Newly released records show top Honolulu rail officials were pumping state lawmakers for money before telling the public the project was over budget and facing a nearly $1 billion shortfall.

The documents describe what transpired during a Dec. 18 closed-door meeting between the Honolulu Authority for Rapid Transportation board of directors and city attorney Gary Takeuchi.

The discussion was part of an executive session held shortly after HART Executive Director and CEO Dan Grabauskas announced at the board meeting that rail was in financial trouble.

At the time, HART Board Member Don Horner said he wanted to “huddle up” and have a “pretty candid discussion” about the projections.

But Civil Beat obtained written minutes of the private meeting after challenging HART’s legal basis for secrecy to the Hawaii Office of Information Practices, which oversees the state’s Sunshine Law governing open meetings.

Leeward LCC Rail2

Top rail officials have been working behind the scenes for months to get more tax money for rail.

Cory Lum/Civil Beat

Horner never cited a Sunshine Law exemption when he asked for the executive session. The agenda noted it could be to talk with attorneys about legal matters related to the project.

But the minutes show that the board’s conversation focused almost entirely on the political maneuvering that would be necessary to extend the general excise tax surcharge for the $6 billion project beyond its 2022 sunset. There was little, if any, questioning of Takeuchi reflected in the minutes.

Civil Beat Law Center for the Public Interest Executive Director Brian Black said it’s troubling that such discussions took place out of public view, especially when HART said it needed the privacy to talk with attorneys. He added that this specific example highlights the need for better enforcement of possible Sunshine Law violations.

“It almost seems to validate everyone’s fears,” Black said. “Many people fear that the boards use the exceptions, such as the legal advice exemption, and that they just use it for themselves to be able to talk frankly.”

The minutes reflect a multi-faceted approach used by HART to woo lawmakers, including attempts to get Gov. David Ige on board with the GET extension early on.

According to the minutes, HART Chairman Ivan Lui-Kwan updated board members on lobbying efforts that were already underway to increase the GET surcharge. He said state lawmakers were being taken on tours of the rail line and meetings had been arranged with the influential heads of the transportation and finance committees prior to the Jan. 21 start of the legislative session.

Attendees at those meetings included a combination of HART board members, Grabauskas and Jennifer Sabas, who heads Move Oahu Forward, a pro-rail community group whose members include some of the most influential business and labor leaders in the state. Sabas is former chief of staff to the late U.S. Sen. Dan Inouye, and was instrumental in securing $1.5 billion in federal money for the project.

HART Boardmember Don Horner during HART meeting held at Kapolei Hale.  18 dec 2014. photograph Cory Lum

HART board member Don Horner wanted to discuss the latest budget projections behind closed doors.

Cory Lum/Civil Beat

HART Board Member Don Horner suggested enticing lawmakers with the promise of more money if they approved the GET extension for the city. The state currently skims 10 percent of the GET surcharge for rail for administrative expenses, and over the life of the tax is expected to collect more than $400 million.

Horner said that if the state’s take on the surcharge were raised to 25 percent it might sway certain senators. A bill was introduced this session to do just that, but has not gained any traction.

Board members also wanted to convince Ige to include the GET surcharge in his first-ever State of the State address. They noted the importance of getting House Speaker Joe Souki and Senate President Donna Mercado Kim to broach the topic in their respective speeches as well.

But the plan didn’t work out as expected, at least with Ige. While he mentioned his support for rail during his address, he said it was important for the city to cut costs before asking for more money.

His administration remains skeptical about the tax increase until more information can be provided.

‘Ringing the Alarm’

What’s difficult to know is just how long city and HART officials have been working the halls of the State Capitol trying to secure more GET money.

The first warning that the project might be in trouble came last September when the lowest bid to build nine stations came in $110 million more than budgeted. That was a 60 percent increase over what was anticipated.

Ivan Lui Kwan, Chairman of HART Board of Directors, Donna Leong, Honolulu Corporation Counsel, Dane Gerabauskas, Executive and CEO of HART pose of photographs after news conference announcing the end of two federal lawsuits involving rail. 2.18.14 PF Bentley/Civil Beat

HART Chairman Ivan Lui-Kwan, far left, says lobbying efforts are ongoing to convince the state to extend the GET surcharge for rail.

PF Bentley/Civil Beat

But even at that time Grabauskas and others were optimistic they had enough money in their contingency fund to complete the project. A consultant hired by the Federal Transit Administration, however, was not as hopeful, saying in monthly reports that “aggressive cost containment” was necessary.

Lui-Kwan told Civil Beat in an interview that HART officials began talking to lawmakers before Dec. 18 about the GET surcharge, but he didn’t know when those discussions began.

“The focus really was on how did we get to where we are and why are we ringing the alarm,” Lui-Kwan said. “It was really important to engage in that discussion.”

He said there was a meeting with Ige’s chief of staff, Mike McCartney, before the State of the State, and that talks with other lawmakers are ongoing.

A Senate committee passed a bill Feb. 12 that would extend the GET surcharge another 25 years. The bill still must be heard by the Senate Ways and Means Committee if it is to move on.

You can read HART’s executive session minutes here:

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