Coalition for Effective Transportation Alternatives

CETA
530 Dayton, No. 202
Edmonds, WA
98020
425 412-3674

Samples of Letters We've Sent

Letter to 26 Electeds Regarding Letter to Sen. Patty Murray

This is an admiring and appreciative note in response to your October 31st letter to Senator Patty Murray, requesting that she redirect funds from Sound Transit's Link light rail project to useful transit investments for the region. There is desperate need for leadership from our elected representatives, as you exemplify.

As a life-long resident, engaged during the past 33 years in civic affairs--as director of public affairs for the King Broadcasting Company, then director of the Bullitt Foundation, involved in local transportation issues during that length of time--I offer the following comments regarding Sound Transit's promises vs. performance, with respect to South King County, East King County, and North King County subareas. My apologies for not being prepared, yet, to offer similar critiques for Snohomish and Pierce Counties.

Also, I will attach remarks prepared for the Washington State Auditor's Office, which summarize, among other things, Sound Transit's record of willful misrepresentation. Plus a critical appendix for that presentation, tables from Sound Transit's 2002 Financial Plan.

SOUTH KING COUNTY:

The following summary was prepared with the assistance of Jim MacIsaac--who has more public and private sector transportation experience and a lot more expertise than anyone in the Sound Transit organization. Also, he is retired, able to represent the public interest in an unfettered manner. The following was first shared with the five members of the Tukwila City Council who exhibited such courage and judgment when they moved to oppose Sound Transit. Then it was summarized in my presentation to the USDOT Inspector General:

South King County's case is an object lesson of what that subarea is being put through, and what lies ahead. The Link light rail project presented to voters in 1996 was to cost South King County $315 million construction capital, plus $31 million debt service during the project's development, $346 million total (1995$), or about $450 million (YOE$). This data is from Sound Move, the Ten-Year Regional Transit System Plan, 1996. For which the subarea was promised nearly eight miles of track, from the city of Seattle boundary to South 200th Street, and five stations, Boeing Access Road, Tukwila (South 144th), South 154th, SeaTac Airport, and South 200th.

Sound Transit also promised to evaluate an alternative route using Interurban Avenue, to serve Southcenter, South King County's leading retail trade and employment destination. The agency swiftly ruled that out, on grounds that it would add $140 million, bringing the total to $590 million, which it couldn't afford.

But now, without Southcenter, Sound Transit's projected cost of South King County's portion of Initial Segment is $791 million, a $340 million, 75 percent cost overrun, which it claims it can afford. For that huge sum, South King County gets, not 7.8 miles to SeaTac Airport and South 200th Street, but 4.9 miles, from the Seattle city limit to South 154th. And it doesn't get the promised five stations, it gets a solitary station on the edge of Tukwila.

The cost to complete the line to SeaTac airport and South 200th Street was last projected by Sound Transit as $477 million more--provided it's done by 2009. That's a larger sum than that represented to voters in 1996 for the entire South King County segment. Should Sound Transit continue Link light rail to SeaTac, by 2009--which it can't afford to do--the total capital development tab would be $1.3 billion, 2.8 times the "very conservative" cost represented to voters in 1996. If it's delayed, it'll cost more. Even then, if it's ever done, South King County will get only three stations, instead of the promised five.

Faced with this outcome, five of seven members of the Tukwila City Council wisely opposed the project in a June 2002 vote. Sound Transit then rolled out its in-house spinmeisters and its hired PR operatives, and stomped on the brave souls who dared stand up to it, accusing them of "anti-regionalism" and of "breaking their promises."

But they report that 90 percent of the constituents from whom they heard applauded their action. As well they should.

EAST KING COUNTY:

As a member of a Regional Transit Authority committee, I was a colleague of Skip Rowley, of Issaquah, who first raised the issue of what came to be called "subarea equity," in January 1996. Sound Transit deemed it politic to promise that each of the five subareas would receive benefits commensurate with their taxes, and this was spelled out in Sound Move--with reference both to tax revenue and use of debt. Essentially, East King County might not oppose a risky and wasteful rail tunnel project in Seattle, so long as it didn't have to subsidize the folly. So it was done.

But, strapped for funds due to its own misrepresentations and waste, Sound Transit is busily extracting resources from East King County, which is the one jurisdiction that isn't hemorrhaging money--because its transit investments are in buses, transit centers, and HOV improvements, rather than Link and Sounder. Here is how its money is being raided:

First, Sound Transit is holding the cash resources of all the subareas. It invests the money, and keeps the interest. This amounts to a lot of money--projected to total $934 million by 2021. (See Sound Transit's 2002 Financial Plan, 1997-2021, table 4-1B.) Because it's much the healthiest, East King County will contribute nearly half the money on which the $934 million interest is earned--and get none of it back, at least not directly.

Second, to help in this scam, Sound Transit has borrowed money it doesn't need, and the subareas pay the cost of the borrowing, while Sound Transit keeps the interest on the invested capital. In 1999, Sound Transit bonded for $350 million, 30-year bonds. So the five areas are assigned their respective shares of that burden--which has been running at a cost of $17,164,000 per year, will increase to $21,349,000 in 2007, and top out at $34,735,000 for the last decade, 2019 -2028. Since Link light rail still hasn't started construction, Sound Transit projects it will have $1.4 billion cash ("unrestricted retained earnings") as of the end of 2002. So, while the subareas pay for bonds that aren't yet needed, Sound Transit invests all that money, plus not-yet-needed tax revenues, and pockets the interest.

