Updated with scads of more info.

Judge Laura Gene Middaugh announced today that a key portion of the council's February 2011 ordinance on the proposed deep-bore tunnel was a policy decision subject to referendum. However, she says it's unclear which non-policy portions of the ordinance should be extracted from the referendum before putting the issue before voters. The court will reconvene next Friday to sort that out.

Attorneys for the group Protect Seattle Now, which submitted more than 29,000 signatures to qualify for the ballot, declared immediate victory. "I feel great. I think it was the right decision," said Knoll Lowney. Meanwhile, lead counsel for Protect Seattle Now Gary Manca said that a vote was essential because, "We are at the policy decision point."

The decision was a rebuke of Seattle City Attorney Pete Holmes, who argued that the the public couldn't vote on the referendum, filed the lawsuit to keep the measure off the ballot, and spent tens of thousands of city dollars on legal fees. The judge also ruled, as I mentioned earlier, that Holmes lacked authority to file the lawsuit at all.

In dispute was whether the ordinance's subject matter was eligible for an election: administrative acts aren't subject to a referendum but legislative decisions are. So which was this? A little of both, it turns out. Three contracts the council approved with the state, concerning right of way and utility relocation, are administrative, Middaugh said. But language in the ordinance also said the council would make its final decision and provide notice at a public meeting later this year. (State and city laws say government can't make a final decision on major projects until environmental studies are complete.)

That latter portion—section six—amounted to a policy decision in the judge's eyes. "The use of the word 'notice' implies that [council members] are not doing it in a way that will allow for review of the policy at a later date," Middaugh said. "Because of the way the ordinance is drafted, I think this is a policy decision and it is subject to referendum." She indicated that if the council hadn't included this provision, "my decision would be different."

Middaugh told both sides to present arguments next week about which portions of the ordinance are referable to voters. That tight timeline allows the referendum to appear on the August ballot.

What remains unclear is what affect the referendum will have. That partly depends on what Middaugh decides may be subject to a vote—just the council's final decision or the whole thing? But say, for instance, that the contracts are non-referable and only the final decision to approve the tunnel can go to voters, then does that final decision even matter? In other words, if the contracts are done, why does the council's vote matter?

"I think the impact is more political," said Tim Harris, a member of Protect Seattle Now. "No matter what the vote on the referendum, it cracks the aura of inevitability that tunnel supporters have created."

Regardless of the referendum's outcome, "The contracts are in place," Paul Lawrence, who argued on behalf of the pro-tunnel group Let's Move Forward, said after the court adjourned. Attorneys for the state and tunnel advocates had argued that the entire ordinance was administrative in nature and that the state had granted sole authority to the city council—not voters—to make the final decision.

Asked why his office invested so much time and money in a case it lacked authority to file, assistant city attorney John Schochet said his arguments would remain the same as a secondary plaintiff. "We would have done the work in any event," he says.