City scrambles to find $5.8 million

By Treena Shapiro
Advertiser Staff Writer

On the heels of a bus fare increase to help end the bus workers' strike, the city now has to come up with $5.8 million to cover the first year in a four-year arbitrated award for police officers.

With no money set aside to cover the raises and health fund increases and a budget that has been cut to the bone, the city is faced with few choices. Because it is unlikely the city will reject the agreement, paying for the raises this year will require increasing the gasoline or vehicle weight tax, cutting departmental budgets or a combination of both, as proposed by Mayor Jeremy Harris.

City Council Chairman Gary Okino favors waiting until the next fiscal year, when the city can consider other sources of revenue, such as property taxes or user fees.

State of Hawaii Organization of Police Officers President Tenari Ma'afala said waiting until July 2004 is fine, as long as the raises are paid retroactively for the contract that covers four years starting this past July. However, Ma'afala said he does not believe that the city does not have the money to pay, based on Los Angeles-based arbitrator Catherine Harris' decision.

"In her eyes there is money," he said. "That's the arbitrator's position."

The arbitration decision comes during lean times for the city. The mayor has said repeatedly that there is no money for raises, first for the firefighters in April, then the bus drivers last month and now the police officers.

To pay for police raises, the City Council may be forced to ask motorists to pay 2 cents more per gallon at the gas pump. But that would come after the council last month raised bus fares during a bus strike by the Hawai'i Teamsters and Allied Workers Local 996. The bus fares were increased enough to cover a $6.8 million shortfall in the bus budget that would have led to a cut of 100,000 service hours.

Catherine Harris issued the ruling on Sept. 26. The decision gives Hawai'i's 2,600 police officers 4 percent raises in each of the four years of the contract. With increases to the health fund, as well, the city will have to pay an additional $67 million to cover its 1,905 police officers over the length of the contract.

Ma'afala suggested that the city should have done what Maui, Kaua'i and the Big Island did — set aside a special fund in anticipation of the raises. "It's unfair that the mayor would come out and say that the officers deserve a pay raise but now we have to go out and find (the money)," he said.

He does not object to a tax increase to pay for the "long overdue" raises. "They gotta do what they gotta do to find the raise," Ma'afala said.

The mayor said he did not include raises in the current budget for a variety of reasons, the first and foremost being his consistent position that there is no money for raises for any city employees. "The taxpayers couldn't afford pay raises for any employees during this tough economy," he said.

He also said the city typically does not budget prospectively for contracts that are in negotiation or arbitration because it would, in effect, show the city's hand. "If they budget $8 million, then my guess is the arbitrator would award $8 million," he said. "That's very poor collective bargaining."

Council Budget Chairwoman Ann Kobayashi said she believes the city could have anticipated the raises, as the other counties did. "They all have money set aside and they're ready to go, but we're still scrambling to see where the money will come from," she said.

Responding to Kobayashi's criticism, the mayor said the council could have budgeted the money themselves.

Kobayashi said the council left in the budget "different pockets of money that we could have cut," but she worries about further cuts to city departments.

"The mayor said he's going to cut even more," she said. "I don't know why they continue to cut in the departments when all of the city employees are already overworked. To cut even more, I don't know if that will work."

Kobayashi said she is waiting to see the administration's proposal before deciding whether she would support a 2-cent increase in the gasoline tax, which has been floated by the mayor.

Councilman Donovan Dela Cruz, whose district stretches from Mililani to 'Ahuimanu through the North Shore, said he is hesitant to raise the gas tax since his constituents typically have to drive the most.

Dela Cruz, who proposed selling advertising on the sides of city buses, said he would like to see more creative revenue-generating proposals from the administration.

"I've always been an advocate for finding revenues other than property taxes, user fees and increased fares," he said.

Dela Cruz said he hopes that the Legislature will finally grant the counties' request for the revenue from uncontested traffic fines and forfeitures. Currently the counties must pay for enforcement of traffic laws, but the state still collects the $8 million to $10 million in revenue. "I think that's an option that hopefully the state will consider," Dela Cruz said.

Rather than reopen the city budget in a effort to dig out the $5.8 million, Okino said it would be better to wait until the raises can be included in the next budget. "There's not too much in the city budget where we can come up with that kind of money," he said. "We've kind of taken out most of the fat."

He thinks that the council will have to go back and find revenue to cover a probable shortfall in the bus budget to deal with lost ridership after the bus strike kept buses off the road for 34 days. "That would need immediate attention," he said.

Okino suggested that dealing with the raises in the next budget cycle opens up more possibilities because the raises can be considered as part of a bigger picture, while in a supplemental budget request there are few options.

"If we look at the big picture, police raises and all, then we can look at user fees, we can look at the property tax that we couldn't look at in a supplemental, and other things, cuts in services, things like that," Okino said.

Reach Treena Shapiro at tshapiro@honoluluadvertiser.com or 525-8070.