Paying for garbage pickup and parking at Ala Moana Beach Park are among the options being considered by City Council Budget Chairman Nestor Garcia as he prepares to deal with a $140 million shortfall in the city operating operating budget.

The proposals are listed in a memo written by Garcia to Mayor Mufi Hannemann and Managing Director Kirk Caldwell.

The letter includes "an initial list of potential cuts, reductions in services and changes in current policies," and asks for the Hannemann administration's views on the proposals.

The mayor typically submits a budget plan in March and the council deliberates through May. But Garcia told The Advertiser that given the budget woes the city is facing, he wants to begin discussions sooner about what services can be cut, and how more income can be generated.

"I'm trying to take a prudent, activist approach, and not wait until the mayor submits his budget in March," Garcia said. "And then it's crunch time and we don't have that much time to actually go into more serious discussion. This is an attempt to flag the administration and let the mayor know what areas I'm looking at."

Among the possibilities Garcia listed in his memo:

• Charging a fee for trash pickup at single-family, multifamily and nonprofit organizations.

• Placing pay stations in the parking lots at Kapiolani Regional Park and Ala Moana Regional Park.

• Consolidating and possibly closing police substations and satellite city halls.

• Slashing the holiday Honolulu City Lights, Windward City Lights and Kapolei City Lights, possibly by as much as 50 percent.

• Reducing the number of members in the 40-person Royal Hawaiian Band.

• Eliminating the funding to provide cable television broadcasts of council meetings and O'ahu neighborhood boards.

• Increasing rates for the city's Summer Fun program for youths.

5% COUNCIL PAY CUT

"I'm serious about bringing (the proposals) up for discussion at least," Garcia said. "Whether we follow through depends on how my colleagues react to all of them. I'm only one vote."

Garcia said he also will propose that the nine council members take a minimum 5 percent pay cut.

"That's the floor, not the ceiling," he said. "We're talking about a 5 percent pay cut minimum."

City budget officials did not return calls for comment. Staff from the Department of Budget and Fiscal Services is in the process of working out budgets with each of the city's agencies.

The budget allotment for city agencies was cut by 4.5 percent on July 1.

That reduced amount, which excluded public safety agencies such as police and firefighting, was used as a starting point for discussions for the coming year's budget, Deputy Budget Director Mark Oto said earlier this month.

Council Chairman Todd Apo said he also wants the council to start looking into what changes can be made to city services in the coming year in light of the tight fiscal picture.

"It all needs to be out there for discussion," Apo said. "Although I would prefer to find ways to reduce costs rather than increase revenues."

Nonetheless, he said, "people have to understand that if we don't raise revenues, then we're going to reduce city services."

Apo said he also wants to hear what the administration has to say about the possibility of furloughs for city employees. "Our manpower costs are the largest part of the budget," he said.

In October, the Hawai'i Government Employees Association agreed to allow Honolulu and the other three counties the option of ordering up to 18 furlough days for its members this fiscal year, and 24 next year. Hannemann said then that furloughs are unlikely for the city this fiscal year but are a near certainty next year.

IT COULD GET WORSE

The city budget shortfall could get worse.

This week, Gov. Linda Lingle announced that she wants to divert $99 million in hotel room tax revenues from the counties to the state for each of the next three years.

For the City and County of Honolulu, that's a loss of $44.5 million annually.

Taking transient accommodations tax funding away from the counties has been talked about for years, but the mayors and county council members have successfully argued that they are due the money because visitors to Hawai'i use county services such as roads, sewers and police.

But given this year's economic travails, they may not able to convince state lawmakers to leave their portion alone.

In addition, declining property values caused by the economic downturn have resulted in lower property tax collections, which are the city's main source of revenues.

Last week, tax assessment officials announced that valuations are down 6.7 percent, which means tax collections will be down 6.7 percent unless the council decides to raise rates.

The drop was slightly better than the 10 percent drop some city officials had predicted, a drop they estimated would cost the city about $85 million in revenue.

KALAPA'S VIEWS

Apo and Garcia said the situation is grave and they want a frank discussion on the city's budget priorities to begin now.

Lowell Kalapa, president of the nonprofit watchdog Tax Foundation of Hawaii, said he likes that council leaders are starting to look at the budget situation earlier than usual.

The city should be concentrating on core responsibilities, Kalapa said. An entity such as the Royal Hawaiian Band, despite its claim as the only full-time municipal band in the United States, should be getting at least some of its funding from private sources, he said.

"If corporations or individuals feel it's worth saving then they should step forward with the support," Kalapa said.

Kalapa said he also doesn't have a problem with fees increasing for services that are enjoyed by only a minority of people, such as Summer Fun.

But he cautioned the council against charging for waste disposal, which is a health-and-safety concern. Like police and fire services, they benefit all, he said. "That's what we're paying our property taxes for," he said.

The council and administration should look more at cutting back on non-core services and the possibility of privatizing more of its services, Kalapa said.

A number of services are already privatized because they are cheaper, among them the city's bus system, he said.