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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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.

Residential A Property Tax Hike – additional discussions needed

Many property owners were shocked when they opened their real property tax bills this summer. Some found increases of 100% or more.  I wrote about some of the concerns related to this increase in a commentary published by the Star Advertiser this week.

This is a good start to important and necessary discussions about tax policy in general and related issues such as affordable housing.  The 2014 Honolulu Real Property Tax Advisory Commission has been meeting and will be putting together some recommendations about our county tax system.  In my next post, we’ll discuss some of the issues that the commission is covering, including some potential recommendations for change.

The commentary is behind a paywall, so I’ve uploaded a copy of it here.  Please let me know your thoughts.

SA commentary Property Taxes 9-4-14