The board of the Honolulu Authority for Rapid Transportation and its executive director Dan Grabauskas agreed to part ways Thursday morning, as HART looks for a fresh start for the city’s behind-schedule, over-budget rail project.

The board appointed one of its own members, Mike Formby, to take charge until a permanent replacement is found. Formby is Honolulu’s director of transportation. Board chair Colleen Hanabusa met with Mayor Kirk Caldwell after the meeting and got his approval for the move and Formby resigned his position on the HART board.

The board also appointed a group to look for a permanent replacement, to be led by board member Colbert Matsumoto.

HART Executive Director Dan Grabauskas gives press conference on auditor’s report coming out tomorrow. 14 april 2016

Dan Grabauskas will receive a year’s salary amounting to $282,250.

Cory Lum/Civil Beat

Grabauskas was first appointed to run Honolulu’s rail project in March 2012. The HART board renewed his contract until April 2018, but reserved the right to fire him at any time.

Because his contract was severed early, he’s entitled to one year of salary amounting to $282,250.

Thursday was to be his last day on job. But under the terms of his contract, he will be on the payroll until Oct. 17. His severance settlement includes that salary plus another year.

Grabauskas received total yearly compensation of $299,250, which included housing and transportation allowances.

As executive director and chief executive office, Grabauskas found himself in the middle of controversies that have plagued the project.

The 20-mile, 21-station line was initially supposed to extend from Kapolei to the Ala Moana Center at a cost estimated at about $5.26 billion until late last year.

But the project has blown its budget and the cost is now pegged at $8.3 billion. One federal estimate puts it at as much as $10.1 billion.

Because of budget overruns, Caldwell has called for the project to stop at Middle Street until the city can find the funds to extend it to Ala Moana. Officials estimate they need another $1.5 billion to complete it.

“The board is very thankful to Dan for all his years of dedicated service to the rail project,” Hanabusa said after the meeting. “The rail project got off to a strong start because of his energy and enthusiasm.”

But she declined to detail the reasons behind Grabauskas’ departure. And in a separation document, HART  agreed not to discuss issues related to Grabauskas’ employment beyond what was contained in a press release.

“This is a matter of all of us thinking of one thing, which is what is the best interest of HART, what is the best interest of the City and County of Honolulu and the people, and the project itself,” Hanabusa said.

She said that Formby’s knowledge of the project, relationships in city and state government and familiarity with the HART staff make him the ideal interim head.

“You can’t ask for anyone better to step in and hit the ground running than Michael Formby,” she said.

Those qualities will be particularly important, she said, when Honolulu officials, including Caldwell, meet with the Federal Transit Administration in San Francisco at the end of the month. The HART board and the city must present a “recovery plan” for a revised project to the FTA by the end of the year.

Hanabusa said she expected to depart as chair of the HART board by the November general election, when she will be on the ballot as the Democratic candidate for Hawaii’s 1st Congressional District.

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