City Promises No Additional Cost for Rail Authority, but Oahu Taxpayers Now Fund Agency at $22 Million Annually

“Question: Will this (a public transit authority to govern the activities of the Honolulu Rail Transit Project) cost more money?

“Answer: No, there would be no additional cost to create the transit authority as it utilizes existing staff and facilities. Members of the transit authority’s board of directors would be volunteers.” –  2010 flier ‘General Election Public Transit Authority Charter Amendment Question’ produced by the City & County of Honolulu

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BY MALIA ZIMMERMAN – These were the promises made to Oahu voters by the City & County of Honolulu administration under the direction of Mayor Mufi Hannemann and his managing director, turned acting mayor, Kirk Caldwell.

The public then approved the charter amendment in the November 2010 General Election by 63 percent of the vote on the promise it would cost them nothing.

Caldwell lost his bid for Mayor, and former City Prosecutor Peter Carlisle was elected to the city’s top office.

Fast forward less than two years to July 2012, and HART has become a pricey force of its own.

The agency, which is responsible for building, maintaining and operating the rail system, has an annual budget of $22 million.

Volunteers serve on the board, but this is the same board that hired HART Executive director/CEO Dan Grabauskas this spring at a cost of nearly $1 million for a three-year contract.

There are 87 people on the HART staff that are paid by the city taxpayers and that number is expected to increase to between 139 to 142 people in the coming months.

And there are the five public relations people on the HART staff, compared with most city and state agencies that have either no public relations people or just one.

The city is not using existing facilities to house the growing personnel as promised in the 2010 city charter informational flier.

HART’s operations have expanded to three floors at Alii Place, located on Alakea Street, one of Downtown Honolulu’s main business thoroughfares.

Up until now, HART took up two floors costing taxpayers $1.7 million a year. However, with the ever-expanding staff and space requirements, the agency plans to take up three floors in the prime center at a cost of $2 million a year.

HART’s travel budget is rising from $82,000 to $104,000 a year.

The costs to condemn land for the project went from $90 million to $214 million.

In addition to HART’s operating budget, the city already has committed $2 billion in contracts for the rail project, even though the city still has no guarantee that U.S. Senator Daniel Inouye has secured $1.55 billion for the rail project.

Besides the on-staff public relations people, the agency has spent more than $4 million a year on public relations, advertising, marketing and lobbying services – even after the rail was approved by the voters by a slim margin in 2008.

Neither HART, nor the city administration under Hannemann, Caldwell or Carlisle has kept track of exactly how those firms spent taxpayer money and what they’ve accomplished.

One recent example of this lack of oversight took place in early June, when Council Member Romy Cachola reported on a series of emails he obtained that were sent to the Filipino community by a public relations contractor that the city hired with taxpayer funds to help promote the rail project.

In the emails, which were sent to a group calling themselves Filipinos for Rail, Bennette Misalucha is directing the group as to how to lobby Cachola to “make sure he is for rail.” (See the Emails Targeting Romy Cachola) Misalucha lists herself on Linked In as President of Red Monarch Strategies Inc., a public relations and advertising firm.

She told the email recipients to tell Cachola that he needs to support the Filipino community and he can do that by supporting rail. In the emails, Misalucha tells the Filipinos for Rail group that advertisements targeting Cachola would be running on two radio stations and a local Filipino news magazine. They also were organizing an outreach at the farmers market where they would lobby Cachola if he showed up.

Cachola asked HART CEO Grabauskas if he knew city taxpayer funds were being used to lobby and target council members in that manner. Grabauskas denied any knowledge but promised to look into the emails and report back to the council.

Council Budget Chair Ann Kobyashi, who was clearly offended by the tactics, said the city has sunk to an all time low. Kobayashi reminded Grabauskas that he is responsible for monitoring the city contracts and funds going to as many as 10 public relations firms and 24 public relations officials hired to promote the rail project.

In another instance, Kobayashi wrote to Grabauskas on June 12, 2012, about a June 6, 2012, job posting on Craigslist, which seeks candidates willing to go door-to-door promoting the city’s rail project. She asked him if HART or its public relations contractors were responsible for the posting and if city funds were being used.

It took Grabauskas more than two weeks to tell Kobayashi that “HART has no involvement in the effort” but that he “inquired with third party rail supporters” and found Pacific Resource Partnership may be responsible, since it hired canvassers for its ‘Imua Rail’ effort to promote the rail.

Honolulu City Council Member Tom Berg said he was the only council member to vote against all of HART’s budget bills because he believes “HART is fleecing the taxpayers.”

In a letter sent July 6 to Grabauskas, Berg challenges HART expenditures, this time specifically for public relations expenditures.

“I am seeking information from you as to where in any rule, procedure, or otherwise, the federal government mandates a requisite that in order to receive federal funding for the rail project at this juncture, HART must deploy millions a year in advertisements, notifications, and communications entailing 24 entities to perform and execute that task? … just exactly what do 24 entities in public outreach do that requires a $4 million in payroll expenditure each year?”

In an interview with Hawaii Reporter, Kobayashi asks how much more city taxpayers will have to spend on HART.

She notes that before the 2010 vote, the city council and voters were made certain promises by the city administration.

For example, there would be no extra cost to operate HART, and yet in the first year, Kobayashi said HART cost $20 million and has grown to $22 million annually.

The city administration also promised voters the elevated steel on steel rail system would cost $3.7 billion and that it would go to Salt Lake and the University of Hawaii, Kobayashi said.

Now just 20 miles of the project cost $5.2 billion and to build the entire line to the University of Hawaii will cost $9 billion.

HART has made minor cuts to the budget by delaying some hires and cutting travel by $21,000, but Kobayashi said those cuts are to the increases in the budget and not the existing expenditures.

Kobayashi said Grabauskas promised the Council Budget committee that he would continue to look for cuts and report back, but she still has not heard from him.

Kirk Caldwell, once again a candidate for Honolulu mayor, did not immediately respond to an email inquiring whether if elected, he would encourage HART, now a “semi autonomous agency”, to keep his original promise to taxpayers that “there would be no additional cost to create the transit authority as it utilizes existing staff and facilities.”

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