Report to the Inspector General
US Department of Transportation
February 9,  2001
Seattle, Washington

presented by
Emory Bundy
260 Dorffel Drive East
Seattle, Washington 98112
Steering committee member, Sane Transit
Co-chair, Citizens for Mobility
Former foundation executive, broadcast manager, college professor
Retired

Introduction

On November 5, 1996, central Puget Sound voters approved the following proposition:

The Ten-Year Regional Transit Plan, "Sound Move," promised a $1.67 billion light rail system, University District to SeaTac, to be placed in operation in 2006. The promises were firm and specific: The cost was represented in the text as "conservative," "very conservative," and "extremely conservative." Voters were promised in the plan that the Regional Transit Authority/Sound Transit would "make certain" it was executed on time and within budget. Sound Transit assured voters that the work of an independent, Expert Review Panel further guaranteed the reliability of these assurances, and provided parallel confidence in the reliability of projected ridership benefits and system operating costs. Elaborate promises were made concerning "subarea equity," detailed at length in Appendix B: Financial Policies. Voters were assured that "local tax revenues and related debt for projects and services [will] benefit the [five] subareas generally in proportion to the level of revenues each subarea generates." Appendix B provided specific remedies in the event of a shortfall in subarea revenue. None of the remedies anticipated raiding, or borrowing against the resources of other subareas.

In March 2000, it was represented to the Federal Transit Administration that the original $1.67 billion cost for Link light rail, University District to SeaTac, had increased to $1.924 billion for a set of reasons, including adjustments to the alignment, accelerated rises in property values, added mitigation costs, etc. That estimated cost was represented as solid:

"The most costly segments of the Central Link project (including the Capitol Hill tunnel) have been carefully planned for the past nine years. The cost estimates for these segments are stable and have received intense scrutiny. The Link MOS project lies primarily within the bounds of this stable project scope."

Sound Transit continued until December 2000 to represent to the federal government, including Congress, that the true price was $1.924, and added,

"[T]here is nothing currently, nor in the near term, that would raise any doubts about the agency’s sound financial condition."

Accordingly, Sound Transit’s Link light rail project was presented as fully meeting the conditions set by Congress:

"FTA is directed to enter into full funding agreements only when there are no outstanding issues which would have a material effect on the estimated cost of the project or on the local financial commitment to complete the project under the terms of the agreement. Areas which FTA should consider in ensuring that this condition is met include: the degree of certainty, and any remaining risks in, capital cost estimates and the availability of adequate contingency funds to cover increases in capital costs due to uncertainty; any unresolved issues with respect to non-federal sources of funding for the project (e.g., the need for further legislative action, bond referenda, or other actions to finalize the availability of non-federal funds); and the need for acquisition of existing railroad rights-of-way. FTA should enter into new full funding agreements during the final design phase...The conferees agree that the agreement should be entered into only once there is no longer a risk that cost estimates are likely to change more than the estimated contingent amounts, and there is no longer a risk that a major part of the local funding will not be made available."

In fact, costs were increasing by hundreds of millions of dollars, but Sound Transit was not admitting and reporting the increases. By summer 2000, Dr. Kriss Sjoblom, senior economist of Washington Research Council, relying solely on Sound Transit’s own records, discerned that costs had increased by an additional $480 million (constant dollars)., at least His calculations were summarized in a subsequent report, dated September 5, 2000.

In spite of assurances from Sound Transit about the reliability of the cost estimates for the Capitol Hill tunnel, there was growing disquiet in the community. The estimated cost of $500 million for a 4.5-mile tunnel was strikingly lower than the actual experience of Los Angeles Metropolitan Transit Authority, in its 17-mile rail tunnel, which averaged $254 million per mile, including stations.

The pre-eminent local authority on tunneling, Frank Carluccio, who was not participating in the project, predicted that the lowest bid would exceed $800 million.

One of the pre-selected contractors, Obayashi of Japan, pulled out in May 2000, with skeptical observations about the cost, schedule, and viability of the project Akio Watanabe, Obayashi construction manager, said the project, "is much more complicated than originally thought, and cannot be finished in the expected 3 and 1/2 years."

