Hawaii Real Estate Daily

• 1. City & County of Honolulu’s own Parsons Brinkerhoff studies show when rail is built, it won’t change road congestion. Per Parsons Brinkerhoff, when complete, rail will take take 1.3 percent of cars off the road. Per Mayor Mufi Hannemann at the KGMB forum, it will take 11 percent of cars off the road, at an expense of $6+ billion.

• 2. Federal funds are in no way assured, despite Hannemann saying we will receive $900 million. The Environmental Impact Statement (EIS) must compare alternative possibilities.

• 3. Why has Hannemann delayed presentation of the EIS for some 6 months, possibly until after the election? Suspicious?

• 4. Rail will be ugly (80 feet and higher in a neighborhood you use), noisy (next to your place?) and running 20 hours a day – empty most of the time.

• 5. Hannemann refuses even to try road congestion pricing (rush hour), even though it works well in cities all over the world. Why?

• 6. A study of 258 rail and bridge projects over 70 years showed that 90 percent of them have cost overruns (Miller-mcCune.com, September issue, Derailing the Boondoggle), drastically over budget costs. The U.S. Department of Transportation says rail costs average 40 percent more than budget.

• 7. City & County of Honolulu budgets $70 million to buy all the land needed for rail. Are they kidding us?

• 8. Parsons Brinkerhoff ran the Big Dig in Boston, which started at $3.7 billion (sound familiar?) and ended at $14.6 billion ($22 Billion with interest). Are we next?

• 9. Why haven’t we seen any operations costs? City & County of Honolulu Transport Director says these costs will likely come from our property taxes. How much? Why the mystery about operations costs? It’s your money.

• 10. Why repeated contracts to the same few bidders who kick into Hannemann’s campaign?

• 11. City & County of Honolulu has not added buses since the mid 1990’s, trying to force us into rail. Why not more buses now running on hydrogen?

• 12. Hannemann hasn’t added left turn lanes and more bus pull-offs to speed traffic. Why? Why not 4 day work weeks to cut traffic?

• 13. By the time the swollen rail tab arrives, we’ll have ruined the City & County of Honolulu bond rating for all of our other needs.

• 14. U.S. District Judge David Ezra warns us that we need sewers first to avert public health disasters with 6 major lines that have, per a City & County of Honolulu study, “Outlived their useful life.” City & County of Honolulu fought to delay fixing them and $6 million of your tax dollars later, lost in federal court. Sewers and sewage treatment will run in the billions. The Waikiki sewer break at $48 million showed us what to expect from Hannemann with sewer maintenance. Will Hannemann have rail cost us needed sewers?

• 15. The National financial crisis equals fewer visitors which equals a drop in business which equals less City & County of Honolulu tax receipts — just when City & County of Honolulu incurs huge, open-ended rail costs. Does that make sense?

• 16. Hannemann says he loves Honolulu, but suggests he won’t stick it out as Mayor past 2010, but he will stick us with the rail tab when he moves on. If rail is that important, why won’t Hannemann promise to stick around and finish the job.

• 17. Engineering studies indicate that rail will have a huge carbon footprint, bigger than all the cars-buses-trucks combined. State law now requires that we cut emissions to limit global warming. As Mayoral Candidate and Professor Panos Prevedouros points out, rail flops on the global warming requirement.

• 18. Your electricity bill is up 51 percent in the past 12 months. Imagine rail electricity costs in 2018 for 20+ stations, 24 hours a day, plus empty cars running 20 hours a day? It will be at your expense.

• 19. Rail may very well bankrupt City & County of Honolulu. If so, then what?

• 20. Rail costs may very well drive out other much needed city services that we rely on, forcing us to raise property taxes and maybe the excise tax again. Is a noisy, ugly rail that does not cut traffic worth higher property taxes? If so, how much higher?

• 21. Why no serious look first at more HOT lanes , far more buses, and multiple occupant vehicle incentives? Why ignore other options? What’s the rush?

Please add it all up, weigh the pros against the cons, and vote what you think is best for all of us.

