FOR IMMEDIATE RELEASE                                    July 13, 2006

Release M-80-06

CITY FREES UP MORE THAN $5 MILLION

            Mayor Mufi Hannemann today announced a review of long-outstanding financial obligations has enabled the City to cancel purchase orders totaling $3.1 million.  Meanwhile, dramatic decreases in workers compensation costs saved the City an additional $2 million this past fiscal year.

            The funds involve purchase orders from the prior administration, some of them more than 10 years old, that City departments were carrying on their books, but are not going to be used.  Until those purchase orders were cancelled, their unused amounts were encumbered – carried as liabilities on the City’s books.

            “Fiscal accountability is a cornerstone of my administration. When the Mayor’s Project Management Team discovered these outdated purchase orders, I ordered a Citywide review and turned up these funds,” said Hannemann.  “The total will likely be higher as departments complete their reviews.”

            Budget and Fiscal Services Director Mary Pat Waterhouse said her department will conduct periodic reviews of purchase orders in the future and is also examining prior obligated capital improvement projects.  Reductions there could help the City’s bond capacity, even if they don’t produce actual savings.

            “Good accounting practices include regular reviews that would have identified these funds years ago, had the reviews been done then,” she said.

            Regarding workers compensation savings, Human Resources Director Ken Nakamatsu said, “The departments should be credited for keeping on top of their safety programs and for working with our department in returning injured employees to productive work. These are two aspects of worker’s comp that help us keep costs down.”

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Contact:

Mary Pat Waterhouse, Budget Director, 523-4617

Ken Nakamatsu, Human Resources Director, 523-4809