Honolulu expenses ranging from veterinarian visits for police dogs to initiatives addressing homelessness and climate change are on the chopping block as the city grapples with a massive budget shortfall, according to city records.
Each department was tasked with proposing cuts of 5% to 10% of their operating budgets for the current fiscal year, which ends in June. Civil Beat received a spreadsheet of the proposals through a public records request.
While the cuts represented in the proposals are not a done deal, they illustrate the options the city is considering to handle the major impact the COVID-19 pandemic is having on city revenues.
The total impact could be a loss of $400 million or more, Manny Valbuena, the city’s acting director of the Department of Budget and Fiscal Services, told City Council members on Wednesday.
That represents about 13% of the city’s nearly $3 billion operating budget – more than BFS even asked the departments to consider in their cost reduction proposals.
Civil Beat requested a detailed breakdown of revenue losses, but Valbuena did not provide it. Mayor Kirk Caldwell’s spokesman Alexander Zannes said the city wouldn’t be releasing those numbers “until the real property assessment values are certified and the numbers are more solid.” Real property taxes are the city’s largest revenue source.
However, a report from BFS to the City Council shows “actual cumulative revenues” were at only 40% of the budgeted revenues from July 1 through Sept. 30. The loss of state transient accommodations tax revenue alone left a $40 million hole, Valbuena said, and fuel taxes, golf and zoo revenue and other areas are also taking a hit.
“We’re looking at everything to basically avoid furloughs, layoffs or pay cuts,” Valbuena told Civil Beat.
The City and County of Honolulu has approximately 10,000 employees.
Suggestions to cut office supply spending and travel were common across departments, but that kind of trimming won’t be nearly enough.
Core city services are likely to be affected, touching many aspects of daily life on Oahu, the records show. It could mean bumpier roadways, parks falling into disrepair, slower action to address illegal dumping and fewer resources for police investigations.
Eliminating costs now for things like legal consultants and repair services could also prove more expensive down the line, according to the departments’ proposals.
Budget analysts are still reviewing the cost reduction proposals from each department, Valbuena said. He plans to issue a set of recommendations to Caldwell, who will make a decision before he leaves office on Jan. 2.
Since it’s a matter of restricting the existing city budget, the cuts do not require City Council approval. Mayor-elect Rick Blangiardi will inherit Caldwell’s budget and will then be tasked with proposing his own in March.
At a press conference on Thursday, Caldwell said his administration is doing what it can to close the financial gap, but his successor may need to pursue furloughs next year to achieve “significant savings.”
“We don’t need to furlough now, and we don’t need to furlough for the remainder of this fiscal year, which is about seven months,” he said. “But furloughs are going to have to be seriously looked at in the next fiscal budget.”
Taking 10% away impacts some departments more than others, and Valbuena said he would take that into consideration as he formulates his recommendation to the mayor.
Housing and homelessness programs could take a major hit.
To hit the cost reduction mark, the Department of Community Services proposed cutting $500,000 from its homeless outreach navigation project, POST; $250,000 for its homeless transportation program; and over $350,000 from its landlord engagement program, which works to ease property owner concerns about renting to formerly homeless people.
Nevertheless, the programs could continue into the new fiscal year with remaining funds, according to the proposal.
Housing services could also be affected through the Department of Land Management, which proposed cutting nearly $65,000 used to subsidize affordable housing projects.
The Community Services proposal also suggests cutting $20,000 from a program run with the Honolulu Police Department that aims to divert juvenile offenders from the criminal justice system.
Two grant programs that serve people with special needs could be deferred or downsized by an elimination of up to $25,000.
One aims to provide training to assist visually impaired people in career development and advancement. The other aims to remove barriers for people with intellectual or developmental disabilities by providing “peer-peer friendships, inclusive events, and leadership development opportunities.”
Up to $12,500 could be cut from a City Council-backed program that sought to “support education, collaboration, and program development” for the Native Hawaiian homestead community in Papakolea, according to DCS’s proposal.
The Department of Design and Construction proposed axing $395,613 that would have gone toward a consultant who would develop standards to mitigate and adapt to the impacts of climate change and sea level rise.
“Without these funds, DDC will not be able to pursue this issue,” the proposal states.
At the Honolulu Police Department, special funds for investigations could be eliminated. However, HPD said in its proposal that it “will not affect investigations or jeopardize safety in the community.” There could be cause for concern, however, if reductions continue into the new fiscal year, HPD wrote.
Money for police dogs’ veterinary services “lapsed” due to no services being rendered, according to the HPD’s proposal. The department said this will have an “unknown” impact.
HPD is also proposing reductions to funding for gun parts, gun maintenance supplies and ammunition. The department said this will have a minimal impact for now on its operations.
Other HPD funds that were budgeted for procurement have gone unspent in cases when federal CARES Act money would cover the bill, according to the proposal.
The department has received over $30 million in CARES money, over half of which is for overtime. The department has purchased all-terrain vehicles and numerous new trucks for officers and granted overtime to issue an unprecedented number of pandemic-related tickets, particularly to homeless people. In addition, the department has used federal funds to extend hours for gun registration and permitting.
