Norfolk light rail is over budget, opening delayed to 2011

NORFOLK

Construction of Norfolk's starter light-rail line is running as much as 41 percent over its original budget, and that has angry local leaders demanding an explanation from Hampton Roads Transit, which manages the project.

HRT officials said this week they need $38 million to $40 million more to finish the 7.4-mile transit system, which is just over 50 percent complete.

When construction started in October 2007, the budget was $232 million. That figure escalated to $288 million in December 2008.

The latest cost estimate is $326 million to $328 million, HRT President Michael Townes said. Officials said the complexities of building in old, downtown streets as well as project enhancements have driven up the cost.

As a result, light rail's opening date has been pushed back again. Originally set to open next month and later pushed to October 2010, it now will be delayed up to three more months - into the first part of 2011, Townes said.

Most Norfolk City Council members and elected leaders who make up HRT's governing board were not aware of the cost overruns and delays until they were contacted Friday by The Virginian-Pilot.

The issue came to light when the Commonwealth Transportation Board voted Thursday to spend an extra $20 million on the project. Already, the state is contributing $67.1 million. The federal share is $167.2 million and the city's is $53.7 million.

While the city is legally responsible for the other $18 million to $20 million, City Manager Regina V.K. Williams said the city and HRT are working to find federal money and other sources to fill the gap instead of dipping further into city coffers.

"We cannot put this cost back on the taxpayers," Vice Mayor Anthony L. Burfoot said. "We can't afford to do any more, and we're not going to raise taxes."

A number of elected leaders have been asking for light-rail budget updates, but said they either got no responses or inaccurate responses.

Virginia Beach Councilman Jim Wood, who chair s HRT's board, used the words "incensed" and "indignant" regarding the latest developments.

"I'm very disturbed by the quality of information received from HRT's senior staff and the lack of accurate information received from HRT senior staff," Wood said. "When every single meeting we have we're told we're on budget and on schedule when we're not, that's a major issue."

Norfolk Councilman Paul R. Riddick said, "We can't afford to have that kind of leadership. For them to go this far down the road and this much over budget, we've got to do some things over there to make a difference."

W. Randy Wright, the Norfolk city councilman who has shepherded the project, said, "I think people need to be held accountable for what has transpired, and I won't go any further than that."

Townes said he did not inform the board because he did not have solid numbers and because he was awaiting the Transportation Board's action first.

"We've been refining these numbers and we didn't have a number to give to the board - we still don't have an exact number to give to the board," he said.

Asked what's next, Wood said he has called a special meeting of the HRT board's executive committee to discuss "litigation issues and personnel issues."

Townes and Williams said a number of factors have contributed to the increased costs. Several aspects of the project have been enhanced, including safety and security elements, passenger stations, the design of the storage and maintenance building, park-and-ride lots and landscaping.

Additionally, the challenges of embedding tracks in the streets of downtown have proven costly, in terms of both money and time. A key issue has been relocating underground utilities and the delays that work has caused.

Earlier this month, the city hired transportation consultant Philip Shucet, former Virginia Department of Transportation commissioner, to assist with the project. He said the light-rail construction "is a very complex project in an urban area with a lot of contractors all working at the same time."

Shucet said his job is to try to remove complexities. One way he's doing that is renegotiating with contractors for price guarantees. He said that can make costs more predictable, and "you can stop focusing on the day-to-day minutiae of change orders and devote all your attention to delivering the contract."

Townes said that HRT recently hired a transit construction expert and a financial consultant.

"We at HRT understand that our business practices need to be revised," he said.

Townes noted that the original design of the light-rail project was "bare bones" to meet stringent criteria for federal money. He said the newest budget is close to the price tag HRT estimated several years ago before slashing more than $100 million in a "value engineering" exercise to reduce costs.

"Many of the elements removed have now been put back in the project," Townes said.

Even at the new price, Norfolk's project is still the cheapest per-mile of any light rail built this decade in the country, at about $44 million per mile.

The next closest is Charlotte at $48 million per mile. Others range from $55 million per mile in Portland, Ore., to $600 million per mile in Seattle, which included a tunnel.

Meanwhile, Wood said he worries about the fallout for possibly extending light rail into Virginia Beach, which is under study.

"The perception is going to be very negative by a number of our citizens, and frankly I can't blame them," he said. "If Virginia Beach goes forward with the project, we certainly will have learned a lot from the issues going on right now."

Pilot writer Harry Minium contributed to this story.

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