HART Proposals to be Discussed Friday

On Friday afternoon the Honolulu Charter Commission will meet to discuss a dozen proposals related to the Honolulu Authority for Rapid Transit (HART). Let’s take a closer look.

Merging Rail, Bus and HandiVan

The following proposals would put the three modes of transportation under one agency:

  • #10 would terminate HART and put rail construction back under the mayor and city council;
  • #14 would create a single transit agency for bus, rail and HandiVan;
  • #47 would also create a single entity for transportation operations and maintenance with a transportation board that includes at least three members who have expertise in transportation operations and/or public finance;
  • #76 would remove operations and maintenance from HART and the Department of Transportation Services and create new public transit entity; and
  • #92 is a HART proposal and would create one agency for operations and maintenance.

Putting rail, bus and HandiVan under one agency makes sense, but we’ve seen that doesn’t work well under the mayor. Our current set up with HART also does not work. The Commission is sure to spend a lot of time discussing these options, but it seems the best solution is something in the middle, e.g., operations and maintenance under the mayor with some kind of board making key recommendations and the council making policy decisions and funding approvals.

Other HART-Initiated proposals

  • #93 would establish a transition committee that would make recommendations such as the best structure for a unified transit authority, how the charter should be amended to reflect mayor/council approval over the transit authority’s budgets, set qualifications and approve actual amendments for 2016;
  • #94 would allow HART to use other funds the Council may authorize for funding rail and would remove the operating budget from the Charter (and therefore the approval requirement by the Council); and
  • #95 would allow HART to issue any kind of bonds.

Based on what I’ve seen at HART and Council meetings, it would not be a good idea to remove the operating budget from the Charter nor allow HART to issue any kind of bonds without approval from the Council. Proposal 93 would potentially give too much control to a new transit authority.

Remaining proposals for Friday include:

  • #13 would require HART members to have certain experience and knowledge and ride rail once per week on average;
  • #45 would set a due date of not less than 120 days prior to the end of fiscal year for the mayor to turn the budgets in to the Council: and
  • #140 would create an independent review board to look at 5-, 10-, 15- and 20-year financial projections, especially considering obligations created by the rail project.

Proposal 140 certainly has a lot of merit and could potentially be done via ordinance.

Lastly, let’s take a moment to remember the proposals that the Commission “deferred” back in December.

Three proposals, 71, 139 and 146, would either eliminate HART (and rail) or shorten the rail project. One commissioner stated that the Commission shouldn’t be a “cheap route for referendum” on rail. Another commissioner stated that if voters did support one of the proposals, the city would be in breach of the contract with the Federal Transit Administration.

First of all, it appears very likely we will be in breach of the Full Funding Grant Agreement anyway, because the rail is not coming in on time. Second, voters approved steel-wheel-on-steel rail by a slim margin and allowed the creation of HART, because it was seen as a way to “take politics out” of it. I believe we should have the opportunity to vote on rail again, especially given the misinformation and lack of transparency we have experienced.

The Commission’s meeting will be held at 4:30 p.m. Friday in the Honolulu Hale committee room on the second floor. They will also hold their budget meeting at 3:30 p.m. Agendas and proposals are available at http://www.honoluluchartercommission.org/, and testimony and comments may be submitted to cclcharter@honolulu.gov. Make sure your voice is heard.

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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.

 

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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