1 Council, Please Ho'oponopono Honolulu Rail Testimony of Michael Asato Transportation & Transit Planning Committee City Council City & County of Honolulu Special Meeting on HONOLULU HIGH-CAPACITY TRANSIT CORRIDOR PROJECT DRAFT FINANCIAL PLAN FOR ENTRY INTO FINAL DESIGN May 12, 2011 Whether you are for rail or against rail, one thing that we can all surely agree on is that it be done the “right” way — the pono way. In this regard what follows are precatory (prayerful) recommendations of Council fiduciary duties particularly applicable to rail, where its due diligence should focus, corresponding troublesome findings, and remedies to “make things right” — ho'oponopono [video]. I. Applicable Council Fiduciary Duties 1. Risk Mitigation 2. Legislative Oversight 3. Affirmative Duty of Candor II. Due Diligence Focus 1. FTA Standard Cost Category (SCC) for Capital Projects Worksheet 2. City Ordinance 07-001 and Council Policy Resolution 00-29, CD1 3. National Environmental Policy Act (NEPA) III. Corresponding Troublesome Findings on Rail 1. Kapakahi (Ass Backward) Phased Project Approach, and Worst-Case Scenario 2. Implicit Cross-Subsidy of General Fund to Capital Cost via Revenue-Fungible DBOM Core Systems Contract 3. Unethical Final EIS Presentation, and Senator Inouye’s False & Misleading Statement on Rail IV. Ho'oponopono Remedies 1. Mitigate Risk for SCC 40.04 per FTA Contingency Criteria before FFGA Application 2. Ensure Compliance with Legislative Intents of City Ordinance 07-001, and Council Policy Resolution 00-29, CD1 3. Proclaim Apologies to Senator Inouye and General Public for Unethical Presentation of Final EIS V. Summary: “Investment” Analysis of Honolulu Rail
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Council, Please Ho'oponopono Honolulu Rail
Testimony of
Michael Asato
Transportation & Transit Planning Committee
City Council
City & County of Honolulu
Special Meeting on
HONOLULU HIGH-CAPACITY TRANSIT CORRIDOR PROJECT
DRAFT FINANCIAL PLAN FOR ENTRY INTO FINAL DESIGN
May 12, 2011
Whether you are for rail or against rail, one thing that we can all surely agree on is that it be done the “right”
way — the pono way.
In this regard what follows are precatory (prayerful) recommendations of Council fiduciary duties particularly
applicable to rail, where its due diligence should focus, corresponding troublesome findings, and remedies to
“make things right” — ho'oponopono [video].
I. Applicable Council Fiduciary Duties
1. Risk Mitigation
2. Legislative Oversight
3. Affirmative Duty of Candor
II. Due Diligence Focus
1. FTA Standard Cost Category (SCC) for Capital Projects Worksheet
2. City Ordinance 07-001 and Council Policy Resolution 00-29, CD1
3. National Environmental Policy Act (NEPA)
III. Corresponding Troublesome Findings on Rail
1. Kapakahi (Ass Backward) Phased Project Approach, and Worst-Case Scenario
2. Implicit Cross-Subsidy of General Fund to Capital Cost via Revenue-Fungible DBOM Core Systems Contract
3. Unethical Final EIS Presentation, and Senator Inouye’s False & Misleading Statement on Rail
IV. Ho'oponopono Remedies
1. Mitigate Risk for SCC 40.04 per FTA Contingency Criteria before FFGA Application
2. Ensure Compliance with Legislative Intents of City Ordinance 07-001, and Council Policy Resolution 00-29, CD1
3. Proclaim Apologies to Senator Inouye and General Public for Unethical Presentation of Final EIS
V. Summary: “Investment” Analysis of Honolulu Rail
V. Summary: “Investment” Analysis of Honolulu Rail Vice Chair Martin has characterized Honolulu Rail as an “investment.” 4 An investment can be analyzed in terms
of its risk and return: i.e., is the expected return-on-investment worth the risk? As shown above the “risk” of
Honolulu Rail is the worst-case scenario of stalled construction in Kakaako (with at least a $5.5 billion price tag).
For the “return” I suggest reflecting on the following passage by former British Member of Parliament
Bryan Magee who wrote in “What Use is Popper to a Politician?” in Popper's Open Society After Fifty Years:
The Continuing Relevance of Karl Popper (Ian Jarvie (ed.), Routledge, 1999):
In politics solutions, real or attempted, are normally called policies. Every reputable political or social policy is a proposed solution to a problem; and we always need to be clear about the problem before we can propose a solution. We must always be able to ask of a policy: ‘To what problem is this the solution?’ If there is no problem to which a given policy is a solution then the policy is superfluous, and therefore harmful, if only because it consumes resources to no purpose. … It is essential to start from problems, and to arrive at the formulation of each policy only as a solution to a problem.
As an aside, if you listen carefully to President Obama when he speaks on our nation’s great challenges, he often
frames his remarks in terms of problem solving [e.g., video]. Thus the expected return-on-investment can be
identified by asking, To what “problem” is Honolulu Rail the solution? Note that what you or I regard as a
“problem” (or priority) is fundamentally a values judgment.
Framing policymaking as problem solving can be operationalized by the format of the U.S. Army staff study
(FM 101-5, Appendix D [link]). Following its format, in Vice Chair Martin’s words, some “tough questions to be
assured that this investment is the best value for our taxes, especially in these critical times” are:
To what “problem” is Honolulu Rail the solution? And why is it a “real” problem?
