Fizz has been displaced this morning* with a PubliCola One Question. And the question goes to Sound Transit planning director Ric Ilgenfritz.
The question: Why won’t Sound Transit’s $50 billion proposal—the ST3 plan to expand light rail north to Everett, south to Tacoma, east to Issaquah, and from Ballard and West Seattle to downtown Seattle—be ready until around the time of your grandson’s bris? In Seattle, for example, the West Seattle to downtown line won’t be ready until 2033 and the Ballard to downtown line won’t be ready until 2038, 17 and 22 years respectively. In twenty two years, we’ll be further away than we are today from Blackstreet featuring Dr. Dre.
I’ve heard ST consultant polling shows it’s not the gargantuan $50 billion price tag ($27 billion in new taxes and $23 billion in federal money, existing ST taxes, and bond proceeds), but rather, the long wait that’s got voters spooked. Voters are apparently more than happy to pay for light rail, but they’d also like to use light rail.
And if voters are spooked, you know ST is spooked too. They’re all about elections. After all, the whole slave-to-the-spine POV of the plan reads as pure political calculation to woo as many subarea voting blocs as possible this November rather than as thoughtful urban planning; transportation planners generally advise that you build out from the central core first rather than building straight out to park and rides.
ST is spooked to the point that when I called yesterday to ask for an explanation about the lengthy timetable, they informed me they were holding a briefing with reporters and transit activists that very afternoon to address the timeline question.
Here’s what ST planning director Ric Ilgenfritz said yesterday: “We’re not going to say we can do things faster than we think we can. I understand people are not comfortable with these timelines, but we’re telling the truth to the public about what we think this stuff takes. We’re not going to bullshit anybody. This is what we think it takes to do the job and do it well.”
Specifically, Ilgenfritz—noting that we waited 20 years to complete ST1, and that it will be 17 years by the time ST2’s east link line to Overlake near the Microsoft campus in Redmond is finished—explained there are two big factors governing the timeline: building and financing.
I understand people are not comfortable with these timelines, but we’re telling the truth to the public about what we think this stuff takes. We’re not going to bullshit anybody. This is what we think it takes to do the job and do it well.
And within that frame, there are three phases to the building component—development, final design and permitting, and construction. Construction is the least flexible of those elements, according to Ilgenfritz. “Construction takes what it takes,” he said, “once you’re mobilized.” Getting mobilized is the prerequisite process which involves doing environmental impact statements for all the station options to settle on your final plan and then designing and permitting that specific plan.
Ilgenfritz says it’s those first two phases before the construction begins that provide the most opportunities for speeding up the schedule, but as opposed to construction, “it’s the least predictable because you never know what you’re going to encounter.”
By that Ilgenfritz meant the EIS and the public process—including vetting all the possible environmental impacts of each station option and then acquiring property and working with individual cities on permitting—can be a political mine field. Basing ST3 timing estimates on “our experience to date” (he used the ST2 Federal Way EIS as an example with its “six month detour” in a local debate over determining the alignment around Highline Community College), Ilgenfritz laid out the reality of the Ballard line. He estimated an overall 18 to 20 year range, with the EIS period (including studying six potential tunneled stations at Seattle Center, South Lake Union, Denny, Westlake, Midtown, and International District/Chinatown) taking five to six years, the final design taking three to four years, and final construction (including the second downtown tunnel that will largely have to be built under traffic and not on the side of the street like Capitol Hill which made staging easier, he said) taking seven to eight years.
Asked about the possibility of phasing in the Ballard to downtown line to get a portion of that route up and running sooner (and as a way to make Seattle voters happier), Ilgenfritz said that would simply “build support for some and cost support for others” (a nod to the regional political challenges of prioritizing Seattle projects over projects in the suburbs.)
The other issue that controls the timeline is financing. Yes, the ST3 plan identifies $50 billion in revenues (including, as Ilgenfrtiz elaborated yesterday, counting on three federal grants.) But it’s not as if they’ll have a $50 billion check in hand on November 9, the day after election day, if they win at the ballot. For starters, obviously, the $50 billion, in part, relies on $27 million in new taxes that they’ll be collecting over decades. Second, ST’s funding model relies on issuing bonds. And according to ST rules, they can’t take on all their debt at once because putting all their collateral in play at once violates their bonding rules.
As Ilgenfritz explained it the “schedule for issuing bonds corresponds to the schedule for building the projects.” And, he went on: “we can’t issue all of the bonds all at once. We have to issue them in series… in a sequence that allows us to maintain our debt coverage ratio. And that’s a governor on how much bonding we can do.”
ST board rules, which are based on getting the most competitive bond ratings, require the agency to have enough money annually to cover all their costs for that year—plus half of their outstanding debt. “We can’t ever have more debt out,” Ilgenfritz says, “than we can cover on an annual basis plus a fifty percent reserve.” That’s a 1.5 debt coverage ratio.
The reason for the conservative policy? It gives them a better bond rating, which makes it cheaper for them to borrow money. As Ilgenfritz put it: “The cheaper your interest rate, the lower your cost to capital, the more financial capacity you have over the long term.”
The ST3 plan is divided into three phases—early deliverables like bus rapid transit improvements on the Rapid Ride C and D lines and on 405 that will proceed the completion of ST2 in 2023; projects that are happening relatively soon after ST2 gets done such as getting to Federal Way and Downtown Redmond by 2028, and then a series of later projects such as getting to the Tacoma Dome and from West Seattle to downtown Seattle in 2033 and to Tacoma Community College and to Issaquah in 2041.
Ilgenfritz concluded: “The three phases fit within the financial capacity curve. Each has a schedule, a linear schedule. Take anyone and slide forward or back, and it changes the curve…to the point where if you move one you’re going to have to move another and so on and so on… [and] you blow your [debt] coverage ratio…that 1.5 debt coverage.”
*If discussions of debt financing are not what you had in mind when you turned to Fizz this morning, here’s some city hall gossip for you: I’ve reported before on the alarming recent staff turnover in the city council’s central staff department[1] (the council’s policy brain trust.)
Well, four more people have since resigned from the shop, all from human resources, bringing the departures to around 10 people out the door in the last year. What’s notable about the most recent wave of departures is how quickly the staffers left—one reportedly staying for just a month. Also noteworthy: One of the city council staffers who quit has reportedly filed a workplace discrimination suit against the city.
References
- ^ the alarming recent staff turnover in the city council’s central staff department (www.seattlemet.com)
