The City Council approved the rail recovery plan this week, making it more likely that property tax dollars will help fund project construction despite earlier assurances those dollars would not be used.
For several Council members, including those who voted for Resolution 17-266 Opens in a new tab, it was a bitter pill to swallow.
“This is a discussion that I have dreaded for a long time,” Council Chairman Ron Menor said moments before joining the majority in Friday’s 5-3 vote. “That is not a decision we made … but that is a requirement that was imposed on us by the state Legislature.”
The recovery plan, sent to the Federal Transit Administration on Sept. 15, shifts the responsibility to the city to cover an estimated $160 million in administration costs for its local rail agency which is technically part of the project’s larger, capital costs.
Currently, Oahu’s state general excise tax surcharge revenues cover the costs of running the Honolulu Authority for Rapid Transportation. However, state leaders, who’ve called for the city to put more “skin in the game,” included that change in their most recent rail bailout package, Act 1 Opens in a new tab, which was approved last month in special session.
“We need to make the best of the cards that the Legislature has dealt,” Menor said. The Council, by city ordinance, has to approve any intergovernmental agreements on rail that affect the city.
Councilwoman Kymberly Pine, who joined Menor in voting to approve, was scathing in her comments toward the state.
“It was really just done to hurt people,” she said of the change Friday. Earlier in the week, during a joint committee meeting Tuesday to take up the resolution, Pine called it a “conscious effort by the Legislature to stick it to the city taxpayer.”
“I am extremely disappointed that they are strapping us, the taxpayer, with $160 million in operational costs that used to be paid for by the general excise tax.”
Council members Ikaika Anderson, Brandon Elefante and Joey Manahan joined Menor and Pine. Council members Carol Fukunaga, Ann Kobayashi and Trevor Ozawa voted against.
Councilman Ernie Martin did not attend Friday’s special full-Council meeting. In a Thursday memo to Menor, Martin asked to be excused because the recovery plan had already been delivered to the FTA. He considered the resolution an “after the fact” action that “would preclude any deliberative discussion.”
It remains to be seen whether city leaders will further raise property taxes to help shoulder the added HART costs. The city could float more bonds instead to avoid that, Budget and Fiscal Services Director
Nelson Koyanagi told the Council.
It could also decrease core city services, Koyanagi added.
Menor said he aims to use as few property tax dollars as possible to fund HART while also not floating bonds, but he did not offer any specifics.
A 2007 ordinance limited rail construction funding to two sources: the GET surcharge revenues and federal funds.
In April, Menor introduced Bill 42 Opens in a new tab, which would allow city dollars to help fund rail construction, not just state and federal funds. Council members deferred the measure in May, however. The Council further looked to consider it in August but later canceled.
On Friday, Kobayashi also wondered why rail officials submitted the recovery plan before the City Council had a chance to approve the document.
“The timing could have been better,” Donna Leong, the city’s corporation counsel, told Kobayashi from the podium. “But it’s better to get approval after the fact than to not get approval at all.”
HART Executive Director Andy Robbins added that his agency needed to get the plan to the FTA by its Sept. 15 deadline. The recovery plan still needed the Council’s approval before the FTA would substantively review it, he said.
Community activist
Natalie Iwasa wondered why the City Council was “rushing” this week to approve the plan if the FTA had not set a deadline for that.
Earlier, at Tuesday’s meeting, Iwasa pointed to a small typo in the plan, in which HART officials misstated rail’s total capital project costs by an extra $30,000.
“We got into this mess because planning was not adequate, and here we are having one meeting on Tuesday and then another meeting on Friday to approve the plan,” Iwasa said Tuesday. “We’re continuing this idea of rushing.”
