FOR IMMEDIATE RELEASE: 3/19/2013
Councilmember Tim Burgess
Councilmember Burgess requests audit of City’s transportation funding program
Review should focus on unnecessary debt service payments and huge cash balances
Seattle — Seattle City Councilmember Tim Burgess, chair of the City Council’s Budget Committee, asked the City Auditor today to conduct an audit of the Seattle Department of Transportation’s capital investment program and its management of cash balances.
Burgess asked for the auditor’s intervention after learning that SDOT incurred millions of dollars of unused debt in recent years. In 2011, $112 million remained in its cash balance from bond sale proceeds. Last year, the total was $64 million.
"We are $1.8 billion behind on basic street and bridge maintenance projects. It’s very troubling that we have been sitting on so much cash," said Councilmember Burgess. "We sold the bonds. We have the money. We should spend these funds to improve mobility and repair our bridges, streets and sidewalks today. Instead, SDOT is wasting taxpayer dollars on unnecessary interest payments. Until we can determine why this is happening and adopt corrective measures, I will not vote to incur any additional debt for SDOT-managed projects."
The Council’s Government Performance and Finance Committee will review legislation proposed by the Mayor tomorrow morning that includes incurring additional debt for SDOT. Burgess will move to amend the legislation in committee to stop the sale of any additional bonds for this department.
The City regularly issues bonds to finance large capital programs. Regardless of when the proceeds from the bonds are actually spent, the public has to pay the debt service. If capital projects are not started in a timely manner, or funds are not needed in accordance with project plans, these payments are spent unnecessarily. Millions of taxpayer dollars have been spent in this way in recent years.
The audit will explore processes and controls within SDOT that will reduce the likelihood of large, ongoing bond proceed balances and recommend what changes should be introduced to avoid such occurrences in the future.
"This is fundamentally a question whether we have sound financial management by this Administration and SDOT to deliver basic maintenance projects at levels funded by the City Council," added Burgess. "This practice must stop and we have to find where the problem is to avoid flushing millions of taxpayer dollars down the drain."
Last year, the Council passed Resolution 31393 asking for a performance and management review of SDOT; this financial audit will supplement the findings of that review, which is underway.