Amid rail officials’ seeming inability to stay ahead of skyrocketing costs and calls for greater accountability, the project’s top executive resigned Thursday after more than four years leading the Honolulu Authority for Rapid Transportation.
Colleen Hanabusa announced Dan Grabauskas’ resignation Thursday after the HART board she chairs emerged from its final private session on his job evaluation. Since April it spent some 17 hours behind closed doors discussing the matter.
“I believe in this project and its importance to the residents of Oahu, and by stepping aside today I hope to allow HART to move forward to ultimate success with fresh leadership,” Grabauskas wrote in a resignation letter to the board Thursday.
The executive, who led HART since April 2012, attended the start of Thursday’s meeting but wasn’t present when the board announced that the parties had come to a mutual agreement for his resignation. Grabauskas was not available for comment afterward.
Hanabusa said the board voted unanimously to approve the severance deal. Asked whether the board had asked for Grabauskas’ resignation, Hanabusa said it was a personnel matter.
“If you look at the history of the project and what has happened, each one of us interprets it differently,” Hanabusa said. “He believes, with the board, that it’s time to move on.”
Grabauskas was in the second year of his latest three-year contract. Under his deal he’ll get severance of $282,250, which Hanabusa said reflected his base salary of $257,250 plus $25,000 for a release of claims. She said his last day on the job was Thursday but that the official separation date is in October.
Mike Formby — who emerged as one of Grabauskas’ most outspoken critics in recent months — has temporarily stepped down as the city Department of Transportation Services director to serve as HART’s acting executive director. He’ll also temporarily step down from the HART board, and he’ll lead the rail agency until its board finds Grabauskas’ replacement, officials said. Formby met with rail’s senior management immediately following Thursday’s meeting.
Formby will continue to earn his $147,000 DTS salary, Hanabusa said. He and other rail leaders will be in San Francisco on Aug. 29 and 30 to discuss the project’s future with top Federal Transit Administration officials, she added.
While some have called for Grabauskas’ departure for months, the move adds more uncertainty to a cash-strapped project that’s now short at least $1.3 billion to make it all the way to Ala Moana Center. Nonetheless, city leaders say the departure allows HART to hire an executive with more construction savvy. Grabauskas’ forte, they said, was operations. The transit system’s not slated to start full service until 2024 — if the city somehow finds the dollars to finish it.
On Thursday, Mayor Kirk Caldwell said he would have supported whatever the board decided because city voters had left it to the HART leaders to make the choice. He added that he believed the board made the “appropriate decision.” Caldwell has touted his board appointments of Hanabusa and Colbert Matsumoto as key steps toward better rail oversight.
Caldwell’s opponent in this year’s competitive mayoral race, former U.S. Rep. and City Councilman Charles Djou, called for Grabauskas’ dismissal Wednesday and argued that Caldwell should be the next to go.
City Council Chairman Ernie Martin added in a statement Thursday, “While I called for his resignation months ago, I would like to thank Dan Grabauskas for his service.”
Both Caldwell and Hanabusa said politics had nothing to do with Grabauskas’ resignation, and a spokesman for Martin said the Council chairman’s previous calls for Grabauskas to leave weren’t politically motivated, either.
Last spring, when Martin called for his exit, Grabauskas said he intended to leave that decision to the board.
“This is my home. I’ve put down roots now over the last four years,” Grabauskas said in April. “I love Hawaii. I’d like to stay here, and I’d like to see this project through.”
GRABAUSKAS garnered positive marks soon after arriving at HART. In July 2012, three months after starting the job, he slashed the agency’s much-criticized public relations budget by $2.8 million and told City Council members that he “wholeheartedly” supported an audit of rail-related public outreach. He also won points for being considered more responsive to rail stakeholders and the public at large.
“Thanks to Dan coming on board, there was better consistency, coherence. There was follow-through. What it really said to me was he was a people person,” said Hinaleimoana Wong-Kalu, who chairs the Oahu Burial Council. The burial council, administered through the Department of Land and Natural Resources’ State Historic Preservation Division, dealt closely with HART over the agency’s archaeological inventory survey along the line, particularly after the state’s top court ruled the survey would have to be finished before construction could continue.
