SpecialSession 2017 Table of Contents 1. History of project 2. Who is the Honolulu Authority for Rapid Transportation 3. Project costs 4. Project reports and recommendations 5. Possible options for the construction of rail 6. References History ofpmject How did we get here? Hawaii State Legislature  2006 – Act 247, SLH 2005 granted county surcharge up to 0.5% on the GET to fund county public transportation systems.    Projected cost: $3.6B 2015 – Legislature and City Council approved an extension of the surcharge through 2027.  Projected costs: $6.57B  Five-year extension of the GET (2022-2027) was anticipated to yield $1.2B in additional funds. 2017 – the City sought an GET extension via SB1183  Projected costs: $8.2B  Includes contingency funds  Excludes debt service ($10B projected cost with rail financing) Charter Amendments voted by the Oahu residents City and County of Honolulu  2008 Charter Amendment: “Shall the powers, duties and functions of the city, through its director of transportation services include the establishment of a steel wheel on steel rail transit system.”   No: 47.4% 2010 Charter Amendment: “Shall the Revised City Charter be amended to create a semi-autonomous public transit authority responsible for the planning, construction, operation, maintenance, and expansion of the City’s fixed guideway mass transit system.”   The Vote was: Yes: 52.6% The Vote was: Yes: 68.6% No: 31.4% 2016 Charter Amendment: “ Should a unified multi-modal transportation system be created.”  The Vote was: Yes: 69% No: 32% Collection of funds to date GET Surcharge  Projected revenue totals $5.2B from the inception of the surcharge on January 1, 2007, through the current sunset date of December 31, 2027.  As of July 31, 2017 – HART has received $1.98 billion from the GET surcharge. Federal Funds  $1.55B federal Full Funding Grant Agreement (FFGA) approved in 2012 to pay for the construction of Honolulu’s rail project.  FTA has obligated $806 million – HART has a drawdown on $794.3 million through July 18, 2017 .  Remaining obligation: $743.7 million "x HAND HMUW iixuif-ud?wa) '53:!qu P?nf-t i?du m! Rm-Aums Ram} - PM 111 .nd him? I wulv' Phases of Construction  Segment I (West Oahu/Farrington Hwy)   Segment II (Kamehameha Hwy)   Pearl Highlands to Aloha Stadium (4 miles/3 stations) Segment III (Airport)   E. Kapolei to Pearl Highlands (7 miles/6 stations) Aloha Stadium to Middle Street (5 miles/4 stations) Segment IV (City Center)  Middle Street to Ala Moana Center (4 miles/8 stations) Major Project Delays  Legal delay costs related to the Notice to Proceed, Archaeological Inventory Survey, and Traditional Cultural Property have incurred $172M in delay costs.  The West Oahu/Farrington Highway Guideway section incurred a total delay of 23.5 months and $107M in costs.  Protests by unsuccessful vendors over the Design-Build-Operate-Maintain Contract resulted in a 9 month delay in awarding the contract and a $8.7M settlement of delay claims.  “Premature” notice to proceed on contracts Other costs related to construction   Change Orders  HART Board approved nearly $15M in additional change orders in March 2017 to help cover changes of prematurely awarded construction contracts.  $65M unresolved change orders Kiewit  HART has already approved more than $284M in change orders to Kiewit, including $57M in 2014.  $27M for Ansaldo in change orders HART Administration/Staff  $22.9 million  Eminent  Domain (cost of acquiring parcels along rail route) Contingency - $1.1B in allocated and unallocated contingency  The FFGA included $644M in allocated and unallocated contingency Who is Who is the Honolulu Authority for Rapid Transportation (HART)?  