The phrase,'Unsound Transit', was coined by the Wall Street Journal to describe Seattle where,"Light Rail Madness eats billions that could otherwise be devoted to truly efficient transportation technologies." The Puget Sound's traffic congestion is a growing cancer on the region's prosperity. This website, captures news and expert opinion about ways to address the crisis. This is not a blog, but a knowledge base, which collects the best articles and presents them in a searchable format. My goal is to arm residents with knowledge so they can champion fact-based, rather than emotional, solutions.

Transportation

Monday, March 10, 2008

Citizen sues Sound Transit over its financing activities

SUPERIOR COURT OF STATE OF WASHINGTON IN AND FOR COUNTY OF KING 12/8/03

_______________________________

)
WILL KNEDLIK, a taxpayer, ) CAUSE NO.
)
Plaintiff, )
) COMPLAINT FOR JUDICIAL DECLARATIONS
v. ) ORDERING SOUND TRANSIT TO DISGORGE
) MOTOR VEHICLE EXCISE TAXES RECEIVED
SOUND TRANSIT, legally known ) SINCE VOTERS ADOPTED INITIATIVE 776,
as CENTRAL PUGET SOUND ) ROLL BACK LOCAL-OPTION TAXES UNDER
REGIONAL TRANSIT AUTHOR- ) "SOUND MOVE" TERMS ON MARCH 31, 2007,
ITY, and formerly known as "RTA"; ) AND VOID ITS "OFFER SHEET" WITH BNSF,
BURLINGTON NORTHERN ) AS UNCONSTITUTIONAL AND ULTRA VIRES,
SANTA FE RAILWAY CO., a ) AND ITS PROCUREMENT PROCESSES WITH
Delaware corporation; and ) KINKISHARYOU/MITSUI, AS ULTRA VIRES; &
KINKISHARYOU/MITSUI, a ) FINDING "BAD FAITH" TOWARD REGIONAL
joint venture of unknown form, ) TAXPAYERS BY THE AGENCY, ITS CURRENT
) OFFICERS, ITS PRESENT SENIOR MANAGERS,
Defendants. ) CERTAIN DIRECTORS, AND OTHER AGENTS
_______________________________ )

PARTIES

1. Plaintiff WILL KNEDLIK, a taxpayer and physically-handicapped person residing in Defendant SOUND TRANSIT's East King County subarea within King County at Kirkland, has paid every form of local-option taxes approved for 10 years for said agency by regional taxpayers, since imposition began on April 1, 1997, including motor vehicle excise taxes paid under protest on July 30, 2003, after a majority of state voters repealed statutory authority to levy and to collect said MVET, through passage of Initiative 776, statewide, at the General Election on November 5, 2002.

2. Defendant SOUND TRANSIT, a "regional transit authority" as defined within and by RCW 81.112.020, and a "class four" state agency pursuant to RCW 43.03.250, has its principal place of business within King County at Seattle, in its Union Station, where its Board of Directors meets and controls major agency operations across much of King, Pierce and Snohomish counties.

3. Defendant BURLINGTON NORTHERN SANTA FE RAILWAY CO., a Delaware corporation, has offices and operations in King County, and agreed on May 28, 2003 to terms of an "Offer Sheet" with Defendant SOUND TRANSIT, which is or is to be attached as Exhibit A.

4. Defendant KINKISHARYOU/MITSUI, a joint venture of as-yet-unknown legal form, is currently operating from Mitsui and Co. (USA) Inc.'s facilities in Seattle, at 1001 Fourth Avenue, and has negotiated with Defendant SOUND TRANSIT in King County to sell certain services and related transportation products for $108,606,040, with an escalation provision for up to $9,579,808, resulting in the agency's Finance Committee formally voting on December 3, 2003 to recommend "Do Pass," to the full Board of Directors, for a "total authorized contract amount not to exceed $131,798,794," pursuant to Motion No. M2003-123, which is or is to be attached as Exhibit B.

JURISDICTION

5. Actual controversies, ripe for adjudication, require prompt declaratory relief to prevent Defendant SOUND TRANSIT's ultra vires collection of up-to-$3 billion in repealed motor vehicle excise taxes, from late 2002 to late 2028, by use of negligent misrepresentations to taxpayers in this region, or of intentional frauds on regional taxpayers, or both; to prevent its ultra vires collection of more taxes by failures to implement the partial tax rollback promised to taxpayers, after one decade, by its "Sound Move" limits adopted pursuant to RCW 81.112.030(5), on May 31, 1996, to narrow its official "system and financing plan" adopted pursuant to RCW 81.112.030(6), on October 29, 1994, unless local-option tax rates approved on November 5, 1996, for 10 years only, are extended by a majority of regional taxpayers no-later-than November 5, 2006; to prevent its unconstitutional lending of the agency's credit to Defendant BURLINGTON NORTHERN SANTA FE RAILWAY CO. for now-unlimited environmental costs pursuant to the attached "Offer Sheet" executed by the parties, its ultra vires taking on of debt beyond the "combined" ceiling of $1.052 billion restricting its long-term debt, limited to $800 million under its statutory "system and financing plan," and its short-term debt, limited to another $352 million under terms of "Sound Move," and its ultra vires plans to purchase railroad right-of-way and track, from Lakewood to Nisqually, not authorized by its adopted-and-approved "system and financing plan"; to prevent its ultra vires agreement to take on large financial obligations to Defendant KINKISHARYOU/MITSUI well beyond the cost limit, set by "Sound Move" at no-more-than $3.914 billion for all agency commitments and use of funds from all sources for capital, operational and other costs of every kind from April 1, 1997 to March, 31, 2007 (measured in so-called "1995" dollars, adjusted for inflation and for deflation, recently, in high-capacity transportation projects, transit right-of-way and normal government functions); and to limit said irrevocable-and-further harms to Plaintiff KNEDLIK (and to other regional taxpayers).

FACTS

6. As a legislatively-authorized "regional transit authority," Defendant SOUND TRANSIT exercises powers to plan, construct, finance and operate components of a regional "high capacity transportation system," pursuant to RCW 81.104.100, subject to an extensive series of statutorily-required preapprovals for its mandatory "system and financing plan," under RCW 81.112.030(1) et sequens, including required preapprovals by elected "legislative authorities" of King, Pierce and Snohomish counties (pursuant first to RCW 81.112.030[2] and thereafter to RCW 81.112.030[6]), by a state-appointed "Expert Review Panel" (pursuant to RCW 81.104.110), and by taxpayers who reside within the one-off junior taxing district's boundaries (pursuant first to RCW 81.112.030[6] and, after voters rejected Defendant SOUND TRANSIT's initial ballot for local-option taxes paid from within said taxing district on March 14, 1995, thereafter to RCW 81.112.030[9]), and further subject to additional limitations later imposed on original agency powers both by the Washington State Legislature in 1993 and in 1994 (e.g., through chapter 44, section 1, 1994 Session laws as codified at RCW 81.112.030[9]), and also by state taxpayers in late 2002 (through Initiative 776).

7. In historical particular, Defendant SOUND TRANSIT's required "system and financing plan" was developed first by an interim planning agency, the Joint Regional Policy Committee (as established by the Washington State Legislature in 1990), and subsequently by the agency’s Board of Directors (as authorized legislatively in 1992 after the JRPC formally urged its creation in 1991).

8. Defendant SOUND TRANSIT's mandatory "system and financing plan" devolved, after several drafts from early 1990 to late 1994, into two iterations each requiring formal preapprovals by two of the three elected "legislative authorities" for King, Pierce and Snohomish counties (with the second document also requiring a separate preapproval, by regional taxpayers living within said counties, as well as by at least two county councils, until chapter 44, section 1, 1994 Session laws modified RCW 81.112.030 to abolish this duplicative preapproval and to limit regional taxpayers to voting, yea or nay, on local-option taxes to fund most of the costs for the agency-adopted and county-approved "system and financing plan" that is statutorily required by RCW 81.112.030[6]).

9. Central motivations for this cautious iterative process, as well as for interrelated reviews of the then-devolving "system and financing plan" by a state Expert Review Panel, by an extensive public-outreach process and by various other vetting mechanisms imposed by the Washington State Legislature, resulted from at least two sets of substantial anxieties by state policymakers, here, due directly "to Washington State's experience with the Washington Public Power Supply System (WPPSS), and to concerns about costs and performance of new rail transit systems nationwide" (as set out in official Expert Review Panel materials, prepared by state-retained professional staff, outlining its history, functions and initial 10 meetings for its session on August 31, 1992).

10. Core terms of this multiple-step iterative process, which was devised in statutory law, yield a modality whereby the Washington State Legislature set upper limits both on local-option taxes and also on debt authority for regional transit authorities, statewide, but granted these thus-bounded revenue powers subject not merely to its own statutory tax-and-debt ceilings, but also to a series of preapprovals yielding lower revenue limits, first by members of county "legislative authorities," directly, and subsequently by regional taxpayers, indirectly, through their collective decision either to approve those constraints on local-option taxes negotiated by King, Pierce and Snohomish counties, or to vote against the local-option tax ballot presented to them and, thereby, to compel the agency to (a) resubmit the same proposal, without change, as to local-option taxes that voters can only accept or reject, or (b) reduce the local-option tax component requiring ballot approval, further, in some thus-"negotiated" fashion satisfactory enough to the region's taxpayers, who earlier voted down the first tax measure, to approve the agency's subsequently-made "offer."

