Contributor Dan Ryan joined the blog in 2015 after several guest posts. He grew up in Ireland, and has lived on the Eastside for 15 years. Dan is a recovering economist with a day job in telecommunications. Apart from transit, Dan frequently writes about suburban land use issues.
In 2017, WSDOT published a feasibility study of high-speed rail (HSR) in the Vancouver-Seattle-Portland corridor. It estimated a $25-42 billion capital cost for a rail line that would carry about 5,000 riders a day in 2035 and would just cover operation costs by sometime in the 2040s. This hardly appeared promising, but was enough to prompt a trickle of funds from the Legislature and regional partners for a “business case” study.
We have obtained a copy of the business case study which WSDOT will send to the Legislature this month. How does it advance our knowledge beyond what we learned in 2017?
In broad terms, the financial outlook for high-speed rail in
this study looks a lot like the numbers presented two years ago. The business
case doesn’t attempt to revisit the capital cost estimates of the earlier study.
Ridership is somewhat better, but break-even on operating costs remains
somewhere in the 2040s.
Regional leaders are nearing agreement on Vision 2050, a growth plan for the Puget Sound area through 2050. On Thursday, the Puget Sound Regional Council (PSRC) is likely to approve the release of a Final Supplemental Environmental Impact Statement (FSEIS). The new plan significantly shifts the distribution of regional growth to concentrate around high-capacity transit centers.
Once adopted by the Puget Sound Regional Council (PSRC), the plan’s requirements will cascade down through county and city plans to growth targets and zoning changes for every city in the region.
Earlier this year, the King County Council ordered a review of funding options for Metro Connects. This Wednesday, the Regional Transit Committee receives a status update on the effort. It considers a $220 million increase in annual funding for Metro, enough to get Metro to its long-range service goals.
Metro Connects is Metro’s long range plan, designed to integrate with Sound Transit expansion through 2040 and to meet the transit needs of city and County comprehensive plans. The Metro Connects plan, adopted in 2015, envisions a 70% increase in Metro bus service hours by 2040 over 2015 levels. That would increase transit ridership to 1 million daily boardings, and enable frequent service within 1/2 mile for 73% of county residents.
The draft ST3 plan in March 2016 extended rail beyond Lynnwood in two steps. The first, in 2036, would bring service to North Lynnwood, serving stations at West Alderwood Mall, Ash Way, and Mariner. The second, in 2041, extended around the SW Everett Industrial Center (Paine Field) and north to Everett Station.
When the plan was finalized two months later, the extensions were combined so the Paine Field and Everett stations would open five years earlier. It was a telling decision that all the extra financial resources of the final plan were put into the northern segment. This looks like an error. While all parts of Everett Link have their value, the immediate rider needs are mostly between Lynnwood and Mariner.
Work has begun on SR 522 BRT, with the first BAT lanes in Bothell coming online in late 2020, and Sound Transit’s Stride BRT service opening in 2024. Although phase 1 design recently concluded and the project is now entering the Conceptual Engineering and Environmental process, planners continue to evaluate how to serve the low-ridership Woodinville segment.
The BRT extends from the Shoreline Link rail station along NE 145th where Sound Transit will add bus queue bypasses and signal priority for transit at key intersections. On SR 522, the patchwork of existing BAT (business access & transit) lanes will be filled in to create an uninterrupted lane for transit from 145th to Bothell. In Bothell, the BRT is likely to operate on downtown streets, serving UW Bothell and connecting to I-405 BRT at NE 195th St.
Beyond that, there is a 3.5-mile segment to the Woodinville Park & Ride where the planned service is more basic. The ST3 plan does not fund any capital improvements east of I-405 and the buses operate in general purpose freeway lanes on I-405 and SR 522. The 10-minute headways west of I-405 drop to every 20 minutes into Woodinville.
