City, state must agree on rail plan

The City Council is poised at its meeting today to authorize the issuance of bonds funding construction of the cash-strapped $8.2 billion rail project, if the votes come in as the mayor projects.

But the real significance of the action is for the statement it will transmit to the Federal Transit Administration, now deciding on the release of remaining federal subsidy funds, and to state lawmakers, who hold the financing future of rail in their hands.

“We want to send the message that we still stand firmly behind completing the rail, all the way to Ala Moana, and obviously to get the money to finish the first 15 miles,” Mayor Kirk Caldwell said, during a meeting with the Honolulu Star-Advertiser editorial board on Monday.

Today’s Council’s meeting is focused principally on the the first of a series of bond floats to allow construction to continue to Middle Street. The project has been up to now underwritten by the general excise tax (GET) surcharge and what FTA funding has been released so far (about half of its $1.55 billion grant).

But there is also a pair of measures, Bills 58 and 59, that should be allowed to proceed. This legislation would strengthens the city’s requirements for affordable housing development within the transit-oriented development zones. They also would provide building incentives aimed at attracting the development of units to lower-income residents, especially renters.

Developers have balked at the plan, but the Council must keep its eye on the prize of affordable housing. The rail project remains the most potent single opportunity for the city to correct a widening shortage of homes available to those earning below the area median income.

There is another critical date looming on the calendar: Aug. 28 has been set as the date for the convening of a special session of the state Legislature aimed expressly at finding more rail revenue.

It is abundantly clear that the failure for the Legislature to approve any kind of tax extension during the regular session represents lawmakers’ lack of faith in the project. The city’s previous assurances — that the last tax extension would suffice — explain the current doubts in the project cost projections by the Honolulu Authority for Rapid Transportation.

Krishniah Murthy, HART’s interim executive director, told the Star-Advertiser that his agency has taken steps to tighten its grip on cost controls. He cited the hiring of a new chief financial officer, more rigorous reviews of change-order requests from contractors and other efforts among the improvements.

Murthy needs to report on these measures to legislative leaders, who could use a better reason to believe what they’re being told about costs.

HART and city administration officials also should support ideas offered by legislators — especially the concept of front-loading the schedule to pay off the bonds, to keep financing charges in check.

State Rep. Sylvia Luke, the House Finance chairwoman, has favored an infusion of funds from the transient accommodations tax (TAT) to make these accelerated payments possible, in addition to a modest extension of the GET surcharge.

Some version of that idea should get serious consideration, weighing carefully its effect on the visitor industry.

However, lawmakers also should take care to keep the funding measure focused on the rail exclusively. Adding on other state projects as beneficiaries, as was proposed during regular session, would only prolong the period taxpayers will be tapped for construction.

Once the special session convenes, the mission should be to assemble the money for rail, period. Wavering in that commitment puts FTA approval at risk.

And failure of this project would waste a rare opportunity for the redevelopment of Oahu’s urban corridor in a way that best serves the needs of its people.