After a week of stress between the mayor and state lawmakers over a sudden half-billion dollar “stress test” rail cost hike, rail officials say they’re not increasing their expected costs.
This is an issue we’ve been tracking since last week when Mayor Kirk Caldwell wrote to lawmakers to say their funding wasn’t enough, in part because “the FTA requires a construction stress contingency as part of the recovery plan” due soon. That brought the latest cost figure of $8.165 billion another $548 million higher, to $8.7 billion before additional financing costs.
Lawmakers and even congressional delegates doubted that, and the FTA told KHON2 the city is not required to add any more pad. The FTA told KHON2 the recovery plan should “detail the funding plan and the resource streams/contributions that will cover the delta between the original submitted plan and the revised estimated total project cost.” FTA explained that any further analysis of funding sufficiency would be FTA’s to conduct after receiving the plan, explaining, “Once received, FTA will examine the assumptions made within the finance plan to determine its reasonableness.”
FTA also explained the concept of stress-testing is not about adding costs, but about analyzing revenue, stating: “The stress test should be interpreted as examining the ability to fund the project if revenues are less than anticipated.”
HART told Always Investigating on Tuesday it will be sticking to its $8.165 billion cost figure, saying:
“HART will not include the 10% stress test figure ($548 million) in its September 15th Recovery Plan.”
We asked if there are any updates to the mayor’s position on the stress-test add-on and have not yet heard back.
Rep. Scott Saiki, House speaker, said to expect no changes in funding once the House gets its hands on the bill tomorrow.
But KHON2 asked Saiki, if there is yet another shortage, how is the city supposed to deal with it?
“Well at this point I would say that if the city runs short in the future, then the city needs to resolve that issue on its own,” Saiki said. “Is it rail or is it the Blaisdell renovation project, because if the city does not go through with the Blaisdell renovation project, can’t it use those funds for rail instead? It’s a matter of priorities. The city can’t have it all.”
He is referring to a planned Neal S. Blaisdell renovation with an initial cost estimate between $300 million and $400 million. One of the regular-session rail bailout bills would have blocked the city from spending on that renovation.
We asked the mayor’s office if other city capital projects being prioritized, or sorted between essential and nonessential, in case of unfunded rail cost overruns such that other capital spending would be delayed or alternately sourced.
In a past financial plan, 2012, the city had told the FTA that short-term borrowing called TECP could cover a cost overrun scenario; HART told us yesterday that same source could be used for any more overruns.
KHON2 asked the mayor’s office if there is a reason the Administration and/or HART would not still be able to use TECP as the 2012 stress test paragraph described. We’ll update this story upon receipt of any responses.