 Welcome to Hawaii Together on the Think Tech Hawaii Broadcast Network. I'm Kaylee Ikeena, President of the Grassroot Institute and your host today. Well, if you live anywhere in the islands and perhaps anywhere in the country, you know that the major public works project here in our state is the building of a fixed rail system all the way through Honolulu on the island of Oahu. It's headed by a group called HART, the Hawaii Area Rapid Transit, or Authority for Rapid Transportation. I'm delighted today to have somebody who has some great insights into the project and who can answer questions that are probably on your mind. He's Joe Uno, he's the president of his own company and principal estimator at J. Uno & Associates. He's also a member of the Honolulu Authority for Rapid Transportation but I want to make it clear at the start that he's not here in his capacity as a board member but as a private citizen and so anything he says is only attributable to him and his own opinions. Maybe you're asking this question that we all have. What's next for Honolulu's over budget and behind schedule rail project? Joe, well, we're going to ask him what he has in mind. The cost overruns are so vast at this point that redirecting the project may be an option worth looking at. Transparency and accountability are also needed to better evaluate the project's next steps. Joe, so glad for your expertise and your willingness to serve on the and be with us today. Welcome to the program. Thank you. Thank you, Dr. Akina. Glad to be here. Thank you for the opportunity. Well, Joe, although you're only a member of the board for perhaps less than two years, a year and a half or so, you've had an introduction to the heart project from the inception at the beginning. Tell us a little bit about your relationship to the project. Yeah, that's an interesting story. So back, I think it was in 2008. I testified before the sitting council's transportation committee. At the time, you know, I'm a cost estimator, a professional cost estimator. I looked at the 600 page cost estimate that was prepared at that point and I was reporting to the council that the estimate at that point was $3.6 billion and it was far, far below what it should be. It should have been updated to over seven and a half billion at that point back in 2008. I was quickly gaveled off the dais for that comment. I was thanked by Chairman Nester Garcia at that point. Thank you, Ms. Uno, and next. So that was a real quick testimony. It might be surprising to some that you've ended up on the board. Now, you come to the board with quite a bit of credentialing. You're in cost estimation in terms of construction and I got a question I want to ask you. Yes, sir. What are we dealing with the rail? Are we dealing with a transportation project or ultimately now are we dealing with a construction project? And what kind of background do you bring to that? That's really interesting. It's an interesting question because I've come to the conclusion that it's neither a construction project. It's not a transportation project, but it's a political project. Right now, it's all about politics and when you turn it into a political project, it loses any semblance of reason that one might use to as a metric to chart the progress or make decisions. Decisions like based on cost benefit ratios, decisions that are based on true updated ridership projections and the like. So yeah, I don't look at it as a transportation project or a construction project anymore. It's all about people's political ambitions, I think. And as such, I think it, like I said, it has a completely different metric now. Well, I can see Joe, why you wanted me to point out clearly that you're not speaking as a member of the board capacity. You know, for much of the public, there's been this ongoing love hate relationship with the rail with strong pro rail voices and strong anti rail voices. How do you account for this high level of conflict in our community? Well, I'm not sure I can speak to that very well. I do know that it, because there's a lot of money involved and the public deserves to know the truth about the rail, about how it's financed about what our future indebtedness is going to be. You know, Civil Beat recently did a poll and only 18 to 20% of the people thought that there was transparency and honesty in the city government. And that means 80% do not believe that there's transparency. And I think Hart is one of the, probably one of the biggest elements to that distrust right now. You know, that's quite a staggering number of people who don't have faith or confidence that we're getting the message that the government should be giving us. Why ultimately do you think that is you mentioned earlier politics, but it does it go beyond politics does it go into the way institutions are operated. Yeah, I, I, you know, I can't really, again, it's hard for me to speak to that but I do know that it seems that since I've decided that it was a it is a political project that things sort of start to make a little more sense now. And I'm wondering, well, why, why aren't people talking about this why won't they allow us to think about or consider a plan C. Why aren't we going to get updated ridership, especially, you know, in the face of all of this change that we've been through in the last year through the pandemic and and the coming changes the disruptive changes that are going to come in the in the form of transparency. And the transportation is going to be so disrupted in the in the next few years in the next decade, we probably will have autonomous cars you and I, I think I probably bought my last internal combustion engine car, and I may have bought my last car, because in the future we're just going to be able to have ride sharing, and that's going to replace a lot of cars and be more efficient and safer for people. Well I'm glad you're talking about the disruption that technology can bring, which often leaves in the dust, old technologies. So, let me just ask you this question based upon your observation here. Why have we made such an investment in a rather old technology, the rail system, in light of upcoming new technologies, like autonomous vehicle. Well I'm not sure that's a fair assessment because back in when we did decide in to go to go through with this project it probably was going to be a good project, I mean it had ridership projections that were you know done until the 2018. And so it was supposed to be finished three years ago, and those ridership projections, you know they said that it was going to reduce traffic by 2%. So, you know people were all in they thought. This was a good idea reduce traffic, you