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Friday, April 6, 2001 - Page updated at 12:00 AM

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Sound Transit troubles, Day 2

Seattle Times staff reporter

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Sound Transit's financial woes got $50 million worse yesterday.

The agency learned that amount of money, on top of an additional $75 million in federal funding, is being withheld because of concerns raised by the U.S. Inspector General's Office.

The hold on $125 million in federal money could delay construction of the 21-mile light-rail project and ultimately make the $4.1 billion venture - already the most expensive in the country - even more costly.

Sound Transit's officials put the best possible face on its troubles yesterday, saying that transit projects in other states have had similar setbacks and come out fine.

Metropolitan King County Councilman Rob McKenna, vice chairman of the Sound Transit finance committee and a light-rail critic, says the agency and its board of directors need to start taking the problems more seriously. "There is no introspection here," he said yesterday. "There is just spin control."

Joni Earl, Sound Transit's acting executive director, said she knows Congress means business. "These are some serious hurdles."

The federal money has been put on hold because of an inspector general's report released Wednesday that questioned Sound Transit's cost estimate for building light rail and the agency's ability to pay for the project. The report recommended Sound Transit not get any money until it proves its numbers are accurate and Congress has more time to review the project.

Sound Transit learned Wednesday that it is not expected to get a $75 million federal grant next year. Yesterday, it was told by Washington's congressional delegation that an additional $50 million expected this year is in limbo.

The money is part of a $500 million grant agreement approved by the Federal Transit Administration (FTA) in January. The pact promises that the FTA will ask Congress for annual appropriations through 2006.

Delays in getting federal money could cause problems for the light-rail project. Sound Transit, for example, planned to begin buying property by this summer for construction staging areas. Most of the $50 million in federal money expected this year was earmarked for buying property.

The hold on federal money could postpone real-estate and right-of-way purchases, which could push back completion of the project and drive up costs.

"The downside is that if this project is delayed for a year, we know that labor (and other costs) go up. It could cost more because of that," said Sen. Patty Murray, D-Wash., who has expressed strong support for the project.

Sound Transit's current budget doesn't have much room for error. The agency recently complained it couldn't even afford to pay $25 million to $50 million to move private utilities. It's arguing with Qwest Communications about who should pick up the cost.

Sound Transit budget officials yesterday were mum about how the agency would cope, saying they were still crunching numbers.

The agency still holds out hope it can get some federal grant money this year. The U.S. Department of Transportation has said Sound Transit could get the $50 million promised for this year if it met all the conditions set by the inspector general, according to Murray. But it's not clear how long that would take or even if Sound Transit could get past the hurdles.

It's unlikely Sound Transit will get any of the $75 million promised for 2002 because it was left out of President Bush's budget.

"We have in the past put money into the budget for projects that were not part of the White House budget," Murray said. "But it is much more difficult because you are then ... taking money away from someone who thought they had it. It's not unheard of, but it's difficult."

If Sound Transit can make it through the next few months and satisfy all of the questions raised by the inspector general, the agency should eventually get all the $500 million promised in the coming years, Murray said.

"The reason I think there is heightened scrutiny of Seattle right now is because we have a large number of requests in from around the country for transit projects," she said. "There is the propensity of congressmen right now to find ones they can dump to make room for friends. Is that bad for Sound Transit? No, it's good for them to get their house in order."

Andrew Garber can be reached at 206-464-2595 or agarber@seattletimes.com.

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