11. Defendant SOUND TRANSIT’s ultimately-adopted "system and financing plan" (as legislatively required by RCW 81.112.030[1] and [6]), and its separately-obtained authority directly from regional taxpayers to levy and to collect certain local-option taxes to finance the vast majority of expenses for its much smaller "ten-year development and implementation program" (presented to regional taxpayer through the second ballot title's formal reference to its Resolution No. 75, on November 5, 1996, as statutorily authorized by RCW 81.112.030[9]), were effectively "negotiated" through this simple linear process inexorably ratcheting down agency-desired financial capabilities, cog by cog, from the absolute statutory maxima, both for local-option taxes and also for debt, to lower-and-lower levels, as transit agents "negotiated" first with each of three county councils in mid 1993 under RCW 81.112.030(3) and again in mid-to-late 1994 under RCW 81.112.030(6) (in order to gain two separate preapprovals required from these "legislative authorities"); subsequently with regional taxpayers (in order to receive guidance yielded by voters’ collective refusal, at a Special Election on March 14, 1995, to tax themselves to fund "The Regional Transit System Master Plan" adopted by the agency, in its entirety, despite preapprovals of this "system and financing plan" by King, Pierce and Snohomish counties, pursuant to their roles under RCW 81.112.030[6], after its official adoption by the agency on October 29, 1994); and finally with itself (in order to overcome the first negative balloting with a much-shorter-term program, with a much-less-costly project list, and with a partial tax rollback, in the junior taxing district, unless affirmatively extended, through a second ballot, whereby regional taxpayers must revote to extend local-option taxes at initial rates).

12. While this careful iterative process yields a simple linear function, numerous acts and myriad events that were required, legally, and that occurred during its devolution from early 1990 to late 1996, factually, involve a significant number of small, medium and large steps, over nearly six full years, from initial passage of the first of several major chapter laws, by state policymakers, setting out those rather-detailed iterative mechanisms imposed by the Washington State Legislature, through affirmative acts taken by the interim JRPC from 1990 to 1993, through follow-on actions taken by the regional transit authority from 1993 to 1996, through two ratification votes over 17-plus months by local policymakers on three county councils, through professional analyses and the 10 formal written reports by a statutory Expert Review Panel, through voting-booth defeat of the first ballot on local-option taxes to finance "Phase I," at the rates currently in place today, but for a longer period of time, to taxpayers' final solution of this simple but multi-term linear equation here, as of November 5, 1996, as the ultimate policymakers, whereby regional taxpayers finally approved local-option taxes, at rates identical to those earlier rejected on March 14, 1995, to finance a much smaller "Phase I" ballot proposition over one decade, subject to a further vote, before the end of that decadal approval, to decide essentially whether to grant longer-term authority or to pull the plug. 13. This quite-deliberate iterative process yielded, seriatim, three separate-but-interrelated "system and financing plan" documents: (a) the JRPC's concept-level "Regional Transit System Plan," formally adopted on May 28, 1993, with an estimated $8.3 billion price tag, as the "system and financing plan" required by RCW 81.112.030(1), and formally accepted by King, Pierce and Snohomish counties, within 45 days, as required for the statutory process to continue, pursuant to RCW 81.112.030(2), as the basis for moving forward toward development of a detailed funding plan, for resolving "any outstanding issues to the satisfaction of participating county councils and the RTA" (JRPC's Final Plan at page 31), and, "[a]fter reaching agreement on the financing plan" with the three counties, for submitting just the taxation "portion of the financing plan that is a local responsibility to a public vote" (Ibid); (b) "The Regional Transit System Master Plan," formally adopted by Defendant SOUND TRANSIT's Board of Directors, after almost exactly 17 months of further work, on October 29, 1994, with a precisely-stated $6.407 billion price tag for the agency's amended "system and financing plan" allowed by RCW 81.112.030(6), and formally accepted by the three counties within 45 days as required by statute (but thereafter denied funding by voters on March 14, 1995); and (c) "Sound Move: The Ten-Year Regional Transit System Plan," formally adopted by the agency on May 31, 1996, with its precisely-stated $3.914 billion price tag, for a slimmed-down subset of components, mixed and matched from its "system and financing plan," as formally-adopted by the agency earlier and as formally ratified by the counties already, as explicitly allowed pursuant to Defendant SOUND TRANSIT's specific statutory authority to "make minor modifications to the plan as deemed necessary" (as codified currently as RCW 81.112.030[5]).

14. Defendant SOUND TRANSIT, its then officers, its then other Board members, its then senior managers, its then other agents and many more transit proponents found the chopping of one major element, after another, from the JRPC's $8.3 billion "wish list" both difficult and also painful.

15. Statutorily "minor modifications" to the agency's legislatively-required official "system and financing plan" through its "Sound Move" amendment, albeit "minor" legally, yield several key clarifications of the agency's Master Plan adding greater specificity as to assurances, commitments, guarantees and promises made to regional taxpayers, in more-inchoate form, in the Master Plan (for which funding had been unsuccessfully sought on March 14, 1995), in order to induce, in pivotal part through such greater clarity as to its legal constraints, a positive vote on November 5, 1996 to fund far less than one half of those costs that were required for the original "system and financing plan" tabled by the JRPC 42 months earlier (before the agency sliced that $8.3 billion concept, with two major surgeries, to somewhat less than $7 billion initially, and to just below $4 billion finally).

16. This arduous-and-agonizing ratcheting down of system elements, program costs and financial capabilities also resulted in either one statutory contract between Defendant SOUND TRANSIT and King, Pierce and Snohomish counties, or else three substantively-identical statutory contracts between the agency and each county, which, in either case, result in law with formal contractualization of identical terms and conditions as those within the agency's statutorily-required "system and financing plan," as negotiated over several years, under RCW 81.104.100 and RCW 81.112.030, prior to its official adoption, as required by RCW 81.112.030(6), on October 29, 1994.

17. The core terms and central conditions of Defendant SOUND TRANSIT's formally-adopted and formally-approved "system and financing plan," and its parallel statutory contracts, are thereby-"negotiated" limits upon (a) local-option sales tax at .4 percent and local-option MVET at .3 percent, and (b) long-term debt at $800 million (for 16 years after formal adoption of the Master Plan, on October 29, 1994, and after formal ratification votes by the three counties within 45 days).

18. In particular, Defendant SOUND TRANSIT squarely committed to, and is now legally obligated for, a "Maximum Bond Level" during "Phase I Implementation" of its statutorily-required "system and financing plan" (bolding in the original Master Plan text at page 39), as well as to promulgate "engineering and financial principles which better describe how bond financing will be utilized to meet the goals of the 16-year Phase I Plan, and to meet future financing requirements for Phase II" (Master Plan at page 40), and to "make every effort, over the 16-year period, to achieve program goals while accumulating less debt than the $800 million ceiling" (Ibid).

19. In further particular, Defendant SOUND TRANSIT has specifically committed to (for its Phase I Implementation" of its statutorily-required "system and financing plan"): "Maximum Bond Level: To ensure that the RTA maintains a reasonable, financially prudent debt level, an overall long term debt ceiling of $800 million shall be established" (Master Plan at page 39).

20. In still further particular, core terms and central conditions of Defendant SOUND TRANSIT's "Financial & Engineering Principals for RTA Debt Management," as formally adopted by the agency through passage of Motion No. 4, on February 10, 1995, in order to meet (a) specific obligations under its "system and financing plan" (i.e. as recited in said motion from its Master Plan at page 40), and (b) parallel contractual obligations to King, Pierce and Snohomish counties (i.e. pursuant to statutory contractual duties derived therefrom by operation of law), state very squarely: "The primary objectives of the RTA financial and engineering principles shall be to:

"insure prudent financial management of the Phase I capital program;

"limit the impact of debt on decisions with respect to Phase II of the Master Plan;

"fund the Phase I capital program on a pay-as-you-go basis; and

"maintain flexibility to access and respond to the market in order to achieve cost-effective and efficient financing for the Phase II program."

21. In yet further particular, Defendant SOUND TRANSIT's "Financial & Engineering Principals for RTA Debt Management" starts its clarification of "Debt Financing" with notice that "[a]n $800 million ceiling on long term debt has been established in the Master Plan, and implies long term financing of a portion of the capital costs of construction. The $800 million ceiling should be interpreted to mean that at the end of the sixteen year Phase I, there will not be RTA bonds outstanding in an aggregate principle amount that exceeds this ceiling" (with bolding in the original at page 2); then specifies in its formal "Interpretation" section that "[i]f the cost of Phase I were to increase beyond present estimates [in the agency's officially-adopted "system and financing plan"], it should be assumed that the $800 million limitation would survive any such adjustments" (Ibid); and further specifies that, as to "short term borrowing of five years or less," the agency plans to use such debt issues "primarily to bridge the gap between the necessary timing of expenditures (bolding in the original at page 3), and "the RTA should reserve the flexibility to issue long term debt for the refunding of the short term debt should that prove beneficial and within the $800 million ceiling as defined above [within the bolded quotation set out hereinabove]" (Ibid).

