Thursday, January 14, 1999

Council members oppose
using bonds for salaries

By Gordon Y.K. Pang


Mayor Jeremy Harris and his administration are under fire from City Council members for planning to use $2.5 million in borrowed money to pay part of the salaries of city employees.

The Council Budget Committee yesterday voted 3-2 to move the bill allocating bond money to pay for the services of 146 employees of the Design and Construction Department.

The measure is expected to meet stiff opposition at the Council level, however, as five of the nine members objected to the idea of borrowing notes, paid back with interest over five to 30 years, to pay for salaries.

"We're going to be paying for people's salaries when they're long gone," Councilwoman Donna Mercado Kim said.

Budget Director Malcolm Tom told Council members they had authorized the administration to use bonds for salaries when it approved this year's annual construction budget last July.

Under the projects adjustment account, "salary costs may be provided for staff time spent on projects budgeted ... for planning design and inspection."

Tom said private firms typically divvy up their pay to employees based on work done in specified areas. In this case, department architects, engineers, inspectors and others handled specific city projects, he said.

But Council members said they aren't convinced of the justification for using bond money to pay for up to 70 percent of the salaries of employees in the Design and Construction Department.

The list provided by Tom included using bond money to pay for 20 percent of the salary of Design and Construction Director Randy Fujiki and his deputy, Roland Libby.

Council members demanded to see precise time sheets to see how much time each employee spent on each project.

Councilman John DeSoto said he's worried that the move will jeopardize the city's credit standing with bond raters who've previously warned against the use of bond money to pay for salaries and equipment purchases.

Councilman Jon Yoshimura said the city already is paying too much for money it's borrowed in the past to be paying for salaries through bonds.

"Out of a $1 billion budget, we have $200 million going to the banks (in debt service)," Yoshimura said. "If we do this over the next 20 years, we're going to allocate our CIP budget into infinity," Kim said.

Councilman Steve Holmes said the city also is "running a horrible risk" of losing federal funding which may have strict requirements on how money is spent.

Budget Chairman John Henry Felix was joined by Rene Mansho and Andy Mirikitani in voting to move the matter out of committee. Committee members Yoshimura and Kim were opposed.

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