Monorail backers launch offensive to ease rising anxiety about project

There are no petitions, no candidates, no ballots.

Still, a fifth political campaign for Seattle's monorail is under way.

The Seattle Monorail Project (SMP) yesterday published a full-page newspaper ad countering what the agency calls "misleading financial figures" in the local media. Reports now put the full cost of the $2.1 billion Green Line at more than $11 billion, if interest payments are included through 2053.

The agency hopes to ease public anxiety about the monorail's cost, while an uncertain Seattle City Council steams toward a late-summer vote on whether to grant permits for monorail construction on city streets and at Seattle Center.

Even before the council acts, though, the SMP's Finance Committee tomorrow will consider authorizing up to $350 million in short-term debt called "commercial paper" to start paying contractors. That adds to the $110 million the agency already owes Bank of America for land purchases, planning and other tasks since voters approved the Green Line in 2002.

In three other elections since 1997, Seattle voters have also supported the monorail.

Monorail officials accused the media and opponents of using a double standard, noting that until last week hardly anyone talked about interest costs of other projects.

State Treasurer Mike Murphy, though, has said the monorail would be making five times the sticker price in total payments on bonds sold to finance construction, compared with a more common 2-to-1 ratio.

Here is a review of the points in the SMP ad published in Seattle newspapers:

Ad: The total cost of the Monorail is $1.94 billion in today's dollars. The $11 billion figure recently reported in the news is misleading and holds the Monorail to a different standard than is applied to other public projects. This figure represents an estimate of the total tax dollars over 50 years to finance — as well as design, build, operate and maintain — the Monorail. Public discussion of other projects, such as the I-405 expansion, the SR-520 bridge replacement and the Viaduct, focuses on the cost of construction but does not include interest or operations and maintenance figures for over half a century. If those figures were included, their totals would be much higher.

The key phrase is "over 50 years."

Joel Horn, the monorail project's executive director, says a dollar in 2050 would be equal to a dime today, so the "$11 billion" figure sounds more shocking than it really is.

Linda Mullen, a Washington Department of Transportation spokeswoman, objected to the ad's mention of the floating bridge, I-405 and viaduct projects, which would use shorter-term bonds of 30 years or less. "No WSDOT project is based on financing arrangements that resemble the recently announced plans for the monorail project," Mullen said in an e-mail to public officials and reporters yesterday.

Also, the operating money SMP talks about would run out in 2020, forcing the agency to break even or find cash somewhere else after that.

Ad: As approved by voters in 2002, taxpayers will pay a 1.4 percent MVET. That rate has not changed and will not increase.

True. SMP is holding the motor-vehicle excise tax (MVET) to the $140 per $10,000 of vehicle value that voters approved.

Seattle car owners shouldn't expect the tax to ease over time. In general, the average monorail tax bill (now averaging $130 per vehicle) will rise with inflation until the bonds are paid off.

Ad: When the Monorail debt is repaid, the tax will end.

The ballot measure in 2002 said the tax could be used only for the Green Line, unless voters approve a change. The monorail agency set no expiration date on the tax.

The latest estimate of 50 years to pay for the line is roughly double the early expectations.

But even a 2053 expiration date assumes that the combination of more cars and higher values will boost tax collections by 6.1 percent a year, based on a consultant's study.

Four outside economists who reviewed the study at the request of the SMP suggested a more cautious 4.8 percent assumption, similar to what Sound Transit expects in its Seattle, Shoreline and Lake Forest Park taxing zone. At 4.8 percent growth, the tax would persist several years longer.

Ad: Like the Monorail, more than 100 major public projects across the country have been financed over a long term, including construction of a terminal at JFK International Airport and the E-470 Highway in Denver.

Most projects on a separate SMP list released yesterday are smaller and not funded by a tax, but support themselves predominantly through user fees — highway tolls, airport operations, sewer fees or electricity bills.

SMP has mentioned a 75-year bond issue by Chelan County Public Utility District in Central Washington. But that can be repaid by power sales from Columbia River dams, not a tax. King County sells 40-year sewer bonds whose costs are included in monthly bills.

Ad: The Seattle Monorail Project has a fixed-price contract that requires that the entire Green Line be built on schedule and within the voter-approved funding limits.

The proposed contract requires builders to finish the line for $1.615 billion and includes $500 million in performance bonds to guarantee completion.

Contractors, led by Fluor Enterprises, the nation's second-largest design-build company by sales, would earn an extra $35,000 a day for early completion before Dec. 1, 2010, or lose $35,000 a day if late.

"Voter-approved funding limits" refers to a debt ceiling of $1.5 billion in 2002 dollars, now $1.7 billion and rising. With a total principal of $2.3 billion, including some refinancing, SMP plans to time its bond sales to maneuver within the cap.

Ad: The Seattle Monorail Green Line will be a 14-mile, elevated mass transit system along the voter approved route. It can provide more than 70,000 trips daily. The Monorail will serve key destinations, including Seattle Center, Key Arena, Pike Place Market, Downtown, Pioneer Square, Safeco Field, Qwest Field and Chinatown-International District, plus neighborhoods in Ballard, Interbay, Queen Anne, Belltown, SODO and West Seattle. The Monorail is a safe, fast and modern mass transit system that's good for the environment and never gets stuck in traffic.

All 14 miles are in the contract, as promised. A capacity of 70,000 riders requires the trains to be near full all day long. Population density, fares and shuttle-bus services, which all affect ridership, remain undetermined.

Whatever the count, riders would still rise above traffic jams on the surface.

Times reporter Jim Brunner contributed to this article.

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