The city wants 10 additional months to submit to federal transit officials a plan for how it intends to proceed with its increasingly expensive rail project.
In a letter dated Friday to Federal Transit Administration officials — Administrator Carolyn Flowers and Regional Administrator Leslie Rogers — Mayor Kirk Caldwell said the city wants until June 1 to submit a recovery plan.
Prompted by a climb in the project’s project price tag to $8 billion from $6.8 billion in a matter of weeks, the FTA had set an Aug. 7 deadline for the city to submit a plan outlining how it intends to deal with a projected shortfall of as much as $1.5 billion for the 20-mile route from East Kapolei to Ala Moana Center.
“While we acknowledge the FTA’s desire to receive a Recovery Plan by August 7, 2016, the size of the potential funding gap in the Project is such that additional time is needed to carefully assess all options,” Caldwell wrote in the letter. “A June 1, 2017 date will provide the city the time it needs to more fully develop and cost Project options based not only on the resources available today, but resources the city intends to aggressively pursue between now and the first half of … 2017.”
Caldwell last week surprised many when he announced he was joining Council Chairman Ernie Martin in recommending that the city aim to finish the 15-mile segment from Kapolei to Middle Street first with the money that is projected to be available before proceeding on the remaining 5 miles to Ala Moana Center.
In his letter to the FTA, however, the mayor emphasized that the request to extend the deadline for the recovery plan “in no way reduces the city’s commitment to 20 miles and 21 stations under the minimum operable segment.”
FTA officials were not able to respond Monday to the Honolulu Star-Advertiser’s request for comment on Caldwell’s letter.
Both Colleen Hanabusa, chairwoman of the Honolulu Authority for Rapid Transportation, and Martin said they aren’t surprised by Caldwell’s letter, given the short timetable the FTA gave the city.
“I think it’s very obvious, to do this right, that the Aug. 7 deadline just can’t be met,” Hanabusa said. She expects federal officials to be amenable to an extension provided the city can show it is working on its financing problems, although how long that extension might be is uncertain, she said.
HART officials recently said that they believe they could provide, by Aug. 7, a guide to forming a more detailed plan later. A one-page “work plan” attached to Caldwell’s letter should show the FTA that the city is not sitting idly, she said.
Adding to the time crunch is the need for HART to submit recommendations to the Council and the mayor, she said. The Council, by resolution, would then authorize her board to instruct its staff to negotiate with the FTA, she said.
“It is the City Council … that will have to make the ultimate decision because it is the City and County of Honolulu that is the grantee under the Full Funding Grant Agreement,” she said. “HART, at best, is an agent.”
And because the Council must adhere to open-meetings law requirements, “it could not be done in any meaningful way” by Aug. 7, Hanabusa said.
But before then, she said, “We (at HART) need to understand ridership numbers better. We need to understand where people are getting on and getting off. We also need to understand the financing component — how much money is there and what’s the projection?” Hanabusa said. That might take some time, she said.
Hanabusa said she envisions HART will provide the Council a series of alternatives, possibly in ranked order, rather than a single recommended action.
However, Martin said, “My position is that we need to deal with realities sooner rather than later. … If all partners are committed, a recovery plan is potentially achievable well before the requested extension date.”
The city has several options, including “incorporation of federal dollars in the form of CDBG funds, HUD program money, the state’s federal highway fund, the possibility of retaining a portion of the GET surcharge, as well as public-private partnerships and development agreements between the city and potential investors,” Martin said, referring to community development block grants and the U.S. Department of Housing and Urban Development.
Hanabusa said the city needs to first ensure it can satisfy the FTA’s conditions for the $1.55 billion the agency agreed to provide the project in the Full Funding Grant Agreement. “What the FTA is asking us to do, and Council, is basically to build to budget. Don’t tell us that you’re going to get more money.”
Without the federal dollars, the city won’t even have enough to get to the Middle Street station under the current projections, she said. “They’ve got skin in the game, as they say,” she said, referring to the FTA. “They can ask for the money back.”
Hanabusa said the FTA may not allow the city to break free from its commitment to build the project eventually to Ala Moana Center and then later to the University of Hawaii-Manoa. “We’ll get relief, we’ll get like a pause button, but we’re not going to avoid it.”
FTA letter from Caldwell