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Veto Message — Bill 29 June 15, 2011 Page 3 Unequal Treatment The council also adopted an amendment that inexplicably favors some county residents over others by offering subsidized golf play in East Hawai`i, but not in West Hawaii. We are one community, and I insisted from the very beginning of my administration that all residents of our island be treated equitably. The council has offered no justification for this budget amendment. Conclusion Most of the council's budget amendments this year were designed to redirect funds to make a partial payment against future health care obligations for retirees known as the General Accounting Standards Board Statement No. 45 payment. Also known as GASB 45, this is a voluntary payment against a future obligation, and has been compared to pre - paying a mortgage. The State of Hawai`i has made no GASB payments, and the City & County of Honolulu is deferring its GASB payment for this year. The County of Hawai`i, meanwhile, has made these payments for four straight years. Representatives of Bank of America Merrill Lynch, which has served as an underwriter for Hawai`i County bonds, confirm that many Mainland municipalities are forgoing the GASB 45 payments because of the difficult economic times. Those representatives stress that maintaining adequate financial reserves should be the county's focus at this time. We can and should defer the GASB payment until county finances improve. Our priority today is to build up the county's cash reserves, protect the county's bond rating, and prepare for the uncertain times ahead. Our administration submitted a balanced budget that is $35.9 million less than the budget in effect when I took office. Our goal was to reduce county spending for a third consecutive year while maintaining essential police, fire and civil defense protection, and also preserving programs and services for our children and elderly. We met our goal while also protecting funding for non - profit service organizations. I am proud of the careful, difficult work done by our administration, and by our departments. They have done an excellent job of completing projects and delivering services in a very challenging economic period, and did so while reducing the size and cost of county government. Our administration budget is a reflection of their hard work and careful planning for the future. I thank the County Council for its proposals and amendments, and I regret that those amendments do not meet the requirements of the County of Hawai`i Charter or the County Code. Those shortcomings leave me no choice but to disapprove Bill 29 (Draft 4) and return it to council. Mahalo for your efforts, and for your understanding. Aloha, (DCA. •1 . William P. Kenoi MAYOR County of Hawai'i is an Equal Opportunity Pmvider and Employer.