Introduction
The Sound Transit Citizen Oversight Panel (COP) is a 15-member volunteer body appointed by the Sound Transit Board to oversee and monitor the implementation of Sound Move, the voter approved regional transit plan. This is the Panel's thirteenth semi-annual report and covers Sound Transit's performance during the first half of the year 2003.
Summary of Sound Transit Performance
Sound Transit continues to accumulate successes in carrying out the mission of Sound Move. This period saw the completion of three capital projects, with construction underway for some ten others. Negotiations were concluded on a number of key agreements toward projects that are in the planning and design stages.
A major achievement in Pierce County, Tacoma Link will begin operation on August 22. In Seattle, the Initial Segment of Central Link received an important vote of confidence with the issuance of a clean report from the U.S. DOT Inspector General (I.G.). A breakthrough agreement in principle was achieved with Burlington Northern Sante Fe Railroad that will allow Sounder commuter rail to begin demonstration service to Everett soon. Also, an agreement was reached with the Port of Seattle to extend Central Link to the airport by 2011.
Sound Transit deserves credit this period for a number of real pluses, however, the negatives remain.
The long-awaited federal funding authorization for the Initial Segment of Central Link is still in limbo. This Panel stated in its year-end report six months ago, that without the $500 million full funding grant agreement, it would be difficult to claim that Sound Transit is on track to fulfill the key elements of Sound Move. We are concerned that despite the efforts of regional leaders and most of our Congressional delegation, new delays and obstacles seem to plague the Initial Segment of Link, the centerpiece of the region's plan for improved mobility. The July 7, 2003 letter from the I.G. offers some reassurance.
While the news of the BNSF agreement for Sounder service was greeted with relief, the Panel also received it with very mixed feelings. The cost to bring commuter rail north was estimated at $128 million for track and facility improvements; the announced agreement places it at $250 million, more than $100 million more expensive than was estimated. Service was proposed to be initially six round trips per day at build-out, and now will be only four round trips in the peak direction only. COP members are not unanimous in believing the benefit is still worth the cost at this price. On the other hand, Panel members believe that Sound Transit had little leverage in negotiating with BNSF and deserved credit for reaching an agreement.
Thus, the tenor of this mid-year report is one of cautious hopefulness and diminished expectations. Step by step, improvements in many areas are building a stronger agency, better equipped to fulfill the mission approved by voters in 1996. But the journey to the future of an integrated high capacity transportation system is slower, more costly and more fraught with difficulties than the citizens of this region expected.
Management Accomplishments and Issues
Cumulatively, many incremental improvements at Sound Transit are building a stronger agency and providing rail and bus transit service to thousands of riders each day.
Transit Services
Sounder commuter rail service between Tacoma and Seattle is serving upwards of 2,600 riders each weekday. ST Express Buses are providing 25,000 boardings a day between the major centers of the three-county region. The agency has accumulated several years of operating experience, and individual routes are receiving ongoing review and fine-tuning to enhance ridership productivity, scheduling, feeder service and parking capacity. Marketing efforts jointly with local transit agencies and the ferry system are leading to consistent market development and system ridership growth. While these are tangible milestones of progress that thousands of citizens enjoy every day, COP has asked a question that staff have not been able to answer: How many of these riders are new to transit? We urge the agency to collect and publish this information.
Other, much less visible accomplishments are taking place inside Sound Transit.
Communications
This function is improving but issues remain to be addressed. Communication is still mixed with the local government community in the Puget Sound region. Jurisdictions that are Sound Transit's partners and stakeholders still report occasional misunderstandings and miscommunications about project selection, design and permitting processes. Some of these are simple clashes of differing interests where a local government wants to extract more from Sound Transit than Sound Transit's budget can accommodate. But others appear to be instances of failure to agree on basic premises or poorly communicated mid-course changes. While Sound Transit staff are given generally good marks for being responsive and willing to talk, the effectiveness of the communication is sometimes lacking and frustration is left in its wake.
Another observation the Panel heard from local government officials was that citizens often have a hard time distinguishing Sound Transit projects from WSDOT projects and Sound Transit services from local transit services. More should be done in the future to ensure that signage and marketing clearly identifies where Sound Transit's investments are at work.
The centralized communications functions at Sound Transit, especially media relations and government relations, are stronger than before. The outlines of a comprehensive strategy and proactive outreach to constituents are beginning to be felt in a positive way and the agency's responses to misinformation by opponents are prompter and more aggressive than before. The agency has stepped up its grassroots outreach too and has communicated its progress at numerous meetings with a wide range of organizations. Observers have cited the usefulness of the twice-monthly Executive Director reports that are distributed by e-mail to interested persons. On the other hand, Panel members noted that despite previously expressed concern about the agency's website, no changes have yet been seen there.
