Build the Monorail right, or not at all

[NWPT55]Even though I voted against it, it really bothers me to criticize the Seattle Monorail, because a) I sorta, really want it, and b) some of its most vocal opponents are vicious, lying bastards, who take great joy in scuttling any public project that doesn’t directly benefit their corporate overseers. But after seeing the SMP’s response to public criticism of the final plan’s financing and less than aesthetic design, I am underwhelmed.

The news today is about the long term interest costs to build the Monorail Green Line.

The newspaper is correct when it adds all of those future interest payments together and gets to around $11 billion. However, the value of these interest payments in 2005 dollars is closer to $1.9 billion, or roughly the same as the total cost of the Project which is just under $2 billion (in 2005 dollars). Keep in mind that most of the dollars added up and presented in the Seattle PI article will be paid 30 or 40 years into the future, when a dollar then is worth about 10 to 15 cents today.

It is similar to when someone buys a home with a 30-year mortgage and the interest payments over the 30 years end up being greater than the initial price of the home.

Well yeah, that’s kinda true… from the financial perspective of the SMP… but not for the individual taxpayers who are being asked to pay off the bonds. Presumably, the SMP will issue bonds with fixed regular payments, similar to a mortgage. So due to inflation, a fixed payment today of $100 might be worth only $0.10 in 2005 dollars, several decades hence. But individual taxpayers’ car tabs will rise with inflation along with the price of cars.

The SMP’s 1.4% car tab tax currently costs me $177.00 a year on my 4 year-old car. Due to wear and tear and changing circumstances, I expect I’ll buy several new cars over the coming decades… and each of those will be purchased in inflation-adjusted dollars. So assuming I buy a new car of similar value every 8 to 10 years, my average annual Monorail tax will remain about $177.00 in 2005 dollars. Thus, at the same time the SMP’s annual bond repayments are worth ten cents on the inflation-adjusted dollar, I’ll be paying $1770.00 a year, not $17.00.

In simple terms, if the car tab is levied for 50 years, not the originally projected 25, the Monorail will end up personally costing me about twice as much… roughly $8500 in 2005 dollars. (Though to be fair, I’ll likely be dead before the bonds are paid off, so my total bill will be somewhat less.)

And that has always been my primary complaint about the Monorail… its financing. We are asking taxpayers to ostensibly pay 1.4% of the value of their cars, every year for the rest of their lives. And I wonder… will taxpayers be willing to pony up additional revenues to fund anything else? Or, as I suspect, will the 14-mile Green Line be the only transportation project Seattle voters build over the next half-century?

The SMP’s response generated one more disappointment. They told us we have only two options:

1) We can move forward with this plan.

2) We can decide to not build the Monorail Green Line at all.

Yes I know… politically, those are likely the only two options. But there is a third, if the SMP board has the patience, fortitude and leadership to pursue it. They could pause from the rush to break ground, go back to the drawing board, and come up with a new proposal that simply makes more financial sense. Lob a few miles off one end or the other, propose a more reliable mix of financing, and give us back the sleek design that will make the Monorail an icon rather than an eyesore. Then come back to the polls for another vote if they have to, but this time with all their ducks in a row, and the fixed price contracts in hand. Sure, it could delay the project a couple more years, and they always risk losing a close vote rather than winning one. But it would be the responsible, creative thing to do given the circumstances.

As a progressive, I believe in the social benefits of public transit, and I’m willing to put my tax dollars where my mouth is. But we should only support those public projects that make sense.

It pains me to write this, because in doing so, I am not living up to my responsibility to parry the rhetorical blows of the right-wing critics who will surely paint any decision by the SMP as the ultimate in bureaucratic bungling and arrogance. The anti-transit crowd is in this battle on purely ideological grounds — they are unwilling to give an inch, and the temptation is to be just as inch-stingy in return. Indeed, if this were a national or even a state-wide issue, I would be much more reluctant to voice my reasoned opposition to a transit project I kinda, sorta want.

