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Report of the Permitted Interaction Group On Proposals Relating to Transportation Members: Kevin Mulligan (Chair) Cheryl Soon David Rae Nathan Okubo TRANSPORTATION PERMITTED INTERACTION GROUP REPORT. Introduction ‘The Transportation permitted interaction group considered a number of proposals that came before the Charter Commission. Several proposals (#14, #47 and #02) called for the establishment of a single transit agency for bus, rail and Handi-Van, One proposal #10 ‘suggested tuming control and authority of the rail project from HART to the Mayor and City Council. Other transitrelated proposals (#93, #94 and # 05) submitted did not address the governance structure for public transit on Oahu. In addition to the proposals submitted by the October 31, 2015 deadline, there was public testimony and a major amendment by the City administration to its proposal 76 as ‘announced by the Mayor in his 2016 State of the City address. The amended proposal 76A, creates and establishes a single municipal public transportation entity to manage and be responsible for the operations and maintenance of the city’s intermodal public transportation system, including but not limited to bus, paratransit and rail, which is placed within the Department of Transportation Services, and under the authority of the Managing Director, Mayor and City Council. The permitted interaction group used Proposal 76 and made further amendments following its research and investigation, ‘The permitted interaction group was responsible for researching and investigating issues related to the operations and maintenance of Honolulu's transportation system with particular attention to governance, oversight, social aquity, and the integration of rail, bus and Hand-Van, During our deliberations, we focused on these key issues: ‘+ Social equity and access to ensure the fair and equitable treatment for those usina bus, Handi.Van and rai ‘Finding the best governance structure, on behalf of both the taxpayers and riders, with sufficient oversight to control costs. ‘+ The role of safeguards, in the system, including citizen involvement, and oversight by the Mayor, City Council and other City departments. ‘+The timing of structural and governance changes so that rail, bus and Handi-Van services cen be property and efficiently integrated through advanced planning and coordination. Governance and financing for public transportation are so closely inter- ‘elated that they must be addressed together. ‘+ Leadership is critical to changes in public transportation governance. ‘The permited interaction group convened seven times and met with representatives ‘from DTS, Corporation Counsel and HART Board Chair Colleen Hanabusa. We also ‘examined the operational structures used by other multi-modal transit systems, including ‘the San Franc'sco Municipal Transportation Agency (SFMTA), Tri-County Metropolitan ‘Transportation District of Oregon (TriMet) (Portland, Oregon) and the Bay Area Rapid ‘Transit District (BART). Findings ‘+ The permitted interaction group finds there is a sense of urgency to make major ‘modifications to both the HART governance structure and to the assignment of ‘operations and maintenance duties and responsibiities. Itis of particular importance that a window of opportunity now exists for significant governance change and we must capitalize on itto ensure that a smooth transition to operations and maintenance takes place, + In-addition, we find there is @ need for clarty -egarding the financing of operations and ‘maintenance of the mul-modal transportation system. In particular, a coordinated fare (and transfer) structure system needs to be balanced with both the service levels possible and the subsidy levels, which are wihin the purview of the administration and City Council and not the semi-autonomous authority. + Finally, we find that the HART governance structure is deficient in authorities granted to the Board for conducting its oversight responsibilities, and in part prevented from doing s0 by the current Charter language. This report examines the permitted interaction group findings and makes recommendations for discussion and action by the Charter Commission |. Recommendation with regard to Operations & Mait ‘The permitted interaction group concludes ard recommends that the preferred alternative for operations and maintenance of the ral system is to change from a special purpose transit authorty (HART) and replace it wth a municipal transit agency (Department of Transportation Services (DTS) as set forth in an amended proposal #76A. A municipal agency Isa common govemance model in mid-sized urban areas like Honolulu. Under this amended proposal, HART will continue to be responsible for rll construction, while the operations and ‘maintenance of rll, bs and Hand-Van are placed within DTS. ‘The reasons behind the recommended change in responsibilities include a combination ‘of service coordination and funding challenges. It is widely agreed that the routing and service ‘coordination of the mult-modal system needs to be as seamless as possible, DTS is ina better position to do so, since it already establishes service levels and routing for TheBus and Handi-Van The transition section of the charter proposal addresses the transfer of positions from HART to DTS, because DTS will need additonal staffing to conduct this broadened role ‘and responsibilty. (One of the largest issues is establishing a coordinated fare structure. Since operations ‘and maintenance will