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Tuesday, April 30, 2002 - Page updated at 12:00 AM

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Millions OK'd for Rainier Valley to mitigate effects of light rail

Seattle Times staff reporter

Despite some grumbling over the cost and timing, the Seattle City Council voted unanimously yesterday to approve a $50 million community-development fund to boost Rainier Valley during Sound Transit's light-rail construction and beyond.

The city will pick up the lion's share of what some argued ought to be Sound Transit's tab. Seattle will pay $42.8 million over the next seven years, while King County will pick up the remaining $7.2 million.

Supporters of the fund had lobbied hard in recent months for the money and were jubilant yesterday.

"Hey, we need to throw a big party," Michael Richmond, coordinator for the Rainier Valley Transit Advisory Council, told another supporter after the 8-0 vote.

It was a victory for Mayor Greg Nickels, who staked his political life on support for Sound Transit in last year's election and who had pushed for the legislation in recent weeks.

But some council members were less than happy about committing the city — and Seattle City Light — to a big expense at a time of looming budget cuts.

"If I were making a financial decision today, I would not be voting for this," said Councilwoman Jan Drago, who chairs the council's budget committee.

The city's budget office last week revealed a budget gap next year of at least $50 million, prompting Nickels to ask most city departments to come up with budget cuts of between 9 and 15 percent.

That could mean cuts in all sorts of city services, said City Council President Peter Steinbrueck. He noted that smaller budget cuts this year will result in the closure of public libraries for a week in August and a week in December.

A larger budget cut contemplated by Nickels could mean even longer library closures next year, Steinbrueck predicted.

"This is serious, and the public is soon going to find out how serious this is," he said.

Critics also objected to the plan to make cash-strapped City Light absorb much of the cost. The utility already has raised rates by an average of 60 percent over the past year because of high energy costs.

While there won't be a line item on City Light bills for the Rainier Valley fund, the utility's ratepayers will be tapped for $17.5 million over the next four years.

City Councilwoman Heidi Wills, who chairs the council's Energy Committee, sponsored a successful amendment yesterday that puts off the utility's largest payments until 2006. City Light will now pay $3 million for the Sound Transit fund in 2003, with the amount increasing to $7.4 million in 2006.

Wills said that would allow City Light to pay the largest amounts "once the utility has financially recovered" from its current crisis.

But it is not clear when the utility will be fully recovered from the energy crisis. Current surcharges were originally scheduled to be reduced next year but now are expected to remain until mid-2004. And City Light's debt of $1.7 billion is expected to remain high until at least 2011.

All of the grousing by council critics couldn't contain the enthusiasm of supporters, who said the money would inject a long-needed dose of economic vitality into one of the city's poorest neighborhoods.

"These are hard times for the city budget, but they've been hard times for the Rainier Valley for a long time," said City Councilman Richard Conlin, who chairs the council's transportation committee. "We can't balance our budget on the backs of the poor."

Part of the $50 million fund will assist people whose businesses or homes are displaced by Sound Transit's light rail, which will be constructed at street level down the middle of Martin Luther King Jr. Way South in the valley.

Displaced businesses each could get up to $150,000 in grants and $1.3 million in interest-free loans. Others that are affected, but don't have to move, could get grants of up to $30,000 and loans of up to $1 million. That would be in addition to aid from Sound Transit, which will pay for businesses to move and up to $10,000 to cover higher rents and costs after they move.

A large part of the $50 million would go into a permanent bank account and be used to make loans to projects deemed worthy by a committee of community members. The fund could pay for transit-oriented development, day-care centers and an apprenticeship program to train Rainier Valley residents to work on light-rail construction jobs.

"It's terrific," Richmond said. "This is a clear example of the city and the community coming together to do something right."

The fund was originally promised in 1999 by five Sound Transit board members, including former Mayor Paul Schell, City Councilman Richard McIver, and Nickels, then a member of the Metropolitan King County Council.

In 1999, Sound Transit signed an agreement with the federal government promising to create the fund as a condition of receiving federal money. That means the transit agency — not the county or city — is on the hook as far as the federal government is concerned.

McIver said Sound Transit always expected the city and county to split the cost of the $50 million fund.

However, the written record is murky. City leaders at various times pledged to contribute to the fund "to the extent possible" and "to the maximum extent possible." But it was only this year, when Nickels submitted legislation, that the council became aware the city would pay for almost all of the fund.

Councilman Nick Licata, the most outspoken critic of the agreement, was unable to vote yesterday because he was out of town after the death of his father last week.

The $50 million fund comes in addition to a council vote last week that commits the city to paying up to $19.8 million to bury utility lines along Martin Luther King Jr. Way South when light-rail construction tears up the street.

Jim Brunner can be reached at 206-515-5628 or jbrunner@seattletimes.com.

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