know, and have that take on take on the project. But here we are you know, 2021, and we're not projected to finish for another decade. That's, that's if we're fortunate, we will finish in 2031. And, you know, we went from, you know, five billion five billion dollars, the beginning to now we're at 12 and a half billion dollars. We have three and a half billion dollars that we don't know how we're going to fund. What have you seen as a board member and again you're speaking only from your personal private vantage point. What have you seen challenges for board members, some have come and gone and you recently have been added to the board you replace John Henry Felix as a board member what kind of challenges are being faced. One of the big challenges that that a lot of people don't know is that we have a quorum challenge, and the quorum challenge stemmed from we had originally nine voting members and one non voting member. And then, as a result of act one, where we got more month we got the extension of the GT and the TAT from the state legislature. They added four more board members, all non voting. So that makes a total of 14 board members. Nine voting and five non voting, but the quorum is such that we count all 14 as a quorum. So a majority is seven plus one. We have nine voting members, two members can veto anything. That's hard math to kind of wrap your head around sometimes, but it became clear to me that that was a real, really a source of dysfunction for us. You know two members are are basically a majority, they can veto anything just two votes. So we asked the legislature this past session. Well, we didn't, you know, we, we asked for some, some relief in terms of, you know, we wanted them to clarify, how should we count these for for members should all 14 be voting members, or should we go back to nine voting members. And, and so a five five four decision would be a majority. And they did not. It didn't make it out of committee. So they sort of left up this, this crazy dysfunction they just left it on the boards for us. And so going forward, at least until the next next session. And until the city charter can be amended. We have some really, we have this dysfunctional quorum issue and it's a real problem. Well, that's a real management problem, especially in light of the significant decisions that have to be made, sometimes very, very critical. Joe, we're going to go to a break in a few minutes but first I'd like to get your initial input on something which is so evident to many people. The rail costs have increased dramatically since the initial estimates and they continue to run from 2.5 billion in 2006 to 12.4 billion today. Everyone expects that to go up also. What's a major reason before we go to the break you can give us at least one. What's a major reason for the rise in cost. Right. Well, just recently, you know, as I've been on the board, it kind of went up by a couple of billion just because I got on the board and I don't want to blame myself for that but in a way, I have challenged the staff, the professional staff at heart and to their credit, you know, they've come up with, I think better more realistic as cost estimates and schedules. We have a wealth of historical data on what things should cost and how long they should take. And that since, and then since Lori Kahikina came aboard, there's been a lot more push for, I believe, a more realistic budget and schedule projections so I think that's a bit has a big part of it. The other part was when we did the P3 process, we were able to gain some information that industry thought that that last four miles is going to cost 2.8 billion. The estimates at that point at heart internal estimates were 1.4 billion. So right there we added $1.4 billion to the project because we understood the reality was not 1.4 but was 2.8 billion. One of the big reasons for the sort of the sudden increase, but I think, you know, Lori Kahikina is doing a really great job to try to, they want to hold, start to give us better numbers that they can actually meet. Very good. When we come back from a break I want to ask you about the cost of change orders which have been plentiful during the history of the rail as well as unanticipated costs that perhaps should have been. My guest today is Joe Uno. We're going to be right back talking about the rail. I'm Kelea Ikeena on Think Tech Hawaii. Don't go away. Welcome back to Hawaii Together on the Think Tech Hawaii broadcast network. I'm Kelea Ikeena talking with Joe Uno, a member of the Heart Board for the Honolulu Rapid Transit. He is here in his private capacity and answering some important questions. Joe, the CEO Lori Kahikina says the project will cost $12.4 billion and take another 10 years to finish. That's about $3 billion more than existing sources of revenue including surcharges, borrowing and federal funds. Now that the costs have risen so fast and with the news that we're about $3 billion short, what are the options that Heart has for funding and for completing the project? Yeah, we're in a real pickle here. You know, I think some people we might be praying that we'll get some of President Biden's infrastructure money, but there have been opposing opinions on the viability of that idea. I think usually typically in a project like this you would float some bonds and be able to finance the rest of the project. Right now, without an extension on the GE and the TAT, which didn't make it out of committee again this year, there's no way to pay for another bond issue in my mind, in my estimation, that right now are the GE and the TAT end in 2030 and for us to be able to float more bonds, we'd have to have basically an indefinite extension on that GE and TAT tax. And we don't have that right now. And then another issue that's facing Heart relative to borrowing more money is that the city has a limit on the amount of debt that it can take. And I believe it's something like 20% of the budget. And we've already, you know, gone to the well once and they've extended that or increased that amount of debt just for Heart. And you know, not too long ago, the truth in accounting nonprofit put out a report that, you know, Honolulu was the third worst financial shape in the country. And that, at that time, that did not include Heart. That number didn't include Heart and didn't include a three and a half billion dollar additional shortfall. And I don't think it completely included all of the unfunded liabilities. And those, those as you know Dr. Keena, those are those bankrupts other cities that don't have a heart. Well, we certainly have a challenge ahead of us if we continue with rail as originally conceived. You have come up