Proposed tunnel would raise utility bills about $6 a month

If Seattle City Hall wins its fight to build an Alaskan Way tunnel, residents would pay higher water, power and sewer bills long after it opens.

City officials propose $500 million in new utility charges to help cover the difference between a $3.4 billion tunnel and a $2.8 billion, state-funded elevated structure.

The tunnel would add an average $6.05 a month to residential bills, or about $73 a year, from 2008 to 2017, based on figures provided by the city.

Seattleites already pay several hundred dollars annually in sales, gas and car-tab taxes for transportation and soon will pay a voter-approved property tax for streets and walkways. A regional ballot measure this fall would increase funding for Sound Transit and regional highways.

The extra tunnel expense is part of what Seattle voters must consider in the all-mail advisory vote under way. Two ballot questions ask voters whether they prefer to replace the Alaskan Way Viaduct with a new six-lane viaduct or a four-lane tunnel. Ballots must be postmarked by March 13.

"It's about the future of the city, the future of the waterfront," City Councilwoman Jan Drago, a tunnel proponent, said.

Utility bills and the tunnel

Seattle would need $500 million in utility collections to help pay for a new tunnel to replace the old Alaskan Way Viaduct. The figures below show how much extra the average household would pay per month from 2008 to 2017. After that, the amounts would decrease.

Electricity: $2.32

Water: 64 cents

Wastewater:$2.37

Drainage: 72 cents

TOTAL: $6.05

Source: City of Seattle

A shallow, cut-and-cover tunnel would create a waterfront promenade instead of what pro-tunnel Mayor Greg Nickels calls the "Big Ugly" rebuild of the viaduct, and the price isn't that much different, backers say.

"If you're thinking long-term, the difference between the two is minimal. Ten years from now, people won't even question it," Drago said.

Council President Nick Licata, who supports the less-expensive viaduct, said the utility-rate increase would have "a cumulative effect" on the city's affordability.

"I think it's time we give ratepayers a break, not charge more money," he said.

The mayor's proposal also includes a $250 million property tax on downtown landowners, who would benefit from removing the elevated viaduct. That would put the total higher than $3.4 billion (assuming the state chips in $2.8 billion), giving the city a cushion if costs increase.

Other suggestions include tolls, federal aid or a grant from the Port of Seattle.

Why utilities?

Why does the city propose ratepayer money for a tunnel?

The mayor's transportation policy adviser, Michael Mann, said $500 million approximates the cost to move and rebuild underground wires and pipes, making it a legitimate utility expense.

He compares the tunnel situation to Sound Transit, which won a 2002 federal case forcing Qwest to pay to move wires along a Tacoma light-rail route. Utility relocations are paid by utilities, he said.

But Seattle attorney David Jurca -- who recently won a state Supreme Court ruling that banned City Light from spending money on out-of-town pollution-control projects -- said tunnel-related expenses should be covered by transportation funds, not utility bills.

"Serious legal issues are raised," Jurca said, "and we're taking a close look at it."

But even if there might be legal questions, Nickels faces a more urgent problem: Gov. Christine Gregoire and House Speaker Frank Chopp say a new elevated structure is the only viable option.

If a tunnel did prevail, Seattle would sell bonds with repayment periods of up to 30 years, to reduce the monthly hit on rates. The city has not yet provided a detailed debt-service plan.

During the next decade, a tunnel would add nearly 5 percent to the household utility bill (on average, currently $126 a month). After 2017, the tunnel-related expense per household gradually would decline, Mann said.

Licata does not accept the administration's estimate of utility charges at face value. "There's tremendous pressure on all the departments to conform to the message that the tunnel is not expensive. Consequently, I think we need an outside party to check those numbers," he said.

Councilman David Della, who also supports a new viaduct, said his main issue is that Seattle would have to cover both the utilities and any cost overruns for a tunnel, while the state would cover all costs of an elevated structure.

If the old viaduct is removed and a decision is made simply to improve surface streets and transit, state lawmakers would likely withhold at least some of the money committed to a new viaduct.

Mike Lindblom: 206-515-5631 or mlindblom@seattletimes.com.