HART Errors – Lack of Acknowledgement is Troublesome

Last week I wrote about errors and inconsistencies I’ve found related to the Honolulu rail project. Councilmember Ozawa apparently followed up with HART regarding one of those errors – the West Oahu Farrington Highway summary change orders calculation. HART responded via a letter dated February 3, 2016.

I do not know specifically what Ozawa requested (his communication to HART is not posted on the council’s website).  I do know, however, that HART did not address the issue of the error.

We all make mistakes. Shouldn’t agencies like HART at least acknowledge that an error was made?  Wouldn’t it be a lot easier than clouding the issue with explanations that may be correct but don’t address the concerns?

I’ve taken the liberty of showing the change order calculation (suggested presentation) as it would be if HART had included the credit and the full administrative costs from its detailed spreadsheets. Using this presentation, we can see how much rounding is included in the approved change order.

How many other errors have been summarily dismissed by HART? How much are we losing out because of this? I don’t know the answers to these questions, but I will continue to press for transparency and accountability.

 

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Rail’s Numbers – A Pattern of Errors and Inconsistencies

The HART board formally accepted the audit of their June 30, 2015, financial statements at its meeting January 28. During that meeting, I mentioned that their note on “Liquidity Risk” included a statement that the federal government “may” require the return of federal funds if there is a breach of the grant agreement and that this is inconsistent with statements HART has been making.

HART chair Don Horner then made a point of asking the auditors whether they had found any “pattern of errors,” “inconsistencies” or “sloppy information.” The auditors said “no.” But what Horner failed to point out is that the errors and inconsistencies that I’ve found are beyond the auditors’ scope of work.

The reports that contain these errors have been used by legislators and councilmembers when making decisions related to rail, and I think it’s important we understand just how pervasive this problem is.

Here are the errors, with more detailed information below:

Accrual Basis Mixed with Cash Basis

The legislature had good questions for HART last year when they were discussing the extension of the general excise surcharge tax. One report that HART provided in response was “Revenues from January 1, 2007 to December 31, 2014.” The report shows a mixture of accrual basis and cash basis numbers for revenue. For people who are unfamiliar with these concepts, an analogy would be creating a table of temperatures with some listed as Celsius and others as Fahrenheit. It doesn’t make sense and just isn’t done.

Incorrect Revenues and Inconsistent Expenditures

The revenues report led me to HART’s monthly “Planned vs. Received Project Funding” figure, which is included in HART’s progress reports and the monthly ad that is published in the Honolulu Star-Advertiser. This report double counts $298 million of revenue. This is not an obvious error but had been repeated many months (possibly years – I didn’t go back to check) until it was finally corrected in the August 2015 PMOC report.

HART provided a number of reports to the Honolulu City Council in response to questions about the surcharge tax extension.  Table A-1, “Capital Plan Cash Flows @ 4% GET Surcharge Growth Rate” projects“All Other” revenue to be only $6 million, but as of the date it was given to council, other revenue had already exceeded $9 million. This is the table that Chair Martin based his amendment on for the floor draft to Bill 23 (the surcharge extension) that went to the mayor for his signature.

Table A-1 also shows expenditures to date (June 30, 2015) of $1,512 million, while the “Quarterly Cash and County Surcharge Revenue Report as of June 30, 2015” shows total expenditures of $1,637 million. HART’s monthly “FACTS” ad shows the expenditures at yet another amount — $1,581 million. No one on the council asked HART in a public setting why these numbers don’t match. No one from HART provided me with an explanation.

Other Types of Errors

Mayor Caldwell has stated he prefers the surcharge tax, because 33% to 38% of the tax is paid by visitors and offshore military. The amount is actually less than 20%.  Additional information on this was provided by me to the city council October 21, 2015.

When Ann Kobayashi asked HART for their ridership plan, they gave the council a table with columns of numbers that didn’t add up. Even the “Raw Data” from which the table came from had math errors.

When the city council was discussing authorization for HART to issue bonds backed by the City and County of Honolulu, HART provided the council with a cash flow projection that included a $140 million math error. This document is now part of our city law in Resolution 15-7.

HART’s updated “Project Balance” as of October 15, 2015, was confusing at best and also included a math error. Here’s my suggested presentation of that same information.

The most recent error I found was related to the $26 million change order for the West Oahu Farrington Highway Guideway. HART did not include a credit of about $5,000. However, they did round up administrative costs, so that the net impact was about $2,000 . . . in the contractor’s favor.

Update:  there was one more slide related to the WOFH change order that had an error.  The total was off by $4,000 and was presented to the HART board at its December meeting.

These are just the errors that I’ve noticed. HART produces many other numbers for decision making and “public consumption.” Isn’t it time that they were accurate, complete and consistent?

