While at long last there seems to be movement on the rail-tax extension issue, the City Council seems to be slow-walking toward that decision point, as well as toward resolution of the project’s entire legal mess.
As politically painful as it might seem to take a series of votes on a controversial issue in advance of an election year, that is what the public interest calls Council members to do.
The hot-potato issue of the rail vote came into focus last week when Council Chairman Ernie Martin signaled that Bill 23, which would extend the general excise tax surcharge financing the rail for five years, would get a committee hearing in the coming weeks.
But he also signaled the Council’s ambivalence on this issue, adding that he’s unsure such a tinderbox of a bill could make it out of committee.
Regardless, it’s Martin’s job to see that it does. The Council needs to put the rail project on firmer financial footing, an aim that will only get more difficult if it kicks the GET can down the road.
The second task lies in cleaning up the ethical mess made by Council members when they voted on the original bond authorization bill, and a raft of measures to follow, in 2012.
Action here is essential to enable continued bond financing for the project and pay its construction bills.
In brief, former City Councilman Romy Cachola reached a settlement with the Ethics Commission to drop an investigation.
The allegations were that Cachola accepted illegal gifts from rail lobbyists and failed to disclose his conflict in advance of his vote on the project.
The commission also began looking into similar gifts made to other Council members.
In the wake of these revelations, Campbell Estate heiress Abigail Kawananakoa filed suit seeking to invalidate 11 rail-related bills the Council had passed.
As the basis for this claim, according to the complaint, Kawananakoa cited a finding by the commission that a vote by a Council member is null and void if the member had an undisclosed conflict of interest.
The lawsuit seeks, among other things, that the city be stopped from continuing to fund aspects of the project enabled by the invalidated laws, including major rail budget provisions.
But even before the suit could come to trial, it poses a potentially fatal threat to the project that the Council must act promptly to remedy.
That also came to light last week when officials of the Caldwell administration asserted a re-vote on the 2012 rail authorization is required by January to keep the financial plan afloat.
The Council needs to authorize the issuance of up to $450 million in short-term bonds for the $6 billion rail project and other needs.
City Budget Director Nelson Koyanagi sent a letter to the Council on Thursday stating that the city wants to issue the bonds through a new "tax-exempt commercial paper" (TECP) program.
But the TECP program requires a signature from city Corporation Counsel Donna Leong affirming that there is no pending litigation affecting the finances — which, of course, she can’t affirm because of the Kawananakoa lawsuit.
The bottom line is that it’s pointless to postpone action on any of these matters. The Council should pass Bill 73, the measure that replicates the original bond authorization measure. That way the city can move on with its TECP bond program and ensure a healthy cash-flow for the project and avoid late-payment costs.
While they’re at it, it would make sense to bite the bullet and re-vote all 11 of the measures identified in the lawsuit.
They need to do that with full disclosure of any conflicts. Otherwise, the legal cloud hovering over the project will persist, and that is sure to disrupt the project planning going forward.
Things will not get any easier, or cheaper, through stalling tactics.
Further, it’s simply the right, ethical way to proceed. Taxpayers elect members of Council to make the decisions required to serve the public and to do so openly.
The decision to proceed with rail was a justifiable one. The city needs transit alternatives linking its population centers from west to east, and the urban-planning advantage of concentrating development along the alignment fulfills Oahu’s needs as well.
The city made a commitment to rail, and it’s time for the people’s elected leaders to own that decision. The best way to do that would be to authorize the extension of the rail tax surcharge, and renew the commitment fully, without delay.
