WAILUKU — The county's budget for 2009 will include money for some major infrastructure improvements, while holding property tax rates at current levels.

The Maui County Council unanimously approved the $560.8 million spending plan at a special meeting Thursday. Up just 2 percent from the current year, the budget increases borrowing significantly to compensate for stagnant revenues and the loss of critical state infrastructure loans. While taxes would stay the same, rates for water, sewers, trash collection and other services would go up.

"Although not as bountiful as in years past, it's still in my opinion a very fair budget," said Council Member Bill Kauakea Medeiros.

The budget, along with new rates and fees, will go into effect July 1.

The county faced nearly flat revenues, along with unavoidable increases in costs, including around $10 million in contractual raises to workers. That left less funding available for discretionary projects and grants to social service agencies.

Council members said they tried to keep taxes to a minimum out of consideration for residents struggling in a slowing economy. Budget Chairman Joe Pontanilla said the budget "sought to strike the best possible balance between minimizing the tax burden on residents and maintaining the county's core infrastructure."

The budget includes a sharp increase in borrowing, with $50.7 million in bond projects, up from $39 million this year. But the council plans to hold back part of that amount, authorizing only $28.9 million in general obligation bonds so far. That means Mayor Charmaine Tavares would have to return for additional approvals in order to borrow the rest of the money.

"I think it was wise to withhold some of the projects from the bond authorization," said Council Member Jo Anne Johnson.

State revolving fund loans, which the county has relied upon in the past for water and wastewater projects, were not available to Maui this year, leading the county to turn to bonds for more financing.

Managing Director Sheri Morrison said the package would "lay the foundation" for the county to head into a period of even tighter finances.

"It's a good, tight budget, and it'll lead into next year in the right way," she said.

While property tax revenues estimated at $220.4 million are nearly a sure thing, the county's take of state-collected hotel-room taxes, estimated at $22 million, could be diminished if visitor counts continue to lag, Morrison warned.

"We'll have to watch revenue streams to make sure they match our estimates," she said.

Council members largely supported Tavares' requests, but she didn't get everything she wanted. Funds to start a proposed Emergency Operations Center, a fortified civil defense base in Waikapu that would also be a backup computing center, were reduced from $1 million to $250,000.

The council also turned down some of her proposed fee increases, including a plan to change the fee structure for renting community centers and park facilities from a daily to an hourly rate. Her proposal to increase fees at the Waiehu Municipal Golf Course was nixed after golfers complained that the course was in bad condition.

Council Member Mike Molina said the budget was as comfortable as could be expected as the county looks ahead to tougher economic times.

"Next term I know we're going to have to tighten our belts," he said. "So we might as well just celebrate right now for what we have."

• Ilima Loomis can be reached at iloomis@mauinews.com.

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