Tuesday, May 30, 2023
Hawai'i Free Press

Current Articles | Archives

Friday, March 16, 2018
Bond funding scheme for rail shows need for audit
By Keli'i Akina PhD @ 6:08 PM :: 4338 Views :: Rail

Bond funding scheme for rail shows need for audit

From Grassroot Institute, March 16, 2018

Is anyone surprised that Honolulu Mayor Kirk Caldwell wants the city to use $44 million of bond debt to pay for administrative costs related to construction of the city’s planned 20-mile rail system?

The proposal is a bad sign, indicating once again that the city megaproject is in poor financial health — and, clearly, that the wildly over-budget and behind-schedule transit development needs a full, “deep” audit for fraud, waste and abuse.

Caldwell’s proposal to use bond money to pay for administrative costs of the Honolulu Authority for Rapid Transportation was contained in his fiscal 2019 executive and capital programs budget, which he submitted to the Honolulu County Council on March 2. The requested funds would have to be paid back with interest, and certainly add to the ever-mounting costs of the project.

One local budget analyst said the debt interest alone could eventually be almost as much as the principal amount borrowed (assuming a 5 percent interest rate), and dangerously set a precedent for using this kind of funding mechanism in future years.

In addition, the proposed spending also goes against the Honolulu City Council’s law banning itself from using city funds for the rail. Ordinance 07-001 Section 3, states that rail expenses “shall be paid entirely from general excise and use tax surcharge revenues, interest earned on the revenues, and any federal, state, or private revenues”

Notice that the law does not say “city” revenues can be used. That’s why some members of the Council have been seeking for some time to change the law.

Meanwhile, according to the most recent evaluation of Honolulu’s finances by Moody’s Investors Services, Honolulu’s “challenges related to construction of light rail” could lead to a downgrade of its Aa1 credit rating, if the city shows an “inability to manage escalating fixed cost(s).”

Yet the mayor and his cohorts on the Council now want to borrow money not only for the capital construction costs of the rail, but also for its administrative costs.

After receiving criticism that the rail was well over budget last summer during the latest round to seek state tax aid, Caldwell and other boosters of the project indicated that the rail’s skyrocketing costs were now under control, and that building and operating the rail would not place the city in an endless cycle of debt.

Skeptics took those assurances with a grain of salt, but this update underlines the questions that still dog the project.

The only way to effectively address those concerns and restore public trust is through a full audit of the rail.

Although the city passed a “follow-up audit” last year, that audit will not specifically look for fraud, waste and abuse. More transparency is needed.

Whether folks are pro-rail or anti-rail, the funding realities demonstrate that city officials need to be more forthright with the public — not only about its real costs, but also about its long-term effect on Honolulu’s finances.

In the end, it’s a question of accountability, transparency and the public trust.

The first step is to provide full investigation of the project.
E hana kakou (Let’s work together!),

Keli'i Akina, Ph.D.


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


808 Silent Majority

Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Back da Blue Hawaii

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute


Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together



Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui


Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii


National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport


OHA Lies

Opt Out Today


Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii



Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii


Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu


West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii