Ozawa’s Voting Record: Pro-rail in a Pinch

Councilmember Ozawa is chair of the Honolulu City Council Committee on Budget and for about four months has been holding two resolutions that would authorize bonds to pay for rail. The Federal Transit Administration (FTA) has forced the issue by giving a 60-day deadline in a letter they released September 21.

By not putting these resolutions on the committee’s agenda, Ozawa has already cost taxpayers $300,000 – $600,000 in extra bond issuance costs, according to Nelson Koyanagi, Director of Budget and Fiscal Services. But let’s take a closer look at some of the other rail measures.

Bill 22 (2018), CD2, HART’s Capital Budget for Fiscal Year 2019

Earlier this year Ozawa used a sneaky tactic to try to authorize the use of city funds to pay for rail. In a floor draft of Bill 22, CD2, HART’s capital budget, Ozawa included a one-sentence proviso:

(g) Notwithstanding the provisions of Ordinance 07-001, City revenues may be used to pay for the debt service for the $44 million appropriated from the general improvement bond fund. (Emphasis added.)

During discussion on June 6, he stated he came up with “this solution,” because no one had any other suggestions. There had been no discussion of this option during prior meetings. Other councilmembers were therefore concerned that there hadn’t been adequate notice to the public, and the amendment did not pass.

By the way, Ozawa’s support of this proviso isn’t “adamant opposition to using property taxes to pay for rail construction” as he stated in a recent email.

Bill 42 (2017), CD1, Authorizing the Use of City Funds for Rail

In order to address the deadline given by the FTA, the Council recently held special meetings to discuss Bill 42. The bill would allow the use of city taxpayer funds, e.g., real property taxes, to be used to pay for rail. Ozawa voted “no,” but this was a safe vote for him, because Councilmember Ann Kobayashi was the only other no vote. The bill continues to move forward and will be up for final reading on October 30.

When the pressure is on, however, Ozawa pulls through for pro-rail groups, as evidenced by his votes on two measures in 2017.

Bill 34, (2017), CD1, Authorization to Issue Bonds Equal to HART’s Capital Budget

Bill 34 (2017) is the initial authorization to issue bonds to cover capital costs of rail. Ozawa voted “no” on second reading, then switched to “yes” at the final hearing, June 7, 2017. From the Honolulu StarAdvertiser:

City Councilman Trevor Ozawa represented the swing vote, switching from a “no” to a “yes” after he read a statement from the dais at Honolulu Hale.”

All bond issuances must be approved for specific dollar amounts after the general authorization is approved. In this case, Ozawa again shows his pro-rail position when voting on Resolution 17-173.

Resolution 17-173, Authorizing the Sale of $350,000,000 in Bonds to Finance Capital Costs for Rail

On July 12, 2017, Ozawa voted “yes” on Resolution 17-173, which was the authorization for HART’s first bond issuance. Councilmembers Fukunaga, Kobayashi and Martin voted “no.” Six votes are needed to approve bond issuance. Had Ozawa voted “no,” the resolution would not have passed.

Ozawa also does not act with fiscal prudence regarding HART’s budgets.

Bill 21 (2018), CD2, HART’s Operating Budget for Fiscal Year 2019

In testimony before the Honolulu City Council, I asked councilmembers to cut HART’s budget, especially public relations (PR). Ozawa initially cut two PR staff, but then he added them back for final reading. In addition, he gave them $44 million more to spend. Roy Amemiya, city managing director, expressed concerns about this, because it means the city will have less oversight of the $44 million.

Bills 17 and 18 (2015), HART’s Operating and Capital Budgets for Fiscal Year 2016

During the March 31, 2015, meeting of the Hawaii Kai Neighborhood Board, Ozawa stated he made cuts to the HART budget. The record shows, however, that he made no cuts.

According to the FTA, there’s still a $134 million shortfall in HART’s projected revenues. In addition, with a budget of only $848 million for the City Center Guideway and Stations from Middle Street to Ala Moana, it’s very likely that additional funding will be requested. Ozawa may vote “no” on rail measures prior to the election, but when the pressure is on and voters aren’t able to exert much influence, I’m sure we’ll see his pro-rail nature shine through.

Note:  This is a re-post from my site.

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Storm Drain Report – Niu Valley & Aina Haina

Last Thursday I had the privilege of presenting a Storm Drain Report to Kuliouou-Kalani Iki Neighborhood Board members and residents. The report has also been given to city representatives.

One of my main concerns was the way the roadways had been repaved in Aina Haina. Specifically, gutters were paved over, and access to storm drains has been reduced. According to a resident, she had checked with the city several years ago when crews were working and was told the repaving project was designed that way.

At a minimum, the standard that allows repaving to be done in this manner should be looked at, and unless there is a very good reason for almost blocking off access to storm drains, the practice should be disallowed.

Here’s an example of a drain that has been almost blocked off. This one is near Diamond Head. I will post a report about Kahala storm drains next week.

