Honolulu rail officials may have violated federal law in issuing millions of dollars in payments to property owners along the rail line who were forced to relocate to make way for the project.

In a letter released to media late Thursday, Honolulu Authority for Rapid Transportation Executive Director Andrew Robbins informed rail’s Federal Transit Administration partners — and the Inspector General for the U.S. Department of Transportation — that his agency uncovered widespread payments potentially in excess of what the federal law allows.

Robbins suggests that HART forgo $3.8 million in future FTA payments, essentially giving back what the federal agency has already paid out to cover its share of relocation costs.

The relocation payments aim to compensate owners and tenants whose properties lie in the path of the elevated line. They’re covered by the Uniform Relocation Assistance and Real Property Acquisition Act, which sets standards for takes along big public projects such as rail.

The letter doesn’t go into much detail on what happened other than to say most of the relocation files examined so far have missing documents, math errors and “payments made without justification.”

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HART says that as of January it’s paid nearly $13.2 million in total relocation costs for rail, but it’s still not clear how much of that sum is affected.

Robbins adds that he’s not aware of any wrongdoing by those who received relocation money. The rail agency is expanding its internal review of the situation, the letter states.

Problems Emerged Last Year

HART said it uncovered problems with its relocation payments after it hired a new consultant, Colliers, to help with properties in rail’s right-of-way, and a subcontractor, W.D. Schock, in November 2016 to assist the rail project.

That month, a separate contract expired for HART’s former right-of-way consultant, Paragon Partners, and wasn’t renewed, according to Thursday’s letter. It did not specify why.

HART’s own planning, permitting and right-of-way director, Jesse Souki, also left the project in November 2016 after about a year on the job and became the Hawaii Community Development Authority’s executive director. Souki could not be reached for comment late Thursday after HART released its letter.

(UPDATE: On Friday, Souki said that one of the last things he did as HART’s right-of-way director was bring on Colliers and W.D. Schock to replace Paragon. When Paragon’s contract expired and the work went out to bid, Colliers’ proposal was stronger than Paragon’s, he said. Souki said he didn’t see problems with Paragon’s work on relocation payments, but in an email he added “it appears that W.D. Schock’s work is helping to improve the program. That is good news.”)

According to HART’s letter, W.D. Schock started reviewing relocation files and then approached HART in February 2017 with payments that weren’t eligible under federal law. HART and its attorneys then spent much of 2017 investigating whether they had a bigger problem on their hands, with more widespread relocation payments for rail that violated the federal Uniform Relocation Act.

They examined 18 samples, representing less than 20 percent of rail’s total relocation files and representing “some of the most complex, high-dollar” payments to owners and tenants along the rail line.

In 15 of those 18 cases, HART says it found “potential deficiencies” — the missing documents and math errors.

Damage Control

Now, HART is scrambling.

In his letter, Robbins suggests that HART fully compensate the FTA for the $3.8 million it’s already paid in relocation costs.

He also notes that the local agency has largely “restructured” its right-of-way staff. Souki’s replacement, Abbey Mayer, started in December 2016. A deputy director for right-of-way issues left HART in late 2017 after working there four years.

Robbins added that he intends to create a new “acquisition and relocation program manager” position at HART — and fill that job with someone who has URA expertise.

Cory Lum/Civil Beat

Earlier on Thursday, prior to the letter’s public release, HART board members spent more than an hour in closed session getting a briefing on the status of rail relocations under the federal guidelines.

As soon as they emerged from that session, Robbins read a statement aloud to the room.

“While HART’s focus is on ensuring compliance going forward, HART is also committed to identifying and correcting any past non-complying actions,” it read. “To the extent permitted by law we will keep the board apprised of the status of the FTA’s review and our progress in resolving this matter.”

But he didn’t read the letter aloud, so there was little context at the time. He did note the letter would be posted later Thursday on the HART website. Robbins declined to comment further until his agency hears back from the FTA.

Robbins is relatively new to the project — the board hired him this past July, so much of the situation with the relocation costs predates his tenure. His predecessor, Krishniah Murthy, led the project for nearly a year as the interim executive director starting in December 2016.

Former HART Executive Director Dan Grabauskas resigned under mutual agreement with the board in August 2016 as project costs continued to skyrocket.

It’s not yet clear whether this situation will impact Honolulu’s $1.55 billion funding deal with the federal government, covered under a 2012 grant agreement. HART officials continue to wait and see whether the FTA will approve their rail recovery plan from last year — and then release project’s remaining $744 million in federal dollars.

Rail’s longtime federal watchdog has previously expressed its concerns on whether the funding listed in that recovery plan will be enough to build all 20 miles and 21 stations. Robbins, however, has said he’s “highly confident” they’ll get approval.

FTA representatives weren’t available for comment late Thursday.

(UPDATE: On Friday, the agency said in a statement that it’s reviewing what HART sent and will “determine appropriate next steps” once that’s done.)

Read HART’s letter here: