Is the Honolulu Elevated Railway in its Death Throes?

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BY HONOLULUTRAFFIC.COM – Obviously, our former Mayor and now gubernatorial aspirant, Mufi Hannemann, must keep the elevated railway alive until after the November elections. Hannemann even declared that he had made sure before resigning as mayor “that no future mayor, no future City Council, can reverse the course we are embarking upon” with the rail project.

This is pure and simple braggadocio — strutting his stuff to the November election. Note that he did not mention the Federal Transit Administration or the current Governor.


The FTA has said that the City’s current financial plan is insufficiently robust to warrant entry into the next stage, Final Design. The Governor has said that she needs to see a plan that is robust enough to warrant entry before she will “accept” the Final EIS.

Mufi can continue this standoff by not having the City produce a new financial plan; Caldwell will do what he is told. Mufi can then continue to blame the Governor for holding up the project while deflecting blame from himself.

As we have written before (see our “misstatements” entry on July 17), the financial plan cannot be made robust enough without some highly improbable event whereby some hundreds of millions are dropped in the City’s lap. Not likely. They only have two real sources of funds — the GE Tax surcharge and federal funds. The GE tax is shaky and the fed funds are maxed out.

In 2006, the City forecast it would collect $759 million from the GE tax surcharge during fiscal years 2007-2010 ending June 30, 2010. It actually collected $536 million, 30 percent less than projected.

The three full fiscal years of tax collections have shown continuing declines — $169 million in 2008, $161 million in 2009 and $158 million in 2010.

While the Mayor and the Star Advertiser headlined record tax collections, that is editorial, not news. The news is that for the last quarter ending June 30, 2010, which included the record month, collections declined by 11 percent compared to the year earlier. This is why the Federal Transit Administration and the Governor want an independent projection of GE Tax collections.

At the moment, without using bus funds, the City is at the very least $300 million short. Mufi said yesterday, “Bus service will not be compromised; we will not use the bus fund for this rail transit system.” He can say that but the fact is, that the City’s formal financial plan given to the FTA plans to use bus funds.

Add to this the lack of progress on the Section 106 Programmatic Agreement regarding historic properties and native Hawaiian burial grounds. Then on top of that is the City’s agreement with EPA to spend $4.7 billion on our sewer systems. FTA is already worried about “competing demands on funding sources.” On top of that comes the revelation (see below) that our working age population, which is to say commuters, is declining. What does that do to ridership projections?

We do not see how rail proponents can overcome all this. However, all this delay will get Mufi to a safe haven beyond the November election. Then he can easily rationalize why the elevated railway did not happen.

date July 20, 2010.

Bad news for the elevated railway — commuters declining:

The Final  EIS tells us that for Oahu in the year 2030 there is a “projected population of 1,117,200” (FEIS, p. 1-6). However when we go to the latest Hawaii State population forecast for Oahu in 2030 we find a forecast that is 1,017,565 — that’s 100,000 less.

Worse yet, when we examine the data by age group and separate out the 20 to 64 year olds who will be our commuters in 2030, we find there will be fewer of them compared to today. This contrasts markedly with the City and FTA Final EIS projection that there will be 21 percent more “trips to and from work” by 2030 (FEIS, Table 3-11).

The significance of these data is two-fold. First, the City has not updated the Final EIS to reflect the State’s reduction in population growth data. Second, we can find no use in the Final EIS of age data. Given that all the growth is in people of school age and those likely to be retired, it is evident that the current ridership projections are highly overstated.

FTA extends comment period for the Final EIS:

The Federal Transit Administration announced today that they have extended the comment period to August 16 to allow additional time for all parties to review and comment on the Final EIS.

date July 19, 2010.

More grim news about rail transit cost overruns:

City Transportation Director Yoshioka keeps telling us that there have been major changes at FTA in the last few years and transit projects are now coming in on time and on budget.

We hate to keep bursting his bubble but that has not been the case, and two more have just come to light. In a June 18, 2010, letter to Christopher Dodd, the U.S. House Banking Chairman, FTA Administrator Peter Rogoff lays out his latest problems with two New York City projects.

    “… the news regarding the cost overruns and schedule delays is grim. As displayed in the enclosed table, FTA now estimates that the East Side Access project is likely to cost $1.769 billion more than was initially anticipated and will be delivered some 52 months later than the dates cited in the FFGA [Full Funding Grant Agreement] that was signed by my predecessor in December 2006. For the Second Avenue Subway project, FTA estimates that the project will cost some $930 million more than anticipated and be delivered 44 months later than the dates cited in the FFGA that was signed by my predecessor in November 2007.”

What Honolulu taxpayers should note is that the projected cost of the rail project has steadily increased from $2.6 billion in 2004 to $5.5 billion today with little or no change in the scope of the project. We can normally expect that the projected cost will continue to increase as we get closer to an FFGA.

Second, these cost overruns in the letter are relative to the FFGA and we are about 18 to 24 months away from being granted an FFGA.

Despite Transportation Director Yoshioka’s assertions that FTA projects are now under strict controls, they are decidedly not as evidenced by these and other projects we have brought to your attention during the past year.

Further, in the same letter, Administrator Rogoff writes to Dodd, “Most importantly, I want to assure you that not a single penny of additional Federal Section 5309 New Starts dollars will be used to fund these delays and cost overruns.”

In other words, city taxpayers are on their own for the cost overruns.