In March 2020, Metro will implement a restructure of service in the North Eastside. Most attention will focus on the truncation of Metro 255 to connect with Link at UW station. Another key element of the improved Metro network is route 250. This new route connects downtown Bellevue to Kirkland and runs through to Redmond. It splices together the most productive parts of several current routes (234, 235, 248) for a more frequent connection serving three of the Eastside’s major downtown centers.
The route is likely to be successful. It is, however, a step away from the Long-Range Plan (LRP) Metro adopted in 2017. In developing the North Eastside restructure, Metro assessed that this routing has more value than the Rapid Ride routing assumed for 2025. Sometime this year, Metro will kick off planning this year for a 2025 RapidRide route in this market. As they do so, Metro should reflect the learning of the North Eastside process, adopting route 250 as the preferred option for service north of Bellevue, with Kirkland-Redmond service substituted for the less useful Kirkland-Totem Lake segment. Continue reading “Kirkland’s RapidRide should connect to Redmond”
WSDOT is preparing for the Rest of the West, the remaining phases of construction on SR 520 between Lake Washington and I-5. First up is the Montlake Project, where construction may begin as early as May. For transit riders, this means the Montlake flyer stop and the transit-only lanes on the Montlake Boulevard exit will both close in June. Several planned mitigations will blunt the impacts to transit riders.
The closure of Montlake flyer stops means buses not exiting the freeway will no longer stop in the Montlake area. In mitigation, WSDOT is funding additional weekend and evening service on Sound Transit route 542 through March 2020. That added service commenced with the March 2019 service change. The closure of the freeway stations are targeted for June 15.
Sound Transit has significantly refined the design for I-405 BRT which is anticipated to begin service in 2024. The final set of refinements from Phase 1 of design were shared with the System Expansion Committee at their March meeting. The design changes reduce travel times on the corridor and improve reliability. The shorter travel times make the service more appealing and ridership estimates have been raised correspondingly.
Construction will mostly occur in 2023-2024. WSDOT will begin construction of two stations (NE 44th in Renton and NE 85th in Kirkland) much earlier. Both are lengthier and more complex projects, and NE 44th is scheduled as part of the widening of I-405 south of Bellevue starting in 2019.
Although we are early in the ST3 program, some observers are already looking forward to extending Link light rail lines into the suburbs and adding more lines in Seattle. The ST3 plan funds severalstudies of suburban extensions. Current taxes do not support further expansions at the pace of ST3, however. Unless Sound Transit secures another large tax increase, capital spending beyond ST3 will be mostly squeezed out by the costs of managing what has already been built and financing the bonds accumulated in ST3.
The budget for future projects is constrained by Sound Transit’s tax authority. Sound Transit levies nearly all the taxes currently permitted by the Legislature; the only unused authority is a small rental car tax. Any prospect of further authority is hard to forecast. Certainly, it is difficult to imagine today’s Legislature granting more tax authority. Many legislators were unhappy about how the ST3 program far outran the smaller 15-year program they anticipated in 2015, and high car tabs remain unpopular. On the other hand, fifteen years is a long time in politics, and a new generation of legislators in the 2030s may take a sunnier view.
But let’s suppose we are limited by current law, or equivalently that voters resist new taxes. In that scenario, Sound Transit might ask voters in the waning years of the ST3 program to authorize more projects with an extension of current taxes. How much could Sound Transit build with voter approval if they just roll the current law taxes forward indefinitely? Less than you might expect. It turns out that a capital program extended to 2060 would have a run rate perhaps only a third as large as the 2016-2041 program.
Where will riders use the ST3 Link system in 2040? Longtime readers will be familiar with project ridership estimates, but most riders on Link are not going to the ends of the line. Along any line, ridership can be much higher on some segments than others. The suburban lines have weak ridership at the tails. Even the Seattle ST3 extensions have lower ridership outside of downtown than is widely understood.
