HI: Uncertainty over Honolulu rail leadership could put funding in jeopardy

June 7, 2024
HART, so far, has received $125 million out of $744 million it’s expecting from the FTA after reaching an agreement with the FTA to shorten the route and bring it in on budget, resulting in the opening of the system a year ago.

The Federal Transit Administration on Monday warned that leadership uncertainty at the Honolulu Authority for Rapid Transportation could jeopardize another $250 million in federal money needed by the city’s rail system.

HART, so far, has received $125 million out of $744 million it’s expecting from the FTA after reaching an agreement with the FTA to shorten the route and bring it in on budget, resulting in the opening of the system a year ago.

The $125 million payment was the first for the rail project from the FTA since 2017.

The next round of funding — or “tranche” — would come once HART awards a contract to build the final leg of the 18.75-mile project into its final destination from East Kapolei into Kakaako.

After years of delays and cost overruns to get rail running, the FTA told the Honolulu Star-Advertiser on Monday, “There has been meaningful and encouraging recent progress.”

But following a story in Sunday’s Star-Advertiser about ongoing uncertainty over the future of Lori Kahikina — HART’s CEO and executive director, whose contract expires in six months — the FTA wrote in an email to the Star- Advertiser:

“Any change in leadership by a project sponsor must maintain the technical capacity and project delivery schedule set forth in the grant agreement. Failure to do so could result in funding being delayed until that capacity was demonstrated.”

Kahikina has been widely credited for helping to restore the FTA’s faith in Honolulu’s rail project and getting federal funds flowing into it.

But tensions between Kahikina and HART’s 12- member, unpaid volunteer board — specifically board Chair Colleen Hanabusa — have now raised concerns that bidders might lose interest in building the Civic Center “guideway” project, or increase their bids as a financial cushion because of leadership uncertainty.

Bids are scheduled to go out in July.

Kahikina’s $275,000-per-year contract expires Dec. 31.

The first serious discussion about her future has been scheduled for a meeting Friday of the HART board’s Human Resources Committee.

A separate item on the agenda described as “Referral of Recent Media Reports Regarding Board Member Conduct for Investigation/Action” may be related to board member Natalie Iwasa, who recently appeared before the City Council and described Kahikina’s situation at HART as a “corrosive environment.”

Kahikina became HART’s interim CEO and executive director in January 2021 and began cutting redundant staff and contractors to get the stalled project under financial control.

Mayor Rick Blangiardi then appointed Hanabusa to the HART board seven months later, and tensions began but went largely unnoticed by a public that fails to tune in to the monthly board meetings and committee hearings.

Then Iwase revealed the situation to the City Council during a HART budget briefing, leading to concerns among some council members.

Asked whether the FTA has talked to Honolulu officials about the uncertain future of HART leadership, the FTA told the Star-Advertiser:

“FTA does not address local decision-making regarding operation of a given transit agency, including its leadership.”

Blangiardi’s office pre­viously told the Star- Advertiser that “this matter needs to be resolved in HART and we are taking steps to facilitate a resolution of differences.”

Correction: HART expects $744 million in Federal Transmit Administration funds, not $785 million as reported in an earlier version of this story.

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