22. Defendant SOUND TRANSIT's "Financial & Engineering Principals for RTA Debt Management" also formally committed the agency to a two-component "Public Accountability" process: "To insure that Phase I system plan development and implementation occurs within the framework and intent of the Master Plan's principles and commitments, the RTA shall 1) have conducted annually a comprehensive performance audit through independent audit services; and 2) appoint and maintain for the sixteen year Phase I construction period a citizen's oversight committee charged with an annual evaluation of the RTA's performance audit and financial plan for recommendation to the Board [through 2010]" (Op. Cit. at page 2).

23. In addition, Defendant SOUND TRANSIT's then-Chairman, Hon. Bruce Laing, and its then-Finance Committee Chairman, Hon. Greg Nickels, clearly explained to all Board members, with considerable specificity, what the agency had negotiated with and committed to King, Pierce and Snohomish counties by agreeing to the agency's absolute maximum limit of $800 million on long-term debt, for its "Phase I" program, under its statutorily-required "system and financing plan."

24. Then-Chairman Laing responded to Hon. Paul Miller's question about tax rates after "Phase I" ends: "We do know we are limiting debt to $800 million and we intend to reduce that debt as rapidly as possible; it will only be that high if we have no other alternative"; added "I think we are saying the tax rate will go down"; but declined certainty, about eventual tax rates, since "this is a Master Plan that has additional phases" (official Board Meeting minutes for February 10, 1995).

25. Then-Chairman Laing's explicit commitment to the agency's $800 million limit on long-term debt for "Phase I" under all circumstances was stated to Defendant SOUND TRANSIT's Board members after its then-Finance Committee Chairman had already explained, in detail, at said meeting that, "[w]ith regard to debt financing, the $800 million ceiling on long term debt should be interpreted to mean that at the end of the sixteen year Phase I [October 28, 2010], there will not be RTA bonds outstanding in an aggregate principle amount that exceeds this ceiling" (Ibid), as the "Financial and Engineering Principles" quotation hereinabove was read, apparently, word for word.

26. Mayor Nickels also highlighted and emphasized the "Public Accountability" section: "Perhaps most important is public accountability. To insure that Phase I system plan development and implementation occurs within the framework and intent of the Master Plan's principles and commitments, the RTA shall 1) have conducted annually a comprehensive performance audit through independent audit services; and 2) appoint and maintain for the sixteen year Phase I construction period a citizens' oversight committee charged with an annual evaluation of the RTA's performance audit and financial plan for recommendation to the Board" (as again quoted verbatim to the entire agency's Board according to its official Board Meeting minutes for February 10, 1995).

27. Separate-but-related developments during this long process also compelled Defendant SOUND TRANSIT to accept additional statutory contractual terms beyond those stated within its official "system and financing plan," including but likely not limited to substantial constraints on its fisc and its operations imposed by a hard-ball amendment proposed by Hon. Kent Pullen and Hon. Ron Sims, qua quid pro quo for adoption of King County Ordinance No. 10925 legally required for Defendant SOUND TRANSIT to have been allowed to be created and its Board thus appointed, which the King County Council adopted by a one-vote margin provided by then-Councilman Sims.

28. Equal footing doctrines likely make all constraints thus jointly coerced by Messrs. Pullen and Sims available to Pierce and Snohomish counties to benefit their respective taxpayers.

29. In addition to tax-and-debt limits which are quintessential elements both of Defendant SOUND TRANSIT's statutorily-required "system and financing plan," and also of its fully-parallel statutory contractual duties as to every such tax-and-debt responsibility owed to King, Pierce and Snohomish counties, the agency imposed several further limits on tax-and-debt powers in "Sound Move" to induce regional taxpayers to move from rejecting a ballot for funding its initial "Phase I" program (with the sales-tax rate at .4 percent and with the MVET rate at .3 percent) to accepting the ballot to finance its greatly-slimmed-down "Phase I" project list with identical local-option tax rates (with sales taxes still set at the same .4 percent and with MVET still set at the same .3 percent).

30. Among numerous assurances, commitments, guarantees and promises which Defendant SOUND TRANSIT made to regional taxpayers to shift the majority from nay on March 14, 1995 to yea on November 5, 1996, as formalized in "Sound Move" on May 31, 1996, is one which not only ratcheted down the proposal's price tag to less than $4 billion (from the initial concept's $8.3 billion and the first ballot's nominal $6.704 billion), but which fundamentally reduced regional taxpayers' obligations, as to local-option taxes funding most of the agency's "Phase I" costs, from what had in essence been a totally or almost-completely "open ended" levy, with little or no real constraints on the eventual take of local-option taxes, by Defendant SOUND TRANSIT, under its first ballot to fund its "Phase I" under its "system and financing plan," to what is now explicitly a fully-"closed end" levy, after its "Sound Move" tightened up earlier-rather-inchoate major terms, whereunder not one, but two, trigger mechanisms terminate the agency's slimmed-down local-option tax authority for its "Phase I," either when $3.914 billion from all possible sources are committed, or else when local-option taxes have been collected, for a single decade, on March 31, 2007/April 1, 2007, and whereafter the 36-page "Sound Move" monograph guarantees regional taxpayers, not once, but twice (in identical words and with identical bolding): "System expansion or tax rollback -- Any second phase capital program which continues local taxes for financing will require voter approval within the RTA District. If voters decide not to extend the system, the RTA will roll back the tax rate to a level sufficient to pay off the bonds and operate and maintain the investments made as part of Sound Move" ("Sound Move: The Ten-Year Regional Transit System Plan" at pages 6 and 36).

31. Defendant SOUND TRANSIT's ability to utilize debt financing for its current "Phase I" program was further constrained, quite significantly, when "Sound Move" added a specific limit for the agency's total "combined" long-term debt and short-term debt, at $1.052 billion, to the agency's already-explicit $800 million long-term debt ceiling in its statutorily-required "system and financing plan" (as "Sound Move" indicates at page 34, as well within its Appendix A at page A2, inter alia).

32. Defendant SOUND TRANSIT's "Sound Move" amendment to its officially-adopted "system and financing plan" acknowledged directly that the "preferred system" that was available to be "presented to the voters" for a funding ballot, on November 5, 1996, still required "more detailed planning and engineering" ("The Ten-Year Regional Transit System Plan" at page 26), and, thus, the agency obligated itself formally therein both to "continue to identify and evaluate alternatives that might achieve the same goals and benefits more cost effectively" and also to "monitor system performance and productivity and make changes to service plans when appropriate" (Ibid), among myriad such cost-effectiveness promises to taxpayers by the agency, its officers and its other agents.

33. Defendant SOUND TRANSIT's adoption of "Sound Move" thus clarifies the maximum level of "combined" debt available to the agency for its "Phase I" program, which had not been fully clear, earlier, despite Board adoption of its "Financial & Engineering Principles" on February 10, 1995 (in order to meet its legal obligations to King, Pierce and Snohomish counties in its "system and financing plan" formally recited in its Motion 4), despite Mayor Nickels' related explanation that "the $800 million ceiling on long term debt should be interpreted to mean that at the end of the sixteen year Phase I [October 28, 2010], there will not be RTA bonds outstanding in an aggregate principle amount that exceeds this ceiling" (official Board Meeting minutes for February 10, 1995), and despite then-Chairman Laing's reiteration of the $800 million ceiling on long-term debt (Ibid).

34. Defendant SOUND TRANSIT's adoption of this statutorily-"minor" but functionally-quintessential "Sound Move" clarification to its legally-controlling "system and financing plan," as one of those legislatively-authorized "minor modifications to the plan" available to the agency by terms of the explicit language of RCW 81.112.030(5), implicates gargantuan monetary impacts for all regional taxpayers because every dollar of long-term debt in place at the termination date for the adopted "Phase I" program effectively extends said "Phase I" term for 30, 40 or even 50 years more (whether "Phase I" is to end after a "nominal" but very "soft" 16 year period for local-options taxes proposed to regional voters in March, 1995, or abruptly, under "Sound Move," on March 31, 2007).

35. Defendant SOUND TRANSIT's legally-quintessential change from asking regional taxpayers for ballot approval of local-option taxes to finance the vast majority of its initial "Phase I" program on a totally or almost-completely "open ended" basis to requesting them to tax themselves at identical local-option tax rates, but on a "closed end" basis, is patent from simple comparison of the agency's twice-made promise of a partial "tax rollback," as above quoted from "The Ten-Year Regional System Plan," with its equally-specific notification to regional taxpayers, previously, that should "cost overruns or revenue shortfalls" occur, then the agency "will complete the full phase as proposed, with as minimum (sic) delay in the construction schedule as possible," at page 32 of "The Regional Transit System Master Plan," with no specified dollar limit in this critical circumstance (despite the nominal price tag for "Phase I" of $6.704 billion), and with no time limit on duration of its taxing authority to implement "the full phase as proposed" (despite its nominal 16-year period).

