Honolulu Budget Committee FY27 Budget Briefing - March 9, 2026
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Honolulu Budget Committee FY27 Budget Briefing - March 9, 2026
The Honolulu City Council Committee on Budget convened on Monday, March 9, 2026, at 9:03 AM for an informational briefing on the administration's proposed Fiscal Year 2027 budget. Chair Okimoto presided, with Vice Chair Nishimoto, Councilmembers Cordero, Kia Aina, Talba, Chair Waters, and others present. No public testimony was offered. The briefing featured presentations from Mayor Rick Blangiardi, Budget and Fiscal Services (BFS) Director Andy Kowano, Managing Director Mike Formby, Deputy Managing Director Krishna Jaram, and directors from the Office of Climate Change, Sustainability and Resiliency (OCSSR), Mayor's Office of Culture and the Arts (MOCA), Office of Economic Revitalization (OER), and Neighborhood Commission Office (NCO). The session highlighted the city's tight fiscal situation, efforts to hold the line on taxes, and strategic investments in core services and infrastructure.
Consent Calendar
- No consent items were presented.
Public Comments & Testimony
- The chair called for in-person and remote testimony on each agenda item; no members of the public registered to testify.
Fiscal Year 2027 Preliminary Budget Presentation
Mayor Blangiardi opened by emphasizing the administration's commitment to fiscal discipline. He noted that federal pandemic relief funds (over $800 million) have been fully utilized, and the city faces flat real property tax revenues. The operating budget proposal is $3.9 billion, a $38.4 million increase over FY26, but collective bargaining agreements add $55 million in costs, requiring $17 million in net cuts. Director Kowano detailed that the combined operating and CIP budget reflects $133.6 million in cuts from the prior year's adopted level. The CIP budget decreases by $172.1 million to $1.11 billion, focusing on projects that can be completed within the next two years and 10 months. The city's unreserved general fund balance stands at about $630 million, and the proposed budget includes a $5 million transfer to the fiscal stability fund.
The administration reallocated $30 million in vacant position salaries to balance the budget, along with corresponding reductions in fringe benefits (ERS, OPEB). Director Kowano explained that departments were evaluated individually on vacancy rates and hiring trends; the Honolulu Fire Department was exempted from salary reductions due to its tight budgeting.
Council members questioned the budget process. Vice Chair Nishimoto and Chair Waters pressed for access to departments' initial budget requests; Director Kowano declined, arguing the mayor's budget marks the starting point for council deliberation and sharing earlier drafts would confuse the process. Councilmember Tupola and others urged earlier engagement from departments to allow more thorough review before hearings.
Capital Improvement and Operating Budget Details
Council Chair Waters noted that the CIP budget is 1.1 billion but only about half of that is typically issued in bonds annually. Discussion centered on the appropriate use of CIP funds; Chair Okimoto questioned the inclusion of vehicles (costing $60,000+ with 10-year-plus life) in CIP. Director Kowano defended the policy, stating it ensures affordable debt financing and maintains the city's AA+ bond rating.
Councilmember Cordero raised the need to shift the tax burden from struggling residents to those better able to pay. Chair Waters suggested increasing rates on high-end Residential A properties, and Director Kowano acknowledged openness to forming a permitted interaction group to study tax restructuring.
Concerns were raised about hazard pay (THP). Managing Director Formby reported that supplemental agreements for firefighters and Teamsters offer up to $7,500 per eligible employee, pending ratification. Approximately 20 DCS employees may be re-evaluated for eligibility due to hybrid work records. The FY26 hazard pay allocation was $34.4 million; no amount is budgeted in FY27.
Managing Director’s Office and Federal Funding Initiatives
Deputy Managing Director Jaram presented the MDO budget, which decreased overall. New federal funding strategists (Erica Moritsugu and Anika Nozaki) and a data team (Kira Chuchum, Sandy Briggs, Christie Briggs) were hired using existing positions, requiring no additional funding. Councilmembers encouraged proactive pursuit of federal grants and appropriation earmarks.
Climate Change, Sustainability and Resiliency (OCSSR)
Director Fox presented an operating budget of $1.6 million (a $5,300 decrease) and a $1.357 million recommendation for the Climate Resiliency Fund. The fund allocates 59% to 16 city departmental projects (including green retrofits, food sustainability, shoreline protection), 36% to externally directed initiatives (residential energy resilience, cesspool conversion assistance, nonprofit contracts via a third-party RFP), and 5% to administration. Fox noted that CCSR consistently leverages a 1:3 match in external funding. Councilmembers praised the structured process and requested further project details.
Mayor’s Office of Culture and the Arts (MOCA)
Director Santos requested a small budget adjustment to support a new program/operations manager role and to fund two initiatives: a public art maintenance pilot and a culture and arts incubator pilot. The transfer of Honolulu City Lights funding to DFM offsets some costs. Santos emphasized that MOCA operates at a fraction of peer cities' capacity per capita. Councilmembers expressed support and commended the office's strategic planning.
