Anticipating continued depressed revenue sources such as real property taxes due to the COVID-19 pandemic, Mayor Rick Blangiardi needed to fill a $73 million hole in the city’s budget.
He proposed a $2.9 billion operating budget with no tax increases or furloughs.
The budget, which would begin July 1, includes cost-saving measures such as deferring a $139.7 million contribution to retirees’ health care benefits.
The city also will no longer hire any new employees besides vacant positions granted an exception, like openings for first responders.
“We figured out a way to do that,” Blangiardi said.
“We’ll implement a hiring freeze, but it will not affect our first responders. We’ll ask them to continue to provide for the safety and security of the people who live on this island.”
However, the budgeted employer contributions to the city’s employees’ retirement system are $4.4 million higher in fiscal year 2022, compared with the current fiscal year, due to “excessive overtime pay” for certain departments.
“It’s primarily HPD,” Blangiardi said.
Honolulu Police Department officers violated the department’s overtime policy last fall. Some said they worked up to 300 hours of overtime in a one-month period.
Blangiardi confirmed that federal CARES funds paid for the overtime abuse by the department, and no city taxpayer money would be used.
All city departments would see operating reductions.
“It involves reducing our expenses or expenditures in salaries, fringe, current expenses to operate the departments,” Director of Budget and Fiscal Services Andy Kawano said.
The only fee increase proposed is to enter Hanauma Bay, which will go to $25 from $12 for nonresident visitors 13 years of age and older. Residents with state IDs would enter for free.
During the COVID-19 pandemic there has been a 75% drop in the number of visitors to the nature preserve. However, the costs to maintain Hanauma Bay have not decreased accordingly. The increased fee would help offset those costs.
Blangiardi’s budget also includes $10.7 million for programs to combat homelessness, such as the Housing First Initiative and the Punawai Rest Stop in Iwilei.
In addition, it includes $37.5 million to renovate and develop affordable, low-income housing.
The city’s $1 billion Capital Improvement Plan would see about a 26% decrease, compared with the previous, 2021 budget.
“The major reduction in our Capital Improvement Plan really had to do with the amount of moneys that were allocated,” Blangiardi said.
The largest chunk, over half of the plan’s budget, is going to sanitation initiatives that include a $27.8 million HPOWER ash recycling program. It is meant to divert the ash created by the waste-to-energy incinerator in Kapolei away from the island’s only municipal landfill, Waimanalo Gulch.
“This ash recycling project is going to take that ash, and it’s going to create construction materials for concrete mixtures, as well as remove metals and recycle that,” Director of Environmental Services Wesley Yokoyama said.
He also highlighted a project to turn methane, the byproduct from sewage, into energy.
The city also plans to expand its traffic control system, which includes traffic cameras and traffic signal applications, to the West side, as it currently stops at Kapolei and does not continue through Waianae and Nanakuli.
That project would cost $10.4 million.
For rail the mayor has budgeted $101 million for operation and maintenance. However, Blangiardi said the actual amount would depend on whether the rail begins operating this year.
“There is a lot up in the air with rail,” he said.
The proposed budget still needs to be heard by the City Council, which will likely implement adjustments.
“My priority is to ensure that the FY22 Budget process remains a collaborative process, with involvement of the City Administration, all Council-members, and most importantly, input from the general public,” said Council Budget and Finance Chairman Calvin Say.
“We stand committed to improving quality of life for residents throughout O‘ahu.”
The budget is expected to have its first hearing in front of the full Council on March 17.
