Honolulu Rail Board: What Do You Do With A $2.4 Billion Bailout?
A board member expressed concern about new oversight rules, but rail managers say those are “not much of an issue.”
Ten days after Gov. David Ige signed a rail funding bill tying an infusion of $2.4 billion of sorely needed funding to greater transparency聽on spending, the first meeting of the Honolulu rail board featured an ironic twist.
The held three separate closed-door meetings — to discuss legal issues, the rail project鈥檚 financial plan and the outgoing chief executive鈥檚 performance review.
The stated reasons for the executive sessions were legitimate under Hawaii鈥檚 , which governs public meetings.
Still, HART鈥檚 new executive director, Andy Robbins, acknowledged the irony when asked about it during one of Thursday’s long executive sessions, when he was waiting in a mostly empty meeting room with a handful of news reporters and HART staff.
In a potentially more troubling sign, one HART board member during the meeting immediately questioned the greater oversight requirements imposed by the funding measure.
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Robbins takes over HART in what could well be the final act of the rail鈥檚 drama-filled construction. The Legislature鈥檚 rail funding bill is meant to give HART 聽financial breathing room as construction of the 20-mile line heads into its last leg.
The funding package provides nearly $2.4 billion in projected tax revenue: $1.046 billion in extra tax money from Oahu taxpayers and $1.3 billion from hotel guests statewide.
HART鈥檚 next big task is to incorporate the new tax revenue projections into a new financial plan to submit to the . The FTA has pledged $1.55 billion to help pay for the rail, which HART expects to cost $8.165 billion in total.
On Thursday, HART鈥檚 chief financial officer, Robert Yu, said HART鈥檚 new financial plan should be finished by Friday, which the FTA has set as a deadline for submitting the plan.
But the bill has another implicit purpose: to create greater oversight over the project, which even some rail supporters have criticized for running billions of dollars over initial cost estimates.
To that end, the bill requires a sweeping audit of HART and provides $1 million to pay for audit work. It also puts the State Comptroller and Director of Budget and Finance in charge of reviewing invoices and doling out money as the invoices come in, and it provides $500,000 for four staff positions to do the work. Those certification statements must be posted on a public website shortly after payments are made.
The oversight provisions were widely discussed during the five-day special session in which the Legislature pushed the bill through, with some members of the public demanding an even more stringent 鈥渇orensic鈥 review.
HART鈥檚 government relations director, Joyce Oliveira, began Thursday鈥檚 HART meeting by going over the requirements. She also noted the extra $2.4 billion to construct rail must be used for capital costs, not HART administration.
Almost immediately, one HART board member questioned the new oversight requirements.
Ember Shinn, a former managing director for Honolulu Mayor Kirk Caldwell, pointed out the state auditor, comptroller and finance director will receive extra money to conduct their audits and process invoices and payments. But she said HART won鈥檛 get extra money to pay staff to comply with the requirements.
Every minute HART staff must spend fulfilling oversight requirements, Shinn said, is a minute that can鈥檛 be spent building the project. Shinn鈥檚 comments preceded the board鈥檚 first closed door meeting, held to discuss the 鈥渓egal effect鈥 of the rail funding law and a related Honolulu City Council ordinance.
But HART officials said they were not worried about effects of the new law.
HART spokesman Bill Brennan said he foresaw no problems with HART staff complying with the new billing system. Robbins later agreed, saying the staff already perform extensive reviews of bills and invoices.
鈥淚 don鈥檛 see it as much of an issue on our side,鈥 he said.
