MEMORANDUM
January, 2001
by Sane Transit Technical Working Group with additional professional legal assistance
Re: Congressional, Legal, and Regulatory Issues Indicate that Sound Transit's January 19, 2001 FFGA for its Link Light Rail Project is Unlawful
Background:
Since 1996 Sound Transit ("ST") has been attempting to develop and implement a "light rail" project in the Central Puget Sound region of Washington state.
As part of this effort, it has been pursuing grant funding from the Federal Transit Administration ("FTA") under its "fixed guideway" funding authority.
In 1998, the FTA directed ST to define a Minimum Operating Segment ("MOS-1") for purposes of FTA funding. This MOS-1 was defined as a 7.2 mile segment from NE 45th Street to S. Lander Street.
In 1999 ST and FTA published a Final Environmental Impact Statement ("FEIS") for the project proposal. That proposal called for a light rail project of 20-plus miles in length, from NE 45th Street south to Sea-Tac Airport, with an optional extension to Northgate if funds permitted. (Hereinafter the "Preferred Alternative" or the "Project".) The Project was to be completed by the end of 2006.
In January 2000 the FTA issued its Record of Decision ("ROD") on the Project. The ROD was based on the assumption that the Project would cost approximately $ 1.9 billion (1995$), and would be completed in 2006.
Between September and November 2000 Congress conducted its 60 day review of the proposed FTA funding ("FFGA"). This review was based upon the same assumptions outlined in the preceding paragraph of this Memorandum.
On December 14, 2000 ST staff presented the ST Board with a revised cost estimate for the Project of $ 2.6 billion (1995$), and a revised completion date of 2009. These revised assumptions have not yet been reviewed by Congress.
In January 2001, Members of Congress, including Representatives Rogers and Dunn, requested the FTA to withhold issuance of the FFGA for the Project.
Nevertheless, on the evening of January 19, 2001, in the waning hours of the Clinton Administration, the FTA signed the FFGA in question.
Issue:
The issue addressed in this Memorandum is whether the parties have lawfully entered into the FFGA.
Short Answer:
In essence, the answer is no. The Project that is the subject matter of the FFGA is materially different from that reviewed by Congress. And the subject matter of the Project approved in the FFGA is materially different from that reviewed for environmental compliance some one year earlier. For these and related reasons, the FFGA is voidable and should be rescinded.
DISCUSSION;
Source Documents:
The source documents referenced in the below discussion are:
FTA Circular C - 5200.1 (July 2, 1993)…
Summary of Discussion:
The FTA has approved for funding a Project that was not subject to review by Congress as required. It has approved for funding a Project that has not been subjected to the requisite environmental review under federal law. And it has approved for funding a Project that is not, at the time of signing of the FFGA, of sufficient specificity to comply with FTA's own requirements for funding.
For the foregoing reasons Congress should take steps to cause FTA and ST to annul the FFGA signed in January 2001. Alternatively, Congress in its discretion should make explicit its intention not to fund any further activities under the FFGA until a legitimate alternatives analysis has been completed and the project re-evaluated in accordance with FTA guidelines.
Summary of Issues:
Issue No. 1: Misleading Congress
Issue No. 2: Failure to Comply With Federal Environmental Requirements
Issue No. 3: Failure to Comply with Requirements of Statutory Authorization
No Alternatives Analysis
No Project Justification
Inadequate Technical Capability of Grant Recipient
No Showing of Adequate Local Financial Commitment
No Showing of Likelihood to Meet Statutory Requirements in Future
Other Factors
Conclusion
Issue No. 1: Misleading Congress
As ST acknowledges, Staff Report, page 6, attached to ST Resolution 2001-01, it is required that Congress be given a 60-day review of the proposed FFGA before implementation. That 60-day review expired November 11, 2000.
It is undisputed that the Project subjected to the 60-day Congressional review was a $1.9 billion (1995$) Project (NE 45th Street to Sea-Tac Airport), to be completed by the end of 2006. It is equally undisputed that as a result of ST Resolution R2001-01, the Project was redefined to be $ 2.6 billion (1995$) for the same length, but now to be completed by the end of 2009. Finally, it is agreed that the Project approved for funding in the FFGA was the latter, i.e. $2.6 billion to be completed in 2009.
It is beyond peradventure that the changes from $1.9 to $2.6 billion, and from completion date of 2006 to 2009, are material changes. Indeed, this is why ST devoted three full pages of discussion to the items in the Staff Report, and why they had to be put to a "super majority" (2/3) vote of the ST Board, all as reflected in ST Resolution R2001-01.
