LIHU‘E — Submitted to the Kaua‘i County Council for review, Mayor Derek Kawakami’s fiscal year 2022-23 budget proposes a $260.2 million operating budget and $48.9 million capital improvement projects budget.
“This submittal marks the third budget submitted by my administration during the COVID-19 pandemic,” Kawakami said in a memo to the council. “Looking back to March 2020, I never would have imagined the long road ahead in response to this emergency. Our journey has taken us to this point now, where together we are more resilient than ever. And, together, we remain grateful to serve the public and maintain our core responsibilities to our community.”
But the ramifications of the COVID-19 pandemic on the economy are not in the past.
“And with the most recent rockfall event that has affected our Westside community, the growing conflict in Eastern Europe and rising inflationary conditions, we must be mindful of more challenges yet to come,” Kawakami said. “Our fiscal position is delicate but stable as we face these headwinds, but your county government, our island and our people are ready.”
As opposed to past years’ budgets, which were fiscally conservative and relied on adjusting to pandemic-related cutbacks, Kawakami called this proposed budget “unique” in that there’s an “uneven cash-flow conditions created by both political and external means.”
“This budget hits at a time where there is a revenue surge while long-term liabilities like collective bargaining have yet to catch up,” he said. FY23 begins July 1 and run to June 30, 2023.
With revenues up about 25% over last year due to the reclassification of the residential investor tax class and the county’s new transient accommodations tax, this budget proposal is more than FY22’s proposed $243 million operating budget and a $24.3 million CIP budget.
But it’s important to note, Kawakami said, that the more revenues now will not be a long-term financial plan without policy changes to the county’s overall tax structure and increasing rates.
“Looking beyond this proposal, we anticipate that large collective-bargaining increases will occur in further years,” he said. “Also, while FY23’s reserve is based upon the lower revenues of FY22 — which at the time were lacking our fair TAT share from the state — FY24’s reserve will be markedly higher than what is budgeted in this year’s proposal.”
The proposed balanced budgets will place 30% of the last fiscal year’s general-fund revenues into restriction. With the elimination of the state TAT and the creation of the county’s own 3% taxation and higher real-property-tax revenues, FY24 will lead to a larger budgeted reserve.
Salaries, benefits and collective-bargaining expenses make up 62.2% of the total budget and about 82.3% of the general fund.
Within the CIP budget, which is almost double at $48.9 million to what was allocated for last year, $24.7 million, focuses on different infrastructure and repair goals.
General-excise-tax-surcharge expenditures make up about $24.3 million. From that, there’s about $15.6 million in repaving and about $4.3 million for other road-related costs. The budget sees $1.1 million for Puhi Road paving, $1.3 million for Kolo Road, and $200,000 in funding for a Westside shared path. The county will use about $4 million in Federal Transit Authority funds for The Kaua‘i Bus baseyard expansion projects.
Overdue improvements for wastewater-treatment facilities were also noted in the budget, including $1.5 million for the Lihu‘e Wastewater Treatment Plant and $1.7 million for improvements and planning at the Wailua WWTP. The department is also proposing $3 million for public-safety communications.
The sewer fund showed a 19.4% increase in revenue for FY23, but “the monies still do not cover the cost of operations,” Kawakami said, and will result in general-fund contributions.
“As the county-run server system only provides service to a minority of the households on island, and aging wastewater infrastructure will require increased maintenance effort, without fee adjustments maintaining safe and compliant operation will inevitably demand further general fund subsidy from the overall tax base,” he notes.
Because the Ma‘alo site for a landfill has fallen through, which Kawakami points to “the reticence of state agencies to agree to its siting in that location,” $600,000 in funding has been allocated for a siting study.
“Monies are included in this budget for a new siting study to find a new landfill location, with enhanced investments on the solid waste operational side for even more diversion opportunities,” Kawakami said. “We are also adding $1.5 million in compliance costs for our refuse transfer stations islandwide to ensure required best-management practices are deployed at our facilities.”
Kawakami noted his commitment to working on the county’s Integrated Solid Waste Management Plan’s recommendation to study the feasibility of a materials-recovery facility, curbside recycling and other waste-diversion programs during his State of the County address last week.
The Department of Parks &Recreation is seeing four new positions, including three positions within a Central District Team that will focus on Lihu‘e beautification.
Kawakami is also proposing relocating personnel and establishing two new park rangers, with one at the Ke Ala Hele Makalae and Bryan J. Baptiste Sports Complex in Kapa‘a.
In line with more money, Kawakami is proposing allocating $3 million toward affordable-housing initiatives.
“While much of the affordable-housing support does come from federal and state appropriations, some adjustments at our supplemental budget submittal may relate to filling potential gaps that become apparent as congressional and state legislative activities continue this session,” he said.
The budget continues to restrict the purchase of new vehicles and equipment for the most part, with exceptions being for operational necessities. The budget introduces six new positions and puts several on dollar-funding. However, there are no layoffs or furloughs anticipated.
The proposed budgets, Draft Bill No. 2851 and Draft Bill No. 2852, will be up for first reading at the council’s Wednesday meeting at 8:30 a.m., which is available to watch via kauai.gov/webcast-meetings.
The proposed budget is available to view attached to the council’s March 23 meeting, or at kauai.gov/Government/County-Council/Budget-Notices-Minutes-Ordinances.
Departments begin presentations on their respective budgets to the council on Thursday at 9 a.m., again, available for view online.