Each signal proved to be more predictive than Sound Transit’s assurances. Then, in early August 2000, when the two bids for the Capitol Hill tunnel were opened, Sound Transit promptly declared them secret.

Not long afterward, a front-page Seattle Post-Intelligencer news story by Chris McGann reported that tunnel bids were substantially over budget.  On September 6, KING-TV reporter Darin Watkins said a reliable source in Sound Transit confirmed that the bids were "nearly $400 million more than expected."

As the discrepancy between the apparent cost of the Link light rail project diverged from Sound Transit’s representations to the community, and to the federal government, 88 community leaders called for an independent audit and review of the project. This was announced at a September 6, 2000 press conference. Those calling for an independent audit included a former governor, former King County Assessor, prominent leaders of the business community, environmental leaders, civic leaders, social activists, a former municipal court judge, a dozen elected officials, and others from diverse neighborhoods, ethnic groups, and social classes.

Sound Transit was at least a half-billion dollars over its admitted costs, plus the multi-hundreds of millions of dollars in over-budget Capitol Hill tunnel bids. But the agency made the following response at a well-orchestrated press conference, led by its chairman, Dave Earling:

"’We're already audited to death,’ said Dave Earling, chairman of the Sound Transit board….

"’They have simply twisted the truth to suggest a crisis, when in fact there isn't any,’ he said. Sound Transit officials said there were no cost overruns and no need for an audit."

Pursuant to the requirements of Congress, the acting director of FTA, Nuria Fernandez, forwarded to the chairmen and ranking members of the respective appropriations committees "a financial analysis of the project's costs and sponsor's ability to finance, which shall be conducted by an independent examiner and shall include an assessment of the capital cost estimate and the finance plan, the source and security of all public and private-sector financial instruments, the project’s operating plan which enumerates the project’s future revenue and ridership forecasts, and planned contingencies and risks associated with the project."

Diversified Capital, Inc. was commissioned to do the job Its report was completed in early August, months after no less than $480 million in additional costs was known to Sound Transit. DCI’s report was transmitted by FTA to Congress on September 8, 2000. Acting director Fernandez vouched for the project in the following terms:

"FTA and our Financial Management Oversight (FMO) contractor have reviewed Sound Transit’s financing for the project and finds local commitments and project costs are reasonable and conclude that Sound Transit has the financial capacity to complete the MOS-1 project."

Yet at that moment Sound Transit was explicitly aware that its lowest Capitol Hill tunnel bid was hundreds of millions of dollars over the budget, and it had accumulated at least a half-billion dollars of unacknowledged cost overruns prior to that. FTA knew that too, or should have. These facts would be confirmed a short while later.

In Washington DC the DCI Baseline Report was used to reassure the appropriations committees of Congress of the solid financial basis of the project. In Seattle, the DCI report was used by Sound Transit, seconded by FTA, to seek to discredit those who were suggesting costs were running over, and therefore were calling for an independent audit. On September 12, 2000, Sound Transit planted the DCI report with journalists for the Seattle Times and PI, with its own spin. The resulting article in the Seattle Times, by Andrew Garber, is appended, and includes the following comments from FTA spokesman Bruce Frame:

"Recent claims that Sound Transit has blown its budget caused the Federal Transit Administration to recheck its facts.

"It came back with the same result: Sound Transit should get $500 million in federal money to help build a light-rail system.

"The transit administration sent an agreement to Congress this week, saying that it highly recommended giving Sound Transit the money. Congress has 60 days to review the package.

"’You have a very good project here,’ said Bruce Frame, a spokesman for the transit administration.

"Frame said the agency tracks news reports regarding Sound Transit. The agency took note last week when critics claimed Sound Transit was over budget and should reassess its finances before accepting federal money.

"’We saw the stories, and we did take a quick look at the statements,’ Frame said.

"The transit administration went back to two firms it had hired to judge Sound Transit's ability to complete the project submitted for federal money. The consultants had reviewed Sound Transit's technical and financial ability to complete the project. Both stood by their findings that Sound Transit could do what it promised, Frame said."

