Honolulu City Council members approved a draft of the city budget Wednesday that would deny Mayor Kirk Caldwell’s request to fund eight staff positions in a new housing division and cut $125 million of the $490.7 million that he is seeking for sewer improvements.

The draft would also eliminate the entire budget proposed for Hale Mauliola, the city’s new container housing facility at Sand Island that’s being used to help homeless people get off the streets and transition into permanent housing.

But Councilman Joey Manahan, who was highly critical of the facility during a Budget Committee meeting two weeks ago, said after Wednesday’s hearing he thought money to continue operating the Sand Island facility would be added back into the budget.

Honolulu City Councilman Joey Manahan speaks during a hearing on a bill to regulate transportation network companies like Uber and Lyft, Wednesday.
Honolulu City Councilman Joey Manahan is critical of the city’s homelessness facility on Sand Island, but has backtracked from his earlier position that it should be shut down. Anita Hofschneider/Civil Beat

“In my mind, we were never really cutting it,” Manahan said, adding that his proposal to cut the funding was simply intended to further budget discussions. “We wouldn’t do that.”

Overall, city lawmakers slashed $26 million from Caldwell’s $2.3 billion proposed executive operating budget and $57.5 million from his nearly $835 million proposed capital projects budget.

But they added $350,000 to their own $18.7 million legislative budget, including $250,000 to help the council establish and oversee homelessness initiatives.

The budget deliberations are happening against the backdrop of an upcoming mayoral election.

A final budget is due to the mayor June 3. For now, the three budget bills will be sent back to the Budget Committee chaired by Councilwoman Ann Kobayashi of Manoa.

Relations between the council and the mayor’s office have been rocky, and the budget deliberations are happening against the backdrop of an upcoming mayoral election. Council Chairman Ernie Martin pulled papers Tuesday for a possible run for mayor against Caldwell, and has until June 7 to officially file.

While all three budget measures passed unanimously Wednesday, not all council members agree on the details.

Councilman Brandon Elefante said he’s concerned about cutting the mayor’s request to fund sewer improvements, given that the city is under a $5.2 billion consent decree by the U.S. Environmental Protection Agency to upgrade its wastewater system.

One sewer project that was left out of Wednesday’s budget bill is the $83.5 million Awa Street project that must be completed by June 30, 2020.

While the draft budget cut funding across numerous departments, council members added millions for park and road improvements, as well as money to support homeless services and nonprofits.

Aid To Nonprofits

Near the start of Wednesday’s budget hearing, council members heard testimony from nonprofit groups seeking taxpayer support.

The draft budget sets aside $1.9 million in general fund money for several organizations, including the Institute for Human Services.

That spending would be in addition to the city’s Grants in Aid program, which evaluates applications from nonprofits and is expected to distribute $5.9 million in grants this year.

Honolulu City Council member Ann Kobayashi6
City Councilwoman Ann Kobayashi is chair of the Budget Committee, where the three spending bills are headed next. Cory Lum/Civil Beat

Natalie Iwasa, an accountant who testifies frequently and who ran unsuccessfully for the City Council in 2014, said the projects were “very worthy” but was concerned about using the general fund to support them.

Iwasa questioned granting additional money to nonprofits at the cost of city services, noting that among other things, Wednesday’s draft budget cut ethics training for thousands of city employees.

Elefante echoed her concern, asking: “How do we justify adding on $1.9 million when we are cutting our own city resources and giving away funds to nonprofits?”

The city approved more than $2 million last year in general fund money for similar awards.

Kobayashi defended the decision to appropriate the funds, contending that the Caldwell administration took $5 million that should have gone to nonprofits and used it for city projects this fiscal year.

“Giving that $2 million back to the community, it’s the least we can do,” she said.

Andrew Pereira, spokesman for Caldwell, said in an email Wednesday that city agencies are allowed to use federal grant money known as Community Development Block Grants and HOME funds if their projects qualify.

The current budget earmarks federal funding from the city to support several programs, including a down payment loan program, the city’s work readiness program and Housing First rental assistance for homeless people. Five city projects also successfully competed for funding alongside nonprofits through a city request-for-proposals process, Pereira wrote.

Regarding the council’s plans to provide an extra $1.9 million to nonprofits, Pereira noted that the city’s existing Grants in Aid program “rates the proposals on merit and removes political influence and favoritism from the process.”

He said the mayor would evaluate the additional funding proposals for nonprofits, but emphasized that services such as roads, buses, sewers, parks and combating homelessness have been the administration’s priority.

“Mayor Caldwell wants to work collaboratively with the council, but must decide whether these add-ons will detract from the core services provided by city agencies and that our taxpayers depend on,” Pereira wrote.

Spending On Homelessness

At Wednesday’s hearing, Manahan apologized to his fellow council members for his comments at a recent Budget Committee meeting where he insisted he didn’t want Hale Maoliola in his district and criticized the city administration for not moving forward with his proposals related to homelessness.

Manahan said he’s under pressure from the business community in Kalihi to introduce a bill that would ban sitting or lying on sidewalks in the neighborhood.

The City Council has passed numerous sit-lie bans in Waikiki and nearby business districts, but Caldwell has opposed expanding them further because of concerns that it may be unconstitutional.

Manahan criticized the mayor’s proposal for eight staff members to fill a new housing division, arguing Caldwell hasn’t justified it.

“We are under the gun to do sit-lie,” Manahan said.

He also criticized the mayor’s proposal for eight staff members to fill a new housing division, arguing Caldwell hasn’t justified it. The mayor’s office has said that the city needs more staff to work with developers to facilitate the development of affordable housing.

That proposal has failed to get support from key Council members, including Martin and Kobayashi, who say the mayor should rely upon existing staff.

Wednesday’s draft budget adds $3 million for a hygiene center in Iwilei that would provide public restrooms, showers and laundry facilities to homeless people.

The additional $250,000 in the council’s legislative budget is also intended to “facilitate the council’s oversight and establishment of policies for the planning and development of urban rest stops, navigation centers, and workforce/affordable housing projects,” according to the draft budget.

Click here to read the revised legislative budget, the revised executive operating budget and the revised executive capital budget.

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