What’s the hurry?

With heavy, above-ground construction set to start any day, rail opponents have revved up their criticism of the $5.2 billion project.

They charge that it’s “reckless” to move forward with construction without any guarantee that Honolulu will get the $1.55 billion in federal funds it’s counting on to complete the 20-mile elevated line.

It may be, but it’s certainly something that’s done elsewhere, a Civil Beat investigation of other rail projects across the country found. Some followed a path similar to Honolulu’s, beginning construction using local dollars before getting a commitment of federal funds.

  • In New York, construction on the $7.4 billion Long Island Rail Road East Side Access project began more than five years before the feds signed a Full Funding Grant Agreement (FFGA) with the state in December 2006.
  • In Portland, construction began in June 2011 on a $134 million bridge, the centerpiece of the area’s $1.5 billion Portland-Milwaukie rail project. The transportation agency didn’t apply for the FFGA until August and it’s still not signed.
  • In San Francisco, tunnel construction began on the $1.6 billion Central Subway project after the Federal Transit Administration gave the city its second of two Letters of No Prejudice in February. The FFGA is expected later this year.

“Most every New Starts project receives multiple LONPs,” the FTA told Civil Beat in an email in March, referring to the documents local governments are using to begin construction before receiving a federal funding guarantee.

Honolulu is a New Starts project that has received two such letters so far, the first allowing the moving of utility lines and the most recent permitting construction of columns and the rail line itself.

Opponents like former Hawaii Gov. Ben Cayetano have complained that the city shouldn’t have awarded contracts until all the money was accounted for. The mayoral candidate insists that the Honolulu Authority for Rapid Transportation should wait until it secures financial backing.

“No reasonable person in my mind would ever give contracts for which there really is no money. You try doing that, you try writing a check when you don’t have money in the bank account,” Cayetano said at a recent press conference. “Peter Carlisle used to prosecute people like that. What the hell is the difference?”

He said the LONP wasn’t a true green light; it only meant the FTA told Honolulu it can spend its own money, stopping short of guaranteeing federal funds. These federal letters generally contain explicit language stating they should not be construed to represent a financial guarantee, as did the one for Honolulu.

Cayetano said the city has promised to undo any work if a lawsuit he and other community leaders have filed succeeds in stopping the project or if the FFGA doesn’t come through.

“The problem with that kind of thinking, it just shows how reckless these people are, because in order to do that, they’d have to do it with taxpayers’ money,” Cayetano said. “I think what’s happened is malfeasance. They have a fiduciary duty to the people of this state, this city, and they have clearly breached it.”

Indeed, interim HART Chief Toru Hamayasu has said it’s cheaper to build columns now and tear them down later rather than waiting for the FFGA to start construction. That’s because of delay claims from contractors and inflation in the cost of materials and labor.

City Council Vice Chair Ikaika Anderson expressed skepticism about the claim, and after flirting with a resolution demanding a halt to construction, is still waiting on a full explanation from Hamayasu on the calculations.

“I’m also concerned that building these columns only to have them sit there and then be taken down could possibly be a monument of embarrassment,” Anderson said at a Budget Committee hearing last month.

Civil Beat’s review found Honolulu’s approach is consistent with what several other cities have done both when it comes to the timing of major contracts and the start of heavy construction. The feds in February approved Honolulu spending up to $185 million of local money. HART has yet to apply for the federal funds and hopes to have a deal signed by October.

The FTA provided a list of recent projects that received approval to start construction before a completed FFGA.

  • Portland Milwaukie LRT
  • Houston North LRT
  • Houston Southeast LRT
  • Draper LRT in Salt Lake County
  • Central Florida Commuter Rail
  • San Francisco Central Subway
  • St. Paul – Minneapolis Central Corridor LRT
  • Denver EAGLE commuter rail

Civil Beat looked at these and other rail projects to see whether Honolulu is being fiscally irresponsible. We found some that started heavy construction before federal funding and others that started pre-construction work early. Most seemed to consider a Record of Decision (ROD) or LONP as a “green light” to move forward.

