The Virginian-Pilot
©
NORFOLK
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 Wednesday that the price could climb another $12 million.
During a closed-door executive committee meeting Wednesday, 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 Wednesday 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.
“There was no consensus to dismiss or discipline at this point,” HRT Board Chairman Jim Wood, a Virginia Beach city councilman, said.
Norfolk Vice Mayor Anthony L. Burfoot said if there was any question about more cost overruns, Townes should have told the Norfolk council Tuesday. 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 Wednesday, 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.
Norfolk Councilman Paul Riddick said he supports Townes and attended Wednesday’s meeting even though he’s not on the executive committee. Riddick is a board member.
“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 will go to HRT’s attorney for consideration of “legal action or other action.”
Tuesday, Norfolk councilmembers 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.
Debbie Messina, (757) 446-2588, debbie.messina@pilotonline.com
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Who gets paid to prepare and monitor the budget?
It appears the left hand and the right hand are disconnected from the body and this project needs emergency surgery. How much more will it cost if you fire Townes? The scariest thing to me is who will replace him? Will they have the contacts and connections that he has successfully built in implementing and running this project to date as a whole? Will it be a deterrent and more costly to the project overall? Act out of anger and most anyone will be able to write the outcome. Everyone needs to come together and monitor the budget, control the costs, and audit through the whole process (contract execution, the accounting system, budget operations, operations, payment of invoices, bank accounts, consultant minimization, and reporting until some realistic values can be ascertained that are bullet proof.) This is a major project not a one man band. Since "budget" is the hot topic get face-to-face with the people preparing it and don't let them hide behind their superiors.
Consensus or spin on what to do on cost overage
Those who advocate a course of action will formerly want to hear views of the proposal to either remove or retain Mr Towns as noted by Chairman Woods. That is unless a formal request was not made as Mr Woods suggested. In other words, there was no proposal for consensus or a group opinion. Perhaps the HRT Chairman can explain because the present sound bite is beginning to sound like a relentless spin.
Light Rail is Failed Venture for this Community
Two years ago I completed a research paper on the Norfolk-Virginia Beach LRT project for a UVA Construction Management graduate course. At that time it was obvious to me that this undertaking would only result in huge cost overruns due to what I thought was an obvious manipulation of the construction and maintenance costs and overly optimistic usage estimates. Here is what I found in the information available in the public domain.
Although the community leaders had been strong proponents of a regional light rail system, over the years there had been community opposition to the Norfolk-Virginia Beach LRT system. This stemmed from the seemingly high initial construction cost estimate of $375M, the estimated annual operating and maintenance costs of $11M, the questionable willingness of commuters to abandon their cars, the lack of a geographical city/regional center resulting in too few people going to the same place at the same time, and the attempt by the Norfolk government officials to force the revitalization, and commercial and residential development of downtown Norfolk with a LRT at taxpayer expense.
The initial estimate for the cost of the original 18 mile system
Mike Townes wants Federal funds for another lobbyist (TPO)
TPO Committee Meeting, July 23, 2009; Mr. Spore raised the question regarding the issue that federal funds could not be used to pay for a lobbyist. Mr. Farmer noted the position would be funded through PL funds. Mr. Townes stated there was a significant difference between a legislative representative of an organization and a lobbyist who was hired as a big gun. Mr. Farmer indicated the position was initially going to be funded by the reserve funds; however, it was changed after the May HRTPO Board Meeting. The Board was not willing to use local funds for the position because their budgets were already completed. Mr. Farmer stated the only other source for funding was from the PL funds. He noted the position of Legislative Liaison would not be as a lobbyist. Ms. Dabney stated the PL funds could only be used for the position if the Liaison’s job was to research and report back to the HRTPO in order for the Executive Director to make informed decisions.
Mike Townes = Regional Government Corruption
Folks, the $100M cost over run on a tiny 7 mile light rail project in Norfolk is just the tip of the iceberg in regard to the corruption going on with the all-appointed regional government being forming in Tidewater!
If we had a real investigative press that wasn't in bed with the "regional agenda" we'd know a whole lot more about the complex and expensive regional government that has beed set up to allow guys like Mike Townes to do what he does.
Mike Townes is simply the tip of the iceberg. To correct the abuse of our tax dollars will require a massive house cleaning - and the General Assembly and Governor Bob McDonnell need to make this a priority. The savings can be significant. And we all know how the state is searching for constructive ways to reduce spending.
Mike Townes VOTES on the TPO Committ! More regional mess?
Notice that Mike Townes VOTES on the TPO. July 23rd, 2009.
TPO Committee: Joe S. Frank, Chairman, NN, Stan D. Clark, IW, Jeffrey Florin, VPA (The Port Authority), Clifton E. Hayes, Jr., CH, Dennis W. Heuer, VDOT, James O. McReynolds, YK, Mark D. Rickards, WATA, Ivan P. Rucker, FHWA, Douglas L. Smith, PO, James K. Spore, VB, Michael S. Townes, TDCHR, Molly J. Ward, HA.
During the June meeting of the TPO Committee, it was also requested that Mr. Peter Huber, HRPDC Legal Counsel, outline an issue paper on forming the HRTPO into a non-stock, not-for-profit corporation. It was requested that the issue paper, to be considered by the Committee at its July meeting, include information on establishing a new legal status for the TPO as well as the costs involved.
Reid Greenmum
Rather prolific keyboard commando on this subject, demanding every elected official's resignation.
The bottom line is that Townes is the one who kept the elected officials in the dark, and it is clear he is playing the race card to keep the commission split to keep his job. Riddick is proof of this - - as a Norfolk councilman has the most to lose, yet he defends this as a "hiccup."
Of course, this is Reid's Christmas present. He is negative on nearly everything and this has to make his day. Quite sad when someone takes pleasure in the failure of others.
Townes needs to go. I hope that Jim Wood can cobble together the votes to make this happen and that Riddick's race baiting does not hinder this process.
That would be a Christmas present we could all share.
The truth does please H. Watkins
Merry Christmas H. Watkins. No, I'm far from negative on nearly everything. But I will help defeat abuses of our tax funds when I see them. I also appreciate that Mike Townes is much like a City Manager. He is a paid employee that works for the TDCHR. The ELECTED individuals that agreed to accept the responsibility for oversight of HRT are responsible for these cost over runs. THEY are responsible for the safeguarding of our tax dollars. The other highly paid HRT employees that lead the efforts to oversee the 7 mile light rail project in Norfolk, THEY either lied to the TDCHR, or they reported the truth, and the TDCHR ignored what they were told. So, those folks, if they lied - or if they simply failed to keep track of the project as they were paid to do, they need to be fire as well. Simply throwing only Mike Townes under the bus will not correct anything, nor hold those responsible - accountable.
slight problem with reid's logic
Unless I am mistaken, by law the commission can only hire and fire one person - Townes. My assumption is based on him being like a city manager.
They need to break any potential racial nonsense, hold him accountable, terminate him, and bring in a strong leader who can hold those within the organization accountable.
Out of control regional government
So, if what you believe is true, then we clearly have an out of control regional entity spending hundreds of millions, potentailly BILLIONS of our tax dollars and the ELECTED body set up to safeguard our tax dollars can only fire ONE person out of the more than 800 people that taxpayers pay at HRT?
Wow - Folks, we need to change this immediately. The entire regional structure leads to disasters like SPSA and HRT and we taxpayers are powerless to do anything about it.
Of course, the problem isn't limited to Mike Townes - the ELECTED people appointed to govern HRT are responsibel and THEY need to be fired. The Governor and the General Assembly need to act to correct this mess. They create the TDCHR and agreed to the creation of HRT.