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HomeMy WebLinkAboutCOM 0742.002 1996-1998County of Hawaii Finance Department Budget Narrative Supplement Legislative Auditor's Office March 1998 ltle No. ByQ Ref. To: FC W. Da, Ya i 0 1M I .; Funding Significant Budget Changes (+/- FY 98) Comments Budget Summary - Finance Department Prepared by the Legislative Auditor's Office 1998-99 Budget Estimate: $6-185,044 1997-98 Budget: $5,936.880 Prior Year Funding: (Actual) 93-94 94-95 95-96 $4,567,843 $4,332,164 $4,623,518 March 11, 1998 Change: + $248-164 (4% increase) 96-97 $4,790,264 Office Rent & Maintenance OCE (acct. 5121.42) increased $293,600. This increase is a primary source of the increase in this Department's budget. Reason: Development and maintenance of County facilities at the JC Penneys Bldg. and Hanama Place. In its budget summary the Finance Department identified a number of problems that may hinder it from accomplishing its objectives. These included the following: • Outdated accounting system software on Wang computer system - does not facilitate prompt financial report issuance and tracking of data for special management reports; (See pg. M) • Incomplete substantive revisions to chapter 19 - constitutes a threat to the County tax base (See pg. 11); • Tax Board of Appeals issuing decisions beyond the scope of their authority - constitutes a threat to the County tax base (See pg. 12); • The failure to expeditiously terminate a central services agreement with the City and County of Honolulu - constitutes a threat to the entire tax base (See pg. 12); and Comments Continued Attachments Budget Summary - Finance Department Page 2 Lack of sufficient Data Processing Division manpower to respond to ever increasing demand for computer support (See pgs. 9 & 11) Emerging Trends or Issues (pgs. 14-15) includes an expression of concern about the impact of the year 2000 on the County's accounting and payroll programs (pg. 14 - Accounts) and a comment that marketplace trends affecting property values may affect operations (pg. 15 - Real Property Tax). The Department included within its list of accomplishments (pgs. 12-14) comments that it is in the process of reviewing existing policies and procedures in order to improve the delivery of government services and program levels (pg. 12 - Admin./Budget) and that real property databases show promise as a possible revenue source, contingent upon establishment of County policies on access, cost, etc. re. electronic data. (pg. 14 - Real Property Tax) The following supplemental materials were submitted by the Finance Department: Department Budget pgs. 4-5 Department/Program Description pgs. 7-15 Department Personnel Summary pgs. 16-17 Program Summary: Real Property Tax Division pgs. 19-29 This page intentionally left blank. DEPARTMENT SUMMARY: FY 98-99 REQUEST FINANCE DEPARTMENT DEPARTMENT BUDGET: NEXT FY 98-99 NAME OF PROGRAMS S&W OCE EQPT TOTAL Administration/Budget 310,168 966,600(l) 12,200 1 300 1,290,268 Accounts Division 375 844 18 0 , 0 0 0 (2 ) 20 693 1,045 577,582 PurchasingDivision 202,036 430,000(3 18,150 4,700 654,886 Treasury Division 501,000 248,085 23,000 772,085 Real Property Tax Division 1,591,344 627,500 55,000 2,273,844 Data Processing Division 487 724 3 , 000 (4 ) 97,655 28,000 616,379 Kaiko'o Annex DEPARTMENT TOTALS 3,468,116 2,603,883 113,045 6,185,044 (1) Office Rent & Maintenance (2) Telepnone (3) Storeroom & Advertising (4) Election overtime DEPARTMENT BUDGET BY FUND SOURCE COUNTY: 5,980,044 OTHER GOVERNMENT: 205,000 OTHER: DEPARTMENT SUMMARY: FY 98-99 REQUEST FINANCE DEPARTMENT DEPARTMENT BUDGET: PRIOR FY 97-98 NAME OF PROGRAMS S&W OCE EQPT TOTAL Administration/Bud et g 297,100 673,000(l) 15,665 1,200 986,965 Accounts Division 351 720 180,000(2) 20 938 1,200 553,858 Purchasing Division 197,868 474 77 14,500 6,300 652,668 Treasury Division 484,930 313,610 5,500 804,040 Real Property Tax Division 1,608,513 677,600 37,100 2,323,213 Data Processing Division 472,484 105.652 38,000 616 136 Kaiko'o Annex DEPARTMENT TOTALS 3,412,615 2,434,965 89,300 5,936,880 (1) Office Rent and Maintenance (2) Telephone (3) Storeroom and Advertising This page intentionally left blank. DEPARTMENT SUMMARY: FY 98-99 REQUEST FINANCE DEPARTMENT DISCUSSION RE: NEXT FY 98-99 1. LIST MAJOR DEPARTMENT OBJECTIVES TO BE ACCOMPLISHED NEXT FY 98-99. Administration/Budget • Continue with the reassessment and development of administrative rules for the various divisions. • Continue with development of the property management program. • Review Chapter 19, HCC, as