Residents who rely on public transit to get around Issaquah may be the latest victims of the budget crisis gripping local and state governments.

The City of Issaquah is reconsidering whether to fund its share of a partnership agreement to increase the area covered by the Route 200 bus, which currently services a loop route between the Newport Way Park and Ride, the Issaquah Community Center, the Fred Meyer store on East Lake Sammamish Parkway and Pickering Barn.

Under the partnership agreement, the City of Issaquah, King County Metro, Port Blakely Communities, Timber Ridge at Talus, and the Talus Residential Association would fund the expansion of the Route 200 to serve Highlands and Talus residents, beginning in Sept. 2010.

It was to be another feather in the cap for Metro’s “Transit Now” initiative, where the King County agency provides 2 to 1 matching funds to encourage cities and private groups to contribute to better bus service in their communities.

But with money tight in the city, Mayor Ava Frisinger did not include the approximately $80,000 needed to begin the service as scheduled in Sept. 2010 in her draft budget for next year.

The city council is currently reviewing the budget. It will hold a public hearing on budget items on Dec. 7, before the scheduled adoption Dec. 21.

The annual cost for the city to expand the Route 200 will be $234,000, a contribution they will make over the five year period of the program.

The total annual cost for the route expansion is estimated at $1,389,000 – the lion share to be paid by Metro, with remaining amount paid by the city, and the Talus and Highlands developers.

After the five years are up, King County Metro will take over full funding of the service, if ridership numbers deem it necessary.

The Mayor’s decision to not include the Transit Now funding in her proposed budget for 2010 was brought to the attention of The Reporter by Highlands resident Chris Hawkins, who, although understanding of the city’s budget constraints, was concerned that the city’s handling of the Route 200 expansion did not effectively address more serious planning issues.

“Now that money is tight, the city has already made some serious cuts in staff, and it is time to look at some of these ‘nice to have’ projects,” he wrote in an e-mail to The Reporter. “The route 200 expansion is a ‘nice to have’, and if it gets cut, so be it. But here are the parts that bother me. If I look at the 2010 proposed budget, there are still a lot of what I consider ‘nice to have’ projects. Why is one of the few projects in Issaquah Highlands among the first to get the axe?”

Hawkins said he was suspicious that the decision to expand the Route 200 in the first place was not motivated by the present needs of residents, but in order to mitigate the traffic problems that would undoubtedly be caused by the transfer of development allowances from Park Pointe to the Port Blakely development in the Highlands.

Under a Transfer of Development Rights (TDR) agreement supported by the City of Issaquah, land at Park Pointe on Tiger Mountain would be preserved – in return the owners of that land would receive permission to exceed the city’s own limits on residential, commercial and office space density in the Highlands.

According to a memo from Nelson/Nygaard Consulting Associates of Portland, Ore., to City of Issaquah Major Development Review Team, the addition of 1,467 Equivalent Residential Units (ERUs), on top of the previous maximum of 6,479 ERUs, would result in approximately 1,317 more vehicles traveling along Highlands Drive between High Street and Discovery Drive in the evening peak hours.

“This is going to impact a lot of people in Issaquah and Sammamish,” Hawkins said. “If you have a look at the traffic up here now, it is not unreasonable to think it might be seven times that.”

City of Issaquah councilmember Fred Butler, a member of the Sound Transit Board of Directors and the King County Regional Transit Committee, said that the 200 expansion was “a budget decision we have to make.”

He said it would be a number of items being considered by the council in coming weeks, which included returning eliminated staffing positions, or funding other projects.

“I’m supportive of (the route 200 expansion) right now, but there are other things under consideration,” Butler said. “We’ve got some juggling to do.”

The councilor added that if the city decided not to fund the project in this budget, it may mean only a delay of three or four months, when the program could begin in the first quarter of 2011, paid for out of that year’s budget.

But there are other partners to consider, the Talus developers and Port Blakely.

Butler said it had been indicated to him that Port Blakely would be supportive of delaying the program, given the slower than expected development of the Highlands.

It is understood that the Talus group are more eager to begin the route expansion.

If the extension is not funded it will require an amendment of the funding agreement with King County Metro, Port Blakely, and Talus.

Councilmember Joshua Schaer, who along with Butler is on the City of Issaquah’s Transportation Committee, said that much of the debate over the route 200 service had to do with the timing.

“If we defer it, then that might be a better fit with the opening of the new Swedish Hospital in the Highlands,” he said.

Speaking to the issue of increased density in the Highlands build plans he said “in terms of what traffic to expect, it is a little hard to say of we haven’t seen the development yet.”

He added that the transportation committee was listening to calls from the Squak Mountain community to provide bus service there, and have been considering how to provide a couple of morning and evening trips by routes 927 or 269 to that area.