COM 0423.003 2002-2004 - Laserfiche WebLink

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ISSUES AND ANALYSIS 1. SPECIAL FUND Must the Council establish the Shipper's Wharf Committee Trust Fund pursuant to Section 10-12, Hawaii County Charter, which states: "Upon recommendation of the mayor, the council may by ordinance abolish or establish such special funds as may be necessary for the proper and efficient segregation of the fiscal operations of the county." (emphasis added) Whether a special fund should be established by the County Council is not a legal or accounting question according to Deputy Corporation Counsel Craig Masuda and KPMG, respectively. It seems to be one of policy. Unlike the State of Hawaii, which has defined 'special fund,' the county has no definition of a special fund. A review of the minutes of the 1963-1968 Charter Commissions does not shed light on the intent of Section 10-12, Hawaii County Charter. Bottom line: Are the assets of the Shipper's Wharf Committee Trust part of the Coun 's fiscal operations? We believe they are not. While the purpose of the Trust is a public purpose as opposed to a private purpose, it is incorrect to conclude that the assets are public assets for use by the Coun of Hawaii. The County of Hawaii has no authority to access the Trust Fund inasmuch as the Trust was established by court order, not by county, state or federal law. Only the Mayor, acting as Trustee, may access the Fund. Trust Funds do not support the operations of any Coun service, program or activity. Monies from the Shipper's Wharf Committee Trust Fund may complement the Coun 's activities, but are independent of the Coun 's obligations. It has been argued that the County's accounting system and personnel are being used to administer the Trust. Nevertheless, the act of administration does not mean the Trust or its activities are a Coun operation. Is it legal to direct County resources to anon-government activity? Mr. Masuda opines: "As the purpose of the trust is a public purpose, a municipal corporation is allowed to expend resources, such as those of the Corporation Counsel and Department of Finance, on the administration and maintenance of this trust. Should the purpose of this trust had been a private one, such as the care and maintenance of an individual or a family, then case law would not allow the expenditure of such resources by a municipal corporation.i15 2. COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) Must the Shipper's Wharf Committee Trusi Fund be reported in the County of Hawai`i's Comprehensive Annual Financial Report (CAFR)? Craig Masuda, Deputy Corporation Counsel, memorandum dated March 1, 2004. 4