Mayor’s office plots $1.8B spending plan

The operating budget slots $265.1 million for construction of a mass-transit system

STORY SUMMARY »

Mayor Mufi Hannemann's administration is proposing what city Budget Director Mary Patricia Waterhouse calls a "bare-bones" $1.8 billion operating budget for next year that will not raise property taxes.

The budget also calls for $831.5 million in construction and other capital costs. About $265.1 million would be spent to plan, design and break ground on construction of a new mass-transit system.

2009 City Budget

Operating budget: $1.8 billion

Capital improvement budget: $831.5 million

Revenues

From property taxes: $788 million, an increase of $27.6 million from 2008. The mayor is proposing to keep property tax rates the same and offer a $100 tax credit for qualified homeowners.

Spending

Retirement and health benefits: $51.9 million toward paying down an estimated $1.2 billion shortfall during the next 30 years in health and other benefits for city workers

Transit: $265.1 million for planning, design and construction of a mass-transit system; $4 million to continue operation of TheBoat; $31.1 million to buy 50 hybrid buses; and $1 million for bikeway improvements

Sewers and garbage: $245.3 million for sewer projects; $5 million to ship garbage off island; $8 million to expand curbside recycling

Roads: $77 million for repair and maintenance of city streets

Police and fire: $63,000 to start up a Honolulu Police Department parks patrol; $5.5 million for 58 patrol cars, 10 motorcycles, a helicopter and other police equipment; $4.3 million for three fire engines, two ladder trucks and other fire equipment.; $1.9 million to plan and design a new East Kapolei Fire Station

Housing: $7.3 million to renovate the Kulana Nani affordable rental housing project in Kaneohe and acquire the fee interest in the land; $2 million to develop the River Street Residences in Chinatown

Parks: $15.6 million for parks improvements; $6.9 million for a new Asian tropical forest elephant facility at the Honolulu Zoo.

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Property taxes for Oahu homeowners would not go up under a budget submitted to the City Council yesterday by Mayor Mufi Hannemann.

The $1.839 billion operating budget increases spending by 12 percent, while the $831.5 million construction budget is about 5 percent more than this year's budget.

Budget Director Mary Patricia Waterhouse said the administration is trying to hold the line on costs, despite pay raises for public employees, rising retirement and health benefit payments and higher electricity and fuel costs.

"We really tried to keep the bottom line as close to the bottom as possible," Waterhouse said.

Despite falling property values, the city will actually see more money from property taxes because of new condominium and housing projects that are being finished this year and new commercial developments, Waterhouse said.

Property tax revenue is expected to increase by $27.6 million next year to $788 million.

The administration is also proposing a $100 tax credit for qualified homeowners.

This year the tax credit was $200, said Council Budget Chairman Todd Apo.

Apo said the Council will look to see if it can lower property taxes while still preserving city services.

Planning, design and construction of a mass-transit system is one of the largest items in the budget at an estimated $265.1 million, up from about $85 million this year. The city hopes to break ground on construction of the system in 2009.

The mayor is also proposing to spend $245.3 million on sewer upgrades and sanitation projects. The budget also includes the first money -- $5 million -- to start shipping Oahu's garbage to another state and $8 million to expand curbside recycling.

As proposed in his State of the City speech, Hannemann is also including $63,000 to start a new unit of police officers to patrol city parks.

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"This budget offers a combination of new proposals, such as beefing up security in our parks and beginning planning for the fixed guideway, with the tried-and-true priorities of catching up on our backlog of sewer and road work and the maintenance of public facilities," Hannemann said in a news release.

Police will also get $5.5 million for a new helicopter, patrol cars, motorcycles and other equipment, plus $2 million for police station improvements.

The Fire Department will get $4.3 million for new engines and ladder trucks, plus $2 million for fire station improvements and $1.9 million to plan and design a new East Kapolei fire station.

The mayor also wants to spend $15.6 million for parks improvements and $6.9 million for the construction of a new Asian tropical elephant facility at the Honolulu Zoo.

Hannemann said he also wants to start addressing an estimated $1.2 billion shortfall during the next 30 years for health costs for retirees and city workers with a $51.9 million payment next year.

East Oahu Councilman Charles Djou, who has not voted for a budget during his time on the Council, praised Hannemann for not raising property tax rates but criticized the spending increases.

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"I do not believe we can sustain this level of spending increase," Djou said. "It's a lot of spending that in my opinion the people in the city and county of Honolulu cannot afford."

Djou noted that Hannemann was a critic of then-Mayor Jeremy Harris' capital spending when Hannemann was on the City Council.

Hannemann shot back at Djou with a written statement, noting that the mayor's budget proposes spending more than $45 million in Djou's district, including sewer upgrades, flood control projects and curbside recycling.

"Is this the kind of spending that Councilman Djou finds wasteful?" the statement reads.

Hannemann said he would be "pleasantly surprised if Councilman Djou were to provide his constituents with more effective representation by finally voting in favor of a budget instead of always relying on the administration and other Council members to carry his water."