(Commentary submitted by Councilman Pete Hoffmann)

Recently there has been some speculation regarding my political aspirations since I am prohibited from running for a fifth consecutive term as Councilman next year. I’ll admit that I have fueled some of that speculation and indicated that I am considering whether I should campaign for Mayor. It is no secret that I am disappointed with the leadership demonstrated by Mayor Kenoi and have felt that I could do much better for the residents of this County.

However, translating that political desire/commitment into election votes is not easy. I have analyzed the situation taking into account my participation in a campaign against the two most likely candidates for the Mayor’s office in 2012; Mr. Kenoi and Dominic Yagong. From my perspective, I sought to determine whether I could survive the primary election, i.e. be one of the two candidates involved in a runoff in November 2012. My objective has always been not merely to run for office – I don’t obtain much satisfaction from merely seeing my name in the papers. My goal in campaigning would be to have a reasonable chance to win and thereby make a difference.

My analysis, some of which relied on a professional survey, provided me with inconclusive results. After further discussion with my wife, who is always involved in decisions of this nature, I have decided I will not seek the office of Mayor next year. I am undecided if I will consider any other political office at this time, but unless the “candidate landscape” for the Mayor’s office changes significantly, I will not be a participant in that race.

One of the most rewarding aspects of being in public office at any level is the opportunity to meet and work with interesting and talented personalities. I have been honored to have had that opportunity while serving as Councilman. It truly makes a sometimes frustrating experience worthwhile. To those individuals island-wide, who have urged me to run for Mayor, and/or who have simply encouraged me to continue my advocacy for resolving some of the contentious issues facing our County, I can only extend thanks and deep appreciation. You have made this effort exciting.

As we look ahead, I urge all to continue to support candidates in next year’s elections who are able to distinguish between narrow political objectives and the best interest of the residents of our island. I am committed to evaluate my choices on that basis. Meanwhile, I will continue to work hard to bring positive change and effective government to our County and encourage all to support those efforts. Thank you again for allowing me the chance to serve and try and make positive changes for our County.

(Submitted by Councilman Pete Hoffmann)

Happy New Fiscal Year (2011-2012) to you all. The County has managed to stumble into July and has survived the budget struggles of the past two months. Permit me a few observations on the results and the process:

The Mayor’s 5 May becomes effective today, 1 July. It is a balanced budget, but doesn’t save anything as far as expenses are concerned. It defers some liabilities. There’s nothing wrong with that, so long as the total deferments are not too large, and we don’t encourage this as a habit. I think we are reasonably on solid ground at least in this fiscal year, but we shouldn’t use GASB-45 as a ‘bill-payer’ again next year. One can only wonder why the Mayor would use GASB-45 deferments as the centerpiece of his budget balancing act this year, when he was so stubbornly opposed to this same suggestion that I made previously? If we had adopted this recommendation, we might not have had to raise property tax rates.

Unlike a few of my Council colleagues who expressed indignation at the Corporation Counsel’s letters about the amended budget, I see this as another example of mayoral politics. Let’s face it, the Mayor won this battle, let’s move on. No one associated with the budget process or with the County Charter can find anything illegal in what the Council did. Unprecedented perhaps, but hardly illegal. County residents were treated to some political ‘smoke and mirrors’ and as a result the veto could not be overridden.

It’s hard to fathom why the Mayor could not or would not exercise some discretion on the Council’s amended budget. There seemed to be at least a few Council amendments that should have been ‘saved’. But it appears to many that the Mayor’s message is simply: “do it my way or not at all”. Sad to think this poses as effective leadership for our County. Of course, we can revisit some of the issues during the coming months (the Police radio proposal for example), but why go through the process once again? This is not the spirit of cooperation anticipated from the Mayor nor is it good management. County residents deserve better.

I am pleased to see that the Mayor is recommending some flexibility in regard to furloughs in the coming years. Both the Council and administration are not willing as yet to face the 800-pound gorilla in the room, i.e. reductions in staff. If economic conditions do not improve, this must be addressed. Let me repeat, I do not advocate any reductions at this time, however, it is utter nonsense to talk about real savings if we do not include a reduction in personnel costs from that equation. Furloughs seem to be one alternative. Some won’t admit it, but the County’s ‘Furlough Friday Program’ of the past two years brought savings to County taxpayers, did not result in any significant reduction in County services, and County employees retained their jobs, and perhaps as important, their medical and other benefits. I believe this is the direction the County must pursue and I’m pleased to see the Mayor make the effort.

