GAO Jones Act Report to be Released Next Week
Sequestration: Army Tuition Assistance Ends Today
Honolulu Ranked 8th-Worst City for Drivers
Rail Fail: Ansaldo Breda, Finmeccanica Financial Report Shows Negative Net Worth, Massive Losses
SA: Ansaldo STS builds train control and operating systems and makes money — including a $98 million net profit in 2012. AnsaldoBreda, meanwhile, makes rail cars and has been losing money for years — including a $912 million loss in 2011.
Executives of the two firms told HART officials that Finmeccanica has rebounded from some $3.2 billion in losses in 2011, which included the nearly $1 billion AnsaldoBreda loss. Finmeccanica has since reinvested hundreds of millions of dollars in the rail car builder.
The city also has several layers of protection to make sure its train system is completed, the Ansaldo executives reported, including a strongly rated bond from Chartis, an insurance firm, and a legal obligation by Finmeccanica. (Yup. Our only hope is the surety bond. Do Chartis stockholders know what they’re in for?)
Finmeccanica is on the hook for the project even if it sells its Ansaldo holdings, HART Finance Committee Chairman Don Horner said after the update…. (And since Fin is junk, that’s reaaaaly reassuring)
Should AnsaldoBreda default on the rail cars, STS would remain responsible for the contract and "is more than capable" of carrying it out, based on its financial strength, Pozza said.
Finmeccanica saw S&P cut its debt rating to junk status in January amid concerns it wouldn't be able to sell off its energy and rail assets, in order to reduce overall debt. The conglomerate fully owns AnsaldoBreda and 40 percent of Ansaldo STS.
Nonetheless, Finmeccanica is "moving toward a profitable path," Ansaldo STS Chief Financial Officer Christian Andi said via a video feed from Italy. "We don't see any issue" going forward with AnsaldoBreda, added Andi, who had planned to attend Thursday's meeting in person but said he broke his leg recently in a skiing accident. (Translation: He is busy desperately trying to form an Italian government after a new party headed by comedian scored big in parliamentary elections.)
HART's Finance and Oversight Committee members voted unanimously to authorize Ansaldo Honolulu JV to move ahead. Board member Ivan Lui-Kwan recused himself. HART's lawyers advised him to refrain from voting because a business partner represents Ansaldo, he said. (What? Only one with a conflict of interest???)
HART Chief Executive Officer Daniel Grabauskas will give final approval for Ansaldo Honolulu to move forward, and he expressed confidence Thursday in the joint venture. (Translation: We’re stuck now and its too late to switch, so hope ... Pray!)
read … Ansaldo says it can do the job
Crossover at the Capitol
HNN: It's Crossover at the Capitol -- meaning hundreds of bills are moving from the House to the Senate and vice versa, as lawmakers reach the halfway point this legislative session.
Of the 1388 bills that were introduced in the Senate, only 384 of them are crossing over. 360 of the 1484 proposals introduced by Representatives will now be considered by Senators.
read … Crossover
HPD makes a push for, and against, new laws
KHON: The following is a complete list of bills HPD discussed on Thursday:
- Cruelty to Animals- HB 148
- Dangerous Wheels- HB 146 and SB 337
- Firearms- SB 36, SB 69, and SB280
- Gambling & Marijuana- HB 154, HB 343, HB 667, HB668, HB 944, SB 68, SB 192, SB 394, SB 689, SB 695, and SB 1337
- Resisting Arrest- SB 78
- Simulated Firearms- HB 147 and SB 2
- Traffic Safety- HB 980, HB 1308, SB 4, SB 484, SB 495
SA: HPD seeks ban on spiked lug nut covers
read … HPD
Crossover News:
PPPA: Hot Exchange Before Senate Passes Development Bill
CB: On Thursday (March 7) the Senate approved Senate Bill 215, which creates a public-private partnership authority to initiate three pilot projects. But before the vote Sens. Russell Ruderman and Laura Thielen warned that the PPPA bill was — or could later become — a PLDC-like measure….
“I’m tired of people thinking I am anti-environment,” she said, nearly shouting. Solomon said she wants to “create a future” for Hawaii rather than one that, as she suggested, smells like urine. She was referring to the homeless situation that plagues downtown Honolulu.
The lone Republican, Sam Slom, remarked, “This has been a really interesting discussion. It pains me greatly to see disarray among the majority.”
