City funds transfer Mayor Jeremy Harris may be improperly raiding the city sewer fund to help balance the $1 billion general operating budget, according to an attorney for the City Council.
may be illegal
Mayor Harris wants to move
sewer funds to the general fund
to balance the budgetBy Gordon Y.K. Pang
gpang@starbulletin.comThe Harris administration has proposed transferring $60 million from the sewer fund into the general fund for the 2003 fiscal year that begins July 1.
When Council members last month suggested that the transfer be stopped, Budget Director Caroll Takahashi said property taxes would have to be raised roughly 15.6 percent across the board to make up for the lost revenue.
The Council's attorney also questions the use of $41 million in sewer funds to balance the current year's general operating budget.
Harris officials say the transfers constitute repayment for sewage projects done before a separate sewer fund was set up in 2000.
City officials say an additional $47.6 million is still owed.
Council members have been questioning the propriety and legality of taking money from the sewer fund.
They noted that city waste-water officials are forecasting the need for billions of dollars of sewage projects in the coming decades that will require increases in sewer fees beginning next year.
Lloyd Yoshioka, a staff attorney with the Council's Office of Council Services, wrote: "We could find no provision in federal or state law or ordinance which authorizes user charge revenues to be used to either pay for or reimburse the general fund to pay for past waste-water system expenses."
Yoshioka said sewer fund money should only be used for operation, maintenance, and replacement costs incurred in the year immediately prior to a proposed transfer.
The Council, he said, should seek an opinion from the Office of Corporation Counsel about the legality of the transfer before approving it.
Takahashi said last night that Yoshioka's premises are incorrect because they assume that federal dollars were used for the projects and reimbursements.
In actuality, she said, federal funds accounted for less than half of the money used for sewer projects and were factored out before determining the amount the general fund was to be reimbursed.
Budget Chairwoman Ann Kobayashi, among the Council members questioning the two years of transfers, said Yoshioka's findings are "very troubling."
Kobayashi said she wants to see opinions from the Corporation Counsel David Arakawa and the city's bond counsel before commenting further.
Managing Director Ben Lee said the issue of sewer fund reimbursements was raised last year and both the Office of Corporation Counsel and the city's bond counsel cleared the transfer.
Council Chairman John DeSoto, who sought the opinion from Yoshioka, said the city should have returned the excess sewer funds to ratepayers or used it right away to pay for needed repair projects, not balance the budget.
City & County of Honolulu
