(Seattle) Monorail's building, debt costs balloon to $11 billion (sold to voters as $2 billion!)

Seattle Post-Intelligence ^ | 6/22/05 | JANE HADLEY

[Diddle E. Squat]

t will cost more than $11 billion to pay for the 14-mile monorail Green Line project and the debt to finance it, according to documents made public yesterday.

That's more than triple what Sound Transit will pay for construction and debt service for its 14-mile light rail line from downtown Seattle to Tukwila.

The total also is more than five times the construction tab alone for the monorail, a ratio that troubles state Treasurer Mike Murphy.

"You've got to be kidding me," Murphy said yesterday. "That's ludicrous."

He said the typical principal and interest payments on a state project amount to double the construction cost of the project. That ratio would suggest a total cost of less than $4 billion for the $1.9 billion monorail.

Monorail officials said Monday that they would overcome budget obstacles by extending collection of a Seattle car-tab tax until 2050 or beyond. Murphy said the state ordinarily does not issue bonds longer than 25 years, because there is no "economic advantage."

In addition, the monorail expects to pay higher interest rates than Sound Transit -- up to 7 or 8 percent for junk bonds, which will pay for part of the project Seattle voters narrowly approved in 2002.

The monorail has been forced into some unconventional financing arrangements because the project is about 20 percent more expensive than expected and because its motor-vehicle excise tax revenue is 30 percent less than expected. Seattle residents pay 1.4 percent annually of the state-calculated value of their vehicles.

OnTrack, which bills itself as a monorail watchdog group, was critical of the tax extension plan.

"There's a huge price with extending the term of the bonds out as long as they're going," said OnTrack policy analyst Krista Camenzind, calling $11 billion "an amazing amount of money to pay for bonds."

"The kids who graduated from high school this month will be paying this monorail tax for their entire working life and maybe into their retirement, but they had no say in planning or approving the Green Line," she said.

City Councilman Richard Conlin, who has been a monorail skeptic, said it's too early to draw any conclusions, but he added: "When I heard there was 45 years of payments, it's troubling. I really need to look at that very carefully."

Of the $11 billion in debt service, he said, "That's a ton of money."

The City Council must ultimately approve construction of the West Seattle to Crown Hill line on city streets.

Longtime monorail critic Henry Aronson said the extended tax bite would make it difficult and perhaps impossible for Seattle to pay for other transportation projects, such as any future monorail lines, extending light rail or replacing the Alaskan Way Viaduct and the state Route 520 bridge.

"The monorail board seems perfectly happy to mortgage four generations of taxpayers to pay for one-fifth of the monorail plan offered to the voters in 2002," he said.

Monorail spokeswoman Natasha Jones said the $11 billion number looks big because it includes inflated future dollars.

"It does look like a big number when you get out that far," she said. "We opted to spread that over a larger period of time. These are choices we all make in our everyday life. Do you pay off your mortgage in 15 years or do you spread it out over 30 years?"

Jones noted that the monorail is a "tangible asset," not clothes or food or a trip. "This is a 100-year system we're aiming for," she said.

It's reasonable not to put the entire cost on current users, she said.

Paying for future extensions of the monorail or other transportation projects "is a discussion the community will need to have," she said. "They can look at federal dollars or other taxing mechanisms."

Murphy, the state treasurer, said he ordinarily does not get involved in local issues but made an exception for the monorail.

"I have a several-inch-thick file on these guys. Everything I have seen just does not pencil out," he said. Murphy says he does not believe the monorail will have enough income from the car tab tax to pay for the debt.

He said the monorail's finance director, Jonathan Buchter, recently asked for a meeting, but Murphy told Buchter he had already met several times with him and "now I want to meet with your board." A meeting is set for early July. State Auditor Brian Sonntag, who is also concerned about the project, also plans to be present.

"When we see folks going off the deep end, we feel it's important to comment on it," Murphy said. "The number keeps getting bigger and bigger and bigger and they haven't turned a spade of dirt yet. That's the issue for me. I would never ever, ever indebt the state of Washington in the way they are indebting the citizens of the city of Seattle. It's unconscionable what they're doing."