HART is responsible for the planning, construction and expansion of the Honolulu Rail transit project.  Semi-autonomous agency established on July 1, 2011 through an amendment to the Revised Charter of the City and County of Honolulu.  KRISHNIAH N. MURTHY, P.E., F. ASCE, Interim Executive Director of HART. (Term December 5, 2016 to December 4, 2017)  ANDREW ROBBINS – new executive director to start in September  HART is governed by a 10-member volunteer Board of Directors, serving five-year staggered terms. HART Board of Directors Damien Kim Chair Terrence Lee Vice-Chair John Henry Felix Wes Frysztacki Ford Fuchigami Terri Fujii Glenn M. Nohara Ember Shinn Kathy Sokugawa Hoyt H. Zia ijectcosts GET Surcharge Collections vs Cost of Construction vs Debt Service (in $ millions) $1,200.0 $1,000.0 $800.0 $600.0 $400.0 $200.0 $- 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 GET Surcharge Collections Cost of Construction Cost of Debt Service Linear (GET Surcharge Collections) 2 per. Mov. Avg. (Cost of Construction) Estimated cost for completion Estimate at Completion Contract Summary Status Active Contracts (includes allocated contingency) $ 4,129,313,000 Unawarded Construction (includes allocated contingency) $ 1,928,548,000 Staff and Consultants (includes allocated contingency) $ 1,286,632,000 Completed Contracts $ 546,950,000 Unallocated Contingency $ 273,641,000 Total Capital Project (excludes financing costs) $ 8,165,084,000 Cost and Percentage Completion of Major Contracts Awarded:  West Oahu/Farrington Highway Guideway ($662M, 97.1%); Kamehameha Highway Guideway ($82M, 88.9%); Maintenance and Storage Facility ($274M, 100%); Core Systems ($601M, 43.0%); and Airport Section Guideway and Stations Group ($875M, 5.0%).  HART currently has over $4.27B in either completed or awarded contracts, which include 15.9 of the 20.1 miles of guideway and 13 of the 21 stations.  The Project plans to procure the City Center Section Guideway and Station Group DesignBuild (CCGS) package and the Pearl Highlands Garage and Transit Center (PHGT) DB package in 2018. ijectreports and recommendations Porter & Associates, Inc. Report Jan. 2012 and Sept. 2012  The Project will require an additional $80.6 million in operating subsidies in its first full year of operation (2020).  The City would need to achieve a lower rate of growth in nontransit uses of General Fund and Highway Fund revenues.  Stress tests determined that the City would have the financial capacity to withstand a 10% increase in Project cost, and a lower rate of growth in GET surcharge revenues.  Tests indicated that the City could incur an additional debt obligation of $373.2M, and may need to fund between $70.9M and $123.1M in rail operating and capital costs that would need to be satisfied from other, non-Project revenues available to the City. Project Management Oversight Contractor Report 2016 Risk Refresh Report  Jacobs Engineering Group, Inc. was assigned by the FTA in 2009 to monitor the Project and provide “information and well-grounded professional opinions regarding the reliability of the project scope, cost, and schedule”.  Lack of attention on risk, cost containment and management of the project.  Poor management of the design build contracts.  Lack of technical capability on staff. Fe de 131 11311311: Ad ministra 1310 Requesting a ?nancialplan by Septemberl5th 1?1 on . 