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MAYOR SUBMITS FY2009 BUDGET TO CITY COUNCIL

 

            Mayor Mufi Hannemann today submitted to the City Council the administration’s Fiscal Year 2009 budget that places a priority on fiscal discipline and saving money for long-term obligations.

 

            “As in previous years, the Fiscal Year 2009 budget places a premium on financial prudence and accountability, with a steadfast commitment to basic City services like public safety, sewers and solid waste, parks and public facilities, and transportation,” said Hannemann, echoing the theme of his previous budget proposals. “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 maintenance of public facilities.”

 

            For the upcoming fiscal year, Hannemann is proposing an executive operating budget of $1.839 billion and a capital improvement budget of $831.5 million.  The City Charter requires the mayor to submit a budget to the City Council by March 2 each year.  The Council has until June 15 to enact the budget ordinances and set the property tax rates for the next fiscal year, which runs from July to the following June 30.

 

            It should be noted that Mayor Hannemann is not requesting any increases in tax rates or fees to support his proposed budget.  Mindful of the recent appreciation of real estate, the administration has also budgeted for a $100 real property tax credit for qualifying homeowners.

 

            The operating budget is being impacted by non-controllable costs, such as debt service and pension and health requirements, as well as arbitrated pay raises.  Excluding these factors, the proposed FY 2009 operating budget represents a 5.5 percent increase over the previous fiscal year.  The budget proposes appropriating $91.8 million for other post-employment benefits, specifically the City’s long-term obligations to fund health insurance for retirees.

 

            Said Hannemann, “Other post-employment benefits is a term that may not be familiar to the general public, but which is becoming a nagging concern of state and local governments across the nation.  Simply put, governments must now account for their long-term obligations to retirees on their financial statements.  Unlike the state government, Honolulu and our Neighbor Island counties have begun setting aside money for this long-term requirement.  It’s the responsible thing to do because we can’t in good conscience leave a costly obligation for future generations to pay.  It’s only prudent that we save as much as we can, rather than spend everything as we go.”

 

            Hannemann is also proposing adding another $10 million to the City’s Fiscal Stability Reserve Fund, a rainy day fund the City can draw upon for emergencies like economic crises or natural disasters.

 

            The mayor noted, “We were the first in the state to have our bond rating upgraded because of our policies of fiscal discipline and spending money on core City services.  Our budget proposals reflect our adherence to those policies.  Moreover, I’ve vowed that no future mayor or Council, not to mention future generations, should have to shoulder the kind of financial demands that arise out of irresponsible budgeting and long-term planning.  That’s why we’re budgeting for the future today.”

 

            The budget highlights are listed below.

 

            Sewers and Solid Waste

·       $245.3 million for sewer rehabilitation and sanitation-related projects.

·       $5 million for the shipping of solid waste off-island.

·       $8 million to expand curbside recycling.

·       $2.5 million for the third year of the Leeward Coast Community Benefits package, which offsets the burden of the Waimanalo Gulch Landfill on residents of that area of Oahu.  The money is split between grants to service providers and parks improvements.

 

            Roads

·       $77 million for rehabilitation of major roads.

·       $3.4 million for road repairs using City crews.

·       $6.4 million to rehabilitate and complete seismic retrofits of bridges.

·       $5.2 million to inspect and plan improvements to potential rock-slide areas.

 

Transportation

·       $265.1 million to plan, design, and begin construction of the fixed guideway linking Kapolei with downtown Honolulu (includes $14 million in federal funds).

·       $31.1 million to purchase 50 hybrid buses (includes $24.8 million in federal funds).

·       $2.5 million to construct the Alapai Transit Center and $350,000 to plan the Windward Transit Center.

·       $4.2 million to construct the Middle Street Intermodal Center.

·       $6.7 million to design the Alapai Transportation Management Center.

·       $4 million to continue operation of TheBoat, the commuter ferry linking West Oahu with downtown Honolulu.

·       $1 million for bikeway improvements and funding for one new engineer position to oversee the City’s plans to provide more bikeways and bike routes.

 

            Public Safety

·       $63,000 to form a parks patrol of officers from the Honolulu Police Department, working in cooperation with the parks staff.

·       Six positions to bolster the police department’s recruitment and training efforts.

·       $5.5 million for 58 replacement patrol cars, 10 motorcycles, one helicopter, and other equipment for the Honolulu Police Department.

·       $2 million for major improvements to police stations and other facilities.

·       $4.3 million for three fire engines, two ladder trucks, and other equipment for the Honolulu Fire Department.

·       $2 million for major capital improvements to fire houses and facilities.

·       $1.2 million (from the operating budget) for repairs to fire houses and $800,000 for general repairs to other City facilities.

·       $1.19 million to plan and design a new East Kapolei fire station.

 

            Housing and Sustainability

·       $4 million to acquire land in the Honouliuli Preserve and Puuiki Beach in Waialua using money from the Clean Water and Natural Lands Fund.

·       $3.8 million to renovate the Kulana Nani affordable rental housing project in Kaneohe and $3.5 million from the Affordable Housing Fund to acquire the fee interest in the land.

·       $2 million to develop the River Street Residences in Chinatown, a transitional shelter for families and individuals, including those with disabilities.

·       $1.1 million for a new federally funded tenant-based rental assistance program, similar to the Section 8 rental vouchers (includes three positions and $960,000 in rental subsidies)

·       $305,000 for the Honolulu Sustainability Center project, which will demonstrate the benefits of new technologies such as rooftop photovoltaic, green roofs, recycling, and other sustainable systems to help reshape urban core structures.

 

Parks and Public Facilities

·       $15.6 million for parks improvements

·       $6.9 million for the construction of the new elephant facility at Honolulu Zoo.

 

            City Operations

·       $91.8 million for other post-employment benefits, primarily the City’s long-term obligations to the Employer-Union Health Benefits Trust Fund to pay for health insurance for retirees .  The administration set aside $40 million of this sum last year, but is now seeking authorization to begin paying the state government for this obligation.

·       $10.4 million for a provisional account to cover anticipated increases in the cost of fuel and electricity.

·       $10 million for the Fiscal Stability Reserve Fund, money for economic crises or natural disasters.

 

            Information on the budget is available at: www.honolulu.gov/budget

  

Contact

Bill Brennan, 527-6928

Tuesday, June 03, 2008

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