The City Council voted 8-1 on Wednesday to approve a $1.96 billion operating budget and $620 million capital improvements budget for the new fiscal year that begins July 1.

The operating budget is only slightly larger than the $1.93 billion plan introduced by Mayor Peter Carlisle in March, while the capital improvements budget is about 7 percent more than Carlisle’s $577 million proposal.

As in the Carlisle budget plan, the Council also voted not to raise, or drop, property tax rates. Increases in property valuations in key Oahu neighborhoods are expected to help bring in added revenue to offset the small bump from the current year’s $1.93 billion budget. The budgets will go to Carlisle’s office for consideration.

The biggest clash involved a dispute over how much to appropriate for a second $24.5 million, egg-shaped sewage digester at the Sand Island Wastewater Treatment Facility.

Going into Wednesday’s final vote, the Budget Committee had proposed providing only $12.5 million for the project, with a proviso that the administration be required to look for other ways of disposing of sewage.

Budget Chairwoman Ann Kobayashi proposed Wednesday reinstating $9 million for a total of $21.5 million. Councilman Nestor Garcia proposed adding $12 million, which would have taken the appropriation back to the original $24.5 million.

After more than an hour of debate, Kobayashi’s plan won out.

City Environmental Services Director Tim Steinberger said, "My concern is that we have been operating at capacity."

Delaying construction of the digester "does mean we increase our risk" of a mechanical malfunction that could lead to an overflow or permanent loss of the initial digester, he said.

"That would result in a violation of the Clean Water Act."

Steinberger said after the meeting that his agency will be able to work out a design and construction agreement with the contractor, Synagro, to accommodate the smaller budget. By constructing a sludge storage tank later and using previously approved funds to foot part of the cost of planning and design, "we feel we can build it for $21.5 million," he said.

Plans are to finish a second digester by 2016, about the time the capacity of the first one will be reached.

Despite all the debate over $3 million, some $400 million, or more than two-thirds of the CIP budget, is targeted for sewer and solid waste improvements.

Councilman Tom Berg cast the sole vote against the budgets.

A last-minute addition to the capital improvements budget added $2 million for a long-envisioned Oahu Arts Center on the grounds of the city’s Patsy T. Mink Central Oahu Regional Park.