invariably require public subsidy, the authorty to set fares must be lodged within the administration and City Council so this balancing can take place. The authority for setting ral ‘ares needs to be removed from the publi transit authority along with the removal of operations and maintenance duties. We make note that the current contract between HART and Ansaldo allows fora five- year operations and maintenance period with two possible extensions. The intent of this charter proposal is that his portion of the contract would be transferred over tothe Cy as s00n as possible, with ¢ recommendation that it occur on January, 2017, By separating construction from operations and maintenance, we are encouraging sound financial management. HandiVan riders tested that they were concermed that their service levels would be diminished if priory were given to HART capital financial chalenges. If that were to happen this would set off social equity issue and possible Volatons of federal environmental justice requirements. The amended proposal 76 A creates a clear separation between the operating and capital budgets. 11. Non-fare revenues ‘Our recommendations include the need to seek revenues from real estate and making ‘them available to help fund operations and maintenance and thereby lower the subsidy ‘amount. DTS should have a key role in this endeavor. We believe DTS must aggressively pursue revenue-generaiing opportunities used by other transit organizations. These includk Increasing ridership as a means to increase revenue. Ridership should be a key performance metric. Creating innovative partnerships with businesses and cther organizations that will contribute to transit funding. Increasing its own-source revenue through advertising, concessions and parking In or adjacent to transit facies. ‘Maximizing federal reimbursement for paratransit operations. Selling or leasing city-owned surplus land, including a rights, for transit-oriented ‘developments. This will provide revenue for the transit system, as well as increase property tax revenues through new jobs, housing and economic development, Locating new development projects near rail transit staions that will financially support rail service. Recommendation to form a Rate Commission ‘Another proposed change is the establishment of a rate commission to set fares for all modes of public transit, This would be a seven-member commission appointed by the Mayor and City. Council it would annually review the fares and make recommendations to the DTS Director taking into consideration such factors as transportation equity, accessibility, sustainability, and effect on ridership. The Mayor would transmit the recommendations to the Council, with or without amendments. The Council would actually set the rate(s) taking into consideration the same factors. Recommendations with regard to HART Governance ‘The loss of public confidence in HART and the rall project is a major concer. The problems at HART are in part structural and can be improved by specific changes to the 5 ‘Charter. We believe the current governance structure within HART Is ineffective because the Board is limited to policy and prohibited from involvement with the administrative responsibilities ofits Executive Director. This leads to inadequate oversight, lack of transparency even for Board members, and overall dysfunction. inappropriately separates HART from accountability expected from lected officials unti a crisis emerges such as a major cost over-un. In addition, decisions that impact funding and financial responsibilies are too far removed from elected decision- makers and taxpayers. The status quo, which has real and negative consequences for almost ‘one milion people who live ard work on Oahu, cannot continue. The rall project requires ‘addtional oversight, along with @ commitment to openness, new ideas, and real accountability To improve accountabitty within HART, we are recommending specific changes to several sections of the Revised Charter of the City and County of Honolulu, and in particular Section 17-103 3. (g) which pertains to powers, duties and functions ofthe HART Board of Directors. Currently, itreads in pertinent part as folows: “(g) Except for purposes of inquiry or as otherwise provided in this article, nether the board nor its members shall interfere in anyway with the administrative affairs ofthe authority.” This restricts the HART Board of Directors from exercising necessary oversight. The proposed language will give the Board cf Directors the decision-making authority to stabilize and strengthen the finances, management and operations of HART. Final Comments and Justification ‘The current situation wih the rail project demonstrates the need for significant and immediate change so thatthe City and County of Honolulu can execute a sustained effort to transform its public transportation organization. An effective, integrated public transit system is 6 fundamental to the civic and economic well-being of Honolulu. This plan of action will be difficult, but the altemative is far worse: an increasingly unaffordable and ineffective transit system, Under the proposed organizational structure, DTS will be able to coordinate bus, rail and Hand-Van services to the public. The objective is, the integration of car, car sharing, bicycle use, bicycle sharing, walking, public and private transit and paratransit modes by advancing seamless payment, information and connectivity. We are confident that DTS can ‘achieve these objectives under proposal #76A, as amended, "Nothing short