In September, local officials finally delivered what they described as the Honolulu rail system’s full recovery plan — a move they hoped would sway the Federal Transit Administration to release its remaining $744 million dedicated to the project.
At the time, rail leaders said to expect extensive vetting by the FTA.
But since then it’s also become clear that the recovery plan — a 213-page blueprint for how to move the multi-billion-dollar transit project past its budget woes — is still very much a work in progress, with plenty of pukas left to fill.
The board overseeing rail has so far declined to approve the recovery plan until it’s more fleshed out. In October, a month after its submission, board members asked the rail agency’s staff to bring it to them once it more closely resembles a final draft.
Still, Honolulu Authority for Rapid Transportation Executive Director Andrew Robbins says the plan is in solid shape.
“It wasn’t necessarily complete, but that doesn’t mean it’s a static document,” Robbins told Civil Beat on Friday. “We can still take comments and approve it.”
Whether the FTA eventually approves the HART recovery plan — and releases the rest of its federal funding — remains a key issue for the future of the rail project. HART now says it can deliver the rail system for just over $9 billion, including financing.
But that budget relies on the FTA agreeing to provide its full $1.55 billion share to Honolulu rail. The FTA has already provided more than $800 million for the project.
Robbins said he’s optimistic that rail’s federal partners will approve the plan sometime before June 30. That’s the city’s deadline to avoid borrowing extra money to make up for the withheld federal money, he said.
“We will have to answer a lot of questions and make a lot of revisions, but I’m highly confident,” Robbins said.
HART and FTA officials so far have discussed the plan over the phone, but Robbins said he pressed this week for the two rail-oversight agencies to hold face-to-face meetings either later this month or in early February.
“We’ve been very patient up until now,” Robbins said Friday. “Now we’re starting to push.”
Damien Kim, chairman of the HART board, and Terrence Lee, vice chairman, said last week they haven’t heard of any problems with the vetting so far. Still, they and their colleagues expect to see more work done on the recovery plan.
“My discomfort with using the word ‘approve’ is pretty high,” HART board member Wes Frysztacki said when board approval was considered in October.
And despite the submitted plan’s update on how to fund rail, HART board member Ember Shinn encouraged staff in October to keep working on it and address “the very serious concerns of whether financially we can move forward with this project” as well as “the risks we face down the road.”
She declined to discuss the issue further last week.
In December, HART’s chief financial officer, Robert Yu, told the board that agency staff had spent the past few months re-evaluating and refining the risks that could drive up project costs as part of their ongoing recovery plan work.
“I think what was lacking a little bit, you know, in the past was a comprehensive and proper evaluation, identification and valuation of all the risks associated with the contracts and the project,” Yu told the agency’s board.
HART’s staff members “have been logging some pretty long hours for the last few months” identifying risks and estimating their “value” for each of the contracts to build rail, Yu said.
Once the FTA receives that work, “they’re probably going to have many more questions,” he added.
Robbins said he doesn’t expect those refinements to change HART’s official price estimate to build the full 20-mile, 21-station system, which has hovered at more than $8 billion for the past year and a half.
If risk-related costs rise under one contract, the agency will look to bring the costs down somewhere else, he said.
On Thursday, FTA officials say they did receive the additional information from HART on Dec. 22. They may need more details as they continue to review the recovery plan and said they couldn’t estimate when they might be done.
“We have not issued any formal correspondence to HART since receiving the plan,” the FTA said in a statement provided to Civil Beat.
Nonetheless, the FTA has already asked HART for more details including how it came up with its tax-revenue forecasts for rail, according to Yu.
In addition to the federal money, rail will primarily rely on nearly $6 billion in general excise tax revenue and more than a $1 billion in hotel tax revenue under the recovery plan.
Those state tax dollars make up the lion’s share of the budget — and Robbins said it’s a big reason he’s confident FTA will approve the financial plan.
One key question that remains unanswered is where the city will find the $54 million in “additional funds” required for rail that’s listed in the recovery plan. So far, city officials say they don’t know.
“We will have to answer a lot of questions and make a lot of revisions, but I’m highly confident.” — Andrew Robbins, HART executive director
Meanwhile, the City Council voted to approve the recovery plan in October — but only after HART officials told its members that the FTA wouldn’t seriously review the plan without their affirmative vote.
Last summer, Honolulu Mayor Kirk Caldwell, one of the island’s most outspoken rail advocates, raised concerns that the state’s latest rail bailout package needed an additional $548 million to show the FTA it could handle the “stress test” of a 10 percent increase in capital costs.
Caldwell sparred with state lawmakers over the issue during their special session on rail, with tempers flaring in their private meetings.
“It’s going to be a long process,” Krishniah Murthy, a HART senior advisor and the agency’s former interim executive director, said last year. “This will take some time.”