Saturday, August 22, 2009
City should have released rail deficit numbers, two councilmembers say
Advertiser Staff
City officials should have been forthcoming about a $500 million shortfall over the city's plans for a commuter rail project, two key City Councilmen said this afternoon.
City Council chairman Todd Apo and Councilman Charles Djou were unhappy that city officials did not release a May 1 draft report to them, but said the project should move forward.
The report was the focus of a page one story in The Advertiser today after it was obtained by two rail opponents, using the Freedom of Information Act.
"If we're going to do rail, we want to make sure we do it right," Djou said. "And doing it right means an open, honest process – everybody's in agreement with that. But I think the integrity of the process breaks down when the administration tells the public and Honolulu City Council one thing and releases a document to the feds in Washington D.C. saying something quite different."
At a separate, simultaneous press conference today, city transportation director Wayne Yoshioka said the city did nothing wrong in not disclosing the May 1 report that said the city's transit-tax revenue will fall $500 million short of what is needed to complete the proposed $5.3 billion elevated commuter line.
Yoshioka said the May 1 report was not final and an upcoming September report will address the $500 million shortfall.
U.S. Rep. Neil Abercrombie, (D-Hawaii), said today that he is worried about the apparent lack of transparency in the running of the rail project.
Abercrombie said he fears that opponents will have an opportunity to kill the rail project because of the way it is being managed.
"I'm concerned the project is going to be Supperferried," Abercrombie said in reference to the demise of the Hawaii Superferry, a high-speed, inter-island shuttle service. The Superferry left the state after a court ruled it had not completed required environmental studies.
The city today released a statement from federal transit administrator Peter Rogoff, saying, "Today, The Honolulu Advertiser Newspaper published a story highlighting information from an outdated May 1st financial report ... That report no longer reflects the city's financial plan for the project."
Today's page one story in The Advertiser quoted Toru Hamayasu, deputy director of the Honolulu Department of Transportation Services, as saying the May 1 report was "an outdated report and no longer accurate."
The city has not released an updated report that it has and said it will not release the new report until it is finalized.
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Hawaii Hurricane Fund — Providing Stability in Uncertain Times
By Romy Cachola, 8/11/2009 8:20:34 AM
Faced with a $786 million budget deficit, state and union leaders are looking at ways to minimize the effects of furloughs and public employee layoffs and to balance the budget, including tapping into the $185 million Hawaii Hurricane Relief Fund (HHRF).
Historical Background
To better understand the ramifications of raiding the HHRF, we must first review the fund’s history. In 1994, a year after the Legislature established the HHRF, a State briefing revealed several alarming findings about the fund, which included the following:
• The State collected about $80 million annually from hurricane insurance premiums, mortgage recording fees and annual assessments of insurance companies.
• Nearly all of the $80 million was used to buy reinsurance coverage worth $500 million in the Bahamas.
• The $1.7 billion pool to pay for losses was just enough to cover damages by an Iniki-level hurricane. If a hurricane hits metropolitan Oahu, homeowners will likely receive about 50 cents on the dollar for damages, rather than be paid in full.
In 1995 as a State Representative, to address this concern I introduced a bill which became law as Act 32. In lieu of buying reinsurance, Act 32 set up a savings mechanism for the hurricane fund that proposed:
• 1) Floating $500 million in state revenue bonds.
At that time, the rule of thumb for debt service was 10 percent of debt principal, or in this case, $50 million. The $80 million in annual collections less the $50 million in debt service equals an annual savings of $30 million into the reserve fund.
• 2) Securing $500 million loan commitment from the federal government that would take the place of reinsurance, thus allowing the $80 million collected annually to go into the reserve fund.
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By admin - Posted on June 10th, 2009
State of Hawaii Sells $725.3 Million In General Obligation Bonds
The $725.3 million bond sale included $500 million of new money proceeds to fund new capital improvement
projects and $225.3 million of refunding bonds to refinance outstanding debt. The refinancing of existing debt resulted in a reduction in debt service of approximately $100 million per year in fiscal years 2010 and 2011. The overall interest rate
for the bonds was 4.12 percent.
