Honolulu City Council Chairman Ernie Martin is questioning whether there needs to be a shake-up at the Honolulu Authority for Rapid Transportation to get the $6.6 billion rail project back on track.
Martin broached the subject during a special Budget Committee meeting in Kapolei on Wednesday to consider a bill that would extend by five years a general excise tax surcharge to cover most rail costs.
The surcharge is set to end in 2022 unless the council approves the five-year extension, which was already authorized by the Legislature. Officials say it is needed to pay for a growing deficit of more than $1 billion that stems from cost overruns and less-than-expected revenues.
While Martin didn’t directly say that HART Executive Director and CEO Dan Grabauskas needed to go, he did insinuate that some change in project management might be necessary.
Martin used the recent firing of University of Hawaii football coach Norm Chow as an analogy for rail. The project broke ground in 2011, the same year Chow was hired.
“He knew that change had to occur,” Martin said of Naeole’s decision. “We cannot continue to take a beating without making changes. Here we are four years down the line taking loss after loss and nothing has changed, except that you’re coming before us asking for more money.”
Martin wants to put a cap on how much surcharge revenue can be used for rail at $910 million — not enough to cover current cost estimates — and has proposed diverting the rest of the funds collected toward affordable housing.
He also wants more accountability measures put in place for HART, including forcing the agency to provide regular updates to the City Council on project finances and an accounting of how much money subcontractors are taking home.
“Here we are four years down the line taking loss after loss and nothing has changed, except that you’re coming before us asking for more money.” — Honolulu City Council Chairman Ernie Martin
Martin said his biggest fear is that the costs continue to rise to the point where rail is no longer worth the effort. He accused Grabauskas of asking the City Council for a “blank check.”
Both HART and the Caldwell administration have supported Martin’s measure that calls for more City Council oversight of the rail project. But they want more flexibility with the proposed cap so that they can cover all the expenses.
The Federal Transit Administration awarded the city a $1.5 billion grant to help build the 20-mile, 21-station rail line. Officials say that they might be in danger of having to pay back some or all of that money if they don’t follow through on that promise, and they say they need the full five-year surcharge extension to do so.
Grabauskas, who was hired in the spring of 2012 out of Boston, acknowledged that it’s difficult to know exactly how much the project will cost until all the bid packages for construction have come in.
He said HART is relying on its best guesses based on past performance and current market indicators that show Honolulu is experiencing some of the highest construction prices in the country.
“For me to tell you the exact numbers here are the exact numbers we’ll see when we open the bids, that’s not possible,” Grabauskas said.
It was clear during the meeting that several council members want more oversight of the project.
Budget Chairman Ann Kobayashi, in particular, said she was worried that city would have to increase property taxes should prices continue to escalate. She also wanted HART to consider other alternatives to the full 20-mile route should costs get out of hand.
“We have to start worrying about this, we have to start being concerned about the finances,” Kobayashi said. “We have to restore the public’s trust in this project.”
The Budget Committee did not vote on the rail tax extension. Another special meeting is scheduled for 5:30 p.m. Monday at Washington Middle School in Honolulu to discuss the proposal, as well as Martin’s proposed cap.