Joel Horn's Blank Check

"Creative financing," he called it early on, without explaining. Maybe that should have been our clue that Joel Horn was taking another ride with taxpayer money. Unlike his attempt to plant a big publicly financed park for a billionaire on the shores of South Lake Union, or his brokering of City Hall's giveaway of a public hospital on Beacon Hill to a big corporation, this time Horn had citywide voter approval, eminent domain, a blank check, and control. Engineer Joel, policy wonk and visionary schmoozer, confident at the levers, was clearing the track. But he would steer the Seattle Monorail Project along an increasingly rickety course, one that turned out to be so creatively—if not furtively—financed that Horn had no option but to crash, burn, and walk away. The railroad ran Joel's way or no way—which just might be the monorail's fate. In resigning, the project's executive director has left it dangling off the end of a bridge to nowhere. No longer under the controlling hand of the man in charge of the public agency and its secrets, Seattle's monorail fantasy ride has suddenly been derailed by the truth.

When Horn and his staff repeated their monorail mantra—"the project can be built within the voter-approved financial limits"—they never added that, of course, there were no limits. They did not say, plain and simple: Listen, read the fine print on the contract you inked at the polls. SMP can, without a time limit, collect a 1.4 percent excise tax on auto licenses to pay for a maximum $1.5 billion in borrowed money, but the borrowing limit "shall not apply to debt incurred to finance or refinance obligations previously issued or incurred within the Bonding Limit." That's money at any price, for any duration. We can borrow $1.5 billion, pay it down some, and borrow more, always staying within the ceiling but, in fact, paying additional billions to borrow. Interest and fees to build the $2.1 billion Green Line from Crown Hill to Morgan Junction, with stops downtown, would come to at least five times the construction cost—$9 billion to $12 billion in future taxpayer dollars over 50 to 70 years, ending around the time Chelsea Clinton's granddaughter finishes her second term in the White House. It was a lifetime balloon payment for Seattleites.

Horn never pointed that out, even in the end, not even to his bosses on the executive board. But that's what voters—slim majority or not—committed to, as Horn saw it. "We're here today to deliver on a promise," he told the board June 20 while presenting the proposed finance plan and construction contract with sole bidder Cascadia Monorail. He only briefly mentioned it would take "a third longer" to pay off the bonds (try two-thirds longer). Revenue had earlier been over-projected by at least 30 percent, but Horn had a mandate to come up with a financial plan, and by God, he came up with one. It was his job. He was in control. And then, on the Fourth of July, he was not. He called up each member of the executive board and said goodbye; those he couldn't reach, he left voice mails. "I take full responsibility for both the good and the bad," he also told his staff in an e-mail. "Right now my continued presence as Executive Director is proving to be a distraction from the real issue at hand. . . . See you on Opening Day."

The $11 billion magnitude of the finance plan was buried in a document called "Debt Structure Supporting Detail."

A few days earlier, the board had decided Horn's financing plan was DOA. Paul Toliver, the one member with an extensive transportation background, as ex-director of the Department of Transportation for King County and of transit for Metro, said he was in "shock and awe" over the numbers. Looking like victims of a train wreck, several board members expressed a "sense of betrayal" and, in the words of Cindi Laws, "disgust as well."

The impetus for this sense of betrayal and disgust was not immediately evident when the proposal was presented to the board last month. Horn's detractors at OnTrack, an opposition and watchdog group, first noticed the gargantuan interest number buried in the finance proposal's paperwork and blew the whistle, tipping off the media. It's scary how close the deal came to approval. Had no outsider summed it up after plowing through some of the 40,000 pages of contract documents, the project would have continued moving forward. Even scarier is the fact that a year earlier, Horn and his managers sought approval to sell $1 billion worth of bonds, risking the loss of at least $100 million in financing costs if the project failed and/or committing taxpayers to today's outrageous spending plan. At the last minute, the board wised up then, too. It decided it was better— get this—to see how much the project might actually cost first.