The Seattle Monorail Project released its voluminous report Monday detailing finances. Buchter has insisted that the numbers do pencil out. However, he was gone yesterday and will be for the rest of the week, Jones said.

Murphy said the monorail "did a tricky thing" when it told voters debt would be capped at $1.5 billion in 2002 dollars. That means that the debt is "an open-ended deal" and the more time passes, the higher the debt cap is.

Richard Borkowski, president of People for Modern Transit, said there are many uncertainties hanging over the project.

"The price keeps going up and they're delivering much less than what was voted on," he said. "They're buying fewer trains, the frequency is less, there are fewer stations."

Jones said the critics have been claiming "the sky is falling" for the past three years.

"We've risen to every challenge that's been thrown our way," she said. "We've been able to do all the things critics have said we couldn't do. We've done a great thing. We've delivered an elevated-automated transit system citizens have been clamoring for decades."

The project will bring 2,100 jobs every year for construction, she noted. The monorail is scheduled to open Dec. 1, 2010.

MONORAIL COSTS

To pay for the 14-mile monorail project and the debt to finance it, more than $11 billion will be required. That's more than triple what Sound Transit will pay for construction and debt service for its 14-mile light rail line from downtown Seattle to Tukwila.

# Monorail construction costs and debt service: $11 billion.

# Sound Transit's Central Line construction cost and debt service: $3.24 billion.

[GretchenM]

ping

[southernnorthcarolina]

Monorail, light rail, heavy rail, subway, streetcar, mag lev... they all have one fatal flaw: they're fixed. They take people, at mind-boggling expense, from where they aren't to where they don't want to go.

It is amazing that almost every wanna-be "big city" has a commuter rail system underway, or in the planning stages. For reasons which have never been satisfactorily explained to me, a city simply MUST embrace 19th-century technology to be thought of as a "World Class City." My home town (though I've had the common sense to move to the exurbs, thereby avoiding at least some of the tax burden) of Charlotte is one such city. The South Line of its light rail system has been green-lighted for the commencement of construction. Of course, its budget has more than doubled before the first shovel of dirt was turned, despite the fact that the project scope has been scaled back to avoid even more egregious cost overruns. The line was shortened, so that it will stop short of the I-485 beltline, rather than crossing it. More amazingly, each station platform has been reduced in length, and therefore will be able to accommodate trains with a maximum length of TWO cars. Add to the equation the fact that the route will have numerous grade crossings, and what you have is not mass transit, but a toy. Lionel should have been asked to bid on the project.

Of course, it's all about incrementalism. Get the first line done, no matter how puny, and then use the "we can't stop now" argument. It's happening in mid-sized cities from coast to coast. Each and every one of them will be saddled with a money-losing white elephant for decades to come. Very sad.

[ApplegateRanch]

Sometimes, it IS cheaper to pull the plug on a started project, no matter what the loss is.

[Fledermaus]

I'm not going to read the whole article so let me ask, how much federal money is involved?

Another Big Dig RIP OFF?

I'm getting so sick of paying taxes to fund all these pie-in-the-sky lies the blue city folks shove down us so they can have "public transportation" and pretty "greenways" (prediction: mental illness in Boston will skyrocket from it's even high average being left wing idiots because off all the driving and train riding they do underground).

[Fledermaus]

Been there, done that - WPA!

[Conservative Firster]

Lyle Lanley

Well, sir, there's nothing on earth
Like a genuine,
Bona fide,
Electrified,
Six-car
Monorail! ...
What'd I say?
Monorail!
What's it called?
Monorail!
That's right! Monorail!
I hear those things are awfully loud...
It glides as softly as a cloud.
Is there a chance the track could break?
Not on your life, my Hindu friend.
What about us brain-dead slobs?
You'll all be given cushy jobs.
Were you sent here by the devil?
No, good sir, I'm on the level.
The ring came off my pudding can.
Take my pen knife, my good man.
I swear it's Springfield's only choice...
Throw up your hands and raise your voice!
Monorail!
What's it called?
Monorail!
Once again...
Monorail!
But Main Street's still all cracked and broken...
Sorry, Mom, the mob has spoken!
Monorail!
Monorail!
Monorail!
Monorail!
Mono... D'oh!