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.

Advertisements

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.