Don Horner’s resignation as chairman of the board that oversees Oahu’s rail project is unfortunate, and it would be naive to expect a miraculous turn of events — no more cost overruns and scheduling delays — because a political head has rolled.
What the retired banker takes with him is his financial expertise, which the Honolulu Authority for Rapid Transportation (HART) desperately needs, given the escalating price tag of the rail project, now at nearly $7 billion.
Yes, the rail project has been plagued by missteps: premature contracts delayed by lawsuits that drove up costs; dubious, overly optimistic financials presented to the City Council; and HART not fully taking into account utility clearance issues along the guideway’s path. Yet that cannot be pinned solely on HART’s board chairman.
While public confidence in the project has waned due to HART’s perceived mismanagement, using Horner as a scapegoat looks like political maneuvering on the part of Council Chairman Ernie Martin and Mayor Kirk Caldwell.
Martin, in a letter last week, asked for both Horner and HART Executive Director Dan Grabauskas to resign. Caldwell, who was out of state last week, said he had already planned to ask for Horner’s resignation upon his return.
Both now are trying to distance themselves from the rail snafus. But Caldwell in particular has been erratic in his leadership to, as he has repeatedly vowed, “build rail better.”
Horner’s departure comes just days before Friday’s expected release of a city auditor’s report on management of the rail project. Grabauskas, now in the second year of his latest three-year contract, is undergoing his regular evaluation by the HART board, which has the authority to terminate the executive director.
Caldwell contends that Horner, using “sugarcoated” figures, mismanaged the City Council’s expectations of how much more the project will cost.
The Council earlier this year passed a five-year extension of the rail tax, largely based on guarantees that no further extensions would be needed to finish building the project. Those guarantees are now in question.
Horner also took heat for his own political maneuvering last year as state lawmakers were deciding whether to allow a rail surcharge extension. Minutes from an executive session revealed that Horner suggested the state’s take on the rail surcharge be raised to 25 percent, up from 10 percent, in order to sway lawmakers to pass the enabling legislation for the extension.
Caldwell must now choose wisely in filling the vacancy left by Horner, the retired CEO of First Hawaiian Bank, and appoint a board member with financial acumen. The board also will have to elect a chairperson able to ride herd on the project and keep the lines of communication open with all stakeholders.
It is woefully apparent that a communication void exists between the semi-
autonomous HART and its volunteer board, as well as between HART and the city government.
Caldwell-appointed HART board members said they have been kept out of the loop on the true scope of rail challenges such as the Hawaiian Electric Co. utility clearances, learning more about the issue only by inviting themselves to a meeting with the project’s independent consultants.
City Director of Transportation Services Mike Formby said the board also was kept in the dark on the cancellation of a $240-$260 million contract to build a parking structure and transit center at Pearl Highlands.
Clearly, Grabauskas will need to do a better job of keeping the HART board and city leaders apprised of developments — both good and bad. Conversely, the board itself will need to be more aggressive in its oversight of HART.
The board ultimately represents Oahu taxpayers who are funding the state’s largest public works project. Board members will need to ask tougher, detailed questions regarding management of rail contracts and spending, and seek deeper explanations of cost overruns, which have plagued the project.
The city auditor’s report on rail will likely point out areas for improvement, and HART’s management must take heed.
The last thing the project needs is more upheaval via another key resignation — or termination — that could further delay the project’s soft opening at Aloha Stadium.