Good news for Sound Transit

Good news doesn't seem to travel very fast in this town when the good news is about Sound Transit. Good news has been buried in the noise of the mayor's race and the debate over Sound Transit's admittedly spotted past.

Good news lost in the heat of the Sound Transit Board's decision to build the southern link was a financial report by the independent Project Review Committee. The report concluded, "Sound Transit can build what it promised the voters assuming reasonable revenues, and it can start construction next year. It will take discipline, solid management and some tough policy choices, but it can be done."

What Sound Transit promised the voters and what the PRC believes can be built, is a 21-mile-long light-rail line from South 200th to Northeast 45th Street in the University District with the understanding that the agency "expects to find, and will aggressively seek, additional funding sources to build the segment between the University District and Northgate."

This is not wishful thinking on the part of the PRC. It is based on hard analysis of Sound Transit's financial plan, some reasonable expectations of local and national elected officials and four core principles adopted by PRC.

The first principle is to complete the voter approved light-rail plan before going back to the voters to request additional funding. It is a commitment that can and must be honored.

Second is to preserve the project's federal support. The federal government has approved $500 million for the project and it can and must be saved.

Third is to begin construction immediately on a first segment of the line. Experience across the country is that completion and operation of a first light-rail segment has resulted in strong public support and federal funding to extend and expand the system. In our case, this first southern segment is 13 miles -- two-thirds of the voter-approved project.

And finally, create a construction budget based upon available revenues. That one sounds simple. But it hasn't been done. Budgets have been swollen by a host of mostly political pressures.

The PRC's analysis of Sound Transit's financial plan revealed some impressive work by the agency's staff but resulted in several recommended changes. If the Sound Transit Board makes these changes, the PRC believes the commitment to voters can be kept.

First, match the financial plan to the current project schedule. The plan is based on what is called Phase One, the portion of the project from Convention Place Station in downtown to South 154th, which would be completed in 2009. However, the agency's planning and construction schedule to complete the entire voter approved light-rail line from South 200th to Northeast 45th stretches out to 2013. The financial plan should be extended to reflect the completion of the entire line in 2013. Just doing that creates additional financial capacity of about $150 million for North and South King County sub-areas -- money that could be used to complete the light-rail line.

Second, adjust the financial plan to reflect the recent decision to accommodate joint operations (use by bus and light rail) in the downtown Seattle transit tunnel (DSTT). Sound Transit had originally planned to take control of the DSTT from Metro King County in 2007 and convert the tunnel from bus use to light rail. It was assumed that when that conversion occurred Sound Transit would pay for 100 percent of the county's debt service payments for the tunnel. But with planned joint bus-rail operations in the tunnel that doesn't make sense, and the $80 million in debt service payments through 2013 needs to be renegotiated to save at least $40 million.

The financial plan also assumes the full cost of converting the tunnel to joint operations will be paid by the North and South King County sub-areas. Since joint operations means that regional bus service will use the tunnel, it makes sense to shift the $114 million in tunnel joint-use retrofit costs to the regional fund.

That fund that pays for things that benefit all sub-areas, thus increasing the available funds for extending light rail north and south. (It should be noted that the north King County sub-area will still pay for the "base cost" to convert the tunnel to rail use, making this recommendation consistent with cost-sharing agreements made by the three counties at the start of the project.)

Third, there are several underlying assumptions in the financial plan that have the effect of increasing outside borrowing and increasing overall interest payments. Reducing that kind of borrowing by increasing internal borrowing among the various funds could save another $105 million for the north and south King County sub-areas. And policies relating to debt coverage, design and construction reserves, and a full year of debt service reserves are unnecessarily conservative. With only modest changes in policy, the financial capacity of north and south King County sub-areas could be increased by another $200 million that could be used to complete the light-rail line.

We believe these and other recommendations concerning the financial plan are consistent with Sound Transit's commitment to sub-area equity and will result in much greater likelihood that both the northern and southern segments of the system can be fully funded.

Finally, the financial plan assumes a costly deep tunnel crossing of Portage Bay resulting in a nearly $40-million third-party mitigation agreement with the University of Washington and a very expensive deep station in the University District. Sound Transit has committed to reviewing alternative light-rail alignments to the north and the PRC members believe that lower cost solutions can be found. Assuming an alternative crossing of Portage Bay, constructing one, not two, stations in the University District (as has been suggested by university officials) could result in a sizable reduction in mitigation and construction costs, somewhere in the neighborhood of $100 million to $200 million.

Add to all that the very real likelihood of additional federal funds received over the period 2002 to project completion in 2013, then funds for completion of the full project from south of the airport to north of the University District have the very real possibility of reaching $1.6 billion. With tight cost controls on construction of the first segment in the south, budgeting that matches available revenues and some tough but practical policy decisions by the Sound Transit Board, there should be sufficient local and federal revenues to complete the project promised to the voters.

The Project Review Committee believes there is now solid management and staff in place in the agency to build this project. Key leaders on the Sound Transit Board are now fully engaged and committed to building this first light-rail line -- two-thirds of the full project -- in such a way as to regain public support for this key piece of our region's transportation system.

Charles Royer and Kathy Scanlan are members of the Sound Transit Project Review Committee; members Jim Ellis and Slade Gorton also contributed to this article.

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