Emory Bundy's Public Testimony before the Sound
September 27, 2001 and January 11, 2001
Bundy's postscript to the testimony, where he reflects upon the 12-4 vote by the Board to proceed with the Link Light Rail starter segment:
Though grateful for the opportunity to be heard, it was a depressing experience. It is painful to witness how vast a sum the board is prepared to invest in such a tiny piece of the region's transportation problem--and how indifferent the board is to the most elemental relationship between costs and benefits.
It takes me back to formative experiences in WPPSS days, more than a quarter-century ago. WPPSS wanted to build lots of new central station coal and nuclear generating plants. Very careful studies, one by the environmental organization, Natural Resources Defense Council, the other by the architecture engineering firm, Skidmore Owens and Merrill, concluded that an array of specific investments in energy efficiency could meet the region's energy needs as well as the WPPSS plants could--for a fraction of the cost, more quickly, with less risk, and less environmental damage. It was difficult to understand, and painful to witness, as those who had the power and controlled the resources frittered away the region's resources with such extravagant waste.
Just like the Sound Transit board is doing. It is resolved to start Link, irrespective of its costs vs. benefits, just as its predecessor started WPPSS nuclear stations one through five. But some day, as money evaporates and problems burgeon, the region will have to come to grips with reality, again. If we agree that we need public transit to play an important part in helping deal with the central Puget Sound's challenges of congestion and immobility, there is a simple formula to measure whether it is accomplishing that goal: Today public transit serves but 3+ percent of the region's trips, while enjoying a three-quarters of a billion dollars annual subsidy.
We must have a transit system that is more efficient, reduces the per-trip subsidy, and thereby is able to reach a progressively larger segment of the market--that is, increases transit's market share. Link light rail will do precisely the opposite. The numbers are stark, and unambiguous. It will make transit less efficient, with prodigious capital investments and much higher operating subsidies for each trip. And, in doing so, Link will assure that the market share of transit does not improve, as more and more and more money is allocated to it.
Testimony to the Board of Sound Transit:
September 27, 2001
The challenge of congestion and mobility
This region has a tremendous transportation challenge. Year to year, the challenge is growing ever-more formidable. The Puget Sound Regional Council reports that this urban area adds about 200,000 daily trips, each year. In 1996 there were 8.9 million daily trips. Today, about 10 million. By 2010, 11.8, and by 2020, about 14 million. The trips are the product of a growing population, greater economic activity, and the pursuits of daily living by millions of citizens going to work, school, shopping, recreation, and so forth.
Those trips must be accommodated, somehow. To the extent they are not, the quality of life and the success of the economy will dwindle. If congestion becomes progressively unbearable, people will progressively forego the pleasures and needs of daily living As congestion become progressively unbearable, businesses will determine it is too cumbersome or expensive to continue freight-dependent or other movement-dependent aspects of their operations. It's happening already.
You are charged to help address the problem. You have been entrusted by the public with authority, and a great deal of money, to do so.
How not to help solve a problem
Link light rail, Phase I, from Convention Place to South 154th, 14 miles, will cost $2.45 billion, according to your calculations. (You volunteer that it's $2.1 billion, and in the fine print one finds an additional $351 million for debt service before and during construction. By standard accounting procedures, that is part of the capital cost of the project, it is what we must admit to the federal government, and it is what we must pay. There will follow decades of payments on long-term bonds, on top of the $2.45 billion, but interest on debt AFTER the project is completed is properly reflected in another account, and is not part of the capital cost of the project.) $2.45 billion adds about $890 million dollars to the cost of the 14-mile south Link light rail alignment you announced last January--$1.56 billion, including debt service.
What are the benefits? How many, and what share of the region's new daily trips per do you expect to address with that massive investment? The answer is, 14,000, or 28/100ths of one percent. As of the year 2020, for every 357 new daily trips, your $2.45 billion Link investment will serve one. You claim that, in 2020, you will serve 42,000 daily trips on your New Link, Phase I--but only 14,000 will be new trips. The balance will simply be people Metro Transit serves already, on buses. The 28,000 that will transfer from buses to rail will switch from a less expensive to a more expensive mode of transit. It will add to the daily per-trip subsidy, increase the operating cost burden, and make the transit system more inefficient. It's retrogressive.
