Monorail bid tops projection by $200M

The Seattle Monorail Project is trying to pare down its plans because the sole bid came in roughly $200 million higher than expected, according to sources knowledgeable about the project.

The agency and Cascadia Monorail have been working to trim costly features since Cascadia submitted its bid Aug. 16. The estimated gap of $200 million has been privately known for months, sources said.

In 2002, Seattle voters approved a car-tab tax to pay for the 14-mile Green Line running from Ballard to West Seattle. While escalating costs estimates are not unusual in big transportation projects, the monorail initiative limited the public debt for the project to $1.5 billion. Monorail officials promised not to go back to voters seeking more money for the Green Line.

The contract talks, which began six months ago today, have been conducted in private. And most of the monorail's nine-member governing board has not seen the bottom-line price tag from Cascadia, according to board members Richard Stevenson and Cindi Laws.

Laws said staff members told her cost cutting is under way.

"It was portrayed to me that the reductions could occur relatively painlessly," Laws said. "I disagree with that, based on what I've seen so far."

She predicts the public will be disappointed by aspects of the design. But like the now-demolished Kingdome, Laws said, the monorail would be "very functional." The trains will still move large numbers of people and the project is still worth pursuing, she said.

Cost-saving issues that have been discussed include whether to delay purchasing some trains until the ridership peaks; how to equip special "tourist trains" that cost more but might generate operating money; and how much of the line would use slower but cheaper single tracks, sources say.

The agency has not released bid details while the closed-door talks proceed. But in a Sept. 8 meeting, officials said the proposal was affordable within the $1.5 billion cap.

Monorail Chairman Tom Weeks would not comment about finances yesterday.

Before a final contract is signed, the SMP plans to release details and hold at least one public hearing.

The bid requirement allows Cascadia — a 29-company consortium headed by Washington Group International, Fluor and Hitachi — to raise its price or walk away after 180 days. But Six Silva of Washington Group said there are no plans to exercise the clause and that the Cascadia group remains committed to the monorail.

Silva has said the elevated trains would still meet bid specifications to move 4,400 people per hour in each direction downtown, and 2,200 in Ballard and West Seattle.

Stretching dollars

Money was already tight because the revenue collected by the SMP's car-tab tax has fallen short of projections. The revenue situation has improved somewhat, in part because new rules make it more difficult for Seattle residents to avoid paying the tax.

The agency has already taken cost-saving steps. In 2004, it scrapped some fancy station concepts that documents say would have cost up to $185 million. Cascadia created its own designs.

SMP has also talked about selling bonds with terms of up to 40 years, a longer term than the usual 25- to 30-year debt on public projects. That would allow the agency to generate more cash in the early years to pay for construction.

But long-term payouts would be $700 million more using 40-year bonds compared to 30-year bonds, according to rough calculations by the state Senate Transportation Committee.

Yesterday, the Senate committee passed an amendment that would ban the SMP board from taking on bond debt until it is replaced by a new board appointed by the Seattle City Council. The current board includes two elected members and seven appointed by a previous monorail board, the City Council and Mayor Greg Nickels.

Sen. Ken Jacobsen, D-North Seattle, compared the board to the inexperienced Washington Public Power Supply System leadership of the late 1970s. WPPSS defaulted on $2.2 billion in bonds while completing only one of its five planned nuclear reactors.

"This is an inexperienced board. They're in over their heads," he said.

Weeks, the Monorail board chairman, said he was unaware of the Senate proposal. But, he said, "I think it is a very impressive combination of skills that is assembled on our board."

Sen. Erik Poulsen, D-West Seattle, a Monorail backer, said that and other proposals would add delays.

"I don't want the people in Seattle to take on any more debt than they have to," he said. "I pay the monorail tax. I have a three-car family. I agree with the people in Seattle who said stop the dithering and get the monorail built."

Deadline time?

Cascadia executive Silva said more time is needed to finish the contract talks because the monorail is extraordinarily complex.

"I believe we're talking about months, not weeks or days," he said. Cascadia's negotiations include conversations with city permitting agencies and landowners along the route.

Monorail board member Laws said the agency should consider setting a deadline, perhaps by the end of March, for concluding the talks. Fellow board member Cleve Stockmeyer said while he doesn't support a deadline, the staff should soon lay out options for "re-procurement" — reopening the bid process if talks fail.

A rival team led by Bombardier of Canada, which pulled out last year over the SMP's tough liability standards, is actively lobbying for its "Team Monorail" plan to be considered again. Dick McNamara, a team agent in Seattle, said the group can build the Green Line for close to the original cost estimate.

Mike Lindblom: 206-515-5631 or mlindblom@seattletimes.com