Council OKs
2 huge budgets;
critics point to
2002 elections

Capital improvements
alone started out at a
record $581 million

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By Gordon Y.K. Pang
Star-Bulletin

Honolulu City Council members yesterday avoided approving the largest capital improvements budget in the city's history.

But they still found it in themselves to skirmish over the merits of approving a $579 million CIP budget for the 2002 fiscal year that begins July 1. That is only $1 million shy of the $580 million approved in 1992.

Also yesterday, the Council approved a $1.1 billion operating budget, which is a record high.

The CIP budget was $498 million when submitted to the Council by Mayor Jeremy Harris on March 2. Additions by both the mayor and Council members, however, inflated the budget to $581 million when yesterday's meeting began.

But Council members voted 7-2 to trim $2 million from the $8.1 million that had originally been set aside for purchase of the Luana Hills Golf Course. Members said because they no longer want to condemn the parcel but negotiate a "conservation easement" with landowner HRT Ltd., a lesser amount needed to be appropriated.

Recent critics of this year's CIP budget, including Councilman Andy Mirikitani, have said it is driven politically. Mirikitani was the only Council member to vote against the CIP budget.

Mirikitani noted that Harris is running for governor next year, while seven of the nine Council members are barred from seeking re-election in 2002, meaning they will be looking for employment elsewhere. Councilman Duke Bainum is an announced candidate for mayor, while Council Chairman Jon Yoshimura and Councilman John DeSoto have indicated interest in running for lieutenant governor.

Defenders of the CIP budget pointed out that about $200 million is targeted for federally mandated waste-water improvements. An additional $15 million is tied to the city's long-stalled and forced relocation of its Kewalo Corporation Yard operations in Kakaako.

Bainum also noted that a good number of CIP projects do not pan out for various reasons. Most of the other projects, he said, "are not pork; they are projects our communities want."

Some, he said, have been in planning for years but went on the back burner because of lean economic years.

"I think the community realizes many of us are leaving the Council, and they think it's essential that they pursue the funding for their projects while the Council members who know their projects the best are still in office, rather than having to start from scratch with new Council members," he said.

Mirikitani, however, said he saw no justification for increasing the burden on taxpayers by 90 percent over last year. "We are mortgaging our city's future."

Councilman John Henry Felix, who lobbied unsuccessfully to kill all funding for Luana Hills, said $107 million of next year's operating budget will go toward repaying bonds. City analysts show that amount will climb to $207 million in four years, Felix said.

"These payments will continue to rise," he said. "In order to pay for these debts, the city will have to increase its revenues."

Lost in the shuffle of the CIP budget debate was final passage of a relatively controversy-free operating budget.

It includes an actual cut in the property tax rate for apartment and condominium owners -- to $4.21 per $1,000 of valuation from $4.49. Single-family rates will remain $3.65 per $1,000 of valuation. The eventual goal of Harris and the Council is for single-family and multifamily homeowners to be assessed the same rate in three years. This year's cut is estimated to cost the city about $3.8 million in revenues.

The operating budget included no other major changes in taxes or fees, although separate actions made earlier this year will mean an increase for TheBus riders to $1.50 per ride from the current $1 fare. The change will be effective July 1.

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City & County of Honolulu