Sound Transit predicted revenue for 2018

Unveiling the $2.2 billion 2018 proposed budget, Sound Transit CEO Peter Rogoff told the board the potential elimination of federal grants, specifically a $1.17 billion grant for the Lynnwood Link extension, is one “key challenge” to Sound Transit’s future financial plan.

Other funding in peril includes $3.3 $3.7 billion in grant money for various Full Funding Grant Agreements and $500 million for the Federal Way Extension. Federal uncertainty aggravates proposals by State legislators to revise the motor vehicle excise tax (MVET) rate. ST Executive Director of Finance and IT Brian McCartan said new legislation could eliminate $2-12 billion from Sound Transit’s budget.

Despite federal and state concerns, 2018 marks the agency’s strongest revenue year, as a full year of ST3 taxes is combined with ST2 taxes in a strong economy. Sales and use tax will account for 62% of the $2 billion of revenue to be collected in 2018, by far the largest source. 16% of revenues are predicted to come from MVET, 9% from federal grants, 7% from property taxes, and passenger fares contribute 5% or $93 million. In 2018 passenger fare revenues are projected to be 6.2% higher next year than in 2017.

A drawdown in the agency’s $1 billion cash reserve will be necessary, as Sound Transit predicts spending $200 million more than the agency is collecting in revenue in 2018.

“This how we have intended to fund the program all along. We go out to the capital markets, we build up our cash balance. We draw that down as the capital projects build, then we go back out and issue more bonds,” McCartan said.

Almost 80%, or $1.7 billion, of the $2.2 billion spent next year will go toward expanding the system with capital projects. $318m will pay for operating expenses and $146m is reserved for debt service. According to the agency, as of July 2017, Sound Transit’s current debt totaled $2.3 billion. According to the proposed 2018 budget, Sound Transit plans on spending 20% more than in the previous year.

The proposed budget also reflects higher maintenance costs required to maintain the growing fleet and facilities, and an increase in security costs as the agency transitions into taking over full control of the Downtown Seattle Transit Tunnel. Sound Transit also plans on hiring 123 full-time staff between 2017 and 2018: 79 to support increasing construction activity, 23 to aid the growing operations side, and 21 for administrative needs, said McCartan.

The budget for operations increases 8.6% to fund service added in 2017 and now in operation for a full year — 15,000 hours of ST Express, two additional Sounder round trips, and an increase in train car capacity on Link.

The budget will reflect the largest capital spending ever, with $1.7 billion estimated to be spent on new projects, including, SR 522 bus rapid transit, Sounder parking, ORCA Next Generation, programs to develop transit-oriented development and improve system access, and five Link corridors:

  • East Link –  $575 million
  • Northgate Link – $331 million
  • Federal Way Link – $123 million
  • Lynnwood Link – $148 million
  • Tacoma Link –  $20 million

“You are seeing the agency really gear up for both build of projects in the construction phase but also the early planning and engineering on the ST3 projects,” McCartan said.

The budget will be presented in more detail to the Citizen’s Oversight Panel and the Operations and Administration Committee, both on November 2, and at the Capital Committee meeting November 9. The budget will be back in front of the full board December 21 for final approval.

32 Replies to “Federal Grants Crucial to Sound Transit’s Budget”

  1. Wow if only Olympia bothered to help out, even just a little bit, to pick up the slack. Imagine!

    1. The state can’t even manage to fund schools. Maybe that is why they are so eager to mess with the car tabs. WA legislators are super jelly that a transit agency is so much better at funding than they are.

  2. Woah . . . that’s $1.7 billion in tax revenue next year. ST3 needs $27 billion of tax revenue over the build-out period (assuming the feds eventually kick in the anticipated amounts over that 25-year stretch). Assuming a 5% tax revenue growth rate, the full $27 billion will be collected in 12 years. The tax rollbacks could occur far earlier than I’d thought!

    1. First, 5% tax revenue growth isn’t realistic over any long-term horizon. Short-term, there has been a huge boom in Seattle the last couple of years, but that won’t last. Second, $27 billion is in 2017 dollars, while the much hyped $54 billion includes 25 years of inflation.

      1. That’s not correct. The ST3 plan documents, under sources and uses of funds, clearly state that the estimations are given in YOE$ and take into account inflation for the period 2017-2041.

        This is another reason why Sound Transit needed to publish their 2017 annual financial plan, something they failed to do.

    2. Don’t forget that $1.7B figure includes the original Sound Move, ST2, AND the ST3 taxes. For reference pre-ST3 in 2016, ST took in $866m in revenue.