2 12 AUTHORITY ran RAFICI 2017" The Honorable Ronald D. Houchi. President Slate Senate Hawaii State Capitol 415 South Baretanla Street. Room 4.09 Htwunolulu Ha ThE.l Honorable Donovan M. Dela Cruz. Chair ate Committee on Wars and Me ns ll State Capltol 415 501.1111 Beretanla . ?8 Honolulu. HawaIi 95813 The Honorable Lorraine R. Inouye. Chair Senate Commi on Transportation and Enema)r Hawaii State Capitol 415 South Eeretanla Room 210 Honolulu Hawaii 958 3 lf-lTE HIM EI-IFCLITI The HonorableScottl<.Sai peaker State House of Representatives Hawaii State Capitol 41.5 South Beret Illa Street. Room 431 Honolu.u. Hawaii 95813 H.I1th .Ia tl'l Eeretama Honolulu. Hawaii 96813 Transportatl?n Hat-.aII State Capitol ?115 South Beretanla Street Room 419 Honolulu. Hawaii 96813 Dear Pracldent Hour Speaker Sal .1. Senator Dela Cruz. Representative Ltd-.6. Senator and . hniah f1. Mur?rhy rirn Executive Director and CEO Attachmr; . The Honorable David '1 GI: 'ernor The Honorable Elr rI SI: atz, enator Honoraile tx- ie Himr .Senatc-r Th rd.Cong'resswoman ortatlon (HARTJ on July 2:1. 201?. from . requesting an updated Fi The Honorable Colleen Henabuea. Cong eve-omen All Members of th State Senate All Memberr- of the House of Representatl ole Hon Menor. Shaw. and All ?bers ofth ulu 3 Sue-r H-nnululu. Halt-J'l 9681] u.s. Depurfn?lenl Executive Dire 1200 New Jersey Avenue. SE of Trans purlution Washington DC 20590 Federal Transit Mr. 'qlmiah Munhy '(eculiko Director and CltichHeoutivc 011? oer Honolulu for Rapid Trans nnatton 100?) Mal-tea Street (5 Honoluiu. 1-11 9681.1 ear r. Murthy". As we discussed during ourmeetlng on lune 1 1.1h1: Room ery l?lan uhnultL-d by the Honolulu Authoriw 1m Rapltl' I'm I'pnrlu commu Honolulu a dedi 1"und1'm: 1'11 no 11? hlt?. ?nenetal plan "out. our Au}: about the. pt ism budget 21an l'hI: 1' 1111: ll11. ?red 1 working with ynu to idcnli wlutiom that would 11111:? 3: FFGA We have noted 1111:. Hawaii 1 tum: leidership' to hold a - shortly there ?1 \1-111 be motor-:11 to com Please contact on Admit Matthew .1. aynr irk Caldwell P0 ssib le 0 ptio ns f0 1' rail 0 0 115th tio Areas of common ground  Lands acquired by City (parcels sitting vacant/inactive)  HART administration costs ($22M) to be paid for by the City –not out of the GET surcharge  Limit how much can be spent on marketing  Consider prohibiting City from billing departments (i.e. Corp Counsel)  Reduce the State’s administrative fee to 1%  Tax Foundation lawsuit on 10% administration fee – use future allocations to payback  Possibility of drawdown method of disbursing funds Conference Position: SB1183 SD2 HD2 CD1  GET Surcharge sunsets in 2027**  12% TAT (Increase of 2.75%) from 2018-2027  Requiring TAT and Surcharge funds to be spent on capital costs of a mass transit project (not operating or administrative costs)  2.75% Increase of Statewide TAT State Administration fee for TAT decreases from 10% 44.1% share of Honolulu TAT to 1%.  Allocate $50M to the New Start Education Fund from 2018-2027  Decreasing TAT allocation to counties from $103M to $93M from 2018-2027  Honolulu’s portion of TAT allocation ($13M = 44.1%) must go to fund rail from 2018-2027  Prohibits the use of public funds for reconstruction or redevelopment of an event venue for counties already collecting GET surcharge for a mass transit project $ 2,282,940,086 $ 130,000,000 New Start Education Fund $ (500,000,000) Total (2027): $ 1,912,940,086 **Current projections already include GET surcharge until sunset 2027. This chart shows potential identified revenue sources. House Position: SB1183 SD2 HD2 HCD2 FA6  Extend GET Surcharge to 2028  Increase TAT 1% from 2018-2028  Requiring TAT and Surcharge funds to be spent on capital costs of a mass transit project (not operating or administrative costs)  State Administration fee for TAT decreases from 10% to 1%.  