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Members of a key state Senate committee blasted the Hawaii Tourism Authority at a Tuesday hearing for its lack of transparency and what they termed “unsustainable” spending and debt management.
The Ways and Means Committee, led by Chairwoman Jill Tokuda (D, Kailua-Kaneohe), criticized the publicly funded HTA for submitting a budget that didn’t include the breakdowns for individual programs under each line item. Committee members also questioned why HTA spending was exceeding its state-allotted, annual $82 million tourism special fund by millions during a boom visitor market, and why it is paying the state only $20 million of the $26.4 million yearly internal debt service on the Hawai‘i Convention Center. The tourism special fund pays for HTA’s marketing and operations.
Tokuda said HTA budgeted tourism special funds at $93.2 million in 2016 and $89.9 million in 2017, far exceeding the annual $82 million state allotment.
“I’ve never gotten actuals. It’s a little fluffy,” said Tokuda, who went on to accuse the agency of burning through its reserve funding. She ordered HTA to deliver four years’ worth of actual spending to actual revenue.
Sen. Glenn Wakai (D, Kalihi-Salt Lake), a committee member and the chairman of the Senate’s Tourism Committee, also wants more data from HTA.
Wakai said he has tried for a month to obtain detailed HTA budget worksheets. Wakai told the Honolulu Star-Advertiser that when HTA blocked his Dec. 6 request, he filed a formal open-records request under the Uniform Information Practices Act. HTA denied the request, citing the need to protect “proprietary information” and “competitive advantage.” He appealed its decision Thursday but his request remains unfulfilled.
“This is the first time that I’ve had to go through these means as a lawmaker to get information. The fact that I am being kept in the dark is very disturbing to me,” Wakai said. “For me to evaluate the successes or shortfalls, I need the numbers or data. They hold all the information and only let out information that they deem fit for public consumption.”
During Tuesday’s hearing, HTA President and Chief Executive George Szigeti said he is withholding “proprietary information” with HTA board approval. “No CEO would give the road map of their company’s success to their competitor,” he said. “We are competing against other countries that want our business. We don’t tell them what we do.”
Wakai said HTA’s refusal to provide detailed budget information to lawmakers violates state law. “The law is clear. They are to give us information if we ask for it, and if it’s proprietary I have a duty to keep it private,” he said prior to the hearing.
While the agency did not provide the committee with detailed spending numbers, Chief Operating Officer Randy Baldemor sought to clarify the agency’s budget. He said HTA is augmenting its budget with unspent marketing funds from prior years. He also said HTA maintains a $14 million reserve fund.
Baldemor said HTA’s reserve is adequate to meet future needs, but several senators remained unconvinced.
“I’m bewildered as much as the chair, maybe more. We’re not in 2009. Tourism numbers are up. What happens next year when you burn through all the money and you have a downturn?” asked Sen. Donna Mercado Kim (D, Kalihi Valley- Moanalua-Halawa).
The committee also questioned HTA’s decision to short the state $6.4 million annually on its Hawai‘i Convention Center debt repayment.
Marc Togashi, HTA vice president of finance, said the agency paid the state what it “could afford” in debt repayment this year and last. HTA still owes $297 million in principal and interest on the facility, which was funded with $350 million in general obligation bonds issued from 1992 to 1998, he told the Star-Advertiser.
Togashi said lawmakers reduced HTA’s convention center special fund to $26.5 million from $33 million in 2014 to provide for a conservation easement at Turtle Bay. At the same time, he said, the center’s bond debt was lowered to $16.5 million from $26.4 million. The law was repealed the following year, and the bond debt was restored to the higher payment but, Togashi said, the convention center fund was never made whole.
Togashi said center debt also remains high because Gov. Neil Abercrombie’s administration added $53 million to the debt schedule in 2011 to cover costs that the state incurred after the expiration of the Hawaii Convention Center Authority. “We’re working with (the state) to come up with a solution,” he said.
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