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Mayor Submits Lean 2003 Operating Budget and Reduced Capital Budget to the City Council 

For the eighth consecutive year, Mayor Jeremy Harris today delivered a lean Operating Budget to the City Council along with a reduced Capital Budget that focuses on core City services. The proposed Operating Budget allows the City to meet its fiscal obligations without increasing real property tax rates or sewer and user fees. It also incorporates full funding for mandatory collective bargaining pay increases and increases in employees’ benefits, including health fund contributions. 

“In spite of a flat economy, we have been able to balance the budget primarily by tight control of our operating expenses and also by restructuring our debt to take advantage of much lower interest rates,” the Mayor said. “As a result of the many initiatives undertaken since 1994, the City has reduced the number of employees by seven percent through attrition, retirement and consolidation. We’ve also been more aggressive about using technology and other innovations, and this has allowed the City to keep costs down while increasing the quality and variety of services to the public.” 

In his message to the Council, the Mayor also recommended that his three-year plan to adjust the real property tax rate for apartment and condominium owners be continued. Apartment/condo tax rates were reduced from $4.49 to $4.21 per thousand of assessed valuation in fiscal 2002 and Mayor Harris is proposing that the Council reduce the rate to $3.93 in fiscal 2003. If the Council further reduces rates in fiscal 2004, apartment/condo and single-family residential rates will be comparable at $3.65 per thousand of assessed valuation. 

The Operating Budget for the coming fiscal year is $1.1 billion, an increase of $37 million or 3.4 percent over the previous year. The increase is largely due to the $24 million in collective bargaining pay raises owed to employees and increased Health Fund contributions of $5 million, and this increase is being offset by savings elsewhere in the budget. 

Public safety again accounts for the greatest share of the Operating Budget

at 22.4 percent. The budget calls for the funding of a total of 22 new police and firepositions. Proposed funding for the City’s Parks and Recreation Department has been increased by more than 10 percent to $4.5 million. 

The Mayor’s Capital Budget totals $475.5 million which is $103 million less than the fiscal year 2002 Capital Budget of $579 million. Projects in the proposed budget fund projects that improve the quality of life for Oahu’s residents. The Capital Budget also reflects recommendations by Neighborhood Boards and those who are part of the Community Vision Process. 

Highlights include $155.1 million for wastewater system improvements that will allow the City to meet federal standards and improve its sewer systems. Improvements are designed to keep the City’s sewer system in compliance with federal clean water standards. The most significant project is a series of improvements to the Sand Island Treatment Plant, budgeted at approximately $94.9 million. 

Also included in the Capital Budget are $6 million for the expansion of H-Power, the City’s waste-to-energy plant, and $8 million to acquire land adjacent to H-Power for the development of a recycling technology park. H-Power’s expansion will increase capacity by 50 percent and reduce the amount of waste sent to the landfill by 80 percent.

The recycling technology park will reduce future landfill needs by allowing the separation of recyclable and incombustible materials. Portions of this land will also be used to develop public-private partnerships to implement cutting-edge alternatives for waste disposal. 

About $65 million has been proposed for transportation improvements, to include construction of the first phase of the Bus Rapid Transit System. The goal is to have the first section--from Iwilei to Waikiki--operational in less than three years. 

   The Mayor said, “Continued investment in the infrastructure of the City is critical to spurring economic growth and improving the quality of life for everyone. To accomplish this, we have crafted a budget that funds our critical programs, insures public safety, preserves the environment but does not increase taxes or user fees.”



Tuesday, July 09, 2002

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