Seattle City Council said Monday July 26 they will withhold final action endorsing agreements with the state on construction terms for the deep bore tunnel but that it will pass a resolution in support of the project.

In discussions with the City Council today City Attorney Peter Holmes said city and state negotiators agreed to this approach after analysis showed near impossibility of enforcing the current wording in state tunnel legislation regarding potential additional costs. This has been central to the Mayor's argument that the city should not be held responsible for cost overruns.

That endorsement resolution will come next Monday August 2, and will state their intention to pass ordinances later, on three important agreements with WSDOT.

The approval would come only after bids on the tunnel boring are received and are approved by WSDOT.

Mayor McGinn has threatened to veto the agreements unless they contained language that relieved the city of responsibility for any cost overruns. The agreements are with Seattle Department of Transportation, Seattle Public Utilities and Seattle City Light.

The council plans to delay passing the ordinances until it can be demonstrated that the contract price agreed to by the low bid contractor is at or below the state’s estimate for the project.

The “design-build” nature of the agreement means the responsibility for hitting the final bid target is on the contractor.

The state’s estimates cost to bore the tunnel itself, and line it with concrete, is $350 million.

The City Council posted this press release today:

Seattle City Councilmembers today announced the completion of negotiated Alaskan Way Viaduct agreements and their intent to authorize these agreements among Seattle City Light, Seattle Department of Transportation and Seattle Public Utilities and the Washington State Department of Transportation.

After months of negotiations, the City Council has reached agreement with the State and introduced Resolution 31235. This resolution implements Ordinance 123133 and details the Council's intent to authorize the agreements once the State awards a contract consistent with the program's scope and budget and subject to environmental review.

"This resolution protects the City of Seattle. We have negotiated strongly worded agreements with the State, and we won't sign them until we know the complete contracting costs for the tunnel," stated Councilmember Sally Bagshaw, co-chair of the Alaskan Way Viaduct and Seawall Replacement (AWV) special committee.

Resolution 31235 reaffirms the City's policy that the State is solely responsible for all costs associated with the deep-bore tunnel, including any cost overruns related to implementation of WSDOT’s program. The resolution directly addresses potential overruns, stating "it is the City’s policy that in no event shall the City or any Seattle-area property owners be specially required by the State to pay for costs or any cost overruns related to implementing WSDOT's program."

The state has agreed with the City Council that we need not execute the final agreements until after the State and City Council have had a chance to review the bids and the design-build contract itself to make certain that the costs are reasonable and within budget and that the risks associated with the project have been defined properly.

"I am honored to have participated in getting the City Council to this point today," stated City Attorney Pete Holmes. "Councilmember Mike O’Brien asked, 'Can we wait for the bids?' In consultation with Councilmembers Sally J. Clark, Sally Bagshaw and Tom Rasmussen, our office asked the governor that very question. This resolution allows the contractors to complete their bid proposals, and it allows us to wait for those bids. It is a win-win for everyone."

The resolution reflects Council negotiations with the State to protect the City against cost overruns on the tunnel. The agreements protect the City's interests by requiring mutual agreement of both the City and the State before any re-allocation of the $380 million currently budgeted for rebuilding a new surface Alaskan Way and other improvements.

"This resolution makes clear the city's commitment to our project partners," stated Councilmember Sally J. Clark, co-chair of the Alaskan Way Viaduct and Seawall Replacement special committee. "That’s fundamental to moving forward with our vision for a transportation system, our economy and a waterfront that works for Seattle."

"We have put the cost overrun concerns to rest by negotiating a solution with the State that works for everyone," stated Council President Richard Conlin. "We must end the white noise around this project and focus our energy on moving the project forward and providing a corridor that works for the city, region and state."

"It is time to get beyond fear mongering and begin creating a waterfront for all," stated Councilmember Jean Godden.

"In waiting for the bids to come back before signing the agreements, we will have greater certainty that the WSDOT budget is sustainable through the entire project," stated Councilmember Tom Rasmussen Transportation Committee chair. "We are confident in this bidding climate that the City’s best interests will be preserved and the state can move forward with this urgent project that is important to the entire state."

The mayor released this statement today:

“It appears that Council is doing everything possible to prevent a public vote. Yet they still have not dealt with the underlying issue - who will pay for overruns given the $2.4 billion cap in state law. Until the state law is changed, Seattle remains at risk of paying cost overruns.”

He plans to hold a press conference today, July 27 at 11am .

If you missed the full report prepared by Dr. Thomas Neff on the tunnel project here's that link.
http://mayormcginn.seattle.gov/wp-content/uploads/2010/07/FINAL-REPORT…