Credits: Hawaii Reporter

Eight Pa’ia stores have closed in the past two months, and north shore business owners place much of the blame for the dire situation on Mayor Charmaine Tavares’ decision to shut down nonpermitted short-term rentals.

Overall, revenue is down 45 percent, Susun White of the Pa’ia Merchants Association told the Maui County Council’s Land Use Committee. A quarter of that decline is blamed on the loss of short-term rentals, she said.

“It could take years for us to recover,” White said.

For months now, the committee has been working its way through a set of bills intended to rewrite ordinances governing short-term rentals, defined as transient vacation rentals and as bed-and-breakfasts. One of the more controversial proposals involves whether to allow bed-and-breakfasts on land zoned for agriculture.

Islandwide, visitor numbers and tourist expenditures are down almost 18 percent from a year ago, according to the state tourism liaison’s office. The state says rising airline ticket prices and the ongoing mortgage and financial banking collapses, as well as unnecessary government regulation of cruise ships, are responsible for the poor tourism figures.

But committee Chairwoman Gladys Baisa said she’s received numerous e-mails from north shore business people who said their downturn predates the shutdowns by ATA and Aloha Airlines, as well as the banking crisis.

Pa’ia business owner Patti Pottorff wrote the Land Use Committee to say that her customers, many of whom are windsurfers, have told her that without accommodations close to the beach, they are instead opting for vacations in Mexico and the Bahamas.

The committee Thursday took public testimony for about an hour and discussed the bills itself for less than an hour.

The administration proposed the ordinances to streamline the short-term rental application process and further regulate where they are allowed. In the meantime, Tavares ordered her administration to crack down on illegal vacation rentals.

Tavares has maintained that the dramatic increase in nonpermitted temporary vacation rentals in recent years has contributed to a long-term rental housing shortage and has damaged the character of some residential communities.

Jocelyn Perreira, executive director of the Wailuku Main Street Association, said she prefers that the county keep its conditional-use permitting process for vacation rentals. The administration and operators want to get rid of it, calling it cumbersome and slow. However, Perreira said that short-term rentals still need greater oversight.

“We’re all in for the fight of our lives,” Perreira said. “Businesses should focus on local population as the meat and potatoes, and the visitors are the gravy.”

Dave DeLeon of the Realtors Association of Maui called on the committee to bring short-term rentals back on line in time to save local businesses.

“We’re making progress, and every time we meet we move a little bit ahead,” Baisa said. “We’re inching along.”

But the committee took no action Thursday.

Council member Jo Anne Johnson did introduce an amendment that says that in order for a bed-and-breakfast to be allowed in an agricultural district, the applicant must first prove that its state farm plan has been fully implemented, and that it complies with Hawai’i law regarding allowable uses in on agricultural zoned property.

Johnson said she has concern about whether state law even allows temporary vacation rentals and bed-and-breakfasts to be operated within agricultural districts.

“I’m looking at trying to be a little more restrictive,” Johnson said. “We are literally trying to save the family farm.”

Her amendment also prohibits bed-and-breakfasts where restricted by private community association bylaws and in an agricultural district with a condominium property regime.

“Most of the people that have filed under CPRs are very sophisticated,” Johnson said. “Two owners can go on one lot and create a setting where in some cases they are not even doing any farming.”

Johnson said she is trying to prevent the county from opening itself to litigation by those who oppose short-term rentals on agricultural land.

“I just don’t want to see more pressure on the development of our farmlands when we have an opportunity to create sustainable farms,” Johnson said.

Jim Smith testified that putting bed-and-breakfasts on ag land discourages the farm lifestyle that needs to be preserved.

“What we’re talking about is an economic engine versus our moral values,” Smith said. “The bill is a failure.”

Credits: Honolulu Advertiser

Our four point plan to secure a bright economic future for Honolulu may be summarized as follows:

• 1. Bring our infrastructure to world-class standards. A city in the current state of disrepair like ours simply cannot have a serious discussion about economic growth until our sewage is properly contained and treated, our water is clean and stays in the pipes, our roads provide a reasonably speedy service and are free of bumps and potholes, our trash is recycled, re-used and controlled; and our taxes are reduced so that businesses stay in business and low income folks are not forced into homelessness.

