Excerpts from Honolulu Mayor Mufi Hannemann's fifth State of the City address yesterday:

Just last week, Congress put the final touches on a $787 billion stimulus package, of which at least $678 million will flow to the Hawaiian Islands.

Sen. (Daniel K.) Inouye tells us that there'll be $170 million for roads and buses, plus $51 million for waste water and sewage upgrades, for starters.

Here at home, the city's stimulus involves nearly $1 billion in capital improvements for this fiscal year, and another $1.7 billion for the coming year, with spending targeted at our traditional priorities of roads, sewers and public facilities.

Permitting: With so much at stake, we must make sure that we put people to work as soon as possible. All of these projects require city permits, and we think streamlining the permit process will ensure that projects are indeed shovel-ready.

The Department of Planning and Permitting will be reducing its approval steps for city construction permits to a one-time review. We'll be instituting an Express State Permit process to streamline the permitting of state projects.

Wastewater: The Environmental Protection Agency has determined that we must construct costly and unnecessary secondary treatment plants at Sand Island and Honouliuli, at a price tag exceeding $1 billion.

The EPA refused to consider the fact that secondary treatment would actually be harmful to the environment because of the carbon emissions from what is a heavily industrial process. The EPA also based its denial on outdated state water quality standards that differ significantly from what's considered appropriate today. We've appealed to the Legislature to update the water quality standards this session, and we hope that the Health Department will provide its input and support so that we can accomplish something that's long overdue and that will benefit us all. We'll also take issue with the EPA on its faulty determinations.

Rail transit: After coming so far, and with so much at stake, some legislators and state administration officials want to take the transit money, steal it really, choosing to do what's easy over what's right. This is an utter breach of faith with the people. My administration views any attempt to divert the transit money as illegal and I am working with our friends at the Legislature to defeat this harebrained scheme.

Hawaii Council of Mayors: I've made mention before of the strong and unprecedented partnership among your mayors. There's strong interest in cooperating on information technology ventures, such as hardware, networks, telephones, security, and software. Another promising area is the joint purchasing of vehicles, equipment, and supplies. Our preliminary research tells us that purchases made on behalf of all the counties can be cheaper than purchases by the individual counties.

Kapolei land: The city is inviting the state to join us in developing a one-stop center for things like, say, the state's unemployment insurance office and the city's O'ahu WorkLinks, or state and county permitting functions. Why not step beyond our government boundaries for a project that improves services and moves us that much closer to making Kapolei not just a second city, but a great city.

Non-profit groups: I'm willing to take the first step to bring these organizations together to see if we can collectively come up with ideas that will enable them to continue their praiseworthy work on our behalf, with the city committed to doing its fair share.

Budget: For the fiscal year that begins in July 2010, we expect revenues to decline by about 170 million dollars or more, depending on the duration and severity of the economic downturn.

We have to prepare ourselves, beginning right now. That's why we're developing a two-year budget, one that looks down the road, rather than what's at the next intersection.

Neighborhood boards: I've asked the Neighborhood Commission to look into ... increasing the effectiveness of the boards, not to mention saving money, by possibly realigning the boundaries and having fewer boards, as well as altering the timing and frequency of the board elections.

Cabinet: Our financial situation this coming year will preclude us from offering pay raises for city employees represented by the HGEA and UPW unions. In concert, I'm denying pay raises for the managerial employees who supervise those union workers. Finally, in a gesture that has really touched me, the appointed members of my cabinet have offered to join me in working without pay one day a month, in recognition of our fiscal situation.

Yes, our journey ahead looks difficult and demanding. The path is dark, and we don't know what challenges await us.

But I have always been one who has not retreated from fear, who has not cowered before the unpopular, who has instead drawn strength and inspiration by doing what's right, what's pono.

As I said in my inaugural address, I stand ready to listen, ready to collaborate, ready to lead.

Imua. Let's go forward; we have work have work to do.