Put simply, the Project approved for funding in the FFGA is not the same Project put to Congressional review in the fall of 2000. Because the Congressional review function has not been satisfied, the FFGA is voidable. In addition, the Congressional Budget Office, Inspector General, or both, should conduct an investigation into this matter and take appropriate disciplinary action against current or former FTA employees who participated in this effort to mislead Congress.
Issue No. 2: Failure to Comply With Federal Environmental Requirements
This issue turns on the same fundamental point made in discussion of Issue No. 1, above: Namely, the Project reviewed for environmental compliance was not the same Project as that approved for funding in the FFGA.
It is clear from examination of the FEIS (e.g. p. 6-3) and from the ROD (e.g. p.3, "Background") that the parties conducted environmental review of a Project to be completed by the end of 2006. Yet the FFGA approves for funding a Project to be completed three years later, by the end of 2009.
Because , as explained in Circular C-5200.1 at page I-7, the FFGA incorporates by reference the Jan. 5, 2000 ROD [which has not been amended], we have an analytical disconnect: An FFGA funding authorization for a Project to be completed in 2009, based upon a ROD review of a Project to be completed in 2006.
There are a host of other environmental problems with the Project, many of which are summarized in the Citizens for Mobility complaint in federal district court.
But for present purposes it is enough to focus on the extension of the Project time from 2006 to 2009. The Circular, at page I-1, Para. 3, states that: "The Project Description should not extend or alter the Project as evaluated in the environmental process . . . ." In the event of such extension or alteration, "additional environmental review and evaluation will be necessary before the parties execute the FFGA." Id.
In the ST Staff Report for R2001-01, at page one, staff references as a "Highlight of the Proposed Action" an amendment of the Sound Move plan to "extend the time" for completion of the Project from 2006 to 2009. And on pages 2 to 4 thereof, staff devotes extensive discussion to the topic of "Extension of Central Link Schedule from 2006 to 2009." Again, this was a matter subjected to a "super majority" (2/3) vote of the ST Board.
These facts show beyond dispute the importance and "materiality" of the extension from 2006 to 2009. Because no environmental review was conducted after this extension decision was made, the parties were not permitted to execute the FFGA.
Issue No. 3: Failure to Comply with Requirements of Statutory Authorization
Title 49 U.S.C. 5309(e) sets forth a number of specific statutory requirements to be met, and these requirements are fleshed out by both the FTA's Technical Guidance Memorandum of July 1999, and its Circular C-5200.1.
No Alternatives Analysis
The statute requires an adequate "alternatives analysis", a showing of adequate "project justification", an "acceptable degree of local financial commitment," and a showing of the "reasonable likelihood that the project will continue to meet" the requirements of the statute. As discussed in some detail in the Citizens for Mobility complaint, the project - - even before its January 2001 amendments - - failed to meet these statutory requirements. The situation is even more aggravated now.
For present purposes, however, it is enough to observe that this new Project - - the Project approved for funding in the FFGA, namely the $2.6 billion (1995$) Project scheduled for completion in 2009 - - has never been subjected to any of the analysis required by 49 U.S.C. 5309(e). This new Project was not approved by the ST Board until January 11, 2001, was not submitted to FTA, in the form of a revised FFGA Application, until thereafter, and then was approved on January 19, 2001, as aforementioned. There was simply no time for, and there was no analysis of any kind as required by statute.
Thus the new Project has not been compared to alternatives, and therefore no "alternatives analysis" has been conducted as required by 49 U.S.C. 5309(e)(1)(A).
Similarly, there has been no "justification" of the new Project, as required. Id., - (1)(B), and - (e)(3). Section 5309(e)(1)(B) requires a determination of justification based upon "a comprehensive review of its mobility improvements, environmental benefits, cost effectiveness, and operating efficiencies . . . ." No such comprehensive review has been conducted of the new Project, as approved by the ST Board on January 11, 2001, and approved for funding in the FFGA signed January 19, 2001.
Section 5309(e)(3)(A) requires that the project justification analysis include a consideration of "direct and indirect costs of relevant alternatives." This analysis has not been conducted for any alternatives to the new Project proposal for light rail, save the "no action" alternative.