The presenter of this current report was confronted that same day by a member of the Seattle Times editorial board. O. Casey Corr, who demanded, "Doesn’t this report discredit your suggestion that Sound Transit is in financial trouble?" I conceded that it seemed to—but had not had a chance to review the report. Overnight I had the opportunity, and the next morning sent a memo to the Seattle Times’ reporter, Andrew Garber, leading with the observation that the DCI report was premised entirely on data supplied by the agency being studied, Sound Transit:

"[I]t is clear that the conclusion that Sound Transit is in good shape is predicated entirely on the core premise of the study, which appears under the heading, ‘Limitations on Reliability of the Data and Use of the Report’:

"’Since data provided by Sound Transit were assumed to be accurate, any inherent limitations, errors or irregularities that occurred may not be detected.’

"The next sentence is the disclaimer, which says, ‘In addition, projection of any evaluation beyond the period of analysis is not appropriate.’ Translated: don't blame us when nothing works out as predicted.

"This is simply one more good example of why we can't rely on the official process."

The comment with reference to "the official process" is intended to point at FTA as well as Sound Transit. The idea of an "independent analysis" that relies entirely on data supplied by the party being analyzed—and then is forwarded to Congress by an agency that knew, or should have known, that the cost data underlying the study were misrepresented—is subversive to the appropriations process. It is precisely what has contributed to the problems and sufferings of communities like Los Angeles and Boston.

DCI’s study subjected Sound Transit’s Link light rail project to a "stress case scenario." That scenario tested the fiscal viability of the project if farebox revenue was only half that projected (estimated to cover a breathtaking 55 percent of operations and maintenance costs), O&M costs were 10 percent high, and capital costs of MOS-1 ran 10 percent over budget. "This unlikely scenario results in negative cash flows in the years 2001-2008, with a positive balance of $28.5 million restored by 2009."

Yet the resulting, estimated cost to complete MOS-1 was still only $1.84 billion, which includes a 10 percent cost overrun, is $760 million less than what even Sound Transit now concedes, without a "highly unlikely" 10 percent cost overrun. It would be illuminating to check what the conclusion of DCI’s stress case scenario would be if it was conducted in precisely the same way, with honest numbers.

The false claims by Sound Transit, backed by FTA, as so dramatically evidenced in the DCI report episode, appears to have prompted the Seattle Times editorial board—which had strongly supported the RTA rail project from the beginning—to revisit its earlier decision. A Seattle Times column by editorialist O. Casey Corr, made the following reference to DCI’s analysis:

"A recent federal report said Sound Transit did have enough money, but based that opinion on a ‘stress test’ that projected no more than a 10 percent increase in costs over contingencies – an analysis so kind and gentle, it should be listed in this debate as a charitable donation."

One month later the Seattle Times, the region’s leading journal of record, with editorial board and ownership in accord, announced a stunning change of course:

In the ensuing weeks, similar concerns, and similar calls for closer scrutiny, and for withdrawing the FTA grant proposal, were made by a number of other newspapers, including the Eastside Journal/South County Journal, Puget Sound Business Journal, Seattle Weekly, The Stranger, and Seattle Post-Intelligencer. The modest-size neighborhood weekly, the Queen Anne/Magnolia News, was so passionate that it made the following editorial retort one week after it was paid handsomely to carry Sound Transit’s latest self-promotion advertisement:

The fiction that Link light rail, University District to SeaTac, was a $1.924 billion project, in constant dollars, was maintained in the months preceding, and all through the 60-day Congressional review period. The $480 million Dr. Sjoblom had authoritatively identified months earlier, from Sound Transit’s records, continued to be omitted. The Capitol Hill tunnel bids continued to be kept secret, officially, even though they were a well-known secret. A Wall Street Journal article in late October, quoting Sound Transit’s director of real estate and facilities, Jeri Cranney. admitted that right-of-way costs had almost doubled in the Rainier Valley, to $90 million. There were similar indications of right-of-way cost overruns all up and down the line, but they were not expressly admitted. None of the increases were reflected in Sound Transit’s official budget. At about the same time, an extensive, authoritative report by the Cooper Consulting Company, commissioned by Save Our Valley, concluded that in the Rainier Valley area alone Sound Transit understated property and displacement costs by $144 million (1995$). Another study by Cooper Consulting, for the Tukwila municipality, nearby, concluded that understated property and displacement in that jurisdiction totaled an additional $56 million.

