Honolulu City Council Budget Committee Hearing on HART, DTS, and DPP Budgets – March 11, 2026
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Honolulu City Council Budget Committee Hearing on HART, DTS, and DPP Budgets – March 11, 2026
The Honolulu City Council Budget Committee convened on Wednesday, March 11, 2026, at 10:08 AM to review the fiscal year 2027 operating and capital budget requests for the Honolulu Authority for Rapid Transportation (HART), Department of Transportation Services (DTS), and Department of Planning and Permitting (DPP). The meeting included presentations, Q&A, and public testimony. No formal votes were taken.
Public Comments & Testimony
- Raquel Achu (Wai Lua Moku) submitted written testimony and spoke in support of providing enforcement resources for DPP. She stated that the department has warranted consideration for additional resources to address ongoing issues, emphasizing that without enforcement, efforts are "just chasing in circles."
Discussion Items
HART Capital and Operating Budget Review
- HART Deputy Executive Director Michael O’Keefe presented the FY27 budget request, approved by the HART board on November 21, 2025.
- Operating budget: $177.6 million requested, up $2.8 million (1.6%) over FY26. Approximately 97% ($172.6 million) is for debt service, including $135.5 million in principal payments, $33.8 million in interest, and $3.3 million in administrative fees and arbitrage expenses. Total labor costs budgeted at $1.3 million (down 16.8%).
- Capital budget: $891.5 million requested, up $97.8 million (12.3%) over FY26. Includes $1.6 billion fixed contract for city center guideway and stations (segment three), Pearl Highlands transit center access ramp ($7.8 million increase due to revised construction cost estimate), Waipahu Station Mackay entrance, and park-and-ride construction (900 stalls at East Kapolei, 1,100 stalls at UH West Oahu).
- Staffing: Currently 50 filled positions; 22 more anticipated by end of FY27 (total 72). Of those, 6.5 allocated to operating budget, 65.5 capitalized. No planned abolitions.
- Funding sources: 75% from GET/TET state surcharges; $125 million under Full Funding Grant Agreement (FFGA) for utility relocation completion (expected by end of 2026); final $119 million tranche available September 2027, not tied to performance milestones. Annual $10 million city subsidy. No new GO bond debt planned; $150 million in tax-exempt commercial paper (TECP) requested but not expected to be used in FY27.
- Outstanding debt: Approximately $750 million as of March 2026, all to be fully retired by 2030.
- Councilmember Cordero raised concerns about ADA elevator/escalator durability and park-and-ride design for pedestrian safety at Kapolei station. O’Keefe acknowledged lessons learned from earlier segments and said the team is "taking another look" at the Kapolei design.
- Councilmember DeSantis Tam questioned the 8% increase in TAT revenue projections given softening tourism. O’Keefe noted that GET collections were up 5.8% in the first seven months of FY27, offsetting lower TAT, and that HART has a cash reserve cushion.
- Councilmember Tupola noted that the operating budget includes 6.5 staff in operating vs. 65.5 in capital, which is an accounting allocation based on federal guidelines.
DTS Executive Capital and Operating Budget Review
- DTS Director Roger Morton presented the FY27 budget of $501 million: $25 million for support staff, $351 million for bus and HandiVan, and $123.9 million for Skyline. Overall 2.9% increase over FY26.
- Skyline operations: $123.9 million, with the largest expense being the Hitachi contract ($77 million). Electricity ($13.5 million), elevator/escalator maintenance ($8 million), security, and insurance.
- Revenues: $50 million generated system-wide, including $3.57 million fare increase from recently approved fare hike (net after adjusting for unchanged senior/disabled fares). Federal operating subsidy of $21.12 million for bus maintenance. No additional federal operating funds for Skyline.
- Advertising: Current vendor (Japanese transit advertiser) handles bus ads; exterior advertising on buses and stations is prohibited by ordinance. Morton estimated potential revenue of $6–7 million from exterior ads, compared to current $120,000.
- Vacancies: 31 vacancies, lowest in years; aim to fill 22 by June. Hiring engineers improved due to higher salary scale.
- Fleet age: Average fleet age 12 years; some buses over 20 years. FY27 bus acquisition ($34.7 million) is significantly lower than FY26 ($74 million) due to procurement timelines and vendor delivery delays (23–24 months after order).
- Fare system: Existing Holo contract expiring; DTS budgeting $1.35 million for a three-month shadowing period for reprocurement. Open payments (credit/debit card) will begin implementation within nine months, reducing need for Holo cards (300,000 issued annually).
- Councilmember Waters questioned limited revenue generation from advertising and park-and-ride overnight parking. Morton noted park-and-ride lots are currently prioritized for commuters; overnight parking could be explored as capacity increases with new lots.
- Councilmember DeSantis Tam inquired about federal grant reimbursements for salaries; DTS stated reimbursements go back to the fund from which expenditure was drawn (highway fund or general fund).
DPP Budget Review
- DPP Director Dawn Takeuchi Apuna presented the FY27 budget, reduced 5% overall. Only one new full-time equivalent (reactivated construction inspector). Salaries reduced 4.99% due to vacancy savings.