• 2. Develop sustainable energy supplies to secure a low-cost expansion that is largely free of fossil fuels. Hawaii is blessed with abundant solar, wind, geothermal, and wave energy that can free us from the shackles of imported oil and coal. We had a tradition of sugar cane agriculture; sugar cane is the preferred source for making ethanol. Where is the wisdom in importing ethanol from Iowa?

• 3. Reposition our tourism to serve established and emerging niche markets. For example, specialize in hosting professional and specialty conferences that bring in millions of high-value visitors from around the world. Many conferences can showcase Honolulu as the city of the future, a city that is ethnically integrated like no other, a city that is clean and in good repair, a city that is cooled and powered with green energy. We can lead the world in true eco-tourism by demonstrating what real sustainability looks like.

• 4. Reverse the brain drain through the knowledge gained by giving this city the infrastructure and energy alternatives it deserves. Our university graduates will study, work in, and export sustainable technology to cities around the world, cities that will come to Honolulu to model what we have created in:

Renewable energy, trash and recycling factories, point to point fuel cell buses on high occupancy reversible expressways, intelligent transportation systems, green buildings, telecommuting and the integration of culture and the arts into technology and infrastructure.

Indeed trash factories and reversible lanes can be designed with beauty and cultural sensitivity in mind. See for example what the Figg Bridge company has done in Indian reservations and national parks.

We have solutions which combine form, function, efficiency, results, and state of the art technology. It’s worth staying home and making this beautiful place truly great.

Credits: Hawaii Reporter

On the eve of Oahu’s Mayoral election, which may well decide the future of the current mayor’s proposed rail project, I took some time to review the 600+ page estimate prepared for this project by Parsons Brinkerhoff Quade & Douglas (PB), dated October 23, 2006.To many of you, I am the guy who you depend on to crunch numbers, reconcile costs and scopes and make sense of budgets. With that in mind, I took a look at the fixed rail mass transit system now being proposed for our City. If implemented, it will be the largest public works project in the State’s history.

This report is a compilation of the cost estimates of many proposed alignments and spurs. One of the issues that had been concerning me was that of the estimated cost of $3.7 billion for this project that has been stated by the Administration and its consultants.

I went looking for this number in the 600+ page cost estimate and I asked the City Council for help. Nowhere in the report does anything add up to $3.7 billion dollars. Not only that, but the current alignments being promoted are not even in this document. Why, after spending hundreds of thousands of dollars, can the City and their consultants not show us a clear, concise estimate based on a clear and concise alignment?

Ron Tober, the City’s lead consultant for this project, led a similar effort in Charlotte, N.C.. There, the costs went from a projected $221 million to over $462 million. By Mr. Tober’s own admission, “We got beat over the head with the 1998 numbers and the new numbers.”. When is the Mayor going to fess up to the “new numbers”? Maybe it’s time for Mr. Tober to take his own advice and show us the “new numbers.”

The other issue with this cost estimate is its age. The report states, “All construction and capital costs are expressed in 4th quarter 2006 dollars.”. If the $3.7 billion had been derived from this report, then clearly some escalation needs to be added. Not just to bring the estimated cost to today’s dollars, but to properly allow for escalation during the period of design and construction.

The University of Hawaii Economic Research Organization (UHERO), reported that construction costs rose 8% in 2007 and predicted a 4-5% rise in 2008/09. This was before the steep increases in steel and oil we have seen thus far this year and does not include the unrest caused by the current turmoil in the World’s financial markets.

Using a liberal 8 percent for 2007 and 4 percent for 2008, the $3.7 billion should be $4.2 billion. Add escalation to the midpoint of a ten year design and construction at 5 percent per year and the number we should be talking about is closer to $5.5 billion in today’s dollars.

I asked myself that perhaps, even at this cost, does this project make sense? If you read the reports carefully, you will see that there will be no appreciable reduction in traffic congestion with rail. This conclusion is not reported by the City or its consultants, but it is in the report if you look hard enough and do a little homework. It seems that the public has heard the promise of a reduction in traffic congestion so many times, it has morphed into the truth.