While you spend $2.45 billion to serve one of every 357 new trips, somehow the region must figure out ways to address the other 356--by making better use of buses, more carpooling, vanpooling, bicycling, more advanced and efficient transit technology, monorail, whatever. But as you spend prodigious sums of money, the region's ability to support more productive measures will be impaired. The consequence will be diminished economic activity, from what otherwise would occur, and incremental impairment of the quality of life of citizens. If other ways to accommodate new trips were as costly as Link light rail, between 1996 and 2020, just to keep congestion from getting worse, the region would need to invest $875 billion. That's your level of productivity: at the rate you spend, we will require $875 billion to keep congestion from getting worse. Which, of course, is impossible. So your approach assures that our traffic problems will compound.
At the least, Do No Harm
But your actions are even worse than ineffectual. They are positively harmful.
Today's editorial in the Seattle Post-Intelligencer has the admonition, Do No Harm. If you close the downtown tunnel for two years, to prepare it for joint bus/rail operations, you will do an immense amount of harm. When it reopens, after nightmares of construction impacts and traffic jams, the tunnel's capacity to handle transit patrons will be diminished.
Your actions threaten to impair the utility of the transit tunnel, and undermine the viability of a vibrant, downtown commercial district, one of the finest and most successful in America.
You also will visit great harm on the people and enterprises of the Rainier Valley, notably the Martin Luther King Way corridor. None of your plans to the north--going through more affluent, mainly white neighborhoods along Eastlake, in the University District, Roosevelt area, Maple Leaf, and on to Northgate--anticipate an at-grade system. But your at-grade system along MLK entails massive alienation of property, acute safety hazards, division of the community, and impaired ability of people to travel east/west. You plan to visit those impacts only on a poorer community, with substantial minority and immigrant populations, less able to defend itself.
If, at the least, you could merely waste money--indulge your rail dreams, if you must, but refrain from harming the downtown, or the Rainier Valley--your actions would be less ominous. You could accomplish the Do No Harm admonition with two changes in your plans: Stay out of the downtown tunnel, and use the money you save to elevate or tunnel the line through the Rainier Valley, thereby mitigating the damage you otherwise will inflict.
I will append to my testimony the remarks I made before you on January 11. They stand up well with the passage of time and events and will tend to validate my remarks today.
Testimony to the Board of Sound Transit
January 11, 2001
In 1995-96 I participated as a member of a Regional Transit Authority committee reviewing this project, prior to its submission to voters.
It was repeatedly pointed out that proponents of such projects systematically understate the costs, and overstate the benefits, in order to get taxpayers to approve projects they want to carry out-with the result that critical transportation needs of the affected community are not met. We warned, "these project consistently run far over the costs submitted to voters, by which they're justified and approved." You insisted that was not true.
Sound Transit Board's misrepresentations to voters, 1996 and today
You, the board promised that you would honestly, competently, and reliably present the true facts. What people voted for in 1996 is this "Sound Move: Ten-Year Regional Transit Plan," which you placed before them. Here are your assurances, your promises, your word, your honor:
"Sound Move is based on extremely conservative cost and ridership assumptions and methodologies reviewed by an independent expert review panelIn addition, the RTA has adopted strict cost management control principles to make certain Sound Move stays on schedule and within budget." Sound Move, page 31.
"The assumptions used to project costs and revenues for Sound Move are consciously conservative. The assumptions have been carefully analyzed to provide a cushion in case there are adverse changes in one or more of the revenue or expense projections." p. 35
"RTA [will] make certain that Sound Move is financed on time and within budget, and that principles and commitments to the public are met." p. 35
"The financial policies provide important tools to the RTA to make sure that Sound Move is financed on time and within budget." p. 35
"The RTA assumes no state funds, thus placing no additional demand on limited state resources that are needed for other regional transportation investments" p. 33.
So the claim that the voters gave you a blank check and an open schedule is false. You specifically asked for authority to implement a $1.67 billion system within ten years, assured voters you were making extremely conservative cost assumptions, and that you would make certain the budget and schedule was met. That's what voters approved.
And here's what you say today, quoting your chairman:
"They [the board members] are unable to back off as they are bound by what the voters in three counties approved in 1996."
You say you want to regain credibility, and yet you continue to abuse the truth.
You also made the following promise to voters in 1996:
"As the RTA proceeds...it will continue to identify and evaluate alternatives that might achieve the same system goals and benefits more cost-effectively." p. 26
One would think, having finally admitted that you've been hiding $1 billion [actually, $1.5 billion] in cost overruns, that it would be timely to keep your promise to "continue to identify and evaluate alternatives." But you refuse to do so.