36. Defendant SOUND TRANSIT's ratcheting down of its "Phase I" program, cog by cog, first narrowed a wish list of $8.3 billion in estimated costs to be funded to about 80 percent of the JRPC's proposal (with a nominal cost ceiling, at $6.704 billion, but with no real upper boundary on what taxpayers were requested to fund on March 14, 1995, and with a nominal 16-year term, but with no actual limit on the period for which taxes could be imposed under the ballot presented to regional taxpayers then), and subsequently slimmed down its final "Phase I" ballot proposal to what could be financed with no-more-than $3.914 billion from taxes, debt, grants, farebox revenues and every other source, with a real limit at that stated amount, whether reached during or at the end of a shortened duration for "Phase I," which is set at no-more-than 10 years, and which shall be abruptly enforced by the agency's guarantee to a partial "tax rollback" (unless initial local-option tax rates are extended by regional taxpayers, with their affirmative decision at the ballot box subsequently, through a second ballot proposal for a "Phase II" funding proposal in advance of commencement of this partial "tax rollback" to begin, otherwise, as of midnight on March 31, 2007/April 1, 2007).

37. Defendant SOUND TRANSIT reiterated its explicit commitment to enormous "Public Accountability," both through the "minor modifications" made to its statutorily-required, officially-adopted and formally-approved "system and financing plan" ("Sound Move" at page 6, inter alia), and also through the Board's slight alterations to wording in its Resolution No. 75's guarantee as to audits: "To ensure that the ten-year development and implementation program occurs within the framework and intent of the financial policies approved by Resolution 72, the RTA will conduct an annual comprehensive performance audit through independent audit services and appoint and maintain a citizens' oversight committee for the ten-year construction period. The oversight committee is charged with an annual review of the RTA's performance audit and financial plan and for reporting and recommendations to the Board" (as formally adopted on August 23, 1996, as formally referenced in the ballot title requesting local-option taxes at the General Election upon November 5, 1996, and as relied on before the Washington State Supreme Court on June 10, 2003).

38. Defendant SOUND TRANSIT's broadly-negotiated and self-imposed obligations, both to "continue to identify and evaluate alternatives that might achieve the same goals and benefits more cost effectively" and also to "monitor system performance and productivity and make changes to service plans when appropriate," pursuant to specific commitments made to taxpayers in "Sound Move," was and is logically triggered of necessity, in fact and in law, when its sizeable estimates for commercial-rail and light-rail capital costs escalated quite dramatically between mid 2000 and this date, and when these rail modalities' estimated ridership advantages over bus rapid transit narrowed greatly during this same period, and when estimates for BRT capital costs fell, based on the actual purchases made by the agency, also during this same period, and when growth in BRT ridership has exceeded the agency's past-but-pivotal projections, also over this identical 2000-to-2003 timeframe.

39. Defendant SOUND TRANSIT's obligation to review its "system and financing plan" as to commercial rail, light rail and BRT allocations in the "Sound Move" amendment was and is also triggered by its inability to complete all such major elements within maximum limits on long-term debt, "combined" debt, and total costs imposed under its "system and financing plan" (as amended).

40. In January, 1999, Defendant SOUND TRANSIT sold $350 million of long-term debt, pursuant to the agency's "Master Resolution," which sets forth its bond covenants pledging all local-option taxes of every type to purchasers to guarantee full-and-timely payments for all principal and all interest, on terms and on conditions stated therein, and controlling thereafter, as established by Board members' unanimous adoption of Defendant SOUND TRANSIT's Resolution No. R98-47.

41. In 2002, Initiative 776 was filed by Tim Eyman and by certain of his associates in their repeated efforts to limit state-and-local taxes; approvals by and other required acts of Washington State's Secretary of State and other officials were obtained as required by state statutes; signatures were collected according to state law in sufficient numbers to place the measure on the state ballot; voters approved said initiative legislation at the General Election for that year; and the Washington State Supreme Court upheld its constitutionality, after a direct appeal, during October, 2003.

42. Defendant SOUND TRANSIT's guarantee to regional taxpayers regarding the partial "tax rollback" after one decade, among "minor modifications" made to the agency's "system and financing plan" through its "Sound Move" amendment, required its Master Bond Resolution's terms for debt issued in January, 1999 to allow for same through the "Sufficiency Test" set forth therein.

43. This bond term now legally requires (a) MVET receipts being collected for Defendant SOUND TRANSIT to end (for reasons deriving directly from the agency's explicit "tax rollback" promises to voters on November 5, 1996), and (b) disgorgement by the agency of MVET received, since Initiative 776 was passed by state taxpayers, in late 2002, and after its constitutionality was upheld by this state's highest court in late 2003 (for reasons more fully documented hereinbelow).

44. Before state voters adopted Initiative 776, and thereby repealed prior code authority for levy and for collection of certain motor vehicle excise taxes by state, regional and local agencies, in late 2002, Defendant SOUND TRANSIT's agents began lobbying Washington State's Department of Licensing and the Washington State Attorney General's senior officials with claims that the agency must be afforded a right, legally, to continue to receive all MVET pledged by it for up-to-30 years to purchasers of $350 million in long-term debt issued by the agency, in early 1999, even if state voters should repeal statutory authority for said tax to be levied and collected, statewide, as based largely but not exclusively on its repeated claims that Contract Clauses of the United States Constitution and of the Washington State Constitution each requires such tax's continuation, despite its repeal, until the full $350 million in earlier-issued municipal bonds are paid off, totally, in 2028.

45. Examples of Defendant SOUND TRANSIT's said "Contract Clause" claims used to lobby for continued receipt of MVET, despite the repeal of authorizing legislation by taxpayers of the State of Washington through Initiative 776, are or will be attached as Exhibit C and Exhibit D.

46. During 15-to-18 months from early 2002, when Initiative 776 was filed by Mr. Eyman and his associates, until mid 2003, when interest rates on municipal bonds reached historically-low rates, record amounts of previously-issued "rated" government debt was refinanced all across the Unites States by local, regional and state governments in order to benefit their respective taxpayers.

47. For example, King County refinanced over $1 billion in previously issued debt during this unique window of opportunity, with estimated savings of "63 million in debt service costs over the life of bonds refinanced since 2000" (as claimed by the King County Council's "Report to the Public" in an undated document issued, recently, in the late summer, or early autumn, of this year).

48. Impetus for this refinancing of over $1 billion by King County was led by Defendant SOUND TRANSIT's Chairman (in his elected role as King County Executive), and by its Central Link Oversight Committee Chairwoman (in her elected role as Chair of the King County Council).

49. On information available to date and on belief at this time, Plaintiff KNEDLIK alleges Defendant SOUND TRANSIT's failure to refinance it $350 million in previously-issued long-term debt, during this period of historically-low interest rates that was utilized by local, regional and state governments nationwide in order to benefit their respective taxpayers by obtaining large reductions in interest costs over the life of outstanding bonds thus refinanced at record levels by jurisdictions all over the United States, resulted: (a) from negligent-or-intentional wrongdoing by the agency's current officers, its present senior managers and certain of its other agents in order to preserve the "Contract Clause" pretext being used for ongoing lobbying efforts for ultra vires collections of up-to-$3 billion in MVET from regional taxpayers through said false-or-fraudulent claims; and (b) in substantial losses to regional taxpayers in totally-unnecessary interest costs from 2002-03 to 2028.

50. After state voters passed Initiative 776, and thereby repealed statutory authority to levy and to collect certain motor vehicle excise taxes by state, regional and local agencies beyond late 2002, Defendant SOUND TRANSIT's current Chairman, Mr. Sims, and its present Chief Executive Officer, Ms. Joni Earl, began to utilize certain decisions taken by the Washington State Department of Licensing and by the Office of the Washington State Attorney General, based in part on repeated averments made by the agency's own representatives, to garner credibility for their claims that it has both constitutional obligations and also lawful authority to continue to receive all MVET to become nominally available for its uses, between 2002 and 2028, but for taxpayers' legal repeal of MVET.

51. Among numerous such claims made by Chairman Sims was his formal statement, "for the record," during an agency Board meeting that "Sound Transit has received a letter form the Department of Licensing stating that Sound Transit's Motor Vehicle Excise tax (MVET) the (sic) revenue will continue to be collected" (official Board Meeting minutes for November 21, 2002), along with many similar claims made by the agency's other officers and by its senior managers.

52. Among multiple statements made by CEO Earl was her report on that Board meeting (for public distribution): "The Board has assurance that Sound Transit will continue to collect its MVET money, and its important work will continue. The state Department of Licensing has agreed to continue collecting Sound Transit’s MVET revenue unless told otherwise by the courts. The state Attorney General’s office has also determined that governments cannot breech their contracts with bondholders and that the taxes will continue to be collected under the law to pay for bonds" ("Report on the Sound Transit Board Meeting of Nov. 21" then issued by CEO Earl).

