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FOR IMMEDIATE RELEASE                       March 1, 2005              

Release M-22

          

 

 

MAYOR TRANSMITS FY2005-06 BUDGET BILLS

           

            Mayor Mufi Hannemann today (March 1, 2005) sent to the Honolulu City Council his proposed City budget for Fiscal Year 2006, which runs from July 1, 2005 to June 30, 2006.

 

             This proposed budget is characterized by the mayor’s maxims:  We can only afford “need to have,” not “nice to have.” And “Do we need it? Can we afford it? Can we maintain it?” As he indicated in his state of the City speech, the City must pay attention to matters that were ignored in the past, particularly in sewers and road maintenance.

 

             In addition to the operating budget and capital improvements budget, the administration has sent to the Council several other measures concerning real property tax rates and increases in sewer fees, motor vehicle weight taxes and rental fees for City facilities.

 

             The City Council has until June 15 to adopt the budget. Here are some highlights:

 

 

            OPERATING BUDGET:

   

            The Hannemann administration is proposing an executive operating budget of $1.356 billion, an increase of $127 million, or about 10 percent, over the current fiscal year. Most of the increase is due to higher fixed costs, primarily debt service, employee retirement fund contributions and bus subsidies. Operating budget highlights include:

     

·       $4 million to expand curbside recycling islandwide. Curbside recycling is scheduled to resume this summer in Mililani and expand to the rest of the island over the next year.

 

·       $2 million to expand regularly scheduled, “no call” bulky item pickup islandwide. Service in the Waianae Coast began today. An additional $1 million will be needed to buy trucks.

 

·       $88 million in operating subsidies for TheBus, an $11 million increase over this year, largely to cover increased fuel costs.

 

·       $1 million for asphalt for pothole repairs.

 

·       $473,000 for temporarily facilities for new ambulance units at Makiki, Kaaawa and Nanakuli.

 

·       $101,000 for four new building permit clerk positions in the Department of Planning and Permitting. That’s in addition to eight new employees the department hired recently.

 

·       $82,000 for a pilot program to provide extended hours of operation at satellite city halls in shopping centers.

 

·       $72,000 for six part-time driver license examiners to be hired during the peak summer and Christmas seasons.

 

 

            CAPITAL BUDGET

 

            The administration is proposing a capital budget of $451 million, an increase of 50 percent over the current year. More than half of that total -- $241 million – would go to sewer system repairs. The proposed capital improvement projects include:

 

·       $30 million plus $40 million from the current fiscal year for road rehabilitation projects.

 

·       $10 million to replace 3,200 feet of sewer pipe in Niu. This is the force main that broke three times last month.

 

·       $30 million to replace 6,600 feet of sewer pipe on Beachwalk Avenue and Ala Wai Boulevard.

 

·       $20 million to line or replace 22,000 feet of sewer pipe in St. Louis Heights.

 

·       Continued work on the $50 million Kalaheo Avenue sewer reconstruction on Kalaheo Avenue in Kailua and $15 million to rehabilitate 3,400 feet of sewer pipes on Kalaheo Avenue and Mokapu Bouelvard.

 

·       $12 million for a Kapolei Consolidated Corporation Yard and other Leeward Oahu projects that are part of the community benefits package the mayor promised in exchange for the presence of the Waimanalo Gulch landfill.

 

·       $4.4 million to replace the Blaisdell Center Arena’s antiquated air-conditioning system. It was originally installed when the arena was built in the early 1960s.

 

 

REVENUE SOURCES

 

     The administration is proposing to continue current property tax rates, except for a modest reduction in the rate for agricultural land. Because of increases in the value of Oahu real estate, many homeowners will end up paying more in property taxes.

 

      The dire need for stepped up maintenance of sewers and roads precludes asking for widespread reductions in property tax rates this year. However, to help homeowners who need relief the most, the administration is proposing changes to the City’s existing “circuit breaker” property tax relief ordinance. Those changes should make more low-income homeowners eligible for relief totaling $3.6 million.

 

Other revenue proposals include:

·       Raise sewer fees 25 percent, with 10 percent increases in each of the following five years.  The 25 percent increase would generate roughly $28 million in additional revenue to help rebuild the City’s sewer fund.

 

·       Raise the City’s vehicle weight tax from two cents a pound to three cents a pound for non-commercial vehicles. For example, the owner of a Toyota Camry would pay about $30 more in weight taxes each year. The weight tax would go from 2.5 cents a pound to 3.5 cents a pound for commercial vehicles. The additional revenue -- $22 million annually -- would go toward the war on potholes. The higher tax would not take effect until January 1, 2006. (On March 14, a consultant will begin a three-month study of City motor vehicle licensing operations with a goal of identifying ways to streamline transactions. The comprehensive $175,000 study is something automobile dealers and consumers have wanted the City to do for a long time. In addition, the City plans to begin offering on-line reservations for driver license road tests in the near future.)

 

·       Increase rental rates for facilities at the Neal Blaisdell Center and the Waikiki Shell. The proposed rates are included in a separate bill submitted to the City Council.

 

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Contact:

Mark Matsunaga 527-5767

Bill Brennan 527-6928

 

 

 

 

 

 

 

 

 

 

 

 

 

Wednesday, March 02, 2005

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