In the past two months, the Seattle Monorail Project (SMP) has released two key aspects of its proposal to build a 14-mile monorail line from Ballard to downtown to West Seattle. One is the plan to build the line. The other is the financing package to pay for it. Both were released after nine months of closed-door negotiations.

While we endorse the plan, we cannot endorse the $11 billion financing proposal.

The day after the SMP unveiled its financing scheme, the agency's finance director, Jonathan Buchter, left town. It was a prudent move. If Buchter had been in town last week, a mob of Stranger staffers would have marched down to SMP headquarters at Fourth Avenue and Stewart Street, torches and pitchforks in hand, and torn Buchter limb from limb.

The $11 billion bombshell was first reported on The Stranger's blog last Tuesday, June 21—one day before the news hit the front page of the Seattle Post-Intelligencer. According to the monorail agency's own publicly available estimates, the Green Line would actually cost $11 billion: approximately $2.1 billion, plus $9 billion in interest payments on long-term, and in many cases high-interest, bonds. That's like taking out a mortgage and paying more than four times its value in interest alone. (Typically interest on a home loan roughly matches the price of the home.) The SMP's terms are as unacceptable for a public-transit system as they are for a house.

We're still excited about the 14-mile line the agency unveiled last week. We still believe the monorail remains the best hope for truly rapid public transit in Seattle. We also believe that advocates of the plan, such as The Stranger, should call for radical steps to save it now.

We propose a revote on the Green Line—the promising 14-mile, $2.1 billion, Ballard-to-downtown-to-West Seattle route. The revote would keep the Green Line, but mandate a new financing plan that doesn't rely on junk bonds and a 50-year (or longer) tax to pay for the project.

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As if it needs to be said: The Stranger has adamantly, religiously, and maniacally supported the monorail. Ever since visionary cab driver Dick Falkenbury drew up the first monorail plan in 1993—with elevated trains zipping in an X pattern across the city—we've been convinced that the monorail is a smart idea. We've published pro-monorail stories, columns, articles, and editorials. Last year, we rallied against a reactionary "monorail recall" campaign that would have sunk the two-year-old agency. And the pro-monorail camp won, by an overwhelming 63.5 percent margin. Seattle was finally, firmly in our corner.

Prior to the 2004 election, the monorail was viewed as an idealistic fantasy that lacked practical fundamentals like a builder, a price tag, and a construction plan. This summer, the SMP emerged from contract negotiations with all three—a builder (a consortium headed up by a Fortune 500 company, the $9.3 billion Fluor Corporation); a reasonable price ($2.1 billion); and a blueprint to build the system—giving the agency more credibility and momentum than ever before. Political leaders and the mainstream press could no longer belittle the project.

Unfortunately, the SMP may have fatally undermined the plan's credibility and momentum by concocting a costly and questionable financing scheme. Among the questions the SMP has yet to answer: Why did agency officials fail to reveal the entire cost of the project, including financing, up front—leaving it to monorail opponents, and newspapers like The Stranger and P-I, to unearth the damning $11 billion figure? Why, when the number came out, did the agency adopt a defensive stance, accusing alarmed citizens and members of the media (including, incredibly, Stranger reporters) of "parroting monorail opponents," instead of acknowledging that the figures were troubling? And why, even as calls to dismantle the SMP are pouring in from the public and city officials, does the agency still refuse to admit that it made a mistake?

You won't get the answers to any of these questions from SMP director Joel Horn, who maintains a reflexively defensive posture. In many ways, that's understandable. Since the moment it was created, the agency has been under siege by a mob of property owners, neighborhood whiners, and anti-urbanists who've taken cheap shots and waged misinformation campaigns. But Horn's defensiveness is now as much a problem as the monorail opponents' demagoguery. And, in what may have been the worst PR timing for any government agency ever, a cheerful flyer inviting voters to "tell us what you think" arrived... one day after the P-I's alarming headline: "Monorail's Building, Debt Costs Balloon to $11 Billion." What do we think? We think you're fucked.

Horn has further damaged the agency's image by condescending to monorail supporters and detractors alike, noting patronizingly that the $11 billion figure is in higher, inflation-adjusted "year-of-expenditure" dollars. Put the $9 billion in interest in 2005 dollars, Horn says, and it would be closer to $2.2 billion—a much more reasonable-sounding number than the sticker-shock inducing $11 billion figure.

