Seattle City Council to delay tunnel action

A Seattle City Council plan to delay approving Highway 99 tunnel contracts is an abrupt change of course that would allow the state to seek bids for the project without worrying about two threats: a mayoral veto or a public vote.

The council has insisted for months that it must sign the agreements this summer so the state can move forward and seek bids on the tunnel planned to replace the aging Alaskan Way Viaduct.

On Monday, the council said it will adopt a resolution next week supporting the tunnel but stating the city won't be responsible for cost overruns. The contracts between the city and state, however, wouldn't be signed until January or February — after the state receives its bids.

The delay won't slow the project, officials said.

Council members said postponing the agreements would give them more information about project costs before they commit. But Mayor Mike McGinn said the council is just delaying the question about cost overruns and trying to dodge a threatened public vote.

McGinn has been pushing the council to insist the state Legislature drop a provision in state law that says Seattle-area property owners who benefit from the tunnel should pay cost overruns on the $2 billion state project.

He said he would veto the contracts unless the city made them contingent on the Legislature changing the law. And some activists in Seattle have said they are considering a referendum against the tunnel unless the agreements ensure the city isn't on the hook for overruns.

The resolution the council plans to approve next week isn't subject to a veto or referendum.

The contracts with the state are technical agreements about permits, street vacations and utility relocations, but they have become something of a political football, since the mayor says the agreements are the city's last piece of leverage with the state.

McGinn said Monday the council changed tactics to avoid a public vote.

"I think that the council got a wake-up call from the public on this one, and they apparently don't have the votes" to approve the contracts, he said.

McGinn also said the resolution still doesn't settle the issue of cost overruns and that "they're just delaying the important question until later."

State leaders said the council's decision to adopt a resolution now supporting the tunnel will give bidders confidence the project is on track.

A drawn-out mayoral veto fight or a pending public vote on the tunnel would lend political uncertainty to the process, state Transportation Secretary Paula Hammond said. And that could lead to higher bids, to account for the increased risk, she said.

City Attorney Pete Holmes also supported the council's move.

"I think this is truly a win-win development, and it's an example of trying to address the merits of some of the issues that are being raised," Holmes told the council Monday. "It means that we can all continue to do our work and at the same time let this very real issue about cost overruns work itself out."

Exactly how the cost-overruns issue will be resolved is still unclear.

At a news conference Monday, council members wouldn't say whether they will use the extra time to lobby the Legislature to clarify who would pay for overruns.

Council members — along with Holmes, Gov. Chris Gregoire and state Attorney General Rob McKenna — all agree the language of the state law is not enforceable.

At the governor's request, McKenna sent a letter clarifying that the Legislature would have to pass another bill to impose cost overruns on Seattle.

Still, some argue the cost-overruns provision demonstrates a "legislative intent" that state lawmakers could point to later if project costs spin out of control.

Councilmember Mike O'Brien, the council's lone tunnel-detractor, said he will push the city to lobby to change the law.

Council President Richard Conlin, however, said opening the issue for debate in the Legislature could threaten the project's funding.

Some lawmakers might not support the project without the clause, Conlin said, or they might decide the money is better used elsewhere.

The council's resolution is explicit about overruns: "It is the City's policy that the State is solely responsible for all costs, including cost overruns."

A City Council committee meeting on the tunnel Monday was packed with union and business interests. The overwhelming majority of the more than 60 people who testified supported the tunnel, which they said was crucial to creating jobs and moving freight.

Meanwhile, activists considering a referendum against the project wouldn't say whether the council's planned delay has them looking at other options, such as an initiative.

Emily Heffter: 206-464-8246 or eheffter@seattletimes.com