Section 5309(e)(3)(F) requires that the project justification analysis include consideration of the "technical capability of the grant recipient to construct the project." There has been no such consideration with respect to the new Project. Thus, in the ST Staff Report of January 2001, at page 2, they explain that "a number of unforeseen conditions and changed circumstances have increased the time predicted to implement the Link and its estimated cost."
ST Staff identifies, as examples of these unforeseen conditions, "the addition of tunnel and station shells under Beacon Hill; the discovery of unstable soils beneath Portage Bay and in the vicinity of a number of the proposed underground stations; constraints based upon more complete engineering and construction design information; increased right-of-way costs and construction costs; and increased environmental mitigation costs to address such issues as noise, vibration, endangered species protection, and traffic and safety impacts associated with construction in a densely-populated urban environment." Id., page 3.
The above is a remarkable collection of admissions. ST admits it did not foresee these things. What is not clear, and what has not been considered by FTA, is whether or to what extent ST should have foreseen these challenges. The required "technical capability" of the grant recipient includes certainly the ability to plan and implement the project in a professional manner. This in turn requires the ability to foresee most major challenges, and plan around them or price into the Project the cost of surmounting them. Despite the luxury of more than four years of planning, and tens of millions of dollars supporting that planning effort (including over $40 million from the FTA), ST has demonstrated its utter inability to plan, to foresee, to assess, to really accomplish any of the basic project management functions that are essential to prove "technical capability". Indeed, despite having the FFGA, ST is still unable to provide answers to a whole range of fundamental questions; where will the line terminate in phase one? what exactly is the alignment? will state funding be used? What ST has demonstrated is that it lacks the technical capability to complete the Project on time and on budget.
Again, however, for present purposes the important statutory point is that the record is devoid of any evidence showing that the FTA, before granting the FFGA, gave any consideration to the "technical capability" of ST in light of the ST Board Resolution, R2001-01, and the new Project proposal submitted thereafter. In this respect the FTA has failed to comply with its own authorizing statute.
In similar vein, FTA has conducted no research or analysis to determine whether the requisite degree of local financial commitment has been demonstrated with respect to the new Project. At this juncture we know at least two things: (1) The current Project proposal is materially different from that approved by the local voters in 1996; and (2) ST currently estimates that it needs far more FTA funding than it ever suggested to the Washington voters in 1996. And we know one other thing: With respect to the new Project proposal, the FTA has not examined either of the above issues.
Regarding the first point, the 1996 "Sound Move" document, put to the voters, called for a $1.7 billion (1995$) Project, not the current $2.6 billion (1995$); it called for completion in 2006, not 2009; and it called for a length from NE 45th Street to Sea-Tac Airport (over 20 miles), not the 7.2 miles of MOS-1 which is all that ST is committed to under the FFGA (and in numerous other material respects the project scope has changed since 1996). So, to summarize, the cost, schedule, and scope of the Project is materially different from what the voters approved in 1996.
Perhaps there is no better evidence of the materiality of these changes than the ST Board Resolution, R2001-01. There, at page 6, ST indicates the budget is "hereby amended", and the project duration is "extended". This is based on the Staff Report, page 1, recommending to "amend the Sound Move Ten-Year Regional Transit System Plan to provide for a revised . . . schedule and budget." ST does not explain how, under local law, it can amend something previously approved by the voters without a new vote; nor, notably, has FTA conducted any examination or analysis of this issue. If the new Project (i.e., the "amended" Project) is not authorized by the voters under local law, the presence of a local financial commitment remains an open question.
As to the second point raised above, ST indicated in 1999 in its New Starts Report, pages 3 and 4, that it anticipated 33% funding through the FFGA for its MOS-1, for a total of $500 million in 1995 dollars. By contrast, in the FFGA signed Jan. 19, 2001, and in Attachments 2 and 3a to the FFGA, it is clear that the maximum federal commitment is $500 million in YOE dollars [substantially less in 1995 dollars], compared to the total estimated Project cost for MOS-1 of $2.6 billion in YOE dollars. Thus, the federal match has diminished from the 33% anticipated as late as September 1999, to less than 20% today.
How does ST expect to fund the difference? This is explained, in part, in ST Board Resolution R2001-01, where in the attached Staff Report at page 4 it is explained that the "additional cost to complete the project can be funded . . . [in part through] an increase in federal funds from $941 million to $1.43 billion . . . ." Putting aside for the moment where the $941 million figure came from, the important point here is ST's assumption that it can secure approximately $500 million of additional FTA funding, even though the ink is scarcely dry on an FFGA indicating on its first page that the "Maximum Federal New Starts Financial Contribution" is the original $500 million, nothing more.
