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Honolulu Mayor Rick Blangiardi on Friday unveiled a proposed $3.6 billion operating budget for the next fiscal year that puts more money toward equipment maintenance and public safety and sets aside about $80 million for potential hazard back pay stemming from the pandemic. 

Blangiardi presented highlights of his budget at a press conference Friday afternoon with Department of Budget and Fiscal Services director Andrew Kawano.

In total, Blangiardi is proposing to spend about $3.6 billion on operating expenses including employee salaries and about $920 million on projects like road improvements and wastewater treatment upgrades.

“This is not just about balancing numbers – this is about meaning and purpose and impact,” Blangiardi said Friday.

The operating budget is slightly larger than last year’s $3.4 billion allocation. The capital improvement budget is about $420 million lower than last year’s.

Public safety, including the police department, fire department and Department of Emergency Services, would receive about $677.6 million under Blangiardi’s proposed budget. Most of that would go to the police.

The Honolulu Police Department’s budget would grow from about $354 million this fiscal year to about $371 million, mostly for administrative services and salary increases that the mayor said had been negotiated previously.

“We’re doing everything we possibly can to make the police department as attractive and as viable as possible,” he said.

Money for equipment maintenance and purchases would be more than triple what it has been in previous years. 

Blangiardi is proposing over $44 million in equipment spending this year, compared to about $12 million during each of the past two years.

“Since the pandemic, there was a slowdown and capacity issues by a number of our suppliers that provide heavy and light equipment vehicles to the city,” Kawano said at the press conference.

One example: the city has ordered 73 new garbage trucks over the past five years, and so far it has only received 17. The latest of these came in November 2020. In a press release from February, deputy communications director Ian Scheuring noted that this means trucks are being driven for longer than their normal lifespans.

“As a result, these trucks are increasingly vulnerable to breaking down and require more maintenance than newer trucks,” he wrote. Partly as a result, solid waste management could get about an extra $30 million this year.

Transportation is typically one of the biggest categories of spending for cities. In Honolulu, Blangiardi’s proposal is to spend about $427.7 million on mass transit services like TheBus and Skyline, a little less than 12% of the operating budget. That percentage is on par with previous years.

The largest categories of proposed spending, like always, are the fixed expenses of employee benefits and debt servicing. Those come in at $844.7 million and $677.6 million, respectively, or about 42% of the total operating budget. 

While the proposed capital improvement budget is lower than last year’s, that doesn’t necessarily mean that there will be less of a commitment to investing in infrastructure, said Blangiardi and Kawano.

“That’s because of the nature of capital improvements,” said Kawano, referencing sometimes complicated funding schedules.

And, said Blangiardi, another reason for this lower capital budget is because the city wants to build affordable housing using a different financing method than it has in the past, which requires approval .

“But don’t confuse that with any less of a commitment – in fact our commitment is greater than ever – to build what’s right and what will work in the marketplace,” he said. 

About $22.8 million of capital funding would be allocated toward affordable housing development this year, and about $205 million is being carried over from the current fiscal year. About $55.8 million would go toward park improvements like designing softball lights for Kamamalu Park.

A little less than half of the proposed capital spending plan, about $445 million, would be for wastewater improvements. The city broke ground Friday morning on a six-year project to upgrade Honouliuli Wastewater Treatment Plant that will cost about $517 million.

This unveiling of the mayor’s proposed budget is the first step in a process that will continue over the next few months. The mayor’s proposal goes before the City Council for consideration and approval before the new fiscal year starts on July 1.

One big expenditure the city is still bracing for is hazard back pay owed to union members who worked during the pandemic. 

Almost $80 million of federal pandemic money has been set aside for the back pay, money that had been allocated like creating affordable housing or improving parks.

The federal money was given to the city with the intention of supporting projects whose funding had been overshadowed by pandemic-related expenses. But the city isn’t allowed to hold onto this federal money forever – a looming deadline forces it to “obligate” the money by the end of 2024 and to spend it by the end of 2026. 

Money for many of the projects was unlikely to be spent by then, according to a November letter from the mayor’s office to the City Council.

The total dollar amount owed to union workers is still unclear because negotiations are ongoing, Blangiardi said Friday.