Mayor Caldwell statement on rail project

News release from City and County of Honolulu June 16, 2016

Mayor Kirk Caldwell remains committed to building rail the full 20 miles from East Kapolei to Ala Moana Shopping Center.

Given that the Federal Transit Administration has requested a Recovery Plan from the Honolulu Authority for Rapid Transportation (HART) by August 7, 2016, that addresses the discrepancy between the current cost projection for the full system at $8.3 billion, and the current revenue from the combined General Excise Tax .05% surcharge and the FTA’s $1.5 billion at $6.8 billion, the Mayor proposed to HART that it makes sense to phase the project as follows:

• To work with the $6.8 billion projection, build the guideway to the Middle Street station which is a central location and multi-modal hub to transfer to other transportation options.  East Kapolei to Middle Street is 15 miles of guideway.

• Continue aggressive cost cutting measures and secure additional funding to complete the last five miles of the project to Ala Moana.  Other funding options include federal funding, state funding, and private partnerships.  One option that the Mayor is not willing to consider is raising real property taxes. (TRANSLATION: He will go for a GE Tax extension again.)

“I am totally committed to getting to Ala Moana and ultimately to UH Manoa; that is ideally where rail should be going and how we will get optimal ridership,” said Mayor Caldwell.  “I wish we could continue all the way to Ala Moana now, but that is a challenge that cannot be addressed until additional funding becomes available.”

“I’m offering this proposal now since the HART board does not meet again until mid-July, and we are facing an FTA deadline for the Recovery Plan by August 7th,” continued the Mayor.  “Further extensions will happen at the appropriate time, based on our financial resources.  The fiscally responsible thing to do is to continue building rail in this current phase, while working on the most cost-effective way to accomplish the last phase.  I’m committed to finishing rail.  The people on the West side of Oahu suffer traffic gridlock and their quality of life is negatively impacted every single day.”

A rough, unofficial transcript of Mayor Caldwell’s statement to the HART Board today is copied below:  (Paragraph breaks not provided in transcript)

Thank you, Madame Chair.

I want to thank the other members of the board for the really, really hard work you have been doing. I have to say in the past six, seven months you guys have been carrying a lot of heavy, heavy work and you have been doing great in terms of questions you are asking, and just making sure the public understands fully and completely the challenges we face today. And I’m here to talk to you about those challenges in a request I have.

As you know, on May 12th Leslie Rogers asked to meet with me and have Carolyn Flowers, the acting chair of the FTA on the phone from DC it was 8 o'clock in the evening when she was on the phone. I asked Ernie Martin to sit in and he had Laura Figuera come in too. As you know, Leslie Rogers delivered to us what they thought the true cost of the rail cost would be, a 65 percent probability at the high end he said it will be about $8.1 billion. And he said you also know given the GET collections, estimated collections, and what you are getting from the FTA in terms of $1.55 billion you are looking at about $6.8 billion. So you have this funding gap and you have to decide how you are going to meet that gap, and how you're going to build a fully functional system.

And he must have said it 10 times to me, “fully functional, fully functional,” and I asked him what does that mean, and he said his system that could be modified, but in modifying it we have to make sure that you have the ridership level sufficient to make sure that your subsidy is reasonable. And of course if you shorten, if you change your route, this impacts ridership, and we’re concerned, but we're not going to tell you what to do, we want to get a proposal from you.

Then on June 6th, we got another letter from Leslie Rogers, and which he said we want to get your recovery plan, this is what he talked about on the 12th, by August 7th. And so timing becomes extremely important.

At the same time HART staff presented to the HART board a couple things, one, they provided six options of different things to look at, from moving the route down to Nimitz, to shortening, to all kinds of other things. And at the same time, they came up with new adjusted projections at the high end, I'm taking the high end, because I think that the high-end is probably where it's going to be, unfortunately, I hope it's going to be less, but let's be realistic and start at high, at a 65 percent probability they are even higher now than what Leslie Rogers told us at $8.3 billion and counting.

So we can look at the alternatives presented by HART, but all of them have cost implications, revenue implications, ridership implications, then to really get answers to those implications, I don't think it's possible to do it by August 7th. It just takes a lot of studying.

