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Friday, January 16, 2004 - Page updated at 12:28 A.M.
Panel OKs monorail car-tax increase to 1.4 percent
By Mike Lindblom
The tax rate will rise to 1.4 percent of a vehicle's assessed value. That equates to $280 a year on a car worth $20,000. The tax increase, which raises the levy to the maximum level allowed by the monorail initiative passed by voters in 2002, was widely expected. Last year, the agency gave voters a 12-month reprieve by collecting the tax at a lower introductory rate, of 0.85 percent.
The tax increase is expected to be formally approved by the full board Jan. 24.
Monorail officials also heard good news from a Bank of America executive, who said the bank is willing to offer a $250 million safety net to assist with future financing.
Meanwhile, monorail critics yesterday announced the formation of a group called OnTrack to independently scrutinize the project.
"Now is exactly the time to be asking the tough questions," said co-chair Donald Wise, managing director of Metzler Realty Advisors, who has followed monorail issues through downtown business groups.
OnTrack has hired a former state Transportation Department staffer, Rene Montgelas, at a cost of about $25,000 for the next three months, she said.
The monorail must resolve several pressing issues this year before it can begin selling construction bonds.
Tax revenues remain one-third below what the agency told voters it would be able to collect.
To narrow the gap, Executive Director Joel Horn has proposed reducing four miles of the 14-mile route from dual tracks to just one track shared by northbound and southbound trains.
Another proposal would put elevators rather than escalators at the stations, so smaller stations could be built in Ballard, downtown and West Seattle.
Monorail leaders are trying to lower the price of the system to $1.6 billion from $1.75 billion in the original voter-approved plan.
The board also is seeking new rules from the state Department of Licensing or legislators to make it more difficult for Seattle residents to register their cars outside the city and evade the monorail tax.
The board also wants to make newcomers from out of state pay the monorail tax immediately rather than wait a year.
Board members also want permission from the Seattle City Council this year to build monorail columns on streets, sidewalks and the West Seattle Bridge deck.
The monorail authority is pursuing complex debt strategies that include leasing the monorail trains, selling traditional municipal bonds and lower-rated "second-tier" bonds and asking construction teams to help finance the project.
Export loans might be sought from foreign countries such as Japan and Canada if companies from those countries are involved in the work, said Maud Daudon, managing director of Seattle-Northwest Securities, the monorail agency's financial advisers.
Bank of America's $250 million "letter of credit" would be available in case there are years the car-tab tax doesn't cover construction costs.
Having that safety net would make monorail bonds more acceptable to investors and drive down the interest costs by tens of millions of dollars, officials said.
Alex Johnston, a senior vice president at the bank, said the car-tab tax is a reliable source that could support a $1.6 billion monorail.
Sue Secker, chairwoman of the monorail finance committee, called the bank's comments a good sign. "This makes me feel terrific," she said.
Mike Lindblom: 206-515-5631 or email@example.com
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