Diamon Head almost closed 7-1-18

HART Meeting Tomorrow: More Broken Promises and Lack of Transparency

The Honolulu Authority for Rapid Transit (HART) board of directors will meet at 8 a.m. tomorrow, and there are several things we should all be concerned about:

• a resolution requesting that the Honolulu City Council approve a bond float for the much-talked-about $44 million for HART marketing and personnel costs;

• the potential that the board “may” go into Executive Session regarding several issues that should be discussed in public; and

• the lack of a discussion item regarding the state auditor’s concern about HART management recording employees during interviews.

When I read the agenda, I was shocked to see a resolution requesting that the Honolulu City Council approve the issuance of bonds to cover the $44 million. This $44 million was initially put into the city’s capital improvement (CIP) budget by the mayor and then moved to HART’s CIP budget by the council.

During two months of budget discussions, we were told several times that HART had the money to pay these costs. We were reassured that no bonds would be needed for next fiscal year. Even as recently as the June 6 full council meeting, the $44 million was referred to as just “a placeholder,” similar to having a line of credit available.

Who knew that this was not correct? When did they know it? When will we be given accurate and complete information?

It’s also important to note that this resolution calls for the $44 million to be repaid with city funds, which breaks another promise that was made to us with respect to the rail project, i.e., that no city money (read “real property taxes”) would be used for rail construction.

If that isn’t enough for people to be concerned about rail finances, the HART board may go into “Executive Session” on five items including approval of the budgets that the council just passed, the bond approval requests (there’s another one for $450 million), a change order and the discussion on public-private partnerships. (This last one is a biggie, because it will cover the City Center Guideway and Stations – the last major piece of the rail project to be contracted.) All of these issues should be discussed in the open. Executive sessions are closed to the public, however.

What are they trying to hide? Have costs gone up yet again?

And finally, it’s notable that there is no discussion slated regarding management’s policy of recording employees during state audit interviews. During the last HART board meeting, Les Kondo, the state auditor, expressed serious concerns about this practice and asked that it be stopped. A former state attorney general has said it is illegal to record employees in this manner, and at least two board members had questions about the issue. No discussion took place, because corporation counsel stated it wasn’t allowed due to sunshine law restrictions. (Thank you to Tom Yamachika for the reminder that the board could have voted to sunshine the item onto the agenda.) Most employees will likely not feel free to openly discuss their concerns in this type of environment, yet there appears to be no follow up by the board.

I agree with HART board member John Henry Felix -– it’s time for a “forensic audit.” We cannot afford to continue the way we have.

The HART board meeting will be broadcast live on Olelo 53.

A Sneaky Way to Approve City Funds for Rail

 

Buried in a proposed amendment to the bill for HART’s capital improvement budget (Bill 22, CD2, FD1) is the statement:

 

“Notwithstanding the provisions of Ordinance 07-001, City revenues may be used to pay for the debt service for the $44 million appropriated from the general improvement bond fund.”

 

We were told no city funds would be used to pay for rail.  Last year, however, the state legislature passed Act 1, which prohibits the general excise tax surcharge from being used to pay HART’s administrative or marketing costs, including personnel costs.  By default, that means that the bulk of these costs will need to be paid by city funds. Councilmembers then started discussions on Bill 42, which added “city” to the list of funding sources for rail.  It was opposed by most testifiers, and no final decision was made on it.

 

The mayor put $44 million of HART administrative and marketing costs into the city capital improvement (CIP) budget for next fiscal year.  Several councilmembers decried this as bad policy but then merely moved those costs to HART’s CIP budget.  

 

When asked about the $44 million, HART representatives stated they had enough cash to pay it, but according to their cash flow projections, bonds would be floated and apparently used to pay a significant portion of it.  There was no additional discussion of how the $44 million would be funded.

 

We deserve an open discussion of how and when city funds will be used to pay for rail and what councilmembers’ plans are to cover the $44 million.

 

As a side note, it is also important to consider that no significant cuts to HART’s administrative or marketing costs have been made.

 

There is one final hearing on this bill Wednesday. I will be there to oppose this bill and the manner in which the amendment is being done. I encourage others to testify as well.  The agenda and instructions on providing testimony are available here.

 

Open Letter to Residents and Taxpayers of Oahu

Aloha!

You may be aware I am running for Honolulu City Council District 4. I’ve been active in the community for about 15 years and have testified at city council for about as long.  I decided to run, because I believe we must improve the way government is run and our tax dollars are spent.

Several key issues facing Honolulu residents and taxpayers are interrelated – homelessness, affordable housing, infrastructure and rail. As we’ve seen over the past month or so, rail has started impacting city services and these key issues.  Recent budget amendments include:

  • Slashing the Department of Land Management to only two people. The department manages the city’s affordable rentals program as well as all city-owned land. At the current level of funding, the department cannot meet its mandated responsibilities under the city charter;
  • Cutting millions from the Department of Environmental Services, including wastewater treatment and disposal costs for maintenance programs;
  • Cutting the Department of Information Technology’s equipment budget in half. The director testified that the equipment is needed in order to avoid shut down of the city’s entire communications system.

