Flood bills could dry up tax cuts

Property tax breaks could be going down the drain as the City Council decides how much to budget for flood and sewer disasters caused by heavy rains that hit Oahu over the past several weeks.

"We had hoped to offer more relief, but with all the sewer and flood control and the drainage problems, we may not be able to do as much relief as we had hoped," Budget Chairwoman Ann Kobayashi said.

The Council's Budget Committee is scheduled to vote today on Kobayashi's recommended amendments to Mayor Mufi Hannemann's proposed $1.49 billion operating and $629 million capital improvement budgets for the fiscal year beginning July 1.

Kobayashi's recommendations -- based on her and other members' suggestions -- call for more than $6.5 million in cuts and more than $2.5 million in add-ons to the operating budget.

"We're trying to cut as much of the budget as we can because the less of a budget, the more tax relief," Kobayashi said.

About half of the proposed cuts are coming from administration projections of rising electricity costs.

During several weeks of budget hearings last month, councilmembers questioned how the administration arrived at the electricity figures. "It went all over the place," said Kobayashi, who also said the suggested cuts are aimed to keep salary increases at no more than 5 percent above last year's budget.

Some of the larger budget additions include adding a bus route from Kunia Village to Waikiki, adding police officer positions for agricultural theft cases and reinstating the now-defunct but popular E-route between downtown Honolulu and Waikiki.

Kobayashi's recommended cuts to the capital improvement budget include the entire $5 million slated for expanding the Waimanalo Gulch landfill. "Let's look at new (solid waste) technology," she said in response.

And she said if the administration is serious about pursuing alternatives to landfills, "then maybe we can insert the money again. We have to be practical."

Her recommendations also call for $1.8 million in cuts in construction funds for beach restoration at the Waikiki War Memorial Natatorium site.

Now, Kobayashi said that she does not know how much of a break taxpayers will receive.

"The taxes will be based on what will it cost to run the city, and that's how much we're going to collect. That's why we hope to keep the city's cost down," she said.

At the same time, the city still does not have a firm figure on the costs of flood-related problems.

During yesterday's budget briefing, Councilman Todd Apo asked acting Managing Director Wayne Hashiro if the administration planned to make any adjustments to the next year's proposed budgets since most of the flooding occurred after the budget was submitted.

Hashiro said that the city is working with Civil Defense to determine those costs, and it is also trying to see if the city might qualify for federal or state disaster funding.

"If both FEMA and state funds are not available, we may be asking for a supplemental budget," Hashiro told the committee.

Kobayashi believes the final figures will be submitted before the budget receives a final vote in June. By then the Council might know if the city will be fined by the federal government over any of the sewer spills.

For example, she said, if the city is penalized, the money will likely come out of the general treasury fund and not borrowed money.

"Once we know what the hit is to the city as far as the added sewer costs and drainage ... we should know then what the rate will be for property taxes," she said.