The busiest part of the system is, of course, downtown Seattle with about 200,000 daily riders expected across both tunnels. Near downtown, the largest number of riders will traverse the North Line (about 108,000 daily riders near Northgate), the South Line (72,000 riders near Tukwila), and the east (65,000 riders crossing Lake Washington).*
Ridership to downtown Seattle from the ends of the Ballard and West Seattle extensions are smaller. West Seattle Link will carry 32,000 over the West Seattle bridge. Ballard Link has 34,000 riders on the segment west of Seattle Center. Taken together, this is scarcely more than the East Link ridership across Lake Washington.
Sound Transit CEO Peter Rogoff has suggested the agency is exploring creative financing options for Everett Link that shift some costs outside of agency debt limits. If successful, this would mitigate the risk of project delays as Sound Transit bumps up against statutory limits on debt in the 2030s, and may even accelerate the timetable.
“Our goal in terms of being able to serve Everett sooner is two-fold. One, to work with the communities as cooperative partners to see if we can’t focus on results and minimize bureaucracy to get a plan to get up here as soon as we can. That’s A. B, if there is a way that we can work out a financial arrangement where we could start incurring costs for this that would be exempt from the debt cap imposed on us, that might provide some opportunities to get up here sooner. We’re trying to be as creative as possible.
We’ve made that commitment to not only Paul Roberts, to Dave Somers, to Dave Earling, who’ve been on this for a long time. I don’t want to say it’s impossible. I’d like to continue with each passing year to see if we can’t drive that schedule closer and closer.”
Sound Transit, like any local government in Washington State, faces a constitutional limitation that non-voted debt not exceed 1.5% of the assessed value of property within its jurisdiction. This constrains the size and timing of capital investments as revenues must accumulate to cover most of the program. At its peak, the financial plan envisions $17.6 billion in debt by 2035, just as Everett Link is scheduled to open in 2036. The debt limit in 2035 is projected at $20.1 billion. There are many risks to that forecast, starting with the inescapable vagaries of a financial forecast two decades into the future. MVET reform alone could erode almost all of Sound Transit’s cushion unless accompanied by offsets. Several billions of anticipated federal grants are uncertain. Community pressures may drive some project costs higher.
Bellevue is planning a “CommutePool” network of autonomous rideshare services. The goal is to launch the service in 2019, connecting riders from southeast King County to major employers in Bellevue and Kirkland.
Last week, Bellevue and Kirkland jointly submitted a $3 million grant application to the US Department of Transportation’s ATCMTD program (Advanced Transportation and Congestion Management Technologies Deployment). That program funds model deployments of new technologies for transportation safety and efficiency. A decision on the grant is expected by October. The project also anticipates matching funds from both cities and contributions from major Bellevue employers in the Commute Trip Reduction program. Employers already pay for employee use of vans, so this can be an important source of matching funds. The projected cost of launching the program is about $9 million.
Riders will access the system via a smartphone app which Amazon will develop. The app can select pick-up and drop-off locations, find available parking at park-and-rides or leased parking areas, and reserve seats at specific times. Luum, a Seattle firm actively managing commute options at many Eastside firms, will coordinate the program at participating businesses.
Bellevue would like to operate the service with autonomous vehicles, but could lease non-automated electric vehicles as needed to start service by mid-2019. An RFP to obtain vehicles is likely soon after the grant is approved. Waymo plans to purchase 82,000 autonomous vehicles for deployment beginning 2019, and General Motors have also said they will deploy autonomous vehicles commercially next year.
In Bellevue, the CommutePool vans will serve major buildings and designated curb pick-up and drop-off locations.
The proposal has buy-in from many of the largest Bellevue and Kirkland employers. Employers with some 33,000 employees on the Eastside have signed letters of commitment to support the program.
A week ago, the Everett Herald carried an Op-Ed by three Sound Transit Board members from Snohomish County. The authors, Paul Roberts, Dave Earling and Dave Somers, criticize Sound Transit for not completing the light rail spine as quickly as possible. They go on to argue the strict subarea equity policy, where Sound Transit investments go to the subareas that pay for them, should be changed. The end goal, of course, is earlier delivery of rail to Everett at the expense of projects in other areas.
