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Wednesday, August 3, 2011

Tunnel Budget Reaches Over $6.14 Billion With Interest; Crtics May Sue to Obtain Final Finance Plan

Posted by on Wed, Aug 3, 2011 at 12:15 PM

email_memo.png

Washington State Department of Transportation (WSDOT) staff shared an email in 2009, which was uncovered this week, that acknowledged interest payments will make the final cost of the deep-bore tunnel billions more than the $4.2 billion sticker price for the tunnel. Now the state is refusing to disclose its final financing estimates for the project, so tunnel critics may file a lawsuit this week to get them.

The internal email sent to WSDOT consultant Amy Grotefendt says that $1.9 billion in interest—just on the state's $2.4 billion contribution to the project—will bring the budget to $6.14 billion. But that figure is still "not counting any interest that the other contributors may incur," the email says. Other project elements that may add more interest include $400 million in tolling bonds and another $1.2 billion in contributions from the City of Seattle and the Port of Seattle.

But some fear the financing plan will cost taxpayers more than the state anticipated two years ago, owing to lower revenues from gas taxes that will slow the pace for paying off construction bonds and adding to the long-term interest. They note that the auto industry announced last week it would embrace higher fuel efficiency standards that will reach 54.5 miles per gallon by 2025, which means Washington drivers will likely pay less gas taxes in the future. In addition, per capita driving is down in King County. While that efficiency is a positive development, it means gas tax revenue may not meet previous forecasts to pay off 30-year tunnel bonds. "If the gas tax revenue does not come in as planned, the legislature will need to take action to remedy the situation," the WSDOT email says.

Asked last month about the financing plan, Grotefendt said that the previous estimate is "no longer current." What estimate is current?

Anti-tunnel group Protect Seattle Now, activist Elizabeth Campbell, and The Stranger all requested the tunnel's final financing plan and were denied. The state said disclosing it "would be harmful to the deliberative function process" between the state and the Federal Highway Administration. Further, Grotefendt refused to provide the documents or any estimates to The Stranger, saying, "Once it is finalized—anticipated in mid to late August—it will be available to the public." That is, the records likely won't be available until after the August 16 vote on the tunnel.

Fed up, Protect Seattle Now is considering filing a lawsuit this week that would compel the state to release key portions of the financing plan. Attorney Gary Manca, who successfully fought highway officials and the city to place Referendum 1 on the ballot, says the state may withhold information about policy recommendations and opinion, but not the hard facts of cost estimates and future gas tax forecasts. "We are considering asking a judge to look at the document and decide what should be disclosed," says Manca.

"You'd want to know the full cost of the house before you buy it, and we should understand the full cost of this project before we build it," says Protect Seattle Now campaign manager Esther Handy. "The fact that the state won't tell us how much it will cost and how much taxes will go up in the future should give us pause before we green light the project."

 

Comments (26) RSS

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1
"an email in 2009, which was uncovered this week"

The Weekly's Rick Anderson wrote about his email exchange and quoted from it...in 2009.
http://blogs.seattleweekly.com/dailyweek…
Posted by gloomy gus on August 3, 2011 at 12:27 PM · Report this
Dominic Holden 2
@1) I've linked to that article before, but I don't see any mention of this internal email.
Posted by Dominic Holden on August 3, 2011 at 12:31 PM · Report this
Baconcat 3
The cost estimates probably went up, I'm guessing.
Posted by Baconcat on August 3, 2011 at 12:36 PM · Report this
psbirch 4
6 billion doesn't seem that much more than 4, 6 and 4 both being small numbers, and none of us has any personal frame of reference for how much a tunnel "should" cost, besides.

So has anyone done the math on the cost per foot or per sq. ft. of this thing? . 4.2 billion / 2 miles is what, just shy of $400,000 a foot of four lane highway? Figure 15 foot lanes that's...6k a sq foot? So upping that to 6.14 and we're looking at $9,600 a square foot?

Gate's mansion in Medina is (according to Wikipedia) 66,000 sq ft and valued at 147.5 million. That's "only" $2,235 a sq. ft.

Is there any value in such a comparison?
Posted by psbirch on August 3, 2011 at 12:39 PM · Report this
5
Given that gas tax revenue is down and debt ratings are shaky, I'm betting the financing costs have gone up as well. $7 billion? $7.5 billion?

How much is too much, when the state's environmental impact statement says there's not even a benefit?
Posted by Ben Schiendelman on August 3, 2011 at 12:41 PM · Report this
Martin H. Duke 6
WSDOT's coverup is likely indefensible, but rolling interest costs into the overall costs is simply not how project expenditures are reported. When you do that, you can no longer compare this to the cost of other projects.
Posted by Martin H. Duke http://seattletransitblog.com on August 3, 2011 at 12:48 PM · Report this
7
Please notice (in the referenced email) that the $6.14B 2009 estimate is for the WHOLE viaduct replacement project, parts of which are already underway. It is not, as this article states, for the tunnel alone.

Refer to the email, and read the answer to the following question: "Thus, is $4.24 billion still the total estimated cost (amount being contributed from all sources, city, state, US, etc.)?"
Posted by fact.checker.11 on August 3, 2011 at 12:49 PM · Report this
Dominic Holden 8
@6) I agree, Martin, they're separate parts of the budget--and the base cost is necessary for comparison to other projects. That said, it's a matter of public interest to know how financing will affect the total bill.
Posted by Dominic Holden on August 3, 2011 at 12:58 PM · Report this
9
@2, fair enough. As for that internal bit at the end, I'd have been shocked if WSDOT (or anybody) didn't think there could be an adjustment if gas tax revenue declined, especially if it should for some reason start dropping faster than construction costs have been.
Posted by gloomy gus on August 3, 2011 at 1:00 PM · Report this
10
@6:

Funny. That's how they—the same people pushing the tunnel—killed the monorail.
Posted by Dan Savage on August 3, 2011 at 1:12 PM · Report this
Kinison 11
Hackers break into UK science labs and steal THOUSANDS of emails. Republicans cherry pick one sentance out of it and suddenly ... "OMG global warming is a scam!".