relating to Agriculture Taxation. • Continue regular training to provide training for employees who deal with financial matters. Accounts Division: Re -obtain a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association. Data Processing Division: • Continue "Year 2000" related projects to prepare County computer systems and applications for the turn of the century. • Convert Wang telecommunications network to dial-up mode and phase out other methods and older systems where possible. • Expand use of Windows NT computer system within Finance Department and explore interconnection to County's Wang computer systems. • Explore interconnection of various department/agency LANs into a County -wide network. 0 Expand County's use of Internet and possible relocate Web site to Finance Department's Windows NT system. Purchasing Division: • Provide all Departments and Agencies with an updated Procurement Manual. • Complete LAN System enabling staff to communicate with each others' PCs and other Finance Department personnel. • Conduct pilot program to enable other agencies to electronically process their own confirming purchase orders. • Initiate advertising for IFB's and RFP's on County Internet website and enable bidders to electronically capture bid documents. Real Property Tax: • Maintain sales assessment mean ratio of + 10% from the 100% assessment. • Maintain a co -efficient dispersion at + 15% of the mean ratio. • Conduct field inspections of building permits issued or on file for all new construction. • Continue with efforts to clean up data files on the computerized on-line tax assessment system. • Maintain an active educational and informational program on real property taxation. • Initiate proceedings for two real property tax foreclosure sales to reduce the number of delinquent accounts and dollar volume. 2. LIST MAJOR PROFESSIONAL SERVICE CONTRACTS (>$25,000) AND THE RATIONALE FOR EACH. NONE 3. LIST MAJOR EQUIPMENT PURCHASES (>$10,000) BUDGETED FOR FY 98-99. PROVIDE JUSTIFICATION. Data Processing: $16,000 Telecommunications hardware/software for inter -systems networking. By increasing the use of dial-up ports, we can expand our telecommunications network capability and replace older more complex and expensive technology. By adding components such as TCP/IP software to the Wang system, we can develop greater capability for interconnecting non -Wang computer systems to the Wang environment and facilitate broader use of all of our Computer systems. By adding Internet server software to our NT LAN we can bring Internet website function in house and better control access to our web pages and Internet e-mail system. Real Property Tax: $25,000 Replacement motor vehicle; used for conducting field work. $16,000 Continuing to upgrade existing computer equipment to improve efficiency. 4. LIST ANY FUNCTIONS OR ACTIVITIES THAT YOUR DEPARTMENT SHOULD BE DOING TO FULFILL YOUR STATUTORY OR OTHER MANDATES BUT ARE UNABLE TO PROVIDE. PLASE EXPLAIN. Data Processing: There is an ever increasing demand for computer support as County departments and agencies purchase more computer systems and expand existing systems. For example, by June of 1998, there will be approximately 600 PCs and 10 local area networks in place, while ten years ago there were only about 25 PCs in use. Finance Department's Data Processing Division is hard pressed to meet the constant demand for new support while also maintaining ongoing support levels for existing systems and applications. 0 This page intentionally left blank. 10 DEPARTMENT SUMMARY: FY 98-99 REQUEST FINANCE DEPARTMENT DISCUSSION RE: PRIOR YEAR FY 96-97 AND FY 97-98 WITH RESPECT TO YOUR INDIVIDUAL PROGRAMS AND YOUR CURRENT AND PRIOR FY'S OBJECTIVES, IS THERE ANYTHING THAT IS PREVENTING OR HINDERING YOU FROM ACOMPLISHING YOUR OBJECTIVES? Accounts Division: Problems with the outdated accounting system software on the Wang computer caused the November 30, 1997, monthly budget status report to be issued several weeks late. The present accounting system does not facilitate prompt issuance of financial reports, and does not adequately track data for special management reports. Data Processing Division would like to be able to provide greater depth of support and service to other County departments and agencies in helping them achieve their office automation goals. Projects such as migrating away from older to newer computer systems, improving and enhancing existing applications, implementing new systems, inter -networking various departmental computer systems, increasing