The previous Sept. 30th post opined ST CEO Rogoff had failed to provide his 2021 budget detailing his response to the COVID-19 pandemic. While Sound transit had detailed how service on all the transit modes will be adjusted it had not provided any information about the pandemic's effect on finances or on system expansion.
That was provided in an October 14th presentation to the Sound Transit Board Finance and Audit Committee, "Financial Plan update & Proposed 2021 Budget". It can best be described as an "overview" with a series of charts showing the pandemic impact on both the "Long Range Financial Plan" and the "Proposed 2021 Budget".
The Long Range Financial Plan provides a reasonable explanation of the problem. The loss in available resources and the increase in expenditures along with the reduction in allowable debt will result in $2.7B unfunded expenditures by 2041. That even a "moderate recession" required a "Realignment" consisting of a 4-year delay for some projects to avoid the projected need for debt exceeding the available debt capacity. A more "severe recession" could make even a 5-year delay unaffordable.
The 4-year delay also reduced Sound Transit debt at the end in 2041 from $25B to $20B. That's still more than the $17B projected prior to the pandemic (It's never been clear how Sound Transit intends to pay off either level once ST3 funding ends)
Rofoff incompetence is exemplified by the plan's Proposed 2021 Budget. His "Major cost-saving initiatives in 2020-2021", eliminating 77 vacant positions is offset by his adding 42 positions. He claims they're needed for system expansion while delaying the expansions for 4 years. His 2021 revenue projection fare revenues will increase 64% with pandemic seems "optimistic". The major "other" revenue was listed as $700M from TIFIA.
TIFIA apparently stands for the Transportation Infrastructure Finance and Innovation Act. TIFIA called the loan, "The largest single TIFIA loan to a transit agency in the country and the second largest TIFIA loan overall in the 25-year history of the program". Yet he neglects to include the apparent added $700M debt in the charts showing pandemic effects on debt.
Rogoff demonstrates further incompetence with how he to uses the funds in response to pandemic. Rather than reducing 2021 "System Expansion" funding he increases it from $2.242B to $2.306B, funding his decision, "Current construction continues".
He refuses to recognize light rail extensions beyond Northgate or Angel Lake will do nothing to increase light rail capacity through DSTT or reduce I-5 congestion. That any riders added will reduce access to light rail for current riders.
Those extensions are the ones he should at least delay if not cancel. Rather than delaying the West Seattle-to-Ballard light rail link for 4 years he should expedite their far less expensive construction, reducing the pandemic effect on debt. Thousands of additional Seattle commuters would benefit instead of existing Central Link riders losing access because of Lynnwood and Federal Way extensions riders.
Rogoff waits until page 41 of the 43 pages to mention his approach to increasing tax revenue with pandemic with following agenda:
11/5-Public Hearing--budget and property taxes
11/5-Executive Committee--budget overview and property tax levy
11/19-Board Meeting--request for approval of a property tax levy
The board had previously increased property taxes by $125.00 on a $500,000 home in response to I-976 passage. Since I-976 was invalidated they could have ended that increase. Instead it's not clear how much additional he intends to ask for, how this affects the debt problem, or what limits the board authority to raise them.
The bottom line is a competent transit CEO would have used the loss in funds as a reason to expedite the less expensive West Seattle-to-Ballard light rail link. Thousands of Seattle residents would have benefitted and the debt at the end in 2041 would be far less.
CEO Rogoff didn't and isn't.
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