The board of directors for the Honolulu Authority for Rapid Transportation on Friday approved a new contract with a 22% raise for Executive Director and CEO Lori Kahikina to oversee completion of the nearly $10 billion Skyline.

During a special HART board meeting, the panel offered Kahikina a new three-year, $336,000 annual contract, up from her $275,000 salary under the current contract, which expires Dec. 31.

The new contract will start Jan. 1 and includes two two-year options for extension.

“I want to thank the members of the HART Board’s Permitted Interaction Group for working with me to develop the terms of this contract, as well as the Board for approving this contract and placing their continued trust in me to lead HART,” Kahikina said after the meeting in a written statement.

“As I’ve said before, I’m very passionate about this project and am so pleased we’ve come to this agreement,” she said. “I’m extremely proud of all the accomplishments and good work that we, as a team, have achieved together and I look forward to many more momentous milestones.”

Kahikina joined the rail agency in January 2021 as interim executive director and CEO.

The HART board appointed Kahikina to a three-year term as executive director and CEO, from January 2022 through Dec. 31, 2024.

To determine Kahikina’s latest work agreement, the rail agency’s permitted interaction group, or PIG, formed to investigate and then recommend terms of the CEO’s negotiated contract to the full HART board of directors.

At Friday’s meeting, Roger Morton, chair of the subcommittee, related that the PIG “met about seven times to go over the contract.”

“We looked at it from multiple angles,” he added. “The gist of the discussion was that the executive director has done a good job so far, and so the PIG was inclined to recommend reappointment of Lori for a term of three years.”

Morton said, “But we’re also mindful that the rail project has an estimated life now of seven (years).”

Due to that, he said the PIG recommended Kahikina stay on for “a three-year fixed term” and then an option for the two two-year terms. He noted that “could get us potentially to the end of this project, which would be (Dec. 31, 2031).”

Any extensions of Kahikina’s contract beyond that time period would be at the board’s discretion, he added.

Also, according to the language of her latest contract, Kahikina “shall attend and satisfactorily complete all components” of a CEO professional development program “at the University of California, Berkeley’s Haas School of Business or a comparable program approved by the board.”

According to the contract, the cost of the CEO program, and its related travel expenses, “is to be borne by the board up to $45,000 or such higher amount as approved by the board.”

Although he’d later consent to the overall contract agreement, board member Robert Yu questioned why Kahikina would essentially need to return to school for further training.

“It’s just weird to me that we’re paying someone $336,000 a year, but we are requiring that person to complete (this program),” Yu said. “It should be up to the employee to decide whether they want to do it or not, since you are all talking about all of the good things about the current executive director, and we’re paying her a competitive salary.”

Morton and other board members suggested that executive development across many work industries was common practice. Kahikina, they noted, had agreed to his contract provision as well.

“I think when we’re talking about an $11 (billion) or an $11-1/2 billion project, I think that it’s money that will be well spent,” Morton replied.

After the meeting, Morton told the Honolulu Star-­Advertiser by phone that the $11 billion-plus figure he’d spoken of was being used “in a figurative way, that this is a big project.”

He indicated the current forecast of Skyline’s construction was still pegged at roughly $10 billion.

And after Friday’s meeting, HART stated the $1.66 billion contract award granted in mid-August to Los Angeles-based Tutor Perini Corp. to design and build Skyline’s last 3-mile segment to Kakaako prompted further cost review at the rail agency.

“The cost of the recently awarded construction contract for the City Center Guideway and Station contract may result in a slight increase in the estimated cost of the project’s construction; however, the total cost of the project is expected to be relatively unchanged from the amount included in the 2022 Recovery Plan, due to an offsetting lower estimated cost of borrowing,” HART staff told the Star-Advertiser via email. “An evaluation is underway of the final cost estimates, including the determination of appropriate contingency amounts.”

In late August, Kahikina told the board that due to the size of HART’s contract with Tutor Perini, certain rail-related projects may have to be deferred, though it’s not been disclosed which projects might be postponed.

Meanwhile, HART board Chair Colleen Hanabusa abstained from voting on Kahikina’s latest contract.

“As everyone on the board is aware, this is something that I have personally not participated in, and I will not participate in this,” Hanabusa said before she turned over proceedings to board Vice Chair Kika Bukoski and temporarily left the boardroom.

HART board Executive Officer Cindy Matsushita told the Star-Advertiser afterward that Hanabusa’s “decision to abstain from today’s discussion is consistent with her abstention from voting on prior decisions regarding the executive director and CEO’s employment agreement.”

Tension between Hana­busa and Kahikina became public after the two had a contentious exchange during an April board meeting.

Previously, Hanabusa said May 22 that she’d referred prior concerns about Kahi­kina’s treatment by the board to the city’s human resources de­partment for investigation, in a move that Hanabusa called “self-­reporting myself.”

But following months of delays and after much debate, the HART board voted June 28 to provisionally grant Kahikina a new multiyear contract.

At the same June 28 meeting, Hanabusa indicated — but did not fully explain — that she planned to step down as leader of the board of directors, pending a deferred annual board leadership election that’s expected to be held later this year.

In related business Friday, the HART board formally selected the panel’s ninth voting member.

Lisa J. Baker, a Kailua resident and retired project manager who’d last worked for HART-related contractors from 2015 through 2023, was picked out of three finalists vying to join the volunteer board.

The panel’s vacant voting-member position was previously held by Edwin Young, who stepped down earlier this year due to health concerns.

Baker will serve the remainder of that position’s term, which expires June 30, 2028, according to HART staff.

“The HART Board is integral to the success of this project and I look forward to working with Lisa Baker in her new capacity as the ninth voting member,” Kahikina said in a written statement after the meeting. “Mahalo to former Board member Edwin Young for his dedicated service to the rail project.”

Mayor Rick Blangiardi is also expected to fill a second board vacancy following the resignation of board member Michele Chun Brunn­graber in August.