City payoff

Will Seattle taxpayers get stuck with a $42.8 million bill for light rail?

WHO’S GOING to pay off the Rainier Valley to take light rail?

Mayor Greg Nickels and the Seattle City Council want Seattle taxpayers, electric utility ratepayers, and water users to pay $42.8 million to heal the Valley’s light-rail wounds. Opponents say the payments are “an unlawful and ill-advised raid” on city and utility funds. The City Council’s transportation committee will consider the proposal on Friday, April 12.

Sound Transit’s troubled $2 billion, 14-mile light-rail route from downtown to Tukwila will run along the length of the Valley on Martin Luther King Way, knocking out all or part of 300 properties and disrupting dozens more during its three-year-long construction, which is slated to begin in 2004. Rainier Valley residents fear it will rip their community apart and destroy one of the most diverse commercial corridors in the city.

As a salve to embattled Rainier Valley residents, Nickels and the City Council want to pay $42.8 million into a community development fund for the Valley that would help ease the the problems caused by light rail and pay for long-term projects, such as workforce development, affordable housing, and microlending programs. “This is political money that’s basically being put up to appease the community and gain more support for the rail system,” says Seattle City Council President Peter Steinbrueck, who’s offered his grudging support for the proposal.

Of the city’s $42.8 million, $21.3 million, or nearly half, would come directly from the city, mostly from the city’s general fund. The remaining $21.5 million would come from in-kind contributions by Seattle Public Utilities ($4 million) and City Light ($7.5 million) ; the utilities would do work for Sound Transit at no charge, and the transit agency would put its savings into the community development fund.

No one is disputing that the money is badly needed. The question is: Who should pay for it? Sound Transit seems like the obvious choice; after all, the three-county agency has its own taxing authority and is currently brimming with cash. In contrast, the city of Seattle is facing a deficit of between $30 million and $50 million, and City Light has raised rates an average of 60 percent in the last year to cope with a staggering debt of nearly $2 billion.

Seattle City Council member Nick Licata says the city shouldn’t have to pay for Sound Transit’s sins. “We’ve pointed out this [problem] all along—now [Sound Transit is] coming to us asking for money to spend on all these impacts,” Licata says. Since the council adopted a resolution supporting the proposed development fund in 1999, Licata says, the city’s financial situation has become “a whole different landscape.”

Meanwhile, some critics are asking whether City Light has any business footing nearly the half the bill for a fund that has nothing to do with utilities. Jorgen Bader, a former assistant city attorney and member of the Seattle Community Council Federation, warns that the city may find itself in a situation similar to the one it was in last December, when it lost an attempt to force City Light to pay for the electricity to run city street lights. In that case, a King County Superior Court judge ruled that because streetlights are a basic city service, they should not be paid for by a separate entity like City Light. “You can’t take money that belongs to City Light and use it for development,” Bader says. “If [the city] rips off City Light—which has this enormous debt—in order to make it up, [City Light] has to raise their rates. It is illegal.”

Council member Richard McIver acknowledges that City Light will likely have to raise its rates, probably by “renewing” the existing power surcharge. But McIver says the city attorney’s office has scrubbed the fund’s financing clean. “That’s all been resolved,” he says.

But council member Heidi Wills, who chairs the council’s energy and environmental policy committee, says she still has questions about how the fund would work, how City Light would pay for it, and whether the practice of channeling contributions through Sound Transit is legal to begin with. “We need to have the law department at meetings to ensure that this is completely legal and that we would not be vulnerable to any legal challenges,” Wills says.

Why should the city have to spring for Sound Transit’s peace offering in the first place? Some supporters say Seattle has a responsibility to support an underserved, low-income part of the city. “To me, [the fund is] just our commitment to the community we’re going through” with light rail, says McIver, a member of the Sound Transit board.

Others suggest, somewhat tautologically, that the city agreed to pay for the fund when it was first proposed by Sound Transit in 1999. “The city of Seattle and King County committed to funding the program,” says Sound Transit chief financial officer Hugh Simpson.

But no one—not Sound Transit, not City Council members, not the anti-light-rail organization Save Our Valley—could explain why Sound Transit wasn’t picking up some of the bill for a plan that could, if all goes well, keep the agency out of court over some property acquisitions and mitigation payments. “It should have been Sound Transit’s responsibility from the beginning,” Save Our Valley president George Curtis says.


The city could pay even more of Sound Transit’s bills. Under a proposal also being heard on Friday, April 12, Seattle taxpayers would pick up most of the tab for placing electric, phone, and fiber-optic lines underground along Martin Luther King Way, a promise Sound Transit made to Rainier Valley residents during light-rail negotiations in 1999.

Sound Transit will pay the $13.5 million it will cost to move the city’s utilities from one above-ground spot to another (moving private lines, such as those owned by Qwest, will be paid for by the companies that own them). “Our responsibility is to just relocate the poles themselves,” says Ahmad Fazel, Sound Transit’s light-rail director. That leaves the city holding the bag for the remaining $15.4 million to $19.8 million it would cost to put the lines underground.

Most of the extra money for undergrounding, according to Seattle City Council President Peter Steinbrueck, would probably come from City Light. Last week, however, council members indicated that they wanted to leave their options open—mainly because, as City Council member Heidi Wills put it, “We cannot be sure that City Light will be financially healthy” when the city has to start paying for undergrounding sometime in 2005.

Erica C. Barnett