Honolulu's Boards: A Black Humor Sample

The Sunday (Jan. 30, 2011) newspaper editorial explains that the Transit Authority will be a powerful volunteer board that oversees billions. Of course I find it entirely unnecessary.

"At the most we would need a separate division at the city within the Department of Transportation Services," Prevedouros said. "The largest problem is lack of accountability."

Mayor Peter Carlisle disagrees.

Amusingly, on the cover of the same newspaper on the same day(!) we see this:

Federal regulators have raised serious questions about the actions of the volunteer board overseeing the state's second-largest credit union while the directors are facing increasing internal criticism about the level of benefits they are giving themselves. (This board oversees over one billion dollars in assets.)

And let's look at the performance of another board that oversees the state Employees' Retirement System pension fund. See the graph below. They started with 9.9 billion in 2000 and ended up with 9.8 billion in 2010, while the number of pensioners has increased. We now face roughly a 10 billion dollar underfunding.

So what's the verdict on unelected boards managing billions? Broken Trust should be a good hint understood by those who have at least a casual appreciation for history. Carlisle excluded, of course.

Malama Aina? No! Can Start Construction? No!

Two great articles were published in Hawaii Reporter today.


Honolulu Rail May Stop Traffic | Hawaii Reporter

Hawai`i is a place where uncommon nature has been patient with common humanity for hundreds of years. Though we have run over it with concrete, it still engages us with views of towering mountains, and the beautiful blue sea.

So when we who love Hawaii think about just it is what we love, I wonder how much thought has been given to the incompatibility of the steel-on-steel rail, atop massive slabs of concrete to the Hawaii we love?

Malama Aina? ... We have done our beautiful islands enough harm. Now, more than ever, we should be their keepers. If we love Hawai`i, if we love O’ahu, if we love Honolulu, how did we say yes to rail?

Is the City Allowed to Start Construction on Honolulu Rail? | Hawaii Reporter

The terminology used by the FTA to outline these two levels of construction authority is Pre-Award Authority and Letter of No Prejudice.

The city has not come out and explained these requirements to the public. Therefore, it is time for the city council and the media to ask for clarity.

Here are some questions to ask the city to get them to explain where they are in the FTA New starts process:

1. Please explain the difference between the Pre-Award Construction Authority that is applied when Honolulu receives its Record of Decision and the construction authority that comes with a Letter of No Prejudice?

2. Please tell us when you are going to apply for permission to enter into Final Design? Please tell us what the city needs to do in order to make this application?

3. Please tell us what will be accomplished in Final Design and why it will take almost a year to complete?

The Bills are in the Billions

Hawaii.StateBudgetWatch.org has issued a report on the financial state of the state which may be summarized as follows.

+$19,555,468,000 Assets
-$13,244,809,000 Capital Assets (we can't sell roads and bridges to pay bills)
- $2,381,139,000 Restricted Assets (law does not allow the sale of these assets)
+$3,929,520,000 Available Assets to Pay Bills

-$10,218,595,000 Reported Liabilities (these appear in the biennial budgets)
-$11,903,857,000 Unreported Retirement Liabilities (these are hidden in the biennial budgets but very much real liabilities: pension funds and coverages for state employees)**

+$18,192,932,000 Money Needed to Pay Liabilities

$39,600 Each Taxpayer’s Financial Burden

The report does not include city's projected liabilities which easily top
+$11,000,000,000 for Rail and Sewers alone

Each Oahu taxpayer's liability today is well over $60,000.

Here is a comparison of how bad this is: Greece is near bankruptcy. Greece's debt is about $440 Billion (over 300 Billion euro) and there are about 11 million Greeks. So the current liability for each Greek is about $40,000.

To cope with the repayment of the debt, sales taxes in Greece exploded to 23% and added gasoline tax increased price from $5 per gallon in early 2010 to $8 per gallon in mid-2010.

Meanwhile in Hawaii a thoroughly rotted political structure supported by myopic large businesses and entertainment-focused media is piling on bad projects, bad laws, bad decisions and colossal debt.

** Update (1/28/11): Hawaii makes national news by having the highest debt. "Hawaii's debt, for instance, is $5.2 billion. But so is its pension obligation. Combined, the dual obligations make up 16.2% of the state's economy, according to a report released Thursday by Moody's Investors Service. That's the nation's highest total liability as a share of the state's gross domestic product." This seriously jeopardizes Hawaii's to issue bonds at favorable rates.

Decrepid Infrastructure Must Be Number One Priority

It seems that this message is loud and clear. People get it, Congress seem to get it and President Obama has started speaking more strongly about maintenance. But words must turn into acts.