of bold and urgent action is required. Without real change now, we will lose the opportunity to achieve a reliable, well-managed, costeffectve, integrated public transportation system, Our goal s to achieve an urban transportation system that provides attractive transportation choices enabling people to get to the places they need to go ~ safely, efficiently and affordably, now and in the decades to come. This will improve the environment by easing trafic congestion, reducing air pollution - making Honolulu a better place to lve, (ur city continues to grow, and as a community, we have a choice: Do we want to shape urban growth, or do we want urban growth to shape us? To shape urban growth we ‘must invest in public transit. Honolulu deserves a reliable, well-managed, cost-effective public transportation system and Proposal 76A, as amended, offers a plan of action to pursue ‘needed organizational and operational reforms to achieve this important goal and is a blueprint for action. ‘This new governance structure will meet the specific needs and characteristics of the City and County of Honolulu. We must improve the governance structure so that we can plan, operate and maintain a 21%-century public transportation system. Marginal changes to the {governance structure of public transportation on Oahu will produce litle or no meaningful 7 improvement for those who wil ride the rail project and the taxpayers. HART wil continue to struggle to meet its basic mission of building a rail system that willbe an essential part of a reliable public transit system for the people of Oahu. Finally, the permitted interaction group proposes that this set of recommendations be fully vvetted during the Charter Public Outreach meetings, CHARTER COMMISSION PERMITTED INTERACTION GROUP FOR PUBLIC TRANSIT PROPOSALS REVISED PROPOSAL 76A + NEW RATE COMMISSION (4-21-16 ver.) (PIG Meeting Date: May 11, 2016; Draft Date: May 13, 2016) Revisions To Agricte VI, CuaPren 17: DrPaRTMENT oF TRANSPORTATION SERVICES ‘Section 6-1701. Organization — ‘There shal be a department of transportation services which shall consist ofa director of transportation services, arate commission, and necessary staf. The director of transportation services shall be the administrative head of the department. Section 6-1703. Powers, Duties and Functions — ‘The director of transportation services shal: (@) Plan, operate and maintain the city’s multimodal municipal transportation system in accordance with the general plan and development plans, and advise on the development thereof. (©) Locate select, install and maintain traffic contro facilities and devices. (©) Provide educational programs to promote trafic safety. (@)Promulgate rules and regulations pursuant to standards established by law. (©) Manage and maintain all commercial parking facilities except facilites that are attached or adjacent to a building or project managed by another city agency. (Enforce the collection of fares, fes, rates, tolls and other charges for use of any and all modes of the multimodal municipal transportation system and deposit those collactions into the city treasury in a fund separate and apart from any other funds ofthe city. [REPEAL SECTIONS 6-1704 anv 6-1705 axp REPLACE WITH THE FOLLOWING: Section 6-1704, Rate Commission — 1. ‘There shall be a rete commission consisting of seven members appointed as follows: (2) Three members shall be appointed by the mayor without necessity of council confirmation; (b) Three members shall be appointed by the council; and (©) One member shall be nominated and, upon council confirmation, appointed by the ‘mayor. The member appointed pursuant to this paragraph shal be the chair ofthe rate Each member shall bea duly registered voter of he city. 2, Each member of the rate commission shall be appointed toa five-year term except that: (2) Of the initial members appointed by the mayor without couneil confirmation, one shall be appointed to a two-year term, one shall be appointed toa three-year term, and one stall be appointed to a four-year term; and (©) Ofthe initial members appointed by the council, one shall be appointed toa two- ‘year term, one shall be appointed toa three-year term, and one shall be appointed toa four- year term. Paget — ‘The term of each member shall commence on July { and expire on June 30 ofthe applicable years. A member, however, may serve beyond the expiration date until # successor is appointed ‘and qualified. The tem of the successor, no matter when appointed, shall commence on the July 1 immediately following the June 30 expiration ofthe predecessor's term ‘When & member leaves the rate commission by other than expiration of aterm, a successor shall be appointed to serve the remainder of the unexpired term. The successor shal be appointed inthe same manner as the predecessor. ‘The council may establish procedures by ordinance forthe replacement of a member who cannot serve temporarily beeause of illness, incapacity, or absence, "No person shall serve on the rate commission for more than tWo consecutive full tems oF ‘more than ten consecutive years, whichever is greater. 