Meanwhile, its administrative overhead costs have more than doubled from the original projections, so it has a much-fatter central bureaucratic empire. Also, it spends more than $9 million annually on PR, media buys, and lobbying, most of it self-serving agency propaganda. Your tax revenues at work.

Third is the phenomenon of subarea borrowing. On the grounds that one subarea has money it doesn't need, and others need it, Sound Transit loans money from the former to the latter, purportedly to save the region money. But the subarea that loans money does so interest-free, hence the lending subarea subsidizes the borrower. It's crazy for East King County to be paying market rate for bonds it doesn't need, and see its money lent for no return, while Sound Transit keeps all interest on invested money. But that's the way this scam operates.

Subarea interest-free borrowing is scheduled to end in 2009, and everybody is supposed to settle accounts. But Sound Transit management secretly conspired with the Project Review Committee (which was infested with conflicts of interest) to recommend subarea borrowing be extended by another decade. Although I am not aware of that being done, as a matter of board policy, Sound Transit management and its board chairman act on the premise that it will be done. The surreptitious manner in which this is happening is summarized in my report to the state auditor.

And fourth, is the matter of risk. Sound Transit operates on compounded optimism, and has pledged the financial capacity of the entire region to underwrite bonds, and keep its commitments to the federal government--to complete its Link light rail segment, come hell-or-high-water--in return for a $500 million grant. Things are so close to the wire that it is virtually guaranteed that Sound Transit will not meet its obligations to bondholders and the federal government without further violations of its subarea equity commitments. It will be legally obliged to honor the former, and that will require it to violate the latter. Honoring subarea equity will be like the rest of Sound Transit's promises. Promises are what that agency does to get money from local voters and from the federal government. But it accepts no obligation to honor its promises, and there's no institution prepared to enforce its promises.

So, East King County, you are paying for bonds you don't need, lending money for no return, seeing your resources earn money that flows to Sound Transit's coffers, and you are unwittingly assuming a huge risk exposure for transit projects of no benefit to your citizens and taxpayers. It's bad now, and it will get a lot worse.

But...you're a lot better off than the people who reside in Seattle/North King County.

NORTH KING COUNTY:

On a summer wilderness kayaking trip in the Queen Charlotte islands, British Columbia, my wife and I were in the company of several friends from Lake Forest Park. One evening there was a campfire discussion of Sound Transit, which led me subsequently to calculate the cost and benefits for residents of Lake Forest Park. Here's my report:

There is no prospect, at current taxing levels, that light rail will reach north of downtown Seattle, much less the Shoreline area. And ALL North King County's resources are committed by Sound Transit to Link light rail. The current per-capita tax burden for Sound Transit is $106 per year. That means a family of four pays about $425 annually. (Sound Transit claims it's about $100 for a family of four, but that's just another misrepresentation. The formula is simple: divide the annual taxes paid by the number of people paying them. It's currently about $260 million per year, paid by 2.45 million people--because there are about 3 million in the three-county area, minus 550,000 who reside outside the taxing district. That comes to $106 average per person, per year.) So...assume that existing taxes will be paid at least to 2039, to retire the bonds that will be issued for Initial Segment, and pay for operating subsidies. That will total about $5,000 for a Lake Forest Park family of four. For NOTHING.

You'll be paying, your children, and grandchildren.

If Sound Transit succeeds in extracting its full local option tax--which is more than double the existing level of taxation--it might be possible to extend Link light rail as far as Northgate. So a four-person family in Lake Forest Park then will pay something well beyond $10,000--and still get NOTHING in return. Save, instead of riding a Metro Express bus directly downtown, you will be directed to Northgate, where you can wait, and make a transfer to a train.

But the citizens of Shoreline will be lucky compared to those who live in Seattle, the putative beneficiaries. Because Link light rail will severely damage the communities it will go through. Every community along the route--Tukwila, Martin Luther King Way, downtown Seattle, Capitol Hill, and University District--all of which supported the 1996 vote, have turned against it. Tukwila City Council, Save Our Valley, Downtown Seattle Association, Capitol Hill Community Council, Businesses of Broadway, and University District Community Council now realize that the impacts will be negative. It will be a public safety hazard along MLK in the Rainier Valley--a similar line in South Los Angeles, the Blue Line, killed 53 people during its first decade of operation. It will cause worse congestion along its many arterial crossings, which is admitted in an obscure appendix to the EIS. Downtown it will intensify congestion during years of construction, and then diminish the transit capacity of the existing downtown tunnel, impairing the region's express bus operations. It will jeopardize the health of Seattle's downtown retail district.

So...those of you who will merely pay money, for nothing, consider the plight of those who live in Seattle. The leading victims will be the citizens of the communities Link light rail will traverse, who will pay taxes, too, and be visited by compounded congestion, safety hazards, and an impaired business climate.