Feds give city more time to concoct rail plan

The rail system’s federal partners have again extended the deadline for the city’s crucial rail “recovery” plan, giving local leaders four more months to deal with daunting budget problems but not as much time as they’d hoped.

The new April 30 deadline, issued this week in a letter from the Federal Transit Administration to Honolulu Mayor Kirk Caldwell, casts more uncertainty over rail’s future. Caldwell and other project leaders had asked the FTA to give them until the end of July to submit the plan.

That proposed summer deadline would have allowed time for state lawmakers to potentially authorize another rail-tax extension and secure more funding to finish the full 20-mile, 21-station system at Ala Moana Center.

Instead, the FTA’s new April 30 deadline will fall toward the end of the annual legislative session — just as it’s becoming clear which bills will pass and which will fail — and it would likely fall several days before the Legislature takes its final votes.

It also falls well ahead of the governor’s actions to either sign bills into law, let them pass into law without his signature, or veto them.

It remains unclear whether the FTA would accept a rail recovery plan that includes revenues that haven’t been signed into law. The federal agency could revoke its $1.55 billion for the project if it’s not satisfied with the city’s plans, now that Honolulu is technically in breach of its rail funding deal.

Currently, the elevated rail system — Hawaii’s largest-ever public works project — faces a budget gap of about $2 billion due to construction cost hikes, schedule delays, unforeseen utility relocation work and other woes. Rail leaders acknowledged last week that their latest $8.6 billion estimate could further climb by almost a billion dollars depending on how rail’s debt service and interest are financed.

The federal agency’s Tuesday letter, signed by FTA Region IX Deputy Administrator Edward Carranza Jr., stated that while the city should continue with its “Plan A” to build the entire East Kapolei to Ala Moana Center line, it should also simultaneously work on its “Plan B” based on a “build to budget” scenario using an anticipated $6.8 billion in revenues as its price ceiling.

Plan B could drastically cut rail’s length — perhaps ending the line downtown near Aloha Tower — as well as reduce stations and ridership.

Nonetheless, Caldwell on Wednesday characterized the April 30 deadline extension as “good news” to “hopefully” deliver a recovery plan that shows the city building the full rail line.

“They didn’t give us as much (time) as I’d like,” Caldwell said during a media briefing. He wanted to submit the plan in the summer “because by then the governor would’ve signed into law hopefully a bill allowing us to raise additional funds.”

“But it’s close, you know,” Caldwell added. “We don’t live in a perfect world, and I think they’ve given us a fair deal.”

However, Honolulu City Council Chairman Ernie Martin read the FTA’s letter much differently. In a statement Wednesday, he said the new deadline threatens the full project’s completion.

“The FTA is very clear that they want us to build a project with $6.8 billion, regardless of whether or not it fulfills the vision approved by the voters. To me, that is unacceptable,” Martin said. “The city is committed to building a 21-mile, 20-station system that connects West Oahu to downtown.” Last week the City Council unanimously passed a resolution supporting a general excise tax surcharge extension to build the full line.

The Honolulu Authority for Rapid Transportation, which oversees rail construction, issued a statement thanking the FTA for the extension. HART’s new interim director, Krishniah Murthy, is three days into his new job, part of a yearlong contract with the semiautonomous agency.

Originally, the FTA gave the city until Aug. 7, 2016, to come up with a recovery plan — a tight deadline that prompted Caldwell last summer to say the best option would be to stop building rail at Middle Street until the city could find more dollars.

In July, the FTA extended the deadline to Dec. 31, but city leaders continued to press for a deadline after the legislative session. Meanwhile, the American Public Transportation Association will soon conduct a peer review of HART at FTA’s request, officials say.

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Honolulu Star-Advertiser reporter Gordon Y.K. Pang contributed to this story.

Honolulu Rail Recovery Plan Submission Extension 12.06.2016 by Honolulu Star-Advertiser on Scribd