Hannemann said the increases are needed to pay for basic city services that include sewer work and road repairs that had been neglected before he took office. The increases also will cover employee expenses that include 2 percent to 4 percent pay raises for city workers.

"You have to make difficult choices," Hannemann said.

Combined with a $451 million proposed construction budget — not a record — the total city spending plan comes to $1.8 billion for the fiscal year that begins July 1.

The nine-member City Council has until June 15 to adopt a city budget. Generally, council members say they believe that fee increases are inevitable. The sewer bill would rise from a monthly average of $33 to $66 in six years under Hannemann's plan, but officials said going the previous 12 years without an increase made big changes necessary.

And residents seemed inclined to accept the increases.

"No one likes to see money come out of their pocket, but the bills have to be paid," said Tammy Beaumont of Manoa, a real estate agent.

"I'm OK with that," said Kenai Kemp, a 19-year-old University of Hawai'i social work student from Mililani. "I'm not for more taxes, but if they promise to fix the roads and the sewer with the money, I can live with that."

City Council member Charles Djou praised Hannemann's general theme of spending money on core services such as road repairs.

But Djou would like to see more cuts so there would be fewer increases, even if that means skipping raises for city workers this year. He especially would like to avoid such a big increase in the vehicle weight tax, which increased by 60 percent just over a year ago. That increase was from 1.25 cents per pound to 2 cents per pound.

Djou said this proposal would increase the tax by an additional 50 percent, to 3 cents a pound, which he said seems steep.

For the owner of an average car, the tax would increase about $30 a year, city officials said. That tax is paid when you register your car each year.

Djou noted that Hannemann planned to use the $22 million from the fee increase for road repairs, but that it is also close to the estimated cost of paying for city worker pay raises.

"We've increased commercial property taxes twice; we've increased residential property taxes. Now we're going to raise vehicle taxes a second time and these aren't small increases," Djou said. "Enough is enough; it's time we look at the budget for cutting it."

Hannemann said the pay raises are needed to help retain good workers who have become discouraged by years of "doing more with less" in the past.

Rates for nonprofits

"It's been long overdue," he said.

Quintal said the nonprofit organizations — including schools — now pay less than one-third of what it costs for the city to open and operate the facilities for a day's event rate.

For example, he said a nonprofit now pays only $788 to rent the arena for a day, although it costs the city $3,300 to open and staff such an event. A for-profit organization now pays $4,500 in rent.

Under Hannemann's proposal, the nonprofit fee would increase each year for five years by 15 to 20 percent. That would mean the organization would pay $1,288 a day beginning July 1 with graduated increases that would take the price tag up to the actual cost of $3,300, Quintal said.

Now, Quintal said, nonprofits pay $525 for the concert hall even though the actual event cost for the city is $1,850 a day. The proposal would hike the fee to $790 by July 1 and $1,850 in five years.

For the upcoming year, Quintal said the changes wouldn't bring in a lot more money because so many events are already booked at the existing price.

But it could make a big difference in coming years because the nonprofits would either pay more or switch to another location, freeing the city facilities to rent to for-profit groups for higher fees, a share of ticket revenue and even concession sales.

'Playing catch-up'

City Council Budget Chairwoman Ann Kobayashi said she liked Hannemann's overall approach and wasn't surprised that the operating budget grew to a record size.

"We're just playing catch-up," she said. "The good part is there are no glamour projects in there."

Kobayashi said she realizes that the rate and fee increases will be bad news to residents watching their own budgets. "It will be a little painful but at least we'll get our sewers fixed and our roads redone," she said.

Kobayashi has some concerns about the plan to boost the rates that nonprofit organizations, such as public schools, pay to rent city facilities.

"I worry about the schools paying more for graduation," she said. "I don't want any school to not be able to hold their graduations there. It's always so special for them to come to the Blaisdell Center."

No natatorium plan

What's not in the budget that Hannemann would have liked to include? A plan for the controversial and crumbling Waikiki War Memorial Natatorium, he said.

Hannemann said he feels it's important to preserve the historic arch but worries about the public safety issues raised by other sections of the pool complex.

"I'd like to see more beach," he said, but this year there's no money for a new plan.

Earlier, Hannemann indicated he was canceling about $12 million in construction projects, looking for private help to run "nice-to-have" projects such as vision team projects proposed by the community and beach-front festivities initiated by former Mayor Jeremy Harris.

Council Chairman Donovan Dela Cruz said Hannemann's proposals make good financial sense.

"There's no doubt that the priorities are basic city services," he said. "There are some areas where if we don't make the investment now, it's definitely going to cost taxpayers more later."

Residents seemed ready to pay more for problems they encounter daily.

"I'd rather have better roads, even if I have to pay a little more. Improvements always cost something, and somebody always has to pay a price for them," said Phonexay Oulayrack, 34, a Kahuku farmer selling vegetables at Manoa Marketplace.

Graham Lee-Driscoll, a semi-retired cinematographer living in the Punchbowl area, agreed.

"It has to be done," he said. "The roads are the worst in the world."

"Even in the Australian Outback they have better roads. If we don't do something now, they'll be in really bad shape in a few more years."

Staff writer Mike Leidemann contributed to this report. Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com or 535-2429.