Editorial: FTA requires city to tighten its belt

Despite the Honolulu Authority for Rapid Transportation’s assertion that there’s no need to step up the pace of city contributions to pay for rail construction, the city’s partner in the project, the Federal Transit Administration, insists, to the contrary, that it’s time to pony up.

Given HART’s record of tangled and sometimes outright wasteful spending on the project, it’s not surprising that Mayor Kirk Caldwell’s request for the FTA to release its final chunk of funding while the city puts off payments until later is falling on deaf federal ears.

Since 2016, when it became clear that construction of Honolulu’s 20-mile elevated rail system was vastly overbudget and delayed, the FTA has been rightly wary of HART-related projections. It has yet to sign off on a city plan for financial recovery. And until it does, a hefty financial commitment hangs in the balance.

In 2012, the partners signed a “Full Funding Grant Agreement” committing the federal government to contributing $1.55 billion for Honolulu to build a 20-mile elevated rail system with 21 stations. So far, the city has received about half of the funds. But if the FTA loses faith in the partnership, it can deny the release of the remaining $744 million and require partial or even full return of the grant money.

This largest-ever public works effort in Hawaii can ill afford to lose its partner, of course. And so it’s time to brace for austerity belt-tightening, as the FTA wants the city to commit $25 million in city funds toward rail construction in the fiscal year that begins July 1 as well as a total of $92 million more during the following seven years.

As the City Council pieces together its budget for the coming fiscal year, it will be sizing up how to carve out $25 million without making painful cuts to city services. For starters, it should reluctantly kiss goodbye Councilwoman Heidi Tsuneyoshi’s idea of overriding Caldwell’s recent veto of a bill to lower by $70 a year the property taxes of homeowners who live in their houses.

Yes, the notion of lowering a property tax bill — even if essentially a pocket-change gesture — is attractive, given the standard home exemption last increased in 2006. But the mayor has countered that the bill would cost the city an estimated $10.3 million in property tax revenues, which could “impair” the city’s ability to meet financial obligations.

First in mind, apparently, was payment to the city employees’ retirement system. Now, with payment for rail also taking shape as a priority, it makes financial sense to let the veto stand.

Also, after two failed attempts in previous years, Caldwell has again proposed a trash pickup fee as a revenue-generator. That’s not an unreasonable idea as Kauai and Maui counties charge a fee for curbside pickup, as do a majority of municipalities on the mainland.

Core city services, facilities and parks must be maintained, of course. But Caldwell and the Council should scale back or shelve grand plans for a Neal Blaisdell Center makeover. A draft environmental assessment for the proposal, released in November, pegged the cost at $772.9 million — already an increase of $56 million over a price tag released earlier in 2018 in the city’s Blaisdell Center Master Plan.

While the mayor’s cosmopolitan vision for Blaisdell as a lively civic center is inviting, it would be irresponsible to take on such a financial burden — even if lightened with a public-private partnership — while rail-related uncertainty lingers on.

With rail construction now stretching beyond the halfway mark — and the FTA now clearly stating financial partnership requirements moving forward— the city needs to push on with redoubled budget-minded determination.