But this is Seattle, a bastion of progressivism, and quite frankly the political and rhetorical machinations of a handful of marginal, anti-transit blowhards shouldn’t even enter into the equation. We have the opportunity to build a 21st Century transit system, and the responsibility to build it right.

And I simply am not convinced that the current proposal is the right way to build the Monorail.

Comments

  1. 1

    Mr. X spews:

    I’ve gone back and forth on the Monorail, but paying 4x more in interest than the capital cost of the project is simply too much.

    Thanks for your work, folks, but it’s time to keep your campaign(s) promises and pull the plug.

  2. 2

    Jon spews:

    Goldy: “It pains me to write this, because in doing so, I am not living up to my responsibility to parry the rhetorical blows of the right-wing critics who will surely paint any decision by the SMP as the ultimate in bureaucratic bungling and arrogance.”

    I understand where you’re coming from on this, however, right is right, and it shouldn’t cause you pain just because you may agreeing with the other side. As you alluded to, a lot of the anti-monorail crowd would be against it if it cost $1 in tax money.

    Your post brings up an important issue: When (if ever) do the voters get another opportunity to re-approve public projects when the scope and/or costs change dramatically? I think certain thresholds should be put in place for a re-vote, but that may be opening another can of worms.

    Personally, I think it’s a dirty shame Seattle has gone this long without a decent mass transit system; especially when we could have voted in one 37 years ago and the feds would have pretty much paid for it, but that’s another post.

  3. 3

    candrewb spews:

    I couldn’t be more for the monorail, I’ve even volunteered for it. However, if the best they can do is this ridiculous financing scheme, they have to kill it. Upwards if 8 bil (4-5x)in interest? Who receives it? Sounds a little too inside baseball to me. Too bad, I hope they figure out something else.

  4. 4

    Felix Fermin spews:

    As much as it pains you, Goldy, it is incumbent upon you as a member of the reality-based community to make this statement. I’d expect nothing less.

  5. 6

    Mr. X spews:

    Old school liberals hated corporate welfare as much as progressives do, but the centrist wing of the Dems have been a real disappointment to those of us from (as my man Howard Dean put it) the Democratic wing of the Democratic party.

  6. 7

    David spews:

    The difference in my mind is that the right wing hasn’t tarred and feathered the word “progressive” the way they did the word “liberal.” Not yet, anyway.

    (Now “liberal” is an epithet with all sorts of negative connotations that obscure the real values of liberalism. “Progressive” still denotes those, or similar, values.)

  7. 8

    David spews:

    Anyway, my feelings are similar to Goldy’s on this. Monorail: great idea. Somewhat compromised monorail: not as great an idea. Somewhat compromised monorail we still can’t quite afford using the money at hand: not a great idea.

    It’s not even that it’s too expensive as a project, in absolute terms; if they had a revenue source that could support its cost, or perhaps some federal transportation funding to make up the difference, I’d support it in a second. But with just the MVET, it can’t be done right and paid for.

  8. 9

    smoke spews:

    Not all conservatives are against all public transit. Transit systems that make sense, that means actually moves people at a reasonable cost are supported by more than you realize.

    Too many examples of transit used to support the argument are in cities in which are geographically different from Seattle.

    The system that works well in Phila. will not work here.

    Expanding bus service makes sense. Monorail, OK….just get the funding straight.

    Light rail? IMO It’s an OK idea with very poor execution. Why we insist on throwing good money after bad never ceases to amaze me.

  9. 10

    spews:

    Goldy wrote,

    Thus, at the same time the SMP’s annual bond repayments are worth ten cents on the inflation-adjusted dollar, I’ll be paying $1770.00 a year, not $17.00.

    I don’t buy this argument because we all know that the cost for a car today is much the same as it was 30 years ago, or actually much less given inflation. In 2040 you will still be able to buy a car for $10,000 or $20,000 and the MVET will still be 1.4% of that.

