Don Horner, who once oversaw the state’s largest financial institution, will no longer help oversee the state’s largest public works project.

Horner tendered his resignation to Mayor Kirk Caldwell on Monday as the rail agency’s volunteer board chairman, as the transit project faces rising costs and growing uncertainty.

Horner’s move follows several weeks of upheaval for rail management, in which the city’s top elected leaders have repeatedly put in writing their crumbling faith in the Honolulu Authority for Rapid Transportation’s handling of the project, now estimated to cost nearly $7 billion. HART leaders say the skyrocketing costs are mainly due to construction market forces beyond their control.

Horner delivered his resignation letter to Honolulu Hale five days after Council Chairman Ernie Martin called on Horner and HART Executive Director Dan Grabauskas to resign, and several days before a critical report from the city auditor’s office will be released. In a news conference Monday, Caldwell said that he had already planned to ask for Horner’s resignation prior to Martin’s request. Caldwell was out of state on vacation last week and had scheduled to meet Horner upon his return.

“I just want to make absolutely certain that there’s confidence in this project. And I’ve see an erosion of confidence in this project, both by my administration, by the City Council … and by the public at large,” Caldwell said Monday.

In his resignation letter, Horner said “too often in politics, the focus becomes shooting the messenger of unpleasant news rather than collaboratively working on solutions.” In a separate letter responding to Martin’s concerns, Horner praised HART staff and said Martin’s concerns were a surprise “since we had met a few days earlier, and your concern was not discussed.”

Horner retired as CEO of First Hawaiian Bank in late 2011, after being affiliated with the institution for more than three decades. He also served as the bank’s chairman and president.

Martin is Caldwell’s top political rival and considering a mayoral run against him later this year. Caldwell’s predecessor, former mayor Peter Carlisle, appointed Horner to the HART board for the agency’s 2011 inception. Caldwell said earlier this year that his own reputation is on the line with rail.

Caldwell said Monday that he did not believe Horner to be a “sacrificial lamb.” Even if rail’s costs continue to climb without him on the board, Horner as chairman mismanaged the City Council’s expectations of how much more the project will cost with “sugarcoated” figures, Caldwell said. The Council earlier this year passed a five-year extension of the rail tax, although it aims to cap how much more HART can spend at $1.1 billion.

Horner disagreed with Caldwell’s take. “The (budget) numbers do not come from the board,” he said Monday. “The numbers come from the HART administration, and they’re based on the best information that the professionals have.”

By any standard, not all of the budget figures that Horner presented during his eight-month tenure as chairman were optimistic. In September, several weeks after he became chairman, Horner and Grabauskas warned Caldwell in writing that escalating construction costs could drive rail’s costs by an additional $200 million and that the project could be delayed by more than a year. The mayor then held a press conference and declared those cost increases and schedule delays unacceptable. He urged HART to do all it could to mitigate them.

As for Grabauskas’ future with rail, Caldwell said that per the City Charter it’s up to the HART board to decide whether he stays. He’s entering the second year of his latest three-year employment contract.

Caldwell, flanked Monday by HART board allies Colleen Hanabusa and Director of Transportation Services Mike Formby, said that Grabauskas needs to do a better job communicating to them. Grabauskas is currently undergoing his regular employee evaluation by HART board members — a process that could take a couple of months. Caldwell encouraged the board to look “long and hard” at what he felt were recent communication snafus.

Formby and Hanabusa said they felt that weren’t getting all the details that they needed under Grabauskas’ leadership on significant issues facing rail.

Hanabusa, a former Hawaii congresswoman, said it wasn’t until she and Formby “invited themselves” to sit in on meetings with the project’s independent consultants — despite being told those meetings “weren’t available to (board) members” — that they learned the true scope of rail challenges such as Hawaiian Electric Co. utility clearances along the guideway.

Formby, meanwhile, vented that HART staff did not consult the board before canceling what he said was a $240-$260 million contract to build a critical parking structure and transit center at Pearl Highlands. Formby called that structure vital to keep ridership numbers sound.

“There was no discussion brought to the board on that issue,” Formby said Monday.

Grabauskas was not available for comment Monday, according to a HART spokesman.

Caldwell said he’ll seek a new appointee to replace Horner.

Damien Kim, the 10-member HART board’s vice chairman, will serve as interim chairman until the group selects the new leader. Kim, who serves as business manager and financial secretary for the International Brotherhood of Electrical Workers Local 1186, said he’s “ready to meet the challenge,” if the board votes to make him chairman.

The HART board typically votes to have its chairman serve two consecutive one-year terms, Kim said. Horner was set to complete his first year as chairman this summer.

Hanabusa, a Caldwell appointee who’s one of the board’s newest and most outspoken members, said it would be presumptuous for her to consider being chairwoman because she’s finishing her predecessor Carrie Okinaga’s term. It’s also slated to end this summer.

“My main focus has always been how to make HART better,” and “I can do that in whatever role I’m holding,” Hanabusa said.

“This project belongs to all of us and now we have to fix it,” Martin added in a statement Monday.

Horner Resignation by Honolulu Star-Advertiser

Horner to Martin by Honolulu Star-Advertiser