Skip to comments.(Seattle) Monorail's building, debt costs balloon to $11 billion (sold to voters as $2 billion!)
Posted on 06/22/2005 10:31:07 AM PDT by Diddle E. Squat
t will cost more than $11 billion to pay for the 14-mile monorail Green Line project and the debt to finance it, according to documents made public yesterday.
That's more than triple what Sound Transit will pay for construction and debt service for its 14-mile light rail line from downtown Seattle to Tukwila.
The total also is more than five times the construction tab alone for the monorail, a ratio that troubles state Treasurer Mike Murphy.
"You've got to be kidding me," Murphy said yesterday. "That's ludicrous."
He said the typical principal and interest payments on a state project amount to double the construction cost of the project. That ratio would suggest a total cost of less than $4 billion for the $1.9 billion monorail.
Monorail officials said Monday that they would overcome budget obstacles by extending collection of a Seattle car-tab tax until 2050 or beyond. Murphy said the state ordinarily does not issue bonds longer than 25 years, because there is no "economic advantage."
In addition, the monorail expects to pay higher interest rates than Sound Transit -- up to 7 or 8 percent for junk bonds, which will pay for part of the project Seattle voters narrowly approved in 2002.
The monorail has been forced into some unconventional financing arrangements because the project is about 20 percent more expensive than expected and because its motor-vehicle excise tax revenue is 30 percent less than expected. Seattle residents pay 1.4 percent annually of the state-calculated value of their vehicles.
OnTrack, which bills itself as a monorail watchdog group, was critical of the tax extension plan.
"There's a huge price with extending the term of the bonds out as long as they're going," said OnTrack policy analyst Krista Camenzind, calling $11 billion "an amazing amount of money to pay for bonds."
"The kids who graduated from high school this month will be paying this monorail tax for their entire working life and maybe into their retirement, but they had no say in planning or approving the Green Line," she said.
City Councilman Richard Conlin, who has been a monorail skeptic, said it's too early to draw any conclusions, but he added: "When I heard there was 45 years of payments, it's troubling. I really need to look at that very carefully."
Of the $11 billion in debt service, he said, "That's a ton of money."
The City Council must ultimately approve construction of the West Seattle to Crown Hill line on city streets.
Longtime monorail critic Henry Aronson said the extended tax bite would make it difficult and perhaps impossible for Seattle to pay for other transportation projects, such as any future monorail lines, extending light rail or replacing the Alaskan Way Viaduct and the state Route 520 bridge.
"The monorail board seems perfectly happy to mortgage four generations of taxpayers to pay for one-fifth of the monorail plan offered to the voters in 2002," he said.
Monorail spokeswoman Natasha Jones said the $11 billion number looks big because it includes inflated future dollars.
"It does look like a big number when you get out that far," she said. "We opted to spread that over a larger period of time. These are choices we all make in our everyday life. Do you pay off your mortgage in 15 years or do you spread it out over 30 years?"
Jones noted that the monorail is a "tangible asset," not clothes or food or a trip. "This is a 100-year system we're aiming for," she said.
It's reasonable not to put the entire cost on current users, she said.
Paying for future extensions of the monorail or other transportation projects "is a discussion the community will need to have," she said. "They can look at federal dollars or other taxing mechanisms."
Murphy, the state treasurer, said he ordinarily does not get involved in local issues but made an exception for the monorail.
"I have a several-inch-thick file on these guys. Everything I have seen just does not pencil out," he said. Murphy says he does not believe the monorail will have enough income from the car tab tax to pay for the debt.
He said the monorail's finance director, Jonathan Buchter, recently asked for a meeting, but Murphy told Buchter he had already met several times with him and "now I want to meet with your board." A meeting is set for early July. State Auditor Brian Sonntag, who is also concerned about the project, also plans to be present.
"When we see folks going off the deep end, we feel it's important to comment on it," Murphy said. "The number keeps getting bigger and bigger and bigger and they haven't turned a spade of dirt yet. That's the issue for me. I would never ever, ever indebt the state of Washington in the way they are indebting the citizens of the city of Seattle. It's unconscionable what they're doing."
The Seattle Monorail Project released its voluminous report Monday detailing finances. Buchter has insisted that the numbers do pencil out. However, he was gone yesterday and will be for the rest of the week, Jones said.
Murphy said the monorail "did a tricky thing" when it told voters debt would be capped at $1.5 billion in 2002 dollars. That means that the debt is "an open-ended deal" and the more time passes, the higher the debt cap is.
Richard Borkowski, president of People for Modern Transit, said there are many uncertainties hanging over the project.
"The price keeps going up and they're delivering much less than what was voted on," he said. "They're buying fewer trains, the frequency is less, there are fewer stations."
Jones said the critics have been claiming "the sky is falling" for the past three years.
"We've risen to every challenge that's been thrown our way," she said. "We've been able to do all the things critics have said we couldn't do. We've done a great thing. We've delivered an elevated-automated transit system citizens have been clamoring for decades."
The project will bring 2,100 jobs every year for construction, she noted. The monorail is scheduled to open Dec. 1, 2010.
To pay for the 14-mile monorail project and the debt to finance it, more than $11 billion will be required. That's more than triple what Sound Transit will pay for construction and debt service for its 14-mile light rail line from downtown Seattle to Tukwila.
# Monorail construction costs and debt service: $11 billion.
# Sound Transit's Central Line construction cost and debt service: $3.24 billion.
But don't you know! If we just close ourselves off from foreign trade and build monorails everywhere our economic problems will be solved!
"The project will bring 2,100 jobs every year for construction, she noted."
Ever heard of broken window fallacy? Maybe this explains why Willie Green supports it.
No, they won't - they'll just move out of Seattle. ;)
color me shocked.
A public transporation project running over budget?
Next thing you know, celebrities in LA will be able to get away with murder.
"The project will bring 2,100 jobs every year for construction, she noted."
You could do the same thing by hiring a group of people to break car windows and another group to repair the same car windows. Voila! Employment for a bunch of people!
"Final Costs?" BWA HA BWA HA HA HEEEEEEEEEEEEEEEEEEEEEEE. gasp.
The Dem mayor of Indianapolis is promoting a monorail/light rail system, and the Indianapolis Star (once conservative, but now that it is owned by Gannett, its editorial policy has "grown") is promoting it relentlessly.
We gotta get I-912 on the Ballot.....these dufuses in Seattle are just HELPING us along!!!
Indiana government, both state and local, is FUBAR. I can't remember a time when I have disagreed more with the decisions they are making. Monorails, handouts to the Colts, DST, sin taxes, the list goes on and on.
Well, you get what you pay for and Washington got this administration. Good luck to them.
One good thing, in 2008 they can blame Gregorie for it.
LOL! I love that episode! Seattle voters must not watch 'The Simpsons', too bad for them.
Pretty expensive homeless shelter...
(who else is going to ride it??)
Unless they're actuall done, double it.
My first thought when I saw the article was if the monorail was referred to as "The Big Lift."
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