Allocate $25M to the New Start Education Fund from 2018-2028  Increasing TAT allocation to counties to $103M from $93 M from 2018-2028  Prohibits the use of public funds for reconstruction or redevelopment of an event venue for counties already collecting GET surcharge for a mass transit project Surcharge Oahu Only 99% of GET $ 398,697,478 1% of statewide TAT $ 958,301,113 New Start Education Fund $ (250,000,000) Total (2028): $ 1,106,998,591 Statewide GET Collections GET COLLECTIONS BY COUNTY JUNE 2017 Oahu Maui Hawaii 11% Kauai 14% 18% 71% 4% County Total Monthly Collections % of Total Oahu $ 546,243,167.58 71% Maui $ 35,570,292.18 11% Hawaii $ 34,648,222.35 14% Kauai $ 13,909,593.03 4% Statewide GET Allocations (payroll) PAYROLL BY COUNTY JULY 2017 Oahu Maui Hawaii 11% Payroll by Island ($ in thousands) District Kauai 14% 18% 71% 4% 7/5/17 7/20/17 Hawaii $ 19,624 $ 19,532 $ 39,157 13.8 Oahu $ 97,436 $ 97,139 $194,575 68.8 Molokai $ $ $ Kauai $ 6,175 Maui 659 % 1,287 0.5 $ 6,129 $ 12,305 4.3 $ 14,056 $ 13,548 $ 27,604 9.8 Lanai $348,912 $327,355 $ 676 0.2 None $ $ $ 7,289 2.6 Total $141,328 3,027 628 Total July 4,261 $141,567 $282,895 100% Monthly County TAT Collections FY2016 – 2017 OAHU 2017 % MAUI % HAWAII % KAUAI % STATEWIDE June May April $ 33,531,021 77% $ 4,669,467 11% $ 3,356,994 8% $ 2,240,040 5% $ 43,797,522 $ 29,753,496 73% $ 4,993,989 12% $ 3,782,475 9% $ 2,119,114 5% $ 40,649,074 March $ 31,455,485 75% $ 4,843,511 12% $ 3,654,454 9% $ 2,038,663 5% $ 41,992,113 February $ 38,668,517 76% $ 5,295,453 10% $ 4,289,785 8% $ 2,796,437 5% $ 51,050,192 January $ 36,008,613 77% $ 4,611,520 10% $ 3,362,353 7% $ 2,586,243 6% $ 46,568,729 2016 December $ November $ 24,176,733 78% $ 3,323,893 11% $ 2,092,990 7% $ 1,601,212 5% $ 31,194,828 25,858,142 79% $ 3,127,132 10% $ 1,982,008 6% $ 1,815,875 6% $ 32,783,156 $ 28,869,931 81% $ 2,616,844 7% $ 2,272,422 6% $ 1,784,129 5% $ 35,543,327 September $ August $ 32,149,967 81% $ 3,042,120 8% $ 2,424,324 6% $ 2,232,205 6% $ 39,848,616 67,643,459 98% $ 2,620,279 4% $ (3,129,130) -5% $ 1,989,682 3% $ 69,124,290 125% $ (9,488,553) -23% $ (2,477,686) -6% $ 1,986,277 5% $ 40,678,568 October July $ 50,658,531 TOTAL FY17 $ 365,242,874 85% $ 24,986,188 6% $ 18,253,994 4% $ 20,949,838 5% $ 429,432,893 State wide 110 atio ns TAT ALLOCATIONS I ntie 5' I Teun' em Special Fm'ntis l-i [Le rwe ntie Ce nte r' Fu {is Turtle Elan:r La mi a nil [level pme ?t I General Fund County TAT Collections and Allocations TAT COLLECTIONS JUNE 2017 Oahu Maui Hawaii Kauai County 8% 11% 13% 76% 5% Distribution (per HRS 237-D) Oahu 44.1% Maui 22.8% Hawaii 18.6% Kauai 14.5% Statewide TAT increases TAT Rate Changes and Effective Dates, 1987-Current Effect Date Rate January 1, 1987 5.0% July 1, 1994 6.0% January 1, 1999 7.25% July 1, 2009 8.25% July 1, 2010 9.25% Source: The Auditor, State of Hawaii, 2015  Research by several University of Hawaii economics professors found that Hawaii’s 5% TAT of 1987 did not have a statistically significant negative revenue impact on lodging suppliers. (Mak, 2016) TAT Historical Growth Statewide (2006 - 2016) 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 TAT Total $ 446,794 $420,981 $395,242 $368,576 $323,950 $284,472 $224,250 $210,622 $229,388 $224,942 $217,008 Revenues % change 6.13% 6.51% 7.23% 13.78% 13.88% 26.85% 6.47% -8.18% 1.98% 3.66% Per B&F, (29 year average growth rate since inception in 1987 is 8.36%. Last 10-year average, including Great Recession, is 8.52%) Statewide highways