Seattle’s troubled streetcar project is now an additional $50 million over budget.
A cost analysis done during an independent review of the project found that, based on the current model, the Center City Connector will cost up to $252 million. That's more than $100 million over the original budget of $143.2 million and $50 million over the most recent estimate of $197 million.
Though it doesn’t make any recommendations, consulting firm KPMG has laid out four options for the city to consider moving forward. Two of those options would terminate the project.
If completed, the Center City Connector would fill in the existing gap between the South Lake Union and First Hill streetcar lines. Preliminary construction on the new streetcar line began in fall 2017.
Seattle Mayor Jenny Durkan announced the project would be put on hold in March. Durkan’s decision came after her office learned the project faced a funding shortfall because of design expenditure, rising construction costs, and underestimating the full cost of the streetcar vehicles. Her office then requested KPMG to do an independent review of the streetcar project.
"Those projects were not managed well," Seattle Mayor Jenny Durkan said Friday. "We are not done yet evaluating the streetcar."
Durkan says the city will make its decision whether to continue or stop the streetcar project as early as this fall or possibly early next year.
The original budget for the project in late 2016 was estimated at $143.2 million. In late 2016, that estimate rose to $177 million. In March 2018, the estimated cost of the project grew to approximately $197 million.
In addition to the rising costs of the project itself, a significant difference in the estimated annual operating and maintenance costs were discovered this year. The Seattle Department of Transportation (SDOT) estimated the costs at approximately $16 million per year. King County Metro, which runs the system, now estimates the operating costs would be approximately $24 million.
Complicating the issue further, a review of the project released by the mayor's office found the new streetcars may be too big for the city's existing tracks. The review found the new streetcars were nine feet longer and 20,000 pounds heavier than the current streetcars, and would swing wider and have problems navigating corners. The city now needs to re-engineer parts of the existing tracks for the streetcars to go around curves.
It was assumed that the new streetcar line would begin operating in 2022. KGPM notes there is “risk that additional delays will result in the first year of operation pushing beyond 2022.”
There are several key factors the city needs to take into consideration as it decides the fate of the project, according to KPMG.
If the project continues, KPMG notes that a $75 million Federal Transit Administration (FTA) Small Starts Grant is still under review. Contributions or grants from the FTA, Sound Transit, and King County Metro may not be extended by the grantors past current expiration dates. Additionally, contract commitments and delay claims may require additional negotiation and legal review. Because of the difference in estimated operating costs, SDOT and King County Metro may need to increase collaboration efforts to identify an appropriate plan.
FTA's decision to fund the project would take another 18 months after the city makes its decision to continue the project.
KPMG also recommends the city has additional engineering analysis and design work done if it moves forward.
If the city chooses to terminate the project, costs incurred to date, committed costs, and liabilities are estimated to exceed $55 million. Any contract commitments and termination claims may also add to those costs.