Mayor Rob Ford started his day speaking with Ontario's Premier Dalton McGuinty about killing the Transit City project, and one of his city council opponents ended his by trying to rally support for the light-rail scheme.

"I have always supported Transit City and continue to believe that it is the best opportunity to provide a mass transit network to the City of Toronto," Coun. Adam Vaughan said Tuesday night in an email to supporters.

"It is not simply the best we can do under the circumstances; it’s the right thing to do period."

At 9:30 a.m., Ford and McGuinty held their first official meeting since Ford assumed office on Dec. 1 (he officially took the oath of office on Tuesday afternoon at City Hall).

"We're going to work with the province to implement our plan, our subway plan," Ford told reporters during a scrum after the 30-minute meeting at Queen's Park. "And our subway plan is to go underground. That's what I campaigned on, that's what the people want."

A spokesman for the premier's office described the meeting as a "goodwill" gathering to build a working relationship.

One of Ford's key planks in his successful election run was a promise to scuttle the Transit City light-rail plan championed by former mayor David Miller, and instead to push for a subway system.

Ford said on Tuesday that he did not need the support of city council to kill Transit City because the council never voted to implement the massive plan.

TTC spokesman Brad Ross told CTV Toronto it is true the city never held a special 'Transit City' vote on the plan as a whole, but the TTC board did unanimously approve the plan in the spring of 2007. Portions of the plan were voted on by council through capital budget debates and environmental assessments, he said.

The Ontario government is paying for most of the capital costs of the $8.15-billion Transit City plan.

Work is already underway on portions of Transit City and other contracts are signed for equipment such as light-rail vehicles and tunnel borers.

There are fears Toronto taxpayers could be stuck with up to $150 million in cancellation costs if Ford terminates the Transit City contracts.

Vaughan said light rail would bring transit to the city's priority neighbourhoods and help development there by pushing up land values. This was key to the city's tower renewal strategy, he said in the letter.

Light rail also encouraged more surface development, while with subways, development only occurs around the stations, he said.

Opponents of the LRT approach point to the construction delays along St. Clair Avenue West when a dedicated streetcar line was built there.

Suburban residents are already concerned about increasing densities along rapid-transit routes, Vaughan said.

"If jumping from three stories to six stories is currently unacceptable, what will these communities say when 40-storey towers are proposed along subway routes?"

Ford has said air rights to development above subway stations will help pay for the lines.

Ford also said the province agreed to meet its promise to help cover the cost of administering welfare for the past year. Ford said McGuinty agreed to pay $52 million to the city to cover welfare costs.

The city had been asking for $53.7 million, while Finance Minister Dwight Duncan said they were entitled to much less.

Ford has promised to repeal the $60 vehicle registration tax during the first council meeting, which continues Wednesday.

With files from CTV Toronto's Alicia Markson and The Canadian Press