City Council Grows Anxious As Rail’s COVID-19 Problems Deepen
The transit project has been plagued for years by skyrocketing costs. Now it faces a $100 million slump in the revenues that fund construction.
Honolulu rail is on course to receive about $100 million less in funding toward its completion in the coming year than planned thanks to COVID-19, according to the project’s top financial officer.
Meanwhile, the transit line’s west side passenger service to Aloha Stadium, once touted to launch as early as December, has now been pushed back to March. The pandemic has disrupted getting the needed materials to Oahu, but it’s more severely disrupted getting engineers and their technical expertise to the island, officials say.
Furthermore, the public-private partnership that’s expected to finally get the full 20-mile, 21-station line all the way to Ala Moana Center appears to have been pushed back about another month.
HART Executive Director Andrew Robbins said in April that the pandemic would delay that contract award until August. On Tuesday, he said to look for that award in September.
The more than $9 billion project has faced a steady stream of obstacles since its inception. Now, in the age of coronavirus, it’s confronting new problems that have Honolulu City Council members increasingly anxious.
At Tuesday’s meeting, they repeatedly pressed HART on whether any of the project’s remaining $744 million in federal New Starts funding had lapsed.
Is FTA Running Out Of Patience?
The Federal Transit Administration has withheld those funds for nearly five years now, going back to 2015. The federal agency has said it won’t start releasing the money until it sees the P3 bids.
When told the money was still available and that the FTA wants to help the project to succeed, council members nonetheless pressed HART further on whether those funds might lapse in the future.
From the council’s vantage point — and based on meetings it’s had with the FTA directly — members worry that the federal agency is running out of patience, regardless of whether the virus is now to blame.
“They’re not happy with how this project is going,” Councilman Tommy Waters said Tuesday, recounting a session he attended with FTA leaders.聽 “It was not a warm welcome that we got. It was very, very uncomfortable.”
Waters was unavailable to explain further after Tuesday’s budget meeting.
Councilman Joey Manahan expressed frustration that HART has eight staff for government relations and public information, yet the council has repeatedly been surprised to hear of the FTA’s discontent.
“I cannot explain to you why the federal government presents itself” the way it does to council members, Robbins testified in response. The FTA’s local staff and the contractors it has overseeing rail “are much more on top of the project.”
However, officials closer to the project from the FTA’s Region 9 office, which oversees the West Coast and the Pacific, have also been critical of rail’s progress, Councilwoman Heidi Tsuneyoshi said. (Last fall, when HART said in a press release that Region 9 Administrator had “high praise” for HART’s efforts, the FTA .)
Big Dip In State Tax Revenues
So far, most of rail’s financial woes have stemmed from skyrocketing costs and delays. It now faces a severe slump in the state tax revenues used to fund construction, however, due to the economic devastation wrought by COVID-19.
On Tuesday, Councilwoman Kym Pine pressed HART Chief Financial Officer Ruth Lohr on whether the rail agency would eventually come to the city for more funding.
Lohr had already testified that the project was poised to lose some $40 million per quarter in its state general excise tax surcharge revenues, and about $10 million in transient occupancy tax revenues, which have been all but eliminated so far in the pandemic.
She told Pine and the council that it’s too early to say whether rail would need to draw more city funds to make up the shortfall.
However, Lohr added that the “onus is on us” — HART — to come up with possible solutions versus “just dropping a bomb on the City Council and saying, ‘Hey, we need more funding.'”
Waters asked HART officials Tuesday whether they would consider asking the state for a third bailout if needed. Joyce Oliveira, the agency’s deputy director, reminded him that the Legislature made clear that HART shouldn’t return for more state tax revenues.
Robbins pointed out that the previous two bailouts followed what’s largely considered to be HART’s own mismanagement, not a global pandemic.