    Yes I know… politically, those are likely the only two options. But there is a third, if the SMP board has the patience, fortitude and leadership to pursue it. They could pause from the rush to break ground, go back to the drawing board, and come up with a new proposal that simply makes more financial sense. Lob a few miles off one end or the other, propose a more reliable mix of financing, and give us back the sleek design that will make the Monorail an icon rather than an eyesore. Then come back to the polls for another vote if they have to, but this time with all their ducks in a row, and the fixed price contracts in hand. Sure, it could delay the project a couple more years, and they always risk losing a close vote rather than winning one. But it would be the responsible, creative thing to do given the circumstances.

    The problem is the project planners have had their options limited by what the voters previously voted on: a 14 mile route and a limited means to finance it. While the Monorail planners should go back and offer suggested changes to ease the pain, they will have to get voter approval on those changes.

    This does not have to be a go/no go decision making point. The public review process should be one where we ask the planners to come up with modifications that will produce a more affordable solution, of a kind voters originally hoped for, but did so without the real knowledge of all the variables needed to accurately project the costs of the solution. We should look at the ways the project can better finance the cost, how it can be simplified, and offer those alternatives to the voters.

  10. 11

    prr spews:

    In reading all the recent articles, blogs, etc… It seem that everyone has forgotten that this was to be the first stage of a city wode monorail system.

    To continue on with this proposal, under the current plan, is absolutely foolish.

    The first stage is ridiculously over priced and under funded. We are now talking about removing staions, shorening the line and so on.

    This plan needs tobe killed. How many 10′s if not hundred of millions have already been wasted?

  11. 12

    spews:

    prr writes, “This plan needs tobe killed.

    Offer a plan that meets your needs (supposedly one that has multiple lines and costs the same price as one line) and I’ll listen. Or is this just your opportunity to say kill the monorail because, heck, you never really wanted to see it built in the first place?

  12. 13

    drool spews:

    It’s too bad a ton of money is beign pissed away on projects that could have been handled by a decent bus system. These rail things are inflexible, expensive (here’s the 3rd example locally following light rail and commuter rail), it seems doomed to failure time after time.

    More buses. Meanwhile, I drive as there’s no mass transit for me.

  13. 14

    prr spews:

    Daniel K,

    A plan that meets my needs?

    Okay, how about this.

    As this is supposed to be a mass transit system, why don’t we actually take a minute to think what would be productive?

    1. Link something besides a friggin bus line to the airport, you’d think that with the Nick name jet city, one of the brain surgeons involved in this think tank would have said. “Wow, out of towners and people looking to go to the airport might find this useful.” This should have been a first priority in this plan: Linking Seattle with Seatac.

    2. Stop wasting time with so many public opinion meetings and focus groups. The group was given 6 millians dollars to accomlish what? This organization has been a joke since day one. Have them go back to the drawing board with the original budget and make it work, If they cannot, have this organization refund all the monies they have received to date.

    3. Pick one rapid transit system, light rail, monorail, friggin jetpack, who cares. We needs al additional state agency in this area like Boston needs another historical monument. At any rate, link that public transport together with all the neighborhoods (not just one ine that “kinda” get you to your location”). Having a transportation system that you need to take a cab, to a bus line to get to the monorail station is just plain assinine.

    4. Have the state back the bond/insurance, this will cut down tremendously on the bid.

    This cuurent plan has been streamlined down so far from the original proposal that it does not reflect what the voters called for.

    Like I said before, kill this program.

  14. 15

    spews:

    prr wrote,

    1. Link something besides a friggin bus line to the airport, you’d think that with the Nick name jet city, one of the brain surgeons involved in this think tank would have said. “Wow, out of towners and people looking to go to the airport might find this useful.” This should have been a first priority in this plan: Linking Seattle with Seatac.

    I believe that there is a plan to extend the light rail line to the airport. Go here to educate yourself.

    2. Stop wasting time with so many public opinion meetings and focus groups. The group was given 6 millians dollars to accomlish what? This organization has been a joke since day one. Have them go back to the drawing board with the original budget and make it work, If they cannot, have this organization refund all the monies they have received to date.