with a different way of looking at rail we call it plan C. You've written about that reason. Could you briefly describe what you have in mind in terms of plan C and the talk a little bit about ridership. Yeah, so I put forward in it in a letter to the editor, two months ago, a plan C and what I, what I'm seeing is that we're at a real opportune time a real inflection point on the project that the current contracts end at Middle Street, current construction contracts end at Middle Street. We don't have any design or construction contracts beyond that east of Middle Street at the at this point. You know we have like we've talked about we have this funding issue. We have, we have what I believe are are really, really outdated ridership projections and even those ridership projections for 2018. Some would say we're we're absurdly inflated. And so we have some real challenges with respect to with the ridership. The other thing that I think I mentioned earlier was the rise and the opportunity of autonomous vehicles and a disruptive technology that that will bring. That's that we're on the cusp of the future here on on that type of technology. I think ride hailing and sharing are going to really change things a lot for us and I think that, you know, this is a real opportunity we if we at heart should take the position that we are trying to build a multimodal public mass transit system. And let that sink in a little a multimodal mass transit system includes buses includes autonomous vehicles includes the includes the rail up until Middle Street perhaps. I think it's a real opportunity for us to take a pause. There's a right now there's already a transit station at Middle Street. There may be opportunities there at Lagoon Drive also. That's a nice opportune place to get on the freeway and go down limits from Lagoon Drive. So, I think, like I said, I think we're at a real inflection point on the project, and it's a perfect storm things that just come together you know the pandemic, the slowdown in the money, the, and the riderships. Those are all coming together at the same time and it's like that joke about you know, God not sending a helicopter, you know, Yeah, you know, I mean it's exciting to hear you talk about that I've got my iPhone in my hand here and just to imagine that the solution may begin here. And I may be taking three or four different modes of transportation to get me to my destination and back, but in a way that's very efficient. That's very forward thinking and it really is the direction we are going. There's some other funding issues that you've raised, particularly with the federal funding there's a lot of confusion as to whether we'll lose federal funding should we not complete the rail project. All the way to Ala Moana, and we have the full funding grant agreement do you have some thoughts about that. Yeah, so the full funding grant agreement we the city of Honolulu agreed with the federal transportation authority that the complete system would go all the way to Ala Moana. And for that, the grant agreement was $1.55 billion. The fence have paid us $850 million, I believe, so far. I'm sorry, $800 million. Right. And there's $755 million that is still to come. So, right now, I characterize it as the boogeyman, because people trot that out and say that if we don't go all the way to Ala Moana we're going to have to pay it pay back to $800 million and lose the $755 million. And so, well, if you do the math, and if you say stop at Middle Street, and you had to pay back to $800 million, wouldn't that be a better solution than going into debt another three and a half billion dollars? I mean that's over four times the loss, right? So, it's sort of in that vein of people have this aversion, what they call loss aversion, and they just don't want to give up that money. But the actual truth of the matter is, I believe, and I don't have this from the federal government at all, but I believe that the federal government, I also want to see a multimodal mass transit system for Hawaii and for Honolulu in particular. And I think that they would be willing to work with us. I don't think that they're going to sue us and get all the money back. I mean, again, like I said, I characterize that as a boogeyman that gets that trotted out all the time to scare people into thinking that, you know, we have to go all the way to Ala Moana or, or, or else, you know, the math just doesn't work out very well. Well, Joe, you've been very informative today and as we close I'd like you to put on your look at your crystal ball. What do you see next for the rail? What do you predict will happen and how citizens respond and communicate to their leaders? Yeah. Well, Dr. You know, the recent passing of our master navigator Chad Babayan brought to the fore what he and Hokulea and the Polynesian Voyaging Society brought to Hawaii. And I know I'm going out a little bit on a limb here, but, but they really brought in, you know, an understanding of, of, of what is Pono. And I think that I think our leadership really needs to consider how we're going to live on. How do we make decisions based on not just our short term gains of, you know, of getting elected on the next round. Who, who's going to be governor next or, or who's going to be mayor next or whatever. Those are short term gains. And if you follow Simon Sinek and his infinite game theory, I think longer term and not just short term. And I think that's, I think that's a key for our leadership with 80% not trusting the government. I think people should take a, I think the government are elected leaders should take a real lesson from that. I think we owe it to our people, we owe it to our children and our grandchildren to do the right thing to decide in a Pono manner. What is right for for Honolulu. And because it's a political project now that people need to speak up, they need to call their city council people. They need to call their representatives. They need to write letters. They need to write email to them and let them know how they're feeling if 80% of the people are unhappy with the way things are going. That's a big voice. And it's not a silent majority. You know it shouldn't be a silent majority and if you want to see change happen. You have to make your voice heard. Well, Joe, I want to thank you for that. We appreciate all you've shared today and we'll look forward to learning more from you in the future. My guest today has been Joe Uno. We've been talking about the rail. You're watching Hawaii together on the think tech Hawaii broadcast network. I'm Kaylee Ikeena from the grassroots Institute until next time. Aloha and a Hanukako. Let's continue to work together.