collections and allocations Highways Fiscal Year Ending June 30, 2016 County Gross Revenue % Generated Oahu $ 80,977,632 60% Hawaii $ 23,546,086 17% Kauai $ 9,809,793 7% Maui $ 20,433,625 15% Total $ 134,767,137 HIGHWAY SPECIAL FUND ALLOCATIONS Oahu Hawaii Kauai 25% 19% 44% 31% Maui 25% Statewide airport collections and allocations Airports Fiscal Year Ending June 30, 2016 Total Honolulu Int. Hilo Int. Kona Int. Kahului Lihue All others Revenue $ 353,071,282 $ 237,643,850 $ 7,286,685 $ 24,062,346 $ 57,926,473 $ 24,424,710 $ 1,727,218 Expenses $ 259,222,720 $ 153,410,648 $ 14,549,461 $ 21,629,608 $ 28,865,902 $ 19,649,703 $ 21,117,398 Statewide harbors collections and allocations Small Boat Harbors (DOBOR) 2015 2016 Revenues Expenses Difference Revenues Expenses Difference Hawaii $ 2,296,010 $ 3,618,440 $ (1,322,429) $ 2,535,556 $ 2,328,168 $ 207,387 Maui $ 2,795,562 $ 2,325,249 $470,312 $ 2,988,353 $ 2,279,622 $ 708,731 Oahu $ 6,941,574 $ 5,593,023 $1,348,550 $ 6,273,589 $4,708,488 $ 1,565,370 Kauai $ 1,000,780 $ 2,275,132 $ (1,274,351) $ 915,170 $ 1,771,337 $ (586,166) Possible project options  Option A: Stop at Middle Street  Option B: Stop Downtown at Aloha Tower  Option C: Complete to Ala Moana Option A: Stop at Middle Street  No extension on GET surcharge needed (legislature would not need to convene a Special Session)  Current date (2027) provides funding to build to Middle Street  This would include the release of the second obligation of $743.7 under FFGA  FFGA funds will have to be paid back to FTA  City would need to figure out how to make up $1.55B funding gap AI HOME LULLI MTHOHITY n- HAHD THANSPOHTATIOH WHAT IF WE WERE TO STOP TOTAL DOLLARS SPENT TO-DATE $2 649 (JANUARY 2017) ml Ion REPAY FTA FOR FFGA FUNDS DRAWN TO-DATE $712 million RETURN REMAINDER OF FTA GRANT $838 million REMAINING CONTRACT OBLIGATIONS $150 million EXISTING CONTRACTS TERMINATION EXPOSURE TO CLAIMS REMOVAL 8: DISPOSAL OF EXISTING $1,806 million STRUCTURES 5250 DEFAULT ON FULL FUNDING GRANT Negative Standing with Federal Government for Decades CITY EXPOSURE Exposure to Lawsuits from Developers and Investors with Developments Near the Raii Alignment HONOLULU RAIL TRANSIT PROJECT 24?Hour Project Hotline (808} 566-2299 Option B: Stop at Aloha Tower  $6.8B  Public-Private Partnerships (need enabling legislation) to assist with project costs continuing on to:  Civic Center  Kakaako  Ala Moana  FFGA funds will have to be paid back to FTA  City would need to figure out how to make up $1.55B funding gap Option C: Complete to Ala Moana  Option #1: Extend Oahu GET Surcharge only  Option #2: Increase Oahu GET Surcharge  Option #3: Extend Oahu GET Surcharge + Oahu TAT increase  Option #4: Extend Oahu GET Surcharge + Statewide TAT increase  Option #5: Statewide GET surcharge + Statewide TAT Increase  Remaining obligation of $743.7M under FFGA released  Condition surcharge funds Possible Conditions  Forensic Audit  A forensic audit could be conducted and forwarded to the City Council for its review and evaluation to include, but not limited to, project controls, management and cost containment; review and justification of change orders; amount of contingencies and its drawdowns; administrative cost to operate HART.  Provided that The Mayor of the City and County of Honolulu and HART submit to the City Council by the end of 2017 for its review and evaluation.  Public-Private Partnerships at stations to assist with project costs (need enabling legislation)  State Match County Funds  The State will provide (X) amount to be matched by the City.  