    Come on. As soon as they do that you’ll be up in arms because there have been no public forums or votes by the public on the matter. The issue you neglect to consider is that the agency has been forced to follow the guidelines set down that have restricted their freedom to find alternative funding, or alter the plan that voters voted for. Were they to make such changes you can bet your ass that someone like Tim Eyman would be jumping all over the matter with an initiative to kill the project. That’s the environment we now live in.

    3. Pick one rapid transit system, light rail, monorail, friggin jetpack, who cares. We needs al additional state agency in this area like Boston needs another historical monument. At any rate, link that public transport together with all the neighborhoods (not just one ine that “kinda” get you to your location”). Having a transportation system that you need to take a cab, to a bus line to get to the monorail station is just plain assinine.

    The “pick one transit system” argument is just a load of codswallop. There is no reason we can’t have buses and light rail and elevated rail. There is no reason why a light rail line can’t be part of a system that has an elevated line. Changing “lines” would be no different than if they were both of the same type. Meanwhile saying buses can do the trick is to ignore the original problem: road traffic. An extra buses you put on the roads are just that many more buses stuck in the same traffic the light rail and monorail systems are going to be able to avoid.

    4. Have the state back the bond/insurance, this will cut down tremendously on the bid.

    This cuurent plan has been streamlined down so far from the original proposal that it does not reflect what the voters called for.

    Actually, the problem is that it has been kept as close as possible to what the voters asked for and that has in fact become a straightjacket for the planners.

    (BTW, Goldy, it would be great if you could add more rows to the the comment textarea box. 4 lines is very few and quite claustrophobic to write comments in. Thanks.)

  15. 16

    prr spews:

    In response to:

    “I believe that there is a plan to extend the light rail line to the airport. Go here to educate yourself.”

    Are you kidding me, the first tsgae is going to take 50 years to pay off and has already been bastrdised. This will never be added on to. I’ve heard their BS before, this is not an education.

    “Come on. As soon as they do that you’ll be up in arms because there have been no public forums or votes by the public on the matter. The issue you neglect to consider is that the agency has been forced to follow the guidelines set down that have restricted their freedom to find alternative funding, or alter the plan that voters voted for. Were they to make such changes you can bet your ass that someone like Tim Eyman would be jumping all over the matter with an initiative to kill the project. That’s the environment we now live in.”

    To paraphrase Bull halsey, when you are in command, command.

    “The “pick one transit system” argument is just a load of codswallop. There is no reason we can’t have buses and light rail and elevated rail. There is no reason why a light rail line can’t be part of a system that has an elevated line. Changing “lines” would be no different than if they were both of the same type. Meanwhile saying buses can do the trick is to ignore the original problem: road traffic. An extra buses you put on the roads are just that many more buses stuck in the same traffic the light rail and monorail systems are going to be able to avoid.”

    Go take a trip to Boston, New york or London and get back to me.

    “Actually, the problem is that it has been kept as close as possible to what the voters asked for and that has in fact become a straightjacket for the planners.”

    No, the problem is that the Monorail has been a joke since day one, they are over budget and have blown deadlines before the project has even begun.

  16. 17

    Aaron S spews:

    Now, I’m no public finance analyst… Well, ok, I am a public finance analyst. Total debt service, this $11mm figure, is not something that is meaningful or talked about (except by the local “news” media).

    A municipality evaluates the project cost and the rate at which they borrow, the true interest cost or the all-in interest cost( TIC and AIC, respectively.) Very similiar to Goldy’s analogy with a home mortgage. Who ever quotes the cost of their home as total principal and interest? “You paid a million dollars for a 2-bedroom in Lake City?!?!” See, it’s silly.

    When the public votes on a general obligation bond issue, does it vote on total debt service? No, just the par amount.

    With regard to level payments (or level debt service) and increasing tabs receipts, this makes little sense. Surely debt service will be matched to revenues, so chances are (if indeed the 1.4% is maintained and tabs receipts increase with inflation) debt service will increase at the same rate.

    Nevertheless, there is a time-value for money and the debt service needs to be present-valued back at this rate to determine the PV of borrowing. In public finance, the rate used is the cost of borrowing. The cost-of-borrowing is determined by finding the rate needed so that the present value of the total debt service is equal to the par amount plus or minus any discount or premium and adjusting to include any costs of issuance.

    Necessarily, this means the present value cost of the project is the project’s cost, which makes a whole lot of sense and is why when someone asks you how much your house costs, you say “I paid $350,000,” not $1,000,000.

  17. 18

    Steven spews:

    Aaron~

    Fine. So we’re paying $2billion for the monorail and $9billion for the financing. Just like with my house, it is my future income that pays for the financing. And that is the point–we the taxpayers are being asked to pay basically double (25 years vs. 50 years of tax) for the financing for this project. Plus it really isn’t the project we were promised. With the new column design, 2nd Avenue downtown will be completely overwhelmed. Responsible people would pull the plug now.

  18. 19

    spews:

    ppr wrote,

    “I believe that there is a plan to extend the light rail line to the airport. Go here to educate yourself.”

    Are you kidding me, the first tsgae is going to take 50 years to pay off and has already been bastrdised. This will never be added on to. I’ve heard their BS before, this is not an education.

    Obviously you didn’t bother to read the contents at the link I provided. So here it is again: http://www.soundtransit.org/pr.....efault.asp

    This link will be an extension from the light rail line, not the monorail line which does not extend in that direction. The link is targeted for completion in 2009 – not 50 years from now.

    As for transportation in other cities, well I was recently in Boston where I took the T from the airport, changed to another T line, then to another T line, and then to a commuter rail line. Multiple means of public transportation co-existing. But perhaps such “complexity” is too much for you?

  19. 20

    spews:

    Steven wrote “Responsible people would pull the plug now.

    No, unimaginative people who never wanted the monorail would pull the plug now. Responsible people would evaluate the situation, make adjustments to the boundaries the agency was working within (financing options, design and length), and make the changes to improve the plan and make this happen. Irresponsible people would continue to let out public transportation problems be left unsolved and the problem of future generations.

  20. 21

    righton spews:

    daniel; they lied when they first promised rail to the airport, why trust an 07 forecast? Plus its the most roundabout way to ever get to the airport.

    Most real world class cities have rail to the airport, and it works. Tokyo, London, Paris….sadly none/few in US.

  21. 22

    spews:

    righton wrote, “why trust an 07 forecast?

    Huh? 07 forecast? The link is projected for 2009. Is that page so hard to read?

    The cities that have rail links to their airports surely never asked the public to vote on each and every step of the plans. You pick the form of governance you wish to have. But once given that responsibility you need to also back up your vote with goodwill and support.

    As for “they lied”, are you suggesting that politicians that lie are a problem for you? If so, I have a memo I’d like you to read.

  22. 24

    headless lucy spews:

    Seattle is a great place to live and would be even better with some decent public transportation.

  23. 25

    righton spews:

    daniel, 22

    Were you here when we voted for a train system connecting the airport? We did. About 1/2 the cost of the lower, reduced system. Wonder why? They lied when they gave a cost forecast? Oh, they didn’t know, then incompetence excuses them?

    Name one great transit thing we have here? Sunken I-90? Exits at the Arboretum?, 520 w/ 2 car carpool, changes to 3, S curves; I90 at the stadiums? Bus tunnel? $1billion sounder system?

  24. 26

    marks spews:

    Candrewb:

    21, Chicago and SF have rail to the airports. It is wonderful.

    No, it is ridiculous. Go ahead and carry your bags there…You’re talking about BART, right?

  25. 27

    headless lucy spews:

    The monorail is about tourism, not transportation. So build it already! Get your damn priorities straight. The people at Boeing know that their huge business is driven by tourism and always has been. That’s where the money’s at, do-does! You will never have the “best plan possible” because that goal recedes infinitely into the future with each passing day…. It’s like marriage. Eventually you have to pick someone, and they’re never the “perfect” one.