Then, on November 16, 2000, just after the 60 days Congressional review period had transpired, which meant that the full funding grant agreement was on, Sound Transit revealed that the tunnel bid would add at least $298 million to the project. Tunnel negotiations were suspended, and some hope arose that perhaps the region would act prudently, and begin to extricate itself from its morass. The board passed a resolution asking staff why the tunnel bids were so much higher than expected, requested that alternative alignments be studied, and asked staff to report on the actual cost of the full Link light rail project, University District to SeaTac.

One month later, December 14, 2000, Sound Transit made the stunning admission that it had been understating costs by more than $1 billion. It added, implausibly, that the those prodigious understatements were the result of "honest mistakes and errors in judgment." The executive director of Sound Transit nobly took the blame, and generously wrote that the board was entitled to ask, "Why should I believe Sound Transit staff now?"

But the overruns were hardly a surprise. Anyone paying attention—which surely must include anyone with board responsibilities for one of the largest public works investments in the history of the region—could not fail to have known, at least approximately, the scale of the overruns. A week earlier, the author of this presentation wrote a summary of the overruns, entirely from open, public records, which was published in the Seattle Times, titled, "Link light rail: value down, costs up" My conservative estimate was a cost overrun in excess of $1 billion over the original price, and nearly $900 million over that represented by Sound Transit to the federal government, DCI, and the Congress. The figure admitted by Sound Transit on December 14 was higher still. Then, on January 11, 2001, questioning by board member Rob McKenna extracted the concession that agency costs were $350 to $400 million higher still. There are substantial costs above that, yet to be admitted.

Starting with the December 14 board meeting, Sound Transit set its course on rushing through the full funding grant agreement for which it had worked so hard. Its New Starts submission falsely represented costs, and had been evaluated on the basis of those misrepresentations. The independent review of its fiscal capacity by DCI relied on a budget that understated costs by more than $1 billion. The 60-day review opportunity afforded Congress carried the false claims forward, months after Sound Transit knew they were false. But having gotten near its objective, Sound Transit hastened to finalize the FFGA before the departing federal administration left town:

"In a hasty attempt to secure $500 million in federal funding before the Clinton administration steps down, Sound Transit will move forward with light rail despite mounting objections about costs, the agency's leaders say….

"President Clinton's transit administrators, the people with whom the agency has worked for more than a year to secure the $500 million, multiyear grant, give up their positions in two weeks and won't be replaced until the Senate confirms President-elect George W. Bush's appointees. The agency must act to avoid delaying or even losing its shot at the money, [Sound Transit executive director] White and [board chairman] Earling said…."

In that quest Sound Transit was backed up by the same FTA representative who previously had vouched for the DCI report:

"Bruce Frame, FTA spokesman, has said that it's not unusual for costs to change as transit projects progress, nor do higher costs ruin the agency's chances of securing the grant. Sound Transit officials say ridership estimates are good enough to justify the higher cost of the line."

FTA was an advocate for Sound Transit, rather than exercising its oversight responsibilities. This conflicted with the recommendations of the Federal Task Force which investigated the Boston "Big Dig" project. Secretary Slater had endorsed the task force’s recommendations, only nine months earlier. He had observed, "Implementing these recommendations is necessary to restore integrity and public confidence…"

At its January 11, 2001 board meeting, Sound Transit heard from a plethora of citizens who called for the board to proceed with the FFGA, or delay, with the preponderance of testimony favoring delay. The board then voted to proceed, by a one-sided margin, 14 for, 1 against (Rob McKenna). The action was extraordinary: The board voted to approve a $500 million federal contract it had not read, which entailed billions of dollars of specific obligations, to build a light rail line with a host of unresolved issues, including final alignment, premised on a financial plan it had not yet adopted. On the latter point, the board approved the financial plan by the end of the board meeting, after a brief, superficial, cursory review.

