Civil Beat is on record as opposing any more money for the Honolulu rail project beyond what has already been budgeted.

Just four months ago we wrote, “In addition to the rail project’s ridiculous cost overruns, the city has yet to even present a plan for how it will cover rail’s operating and maintenance costs.”

That conviction is only reinforced by alarming developments in recent days.

Honolulu Mayor Kirk Caldwell and state House and Senate leaders have engaged in an open brawl with the city administration and the Honolulu Authority for Rapid Transportation over whether the total cost of the project is $8.2 billion or $8.7 billion.

Meantime, on Saturday The Associated Press reported that a transportation consultant and national expert on transit issues said, “Right now it’s probably a race between California and Hawaii of who’s going to get their projects built or have the biggest boondoggle in the country.”

This is enormously embarrassing — not to mention fiscally stupid — for the city, the state and all of us who live here and pay taxes.

Capitol building Downtown Honolulu. 17 april 2017
Hot ticket: Senate Ways and Means will begin hearing the bill to further fund Honolulu rail Monday. Preserving language calling for a thorough audit is an essential part of the legislation. Cory Lum/Civil Beat

Beginning Monday, state lawmakers will consider Senate Bill 4, a compromise proposal to generate almost $2.4 billion from two state taxes to allow Honolulu to pay for what is conservatively expected to be a $10 billion rail project by the time construction ends at Ala Moana Center.

While we remain very uncomfortable with any further bailout for rail, we are heartened that SB 4 includes detailed language calling for the State Auditor to closely scrutinize HART, including its financial records, management policies and accounting systems.

While the words “forensic” and “independent” — words used by several prominent rail critics of the type of audit they prefer — are not mentioned in SB 4, the proposed legislation calls for serious state oversight of the city project.

As spelled out in the bill, in order to make sure that county surcharges on state taxes are being “managed and used in a reasonable manner,” the auditor’s examination scope will include the following:

  • fiscal and management policies, practices and processes associated with HART’s plans, design, bidding and construction of the project;
  • all contracts awarded for, and expenses associated with, the project including payments to contractors, subcontractors and consultants, as well as any change orders;
  • spending by HART for personnel costs, lease rent and “any other costs associated with its management and operations”; and
  • “any other subjects that the auditor deems necessary for review, to determine whether funds received” by the Honolulu Authority for Rapid Transportation from the county surcharge on state tax “are being managed and used in a reasonable manner.”

The State Auditor will also be tasked with researching Federal Transit Authority criteria to find out whether spending complies with the city’s full-funding agreement with the feds.

But wait, there’s more.

The auditor shall — not may — identify alternative routes, development options and projected costs for the section that will run from Middle Street to Ala Moana.

HART must also provide to the auditor a “detailed financial plan” on how the city will finance operations and maintenance costs “without the use of state moneys or other state-provided financial supports.”

The Power To Subpoena

To help the auditor’s office do its job, it has subpoena power to obtain any HART documents it deems necessary, “including but not limited to invoices, contracts, progress reports, and time schedules.”

There is also this condition in the measure:

Any private company or agency contracted to provide services for the locally preferred alternative for a mass transit project shall cooperate with and assist the auditor as needed in conducting the annual review, including promptly providing all records and other information requested by the auditor in the course of the annual review.

No wonder Mayor Caldwell doesn’t like SB 4.

It’s much easier to simply beg for a never-ending GET surcharge for Oahu and to appoint Caldwell buddies like Ember Shinn to the HART board so they can oppose calls for audits.

The auditor’s report is due shortly before the Legislature will convene in 2019.

That may seem like a long ways away, but construction on rail can continue as the changes in funding kick in. Annual reviews of the rail agency are also required by the auditor under SB 4

The Legislature has the authority to revisit the language in SB 4 in future sessions, including the audit requirements and funding mechanisms.

The Senate Ways and Means Committee is scheduled to hear SB 4 beginning at 3 p.m. Monday in the Capitol Auditorium.

We urge the public and public officials to give careful, thoughtful consideration to this legislation.

As much as we would rather not throw any more taxpayer money toward the rail project, if it is to happen, it’s imperative that an agency other than the city and HART keep close tabs on and where and how the money is being spent.

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