“Whether or not he was going to be the best fit in other elements of the project, I can’t speak to that. (But) you needed a glue — to glue together the working components … and I think that was him,” Wong-Kalu added. “I appreciate that which he has brought to the project. I don’t think it would’ve come this far without him.”
For his first yearly evaluation, in spring 2013, the board unanimously praised Grabauskas for “exceeding expectations” with his leadership. It awarded him a $35,000 bonus in that year and the next.
But the course of his tenure started to change in August 2014, when HART opened bids to build the rail’s nine westernmost stations that all came in more than $100 million over budget. The bids surprised rail officials and Grabauskas, who expressed uncertainty over whether the rest of the planned construction would fall within budget.
Four months later he would announce that the project faced a $910 million budget deficit, largely due to a hot construction market.
In winter 2015 Grabauskas would help local policymakers — particularly Caldwell — make the case before state legislators to approve a rail-tax extension.
On March 4 of that year, as lawmakers closed in on what would be a five-year extension of Oahu’s general excise tax surcharge, Senate Ways and Means Chairwoman Jill Tokuda asked Grabauskas whether the five-year proposal “finishes what you’ve started.”
“That’s correct,” Grabauskas replied. Five years, he told the senators, should give the project three years of tax revenues to fill rail’s budget hole, plus a contingency cushion. In all, it could boost rail’s total budget to about $7 billion, rail officials estimated. (They later adjusted that to about $6.8 billion)
Missing from that discussion with lawmakers, however, was an August 2014 Federal Transit Administration risk assessment that put rail’s “upper-bound” price tag — the most that rail could cost — at just under $7.6 billion.
Hanabusa, HART’s current board chairwoman, flagged that cost figure earlier this summer.
Months after state leaders approved the tax extension, rail officials including Grabauskas indicated that construction-cost escalation and utility problems were further driving up costs.
Board members who had supported his leadership — Ivan Lui Kwan, University of Hawaii General Counsel Carrie Okinaga, former First Hawaiian Bank Chairman Don Horner, former state Senate President Bobby Bunda and private development manager Keslie Hui — either left the board to pursue other opportunities or were pressured by city leaders to leave as the costs mounted.
Members of the revamped board, particularly Hanabusa and Formby, began to openly criticize Grabauskas — saying he wasn’t forthcoming with budget details and other information. In April, Formby fumed that “we look like potted plants when we don’t have the opportunity to ask questions and make decisions.”
Hanabusa said that month she was “very disturbed” by Grabauskas’ defiant reaction to a city audit released this spring that criticized HART for relying on outdated financial figures, among other issues. Grabauskas had accused city Auditor Edwin Young of bowing to political pressure inside Honolulu Hale with his handling of that report.
In August 2009, Grabauskas agreed to a $327,000 buyout to resign as the Massachusetts Bay Transportation Authority’s general manager, amid questions over two crashes on the Boston area’s Green Line subway and the agency’s financial troubles, according to the Boston Globe.
Grabauskas, Boston’s former Mayor Thomas Menino and other officials criticized his departure as politically driven by the state’s then-governor, Deval Patrick, a Democrat, according to the Associated Press. (Grabauskas was a Republican appointee.)
In Honolulu, whom the board hires largely depends on whether city voters approve a City Charter amendment to transfer rail operation to DTS and leave HART to build the system, Hanabusa said. She appointed board member Colbert Matsumoto as chairman of the search committee.
Formby’s deputy at DTS, Mark Garrity, will serve as that department’s acting director but won’t serve on the HART board, officials said.
Retired community activist Jim Anthony said he worried about losing Grabauskas’ institutional knowledge on the project. Hanabusa said that HART staff has much of that knowledge.
Rail leaders now focus on a recovery plan for the project.
“I don’t think that getting rid of someone is necessarily going to make a problem disappear,” Wong-Kalu said.
Daniel Grabauskas Resignation Letter
