KAPOLEI — The new year brings an economic slump and dwindling city tax revenues, but familiar faces will be back in Honolulu Hale to handle the issues as Mayor Mufi Hannemann and five City Council members were sworn into office yesterday.

City Councilman Duke Bainum is the lone newcomer to the council, while council members Nestor Garcia, Romy Cachola, Barbara Marshall and chairman Todd K. Apo return for second terms.

Bainum served on the City Council from 1995 to 2003 before unsuccessfully challenging Hannemann for mayor in 2004, losing by less than 1,500 votes.

Bainum said any past issues with Hannemann would remain in the past and that now is not the time for political discord.

"It's clear that we have some serious challenges," said Bainum, draped in lei and speaking outside the council chambers yesterday. "We'll work with whoever, whenever. People want a safe and prosperous Honolulu and there is certainly a need for collaboration, now, more than ever."

The City Council was sworn in at noon at Honolulu Hale in front of a large audience of family members, friends, Hannemann and Gov. Linda Lingle.

Marshall, who is battling colon cancer, easily won re-election during the Sept. 20 primary, but has missed several meetings while she works through recovery.

She showed up yesterday in a wheelchair guided by her husband, but was able to stand on her own and take the oath of office.

Marshall left before the speeches began, but not before receiving a standing ovation by all in attendance.

"Thank you for being here and know that all of our thoughts are with you," Apo said.

Marshall is battling cancer for the third time in the past six years, but has said she is confident she can perform her council duties.

Marshall was diagnosed with colon cancer in May, and is undergoing chemotherapy while taking oral cancer medication.

In the past several months, her treatment and condition have forced her to miss several council meetings and community events.

Apo, who took over as chairman when it became clear that Marshall needed more time to focus on recovery, used his speech to highlight the city's need to be fiscally responsible while moving forward with the proposed $5.3 billion rail transit plan.

Apo also emphasized the reality that council members will often disagree, but that the divide between opinions often leads to a thorough discussion of ideas.

"The public deserves a council that is stable, understandable, and that provides a level of collaboration and leadership in its lawmaking and policy setting," Apo said before the council. "Our working relationship with the mayor and his administration will remain respectful and respected, with a clear understanding of the level of independence that is expected between these two branches of city government."

Hannemann was sworn in by Judge Bode S. Uale at Kapolei Hale at 10 a.m. yesterday in front of an invitation-only crowd of more than 60 family members, Cabinet staff and friends.

Following a performance by a five-man a cappella group that included renditions of "Proud to be an American" and Hannemann favorite "Love at Home," Hannemann addressed the crowd and stressed the importance of family.

"I am blessed to have such a wonderful family," Hannemann said. "They are with me every step along the way."

Speaking after the proceedings, Hannemann acknowledged the challenges facing the city.

He said he wants to continue to focus on core city services while combing the budget to make sure that all excess is cut.

Hannemann said the rail transit project and access to federal dollars will create economic opportunity and that the city needs to move forward quickly.

He did not discount the possibility of increased property taxes, but said he wants to ensure the city is spending money as efficiently as possible first.

"The specific focus will be on the economy. We need to maintain and create new jobs, and we're going to continue to seek good jobs and private partnerships."

Also yesterday, Hannemann responded to an effort to impeach him sponsored by Eric Ryan and John S. Carroll, two key members of the Stop Rail Now movement.

Ryan set up the Web site www.impeachMufi.com and is working to gather 5,000 signatures of registered voters to turn over to a Circuit Court judge. The group is operating off the belief that Hannemann "fraudulently" deceived the public by using city money to pay for advertising for the city's proposed rail project.

Ryan maintains that the advertisements are illegal and spread misinformation about the project.

"Mufi didn't care about giving voters the truth," Ryan said in a statement.

Hannemann brushed aside the impeachment attempt.

"Today is inauguration day and we're happy the people expressed confidence in our work and our team," said Hannemann, speaking after the ceremony in Kapolei. "We won by claiming nearly 60 percent of the vote and the voters favored rail. We have a clear mandate moving forward."