The Board of Directors of the Honolulu Authority for Rapid Transportation (HART) met in executive session to discuss legal matters related to the General Excise Tax (GET) surcharge and efforts to extend its sunset date beyond 2022. The Board discussed meeting with state legislators to inform them about the rail project and importance of the GET revenues. They also discussed the City's reliance on HART and the potential effect of changes to the GET or Transient Accommodations Tax on project financing. Board members debated the state's retention of GET revenues and HART's authority to pursue value capture strategies to help fund the rail project.

1. CONFIDENTIAL
Executive Session
Board of Directors Meeting
Kapolei Hale, Conference Room B
1000 Uluohia Street
Kapolei, Hawaii 96707
Thursday, December 18, 2014
MINUTES
PRESENT: Ivan Lui-Kwan
Donald G. Horner
Keslie Hui
Carrie Okinaga
Damien Kim
Robert “Bobby” Bunda
George Atta
EXCUSED: Michael Formby
William “Buzz” Hong
Ford Fuchigami
ALSO IN ATTENDANCE: Gary Takeuchi Cindy Matsushita
The Board of Directors convened in executive session at 12:25 a.m.
Board member Donald G. Horner noted that the Board would be discussing legal matters in
executive session, especially the General Excise Tax (GET) surcharge.
HART Board Chair Ivan Lui-Kwan reported on efforts to eliminate or extend the sunset date
for the GET surcharge, which is scheduled for December 31, 2022. He said that the two areas
of focus were to (1) inform new state legislators on the issues surrounding the GET extension,
as well as (2) ensuring that City Council members and the Mayor were in agreement with
these efforts. Mr. Lui-Kwan said that HART had also provided tours of the Rail Project to
legislators to inform them about the project. He said that meetings had been arranged with the
chairs of the financial and transportation committees prior to the start of the legislative
session. Attendees of the meetings, in various combinations, included Board members,

2. Executive Session
HART Board of Directors Meeting
December 18, 2014
Page 2
Executive Director and CEO Daniel Grabauskas, and Move Oahu Forward Executive Director
Jennifer Sabas. Other meetings with lawmakers were ongoing.
Mr. Horner emphasized that the City Council and Mayor were relying on HART, and that all
members should get involved with the efforts at the legislature, emphasizing the importance
of explaining to lawmakers that rail is an investment. He said that the outcome of the GET
measures would affect the Memorandum of Understanding with the City regarding debt
financing. He said that a suggestion that the 10 percent retained by the State of Hawaii be
raised to 25 percent over time may find support with some Senate members, and he reminded
members that the Senate had been supportive in the past, and had advocated for passage of the
0.5 percent GET surcharge for rail. This arrangement, however, will result in a deficit in
anticipated GET revenues. Board member Carrie Okinaga discussed with members about the
delta between the 10 percent retained by the State and the proposed 25 percent, and whether
that would cover the costs HDOT was recovering from HART for oversight of the rail project.
Mr. Horner spoke about the effect of a potential change to the Transient Accommodations
Tax on the City’s revenues. Mr. Lui-Kwan discussed with members about the opinion of
some legislators that the 10 percent is not an administrative fee, but revenue sharing, given
that GET is the State’s single largest revenue source and that transportation is viewed as a
county responsibility.
Board member Robert “Bobby” Bunda opined that extension of the surcharge will be
difficult, and that opening day speeches of the Speaker of the House and the Senate President
would be important. The Governor’s state of the State address would be the following week,
and he should be asked to include the GET in his address. Mr. Atta suggested a statement
about extending rail to Manoa.
Mr. Horner said that the GET issue affected more than the City and County of Honolulu; the
other counties’ opportunity for a surcharge would be impacted by what happens to the sunset
date. Also, members discussed the need for HART to capture value resulting from rail to help
fund the project.
Ms. Okinaga summarized the ongoing legal issues facing HART as including 1) whether
HART could enter into the bond financing MOU with the City when the future of the GET
surcharge was subject to possible change; and 2) HART’s authority to add value capture to
the project finances.
Mr. Lui-Kwan adjourned executive session at 1:01 p.m.
Respectfully Submitted,
Cindy Matsushita
Board Administrator

3. Executive Session
HART Board of Directors Meeting
December 18, 2014
Page 3
Approved:
Ivan Lui-Kwan, Esq.
Board Chair
Date