» Traffic gridlock? Job creation? Development?
What are the “other” ways to solve this problem?
» This is the analysis of alternatives complaint of the Cayetano/Slom/Slater lawsuit [link].
And in all intellectual honesty, why is Honolulu Rail the “best” way to solve the problem?
A selection criteria for “best” (and an alternative to cost-benefit analysis) is:
External Validity: How well a proposed solution solves “the problem.”
» Rail does not solve “the problem” of reducing traffic gridlock.
Interval Validity: No internal inconsistencies, unintended consequences, side effects.
» Rail does not comply with Ordinance 07-001, and Council Policy Resolution 00-29, CD1.
1 Chair Breene Harimoto, Transportation Committee Meeting, March 30, 2011: “This is the largest public works project in the history of this State. The public is demanding some oversight, demanding answers — and it is our fiduciary responsibility to ask questions and to be accountable to our constituents.”
2 Councilmember Stanley Chang, Transportation Committee Meeting, March 30, 2011: “In summary Chair Harimoto I wanted to thank you for your patience in allowing to ask all these questions. I think it's imperative both in our duty as councilmembers to our constituents in our respective districts that we demonstrate the level of due diligence that I believe we were all elected to perform on projects on such importance to the future of this City as this one. So I very much thank the Administration and everyone here today for answering all these questions as patiently as you have. And I might also add that in addition to our respective obligations to our respective constituents that I think it is extremely important for the public trust and confidence in the long-term success of rapid transit in Honolulu that this spirit of openness and transparency be all pervasive, and that in every context, in every situation that the Administration will be as open and candid and forthcoming and proactively candid as possible whether it is good news, whether it is bad news, whether there is public concern as there is in this case, when there is no public concern as there are undoubtedly in other cases, and that only by that spirit of true, open, proactive transparency will the public have the full level of confidence and trust in the Administration, in the city government as to justify undertaking the largest public works project that the State has ever undertaken and more importantly not just the largest in terms of dollar value but the single, I think biggest project that either the State or City has undertaken to change our way of life, to fundamentally alter the way of life of the people of Honolulu as this project. I'm 28 years old. I've not seen in my lifetime another change either the Federal or State or City governments have undertaken here to fundamentally change my way of life as this rail project possibly back to the advent of the popularization of jet travel. Because this is a project of such importance as you are extremely well aware we are very grateful for the opportunity to perform our due diligence in the most open and transparent and candid way possible to further the public trust and confidence in us, in you, in the city government of Honolulu. So with that thank you very much Mr. Chair for your patience and thank you very much again to the Administration for answering this extremely thorough and lengthy line of questioning.”
Anderson: Now when are also we anticipating the Full Funding Grant Agreement at this point in time?
Hamayasu: Either later this calendar year or early next year in 2012.
Anderson: And you folks are going to be asking for a bond float at some point this year? The reason I am asking is just based on the PowerPoint presentation.
Hamayasu: Not bond floating in fiscal 2012, but obligation for the encumbrance of that bond identified money in 2012. But floating the bond or issuing the bond we anticipate in fiscal 2013.
Anderson: But you do plan to ask Council to authorize that in fiscal year 2012.
Hamayasu: I think that is required.
Anderson: By whom?
Hamayasu: In Charter.
Anderson: Now I am looking at the PMOC Monthly Report, the final that was dated February 2011. And on page 18 of that document it states that the FTA award Full Funding Grant Agreement projection is for September 2012. So if in fact without looking for the FFGA until that time, why would we be asking for the bond float in fiscal year 2012? In short, September 6, 2012 is not until fiscal year 2013, so why are we even contemplating asking for a bond float or authorization of one in fiscal year 2012?
Hamayasu: I'm sorry but I am having a difficulty trying to connect those two events to be relevant.
Anderson: You don't see any relevance in the FFGA with the bond float?
Anderson: So you think it would be fiscally responsible for the Council to authorize floatation of bonds without having a commitment from the FTA to the full FFGA?
Hamayasu: If we are going to do this project, yes.
Anderson: So you think it is going to proceed then without having that FFGA first?
Hamayasu: That's how the process works, yes.
Anderson: For some reason if Council decides to wait until the FFGA, then what happens?
Hamayasu: I think there is going to be a delay in the project, and additional money because of that delay.
Anderson: Okay, but you have said that the reason you folks are ... what I heard and please correct me if I am wrong but I heard that is that you are anticipating FFGA possibly by the end of this calendar year?
Hamayasu: End of this calendar year, yes it could occur as early as in the end of this calendar year, 2011 -- and then early 2012 or I guess the PMOC has a different opinion and they are saying September. We are saying early 2012.
Anderson. Okay, and if that were the case I could possibly understand why you might be asking for the authorization of the bond but if in fact we don't get the FFGA until September 2012 as this February 2011 Final PMOC Monthly Report states, I just don't see the urgency. And in fact I have been questioned on that by my own constituents?
Hamayasu: Urgency is because any delay would be adding the cost to the project, and this project cost has been developed with a certain schedule as disclosed in the EIS as well as early as the DEIS in 2007, so we are just following that schedule.
4 Vice Chair Ernest Martin, Transportation Committee Meeting, March 30, 2011: “All the members of this Council are accountable to a significantly greater population, and all of our line of questioning that is basically the rationale. Being that this is the largest public works project in the history of our State, there are concerns irrespective of whether you are supportive of rail or not, and I think the people we represent want us to ask these tough questions to be assured that this investment is the best value for our taxes, especially in these critical times. I just wanted to make that statement.”