For the record, the Honolulu City Council supports rail and wants to see it completed successfully for the sake of Oahu’s future sustainability. Lately, Council support has been called into question by members of the state Legislature and others on the proposed extension of the general excise tax surcharge for rail.
For the Council, it’s not just about the surcharge. Holding overall financial authority for rail means Councilmembers don’t have the luxury of piecemeal oversight of the project. That’s the job of the Honolulu Authority for Rapid Transportation (HART), its appointed board, and the mayor.
The Council must stay focused on the big picture. And right now, that picture is troubling — like the $910 million hole that suddenly appeared after we received glowing reports for 2014 and the news that HART had awarded a bonus to its executive director.
The three most talked about options to plug the projected shortfall all sound simple enough: extend the general excise tax surcharge, increase property taxes, or scrap the project. But raising property taxes before exploring all possible remedies is irresponsible, and a total stoppage is foolish and shortsighted. The city is liable for repayment of the entire $1.55 billion federal grant if the project fails and future requests for federal transportation funds would likely be rejected.
Extending the surcharge is clearly the most viable and it spreads the burden among all Oahu residents, businesses and tourists.
The time has come for frank answers from everyone responsible for rail, from the mayor and the Council, on down to every staff member at HART.
First, do we have the right knowledge and experience on HART’s executive team and staff? They answer to the board of directors appointed by the mayor and the Council. Secondly, is the HART board exerting the leadership and direction it was expected to provide? The answers to these questions may tell us whether it’s time to reconstitute the current board with people possessing the specific expertise to oversee a project of this magnitude.
Legislators rightfully want more fiscal accountability, transparency and cohesive information from the city. The Council shares many of those same concerns, especially the lack of reliable data on which to base important decisions. If the $210 million in federal funds intended for bus and para-transit operations are removed from HART’s financial plan, they must be replaced.
The City Council on its own is exploring other sources of local funds, such as broadening the fuel tax revenue base, redirecting federal formula funds it receives, and possibly changing the City Charter for more flexibility in expending special purpose funds.
The Council remains optimistic that the Legislature will grant some extension of the tax surcharge. I have already introduced Bill 23 (2015) to accept whatever the Legislature decides and authorize its use at the city level. This is a far more telling action to legislators than any ineffectual pronouncements the Council could adopt urging a surcharge extension.
Furthermore, Council Budget Chairwoman Ann Kobayashi has requested stronger Council oversight of fiscal details, such as her current scrutiny of the Memorandum of Understanding between the city and HART on the issuance of bonds for the advancement of funds to continue construction of the project. I am also recommending a forensic city audit of the project that may yield useful information to guide the Council’s future actions.
Rail is a project with broad public benefits. Its success rests on the city getting its act together and rebuilding confidence with the Legislature and the public.