City Begins Construction on Rail Columns – Even Though They May Have to Be Torn Down

BY MALIA ZIMMERMAN – The Honolulu Authority for Rapid Transportation, the city agency charged with overseeing the construction and maintenance of the planned $5.3 billion elevated steel on steel rail system, announced Kiewit InfrastructureWest Co. will begin drilling concrete foundation shafts and support columns on Monday. The company will start on the first phase of the 20-mile project in East Kapolei near Farrington Highway.

That comes after the Federal Transit Administration issued a letter to HART CEO Daniel Grabauskas on Friday, April 20, giving the city the go ahead, with the claim phase one of the project will not likely disturb historical or cultural sites.

“This significant milestone for the rail project moves us closer to providing Oahu residents with an alternative to sitting in horrific traffic congestion,” said Dan Grabauskas, HART’s executive director and CEO. “We want to thank the Federal Transit Administration and state agencies that have worked closely with us on all of the necessary approvals. This is indeed a great day for Oahu.”

HART is launching the project, despite please from several members of the Honolulu City Council to wait until several key issues are resolved.

Those include:

Litigation: A federal lawsuit filed by seven plaintiffs including former Gov. Benjamin Cayetano, former Judge Walter Heen, University of Hawaii Law School Professor Randall Roth, Transportation Expert Cliff Slater, Dr. Michael Uechi, Hawaii’s Thousand Friends, and Small Business Hawaii Education Foundation, challenging the validity of the city’s Environmental Impact Statement. The case, which is overseen by Ninth Circuit Court Judge Wallace Tashima, will be reviewed in August.

Elections: The Mayor’s election, which includes Cayetano as a candidate – he has pledged to stop the rail project if he is elected and is leading in the polls. The primary is in August and the general in November. Any candidate with 50 plus 1 percent of the vote could win outright in the primary election.

Federal Funding: The city has not yet applied for a Full Funding Grant Agreement with the federal government, which seeks $1.55 billion for the rail project. If the city starts the project, and does not receive the $1.55 billion, city taxpayers who already financially strapped will have to make up the difference.

Financial Plan: City Council budget committee members recently approved up to an additional $1.9 billion in bond authorizations for the rail project, with Council Budget Chair Ann Kobayashi voting in opposition. She said the rail was sold to the public on the promise that no money would be borrowed. The bill could be killed in a future vote, leaving the project without the financing it needs to be completed.

In addition, the city administration and Honolulu Authority for Rapid Transportation (HART) – wants another $100 million authorized for the project – for a total of $450 million from the city taxpayers. That issue will come up for a vote on April 25 at a full council meeting.

HART also wants to reserve the right to take $244 million in funding from the city’s Handivan and TheBus maintenance funds. That has further outraged the public, and the council, because bus riders now coping with cuts to The Bus and Handivan service, and the delayed maintenance may further impact services, Kobayashi said.

Kobayashi said if the city administration believes the rail plan is financially sound enough to start construction, it should not need to borrow money from city taxpayers or raid other funds, such as the Handivan and Bus funds.

Public Support. Rail construction is commencing just as public support is fading. Recent polls document just over 30 percent of the public believes the rail should be built, with more than 50 percent opposed.

While many rail proponents say the public supported the rail in a 2008 vote,  Kobayashi counters voters believed in 2008 when they narrowly voted for the rail that it would cost $3.7 billion and be several miles longer, extending to the Salt Lake and the University of Hawaii’s Manoa Campus. Now the rail has ballooned in cost by about $1.6 billion and will skip Salt Lake and stop at the Ala Moana Center, far short of the University.

Cayetano said before the 2008 rail vote, the city administration under then Honolulu Mayor Mufi Hannemann spent $5 million on advertising the rail, and hired 10 public relations firms to gain public support – all on the taxpayer dime.

The lack of momentum is so serious that Inouye has rallied Hawaii’s big business leaders, many who rely on federal funding or regulations, to come out in support of the project via a newly formed group, Move Oahu Forward.

The group issued two press releases last week: one to announce its formation and another to congratulate the city on the beginning of construction: “The Honolulu Rail Transit Project is one of the most significant projects in the history of our state. While the start of construction will create new jobs, the long-term benefits will help to improve the quality of life for the future of our children,” Move Oahu Forward said Friday.

