Budget faces
Council scrutiny

The mayor's plan puts the squeeze
on 11 agencies to meet a
$75 million shortfall

By Gordon Y.K. Pang
Star-Bulletin

Optimism but a lot of questions await Mayor Jeremy Harris on his $1 billion operating budget for next year and his proposal to overhaul city government.

Harris is seeking to consolidate the 26 agencies he now controls into 15 as part of his plan to meet a $75 million shortfall.

The operating budget for the 1998-99 fiscal year, which begins July 1, is for $1.052 billion -- $15.6 million, or 1.5 percent, higher than the current year.

"I'll keep an open mind," Councilman Mufi Hannemann said. "But there's a lot of discussion left to go."

Harris is blaming the increase on recurring, noncontrollable costs such as higher wages for union employees as a result of last year's collective-bargaining contracts.

Factoring for inflation, he said, the coming budget is smaller than this year's and the smallest since 1990.

Some property owners would pay more taxes while others would pay less under what the administration calls a "revenue-neutral property tax rate adjustment."

While assessments continue to drop, the rate side of the equation is going up to adjust for it.

The owner of an average single-family home paid $978 in property taxes, according to budget staff, and would pay $14 less next year.

Budget Director Malcolm Tom said the city had expected to lose $18 million in property taxes but won't under the proposed rate adjustments.

Tom said he expects the rest of the shortfall to be made up primarily by a reduction in operational costs across the departments. Tom said the consolidation would contribute to that savings although he had no immediate numbers.

Harris' budget calls for laying off 151 civil service employees and 34 contract hires. An additional 150 jobs are anticipated to be eliminated through attrition.

He also announced that under the consolidation, 22 appointees would lose their positions although at least five jobs are proposed to be added back.

The layoffs are expected to reduce the shortfall by between $9 million and $10 million.

Harris insisted that Oahu residents will not see a reduction in service.

No new fees or fee hikes are proposed for the coming year. Harris warned, however, that he would consider hikes if this year's state Legislature approves an economic task force package that would take away a projected $16 million in hotel room tax revenues from the city.

The administration also submitted a construction package worth $344.3 million, down 19.7 percent from this year's plan.

Major projects include installing a property appraisal system, constructing a road through the city's Manana project, and building the first phase of the Waiola Sports Complex.

Harris' proposed changes need City Council approval, and some would require voters' OK to change the City Charter.

Council members generally reacted favorably to Harris' overhaul plan yesterday.

Council Finance Chairman John Henry Felix said many of the changes -- such as the abolition of the Housing Department and the merging of the Planning and Land Utilization departments -- have already been proposed by the Council.

Felix also previously spearheaded efforts to strip the Board of Water Supply of its powers and merge water supply functions with wastewater disposal.

Former Budget Chairman Duke Bainum, a frequent critic of the administration's budget policies, said he is generally "very impressed" by the consolidation plan.

He added, however, that he wants more proof that the administration can meet its promise not to cut city services.

Other concerns:

Bainum said he doesn't like consolidating the Budget and Finance departments.

Hannemann said he doesn't think the Fire Department and Civil Defense Agency should be part of a Public Safety Department as proposed.

Zoning Chairwoman Donna Mercado Kim said she hopes accountability in land use policies will improve under a unified land utilization-planning department.