City officials are considering their next move with Honolulu’s rail project after federal officials informed them Wednesday that the construction could ultimately cost taxpayers up to $8.1 billion.
That estimate was not made public, and two days later on Friday, rail officials revealed only that the locally estimated cost had risen to $6.9 billion as of March 1.
Over the weekend, city officials acknowledged that the Federal Transit Administration now estimates the rail project could ultimately cost from $7.7 billion to $8.1 billion.
The original price tag was $5.2 billion.
Federal officials also expect the project to be completed in 2024 rather than 2022.
“We know we have got to finish part of this rail system,” said Colleen Hanabusa, a former congresswoman and chairwoman of the board of the Honolulu Authority for Rapid Transportation, at a press conference Monday outside the Frank Fasi Municipal Building. “The question is, how much can the people and the City and County of Honolulu afford?”
Mike Formby, who leads the city Department of Transportation Services and serves on the HART board, said city officials will spend the next two to three months reviewing how much money the city has to build rail and what the options are for completing all or part of the project.
Options could include shortening the rail line, decreasing the number of stations, slashing the number of rail cars or raising taxes to fund the entire project.
City officials previously feared that changing the project design and technology would risk $1.55 billion in federal funding. But Formby and Hanabusa said the FTA is willing to work with the city now, rather than insisting on construction of the full 20-mile, 21-station steel-on-steel rail line.
Neither Hanabusa nor Formby ruled out going back to the Legislature and the City Council to ask for more money.
But City Council Chairman Ernie Martin said in a statement Monday that he doesn’t support extending the general excise tax surcharge past 2027.
Hanabusa said lawmakers have also told her not to expect to receive any more money for the project. The Legislature passed a bill last year that extended a tax surcharge for five years, at the urging of HART officials and Caldwell, who said the funding was necessary to cover budget shortfalls. The Council followed suit in January.
Formby said Monday that the city is still figuring out what the operating costs for rail will be.
“Unfortunately we don’t have all the pieces of the puzzle yet,” he said, noting that the operating costs would differ depending on the length of the rail line and number of stations and cars. “We are working on that and at some point we will be able to tell the City Council and the residents of this island what it will cost to operate the system on an annual basis.”
Formby and Hanabusa said HART staff members will spend the next several weeks reviewing the FTA report and its higher cost estimates for possible inaccuracies.
“We don’t know exactly what the $8.1 billion means yet,” said Formby, noting that he and Hanabusa haven’t yet read the full report explaining the new cost estimate. “We have to negotiate with the FTA and come to an agreement as to what it’s going to cost to build our system based on our revenue stream.”
Hanabusa said part of the cost increase is because the FTA thinks the project needs a much bigger contingency fund than it currently has. She said she expects HART to revise its $6.9 million cost estimate for the project by the week of June 6.
There will also be a project oversight committee meeting May 24, and Hanabusa is scheduling a special board meeting on the new cost estimate.
Formby and Hanabusa declined to provide a copy of the report Monday, telling reporters to file freedom of information requests with the FTA because it is a draft.