I am convinced that this system will not significantly reduce traffic congestion and will cost significantly more than advertised. I believe that our City will be bankrupted by this project and that many primary City services and innovations will go begging because of it. Will we again see our Police, Fire and Emergency Medical Technicians leave the islands because we cannot keep up with salaries elsewhere? What about solid waste disposal? Water? Sewage? When the coffers are strained by the cost of this project how will we operate smoothly?

I ask that you consider my opinions carefully and vote for anyone but the current administration who appears hell bent on pursuing this project and bankrupting our beautiful City.

Credits: Hawaii Reporter

Sales of Oahu’s single-family homes and condominiums continued to decrease, as did prices, in the three-month period ending in August.

The number of single-family homes sold in the period dropped 29.8 percent compared to the same period last year, 736 sold this year compared with 1,048 in 2007, according to the latest report from Prudential Locations. Condominium sales slipped 30 percent from 1,109 the previous year to 1,058 this year.

The median price for single-family homes was down 5.2 percent to $626,000. Condo prices were down slightly to $332,500.

Credits: Biz Journals

The next time you drive by Kealia Beach on the northeastern shore line of the Garden Isle, look for “Kealanani” across the street.

Formerly the old Lihue Sugar Plantation, it is now the site of an up and coming agricultural subdivision that spans across 2,000 acres and nine valleys.

There’s no hustle and bustle here, just the beauty and soothing sounds of mother nature.

Developers of Kealanani came up with the name because it means “pathway to beauty”.

“This is not another resort development on a golf course in Hawaii,” said Paul Kyno of Sotheby’s International Realty. “The people that we are seeing that are coming here are people that want to change their life style want to live more sustainably.”

Residents will live in plantation style homes. Another major feature: agriculture. At Kealanani, you’re not just a home owner, you’re also a farmer.

“Whether it’s tropical fruit trees or botanical or some type of live stock,” said Project Manager Andy Friend. “We want them to all engage in agricultural activity way more than just doing landscaping.”

Even the developers are green thumbs; planting a few thousand cacao trees for a tea business.

Taro farmer Stuart Wellington invested in the agri-subdivision. His taro farm will cover 90 acres.

Wellington says it’s a dream come true to live and work in the same place.

“The need to be self sufficient in Hawaii I think this property will play a major role allowing farmers to get back to the land and have the opportunity to farm,” said Wellington.

Other farmers will cultivate vanilla and avocados. When it comes to selling the fruits of their harvest, residents will have a place to do that too. There will be a special Farmer’s Market near the entrance to Kealanani.

Developers say we’re about six months away from groundbreaking. So far, more than 20 sites have been sold.

Credits: KHNL

Seafaring commuters from Molokai and Lanai could soon be getting financial support from the county to pay for transportation to Maui, The Maui News reported today.

The County Council Budget and Finance Committee recommended approval Monday of a request to modify the terms of a $182,000 grant to Maui Economic Opportunity Inc. to subsidize commuters from Molokai and Lanai with jobs on Maui.

There are about 25 Molokai workers who ride the Molokai Princess operated by Sea Link of Hawaii to get to jobs on Maui. The number of commuters riding the Lanai ferry had not been confirmed Wednesday, but estimates are as many as 40 people travel on the Expeditions Maui-Lanai ferry on a regular basis for work.

“I am just ecstatic that the county has jumped in,” said David Jung, president of Sea Link of Hawaii. The Molokai ferry has been providing rides for Molokai residents since 1986 when the state initially funded the commuter program.

The state paid as much as $30,000 a month to subsidize as many as 40 Molokai commuters, but in 1996, the state pulled out its financial support. The program was able to continue with employers subsidizing the ferry fares for workers. The cost to commute to and from Molokai by ferry had been $15 a day.

But on June 1, Sea Link increase the fee to $25 per round trip as part of an overall rate increase that includes a fuel surcharge approved by the Public Utilities Commission. Commuters don’t pay the fuel surcharge, which now adds $26 each way. But a general rate increase was part of the request filed by Sea Link.

