Mayor Peter Carlisle’s $1.953 billion operating budget proposal for the next fiscal year would increase city government spending by $28 million compared with last year but does not increase real property tax rates or user fees.
The administration’s spending plan also includes a $577 million construction project budget that focuses on wastewater collection and sewage treatment systems, road repair and maintenance, and public safety.
Carlisle unveiled his proposals Thursday at a news conference at Honolulu Hale.
The budget plans now go to the City Council for review. The Council has until its regular meeting in June to clear the budgets. Carlisle’s approval deadline is before the 2013 fiscal year begins July 1.
"I’m glad that he didn’t raise property taxes or any more fees," Council Budget Chairwoman Ann Kobayashi said. "And I don’t know how everything else will be funded, but it sounds like a lean budget.
"We’re going to go through it line by line to see if there are any more areas where we have savings."
Kobayashi said the capital improvement, or construction, budget would be of particular concern to the Council. Last year, members felt the mayor’s proposal for road repair and maintenance was too lean, prompting them to add about $32 million for those projects.
"I’m sure that’ll be a concern, because we really have terrible roads and we do have to spend more money fixing them and our sewer system," Kobayashi said. "It’s hurting our economy when we don’t fix our infrastructure."
Carlisle’s $577 million capital improvements budget is $30 million more than a year ago, due mostly to sanitation projects required by the 2010 consent decree with the federal government to improve sewage collection and secondary treatment systems, and improvements to the HPOWER waste-to-energy facility, where a third boiler is scheduled to go online later this year.
Capital projects, which are financed by bonds, include $331 million for wastewater facility and collection systems, $97 million for highways and streets, $45 million for public safety, $32 million for general government spending, $30.8 million for non-rail-related transportation projects, $23 million for culture and recreation and $19 million for human services projects.
Road projects include $77 million for repair and maintenance of streets, $2.2 million for Kapolei Parkway construction and $2.1 million for bridge work at various locations.
"We are going to do everything we can to repair roads," Carlisle said.
As he did last year after taking office, Carlisle said his budget aims to reduce the number of city projects financed by debt, noting that for the first time in eight years, the amount the city pays on debt will be lower than the previous fiscal year, by about $7 million.
More savings would come by shifting some vehicle and equipment purchases, about $13 million, from bond financing to cash, saving about $9 million in finance charges, the mayor said.
On city operations, Carlisle described the budget as "responsible," saying it focuses on core services and saving money to fund future obligations, and helps maintain the city’s high bond rating.
"The bottom line is, continuing to make the difficult choices today will lead to long-term fiscal stability," Carlisle said.
The budget continues a 5 percent pay cut for city employees imposed by the last contract workers approved.
The city is negotiating new agreements with police and firefighters. Carlisle said the financial effects of those contracts on the city budget will not be known until they are settled.
The $28 million increase in the operating budget is due primarily to rising electricity and fuel expenses, Carlisle said.
The operating budget also includes $1 million for pavement preservation work to improve road maintenance, $300,000 to fund the spay/neuter certificate program and $200,000 for a pilot program to replace existing parking meters with advanced meters and sensors.
The city will conduct a pilot project for parking in Chinatown and downtown to see whether the city can recoup savings through a more precise payment system that would accurately track parking times and also accept credit cards.
Although there were no proposals to raise user fees or rates, the administration noted that rates for some programs and services may go up because of multiyear step increases approved last year.
The operating budget also includes funds for future obligations, such as employee retiree benefits and the city’s rainy day fund. Carlisle’s budget includes $40 million for the health fund payments for retirees and $20 million for the rainy day fund.
"In the long run, saving will bring stabilization and protect against economic or revenue downturns and emergency situations," the mayor said.
Carlisle’s budget relies on $41 million in hotel room tax money the state allocates to counties and $808 million in real property tax revenue, up $20 million from a year ago.
The increase was due primarily from development projects and improvements of existing properties, such as the Disney Aulani Resort, the Ward Centre parking structure and the Lowe’s home improvement center.
The budget for the city’s $5.27 billion rail transit project is covered by the semiautonomous Honolulu Authority for Rapid Transportation and is not part of the administration’s budget.
