Mayor submits supplemental budget

LIHU‘E — In his administration’s supplemental budget proposal for fiscal year 2022, Mayor Derek Kawakami has requested County Council approval for a $243.3 million operating budget and $24.8 million in capital improvements.

“… (The) COVID-19 pandemic continues to create a dynamic and unpredictable operational and budgetary picture for our County,” Kawakami said in a May 7 memo to the County Council. “In the months since our March transmittal, that volatility has continued, particularly concerning recent actions by the State Legislature impacting our bottom line.”

Kawakami points to “lingering unknowns” still in play for the upcoming budget year, which begins July 1 and runs until June 30, 2022. The overall budget prioritizes past deferred maintenance, affordable housing and pandemic response, he said.

The administration made few changes between its first budget submittal in March, increasing the operating side $324,000 and about half a million more for improvements. The supplemental budget taps into the county’s reserve, but does not suggest layoffs or property-tax increases.

Included in the supplemental budget is $285,000 for an upgraded aerator system at the Kekaha Landfill’s leachate pond and $1.1 million for a compactor that was set to be repaired and must now be replaced.

Already, the budget allocated for a vertical expansion of the Kekaha Landfill projected at $335,200 in the capital improvement projects budget, seeking to add four years to the site’s lifespan. The county will continue negotiations with the state to site a new landfill near Ma‘alo Road in Kapaia.

Also on the side of maintenance, the administration earmarks $150,000 for a cesspool-conversation study.

The supplemental budget also includes $175,000 to overhaul the county’s public-facing websites. This would be in line with the administration’s Project Holomua, which seeks to modernize the county’s technology efforts.

The Legislature sent a bill for Gov. David Ige’s signature that eliminates the state sending transient accommodations tax funds to the counties. In lieu of that, counties may establish ordinances seeking up to 3% of gross transient rental proceeds, fair market rental value taxable, under HRS 237D.

“As the Governor has 45 days to decide on the measure, we do not currently know the disposition of this policy proposal,” Kawakami said. “Therefore, as mentioned, this supplemental proposal eliminates TAT as a source of revenue, and replaces it with a draw from the reserve.”

Because of state funding, the county must put up matching funds on several projects, including $500,000 for Hanapepe Stadium and $420,000 for the Kilauea Neighborhood Center gym.

Due to refinancing of municipal debt, the county will save about $560,000 in debt service costs over the next fiscal year, Kawakami reported.

The administration is still waiting on U.S. Treasury Department guidance on how to use an appropriate $14 million in direct aid over the next two federal fiscal years from the American Rescue Plan.

“We have not included any anticipated ARP revenues as a backstop to the supplemental budget proposal,” Kawakami explained.

In fiscal 2021, the administration has had to send two bills to the council pulling money from the reserve to cover the exclusion of TAT money, causing a shortfall to the county’s balanced-budget requirement.

Additional adds to the proposed supplemental budget include $175,000 for Waimea tennis court lights, over $56,000 for Lihu‘e sewer pump station improvements, and bus shelters in Po‘ipu for $72,000.

This fiscal year, the county worked with $250.7 million on the operating side, and $33.6 million for capital projects.

While the administration did not propose any layoffs, in the March submittal there were 13 positions that have been cut to dollar funding, and 32 positions have been short-funded for half-year contracts. For the May submittal, the administration proposes reestablishing six-month funding for an accountant within the Kaua‘i Police Department and a planner for the Agency on Elderly Affairs.

The May submittal also funds a bridge-maintenance supervisor at the Department of Public Works Roads Division. Within the Wastewater Divison, an additional, six-month-funded engineer is also included.

“While the economic downturn has had a huge impact, we remain optimistic in the direction we are heading and hopeful on the path moving forth,” Kawakami said.

“We look forward to further discussions on the supplemental budget and our upcoming fiscal outlook while continuing our combined efforts to find the best solutions that support, protect and uplift our Kaua‘i community.”

The council holes a budget hearing meeting Wednesday, May 12, at 5 p.m. More information on how to provide testimony and find the budget are at kauai.gov/council.

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Sabrina Bodon, public safety and government reporter, can be reached at 245-0441 or sbodon@thegardenisland.com.