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 twelfth semi-annual report and covers Sound Transit's performance during the second half of the year 2002.
Summary of Sound Transit Performance
The Citizen Oversight Panel has been observing Sound Transit for five and a half years. We can state with confidence that, at the end of 2002, the management, the governance and the systems at Sound Transit have never been stronger. Discipline, culture, tools and practices have all been improved. The Board is more engaged in fulfilling its oversight role than ever before.
However, the public continues to view Sound Transit with skepticism, and uncertainties remain. The next year will be critical in providing the proof of a real turnaround.
Two events must take place in the next six months: 1) the federal funding authorization which is vital to completing Central Link must be awarded, and 2) the capital and operating agreement with Burlington Northern Santa Fe for the Seattle-Everett and Lakewood-Tacoma Sounder segments must be concluded. Until these hurdles are overcome, it will be difficult to argue that Sound Transit is on track to fulfill the key elements of Sound Move.
Numerous smaller Sound Move commitments have already been met. Cumulatively, these smaller successes are providing transit service to thousands of riders each day. Sounder commuter rail service between Tacoma and Seattle is serving 3,000 riders a day. Comfortable ST Express Buses are providing 24,000 boardings a day between all the major centers of the three-country region. New capital facilities such as transit centers, park and ride lots and train stations are in operation throughout the region as well. This year will see the start of service for Tacoma Link, the first element of light rail in the region. These accomplishments represent real and measurable progress on the taxpayer investment of 1996.
Despite all of Sound Transit's recent efforts to be a disciplined and accountable government agency, there are continued public efforts to deny the agency's improvements and undermine its progress. There are clearly also citizens in this region who see the need for this region to move people and goods for the well being of our economy, communities, and environment.
Agency-Wide Accomplishments and Issues
Sound Transit Board and Committees.
The Sound Transit Board, under the leadership of Chair Ron Sims, and the Finance Committee, under the leadership of Chair Kevin Phelps, have become steadily more engaged, more critical, and more accountable to the spirit and the promises of Sound Move. Attendance at Board meetings is excellent and the questions asked of staff are tough. The Board now sends back motions that are not ready for adoption. Board members now take very seriously their responsibility to hold the line on costs, and a new scope control policy, on the verge of adoption by the Board, will require a two-thirds majority for changes that add to the cost of a project. The Board has already become much more aggressive in addressing unbudgeted betterments proposed by local jurisdictions and communities, demonstrating an increased fiscal prudence.
Oversight will be strengthened by the adoption of a new Performance Audit Oversight Committee, an independent panel comprised of two COP members, two Board members and three outside citizens with audit experience. While Sound Transit is already subject to numerous state and federal audits, this new performance audit mechanism will focus on specific performance objectives, outcomes and efficiencies.
Management.
Sound Transit management has clearly been committed to changing the organizational culture, achieving better control over project schedules and budgets, and improving the effectiveness of its public communications. The agency has made great strides in these areas and the executive team continues to develop and fine tune its management practices. Project control systems and procedures are in place now, and project managers have received extensive training in their use. After repeated expressions of concern about the state of the project control systems and practices, COP is able to state that great improvements have taken place in this area.
The year saw real improvements in communicating Sound Transit's accomplishments, and Joni Earl has been visible, together with Board leadership, in the media, in the community and with key stakeholders. The agency was proactive in establishing major milestones for the year and reporting regularly on progress in reaching them. While not all of the milestones were reached by year-end, the forthright and open approach to monitoring and reporting progress was welcome. We hope to see this practice become an ongoing one for Sound Transit.
Legal Challenges Overcome.
One final area of accomplishments that COP wants to highlight is Sound Transit's success in prevailing in court on a number of fundamental legal challenges to its authority to implement Sound Move. Sane Transit brought a lawsuit alleging that Sound Transit could not amend the light rail plan without going back for a revote. The judge disagreed and upheld the Sound Transit Board's authority to amend the plan to meet changing circumstances. Another court decision, this one against the private telephone company Qwest, reiterated the legal precedent that private utilities operating in the public right-of-way must pay to relocate their facilities. Sound Transit has been vindicated on these issues in the courts of law.
Issues Remain.
