Light-rail costs raises criticism from Norfolk council

NORFOLK

City Council members grilled Hampton Roads Transit and city staff Tuesday about $55.9 million in light rail cost overruns, and not all were satisfied with the explanation.

The price tag has grown to $288 million, from $232.1 million a year ago, a 24 percent increase.

"I'm curious why we were so far off," Councilwoman Theresa Whibley said.

Some costs within the budget are double the original estimates - including consultant fees, the downtown construction contract and start-up expenses.

City Manager Regina V.K. Williams stressed to council members that the new number is still a projection and is "subject to further refinements."

The city's share of the added costs is $20.7 million, bringing city taxpayers' contribution to $53.7 million. The state is picking up the rest of the overruns.

Some council members had expressed frustration over delays in getting updated budget information for light rail.

Councilman Barclay C. Winn, who has been critical of Hampton Roads Transit's stewardship of the project, said, "I don't think I got as clear an understanding as I would have liked to get."

In general, officials attribute the overruns to construction and real estate cost increases, safety and security features requested by the state, changes sought by Norfolk State University, and enhancements such as station upgrades and landscaping added by the city.

The largest increases were especially troubling to council members. Consultant contracts to design the system rose to $14 million from $7.7 million and to manage the project jumped to $13.5 million from $5.9 million.

The scope of work that the consultants have been tasked with has expanded, said Fred Schneader, HRT's vice president of construction.

That includes some real estate work that was to be done by the Norfolk Redevelopment and Housing Authority but turned out to be "beyond the realm of what NRHA could do," Schneader said.

The contract to build the downtown stretch of rail will grow to nearly $49 million from $24.3 million.

Tim Brown, HRT's chief engineer, said the design of the downtown portion wasn't complete until after the budget was finalized, a scheduling quirk of the federal process.

The budget was insufficient because "some of the estimating was a mistake" and because the city and HRT made "decisions to do some things differently," Brown said.

Start-up costs are nearly tripling to $6.1 million from $2.1 million because HRT planned for only a month of testing vehicles and training drivers, which city and state officials said was inadequate.

Originally scheduled to carry passengers in January 2010, the rail line's opening date has been pushed to the summer or fall of 2010.

It's not clear yet how the city will pay the extra costs, though Williams said she will present a detailed funding plan in 45 days.

One option is to ask the state lawmakers for permission to spend more of the city's federal transportation funding on the project than what's currently allowed.

Another possibility is to impose a local transportation tax on commercial real estate, which didn't sit well with Councilman Don Williams.

"So we'll tax the Wards Corner business district for light rail?" he said. "I say tax the people who benefit from it."

The city manager noted that the light rail line, which runs from the medical complex on Brambleton Avenue through downtown to the Virginia Beach border at Newtown Road, will benefit the entire city.

Despite the increased costs, the city will have the smallest financial stake in building the project.

Federal funding totals $167.2 million. The state's contribution is increasing from $31.9 million to $67.1 million, while the city's share will go from $33 million to $53.7 million.

Mayor Paul Fraim noted that the city is still paying less than the originally anticipated $58 million, or 25 percent of the costs.

"The state and federal governments proved to be a stronger partner than we originally estimated," Fraim said.

Debbie Messina, (757) 446-2588, debbie.messina@pilotonline.com