David Shapiro: Mayor evades reckoning on true cost of Oahu rail

Mayor Kirk Caldwell, who won office on a woefully unrealized promise to “build rail better,” is going out on another dubious message: It’s the next mayor’s problem.

Rail construction costs nearly doubled on his watch, and he’s begged two state bailouts worth $4 billion, but he’s still whining the Legislature didn’t give enough to cover a federal demand that the city contribute $117 million of its own money for rail construction between now and 2027.

Caldwell and the City Council included $25 million of it in this year’s budget to be funded by a bond sale not yet authorized, but gave no clue where they’ll get the remainder.

Instead, Caldwell put it on a future mayor to squeeze more from the Legislature, claiming lawmakers wouldn’t give it to him because of “politics.”

It’s concerning that Caldwell finds this such a heavy lift.

Of the projected $9.2 billion to build rail from Kapolei to Ala Moana Center, the vast majority would come from the state excise and hotel tax and federal funds, with the city’s $117 million share a relative pittance.

If the mayor and Council can’t find this small amount over seven years, how will they pay the massive cost of operating and maintaining rail, starting with $71 million annually for interim service between Kapolei and Aloha Stadium and rising to as much as $156 million a year for full service to Ala Moana?

Caldwell said his property tax increases the Council approved this year on hotels and expensive investment homes are partly for rail operations, and he also tried to justify his rejected trash pickup fee as needed for rail.

But the property tax increases will raise only $32 million a year, much of which will be gobbled up for general city expenses before rail starts running, and the trash fees would have added only $12 million.

Hotels and high-end residences can be soaked only so much; average homeowner-occupants will have to be hit with stiff property tax increases and refuse fees many times the magnitude Caldwell proposed to get to $156 million for rail operations.

Either that or the next mayor will have to ask the Legislature for a bailout on rail operations as well as construction.

Further confusing the financing is the city’s search for a private partner to build the final four miles of rail through the city center at a fixed price in exchange for the right to operate rail for 30 years.

Mixing construction and operations only muddies the real cost of both.

We’ll pay dearly if we let Caldwell run out the clock on the final 18 months of his term and walk away without giving a true accounting of long-term costs for rail construction and operations and how we’ll cover it.

Reach David Shapiro at volcanicash@gmail.com.