Monorail finance plan abandoned

In response to growing public alarm over a proposed 50-year tax, the Seattle Monorail Project's governing board last night abandoned its own finance plan, effectively putting the effort in limbo.

Several members sounded contrite as they promised to look for an alternative.

Until yesterday, Executive Director Joel Horn and some board members were praising a plan that would have totaled $11.4 billion in principal-and-interest payments for a $2.1 billion line from Ballard to West Seattle. The agency is being squeezed by the combination of a 30 percent shortage in its income from a car-tab tax, and a 20 percent increase in costs.

Voters could be asked for more money.

"I think that's one possibility that could come out of this," said Sue Secker, chairwoman of the board's finance committee.

Horn's employment also is in doubt: Last night's meeting included a closed-door discussion of his performance.

Delays could cause the awaiting contractor team, led by Fluor Enterprises and train supplier Hitachi of Japan, to bail. The contract offer expires in mid-December. An attempt to reach Fluor last night was unsuccessful.

Board members set no new timelines. A City Council review of the financing will be postponed.

Some told Seattle Monorail Project (SMP) to shut down altogether.

"You did a courageous thing today in acknowledging that the finance plan presented to you will not fly with the public," said Rudi Bertschi, a former board chairman of the Energy Northwest nuclear-power utility, formerly known as Washington Public Power Supply System (WPPSS). But he said it's foolish to think SMP can improve on what its staff and expert firms, such as Citigroup, devised.

"If this finance plan is unacceptable, and this is the best plan you can get, where do you have to go?" he said. "This project is dead."

Grant Cogswell, who co-sponsored the first of three successful monorail initiatives in Seattle, encouraged the board to keep trying.

"We know much, much more is spent on highways. If we continue to build around the car in this region, we will exacerbate global warming. ... We will produce toxic runoff in our streams and eventually kill the salmon," he said.

Just six months ago, the board gave Horn an $8,789 merit raise, boosting his salary to $187,000, while other employees got a cost-of-living raise.

Asked about his prospects now, Horn said, "You're hearing it as I'm hearing it."

Secker said, "What we have agreed to is to put everything on the table, including personnel."

Longtime opponent Geof Logan told board members the only way they can save the monorail is to resign so that people with proven megaproject experience can take over.

"Arrogance and ignorance is a fatal combination. Every backcountry skier knows that," he said. "I find it hard to believe you couldn't anticipate the reaction, unless you were not fully briefed by staff."

Board members blamed themselves for what Chairman Tom Weeks called "the debacle of the past week." Members never debated how many years of the tax would be too many, board member Steve Williamson admitted.

Public hearings will go on as scheduled next week, SMP will waive the July 11 deadline for written comment and the board wants another round of hearings later.

SMP canceled its plan to sell up to $350 million in short-term debt to pay contractors almost immediately, even before the monorail receives final permits from the city.

Earlier, Fluor executive Pat Flaherty said the early payment was crucial for the team to relocate utilities, rent office space, pay engineers and perform what he called "early design."

OnTrack, a critics' watchdog group, calculated that if SMP sold basic 30-year bonds with a rock-solid cash-flow plan, it could issue only $750 million in debt, not enough to build the entire 14-mile Green Line from Ballard to West Seattle, as required by the voter-approved plan of 2002.

Henry Aronson of OnTrack said SMP has no other legal reason to exist, so it should therefore stop all spending, disband and turn over its station properties or other assets to a conservator.

State Sen. Ken Jacobsen, D-Seattle, delivered a letter to Gov. Christine Gregoire asking her to call the Legislature into a special session to kill the monorail project.

Marty Brown, Gregoire's legislative liaison, said the governor is not inclined to call a special session, but that lawmakers are free to do so themselves.

Seattle Times Olympia reporter Ralph Thomas contributed to this article. Mike Lindblom: 206-515-5631 or mlindblom@seattletimes.com