 

Charter Commission Decides to Leave Clean Water and Natural Lands Fund Alone, Will Continue Discussion on Several Other Proposals

Some people were breathing a sigh of relief after yesterday’s Honolulu City Charter Commission meeting. The commissioners decided to defer Proposal 17, which would have repealed the Affordable Housing Fund, Clean Water and Natural Lands Fund, and Grants in Aid Fund as well as returned authorization for special fund creation back to the mayor with council approval. (Currently the council and mayor have the authority to create funds.)

In 2012 I opposed the resolution that set up the Grants in Aid Fund as a ballot question, and I continue to oppose the fund. It sets aside .5% of general fund revenue annually to be given away to certain nonprofit organizations. This fund has become a political candy pot for the council and was poorly implemented. In addition, we spend about $100 million on social equity programs every year. Mandates like this are simply bad fiscal policy.

Discussion on these specific funds expended to include creation of funds in general. Commissioners asked for clarification of the interpretation of wording in the charter before the last change was made in 2012. While fund creation may sound innocuous, we only need to look at the state to see how things can get out of hand.

The commission also discussed proposals related to the legislative branch, elections, terms of office and corporation counsel. One idea the commission seemed intrigued with was establishing council districts aligned with the six traditional moku, i.e., Kona, Ewa, Waianae, Waialua, Koolauloa and Koolaupoko. The main question related to this is how it would work with the federal law regarding one person one vote. (One person, one vote is why current political districts are based on population.)

Four proposals related to term limits were discussed. The commission is considering increasing the total number of years for mayor, city councilmembers and prosecuting attorney to a total of 12 years. Neighborhood board members currently have no term limit but would be included in the 12 year limit. The thought behind this is that there’s a steep learning curve, and it’s important to have experienced people and continuity in these positions. One point that was made clear with respect to increasing term limits is that it would not apply to current office holders.

The other major area discussed had to do with the Corporation Counsel. Proposals suggested that the office of corporation counsel and the prosecuting attorney be merged, corporation counsel be an elected position and a couple that would give city council the power to fire corporation counsel. Proposal #79 would require Board of Water Supply and HART contracts be approved by corporation counsel. This particular proposal went to the style committee and will likely be on the ballot. (The BWS and HART already submit contracts to corporation counsel for review.)

Several proposals will be researched further by various commissioners and brought up again, including #69 regarding runoffs for special elections.

The commission will meet again Thursday, February 4, and will cover city power, the mayor’s office, city departments under the managing director, planning and two proposals related to the fire department.

Here’s an updated list of Meeting topics to be covered at future meetings.

Honolulu Charter Commission Discusses Ethics, Police, Fire and Salaries

The Honolulu Charter Commission met on Friday, and it was nice to see more people testifying than during the last several meetings. The commission’s main topics included ethics, salary commission, fire and police.

There are several good ideas contained in the proposals under consideration for ethics reform. One of the best improvements we can make is to have more independence with respect to investigation of waste, abuse and fraud.

The main reason I proposed creating an Office of the Inspector General, proposal #107, is because of the conflict between the city administration, the Honolulu City Council and the Ethics Commission.

For example, the ethics commission was asked to investigate ORI Anuenue Hale and loans from the city that were forgiven by Honolulu City Council Chair Ernie Martin. The mayor, along with the chair, was investigated by the Ethics Commission, and corporation counsel did its own investigation. They would not share that information with the Ethics Commission, however, and since then have made it difficult for the commission to do its work.

An inspector general would be a good complement to our city auditor, prosecutor’s office and the ethics commission. The Charter Commission formed a permitted interaction group consisting of members Broderick, Oshiro and Mulligan to review the proposals related to ethics. It’s not clear, however, how the public can participate in this process, except that emails may be sent to cclcharter@honolulu.gov.

Another important topic is the police department and its commission. Civil Beat did a good job of covering that portion of the meeting in their article Police Reform Gaining Steam At Honolulu Charter Commission. The only thing I would add is a reminder that the police chief is suing the ethics commission, which I believe is wrong.

As for the salary commission, the Charter Commission voted to support the ideas in 43, which would require that salary commission recommendations go into effect within 60 days if they have a three-fourths majority vote. This proposal was sent to the style committee for further work. Proposal 39, which deals specifically with salaries for Ethics Commission staff, was put under the ethics group’s purview. Proposal 41 was withdrawn by the introducer, member Oshiro.

The commission decided to take no action on any fire-related proposals.

The next meeting of the charter commission is set for Monday, January 25, and will include the following topics: Legislative branch, elections, terms of office, finance and corporation counsel. Other meetings scheduled are listed here:  Meeting topics to be covered.

Note the commission will discuss HART and the rail project at its March 4 meeting.

