Federal rail payout depends on City Center bid prices

Local News

After years in limbo and federal money frozen for Honolulu’s rail project, the Federal Transit Administration has approved the project’s recovery plan. The FTA could resume its share of payments next year. but it all depends on how bids come in for rail’s fourth and final segment.

The FTA stopped paying the city years ago, about half-way through Washington’s $1.55 billion share, freezing their stipends for after the cost jumped into the $9 billion range, from the initial $4 billion at the projects conception and $5 billion around the time of the federal funding grant agreement.

“The recovery plan was a necessary step to satisfy the FTA that the project is back on track, we have the project under control,” said HART CEO Andrew Robbins. “That’s a huge achievement from even two years ago.”

FTA demanded a recovery plan before they’d pay another dime, wanting proof the city could muster up the rest of rail’s costs, since the federal share won’t change. The feds have approved the plan, years in the making and after billions more taxpayer dollars were committed. FTA may begin releasing federal money again in early 2020, but not until the cost of the City Center bids — the last 4 miles and 8 stations — are in and are on budget.

“Our P-3 (public-private partnership) City Center procurement is well underway,” Robbins said, “and once we have the bids come back later this year and we get the pricing from the bidders, the FTA will be taking a look at that, and we can look forward to the resumption of federal funding around February of next year.”

The budget caps out at about $1.4 billion left to be spent on the final City Center segment.

Meanwhile HART continues to eke every dollar out of tax surcharges and borrowed money, relying on hundreds of millions in city bonds and short-term paper for cash-flow.

Always Investigating asked, when will the borrowed funds be paid back to the city and its bond-holders?

“All of the funding, it’s always been this way, that when the tax sources sunset and they’re all scheduled to sunset in 2030 that we would essentially pay all the capital debt off at that time,” Robbins said.

While the FTA weighs its payouts, federal investigators have their eyes on HART and several staff. The agency and some of its staff have been served with federal subpoenas demanding details going back to the project’s inception through present, three subpoenas for HART itself and an undisclosed number for current staffers.

“I haven’t stated the exact number, I’ve just stated a handful,” Robbins said. “We don’t feel we have an obligation to reveal the identity of those folks. They deserve their privacy. There’s no indication whatsoever that any of the employees that were served subpoenas are targets or subjects of any investigation. They just appear to be witnesses, people that the investigators want to interview.”

The recovery plan approval letter states no conditions relating to the federal investigation.

Always Investigating asked, what’s the FTA’s position and what are they telling HART about the investigation?

“We’ve had some brief discussions in the past with the FTA about the federal investigation and what they indicated is that’s a different part of the federal government,” Robbins said. “Whether there’s a wrongdoer that’s been with hart either now or in the past, everyone would want to see a potential wrongdoer brought to justice.”

Always Investigating asked, does the FTA restrict HART’s spending on the legal aspects of the investigation?

“There very likely are restrictions in terms of the use of federal funds for legal costs associated with defending individuals, because the federal funding is really intended for the capital costs of the project,” Robbins said.

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