However, challenges and misperceptions remain. The passage of Initiative 776 and the possible loss of Sound Transit's motor vehicle excise tax revenues have created a potential finance plan problem, if the Initiative is upheld by the courts in all respects. In East King County, where some of the region's largest investments in bus service and capital projects are being made, with direct involvement of local elected officials, Sound Transit opponents continue to cast doubts about adherence to subarea equity and other financial policies.
Together with the recent regional political battles over Referendum 51 and the skirmishes over projects in the new regional transportation investment district (RTID), the expressions of public mistrust could have a dangerous cumulative effect. The disunity within the region, not Sound Transit weaknesses, may finally end up undermining support for federal funding. This huge uncertainty could still undo all of the agency's internal efforts to right itself.
Sound Transit must put to rest questions about whether subarea equity is still a firm policy. COP has observed this issue closely and does not believe there have been any exceptions or violations to the policy. However, when leadership remarks are taken out of context, or when agency financial plans and analyses lend themselves to misinterpretation, Sound Transit must be proactive in explaining and refuting them clearly and publicly. COP urges the Board to reaffirm unequivocally the subarea policy, which was a bedrock commitment of Sound Move, and to publicize the existing rules and procedures for subarea allocation.
One issue COP has raised before is Sound Transit's continuing capital budget under-performance. Each of the three lines of business spent about 50% or less than its budgeted capital program for 2002, due to underestimating complexities and failing to gauge accurately how quickly projects would proceed. Project schedules for Link, Sounder and Regional Express have all slipped because of delays, not in construction, but in the preliminary engineering and environmental review stages. Reaching agreements and obtaining approvals have been the great obstacles. Managing processes with third parties and with permitting agencies has proved to be one of Sound Transit's biggest challenges and one that the agency has not yet fully mastered.
On the other hand, COP wishes to caution about a potential new issue, one that might soon result from Sound Transit's improved management. Some projects may be coming in under budget and decisions will have to be made about how to redeploy the savings. The Sound Transit Board has not engaged in a policy discussion regarding this question. Instead, it has transferred funds on a case-by-case basis to fill gaps in projects that have a funding shortfall. Clearly, subarea principles apply. But how will the Board respond to jurisdictions that believe a project's savings should remain in that community? Or to advocates of one transit mode who feel any savings must be reinvested in the same mode? An example of such a dilemma occurred in Everett, where a $5 million savings on the Pacific Avenue Overpass was transferred to the Sounder station budget. These questions deserve the Board's attention and a thorough public discussion.
Link Accomplishments and Issues
Central Link. In Seattle, Central Link preparations are shifting into high gear. Several small construction projects are underway: the land clearing for the maintenance base and the utility relocations along the E3 busway. A master schedule is in place that takes into account scheduling for real estate acquisition, business relocations, permitting, and utility work, in addition to construction stages. Project control procedures have been tightened and the change control board meets weekly to discuss and approve changes. The relationship with the City of Seattle is reported to be good; coordination has been escalated and weekly meetings are taking place to manage issues.
Another 2002 accomplishment worth noting was the completion of the Rainier Valley Community Development Fund operating agreement. After several years of due diligence and intense negotiations between Sound Transit, the City of Seattle, King County and the communities affected by light rail, the CDF is now in existence as an independent community-based institution. It will assist vulnerable businesses, make investments in the community and spur transit-oriented development. The CDF is a testament to government-community problem solving.
The big disappointment for Link in 2002 was the delay of the full funding grant agreement for the Initial Segment. The key third party agreements were completed regarding the downtown Seattle transit tunnel, the Rainier Valley community development fund, utility undergrounding, and the E3 busway. The grant agreement was submitted to the Federal Transit Administration in late spring and Sound Transit developed a schedule that assumed grant award by year-end. However, increased due diligence of the new Initial Segment by the FTA, the Inspector General and the Congress led to delays in the federal process and the FFGA was not granted by year-end as had been hoped. Without the FFGA, construction could not begin, even though Sound Transit was ready to proceed with bid processes and contracts for the northern end of the segment.
Final design of the middle segment of the alignment to Henderson station is over 90%, and final design for the Tukwila segment is at 30%, with about a year's worth of engineering still to be done. The Link director reports that the cost estimate to complete the Initial Segment is firm, with adequate contingencies currently projected.
