Maui Mayoral Budget Reflects Downturn in Global Economy: 12 Furlough Days Proposed

By Wendy Osher

The Mayor’s new budget proposal calls for 12 furlough days, real property tax rate adjustments and a fee increase for some services.  Tavares said the furlough schedule affects HGEA and UPW workers as well as the Mayor’s directors and deputies and other managerial staff, reducing compensation for affected employees by 4.6%, and reducing operating expenses by $15 million.

The mayor’s plan amounts to one furlough day per month—that’s less than the plan floated by Honolulu Mayor Mufi Hannemann calling for two furlough days for city and county employees on Oahu.

“I think it could have been a lot worse,” said Tavares. Although funding was reduced for some non-profits, none lost their funding completely.

The proposals were part of Maui Mayor Charmaine Tavares’ newly unveiled FY 2011 budget that calls for projected revenues of $530 million.  That translates to a 6% decrease from the budget adopted for the current fiscal year.

FY 2011 Budget Overview

Maui Budget Director Fred Pablo looks on as Maui Mayor Charmaine Tavares presents her version of the FY2011 budget to the Maui County Council on Monday, March 15, 2010.

The projected revenue of $530 million includes an operating budget of $446 million and a capital program budget of $83 million, translating to a 6% decrease from the budget adopted for the current fiscal year.

In comparison, the $563 million in revenues for the FY 2010 budget for the current fiscal year included an operating budget of $461 million and a CIP budget of $101 million.

“This significant decrease in the County of Maui budget is a consequence of the downturn in the global economy,” said Tavares.

12 Furlough Days Expected to Reduce Compensation by 4.6%

The proposal includes a plan to furlough most employees for 12 days during the next fiscal year, amounting to a reduction in compensation for each furloughed employee of approximately 4.6%.  Tavares said furlough efforts help to reduce operating expenses by $15 million.

The furlough includes unionized HGEA and UPW employees, division heads and other managers and appointed staff, including directors and deputy directors.

Tavares has yet to finalize a furlough calendar, saying options must be discussed with the unions first.

“We would want them (the furloughs) to go into effect from the start of the fiscal year (July 1, 2010),” said Tavares, “…that will depend on weather or not we have done the consultations we are required to do for the unions—for the HGEA and the UPW,” said Tavares.

The other people that are being furloughed outside of the unions include the Mayor, her appointed staff, directors and deputies, and excluded managerial staff (supervisors or managers of programs that are not in a union, but traditionally follow contracts of their supervisory staff).

The inclusion of essential service employees in the furlough plan will also be discussed with the unions.  “Most of the essential services provided by firefighters and police are exempt, because their contracts are in effect right now and will be for the next fiscal year,” said Tavares.

The schedule amounts to one furlough day per month.  “I think it could have been a lot worse,” said Tavares. “It the contracts, it was negotiated that we would be able to do two days per month, but we felt at the county level here, that if everyone does a little bit, then we can support each other as employees,” said Tavares.

“One of the big costs in county government is overtime because we have 7-day-a-week operations like police and fire, and ocean safety officers,” said Tavares.  “It doesn’t make sense to close a beach, because now you’re putting the public at risk.  So we’re trying to look at where we can control the environment,” said Tavares.

“We tried to balance it out.  I keep saying that if everybody gives a little, then it’s not so painful to any one particular group.  And that’s what I’m trying to get across to people that is if we all share in this, it’s not as bad as it could be,” said Tavares.

Real Property Tax Adjustment Proposed

The new FY 2011 budget calls for an adjustment to real property taxes, the largest component of the County’s revenue.  In FY 201o, real property tax revenue was $233 million, making up 41% of the county’s revenue.

If rates remain at the same level as the current year, Tavares said it would mean a projected revenue decrease of $30 million.

Tavares is proposing an adjustment in tax rates so that $223 million in real property taxes can be generated.  “This will be $10 million less than our current year, but will enable the County to preserve necessary revenue and still provide Maui County homeowners with the lowest rates in the State of Hawaii,” said Tavares.

