Samples of Letters We've Sent
Letter to Tukwila City CouncilJune 18, 2002
I applaud you for your action last evening. You are the first group of elected officials to finally stand up to that huge rail machine that has gone wildly out of control. Sims and Nickels have meandered the tracks and placed stations everywhere they would like within Seattle, but then railroad through your city with one stop at its most remote corner. In fact, that may be the only station ever built outside the city of Seattle for the Central Link project. Sound Transit will have committed ALL of its currently available tax resources out to the year 2039 just to build this least costly Initial Segment of the promised Phase 1 "starter rail" segment of a so-called "regional" rail project.
The financial outlook for Link in the South King Subarea is very bad, for Tukwila it is even worse. The South King subarea is not only obligated for the portion of Link south of the Seattle city limits, but also for the entire cost of Sounder south of downtown Seattle to the Pierce County line and some Regional Express bus services. Even so, the ongoing cost of the small piece of Link will be drawing 55% of your Sound Transit tax dollars -- and you will get one station at the far west tip of your city.
As federal grant hopes have shrunk from about $1.5 billion to only $500 million, the funds shortage is being made up by a dramatic increase in presumed revenue bonding. The delayed effects of the bonded debt service will be devastating by such time as the full force of that debt service hits in 2015 and continues through 2039. (The first 5 years of each 30-year bond issued are interest-only payments) By 2015 annual debt service for Link will be 2.5 times its annual operating costs. The annual cost outlay for Link in 2015 is estimated by ST at $189 million. By then the total annual tax revenue and farebox collections available to Link are (rather optimistically) estimated by ST to total $205 million. Assuming that the costs of building Link IS do not further increase, nearly all of your ST tax revenues from this day forward to 2039 will be obligated for the Sound Transit Phase 1 program, with the Link project terminated four miles short of its S.200th Phase 1 promise. The South King subarea will be bonded to its maximum borrowing limit by 2009.
There is no light rail system in this country that has or ever will have such a bad financial structure for the local taxpayer. This least expensive, 50% surface, portion of Link is now estimated to cost over $200 million per mile in YOE$. Bringing all cost of the Tri-Met MAX system in Portland up to year 2006 dollars, its cost is $64 million per mile. And Westside MAX has a long tunnel bored through rock. In equivalent year dollars, MAX got the same level of annual fed grants as ST is expecting for Link. For MAX the fed $$ funded over 67% of the capital costs. For Link the fed $$ will cover less than 20% of the capital costs. Tri-Met did not have to resort to any significant amount of bond financing. ST will be relying on up to 50% bond financing -- borrowing against ultimately your grandchildren's tax dollars.
Your action last night was likely much wiser than many of you know, because ST does not spread news on its financial programs such as I have done above. What you do hear from ST is "borrow and build now, it will only get more expensive." Not so. The cost of bonding is double the construction cost index.
I do hope you will stay the course.
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