America's capital investment deficit is a great recent article from the Washington Post. I quote this:

"The two deficits are more alike than people realize. Larry Summers, the outgoing director of the National Economics Council, explains it well: You run a deficit both when you borrow money and when you defer maintenance that needs to be done. Either way, you're imposing a cost on future generations. A dollar in delayed road repairs and a dollar in borrowed money are not, in other words, that different: Both mean someone is going to have to spend a dollar later. In 2011, America should stop passing that buck."

Meanwhile, Honolulu has terrible roads, poor facilities at parks and beaches, it operates under an EPA consent decree, it has over 365 water main breaks per year, and has a current deficit of about $100 million.

Unfortunately it also has a mayor who turns his back at the avalanche of existing liabilities and focuses on starting a rail boondoggle that under best scenario estimates will cost us $300 million per year for 30 years, on top of everything else.

Gasoline Price Comparisons: Taxes not Octanes Matter

The original subject is gasoline prices but before we know it, the story becomes about taxes. The graph below shows the stark contrast between 10 states in the U.S. and 10 countries in the European Union, or E.U.


Among the states shown, the lowest gas price is in Oklahoma at $2.532/gallon and the highest is in Hawaii at $3.54/gallon. This one dollar difference is actually a 40% difference. Among the EU countries shown, the lowest gas price is in Spain at $5.496/gallon and the highest is in The Netherlands at $7.382/gallon, a 34% difference between them. The gasoline price in The Netherlands is 110% higher than Hawaii’s. (June 2010 US$ and EU euro rates.)

A similar situation is observed for a small sample of worldwide islands (see below). Most island gasoline prices are twice as high as those in Hawaii. Despite the high prices, all cities in the islands shown have significant problems with congestion. This is because gasoline pricing tends to affect vehicle choice, and has a small effect only on vehicle ownership and use.

At places where gasoline price is relatively low, the typical vehicle has a V6 engine and delivers about 20 mpg in city usage. At places where gasoline price is twice as high, the typical vehicle is a 3 or 4 cylinder subcompact delivering about 40 mpg in city usage. So based on these vehicle choices, driving 12,000 miles per year at either place costs the same for fuel.

Going back to the first graph and comparing The Netherlands with Hawaii we ask: What can possibly explain a 110% difference for the same gas? It’s not technology, it’s not manufacturing, and it’s not transportation. These are less than half of the story. The “larger half” is taxes! See below:

Governments worldwide use taxes to finance general budgets and other infrastructure. Fuel taxes are among the first to be increased when budgets cannot be met. The price of gasoline is “inelastic” as economists call it, that is, a large change in the price of gas (say, +30%) does not correspond to a proportionally large change in highway travel (-10%). This is generally true for urban travel and less so for intercity travel where larger travel reductions may be observed.

Overall the lesson here is that taxes on gasoline are a cash cow for governments. Gas tax does practically nothing in reducing congestion. It may reduce pollution somewhat by forcing lower income people to purchase smaller cars, but it does this at a very high overall cost. The overall cost is high because a large part of the economy worldwide “rides on the streets.” Foods, goods and services need to be brought to the market, delivered, installed and maintained.

Expensive gas makes for expensive commuting, repair services, food and appliances. Gas taxation limits mobility, slows economy and reduces the standard of living.

In more general terms, high energy costs exacerbated by heavy taxation on them are a brake in progress. For a vibrant economy, countries and regions need to optimize their energy portfolio and reduce the taxes on it.

Hawaii energy costs are high and climbing. If the status quo continues (oil dependency and heavy subsidies on low productivity and hyper expensive alternatives), then by definition Hawaii’s long term economic outlook cannot be rosy.

Acknowledgment: Recent civil engineering graduate Michelle Coskey conducted a large part of the research and data compilation in this article.

Yet Another U.S. City Reveals Politicians' Rail Lies

Audit: Norfolk officials knew of light-rail overruns, kept silent. Cost overruns of 45% were hidden very much like Honolulu Transit Division hides from inquiries submitted by city council members and refused to cooperate with Governor Linda Lingle consultant investigating the proposed rail's finances.

Here's the story at Norfolk, Virginia: "City officials knew costs skyrocketed since 2007 but failed to reveal information to City Council. State inspector general indicated that HRT officials intentionally misled federal, state and some city officials about the amount of the overruns, to the point of maintaining a second set of books."

Norfolk is building a 7.4-mile light-rail line, the biggest public works project in Norfolk’s history. Originally $232M, now ballooned to $338 million, paid for with federal, state and city funds.

This excerpt also makes painfully clear the difference between heavy and light rail. Light rail in Norfolk is costing them $46 million per mile including the 45% cost overruns. Honolulu's heavy rail will cost $265 million per mile plus overruns. This is yet another version of Peter Carlisle's definition of "fiscally responsible."

If you recall, the other one is that rail will cost us about one million dollars for every car it will allegedly remove.