There is another aspect of the budget battle that should be mentioned. It came up briefly in yesterday’s Council discussions, but I think it failed to register on many. The Council had recommended that any savings that might occur in the on-going union negotiations be used to offset the GASB-45 deferment. It is unknown if any reductions in salaries/personnel costs will be achieved in this fiscal year. The mayor’s budget fully funded the current payroll scale for all County employees so there is some hope that actual expenses will be less. I trust that if some savings are realized, the Mayor will act on the Council’s recommendation and some payment made to the GASB-45 account.

In summary, let’s get on with business. There’s much to be done and although this budget is finished, the County’s economic distress remains. I continue to hope that when addressing these issues in the coming months, ALL will emphasize leadership and the best interests of our County residents and leave politics and political agendas behind. I trust I am not too optimistic.

The most recent phase of the County’s annual budget skirmish concluded on 18 May with some interesting outcomes. Regardless how one views the Council actions this year, I feel we’ve done a little better than our normal “rearranging the deck chairs on the Titanic” routine. Hours of discussion and testimony did recommend some amendments to the Mayor’s second budget, although I’m not certain the Council did enough to warrant unanimous applause.

Council members have criticized the Mayor’s budget submissions this year as deferring expenses rather than saving anything. I agree. The Mayor deferred some $29M in expenses to other budget cycles. If those deferments were added to his proposed budget of $367M, that would mean the budget would total approximately $396M. Not much of a ‘savings’ in my opinion, in fact somewhat higher than our current fiscal year budget of $374M. But I don’t disagree with all of the Mayor’s proposed deferments, particularly those associated with debt service payments and the payroll delay. Those are reasonable one-time deferments and are common budget mechanisms employed by almost all other government entities.

The complete elimination of the GASB45 payment is another issue, however. As indicated previously, I called for at least a partial use of the GASB45 expense as a ‘bill-payer’ in prior-year budget skirmishes. I was sharply criticized, told it would cost the County in penalties, that it violated some rules, and otherwise I was dismissed completely. This year, GASB45 becomes the Mayor’s ‘salvation’ and source of the largest deferment that balances his budget. What a difference a year makes!!

The Council in its deliberations focused on the GASB45 elimination. I maintain a partial deferment is OK, but not the entire amount. Towards that end, the Council amended the budget to take $2.7M from the Budget Stabilization Fund, approx. $1M from the Open Space Fund, $200K from overtime accounts, and $5.6M from OCE accounts, the latter amount being referred back to the administration to determine where those cuts would be made. In addition, $500K from the West Hawaii Golf program could also be used as an offset to the GASB45 deferment. In total, the Council decided that the $29M deferment proposed by the Mayor be divided into thirds: we left approx. one third or $9M alone (the payroll delay and the debt service payment). We added back approx. one third or $10M to the GASB45 account. And we agreed to defer one third or $10M of the GASB payment.

Are we happy? Maybe not, but as I mentioned previously, we did a little better than rearrange deck chairs, even though we did kick a sizeable ‘can’ down the road a little. I’ll admit I wasn’t overly excited about referring $5.6M back to the Mayor, requesting that he tell us where the cuts be made. I would have been more pleased if the Council determined the location of these decreases. But in previous budget discussions we did suggest some compromise on a variety of budget issues (Hamakua land sale, GASB45 last year, hiring freeze, and a more aggressive elimination of most vacant funded positions, to name a few), none of which met with favorable consideration. Whether or not we can consider this ‘throwback’ normal budget procedure is arguable, but there seemed to be little recourse to insure that some reduction in the $29M deferred expenses is made.

And exactly what is the result of this “budget tap dance?” Since no one chose to address the “800 pound gorilla” in the room (personnel costs), the $10M in Council amendments adds up to a little less than a 3% adjustment to the Mayor’s budget (that totals $367M). Unless some significant change occurs at the next Council meeting on 1 June, we amended a few items and agreed to most of the administration proposals. The question now: if the budget passes second reading on 1 June, will the Mayor accept the less than 3% in changes made by the Council or will the deck chairs be returned to their original positions?

(Commentary submitted by Councilman Pete Hoffmann)