$35M Hurricane Lane hits council budget plans

  • Vehicles line up on Ane Keohokalole Highway to turn at its terminus at Hina Lani Street in Kailua-Kona in March. (Chelsea Jensen/West Hawaii Today)

HILO — Two Kona road projects and an express Kona-Hilo bus route face delays because of new expenses created by Hurricane Lane.

The County Council put its final stamp of approval Wednesday on a revised budget reallocating the proceeds of $10 million the county anticipates receiving this fiscal year from a quarter-cent surcharge on the state general excise tax that starts Jan. 1.

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Struck from the immediate budget was $1.5 million for Oneo Lane and the Ane Keohokalole extension, as well as $1.6 million to expand Hele-On bus routes that included a Hilo-Kona express route, aimed at connecting Hilo with the South Kohala resorts and Kona via Saddle Road.

The money, as well as other trims from Mass Transit, were put into the capital projects fund, to be used to repair county facilities damaged by the hurricane.

Kona Councilman Dru Kanuha said he hopes the road projects can go forward.

“The council voted for the GET with the understanding that specific projects would be covered by this surcharge, i.e… mass transit and road projects,” Kanuha said. “GET money needed to recover from this past natural disaster is understandable, but I hope it doesn’t take away from the high priority items such as Ane Keohokalole Highway and Oneo Lane, which have been high priority for a long time.”

The council left $1.8 million in the budget to buy new buses after Finance Director Deanna Sako said it will save money in the long run.

The county is currently paying daily rental fees on Polynesian Adventure tour buses as it tries to rebuild its fleet.

“They do need the additional buses. They really do need more buses,” Sako said. “We cannot continue to lease the buses. It’s going to run us broke.”

The council, by a 7-0 vote, with Kohala Councilman Tim Richards and Puna Councilwoman Jen Ruggles absent, passed the budget amendment for the current fiscal year that ends June 30.

County administration anticipates $35.1 million in new costs to fix East Hawaii roads and bridges, following a deluge that dumped about 50 inches of rain over a four-day period late last month, said Sako.

While the Federal Emergency Management Agency is expected to reimburse 75 percent of the hurricane expenses, the county still needs to come up with 25 percent, she said.

Sako called a one-year delay of the Kona road projects a “worst-case” scenario, saying the county may still have funds to start them sooner, depending how quickly FEMA pays the county for the damages.

Hurricane Lane damages especially stung the county budget, coming on the heels of a $3.9 million general fund reduction to account for property tax revenues lost from Puna properties devalued because of the May 3 lava flow.

And next year is likely to be even more of a challenge, Sako said.

Even though the budget will see a $20 million to $25 million increase in revenues from the GET, the county is also facing big increases in its contributions to the employees retirement fund and post-employment benefits as dictated by state law. Retirement benefits are expected to climb from $43 million to $51 million, and post-employment benefits to rise from $39.8 million to $41.8 million, according to budget documents.

The GET can be used only for transportation, such as roads, bridges, mass transit and trails, but county officials hope the requirements can be loosened when the state Legislature next meets.

Sako said top county administrators and department heads recently had their budget kickoff meeting, with departments scheduled to being back their budget requests before the county begins drafting next year’s budget in December.

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Property values won’t be calculated until early next year.

“We’re expecting a lean year, and we haven’t worked out all the issues yet,” Sako said.