Is rail too little, too late?

With auto sales, population and tourism numbers projected to continue to rise rapidly, how effective will rail actually be in reducing congestion on Honolulu roads?

The Honolulu Authority for Rapid Transit (HART) trumpets a reduction in traffic congestion on Honolulu’s crowded streets and clogged freeways as the primary benefit to the multi-billion dollar rail project. But, while the project is still years away from completion, statistics on the contributing factors show that congestion will only get worse in the mean time.

The auto industry is booming across the state; car sales and registrations continue to rise rapidly. In 2014, new auto registrations throughout Hawaii increased 11 percent in just the first quarter. Although registrations have stayed flat during the first quarter of 2015, they are projected to rise nearly four percent by the end of the year. And research from the National Automotive Dealers Association found that the auto business remains a multi-billion dollar industry in Hawaii. In 2013 alone, 78 new car and truck dealerships opened across the state.

Part of these gains can be attributed to Hawaii’s growing population. A report from Hawaii’s Department of Business, Economic Development and Tourism says the state’s population has steadily increased every year since 1980. Hawaii’s overall resident population is expected to increase from 1,363,621 in 2010 to 1,708,900 in 2040, an average growth rate of 0.8 percent per year. Oahu, of course, will retain the largest population, currently at 976,000 and projected to rise to 1,008,000 by 2040.

Add to that the impact tourism will have on driving. This year, Oahu has had at least 400,000 visitors each month, many of them renting cars. Nationwide, car rental businesses are seeing significant gains. The American car rental industry generated a record $26.1 billion in revenue last year, sparked—in part—by growing tourism, which is back to pre-recession levels in Hawaii.

HART is making its best effort to assure Oahu residents that rail will alleviate traffic congestion. Rail’s official website says it will, “eliminate an estimated 40,000 car trips from our congested streets and highways.” But does the project take into serious consideration the island’s continued growth? Increases in population, tourism, and vehicles will continue to make HART’s goal of traffic reduction a hard one to reach. If all rail does is take some cars off the road to create room for new ones, its net effect on traffic will be nothing.

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Rail’s growing money pit

The Honolulu Authority for Rapid Transit (HART) experienced another fiscal shortfall, recently, when General Excise Tax (GET) surcharge revenues in the latest quarter fell $8 million short of projections. That brings rail’s total tax deficit to $39 million. This is just the latest in a growing list of financial blows and disappointments related to the state’s largest public works project ever. Here’s a timeline of some of rail’s financial setbacks:

2010-2011: HART faces mounting criticism over the amount it is spending on public relations, presumably to manage negative press and speculation into the controversial rail project. Over-compensation and -employment for HART communications is estimated in the hundreds of thousands, at least. In July, 2012, HART CEO Dan Grabauskas finally cuts half the PR staff.

May, 2013: HART approves more than $10 million to pay for delay costs after a Hawaii Supreme Court decision halts construction.

September, 2013: Safety gates to prevent riders from falling onto the future rail tracks were accidentally left out of the initial project budget. The nearly $30 million dollars needed to build and install the gates will now come from the project’s contingency fund.

August, 2014: Bids to build the first nine rail stations come in more than $100 million over projections. HART originally budgeted $184 million (including contingency funds of $34 million) for building the stations, but the lowest bid came in at $294.5 million.

November, 2014: Concerns over rail’s electricity supply arise. HART previously said relocating utility poles, electricity lines and other utility infrastructure would cost $63 million, but that did not include the actual cost of electricity, which was an unresolved matter with Hawaiian Electric Company.

December, 2014: A financial assessment released by rail authorities says the project is on track to cost $500 million more than expected. Officials blame lagging tax revenues, rising construction costs and project delays. HART’s total contingency fund is just $538 million.

January, 2015: Rail’s budget shortfall rises to $910 million, bringing the total cost of the project to more than $6 billion.

March, 2015: Bids to build three rail stations in Waipahu come in far above projections. The city estimated building stations at Leeward Community College, Waipahu and West Loch would cost between $60-75 million, but the lowest of five bids came in at just under $79 million.

July, 2015: Amid growing concerns about rail’s funds, Governor David Ige signs House Bill 134, which extends the half percent GET surcharge five years, from an end date of 2022 to an end date of 2027. Officials say the surcharge could be extended again if necessary.

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HART seeks to fill board of directors seat

The Honolulu Authority for Rapid Transit (HART) is looking to fill a vacancy on its board of directors left by Robert “Bobby” Bunda, who stepped down in May. In a press release HART Board Chairman Ivan Lui-Kwan said, “We are looking for an individual who recognizes the importance of public transportation, who supports rail transit and who has a passion for public service.”

Bunda is a former state legislator who served on the board of directors since September 2011. Appointed in 2013 to serve a five-year term, Bunda ended it early to spend more time with his family. His replacement’s term will expire June 30, 2018. The vacancy comes just one month after Mayor Caldwell reappointed Vice-Chair Don Horner to a second term. Horner, who began serving a four-year term in the summer of 2011, will continue serving until 2020.

The next board member will have plenty on their plate. Back in 2011, when the board was first established, few expected the rail project to face so many challenges. Four years later, rail has been plagued by legal problems, delays and disputes between authorities and agencies involved.

But the greatest challenge so far remains the fiscal problems. Cost overruns for the $5.2 billion project are estimated at roughly $1 billion as of now. Where exactly that money is expected to come from is still unclear. Governor Ige recently approved extending the GET surcharge tax another five years. The original half percent surcharge for Oahu residents and businesses was expected to end in 2022 but, when HART’s overall revenues fell short by $30 million, it became clear they would have to find ways to generate more funds. The surcharge is now scheduled to end in 2027, but could be extended again.

HART’s board members are part-time volunteers responsible for instituting policies related to transportation and infrastructure in Honolulu County. A local statute requires that Mayor Caldwell appoint three members to the HART board, the Honolulu City Council appoint three members, the HART Board appoints one member, and there are three automatic appointments from relevant city and state departments.

Interested applicants can apply here.

Alex Kekauoha