  3. This is quite the proposed budget, especially considering that Sound Transit failed to publish their 2017 annual financial plan!

  4. The Great Republican Obstruction Derby may end up with the most Republican parts of the Sound Transit District having paid a dozen years to build a system that will never reach them.

    d.p. may very well have the last laugh as Link stalls out at Northgate, Highline and Overlake. Schadenfreude never tasted so haute cuisine!

      1. OK, then, “twenty years”, That’s even better for the Wrecking Crew to have to explain to their constituents.

        “Well, you see, we really didn’t care whether you got taxed for in-city transit improvements until we saw that it could improve our electoral prospects. But, hey, we’re politicians….”

      2. (Chorus)
        Subarea equity, subarea equity
        That’s what makes it fair

        The outer subareas are getting what they asked for in ST1/2/3. Low density combined with long distances means their money doesn’t go as far with buses and Sounder. And it would be silly to build Link segments before it reaches your subarea, because I’m told the biggest market for Link is for going to Seattle. The only subarea that has significant unspent wealth is Pierce, which chose to save up for Link in ST1/2 rather than spending it all on instant gratification. But that’s what they chose to do, and the money is still there. But going back to those long distances. An interesting aspect of Link is that it serves Seattle and King County neighborhoods on its way out of the county. So North King and South King paid for the train in their subareas to serve them, and Pierce and Snoho only have to pay for the extension after the last urban village in King County. Whereas with ST Express, they have to pay for the entire overlapping segments to downtown or the U-District, which have few or no stops in Seattle neighborhoods, and those that exist are along a freeway or in the SODO busway. So that’s where the outer subareas’ money is going to now, and how Link will enable them to keep more of their money in their subarea.

    1. There’s plenty of time to change the plans before Link goes beyond Lynnwood and Federal Way or starts stepping into Issaquah… just in case the subareas decide they want something less expensive that can be up and running sooner. One advantage of the suburbs is they have such wide roads that could easily be converted to transit lanes if they sufficiently wanted them.

      1. Yes, the I-90 bridge could start bus only lanes instead of the super expensive and overbudget rail across the floating bridge. It could be up and running tomorrow and they could fund one of the lines you are talking about with the money they save.

      2. Seattle-Bellevue-Redmond is the most important part of suburban Link. That connects the largest jobs centers, shopping destinations, government business (e.g., court appearances, licenses), etc.It also brings a lot of the Eastside to the ballgames. It’s begun construction so it’s too late to fundamentally change it. It and Lynnwood need the highest capacity that buses can’t provide. Tacoma won’t begin construction until the mid 2020s, and Everett and issaquah in the 2030s.

      3. Yeah, I’m with you Mike. The East Side needs more capacity than buses can deliver. OK, John Miles would argue otherwise, but at a minimum, a bus only solution would require a new bus tunnel, which would probably put the cost at something very similar to what we’ll spend on East Link (if not more). It also wouldn’t get us much, either. The pattern is more of a point to point corridor, rather than a trunk and branch one. Most of the riders are trying to get from downtown Bellevue to downtown Seattle. There are plenty who come in from the suburbs and would prefer a non-stop express to downtown, but a large portion of the riders are making transfers at park and ride spots anyway. The Mercer Island Park and Ride, for example, has much higher ridership than either Issaquah location. Folks are transferring to the “main line”, so that main line might as well be a train.

        I wouldn’t say the same thing about Lynnwood. Lynnwood really isn’t much of a destination (unlike Bellevue). It may, eventually, have a decent amount of density, but it is highly unlikely that it will have huge office towers (like Bellevue). This means that it has much more of a trunk and branch suburban commuter pattern. Ridership is also a lot lower from Lynnwood, so in theory, you could just run buses from Lynnwood (and surrounding areas) into Seattle.

        The challenge, though, is connecting to the rest of Link. It is very hard to get to Northgate, and it would be expensive to build bus ramps to serve it. That would also mean losing out on NE 130th and NE 145th, which would mean service to Lake City (which actually is densely populated) and the 522 corridor would suffer. Ending at 145th makes sense from a connectivity standpoint, but there is really nothing there (even less than what exists in Lynnwood). Again, you would have to build ramps to serve it. This would be a lot cheaper than extending rail, but wouldn’t make sense if the long term goal is to get to Lynnwood (or farther).

        The only cheap, effective terminus would be Mountlake Terrace, which does have bus lanes feeding it. But there is no easy place to turn around, which means a bus could serve it just fine, but then spend a fair amount of time working its way over to the exit, and then back again. That is much better than Northgate, but still not great. Besides, at that point, you are very close to Lynnwood, so you might as well just go that far.

