Diverting bus funds and replacing them with other money is called into question
POSTED: 1:30 a.m. HST, Jul 15, 2010
The city might use general fund money to cover costs associated with building a planned $5.5 billion elevated commuter line, a city official said at a hearing yesterday.'
That scenario is "on the table" but "highly unlikely," said city Transportation Director Wayne Yoshioka. It was the first time the city has publicly stated that general fund revenues, which includes property taxes, could be used to help pay for the 20-mile, East Kapolei-to-Ala Moana project.
The city has said the project would be paid for with about $3.7 billion from a general excise tax surcharge plus $1.55 billion in federal rail funds and $300 million in federal money diverted from TheBus and Handi-Van.
City Councilman Ikaika Anderson yesterday asked Yoshioka whether general fund money might be used to replace funds diverted from TheBus and Handi-Van.
"Is it even a consideration? Sure, everything's on the table," Yoshioka said during a Council hearing on the project's Final Environmental Impact Statement. "But I think when we have to look at this issue we're going to really have to look at it comprehensively.
"It's not really a policy we're following right now."
The possible use of bus money to pay for rail results from less-than-originally anticipated collections from the general excise tax surcharge implemented in 2007.
Anderson warned Yoshioka that any use of general fund money to help pay for rail could violate a 2007 city ordinance. The ordinance in question states that project capital cost and interest "shall be paid entirely from general excise and use tax surcharge revenues, interest earned on the revenues, and any federal, state, or private revenues."
It's not clear whether using city general funds to replace bus money spent on rail would violate the 2007 ordinance.
"If using general fund moneys to make up for that (bus) shortfall is even on the table, you realize that that could be in strict violation at least of the spirit of ordinance 07-01," Anderson told Yoshioka.
"That will be duly noted (and) we'll take that comment and we'll make sure that comment is noted and logged in," Yoshioka said.
The diversion of bus money for rail is a "worst-case scenario" the city hopes to avoid via construction cost savings and potentially lower inflation rates, city officials said. They also hope transit tax collections will exceed expectations in the future. The city has pledged that the quality of its current bus service will not be sacrificed to build the elevated rail.
Groundbreaking on the train was delayed six months by the Federal Transit Administration's review of the project's final environmental impact statement. Now that the study has been released, Mayor Mufi Hannemann wants Gov. Linda Lingle to provide her approval in a timely manner.
Lingle already has promised to conduct a comprehensive review that could take months. That delay could end up increasing the cost of the project or possibly killing it. However, if the project goes forward, but fails financially, all taxpayers could be put at risk, Lingle has warned.
Also yesterday, Hannemann said U.S. Rep. Jim Oberstar, chairman of the U.S. House Committee on Transportation and Infrastructure, called Honolulu's rail project "the premier transit project in the entire country."
"I deeply appreciate Chairman Oberstar's high praise for our rail project," Hannemann said in a news release.
Hannemann said Oberstar called Honolulu's elevated rail a "vastly safer transit" system and said it "received the highest rating from the Federal Transit Administration."
AGREEMENT AT A GLANCESome details from the city's sewage treatment settlement:
COLLECTION SYSTEM WORK» Implement an agreed-upon operation and maintenance program for all force mains.
» Complete 40 gravity sewer projects by Dec. 31, 2016, and evaluate another 38 projects over the next four years.
» Assess the condition, through closed-circuit television, of 650 miles of gravity sewers.
» Repair or replace 144 miles of gravity sewers.
» Clean 500 total miles of gravity mains per year.
SAND ISLAND AND HONOULIULI TREATMENT PLANT UPGRADES» Honouliuli is required to be upgraded to meet secondary treatment standards by June 1, 2024, and Sand Island by Dec. 31, 2035, with possibility of a three-year extension if the city demonstrates that the earlier deadline is not technically feasible or would impose undue financial hardship.
» Both must meet interim effluent limits until they achieve full secondary treatment.
Source: Office of the Corporation Counsel, City & County of Honolulu.