In other words, by its own admission ST cannot solve its financial problems without assuming a future flow of an additional $500 million from the FTA - -an assumption it makes, clearly, at its peril.
No Showing of Likelihood to Meet Statutory Requirements in Future
Even after the recent amendments enlarging the Project budget and extending its duration, still there is little certainty with respect to ST's plans. Thus, in ST Resolution R2001-01, page 3, the ST Board approves a "six-month work plan to complete the contracting procurement process . . . , to complete ongoing value-engineering studies designed to reduce project costs, and to continue to investigate methods to reduce the risks and costs associated with the tunnel crossing beneath Portage Bay and the deep tunnel stations in the University District . . . ."
While ST may hope such efforts will reduce costs, history shows that every time ST has studied the project further, expected costs have gone up, not down. The important point here is that until it completes its six month "work plan" ST will not know with any level of precision what project it intends or expects to implement - - and certainly there is room to doubt that certainty will be established even then. Press reports indicate ST is considering a wide number of route alternatives, and crossing alternatives, including a bridge over Portage Bay rather than the tunnel currently on the drawing boards. No one knows where it will end up, and certainly no one is saying with certainty now.
The FTA Circular, C-5200.1, page 4, states that the FFGA will be prepared "at the time a project moves into the final design stage." In this case, the Project is not in the final design stage, as that phrase is reasonably understood. Evidence of this fact is found in the Application submitted by ST to the FTA in January 2001. Thus, 13.71.02 "Final Design/Engineering - Third Party" will not be complete until December 30, 2001. The Design/Build Contract for Tunnel and Subway Stations will not be awarded until May 20, 2001, 13.23.04, and that date is dubious in light of the ST Board's planned six month "work plan" extending from January into July, 2001.
Separately ST suggests "Contract Final Design" will not be done until Nov. 30, 2002, 13.71.02. Attachment 4 to the FFGA indicates, in para. 1, that the "start date for the design/construction has been revised by eight months to begin June 02, 2001", but again that date is certainly dubious.
Further in Attachment 4 is the indication that for the design/build of the north tunnel subway and stations [the most complex part of MOS-1]: "The design and construction duration has been extended for approximately 28 months. This will accommodate coordination and design reviews by third parties for work affecting their facilities, acquisition of permits, and real estate during the design . . . ." In other words, the design is not final, must be passed through third parties, and apparently may not be final for as much as 28 months from now.
These are by no means the only uncertain aspects of the light rail plan. A number of important Project components, including several stations and a park & ride lot, have been deferred or cancelled. No schedule has been established for completion of these facilities and in their absence the utility of the system is significantly reduced.
The project will also necessitate evicting all bus service from the downtown transit tunnel. As a result, the volume of buses on the surface streets will significantly increase and bus speeds will be significantly slower. In the recently adopted six-month work program ST proposes to "Review strategies to manage surface bus traffic in the Seattle CBD once buses are no longer able to operate in the downtown Seattle Transit Tunnel." These strategies will have an impact on ridership, traffic congestion, and air quality. The costs and performance of the Project cannot be ascertained without first establishing these strategies and also specifc operational adjustments and roadway improvements. These impacts on the bus syetem are not inconsequential. Even with completion of the Project, bus riders are forecast to outnumber light rail riders by better than three to one.
FTA's New Starts Report provides an over-view of the project evaluation process. It states "FTA also includes a variety of other factors when evaluating project justification, including c) additional factors relevant to local and national priorities and relevant to the success of the project." The FEIS for the Project states that a primary objective is to increase transit capacity through the downtown Seattle transit tunnel. However, a review of the Project reveals that in fact peak hour transit capacity through the downtown tunnel would be significantly less than provided by the existing bus service. Clearly, the effect of the Project would just the opposite of local priorities and inconsistent with national transportation policy. On the basis of this factor alone the FFGA should have been rejected, but the agreement with FTA makes no mention of this fatal flaw.
Here, we have a Project which:
Under all of these circumstances, it is difficult to see any evidence that the Project FFGA meets statutory requirements, let alone that there is a "reasonable likelihood that the project will continue to meet" statutory requirements.
[End]
Contacts: Emory Bundy, ebundy@nwlink.com and John Niles, jniles@alum.mit.edu