Monday, December 28, 2009

Executive committee meets to further discuss Norfolk light rail, future of HRT

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One day after telling City Council that light-rail construction costs will not exceed the latest estimate of $328 million, Hampton Road Transit officials said that the price could climb another $12 million, The Virginian-Pilot reports. During a closed-door executive committee meeting, HRT consultants revealed that the project, which was budgeted to cost $232 million when construction started, could rise to about $340 million, a 47 percent increase, several board members confirmed. They added that the projection is preliminary.

That's $52 million more than what city and transit leaders believed was the cost less than a week ago and $108 more than its original budget. The bouncing numbers have deepened city and transit officials waning confidence in HRT leadership.

HRT's executive committee met to consider HRT President Michael Townes' dismissal after learning from The Virginian-Pilot of cost overruns on the 7.4-mile starter light-rail line that runs from the medical center on Brambleton Avenue, through downtown, to the city line at Newtown Road. The closed-door meeting ended with no action but with $12 million potentially added to the tab.

Norfolk Vice Mayor Anthony L. Burfoot said if there was any question about more cost overruns, Townes should have told the Norfolk council. Norfolk is contractually obligated to pay the costs, if federal and state funding can't be found.

"I specifically asked him, ‘Is this it?' " Burfoot said. "He told me, ‘This is it.' We, as a city, have to do something to get this under control ... This guy can no longer sign blank checks. Our taxpayers deserve better."

Norfolk Councilman Don Williams said, "If he knew this and didn't tell us yesterday, I have absolutely no faith in him." Councilman Barclay C. Winn said that more than a year ago, when Townes came to the Norfolk council to explain the first round of cost increases , he asked him if he would resign if there were further increases.

"Michael told me that if they went over that, he would step down, that he would bank his job on it," Winn said. "He should be true to his word. He has put the future of light rail in Hampton Roads in serious doubt. He's putting his personal situation in front of the public good.''

Townes said he did not offer to resign, and he wasn't asked to.

"I am the person to be held accountable for HRT's performance,'' Townes said. "There are clearly other entities that have issues of accountability I think will be addressed."

Townes' future with the agency could be addressed at the next meeting of the full HRT board Jan. 28, said Wood and Norfolk Councilman W. Randy Wright.

"HRT is larger than light rail," he said. "We're the first city in the region to attempt this particular endeavor. Being an older city, we should have realized we would run into a lot of cost overruns."

AECOM, a consulting firm, was hired by HRT in November to analyze the problems. Wood said the consultant is about halfway finished and that a full report would be coming in one to two months. He said the report would go to HRT's attorney for consideration of "legal action or other action."

Norfolk council members learned that more than $30 million of the recent overruns are in so-called "soft costs," which include fees paid to consultants, legal fees and administrative costs. HRT will spend nearly $100 million on light-rail soft costs, according to Townes.

Townes said HRT was "served poorly" by consulting firm PBS&J, which has been paid about $19 million to help run the project and control costs. PBS&J still is working with HRT on the light-rail project.

The state and federal government will fund about $27 million of the overruns, city officials said. HRT officials hope to find funding for the rest. If they can't, Norfolk's taxpayers will be on the hook.

Although the project is being built in Norfolk, federal law requires that HRT manage its construction. Even with the latest overruns, the project remains the cheapest among recent rail projects in the country, at around $46 million per mile. A project in Charlotte, N.C., cost $48 million per mile.

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