A week after Mayor Richard Bissen presented his proposed $1.7 billion budget for fiscal year 2025, the Maui County Council began the monthslong process of receiving public input and reviewing spending plans department by department in an effort to balance Lahaina’s fire recovery with the needs of the rest of the county.

“This year’s budget has taken on added importance,” said council member Yuki Lei Sugimura, chair of the Budget, Finance and Economic Development Committee. “It is critical that we put ourselves in the best possible position for the short- and long-term as we continue on this lengthy road ahead.”

On Monday, at the first of more than 30 scheduled budget meetings throughout the county, Sugimura said it is important to make sure the county shows fiscal responsibility and a “realistic approach to spending” at a time when it is seeking hundreds of millions in outside funding from local foundations, the state and federal grants to rebuild Lahaina.

“How much can the county expend in a single year? Can we fill all our vacancies? Can we complete every project? Are some of these proposed funds better used elsewhere? These are some of the tough questions we will grapple with over the coming weeks,” she said.

The process involves department reviews, council members advocating for district priorities, receiving property tax assessments and setting tax rates. It all leads up to the June 10 deadline set by County Charter for the council to approve the budget.

The mayor then would have an opportunity to issue a veto to which the council would have until June 24 to override. The new fiscal year begins July 1.

Finance was the first of the county’s 17 departments to have its budget reviewed, with the dual purpose of presenting the county’s projected revenues and expenses for the coming fiscal year.

During the department’s presentation, Finance Deputy Director Steve Tesoro said accounting has a continued request from previous years for a much-needed federal grant manager to address audit findings.

In the county’s Annual Comprehensive Financial Report for the fiscal year that ended on June 30 there were several prior audit findings, including failing four times to provide required quarterly reports on the use of federal Covid relief grants.

The audit said that without an effective internal control system, failure to timely review and submit reports could result in the misrepresentation of data and could adversely affect the program outcomes and future funding.

Maui County will be applying for federal Community Development Block Grants to fund rebuilding projects in Lahaina.

Bissen’s proposed budget is a 34% increase over the current spending plan, with the $429 million hike mostly funded by outside revenue earmarked for fire recovery efforts that include housing, debris removal, and repair and replacement of infrastructure.

“We need to rely on other people, where before we didn’t,” Sugimura said. “But we’re now in disaster mode and all that is connected to Aug. 8. We’re living in a different world.”

Part of the process has been for the nine council members to advocate for their districts’ priorities.

“Now’s the time that we really need to think about pet projects because I think West Maui is our biggest pet project,” said Sugimura, who represents Upcountry, where the Kula and Olinda fires destroyed over a dozen homes and burned hundreds of acres.

Despite the large budget, council member Gabe Johnson called it “uninspiring” and “not bold enough.”

With the housing crisis as the island’s biggest issue, Johnson would like to see the county fund more recovery projects with bonds in order to make more cash available for affordable housing and open space.

Sugimura said she invited the county’s bond counsel to the first meeting because a lot of the county’s capital improvement projects will be funded that way to save cash for other needs.

While the county has maintained its excellent bond rating and is well below its legal debt limit, interest rates are high and taking on more debt could adversely affect how much it costs the county to borrow in the future.

During the meeting, Maria Zielinski, who is serving as interim finance director with Scott Teruya on paid leave since Feb. 2, outlined the county’s projected revenues. Many of the projections were lower than the previous year and were described by Zielinski as conservative to account for a “lot of unknowns.”

“We have certain assumptions in our budget and one of them is that we’re going to get something like $150 million from the state,” Zielinski said. “We don’t know if that’s going to be the case.”

Bissen asked the Legislature in February for $401 million in additional state funding over the next three years to help rebuild Lahaina. This would help pay for about 15 projects being worked on by the county’s new Office of Recovery.

When asked about areas that could be cut from the budget, Sugimura said, “I believe that some of the revenues have been understated.”

She rattled off the projection of $60 million in transient accommodations taxes while the county collected $82 million last year.

Among the projected revenue losses because of the fires were $20 million in property taxes due to the more than 2,000 properties that burned down and another $13.7 million from taxes waived for owners with short-term rentals who converted them to long-term rentals for survivors.

The council will be going to each of the nine districts to give residents an opportunity to voice their input. The first one was in Hana on Monday night. It was the only district not to receive funding in the $180.2 million capital improvement projects budget.

Civil Beat’s coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.