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SEATTLE—Mayor Greg Nickels has transmitted legislation to the City Council that, if approved, will keep his promise to the voters by allowing work on the new monorail system to begin immediately.
The Mayor’s proposed legislation would authorize a $20 million start-up loan to the new Seattle Popular Monorail Authority (SPMA). The loan, funded by issuing city bonds, will allow the SPMA to begin work on the project right away, rather than waiting for the newly approved revenue stream to begin. The monorail authority will repay the City, with interest, within two years of drawing funds from the loan. The City Council has previously expressed support for a start-up loan through a resolution passed last July. The Mayor’s legislation puts before the Council specifics of the loan agreement for its approval.
"The monorail is a critical step in building a 21st Century transportation system," the mayor said. "We told the voters that if the monorail passed we’d start work on it immediately. I’m going to keep that promise and do all I can to make the monorail a reality."
Debt service on the bond issue was included in the 2003 Budget adopted by the City Council, and the City will be fully reimbursed for all costs associated with the loan.
Structured as a Line of Credit, the loan allows the SPMA to draw funds as needed over the next two years. The City will earn interest on any portion of the $20 million that is not drawn by the SPMA during this period, and the SPMA will repay the principal amount of the loan and the difference between the City’s interest earnings and interest costs. This arrangement minimizes the cost of the loan to the SPMA, while ensuring that all City costs are reimbursed.
The next steps:
This month, the Mayor intends to begin establishing a permanent monorail authority governing board. He will forward his nominees for confirmation by the interim governing board.
The Mayor will work with the monorail authority and the City Council to establish a schedule for nominations and confirmation with a goal to establish the permanent Board by mid-January 2003.
The Mayor has directed the Seattle Department of Transportation to lead the City’s effort to provide timely, reasonable and cost-effective permit review and coordination, while guiding the monorail into the City’s transportation system and urban environment.
The Mayor also directed City departments to work toward additional coordination goals established by City resolution, including an agreement for shared use of the West Seattle Bridge, a monorail transit way agreement granting use of City right-of-way to the new monorail authority, cost-effective utility coordination, and an agreement providing for transfer of the existing Seattle Center Monorail System to the new authority.
"The voters have said yes. We’re ready to go. Let’s get moving," Nickels said.