LIHU‘E — The budget process opened Thursday with a display of goodwill between the Kaua‘i County mayor and Kaua‘i County Council chair.
At the first 2023-24 fiscal year departmental budget review meeting, Mayor Derek S.K. Kawakami presented Kauai Council Chair Mel Rapozo with a lei, which the chair jokingly referred to as a “peace offering.”
The budget process is a collaborative — and sometimes adversarial — interplay between the council and the mayor’s administration.
In past years, Rapozo has clashed with the administration of former Mayor Bernard Carvalho, now a fellow council member, sending the budget back to the mayor unsigned in 2017.
“Normally before budget, I take a teaspoon of gunpowder just to get fired up,” Rapozo joked Thursday. “So I drank milk to offset that.”
He extended an olive branch to the administration, expressing appreciation that Kawakami had reached out to each council member prior to the Thursday meeting.
In his address to the council, Kawakami extended his own olive branch. He emphasized the importance of the council’s role in the process.
“I don’t see you as being mean, I see you as always taking your job serious,” Kawakami told Rapozo. “A healthy democracy is built on the foundation of checks and balances. If there are questions you have that we cannot answer, then we have to do our job.”
After the mayor’s speech, Budget Administrator Ken Shimonishi presented on the broad strokes of the mayor’s proposals, which include a proposed $312 million operating budget and a $90 million capital improvement projects budget.
Reflecting increased revenues, the operating budget is up $52 million over the previous year, while the capital improvement projects budget jumped about $40 million.
The budget features a projected $45.2 million in new revenues, largely attributed to an increase in real property tax collections amid skyrocketing property values. Real property tax collections are forecast to rise $32.3 million over the previous fiscal year, Shimonishi reported. The bulk of remaining new revenues will come from a $6.5 million estimated increase in general excise tax collections.
Many of the proposed expenditures are aimed at reducing costs in the long run.
The proposal to pay down a $13 million state loan early for the Lima Ola affordable housing project in Lihu‘e could save about $7.5 million by the time the loan is due, depending on how the debt is paid off.
The proposed budget also focuses on purchasing equipment rather than leasing it, which reduces costs down the line. The budget for vehicles would go up $4.5 million and the budget for equipment would increase $4.7 million (respective increases of 139.5 and 80.3 percent) as a result of the focus.
As the administration moves to shift more of the budget toward operations instead of salaries, the chunk of the budget taken up by employee pay is forecast to shrink from 62.8 percent to 56.4 percent.
Salaries would increase about 7.8 percent, with notable gains in Emergency Management (28.5 percent), the County Attorney’s Office (15.1 percent), and the County Housing Agency (12.8 percent).
A total of 30 percent of the proposed budget would be allocated for the reserve fund, a decision Rapozo questioned, citing how rarely the fund is used.
“I cringe when I think about the amount of money that’s being put aside for reserves,” said Rapozo, who suggested possibly lowering the number to 25 percent.
Departmental budget reviews will continue at 9 a.m. Friday. The budget is set for a final decision-making on May 12.
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Guthrie Scrimgeour, reporter, can be reached at 808-647-0329 or gscrimgeour@thegardenisland.com.
