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Harry Kim <br />Mayor <br />County of Hawaii <br />25 Aupuni Street, Room 215 • Hilo, Hawaii 96720 <br />(808)961-8211 . Fax(808)961-6553 <br />March 1. 2006 <br />Stacy Higa, Chairman and <br />Members of the Hawaii County Council <br />Hawaii County Council <br />25 Aupuni Street <br />Hilo, HI 96720 <br />Dear Chairman Higa and Council Members: <br />Dixie Kaetsu <br />Managing Director <br />Barbara Kossow <br />Deputy Managing Dtrectot <br />As required by the Hawaii County Charter, submitted with this message is the proposed <br />operating budget for the County of Hawaii for the fiscal year ending June 30, 2007. This <br />balanced budget includes estimated revenues and appropriations of $316,076,272 and <br />includes the operations of eleven of the County's special funds as well as the general <br />fund. <br />Preparation of the budget involves estimating costs such as debt service, retirement and <br />medical insurance requirements, and obtaining estimated expenditures from departments. <br />Departments were once again instructed to submit status quo spending plans that included <br />inflationary increases. Additional needs were submitted in the form of supplemental <br />budget requests. Funding decisions for these requests were based on how well they <br />addressed legal mandates, community needs, maintenance of public facilities and <br />equipment, and project priorities of this administration. <br />OVERVIEW <br />The County of Hawaii continues to enjoy its best economic times in recent years. Due to <br />an improved economy, a significant growth in revenues is projected. While revenue <br />increases are always welcomed, the financial difficulties residents and this County <br />endured in the years 2000 to 2002 must not be overlooked. During this period, many <br />unpopular, but necessary, decisions were made. Spending for maintenance, repairs, and <br />needed services were reduced. To balance the budget, property taxes were raised. <br />Fortunately, the economy improved and the County was able to gradually resume its <br />maintenance and repair responsibilities, expand services, and provide needed property tax <br />relief to homeowners. A 3% annual growth limit was placed on the market values of <br />properties in the homeowners class; an additional homeowners exemption was given; and <br />the period of the non -speculative residential dedication program was shortened to five <br />years. Comm. No. I L <br />Ref. To:,_ L 6 <br />Ret. Vote <br />