This Annual State of the City address is our chance to look back on our accomplishments as a community and look forward at the challenges that lie ahead.

I’m happy to report that the State of our City is strong. Crime has been reduced dramatically and our citizens are living in the safest City of its size in the United States. Our bus riders now have more buses, more routes, and better service than ever before. Home and business owners are safer with the addition of new fire stations, expanded ambulance service, and state of the art emergency technology.

Our children’s lives have been enriched with new parks, playgrounds and sports facilities. And as taxpayers, we’re paying less property taxes collectively than we have since 1994 now that City government is smaller and more efficient. Employment is up on Oahu – our jobless rate is less than the national average and the lowest of any county in the state. And, our economy is expanding once again.

Honolulu is a great City embarking on a new millennium filled with hope and opportunity. If we have the vision and courage, Honolulu can become a truly great international City. A City that’s a leader in the global economy. A City that serves as an international model for utilizing state-of-the-art technology. A City that boasts an unsurpassed quality of life with safe communities, a healthy environment, and an involved citizenry.

Make no mistake, this great destiny can be achieved – but to achieve it we must continue to adapt and change.

We realized six years ago that if people were going to get value from their government, if City services were going to be relevant and affordable, then our whole system of governance had to change with the times and adapt with the technology.

The "old government" mindset, where politicians and bureaucrats determined all the priorities and made all the decisions, simply doesn’t work in the 21st century. Top-down government is unresponsive and out of touch with the needs of our communities. This "old government" – blind adherence to the "way we’ve always done it" mindset results in inefficient and costly government. And the "old government" that tried to be all things to all people – to do it all itself – simply couldn’t handle the load.

Over the last six years, we’ve become architects of "The New Government". When I say "we", I mean you and I, those of us here today. Community and labor leaders, public servants, neighborhood board members, small business people – all of us working together – have created this "New Government". In fact, one of the key principles of "The New Government" is partnerships.

In our new non-partisan municipal government, it can fairly be said that partnership has replaced partisanship, and consensus-building has overcome confrontation. And I’d like to personally thank Council Chairman Jon C. Yoshimura for his leadership.

We’ve recognized that all voices need to be heard and that you need to have a say in the services government provides; and we must all get involved in working together to get the job done. New Government leverages its resources by forming constructive, working partnerships with the private sector, with non-profits, with community groups – with anyone and everybody who’s a stakeholder in the issue. Sharing resources and power is the hallmark of this New Government approach and where government isn’t best equipped to do the job, it must get out of the way. We must abandon this old fixation on over-regulation and control and move toward a new model where government is instead a facilitator of positive change – partnering, not just regulating.

Another hallmark of New Government is innovation and acceptance of new technology. New Government is open to creative new ideas. We’re always looking for a better way to give you more value for your hard-earned tax dollars: Innovation and Partnership -- that’s the framework of New Government. And it’s producing exciting results in our great City.

The greatest and most exciting partnership the City has forged is with its own citizens. We call it the "21st Century Visioning Process," where every individual on this island, young or old, rich or poor, has an equal opportunity to participate in the decisions that affect our neighborhoods. The results of this process have been extraordinary. Thousands of people have come together to forge a shared Vision for their communities. The focus up to this point has been largely on planning a Vision for our individual neighborhoods. The time has now come for us to broaden our perspective and expand our neighborhood focus into a regional and island-wide Vision.

The effort will begin by convening quarterly Regional Vision meetings around the island. These meetings will enable citizens from different neighborhoods to discuss ideas, issues and improvements that are regional in scope. These meetings will also be televised and Webcast so that people at home can call-in or e-mail to participate in the process.

An islandwide Vision Conference, televised and interactive, will be held after the regional meetings to help develop consensus on a shared Vision for our entire island.

