Honolulu City Council Committee on Budget Meeting – September 23, 2025
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Honolulu City Council Committee on Budget Meeting – September 23, 2025
The Committee on Budget, chaired by Councilmember Okimoto, convened on Tuesday, September 23, 2025, at 9:03 AM. The meeting covered nine agenda items, including audits, fund transfers, fare adjustments, tax exemptions, and fee waivers. Key discussions centered on the Fire Plans Review Revolving Fund audit, transit fare restructuring, and property tax relief for homeowners and veterans.
Public Comments & Testimony
- Arnold Wong (Honolulu Fire Commission) expressed support for the fire department and disagreed with the auditor's findings, stating that contract workers are necessary to prevent backlogs in planning and permitting.
- Donald Sakamoto supported the audit of the fire fund, calling it fair, and also supported the Transportation Demand Management (TDM) program and the Oahu Metropolitan Planning Organization work program.
- Brian Mick (Disability and Communication Access Board) opposed Bill 54 CD1 and the proposed CD2, citing concerns about elimination of fare waivers for personal care attendants (PCAs) and insufficient accommodations for disabled riders.
- Gregory Masekian (Kakua Council President) expressed concerns about consultant costs for transit projects and the weakening of language in Bill 59, and supported the veteran fee waiver with caution about revenue loss.
- Ben Satoshi (Unite Here Local 5) opposed bus fare increases, advocating for public transportation as a public service.
- Myung O (Honolulu Board of Realtors) supported Bill 34 (property tax threshold update).
- Linda Howe supported the property tax threshold update but urged automatic adjustments to prevent future cycles of steep tax increases.
Discussion Items
1. Audit of the Fire Plans Review Revolving Fund (Resolution 25-4)
- Auditor Troy Shimasaki presented findings: the fund’s administrative structure is inconsistent with ordinance requirements, lacks transparency, and bypasses council oversight. Expenditures generally complied with law, but 46% of sampled transactions (31 of 67) were not clearly justified as fire prevention activities. The auditor recommended establishing the revolving fund, removing the “appropriated upon receipt” clause, or adding controls and reporting requirements.
- Fire Chief Kalani Howe acknowledged areas for improvement but disagreed with some findings, arguing that operational expenses (e.g., solid waste, drinking water) are necessary for fire prevention, and that the fund allows flexibility to respond to urgent needs like wildfire prevention and permit processing. He noted that contract positions are reported quarterly to the council.
- Budget Director Andy Kawano confirmed the fund balance is $790,683, and agreed to improve transparency through annual reporting.
- Councilmember Waters clarified that the audit found no violations, and the department acted properly within existing rules.
2. Tax Compromise for Eugenia Postnecker (Resolution 25-239)
- Director Kawano explained that a widow lost her home exemption and tax credit due to a city recording error from decades ago. The city requested a compromise to restore the credit, resulting in a reduced tax liability of $1,891.02.
- Councilmember Waters questioned how to prevent similar errors, and Kawano suggested a permitted interaction group to discuss systemic changes. The resolution was passed unanimously.
3. Transportation Demand Management Program (Resolution 25-258)
- DTS Director Roger Morton and Max Calhammer presented the HNL Connect program, funded by a $190,687 local match (20%) for a federal grant. The program aims to reduce single-occupancy vehicle trips through incentives, marketing, and a restricted parking zone. The return on investment is measured in congestion reduction.
- Councilmember Waters asked about sustainability; Morton noted that the subsidy for transit is about $350 million annually, with farebox revenue at $42 million. The resolution passed.
4. Vision Zero Safety Planning (Resolution 25-259)
- Director Morton and Jermaine Salim described a $160,000 local match for an $800,000 federal planning grant to update crash data, high-injury locations, and lighting needs. The entire contract goes to a single consultant.
- Councilmember Waters questioned the consultant cost; Morton confirmed it is planning money. The resolution passed.
5. Transit Fare Restructuring (Bill 54 2025 CD1)
- The committee considered two proposed CD2 amendments. Councilmember Dosantos Tam proposed expanding the low-income fare threshold from 30% to 50% of area median income (AMI), which could cost $6-10 million in lost revenue. Director Morton noted the current low-income program is underutilized (only 4,500 certifications out of 110,000 eligible), and expanding eligibility might not improve usage without reducing barriers.
- Chair’s CD2 restored the senior rate and limited the director’s authority to set special event fares. The committee adopted the Chair’s CD2 and postponed further action to allow review of Dosantos Tam’s proposal.
- Public testimony highlighted concerns about PCA fare waivers, cash surcharges, and the need for better outreach.
6. Industrial Wastewater Surcharge Repeal (Bill 59 2025)
- Director Babcock explained the bill is a housekeeping measure to remove references to a surcharge that was never implemented. The city regulates industrial users through a pretreatment permitting program. Councilmember Waters questioned the language change from “shall not” to “may not,” calling it weaker. The bill passed to second reading.
7. Real Property Tax Exemptions Correction (Bill 61 2025)
- Director Kawano supported the bill to fix a discrepancy in HCDA rules but requested an amendment to restrict the expanded FAR to renewing taxpayers to avoid a flood of requests. Councilmember Nishimoto agreed to work on the amendment and passed the bill to second reading without it, with the intention to add it later.