We have been told these cuts were necessary in order to be able to meet FTA requirements to include $44 million (two years) of operating costs for the Honolulu Authority for Rapid Transit (HART) in the city budget. Out of HART’s ~$22 million operating budget, a mere $446,000 was cut, and those funds are likely to be restored during the next budget committee meeting.

In addition, if the full $44 million is included in the operating budget, it would needlessly tie up the $22 million that is for next fiscal year.

The city has options other than cutting these important areas. For example, amounts for FICA, a payroll tax, are routinely over-budgeted.  In addition, our entire real property tax system should be reviewed and updated to be fairer and more efficient and to make sure all taxpayers are paying what they should.  As a CPA and certified fraud examiner, I have the skill and experience to analyze the numbers and make smart decisions about them.

These are some of the concerns I have, but I’d like to hear what’s on your mind.  Please share your thoughts below (where it says “Leave a Reply”) or visit www.NatalieIwasa.com.  Note comments are moderated.

It’s Not About the Tree – How a Process was Subverted and a Community Divided

The November 2017 meeting of the Hawaii Kai Neighborhood Board was the toughest public meeting I’ve ever been to, with emotions running high.  Members of the community who attended the meeting spoke passionately about their desire to support a lighted tree at Maunalua Bay, except the item on the agenda that evening was not about a tree . . . it was about a process that did not follow the law or include proper disclosures.

Following is a timeline of events related to the city’s acceptance of a gift of a lighted tree at Maunalua Bay:

  • April 26, 2017 – First reading of Bill 40 to create an adopt-a-tree-program to be administered by the city Department of Parks and Recreation is passed by council.
  • May 2, 2017 – Bill 40 discussed in Committee of Parks, Community and Customer Services. The director of DPR opposed the resolution.
  • May 10, 2017 – Bill 40 passed second reading by full council.
  • May 30, 2017 – At the meeting of the Hawaii Kai Neighborhood Board, Councilmember Ozawa announced that a bill was introduced to adopt the tree at Joe Lukela Beach Park.  I was asked by a board member to monitor the progress of Bill 40.
  • August 22, 2017 – Bill 40 was placed on the agenda of the council’s parks committee, but it was cancelled prior to the meeting.
  • October 24, 2017 (morning) – Resolution 17-278, which is for approval of acceptance of a gift of a trellis system and solar powered panels to power lights for a tree, was discussed in the parks committee.  The gift was valued at $58,000, but there was no mention of the location of this gift.  (Edit for clarification — there was no mention of the location of the gift in the resolution.)
  • October 24, 2017 (evening) – Resolution 17-278 was not mentioned during Councilmember Ozawa’s report at the Hawaii Kai Neighborhood Board meeting.
  • November 1, 2017 – Resolution 17-278, CD1, was not on the agenda that was posted prior to the meeting, but it was “sunshined” onto the agenda unanimously by councilmembers near the end of the meeting, after most members of the public had left.  The CD1 version of the resolution stated a value of $40,000.
  • November 6, 2017 – Two requests were received for agenda items for the November 28, 2017, meeting of the Hawaii Kai Neighborhood Board:  1) A local nonprofit organization requested to have a discussion about the process of acceptance of the gift of a lighted tree, and 2) Councilmember Ozawa, through his staff, requested to have a discussion about the lighting of the tree at Maunalua Bay. The board voted to support more openness and discussion regarding issues of this type in the future

According to Hawaii Revised Statutes Sec. 92-7, the council is not allowed to change an agenda once it has been filed if an item is of “reasonably major importance” and will “affect a significant number of persons.”  The state Office of Information Practices has also stated that agenda items must include “sufficient detail and specificity,” so that members of the public understand what is to be discussed without having to look elsewhere.  The council did not follow the Sunshine Law with respect to this gift, and that was the main concern of members of the Hawaii Kai Neighborhood Board.

Council Bill 40 – status and communications

Council Resolution 17-278 status and communications

Testimony of Hawaii Kai Neighborhood Board 12-6-17

Testimony of Natalie Iwasa 12-6-17

Video recording of Hawaii Kai Neighborhood Board Meeting November 28, 2017

RFP Posted for Honolulu Ethics Commission Audit

Earlier this week, the request for proposals (RFP) for the audit of the Honolulu Ethics Commission was posted.  The RFP outlines several important issues the auditors should cover, but I have a couple of concerns.

Two inspectors and prior commissioners who recently left the commission are not listed as interviewees.  These people likely have important information that should be considered by the auditor.

The other part is just something that I really don’t understand.  What the heck is “an internal self-control assessment of improvements needed”?  And why is the current executive director supposed to perform this assessment?  If anyone has any clues about this, please shed some light by leaving a comment.

Requests for bid clarification are due December 2, and deadline to bid is December 30.

The RFP is posted on the city’s website.  It’s also available here.

Update November 28.  I found out that the intention of the section on the assessment is to have the executive director perform a “control self-assessment” rather than a “self-control assessment.”  Hopefully that clarification will come out with the addenda on December 16.