City Council members are questioning plans to divert federal funding now used for the TheBus into the city’s $5.27 billion rail project, with some council members worrying the heavily used bus system could suffer as a result.

The recent concerns about bus funding center on $244.7 million in so-called "5307" federal Urbanized Area Formula Program funds the city has included in the rail financial plan to help pay for rail construction over the next seven years.

That money would normally be used to buy new buses and vans for the TheBus and TheHandi-Van systems, and to do preventive maintenance. The federal funds are also used to make improvements to city transit centers.

Councilwoman Tulsi Gabbard said the cost of operating the city bus system is rising, and "not a single dollar should be taken away from running, operating, and maintaining our buses in order to go toward this rail project."

Wayne Yoshioka, director of the city Department of Transportation Services, said there is "a very small probability" that the federal 5307 funds will actually be taken from the bus budget and applied to the rail project. None of those federal funds for the bus have been taken for rail so far, he said.

"It’s really there for insurance, to make the (rail) financial plan more robust," he said.

Yoshioka said the bus system needs that money. If the $244.7 million in federal funds were actually diverted to rail, city taxpayers would have to make up the difference, he said.

That could be done by borrowing money for bus and Handi-Van purchases, or by taking money from the city general treasury to pay for maintenance, or both.

During recent budget discussions on rail and the city bus system, Council Budget Committee Chairwoman Ann Kobayashi and Gabbard both suggested that if the 5307 funding isn’t really needed to pay for rail, then it ought to be removed from the rail construction budget.

"They keep saying they don’t need it, but then don’t put it in the (rail) financial plan," Kobayashi said.

"What worries me is the Handi-Vans are very old, and I understand some of them are not well-equipped for those in wheelchairs, so if we need new Handi-Vans and this money is committed to rail, how are we going to purchase a new Handi-Van?" she said.

The financial consultant hired by the Federal Transit Administration to oversee the Honolulu project has warned that the city bus fleet is relatively old, with vehicles that had an average age of 9.2 years in 2008.

Council Transportation Committee Chairman Breene Harimoto, who is a strong rail supporter, said he would also be concerned if 5307 funding is diverted from the bus to rail.

"We were assured that it would not be used (for rail), and I think there is some pressure to take it out of the financial plan," Harimoto said of the federal bus funds.

The 2010 environmental impact statement for rail proposed using up to $305 million in 5307 funds for rail construction "if other project funding sources or cost savings do not cover the full capital cost" of the project.

Federal Transit Administration policy discourages the use of 5307 formula funds for New Starts projects such as the Honolulu rail project, and the FTA has repeatedly cautioned the city about the use of the money in the rail financial plan.

The issue came up during a 2009 meeting between FTA Administrator Peter Rogoff and former Honolulu Mayor Mufi Hannemann, with Rogoff warning that diverting funds from the bus system for rail is a "source of concern" for the agency, according to FTA emails made public this year.

The city later revised the rail financial plan, reducing the amount of 5307 funding for rail from more than $300 million down to $244.7 million in the current plan.

The FTA approved that revised rail financial plan, and allowed the Honolulu project to enter the final design stage late last year.

The Honolulu Authority for Rapid Transportation is again revising the rail financial plan, but the new plan likely will still include 5307 funding, said Daniel Grabauskas, executive director of HART.

"My understanding is that the Federal Transit Administration requires that the funding that we presented to them, including those (5307) funds, stay in there to satisfy them that the financial plan is very strong and very solid," Grabauskas told the Council recently.

However, Grabauskas said last week he has heard concerns from the Council and members of the public who don’t want funding diverted from the bus system.

If construction costs turn out to be lower than expected, or if extra funding can be found because of higher-than-expected tax collections for rail, the aim would be to remove the 5307 funds from the rail project, Grabauskas said.

"If there is a way to do this project and not tap into those funds ultimately once we start managing this project, that should be the goal and that is our goal," he said.

He said the FTA has invested a great deal of money in the Honolulu bus system, and would not allow the city to use 5307 money for rail if the FTA believed that would degrade local bus service.

"We have a great bus system here, and integrating that with the rail system is going to be important," Grabauskas said. "The best systems that I know are the ones that are integrated, and where there is no stepchild within the overall system, which means you fund each as fully as you can."

Mayor Peter Carlisle has said the city will continue to strongly support TheBus and TheHandi-Van systems, and that the city is planning an expansion of bus service to complement the rail network.

The rail and bus systems will be closely linked, with the city projecting that 60 percent of all rail riders will travel by bus to a train station to ride the rail line.

At least some of the recent concern about bus funding was spurred by calls from constituents who are upset about city plans to reduce service on some bus routes and eliminate two routes in an effort to save the city $6 million to $7 million a year in bus operating costs.

Gabbard said she has received calls from residents who are "very concerned" about recently announced city plans to reduce bus service on some routes.

"We need to continue to focus on improving our bus system," Gabbard said. "It is a system that is among the best in the nation, and we can’t afford to take any resources away from that."

Kobayashi said she has been getting calls from many constituents in Manoa, St. Louis Heights, Palolo and Waikiki who are upset because the recent bus schedule changes mean they will have to transfer buses more frequently, and wait longer for buses and Handi-Vans.

"When you’ve just had chemotherapy or something, you don’t want to sit there for an hour and wait," Kobayashi said of the potential delays in Handi-Van service.

Yoshioka said the bus route changes are designed to make the system more efficient and cut costs to avoid a bus fare increase, and have nothing to do with the 5307 funding or the rail project.

Kobayashi was skeptical. "Of course they’re going to say that, and I have no proof that it’s connected, but it’s kind of coincidental. I mean, it’s too much of a coincidence," she said. "Why do they have to cut back service?"

Yoshioka said the city budget for next fiscal year for the TheBus and Handi-Van includes the full amount of $32.7 million in 5307 funding for 2013, even though that same funding was also included in the rail financial plan to cover rail construction costs.

A spokeswoman for HART said the city no longer plans to use the 2013 allocation of 5307 funds for rail. That change will be reflected in the new rail financial plan that will be filed with the FTA later this year, she said.