Suspension of light-rail funds urged

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The U.S. Inspector General's Office advised Congress yesterday to hold off giving Sound Transit money for its $4.1 billion light-rail project. Sound Transit officials expect the move to kill the agency's chances of getting a $75 million federal grant for light rail this year.

What the Inspector General is recommending :: Suspension of all federal money until Sound Transit comes up with a final estimate for how much the over-budget light-rail project will cost. :: Independent verification of Sound Transit's numbers by federal consultants. :: Sixty days for Congress to review the information after the issues are resolved.

"I don't think we'll get the cash this year," said Joni Earl, Sound Transit's acting executive director. "It's going to have some impact. But we don't know what that is."

The inspector general, in a preliminary report, questioned Sound Transit's cost estimate for building light rail and the agency's ability to pay for the 21-mile line, which is more than $1 billion over budget and three years behind schedule.

The inspector general also said the Federal Transit Administration (FTA) failed to adequately review the project before agreeing in January to seek $500 million in federal grants through 2006 to help build the system.

The report, sent to the U.S. secretary of transportation and Congress, recommended that Sound Transit not get any federal money until the agency comes up with a final estimate of the project cost.

The inspector general also recommended that Sound Transit's numbers be verified by federal consultants and that Congress be given 60 days to review the information.

"It is clearly prudent for Congress to wait before making future funding decisions on this project," Rep. Hal Rogers, R-Ky, said.

Rogers, chairman of the Appropriations Committee's transportation subcommittee, had asked the inspector general to audit Sound Transit.

"This report finds that both the Federal Transit Administration and Sound Transit failed in providing due diligence to this project - a basic responsibility," Rogers said.

The inspector general's report continues criticism that started when Sound Transit admitted in December that the project was way over budget and would not be completed until 2009.

Since then, the agency has run into increasing skepticism - locally and in Congress.

Rogers held a hearing last week in Washington, D.C., grilling Sound Transit and transit-administration officials about the cost overruns of the project. Rogers will play a key role in deciding whether Sound Transit will get federal grants for light rail.

The inspector general's report estimated the cost of the light-rail project at $4.1 billion, including finance costs. That's up from $2.5 billion seven months ago.

The report criticized Sound Transit and the FTA for pushing for a $500 million grant agreement last year "despite information that the project's cost and schedule were changing significantly."

Information on the project costs given to Congress in September of last year was "materially understated, and consideration of the grant agreement should have been suspended or withdrawn," the report stated.

The inspector general also said the transit administration's review of the project was not thorough enough and did not address several issues that could affect cost. For example, Sound Transit could have to pay $60 million more to King County for use of the downtown bus tunnel because completion of the light-rail line has been delayed until 2009, the report said.

Earl downplayed such a cost increase. "I think that is a premature number," the Sound Transit acting executive director said.

Overall, Earl said, the report was not a surprise. Most of the issues raised had been brought up.

Earl acknowledged that the agency should have been more forthcoming about cost increases last year.

"There was an inherent belief we would manage our way out of these problems," she said. "We were wrong."

Sound Transit officials said they don't expect to get federal money this year because there's not enough time to meet all the conditions set by the inspector general before Congress allocates money for transit projects.

The agency now hopes it can make up for this year's shortfall in the coming years.

"The report spanks both Sound Transit and the Federal Transit Administration, but while it asks that the money be held up, it doesn't ask for termination of (the $500 million from the federal government)," said County Executive Ron Sims, a Sound Transit board member. "That is a prudent decision."

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