        Lynnwood might be overkill, but not by much. What is overkill is extending it farther north. This is where bus service connecting to Lynnwood TC makes a lot more sense. Population density is low within Snohomish County, and it is a long ways from Everett to Seattle. Lack of density and proximity leads to low ridership — ridership that buses can handle just fine. Travel from Everett to Lynnwood, as slow as it is, is not as slow as Lynnwood to Seattle. Furthermore, there are things that can be done to speed it up, besides the obvious and very cheap transition to HOV 3. For long stretches you have a very big median that could be used to build bus lanes. Building bus lanes for the entire stretch (from Everett to Lynnwood) would be very expensive, because of the various bridges in the way. But building sections — several miles long — would enable a bus to pass dozens of cars when congestion is heavy. When traffic is light, it would stay in the existing HOV-2 lane, but when traffic is heavy, it would use the passing lane, and then get back into the HOV-2 lane for short sections (under bridges). Even without all that, it is quite likely that a trip from Everett to Seattle would be faster if it involved a transfer from bus to rail in Lynnwood, instead of Everett.

      4. Lynnwood Link is for all 600,000 people in the Snohomish subarea. The urban center in the area is Lynnwood, which is conveniently in the middle of the service area. Also, there are hundreds of buses on I-5 and no political will for transit lanes, and I wonder if two transit lanes would be enough anyway. The north end has fewer highways than the south end so everybody crowds up on I-5 and 99; while the south end has my god 509, 99, 599, I-5, the West Valley Highway, 167, the East Valley Road, wide boulevards like Oakesdale Street, Benson Drive, and I may be forgetting something. (I didn’t include the Maple Valley Highway because it’s analogous to tbe Bothell-Everett highway.)

        I agree that Link north of Lynnwood is unnecessary, or at least less necessary. But it’s what Snoho wanted to spend its own money on. (I would have invested in the remaining Swift lines.) And Snoho politicians were adamant that it was their top priority and urgent and necessary to attract companies and workers to the Everett Industrial Center.

      5. Forcing everybody in Lynnwood to go through Mountlake Terrace to get to Seattle would have been bad for several reasons:

        1) It would add yet another connection for people who today take local buses to Lynnwood Transit Center to connect to downtown Seattle service.

        2) For people living in the Lynnwood area (or anywhere north of it), Lynnwood is easier to get to by car, and there’s not enough parking at Mountlake Terrace to cover all the demand from Lynnwood/Everett.

        3) The sound level at the Mountlake Terrace freeway station and parking garage is extremely loud – enough for me to be concerned that anyone subjected to it for a daily commute might be damaging his/her hearing.

    2. “d.p. may very well have the last laugh as Link stalls out at Northgate, Highline and Overlake. Schadenfreude never tasted so haute cuisine!”

      a) I gotta say if a light rail spur instead of the main line went to Paine Field – a la Translink Skytrain style – as a result of all of this, I’d be satisfied. Even more so if it was based on Canada Line tech with automation, extra-large cars and such. Nice thing of these likely funding cuts…

      b) Light rail’s going to Lynnwood for sure. Hopefully Everett downtown.

  5. Richard, might keep in mind that while the DSTT opened in 1990, Bellevue, Redmond, Tacoma, and Lynnwood are all still waiting for their trains. And none have them has bailed from Sound Transit.

    So Sound Transit might want to keep in mind that its existence owed to its invention of a unique interim service that kept the whole region in the game. And if not the exact same thing, similar means to keep serving while building.

    The lack of any discussion of any of these measures is my chief worry about ST-3. Working these into our planning will at least remove some of the worry about possible-read also likely- obstacles and slow-ups.

    ballardite, look up the history of both the Brooklyn and Golden Gate Bridges. Biggest local expense was probably the ink and newsprint claiming each of them would bankrupt the United States. “Those things will scare the cows to death before we get them halfway across!”

    LINK is pretty much on the track of the transit ages. What was going to to wreck the budget to run empty vehicles will suddenly become a threat to sink the bridge. So best thing would be to wire reserved bus lanes across I-90, and then start specking out the trains so they’ll lighter than the buses whose passenger loads just sank the bridge with all hands.

    Archives have some great pics of tugboats straining their cables to keep one side of the bridge from getting blown down to Renton after the other one went gurgling down to Captain Ivar Haglund’s Locker when nobody got around to shut those hatches.

    Buses can’t be coupled. The space a train uses for passenger seats carries only dirty air between buses in the same line. DSTT points good direction. A bus system designed to become a rail system isn’t the only reserve arrow in the quiver. But it’s one we’ve got experience with.


