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With four weeks until Honolulu Mayor Peter Carlisle introduces his first city budget, capital budget cuts and user fees have emerged as likely strategies to close the budget gap. Officials are looking at a pay-as-you-go system for city services like trash pick-up and using public swimming pools.

The city’s current operating budget is $1.8 billion, and its capital budget is $2.1 billion. The latter includes more than $1 billion for the city’s proposed rail line, and about $280 million for city construction projects or capital improvements. Such costs include everything from traffic light maintenance to new fire engines and updated software for city computer systems.

“We are looking really closely not just at the operating budget, but the capital budget,” Honolulu Managing Director Doug Chin told Civil Beat. “If there’s a theme in this next year’s budget, it’s really making sure that we’re not mortgaging the future, and not creating a budget that’s going to be too difficult for our children or grandchildren.”

Specifically, the city is targeting projects that received the go-ahead in fiscal years past, but haven’t gotten off the ground.

“There’s a desire to take a look at the projects in the past fiscal years that have been programmed but not come to fruition, like bicycle capital improvement projects,” said the city’s Transportation Services director, Wayne Yoshioka, in a November Transportation Committee meeting. “I sat down with the mayor’s advisory committee for bicycling … We got into this very exciting discussion about what they saw for the future and what we really needed to be looking at. There are some small projects we can do that would gain a lot of benefit.”

City Council members are moving forward with an of the Transportation Services department’s use of monies allocated for bicycle improvements. The idea, from a City Council perspective, is to make sure that longterm improvements move forward as intended. But that could clash with an administration looking to make sweeping cuts to longterm projects.

Chin said it’s too soon to say which projects could be axed. The mayor has repeatedly griped about city construction costs.

“We’ve been told all along that the capital improvement plan should be a certain amount, that it should be kept at $125 million dollars,” Carlisle told Civil Beat in November. “That’s been the recommendation over and over and over again by the budget people. What happened last year is that went up to $288 million, which was more than double. I want to find out (where) that money was spent.”

The mayor is a vocal supporter of the city’s multibillion-dollar rail project, which city officials say will create thousands of local construction jobs. Carlisle has also grudgingly acknowledged the necessity of complying with a consent decree that will cost the city billions of dollars in sewer system upgrades over the next 30 years.

Carlisle said the shortfall the city is facing is “significant,” though less than $100 million as he originally estimated. Late last year, he said he had already put a stop to a multimillion-dollar city construction project, but declined to elaborate. The mayor has also been vocal about his support for development as a means to economic rejuvenation. Carlisle tapped a Department of Planning and Permitting director who boasted of processing more than “14,000 building permits, representing $1.9 billion of construction work” last fiscal year. At his October swearing-in, one of the major priorities Carlisle cited was to “get money out of government and into the private sector, and specifically the construction industry.”

“Ultimately, you’re sort of putting things into categories,” Carlisle said at the time. “You end up with the conclusion that we need to be far more fiscally disciplined in terms of saving money and far more disciplined in terms of spending money.”

Carlisle said he wants to limit capital improvements outside of rail and sewers to $125 million. But the city’s capital budget for highways and streets alone was more than $126 million last year. Managing director Chin said part of being more disciplined requires a willingness to look at spending over a longer period of time.

“A big concern for us in the amount of debt service that we’re going to be looking at,” Chin told Civil Beat. “The higher the debt service goes, the higher the rates for non-discretionary expenditures. If we don’t have discretion, we have to spend the money. And every year we need to be able to cover those expenses.”

Pay-as-you-go for City Services

While the administration determines which projects are necessary — they point to rail and sewers — and which are not, officials are also looking at user fees to offset operational costs.

“The administration wants to move to a pay-as-you-go system regarding fees for city services,” said City Council member Ikaika Anderson. “Paying for a program for those folks who benefit from the program, as opposed to having the real property tax funding them. They’re looking at camping permit fees, fees for swimming pool usage, fees for refuse collection.”

Thus far, City Council members are considering such proposals with skepticism. A hearing earlier this month about possible camping fees drew tough questions from multiple council members, most of whom said they left the hearing “worried.”

“Fees for service and pay-as-you-go, this is all coming to us from the administration,” said City Council Chairman Nestor Garcia. “But we have to be the ones to balance the budget. The first question is: how is this a critical component of your balanced budget? Then: If we were to change it, kill it, would it unbalance your budget?”

While the mayor is required to present his budget the first week of March, Garcia said it’s likely budget hearings won’t begin until mid-month.

“There’s an old saying,” Garcia said with a smile. “Administration proposes and council disposes. We’ll see what happens.”