City Hall

McGinn Says Council's Tunnel Agreements Are Insufficient

By Erica C. Barnett July 20, 2010

In a conference call with reporters this morning, Mayor Mike McGinn said the agreements with the state proposed by the city council (I reported on the agreements yesterday) are insufficient to protect the city from paying for cost overruns on the deep-bore tunnel.

The council's proposed agreement with the state refer repeatedly to the state's responsibility to "provide necessary funding for all project costs" related to the tunnel, and say explicitly that "the city is not waiving its position that the city and/or its citizens and property owners cannot be held responsible for any or all cost overruns related to the portions of the project for which the state is responsible."

However, McGinn argued this morning that that language is meaningless unless the state legislature removes a provision in state law that says "Seattle area property owners who benefit" from the tunnel must pay for any cost overruns.

"The contracts [the council] is proposing still suffer from the same problem that we faced with the state, which is that as long as the state law is in effect, we are responsible for" cost overruns, McGinn said. Asked about statements by council staff to the effect that the legislature could remove and subsequently restore the overrun language (central staff director Ben Noble told the council, "You can’t make a deal with a legislative body that says [the deal] can’t change over time), McGinn said it was the intent of the legislature that mattered.

"I think that when the legislature says something it means it," McGinn said. "So when the legislature says they expect us to pay cost overruns, I think they mean it. I don't think you can run a government in which laws don't have meaning."

PubliCola pointed out that, as council members have noted, the actual contract to build the tunnel is between the state and the contractor who ultimately wins the bid; the city isn't a party to the contract. So how, we asked, could the city be on the hook for overruns on a contract to which it isn't a party?

McGinn acknowledged that "the contractor could not send [the city] an invoice." However, he said, the state could. "[The contractor] would come to the state, and the state legislature would say, 'We meant it when we said Seattle should pay.'"

McGinn is pushing the city council to amend its agreement with the state to remove the cost overruns provision; his council ally, fellow tunnel opponent Mike O'Brien, has proposed an amendment that would do just that. "We have seen some movement from the council, and I would like to see the council seriously consider the draft language that we presented ... I'm still hopeful that the council will stand with me and with Seattle taxpayers and say" they're opposed to the state provision, McGinn said.

I noted that yesterday, assistant city attorney Darby Ducomb told me that the city would likely litigate if the state tried to pass a property tax (the most likely revenue source) on Seattle-area taxpayers to pay for overruns. Did McGinn lack confidence in the city's legal argument against the state provision?

"There is a risk, and it's hard to make that prediction. But, putting that aside, this is a political issue," McGinn said. "The thought of litigation resolving this is, on its face, a sign of how off-base this project is. ... [Litigation] is not a solution."

McGinn also said his office has considered seeking a so-called "declaratory judgment"—essentially, a legal opinion that the city is not responsible for cost overruns—from a judge. Noting that such judgments are rare in cases where actual money isn't at stake yet, he said "we don't have plans to try that" tactic yet, but added, "that is a potential option. ... I've been 50-50 on that question of whether we should seek a declaratory judgment or not."
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