The three board members argue that the transportation needs of the region are not contained within subarea boundaries. They may have particularly in mind the enormous daily flow of Snohomish County residents to jobs in King County. This burden is amplified by expensive housing in Seattle and the Eastside that pushes more households to commute from relatively affordable places in Snohomish and Pierce Counties. Lower income communities also generate less revenues, meaning the areas with the greatest socio-economic needs have the least ability to fund local transit improvements.
The crux of the issue for Snohomish County is that their subarea is small, contributing just 13% of Sound Transit revenues. Their major ST3 investment, a 16.3 mile rail extension from Lynnwood to Everett, is disproportionately expensive at just over $3 billion in 2014 constant dollars. (In actual year-of-expenditure dollars, Snohomish will spend $6.2 billion on light rail capital, including a ridership-based contribution to the downtown tunnel).
In the design of the ST3 plan, Snohomish’ demands stretched available resources and the political consensus. Any plan had to finish the spine, and also serve Paine Field, whatever the needed subsidies from taxpayers in other subareas. Lengthening ST3 from 15 to 25 years made it possible to meet those demands more or less within Snohomish’ tax capacity. The stretching of Sound Transit debt capacity accelerated timelines so Everett service was moved up from 2041 to 2036.
Many residential buildings are built with more parking than their residents need, and even more parking goes unused during daytime hours when residents are away. So it was encouraging to see a recent announcement from GarageHop. GarageHop is providing 40 spaces for commuter use in an apartment building at the South Kirkland Park & Ride.
GarageHop is a Seattle company that provides monthly parking spaces in apartment buildings, typically leasing spots in buildings with over-provided parking to commuters and residents of buildings without their own parking. This is their first foray into suburban transit parking.
Kirkland Crossing is a market-rate apartment building in South Kirkland, created as part of an award-winning TOD effort that opened in 2015. It was, somewhat ironically, built with excess parking. GarageHop puts these spaces to use by offering guaranteed parking for $80 per month. Customers sign up online and access the secured garage using their smartphone to park in their own reserved parking space.
Parking at the Metro lot across the street is free. However the lot fills daily (averaging 97% utilization in fourth quarter 2017). At busy times, there have been issues with spillover parking to neighboring businesses. The only guaranteed parking at the Metro lot is via a pilot program for carpools and those spots are only guaranteed until 830am. GarageHop doesn’t require a carpool and can be accessed at any time.
Market rates for parking, even with guaranteed access, aren’t high enough to attract developers to build structured parking for transit in the suburbs. But GarageHop’s offer is welcome. They are efficiently reusing parking stalls that exist anyway, and offering an additional option for transit users to access the system.
At an open house on Thursday evening, WSDOT and Sound Transit shared design concepts for the I-405 BRT station at NE 85th St in Kirkland. The station is an ST3 project opening in 2024. The latest design features better connections to local transit and an improved pedestrian environment. None of these make up for the poor location choice. The station will serve just a few hundred riders daily after a capital outlay planned to exceed $300 million.
The NE 85th/I-405 interchange is located one mile northeast of the downtown Kirkland transit center. Today, it is a large cloverleaf with 85th St passing below the freeway. From the west, sidewalks end a half-mile before the station at 6th St, from which there is a 180 feet elevation gain to the freeway. To the east is a low-density commercial strip with modest prospects for redevelopment. This is an unpromising starting point, but the design makes a strong effort to create a station that is as accessible as possible. Continue reading “Kirkland’s NE 85th BRT station”
The once ambitious restructure of bus service between Seattle and the Eastside over SR 520 has been reduced in scope and is expected only to include a truncation of Metro 255 service at UW.
At last Thursday’s King County Regional Transit Committee meeting, Metro staff confirmed that Sound Transit no longer intends to propose any changes to their routes on the corridor. Peak-only Metro routes from the Eastside will also continue to serve downtown. The original restructure proposal had included ten routes, of which the greatest ridership is on Metro 255 from Kirkland and Sound Transit 545 from Redmond.