For a regular rider, a round-trip ferry ride between Maui and Molokai is $132.

For commuters, the county grant would cover $10 of each $25 round-trip fare.

County Transportation Director Don Medeiros said the move to help Molokai commuters with ferry costs is Mayor Charmaine Tavares’ response to residents on the Friendly Isle who signed a petition asking for financial help.

Tavares’ staff has been working to assist Molokai residents who were devastated by massive layoffs with the Molokai Ranch shutdown.

Maui Economic Opportunity Inc. advised the county it did not need $182,000 initially earmarked for transportation costs for dialysis patients on Maui. MEO had won a state grant to cover those expenses and agreed to use the county grant to assist in another venture to help needy citizens.

County officials and MEO representatives worked out a deal that made it cheaper for MEO to administer the commuter program than for the county to operate it.

“If we can help, we should help,” Medeiros said.

He said the county assisting Molokai commuters with transportation costs isn’t any different from the money it pours into bus transportation for commuters on Maui. Last August, there were as many as 270 people using the bus to get to work. That figure has more than doubled with rider records showing approximately 560 commuters a day riding the Maui Bus, a service subsidized by the county.

Employers such as the Westin Maui Resort & Spa initially covered both bus and ferry fees for its workers. But when hotel occupancy rates started plummeting this year, employers had to back out.

Westin Maui Resort & Spa General Manager Craig Anderson testified Monday in support of the county subsidy for commuters. Anderson said his hotel has four employees who have been riding the Molokai Princess for 20 years to get to work.

“They’re not just any four. We believe the four are very valuable employees of our hotel,” Anderson said.

He credited the county administration as well as Council Member Danny Mateo of Molokai and Joe Pontanilla, chairman of the Budget and Finance Committee, for supporting the initiative.

“I’m thrilled that the county took initiative to look for solutions,” Anderson said.

The budget committee acted on a bill to allow a revision in use of the grant to MEO. It is expected to be placed on the County Council’s meeting agenda for first reading on Oct. 3. A second reading and final approval is expected to follow at a council meeting on Oct. 17.

Following an approval, MEO Executive Director Sandy Baz said, his office would be prepared to work with Sea Link of Hawaii and Expeditions in processing subsidized payments for the commuters.

Credits: Honolulu Advertiser

Mayor Mufi Hannemann has moved quickly to address Oahu’s traffic issues. With the backing of the state legislature, Governor Lingle, Hawaii’s Congressional delegation, including former Congressman Ed Case, and the Honolulu City Council, he has supported the move to build a rail transit system for Honolulu. Studies over the years have shown and continue to show that there’ll be less traffic congestion with a rail system than without it, and less traffic congestion with rail than with any other alternative studied, including HOT lanes.In addition, Mayor Hannemann and the city council have instituted an intra-island ferry service, utilized by as many as 7,000 passengers a month. The success of TheBoat shows that isle residents are looking for options to having to drive their car everywhere, everyday. And with the price of gasoline sitting at more than $4.00 a gallon, it’s no wonder. For the same reasons, more people are riding TheBus.

For those who want or need to drive their cars, no problem. The Hannemann administration has filled more potholes and paved more streets for the motoring public.

TRASH:

When Mayor Hannemann took office in 2005, there was no curbside recycling program on Oahu. Today, after instituting successful pilot programs in Mililani and Hawaii Kai, curbside recycling is expanding and will soon go islandwide.

Oahu residents generate nearly 1.7 million tons of trash every year. Only slightly more than 30% of that ever makes it into the landfill. The rest is either recycled or converted into enough electricity to power 40,000 homes every year through the city’s HPOWER plant, which will be expanded in the years to come. Converting trash into electricity is one of the ultimate forms of recycling.

In 2004, before Mayor Hannemann took office, city councilmembers, including mayoral candidate Ann Kobayashi, voted to locate a new city landfill at Waimanalo Gulch across from Ko Olina resort. The administration is now working to enact that council policy, which has the support of the good people of Nanakuli who know that a landfill could be located closer to their backyards should anyone shut down Waimanalo Gulch.