Sound Transit Board's misrepresentations to the federal government
Not only have you systematically misrepresented this project to voters, from the beginning to the present, you have misrepresented it to the federal government.
The Link light rail project was fraudulently justified. You told the federal government it would cost $1.9 billion. That representation continued right through the congressional review period, which ended in November. Things that you knew well -- like the cost overruns of the Capitol Hill tunnel, rising property values, the cost to purchase the downtown tunnel from King County, the cost to acquire property from the University of Washington, and a host of other things-were not included. They were kept off the books. The so-called independent fiscal analysis required by congress was done with Sound Transit's bogus numbers, so the project the congressional appropriations committees reviewed was fraudulent. After the review process was completed you admitted a $1 billion additional cost overrun, just last month.
Having done this, now you are rushing through a last-minute federal grant with the connivance of some cooperative members of the outgoing administrative team at the Federal Transit Administration. You are in such a rush that today you will approve a contract you've not seen, premised on a financial plan you've not adopted, for a project you've not defined. In doing so, you will oblige the citizens and taxpayers of this region to complete a huge, risky, marginally beneficial, four billion dollar project that we cannot afford with current taxing authority. This is the most egregious violation of public trust that I have seen in my lifetime as a resident of this community.
Financing plan is improbable
As to the affordability, here's what is clear from the board
briefing book for this meeting:
1. You need to get an additional $931 million from the federal government, which is 69 percent of the total cost, for the next section of the Link light rail project, from Lander Street to SeaTac. That would be unlikely under any circumstances, but its implausibility is enhanced by your current double-dealings with FTA, your history of misrepresentations, and the fact that there is a limit to the tolerance even of FTA to be associated with embarrassing, over-budget projects.
2. You assume construction costs will not increase faster than inflation, when the normal experience is that construction costs increase faster than inflation.
3. You assume there will be no more cost overruns from this day forward. This from an agency that guaranteed to voters the ten-year, $1.67 billion cost project, which you now excuse with a wave of the hand and that comment that "these things can be expected to run over." You repeat the promises of 1996 that you've not kept and won't honor.
4. And finally, in this briefing book it's clear that there are hundreds of millions of dollars in costs, beyond the $3.6 billion you now admit, that already are known. It's just like the history of your misrepresentations to the federal government-you're keeping these costs off the books in order to serve your desires of the moment. [Note: In his questioning of the staff on January 11 by board member Rob McKenna, it was admitted that the true costs already exceed $4 billion. More recently, the Inspector General and the Diversified Capital, Inc. fiscal review confirmed costs at $4.16 billion.]
And what are these project costs?
They total no less than a half-billion dollars. To which will be added the unwelcome surprises you don't yet know, but which are routine for a project like this one.
Predicting the future
It is easy to predict the years immediately ahead.
You will take the money.
Your cost estimates today will prove to be rose-tinged, like your previous estimates.
Your ballooned assumptions about a federal bail-out will prove disappointing.
The more people learn about this project, and its adverse impacts on their lives, businesses and communities-all the negative consequences you've also systematically hidden-the more anguish and anger there will be.
The more people learn about how trivial the benefits will be from all the billions of dollars and all the disruptions, the more resentment will rain down on you.
Also, now you are moving into the arena of an interesting national story. Newspapers and broadcasting organizations are beginning to notice this scandal, and its implications. One of these days you'll find your names in the New York Times, the Wall Street Journal, and perhaps your images on Sixty Minutes, or 20/20.
Meanwhile, there's a real problem that needs addressing
The greatest civic and economic challenge this community faces today is congestion. People have entrusted great authority and a huge amount of money to you, counting on you to act in a trustworthy and competent fashion to address that challenge. There is a very great deal that could be accomplished with $250 million per year in local tax revenues.
Instead of meeting your obligations to voters and taxpayers, you're resolved to fritter that money away in a hugely expensive, very risky, trivially productive rail scheme. Meanwhile, you refuse to consider superior, more cost-effective, and less risky measures. You not only will saddle us with this problem, but the next generation will be paying off billions of dollars in long-term bonds for your folly, while they suffer the consequences of your ineffectual and wasteful plan.
And then, somehow we are going to have to turn our attention to actually dealing with the problem, poorer by billions, which we can ill-afford, and with a loss of confidence in you, our elected representatives.
You will rue what you are doing to your constituents today, the people you are pledged to serve, the citizens who have entrusted you with this authority.
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Last modified: February 07, 2011