We’ll also be publishing Vision newsletters, where projects and ideas that emerge from the neighborhood Vision meetings will be shared with the entire community. And each Vision area will have its own homepage on our Vision Interactive Website. And to give even more people a chance to share their feelings on community proposals, we’ll also conduct visual preference surveys. You’ll have a chance to log-on and voice your opinion on which landscape plan or architectural design for a planned building you think is best. I call it "Digital Democracy", and it’s all part of an empowered populace.
To encourage more people to get involved in the City management issues and to make it more convenient for you to ask questions or share ideas with City department heads – we’re also starting a new program called "Tell It to the Cabinet".

Once each month, the Cabinet meetings will be televised live, and on-line, via the Internet. These meetings will be interactive, which means that anyone can access the City’s Website to enter into the discussion or ask questions of Cabinet members, and of the Mayor.

All of these initiatives are designed to give people a greater voice in City government, to form a partnership between government and its citizens to develop a shared Vision for our future.

In addition to having active citizen participation, great cities have creative and innovative governments, governments that try new approaches and use cutting edge technology to meet challenges.

Six years ago, we recognized that the economic downturn and the drop in property values was going to provide incredible challenges for our City government. After all, real property taxes represent the City’s main source of revenue to pay for the police, the fire, the refuse – all the municipal services. And while salaries and utility costs were going up and new communities needed additional services such as fire and police stations – property taxes were going down.
We realized that if we were going to be successful in providing more services to more people with less money, we were going to have to be very innovative. We were going to have to streamline and modernize City government to become more customer focused and less bureaucratic. So that’s what we did, we modernized and re-organized. We used technology and just good common sense to reduce the size and cost of government.

But each year, the taxes went down and City workers were put under growing strain to provide more and more services with fewer and fewer dollars. They did it – with creativity and innovation and just plain hard work, they did it. I’d like to recognize those that are here today. Let’s give them a hand.

But still the taxes kept going down. And over this period, more than $87 million of pay raises were awarded to City workers, but we had no money to pay them, so we found more creative ways to innovate and cut costs and we continued to balance the budget year after year.

Now, we’ve reached a point where property taxes are $59 million less than they were when I first became Mayor in 1994. We’ve reduced the number of City departments and the number of City employees by 7%. Despite the fact that we’ve increased police, fire, and other City services all around the island, when you consider inflation, we’re running your City today with a budget that’s $71 million smaller than it was seven years ago.

But we’ve essentially exhausted our streamlining and cost-cutting options under the current law. Yet we’re again facing significant cost increases that are beyond our control.

In the coming year, government employee pay raises and retirement system cost hikes go up by another $58 million. The HGEA and the UPW haven’t been very happy with me because my Administration has repeatedly opposed the pay increases. We opposed them not because they weren’t deserved, but because we simply couldn’t afford them without increasing taxes; yet despite our opposition, the pay raises were awarded.

And while we didn’t agree, binding arbitration must be binding on labor and management alike. We have a moral as well as a legal obligation to pay the awarded raises. As such, I will budget them in the upcoming City Budget.

Despite this single significant cost increase, I’ll work hard in the coming budget to keep property taxes lower than they were in 1994 when I first became Mayor, and we’ll continue to use new technology and innovation to keep government costs down.

The innovations we’ve implemented over the last six years have enabled us to be more efficient and productive to address declining tax revenues, but current law severely limits the ability of management to manage. We’ve reached a point where limited opportunities exist for further significant improvements.

We need to change the current laws to correct unacceptable work practices that increase costs. For instance, one hour of unscheduled work for certain workers can result in twelve hours of pay.

To deal with problems like this, we’ve introduced a comprehensive bill to the State Legislature to remove the barriers to good management. We call it the Common Sense Government Plan.

I also believe that we must have the flexibility to contract work to the private sector when they can do the job more efficiently and cost effectively. We call it Managed Competition, and to allow this to occur, we’ve introduced a second bill to the legislature. Our Common Sense Government and Managed Competition legislation gives government the ability to be more efficient and productive and I ask you to support the passage of these bills.

