State audit offers Sound Transit cost reduction strategies

State audit offers Sound Transit cost reduction strategies
A new state audit offers ideas for ways that Sound Transit could reduce project costs. Photo: freepik.com

Keeping Sound Transit project costs within budget has been a concern starting with the 1996 Sound Move project and has persisted in recent years with light rail extension projects now reaching more than $1 billion above original estimates.

A recent audit conducted by the State Auditor’s Office (SAO) is now offering recommendations for how the regional transit agency could reduce costs during its planning and design phases, though some transportation analysts say the limited scope of the audit means other cost reduction opportunities are also available.

State Auditor Pat McCarthy was a Sound Transit board member from 2009-2016 and recused herself from the audit.

The audit notes that since the ST3 transportation package was approved by voters in 2016 “cost increases and equipment failures on high-profile Sound Transit projects have raised questions about how the agency oversees and manages its projects.” That includes $225 million in added costs for the light rail extension from downtown Seattle across the Interstate 90 bridge to Bellevue and $1.1 billion for the light rail system in Federal Way and Lynnwood.

Compounding the increased costs is a massive revenue shortfall resulting from the shutdown due to COVID-19 in addition to the passage of Initiative 976 in November that is expected to reduce agency revenue by 15 percent – or $328 million annually.

“Given this funding uncertainty and concerns about cost increases and postconstruction problems, controlling costs is imperative if the agency is to deliver its construction program on time and on budget,” the audit stated.

One of the audit’s recommendations is for Sound Transit to limit the number of order changes meant to correct design or contract mistakes; the audit examined 300 change orders worth $172 million and found that $100 million of that was to “address mistakes or missing information in its designs and contracts.”

To avoid those errors, SAO recommends Sound Transit do more upfront planning, which could help the agency avoid design problems it has faced with situations such as malfunctioning escalators at the University of Washington light rail station that require $20 million to replace.

In a response to the audit conclusions, Sound Transit CEO Peter Rogoff wrote that the agency has already incorporated lessons learned from prior projects “to identify design deficiencies sooner and correct them prior to construction.”

Washington Policy Center Transportation Director Mariya Frost said that though the audit is “much needed, given that the last few years have been particularly troubling for the agency,” she added that the scope was limited compared to that of a 2012 audit examining agency costs, revenue, and ridership forecasts along with how the agency had responded to Citizen Oversight Panel’s recommendations.

Frost said other parts of the agency processes that are worth addressing include contracting and competitive bidding. “We are hopeful the Auditor’s Office plans to review these additional areas of concern in the near future.”

Pierce County Executive Bruce Dammeier is among the 18 members of the Sound Transit Board of Directors. In a tweet he wrote: “Sound Transit needs to reform its contracting process to save taxpayers money  and keep projects within budget.”

Another issue acknowledged but not addressed in the audit is whether the Sound Transit Board of Directors membership should be determined by direct elections rather than appointment.

State lawmakers such as Sen. Steve O’Ban (R-28) have in recent years proposed switching to direct elections as a way to improve agency accountability. Last year O’Ban introduced SB 5220, which would have reduced the board to 11 members that would be elected by voters in their districts. The bill failed to clear the Senate Transportation Committee. During this year’s legislative session he introduced a bill removing Pierce County from ST3.

In a tweet, O’Ban said the state legislature “must pass my bill and directly elect ST Board.”

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