In addition to the critical timing and coordination of activities such as real estate purchases and permit approvals, consistent with the master schedule, COP members identified two areas of special challenge for Central Link. Numerous utility projects must be coordinated: with Seattle City Light for electricity; with Seattle Public Utilities for water, sewer and storm drainage; with Puget Sound Energy for natural gas; with private telephone companies, cable companies and fiber optic companies for private utilities. Each utility pipe and cable location must be identified, disconnected and reconnected to businesses and residences, and care taken to avoid disruptions of service to adjacent properties. The danger is that with so many parties involved, mistakes could easily be made, disputes could quickly arise, and costs could be incurred if delays or rework ensue. Sound Transit is still working on procedures and agreements to resolve disputes quickly between its contractors, the various city departments and the utility companies.
Another critical area that will soon need to be significantly ramped up is the function of community relations with businesses, tenants, property owners and residents along the construction path. As construction starts, daily problems and issues will need to be resolved. In the Rainier Valley with its diversity of cultures and languages and the large number of small parcels affected, this will be a huge undertaking. A significant number of community problem solvers will be needed to walk the alignment daily, with language skills, technical knowledge and sensitivity to the kinds of problems and disruptions that will be the norm. We are pleased to report that Sound Transit is now developing a plan to handle this challenge.
Tacoma Link. In Tacoma, Link is progressing on budget and on schedule to open in September 2003. Compliments are due the Tacoma Link construction and implementation teams, which have done their jobs with professionalism and while maintaining good relations with business and property owners along the downtown alignment. In 2002, progress was also made in preparing for operation of the new light rail system in Tacoma. The maintenance base was completed, rail cars were delivered and operating staff were hired. These accomplishments lend support to COP's view, expressed throughout this report, that Sound Transit is now competent to manage its construction and operation programs in the manner of a mature, technically capable organization.
Airport Link. Together with the Port of Seattle, Sound Transit has identified a new terminal location for the airport that was announced as this report was being prepared. Two issues had caused a delay for this segment: the Port's decision process on the location of the north terminal and Sound Transit's funding shortfall in South King County. The events of 9/11 also affected the world of airport planning, as new federal security regulations were promulgated and as the decline in passenger traffic required rethinking of previous airport plans. Uncertainty is still great for this segment of Link, and an affordable finance plan remains to be developed, but progress is again underway.
North Link. On the North Link segment, the supplemental draft EIS is due to be released this spring. An intense period of review and public input will follow and the Board will be again asked to select a preferred alternative and adopt the FEIS by the end of 2003. Options have been studied to take Link north via Capitol Hill or South Lake Union, via the Montlake Cut and across the UW campus or further west along Brooklyn Avenue, and then into the Roosevelt District via either 12th or 8th Avenues. All of these options will require trade-offs to be made on factors such as cost, ridership and community impacts. Since the City of Seattle has disbanded its station-area planning teams, Sound Transit will need to ramp up its community outreach and response efforts to handle input and questions from citizens and affected groups.
At year-end 2002, Link appears to be in good shape on all fronts that it has control over. The management and technical capabilities are strong and Sound Transit leadership has put in place the people and systems to implement the program. The approval of the FFGA is the largest hurdle to be crossed now.
Sounder Accomplishments and Issues
On the Tacoma-to-Seattle Sounder segment, the largest project underway is the construction on the BNSF track and signal contract. This first phase, $159 million, two-year construction contract is 51% complete. The Burlington Northern Sante Fe Railroad is the contractor and construction manager on the segment. When completed, the improvements will enable increased train speeds, expanded freight capacity, and continued operation of the three daily commuter trains on this route. BNSF and Sound Transit staff report that relations between the parties on this segment are good and that the project is under budget at this halfway mark. While about two months behind schedule due to delays in reaching a third-party agreement early last year, BNSF believes it can make up the schedule delay by the end of 2003.
A pivotal question on this segment, which remains for Sound Transit to answer, is whether it can complete the Reservation-Freighthouse connector in Tacoma by September 2003. This connector is a mile-long segment of new track that will add capacity to accommodate the operations of Tacoma Rail, some of which will be displaced by Sounder. The project is still in final design and poses a challenge for completion on time and on budget.