The vote on SB 215 was 20-5, with Ruderman, Thielen, Les Ihara, Josh Green and Mike Gabbard voting “no.” Now it goes to the House.
SA: New development authority OK'd
read … Hot Exchange Before Senate Passes Development Bill
Senate bill seeks more fairness in election financing
WHT: According to the state’s Campaign Spending Commission, $3,780 in public funds would be allocated to a qualifying candidate in the 2014 District 1 primary while $18,333 would be provided to a candidate in District 8.
Senate Bill 381, which the Senate passed Tuesday, seeks to equalize the expenditures.
If passed by the House, qualifying candidates would receive $13,106 across the board for the 2014 primary, no matter which district they were running in.
House Bill 1481, would also remove candidates for governor and lieutenant governor from being able to use the partial-public funding option.
The bill would provide an unspecified amount to help cover the cost of fully funding House and Senate candidates who choose that option.
Qualified candidates would receive $67,562 in Senate races and $32,598 in House races, Baldomero said.
The House passed the bill Tuesday. It is now being considered by the Senate
read … Welfare for Candidates
Military to lawmakers: Cuts will hurt state
MN: Furloughs for Department of Defense employees could bring pay cuts of up to 20 percent and are expected to start in April. Maj. Gen. Darryll Wong of the Department of Defense said that under the worst-case scenario, civilian workers could lose $24 million in wages this year alone.
Wong said the department should know by the end of this week whether Hawaii's critical missions will be exempted from the cuts.
Furloughs aren't the only anticipated impact. Maj. Gen. Roger Matthews of U.S. Army Pacific said the Army plans to ground helicopters in July and limit training exercises and the availability of family programs and health care for retirees.
"The U.S. Pacific is slowing down in most everything we do," Matthews said while emphasizing that the Army won't alter its focus on the Asia-Pacific region.
Matthews and other military leaders present at the hearing told lawmakers that they are holding out hope that Congress will approve military appropriations before furloughs and other spending cuts materialize.
"But hope is not a strategy," Wetherald said. And some effects are already visible.
Ben Nakaoka of Pacific Shipyards International told lawmakers that Ship Maintenance, a military subcontractor and subsidiary of Pacific Shipyards International, had already cut 60 percent of its staff.
"Two months ago, we had a staff level of about 100 employees," Nakaoka said. "A month ago, we were down to 60. Two weeks ago, we were down to 40 employees working part time."
Alan Hayashi from BAE Systems said the military contracting company had already let go 70 employees and could furlough or terminate another 250 people.
Oahu school attended by military dependents gets $33.2M for renovations
At Waikiki military technology conference, empty seats because of budget cuts
Pritchett's Pen: Obama Inflicting Pain for Political Gain
read … Military to lawmakers: Cuts will hurt state
Tomorrow's pensions put pressure on today's needs
Borreca: The state has alternately not put away enough money or borrowed from the pension to the extent that now Hawaii is more than $20 billion out of whack. First there is $8 billion owed the retirement fund and then a gasp-inducing $14 billion in estimated medical care benefits.
By the summer of 2011, Abercrombie was warning of trouble coming, saying it "can tear our social and cultural fabric to shreds.
"We must face the state's long-term responsibilities without flinching," Abercrombie said, adding that all the progress state workers have made in their own labor contracts could be lost if there is not "a firm course of correction."
This year during his State of the State speech, Abercrombie returned to his fearsome prediction to offer a plan to pay down the billions in debt.
Saying that to do it all at once would mean requiring "the state to put up more than $500 million every year for 30 years," Abercrombie called for tucking an extra $100 million a year into the budget dedicated to paying down the liabilities….
Rep. Sylvia Luke, Finance Committee chairwoman, says the budget she will offer includes Abercrombie's suggested $100 million….
The House will approve Luke's budget next week. It then goes to the Senate where Sen. David Ige, Ways and Means chairman, has also said he wants to fund the pension pay-down.
Ige may be a bit more strident in insisting that the state pay its debts. He tossed in a separate bill to stockpile the state pension money.
"It is important that we build the budget around that," Ige said, adding that he wants to step up the pension saving amount by $100 million a year.
That's nice — but when responsible sentiment to cure outstanding pension problems is balanced against the immediate needs to give people money, bandages and shelter today, just wait to see which side wins when you are looking to be popular and win elections.