The reduced scope of the restructure comes against the background of increased optimism about downtown bus movements during the ‘period of maximum constraint’. The removal of more than 800 daily trips from the downtown transit tunnel and construction elsewhere in downtown would strain street capacity and slow transit service without mitigating measures.
The One Center City partners plan several changes to improve downtown capacity without removing so many buses from downtown. On 5th and 6th Avenues, a new northbound transit pathway can serve up to 40 buses an hour (though more likely 25-30 buses). Likely routes on this pathway are peak routes including 74, 76, 77, 301, 308, 316, 311, 252, 257.
On 4th and 2nd Avenues, signal and priority changes will speed bus movements and give pedestrians leading signals improving safety when crossing. On 3rd Ave, all door boarding and all-day bus operations will speed operations there. Through travel for cars will be prohibited during day time hours, but cars will still be permitted to turn right on to the street and must turn right off the street after one block. SDOT, Metro and Sound Transit are sharing in the $30 million cost of street improvements downtown and in Montlake.
Together, these steps allow buses to operate more effectively than they do today through downtown, with up to 25% better travel times on 4th Ave. The added pathway on 5th and 6th alleviates pressure on all avenues. Bus passenger capacity across downtown would increase by 3700 in the PM peak hour, and overall people-moving capacity by all modes would grow by 7500 per hour.
With greater downtown capacity, early proposals to truncate ST 550 at International District station, to route West Seattle buses to First Hill, and to loop route 41 on Pike/Pine, have all been shelved.
Last week in Vancouver BC, Washington Governor Jay Inslee talked up how “the convenience of a one-hour trip between Vancouver and Seattle would create countless opportunities for people in both B.C. and Washington”. He cited an economic analysis that a high-speed rail link between the two cities could create up to 200,000 jobs and $300 billion in increased economic output annually. Inslee has characterized this as a 20:1 return. How seriously should we take these claims?
The economic analysis, funded by Microsoft and the Washington Building Trades, was prepared as an addendum to a study by WSDOT of HSR costs and ridership. It was released in January, a month after the main report. The analysis estimates 38,000 jobs will be created, directly and indirectly, during construction. More speculatively, the authors claim up to another 160,000 jobs will be created through agglomeration effects, effectively growing the Seattle and Vancouver urban area economies by reducing travel times from outlying cities. While agglomeration effects are a real phenomenon, the size of the claimed effects is preposterous. The reader is asked to believe that about sixty jobs can be created for every daily rider on the train.Continue reading “High speed rail economic study makes exaggerated claims”
Bellevue is considering an upzone of the Wilburton area east of Downtown across I-405. A draft EIS, currently open for public comment, examines much greater height and more intense urban activity. The Citizens Advisory Committee is also looking broadly at development standards and public investments to improve the livability of the city’s traditional Auto Row.
The area, despite being so close to downtown, is relatively underdeveloped. Apart from a hospital cluster in the northwest, it’s largely a mix of auto dealerships, big box retail, and older strip malls. Existing zoning generally allows development between 35 and 70 feet (excepting the hospital where allowed heights range up to 200 feet). That has not been enough to induce much developer interest and Bellevue anticipates little future growth under the no-action scenario, with the current 3.6 million square feet of development expanding to just 4.2 million by 2035. Continue reading “Reimagining Wilburton”
Last night, the Senate approved SB 5955, changing the valuation schedule for the ST3 MVET (Motor Vehicle Excise Tax). Up to two-thirds of the cost is remedied by reducing payments from Sound Transit to the Puget Sound Accountability Fund. The vote was 30 yeas, 14 nays, with 5 members excused. The bill now moves to the House of Representatives which has already approved similar reductions to the MVET, but without an offset for the lost Sound Transit revenues.
