Kobayashi slams City Council Budget Chairwoman Ann Kobayashi and her colleagues are making it clear to Mayor Jeremy Harris that his last go-around with the budget will not be his easiest.
Harris budget
She questions using the sewer
fund and restructuring debt
to balance the budgetBy Gordon Y.K. Pang
gpang@starbulletin.comOn the first day of the budget season yesterday, Kobayashi and her committee ripped the administration for attempting to balance the city's $1.2 billion budget by "raiding" $60 million from the sewer fund and refinancing bonds that will extend existing debt into later years.
"I worry about raiding the sewer fund," Kobayashi told reporters after yesterday's morning session. "Already they took out $41 million (in the current budget), and they're looking to take out $60 million as reimbursement for past projects, and I don't know whether that should be done."
City Budget Director Caroll Takahashi said $148 million from the general fund was used to cover the construction of waste-water facilities before a separate sewer account was set up in 1993. She said the proposed $60 million transfer as well as the $41 million constitute repayments.
Councilman Gary Okino said that with an estimated $1 billion needed for sewer repairs and upgrades in the next several years, it makes sense to keep money in the dedicated sewer fund.
Takahashi said bonds can be issued to raise proceeds to bolster the cash outlay for such projects.
Councilman Romy Cachola said he worries that future Councils will be forced to raise sewer rates to pay for the improvements when cash now in the fund is going into the general fund, noting that he, Okino and Kobayashi are the only Council members eligible for re-election in the fall.
Kobayashi said: "It would not be responsible for us to float more bonds at this time because we're going to be faced with a huge debt.
"I think we have to be responsible. It's like having a credit card. In order to solve the problem, we have to stop using the card."
Kobayashi also questioned why some of the sewer fund money would be used for employee salaries, including 18 in the Planning & Permitting Department and six in Budget & Fiscal Services. "That's kind of frightening," she said.
Kobayashi said she wants to find as much in savings elsewhere so at least some of the $60 million can stay in the sewer fund. She is thinking about convening a citizen task force to provide possible solutions.
Kobayashi and other Council members also ripped the administration for proposing to restructure the city's debt by extending the payment schedule -- and interest payments -- without presenting a schedule of the actual additional costs.
Takahashi estimated debt service would increase two-tenths of 1 percent over five years, three-tenths of 1 percent over the remaining 20 years as a result of the restructuring.
"You will find authorities who will disagree with this principle," said Councilman John Henry Felix. "We don't want to leave our colleagues with a disastrous financial situation."
Larry Rolapp, a financial consultant for the city, said to deal with debt issues, the city can raise taxes, increase fees, propose fewer construction projects or reduce services.
City & County of Honolulu