 

Update on Honolulu Charter Commission – Meeting Friday

Every 10 years an appointed commission reviews proposals to change the Revised Charter of Honolulu. The charter is like the “constitution” for the City and County of Honolulu. This is our opportunity to change how our government operates.

The commission has been meeting since March 2015 and received over 150 proposals for changes to the charter. Fifteen of those proposals have been deferred, including proposals that would reduce HART’s authority or limit the rail project. (I’ll discuss those HART proposals at another date. They are not dead.) All proposals have been tentatively categorized by topic to facilitate discussion.

The commission will meet again at 3:30 p.m. Friday and will discuss four of these topics as well as a change to their ethics rules.

Ethics and the Ethics Commission

The following proposals fall under this topic:

  • 15 Require recusal of elected or appointed officials from participating or voting on issues in which they or their families will benefit;

 

  • 107 Create an Office of the Inspector General to replace the Ethics Commission (disclosure – I introduced this one);

 

  • 114 Support the independence of the Ethics Commission by moving it to the Office of the City Auditor;

 

  • 147 Split – 1) Allow public access to Ethics Commission’s rulings, and 2) Gift disclosures; and

 

  • 153 Provide clear standard of conduct, including language about gifts from lobbyists.

 

Given recent reports and concerns about ethics and conflicts between the Ethics Commission and the city administration, it is great that these changes have been proposed and will be discussed. I will look at the proposals more in depth, but I’d like to share a few comments now.

 

The idea of recusal when there is a conflict of interest has been brought up before, and I can understand why #15 was introduced. In the past few years, some councilmembers have not disclosed their conflicts of interest while others have disclosed relationships that are not legally considered conflicts. Improvements to our current system can be made through more education and better enforcement. In consideration of recusal, we need to be careful that constituent groups aren’t left without a voice on important issues.

 

I introduced #107 because of the head butting we’ve seen between the city administration and the Ethics commission. In one instance, it was reported the commission was not able to continue an investigation, because a $600 expenditure was not approved by corporation counsel. The commission is under the thumbs of the administration and gets its funding from the Honolulu City Council, and both sides have been under investigation by the commission. Independence is sorely needed.

 

My proposal needs one change, however. I found out after I introduced it, that the state has a law requiring each county to have an ethics commission. I’m looking at a couple of other cities that have an inspector general and ethics commission and will provide that information to the commission on Friday. The two agencies can complement each other.

 

Salary Commission

The following proposals fall under this topic:

 

  • 39 Authorize the commission to set salary ranges for attorneys who work for the Ethics Commission;

 

  • 41 Authorize the commission to establish salary ranges (vs. specified amounts);

 

  • 43 Require that commission recommendations go into effect within 60 days if they have a two-thirds vote;

 

  • 62 Make commission decisions final without need for approval by the city council or the mayor; and

 

  • 100 Make salary commission recommendations binding.

 

The discussion on these will be interesting.

 

Fire Department and Commission

 

The following proposals fall under this topic:

 

  • 27 Establish a five-year term for the fire chief;

 

  • 37 Establish a five-year term for the fire chief and delete the authority of the Fire Commission to remove the chief;

 

  • 60 Address the use of sirens late at night (deferred):

 

  • 86 Amend the description of the duties of the fire chief and require the chief to promulgate rules for organization and internal administration; and

 

  • 87 Increase the number of members of the Fire Commission from five to seven.

 

Police Department and Commission

 

The following proposals fall under this topic:

 

  • 16 Amend the terms of service of Police Commissioners to ensure broad representation;

 

  • 18 Allow the Police Commission to punish officers for misconduct or bad behavior and allow the mayor to fire the police chief with concurrence of a majority of the commission;

 

  • 22 Establish an Office of the Inspector General attached to the Police Commission;

 

  • 28 Keep identities of complainants against police confidential until the case is completed;

 

  • 31 Authorize the commission to place the police chief on leave due to an ongoing investigation;

 

  • 58 Create an independent citizen agency to review police misconduct;

 

  • 111 Investigate HPD officers based on anonymous complaints and make limited information regarding final disciplinary actions against officers public;

 

  • 147 Treat HPD officers the same as civilians if they commit crimes;

 

  • 151 Increase the commission from 7 to 10 members, limit terms to four years with a maximum of three terms, and require at least three commissioners to have specified qualifications; and

 

  • 152 Improve functioning of HPD and help restore public trust by:

 

  • Authorizing the commission to 1) override a disciplinary decision of the chief if public safety would be compromised; 2) make recommendations directly to the mayor on hiring and dismissing the chief and participate in the chief’s selection; and

 

  • Delete language preventing the commission or members from interfering with the administrative affairs of the police department.

 

Many concerns have been raised in the past few years about the behaviors of some police officers and the chief himself. Several of these proposals are in direct response to those concerns. The Charter Commission may combine ideas of several of them to arrive at an item (or items) to put on the ballot.