As a result of our efforts in streamlining, cost cutting and innovation, "Governing" magazine rated Honolulu as one of the nation’s 13th best-managed cities. This past fall, our bus system was selected as the finest transit system in North America. Our Fire Department became only one of 34 departments out of 32,000 nationwide, to be nationally accredited. And last year, many of our programs won State and National awards of excellence.

Despite these accomplishments, we’re continually exploring new approaches and better ways – more efficient ways to do the job.

By completing the automation of our refuse service last year, we now pick up more refuse than ever before, but it costs taxpayers $6.4 million a year less to do the job.

Through our energy saving programs, we have been able to cut City energy costs.

Council member Holmes has helped form a partnership with The Gas Company to use biogas from wastewater plants to generate electricity. Once implemented, it will save the City $1.0 million a year.

We’re replacing conventional traffic signal lights with light emitting diodes at intersections throughout the island, saving $500,000 a year.

In order to improve customer service and at the same time reduce the number of employees needed to serve our growing population, we’re moving to provide all of our City services on line. We now have Websites for everything from real property tax information to elderly affairs. Forms for almost every imaginable City service are now online, and our new "Fix It On-line" handles hundreds of complaints. To further cut costs, the City is now offering e-commerce. You can now re-register your motor vehicle on-line without even having to leave your home or office.

And in the year ahead, you’ll be able to apply for building permits, get your personalized license plate, or even pay your taxes, all via the Internet – from your home. And I’d like to thank Council member Andy Mirikitani for his leadership in making our City a pioneer in information technology.

We estimate that just over 50% of our island households have internet access to take advantage of all of our convenient on-line services, but that also means that almost half of our citizens don’t have access to the internet. To help alleviate this situation, this year we’ll kick-off Neighborhoods on Line. As the City upgrades its computer systems, those computers that are being replaced will be deployed to recreation centers all around the island providing internet access to all our citizens at a park close to home.

We’ve installed over 600 mobile computers in patrol vehicles and plan to install an additional 600 this year so police officers can obtain criminal information on suspects directly from the field.

If a resident is trapped in a fire, the fire department now has thermal imagers that can locate a person surrounded by flames and smoke.

Residents will have faster ambulance responses, as all of our ambulances are equipped with an Automatic Vehicle Location System allowing the dispatcher to direct the nearest ambulance to an emergency.

Innovations such as these save all of us money as taxpayers, yet here at the City, we’re about more than just running efficient operations, we’re about improving the quality of life for everyone who lives on this island. Making lives better for kids and families – that’s what inspires us every day. Nothing is more precious than our children, and improving their quality of life is our top priority.

Through our partnership with Head Start, we provide 8 affordable day care centers in City parks. This year, we’ll double that number.

Last year, we built 50 new play sets, and we’ll build 50 more this year, concentrating on parks adjacent to schools.

Skateboarders were needing a place to practice their sport, and we listened to their concerns, then put them to work helping us develop a skate facility master plan. This year, we’ll build six more skateboard parks in neighborhoods all around Oahu. Please join me in expressing our appreciation to the hard work of our young skateboarders who developed the plan. And they’re not the only young people who’ve gotten actively involved in their City government.

Our youth in Pearl City worked in partnership with us to build a youth center in their community. And in just a few months, construction will be complete.
We want to be a bicycle friendly City where people are able to use bicycles for transportation and recreation. This year, working with the Honolulu Bicycle League, we’ll be building 11 critical segments of our islandwide bicycle network and adding 50 new bike racks around our City.

In prior years, canoe paddlers have had to use make shift storage and launching facilities, so with the leadership of Council member John DeSoto, they’ve worked with us to develop a master plan for canoe halaus. This year, we’ll be building canoe halaus all around Oahu.

And in Hawaii Kai, thanks to Council member John Henry Felix, the community’s been working with the City to develop a master plan to upgrade and expand Koko Head District Park., and we’ll build Phase I this year.