A successful result of the higher level of communication, Sound Transit was able to favorably address the issues posed by a number of harmful bills proposed in the Legislature this past session. It did so by building coalitions with a variety of allied interest groups from the environmental and labor communities, and with business and civic organizations. Building stronger relationships with Puget Sound legislators between sessions to update and inform them on Sound Transit's current work is needed. It remains to be seen whether the improved communication efforts will yield a similarly successful outcome at the federal level in Washington D.C.
Financial management
In its Year-End 2002 Report, COP raised two financial issues of concern: 1) whether the agency was still fully committed to the principle of subarea equity; and
2) how it intended to address the continuing issue of capital underspending. In the intervening period, management has begun to deal with both of these issues, although more remains to be done.
- Subarea equity: COP asked the Board to confirm its commitment to subarea equity and to lay to rest speculation by some members of the public that violations of the policy exist. In his response letter to COP, Board Chair Ron Sims wrote, ".the Sound Transit Board firmly supports its subarea equity policy. We understand that this principle was a key ingredient to obtaining voter approval of the plan in 1996, and we have no intention of changing the rules." This confirmation was welcome and COP members also appreciated management's efforts this past spring to respond to COP's concerns about the clarity and usefulness of past subarea equity audit reports. These efforts included a series of meetings to understand COP's views of the report format limitations and agreements to improve and supplement the report as well as to add a subarea review of the long-term financial plan. The process was constructive and responsive to the Panel's suggestions.
The recently released 2002 schedule of subarea equity, auditor's report and management discussion are a significant step forward in clarifying the subarea review procedures and providing contextual discussion of the numbers. The Panel urges Sound Transit to make these reports available to the public in an attractive and readable format that will make the subarea equity issue transparent to all. We look forward to the additional review of the long-term financial plan and the higher level of confidence these added procedures will grant the public.
- Capital underspending: COP expressed a concern that Link, Sounder and Regional Express each spent less than 50% of their capital budgets last year and that there had been significant under-performance in each of the previous years as well. Some of this underspending was due to delays outside Sound Transit's control, such as the protracted federal review process related to the FFGA for Central Link. But COP's concern was that, in many cases, project managers throughout the agency continued to be inaccurate in their forecasts of progress on their projects. In its response to COP, management reported that the reasons for these mis-estimates ranged from extended environmental review processes, to difficult property negotiations, and to delays in permit agreements. The agency promised to tighten up cash flow and schedule monitoring.
One of the actions management chose to address this issue was to initiate an adjustment to the capital budget several months into the current fiscal year. The budget amendment, $121 million on a $555 million capital budget, or a 22% change, was adopted by the Finance Committee and the Board. The Finance Committee Chair stated at the time the amendment was introduced that he assumed this would be a one-time solution and that he expected other strategies to be found. COP concurs with that expectation, as our members intended, by raising the issue of underspending, to stimulate changes in budgeting and management practices, not merely in reporting.
Management and staff
The Sound Transit management and staff organizations continue to strengthen the technical capacity, the project management and the functional integration between line departments and staff functions. Employee morale appears to have stabilized and turnover has declined from 12% last year to 8% this year. In all three lines of business, the management teams have been augmented or rearranged, to apparent good effect. In Link and Regional Express, construction management capability in particular has been ramped up to handle the approaching surge in construction activity. In all areas, the agency demonstrates improved skill in self-evaluation and accountability.
Project control and project reporting
Readers of previous COP reports know that this topic has been a significant concern for the Panel in the past. Major improvements in the last two years have included the selection of a single agency-wide project management software and integration of that system with the JDE financial management system via a reporting "portal." Within the current six-month period, this recent integration has lead to improvements in the monthly agency progress reports, including greater consistency across projects and improved readability.
Management has informed COP that it is now developing integrated financial and project reporting that will allow improved project budget tracking, based on actual cash flows, and more accurate quarterly capital spending reports. These are welcome developments and we look forward to seeing these new reports in the future.
The Panel has several suggestions for future refinements to the monthly progress reports:
- In addition to tracking lifetime budgets, show annual budgets, with actual progress year-to-date, for each project;
- Provide an executive summary for each line of business, showing in one table each project listed with both lifetime and annual budgets, and actuals-to-date against those budgets;
- From month to month, indicate which items have changed from the previous month.
While much improved, the monthly progress reports could still be doing more to provide the reader with a snapshot of progress for each project and each program on a monthly basis.
