Grading the Cities introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Honolulu Revenue Rank: 22 Form of Government: Mayor-Council Mayor: Jeremy Harris (took office 1994) City Council: 9 members, elected by district FINANCIAL MANAGEMENT: B- Honolulu’s financial practices are generally pretty good, especially in the face of tough economic times. The rainy day fund is slight — at 0.7 percent of general revenues — but debt and investment policies are solid, and there is a reasonable effort to track the future costs of newly passed projects. Indeed, this capital city is one of few large local governments to have a higher bond rating than the state in which it’s located. Honolulu has lived dangerously by relying on one-time revenues to keep its budget balanced — in fact, more than $130 million in the past three fiscal years alone. The practice seems to be declining, and, if so, that’s good news. “When you look at our one-time revenues in proportion to the size of the budget, it’s not monumental,” insists budget director Roy Amemiya. The city/county government does long-term projections for which it gets credit. Unfortunately, estimates have sometimes been purposefully conservative to avoid union pressures. HUMAN RESOURCES: C Honolulu, like the state of Hawaii, is looking at massive civil service reform. Both are bound by rules established in the late 1930s, and changed only minimally since, that tie Honolulu’s labor force to that of the state and three other counties. This dysfunctional marriage requires that all of them share the same compensation system and negotiate with unions together. Honolulu must offer its police the same salary as a neighboring island with a work force barely one-tenth the size. Reforms of this system have failed in the past, and unions will mount strong opposition. The city recruits aggressively, but hiring is very slow here: It can take Honolulu managers three or four months to fill a position. But that’s an improvement. Not so long ago, it could take eight months. A new Internet application system and applicant tracking programs will help speed things up further. Performance appraisals are done annually. If there’s a notice of substandard performance, employees are evaluated at least once every three months until their work is satisfactory, or they are terminated. Unfortunately, there’s no way to reward employees with cash for superior performance. For the first time, workers can lose raises for substandard work. INFORMATION TECHNOLOGY: B+ Honolulu has poured $18 million into IT projects since 1998 — even while the city has been under tight fiscal constraints. The city has a strong CIO, an excellent IT planning process and a carefully enforced set of well-developed standards. One particularly impressive element in Hawaii’s capital is a true paperless permit system, designed to accept applications, track them through the approval process and integrate all the steps necessary for issuance. In some cases, this has cut permit approval time from weeks to days. Although there are some weaknesses in enterprise-wide systems, Honolulu is addressing many of them. Its old budget information system is being replaced with one that will provide much better decision-making capacity. Perhaps the biggest weakness is in human resources. The city currently has little more than payroll information, and will soon upgrade to a Web-based monitoring system that will allow HR personnel to track an employee from application to retirement. The city’s Web site is generally strong, and allows people to apply for jobs online. Honolulu maintains 14 satellite city halls, which are networked so that citizens can complete almost any transaction they want from any of them. CAPITAL MANAGEMENT: A- It’s easy for a city to keep up with infrastructure when its local economy is booming. Honolulu deserves extra credit for doing an excellent job at this in the 1990s, a time of declining property values and a pinched tourist business. Other cities would use the budget crunch as an excuse to cut back on all infrastructure expenses. But here, leaders have moved forward by leveraging local funds with state and federal dollars and reorganized departments to achieve greater levels of expertise and efficiency. In fact, they’ve turned lemons into lemonade by using the weak real estate market as an opportunity. Bids for capital projects are coming in about 15 percent below original estimates. “With land costs, building costs and borrowing costs down, it’s a good time to invest in our long-term capital needs,” says Randy Fujiki, director of a new department that consolidated multiple construction-related agencies into a single, more efficient unit. One weakness: The city’s capital documents could use improvement. They’re not nearly as informative or expansive as those of other top cities in capital management. MANAGING FOR RESULTS: B Honolulu has created a managing-for-results environment by streamlining its agency structure to hold departments more accountable for their services. For example, separate departments that were all doing construction work were aligned into the new Department of Design and Construction. The operating budget includes both workload indicators and measures that focus more on results. But their quality varies across the departmental map. “There are stragglers,” concedes one official. “It’s a hard concept for an agency always accustomed to looking at how many pieces of paper they processed.” The city is working to help train and educate staff in the development and use of better measures. AVERAGE GRADE: B Copyright © 2000, Congressional Quarterly, Inc. 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