A Sneaky Way to Approve City Funds for Rail
by Natalie Iwasa, What Natalie Thinks, June 5, 2018
Buried in a proposed amendment to the bill for HART’s capital improvement budget (Bill 22, CD2, FD1) is the statement:
“Notwithstanding the provisions of Ordinance 07-001, City revenues may be used to pay for the debt service for the $44 million appropriated from the general improvement bond fund.”
We were told no city funds would be used to pay for rail. Last year, however, the state legislature passed Act 1, which prohibits the general excise tax surcharge from being used to pay HART’s administrative or marketing costs, including personnel costs. By default, that means that the bulk of these costs will need to be paid by city funds. Councilmembers then started discussions on Bill 42, which added “city” to the list of funding sources for rail. It was opposed by most testifiers, and no final decision was made on it.
The mayor put $44 million of HART administrative and marketing costs into the city capital improvement (CIP) budget for next fiscal year. Several councilmembers decried this as bad policy but then merely moved those costs to HART’s CIP budget.
When asked about the $44 million, HART representatives stated they had enough cash to pay it, but according to their cash flow projections, bonds would be floated and apparently used to pay a significant portion of it. There was no additional discussion of how the $44 million would be funded.
We deserve an open discussion of how and when city funds will be used to pay for rail and what councilmembers’ plans are to cover the $44 million.
As a side note, it is also important to consider that no significant cuts to HART’s administrative or marketing costs have been made.
There is one final hearing on this bill Wednesday. I will be there to oppose this bill and the manner in which the amendment is being done. I encourage others to testify as well. The agenda and instructions on providing testimony are available here.