New policy developments
The Board continued this period to adopt policies that carry on and deepen the Sound Move commitments of 1996. A major decision was reached in April when the Board authorized the implementation of the regional Smart Card project. This automated fare integration system fulfills the promise of the one-ticket ride for the region's commuters and brings together all of the region's transit providers in a breakthrough agreement. The parameters of the hardware and software decisions and the terms of each agency's participation were some ten years in the making. Toward the end it appeared that an agreement might not be possible as the interests of individual agencies diverged in a number of areas. But Sound Transit's staff and leadership persisted in seeking the means to a solution and were rewarded with a successful outcome. The result will be significant to the region's riders and to the cause of public transit in the years to come.
Two other important policies were adopted this period: the scope control policy and the new Performance Audit Committee. The new scope control policy clearly spells out the Board's position on limiting unchecked project expansion and imposes new fiscal discipline on project budgets. COP felt this was an important step in cementing the Board's increased commitment to controlling costs. The policy creating the new PAC with its five independent citizen members expands Sound Transit's increased sense of its strengthened governance and accountability to the public.
The Status of Sound Transit Capital Projects
Tacoma Link Light Rail
As noted above, construction on Tacoma Link is complete and the system is being prepared for service begin on August 22. The project is forecast to come in at $766,000 below the lifetime budget of $80.4 million. The stations, track, signals and related utility and street improvements were built with relatively low impacts on the adjacent community and businesses. Sound Transit maintained good communications with the public and with affected properties during the construction phase. COP members look forward to being present at the grand opening of light rail service in the region.
Initial Segment of Central Link Light Rail
Weeks, months and years have passed and the federal Full Funding Grant Agreement is not yet in hand. Sound Transit is ready to begin construction on the E-3 busway and on the operation and maintenance facility, and contractors are poised to put their crews to work, yet more delays in the bureaucratic and political processes have the project on hold. These delays are frustrating for the agency and for the public.
On the bright side, the July 7, 2003 Inspector General report on the Link Initial Segment made positive statements relating to the reasonableness of the cost, schedule and funding sources, safety, issues of the joint tunnel operations, and compliance with the FTA stand-alone segment requirements. These were encouraging, but still incomplete as far as final Congressional review and FTA execution of the "New Starts" FFGA are concerned. And as the I.G. noted, the issue of I-776 and Sound Transit's ability to collect the motor vehicle excise tax, while affirmed in Sound Transit's favor by a lower court, is still outstanding before the Washington State Supreme Court.
We note that the slower economy has produced an advantageous bid climate and the low bid on the O&M facility came in about 15% below the engineers' estimate. If this is the beginning of a trend, then it is very good news indeed for the $1.2 billion construction portion of the total $2.1 billion capital cost of the project.
The Board in May approved an agreement with King County Metro to operate and maintain Central Link. While Sound Transit will operate Tacoma Link itself, it has agreed to contract with King County for the Central Link operation. The benefits of this arrangement will be most strongly felt in the operation of the Downtown Seattle tunnel where buses and trains will operate jointly, and because the highest degree of coordinated systems, dispatching, training and safety control will be required.
Final design is continuing on the Pine Street Stub Tunnel, the retrofit of the Downtown Seattle Transit Tunnel, the Beacon Hill tunnel and the Tukwila segment. The Martin Luther King Jr. Way corridor design is complete and five construction firms have been pre-qualified for contracts. The successful bidder will begin work six months before actual construction begins to engage in a planning and outreach phase with the community. The magnitude and complexity of the project, the large number of affected properties, and the multi-national and Multilingual community environment make the MLK corridor especially challenging. Right-of-way acquisition in the Rainier Valley is progressing on schedule for the 896 properties that must be acquired in whole or in part. Sound Transit is actively coordinating with the City of Seattle and with the private utilities to fully plan for the scheduling and sequencing of all activities.
The new Rainier Valley Community Development Fund is in operation and has issued its first check supplementing the small business relocation assistance provided by Sound Transit. With the careful groundwork laid in structuring the CDF as a revolving loan fund, this Fund should prove to be a long-term asset for the community, long after Link light rail is up and running.
Sound Transit issued its request for proposal for light rail vehicles and received five proposals. It will now negotiate a purchase agreement with one of the proposing manufacturers.
Third-party agreements have been reached or are close to being reached with all parties, but one. The City of Tukwila, whose City Council declined last year to approve a memorandum of agreement with Sound Transit, remains a question mark. The City believes that 1,200 parking spaces are necessary at the 154th Street Station, while Sound Transit has determined that 470 are needed. This issue will likely generate more public controversy before it is finally resolved.