  26. 28

    EvergreenRailfan spews:

    Even though I am one that is for the best transit mode for each corridor(and no one mode will be universal), I think that the city should concentrate more on improving the emissions-free transit they already have on the streets of Seattle. I think that in some cases, two modes may be needed, especially if it is the Monorail. Either a Streetcar or Trackless Trolley would be the best. The Monorail, with fewer stations can fulfill the need for a faster route from NE 145th Street to Downtown Seattle with stations every 1/2 mile to a mile, while a streetcar, trackless trolley line can provide local stops(every 2 blocks).

    The best stand-alone corridor for the Monorail is I-5(but that would be a regional job) or Aurora. Also, West Seattle is a monorail-only candidate, as it is the only rail mode that can clear the Duwamush without interupting shipping traffic.

    I have come to a conclusion, that the Elevated Transportation Company/Seatle Popular Monorail Authority, messed up with the plan they gave us.

  27. 29

    Sirkulat spews:

    For those who have no problem with the line other than its financing, ask yourself why the switchback was located on the south side of Seattle Center. Go ahead, ask. Now ask why the switch wasn’t situated near the next station north, Key Arena, where many more transit users around the clock could access the extra service; where sports events and other attractions could definitely use the extra service.

    This is what is called bonehead engineering and the line is littered with bonehead engineering. The public should be interested and should have the right to rumintate over such basic engineering considerations. Yes, the project costs too much, but its nevertheless a frickin lemon as I’ve long argued while most of you sat back and went duuuuuuuuuuh, whaaaa? How nice that TV station suits get more frequent and rather exclusive service. Oh yeah. Uh huh, uh huh. You heard me. Stick that one in your pipe and smoke it, Corporut Merika.

  28. 30

    prr spews:

    Headless Lucy @ 27…

    “It’s like marriage. Eventually you have to pick someone, and they’re never the “perfect” one. ”

    Wow, someone is really lucky to have you to come home to.

  29. 32

    Sirkulat spews:

    Well well. OK. If the ‘extra service’ monorail switchback is installed on the south side of Seattle Center, how well will that be received by cloth napkin Belltown restauranteurs? I’ll bet these restauranteurs think this will increase customer traffic, because the grocery stores of Lower Queen Anne, the affordable grocery stores of downtown proper, are less are less accessible. Hmmm. Makes you think, eh? What other reason can justify putting the switchback where it serves fewer people? Hmmm?

  30. 33

    EvergreenRailfan spews:

    From the looks of it, it seems that OnTrack just wants the Monorail to keep the promises that they made to the voters, unlike other groups that are totally biased against any kind of rail transit.

  31. 34

    Dick Hertz spews:

    “You paid a million dollars for a 2-bedroom in Lake City?!?!”

    In our real-estate market, you might get a fixer upper for that price.

  32. 35

    BananaLand(aka Iguana) spews:

    As I have been saying for two years, we have sub-optimal rail-based transit projects in this town. Those two should have been combined to form ONE.

    First, the larger the project, the better the economics of scale that can be realized. One management and on organization structure. Lower costs for all purchases of equipment. Both monorail and light rail are paying too much because they are not buying enough.

    Second, and perhaps more importantly, we could have taken the best from each project. Monorail is a superior technical solution – there is no question about that. Light rail will be slow and stop at traffic lights!

    Most importanly, we could then use light rail’s superior funding method. Some money from the federal government, some from the state, some out of sound transit’s budget, and a higher car tab tax (less than monorail, but a little higher than just light rail).

    The fact that not only did this not happen, but it WAS NOT EVEN MENTION as a possibility by Sims, Nickels, the Seattle Silly Council, or the King Co. Council demonstrates that this area does not have rational political leadership. In fact, it has no leadership at all. Just some politicians spoon feeding you sugar.

  33. 36

    EvergreenRailfan spews:

    Some Metro bus routes use Traffic Signal Priority, I believe Route 7 is one of them.(A Pilot Project a few years ago, the transponders are still on the buses). LINK will be using this system.

  34. 37

    John Slyfield spews:

    I think the 4 times the voters voted for the monorail (or against a recall petition), they were not aware of all of the financial impacts of the project. They were told it would be much less than what it’s actually going to cost. If I were in Seattle, I would be livid right now.