Ewa costs boosted
by moving expenses

Relocating businesses pumped
the price tag up by $5.1 million

By Gordon Y.K. Pang
Star-Bulletin

The relocation fund for the city's Ewa Villages Revitalization project increased to $6.3 million from $1.2 million in less than six years because of unanticipated relocation expenses.

The additional $5.1 million was needed because the relocations of Oahu Sugar Co. and other commercial entities "were unanticipated in the original budget," according to documents recently given to the City Council by the city Department of Housing and Community Development.

"Why weren't checks in place? How did the Housing Department allow such a thing?" Councilman Duke Bainum asked.

"How do we know the same type of oversight isn't lacking in other parts of the city."

Twelve people, including two city officials, have been arrested in a police investigation into theft, bribery, money laundering and forgery involving Ewa Villages.

Among them were Michael Kahapea, Property Management Division chief for the Department of Housing and Community Development, and Norman Tam, the city's fair housing officer. Both were suspended from their jobs. The city has until the end of the month to find grounds to fire them.

City Managing Director Bob Fishman and city Budget Director Malcolm Tom said they will look into the $5.1 million increase in the relocation fund.

Bainum, who was budget chairman from 1994 until last month, said he and his colleagues were shown lump-sum relocation budgets that did not break down the costs. He said he asked for more exact figures earlier this year but didn't receive them until recently.

"The Council cannot go and check on every project to see if we're legal," he said. Bainum added, however, that it's up to the administration to inspect vouchers randomly for propriety.

Bainum's staff came up with its own breakdown, albeit $300,000 more than what the Housing Department gave them: $1.2 million allocated for Ewa relocations in fiscal year 1991; $1.2 million more in 1992; $1.2 million in 1994; $1 million in 1996, and $2 million in 1997. There were no allocations for 1993 and 1995.

The relocation controversy was mentioned briefly during a five-

hour informational hearing yesterday in which auditors of the accounting firm KPMG Peat Marwick explained to Council members their recent study on the city's Housing Assistance Fund.

Peat Marwick said the housing fund stands to lose $26.6 million, $9.6 million of that because of Ewa Villages. Auditors said the city administration understated costs and overestimated revenues in five housing projects.

The administration said the audit does not take into account a revised plan which has upped Ewa Village sales.