Crucial Inspector General report confirms light rail is ready for federal funds

Sound Transit Board Chairman Ron Sims today welcomed a clean bill of health for Link light rail in a report from the U.S. Department of Transportation Inspector General. The report, which follows two years of intense scrutiny, confirms that Sound Transit has met requirements for receiving federal funds to build light rail in the Puget Sound region.

In the report, the Inspector General confirmed that Sound Transit had successfully demonstrated that the initial segment of Link light rail is on track in all of the major areas addressed, including the project's costs, schedule, safety and viability as a stand-alone transit project.

"This is a moment of affirmation for Sound Transit," said Sims, King County Executive. "The Inspector General's findings validate both the ‘highly recommended' rating we received from the Federal Transit Administration (FTA) and the inclusion by President Bush of $75 million for this project in his FY 2004 proposed budget."

"Everyone from Boeing to business to President Bush agrees that Link light rail is essential for the Puget Sound, and today the Inspector General has added his seal of approval," said Sen. Patty Murray, D-Wash.

"Sound Transit stands ready to start building this project," Sims said. "The report further builds our momentum as our funding undergoes the final stages of review by the FTA and Congress."

The report culminates a process that began in April 2001, when the Inspector General recommended that a $500 million full funding grant agreement (FFGA) for the light rail project be put on hold until Sound Transit could prove that it had resolved issues of serious concern.

"The Bush Administration takes its responsibility to safeguard the public's funds very seriously and looked at Sound Transit under a microscope," said Edmonds City Council President and Sound Transit Vice Chair Dave Earling. "The intensity of the Inspector General's review confirms that Sound Transit has its house in order."

"Anyone who has any question about whether light rail is back on track should read this report," said Pierce County Executive and Sound Transit Vice Chair John Ladenburg. "We have truly turned a corner. This validation of the changes we've made to the project and the way Sound Transit operates confirms that the problems of the past are behind us."

Over the course of the two-year audit, the Office of the Inspector General stationed staff at Sound Transit's headquarters for nearly a year. The office's report concludes Sound Transit has resolved all of the identified issues; including:

The cost to complete the Link initial segment has been thoroughly evaluated and is reasonable.
The proposed schedule for building the project is viable, and the risks are identified.
Operating buses and trains jointly in the downtown tunnel safely is feasible.
The 14-mile initial segment is a stand-alone system, and any future extensions would be evaluated in their own right if Sound Transit seeks federal funds for them.

"This report recognizes the effectiveness of the changes Sound Transit has made," said Snohomish County Executive and Sound Transit Board Member Bob Drewel. "It affirms what we know very well from our hard work: that the Central Link initial segment is a critical project that Sound Transit is ready to start building."

"Piece by piece, the path is clearing for a program that will put thousands of people to work and will build a new transit alternative for Seattle commuters," said Seattle Mayor Greg Nickels, a Sound Transit Board member.

The report found that one remaining area of concern facing the light rail project is the outcome of pending litigation on the constitutionality of Initiative 776.

"We accept and respect the Inspector General's job of studying every conceivable scenario," said Sims.. "The Sound Transit Board will formally provide assurance that the agency can weather even the worst and most unlikely I-776 scenario within our existing local revenue sources and without compromising our commitment to subarea equity."

"It's important to keep in mind that the state Attorney General has allowed Sound Transit to continue receiving its voter-approved Motor Vehicle Excise Tax, irrespective of whether I-776 is held constitutional," Sims said.

The worst-case scenario identified in the report assumes Sound Transit would not be permitted to collect its full 0.3 percent MVET tax, but instead would only be allowed to collect the amount necessary to make annual payments to repay previously issued bonds. However, to make such a ruling, the Supreme Court would have to reverse clear and long-settled earlier court rulings.

In Municipality of Metropolitan Seattle v. O' Brien, the Court held that a state law cannot limit a transit agency's ability to collect a tax that has been pledged for repayment of bonds. The Court held that the tax must be collected in full even if it the full amount was not necessary to make the bond payments. The Court issued a similar ruling in Tyrpak v. Daniels, where it held that tax collections could not be reduced even if the agency has sufficient funds to make the bond payments from other taxes.

Federal funding for Link will undergo a 60-day Congressional review period after the Federal Transit Administration transmits the grant to Congress.

Click here (Adobe Acrobat file) to view Inspector General Mead's transmittal letter summarizing the report. Click here (1.1 KB Adobe Acrobat file) to view the entire report (to view Adobe Acrobat documents, you'll need the free Adobe Acrobat Reader software). Click here for related Seattle Times article.

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