53. After state voters had approved Initiative 776, Defendant SOUND TRANSIT's Board of Directors was repeatedly urged by Chairman Sims, and by at least one of its two current Vice Chairmen, Hon. John Ladenburg, as well as by one of its former Vice Chairmen who was its long-time Finance Committee Chairman, Mayor Nickels, and by several other present Board members, to intervene in litigation filed, in late 2002, to challenge the constitutionality of said initiative and, on December 12, 2002, despite stated opposition by Hon. Julia Patterson, Resolution No. R2002-22 was adopted by Defendant SOUND TRANSIT's Board by a 15-to-1 margin, with affirmative votes by Chairman Sims, Vice Chairman Ladenburg, Vice Chairman David Earling, Hon. Jack Crawford, Hon. Bob Drewel, Hon. David Enslow, Hon. Mary Gates, Hon. Richard McIver, Hon. Chuck Mosher, Mayor Nickels, Hon. Mark Olson, Hon. Dwight Pelz, Hon. Kevin Phelps, Hon. Cynthia Sullivan and Hon. Claudia Thomas; with a single negative vote by Councilwoman Patterson; and with Hon. Jane Hague and Mr. Doug MacDonald each absent and so voting neither yea nor nay.

54. Official minutes for Defendant SOUND TRANSIT's Executive Committee meeting, which was held on January 9, 2003, state as to this vote as follows: "Mr. MacDonald commented that he was absent from the Board meeting at which the resolution related to I-776 was discussed. He further noted that he strongly supports the resolution passed by the Sound Transit Board."

55. Resolution No. R2002-22 formally states 16 separate premises for Defendant SOUND TRANSIT's Board of Directors having acted to resolve officially, for "the Central Puget Sound Regional Transit Authority[,] that the Executive Director [now CEO Earl] is authorized to join or defend any legal proceeding to determine the legality and application of Initiative 776 to Sound Transit and to defend Sound Transit’s interests," with its said "WHEREAS" paragraphs starting with three of questionable factual accuracy as to the central Puget Sound region's current traffic-congestion ranking, to its most-probable growth in population, and to issues of state-versus-local authority; continuing with four stating statistical data as to an incomplete selection of results for voting in the agency's boundaries over its brief history; adding two as to local-control desiderata and another, in error, as to single-subject duties; and finishing with six paragraphs, of which four focus on the agency's various bond-related claims, either directly or else indirectly, and of which the final two reference a then-recently-filed legal challenge to the "constitutionality of Initiative 776," generally, and posit, as its final reason for joining said then-pending litigation, the rather- indisputable appropriateness of affirmatively cooperating "to protect … the state constitution":

"WHEREAS, Initiative 776 purports to eliminate the agency’s authority to seek additional voter approval to use the MVET as a funding source for future transportation improvements such as the extension of light rail to Northgate, the expansion of commuter rail service, expanded regional bus service, and other improvements identified in the long-range vision for future phases, adopted May 31, 1996, by Resolution No. 73; and

"WHEREAS, in 1999, Sound Transit borrowed $350 million in bond debt secured by both the MVET and sales and uses taxes, and by agreement with bondholders such taxes must continue to be collected until the bonds are fully retired; and

"WHEREAS, the Washington State Attorney General has affirmed Sound Transit’s view that the agency’s MVET tax must be collected until bonds issued by the agency to fund transit improvements are fully repaid in accordance with the contract with bondholders, thereby affirming that the bonds issued by the agency are secure; and

"WHEREAS the MVET and sales and use taxes will be used as planned to fund construction of the commuter rail, light rail, and regional express transportation projects identified in Sound Move, including payment of future bond debt obligations; and

"WHEREAS, a lawsuit has been initiated by Pierce County, King County, the City of Tacoma, and private citizens challenging the constitutionality of Initiative 776 raising issues that will require the court to determine a number of issues that directly or indirectly will determine how Initiative 776 impacts Sound Transit; and

"WHEREAS, it is appropriate for the Sound Transit Board to join the legal challenge of Initiative 776 in order to protect the rights of voters in the Puget Sound region, the principle of local control, the existing voter-approved investment in transportation solutions, and the state constitution."

56. All of these statements as to bonding and constitutional issues, as officially adopted by Defendant SOUND TRANSIT's Board of Directors by a 15-to-1 margin, followed CEO Earl's completely-explicit claims to Defendant SOUND TRANSIT's Board members that "there was no dispute that Sound Transit is legally entitled to collect the MVET until the year 2028" (official Board Meeting minutes for December 12, 2002), and that "unresolved issues regarding Initiative 776 include whether revenues can continue to be pledged for future bonds and whether Initiative 776 legally repeals the authority to impose the tax to build additional transportation projects as Phase II is discussed" (Ibid), and current Vice Chairman Ladenburg's statement, and restatement, that "its is important that the Sound Transit Board, as elected officials, uphold the constitution and protect voters in the Sound Transit region " (official Board Meeting minutes for December 12, 2002), as well as his further assurances to his fellow Board members, as a former Prosecuting Attorney for Pierce County, that "[t]his initiative is so clearly unconstitutional" (Sound Transit News Release, December 12, 2002) that, hence, "we are confident the courts will agree" (Ibid).

57. On July 2, 2003, after oral arguments were heard by the Washington State Supreme Court on Initiative 776, but before it found the measure not "so clearly unconstitutional" as Mr. Ladenburg's legal assurances to his fellow Board members had suggested, and four weeks before Plaintiff KNEDLIK paid MVET for 2003-04 under protest, Defendant SOUND TRANSIT issued formal written explications to regional taxpayers, styled as "Initiative 776 and your Sound Transit tax," which both stated that "[t]he tax will continue to be collected," and also claimed that, "[u]ntil the bonds are no longer outstanding [in 2028], Sound Transit is legally required to collect the tax; [and] therefore the Department of Licensing will continue to collect the tax for Sound Transit," which statement by Defendant SOUND TRANSIT is or is to be attached as Exhibit E.

58. On information available to date and on belief at this time, Plaintiff KNEDLIK alleges that (a) mandatory collection of MVET through 2028, nominally based on pretextual claims of Contract Clause obligations purported by the Defendant SOUND TRANSIT to be owed legally to purchasers of $350 millions in debt sold in 1999, continues to be posited by the agency, by all current officers (including all Committee chairs and vice chairs), by all present senior managers (including CEO Earl, Deputy Chief Executive Officer Vernon Stoner, General Counsel Desmond Brown, Chief Communications Officer Ric Ilgenfritz, and Chief Financial Officer Hugh Simpson), and by certain other members of its Board of Directors; and (b) disgorgement of up-to-$3 billion in ultra vires collections of MVET will not occur without those declarations prayed hereinbelow.

59. In fact and in law, Defendant SOUND TRANSIT's stated bond-covenant premise for joining litigation against all Washington state taxpayers on December 12, 2002 was and is either false or else fraudulent, or both, as to its explicit claim that, "in 1999, Sound Transit borrowed $350 million in bond debt secured by both the MVET and sales and uses taxes, and by agreement with bondholders such taxes must continue to be collected until the bonds are fully retired."

60. In fact and in law, Defendant SOUND TRANSIT's claim to regional taxpayers on July 2, 2003 was and is either false or else fraudulent, or both, as to its key claim that, "[u]ntil the bonds are no longer outstanding [in 2028], Sound Transit is legally required to collect the tax."

61. In fact and in law, numerous other representations of like kind by Defendant SOUND TRANSIT's officers, senior managers and other agents are either false or else fraudulent, or both.

62. Factual and legal bases for establishing Defendant SOUND TRANSIT'S negligence in false representations to, or its intentional frauds on, regional taxpayers are patent in provisions of bond covenants "recommended to the Board" by its then-Finance Committee Chairman, now-Mayor, Nickels (official Board Meeting minutes for November 12, 1998), and then unanimously adopted by said Board in authorizing "up to $400 million in sales tax and MVET bonds" (Ibid).

63. In particular, Defendant SOUND TRANSIT's Board, as thus advised by Mr. Nickels, formally adopted a Master Bond Resolution that explicitly specifies, and squarely establishes, a "Sufficiency Test" to allow a substantial portion of its local-option taxes to be reduced, long before all such bonds are either fully paid off in 2028 or defeased earlier, provided that the agency must fulfill the "Sufficiency Test," which its bond covenants clearly define to "mean that the ratio of Local Option Taxes collected to Annual Debt Service in each Fiscal Year exceeds two times."

