Before next year’s city budget can gain approval, Honolulu’s mayor and his ascendant political rivals on the City Council will take the unusual step of flying to Washington, D.C., where they expect federal officials to outline what’s required of them for rail.

Mayor Kirk Caldwell, along with the council’s recently restored chairman, Ernie Martin, and its new budget chairman, Trevor Ozawa, plan to meet with Federal Transportation Administration officials Monday. They’ll discuss whether the rail project risks losing its remaining federal funding, as Caldwell has said, if the city doesn’t include as much as $44 million for the project’s administrative costs in its fiscal year 2019 budget.

The move comes as Ozawa says he’ll propose including the millions of dollars that the city may have to set aside for rail in its operations budget, where other city programs would have to be cut. Caldwell has instead proposed that the city use bonds in the city’s capital budget to cover those rail costs.

Honolulu City Council member Trevor Ozawa during full council meeting.

Councilman Trevor Ozawa, left, wants the money the city must set aside for rail to come from its operations budget, not from bonding.

Cory Lum/Civil Beat

Officials have said the Honolulu Authority for Rapid Transportation has enough cash flow in the upcoming fiscal year so the agency won’t need $44 million from the city. But rail’s partners at the FTA have insisted in private meetings that the city set aside that money anyway or risk losing its remaining $744 million in federal dollars, the Caldwell administration said.

The administration said it would not actually float the bonds added to the capital budget since HART doesn’t need the money.

“If you go out and get a line of credit (and then) don’t draw on the line of credit it costs you nothing,” city Budget Director Nelson Koyanagi said at a March council meeting. “This is the same situation.”

But Ozawa said the city should be prepared to pay.

“We have to be ready, willing and able to pay,” he said. “The FTA is going to make us do that if push came to shove.”

Ozawa and Martin oppose the administration’s idea of using bonds to cover HART’s administrative costs. Martin was not available for comment Wednesday.

In a letter he submitted along with some proposed budget cuts, the council chair wrote that using bonds to fund HART’s administrative costs “sets a dangerous precedent.”

Those costs are covered this fiscal year and next, according to the administration, but are set to increase in fiscal years 2020 and 2021, when the city will actually need to pony up more money.

Ozawa said taxpayers should not have to pay additional costs incurred from interest on the bonds over time, as they would under Caldwell’s proposal.. 

At the budget hearing Wednesday, department heads insisted they had little or no money to spare, even though Ozawa wants big cuts. 

Ultimately, Ozawa said he wants to find a way “within the confines of the law” to avoid using property taxes to fund any part of the 20-mile, 21-station rail project.

That, he said, will take more research.

Ozawa asked Andrew Robbins, HART’s executive director, to transfer expenses from the agency’s operating budget its capital budget, where state and federal funds can still cover costs.

Ozawa offered the example of a project manager at HART whose salary could be lumped into the project cost in the agency’s capital budget.

The impending trip to Washington came up at Wednesday’s budget meeting when Councilman Ikaika Anderson questioned City Managing Director Roy Amemiya about the visit.

Amemiya said the new council leadership wants to confirm with FTA officials that the city is required to include the $44 million in its upcoming budget. The administration also hopes to get an update on Honolulu’s recovery plan for the project, which is awaiting FTA approval, Amemiya said.

Martin said it won’t be the only upcoming trip involving rail.

The North Shore representative, who is running for Congress, wants to add $42,000 to the city’s legislative budget for out-of-state travel.

“It’s just my opinion that it will probably require additional travel. I don’t think it will be an opportunity for us to settle the issue with respect to the funds that the FTA has been withholding,” Martin wrote in his budget amendment. “I think it will take a number of discussions in order for us to secure the release of those funds”

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