Reality: Act 100: How Hanabusa and Cayetano launched Hawaii Pension crisis
More Reality: Abercrombie Plan: Shortchange Retirees for next 150 Years
read … Tomorrow's pensions put pressure on today's needs
Alleged Killer Cop Gets off Easy
SA: State Attorney General David Louie said in a written statement that the plea agreement was reasonable because three witnesses with information critical to the outcome of the case have died since the offense occurred in 1992. (They caught this guy on the day it happened but somehow its been 21 years….)
He said the family of the missing man, Ruben Gallegos, supported the agreement and continues to hope that Torres may someday reveal where Gallegos’ remains are.
Gallegos, 19, disappeared May 1, 1992, while assigned to cash checks at the Pearl Harbor Naval Base Exchange. He was last seen being escorted from his cashier’s cage by Torres, who was off duty at the time but in uniform. Gallegos has not been seen since then.
Fellow Pearl Harbor federal police officers arrested Torres attempting to re-enter Pearl Harbor later that day and found in his car most of the $80,000 that was assigned to Gallegos, the cashier’s wallet, identification and other personal belongings, a stun gun and a firearm that contained two live rounds and three spent casings.
Torres pleaded no contest in federal court in 1992 to theft and possessing a loaded firearm on a public highway without a license. He was sentenced to two years in prison. (Then nothing for 13 years)
In 2005 the state charged Torres with Gallegos’ murder, and a state jury found him guilty in 2007. (2013-2005 = 8)
But the Hawaii Supreme Court overturned the conviction because of the manner in which federal police discovered the items in Torres’ car. (Soft on crime)
During the trial, Susan Davis, who worked with Torres in California after his release from prison, testified that Torres admitted that he killed an accomplice in a robbery in Hawaii and threatened her if she told anyone.
read … He’ll be out soon
Answers due for cost overruns in county contracts Some as high as eight-fold
WHT: The council’s Finance Committee agenda shows change orders were authorized for five contracts during the first two weeks of January alone, extending completion dates and increasing contract amounts to the tune of $829,322. Over the period of the contracts, change orders have increased one contract amount more than eight-fold, another more than five-fold and several contracts have added significantly to the original bid price.
Changes to original contracts have become more transparent to the County Council and the public because of a 2011 ordinance sponsored by former Council Chairman Dominic Yagong that requires regular reports to the council.
Yagong sponsored the bill after an audit of county contracting procedures showed the county paid 116 percent more for professional services in the 2006-07 fiscal year than those services were originally contracted to cost. Construction contracts that year ended up costing about 33 percent more than the original contracted amount. The industry standard for change orders increasing project costs is about 6 to 10 percent.
Dora Beck, acting director of the Department of Environmental Management, said she’s been asked to attend the council meeting to talk about two DEM projects on the list. She said Councilwoman Brenda Ford, who represents South Kona and Ka‘u, asked that she attend. Ford did not return a telephone message Thursday. (She wants to protect her cronies at Businesses Services Hawaii)
A purchase agreement with Business Services Hawaii for collection of recycling material from transfer stations and landfills was originally secured for $484,030 in 2007, but has been extended eight times, increasing the original contract by 972.5 percent to $4.7 million, according to information provided by the Finance Department. It has been most recently extended for an additional 180 days at $533,000.
Another DEM contract, also with Business Services Hawaii, stems from a 2007 contract for $390,460 for the landfill diversion incentive program. Seven change orders have ballooned that price 608.5 percent to $2.4 million, with the most recent change order adding $200,000 and 180 days to the contract….
…a 114.8 percent increase in a 2011 contract the Office of Aging signed with Hawaii County Economic Opportunity Council for $167,427 for nutrition transportation, bringing the contract price to $192,132….
The Finance Committee meets at 1 p.m. Tuesday in Hilo with videoconferencing from the West Hawaii Civic Center, the Hawaiian Ocean View Estates Community Center and the Waimea and Pahoa council offices.
read … Hawaii County
State Denies Teachers Claims, Pays Prisoners
KHON: "One time it happened at this parking spot, then the other time this spot, and there's another time it happened in front of the school office, and that's the time I called the police, I was so mad," Wong said.
