As rail faces another potential budget crisis, Mayor Kirk Caldwell on Monday suggested a “phased” approach to finish the transit project’s last 4 miles to Ala Moana should it run out of funding again.

He was critical of the Honolulu Authority for Rapid Transportation’s continued pursuit of its long-sought public private partnership to get rail done. Caldwell’s administration surprisingly withdrew from that process a little over a week ago. The rail agency is still proceeding with the procurement alone.

HART is trying to get a more limited deal done before year’s end, but agency officials say they can’t offer any details to the public or even to city leaders because of the state’s procurement code which requires confidentiality.

“We’re not on the same page, and HART needs to get on the same page with the city,” Caldwell said during a City Council hearing Monday. “Let’s get it done and let’s quit being secretive about it.”

Mayor Caldwell testifies at HART meeting held at Kapolei Hale.
Caldwell testified before the HART board on P3 procurement in 2018. Two years later, he and HART leaders are at odds over that approach to award rail’s remaining major construction work. Cory Lum/Civil Beat

Extending rail’s so-called P3 procurement to the end of the year could leave “a shipwreck” for his successor and a City Council with mostly new members to deal with if the effort fails, Caldwell said.

The City Council on Monday sought an update on the project — and a reckoning of its status — amid a flurry of recent setbacks that threaten to drive up costs and delay completion even further. The joint hearing of the council’s budget and transportation committees lasted more than six hours.

Much of the proceedings placed HART Executive Andrew Robbins and his agency deputies on the hot seat for their handling in recent years of utility relocation and procurement on rail’s final phase of construction. Both of those critical efforts have sputtered in recent weeks.

However, Robbins told council members that it’s worth trying to salvage some sort of P3 contract deal “given all of the effort of the last two years” despite the city’s withdrawal.

It’s the closest HART has come to awarding that last major construction contract after trying at least twice before, Robbins said. Canceling this latest attempt would set that award back at least another year, he said.

Council members, meanwhile, probed for any details they could get on why the city withdrew. Both HART and administration officials were tight-lipped since the procurement is still ongoing.

Caldwell and others in his administration said Monday that he hasn’t personally seen the proposals.

HART Executive Director Andrew Robbins during press conference at Alii Place 2nd subpoena.
HART Executive Director Andrew Robbins says it’s worth trying to salvage even a more limited award under the P3 process. He says the state’s procurement code prevents him from offering details of what his agency is trying to accomplish. Cory Lum/Civil Beat

But the mayor revealed that the city officials overseeing P3 involvement — including its chief procurement officer for the contract, Manuel Valbuena — decided to withdraw from the P3 process in late August, which is when rail officials said to expect an award announcement.

However, HART officials told the city it couldn’t withdraw under the two parties’ memorandum of understanding, Caldwell said. Thus, the city told HART it intended to withdraw from that memorandum, and HART called that move “inappropriate,” Caldwell added.

The city was finally able to announce its withdrawal about a month later, on Sept. 25, he said. It was involved because the P3 deal included a 30-year operations and maintenance component, and the city is in charge of the rail line’s future operations.

“They were acting on the belief that they were making the best decision for the city, to protect the city’s interest,” Robbins said. HART officials “really disagree with the city, and I wish they would come back in.”

Meanwhile, Robbins said, HART is working with the state’s chief procurement officer to see what the options are to salvage some sort of contract on the city project. That officer, Sarah Allen, told the HART board last week that it could pursue something more limited in scope.

Valbuena, who also serves as the city’s deputy budget and fiscal services director, called in to that meeting during Allen’s briefing and said he disagreed with her report, although he didn’t provide specifics.

On Monday, Caldwell didn’t offer specifics on how a more gradual, phased approach would work should the latest utility and contract problems, coupled with a revenue shortfall from the COVID-19 pandemic, leave rail short of cash again.

Generally, however, he suggested building the line into downtown and then resuming construction to Ala Moana Center later once the funding becomes available. In 2016, when the project faced an approximately $2 billion budget deficit, officials considered a plan to build as far as Aloha Tower but later scrapped the idea and sought a funding bailout from the Legislature instead.

It remains unclear whether rail’s partners at the Federal Transit Administration would accept a phased alternative, versus a contract that would build 4 miles and eight stations to Ala Moana Center. The city’s $1.55 billion funding deal with the federal agency calls on rail to reach Ala Moana at a minimum.

FTA officials “were extremely troubled but not surprised” when the city announced its P3 withdrawal, Caldwell told council members Monday. The FTA wants to see “progress and direction, and they don’t see that under the triple-p.”

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