BY MALIA ZIMMERMAN – HONOLULU, HAWAII – Honolulu Mayor Peter Carlisle, touting his fiscal conservatism, unveiled his $1.953 billion city budget for FY 2013. The budget, which he called “carefully balanced,” is $28 million or 1.5 percent more than his FY 2012 budget.
It also includes a $577 million capital budget for the coming year, a 5.5 percent increase over his previous capital improvement budget, $295 million of which will go toward upgrades to the City’s wastewater system as mandated by the U.S. Environmental Protection Agency-driven federal consent decree.
The Honolulu City Council will have to approve the plan, which includes no residential property tax increase. He said to get the city on track financially, the city will deposit $20 million into the Rainy Day Fund, pay down more debt, invest in the city retiree healthcare fund, keep an eye on spending and invest in core infrastructure. The city administration plans to keep down salary costs with a 5 percent across-the-board labor cost reduction plan within each City agency.
“This plan keeps the City moving forward and helps prepare for the future. We need to spend wisely on the services our residents depend on, make sure our infrastructure is well-maintained, decrease our debt, and save money for rainy days,” Carlisle said.
Carlisle emphasized his plan to “bend down the debt” by optimizing on low interest rates and bond refunding opportunities. That should save the city $7 million in the new fiscal year, Carlisle predicted.
“We need to steadily grow our reserves and keep our finances strong for future generations. The commitment to savings will also help preserve our excellent bond ratings, which helps save even more money,” Carlisle said.
Other capital improvement projects include $153 million in new general and highway projects. The budget for roadwork, which will be paid for with general debt financing, is down 35 percent from its a five-year average of $234 million, and 17 percent lower than the $185 million budgeted for FY 2012.
Another tactic Carlisle will use to save money is to shift away from bond funding for major equipment purchases as well as smaller ticket items such as sidewalk reconstruction, bus rehabilitation, and certain land expenses. These will be covered with $13 million in cash, eliminating more than $9 million in finance charges, and keeping the city from paying debt service on items or improvements that last less than 25 years.
The city’s priciest project – the construction of the $5.3 billion elevated steel on steel rail system – was not included in the mayor’s budget plan because the HART board manages that project. Increases in water and sewer fees are not addressed in the budget either as they are covered by user fees.
In addition to refinancing debt and changing to cash payments for smaller ticket items, Carlisle is looking for additional revenue opportunities through increased fees, in part to cover the rising cost of electricity and fuel. That includes parking fees, which will be boosted through a new city automated parking system to be implemented in Chinatown and elsewhere. Other city user fees, such as golf and park fees, could also increase, he said.