Crazy? No, Council Members Are Right To Demand Rail Details
Honolulu City Council’s Budget Committee should keep the rail project moving forward today, but insist on full disclosure before final Council approval.
Kirk Caldwell has a strange definition of crazy.
Honolulu鈥檚 mayor says the聽city risks looking 鈥渓olo鈥聽if it jeopardizes its federal funding for the rail project. He wants the City Council to immediately vote to extend the general excise tax surcharge for the state’s portion of the project’s funding.
He has brandished a letter from the Federal Transit Administration’s acting administrator, Therese McMillan, threatening to withhold $250 million in project funding in the current fiscal year if the tax extension doesn’t pass. And Caldwell has told council members it’s important to be 鈥渢aken serious鈥 and prove that 鈥測ou鈥檙e committed to building the project you promised to build and you鈥檙e legally obligated to build.鈥
We beg to differ. This $6.6 billion project is running more than $1 billion over budget. Details regarding spiraling costs have yet to be fully disclosed, and the only prudent moves regarding rail鈥檚 progress must be deliberate and well-informed.
Had those budget details already been addressed聽and made public, the Council would be better prepared to act. But as Council Chair Ernie Martin correctly said in a statement released Monday, 鈥淚t is clear to me that the Council is the public鈥檚 last line of defense against spiraling costs which have yet to be determined, and it cannot abdicate this responsibility.鈥
We understand the mayor鈥檚 frustration. New contracts can鈥檛 be completed and work on the project could stop unless the Council approves the GET extension soon. Caldwell has been sounding alarm bells since the 2015 legislative session, when he similarly hectored legislators in what was ultimately a successful effort to get them to extend authority for the .5 percent surcharge through the end of 2027.
But the Legislature took that action last spring amid a chorus of criticism from lawmakers who didn鈥檛 get the level of financial disclosure they wanted 鈥 and should have gained 鈥 from the .
Lawmakers called for audits of the project; but few further details have been made public since then, and HART Executive Director Dan Grabauskas continues to claim he has no legal responsibility to disclose subcontractor costs that have driven the project deeply into the red.
State legislators and City Council members aren鈥檛 the only ones looking for details 鈥斅爐he federal government is demanding them, too. The federal Department of Transportation’s聽 of the project, and FTA in turn has required HART to supply more information and make changes to the project鈥檚 schedule, cost representations and overall financial plan.
And that work is not complete. According to acting FTA head McMillan’s letter:聽 鈥渢here are further analyses and discussions with HART which must occur, and we may need additional information before we can fully validate a revised cost and schedule.”
Nothing in the letter from FTA states that it is withdrawing funding, only that the $250 million payment is being withheld until it gets the information it asked for from HART and until the agency is 鈥渁ssured of the commitment of the revenue needed for the project.鈥
Instead of pressuring the Council, Caldwell ought to be leaning on HART to provide, more quickly, information that would satisfy both the Council and the feds. The first paragraph of McMillan’s letter noted FTA鈥檚 request last month for updated information and that further analysis and additional information may still be required. (McMillan also expressed, curiously, that she was 鈥渆ncouraged鈥 that HART recently 鈥渁cknowledged the cost and schedule issues.鈥)
Rather than pressuring the Council, Caldwell ought to be leaning on HART to provide more quickly information that would satisfy both the Council and the feds.
Caldwell, in fact, now says HART will submit additional information before the end of the year. That鈥檚 a deadline HART must not miss.
The matter goes before the City Council Budget Committee Wednesday. If passed, it would be presented to the full Council next month, and if it clears that vote, it would return to the Budget Committee for final approval in January. We support the Budget Committee moving forward today, but only on the assumption that HART provides the needed additional information before the year鈥檚 end 鈥 so that the Council can consider it before final approval.
If enough details to make a sound judgment regarding project costs don’t materialize, the Council should apply the brakes until they do.
We also don鈥檛 rule out the Council pulling the plug on the project entirely. Rail鈥檚 sunk costs are considerable, and if the project were to be abandoned, among the inescapable consequences would be repaying $450 million in federal grants already given to the project thus far.
That might prove to be a bargain if HART continues to fail to contain project overruns that have grown geometrically over the past 12 months. But we’re not there yet.
The decision to extend the GET should be made based on whether the project still makes sense going forward, not on what we’ve already spent. And the Council needs more information and transparency on the part of HART in order to make a sound public policy call.
We don鈥檛 support efforts by Martin and perhaps others to revisit the rail route as part of the current deliberations. While extending the rail line to the University of Hawaii at Manoa has always been and continues to be an interesting idea for some, the existing 20-mile, 21-station route is what is on the table.
Extending the rail line later will remain a possibility, but there is no scenario we鈥檙e aware of that would accomplish that now and allow the project to meet its current obligations, maintain federal funding and stay on schedule to prevent costs from spiraling even higher.
Still, considering those ideas as they await project details doesn鈥檛 make council members lolo. It means they may be the only ones taking their responsibilities to taxpayers seriously. As Martin has said since the Legislature passed the GET extension last spring, no one should expect the Council simply to rubber stamp checks for the largest public works project in Hawaii history.
As has often been said, the definition of insanity is doing the same thing over and over again, but expecting different results. If we expect to stem the flow of rail鈥檚 red ink, the council鈥檚 insistence on transparency looks like exactly the change that’s required to get that result.
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