Prevedouros: Floating rail bonds now is a dereliction of City Council’s fiduciary duty

The Honolulu City Council is considering granting permission to float $2 billion in bonds to pay for initial rail contracts. The following is a letter to Honolulu council members from civil engineering professor and former mayoral candidate Panos Prevedouros.

Dear Council Members,

It appears that several of you are misinformed about the status of the rail project. Here is a five line update:

1.  The city does not yet have [Federal Transit Administration] FTA approval to enter Final Design.

2.  The City has not completed Final Design. It is still collecting the necessary samples.

3.  Only after Final Design is completed, the City can enter into a Full Funding Grant Agreement with the FTA.

4.  Only then the actual dollar commitment of the feds will be set in terms of monies and year of expenditure.

5.  At that point, Congress has the prerogative to cut the funding, reduce the funding, or grant it as stated.

See for yourself: www.apta.com/gap/legupdatealert/2011/Pages/2011April20.aspx

Congress cut FTA’s New Starts by a whopping 20 percent for 2011.

The 2011 New Starts funds for the whole nation is $1.59 billion and Honolulu is asking for $1.55 billion!

Floating bonds before federal funds are secured is a dereliction of your fiduciary duty and lack of due diligence.

Mahalo,

Panos Prevedouros