Public hearings this week on the now-shaky monorail proposal will be marked by the conspicuous absence of two men who have been with the agency from the beginning: Joel Horn and Tom Weeks, who resigned Monday as executive director and chairman of the agency's board, respectively. Starting this week, Weeks will be replaced temporarily by board vice-chairwoman Kristina Hill, an architect and professor who has been involved with monorail efforts for nearly a decade; construction director Tom Horkan will temporarily fill Horn's shoes until the board can agree on a permanent replacement.
The high-profile resignations, announced on the July 4 holiday, marked the first decisive action in weeks from an agency that has responded to overwhelming public opposition with defensive counter-spin. (Even in announcing their resignations, Weeks and Horn couldn't resist deflecting blame, implying that the public and media had failed to understand "the complex, long-term financing proposal" that led to the recent public outcry against the project.)
On Monday, Hill sounded hopeful but wary when she met with two Stranger reporters a few hours after the agency announced Weeks's and Horn's decisions. "It's going to be a really bad week. The public comment [at this week's hearings] is all going to be bad. There's going to be calls for the agency to shut down."
Last Tuesday, June 28, in response to complaints from city officials and the public (city council offices reported getting hundreds of letters from people opposed to the project, and virtually none in support) the agency ditched the financing plan, and made it clear that everything—from agency management to the future existence of the project—was on the table. Until last month, "no one on the board ever thought" to discuss for how long it would be reasonable to extend the tax.
The bold moves may be too little, too late for the troubled agency. For months, the SMP has denied what has been increasingly obvious: Its finance scheme, which would have compensated for a 30 percent revenue shortfall and cost overruns of 20 percent by extending the tax that pays for the monorail for as long as 75 years, was dead on arrival.
Horn's and Weeks's resignations followed more than a week of bad news for the monorail. Two weeks ago, The Stranger and Seattle Post-Intelligencer reported that the total cost to build and finance the $2.1 billion project, including interest payments over 50 years, topped $11 billion—$2.1 billion, plus more than $9 billion in interest. In other words, the total cost of the project, including interest and principal, would have exceeded the principal by a ratio of five to one: twice the standard for other public projects of similar size, such as Sound Transit.
The primary reason for the astronomical price tag was a 30 percent shortfall in the revenue stream from a 1.4 percent motor-vehicle excise tax authorized in 2002 to pay for the project; that shortfall was discovered in 2003, but until last week agency board members and staff insisted it was not an issue.
"We need to figure out how we can right ourselves," Hill said Monday. Despite the dire circumstances, "I think there are things we can do" to fund the project without going back to the voters for a revote on the finance plan (something The Stranger called for last week as part of its plan to salvage the project: "Back to the Voters," Erica C. Barnett, Josh Feit, and Dan Savage, June 30, 2005. The Stranger also called on Horn to resign and asked the agency to scrap the finance plan. Two out of three ain't bad.)
Among the new financing possibilities:
• The agency could cut costs. Currently, the monorail proposal includes funding for about $200 million in contingencies. Reducing those contingencies—or trimming away at other aspects of the project—could save years and billions of dollars. Thanks to the high interest-to-principal ratio, Hill says, saving $100 million now could "reduce the length of the tax by eight years and take $4 billion off our total debt." The problem, of course, is where to trim—cutting contingencies might be frowned upon by the city council, which has to sign off on the agency's construction permits before the SMP can build the project; and other aspects of the line, such as bridges and stations, have already been scaled back dramatically.
• The SMP could build the Green Line in stages. The proposal released last month calls for a 14-mile monorail between Ballard and West Seattle. Building a partial line—from Ballard to downtown, for example—would save time and costs and allow the agency to meet a more standard two-to-one debt-to-principal ratio. But without further board discussion, Hill says, "I can't say that's a real option." Cutting the line would require board approval—and a revote on the project.
• The agency could go back to the voters for new taxes. Under the legislation that created the agency, the SMP is authorized to ask voters for a variety of taxes—not just the motor-vehicle excise tax that currently funds the project. Among the options: a property tax, a flat car-tab fee, or a tax on car rentals in the city. But any revote on the taxes that fund project, Hill acknowledges, would be "risky," especially given current popular sentiment against the monorail.
• The SMP could reopen bidding on the project, allowing other companies to submit their own proposals. Last year, Bombardier-led Team Monorail dropped out of the project, citing unreasonable liability requirements. The move left Cascadia Monorail Company, now led by the Fluor Corporation, the sole bidder to design, build, operate, and maintain the project. Team Monorail representatives say their consortium can build the monorail for at least $200 million less than Cascadia. But reopening the process now, just weeks after the agency agreed on a fixed-price contract after months of negotiations with Cascadia, would undoubtedly spur a lawsuit.
• The agency could shut down. The board, Hill says, has come under "tremendous pressure" to close the SMP down, something it has the power to do. Or the city council could refuse to grant the monorail the construction permits it needs to move forward, effectively killing the project. Peter Steinbrueck, a onetime monorail skeptic who came around on the project after visiting Las Vegas's monorail system, said Friday that he doesn't want to sacrifice "the future of mass transit" for a 14-mile monorail from Ballard to downtown to West Seattle. "I cannot think of a way out of this hole," Steinbrueck said.
Hill says the board needs time to regroup and come up with a game plan before making any drastic moves. "We've got to hold it together long enough to figure out what our strategy is." Next week won't offer the board much down time: The agency has public hearings on the plan scheduled for July 5, 6, and 7. ■
