Metro questions monorail's revenue potential

In a letter to monorail planners, Metro general manager Rick Walsh said the monorail proposal headed for the November ballot seems to underestimate losses from giving fare discounts to seniors, students and monthly pass holders. That could mean millions of dollars in lost revenue each year.

In addition, Walsh said Metro cannot afford to run buses to monorail stations as frequently as the Elevated Transportation Co.'s proposal expects. And if passengers have to wait longer to ride the bus to the monorail line, ridership -- and fare revenues -- may be lower than the plan expects, the letter said.

The memo calls into further question whether the new monorail really would pay for itself once it is up and running, as the ETC believes. If not, the system would have to balance its budget by raising fares beyond what Metro charges and, as an ETC official acknowledged, lose riders.

Walsh said in an interview that the transit agency is not trying to derail the proposal. In fact, the ETC invited Metro's scrutiny.

He wrote, in the letter sent last night, that Metro and the ETC have a "common interest to ensure that the future public transportation system is financially sound and is designed to provide convenient, effective service for riders."

Meanwhile, as questions grow over the plan, Virginia Gunby, a former state transportation commissioner, and Tim Hatley, a land-use lobbyist and former aide to County Executive Ron Sims, said they and others are discussing the formation of an anti-monorail campaign. Gunby said she has a number of concerns, including the "aesthetics" of building view-blocking "sky bridges" through downtown, whether costs have been researched enough and the small number of companies who would bid to build the monorail.

Peter Sherwin, co-chairman of the monorail campaign that created the ETC, said: "The sad thing is we're trying to increase traffic capacity downtown. If people vote this down, what are we going to do?"

The ETC took fare discounts into account when coming up with its financial estimates. Rather than expecting to collect the full $1.25 for every ride during off-peak hours, and $1.50 for every peak-hour ride, monorail planners estimated getting an average of $1 per ride.

However, Metro assistant general manager Jim Jacobson said in an interview that Metro -- with the same general fares -- collects only about 90 cents a ride overall when accounting for discounts.

The difference, Metro said, is about $6 million a year, or about 30 percent less than monorail planners are counting on.

However, ETC documents suggest monorail planners actually expected fewer riders than Metro thought it did. Metro said it used ridership projections it received during discussions with ETC staff. According to the ETC's own latest numbers, the system would collect about $2 million or 12 percent less a year than expected.

Either way, Metro's letter raises new doubts about the ETC's claims of being able to break even a few years after the monorail is running.

The Seattle Post-Intelligencer reported earlier this week that the ETC's own consultants have said ridership estimates could be either 10 percent too low or too high. ETC officials also acknowledge the cost of running the system may be higher than expected. As a result, the monorail system could break even, make millions or lose millions a year.

Meanwhile, independent consultants hired by Mayor Greg Nickels are studying whether the monorail can really be built for the $1.68 billion in motor vehicle excise taxes proposed to build the system. The consultant's preliminary results are expected by the time the ETC board takes a tentative vote Monday on the plan and the amount of taxes to put before voters. The board will take a final vote Aug. 5. ETC finance director Joel Horn said the monorail agency is not promising the system will pay for itself, only that the board thinks it's possible.

If the monorail does not make enough to break even, a future board would then have the option of raising rates to make ends meet.

However, the claim was stated more strongly in a brochure mailed to more than 300,000 Seattle households last week, saying income from riders and advertising "should pay the operation and maintenance costs within a few years after opening, which would mean an ongoing public subsidy will not be necessary."

Horn said Metro's comments could be based on different ways of looking at numbers. "What I've learned is that every time you look at these things one way, somebody comes along and says, 'How about if we look at it another one?'"

Walsh said a monorail would allow Metro to cut back on some bus service along routes where both systems would run. But he said Metro could not eliminate those routes entirely if people are to get to places between monorail stations. . As a result, he said, Metro would not have enough money to send buses to monorail stations as frequently as the ETC assumed.

Horn said how Metro would restructure its routes is still years away from being decided. But even if Metro is right, Horn said more people than the ETC is expecting may ride the monorail for its speed, and that could make up the difference. "Whenever people say you're going to get fewer riders, I can tick off lots of reasons why we might get more riders," Horn said.

Walsh, however, said the ETC and Metro also have not figured out how the two systems would share fares when riders transfer from the bus to the monorail. He said it's conceivable commuters could pay $1.50 for the bus during peak hours, and perhaps half-price for the monorail -- for a total of $2.25 each way. That also could reduce ridership, Walsh said.

Horn said that won't be negotiated for years to come, and the ETC and Metro could figure out an arrangement so riders would pay only one fare -- much like Metro's deal with Sound Transit and Snohomish County's Community Transit.

P-I reporter Kery Murakami can be reached at 206-448-8131 or kerymurakami@seattlepi.com

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