64. In further particular, Defendant SOUND TRANSIT's Master Bond Resolution, as so adopted on November 12, 1996, states the "Sufficiency Test" as follows in full (in its Section 1):

"Sufficiency Test means that the ratio of Local Option Taxes collected to Annual Debt Service in each Fiscal Year exceeds two times. For purposes of calculating the Sufficiency Test, there shall be added to Local Option Taxes collected in any Fiscal Year any amount withdrawn from the Tax Stabilization Subaccount in such year and deposited into the Local Option Tax Accounts, and there shall be subtracted from Local Option Taxes collected in any Fiscal Year any amount withdrawn from the Local Option Tax Accounts and deposited into the Tax Stabilization Subaccount; provided, that for purposes of the Sufficiency Test the amount withdrawn from the Tax Stabilization Subaccount in any Fiscal Year shall not exceed 0.50 times the Annual Debt Service in such Fiscal Year."

65. In still further particular, when Defendant SOUND TRANSIT was unable to obtain a policy of municipal bond insurance essential to achieve the highest-possible rating for its maiden debt offering, as required to negotiate the most favorable interest rates available to it in 1999, its Board was asked to amend its Master Bond Resolution, unilaterally, on an after-the-fact basis in law allowed under said bond covenants, even post sale, in order to improve security provided to its bondholders, and the agency specifically amended its Resolution No. R98-47 with Resolution No. R99-4 to add the two words "Sufficiency Test" to the definition of "Annual Debt Service" (in order to make entirely "clear that such definition applies to meeting the Sufficiency Test in a tax rollback scenario," as the agency's then-Director of Finance, Ms. Jan Hendrickson, reported to its Finance Committee, on February 4, 1999, and to its Board of Directors on February 11, 1999).

66. In yet further particular, after clarified application of Defendant SOUND TRANSIT's "Annual Debt Service" obligations, including the "Sufficiency Test," to anticipated circumstances from a partial "tax rollback" (under the agency's "Sound Move" amendment to its adopted-and-approved "system and financing plan), which resulted in the "Sufficiency Test" change that "the rating agencies required" (according to Ms. Hendrickson's written report), the agency's Finance Committee unanimously recommended Board approval, during the key meeting chaired then by Mayor Nickels (and the full Board later followed its "Do Pass" recommendation unanimously).

67. Defendant SOUND TRANSIT's current interest-only obligation for "Annual Debt Service" is $17.164 million in 2003, 2004 and 2005, which then increases to slightly over $21 million per annum from 2006 through 2017, which steps up to $32 million per annum from 2018 through 2022 and which concludes at just under $35 million per annum from 2023 through 2028.

68. Defendant SOUND TRANSIT's receipts from local-option taxes authorized by voters on November 5, 1996 for a 10-year period at their initial rates, which is the current-but-unlawful rate as to MVET after taxpayer adoption of Initiative 776, have consistently exceeded the agency's projections for local-option taxes since imposition began, on April 1, 1997, for collection over the 10-year term for which the agency has authority to receive said taxes without a "Phase II" vote (before the partial "tax rollback" required no-later-than April 1, 2007, unless voters reauthorize the rates, before November 5, 2006, to the extent possible today after voter adoption of Initiative 776).

69. For example, Defendant SOUND TRANSIT reported on March 21, 2002, in a formal News Release entitled "Sound Transit's 2001 revenues exceed forecast budget despite recession," that, despite "economic fallout from the events of September 11," the agency had avoided "budget shortfalls facing many other jurisdictions in Washington," and quoted Councilman Phelps, as its Finance Committee Chairman then and now, to have stated that "this is the fifth year in a row that Sound Transit's actual revenues have exceeded its forecast. This is proof through performance."

70. In 1997, over the final three calendar quarters, Defendant SOUND TRANSIT reported its collections at $115 million in local-option sales taxes, and at $25 million in local-option MVET.

71. In 1998, Defendant SOUND TRANSIT collected $182.679 million in local-option sales taxes, and $44.278 million in local-option MVET.

72. In 1999, the year in which Defendant SOUND TRANSIT issued its 30-year bonds, it collected $196.025 million in local-option sales taxes, and $46.135 million in local-option MVET.

73. In 2000, Defendant SOUND TRANSIT collected $212.478 million in local-option sales taxes, and $58.642 million in local-option MVET.

74. In 2001, Defendant SOUND TRANSIT collected $209.752 million in local-option sales taxes, and $56.123 million in local-option MVET.

75. In 2002, Defendant SOUND TRANSIT collected $204.566 million in local-option sales taxes, and $58.319 million in local-option MVET.

76. In 2003, through the first three calendar quarters, Defendant SOUND TRANSIT has collected $149.63 million in local-option sales taxes, and $46.878 million in local-option MVET.

77. Basic arithmetic documents that Defendant SOUND TRANSIT's collections of local-option sales taxes, without reliance either on local-option MVET collected in any year or on future growth in agency revenues from local-option sales taxes to be reasonably expected with economic recovery in due course and with normal inflation's deflation of the U.S. dollar over time, have in all years exceeded both its present bond-covenanted "Sufficiency Test" duty of circa $34.34 million per annum (based on twice its lowest "Annual Debt Service" costs of $17.164 million today), and also its maximum future bond-covenanted "Sufficiency Test" duties of just over $69 million per annum (based on twice its highest "Annual Debt Service" of $34.543 million from 2023-to-2028).

78. In particular, Defendant SOUND TRANSIT’s receipts from local-option sales taxes have far surpassed its bond-covenanted "Sufficiency Test" obligation of $34.34 million per annum, which is contractually owed to holders of its outstanding long-term debt, by $161.685 million in 1999, by $178.138 million in 2000, by $175.412 million in 2001, by $170.221 million in 2002, and by $115.29 million in 2003 (with local-option sales taxes received only for the first three quarters).

79. In further particular, in every year since Defendant SOUND TRANSIT's sale of its long-term debt in January, 1999, specifically subject to these municipal bonds' explicit "Sufficiency Test," the agency's local-option sales taxes have been more than 10 times its actual current costs of $17.164 million per annum to service its outstanding bonds, and more than five times greater than its actual maximum costs of 34.543 million per annum to service its issued debt between 2023 and 2028 (which, in turn, is more than five times and 2.5 times the levels required by the agency's "Annual Debt Service" obligations, pursuant to its bond covenants' negotiated "Sufficiency Test," to fulfill its contractual obligations as to present-and-future costs, respectively, which are set at double the level of revenues in fact needed to pay holders of its debt on time for everything owed to them). 80. Because the level of arithmetic required to establish these huge surpluses of revenues solely from local-option sales taxes, at far beyond Defendant SOUND TRANSIT's bond covenants' "Sufficiency Test" duties, is so genuinely elementary, no current officer, no present senior manager and no other agent can claim, in good faith, any inability to comprehend these simple mathematical facts established by the agency’s explicitly-negotiated "Sufficiency Test," and this Honorable Court can take judicial notice of these indisputable factual circumstances in determining their bad faith.

81. Because Defendant SOUND TRANSIT specifically negotiated with purchasers of its long-term debt for the explicit contractual right to undertake a partial "tax rollback" over 20 years before it is to pay off its presently-issued bonds, none of this agency’s officers, senior mangers and other agents can claim, in good faith, that the Contract Clause of the United States Constitution or of the Washington State Constitution compels the agency to continue receiving local-option MVET lawfully repealed by voters, and this Honorable Court can take judicial notice of this fact in finding bad faith as to those officers, senior managers and other agents who have falsified this pivotal fact. 82. This Honorable Court can also take judicial notice of the central reason that squarely required Defendant SOUND TRANSIT to negotiate its explicit contractual right to authorize the partial "tax rollback" (as potentially required), without paying off or defeasing its bonds (as referenced by its then-Director of Finance), and that also resulted in the agency being compelled to alter its Master Bond Resolution, after the fact, through post-sales amendments allowed when, inter alia, "adding covenants and agreements of the Authority, proscribing further limitations and restrictions upon the issuance of Bonds and adding provisions clarifying matters arising under the Master Resolution" (Resolution No. R99-4's sixth premise for post-sales changes above quoted).

83. Defendant SOUND TRANSIT's quintessential reason was, and is, a legal obligation undertaken by the agency to voters to make a partial "tax rollback," after a single decade, unless regional taxpayers approve continuation of local-option taxes at initial rates to fund some "Phase II" program, through balloting within the junior taxing district on or before November 5, 2006, as authorized by RCW 81.112.030(9), in order to thus induce regional taxpayers to agree at the polls to authorize and to pay local-option taxes, at their pre-"tax rollback" rates, for even one decade.

84. In particular, the raison d'ĂȘtre for Defendant SOUND TRANSIT's fashioning of its said "Sufficiency Test" in those bond covenants unanimously adopted by agency's Board members in the first instance, and for its clarifying of its legal application to a partial "tax rollback" when "the rating agencies required" thereafter, devolves from an interrelated series of ratcheting-down steps that result first from statutory limitations upon the agency, second from additional limits created by its thereunder-negotiated statutory contract(s) with King, Pierce and Snohomish counties, and third from the agency's further self-imposed constraints to achieve ballot approval on November 5, 1996.