If the City cannot provide the matching dollars upfront, the State is not obligated to fund the project. Methods of Disbursement  Drawdown method options:  Straight reimbursement of receipts; or  Grant-in-Aid; or  Special Loan Fund  By limiting the use of the funds for the rail project the Legislature will be free from the fiduciary obligations which belongs to the city because it is a city project. The option is to limit the use of the funds to the cost of new construction related to the erection and installation of the rail only excluding debt service, administrative costs, operating costs, engineering and or contracted A&E services costs. Drawdown Options  Currently the State transfers the amount generated from the surcharge to the City quarterly with no oversight on how HART spends the funds.  Under a drawdown process, the City would submit its invoices for payment to the state (i.e. BUF or AGS) for review and approval.  The excess of the funds generated (through which ever option is agreed upon) would remain in the State’s General Fund. Grant-In-Aid Special Loan Fund City would have to provide their plans, financial  Similar to Grant-in-Aid. Difference is if the information including a budget, responsibilities for conditions that are imposed by the State and State approval to be able to receive funding from not met the City will have to repay the State. the State. This including infrastructure relocation,  The loan program will be evaluated and funds cost of paying for real property and its location. by stages or milestones will be dispersed by  If the conditions that are spelled out in the grant the State. are not met the City will not receive funds.  Option #1: GET Surcharge only GET extension would be for an additional 7 years but ends up costing the project more because of the financing debt. Collections vs Cost of Construction vs Cost of Debt Service 2034 $1,000.0 $800.0 $200.0 GET Surcharge Collections Cost of Construction Cost of Debt Service 2 per. Mov. Avg. (Cost of Construction) 2035 2034 2033 2032 2031 2030 2029 2028 2027 2026 2025 2024 2023 $2022 398,377,047 $400.0 2021 $ $600.0 2020 $ (2,588,823,281) 2019 Excess $1,200.0 2018 Deficit $ 2,987,200,328 2017 GET extension (over 2027) (in $ millions) Option #2: Increase Oahu GET Surcharge 2033 99% GET Surcharge at 0.65% 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 $ 367,594 $ 402,428 $ 420,537 $ 439,461 $ 459,237 $ 479,903 $ 501,498 $ 524,066 $ 547,649 $ 572,293 $ 399,295,525 2029 $ 417,263,823 2030 $ 436,040,695 2031 $ 455,662,527 2032 $ 476,167,340 2033 $ 497,594,871 Current projections already include 0.5% surcharge until FY2027. An increase in the surcharge would bring in additional revenue equal to 0.15% until 2027. An extension of the surcharge, beyond 2027, would include the full 0.65% in revenue. Option #3: Oahu GET + Oahu TAT 99% Oahu GET Surcharge + 1% Oahu TAT Increase *Any amount in excess of the $2.59B deficit will remain in the general fund or designated elsewhere. Collections vs Cost of Construction 2032 (in $ millions) GET extension (over 2027) $ 2,048,498,010 1% TAT Statewide $ TOTAL: $ 2,777,759,730 Deficit $(2,588,823,281) Excess $ 729,261,720 188,936,449 $1,200 $1,000 $800 $600 $400 $200 $- GET Surcharge Collections Cost of Construction TAT Collections 2 per. Mov. Avg. (Cost of Construction) Descriptions (Including Assumptions) *Executive Summary of Potential Funding for Rail provided by Budget and Finance Worksheet 1 GET Oahu Only & TAT All Islands 4.5% Worksheet 2 GET & TAT All Islands 8% 8% Total Project Costs (Based on HART’s May 26, 2017 Financial Projection: Breakeven Analysis Schedule) $8.165 