Despite the sorry state of many of Hawaii Island’s highways, and Mayor Billy Kenoi’s promise to use capital projects to stimulate the economy by putting people to work, some $2.3 million of gas taxes collected during the bottom of the recession is sitting in a bank instead of being used to build roads.
The Hawaii County Council is scheduled Friday to appropriate the leftover money to a list of road projects for the budget year that ends June 30. The money comes from the fuel taxes collected between 2010 and 2012, funding for which appropriations lapsed because it wasn’t spent within the two years allotted.
The county’s share of the total fuel tax collected for the fiscal year that ended June 30 was $6.1 million, according to statistics provided by the state Department of Taxation.The current year’s budget has $7.25 million allocated for gas tax revenues.
Hawaii County motorists pay 8.8 cents a gallon for the county’s share of the tax.
Public Works Director Warren Lee said the bulk of the money, $1.7 million, was allocated for big public works projects that take time to get permitted and have environmental assessments done. In addition, he said, 5 percent of the fund is always held back in case asphalt and other materials costs come in over budget.
That practice, coupled with higher than expected gas tax revenues, and tight budgeting because of the poor economy, combined to create a larger than anticipated surplus, he said.
“The money wasn’t spent, technically, but it was earmarked,” Lee said. “We don’t want to over-budget and then not get the money.”
Kenoi defended the department, saying his administration pushed out more than $275 million in projects over the past five years, thus keeping his vow to put people to work and improve the economy. He said about $100 million was spent on West Hawaii road projects alone.
“We have our challenges,” he said, of getting projects moving past design, permitting and engineering phases. “I know our guys are working hard and doing the best we can.”
The county’s share of the fuel tax is collected by the state and sent to the county monthly. There are specific rules about how the money is spent, and it must be spent in the district or region it is collected.
The money is in an interest-bearing account until it is used, said Finance Director Nancy Crawford.
Bill 196, which appropriates the money, goes to first reading of the council at 9 a.m. Friday in Hilo. The public can participate in the meeting at Hilo council chambers or by videoconference from the West Hawaii Civic Center, the Waimea council office, the Kohala county facility, the Hawaiian Ocean View Estates Community Center and the Pahoa Neighborhood Facility.
South Kona/Ka‘u Councilwoman Brenda Ford said the good news is that the money doesn’t disappear if not used. Still, she wonders why it wasn’t spent.
“When we have such a dire need to get our roads fixed, why haven’t we been doing that with this money, especially in the depths of the financial recession,” Ford said. “I’m going to be very happy to see it reappropriated.”
A legislative audit of the highway fund conducted for the two years prior to Kenoi taking office in 2008 was highly critical of the Department of Public Works’ handling of the gas tax money.
“DPW Administration and its Highway Maintenance and Traffic Divisions lack basic internal control systems to gather, analyze and communicate information required to promote the effective and efficient utilization of Highway Fund revenues,” former Auditor Colleen Schrandt said in the audit summary. “They have collectively failed to establish, document and communicate policies and procedures to clarify roles, responsibilities, and expectations within each division and the department; delineate the information and data needed to be collected and maintained; and establish formal processes for planning, scheduling, communicating, and coordinating infrastructure maintenance and safety improvement duties.”
The audit went on to recommend the department institute and regulate written policies and procedures, the County Council require periodic updates and the mayor and county administration help DPW plan and prioritize its operations to meet the responsibilities of the highway fund.
In a response to the audit, DPW officials stated that its new administration is committed to continue improving coordination, planning and monitoring of its Highway Fund operations; and as part of this ongoing process, DPW will review findings and incorporate recommendations of the auditor as appropriate, according to the audit summary.
A follow-up audit has not been completed.
But Lee said the department took the audit to heart. One of the first things he did coming in as director was to get Roadsoft inventory software that helps track the condition of roads to help prioritize repairs.