On Nimitz you have utilities going under the road, I just met with Fudge Matsuda, the former Director of Transportation, a great guy, he said “do you know what kind of utilities you have running under Nimitz? In terms of oil pipelines? And the things you have to relocate?”

And therefore I'm asking the HART Board today, as a policy making authority for HART, to make a recommendation to the Honolulu City Council, which is the policy-making body for the City and County of Honolulu, to take appropriate action now, and come up with the appropriate option to consider, and present it to the Honolulu City Council, so that they can consider it through resolution, because we have to do this all by August 7th. That's less than 2 months from now.

And I think what needs to happen is the council needs to take up your recommendation through a scheduled public hearing, as you know those things take a while, and we have to notify and you have to have sunshine. And thereafter, once the Council acts, there has to be a recovery plan that's developed by HART and presented to the FTA for its consideration, it doesn't need doesn't mean that it's going to be accepted, they need to look at it, and from there a new Full Funding Grant Agreement would have to be negotiated.

So Chair Martin and I have talked, and we agree on this. We agreed that the fixed guideway route of the locally preferred alternative that was approved by the council years ago, and supported by the voters of this island, should not be altered. It's too hard to alter it. And we agree that we must live within the revenue boundaries that we’re faced with today, whether it be $6.8 billion, maybe $7, depending on what GET is going to be, both from the $1.55 billion you collect from the Federal Transit Administration, or what we collect from the half percent GET surcharge which by the way was approved by the legislature, in fact that I'm sure I was there when we first approved it, approved again by the legislature when we got a five-year extension signed by the governor, and approved by the city council.

So, $6.8 billion, maybe $7 at the high end, where does it get us? I think most people agree that it gets us to Middle Street with some money left over. Which is important that we have some money left over, and the beauty of getting Middle Street is that you're at the transit center that came online when I first became mayor, and it's a great center, buses pull in and out, so it's ending out in an area that we can then use buses to get the rest of the way into town. That means that we've built about 15 miles of the 20 miles, we have 5 miles left of the minimum operating segment.

And I have to say that I wish we could go all the way to Ala Moana now, and I really wish that we could go up to UH Manoa. I think even those who are against rail, including folks like Councilmember Ann Kobayashi have said: if it went to Manoa I could get a little bit more interested in this. I mean, she lives in that area, as I do. And while I wish we could get further, as the heaviest ridership is the station at Ala Moana, not because people shop there, but because people go there and then quickly into Waikiki where we have a huge workforce, and up to UH Manoa. But that's for another day. In my mind.

As for another day, working with our partners Federal, State, County, public-private partnerships, should funding become available. But I think we need to focus for now on how do we get to Middle Street. I want to emphasize that I am totally committed to going further. But let's focus on what we can do with the money we have.

And therefore today I'm asking the HART Board to hold a public hearing to consider endorsing a proposal to start off with the first 15 miles, ending at Middle Street, from the Kroc Center, and after discussion is made, and should that proposal be supported that it be conveyed to the Honolulu City Council as a policy-making authority for the city, and until the Honolulu City Council holds the appropriate public hearing under resolution to get public input. And I will support these efforts in any way I can.

Again, I want to say that it doesn't preclude future extensions, and I do believe that every system ever built, you don't build the first 10, 20, or 15 miles; I went to school in Boston, first system in the country, eight tenths of a mile and now it's 800 miles. Built over time, given the funding sources that we have available. But let's do a good job for the first 15 miles, and then we can talk about the rest later.

I really want to thank you for allowing me to come to testify, I didn’t call up and say that I was coming, and for letting me cut in - if I cut in, I apologize to anyone that’s here. I want to say from the bottom of my heart I want to thank each and everyone of you for the work you're doing, these meetings the law for a long time, but it's really really important. The biggest construction project in the history of this place, and yes it's a lot of money, and there's a lot of impact, but the legacy that you are building for those 50 or a 100 years from now is what's critically important.

Everyone will forget our actions and what we do here today. But some kid 20 years from now will get on the train in Waipahu with a surfboard to go surfing at Ala Moana Bowls, his mother and father will know that he is safe going to and from having fun. And it's your gift that you're giving to this community and I appreciate you staying the course, and for the heat you take, and I just want to thank you so much.

With that, if you have a question, if not I'm going to run off to another function. But I'm more than happy if you have any questions.

-END-