A cash surplus of over a half-billion dollars will likely be available once the city’s Skyline rail system ends at the Civic Center in Kakaako early next decade, according to the Honolulu Authority for Rapid Transportation.
During a HART board of directors meeting Friday, mention of the surplus — projected at roughly $580 million — sparked interest in seeing the rail line continue to its original final destination at Ala Moana Center.
“If we’re going to have the money, then we ought to be able to start planning to spend it so we can get to Ala Moana,” declared board member Anthony Aalto.
Under Mayor Rick Blangiardi’s administration, the city in 2022 truncated the last 1.25 miles of guideways and the planned final two stations near Ward Avenue and Ala Moana Center. That reduced costs from more than $12.45 billion for a 20-mile, 21-station route down to a $9.8 billion system with an 18.9-mile, 19-station line terminating at Halekauwila Street.
The initial nine-station, 11-mile route from East Kapolei to Halawa opened in early July.
At Friday’s meeting, Rick Keene, HART’s deputy executive director and chief operating officer, said the agency’s ending cash balance involves an expected cash surplus of $120 million from the rail line’s 2022 recovery plan. The Federal Transit Administration had required HART to document plans for the 2031 completion of the rail project within the amount of funding that is forecast to be available.
Moreover, the rail line expects to garner $60 million from state and city general excise tax revenues and Oahu’s transient accommodations tax revenues. It also expects lower interest expenses on HART debt — roughly $220 million — due to reductions in the estimated level of agency borrowings. That reduction would include possible use of tax-exempt, unsecured, short-term “commercial paper” to reduce the borrowings of bonds, Keene said.
Other funding sources included anticipated bond premiums of $70 million, and $15 million from miscellaneous income, primarily earned from interest income from the city’s general cash account and rental income “from some of the properties we take possession of but the tenants are still in,” Keene said.
In addition, HART expects a total of $95 million from two federal funding sources: $65 million in congressional appropriations and $30 million from Federal Highway Administration “flex funds” — monies originally earmarked for state Department of Transportation highways that instead will be transferred to the rail agency after it was discovered the funds will lapse at the end of this month, he said.
“And that’s why they were trying to transfer them over to us, to avoid the lapse,” Keene said of the arrangement with DOT. “The FTA, and we, thought the lapsing period was next year. So that’s why we were waiting till we had more certainty about it.”
The FTA is working to get that $95 million obligated to the rail agency before the end of September, he added.
Keene cautioned these expected monies are only roughly forecast. “Granted, the forecast changes regularly,” he said, noting alternate forecasts showed the ending cash balance at a higher amount — $590 million. “So we do continue to have some things that change that impact that balance.”
As board members desired to see the rail line continue on to Ala Moana, HART staffers said extending the line was still possible.
Nate Meddings, HART’s project director, said the agency “was committed to including an option to Ala Moana” as part of its forthcoming procurement to build the so-called City Center Guideway and Stations, or CCGS, project.
“That’s our initial step,” he said, adding other aspects would include utility relocation through the project corridor.
To that, Aalto asked when would HART need to start relocating utilities “on the assumption that the CCGS contract could include the Ala Moana section, so that portion is not delayed?”
Meddings replied that entities like Hawaiian Electric “never stopped their design update in that area” for utility relocation in relation to rail. And he noted any future design-builder of the Civic Center project also could be hired to work on “the Ala Moana segment for cost efficiency.”
However, Keene said before any surplus monies can be spent on a future Ala Moana segment, the rail agency would need approval from the FTA. “And I think we will have a really good chance of making that argument once we get … the procurement for CCGS,” he added.
In the meantime, board member Robert Yu wanted HART to do more planning.
“Instead of just talking about it, maybe we could put together some kind of business plan, from Civic Center to Ala Moana,” Yu said, adding such a plan could include construction costs as well as ways of gaining potential revenue.
“We have $580 million; don’t know whether that’s enough, right? It seems like a lot of money and it seems like HART always uses more money than we estimate. So, a business plan would be good with respect to going to Ala Moana.”
HART Board Chair Colleen Hanabusa agreed. “I don’t think there’s anything that prohibits the board from planning,” she said. “The board wants to plan.”
Later, Yu asked about bids for the potential contractor for the Civic Center project.
HART Executive Director and CEO Lori Kahikina said the “first part of the procurement is supposed to be due in October.” However, she noted delays were occurring at the state’s Contractors License Board, largely due to the wildfire disaster on Maui.
“There’s an influx of contractors wanting to help on Maui that are trying to get their license, which I understand is causing the delay,” she said, adding HART will likely need an “extension from October to possibly December, maybe even January.”
To that, Yu asked whether the added delays will affect the schedule to complete the rail line at the Civic Center terminus.
“Not at this point,” Kahikina said. “We still feel we can finish the full project by 2031.”
But due to the delays involving rebuilding efforts on Maui and the backlog at the contractors board, awarding the actual bid for the work could drag on.
“We wanted to award it by the summer of next year,” Kahikina said, “but right now that might be delayed a few months.”