Beautifying our island improves everyone’s quality of life. We’ve taken creative ideas on beautification and urban design from all the Vision teams, and this year we’re making improvements to every town and neighborhood. Thanks to the leadership of Council member Gary Okino, we’ll begin the transformation of Aiea and Pearl City this year as we begin the first phase of the Pearl Harbor Historic Trail. And thanks to Rene Mansho, Vice Chair of the City Council, Haleiwa Town will also be transformed.

In highly scenic areas we’ll begin to place the unsightly overhead utility lines underground especially where ocean and mountain view planes are obscured. I’d like to thank Hawaiian Electric for their new policy about sharing cost of under-grounding.

Our Volunteers in the Parks ("VIP’s") work to beautify our island every day by volunteering their time to assist our park staff in landscaping and upkeep. To all of our volunteers in the parks, mahalo nui loa for your commitment.

We’ll continue to beautify our streets and medians; this year we’ll plant 1,000 gold trees all over the island.

To beautify one of the most congested parts of our City, today I’m proposing to create a Convention Center Special District. The district will call for the redevelopment of the area around the convention center with more landscaped open space and urban design guidelines. A Master Plan for this blighted area to complement the Convention Center and Waikiki is long overdue.

Transportation is key for our City to remain vibrant and healthy. Last year, residents were able to reduce their commuting time to town due to expanded express bus service, and I am proud to report that ridership on these routes has doubled. Because of such enthusiastic public support for efficient transit this year, we’ll be moving full-speed ahead on our Trans 2K Transportation Plan, and I’d like to thank Council member Duke Bainum for his leadership on this important project.

I firmly believe that the Vision we develop for our island must include economic diversification. Tourism is now, and will continue to be, an important component of Honolulu’s economy. That’s why we’ve worked so hard to turn Waikiki around and make it a place both visitors and local residents will want to return to. The improvements we’ve made to Waikiki this past year -- such as Kuhio Beach, the Waikiki War Memorial, and the new Kapi`olani Park Bandstand, have all helped to reestablish a strong visitor industry and recreate a Waikiki that welcomes island families. But we must and we shall do more than simply rely on Waikiki-based tourism. To give our economy more stability and to make sure our young people have a choice of good paying professional careers, we must diversify our economy and our job base.

We can and we must play a leadership role in the new global economy. I believe our true destiny is to be the center for research and development, for high technology, and for professional service industries for the entire Asia Pacific region.

We have many attributes that are attractive to high-tech companies. Our City is the safest City of its size in the United States. We’re strategically located with a cosmopolitan multi-lingual population. We have a clean environment, a high quality of life, and superb fiber optic connectivity.

Therefore, over the next year, I propose that we take the following actions:

First, working with the Pearl City community, I propose to establish a High Tech Park on over 50 acres of un-utilized City lands at Manana. This park would provide attractive lease rents and other tax benefits for information-based companies.

Second, the City will work in partnership with Campbell Estate to attract technology companies to the City of Kapolei. My administration will immediately begin negotiations with Hawaiian Electric to modify our contract with them to provide surplus low-cost electricity from our H-Power plant directly to new high tech firms that locate in the surrounding area. Under this plan, no City revenue would be lost, but new technology firms could be attracted to Hawaii to take advantage of low energy costs.

Third, most of the economic and population growth in the world over the next 30 years will occur in Asia. This growth and development is creating enormous environmental and urban problems for the region. To solve these problems, the cities in Asia and the Pacific need expertise in a myriad of areas such as engineering, science and technology – expertise that we have. I believe Hawaii can be the center for these knowledge-based industries.

Over the last several years, we’ve been working to establish Honolulu’s reputation as the place where Asian cities can turn to find the answers to their environmental and infrastructure problems. As we succeed, we’ll open up enormous new Asian markets for our local engineering, planning and technology companies and attract new companies from around the world.

