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Thursday, September 27, 2001 - Page updated at 12:00 AM

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Sound Transit's budget warning

Seattle Times staff reporter

A new audit cautions that Sound Transit's light-rail project runs the risk of cost overruns unless officials gain more control over the budget but noted the agency is on track to deal with the problems.

"There is a potential risk of cost overruns due to the general lack of overall control of the budget," a report by the auditing firm Deloitte & Touche stated.

But the report, released late yesterday and paid for by Sound Transit, said the regional transit authority is making progress in developing methods to keep costs in line.

"They are saying if we get it fixed we're OK, if we don't, we're at risk," said Joni Earl, Sound Transit's executive director.

Earl vowed, "We will have it fixed before we award construction contracts."

Deloitte & Touche officials could not be reached to elaborate on their findings.

Sound Transit's light-rail venture has a long history of cost increases. Earlier this year the agency revealed that a proposed 21-mile project from the city of SeaTac to the University District was more than $1 billion over budget. A storm of controversy and congressional scrutiny followed, forcing the agency to scale back its plans.

Sound Transit's board is expected to vote today on a less expensive, 14-mile light rail line that would run from downtown Seattle to South 154th Street in Tukwila.

The audit said Sound Transit correctly estimated costs for the new $2.1 billion project, but noted the agency still needed a better handle on its budget.

One risk identified by the audit, for example: Sound Transit doesn't have procedures in place yet to "effectively monitor scope creep." Scope creep refers to projects increasing in cost because of changes in design, such as adding stations or new routes.

The report also advised "the agency must strongly resist the temptation" to use reserve funds to pay for changes in the design of the project. Contingencies should be set aside to take care of unexpected problems, the audit stated.

The audit found that Sound Transit has enough money in reserves to deal with unforeseen problems.

But it noted that wasn't always the case.

Sound Transit ran into trouble in the past by shifting money from its reserves to deal with cost increases in its original project, the audit stated.

"The mind-set ... was that any reductions would be made up by savings in other areas as the project moved forward," the audit stated.

Sound Transit previously has acknowledged that after voters approved the project in 1996 it began to reduce the project's design contingencies and should not have done so.

Dave Earling, chairman of Sound Transit's board, would not comment on the audit, saying he had not had a chance to read it.

Rob McKenna, a King County councilman and Sound Transit board member, said he thinks the agency is making progress in dealing with the issues raised by the audit.

"The risk we continue to face is a project that is overly ambitious" in term of the agency's financial resources, he said.

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

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