Chromium-6 In Honolulu's Tap Water

Original post below. Please read the endnote.
===================================
In 1996 the cancer-stricken residents of Hinkley, CA won a $333 million settlement from PG&E for contaminating their tap water with hexavalent chromium, which is commonly abbreviated as chromium-6. This was the basis of the 2000 movie Erin Brockovich starring Julia Roberts.

Fast forward to 2010: Tap water from 31 of 35 U.S. cities tested contains chromium-6 according to laboratory tests commissioned by Environmental Working Group (EWG). [Click for a summary of the EWG report.] The highest levels were detected in Norman, Okla.; Honolulu, Hawaii; and Riverside, California, as the table below shows.

City ------------------------ Population ----- Chromium-6 in Tap Water
Norman, Oklahoma ---------- 89,952 --------------- 12.9 ppb
Honolulu, Hawaii ----------- 661,004 --------------- 2.00 ppb
Riverside, California ------- 280,832 --------------- 1.69 ppb
Madison, Wisconsin -------- 200,814 --------------- 1.58 ppb
San Jose, California -------- 979,000 --------------- 1.34 ppb

The EPA has not yet set a limit for chromium-6 in water despite mounting evidence of the contaminant’s toxic effects, including an EPA draft toxicological review that classifies it as “likely to be carcinogenic to humans” when consumed in drinking water.

According to EWG, the National Toxicology Program has found that chromium-6 in drinking water shows clear evidence of carcinogenic activity in laboratory animals, increasing the risk of otherwise rare gastrointestinal tumors.

California officials last year proposed setting a public health goal for chromium-6 in drinking water of 0.06 parts per billion (ppb). The level of chromium-6 in Honolulu's tap water is 33 times over this proposed limit.
===================================
Note added on December 29, 2010: This article suggests that the Chromium-6 reported amount in tap water is of no consequence to human health.

Those Who Ignore History Are Likely To Repeat It !

Cradle to Grave -- The Holistic View for Sustainability

I am from Waipahu High School. May I ask you a question about hydropower for my science project? In your opinion, will hydropower energy be a successful alternative energy in the future? Will it prevent global warming?
Donnalynn Agpaoa

Donnalynn's question is important and almost universal. Its generic version is: Will Technological Option X be a successful alternative? I'll get to the generic form later, but first, here is my answer to her.

Hydro-power can be very powerful. Its electricity generation is clean, and reliable for 100+ years, if designed properly. Kauai has a small but successful hydro-power generator.

Now lets take account of the negatives.

Hydro-power can destroy ecosystems, and in some cases villages, cities and regional cultures may disappear, as they become submerged in the reservoir (lake) behind the dam.

The dam itself may be viewed as an eyesore. Also it is somewhat risky. If it fails, there will be catastrophe downstream.

One important consideration in the total picture is the amount of steel and concrete that's needed to build the dam. The amount is massive and the manufacture of the necessary steel and concrete will create a lot of pollution. Similarly, the machinery that will build the dam will pollute as it works to build the dam, and the machinery itself created pollution when it was built.

So, say, a Caterpillar front-loader has a life of 30 years and will work at the dam site for 1.5 years. Therefore 5% of the resources and pollution that went to manufacture the front-loader need to be "billed" to the dam project.

We have to take into consideration all these cradle-to-grave sustainability impacts in order to correctly derive the total impact of the proposed hydro-power infrastructure.

As for your hydro-power question, the correct answer is that it can be green but not necessarily. We need to evaluate each and every proposed project, add all its pluses and minuses, and then decide if it is a good project.

=====

In general now, in several cases what appears "green" or "good" is the opposite when all its impacts are accounted for. For example, electricity produced by coal or oil is neither clean nor green.

That's one of the reasons that I oppose the city's elevated heavy rail plan. The promoters call it green, the engineering calls it dark black!

And that's one of the reasons environmentalists dislike the new EPA ratings for electric cars. For example, the Nissan Leaf gets 106 mpge (or MPG-equivalent). Quoting the LA Times:

"Things got hairy with the Leaf. The EPA worked out a formula in which an electric car using 33.7 kilowatt-hours of electricity was considered equivalent to a standard vehicle using a gallon of gasoline.

[On the other hand, a better] process would consider all the greenhouse gases released from the time the electricity is first generated until it is sent through transmission lines to charging units. Based on such measurements, the Leaf would rack up more than 250 grams of CO2 and other emissions every mile, according to data from the Energy Department's Argonne National Lab. Gasoline-fueled cars on average release 450 grams a mile.

The fact that the emissions came from a coal plant producing electricity in Utah is just as bad as if they came out of the tailpipe."

Sustainability is often misused for marketing purposes but in the right hands it provides a mindset and tools to get a holistic view of the impacts of a technological option as small as a solar panel or a household appliance, and as large as a hydro-power dam or a transportation system.