 

The agenda for the Charter Commission’s Friday meeting is available at http://honoluluchartercommission.org/images/1-15-16-Agenda.pdf. It provides instructions for testifying. Note that the last page includes topics for discussion at future meetings. Hopefully the commission will set the dates for these meetings on Friday.

 

The Charter Commission’s website, http://honoluluchartercommission.org/, provides other important information. For a list of proposals that indicates which ones were deferred, please visit: http://data.staradvertiser.com/charter/.

HART Math – When 1 + 1 Doesn’t Equal 2

HART has provided the Honolulu City Council with financial information in response to questions raised about the rail project.  The information includes math errors and inconsistent numbers.

For example, project expenditures are $1,637, $1,581 or $1,512, depending on which report one looks at.  More examples are available in my testimony, here:  Testimony Bill 23 surcharge 11-9-15 special budget with att.

The council is holding a special budget committee meeting at 5:30 p.m. at Washington Middle School.  Please make your voice heard.  The agenda is available here:  Special Budget Meeting Agenda.

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City and State Answer Questions about Kalanianaole Hwy.

Even before the Kalanianaole Hwy. repaving project started, questions were brought up about crosswalks, streetlights and signal timing.  Since most of the job is done, concerns have been brought up about the contra-flow lane and the new yellow striping in the Koko Head bound lanes.

Several agencies handle different aspects of the roadway, so it was refreshing to see Ford Fuchigami, Director of the Hawaii Department of Transportation (DOT), Mike Formby, Director of the Honolulu Department of Transportation Services and Ross Sasamura, Director of the Honolulu Department of Facility Maintenance, at the October 1 meeting of the Kuliouou Neighborhood Board.  They were prepared to respond to community questions.

Signal Timing

The city is planning to do three pilot projects using Adaptive Signal Control Technology, and Kalanianaole Hwy. is one of the corridors where this technology will be implemented (after formal approval is received from the DOT).  This technology uses real-time traffic information to determine which lights should be green.  This sounds like a great idea, but it’ll be important for us to monitor once it’s installed.

Crosswalks

The city is also looking at its crosswalk policy, especially in light of the number of pedestrians who have been killed while in mid-block crosswalks.  Guidelines are regularly updated, but old crosswalks are grandfathered in and rarely removed.  Kalanianaole Hwy. in east Honolulu has several mid-block crosswalks, but only one that has a separate signal.  Some mid-block crosswalks may be eliminated in the future.

Contra-flow Lane

There were a couple of incidents of motorists driving the wrong way in the Koko Head-bound lanes, because the contra-flow lane hadn’t been set up.  To provide motorists with advance notice of the status of the lane, a new sign with a beacon will be installed, most likely at the intersection of East Halemaumau.

In addition, the regular sign posts in the lane itself are being used again.  During road repaving, the metal sleeves that allowed signs to be put up were removed, and cones were used all the way down the contra-flow lane.  One of the tradeoffs of roadwork is that it does take a while to reinstall things like the sleeves, sensor loops and pavement markings.

And those yellow lines? They’ll likely remain, as they are now part of federal guidelines.

LED Streetlighting

Ford Fuchigami announced that the state is going to be replacing its streetlights with LEDs.  Some members of the board expressed concerns about the potential brightness of the lights.  Ford reassured the board that the state is following Dark Sky guidelines.  The planned lights will be 4,000 Kelvin, which is the same as the city, but the state is also including smart controls, which would allow the lights to be dimmed.  (This is something the city’s plan does not include.).  I have asked for a copy of the state’s plan.

Recycled Glass

Did you ever wonder why we don’t use recycled glass in our asphalt?  I have, and now I know why it’s not used more often.  According to Ross Sasamura, the city used recycled glass on a driveway for the Waipio Soccer Park. It’s reflective and could cause confusion with road markings.  When roads are reconstructed, two layers of asphalt are used.  I would think that recycled glass could be used for the bottom layer, without any negative impact.  I’m following up with the city on this.  In the meantime, tumbled glass can be used in some landscaping settings and looks quite nice.

Project Errors

One thing that was not brought up at the meeting but I wanted to share anyway is the right-turn-only-lane in front of Roy’s Restaurant at Keahole Street.  There is currently a solid white line separating the lane from the regular town-bound lane.  Motorists are only supposed to cross solid white lines in emergency or unusual situations, so technically people shouldn’t be turning right there.  The state has been notified of the error and will correct it.  I wonder, however, how such a mistake was allowed to apparently pass through planning reviews and then actual installation on the roadway.  Didn’t anyone think to ask why it was solid the entire length?

All in all, I was pleased with the responses provided during the meeting.  The key now is to make sure “the talk” is followed by “the do.”