One local citizen, Dave Carey, a former vice president of Rainier Bank, wrote in advance of the meeting, and objected in the following, apt terms:

"You are all public servants entrusted by the voters to act within the limits of the authority given you by the public….[T]his project is clearly out of control. Were you to be a director of a publicly owned corporation in the private sector, not immune from answering for your malfeasance, and plough ahead at this point, you would most certainly be personally sued by your irate shareholders. In any event, you will be held accountable by the public for your actions.

"The only responsible course of action for you at this juncture is to summarily dismiss the Sound Transit management which brought us this fiasco, halt the project, fully examine the potentially more effective alternatives to Link, and resubmit the revised plan to the voters. To do otherwise smacks of great hubris and is irresponsible in the extreme."

Momentarily it appeared that the board’s rush might still be derailed, from another quarter, and substituted by due diligence:

"Harold Rogers, soon-to-be chairman of the House Appropriations Subcommittee on Transportation, wants to know why the central part of the Sound Transit project will take three years longer and cost $800 million more than stated in the grant application his committee reviewed last fall, said DanDuBray, Rogers' spokesman. The grant is for the seven-mile portion from South Landers Street to the Northeast 45th Street.

"Rogers requested the review in a letter to the U.S Department of Transportation and asked outgoing agency Secretary Rodney Slater not to sign off on the agreement….

"Rogers' spokesman DuBray said the call for review ‘is not at all a rejection of the project. It's just due diligence.’"

As it turned out, the Department of Transportation did not defer. Lobbied heavily by Senator Patty Murray and Representative Norm Dicks, according to a Sound Transit press release, Secretary Slater signed-off on the FFGA 16 hours before the Clinton Administration left office. However, Representative Rogers then referred the matter to the Inspector General of US Department of Transportation, for further scrutiny, including an audit. His move was endorsed by Representative Jennifer Dunn.

A critical issue is whether the costs of the project have finally topped-out, or whether there will be further cost increases. A related issue is whether the resources anticipated for the project will be forthcoming.

The new, revised budget is premised on the following assumptions:

1. The acknowledged cost of the Central Link capital budget (year-of-expenditure dollars) has just increased from $2.546 billion (Draft 2001 Plan) to $3.602 billion (Updated 2001 Plan), or $1.056 billion.

2. A variety of cost obligations of North King County still are not included in the new, $3.6 billion Link budget: financing costs ($195 million), reserves ($157 million), the community development fund for Rainier Valley, payments to King County for the downtown tunnel, public art, and regional fund contributions. The total, additional obligations approximate $400 million.

3. Excess real estate will be sold, and will show a very favorable return, $95 million.

4. Additional federal funding for Link light rail MOS-2, Lander Street to SeaTac, which previously was pegged at a hoped-for $441 million, will be increased by $490 million, to $931 million. When added to the existing $500 million FFGA for MOS-1, total federal funding for Link light rail, University District to SeaTac, will be $1.431 billion.

5. Construction costs will not increase more rapidly that general inflation, CPI. "Costs must not grow beyond inflation."

6. There will be no recession through 2009.

The assumptions, above, do not take into account the following liabilities:

1. Although Sound Transit has increased right-of-way costs in its new Link light rail budget by $133 million dollars, it still is woefully inadequate. The earlier budget had no provision for property that must be acquired at fair market value from the University of Washington, for both the 45^th Street and Pacific Street stations, which will be quite expensive. The two studies by Cooper Consulting Company, in the Rainier Valley and Tukwila, concluded that the shortfall in the budget for land acquisitions and relocation costs was $200 milllion, in 1995$. The new budget includes a relatively small fraction of that sum. Land is under considerable pressure in the industrial area, where Sound Transit must acquire 19 acres for its maintenance facility. It has arranged to purchase the largest two parcels, including the old Rainier Brewery site, which represent about 85 percent of the land needed. However, for some mysterious reason, it is not possible to obtain information on the cost for the land that will be imposed on Sound Transit, hence it is impossible to verify whether the current budget is adequate. Given past tendencies to dissemble, it raises suspicions that the costs are running well over the amount budgeted.

The total, unacknowledged liabilities for right-of-way and displacement costs probably exceed $100 million, by a wide margin.

