Sound Transit’s Trail Of Broken Promises Casts Pall Over New $50 Billion Proposal

Sound Transit's Trail Of Broken Promises Casts Pall Over New $50 Billion Proposal
To win voter approval of more taxes for its third big round of projects, Sound Transit will have to provide assurances it can meet deadlines and control costs. Photo: BeyondDC.

Sound Transit is promoting its third big round of system-building as a regional transportation solution. Among other things, Sound Transit 3 (ST3) will provide an additional 58 miles of light rail and 39 new stations. That’s over an estimated 25 years, and for an estimated $50 billion. However, some critics claim that an “up” vote on ST3 come November would just set in motion a perpetual tax for Puget Sound residents and guarantee little else.

In 2001 Sound Transit admitted the first phase of their light rail line from University District to Seatac was $1 billion over its $2.5 billion budget and three years behind schedule. The discovery resulted in the resignation of then-CEO Bob White. The project was given a new completion date of 2009 and a new cost estimate of $3.6 billion.

Sound Transit officials and local lawmakers supporting ST3 believe this time around it’ll be different. In fact, they’re arguing ST3 can deliver under budget and earlier than current estimates.

If voters approve ST3 they would legally authorize three taxes:

  • A 0.5 percent bump to the current 0.9 percent sales tax rate
  • .8 percent more layered onto the .3 percent motor vehicle exercise tax running to 2028
  • a new property tax of 25 cents per $1,000 of assessed value

In addition to a sales tax and motor vehicle excise tax, Sound Transit also collects a .8 percent rental car sales tax. They have the authority to implement an employer tax of $2 per employee but it would require voter approval first.

Voter approval for ST3 also gives Sound Transit authority to build the listed projects, according to agency spokesperson Geoff Patrick. The Sound Transit Citizen Oversight Panel says ST3 would be among the largest transit infrastructure projects ever carried out in the country.

Taxpayer Protections Seem Scant, Once More

However, the $50 billion cost is merely an estimate and not a cap on allowable spending for the projects. It’s also based on today’s dollars and doesn’t take into account inflation over 25 years.

Likewise, the project completion dates are estimates and can be pushed back. It’s something that’s happened already with several Sound Transit projects, though ST3 supporters argue project planning incorporates lessons learned from past mistakes.

During Sound Transit’s ST3 public meeting in Redmond last month several residents voiced concerns that the tax rate would be perpetual. Sound Transit CEO Peter Rogoff claimed the rate will change to cover only operating costs once the projects are completed and if voters decide not to approve an ST4.

Rollover Of Some Phase Three Taxes – For Phase Four Planning

The agency isn’t preparing to lower the tax rate when ST3 is completed. ST3 allocates $60-64 million for ST4 planning efforts.

With the first round of projects, called Sound Move, and ST2, the Sound Transit Board pledged they would lower the tax rate once all the projects were completed, if no other measures were approved. However, because of failure to keep to deadlines, Sound Move wasn’t finished by the time ST2 was approved in 2008.

Buyer’s Remorse In Everett

In 1994 the Sound Transit Board vowed “light rail service to Everett shall be given first priority” in the second phase of their long-term regional plan. Yet it is only 20 years later that such a light rail line is being proposed as part of ST3. Even if it’s approved it’s not expected to be completed until 2041.

Some public comments to Sound Transit on ST3 conveyed this frustration from Everett residents despite the existing Sounder commuter train that connects to Seattle.

“19 years ago I voted for this (light rail) to come to Everett and we ended up with the Sounder,” one commenter wrote. “That is not light rail! That is not what we voted for.”

Agency’s Project Oversight Criticized

Another commenter vowed that “Sound Transit will never get my support until it addresses how it runs projects. As near as I can tell no one has taken any responsibility for these mistakes.”

Sound Transit had to deal with financial problems caused by the Great Recession. The 2007-09 economic downturn led to a $4.5 billion shortfall in their 15-year financial forecast that was included in the 2008 voter-approved plan for ST2.

How The Shell Game Works

After the loss of expected revenue the Sound Transit Board delayed parts of ST2 projects like the planned light rail extension from Seatac to Federal Way.

In February they finally restored funding for preliminary engineering of the Federal Way light rail extension to South 272nd Street after making modifications to the original plan.

However, that segment won’t get built unless voters approve ST3 because the funding is included as part of a related ST3 project extending the light rail segment even further south to the Federal Way Transit Center.

ST3’s financial plan doesn’t necessarily anticipate another Great Recession but is “built to accommodate a more standard ebb and flow of the economy” that involves periodic downturns, said Sound Transit Spokesperson Geoff Patrick.

Lots Of Padding, At Taxpayer Expense

However, Bellevue Councilmember Kevin Wallace says they’re now compensating for past mistakes by overestimating the project costs. As part of their cost estimates 22 percent includes allocated/unallocated contingencies in addition to a seven percent reserve.

“They’re padding the budget so they don’t have another economic downturn they can’t recover from,” Wallace said.

Yet the contingency costs may be offset by growing inflation. In 15 years ST3 projects will cost 60 percent more, according to Sound Transit financial documents.

The conservative cost estimates also show Sound Transit has learned from past mistakes, wrote Redmond Mayor John Marchione in an email to Lens.

ST Credibility At Stake, Says Redmond Mayor

“The agency cannot take another hit to its credibility,” Marchione wrote. “Sound Transit has decided to error on the side of caution and not over-promise.”

One ST3 project involves building a 3.7 mile light rail segment from Overlake on the border of Bellevue and Redmond to downtown Redmond.

Oversight Panel Concerns

If ST3 managed to stay within budget it might still have trouble carrying out so many construction projects simultaneously due to a lack of available labor supply. It’s a potential issue the ST Expert Review Panel raised in an April letter to Sound Transit.

The panel also concluded more clarity was needed concerning the responsibilities between Sound Transit and regional transit agencies over constructing some of the transportation infrastructure needed for ST3.

“Based on multiple conversations to date with staff from Sound Transit and the regional transit agencies, we do not believe that any agency has taken “ownership” of determining the plans and funding,” the letter read.

Sound Transit can meet the projects’ timeline, and possibly finish them sooner, said Marchione. But that’s provided cities cooperate when the agency applies for construction permits in their jurisdictions. For example, negotiations with the city of Bellevue over permitting pushed back construction of the Eastlink light rail line from Seattle to Bellevue.

“If a city or county use the permit process to hold Sound Transit hostage that will cause the timeline to slip,” he wrote.

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