Hanabusa elevated to rail board’s top post

As the Honolulu rail agency’s new board chairwoman, former U.S. Rep. Colleen Hanabusa must now help guide the largest public works project in state history as it faces growing financial uncertainty and eroding public confidence.

Hanabusa’s fellow Honolulu Authority for Rapid Transportation volunteer board members unanimously voted to appoint her to the top post Thursday, the day after Mayor Kirk Caldwell reappointed her to a new term that will last through 2021.

“This decision did not come easily. However, I believe the board is at an important juncture,” Hanabusa said moments after becoming chairwoman. “I am doing it because I feel the board has to be very accountable to the public. I feel that we can work together and do the public’s bidding.”

Their vote came during a spirited, daylong meeting in which board members said that HART employees give them “fuzzy numbers” instead of the budget details they need to provide oversight, called for reforms to give them more authority and met in closed session to evaluate the performance of HART’s embattled executive director, Dan Grabauskas.

Board members Thursday also fretted over the $6.57 billion project’s growing costs after HART staff reported that the latest bid proposals to build the guideway and four stations around the airport could be as much as 10 percent higher than the rail agency’s most recent $820 million cost estimates for that work.

It’s becoming less certain that the city will have the funds to complete rail to Ala Moana Center, and for what was likely the first time in an official HART board meeting, HART leaders discussed stopping the public transit project short at Middle Street if costs grow too high.

“Don’t we owe it to the public to talk about alternatives” rather than “ramrodding this 20-mile system through and we can’t afford it?” board member Terrence Lee said. Board member Ivan Lui Kwan added that they needed to consider a “worst-case scenario.”

Federal transit officials have already warned that if the city takes that step — a move that would breach its federal funding contract — then the city would forfeit some $1.55 billion in federal rail dollars, and it could have to repay at least $472 million that it’s already collected. Some local officials, including Honolulu City Council Chairman Ernie Martin, have said they believe the project’s federal partners would instead work toward a “realistic financial plan” to finish the project.

Addressing media outside Alii Place in downtown Honolulu on Thursday as the board met inside, Caldwell stressed his support for building the full 20-mile, 21-station transit line to Ala Moana Station. If rail doesn’t go that full distance, the system won’t get the ridership numbers it needs because it wouldn’t be a convenient mode of travel into town, he said.

Caldwell proposed using some of the state’s controversial 10 percent skim of rail’s general excise tax surcharge to fund actual rail construction if the project needs more money. That 10 percent fee could generate about $500 million with the recent five-year tax extension, and it’s been shown to be much more cash than the state’s tax department needs to administer the Oahu-based surcharge.

Nonetheless, efforts to reform that state fee have died in previous legislative sessions.

“This is a conversation we would have to have with the state Legislature,” Caldwell said. “It would have to be next year. But I think it’s something to be looked at.”

Caldwell encouraged the HART board earlier Thursday to deliver the truth “no matter how unpopular it is.”

Hanabusa will serve the rest of former board Chairman Don Horner’s term, which expires this summer, plus a year after that. Vice Chairman Damien Kim briefly served as interim chairman prior to the vote for Hanabusa. Kim, who serves as business manager and financial secretary for the International Brotherhood of Electrical Workers Local 1186, is expected to be appointed chairman after Hanabusa.

Horner, an original HART board member who had served as its chairman for only about eight months, resigned from the rail body last week amid growing concern over the project’s financial shape. Martin has also called on Grabauskas to resign, although Grabauskas has said he wants to keep his job and would leave that decision to the HART board.

On Thursday the board extended Grabauskas’ evaluation an additional 60 days with Grabauskas’ consent. Emerging from a closed-door board session, Kim said the process would involve “investigations into certain matters.”

Caldwell appointee and insurance company executive Colbert Matsumoto took Horner’s place on the board Thursday. Last week, shortly after Hor­ner’s resignation, Caldwell told reporters that he had already planned to ask Horner to take that action.

During that conference the mayor was flanked by Hanabusa and city Department of Transportation Services Director Mike Formby. The HART board members said that rail staff had not provided them key details about utility clearances, and that staff canceled a major contract to build a parking garage and transit center at the Pearl Highlands station without consulting the board.

The day Horner resigned, Hanabusa said it would be presumptuous for her to consider being chairwoman because Caldwell had not yet appointed her to a new board term. On Thursday she said both Caldwell and Martin made overtures to her about taking over as board chairwoman “primarily after” Horner had resigned.

Formby continued to vent at Thursday’s meeting about the relationship between HART board and staff, saying the board needed to get more timely and reliable budget updates. “We look like potted plants when we don’t have the opportunity to ask questions and make decisions,” Formby said.

Formby further called for a reform of “the governance of the board” to give it more oversight, although it’s not yet clear what that would entail. Hanabusa said that’s one of the first things she’ll look into as chairwoman.