[ERNEST ¥. MARTIN ‘TELEPHONE: 207.6 ax: a) ree-t2a2 ‘an ematiok aor June 14, 2016 Leslie Rogers. Regional Administrator Federal Transit Administration (FTA) 90 7th Sureet, Suite 15-300 San Francisco, CA 94103-6701 Dear Mt Ropery/ AD Cave Casere, 1am in receipt of your Jeter to Honolulu Mayor Kirk Caldwell and the Honolul. ‘Authority for Rapid Transportation (HART) regarding the “Recovery Plan for Completion of the Honolulu Rail Project.” Thank you for fumishing the City Council with a copy of your correspondence as well as for the opportunity for a direct briefing ‘while you were here in Honolulu. The Honolulu City Council remains committed tc working with the administration as well as HART in developing a unified position on rail. The Couneil has already expressed its willingness to work with both entities as well other stakeholders including the private sector, Hawali State Legislature and the FTA, as indicated in the enclosed letter dated May 20, 2016 to Mayor Kirk Caldwell and HART Board Chair Colleen Hianabusa, But your June 6, 2016 letter calling for a Recovery Plan by August 7, 2016 obliges me to once again insist that funds generated by the GET extension and other concitions set forth in Bill 23 (Ordinance 16-1) dictate what we can realistically afford at this point ‘To be sure, given the amount of public funds, personal resources, time and effort already Invested, we cannot let this project fail. In spite of increasing skepticism about the Viability ofthis project, the Council remained steadfast in its support. However, I believe that in order to maintain that suppor, the time has come to deal with absolute values and ‘not depend on consistently unreliable projections, hypotheticals, or better luck to get us ‘through this next challenge. To proceed under such uncertainties would be iresponsible,‘The short time frame we have been given to submit the Recovery Plan to your agency: ‘compels me to call upon all stakeholders to suppor a realistic plan absolutely within our ‘means, given the financial constraints that can no longer be denied or glossed over. As stipulated by the City Charter, the HART Board is the policy making body of the authority. By Charter, they must adhere to the fixed guideway system of the locally preferred alterative approved by the Council, and Counci. approval is required for eny ‘new alignment, extension or addition to the sjstem. What I am proposing is not a new: alignment but a new and more realistic perspective and one that could be considered a. policy cal, given the significance of its fiscal impact. To that end, and by copy of this letter, 1 urge the HART Board of Directors to consider aad endorse a proposal to end construction at Middle Street and to formally convey that decision tothe City Council for appropriate action, Without going into more detail, tis clear that the benefits of such a plan outweigh the drawbacks. Equally important is the fact that it does not preclude us from eventually completing the full 20 mites and 21 stations at a time when, as you so sensibly state in ‘your leter, we have streamlined our organizational structure and recalibrated a critical path for Project completion that is entirely consistent with our expected financial Fesources. As stated in my leter of May 20, 2016, the Honolulu City Council stands ready to lead the discussions to achieve these ends. an SO Emest Martin (Chair & Presiding Officer Honolulu City Couneit Enclosure ce: Mayor Kirk Caldwell HART Board of Directors Daniel Grabauskas ‘All Councilmembers State Senate President State House Speakeresate eee eee 2,26 Caen otk vio lsh rap Tangoraion tT) ES Cony oa ‘ae Se on fee (yale Soe “sen gree Pao Hs Sa Dear Chair Hanabusa and Mayor Caldwell: In the wake of recent news from the FTA on the skyrocketing cost for our fixed guideway system, I feel compelled to state my viewpoint and insights on how we can collectively advance the rail project. Although the $8.1 billion estimate is based on projestions, we will get a cleerer picture of | rail’ tue cost as HART conducts its Risk Refresh Report and finalizes an updated Financial Plan, Let me emphasize several key points, the first of which is thatthe time for finger pointing is long gone. We cannot afford to play the blame game because everyone will lose, Secondly, given the amount of public funds, personal resources, time and effort already invested, we simply cannot let this project fail. We owe it to Oahu's texpayers to make rail work. Failure is not an option ‘The challenge before us is how to pay for the rail project. I would like to make it cleat that I oppose extending the GET surcharge beyond what was agreed to in Bill 23 (Ordinance 16-1), so going back to the Legislature for help is not an option. We need tobe realistic and choose to live within our That being sai, it would be in our best interest to explore every feasible option or a combination of options involving all stakeholders, beginning with the private sector, We need to establish collaborative public-private parnerships which I believe can be successful, In fact, suspect that it ‘will be difficult to extend rail beyond Middle Street unless the private sector joins us at the table. IF ‘we can find private sector partners who would be willing to hep finanee the construction of the 21 ‘al stations at an approximate cost of $30 million each, it would go a long way towards meeting the fanding gap. I am willing to take the lead and initiate discussions with private developers, some of ‘whom have already begun to invest in projects in anticipation of rail traversing through their respective properties.Another stakeholder i the State Legislature, which in 2005 passed legislation allowing the counties to add a half percent surcharge tothe State's 4% general excise ax to fund a transit system and did so again in 2015 to extend the collection for another five years. While we appreciate their efforts, we ‘ay need to tur to them once more—not for another extension but to remit to the City part oral of| the 10% that is deducted by the State as an adminisuative fee. Given the indisputable fact that the 5% GET increase was approved to fund construction ofthe projet, withholding more than the actual administrative cost of collection isan affront to Oahu taxpayers who now see a significant part of ‘her surcharge tax money used to supplement the stete's general revenues instead. As of October 2015, the amount skimmed by the State reached nearly $170 million. The Tex Foundation of Hawaii estimates that the state's 10% share collected through 2027 could top $570 million. This amount ‘would also go a long way'towards meeting the existing funding gap for ral, A thid stakeholder isthe Federal Transit Administration (FTA), We need to meet more often with FTA, officials, even iit requires sending a delegation each month to Washington, DC to resolve their concer, ‘The FTA has indicated its openness to possibly modifying the route and number of transit stations. What \we also need is flexibility in eran cost categories such a the contingency requirement. With clearer financial piewure expected by year's end, we hope the FTA will ee it fit to lower the amount of ‘unallocated contingency funds required as a cushion of sorts should further unforeseen circumstances. arise. Doing so would also help met rail’ existing faring gap. Wit respect to HART and the City administration, we need to continue working together as partners on ths project. t would be a show of good faith as well as transparency to inelude the Council \whenever feasible in desling withthe media on key matters involving rail. No one person or persons should remain in the spotlight, especially sine at the end ofthe day, the buck stops here at the Council {mn summary, given rails curtent fiscal constraints, any discussion on completing the projet is a non- starter unless allstakeholders—the private sector, State Legistaure, FTA, HART, the administration and the City Council—all come tothe table as pariners. By working together, we ean find ways to do rail beter through private investments, the State's 1(% share of the GET surcharge and greater Aexibilty from the FTA, Doing so will ake courage and conviction of purpose and the Council is ready and willing to take the lead inthis collaborative effort Res Emest Martin Chair & Presiding Officer Honolulu City Counel skas, Executive Director ‘All Honolulu City Councilmembers Honorable Ron Kouchi, State Senate President ‘Honorable Joseph Souk, State House Speaker Leslie Rogers, FTA Regional Administrator