Someone gets hold of a single email that suggests the costs of the tunnel is going to cost FAR MORE than anyone though, suddenly far left liberals are going "OMG the tunnel is a scam!!".

I'll wait for local news to verify this. Its not that I dont trust SLOG, but it is rather desperate for some smoking gun that can kill the tunnel.
Posted by Kinison http://www.holgatehawks.com on August 3, 2011 at 1:21 PM · Report this
12
@Dan: Exactly! They kill a grassroots initiative born out of frustration with feckless (and corruptable) politicians, and then try to hide the ballooning costs of their sweetheart deal for their friends. Incredible.
Posted by brizone on August 3, 2011 at 1:22 PM · Report this
13
the disaster continues. personally, i'm trying to make the transition from being incredibly angry & upset about the destruction of my country from within by the unholy alliance of corporate interests & our homegrown lunatic right wing, to gleefully watching the 'god damned plane crash into the god damned mountain,' and the tunnel debacle might just be the issue that can help me make the switch!
Posted by philosophy school dropout on August 3, 2011 at 1:25 PM · Report this
Baconcat 14
@11: yes, strange for liberals to freak out about a staggeringly expensive freeway...
Posted by Baconcat on August 3, 2011 at 1:26 PM · Report this
Baconcat 15
@9: don't forget that WSDOT used traffic projections that were optimistic. I think Sightline warned us about that? Well, some wonk said plainly that the projections would come back to bite us over gas tax revenue...
Posted by Baconcat on August 3, 2011 at 1:36 PM · Report this
Will in Seattle 16
Lying is not illegal in election campaigns.

Told you it will end up costing each Seattle household - renter or owner - $10,000 in extra taxes.

Even if you never use it.
Posted by Will in Seattle http://www.facebook.com/WillSeattle on August 3, 2011 at 1:45 PM · Report this
meanie 17
What kind of schools would we have if the pro-tunnel people were behind the education levys?

gold plated walls?
Posted by meanie http://www.spicealley.net on August 3, 2011 at 1:58 PM · Report this
18
@12 i wouldn't call that incredible. i'd call it standard practice in modern america. it is time to stop being shocked & time to start realizing just who we are as a people.
Posted by philosophy school dropout on August 3, 2011 at 1:58 PM · Report this
19
@17 private schools.
Posted by philosophy school dropout on August 3, 2011 at 2:03 PM · Report this
ScrawnyKayaker 20
@17 We'd have TFA in every district and eventually union-free charter schools run by corporate chains. Which is exactly what the Broad Foundation (who trained Maria Goodloe-Johnson and paid for the campaigns of the four quislings elected to the Seattle school board in 2007), the Gates Foundation, Arne Duncan, etc. are working RIGHT NOW to give us.

Follow all the fun here:
http://saveseattleschools.blogspot.com/
Posted by ScrawnyKayaker on August 3, 2011 at 3:36 PM · Report this
21
Why not just round it up to 50 billion and call it good? It isn't like accuracy and facts are a big part of your "reporting" style anyway.
Posted by clint on August 3, 2011 at 4:16 PM · Report this
22
PSN might want to tell people what their household share of the 6 billion dollars is. Governments throw around millions and billions all the time, after all, and not many people will bother to do the math.
Posted by I have always been... east coaster on August 3, 2011 at 4:40 PM · Report this
23
TUCK the FUNNEL!!! No on Ref. 1.
Posted by pelon on August 4, 2011 at 8:28 PM · Report this
Timrrr 24
So, um... Dom, why is it you conveniently forgot to quote the paragraph ONE LINE UP on that very same e-mail? What's that all about, huh???

You know the one -- the one that reads:
Thus, is $4.24 billion still the total estimated cost (amount being contributed from all sources, city, state, US, etc.)?
Yes, it is the estimated cost for the entire program of investments including the bored tunnel, the new south mile of the corridor near the stadiums, the north and south portals, investments in transit and city streets, seawall replacement, the new grade-separated street from Elliott and Western to the waterfront, and the new Alaskan Way boulevard.

Or did you really think your readers were stupid enough not to notice that lil' tiny detail you oh-so-conveniently left out?!?

Don't play us for fools, Dom. You're better than that.

If your arguments were stronger, maybe you could even persuade on those alone, without having to resort to the lying and cherry-picking and the falsehoods evidenced here, Dom. Maybe....
Posted by Timrrr on August 5, 2011 at 3:22 AM · Report this
Timrrr 25
Who said it?
Explaining that the tunnel would, in fact, have tolls is different that fabricating a myth that the project will fund bus service.

That quote comes from a Dominic Holden posting 27 hours before putting up this post.

Cake or eat it, pick one.
Posted by Timrrr on August 5, 2011 at 4:35 AM · Report this
Timrrr 26
And finally, @22:
Protect Seattle and/or SLOG will never give you those numbers, East Coaster -- cuz then you could do the math for yourself!

2,512,327 households in WA state
1.8 cars per household.
25 years of financing

For a supposed $6.2 billion project that equals:

(drumroll....)

$54.84 per car/year!

But no one here on SLOG wants you to actually do THAT kind of math...
Posted by Timrrr on August 5, 2011 at 4:56 AM · Report this

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