Cost risks
Payments to King County for the transfer of ownership and use of the Downtown Seattle Bus Tunnel to Sound Transit are going to be renegotiated. [Letter from King County Council to Sound Transit] [Tunnel Motion and staff report] [Story in Post-Intelligencer]
Property acquisition along the right of way is likely to be more expensive than planned. Rainier Brewery is an example within MOS-1 alignment. [Hal Cooper documentation illustrates problem in MOS-2]
Additional environmental mitigations of construction beyond budget are likely. [Press accounts indicating concern over noise of construction]
Additional private utility relocation costs (gas, telecommunications from Qwest and others, cable TV) beyond budget are likely. The Fair Compensation Alliance estimates that these costs are approximately $60 million. [Illustration of Qwest telecommunications demand for reimbursement with regard to light rail construction in Minneapolis (pdf file)]
Approximately $400 million in cost obligations in the North King County subarea (including all of Seattle) are not included in the new, $3.6 billion Link budget: financing costs ($195 million), the community development fund for Rainier Valley, public art, and regional fund contributions. In addition, while $170 million has been budget for allocated project reserves, only $157 million has been budget for unallocated project reserves for the entire Locally Preferred Alternative. [Points raised by Councilman McKenna at January 11, 2001 Sound Transit Board meeting]
Additional construction costs may be revealed in Sound Transit's six to nine month work plan of pre-construction engineering review. Also, there may be unbudgeted contract change fees and associated legal fees from changes in contracts with consultants and service vendors. [Work plan as described in January Sound Transit Briefing book (pdf file)]
Additional costs may be revealed through the Central Link Project Review Committee (CLPRC), established by the Board and chaired by former Seattle Mayor Charles Royer. [Press release from Sound Transit describing this Committee] [Unofficial notes from the first meeting of this Committee, prepared by observor John Niles]
The final deep tunnel construction contract, not yet finalized, may assign the risk for an increasing share of additional construction cost arising from unanticipated conditions to Sound Transit rather than to the contractor. [Tunnel construction cost document from Sound Transit (pdf file)]
Cost increases are likely to occur after construction begins, including cost growth that exceeds expected general inflation measured by Consumer Price Index. Costs are not budgeted to exceed expected general inflation, although stress on local construction resources is expected to be high because of the enormity of the Link Light Rail construction requirements. [K. Sjoblom report from September] [Times story about Board doubts]
Costs for ADA mandated paratransit service do not appear to have been included in the Sound Transit budget. ST's decision not to provide paratransit service complementary to regional bus service is open to legal challenge.
The recent dramatic increases in Northwest energy costs will be reflected in higher construction costs and operating costs for Link.
Funding risks
The Full Funding Grant Agreement was executed assuming the full financial capacity of the entire Sound Transit taxing district would be available to pay back MOS-1 construction bonds. However, Sound Transit's voter adopted and legally binding financial policies establish that the tax revenue and bonding capacity of a given subarea must only be spent on projects providing benefits to that subarea. It is unlikely that the North King County subarea (City of Seattle) will have the financial capacity to cover payments on principal and interest for bonds to build the MOS-1 light rail project contained completely within that subarea. (In fact, sales tax revenue growth in the built-out North King Subarea is likely to grow less rapidly than projected.) Thus, the signed and legally enforceable FFGA is in direct conflict with the legally binding principle of subarea equity. [Jim MacIsaac analysis of 2001 Sound Transit Financial Plan] [Funds will be diverted to pay for Link costs (Anonymous Tip)]
The projected farebox recovery rate for Link Light Rail is based on optimistic ridership forecasts and dubious operating cost assumptions; also, the rate exceeds the experience of existing light rail systems described in the National Transit Database.
Additional state funding of Sound Transit is not likely, because the legislature is holding to the Sound Transit promise that additional state funding would not be needed, and there are many competing demands for the use of taxing capacity. [Dick Nelson technical paper] [Op-Ed by 15 legislators]
Additional cost increases from changes and additions being made in MOS-2 to be constructed simultaneously with MOS-1 threaten funds available for MOS-1 (example, the approved change in the Tukwila alignment, and potential change in Rainier Valley as a result of Save Our Valley lawsuit). [Post-Intelligencer on Tukwila]
The $500 million cost of extending Link from the University of Washington to Northgate is unfunded. The
Downtown Seattle Association, the University, and others have specifically requested this extension since MOS-1 in not useful as a stand-alone project. Under the current financial plan Sound Transit will not have the resources to complete this extension anytime in the foreseeable future. [Concerns from University of Washington about light rail line terminating in the University District]Additional unbudgeted cost overruns in Sounder Commuter rail (Tacoma to Everett) would decrease funds available for Link. Construction has not yet begun to improve the right of way north of Seattle. [Emory Bundy memo on Sounder]
Sale of excess real estate by Sound Transit may not yield the budgeted revenue of $95 million. Sound Transit assumptions of real estate inflation may conflict with other assumptions of moderate CPI growth. [Story in the Post-Intelligencer]
Problems in securing additional $931 million federal funding for Link light rail MOS-2 (to be constructed simultaneously with MOS-1) will threaten both MOS-2 and MOS-1.
Periods of recession before 2009 would result in lower than projected revenues. Recessions post 2009 may result in lower revenues and force decreases in Sound Transit services in order to maintain debt repayment. Financial plan assumptions for high rates of economic growth and low rates of inflation appear optimistic.
Schedule risks
Additional sources of delay may be revealed in Sound Transit's work plan of pre-construction engineering review. [Reference item above.]
Additional sources of delay may be revealed through the Central Link Project Review Committee (CLPRC). [Reference item above.]
Delay may occur as a result from political action associated with renegotiation of the Downtown Seattle Transit Tunnel transfer. [Reference item above.]
Save Our Valley Federal Lawsuit alleges violations of the U.S. Civil Rights Act in the use of Federal funds in MOS-2, and success by plaintiffs may affect the schedule for MOS-1. [Cleve Stockmeyer summary]
Citizens for Mobility Federal Lawsuit alleges violations of NEPA, Clean Air Act, and TEA-21 in the plan for MOS-1. [Cleve Stockmeyer summary] [Story in the Post-Intelligencer]
Friends of the Monorail Federal Lawsuit alleges violations of NEPA in the plan for MOS-1. [Cleve Stockmeyer summary]
Additional lawsuits causing delays may arise related to violations of subregional equity financial policy. [The Stranger quoting Rob McKenna]
Additional ballot initiatives, state and local legislation, and lawsuits resulting from neighborhood dissatisfaction with the Link plan and environmental impacts of construction -- Downtown Seattle Association (DSA), Capitol Hill -- and dissatisfaction by citizens generally as the plan continues to drift further from the one promised to voters in 1996.
[DSA withdraws support as reported in Post-Intelligencer]
[News story on filing of new initiative]
[Capitol Hill withdraws support]
[Times story on questions about extending schedule]
[Associated Press story on Ride Free Express January 2001 polling results]
[Ride Free Express analysis of the
January 2001 independent poll commissioned by them.]