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HawaiiNewsNow Video » Rail budget scrutinized at city council
The City Council Budget Committee on Thursday chopped more than $291 million from next year’s construction budget for the rail system before approving preliminarily the budgets for the Honolulu Authority for Rapid Transportation.
The construction and operating budgets and a separate bill authorizing HART to borrow an unspecified sum of money to fund construction of the rail system now go to the full Council for further consideration.
About 75 carpenters, masons, laborers and other rail proponents packed the Council committee hearing room to support the $22.8 million operating budget for HART as well as the agency’s proposed $491 million construction budget.
The planned rail line would extend 20 miles from East Kapolei to Ala Moana Center, and is scheduled to be completed in 2019. The $5.27 billion project has been strongly supported by building industry representatives and unions as a way to create jobs.
Council member Tom Berg questioned why HART is spending more than $2.12 million a year on rent at Alii Place downtown, and suggested the agency should relocate to less expansive office space in Kapolei.
Daniel Grabauskas, HART’s newly appointed executive director, told Council members he is doing a careful review of the budgets to look for ways to cut costs.
"I’ve had a reputation in the past of being frugal — sometimes called cheap — and I intend to maintain that reputation here," he said. "What we’re all about here is being lean and focused on constructing this project on time and on budget."
The construction budget included $291 million in borrowed money HART has budgeted for next year to help finance construction, but Council Budget Chairwoman Ann Kobayashi proposed an amendment to eliminate those borrowed funds.
Grabauskas said he understands some Council members don’t want HART to borrow until the Federal Transit Administration commits to a Full Funding Grant Agreement that would provide $1.55 billion to help pay for the project.
Still, Grabauskas asked the Council to authorize the full construction budget for next year, including the borrowed funds. He said HART might be forced to delay work if it has to return to the Council to get a new appropriation.
"Interrupting the process means delay, and delay means cost," Grabauskas said.
Kobayashi said she does not want families to be stuck paying off debt from the project, and the Budget Committee removed the appropriation for the borrowed funds from the HART budget. However, the Council will have at least two opportunities later to restore the funding.
The committee also initially approved HART’s operating budget, and also voted to approve a third measure that seemingly contradicted the decision to cut all borrowed funds from the budget.
In that later vote the committee advanced a bill authorizing the city to issue bonds or other debt instruments to borrow as much money as was authorized in HART’s construction budget.
Since the committee had already removed the $291 million in borrowed funds, the borrowing bill won’t have any effect unless HART’s budget is amended later to permit borrowing.
Kobayashi acknowledged that as committee chairwoman she could have blocked the borrowing measure, but said she allowed the bill to advance without her support because other committee members wanted it.
The vote on the borrowing measure was 3-1, with only Kobayashi voting no.
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