Mayor Caldwell is on the mainland so managing director Roy Amemiya went over the budget highlights.

He says the greatest challenge the city faces is $1.7 billion in unfunded liabilities for retiree health benefits. The budget earmarks $50 million dollars for that.

Another major concern is paying own the increasing debt service.

On the positive side Amemiya says the booming housing market is expected to bring in an additional $77 million.