8. Residential A Property Tax Threshold Update (Bill 34 2024 CD1)
- Director Kawano outlined the three-tier structure: Residential A threshold raised from $1 million to $1.3 million, and TVU threshold from $900,000. The goal is revenue neutrality through rate adjustments at upper tiers. Councilmember Kiaina introduced Bill 63 2025 to provide a dedication option for affordable rental housing. The committee passed Bill 34 to third reading.
- Councilmember Waters praised the bill as a long-awaited relief for homeowners.
9. Motor Vehicle Registration Fee Waiver for Veteran Kupuna (Bill 62 2024 CD1)
- Director Hashiro reported that the waiver would affect up to 13,849 veterans aged 65+ and result in a maximum revenue loss of $276,980. She requested six months to implement programming changes. Councilmember Toba expressed support. The bill was amended to a CD2 with an effective date of July 1, 2026, and passed.
Key Outcomes
- Resolution 25-4: The committee will meet with BFS and HFD to draft legislation incorporating the auditor’s recommendations, including possibly removing the “appropriated upon receipt” clause.
- Resolution 25-239: Approved for adoption (unanimous).
- Resolution 25-258: Approved for adoption (unanimous).
- Resolution 25-259: Approved for adoption (unanimous).
- Bill 54 2025: Amended to CD2 (Chair’s version) and postponed to a future date determined by the chair.
- Bill 59 2025: Reported out for second reading and public hearing (unanimous).
- Bill 61 2025: Reported out for second reading and public hearing (unanimous), with intention to add an amendment.
- Bill 34 2024 CD1: Reported out for passage on third reading (unanimous).
- Bill 62 2024 CD1: Amended to CD2 with effective date July 1, 2026, and reported out for second reading (unanimous).
Meeting Transcript
Aloha and good morning, everyone. It is Tuesday, September 23rd, 2025, and the time is nine. Oh three AM. Will the committee on budget please come to order? We'd like to welcome to the committee. Committee members who are present in the chamber today. Therefore, the meeting will continue notwithstanding loss of audio-visual communication with remote testifiers or loss of the public broadcast of the meeting. Members of the public will be allowed to provide oral testimony on all items on the agenda in two ways. Video conference from a quiet location if possible. If you are also watching the proceedings on Olelo, please mute your television at the time you're called to testify. When the timer on screen reaches zero, please conclude your remarks remarks promptly. Written testimonies, including the testifier's address, email address, and phone number will be available to the public as described on the posted agenda. As a courtesy, please turn off or silence all cell phones for the duration of this meeting. Remember, moving on to agenda item number one for discussion. We have discussion on the audit of the fire plans review revolving fund. Resolution 25-4. I believe with us in the chamber from the Honolulu Fire Department. Okay, I do see Chief Howe here with us. Good morning, Chief Howell. Good morning. Um morning, Chair Okimoto, Vice Chair, Nishimoto, Council members, Kalani Halfari Chief of the Honolulu Fire Department. Um I appreciate you giving us the opportunity to be here to speak upon or answer any type of questions you have regarding the audit. Um the audit first came out, I think you know we were very open to it because we strongly believe in how we use the funds as intended as the ordinance. You know, I understand that uh the public puts trust in us to use whatever resources we have in the right way. So again, we're open to it. Um it allows us opportunities to seek for improvement, which there's areas that the auditor did find that we could do a better job in maybe the way the fund is structured or how we do reporting or um giving more updates. So that's something that we're willing to um work on and work with. Um, however, there's some areas of the report that you know we didn't agree upon, but you know, that's there's something that we can just leave it at that. But yeah, thank you. Thank you. Members, did we have any questions for Chief Howe? No. Thank you. Thank you for being here and for the work that you and your department put into working with our city auditor. Okay, thank you. Thank you. I'd like to also welcome with us, we have our auditor Troy Shimasaki. Good morning, Chair Okimoto and Committee members. Troy Shimasaki, Office of the City Auditor. Um, I'll provide a brief overview of our audit of the fire plans review fund, resolution 25 4. So this audit was conducted pursuant to resolution 25 4, which was adopted by the city council on January 29th, uh, 2025. The council expressed concerns about fund appropriations being made outside of the executive branch, which is annual budget ordinances and sought to promote efficient operations. The audit was issued on August 22nd, uh August 22nd of this year as report number 2504. So the audit had three audit objectives. First was to determine whether the fire plans review fund's receipts and expenditures were consistent with fund requirements and best practices. Number two, determine whether the fund's current administrative structure was appropriate. And three was to make recommendations as appropriate. First, the fire plans review revolving funds administrative structure was not consistent with ordinance requirements and lacks transparency and accountability for the fund and its fire prevention purposes. However, we found that the city has not specifically established that standalone fire plans review revolving fund and instead, as I said, deposits deposits the fees into the special projects fund, which is a fund typically reserved for special contract related revenues and expenditures. Not only is this structure contrary to city law, it also lacks transparency and accountability that would come with revolving fund requirements.
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