North Link
The supplemental draft environmental impact statement (DEIS) was due in January 2003. In March, Sound Transit released the preliminary results of its alternatives analysis for segments going north from downtown Seattle. The findings were encouraging in that several of the alternatives were found to reduce construction costs and risk while retaining the high ridership of the original preferred alternative under Capitol Hill. The most promising route in terms of cost per rider and reduced risk was the Capitol Hill-Montlake route that would cut across the University of Washington campus.
The region needs to move on with North Link. All options, but especially the Montlake route, would necessitate a comprehensive partnership with the UW, as the route would use University right-of-way and would certainly create a variety of impacts to students, faculty and researchers. COP has expressed its concern in the past that the relationship between Sound Transit and the UW has not always been constructive. In this case, the Panel would reiterate its view that the Montlake route should only be considered a viable option if the commitment is there by both parties to work together collaboratively to address the impacts.
Although it had expected to release its draft EIS in January, staff recommended additional study on a number of issues, and these further analyses pushed the DEIS out to August 2003. The additional work included structural, geo-technical and electro-magnetic field mitigation analyses. In June, staff reported to COP that this work is progressing well and is yielding data that will be productive in the selection of the preferred alternative.
Sounder Commuter Rail
Besides the negotiations with Burlington Northern Sante Fe over the Everett and Lakewood capital and operating agreements, the key issue for Sounder this period has been completing key capital improvements on the Tacoma-Seattle segment by September 15. On that date, the current interim agreement to operate Sounder service will expire, unless certain critical conditions are met. They include completion of major track and signal improvements by BNSF, completion of the Reservation Connector and Tacoma Dome Station, and addition of key signal switches on the Tacoma Rail segment of the line.
COP members consider it unacceptable that Sounder service might be interrupted or even cease operation because of delays in completing these capital improvements. The schedule for these capital projects is exceedingly tight, however, staff appear confident that they will be completed on time. The Panel is hopeful that the new management team at Sounder can execute the workplan to meet this key milestone. Nevertheless, COP believes that the Board should insist that a back-up plan be developed now.
As noted above, Sound Transit last month announced an agreement in principle to extend commuter rail service on BNSF track to Everett in the north and Lakewood in the south. If the details of the transaction can be finalized within 120 days as anticipated, citizens in Snohomish County will be able to experience Sounder trains from Everett and Edmonds to Seattle before the end of this year. This is a Sound Move promise that has been repeatedly delayed. Its fulfillment, however, is troublesome as the cost will be so much higher than originally estimated and the service levels will be less. Sound Transit has also agreed to accept the environmental and permitting risks, which are considerable. While the environmental mitigation plan for the north segment was finally approved by the National Oceanic and Atmospheric Administration and the U.S. Fish and Wildlife Service in March, future regulatory changes are impossible to predict.
Sound Transit staff have made the case that the 97-year right to operate is advantageous to the public and that the benefits of the long-term BNSF agreement outweigh the higher costs. That case has been endorsed by the Sound Transit Board.
Regional Express
Two capital facilities opened for service this period: the DuPont Park and Ride and the Overlake Rider Services Building. A number of major projects in East King and Snohomish Counties are under construction: the Bellevue Direct Access Ramp, the Lynnwood Transit Center and Park and Ride, and the Lynnwood and Ash Way Direct Access Ramps. Construction projects have recently benefited from the competitive industry climate and contractor bids have come in below engineers' estimates.
Major projects that have been the subject of protracted negotiations and delays, the Mercer Island Park and Ride and the Federal Way Transit Center, are finally moving forward with the agreement of the respective local jurisdictions.
Despite these successes, fifteen Regional Express projects still in the preliminary engineering, environmental review and permitting stages are behind schedule. Right-of-way acquisitions are taking longer than originally scheduled and costs are higher than estimated in Sound Move. The I-90 Two-Way Transit project DEIS was released in April and its cost has grown to $100 million plus inflation. The Monthly Progress Report for May acknowledges that despite recasting its annual budget in April, Regional Express is only at 61% of its projected spending plan for the year. The department added a pre-construction program manager position recently to provide a new level of support and oversight to project managers. Together with the ongoing project manager training and a commitment to elevate stalled issues quickly, it is hoped that the agency can begin to accelerate project delivery.
Finally, one message that COP heard in its meetings with stakeholders was that the regional plan is now over 8 years old and in need of a comprehensive update. Most of the projects were originally scheduled for completion in 2006. We urge the Board to provide an updated Sound Move that details current projects and includes the most recent budgets and timelines. We also encourage the Board to initiate Phase II planning soon.
