The timeline for federal officials to approve the Honolulu rail project’s recovery plan keeps getting pushed back.
In February, Honolulu Authority for Rapid Transportation officials had hoped to finally win that long-sought approval by this month, along with the release of the final $744 million in federal funds for the project.
On Thursday, however, they released a two-week-old letter from the Federal Transit Administration indicating the plan’s approval won’t come until early next year, when the final construction costs should be clearer.
Despite that, HART Executive Director Andrew Robbins said the rail project has enough cash to get to early next year thanks to the city’s most recent bond float.
“In the short term we’ll continue to have to use local money,” Robbins told reporters outside HART’s Alii Place headquarters. “But overall it would not be a major hit on the project at all.”
The FTA’s March 29 letter did express confidence in HART’s revised $9.19 billion budget for the project, calling its revised financial plan “reasonable.”
But the letter from the FTA’s new Region IX administrator, Ray Tellis, goes on to detail the same concerns that it outlined in a statement sent to Civil Beat on Wednesday.
Rail’s federal partners remain worried about the actual costs associated with switching to a so-called “public-private partnership” in order to finish the project — an unprecedented move in U.S. transit system construction.
The procurement of that contract, valued at around $1.4 billion, has already seen months of delays and now isn’t expected to be awarded until January.
The FTA proposes releasing rail’s remaining $744 million in federal funding starting in February, once that contract is issued.
Neither the letter nor an accompanying report from Hill International, the consultant monitoring rail for the FTA, mentioned the recent federal grand jury subpoenas levied at HART. Critics contend those orders leave reason to doubt rail will ever see its remaining federal dollars. Robbins and project officials, meanwhile, insist the FTA is proceeding with its approvals regardless of the federal criminal investigation.
Additionally, the FTA wants to see more of the city’s dedicated $214 million contribution to rail costs spent earlier. Those dollars were a condition of the project’s 2017 bailout deal by state leaders, who wanted the city to put more “skin in the game.”
Under the latest plan, that city spending wouldn’t start in earnest until 2026, when rail is slated to start operations. Tellis says the FTA wants to see the city cover more of that spending earlier to avoid lumping it all in with operational costs.
Here’s a chart from HART’s most recent version of the recovery plan, filed in 2018. It shows the agency’s proposed schedule for spending city general fund dollars to help build rail:
The bulk of the city payments starts in 2026. However, in HART’s 2017 version of the recovery plan, the agency had put that $214 million earlier in the timeline:
The FTA wants HART to revert back to the 2017 schedule. But HART’s more recent strategy has been to push those city dollars into later years when it doesn’t think they’ll be needed.
At his news conference Thursday, Robbins said he will try to convince Tellis and other FTA officials to move up approval of the recovery plan and resume federal payments earlier.
The rail agency plans to share with Tellis an independent cost estimate for the remaining construction under a public-private partnership when he visits Honolulu later this month to discuss the plan.
Tellis’ letter, Robbins points out, says that the FTA won’t release the remaining $744 million until “the cost of the procurement is identified and HART can demonstrate its financial ability to fund the contract within its existing financial plan.”
That doesn’t necessarily have to be next year, Robbins said.
“They want to have a better understanding of what the cost of City Center was, and they don’t believe they can get that until next February,” he said, referring to the project’s final four miles of elevated track and eight stations heading into town past Middle Street. “We believe we can show them that” in meetings at the end of the month.
Read the FTA letter on rail’s recovery plan:
Read Hill International’s assessment of rail’s recovery plan:
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