Silicon Valley Berryessa Extension Project fell somewhere in the middle. The $2.3 billion Santa Clara County project received a $900 million grant commitment from the FTA March 12.

Aside from a bridge and other minor work, the project held off on major construction until the FFGA was signed. An official groundbreaking is set for April 12.

However, the project was able to do significant preparation work as a condition of the purchase of the railroad corridor. That work, which included clearing the corridor, was done in 2009 before the transportation project had been defined, said Bernice Alaniz, BART Silicon Valley communications director.

“Every situation is different depending on how that project and those activities are integrated with other activities in the city that the project is in,” she said. “For instance, in putting in the BART bridge, we decided if we can do something concurrently, then it’s going to get done rather than have to redo it later.”

While the funding is a factor, there is no fixed track that all projects follow.

“You have to look at each project individually,” Alaniz said. “There’s so much critical coordination and timing that all those things have to be considered in how you advance the work. It’s a fine-tuned machine to make that happen.”

Here’s a breakdown of what we found out from each city we researched.

Portland-Milwaukie Light Rail Transit

  • Total project cost: $1.5 billion
  • FFGA: Expected this spring. Application submitted Aug. 19, 2011.
  • LONP: Received December 2010.
  • Construction: Started July 1, 2011. Included piers for bridge, relocation of utility lines.
  • Miscellaneous: Date of entry into Final Design, March 29, 2011. Project expected to complete design phase soon.

Houston North Light Rail Transit

  • Total project cost: $756 million
  • FFGA: $450 million funding guarantee, signed Nov. 28, 2011.
  • LONP: One in 2009 to allow Metro to incur costs for utility relocation.
  • Construction: Started prior to FFGA. Unclear exactly when, but local dollars were also being used.

Draper Light Rail Transit in Salt Lake County

  • Total project cost: $194 million
  • FFGA: Signed in December 2011 ($116 million federal, remainder local).
  • Miscellaneous: FTA issued a Record of Decision in September 2010, at which time some construction started, including utilities work and removing old track. ROD specifically says, “Neither the FEIS nor this ROD constitute an FTA commitment to provide financial assistance for the construction of the project.”

Denver, Eagle Commuter Rail

New York, Long Island Rail Road East Side Access

  • Total project cost: $7.4 billion
  • FFGA: Awarded December 2006. To cover $2.6 billion. Received $2.2 billion through FY2012.
  • LONP: Six letters were issued for various construction activities before the FFGA, according to a Metropolitan Transportation Authority spokesman. One, issued in 2001, gave the city permission to spend up to $1.1 billion without losing reimbursement eligibility.
  • Construction: Work started August 2001.

New York, Second Avenue Subway Phase I

  • Total project cost: $4.9 billion
  • FFGA: Awarded November 2007. To cover $1.4 billion. Received $1.2 billion through FY2012.
  • Construction: Early work started January 2007 under Early System Work Agreement, instead of LONP.
  • Final Design: April 2006.

San Francisco, Third Street Light Rail Phase 2, Central Subway

  • Total project cost: $1.6 billion
  • FFGA: Expected later this year, according to a spokeswoman for the San Francisco Municipal Transportation Agency. To cover $942 million. Received $72 million through FY2012.
  • LONP: Received second of two from FTA in early 2012. The letter, according to the San Francisco Chronicle, allows the city to “dig a tunnel under Stockton and Fourth streets, from the downtown Caltrain station to Chinatown.”
  • Construction: Tunnel work began soon after LONP.

San Jose, Silicon Valley Berryessa Extension Project

  • Total project cost: $2.3 billion
  • FFGA: Signed March 12. To cover $900 million. Received $11 million through FY2012.
  • Construction: Officially breaking ground in April. However, rail corridor was cleared in 2009 after the property was purchased for a “transportation project” that had not yet been defined, according to a BART Silicon Valley spokeswoman.

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