Office of Economic Revitalization (OER)
Director Asselbai highlighted OER's role in small business support, local agriculture, workforce training, and economic innovation. The budget includes 21 FTEs (OER) and 3 FTEs (Honolulu Film Office), with salaries shifting from federal pandemic relief to general funds. Current expenses remain flat. OER has secured over $2 million in external grants, including a $400,000 earmark for small business incubator programs. Councilmember Tupola urged OER to prioritize coordination across departments and policy advice rather than operating small programs. Councilmember Kia Aina expressed frustration with communication and oversight, particularly regarding the COVID death benefits program and the status of Bill 35 (vacant spaces activation). Director Asselbai noted that a five-year strategic plan, developed with the commission, is expected in May 2026.
Neighborhood Commission Office (NCO)
Executive Secretary Yonenaka presented a nearly flat operating budget, with a $43,000 increase for the 2026 election cycle to cover higher printing and mailing costs. The office will mail voting passcodes to eligible residents in contested races. Council members encouraged increased voter outreach and improvements to meeting logistics at venues like Kapolei Hale.
Key Outcomes
- No formal votes were taken; the briefing was informational.
- Council members directed the administration to provide additional documentation on project breakdowns, vacancy savings calculations, and hazard pay eligibility reviews.
- The committee recessed for 45 minutes for lunch at 12:58 PM, with plans to resume at 1:45 PM to continue the agenda.
- Chair Okimoto indicated that future meetings will delve into individual department budgets.
Meeting Transcript
Aloha and good morning, everyone. It is Monday, March 9, 2026, and the time is nine oh three AM. Will the committee on budget please come to order? Like to welcome to the committee to the chamber committee members for our present with us today, committee vice chair Nishimoto, um, Council members Cordero, Kia Aina, Talba, and Council Chair Waters also joining us today. We'd like to welcome Council members to Santos Tam and Tupola. Although remote oral testimony is being permitted, this is a regular in-person meeting and not a remote meeting by interactive conference technology under HRS section ninety-two-three point seven. Therefore, the meeting will continue notwithstanding loss of audiovisual communication with remote testifiers or loss of the public broadcast of the meeting. For all our testimonies offered in Olalo Hawaii, additional time as may be necessary will be allowed for the testifier to provide an English translation of their testimony. Persons who have not registered will be given an opportunity to testify following the register testifiers. For those who are joining us by telephone only, please press star nine if you wish to testify, and I will identify you by the last three digits of your phone number. When your number is called, please listen for the prompt to unmute and press star six. Some friendly reminders and tips. Video conference from a quiet location if possible. If you're also watching the proceedings on Olelo, please mute your television at the time you're called to testify. When the timer on your screen reaches zero, please conclude your remarks promptly. Written testimonies, including the testifiers' 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. Members, as a reminder, if you have any supplementary questions for the departments that may come up during or after the meeting, please provide them to my office so we may compile them for the department or managing director's office to respond. We look forward to all of your questions. Also, members, I I plan to take a break for lunch. Councilmember can I ask that question. The time, the start time and duration will be dependent on the flow of the meeting. Agenda item number one, informational briefing, administrative overview. We'll proceed first with testimony. Clerks, do we have any in-person testifiers for this item? Chair there, none. Thank you. Proceeding now with remote testimony, clerks, do we have any remote testifiers for this item? Chair there and then. Thank you. Seeing no testimony, we will not proceed with the administrative review. For your information, the presentation is available online as Departmental Communication 164 2026. With us from the administration, we have I believe Mayor Rick Blangiardi, Office of the Mayor, as well as Director Andy Kowano from the Department of Budget and Fiscal Services. Aloha and good morning, Mayor Blangiardi. Good morning, Chair Okamoto, Council members, good morning. I appreciate the opportunity to kind of kick off our budget discussion. And I just want to say firsthand, um, since Andy Kowano and Carrie Castle sit behind me. I want to thank them for their leadership and our BSFT BFS team. Uh, because we began, as I said in the press release last week, we began looking at 27 before the ink was even dry on our last budget, understanding full well that we had been on a ride, if you will, with federal dollars, nearly 900 billion dollars over the prior four years, increasing spending, understanding the fiscal cliff that we were coming off of. And then on top of that, the cost of living for our residents out here and the impact that it's having, not just on an out migration, that that that's uh the ultimate manifestation, but the anguish that people are living with day in and day out, trying to make ends meet, knowing full well even when there's three jobs in a family, the math still doesn't work. And we wanted to stay sensitive as a leadership team to that reality. And so, quite honestly, I went into the budget this year with managing director Formby, challenging our our team at BFS and all of our cabinet members to see if it was possible to keep our focus on the priorities that we've been working on now for five years, and at the same time be able to do more with less money. Could we possibly do that? Understanding now full well the color of money and the flow of money in the city. And what could we possibly do? I asked Andy to come up with a target of 200 million dollars in cuts. The fact that they came up with 133.6 is remarkable, knowing full well our operating budget's up 38 million, but knowing full well that just alone, given all the other fixed costs in the city, that our collective bargaining agreements were going to increase this by nearly 55 million dollars this year. That is no small feat to be able to do that. So you will hear me talk next week at the state of the city about the nexus between government efficiency, government efficiency, and the cost of living and how that impacts the nexus of our residents. So uh I'm very proud of this.
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