Sound Transit Board's "Unbridled" Realignment

Previous posts have detailed how Sound Transit's Long Range Financial Plans are based on their contention ST3 passage constituted "voter approval of projects" not voter approval of ST3 taxes from 2017 to 2041.  Sound Transit's "2021 Financial Plan and Approved Budget" concluded ST3 passage resulted in "Projected tax revenues of $58.3 billion comprising 60.9% of total sources over 2017--2041."  It also included the need for an additional $17.9B in bonds for the period.  The result was a $25B, "Tax Based Debt" in 2041 with no ST3 taxes to fund payments in 2042.

Sound Transit's "Financial Plan Update: April 2021" increased cost, raising the 2041 debt to $34B, $7.9B more than the "Available Debt Capacity" they could borrow.  Their response has been delaying projects until the could borrow the funds needed.  The "Realignment" resulted in the need for funds for construction and added borrowing extending far beyond the 2041 end of ST3 taxes.

Sound Transit's basis for the borrowing is "Appendix A--ST3 Financial Policies", in their 2021 Financial  Plan and Adopted Budget.  It was adopted June 23, 2016,  giving the Board the following ability to borrow:

Similarly, the Board recognizes that bonds issued and loans incurred by Sound Transit will be secured by the pledge of repayment through revenues including local taxes.  When bonds are issued or loans secured, Sound Transit will enter a binding contract with its bondholders and lenders that requires first lien claim against pledged revenues for repayment and for maintenance and operation of the transit facilities and services funded by the bonds.  Stated differently, bondholders and lenders will have a legal priority to Sound Transit's local tax revenues to repay the bonds and operate and maintain the transit system.

Note it was adopted prior to ST3 passage in November and makes no mention of any constraints on borrowing.  The 2021 budget also gives the Board the following responsibility for "project scope", deciding how the money they borrow will be spent.

The LRFP assumes that future system expansion projects will retain the size and scope originally approved by voters under Sound Move, ST2, and ST3.  But as the system is built out the Board may determine that future projects' scope may need to be altered and potentially increased to meet voter approved goals, public concerns, or other reasons.  Such future expansion decisions cannot be know or captured in the current LRFP, and could potentially increase the Agency's financial risk.

Again, no mention of constraints on Board approved extensions, including those with"financial risk".  Instead the Board shows its disdain for ST3 ending in 2041 by funding the debt with 30-year bonds.  With "Realignment" resulting in funds needed for construction and new 30-year bonds issued beyond 2041. our grand children's children will still be paying.

Sound Transit Board's Realignment is best described as "Unbridled", free from any restraint.  It results from their contention ST3 passage constituted "Voter approval of Projects" rather than voter approval of ST3 taxes.  They assumed that prior to ST3 passage without informing the public of the need for taxes well beyond 2041.  

The bottom line is legal action is needed to limit Sound Transit "Realignment" to what can be funded by ST3 taxes.  At this point nothing can be done about the billions already spent on a "light rail spine".  The spine won't increase transit capacity or reduce I-5 or I-90 congestion into Seattle.  Any funds saved should be diverted to expediting not delaying Ballard and West Seattle extensions that will.   My King County Executive candidacy is an attempt to expose that reality.