The Honolulu Authority for Rapid Transportation (HART) has released its recovery plan for the Honolulu Rail Transit Project.

The plan was due to the Federal Transit Administration (FTA) on Friday, Sept. 15.

Officials say the updated project financial plan reflects the recent deliberations and actions of both state and city governments to provide additional local funding for completion of the construction of the project to Ala Moana Center.

Click here to view HART’s submitted rail recovery plan. (.pdf)

There’s no more Plan B, which ends rail at Middle Street. There’s only Plan A, which is to build all the way down to Ala Moana Center.

In the plan, HART admits the project “has faced numerous challenges that have resulted in cost increases and schedule delays,” and is committed to getting the project back on-track.

Right now, the rail is only 38-percent complete. It’s scheduled to open for full passenger service on Dec. 31, 2025 — eight years away.

The total project cost included in the plan remains at $8.165 billion for capital costs exclusive of finance charges, with full revenue service scheduled for December 2025.

Financing charges of $858 million are also projected, bringing the total project amount to $9.023 billion, including contingency.

HART says the revenue to cover the cost will come from the federal funds as outlined in the project’s Full Funding Grant Agreement, receipt of the county surcharge on the state General Excise Tax, one percent of the state Transient Accommodations Tax, and a subsidy from the City and County of Honolulu.

HART believes this cost estimate and schedule are realistic and achievable.

Andrew Robbins, HART’s new executive director and CEO, says he intends to bring the build in as low as possible from here on out.

“This updated recovery plan lays out the local funding now available to meet the current cost estimate and complete the project,” said Robbins. “One of the many messages I have also given is this is a $7 billion project, because the rest of it is contingency. We should be managing to that budget and the contingency is contingency. We don’t want to assume that’s going to be gobbled up in the cost, so that’s the mindset that I want our staff to have, is that the project is $7 billion. It’s not even the $8.1 billion, because that’s the contingency on top of the $7 billion.”

Officials now plan to open the rail in three phases. HART writes of opening nine stations from East Kapolei to Aloha Stadium in 2020.

Then, a potential second opening would occur around 2023, from Aloha Stadium to Middle Street. That section would be about five miles and three stations: Pearl Harbor, the Airport, and Lagoon Drive.

In a statement, Honolulu Mayor Kirk Caldwell urges HART to stick to schedule:

“Now that the Hawaii State Legislature, Gov. David Ige, Honolulu City Council leadership and HART have done necessary legwork to complete the rail project all the way to Ala Moana with a new financial plan delivered to the Federal Transit Administration (FTA), it’s time for us to refocus on what this project will mean to the future of Oahu residents. There is no alternative on the horizon that will provide transportation equity to the tens of thousands of families who will use rail every day to get into town quickly and easily, without giving up a large portion of their lives. Doing nothing is unacceptable, and although construction of the rail project has been a challenge, it will provide opportunities for affordable housing and transit-oriented development that would not exist without it. I urge the HART Board and new HART Executive Director Andrew Robbins to closely manage the financial plan submitted to the FTA on September 15 and to adhere to the construction timetable for this fully automated rail system.”

HART says if the FTA approves the plan, grant payments could start up again by next summer. Meanwhile, HART is borrowing city bond money to pay bills.

An FTA spokesperson told KHON2 Monday: “FTA is reviewing the plan and will communicate with HART regarding any questions or requests for additional information, as necessary.”

The cost of rail operation and maintenance

The state bailout shifted about $20 million a year in HART administration costs over to city taxpayers, but a recovery plan section called “Operations and Maintenance” covers how hundreds of millions more will be needed every year within decades to run the train and buses.

Taxpayers already pay to support TheBus and Handi-Van. It costs $256 million a year to operate those, and fares cover only 27 percent, so city budgets are used to covering the difference — about $186 million.

The recovery plan says that by year 2036, the bus-and-rail will cost as much as $843 million a year with TheBus more expensive than rail in that number. Still just 27 percent is expected to be paid by fares, so taxpayers have to cover $615 million.

That’s a difference of $429 million a year that the city’s operating budget will need to plan for.

So what can the city tap to cover that?

The plan says they’ll offset as much as possible with things like advertising, parking revenue at rail park-n-rides, and selling right of way for utilities like power or fiber optic along the guideway path.

But the majority will come from taxes and fees, some of which are already bumping up in anticipation, like vehicle weight tax and parking meter increases.

What about possibly increasing property taxes? They are the city’s biggest revenue source, and at the public hearings for the state bailout bill, the mayor mentioned setting aside some from new development along the rail line.

Tackling the operations-and-maintenance price tag can also come from cutting expenses, like bus service reductions where it’s possible to streamline, such as along the rail routes.

Bus ridership in Honolulu has dropped as much as 10 percent over the past couple years, which reflects a national trend.

The recovery plan still counts on ridership growth, but this version does acknowledge the risk and looks at what could happen if bus and rail trips dropped 5, 10 and 15 percent from projections.

That could mean between $5 million and $17 million a year less in fares, so more from your pocketbook.