RE:  DID HONOLULU HAVE THE RIGHT TO AMEND ITS RAIL AGREEMENT BEFORE IT WAS SIGNED?

News Release from Hawaii Republican Party, May 26, 2020

Earlier this month, the Hawaii Republican Party’s (HRP) Chairwoman Ms. Shirlene Ostrov sent a letter to Chief Daniel Hanagami, Special Agent, Office of the State Attorney General, who is investigating Honolulu’s Light Rail Project (herein, project) of which probe includes the examination of rail expenditures. However, in Chairwoman Ostrov’s letter to Chief Hanagami, she contends the investigation include how the Full Funding Grant Agreement (FFGA/herein contract) was represented to the voters.  In particular, did Honolulu have a right to change rail technology before it signed the contract without any penalty, fine, or forfeiture-  and save the taxpayer billions of dollars.

PDF: Link to HRP Letter

The antecedence to HRP’s letter involves the findings of an Executive Summary on the project’s finances in 2010 whereby Governor Linda Lingle recommended the Steel Wheels on Steel Rails (SWSR) transit system not advance as is, and the contract be amended to include a transit system that meets the original price as brokered. 

SCRIBD: Link to Report

In 2011, when Resolution 11-328 was heard by the Honolulu City Council to allow the voters to pursue a more efficient and less costly rail transit system as offered to Honolulu by the Federal Transit Administration (FTA), the resolution was defeated on the basis that per Honolulu City Councilman Ikaika Anderson, the FTA does not allow Honolulu to pursue anything but SWSR.

LINK: Resolution 11-328  (Editor's Note: Tom Berg reso defeated 2-7 on first read)

“Albeit the resolution in question may appear to be old news, had the resolution passed, it was very likely that Honolulu would have today, a better chance at having a functioning rail system built on time, under budget, and with monies left over,” stated Chairwoman Ostrov. “Why the people of Honolulu were denied the right to re-evaluate the project has always been of grave concern to HRP members and myself.”

LINK:  Statement by Councilman Anderson

“I found it odd, that when Councilman Anderson was asked to disclose who in the federal government had told him Honolulu was not permitted to amend our contract years before Honolulu had even signed its FFGA, Councilman Anderson won’t provide a name. And when we researched the contract, it clearly stated in the FTA Circulars that according to Chapter V of the Administrative Guidelines for issuing the grant, ‘any petition by a Grantee to Congress to amend its scope of project, may be executed so long as the request to amend the contract is made before the Grantee signs the contract, and thereby, no penalty, fine, or repay to be levied,’ and this contradiction, is troubling,” stated Chairwoman Ostrov, adding, “The resolution was heard in 2011 and the contract not executed until December 19, 2012, so it appears the terms and conditions of our contract was misrepresented.”

LINK: FFGA Guidelines 

Chairwoman Ostrov hopes her letter to Chief Hanagami can bring closure to whether or not the voters were disenfranchised and denied their right to a better deal.  “If the contractual terms and its conditions were misrepresented, those who did such should be held accountable, after all, we are talking about billions of dollars in cost overruns that could have been easily averted had Resolution 11-328 passed.”