She is among teachers from schools islandwide whose claims for damage reimbursement have been denied by the state, about $30,000 in all, ranging from $27 for broken windshield wiper blades to more than $4,200 for a teacher's car that was stolen abandoned and burned.
"While we're inside the classroom helping the students this is happening, I felt maybe it was the worst day in my life," said Wong.
She filed the school's only reimbursement claim about the vandalism even though she says several teachers cars were struck. The claim, denied.
"Because we didn't have enough evidence to justify that this is happening during the school hours," said Wong.
Yet the state does pay other motorists -- lots.
More than $113,000 over the past couple years for damage from potholes.
$63,000 over two years for cars dinged by rocks zinged from weed wackers.
And besides drivers, paid claims include things like tens of thousands to prison inmates including for stuff lost.
"I don't think it's fair, personally that's what I think," said Wong.
"A teacher isn't held at a higher standard of proof, and every situation, whether it be a pothole or a teachers car getting damaged it has a set criteria it needs to meet for the state to be found liable," stated Tracy Kitaoka, State Risk Management officer. "It boils down to whether the state is found negligent or not."
CB: Student Trips, State Pays $30K
read … Teacher car damage among state's denied claims
State hires private firm to defend against expected Federal indictment over seabirds
KITV: Wedgetail shearwater birds are a protected species, but the federal government apparently thinks it is not protected enough in Hawaii.
Documents from the attorney general’s office describe a Justice Department statewide investigation focused mainly on Oahu.
It is where the DOJ claims a considerable number of wedgetailed shearwaters have been injured by state transportation lights, over a period of several years
In a letter asking for an exemption to hire outside counsel, the attorney general office writes that DOT has an option of entering into a plea agreement, or face a criminal trial….
It's not known whether this current federal investigation involves lights at the airports or harbors.
read … Birds
City brings back permit fees for solar installations
SA: The lost revenue was relatively insignificant when the city began waiving the fee in 2007 as a way to encourage homeowners and businesses to install PV systems. However, the amount has risen sharply in recent years with the explosion of PV installations, and city officials estimate lost fees for fiscal year 2013 will reach about $14 million.
"The bottom line is about fairness," said Caldwell, who signed a bill Thursday restoring the fee. "Everyone has to pay their fair share. We waived the fee at first, similar to what the state did with tax credits, to get people to put in PV. It has worked very, very well."
The cost of a building permit fee, which is about $740 for a $40,000 PV system, is not likely to have much effect on a homeowner's decision on whether to install a system, Caldwell added.
The flurry of PV installations has resulted in a backlog of inspections that has caused permit delays for homeowners. In fiscal 2012, PV building permits accounted for 41 percent of the total permit workload in the department, up from 20 percent in fiscal 2011.
There were 698 permits issued for PV projects in fiscal 2009. By fiscal 2012 that had grown to 9,906 permits. Through the first seven months of fiscal 2013, the Department of Planning and Permitting issued 12,266 permits for PV installations.
read … Subsidy Gone
Fontaine is elected to lead Maui County GOP
MN: Former South Maui Rep. George Fontaine was elected chairman of the Maui County Republican Party on Saturday at the party's county convention.
More than 50 people attended the convention at Kalama Heights Retirement Residence in Kihei.
During the convention, the new chairman discussed building a stronger grass-roots organization by growing involvement and membership, registering new voters, getting out the vote and recruiting and supporting new candidates….
The other officers elected to the executive committee were: Dr. Ben Azman, vice chairman of membership; Paige Fontaine, vice chairwoman of events; Mary Lou Green, secretary; and Kathy Mannoia, treasurer….
read … Fontaine
Hokulia developer files bankruptcy with debt over $500 million
SA: Some of the largest creditors with claims not secured by Oceanside assets include Hawaii County with a $20 million claim, Ackerman Ranch in Kealakekua with a $13.4 million claim and several Kailua-Kona companies and family trusts owed between $500,000 and $3.5 million.
The case stands among one of the largest bankruptcy cases in Hawaii history, based on total debt.
By comparison, some other big cases included Liberty House in 1998 with debt of $248 million, and Hawaiian Airlines in 2003 where debt claims grew to $573 million.
Bloomberg: The case is In re 1250 Oceanside Partners, 13-00353, U.S. Bankruptcy Court, District of Hawaii
read … Bankrupt
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