The reception by council members and the public to Move Oahu Forward has ranged from ho hum to outraged.

Kobayashi asked why the group, which plans to spend money to promote the rail project again, has formed now. “Is there an election coming up?” Kobayashi said, noting the only election she knows of that could impact the rail is for Honolulu Mayor. Kobayashi and others said they wish Hawaii’s big businesses would spend money on Hawaii charities instead of the rail project.

Branding expert Gloria Garvey wrote an editorial making fun of the corporate organization and its reeducation efforts: “After regular people have spent years being inundated with ‘education campaigns’ about rail  they have come to the conclusion that it is a waste of OUR money, and that it won’t solve traffic problems. However, Persons  named Move Oahu Forward beg to differ.”

Hawaii Reporter Cartoonist John Pritchett compares Move Oahu Forward to a similar controversial group from the past that called itself Thumbs Up Hawaii, which included many of the same companies.

Questions Still Unanswered. Honolulu City Council Members asked HART Interim Director Toru Hamayasu last month if HART would delay the start of construction until the lawsuit, elections, financial questions and federal funding issues are resolved.

But Hamayasu said delaying the rail project could cost the city $10 million a month because of inflation. Hamayasu, who was replaced by Grabauskas on April 9, said it was actually cheaper for the city to begin construction on the rail columns and have to tear them down, rather than to wait four more months.

Hamayasu said the city could also face fines if the contractor delays construction any further. The city has already paid $15 million in fines and some $34 million in change orders, Budget Chair Ann Kobayashi said.

Council members wanted HART to provide that financial analysis before moving forward. But Kobayashi and City Council Member Tom Berg both confirmed on Friday that they did not receive any information from the city that showed it is cheaper to build the columns and tear them down rather than delaying construction.

Grabauskas pledged in his first week as HART CEO he’d be more transparent, and get the council members this report, but so far council members said that hasn’t happened.

Berg said council members are still waiting for other important information that they’ve requested for months from HART.

“We cannot get the stats on the number of jobs hired locally for this project versus that from outside Hawaii- the pay for these jobs, and what they do in these positions from HART,” Berg said.

With legal action pending, the promise of local jobs not panning out, the bait and switch on voters in 2008, Berg said he plans to vote “no” for all rail funding mechanisms meant to sustain HART’s operations, credit line, and capital improvements.

“A complete cease and desist on this rail project is in order until we can be convinced without a doubt, that no other city departments and resources will be tapped into to make the numbers balance out. The public has not been assured that absolutely no increase in property taxes or monies from the general fund will ever be used to subsidize the maintenance or operations of the rail for the life of the rail endeavor,” Berg said.

He asked if rail ridership projections from fares collected do not hold as factual or cannot generate the revenue stream necessary- what is the city’s plan to make up for that shortfall?

“Certainly, before we lend credit or front money, HART should play out that scenario to the taxpayers before any deals are brokered,” Berg said.  “This rail project has been one big crap shoot, with the city rolling the dice knowing that if they lose the farm, they will just ask the taxpayer to fork up. Government should not be in the business of taking risks, but rather promoting the peoples’ business based upon sound fiscal foundations before them…all these bonds and line of credit schemes reveal from scratch, that the rail’s foundation is made out of swiss cheese.”

Randall Roth, a plaintiff in the federal lawsuit, said he believes what ever gets built by Kewitt will have to be torn down when they win their lawsuit: “I honestly believe that the decision to start  construction now will prove to be one of the dumbest decisions in the city’s history,” Roth said.

The city was originally set to begin construction in March, but the project was delayed, and HART has offered no explanation.

HART Board of Directors Chairwoman Carrie Okinaga said keeping the project on schedule is critical to keeping the costs within budget.

Lance Wilhelm, Senior Vice President and Hawaii Area Manager for the Kiewit Building Group, We are very pleased to move forward. Our engineers and crews have worked hard to complete the necessary pre-engineering work for final construction to begin. In addition, the upcoming construction will help to provide our residents with much-needed jobs and we look forward to expanding our workforce.”

HART said the rail will being operating from East Kapolei to Ala Moana in 2019 – that is assuming the project is not delayed or derailed by the election, finances or legal challenges.

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