2. Sound Transit has not budgeted for the infrastructure relocation costs for private utilities, such as telephone and gas companies, Quest and Puget Sound Energy. Those companies believe Sound Transit should pay the costs of its rail project, and are prepared to fight in the legislature and courtroom to protect their customers from having to bear that burden. As the vice president of the Fair Competition Alliance, Elaine R. Davis says, "The costs are not trivial. Depending on the routes eventually selected by Sound Transit, aerial and underground utility relocations -- lines, poles, vaults, conduits, cables, and pipes, for example -- could cost private utility customers upwards of $60 million."

3. The King County Council soon will adopt a motion to direct the County executive to consider Metro Transit's increase costs for debt service payments, operations and maintenance of the tunnel and tunnel buses due to Sound Transit’s decision to delay acquiring the tunnel by three years. That delay violates the agreement between the two parties, and the King County Council believes Sound Transit is obliged to absorb the resulting costs. "It will be necessary to negotiate and amend the Transfer Agreement resolving the conflicts between the Sound Transit Board Resolution R2001-01 and the provisions of the current Transfer Agreement. The resulting Tunnel Transfer Agreement shall be submitted to the King County Council for adoption by ordinance."

The estimated cost to Sound Transit, not reflected in its current budget is $30 to $60 million.

4. The Municipality of Tukwila is dissatisfied because the Link light rail route does not go to South Center. Residents and business people in the nearby Pacific Highway South corridor, part of the jurisdiction of Tukwila, represented by a citizens’ group, Sound Decisions, are displeased that the alignment will disrupt their homes and business operations. Accordingly, the parties threatened to sue Sound Transit unless the line was redirected from Pacific Highway to South Center. The parties agreed in December 1999 to try to resolve the dispute, and the lawsuit has been in abeyance. February 2001 arrived, and Sound Transit still had not resolved the matter. The threat of legal action resurfaced. On February 8, 2001, the Sound Transit board tentatively agreed to alter the route to accommodate the wishes of Tukwila, and Sound Decisions. If the tentative agreement does not endure, the other parties will sue Sound Transit. If it does stick, Sound Transit earlier had estimated that it would add $40 million to its costs.

5. There remain grave threats of additional cost overruns from the Capitol Hill tunnel, which will extend from downtown Seattle, under First Hill, Capitol Hill, then under the Lake Washington ship canal at Portage Bay, to the University District. The tunnel under Portage Bay will be approximately 200 feet below sea level. There are risks of water, soft soils, and hard rocks all along the course. Engineers on the Interstate 5 project, who excavated the western edge of Capitol Hill in the 1960s, ran into horrific problems, and severe, unexpected costs. It is impossible to estimate the level of risk, and the consequent, additional costs, but it could be substantial.

6. A number of amenities in the system have been eliminated or deferred. The Convention Place station has been eliminated, "saving" $60 million, snapped up to cover overruns elsewhere. Three stations in Seattle, including Beacon Hill, which is projected to have the greatest patronage south of the downtown, are being "deferred," plus one park and ride lot. The "savings" to the budget total another $50 million, more or less. But, of course, they are not savings at all, because the region will do without the amenities, and when they are built, later, they will cost more than they would today. Between lost amenities and deferred costs, this item represents a hidden $100+ million, unaccounted for.

Sound Transit has compiled a poor record for veracity and competence. Without question, its "very conservative" cost estimates for the Link light rail project have proven to be wildly understated—to date by about $2 billion. Until December 2001, the primary response to cost overruns was to hide them. Since $1 billion in additional costs were acknowledged in December, it has come to light that the $3.6 billion total figure admitted on that occasion failed to disclose another $400 million in obligations, the largest component of which is $195 million for financing costs.

The express assumptions underlying the current financial plan are exceedingly optimistic, unlikely to prevail in the real world. Huge construction projects place heavy demands on the construction trades and industry, almost always in consequence resulting in cost increases greater than CPI. That is the normal economic response when the construction demands inherent in a huge project press up against a limited supply of trained workers and equipment. Yet the premise of the new Sound Transit financial plan makes the opposite assumption, which is unlikely to be borne out.