3. A majority of the entire membership of the rate commission shall constitute @ quorum. ‘The affirmative vote of a majority of the entire membership ofthe rate commission shall be necessary to take an action 4. Section 13-103 of this charter shall not apply to the rate commission or its members. Section 6-1705. Powers, Duties and Functions — 1. The rate commission shal: (@) Adopt rules forthe conduct ofits business. (®)__ When requested by the director of transportation services, or when otherwise deemed necessary and appropriate, but inno event less frequently than annually, eview the fees, rates and charges forthe use of any and all modes ofthe multimodal municipal ‘transportation system. The rate commission shall recommend adjustments thereto such that the revenues derved therefrom, in conjunction with any other revenues allocated tothe ‘multimodal municipal transportation system, shall be sufficient or a nearly sufficient as ‘possible, to support the operation and maintenance of the multimodal municipal ‘transportation sjstem. In making recommendations on such rates, fees and charges, the rate ‘commission may also consider factors such as transportation equity, accessbilt sustainability, availability and effect on ridership. (©). Submitan annual report tothe director of transportation services, mayor and council ‘The rate commission shall make the recommendations authorized under this subsection to the ‘mayor, through the director of transportation services. The mayor will ransmit the recommendations to council, with or without amendments. After receiving the recommendations from the mayor, the council shal fx and adjust reasonable rates and charges for the use of any and all modes ofthe multimodal municipal transportation system so thatthe revenues derived therefrom, in conjunction with any other revenues allocated tothe multimodal municipal transportation system, shall be sufficient or as nearly sufficient as possible, to support the ‘operations and maintenance of the multimodal municipal transportation system. In setting rates, and charges, the comeil may also consider factors such a transportation equity, accessibility, sustainability, availdbility, and effect on ridership. 2, Except for purposes of inquiry, neither the rate commission nor its members shall interfere in any way with the administrative affsrs ofthe department of transportation services or the authority. Revisions To Agric. XVII: Pusuic Transrr AUTHORITY ‘Section 17-102, Definitions ~ For the purposes of this article and Article VI “Authority” and “public transit authority" shall mean the governmental unit known as the ‘Honolulu Authority or Rapid Transportation.” “Board” shall mem the policy-making body, consisting often members of the board of irectors, nine voting members and one non-voting member. “Develop” shall mean plan, design, develop and construct. ““Bxecutive directe” shall mean the executive director ofthe public transit authority. “Fixed guideway system” shall mean the minimum operable segment approved by the city council and any extensions fo the minimum operable segment approved by the mayor and the city council, “Multimodal municipal transportation system” shall mean all public transportation systems of the city including, without limitation, bus, paratransit and fixed guideway systems and associated parking and other services Seetion 17-103. Powers, Duties, and Functions - 1. The public transit authority shall have authority to develop the fixed guideway system as provided in this article, 2. To perform its duties and functions, the transit authority shall have te following general powers (a) To makeand execute contracts, project labor agreements and other instruments requiring execution by the authority on such terms as the authority may deem necessary and ‘convenient or desirable with any person or entity in the execution and performance ofits powers, duties and functions (@) To acquice by eminent domain, purchase, lease or otherwise, inthe name of the city, all real property or any interest therein necessary forthe development ofthe fixed ‘guideway system; provided however tha, prior to commencing such action, the authority shall submit tothe council in writing, alist ofthe parcels and areas to be acquired. The authority shall have the right to proceed with such condemnation action so long asthe council does not alopt a resolution abjecting to the condemnation within 45 days of such notification. Alternatively, afte receipt of the notice from the authority, the council may approve, upon a single reading ofa resolution, such acquisition by eminent domain (©) To recommend tothe council the sale, exchange or transfer of real property or any {interest therein whichis under the control of the authority. The council shall take no action to dispose of such property without the written approval of the authority, and all proceeds from the disposition shall be deposited into the transit fund. (@) Todirectthe development ofthe fixed guideway system, (©) To maintain proper accounts in such manner as to show the true and complete financial status ofthe authority andthe activities and performance thereof, (O._To prepare an annual operating budget for the authority and an annual capital budget for the development of the fixed guideway system. (B)_ To make and alter policies for its organization and internal administration. (8) To create or abolish positions within the authority and establish a pay plan for those ‘persons hoiding postions in the position classification plan in accordance with Section 6- 1109 ofthis charter. ()Tomake temporary transfers of positions between subdivisions ofthe authority. @)_ Toadopt rules in accordance with state law, when necessary to effectuate its functions and duties. (K) Toenter into agreements with any public agency or private entity as it deems proper. ()__ Tohave fll and complete control of all real and personal property used or useful in ‘connection wth the development ofthe fixed guideway