Federal officials said Tuesday they’re weighing whether to give the city an additional 10 months to deliver its rail recovery plan, an extension that would buy Honolulu Mayor Kirk Caldwell and rail leaders more time to pursue the dollars they hope will be enough to finish the full 20-mile line.
Caldwell sent the Federal Transit Administration a request Friday to extend the recovery plan deadline until June 1. That would allow the city to wait until after the 2016 election and the 2017 legislative session have ended to declare how it plans to deal with rail’s runaway costs.
It would give rail leaders the chance to ask state lawmakers that they give the rail project another tax extension, or some other funding assistance, after those lawmakers already authorized a five-year extension in 2015 under assurances that it would be more than enough to complete the project.
On Tuesday, Caldwell acknowledged that timing was a key reason why he’s asked the FTA to push rail’s recovery plan deadline to June 1.
“I picked the end of May because the Legislature is pau (done) in May,” he said during a news conference held in his office.
“I think we owe it to the people and the taxpayers of this island to exhaust every possible revenue source and get the money we need to complete the full 20 miles to Ala Moana,” he added.
Under the current Aug. 7 deadline, Caldwell and other rail officials say the best option they have is to submit to the FTA a plan that stops the cash-strapped project about 4 miles short, at Middle Street, at least for now.
“I hate giving that answer, but that is a truthful, honest, frank answer for a guy who wants to build rail to UH and to downtown Kapolei,” Caldwell said Tuesday of the Middle Street option. “I want the whole system, but we need the time to find the money.”
However, the Legislature’s top two finance leaders Tuesday indicated that rail officials should not return to the state for help next year after they underestimated project costs so badly last year. Rail leaders have been unable to present realistic estimates that keep pace with the skyrocketing costs, and public trust in the transit project has eroded, they said.
“They shouldn’t even try. They need to get their act together and figure this out for the sake of everyone who’s put some faith in them and wanted this to succeed,” state Sen. Jill Tokuda, who chairs the Senate Ways and Means Committee, said Tuesday.
Tokuda (D, Kailua- Kaneohe) said she believes there’s no way the city or the Honolulu Authority for Rapid Transportation, the semiautonomous agency that oversees rail, could get a handle on the situation in time for the 2017 legislative session, which starts in January.
Tokuda’s counterpart in the state House, Rep. Sylvia Luke (D, Punchbowl- Pauoa-Nuuanu), agreed.
“I would not entertain it,” said Luke, who chairs the House Finance Committee, said of authorizing another rail tax extension. “At this point in time it has become such a credibility issue. How do you know what they’re saying now is true? We cannot just give them a blank check.”
The 2015 TAX extension was supposed to provide HART with a buffer of at least $600 million for any unexpected costs. Since state lawmakers approved it last summer, rail’s cost projections have spiked dramatically, and the project now faces a new deficit of at least $1.5 billion, according to the latest official estimates.
Rail officials have pointed to the construction cost escalations that have driven up the cost to build all over Oahu. Nonetheless, it remains unclear how their estimates have been so dramatically off despite taking into consideration annual construction market growth.
HART hasn’t yet issued the contracts to build rail’s second 10 miles. The final price tag remains elusive.
On Tuesday, Caldwell also suggested getting more federal dollars to complete the project. He and other rail officials have said the city would have to lobby for those funds next year, when the new administration takes office following the U.S. presidential election in November. The mayor also suggested pursuing public-private partnerships to at least help close rail’s budget gap.
The FTA has a $1.55 billion funding agreement for Oahu’s rail project, but it could request those dollars back if it finds the city to have breached the deal.
Over the past 25 years, about 10 major capital projects under FTA’s Full Funding Grant Agreement program have required recovery plans to change their scope, budget or schedule during construction, according to the FTA.
All other projects that went into recovery have ultimately been built and completed, FTA officials say. In 2011 the FTA required that the New Jersey Transit Corp. pay back all $95 million in New Starts funds after the local transit agency canceled a project dubbed “Access to the Region’s Core,” or ARC, according to federal officials.