That doesn't fly—or rise above it all, we should say. The standard for public works projects is year-of-expenditure dollars. Sound Transit, the Alaskan Way Viaduct, Seattle's two publicly financed stadiums—the price tag for every large project in Seattle is adjusted for inflation, reflecting what the projects will cost when they're actually paid off, not what they would cost if we paid them off today. Even using that standard, the monorail's $11 billion construction and financing price tag is still far higher than that of any other public project in Seattle. The reason is that while other projects cost about twice as much as the amount borrowed to build the project over the life of the loan, the monorail will cost five times as much.

The reasons for the discrepancy go back to the agency's original financing plan. Back in 2003, then-monorail finance director Daniel Malarkey estimated that the agency would take in more than $4 million a month in tax revenues. As revenues came in a third shy of projections, it became clear that Malarkey had overestimated the monorail's tax base—the total value of cars in Seattle—by about 30 percent. That mistake led to a revenue shortfall of 30 percent. That shortfall, plus the 20 percent increase in the cost of the project (originally, the $2.1 billion Green Line was supposed to cost $1.75 billion), has led to the current financial imbroglio.

Because the SMP can't afford to pay for the monorail with its existing tax revenues, it has to stretch the tax out longer—50 years, if the tax base grows as quickly as expected. In contrast, most state projects are paid off in 25 to 30 years—the same period the monorail agency initially proposed to pay off the 14-mile Green Line.

And even the 50-year scenario may be unrealistic. The agency is basing that estimate on a motor vehicle excise tax (MVET) growth projection that some say is questionable. In 2003, Sound Transit economist Dick Conway said the agency was overestimating its tax base by 1.3 percentage points. If revenues grow more slowly than expected, the monorail tax could extend as long as 75 years, increasing the total cost even further. This risk is unacceptable.

Current state law limits bonds to a period of no longer than 40 years. Last year, the SMP tried to convince lawmakers in Olympia to loosen that restriction. When that effort failed, they opted to simply refinance their debt over and over, so that no single bond goes over the 40-year restriction. The solution is true to the letter of the law, but violates its spirit: to prevent public projects from using tax revenues indefinitely.

Stretching the tax out longer enables the SMP to make lower annual payments toward its total debt. But it also means that the total amount of interest the agency will pay over the life of the tax is higher—just as financing a house purchase over 30 years, instead of paying it off in 15 years, can increase the total amount a homebuyer pays by hundreds of thousands of dollars. Stretching it over 50 years or more, as the monorail is doing, increases the interest payments even further. That's one reason you can't get a 50-year mortgage—if you can't pay it off in 30 years, you can't afford it.

The monorail agency, unlike a homebuyer, has a nearly unlimited range of tools at its disposal. The catch is that some of the tools it's using to finance the project—unrated, uninsured bonds called junk bonds—carry a vastly higher interest rate than the standard secured, rated bonds used to finance most public-works projects. Which is yet another reason the monorail will cost so much more, over the life of the project, than other Seattle projects.

There are other legitimate criticisms of the SMP's financial proposal. Cutbacks in the number of stations and the entrepreneurial opportunities available at those stations will reduce revenues, making it harder for the SMP to keep its promise to break even on operations by 2020. That could force the agency to go back to voters for yet another tax increase—something even monorail board members have acknowledged. Finally, the total cost of the project, at $2.1 billion, is higher than the original $1.75 billion proposal (though not as much over budget as Sound Transit's light rail, which, at about $4.1 billion, is 70 percent higher than the original proposal).

The overwhelming case against the SMP's financing plan points to one simple solution: Scrap the financing plan. The case against the financing plan, however, is not an indictment of the planned 14-mile line itself. With a company in place and ready to build, the city cannot afford to turn its back on Seattle's best hope for inner-city rapid public transit.

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Elevated rapid transit works. It provides an alternative to driving and it rewards people who leave their cars behind by swiftly moving them across the city. Unlike buses or light rail, the monorail never gets stuck in traffic. It is also a better, more efficient way to build mass transit in Seattle because it doesn't require tunnels and it utilizes already existing rights of way, AKA city streets. Elevated rapid transit would link Seattle's far-flung neighborhoods and inspire smart, new growth around its stations. As gas prices rise and a world oil crisis looms, building rapid transit in Seattle is more important than ever to the future economic viability of our city. By voting to build the monorail four times, Seattle voters were prudent and prescient.