TAXES:

Of course everyone knows that it is the Honolulu City Council that has the authority to set tax rates, fees for city services and adopt a balanced city budget. For many years, councilmembers kept the budget artificially low and failed to raise fees to do the work that needed to be done. Sewer fees were not raised for ten years, and a pipe ruptured in Waikiki.

Today, the city budget is about where it should be. It contains pay raises for police and firefighters who are not now leaving Honolulu in the droves they once were. The sewer system is finally being fixed. And Mayor Hannemann is seeing to it that money designated for specific work is going only to that work. No more are funds being raided and diverted to other purposes as they were when Councilmember Kobayashi was budget chair. The city has received its cleanest audits in a decade, and has improved its bond rating under the administration of Mayor Mufi Hannemann.

Credits: Hawaii Reporter

This leased fee for the $134,400 asking price.

Reese said he couldn’t afford to buy his leased fee in the past. According to property records, initial leased fee sales at Waiau Gardens Kai were made in 1994 for $99,000. From 2003 to 2006, homeowners bought their leased fees for $86,300. Last year, the price rose to $134,400.

In the past, some residential lessees of the trust formerly known as Bishop Estate criticized the landowner for keeping leased fee prices tied to peak property values in the early 1990s resulting from the Japanese investment bubble, even though property values declined 20 percent to 30 percent in the later half of the last decade.

In 2002, Kamehameha Schools repriced its leased fees based on updated appraisals as required by a Probate Court mandate, and began a new push to sell what at that time totaled close to 5,500 residential leased fees.

The repricing resulted in a wave of sales over the next several years. In the fiscal year ended June 30, 2005, Kamehameha Schools sold more than 800 residential leased fees for $87 million.

Today, the trust is down to under 1,000 residential leased fees, nearly all of them condos.

That tally is down from a historical figure of leased fees in about 15,000 single-family homes and nearly 13,000 condo units, mostly on O’ahu.
in the beginning

Many sales began with single-family units in the 1980s, which began a transformation of the trust from a land-rich, cash-poor nonprofit primarily established to educate Native Hawaiian children to one of the nation’s wealthiest charitable organizations.

In the fiscal year ended June 30, 2007, the trust reported assets of $9 billion and spent about $250 million on its educational programs.

Laws enabling leasehold homeowners to force lessors, such as Kamehameha Schools, to sell the fee to lessees prompted an initial voluntary sell-off that started in the 1980s. That was repeated for condos when a similar law was passed in 1991. The trust has continued to sell many leased fees even though the lease-to-fee condemnation law covering O’ahu condos was repealed in 2005.

There are a few exceptions to the sale program, including the waterfront Kahala Beach Apartments, residential units in the mixed-use Downtown Honolulu high-rise Executive Centre and about 40 single-family home lots in Punalu’u.

Kamehameha Schools wants to retain the land under those projects for future redevelopment potential.

Paulsen said 98 percent of the trust’s residential property will be sold because there is little or no redevelopment opportunity and the trust doesn’t want to assume whole ownership of homes when leases expire.

“We’re not set up to be a property manager,” he said.

Higashi of Prudential said having agents from an independent brokerage firm visit lessees has helped convince many that they should buy their leased fees.

“I think it’s really made a difference,” he said. “We think we’ll help (Kamehameha Schools) get to the finish line.”

Credits: Honolulu Advertiser

The 3 T’s or Key Issues in my mayoral campaign platform are Traffic, Trash and Taxes. In Honolulu, these problems are bad, worse and worst respectively.

*1. TRAFFIC

There are three main challenges associated with traffic: Traffic congestion, mass transit and paving.

Traffic Congestion

Part of the reason for the severe congestion on Oahu is that the “traffic engineering toolbox” is rarely used. Traffic signals are not synchronized and updated, incidents and accidents are not managed, and freeway bottleneck relief projects are not done. Some of Oahu’s intersections are so congested that a traffic light cannot improve traffic flow. Two-lane underpasses will reduce congestion almost by half and substantially reduce traffic and pedestrian conflicts. In addition, compressed work weeks (4 day, 10 hours per day) and moving UH start times outside the typical commuter peaks will help substantially and immediately.