Honolulu parks and recreation facilities could fall into some disrepair if 10% cuts go forward, according to the Department of Parks and Recreation proposal. Kakou For Parks, the city’s park improvement program, would not be able to continue, and funding for air conditioning and security is on the department’s list for elimination.
The parks department also proposed the cutting of tree pruning services, cleaning and toilet supplies for the Summer Fun Program, medical supplies and storytellers at the Talk Story Festival, among other expenses.
In addition, the department proposed night closures of parks, fields and courts to save on electricity costs, and reducing the number of days the Kuhio Beach torch light ceremony lasts, to save on gas costs.
Cuts to the Environmental Services Department could have unpleasant results, according to its proposal.
Nixing $380,000 in non-holiday overtime pay could mean illegal dumping goes unaddressed at times, the proposal states. Environmental Services could also find itself unable to collect trash if normal equipment fails and the repair budget is no longer available, according to the proposal.
Other potential cuts on the Environmental Services list include $500,000 to line landfill cells to protect the land from ash and solid waste, $280,000 for guard services to address theft, vandalism and property damage at refuse facilities, and over $1 million needed to recycle green waste.
Cutting $185,990 from the Corporation Counsel’s budget could mean insufficient resources to properly represent and defend the city, which could result in “larger judgments and less favorable settlements in the future,” the department wrote.
The Honolulu Ethics Commission’s core mission should not be negatively impacted. Their proposed cuts of over $9,000 would only force them to attend conferences virtually instead of in person, according to its proposal.
Among the cuts proposed by the Department of Planning and Permitting is $350,000, which is its entire budget for operational improvements including staff training. DPP also suggested cutting translation services and the hiring of contested case hearing officers.
The Honolulu Fire Department proposes cutting over $1.4 million in personnel costs, which it says is a result of reducing its recruit class size to reduce COVID-19 risks.
The Department of Transportation Services proposal suggests cutting over $13 million in the transit division for rail costs, including insurance and electricity.
DTS did not respond to a request for more information on those expenditures.
The rail was supposed to begin partial operations in March, but the city announced this week that won’t be happening. The city is now saying that the project, which was supposed to be completed in 2019, won’t be done until 2033 and will now cost a whopping $11 billion.
In the short term, further delay of the rail project is “good for us because then we can save some money,” Valbuena said. The cost savings could help fill the gap of the fuel tax money that the city is losing, he said.
DTS is also suggesting reducing the diesel fuel budget by nearly $5.8 million and is proposing the deferment of $500,000 in the advertising budget that was earmarked for “how-to videos” related to the rail project. The department said the content could be produced in house on a case-by-case basis.
Some of the cuts, if implemented, would have alarming repercussions.
At the Honolulu Zoo, for example, cutting $50,000 from the “animal consumption” budget would mean the zoo animals go hungry, axing $30,000 from the professional services budget would negatively impact animal health care, and striking $10,000 for supplies like animal bedding and hoof knives would amount to neglect, according to the proposal.
“This is a violation of the animal welfare standard,” the proposal states.
That is an example of an action the city would not actually consider taking, Valbuena said.
“It’s just a proposal,” he said. “It doesn’t mean we’re going to follow the proposal.”
Other zoo expenses include $25,000 for animal transportation when they are acquired or loaned from other jurisdictions, and $60,000 for facility repairs, the proposal states. Eliminating those and other line items would jeopardize the Honolulu Zoo’s accreditation, according to the proposal.
City golf courses could also be severely impacted, according to the proposal.
Forgoing the purchase of tens of thousands of dollars in fertilizer would result in thinning turf, and choosing not to install silica sand as a top dressing will result in “dead greens,” the proposal states.
“When unplayable, golfers will not come to play and (will cause a) major loss of revenues,” the report states.
The outline from the Department of Facilities Maintenance warns that cutting $853,038 from consultant services would result in a “high likelihood the city could be placed under a consent decree for storm water violations.”
The city’s rocky financial future could also mean bumpier roads, literally: Facilities Maintenance is proposing cutting $1.6 million for street resurfacing.
Cutting $20,000 in non-holiday overtime pay would mean repair and maintenance workers would be unable to respond to after-hours emergency calls, the proposal states. That would delay response times and could cause “bodily injury,” the department said.
As the island grapples with a virus thought to be transmitted from animals to humans, the city is also considering eliminating tens of thousands in pest control costs. That budget helps eradicate insects, rodents and other critters that the proposal said “could lead to the spread of harmful diseases which can be contracted by animals.”
Reducing $375,000 for fire prevention in city buildings, including fire alarms, extinguishers and inspections, could prove disastrous, according to Facilities Maintenance. So could cuts to the electrical supplies budget, which keeps streetlights on and prevents vehicular accidents, the department said.
With potential cuts to the Customer Services Department, facilities could be left “unsecured & vulnerable to more homeless and vandalism, or inappropriate (behavior) by the public,” according to the breakdown.
In the Budget and Fiscal Services Department itself, $20,000 for postage could be eliminated that would ordinarily go toward the billing of real property taxes, the city’s largest revenue source.
In other words, reduced revenue could make it harder for the city to collect revenue.
“With the current economic situation due to COVID-19, we are already seeing a decrease in real property tax collections and we anticipate an increase in delinquencies,” the proposal states. “Reminder interim bills and/or delinquent bills will not be mailed due to reduced postage funds.”
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