A recession within a given decade is commonplace, yet the new financial plan presumes it won’t happen in the coming decade. Independent, expert studies and reports on property values and relocation costs, by Cooper Consulting Group, ECONorthwest, and Waronzof Associates, suggest that Sound Transit still has underestimated costs in that sector, probably by nine digits. With respect to the costs of relocating utility infrastructure, likely Sound Transit will ultimately accept the costs, or be compelled to. Since it is clear that Sound Transit, due to its three-year schedule delay, will violate the terms of its agreement on the Downtown Seattle Transit Tunnel, it is likely that it will have to pay the $30 to $60 million financial burden that will emanate from that delay.

One "solution" to Sound Transit’s deteriorating financial picture is simply to mark down the federal government for an additional $490 million grant, so now it is to pay $1.431 billion (YOE$)—for a project which, at the outset, was guaranteed to cost only $1.67 billion (1995$). Because MOS-1, University District to Lander Street, will be a detriment not an asset to the region if that’s where the line stops, the federal government must provide strong assurances for the budgeted $1.431 billion for the project. Even with that money success is unlikely; without it, it’s utterly impossible.

Sound Transit’s costs for Link light rail have been subjected to some testing. Its ridership operating costs, and farebox revenues have not. In those arenas, too, it has made very optimistic assumptions, including the assumption that, right from the beginning, it will be the most successful light rail line in North America in terms of ridership and farebox recovery. What if, as seems likely, those sunny aspirations prove no more realistic than its hopeful cost projections? Given its record for accuracy, and good execution, that seems likely.

FTA has tended to promote the project, rather than provide scrupulous oversight responsibilities. Perhaps FTA believes that is doing this region a favor, by providing easy access to a huge federal grant, absent a realistic plan or fiscal capacity to see the project through to success. The greatest favor would be to subject Sound Transit’s Link light rail plan to demanding scrutiny. To see that it passes muster as a genuine, solid prospect to aid the transportation needs of the region, and to improve the efficiency and the market share of transit. To see that the region indeed has in place the financial capacity for the project, with the existing, committed revenue streams.

It is easy to imagine a nightmare scenario on the horizon, modeled on that of Los Angeles, perhaps worse: If this project proceeds, and costs continue to creep and burgeon, as they have, the region will be strapped to complete MOS-1. Under any circumstances, if the federal government is not extraordinarily generous, there is no prospect for completing MOS-2 in the foreseeable future. Once the city is torn up for construction, it will be imperative to complete at least that section of the project, say MOS-1, no matter the cost—just like the Big Dig may a number of multiples of its original, estimated price, but there’s no going back.

If only MOS-1 is completed, Seattle will have a multi-billion dollar, seven mile, local train system, and the largest use will be to transport patrons one mile from Capitol Hill to downtown, which today is exceedingly well-served by buses. Hundreds of morning and evening rush hour buses, from twenty-seven routes, will be turned out of the existing bus tunnel, mostly onto congested city streets. Twenty-four of the lines are regional express buses, many of which will be facilitated in their trips to Seattle by large investments in HOV lanes, only to be mired in gridlock when they arrive in downtown Seattle during rush hours.

The capacity of the downtown tunnel to move transit passengers on trains will be inferior to what it is today on buses. The subsidy necessary to operate the transit system will grow markedly, on top of imposing burdens for debt service. Almost certainly, market share for transit will diminish. Ridership in absolute numbers may decline, as it did for so long in Los Angeles.

A substantial number of individuals and organizations that supported the Link light rail project in 1996 oppose it today. The Downtown Seattle Association was a strong supporter, and now it’s a strong adversary. Virtually every business and civic association on Capitol Hill endorsed the project. That neighborhood, with the greatest transit use in the region, supported the vote by 80 percent. In December, those same organization withdrew their support, and now oppose the project. People in the Rainier Valley believe, with cause, that the project will impose severe, disproportionate harm on them and their communities. While many are opposed, officially and formally their common position is that, should it proceed, they must be treated no less well than other, more affluent neighborhoods.

The Inspector General’s Office will serve the community best by doing its job diligently, proficiently, without fear or favor. Look hard into our circumstances and our prospects, and let the chips fall where they may. If proceeding will be the precursor of a great deal of cost and harm, as seems likely, it would be a favor to help us avert it, and free us to regroup, and take a fresh look at how best to address the serious transportation challenges that confront this region.