The plan itself—the 14-mile elevated line that the SMP unveiled this month—deserves praise. Voters wanted a 14-mile monorail from Ballard and West Seattle to downtown, and the plan delivers on that promise. The plan has funding for 17 stations. The automated, walk-through trains will accommodate 200 passengers each and will arrive every eight minutes during rush hour. And, after a year of city council meetings and over 100 community meetings, the plan changed to meet neighborhood demands: columns were moved further away from buildings and situated to preserve bike lanes over parking; switchbacks were added between Seattle Center and the International District to allow trains to run more frequently downtown; single-tracking was scaled back; and a large number of businesses were saved by moving stations. Certainly, the plan isn't perfect. Among other changes, station designs have been scaled back, and five-to-six-foot-wide columns have replaced the streamlined, sleek steel supports seen in earlier monorail mockups.

However, minor shortcomings and all, the existence of a monorail plan—with concrete, fixed costs, plus the backing of a major civil construction firm—is the best argument for scrapping the financing, but saving the system.

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How do we save the monorail? By junking the junk bonds and coming up with a financing plan that works—one that, like Sound Transit's, is a mix of taxes that collectively pay for the project without concentrating the pain on a single tax. (A straightforward increase in the MVET, while it might solve the problem, would be unlikely to pass muster with voters who barely approved the tax in the first place.) By scrapping the MVET and going with an entirely new mix of taxes, the monorail agency may be able to escape the taint of the car tax, which it grossly overestimated.

To help dissuade the SMP from barreling forward with its misguided financing plan, the city council should expand the scope of its financial review, which is just getting underway, to include not just whether the MVET can pay for the project, but whether it can do so in a reasonable period—something the council isn't currently authorized to ask. The council should also ignore pressure from the agency to rush through its financial review (in its presentation last week, the SMP committed to "thorough but quick review periods," and nothing more), taking a thorough look at the agency's financial data. The main reason the SMP gave for requesting an expedited financial review—that a lengthy review period would spook bonding agencies into lowering its financial rating—is hardly an issue for a project that relies so heavily on unrated junk bonds. Once the council completes its review, it should find the project financially unsound and send a new tax package back to the voters.

A fifth vote? Yes. A system created by a populist movement merits a populist response. Putting the monorail to another vote now, when the monorail's image is at its lowest point ever, is risky. But if we want a monorail system that works, if we want a system that is paid for, if we want a system that can be expanded to a city-wide rapid transit system, a fifth vote is worth the risk. Conceding defeat now—and accepting an untenable $11 billion system—would do a disservice to the populist principles that created the monorail agency in the first place. Unlike Sound Transit supporters, monorail advocates should be principled enough to endorse a revote.

The fifth vote, unlike the preceding four, would be an up-or-down decision on whether we want to build the system laid out in the design and build plan—a plan the SMP deserves credit for completing under Horn's leadership. Monorail supporters would be campaigning on that plan, not on an untenable financial package. The $11 billion figure would be off the table. A yes vote means we build the monorail under a new, rational financing plan, with a package of taxes that fairly spreads the pain. A no vote means we scrap the MVET and dismantle the agency. Middle-of-the-road proposals—such as a supplementary tax that would make up the 30 percent MVET shortfall—don't solve the problem, because if voters reject them, we revert to the status quo: an $11 billion monorail line that will take at least 50 years, and maybe longer, to pay off.

Overruns of that magnitude threaten the viability of any future monorail lines. As monorail board member Cindi Laws put it in the Seattle Times last week: "We need the next generation to pay for lines two through five, not line one." We don't want to build the Green Line only to abandon Falkenbury's dream of a citywide system. Yes, a yes-or-no vote on a new taxing package may fail, killing the SMP in its current configuration. But when the alternative is an indefinite tax administered by an agency that, on financial matters, has shown itself to be opaque, untrustworthy, and incapable of making sound decisions, it's a risk worth taking.

Finally, it's time to clean house at the monorail agency. When Sound Transit ran into $1.1 billion overruns in 2000, its board responded swiftly, replacing agency management with a team of engineering and financial experts. Joel Horn has seen the SMP through a difficult negotiating process and two tough elections, and now would be a perfect time for him to bow out gracefully. The SMP's financial team, which came up with the faulty cost and revenue figures in the first place, should do the same. If they don't have the grace and sense to bow out, the board should push them out. ■

This piece was written by Erica C. Barnett, Josh Feit, and Dan Savage. Join the monorail discussion at forums.thestranger.com.