January 16, 2001

Hon. Dave Earling, Chair
Sound Transit
C/o Coldwell Banker Bain
108 5th Avenue S.
Edmonds, WA 98020

Dear Mr. Earling:

I am writing to you to highlight concerns I have with the proposal that Link Light Rail be delayed three years, from the original commencement of operations in 2006 to a time past the January 1, 2009 deadline set forth in the Downtown Seattle Transit Tunnel Transfer Agreement. If implemented, the delay will require that the transfer agreement be amended, necessitating approval by the Metropolitan King County Council. The delay of Link will increase King County Metro Transit operating and capital costs in ways I have detailed below. It continues to be my position, and I believe the position of the majority of the council, that King County be fully compensated for the transfer of the tunnel. Thus I am confident that the county will require Sound Transit to compensate the county for these increased costs.

The proposed delay implicates three dates that are identified in the transfer agreement: a date for the County's transfer of the tunnel; an expiration date if the transfer does not occur; and a date by which Sound Transit must be scheduled to commence light rail operation or the transfer shall not occur.

First, the transfer agreement contemplates that the transfer will occur on September 24, 2004. The transfer date may be changed by agreement in writing of the county and Sound Transit.

Second, the transfer agreement expires if the transfer does not occur by January 1, 2007. This date could be changed by amending the transfer agreement.

Third, the transfer agreement specifies that eleven contingencies must be satisfied or waived prior to transfer of the tunnel. One of these contingencies is that the scheduled completion of the Minimum Operable Segment has not been delayed beyond January 1, 2009. 

If the Sound Transit Board adopts its staff's recommendation, none of these three dates will be met. As to the transfer and expiration dates, the county may negotiate an agreement to amend the transfer date. Any change in the transfer date and resulting change in the payment schedule will require approval of the county council. As to the contingency that revenue service be scheduled to begin no later than January 1, 2009, the county would have to waive this contingency for the tunnel transfer to proceed.

One of the contingencies before transfer of the tunnel is that the Federal Transit Administration (FTA) enters into a full funding grant agreement with Sound Transit. The FTA has stated it will not do so without a valid transfer agreement for the tunnel in place. It is unclear whether the FTA will sign the grant agreement without knowing whether the county will agree to a later transfer date or waive the completion date of January 1, 2009.

The tunnel transfer agreement contains a number of provisions pertaining to a delay of the transfer and commencement of light rail operations. The primary purpose of these provisions are to assure that the County retains ownership of the tunnel until Sound Transit is certain of its ability to proceed, and to prevent the tunnel from sitting idle due to project delays. Some of the impacts upon the county of delay are:

1. Unless an arrangement is made to recover the tunnel debt service costs during the delay, continuation of debt service payments will cost Metro an estimated $28 million. The current Metro Transit financial plan assumes Sound Transit takes over $12 million annual tunnel debt service payments in late 2004.  

2. King County will need to plan for a variety of fleet impacts to accommodate the presumed extension of bus operations in the tunnel for three years, including:

The existing Breda dual powered bus fleet is near its useful life and will need to be replaced or refurbished to continue beyond the previously established retirement date of 2004.

Metro estimates extending the use of Breda coaches to cost an additional $7.4 million per year due to fuel consumption, maintenance, parts, and a higher per hour operating rate.

A delay in the current plan to refit Breda dual powered coaches for trolley service may leave Metro short of trolleys or require purchase of additional electric coaches.

1. The potential costs of delaying the redevelopment of Convention Place as a transit-oriented development cannot be anticipated. However, the transfer agreement relies upon substantial proceeds from the Convention Place development to return $32 million of the nearly $200 million equity value of the tunnel back to the community as new bus service. Depending upon economic conditions, the delay could either increase or decrease the proceeds from the project.

The proposed delay severely impacts King County and will require that the tunnel transfer agreement be amended. I reiterate that the county must be fully compensated for the transfer of the tunnel. Any delay in the transfer will increase costs to the county, and it is expected that Sound Transit will compensate the county for those increased costs. The county council will be closely watching the actions of Sound Transit with a view to what conditions it may deem necessary to approve amendment of the tunnel transfer agreement.

Sincerely,

Chris Vance, Chair

Transportation Committee

King County Council