Sound Transit kicks off project, service realignment

When the Sound Transit Board began work Sept. 23 on the 2011 budget, it signaled the kickoff of a process that will realign agency project and service priorities in response to the national recession's impact on local tax revenues.

The good news: current
revenue forecasts will still result in a robust regional transit system with
major expansions benefiting the Puget Sound economy, environment and quality of
life. However, revenues currently expected through 2023 are $3.9 billion, or 25
percent, lower than forecasted in 2008, requiring difficult choices during the
2011 budget process.

"No organization can
confront an expected 25 percent reduction in revenues without asking – and
answering – hard questions about priorities," said Sound Transit Board
Chair and Snohomish County Executive Aaron Reardon. "It is important that
we address these issues now and continue to move forward with expanding the
region’s mass transit system as rapidly as we can."

Fortunately, the Sound
Transit 2 Plan included provisions that offer flexibility for responding to an
economic downturn. Over the coming months, the Board will map priorities for
major investments and consider options that achieve maximum public benefit and
maintain regional equity.

Sound Transit CEO Joni Earl
presented the Board with her proposed agency budget for 2011 and recommended
steps to address the revenue shortfall.

"Last year when our
forecast was down $3.1 billion, or 20 percent, we remained cautiously
optimistic that strict cost controls and strong project management could enable
us to deliver the full ST2 program by 2023," Earl said. "While we are
well positioned to make major transit investments in the years ahead, it is no
longer possible to complete the entire program in 15 years."

Under Sound Transit’s
subarea equity framework, each of Sound Transit’s five geographic subareas
faces a different financial picture. Revenues collected within each area’s
boundaries must be used for projects that have been identified to benefit that
subarea’s residents. The recession impacts are worst in the South King County
subarea, where forecasted revenues are down about 31 percent. Projected
revenues are down 26 percent in East King County, 28 percent in Snohomish
County, 26 percent in Pierce County and 16 percent in north King County, which
includes Seattle.

The Proposed 2011 Budget
and staff presentation summarizing the proposed project and service adjustments
are available at: http://www.soundtransit.org/About-Us/Financial-Documents.xml

On Sept. 30 the Board will
conduct a budget workshop to begin shaping priorities for 2011 and beyond. The
workshop will also include discussion of public meetings that will take place
in October. A final 2011 budget is scheduled for adoption in December, along
with a Transportation Improvement Program and Service Implementation Plan that
guide investments beyond 2011.

In crafting the
recommendations, staff applied lessons learned from past challenges, closely
examined underlying assumptions, and focused on the agency’s core mission. The
recommendations use the toolkit included in Appendix B of the voter-approved
ST2 plan, which states that the Board shall respond to the revenue reductions
by taking one or more of the following actions:

• Correct the shortfall
through use of such subarea’s uncommitted funds and/or bonding capacity which
is available to the subarea; and/or

• Scale back the subarea
plan or projects within the plan to match a revised budget; and/or

• Extend the time period of
completion of the subarea plans; and/or

• Seek legislative
authorization and voter approval for additional resources.

Consistent with these
policies, the Proposed 2011 Budget reflects an initial staff review to start
the process of realigning the overall program. The recommendations for each
subarea give priority to projects and services that:

• Best achieve the stated
goals of the voter approved regional transit plans;

• Are necessary to maintain
the existing system in a state of good repair; and

• Are already under or near
construction.

Staff is also recommending
projects and services for delay, deferral (suspension) or reductions based on
the following:

• Lowest projected
ridership;

• Lowest utility in
achieving the stated goals of the voter-approved plans, including undefined
discretionary programs not critical to build-out the capital infrastructure or
daily operation of the regional high capacity system;

• Reserves or contingencies
for projects near completion that are no longer necessary; and

• Projects contingent on
funding or commitments from other partners where funding is not currently
included in any partner plans.

Sound Transit receives the
bulk of its funding through sales tax revenues and a smaller percentage from
the Motor Vehicle Excise Tax and car rental tax within the Sound Transit
District, which covers the urban areas of King, Pierce and Snohomish Counties.
Sound Transit’s revenues have been impacted to the same degree as every other
agency that relies on sales taxes. The cumulative impact is large for a
multi-year program like Sound Transit 2 because it is projected to take a long
time for annual revenues to return to previously assumed levels.