Year-old warning gets new attention as light rail costs soar

NORFOLK

She isn't quite saying I told you so, but Del. Paula Miller says she warned city officials a year ago about "the runaway costs of light rail."

That alarm, she says, should still be heeded.

In November 2008, she wrote a letter to Mayor Paul Fraim and the City Council expressing concern about potential cost overruns. She urged them to appoint an independent panel of private business people to oversee light-rail construction.

"Unless we monitor construction costs now, we could be auditing the mistakes later," she wrote.

The council dismissed her request with little discussion. Fraim ardently defended the city in an exchange with Miller during a meeting with General Assembly members.

Now, however, at least three members of the City Council concede that Miller was right a year ago, and they are calling for an independent review of HRT's light-rail expenditures.

Last month, Hampton Roads Transit head Michael Townes informed the council that the latest cost overruns will be as much as $40 million. A day later, he told the HRT executive board that costs could rise by an additional $12 million.

That's on top of $56 million in cost overruns HRT officials announced a year ago. In all, the project could end up costing $340 million, or 47 percent over its original budget.

Although HRT officials hope to fill most of the gap with federal and state money, the city's taxpayers could be on the hook for more than $25 million. HRT is in charge of the project, but the city is responsible for all cost overruns.

Miller, a Democrat who represents northern Norfolk, said the city should have acted forcefully a year ago to claim oversight of the project.

HRT has said much of the overruns occurred because contractors were delayed, some more than 100 days, because utilities needed to be relocated. During the delays, construction workers and consultants continued to be paid.

"If we had an independent board, they would have been monitoring the change orders," Miller said. "The people at HRT knew about these overruns. You don't make change orders without knowing how much they cost."

City officials said they did not know about the overruns until Townes told them in mid-November. Townes said he informed city officials of the overruns as soon as he knew about them.

Councilmen Don Williams and Barclay C. Winn and Vice Mayor Anthony L. Burfoot all say an independent auditor needs to look at light-rail expenditures.

Williams, a former state delegate, said he believes the Auditor of Public Accounts, an arm of state government, might be the right agency. Miller said she will make such a request of the agency if the council asks.

"We need someone who has no interest in the project, other than finding the truth, to look at their books," Williams said.

Winn, who has criticized HRT more forcefully than anyone else on the council, said he regrets not embracing Miller's call for an independent panel and not speaking out more vociferously about his concerns.

"From day one, I was not pleased with the quality of the talent that we had on board to run that job," he said.

Councilmen W. Randy Wright and Paul R. Riddick, who serve on the HRT board, said they think the city should wait until AECOM, a consulting firm hired by HRT in November to analyze cost overruns, issues its report. Wright said AECOM officials will make a presentation at the next City Council meeting on Jan. 12.

"They've got a great national reputation," he said. "Let's see if their report answers our questions."

Councilwoman Daun S. Hester agreed, saying, "Where are they going to get the money from for another study?"

Hester, who opposes efforts by some HRT officials to fire Townes, said the fault lies with cost-cutting ordered by the city years ago after the original light-rail budget was deemed too costly. About $100 million was cut from the project, which was then supposed to be built for $232 million.

"We cut the project too much," she said. " Now we're back to the original budget."

Councilwoman Theresa Whibley declined comment on an outside audit. She said the city appears to have oversight on the project now that John Keifer, the city's director of public works, has been temporarily named the city's liaison for light rail. Moreover, the city hired transportation consultant Philip Shucet, former Virginia Department of Transportation commissioner, to help Keifer.

"I feel like we're finally doing what Paula asked us to do," she said.

Harry Minium, (757) 446-2371, harry.minium@pilotonline.com