    1. Mark, I’m not talking about the relative value of any particular Link line. [inappropriate language]

  6. Why is Bellevue->Issaquah important enough for light rail in the future, yet unimportant enough in present to even have an all-day bus in the present, which runs more quickly than the milk run of the 271.

    1. You can ask the same thing about Bellevue-Lynnwood, which has no bus on Sunday. Either we’re overserving it later or we’re underserving it now. But ST doesn’t want to spend a lot of money on ST Express, and full-time frequent service on those routes wasn’t included in the ST1/2/3 budget.

      1. I guess, but 405 BRT is merely a step up in service of what already exists (more or less). Bellevue to Issaquah rail is a massive investment in rail infrastructure that won’t even serve one of the existing bus stops.

        To answer the question, though, ST doesn’t run the bus very often, because the buses aren’t very popular. Only about 150 people board from Issaquah TC, and about 120 from the Highlands (and some of those people get off at the UW or Northgate). I realize these buses don’t run very often, but on just the 555, more than 250 board in Bellevue headed to Northgate.

        Issaquah rail is built based on the belief that someday Issaquah to Bellevue transit demand will be huge, even though it is extremely small right now.

      2. It’s regional transit; it has to run all the time or the region isn’t connected and people can’t take it when they want to travel. I agree that Issaquah Link is way overkill, but it was necessary to get a political consensus to build anything. The Everett city government has been an example of cooperation and enthusiasm for fast/frequent transit: one wishes Bellevue, Kirkland, and Mercer island had been like that. The underlying reason for Issaquah Link isn’t so much for the commuting convenience of current Issaquahites, but to make sure Issaquah doesn’t get left behind economically as companies bring jobs and tax revenue and condo residents to Link neighborhoods, and pass up cities without Link. So Issaquah’s underlying reason is actually similar to Snoho’s and Pierce’s and Federal Way’s.

    2. “Issaquah rail is built based on the belief that someday Issaquah to Bellevue transit demand will be huge, even though it is extremely small right now.” Correct-ish. Issaquah gets a station due to their growth plans in Central Issaquah around the station area. I volunteer on Issaquah’s planning policy commission & I can assure you the city’s zoning around the future station walkshed are very ambitious.

      I’ll give Ross’s comment an “ish” because the Bellevue-Issaquah line also serves Factoria & Eastgate, and right now if you board a bus at Eastgate during peak, you are pretty much guarantee to stand, and that’s with buses coming every 5 minutes. So right now Eastgate has ample transit demand (mostly Seattle-bound, but a fair amount of reverse-commute riders heading to Bellevue college), which will be handled by the Link station. Bellevue is upzoning Eastgate, so all 3 stations (Factoria, Eastgate, and Issaquah) have plenty of room to grow between now & 2030

      1. We’ll see what they do with the routing between Issaquah and Factoria. It isn’t enough to serve those areas, they have to be served well. Most of Eastgate is North of 90, while ALL of Factoria is South of 90. The devil will be in the details…

      2. Issaquah rail is built based on the belief that someday Issaquah to Bellevue transit demand will be huge, even though it is extremely small right now.”

        That impression was politically convenient, but the ridership models show mostly intra-Bellevue ridership. Even in 2040, Issaquah-Bellevue ridership isn’t large. Issaquah is growing much faster than PSRC projections, so will surely outperform its numbers, but that’s a low bar.

  7. As far as the federal contributions are concerned, at least for the remainder of FY2018 (which we are already a month into) the funding for transit assistance programs seems to be there. The THUD appropriations bill has moved out of committee and is on the Senate calendar. On the House side, the corresponding transportation bill was wrapped up into an omnibus spending bill and has passed in that chamber without any drastic cuts to these programs. Most likely the Senate bill will move forward and the differences will be worked out in conference.

    This piece did a nice job of summarizing the two spending bills. Again, it’s these appropriations bills that ultimately matter, not the OMB’s or the Congressional GOP’s adopted budgets.

    To follow the Senate bill, here are the links:

    To follow the House bill, here are the links:

  8. After my general reception at ST Operations Committee meetings lately, request about STB language policy.

    The transit world must now become multilingual- what’s “Cable-grip” in former Austrian Empire Italian-accented German, or “That speeding army truck just ripped off our poles and threw them down that ravine the into the Caspian so good thing the battery-pack will get us across the Yaila Mountains!” in Russian.

    Since my only fellow commenter at those meetings is our next Transportation Secretary Alex Tsimerman, I request that I be allowed to read all responses to my comments, however abusive. So long as they are in Russian, Because no driver out of Atlantic cares what any cукин сын says.


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