June 22, 2024
Funds

City Council approves federal agreement to fund Honolulu rail


A critical hurdle to getting a long-awaited injection of cash for Honolulu’s lumbering rail project was crossed Wednesday when the Honolulu City Council signed off on its end of an agreement for federal funding.

The Council voted 8-1 on a resolution authorizing a federal agreement to fund the Skyline rail system’s ongoing construction to a planned Kakaako rail station by 2031. The vote followed the late-November approval of the full funding grant agreement, or FFGA, by the Honolulu Authority for Rapid Transportation board of directors. The federal government still must sign off on the agreement.

If approved, it would make available $744 million — of which $125 million is expected to be released early this year — from the Federal Transit Administration to finish the city’s long-delayed, over-budget rail system.

The FTA is expected to release the $744 million in five installments between this year and September 2027. The release will be based on milestones that include awarding construction
contracts and completing contracted work.

HART officials say the original FFGA, signed between the city and FTA in 2012, provided $1.55 billion in funding for the rail project. Out of that amount, HART received $806 million.

In 2022, Mayor Rick Blangiardi’s administration, under what became known as the recovery plan, truncated the last 1.25 miles of guideways and the planned final two stations near Ward Avenue and Ala Moana Center. That action reduced costs from more than
$12.45 billion for a 20-mile, 21-station rail route to a
$9.9 billion system with an 18.9-mile, 19-station line
terminating at Halekauwila Street.

The initial nine-station,
11-mile route from East Ka­polei to Halawa opened to the public June 30.

Meantime, the city’s adopted version of the FFGA recognizes the rail route’s original destination to Ala Moana Center.

Before Wednesday’s vote, HART Executive Director and CEO Lori Kahikina told the panel that approving the FFGA was “a long time
coming.”

“We haven’t had any funds given to HART since 2017,” she said, noting funds haven’t actually been appropriated since 2014. “We worked hard with our team, with the HART board and, of course, you folks to amend our recovery plan which they accepted within four months, and this is the last step to amend the
contract between the city and FTA.”

She added, “My understanding is they’re ready to give us the signed (FFGA) as soon as you approve, they’re ready to send it to corporation counsel.”

HART board member Anthony Aalto also lauded local government efforts to complete the rail project despite years of delays.

“Hindsight is 20/20. We can all look back now and realize that when we undertook this project it tested us, and it took a long time for HART to learn how to do this right,” said Aalto. “But HART has learned how to do it right. I think part of the evidence for that is for the last five contracts that we’ve let out have all come at or below the budgeted amount.”

He added, “That is not to say that we’re not going to run into major problems in the future, but the way that we handle them … I think ensures that this is going to be a successful project.

“And ultimately we hope it’s going to be one of the most powerful poverty-fighting tools on this island,” he said. “We hope that ultimately 50,000 households or more may be able to get rid of one of their cars and that will save them, collectively, half a billion dollars a year.

“So this project is definitely worthwhile, it’s in line with our efforts to address the crisis that our (asset-­limited, income-constrained, employed) residents are facing, and the federal government is recognizing the progress that we’ve made which is why now, finally,
after 10 years they’re moving close to releasing the $740 million that they
owe us.”

But HART board member Natalie Iwasa, who testified as a private person at the meeting, remained concerned over this agreement.

“The financial plan underlying the full funding grant agreement, in my opinion, has revenues that are just too aggressive,” Iwasa said, noting project costs could overtake what she believed were underwhelming rail revenues. “The costs are at a probability of 65% … when the recovery plan was in process we were looking at 90%, and I feel more comfortable with a 90% cost projection rather than 65%.”

Moreover, she noted the contract for the Kakaako project — the City Center Guideway and Stations — “has not been let.”

“So, that’s budgeted at $1.3 billion,” said Iwasa. “We do not know whether that will come in on cost or not. And we are paying for this project with general excise taxes — taxes on food, rent, medical services — and I am just so concerned about that. In my opinion, there are just too many open questions, too many areas of the financial plan we’re going to run into problems down the road. I hope I’m wrong, but we’ve seen in the past where that hasn’t been the case, so I’m very cautious about this.”

And prior to casting his dissenting vote, Council member Augie Tulba offered his concerns over building more rail line.

“By moving this forward we are still obligating ourselves to use $8.2 billion of the state and local taxpayer money to a rail project when we should be reevaluating … so that we can take care of the needs of our community and the things that
are important for the people in this state,” Tulba said.
“A ‘no’ vote, sorry.”

After the meeting, the city Department of Transportation Services — tasked with operating Skyline — could not be immediately reached for comment over questions regarding rail-related farebox revenues or expectations of city rail operations into 2024.

But during a December news conference inside Honolulu Hale, DTS Director Roger Morton did note Skyline’s ridership numbers had fallen since the start of operations last summer.

“It’s been a challenge for us,” he said.

According to DTS ridership data, for the month of January, as of Sunday, ridership for Skyline was pegged at 59,723.

In December, there were a total 85,460 riders aboard the city’s rail system. Day to day, those numbers fluctuated between a high of 3,637 riders on Dec. 7 and a low of 1,145 on Christmas Day.

During the month of November, rail saw 83,148 riders.

But in prior months, Skyline’s ridership numbers were higher.

In October, there were 92,578 riders on the city’s rail line, while September had 91,088.

In August, Skyline tallied 96,178 riders.

And in July — rail’s first full month of operation — there were 151,633 riders, a number that included a fare-free period that began
June 30 and ended July 4.



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