Mayor unveils budget request; ‘need to act’ on infrastructure

WAILUKU – Wanting to lay a solid foundation for Maui County in years to come, Mayor Alan Arakawa unveiled his 2013-14 budget request Monday with a wish list of more than $105 million for infrastructure and facility improvement projects.

Arakawa told Maui County Council members that the projects ranging from road resurfacing to wastewater and water supply improvements need to be done sooner rather than later.

“Our infrastructure and facilities are old. Our maintenance workers are making repairs and extending operational life where they can, but it is only a temporary fix,” Arakawa told council members, his staff and members of the public in his budget presentation in Council Chambers. “My point is that now is the time to do something about it. We need to act now, while interest rates are low and construction companies are charging less,” he said.

Arakawa is proposing a $573.6 million budget, a $23.7 million, or 4.3 percent, increase from the budget adopted by the council for the county’s 2012-13 budget of $549.9 million.

The spending plan calls for $482.2 million in operating costs and $91.4 million in capital improvement projects, which would be paid for from county funds while other funding sources may be added later.

To pay for the improvements, Arakawa is seeking higher water rates and hikes in most real property tax categories and tipping fees at landfills.

In explaining his reasoning for the various improvements, the mayor said it’s something the county should do now to avoid costly fixes later. He pointed to how the City and County of Honolulu had to pay billions of dollars to upgrade its wastewater collection and treatment system, because it had no other option when a pipe broke during heavy rains in 2006. That break led to millions of gallons of untreated sewage being dumped in the Ala Wai Canal, which runs parallel to and mauka of Waikiki and empties into the ocean.

“This budget isn’t about next year or the year after that. It’s part of a plan that is looking at 50 years down the road,” Arakawa said.

The mayor requested a nearly $2 million increase in the budget for the Parks & Recreation Department in order to better maintain county parks. The parks operating budget, under the category of “other costs,” would rise from $297,410 this fiscal year to nearly $2.3 million for 2013-14.

After his presentation, Arakawa said the increase is necessary to give parks maintenance staff the tools to upgrade and clean parks, such as painting and other projects, including fixing doors and locks.

“We want them to do more of the work,” he said.

To pay for the higher operational and project costs, Arakawa’s administration is seeking various rate hikes, including higher real property taxes. Estimated property values for 2013-14 are projected to amount to $33.4 billion, which would generate an estimated $239 million in revenue, Arakawa said.

The revenue derived from real property tax is the most significant source of revenue for the county, he said.

He also is proposing to restore parity to real property tax classifications that historically shared the same rates until around a decade ago.

The residential, apartment, agricultural and conservation classifications are all proposed to be equal in Arakawa’s proposal, while the commercial and industrial classifications are proposed to be the same.

No tax rate hike is proposed for the homeowner classification because Arakawa said those in the category saw a “significant increase last fiscal year,” with the average homeowner’s tax bill going up 24 percent last year.

Proposed hikes in Arakawa’s budget go from a low of a 4.8 percent increase for the apartment classification to a high of 13 percent for those in the improved residential classification.

The mayor reiterated that he is seeking a 5.2 percent water rate increase for the Department of Water Supply. Arakawa originally announced the proposed increase during his State of the County address earlier this year.

The Department of Environmental Management is seeking an increase to its solid waste tipping fee at its landfills, from $61 to $75 per ton.

The increase could generate $1.3 million in additional revenue and reduce the amount of general fund subsidies for the department to cover total costs.

The Department of Planning is proposing a new rate structure to help recoup up to 30 percent of the cost of issuing planning permits.

After the presentation, Arakawa acknowledged that he has been fielding questions about rate increases so the county can improve its infrastructure and facilities.

“Why do it now?” he said he’s been asked.

“We’re at the point now we’re seeing everything falling apart. We can’t kick the can down the road for the next group. . . . There’s never going to be a perfect time.”

The Maui County Council has until June 10 to pass a budget for the next fiscal year, which begins July 1.

Overall, council members said after the presentation that they approve of the direction the mayor is taking with road, water system and wastewater improvements but they need time to digest and scrutinize the budget proposal.

“I think for the most part we agree with the overall direction the mayor has taken,” said Council Budget and Finance Committee Chairman Mike White. “But we will do our due diligence and make sure we are spending the people’s money wisely.

“I think a lot of the expenditures he is proposing are likely to be appropriate and necessary. But again, our job is to look at . . . whether the numbers reflect an accurate value for the work to be done,” White added.

As for the proposed rate increases, White said: “Our job is to make sure before we increase rates, we need to be looking at making sure that everyone who is supposed to be paying a certain level of taxes is in fact doing so . . . Because this is the people’s money, our job is to make sure the items included in the mayor’s budget are absolutely necessary and good for the county in the long term.”

Council Chairwoman Gladys Baisa said she was especially pleased to hear about the infrastructure, park and road improvements.

“Roads, I’m so excited,” she said after hearing Arakawa’s presentation.

She said she gets many calls about road issues.

The council also will need to get more information about proposed fee and rate increases from the administration to make its decisions on possible increases, if any, Baisa added.

“It all sounds good right now,” she said of the budget. But she added that after around six weeks of deliberations, “We’ll come to our own conclusions.”

Council Member Don Couch said he also liked what Arakawa was proposing regarding improving and upgrading infrastructure. He said that for too long the county has been putting off large fixes and upgrades.

Although he still had to look at the entire budget, Couch, who holds the South Maui residency seat, said he doesn’t think that he will be able to see the beginnings of a county gym in Kihei, as he said he was promised by the administration.

* Melissa Tanji can be reached at