Honolulu City Council Statement on Provisional Account Budget
May 5th, 2026
Questions:
1.) Who initiated the decision to consolidate approximately $41 million into a single fund, and what specific problem in the mayor’s proposed budget does this address?
First, a clarification on terms. This is not a new fund. A fund and a provisional account are distinct legal and budgetary instruments. The Council is proposing a provisional account, a tool the city already uses throughout its budget.
The Council designed this proposal to correct two persistent problems: the repeated lapsing of budgeted dollars, and the lack of transparency around how carryover funds are set aside. Over the past three fiscal years, the City lapsed between $300M and $400M in general funds each year. The city Administration has continued a practice of over-inflating appropriations at levels that do not reflect actual spending, bypassing the oversight controls that protect taxpayers.
The Council's role is not to ratify the mayor's proposed budget. The Council has an independent responsibility to review, question, and adjust it before adoption. That is oversight, not obstruction.
The provisional account addresses this directly. If funds are to be set aside, the Council believes that decision must be made before the budget is submitted, not after Council approval, and it must be transparent. Residents of Honolulu deserve to know what resources exist to meet community needs. City departments deserve to know what funds are actually available to spend.
If the City's spending patterns shift significantly in the coming year due to the Kona Low storms, the Administration retains full access to these historically lapsed funds through this provisional account. If, in future years, the Administration can demonstrate that its proposed budget aligns with actual intended expenditures, the Council will revisit the scope of this account at that time.
Please see the Budget Chair’s Closing remarks on how the $41M was established:
https://www.youtube.com/live/aebToQWbdEk?si=7rEFB-QovEEMvfc9&t=6623
2.) Does this proposal effectively shift budget execution authority from the administration to the Council? If so, was that an intended outcome?
Please see the City Charter regarding initiation of amendments to the City’s budget (Pg. 97, Section 9-105, 1.): https://www.honolulu.gov/cor/wp-content/uploads/sites/17/2025/01/Charter-FINAL-1-16-2025.pdf
No. This proposal does not shift budget execution authority from the administration to the Council.
The administration would continue to oversee City operations and carry out approved expenditures. The Council would simply be exercising its authority over appropriations as it works to right-size the budget, as is contemplated within the City Charter. The intent is accountability, not operational control.
The Administration currently proposes levels of appropriations it does not actually intend to spend. This proposal would simply bring us closer to aligning our appropriations with our historical expenditures.
The proposed provisional account simply acts as a safeguard against operational disruption. The goal is simple: protect services while rebuilding the public’s trust in how the City allocates its resources.
3.) Where do these funds come from? What’s the total amount?
See Council Communication CC-102(26) https://hnldoc.ehawaii.gov/hnldoc/document-download?id=27971
The initial proposal came from the identification of historically lapsed department appropriations. The Budget Chair additionally contemplated utilizing existing provisional funds that have gone under-utilized. The current amount being discussed is approximately $41 million.
The concept stems from the City’s now documented history of lapsing between $300M and $400M in general funds each year. When significant sums of money are appropriated and then go unspent year after year, the Council has a responsibility to ask whether the budget is being built accurately and whether public dollars could be aligned more directly with real needs and priorities.
That matters because better budgeting is connected to the pressure that residents feel every day. If the City budgets more accurately, it can better identify under-utilized resources and redirect them toward priorities such as housing, transportation, infrastructure, public safety, emergency recovery, and cost-of-living pressures.
This is about being more intentional with the money the City already has to ensure that the City invests more strategically, services can be improved, and fees and taxes are not raised unnecessarily.
4.) What mechanisms will be in place to ensure the public can clearly track how these funds are allocated and spent?
That is one of the core purposes of the provisional account.
If the administration seeks to access the account, the request will go through the Council resolution process. That means the request becomes part of the public record, is subject to public review, and can be discussed in a public meeting.
That creates greater accountability. It gives residents, the media, and Councilmembers a better way to understand what money is being requested, why it is being requested, and whether the spending matches the purpose of the account.
5.) What safeguards are in place to prevent funds from being redirected to purposes unrelated to emergencies or core operations?
The safeguard is the public approval process tied to the provisional account.
Right now, the Council is concerned about how frequently interdepartmental transfers are used to address unplanned, underbudgeted, or misbudgeted needs. When large numbers of transfers occur after the budget is adopted, it raises a fair amount of questions.
The provisional account creates a more transparent checkpoint. Before certain dollars are redirected, the administration would need to publicly explain the request, the purpose, and the connection to core operations or emergency recovery.
That is not a penalty. It is fiscal discipline. It gives the public and councilmembers a clearer view of how taxpayer dollars are being managed.
Currently, there are not adequate safeguards in place that hold the administration accountable for all interdepartmental transfers used for unplanned or missbudgeted line items. (in FY24, 158 of 174; and in FY25, 108 of 132 transfers occurred without notification, as they were under required reporting thresholds).
6.) In urgent situations, how will the requirement for Council-approved resolutions impact the speed of accessing funds?
The intent is not to slow immediate emergency response or recovery work.
The City already has emergency response authorities and operational tools for urgent and unforeseen situations. This proposal focuses on greater transparency and accountability in how certain funds are accessed and used as costs extend beyond the immediate emergency period. It is not unreasonable to expect continuing operations to look at least a month ahead to identify when and if they may exceed their existing funding allocation.
The bigger objective is to move the City toward better forecasting, stronger planning, and more intentional use of taxpayer dollars. If departments plan more accurately up front, fewer last minute workarounds should be needed later.
7.) What did the city’s Corporation Counsel tell the City Council about this fund? Is it legal for the Council to pursue this fund? Is the Council investigating the city's claims independently?
We cannot speak on behalf of Corporation Counsel, but I do believe that their position would be difficult to defend publicly.
Still, their opinion was noted and taken seriously. In an abundance of caution, the Council is seeking additional legal review before making final decisions.
The Council obviously has a responsibility to take legal concerns seriously. It also has a responsibility to independently evaluate whether the proposed budget structure is lawful, workable, and in the public interest.
No one benefits from rushing past legal questions. The Council is doing the responsible thing by reviewing the issue carefully before final action.
8.) How long did Corporation Counsel meet with the Council on Friday?
There was no separate meeting with the Council on Friday.
Corporation Counsel’s written opinion was provided to Councilmembers 30 minutes before that hearing, and the Council is now reviewing the issue further.
This official statement was published in the Honolulu Star Advertiser
Reporter: Ian Bauer | ARTICLE