Sound Transit levied a 0.3% MVET in Sound Move in 1996. That levy used a schedule that overvalues newer cars relative to resale values. In 2006, the Legislature approved a new valuation schedule that aligns to resale prices. The 0.3% MVET, because of bond requirements, continued to use the older schedule. This levy expires in 2028.
In ST3, voters approved an additional 0.8% MVET. The enabling legislation specified that it should use the familiar older schedule until 2028, then snap to the more accurate 2006 schedule in 2029. At the time, few noticed how this works, but it became suddenly controversial in 2017 when owners of newer cars received their much higher car tab bills. Some felt overcharged because the effect of the higher rates was compounded by a schedule that “overvalued” their cars.
For car owners, the bill would credit car owners for the difference in valuations for the ST3 MVET. Effectively, they’d pay on whichever schedule shows the lower value. Owners of cars less than ten years old will see bills reduced, and owners of older vehicles are not affected. The bill includes refunds for past payments before September 2018.
The credits reduce Sound Transit revenues by $780 million through 2028. Offsetting this are up to $518 million in reduced payments to the Puget Sound Taxpayer Accountability Account. As the revenue reduction increases Sound Transit debt, there are additional debt servicing costs which could increase the total impact up to $2.3 billion by 2041 if not mitigated. However, reducing the revenue hit by 65% will proportionately reduce the associated debt servicing hit.
At recently as 2012, Sound Transit had less than one billion dollars of debt. That increased to $4.6 billion by the end of 2017. The ST3 program will push it much higher, peaking at a projected $17.6 billion in 2035. That path puts Sound Transit close to legal limits as major ST3 projects are delivered. After 2035, as most major projects are completed, the outstanding debt could be reduced.
Sound Transit’s ability to take on more debt is constrained both by statute and by policy. Most immediately relevant is a statutory limit of non-voted debt at 1.5% of the assessed value of property within the RTA. This is the same limit all Washington State municipalities face. With 60% voter approval, the statutory limit would increase to 5%, though other policies and bond covenants would prevent the debt ever getting that high. The cushion between actual and allowed debt is most narrow in 2035, when the $17.6 billion in outstanding debt nudges against the $20.1 billion limit.
All financial projections over such an extended period are uncertain, combining assumptions about revenue growth, federal grants, project costs, and interest rates many years into the future. The legal debt limit may be lower than anticipated if the growth of assessed property values slows. Some risks correlate in unhelpful ways. Prolonged slower growth would mean lower tax revenues and less ability to borrow to fill the gap.
The long-term debt plan is very sensitive to small changes in the financial plan in the early years. Consider the bills to correct MVET valuations. The tax revenue loss from updating the valuation schedule is just $780 million between 2017 and 2028 if there is no other mitigation from the Legislature. The implications for Sound Transit debt are larger. Absent offsetting cost reductions, the lost revenues must be replaced by debt. The average interest rate is anticipated at 4% through 2021 (reflecting low recent bond rates), and 5.3% thereafter (a more typical pre-recession cost of debt). Sound Transit pays a 1% origination fee on bonds and typically begins repaying principal after five years. The principal and interest payments are themselves funded with more borrowing. At those rates, the MVET reduction accumulates to $1.6 billion in outstanding bonds by 2035, or $2.2 billion by 2041. That appears to just fit within future debt limits, but the margin of error is much too narrow for comfort in a decades-long financial forecast.
Could Sound Transit borrow to replace a loss of federal funding? Lynnwood Link and Federal Way Link alone were anticipated to receive $1.67 billion of federal grants, with several billions more in future New Starts loans on other projects. There is some short-term flexibility in the plan, as Sound Transit is still far from its maximum debt capacity. But extend out the cost of replacing those grants with accumulated interest, and the debt impact roughly doubles by 2035. More debt in the 2020s means exceeding debt limits in the 2030s. A significant shortfall in federal funding would almost surely mean delays or scope reductions somewhere in the capital program. Continue reading “Sound Transit’s debt limit”