Bus revenue has dropped significantly since the onset of the coronavirus pandemic, a situation that’s contributed to what the Caldwell administration estimates will be a $400 million shortfall in next year’s overall city operating budget.
That’s leading one City Council member to suggest that the incoming Blangiardi administration might want to consider delaying the start date of the first segment of the Honolulu rail line by possibly as much as a year if not longer.
The Honolulu Authority for Rapid Transportation, which is tasked with building the now $11 billion-plus rail project, is currently slated to hand over to the city the “interim service” segment, from East Kapolei to Aloha Stadium, sometime in July, which is the beginning of the new fiscal year. (The entire line, from East Kapolei to Ala Moana Center, is now not projected to be done until sometime between 2027 and 2033.)
Councilwoman Kym Pine, who represents West Oahu and has long been an advocate for the 20-mile, 21-station rail line, said at a Council Budget Committee meeting Tuesday that it might make sense to deliberately push back the opening of the first segment if doing so brings savings to help balance the city’s nearly
$3 billion operating budget and save the city from needing to make cuts elsewhere.
She noted that the disagreement between the Caldwell administration and HART Executive Director Andrew Robbins over whether to procure a public-private partnership has only recently been resolved.
“We’re clearly not ready,” Pine said. “And we’re in a crisis (economically), so it just seems we should focus on survival of current service, and then when things get a little better, maybe we can start introducing new services.”
Manuel Valbuena, the city’s acting director of budget and fiscal services, said last week that the administration is projecting a shortfall of at least $400 million, which includes $140 million to $160 million for operations and maintenance of the new rail line. Valbuena said the city may be able to gain some savings, however, since HART pushed back delivery of the first leg into July from the beginning of 2021.
Acting DTS Director Jon Nouchi said pushing back the start of interim service is among a number of options that may be presented to Mayor-elect Rick Blangiardi, who takes over from current Mayor Kirk Caldwell on Jan. 2. But
he stressed, in an interview with the Honolulu Star-Advertiser after the meeting, that a lengthy delay would not be something he would recommend.
The issue came up at the meeting during a discussion on a proposal to increase bus and Hand-Van fares.
The city’s policy is for bus and Hand-Van revenue to recover 25% of the cost of providing services, meaning property taxes and other sources of revenue are supposed to subsidize the remaining 75% of the cost.
Nouchi told the committee, however, that there’s been a large drop in bus ridership due to fewer people riding during the pandemic, while at the same time there’s been a need to increase the busier routes’ service hours in order to reduce the number of passengers per vehicle to maintain social distancing.
“We estimate that our fare box recovery rate hovers somewhere above 9% right now,” Nouchi said. “And yes, it is in sharp disparity to the 25% that we’re supposed to aim at, but the COVID-19 pandemic really presents us with a whole bunch of new, challenging scenarios.”
DTS has been using
$95 million in a Federal Transit Administration pandemic-related grant to help pay for the additional services, he said.
“We are kind of looking at, right now, how we’re going to handle the fiscal year 2022 ahead of us,” Nouchi said.
Pine said she’s been told the drop in transit revenue will cost $40 million to
$50 million, “maybe more” if the city wants to maintain the current level of transit services.
“We’re already looking at budget measures that we could take to … stabilize the loss of our projected revenues,” Nouchi said. “None of those are particularly going to be easy to deal with, but we have to be proactive in looking at what the next fiscal year looks like.”
That’s when Pine asked whether the current administration has considered recommending a delay in starting rail operations by a year.
“That is something that we will be discussing with the next administration,” Nouchi said. “It’s something that we’ve heavily considered. We have to balance, basically, the equity of introducing a new mode and the costs associated with introducing a new mode, especially as it’s not just a matter of opening the new rail system for the first half (of the entire line).”
He noted that bus services designed to work in concert with the rail line also would need to factor into a decision about when to open the interim service.
“Perhaps pausing on that will allow us to save a bunch of money that we can use to help our current system right now,” Nouchi said, adding that maintaining the current level of bus service is the priority.
After the meeting, Nouchi clarified that while pausing rail briefly may be an option that’s presented to the incoming administration, a delay of one year to July 2022 is not something he would recommend. He said the city also already has a contract with Hitachi Rail to operate the partial line when it starts.
Pine said after the meeting that while she doesn’t have all the details to be sold on it completely, delaying opening of the interim segment by a year is among a number of cost-saving measures that she’s advised the Caldwell administration to seriously consider recommending to its successors.
“I don’t know what all of the ramifications are of that decision,” Pine said, “but right now we need to focus on basic survival for the city and making sure we don’t cut necessary services that keep the people safe and keep the city stable. We’re just in this unprecedented time where we’re going to have to make tough decisions we don’t want to but may have to.”
The project’s opening “has been delayed so many times,” she said. “This may be the one time it makes sense to do it.”
In January, HART officials projected they would turn over the first segment in
October, which was later revised to a November-December time frame. In June, when Caldwell let the current year’s budget become law, city officials said they expected operations to begin sometime in February or March, thus saving the city about $18 million that had been budgeted for operations. Earlier this month, citing pandemic-related issues raised by the contractor, HART CEO and Executive Director Andrew Robbins revised the hand-over date to the summer.