Therefore, to further this third initiative, this year we’ll launch an Asia-Pacific Urban Technology Institute. Rather than taking years and millions of dollars to build a new facility, the City will make innovative use of its resources by integrating this Institute into our new municipal building in Kapolei. Working in partnership with private sector firms and the Board of Water Supply, this Institute will exhibit a wide array of cutting edge technology. Asian leaders will be able to receive information and training at the center, and local technology and professional service firms will be able to market their services there.

In addition to attracting international technology firms to the island, we’ll also focus on providing assistance to local entrepreneurs who need support and nurturing to start new businesses. Again, making creative use of existing resources, we will open a City Small Business Incubator using City owned, vacant office space in Chinatown. We’ll not only provide "plug-in ready" space at attractive rates to new start-up businesses, but also form partnerships with the business community and local universities to support and guide these start-up companies.

Just a few blocks away at a second City-owned facility, we’ll open a One-Stop Small Business Development Center in partnership with the U.S. Small Business Administration. Here, individuals interested in starting a small business can come to receive training and guidance in such things as developing a business plan, and securing start up financing. Working together, these two facilities, the Small Business Incubator and the Small Business Development Center, will provide enormous assistance to new firms.

Many existing small business owners feel they don’t have any voice in government and nowhere to turn when confronted by confusing government regulations. To provide that voice, we’ll create a Mayor’s Small Business Advocate. The Advocate will investigate and resolve complaints and red tape that hinder small business. And starting immediately, the City will launch a business-focused economic development Website: ehawaiibusiness.com. The purpose of this "dot-com" is to help our local companies while showcasing Oahu to the world as a good place to do business.

We’ll also be utilizing our state-of-the-art Geographic Information System (GIS) to attract potential investors and businesses to our City. Working in partnership with the Honolulu Board of Realtors, our GIS system will become an economic information network accessible through the Internet. It’ll provide relevant economic data about all parts of our island and catalog real estate information, rents, zoning, infrastructure, and other relevant information. Companies from around the world will be able to access our economic information system to make intelligent decisions about relocating or investing in our City.

And thanks to Councilmember Romy Cachola, we are well on our way to creating our fourth Enterprise Zone.

In order to provide our families and young people with the recreational facilities they need and also help provide jobs at the same time, the City is continuing the development of a sports tourism industry.

Our new Waipio Soccer Complex provides playing fields for our 23,000 youngsters involved in youth soccer, but it’s also poised to contribute to our island’s economy as well.

I’m proud to announce today that in partnership with the leaders of our soccer community, we’ve been selected to host the AYSO National Games in 2002. These games will attract 200 to 250 soccer teams from across the nation and will pump $10 million into our economy.

In addition to soccer, we’re actively seeking professional baseball teams to train on Oahu. I’m proud to also announce today that two Korean Baseball Major League teams have selected Oahu for their winter training and will be using our new baseball facilities in Central Oahu Park starting next year.

Ladies and gentlemen, as you can see we have many ideas for how to make our City a better place to live, to work and to play. To improve on what’s great and make it even better.

These innovative ideas are not solely my own – they come from you – the Neighborhood Boards, the Vision team members, the City Council. Our Vision is a collective Vision. And my friends, just as this collective Vision is generated from you, so our destiny as a great, international City will be secured by you. It is your knowledge, your energy, and your time and talents, which must give life to these dreams and give form to our aspirations.
Today, we’ve discussed where our City’s been and looked ahead to where we’re going.

We’ve abandoned outmoded, old-style government in favor of innovative, New Government.

New Government that utilizes partnerships, leverages community resources, and gives all parties a seat at the table.

New Government that thrives on innovation, that encourages the use of new technology, and puts people first.

New Government that works with business and labor to create new opportunities and broaden our economic base.

New Government that builds a preferred future, and stresses quality of life issues. That puts communities, people and families first.

New Government for the new millennium.

Welcome to the new millennium.


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