After delivering a no-frills State of the City speech last week, Honolulu Mayor Kirk Caldwell will likely submit an equally low-key budget package to the City Council on Monday.
"We think we have a very, very prudent budget," Managing Director Roy Amemiya said Friday in a preview of Monday’s submittal.
Assuming tax rates stay the same as this year, the projected continued rise in property values in fiscal 2016 will result in an 8 percent jump in property tax collections, the operating budget’s main source of funds. That negates the need for the administration to propose any tax or fee increases, or any other revenue-generating proposals, in the operating budget, Caldwell’s lieutenants said.
But despite a $2.28 billion operating budget that is $139 million, or 6.5 percent, higher than the current year’s pot, employee pay and other operating expenses will grow at a much slower pace.
Employee salaries will increase about 2.4 percent, while departmental spending is going up by a mere 1 percent. The employee workforce will stay relatively flat, with a new increase of only 21 new positions, most having to do with converting contracted lifeguards to permanent civil service employees.
Amemiya said the reasons for the operating budget increase would become clear Monday.
"It’s a variety of things," he said.
He insisted, however, that operational costs have not gone up 6.5 percent.
Ember Shinn, executive assistant to Caldwell and formerly city managing director, echoed Amemiya.
"Very little money is going into new initiatives," she said.
The administration will be submitting a $494 million capital improvements budget, which is $215 million, or 30 percent, less than this year’s program, city officials said. A large chunk of that, about $194 million, will go to paying for sewer projects tied to mandated consent decrees.
Caldwell also announced in his address Tuesday that parks facilities will get a $2 million infusion for restroom and playground refurbishments as part of his E Paka Kakou initiative. The administration will also add $1 million to the current $500,000 set aside for nonlabor repair and maintenance costs, Shinn said. Additionally, the CIP budget will include $13.4 million for parks projects scattered across the island, she said.
The mayor is bolstering his Housing First initiative to try to house the chronically homeless, increasing that budget to $5.5 million from $3 million this year, said Shinn. A $2.1 million contract with the Institute for Human Services to provide permanent housing vouchers for up to 115 chronically homeless individuals will continue.
So far this year the program has housed 31 people across various sites, city officials said. The additional $2.5 million should be able to provide permanent housing for an additional 100 people through a separate contract.
The eventual goal is to provide permanent housing for 400 people, Shinn said.
A controversial plan to use a 5-acre site at Sand Island for a temporary encampment or "transitional center" for up to 100 chronically homeless preparing to enter permanent housing remains stalled. The state Health Department is conducting soil analysis on possible contamination on the site.
With a possibility that the project cost will likely climb beyond the $500,000 budgeted due to remediation costs, the administration could reconsider proceeding further at that site, Shinn said. She acknowledged the city is already looking at other sites or possibly other ways the funds could be used to service the homeless.
The administration’s Office of Strategic Development is looking for ways to spend the $32 million in capital improvements that the Council set aside this year for homeless facilties, Shinn said. The city has identified "a couple of sites" where homeless facilities can be established, but she noted that how the general obligation funds are spent is limited to projects that the city must own entirely.
To help with homelessness issues, three new employees, hired at a total cost of $129,000, will form a Homeless Initiatives Unit that will implement and manage Housing First projects and other city programs designed to aid the homeless. They will be attached to the Department of Community Services.
Jun Yang will continue to be Caldwell’s chief adviser on homelessness policies, working out of the mayor’s office, Shinn said.
As announced Tuesday by Caldwell, the CIP-based repaving budget will be $110 million, less than the $175 million budgeted last year and the $130 million earmarked for this year. That’s because the administration had initially expected to repave 300 lane miles annually and has already fixed up 700 miles in two years, city officials said.
For the current year the city had deactivated 618 positions, essentially keeping the positions on the books but without the $29 million in the budget to fund them, or even the authority to fill them by diverting money from elsewhere, during the year. Caldwell is continuing that policy in this budget, deactivating 625 positions for the year, Shinn said.
