Honolulu Mayor unveils 2011 spending plan

Mayor Mufi Hannemann unveiled yesterday a spending plan for the fiscal year that begins on July 1, including a $1.827 billion City operating budget that is just 1.2 percent larger than the current year’s budget.

The increase is driven largely by predetermined costs such as previously arbitrated pay raises for police and firefighters, negotiated pay raises for bus drivers, and other work force costs, the mayor’s office said in a news release.

The plan also includes $14 million for specialized public safety requirements of hosting the 2011 Asia Pacific Economic Cooperation conference. The City hopes to receive federal reimbursement for all or a portion of these costs.

Absent the costs related to labor agreements and the APEC conference, the operating budget would decrease 1.8 percent, Hannemann said.

The spending plan sets the real property tax rate for the newly created Non-Homeowner classification at $3.72 per $1,000 of assessed value. This rate is lower than the old Improved Residential classification rate, which was $3.75 in 2006.

The change for an owner of a typical single-family home in the Non-Homeowner classification is expected to be 49 cents more per month. A change of 25 cents more per month is expected for the owner of a typical condominium in this classification.

The Homeowner rate would remain $3.42 per $1,000 of assessed value, no other classification rates would change, and no additional taxes or fees were proposed.

The budget assumes 21 to 24 day furloughs of certain City employees, and continued five percent pay cuts for Cabinet members. Certain other employees not covered by collective bargaining agreements will also receive five percent pay cuts.

The plan also assumes that Honolulu will continue to receive a fair portion of the Transient Accommodations Tax (hotel room tax) collected from visitors by the State. Honolulu receives approximately $41 million annually from this tax, which helps offset the visitor impact on public services such as police and fire protection, garbage collection, park maintenance and wastewater operations.

The separate $2.108 billion Capital Improvement Project budget included in the spending plan designates $493 million for sanitation upgrades, $124 million for street repairs and $1.316 billion for the City’s rail transit project.

Hannemann cautioned that some commentators habitually lump the Operating and Capital Improvement budgets together and compare them with combined budgets from previous years—which did not include major investments in the island’s sewer system and the rail project—to deliberately create distorted and misleading impressions of City spending.

“The fact of the matter is that the Operating Budget, which pays for all the day-to-day services our residents and visitors depend on, would only increase by 1.2 percent,” Hannemann emphasized. “The separate Capital Improvement budget will obviously be larger than in previous years because we are investing in a major rail transit project this island badly needs, and making up for years of neglect to our sewer system and other infrastructure.”

Highlights of the Capital Improvement budget.

Transit:

    Honolulu High Capacity Transit Project ($1.3 billion);

    Bus and Handi-Van Acquisition ($17.7 million);

    Alapai Transit Center and Alapai Transportation Management Center ($17.1 million).

Sanitation:

    Solid Waste Facility Expansion ($142.8 million);

    Ala Moana Wastewater Pump Station Force Mains No. 3 and 4 ($139.5 million);

    Kaneohe/Kailua Force Main No. 2 ($90.7 million);

    Kailua Wastewater Treatment Plant Improvements ($23.6 million);

Highways and Streets:

    Rehabilitation of Streets ($77 million)

    West Oahu Traffic Improvements at Various Locations ($185.5 million);

Public Safety:

    Police and Fire Equipment and Acquisitions ($9.9 million);

    Replacement of the Waianae Police Station ($5 million);

    East Kapolei Fire Station ($4.5 million).

New initiatives included in the spending plan include:

    a Nanakuli Regional Park;

    Waikiki park and landscaping improvements;

    a senior community center at the former Wailupe Valley School;

    reconstruction of the Kualoa Regional Park wastewater system;

    a Supervisory Control and Data Acquisition system for wastewater facilities; and
    aerial imaging for real property assessments.