OFFICE OF THE MAYOR CITY AND COUNTY OF HONOLULU 530 SOUTH KING STREET, ROOM 300 HONOLULU, HAWAII 96813 PHONE: (808) 768-4141 FAX: (808) 768-4242 INTERNET: www.honolulu.povPETER B. CARLISLE DOUGLAS S. CHIN MAYOR MANAGING DIRECTOR CHRYSTN K. A. EADS DEPUTY MANAGING DIRECTOR June 21, 2011 The Honorable Nestor R. Garcia, Chair and Members Honolulu City Council 530 South King Street, Room 202 Honolulu, Hawai’i 96813 Dear Chair Garcia and Councilmembers: For the reasons stated below, I have vetoed Bill 33(2011), CD2, FD2 and Bill 34 (2011), CDI, FD2, relating to the Honolulu Authority for Rapid Transportation transit funds and operating and capital budgets. Less than a year ago the electorate of Honolulu was asked if it would approve a charter amendment establishing the Honolulu Authority for Rapid Transportation (“HART” or 1 “the authority”). It was to be a semi-autonomous entity with a policy-making board of professionals that would remove the vagaries of the election cycle, individual political ambition and favoritism from the rapid transit project. The passage of this amendment by a significant margin no doubt resulted from a desire by the people to address head-on the suspicion and mistrust surrounding the project caused in no small part by its cost and infrastructure. It remains a project the scope of which this state has not experienced in its history. A semi-autonomous transit authority is a concept I support wholeheartedly. I share with the majority of the public a clear vision of the tremendous benefit to the city of building the rapid transit system and its transit-oriented residential and commercial development in the urban corridor, leaving our open spaces open. Having already made the decision to pursue this elevated rail system, Honolulu as a community wants to see this project done in the most professional, transparent, and cost-effective manner possible. I promised the people of Honolulu I would see to that on my watch. I intend to fulfill that promise, and the formation of HART as authorized in Article 17 and the ability of the individuals appointed to the HART board are key components in honoring that promise. 1 Revised Charter of the City and County of Honolulu (2000), as amended (herein “RCH” or “charter”). The amendment is now Article XVII, Rapid Transit Authority (“Article 17”).
The Honorable Nestor R. Garcia, Chair and Members June 21, 2011 Page 2 The proposed charter amendment presented to the people on the 2010 ballot gave to the ten-member HART board the authority to control the transit funds and, after public hearings, to adopt its operating and capital budgets while still maintaining transparency and accountability to our federal, state and local governments. The people by plebiscite 2 overwhelmingly adopted the charter amendment, now denominated Article 17, and HART is slated to launch on July 1. Article 17 exclusively empowers HART or “the authority,” among other things, to: (1) prepare annual operating and capital budgets for the fixed guideway system and the authority, RCH § 17-1 03(2)(g); (2) have management and control over the moneys made available to the authority in the special transit fund established to receive the county surcharge on state tax, RCH § 17-1 08; (3) receive and expend federal funds authorized for the planning, construction, and operation and maintenance of fixed guideway system projects, RCH § 17-108. The HART Executive Director, among other things, is exclusively empowered to: (1) prepare the annual operating and capital budgets of HART, RCH § 17-104(h); (2) request, and accept appropriations from the city and request and accept grants, loans and gifts from other persons and entities. RCH § 17-104(l). The HART board of directors, among other things, is exclusively empowered to: (1)review, modify as necessary, and adopt annual operating and capital budgets submitted bythe executive director of the authority, RCH § 17-1 03(3)(b); (2) submit a line-itemappropriation request for each of its proposed operating and capital budets for the ensuingfiscal year to the council through the office of the mayor by December Is of each year, RCH§ 17-106. Council points to RCH § 17-I 06 which enables the council to review and approveHART’s line-item appropriation requests as its authority for enacting Bills 33 and 34. Butwhen read in pan materia with the rest of Article 17, specifically the sections cited above,that reliance is misplaced. First, since the transit authority has control over the transit fundsin Article 17, it need not request appropriation of those funds, and council could not grant therequest if it did. Therefore, appropriations referred to in RCH § 17-106 must of necessityrefer to money requested from the city, i.e., from the general fund over which council hascontrol and HART does not. Second, the authority afforded to council by charter to approveHART’s line-item appropriation requests does not support what council has done here, whichis to unilaterally develop and enact its own HART budgets. Third, while Article 17 limits 42 There are many safeguards built into the legislation, and these are summarized in Mayor’s Message No. 74 (2011),dated May 17, 2011, incorporated herein by reference. RCH § 17-106 reads in its entirety: The board shall fix and adjust reasonable rates and charges for the fixedguideway system so that the revenues derived therefrom, in conjunction with revenues received from the generalexcise and use tax surcharge, from the federal government, and from the revenue-generating properties of theauthority, shall be sufficient or as nearly sufficient as possible, to support the fixed guideway system and theauthority. The authority shall submit a line-item appropriation request for each of its proposed operating and capitalbudgets for the ensuing fiscal year to the council through the office of the mayor by December 1st of each year. Theoffice of the mayor shall submit the authority’s line-item appropriation requests without alteration or amendment. Thecouncil shall, with or without amendments, approve the authority’s appropriation requests. See, CR 152 (2011), “Budget Chair Martin clarified that the City Council and not the City Administration initiated Bill
The Honorable Nestor R. Garcia, Chair and Members June 21, 2011 Page 3 council’s role in HART’s budgets to the approval of line-item appropriation requests, it expressly grants the power to prepare and adopt HART’s operating and capital budgets to its executive director and board of directors. Fourth, in light of the charter provisions that vest in HART control and management of the transit fund and the authority to prepare and adopt operating and capital budgets, the provisos in Bills 33 and 34 are of particular concern in that they fundamentally change and contradict the terms of the charter without a charter amendment by the voters. Bills 33 and 34, by which council assumes control over the transit funds and the operating and capital budgets and all appropriations therein, attempt to amend the charter by ordinance. It is axiomatic that the charter may not be amended by ordinance, nor may an ordinance change or limit the effect of the charter, and an ordinance that conflicts with an express provision of the charter is invalid. 5 There is every preliminary indication that the board members chosen both by thecouncil and by the mayor take very seriously their fiduciary duty to build and operate therapid transit system honestly, transparently, on time and within budget. Moreover, the boardmembers recognize the importance of engaging the public, the mayor and the council, andhave expressed a willingness and desire for frequent and open discussion toward that end. Ihave no doubt they will fulfill the mission for which you and I appointed them: toprofessionally guide the rapid transit project within the confines of Article 17, honoring thegoals of honest stewardship, cost-efficiency and transparency. Council need only give thema chance. Bills 33 and 34 undermine the very purpose of the charter amendment therefore Ihave vetoed them. I note further that the Corporation Counsel has refused to approve thesebills as to form and legality. I would urge the Council to reconsider its position on Bills 33and 34 and let the vetoes stand. Very truly yours, ic2/6 Z/ eter B. Carlisle Mayor33.” See, CR 153 (2011) for the same ‘clarification’ as to Bill 34. The charter does not contain authorization forcouncil to initiate any budget other than the legislative budget. RCH § 3-1 11. Fasi v. City Council, 2 Hawai’i 513, 518-19, 823 P. 2d 742, 744 (1992), “A basic tenet of municipal corporation lawis that an ordinance which conflicts with an express provision in a charter is invalid. The proposition is self-evidentthat an ordinance must conform to, be subordinate to, not conflict with, and not exceed the charter, and can no morechange or limit the effect of the charter than a legislative act can modify or supersede a provision of the constitutionof the state.” (Ellipses in original.)