Honolulu rail transit officials say they may have to forego $3.8 million in federal funding, because relocation fees paid to some property owners may be in excess of what federal law allows.

Andrew Robbins, executive director of the Honolulu Authority for Rapid Transportation, sent a letter to the Federal Transit Administration and U.S. Department of Transportation’s Inspector General on Thursday.

The rail authority overseeing construction of Oahu’s $9 billion elevated rail project may have violated federal law in making payments to property owners along the rail line who were forced to relocate, Robbins wrote.

In the letter, Robbins offered to forego $3.8 million in future payments for project costs after the agency uncovered millions in payments potentially in excess of what is allowed under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970.

“We regret any noncompliance with the URA that may have occurred and we are prepared to work with FTA to determine and undertake appropriate corrective actions,” Robbins wrote.

Construction of Honolulu's rail transit project.
Honolulu's rail authority says paid property owners forced to relocate above what it could claim for federal reimbursement. Honolulu Authority for Rapid Transportation

HART has spent $13.1 million on relocation expenses and received reimbursements from the FTA for $3.8 million or 30% of the cost, Robbins said in the letter.

The HART executive real estate team “is not aware of any wrongful or improper conduct by any recipient of relocation payments,” Robbins wrote.

HART said it uncovered problems with its relocation payments after it hired a new consultant, Collier’s, to help with properties in the project'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 the letter.

Schock reported to HART in February 2017 that payments approved for reimbursement on one property were not eligible for federal reimbursement. HART made a decision to review a sampling of HART’s relocation files to determine if other payments were made that didn’t adhere to federal guidelines.

The staff that handles right-of-way acquisitions has experienced turnover. HART is negotiating with Schock for additional staff and has created a new Acquisition and Relocation Program Manager position.

The review that covered relocations over a span of several years targeting high-dollar agreements found deficiencies in 15 of the 18 files due to “missing, inadequate, and/or inconsistent documentation; mathematical errors; and payments made without sufficient justification," according to the letter.

HART plans to expand the internal review in order to identify any additional discrepancies and to assist in determining appropriate corrective actions to ensure compliance going forward, Robbins wrote.

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