Sound Transit's April Budget Debacle

 The previous post detailed how CEO Rogoff's December 2020 version of Sound Transit's 2021 Financial Plan & Adopted Budget included a Long Range budget plan to spend $98B on a transit system expansion by 2041 that ignored the end of ST3 taxes in 2042 needed to pay for the expansion.

It's the result of Sound Transit's definition of "affordable".  Voters presumably voted to approve ST3 in 2016 because they believed the $54B would pay for the transit system expansion in Sound Transit's ST3 Map.  This post details the absurdity of Sound Transit's April 2021 budget,  the latest update to the debacle.

The first demonstration of Sound Transit's "affordable"definition was you could "borrow the money" was CEO Peter Rogoff's 2019 Budget Long Range Plan for 2017-2041.  It detailed his plan to use ST3 taxes to spend $96B on the largest transportation system expansion in the country" by 2041.  However, while the extensions would be completed by 2041, Rogoff's budget left $17B in "Tax Based Debt"in 2042 with no taxes to pay for it.  (The Sound Transit Board responded by renewing his contract for another three years with a hefty raise)

Sound Transit's first example of their concern for "affordability" was the October 2020 presentation to the board's "Finance and Audit Committee".  It included Fall 2019 and Fall 2020 projects showing  the pandemic's effect on "Outstanding Debt" needed and "Debt Capacity" available.

The purported concern was the pandemic had reduced the "debt capacity".  However, it was the increase in "Outstanding Debt" (i.e. cost) between the two years that made the 2020 budget"unaffordable".  The result was a chart, "Financial Plan unaffordable under current forecasts" with $2.7B in "Unfunded expenditures" in "2020 fall financial projections"

The solution was a "realignment" consisting of a 4-year program delay that dramatically reduced debt requirements.  With the delay, October's "Projected Amount of Outstanding Debt" didn't increase until 2029 and remained well below the pandemic's reduced "Debt Capacity" throughout 2017-2041.

All that changed with Sound Transit's Long Range Plan in the April 22, 2021 "Financial Plan Update" to the Board.  The "Unfunded expenditures" in the "Financial Plan Unaffordable" chart increased from $2.7B to $7.9B.  In 6 months, Sound Transit's estimate of 2041 debt needed (again cost) increased from $20B to 34B, double the 2019 2041 debt.  (It apparently had been even higher during the period as the $7.9B was "narrower" than an earlier $11.5B estimate)

Sound Transit's response to the increased debt in the April 2021 update was a chart, "Key Considerations" with the following:

Project scope discipline remains imperative

The irony is if CEO Rogoff had demonstrated a modicum of competence he would have used "Project scope discipline" in his 2019 Long Range Plan to limit light rail extension to what ST3 funding could fund rather than extensions he currently can't even borrow to fund.  My goal as King County Executive candidate is again, not to win, but to expose this debacle, something the Seattle Times assiduously refuses to do.