85. Notwithstanding Defendant SOUND TRANSIT’s absolute maximum ceiling of $800 million for all long-term debt for its "Phase I" program through 2010 (as officially adopted by Defendant SOUND TRANSIT in its statutorily-required "system and financing plan," following 18 months of extensive negotiations by its officers, senior managers and other agents with King, Pierce and Snohomish counties from shortly after creation of the agency in 1993 through official adoption of its statutorily-required "system and financing plan" on October 29, 1994), Defendant SOUND TRANSIT has committed contractually to the Federal Transit Administration, through a recently-executed Full Funding Grant Agreement for $500 million in federal funds for Link Light Rail, to sell $1.5 billion of its long-term debt through the issuance of municipal bonds, and it has further propounded to the Inspector General of the U.S. Department of Transportation that it enjoys valid legal authority to borrow an additional $1 billion, for a term of uncertain duration, as is indicated by an Inspector General document, dated July __, 2003, which is or is to be attached as Exhibit F.

86. Notwithstanding Defendant SOUND TRANSIT’s absolute maximum ceiling of $1.052 billion on its "combined" long-term debt and short-term debt for "Phase I" (as officially adopted through "minor modifications" to the agency's legislatively-required "system and financing plan," through its "Sound Move" amendment, in order to induce regional taxpayers to authorize a single decade of local-option taxes on November 5, 1996 by means of such further self-limitation on its authority for debt financing), the agency has already sold long-term debt and otherwise undertaken, through ultra vires execution of its "Offer Sheet" with Defendant BURLINGTON NORTHERN SANTA FE RAILWAY CO., at least $1.217 billion in "combined" debt, as is set forth more fully in materials provided to the agency’s Board by Plaintiff KNEDLIK, when requesting its Board to comply with its thus-negotiated debt limits, which document is or is to be attached as Exhibit G.

87. Notwithstanding Defendant SOUND TRANSIT’s two separate commitments to cause a "comprehensive performance audit through independent audit services" annually (in Motion No. 4 adopted on February 10, 1995 and in Resolution No. 75 adopted on August 23, 1996), notwithstanding its Board of Directors' explicit recommitment to such annual audit (by referencing Resolution No. 75 to all regional taxpayers in the ballot title for local-option taxes on November 5, 1996) and notwithstanding the agency's binding open-court claim to the Washington State Supreme Court on June 10, 2003, through its General Counsel, both that said resolution is "legislation passed by the voters" (by virtue of its reference in the ballot title), and also that the agency is obligated by all of Resolution No. 75 (in response to Hon. Justice Richard Sanders' direct question as to whether the agency might view duties thereunder selectively), Defendant SOUND TRANSIT, its current-and-previous officers, its present-and-past senior managers, other Board members and other agents have never caused any "comprehensive performance audit through independent audit services" to be conducted (not for 1995, nor for 1996, nor for 1997, nor for 1998, nor for 1999, nor for 2000, nor for 2001, nor for 2002, and the agency has, to this date, made no arrangements for any such comprehensive performance audit for 2003), and its General Counsel’s oral claim that the agency meets all duties under Resolution No. 75, as made to the Washington State Supreme Court, was and is a fraud on Justice Sanders (as well as on every other Justice sitting on this state's highest court).

88. Following Mr. Brown's open-court claims, Defendant SOUND TRANSIT's current CEO Earl indicated in writing that the agency does not consider itself under any obligation to obtain any "comprehensive performance audit through independent audit services," despite Motion 4 adopted directly pursuant to obligations under its "system and financing plan" required by state law, despite parallel statutory contractual duties owed to King, Pierce and Snohomish counties, despite notice of and commitment to Resolution No. 75 to regional taxpayers by reference in the ballot title on November 5, 1996, and despite an open-court recommitment to the Washington State Supreme Court, as is indicated by CEO Earl in her memorandum, which is or is to be attached as Exhibit H.

89. Notwithstanding Defendant SOUND TRANSIT’s two written commitments to a partial "tax rollback" in "Sound Move" over seven and one half years ago, notwithstanding that more than seven full years have passed since the region’s taxpayers approved a single decade of funding prior either to an adopted ballot to finance some "Phase II" plan presented to regional taxpayers or to a partial "tax rollback" pursuant to "Sound Move," and notwithstanding that the "Sound Move" text very explicitly states that the decadal "Sound Move" period began immediately after voter adoption ("The ten-year timeframe for putting the plan in place begins the day after voters approve funding for the new regional transit system" in "Sound Move" at page 26), the agency’s Citizen Oversight Panel was informed at its meeting on November 20, 2003 by Brian McCartan, the agency's Deputy Chief Financial Officer, that its senior management has never discussed, to that day, the impacts of said partial "tax rollback," as required under "Sound Move," on its finances after seven full years.

90. Notwithstanding massive increases in commercial-rail and light-rail capital costs over estimates presented to regional taxpayers, and notwithstanding substantial decreases in capital costs for bus rapid transit vehicles below estimates presented to residents of the junior taxing district, Defendant SOUND TRANSIT has made neither studies pivotal for least-cost alternatives nor cost- effectiveness adjustments to which it specifically committed ("Sound Move" at page 26, inter alia).

91. On information available to date and on belief at this time, Plaintiff KNEDLIK alleges that Defendant SOUND TRANSIT's failure to fulfill its least-cost duties is due to the agency's past-and-current officers and its past-and-present senior managers having negligently or intentionally biased system development against bus rapid transit, since having abandoned a genuine alternatives analysis, "[a]s soon as the more powerful policymakers decided that rail was it, [and] that was it" (as belatedly reported by the Expert Review Panel's final Chairman, Prof. Scott Rutherford, in an out-of-state speech, which he delivered in early 2003, and which is available in a video format).

92. On May 28, 2003, Defendant SOUND TRANSIT executed an agreement in the form of an "Offer Sheet" with Defendant BURLINGTON NORTHERN SANTA FE RAILWAY CO. that, if reduced to a legally-enforceable contract between the parties, would obligate the agency to (a) lend its credit on an unlimited basis to take financial responsibility for each component and every element, both known and also unknown, from permitting for, construction of and mitigation due to high-impact alterations to the natural-and-built environment in order to increase the number of rail tracks within the company’s right-of-way, between Seattle and Everett, including but not limited to filling sensitive wetlands, other unstable areas, and related federal waters (which thus violates the Washington State Constitution’s prohibition against lending of credit to benefit a private party); (b) make further payments to the company totaling nearly $300 million, with short-term debt financing provided by the company, which, together with earlier debt of at least $993 million undertaken by Defendant SOUND TRANSIT to acquire an interest in the Seattle Downtown Transit Tunnel and for other purposes, violates the agency's $1.052 billion limit on "combined" short-term debt and long-term debt under 'Sound Move," and which, together with prior expense commitments, further violates the agency’s $3.914 billion limit on total "Phase I" costs under "Sound Move"; and (c) purchase railroad right-of-way and trackage, from Lakewood to Nisqually, neither within the junior taxing district, nor authorized by its adopted-and-approved "system and financing plan," which therefore is either ultra vires or constitutes a extension of the agency’s "system and financing plan" beyond the scope for "Phase I" presented to regional taxpayers for funding, either on March 14, 1995 (which was rejected), or else on November 5, 1996 (which was passed after large reductions).

93. Defendant SOUND TRANSIT's adopted "Financial & Engineering Principles for RTA Debt Management" mandate, as to any such extension beyond the approved scope for "Phase I," that the agency "may undertake additional projects within the sixteen year construction period (before 20011) and beyond the Phase I system, only if Phase I bonds are paid off and if subregional equity is maintained" ("Financial & Engineering Principles for RTA Debt Management" at page 1).

94. On December 4, 2003, Defendant SOUND TRANSIT’s Finance Committee adopted a "Do Pass" recommendation for commitment of agency funds to buy both services and also related transportation products from Defendant KINKISHARYOU/MITSUI, yielding a "total authorized contract amount not to exceed $131,798,794 " pursuant to Motion No. M2003-123, which, together with prior expense commitments, violates the agency’s $3.914 billion limit on total "Phase I" costs.