For the longer term, HOT lanes provide the best efficiency in congestion relief. Even if a small portion of traffic diverts to the HOT lanes and pays a toll (which is congestion insurance because toll payers are guaranteed a trip at 60 miles per hour), traffic is lessened on existing free roads which benefits to those who do not pay. HOT lanes are a double win-win: Win for buses and carpools, and win for both toll-payers and users of the free roads. Longer term, Kapolei, the second city, has to develop as its name implies and become a city of its own. This will diminish the need to commute to Honolulu. A large campus, a large shopping mall and affordable relocation programs for small businesses can accomplish this in the foreseeable future.

Mass Transit

Oahu leads the nation in carpooling and has a high public bus use.

A proper policy capitalizes on these strengths and makes them stronger. A HOT lane facility is a transit expressway in which all buses, vanpools and large carpools go for free. That’s the HO in HOT (high occupancy). HOT could also be short for high occupancy transitway. About 100 buses and 500 vanpools have roughly twice the passenger capacity of the proposed rail but they use the capacity of only one half of a freeway lane. There is a lot of room on a two or three lane reversible HOT expressway for low occupancy vehicles. These are welcome, but need to pay a toll to control the number of entries. This is needed so that the transitway always flows congestion free. As a result, an express bus can go from Waikele to downtown in 15 minutes.

With HOT lanes, the same express bus can do two trips in the same time that an express bus does the trip today. This doubles bus frequency at little extra cost. Buses will have a priority viaduct that takes them directly to downtown, and then there will be a Bus Rapid Transit system running along King and Beretania streets. As a result, Kapolei to the UH can be done in 45 minutes by bus, instead of 75 minutes by rail and do so at one quarter the cost of rail.

Pavement Programs

Paving on Oahu is terrible. In fact it’s the second worst in the nation. City roadway paving is much worse than that of state highways because of years of neglect. We must stop applying the half-inch pavement overlay treatments that cost tens of millions but last only through the next election, if we’re lucky. Our paved streets are in need of expensive but durable rehabilitation. The city must allocate the proper resources and create a plan for routine and periodic pavement maintenance.

*2. TRASH

Oahu is in a solid waste disposal crisis and under a billion dollar lawsuit from the Environmental Protection Agency for its lack of secondary sewage treatment.

Solid waste disposal

Nearly a million residents and thousands of tourists produce a lot of trash. H-Power reduces a lot but we still wind up with 20% flyash. We need modern waste processing plants with 98% efficiency. There are facilities in Germany and Japan located inside the cities. They are clean and they produce such useful products such as reusable glass, metal, plastic and even stone pebbles. Some are able to provide electricity. None are cheap to install or operate, but they are essential infrastructure for sustainable cities. Once a couple of modern trash management factories are installed, Waimanalo Gulch must close.

Meanwhile, a much larger effort in curbside recycling is required to reduce what goes into Waimanalo Gulch. Those residents directly affected by Waimanalo Gulch should be provided with relocation opportunities and assistance. This is a complex, expensive and divisive issue that needs the best scientific information and comprehensive local input.

Sewers

The second crisis is sewer lines and sewage treatment. The city has made inadequate progress in replacing old and bursting sewer lines. One recent result was the “fountain of disgust,” caused by the release of millions of gallons of untreated sewage into the Ala Wai Canal. This created a major threat to public health and endangered the reputation of tourism in Waikiki. Secondary treatment is important for Oahu. There have been several threats to water quality and public health at Waikiki and Kailua beaches, in Kaneohe Bay and other locations.

Honolulu is among the 1% of cities in the U.S. that do not have secondary sewage treatment. The current administration is gambling on a judge’s ruling in the suit that the Environmental Protection Agency has brought against the city. It is time to negotiate a sustainable long-term plan with the EPA and bring Oahu into compliance. On July 1, 2008, Oahu federal judge Ezra said “It is much more important to fix the sewers than to put in a light rail system.”