- Vacancies: 85 vacancies (21% rate). Expect to fill 15 by June 30 and 35 more in FY27. High vacancy in commercial plan review engineers and inspectors; planner shortage alleviated by a March 2025 shortage designation.
- Overtime: Budgeted $227,000 (8,000 hours) for building permit review by plans examiners and engineers; sewer fund overtime ($11,000) for emergency mapping; highway fund ($8,000) for inspections.
- Revenues: Estimated $32 million unchanged from FY26. Short-term rental penalties projected at $800,000 (up from $550,000) due to expected enforcement. Building permit fee revenue static at $25 million.
- Technology: E-plans, HNote Build, and CIF Check AI systems now operational.
- Bill 7 grants: 58 projects; 6 completed, 17 under construction, 35 under review; total potential 1,752 units with 189 added so far. Pre-construction grants: 3 pending applications. Post-construction: 6 grants awarded ($1.9 million), none pending.
- Councilmember Cordero questioned enforcement for short-term rental registration; Apuna said only two investigators remain, vacancies need filling.
- Councilmember Kia Aina announced a proposed loan forgiveness program to attract engineers, noting workforce development for permitting is a priority of the legislature’s speed task force.
- Councilmember DeSantis Tam noted positive trend: vacancies down from 100 (two years ago) to 85; overtime down from $299,000 to $227,000. Revenue estimates appear conservative.
Key Outcomes
- No votes were taken; the meeting was an informational briefing.
- Councilmembers directed HART to provide an update on Kapolei station park-and-ride design and to monitor TAT revenue trends.
- Councilmembers encouraged DTS to pursue increased advertising revenue, explore overnight parking at park-and-rides, and modernize the Holo fare system. DTS noted that updating the ordinance prohibiting exterior advertising would be a necessary step.
- Councilmembers supported DPP’s technology implementation and requested further data on third-party reviewer and self-certification programs. DPP committed to updating sidewalk and right-of-way permit applications in coordination with a broader city standards update.
Meeting Transcript
Aloha and good morning, everyone. It is Wednesday, March 11, 2026, and the time is ten oh eight AM. Will the committee on budget please come to order? Like to welcome to the committee members who are present in the chamber today, Committee Vice Chair Nishimoto, Council Members Cordero, Kia Aina, Talba, and Council Chair Waters also joining us today. Like to welcome Councilmember to Pola. Before testifying, each person shall state their name. As both English and Hawaiian are official languages of the state of Hawaii, pursue it to Article 15 section four of the Hawaii State Constitution and section one-thirteen of the Hawaii Rivai statutes. For all oral testimonies offered in Olelo, Hawaii, additional time as may be necessary will be allowed for the testifier to provide an English translation of their testimony. After in-person testimony has concluded, I will proceed to remote testimony via video conference or phone. When I call your name, please monitor your screen and follow the prompt to unmute. For those who are joining us by telephone only, please press star nine. If you wish to testify, and I will identify you by the last three digits of your phone number. When your number is called, please listen for the prompt to unmute and press star six. Some friendly reminders and tips. Video conference from a quiet location if possible. If you're also watching the proceedings on Olelo, please mute your television at the time you are called to testify. When the timer on screen reaches zero, please conclude your remarks promptly. Written testimonies, including the testifier's address, email address, and phone number will be available to the public as described on the posted agenda. As a courtesy, please turn off or silence all cell phones for the duration of this meeting. For announcements, members, as a reminder, if you have any supplementary questions for the departments that may come up during or after the meeting, please provide them to my office so we may compile them for the department or managing director's office to respond. We look forward to all of your questions. And also, members, I plan to take a break again for lunch. The start time and duration will be dependent on the flow of the meeting. One final announcement: due to the inclement weather and out of an abundance of caution, the committee will be posting an agenda for Tuesday, March 17, 2026. If budget briefings need to be canceled tomorrow. Agenda item number one, informational briefing. Honolulu Authority for Rapid Transportation Capital and Operating Budget Review. We will first proceed with testimony. Clerks, do we have any in-person testifiers for this item? Chair, there are none. Thank you. Proceeding now with remote testimony. Clerks, do we have any remote testifiers for this item? Chair there are none. Thank you. We'll now proceed with the heart capital and operating budget review. For your information, the presentation is available online as Departmental Communication 181 2026. And joining us from the Heart from Heart, we have Michael O'Keefe, Deputy Executive Director and Chief Operating Officer. Aloha and good morning, Deputy O'Keefe. Aloha budget committee chair and council members. Thank you for the opportunity to present our FY27 budget request. Apologizes, she cannot be here. She was um had a previously scheduled uh business commitment that um that she was unfortunately unable to reschedule in order to be here today. So she she um uh apologizes but sent us on her behalf. And before I get started, I'd just like to introduce two um very important members of the Hart team uh sitting behind me. First, um, Vance Suda, project director, and also uh Richard Oshiro, who is Hart's uh director of budget and finance. So with that, I'll get started. Okay, just beginning with a kind of a high-level overview of our fiscal year 27 request. Uh, for background, the board of directors approved uh the budget that you're about to see at its uh November 21st 2025 meeting. Uh the total proposed budget operating budget request for 27 fiscal year 27 is 177.6 million dollars.
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