The very good news for Sounder on this segment in 2002 was the start of the third daily round-trip train from Tacoma to Seattle and the steadily increasing ridership on the route. The perils of success will now be parking issues at some of the more popular stations. At Puyallup and at Sumner, daily parking is apparently exceeding projections and the lots are already full.
Another success for Sound Transit on this segment was the timely resolution of a dispute with the City of Renton over a parcel of land that was needed to complete track work. This problem was resolved by decisive Board and executive action before it caused project budget or schedule problems. The handling of this situation was an example of lessons learned from past mistakes and might a few years ago have been handled much less effectively.
The Sounder Everett and Lakewood segments do not have good news to report this period. Progress on both segments is stalled in negotiations over capital and operating agreements with BNSF and over funding shortfalls. The FTA has established a March 2003 deadline for reaching agreement with BNSF on Everett and Lakewood track and signal improvements and operations. If Sound Transit fails to meet that deadline, it might have to forfeit federal funding that it sorely needs to fill gaps left by other funding partners. COP urges the Board to make every effort to work with BNSF to conclude this agreement.
Another concern on this segment is the large wetland mitigation for which Sound Transit must receive approval from several environmental agencies, but has not yet obtained. Also, disagreement with the City of Mukilteo about the nature and location of a commuter rail station and parking lot continue. Mukilteo has repeatedly stated that it may prefer to wait for a station if it cannot negotiate the configuration that meets its long-term waterfront vision. Sound Transit may need to consider deferring the Mukilteo station to a later time when conditions are right for agreement.
Sounder experienced unfortunate management turnover this year. A new director has now been in place for some five months, and after a review of the program, has undertaken a reorganization of the department and has asked for an outside review of all cost estimates and schedules. While hoping that these actions lead to a much stronger capability to execute the program, COP members have expressed their concern that costs will go up again and schedules will slip. The admission that the department has been weak in rail engineering expertise and the decision to address that weakness are necessary steps to strengthening the Sounder technical capability.
Regional Express Accomplishments and Issues
The single largest Regional Express capital project, the Bellevue I-405 direct access ramps, is entering its second phase and is moving along well. Sound Transit, the City of Bellevue and WSDOT are working together effectively to manage this $160+ million project. This and two other projects, the Lynnwood transit center and park and ride lot and the DuPont park and ride, are in construction at the end of 2002.
Two transit centers opened for service in 2002, in Overlake and in Bellevue. Both facilities are well-designed and attractive. And both projects had to overcome permitting and construction management challenges before opening on schedule for service to the public. Numerous other Regional Express capital projects have experienced schedule slides. Problems have included obtaining the necessary environmental permits and negotiating needed right-of-way, but also and primarily, reaching agreement with partner jurisdictions on scope and location of projects. COP has observed improved procedures and systems that are now in place for project management and project control. However, the project definition phase continues to be a challenge for the agency, as budgets are constrained and requirements are many.
Several large projects that have experienced such delays may be on the verge of resolution. The Mercer Island transit center and park and ride will hopefully move forward in 2003, as will the Federal Way transit center and access ramp and the North Everett transit center.
In total, Sound Transit is investing over $800 million into regional HOV and transit access improvements. The usefulness of these investments for transit speed and reliability is predicated on maintaining the HOV system for transit. COP is concerned about recent proposals by state transportation commissioners and legislators to open the HOV system to single occupancy vehicles. Current Sound Transit Board policy supports keeping the HOV system reserved for transit and high occupancy vehicles at all times. COP believes this is an appropriate position consistent with the taxpayers' Sound Move investments.
Regional Express has successfully completed deployment of the 19 new express bus routes it promised in Sound Move. This past summer, the 15 millionth rider enjoyed the new service and 24,000 boardings are provided each day. Five years into operations, the agency is now focusing on improving the efficiency and productivity of the service. Several unproductive routes are being reevaluated. Despite efforts to build awareness and market these routes, ridership has remained too low to justify continuing service. COP members have expressed their sense that the Board should proceed to redeploy the funds from unproductive routes to routes where buses are full and riders are standing in the aisles. The Board has previously adopted productivity criteria for the express bus routes and now needs to enforce them. Together with the cost containment strategies recently outlined by staff, doing so will help improve the agency's farebox recovery ratio from its current 22% to the 25% it was projected to achieve.