system, including ll materials, supplies, ad equipment. (1m) To promote and assist transit oriented development projects near fixed guideway system stains that promote transit ridership, and are consistent withthe intent of the adopted community plans and zoning. (2) _Toapply for and receive and accept grants of property, money and services and other assistance offered or made available to it by any person, government or entity, which it ‘may use to meet its capital or operating expenses and for any other use within the scope ofits powers, and to negotiate forthe same upon such terms and conditions as the authority may determine fo be necessary, convenient or desirable. (0) Iraddition to the general powers under this subsection, other general or specific powers may be conferred upon the authority by ordinance, so long as the powers are ‘consistent with tis article ofthe charter. ‘Section 17-104. Powers, Duties and Functions of the Board of Directors — 1, The board shal: (2) _ Bethe policy making body of the authority. () Determine the policies for the development ofthe fixed guideway system, (6) Have the authority to issue revenue bonds under the name of “Honolulu Authority for Rayid Transportation” in accordance with HRS Chapter 4, subject to council approval (@ Review, modify as necessary, and adopt an annual operating budget forthe authority and an annual capital budget forthe fixed guideway system submitted by the ‘executive director of the authority. () Request and accept appropriations from the city, and request and accept grants, loans and gifts from other persons and entities. (® Appoint and may remove an executive director, who shall be the chief exceutive officer of the pie transit authority. The qualifications, power, duties, fnctons, ‘and compensation ofthe executive director shall be established by the board (g) Eveluate the performance ofthe executive director at least annually, and submit a report thereon to the mayor and the council () Review, modify as necessary, and adopt a six-year capital program within six months of te creation ofthe authority and annually update the six-year capital program, provided that such capital programs shall be submitted by the executive directo. (@ Determine the policy for approval of arrangements and agreements with the federal ‘government and with any public entity, private entity or tility owning or having jurisdiction over rights-of-way, tracks, structure, subways, tunnel, stations, = == —- — reset terminals, depots, maintenance facilites, air rights, utility lines, and transit electrical power facilities, subject to approval of the department of transportation services if such arrangements or agreements may affect the operation or maintenance of the fixed guideway system. Adopt and enforce rules and regulations having the force and effect of law to cary ‘ut the provisions of this atile of this charter, and any governing federal or state ‘agreements or laws, including rules and regulations pertaining tothe organization and internal management of the authority and allocation of decision-making responsivity as between the board and the administrative staff. (49 Submit an annual report to the mayor and council on its activities. () In addition to the general powers under this subsection, other general or specific powers may be conferred by ordinance upon the board, so long as the powers are consistent with this article ofthe charter. 2. The board shall consist of ten members, nine voting members and one non-voting ‘member. Al members shall serve part-time. The board shall be governed by the provisions of Section 13-103 ofthis charter, except that subsections (b) and (e) shall not apply and as otherwise provided herein. 3. Appointed members. There shall be seven appointed members. The mayor shall appoint three members. The council shall appoint three members, The six appointed and two ex officio ‘voting members shall appoint, by majority vote, a ninth member. ‘The initial appointments of the seven appointed members shall be as follows: One member fom each mayoral or council appointment shall be designated to serve a five, four, and thee- year term, The ninth member appointed by the voting members shall serve a two-year term, 4. Ex officio members. The state director of transportation and the city director of| transportation services shall be ex officio voting members of the board. The director ofthe department of planaing and permitting shall be the ex officio non-voting member of the bos ‘The ex officio members of the board shall not be subject to any term limit. ‘Section 17-108. Powers, Duties and Funetions ofthe Executive Director ~ ‘The exceutve director shall: (@) Administer all affairs of the authority, including the rules regulations and standards adopted by the board. (©) _ Sign all necessary contracts for the authority, unless otherwise provided by this. article (©) Recoramend tothe board the creation or abolishment of positions. (@) Prepare payrolls and pension rolls. (©). Maintain proper accounts in such manner as to show the true and complete financial status ofthe authority and the activities and performance thereof. (Prepare an annual operating budget forthe authority and an annual capital budget far the development of the fixed guideway system, (@) Prepare and maintain a six-year capital program. (b) Reconsmend rules and regulations for adoption by the board, including those pertaining tothe organization and internal management ofthe authority and allocatcn of

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