HONOLULU - FTA Administrator Peter Rogoff said Tuesday the City and County of Honolulu’s revised financial plan for rail transit must be more robust and not compromise public bus service."We need to see a financial plan that shows that they have not only the funding to meet their obligations above the federal commitment (but) they also need to demonstrate to us that they have sufficient resources to keep the existing bus service operating and well maintained,” said Rogoff, during a nationwide conference call with reporters.
In the most recent financial plan submitted to the FTA in September of 2009, the city uses of $300 million in federal bus subsidies to fund construction of the $5.5 billion elevated rail system.
Mayor Peter Carlisle promised operational funds for city buses would not be an issue when the city releases its new financial plan for rail transit in late spring or early summer.
“The bus is a critical and essential part of our infrastructure now and it cannot in any shape, fashion or form be compromised,” said Carlisle. “The further we move forward the more exact information we're going to have.”
The city's updated financial plan is required by the FTA before the project can enter the final design phase.
When the agency examined the plan two years ago it expressed concern about capital cost estimates, giving it a “low” rating.
“The financial plan show the City has little ability to address funding shortfalls or cost increases,” the FTA wrote in its fiscal year 2011 financial assessment summary of the project.
However Rogoff noted any financial plan is just a snapshot in time influenced by a variety of economic conditions. He said the FTA remains positive about Honolulu’s vision for rail transit and believes the city can get to the “finish line.”
“We're very optimistic about this project,” he said. “It's going to serve a very critical need for those folks that are living through hours of congestion on H1 every day.”
In its latest funding recommendations for New Starts projects in fiscal year 2012, the FTA continues to pledge $1.55 billion for construction of Honolulu’s rail line from East Kapolei to Ala Moana. The amount represents 29 percent of the projected cost of the project.
President Barack Obama included $250 million for the heavy rail system in his fiscal year 2012 budget as a down payment.
“The New Starts project and the fact that we qualified under that shows that they're looking at this from a financial view and the futuristic view as to what it's going to accomplish for Hawaii,” said Carlisle.
“To my mind that's the most important thing to understand, (Rogoff) is looking already at the finish line.”
Still, Rogoff admits getting the amount of funding the FTA wants for projects like Honolulu’s rail system will require cooperation from the republican controlled U.S. House.
“Any of their cuts would set us backwards rather than forwards,” said the FTA administrator.
“While we want to work with the House of Representatives on spending reductions, on deficit and debt reduction, we are heading in a different direction when it comes to infrastructure investment.”
On Tuesday House Appropriations Chairman Hal Rogers (R-Ky) introduced a continuing resolution that slashes spending by $100 billion for the remainder of the current fiscal year, which ends September 30.
Included in the proposed cuts by Rogers is a 22 percent reduction in New Starts funding, which provides federal investment for large public transportation improvements like rail.
“Make no mistake: These cuts will not be easy, and they will affect every Congressional district, but they are necessary and long overdue,” Rogers said in a press release.
Meanwhile Carlisle is watching carefully what happens in the Hawaii legislature where Senate President Shan Tsutsui has introduced a bill to borrow rail funds in order to help close the state’s $844 million deficit.
The measure (SB1426) would allow the state to take $200 million of rail surcharge funds and replace it with $300 million of general obligation bonds issued by the state.
“We're looking at trying to keep all our options available in terms of dealing with the cash shortfall that the state has,” Tsutsui told Khon2. “This is not an anti-rail measure.”
In a recent letter to the Senate Public Safety, Government Operations and Military Affairs Committee, which has scheduled a hearing on Tsutsui’s bill this Thursday, Honolulu Managing Director Douglas Chin wrote in opposition to the measure.
Chin said not only is SB1426 likely illegal under state and county laws that allowed a .5 percent surcharge for rail to be added to the state’s general excise tax, the bill may also send the wrong message to federal officials and lawmakers.
“If the Federal Transit Administration (FTA) and Congress do not consider the dedicated transit fund to be secure and reliable, the City's commitment to the rail project may be questioned and federal support for the project may be put in jeopardy,” said Chin.
Tsutsui’s measure would also extend the life of the rail surcharge another two years until the end of 2024. That would result in another $300 million being collected by the city from tourists and local residents.
Have a news tip? Contact Andrew Pereira at 368-7273. Follow Andrew on Twitter at Khon_Reporter
