially been $13 million or higher.