Rail officials told members of the Honolulu City Council today that they are projecting a loss of $80 million in revenues in the coming year due to the anticipated drop in tax revenues caused by the coronavirus outbreak.

That may mean the Honolulu Authority for Rapid Transportation will need to borrow money to meet the shortfall in the overall $9.2 billion project budget — unless the agency can receive funding through an upcoming federal economic stimulus package, said Ruth Lohr, HART’s chief financial officer.

The alternative may be halting construction along certain parts of the expansive project, which could then result in more delays and additional costs, Lohr told Council members at their regular monthly meeting at Honolulu Hale.

Meanwhile, HART Chief Executive Officer Andrew Robbins told Council members that bids for a public-private partnership to help finance the last phase of construction will need to be delayed until July, three more months, further complicating the situation.

The Federal Transit Administration has been withholding about $744 million in federal funding for the project until a public-private partnership or P3 contract is awarded for the final segment of the 20-mile, East Kapolei-to-Ala Moana line.

But the city and HART recently decided to delay awarding of the multibillion-dollar contract after bidders said they need more time to prepare their proposals in light of the drastic turn in economic conditions, Robbins told reporters last week.

Today, Robbins told the Council bids that its April 22 deadline to submit bids has now been extended three months – until July 22.

The lost state tax revenues makes it more important that roughly $100 million of the $744 million allotment expected from the FTA come in soon.

“That is certainly going to put a strain based on the fact that we would then need to use financing in order to cover those cash flows,” Lohr said. “That puts us in a position where we will be having to then finance significantly more cash flow in order to keep the project from halting which is certainly something that the FTA is not interested in, having to halt the project.”

“We are looking at how we can cover the gap in our funding sources,” Lohr said. “We don’t know yet what the stimulus bill would look like but that’s certainly something we’re hoping will be a way for us to kind of cover that gap.”

The rail project should be able to qualify for federal stimulus dollars since it does help boost the construction industry, Lohr said.

“We definitely have a challenge because by cutting the capital budget, we would actually then be stopping work in certain areas which could then actually result in more costs because we’re delaying a contract that is currently happening.”

Lohr said that HART officials arrived at its lower revenue projections after reviewing the estimates provided to the state by the University of Hawaii Economic Research Organization (UHERO). Her team members then calculated their own, “even more conservative reduction,” she said.

Asked by Council Budget Chairman Joey Manahan if HART was looking at cutting current expenses in next year’s budget, Lohr said it is. However, she said, a key expenditure bump is the anticipated move of the agency’s staff offices out of Alii Place, something HART needs to do.

HART spokesman Bill Brennan said about $3.6 million is being dedicated to the move. HART learned last August that its current lease would not be renewed, he said. A timeline for relocation as well as new site have yet to be decided, he said.

“We’re looking at ways to minimize those costs as much as possible,” Lohr said.

Manahan said after the meeting that the HART update is concerning.

The Council is looking at 5% cuts in current expenses across all city agencies, with the exception of police, fire and medical services, Manahan said.

“If (HART officials) think that their budget is going to hold, I think they’re being overly optimistic,” he said.