*3. TAXES

Oahu taxpayers are among the heaviest taxed individuals in the United States. In four short years, tax collections under Honolulu Mayor Mufi Hannemann went from $1.365 billion during the last fiscal year under then Mayor Jeremy Harris to $1.990 billion under Hannemann, a whopping 46% increase. Did you notice any part of city services improve by 46%? Sewer fees were increased 18% effective July 1, 2008.

Property Taxes

The City & County of Honolulu is responsible for real property tax on commercial and residential properties. Oahu property owners received their latest real property tax bill in the last few days indicating how much they must pay by August 20. Most people on Oahu have seen significant increases in the actual amount of tax they are called upon to pay.

Commercial property owners who pay a rate higher than residential property owners have also seen a big jump in their property tax, which is passed on to the businesses and non-profits renting from them in the form maintenance fees. Those increased costs are then passed onto the customer, or absorbed by the business or non-profit if they cannot be passed on. With commercial property taxes and other city fees at an all time high, many businesses and non-profits are closing because they cannot afford to stay in business any longer. That contributes to the state’s increasing unemployment numbers.

General Excise Surcharge for Rail

The City added an additional 12.5 percent surcharge to the state’s General Excise Gross Income Tax in January 2007 – the largest single tax increase in Hawaii’s history – to fund Oahu’s proposed $6 billion rail system from Kapolei through Honolulu.

Actually, the mayor pleaded with the legislature for the authority to double the surcharge. Since the enactment of the additional GE tax, Oahu taxpayers, individuals, families and small businesses have paid out an additional $250 million to the city, which is being used to fund the rail system. Taxpayers will also need to fund the operation, maintenance and repairs on the rail system, which will be millions more a year.

Some experts estimate that if the rail transit is built, property taxes could rise an additional 40 percent to pay for the project. Sewer fee increases Oahu taxpayers will be responsible for repairs, improvements and replacement of the county’s aging sewer system, which will amount to more than $1 billion. Motor vehicle registration fees have increased dramatically along with sewer fees, which will rise 18 percent this year.

Debt

Many of the city’s long-term projects and infrastructure are secured by selling general obligation bonds, also ultimately the responsibility of county taxpayers. Just the repayment of principle and interest on existing bonds accounts for more than 15 percent of the city’s budget. Additional demands for projects like the rail transit will guarantee that the burden for Oahu taxpayers will increase. Even with the hope that the federal government will somehow provide more money for the city (more money for any other transportation project in history besides New York) the point is that “federal money” still comes from the taxpayers.

Setting Debt Limits

The Tax Foundation of Hawaii makes a good recommendation about adjusting the debt limit for the city budget. “For fiscal year 2008, total real property valuations for determining the counties’ debt limits were roughly $250 billion. The debt limit calculated under the current constitutional formula would allow the counties to issue as much as $37.5 billion of debt.

While it is doubtful that the counties would issue debt of that magnitude, the problem is that the limit is so generous, and the potential for borrowing that amount exists. In fact, in some cases, the liberal use of debt has stretched the resources of the county to the point that a larger portion of that county’s operating budget is going toward the repayment of debt.

Too large a percentage of that budget going to debt service will mean that other expenditures in the budget will suffer or real property taxes will be increased to cover the shortfall. There is no doubt that the county debt limit needs a review, which could be done should a constitutional convention be approved by the voters this year.”

Fiscal Discipline Needed

The city budget is already bursting with generous increases provided for city workers and law enforcement as well as funding the costs for emergency sewer replacement, road repairs, trash disposal and debt service. It is time for the citizen taxpayer who foots the bill for all of these taxes, fees and debt, to make a significant change in the leadership of the city and to recognize that city budgets and expenditures, projects must be tied to the ability of Oahu taxpayers to pay. Taxes and fees are set by the city and can be changed by a more fiscally responsible and taxpayer friendly administration.

I pledge to be that mayor who practices strict fiscal discipline and respects the taxpayers’ every dollar.

Credits: Hawaii Reporter