PRAYER

Plaintiff WILL KNEDLIK prays this Honorable Court to declare, as follows, that:

1. Defendant SOUND TRANSIT is ordered to stop accepting receipt of MVET revenues from the Washington State Department of Licensing; to instruct Department officials, in writing, to terminate all collection activities as to MVET on its behalf; and to disgorge by (a) refunding all MVET paid by Plaintiff KNEDLIK, on July 30, 2003, under protest, and (b) asking the Department to (i) refund MVET to other regional taxpayers similarly situated and (ii) hold other MVET funds;

2. Defendant SOUND TRANSIT is ordered to make all preparations legally necessary for the agency to start the partial "tax rollback" represented in "Sound Move," at pages 6 and 36, not-later-than April 1, 2007, unless regional taxpayers have approved extension of those existing local-option taxes not repealed by Initiative 776, based on full disclosure to regional taxpayers of all information required pursuant to (a) all applicable state statutes, (b) all further commitments made to King, Pierce and Snohomish counties through terms and conditions of the agency's "system and financing plan" adopted on October 29, 1994 (as amended thereafter through any and all "minor modifications" lawfully adopted) and through parallel duties under statutory contractual provisions (prior to "minor modifications" adopted within the agency's "Sound Move" amendment), and (c) all additional obligations created, lawfully, within Resolution No. 75 (as referenced in the ballot title);

3. Defendant SOUND TRANSIT is ordered to present no local-option funding proposal of any kind to regional taxpayers for the financing of any element for any "Phase II" program beyond its official "system and financing plan," including those "minor modifications" made pursuant to its "Sound Move" amendment thereto, until the agency (a) fulfills its obligations to obtain "annually a comprehensive performance audit through independent audit services" for 1995 (pursuant to Motion No. 4), and its said obligations under said motion and its parallel obligations to "perform an annual comprehensive performance audit through independent audit services" for 1996, for 1997, for 1998, for 1999, for 2000, for 2001, for 2002, for 2003, for 2004 and for 2005 (pursuant to Resolution No. 75), and (b) has made each annual performance audit available, without charge, from its current website homepage at www.soundtransit.org, or similarly on any subsequent website, at least 60 days before the scheduled balloting for local-option taxes for such "Phase II";

4. Defendant SOUND TRANSIT is ordered to adopt no annual budget or financial policy and to enter into no financial-or-legal undertaking violative of its statutorily-required, officially-adopted and formally-approved "system and financing plan," pursuant to RCW 81.112.030(6), and of its parallel statutory contractual obligations legally owed to King, Pierce and Snohomish counties as to negotiated limits on its lawful authority; and, if any such policy, budget or other undertaking is nominally adopted before entry of such Order, hereunder, to void each violative provision ab initio;

5. Defendant SOUND TRANSIT is ordered to execute no legally-enforceable contract with Defendant BURLINGTON NORTHERN SANTE FE RAILWAY CO. violative of the Washington State Constitution, or of ultra vires limitations upon its lawful authority; and, if any such contract is executed prior to entry of such Order, hereunder, to void each and every such provision ab initio;

6. Defendant SOUND TRANSIT is ordered to execute no legally-enforceable contract with Defendant KINKISHARYOU/MITSUI, or with any successor to such joint venture in any legal form, violative of ultra vires limitations upon its lawful authority; and, if any such contract is executed prior to entry of such Order, hereunder, to void each and every such provision ab initio;

7. Defendant SOUND TRANSIT is judicially determined, pursuant to appropriate findings of fact and conclusions of law, to have acted in "bad faith" toward regional taxpayers, through its current officers, its present senior managers, and certain other named agents by (a) their negligent misrepresentations or intentional frauds as to its legal right to deny a partial "tax rollback" to every regional taxpayer, after Initiative 776 passed, so as to overtax district residents by up-to-$3 billion through ultra vires MVET levies; (b) its acts to float debt beyond its negotiated and otherwise- legally-enforceable limits of $800 million on long-term debt and of $1.052 billion on "combined" long-term debt and short-term debt so as to burden taxpayers for up-to-$1.448 billion in ultra vires debt; (c) negligent misrepresentations or intentional frauds on the U.S. government as to its falsely- purported legal authority to borrow $2.5 billion so as to exceed its actual $1.052 billion "combined" debt ceiling by nearly 150 percent; (d) its failures to (i) refinance approximately $350 million of its debt between early 2002 and mid 2003 to reduce interest costs for taxpayers, substantially, between 2002-03 and 2028; (ii) revise its lines of business to be cost-effective as commercial-rail and light-rail capital costs soared; (iii) obtain "a comprehensive performance audit through independent audit services" for 1995, 1996, 1997, 1998, 1999, 2000, 2001, and 2002; and (iv) incorporate its obligations for a partial "tax rollback" in its day-to-day financial-and-budget planning processes to this date; (e) its misrepresentation to Justice Sanders and to the entire Washington State Supreme Court on June 10, 2003, in open court, respecting its purportedly commitment to fulfilling all of its obligations stated within Resolution No. 75; (f) its negotiations of (i) unconstitutional and (ii) ultra vires terms with Defendant BURLINGTON NORTH SANTA FE RAILWAY and (iii) ultra vires agreements with Defendant KINKISHARYOU/MITSUI; and (g) such additional wrongdoing by Defendant SOUND TRANSIT as identified during the pendency of causes of action herein stated;

8. Defendant SOUND TRANSIT's officers and other Board members determined to have acted in furtherance of "bad faith," either to this date or hereafter, as established by findings of facts and by conclusions of law, are constitutionally and legally subject to recall from public office for cause pursuant either to passive nonfeasance or else to affirmative malfeasance or misfeasance, subject further to recovery of all monies paid over to them by the agency, and subject finally, both jointly and also severally, for all losses and all damages occasioned by nonfeasance, misfeasance or malfeasance, as incurred by the agency, and as suffered by all residents of the junior taxing district;

9. Defendant SOUND TRANSIT's senior managers, who are identified by positions and by name hereinabove, determined to have acted in furtherance of "bad faith," either to this date or hereafter, as established by findings of facts and by conclusions of law, are subject to termination, for cause, from employment by the agency, subject further to recovery of all monies paid over to them by the agency during their terms of managerial employment, and subject finally, both jointly and also severally, for all losses and all damages occasioned by nonfeasance, misfeasance or malfeasance, as incurred by the agency and as suffered by all residents of the junior taxing district;

10. Plaintiff KNEDLIK has been harmed by Defendant SOUND TRANSIT's acts, and he will suffer further-and-irrevocable harm from the agency unless declaratory relief is granted;

11. Plaintiff KNEDLIK is granted leave to amend this Complaint as appropriate, as to any and all before-or-after occurring events later discovered, including for injunctive and for any such further relief, as required, and as the Court may deem just and equitable in the premises; and

12. Plaintiff KNEDLIK shall be and is awarded costs, fees and other litigation expenses, as a taxpayer, in furtherance of similar interests of other regional taxpayers of the junior taxing district.

DATED this 8th day of December, 2003.

___________________________

Will Knedlik, a Taxpayer, Pro Se
2025 Rose Point Lane
Kirkland, Washington 98033
425-822-1342

SUPERIOR COURT OF STATE OF WASHINGTON IN AND FOR COUNTY OF KING

_______________________________

)
WILL KNEDLIK, a taxpayer, ) CAUSE NO.
)
Plaintiff, ) SUMMONS ON PLAINTIFF WILL KNEDLIK'S
) COMPLAINT FOR JUDICIAL DECLARATIONS
v. ) ORDERING SOUND TRANSIT TO DISGORGE
) MOTOR VEHICLE EXCISE TAXES RECEIVED
SOUND TRANSIT, legally known ) SINCE VOTERS ADOPTED INITIATIVE 776,
as CENTRAL PUGET SOUND ) ROLL BACK LOCAL-OPTION TAXES UNDER
REGIONAL TRANSIT AUTHOR- ) "SOUND MOVE" TERMS ON MARCH 31, 2007,
ITY, and formerly known as "RTA"; ) AND VOID ITS "OFFER SHEET" WITH BNSF,
BURLINGTON NORTHERN ) AS UNCONSTITUTIONAL AND ULTRA VIRES,
SANTA FE RAILWAY CO., a ) AND ITS PROCUREMENT PROCESSES WITH
Delaware corporation; and ) KINKISHARYOU/MITSUI, AS ULTRA VIRES; &
KINKISHARYOU/MITSUI, a ) FINDING "BAD FAITH" TOWARD REGIONAL
joint venture of unknown form, ) TAXPAYERS BY THE AGENCY, ITS CURRENT
) OFFICERS, ITS PRESENT SENIOR MANAGERS,
Defendants. ) CERTAIN DIRECTORS, AND OTHER AGENTS
_______________________________ )

TO THE DEFENDANTS:

A lawsuit has been started against you in the above-entitled Court by Plaintiff hereinabove-indicated. Plaintiff's claims are stated in a written Complaint, a copy of which is served upon you with this Summons.

In order to defend against this lawsuit, you must respond to the Complaint by stating your defenses, in writing, and by serving a copy on the person signing this Summons within twenty (20) days after the service of this Summons, excluding the day of service, or within sixty (60) days, also excluding the day of service, if said service is made upon you outside the State of Washington, or a default judgment may be entered against you without notice.

A default judgment is one whereby Plaintiff is entitled to what is asked for because you have not responded. If you serve a notice of appearance upon the undersigned person, then you are entitled to notice before a default judgment may be entered against you.

If this Summons and the attached Complaint have not been filed in the above-entitled Court already, then you may demand that the Plaintiff file this lawsuit with the Court. If you do so, then the demand must be in writing, and it must be served upon the person who signed this Summons. Within fourteen (14) days after you serve such written demand, Plaintiff must either file this lawsuit with the above-entitled Court, or else service on you of this Summons and the attached Complaint will be void.

If you wish to seek the advice of an attorney in this matter, then you should do so promptly so that your written response, if any, may be served on time. This Summons is issued pursuant to Rule 4 of Superior Court Rules of the State of Washington and pursuant to R.C.W. 4.28.180.

DATED this 8th day of December, 2003.

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