City Council members want clarification from the Carlisle administration on exactly what information was sent to the Budget Committee last March that should have flagged attention to the city’s intent to suspend debt guidelines to borrow extensively for the $5.27 billion rail project.
"We just want everything cleared up so we can move on," Budget Chairwoman Ann Kobayashi said Friday.
Kobayashi has scheduled an informational session at the end of Wednesday’s regular Budget Committee meeting to discuss the waiving of the city’s "debt affordability guidelines."
Managing Director Doug Chin approved a request to waive the guidelines in October. The decision was not publicly announced, and Kobayashi said she was never notified. After Mayor Peter Carlisle’s State of the City speech on Thursday, other Council members, including Chairman Ernie Martin, said they also felt the Council should have been formally notified.
There was no legal requirement to notify the Council, and Chin acknowledged the administration never wrote to Council members. However, Chin said Budget Director Mike Hansen provided the Council with budget data last March showing that borrowing for the rail project would cause the city to exceed the Council’s debt guidelines in the years ahead.
Carlisle backed Chin, saying the information was sent in March but that he did not know whether Council members missed it or if they did not understand the significance of it at the time.
"The budget documents have nothing to do with waiving the guidelines," Kobayashi said. "The budget documents sent in March have nothing to do with waiving the financial guidelines, but he’s combining them, saying that he did notify about the waiving when he didn’t. All he did was send the budget documents."
Chin, in an emailed statement, noted that the rail project has a dedicated source of revenue — the half-percent general excise tax surcharge — and that debt affordability guidelines were created in 1996, before the rail project or Honolulu Authority for Rapid Transportation existed. The guidelines allow for suspension due to "unusual circumstances," he wrote.
"In full compliance with these guidelines, the city’s fiscal department has recommended that the 1996 guidelines continue to apply to all other city debt service, excluding rail from 2014 to 2023, due to rail having its own revenue sources," Chin wrote. "While the Council could have been informed sooner regarding this internal decision, it is not scheduled to be implemented until 2014."
He added that no rail debt has been issued, and during the period of suspension, the city or HART would provide updates to the public on the status of rail debt. He said the Council still has final approval over any borrowing.
