The 2019 construction budget for the Honolulu Rail Transit Project almost got derailed today at the Honolulu City Council.

HART Budget in short crisis

The Federal Transit Administration -- the F-T-A -- is requiring the Honolulu Authority for Rapid Transportation to budget 44 million dollars for the rail transit project. HART President and CEO, Andrew Robbins, told City Councilmembers that the State Legislature and the Governor’s Act 1, prohibits the use of general excise or hotel room taxes -- GET or TAT -- for rail administrative costs, payroll or expenses.

“What the funds will be used for is what we cannot use GET and TAT for. Any use of the 44 million would be the puka left over by the prohibition on Act 1 and whatever lack of funding we have from the federal government.”

The City Council’s Budget Committee provided the 44 million in HART’s capital or construction budget that included a provision that no City property tax monies could be used. But, the City’s Corporation Counsel or legal advisors, said if HART obtains bond financing city property tax money could be used to pay the interest. City Managing Director and Acting Mayor, Roy Amemiya, says that’s why the mayor’s original plan was to hold that money in the administration’s capital budget instead of giving it to HART.

“When you put it in the HART budget, suddenly, the have the authority to move forward and draw on the money. And, there is no oversight by ourselves as we would other kinds of bonds issues. And part of the reason for having 44-million put into the administration’s budget is that we have more control over whether or not that money is spent. By putting it in the HART budget, we lose that authority to oversee the 44-million.”

Councilmember Kimberly Pine says that was not the plan the city administration and the City Council agreed to.

“Did I miss a memo or something? Because I could have sworn that I saw a press release that the mayor supported the 44 million being put in the HART capital budget. I thought we were all in agreement and this was the least controversial part of our discussion for today. The head of HART, he just testified that he said it was okay and the mayor sent a press release that he was okay with it, so I don’t understand what we’re discussing right now.”

The Councilmembers presented all of their concerns…but they realized the City Charter required them to pass the budget by June 15th. After a recess, they came back and approved HART’s $6.5 million dollar operating budget for 2019 and the 1.7 billion capital budget which includes the 44 million. Budget Committee Chair, Trevor Ozawa, says FTA federal funding is at stake and the City Council has future oversight.

“We stand to lose $750 million of federal grant money, which is what I’m concerned with. In addition, any monies that will be expended at any point in the future, like their bonds, would have to come before us specifically for authorization so, at that time, nobody’s guaranteeing votes – yes or no – at least, I’m not, with regard to using property taxes.”

For HPR News, I’m Wayne Yoshioka.