City Council leaders said they are generally supportive of Mayor Kirk Caldwell’s plan to eliminate roughly 600 vacant job positions and cut the funding for additional slots, a plan projected to save $37 million annually for the money-strapped city budget.

Caldwell made the announcement Wednesday, one of several new initiatives unveiled during his second State of the City address, held at Ala Moana Regional Park’s McCoy Pavilion.

"This not only helps us in the short term, but in the long term, it serves to reduce our massive unfunded liability for retirement and health costs, which is a burden on all of us," Caldwell told the crowd of several hundred, mostly supporters and city officials.

Council Budget Chairwoman Ann Kobayashi said after the speech that vacant-funded positions have been a source of contention between Honolulu Councils and mayors. Council members historically have been concerned that funds that are supposed to pay for those not yet hired were instead going to pay for other purposes within an agency.

"The money would be tied up and go somewhere but we just wouldn’t know where," she said.

Last year, the Council slashed funding for the vacancies in half, and included a proviso in the budget restricting how the city can use about $65 million to $80 million for vacant funded positions by requiring that the money be placed into a single account and barring the money from being used for overtime, pay differentials or unbudgeted personal service contracts. Caldwell let the budget bill become law without his signature, partly in protest of the proviso.

Council Chairman Ernie Martin said he is pleased that Caldwell officials have decided to see the Council’s view on vacant positions.

"Saying those positions are not as essential as they had once asserted in the past, that is something that Council Vice Chairman Ikaika Anderson has advocated for years," Martin said.

Caldwell gave no specifics about where the vacancies would be trimmed, but after the speech, Managing Director Ember Shinn said the position cuts will come from all city agencies.

Asked whether that included first-responder agencies such as police, fire and emergency medical services, Shinn said officials from those departments all participated in discussions. She added that those agencies do not just employ sworn and uniformed employees.

The administration is slated to deliver its budget for the next fiscal year to the Council on Friday.

Martin said Caldwell’s speech also pointed out that he is embracing other priorities first raised by Council members, such as increasing the amount of lane miles to be repaved annually and finding money for the Housing First initiative that aims to provide shelter for chronically homeless individuals before addressing root causes such as drug addiction and mental illness.

But both Martin and Kobayashi said the $18.9 million that Caldwell is proposing to take from the Affordable Housing Fund for Housing First may be too much investment into a homeless segment that’s already being addressed by Gov. Neil Abercrombie’s administration.

Both noted that the final decisions on how money from the fund will be used are with the Council.

Martin, a former Department of Community Services official, said it may make more sense to spend a portion of that money for homeless families.

"To me, we’re placing too much emphasis on the single, chronically challenged homeless population while we’re neglecting families. It pains me when I see children sleeping on the sidewalk with no other alternative other than sleeping in vehicles and abandoned spaces."

Kobayashi said, "I don’t know if we need that much (for Housing First) when the state is focusing on that population."

Both Martin and Koba­yashi said they support Caldwell’s emphasis on improving city parks. Caldwell is proposing $39 million for improvements and upgrades islandwide.