Editorial: Open books on city’s rail budget

Nineteen months from now four-car trains will be zipping along an 11-mile stretch of elevated rail from East Kapolei to Aloha Stadium, stopping along that line to pick up and drop off passengers. That’s the tentative plan, according to the Honolulu Authority for Rapid Transportation.

A second interim opening, from the stadium to Middle Street, a 5-mile segment of the 20-mile total line, is slated for late 2023.

Given the fast-approaching start of initial ridership, city leaders owe taxpayers a clear-cut plan that maps out where the operations-related funding will come from. Initially, rider fares will likely cover just a fraction of the annual cost of operations and maintenance (O&M), which HART estimates will be $127 million to $144 million for the full route.

To date, Mayor Kirk Caldwell has outlined only fuzzy — and somewhat confusing — tactics to address long-term O&M demands. His latest pitch to partially pay for steady rail service involves tax hikes for hotels and higher-end residential “investment” properties — the so-called Residential A tax classification. Also, he wants to impose a residential trash pickup fee, an idea previously rejected by the City Council.

Caldwell offered up all three of those revenue-generator ideas earlier this year, when he unveiled his overall $2.8 billion operating budget for the fiscal year starting in July. Back then, though, he said the proposed bump in revenue was largely needed to address an 8 percent bump in the annual budget tied to uncontrollable expenses, primarily employee fringe benefits and collective bargaining costs.

Last week, Council Budget Chairman Joey Manahan said the extra revenue from such tax increases is needed just to balance the budget for next year, before rail operations get underway in December 2020.

HART’s job is only to build the rail line, not to run it. Right now, Caldwell’s administration is tight-lipped on rail O&M specifics as it solicits proposals from companies seeking to help shoulder that responsibility under a public-private partnership. That would be acceptable if rail operations were still several years off.

In this case, the confidentiality matter is frustrating the efforts of Councilwoman Heidi Tsuneyoshi and others attempting to put together a sensible city budget. Regarding the mayor’s rail O&M proposal, Tsuneyoshi said: “That still doesn’t answer the basic concerns as far as what is that actual cost that they’re looking at.”

In addition to basic math questions about operations and maintenance — ranging from the number of rail employees to rail’s interface with bus routes — the City Council is also now grappling with how to comply with the Federal Transit Administration’s recent directive to front-load the pace of city payments for rail construction.

Failure to do so could jeopardize the FTA’s agreement to contribute a total of $1.55 billion for rail construction. The FTA now wants the city to commit $25 million in city funds toward construction in the coming fiscal year as well as a total of $92 million more over the following seven years.

While the Council must quickly find a way to meet this construction-money demand — by way of higher taxes, additional fees, cuts to services or some other means — it’s possible that any delayed construction would buy the city more time to pinpoint rail O&M projections. A consultant for the FTA, after all, has noted there’s only a 65% chance the entire rail line will be ready to roll as scheduled in fall 2026.

Nevertheless, the Council must work closely with the mayor to pencil out budgets for the next several years, to mitigate surprises and sticker shocks. And that must include Honolulu Hale and HART being more candid about rail service’s annual price tags.