Increase in Fees:

Tavares said that sufficient funds are required to properly operate and maintain systems in order to protect the public health, environment, and the county’s investment in infrastructure.

“We have some proposals in the budget that we still have to talk to the unions about, but it’s things like closing the swimming pools one day a week, closing the landfills one day a week, reducing the hours at the service centers,” said Tavares.

In order to help pay for the expense of operating the Waiehu Municipal Golf course, the Mayor is proposing an increase in golf fees that includes a two dollar increase in weekday rates.

Similar increases are proposed for the county’s bus service to pay for operations and the construction of bus shelters.  Tavares said the service costs upwards of $7 million to operate, or about $4 per passenger.  Under the proposal, scheduled routes will continue to be a dollar, free routes will now also cost a dollar, and commuter routes will increase from one dollar to two dollars.

Non-profits:  Funding Reduced in some cases, but not eliminated

The FY 2011 Budget includes $30 million in funding support for non-profits.  That’s larger than the combined total of the state’s three other counties, which are contributing an estimated $9 million to the non-profit sector.

“We continue our commitment to support the many non-profit agencies that provide essential services to our community,” said Tavares.  “Nobody (no non-profit organization) lost their funding completely,” said Tavares.

The funding includes:

• $1 million in county grants to non-profit agencies for housing-related programs
• Close to $8 million in human concerns grants,
• $5 million in transportation grants, and
• $7 million in grants for economic development, environmental protection, watershed protection and conservation.

“There are some (non-profits) that are more essential than others, and that’s what we’ve asked them to recognize,” said Tavares.  “Those agencies that provide for the basic human needs—food, clothing and shelter—those were the ones that we wanted to support very much because in times of economic downturn, there are more and more demands for those types of services,” said Tavares.

“While everybody provides a service that is essential to our community’s well-being, either physically, mentally or socially, everyone has a purpose or else they wouldn’t be a non-profit that’s providing the services,” said Tavares.  She continued, “But at the time now, we have to really focus on those where the most need is,” said Tavares.

Tavares said there is a 25% cut on programs that fall under state jurisdiction including some programs involving Watershed Protection, the Maui Invasive Species Committee, and the University of Hawaii Maui College.

CIP Projects total $83 million compared to $101 million in FY2010

The Mayor’s FY 2011 Budget proposal calls for $83 million in CIP projects, $18 million less than the $101 million appropriated for the current fiscal year.  There are 72 Capital Improvement Projects included in the proposed budget.  Highlights include the following:

• $23 million for water source development, storage and transmission
• $26 million for wastewater improvements, including sewer line, reclamation facilities, and pump stations
• $20 million for a new Kihei Police Station
• $1 million for improvements to the Lahaina Fire Station
• $1 million for improvements to County facilities for access needs
• $1 million for solid waste improvement projects including improvements that will utilize renewable energy
• $10 million for road resurfacing and safety improvements
• $2 million for drainage improvements on Polipoli Road
• $4 million for improvements to the Waiohonu and Kulanihakoi bridges
• $5 million for park improvements
• $1 million for bus shelters

TAT Fight Continues

Maui Mayor Charmaine Tavares travels to the state capitol this afternoon to testify before the Senate in her ongoing efforts to keep Maui County’s portion of the Transient Accommodations Tax (TAT).

Maui County’s share of the TAT or hotel room tax is estimated at $17.5 million for Fiscal Year 2011.

“If we are unsuccessful in convincing the State Legislature to not take away TAT money from the four counties, Maui County’s shortfall will increase from $53 million to over $70 million,” said Tavares.

“The loss would be devastating to public programs and services and cause a rippling negative effect on Maui residents and businesses in the visitor industry,” said Tavares.

Mayor Tavares said the decrease in the county’s budget was a consequence of the downturn in the global economy.  “Balancing the needs and wants of our community with shrinking revenues is a considerable challenge and unlike anything the County has ever had to deal with,” said Tavares.