billion $8.165 billion Total Bond Financing Costs (Based on HART’s financing schedule) $1.399 billion $1.399 billion Adjustment for $21 million per year of revenues for Rail operations through financing period $(294 million) $(231 million) Total Project & Financing Costs & Adjustment $9.270 billion $9.333 billion Total GET Tax Collections 1/1/2007 – 6/30/2017 (June 2017 estimated based on average of previous 11 months) $1.981 billion $1.981 billion Total Projected GET Extension Revenues 7/1/2017 – 6/30/2027 $3.143 billion $4.440 billion Total Federal Grant $1.55 billion $1.55 billion $7 million $7million Total Tax Revenues, Federal Grant & Other Sources $ 6.68 billon $7.98 billion TARGETED FUNDING SHORTFALL $2.59 billion $1.35 billion GET Growth Rate (Per Department of Taxation) TAT Growth Rate (Variable rate for Worksheet 2 determined by Department of Taxation based on Council on Revenue projections) Total Other Sources (Based on HART’s May 26, 2017 Financial Projection: Breakeven Analysis Schedule) 4.5% Option #4: Oahu GET + Statewide TAT 99% Oahu GET Surcharge + 1% Statewide TAT Increase *Any amount in excess of the $2.59B deficit will remain in the general fund or designated elsewhere. Collections vs Cost of Construction 2031 (in $ millions) 99% GET Extension (over 2027) $ 1,705,704,013 1% TAT Statewide $ 1,407,578,097 TOTAL: $ 3,113,282,111 Deficit $(2,588,823,281) Excess $1,200 $1,000 $800 $ 524,458,830 $600 $400 $200 $- GET Surcharge Collections Cost of Construction TAT Collections 2 per. Mov. Avg. (Cost of Construction) Option #5: Statewide GET Surcharge + Statewide TAT 99% Statewide GET Surcharge + 1% Statewide TAT Increase *Any amount in excess of the $2.59B deficit will remain in the general fund or designated elsewhere. Collections vs Cost of Construction (in $ millions) 2028 $1,200 99% All Islands GET Extension (2028) $ 569,567,826 1% TAT Statewide (2018-2028) $ 958,301,113 TOTAL: $ 1,527,868,939 Deficit $(1,354,232,749) Excess $ 173,636,190 $1,000 $800 $600 $400 $200 $- GET Surcharge Collections Cost of Construction TAT Collections 2 per. Mov. Avg. (Cost of Construction) 0.5% Surcharge forMaui, Hawaii and Kauai Maui Hawaii Kauai State Debt vs General Fund Tax Revenues     Pension Unfunded Liability - $8.8B in 2015 (State’s portion $7B)  $5.1B in 2006  72% growth in 10 years Health Benefits Unfunded Liability - $11.8B in 2015 (State’s portion $9B)  $6.3B in 2006  87% growth in 10 years Tax-Exempt General Obligation Bonds Outstanding - $6.6B  $4.3B in 2006  53% growth in 10 years General Fund Tax Revenues - $5.7B in 2015  $4.4B in 2006  30% growth in 10 years *Data provided by Budget & Finance “State General Fund Financial Plan and Impacts to the State Budget”. State Debt vs General Fund Tax Revenues  The State has identified more than $3B in deferred maintenance that is needed to maintain and repair State facilities/buildings.  Summary: Increase in general fund tax revenue growth has not kept up with the increase in State debt *Data provided by Budget & Finance “State General Fund Financial Plan and Impacts to the State Budget”. References  Alternatives Analysis Report (2006)  Final Financial Plan for Entry into Final Design (2011)  Full Funding Grant Agreement (2012)  HART Recovery Plan (2017)  Update Financial Capacity Assessment by Porter & Associates, Inc.  Project Management Oversight Contractor (PMOC) Report (2016)  How Hawaii’s State Government Shares Transient Accommodation Tax Revenues with Its Local Governments,” UHERO; James Mak (2016)  Budget & Finance “State General Fund Financial Plan and Impacts to the State Budget”