computer training opportunities, and expanding public access to County data all deserve increased attention and require adequate staff resources to complete in a professional manner. Limited technical support staff resources coupled with the requirement to provide expanded support in more and more areas has greatly impacted our efforts. Ongoing support obligations have also been affected as staff resources get shifted to new areas. Data Processing Division recognizes, however, that the County government has many priorities and needs but must live within realistic funding considerations. As a result, we will continue to do the best we can with the resources we have at hand. Purchasing Division: Uncertainty over physical location of offices (Penney's?) and computer systems (Wang, IBM, PC or ??) in future makes current planning difficult. Real Property Tax: Substantive revisions to Chapter 19 incomplete, which threatens tax base for the County. We must proceed expeditiously. 11 Tax Board of Review occasionally issues decisions beyond the scope of their authority, which threatens tax base for County. Central Services agreement and data processing contract with City & County of Honolulu threatens entire tax base. Termination of Central Services agreement proceeding too slowly. Separation of function between two agencies is dangerous. 2. LIST MAJOR DEPARTMENT ACCOMPLISHMENTS IN FY 96-97 AND FY 97-98. Administrative/Budget: • Well along in developing of an organizational structure within the Department of Finance to provide for the financial leadership in assisting departments and agencies. • Have reduced paper stream without compromise to fiscal controls and efficiencies. • In the process of reviewing existing policies and procedures for the purpose of improving government operations in the delivery of service and program levels. • Amended Chapter 19, HCC. • Held quarterly training sessions for County employees who deal with financial matters. Accounts Division: In fiscal year 1996-97, the County's Comprehensive Annual Financial Report earned a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers' Association. Also in fiscal 1996- 97, a new payroll assignment policy for the County was developed, and the number of assignee codes was decreased by consolidation, saving time and effort for payroll staff. Data Processing Division: FY 96-97: Began investigating impact of Year 2000 upon County computer systems and applications and initiated several related projects. Obtained compute: support needs and assessment information from departments/agencies to assist in planning projects and allocating limited staff resources. 12 Improved documentation for telecommunications network and procedures to process financial applications (e.g., Payroll, Accounting, Sewer Billing). Completed initial staff cross -training in these areas. Converted accounting and payroll warrant printing to laser printed, 8.5 x 1 I" cut sheet format to yield efficiency and quality improvements. New high speed laser printers installed on main computer system to speed up work output. Addressed privatization issues (computer maintenance contracts, alarm systems, air conditioning, etc.) to avoid abrupt shut down of computer operations which would cripple County government operations. Selected vendor to develop and install County Clerk's new computer system. Selected vendor to install the Police/Fire Computer Aided Dispatch (CAD) system. Developed specifications for departments/agencies. FY 97-98: Upgraded County's central computer system. Completed assessments on numerous applications and computer systems. Updated Year 2000 schedule and status report. Advised and assisted departments/agencies. Provided workshops to County departments/agencies in Year 2000 issues, PC security, PC backups, PC viruses, and Internet. Provided numerous small class hands-on training sessions in PC systems and software. Implemented anti-virus protection program implemented County -wide for PCs. Purchasing Division: + Added Procurement & Specifications Specialist position to handle increased workloads as a result of new procurement law. • Completed revision of Finance Director's Rule 16 and conducted public hearings to bring our procurement rules into conformance with State & Charter and increase levels of authority at using agency level. • Assumed responsibility for Storeroom from Accounts Division. • PCs and Microsoft Office software installed and training of all staff initiated. 13 Real Property Tax: Achieved major program goals and objectives. Successfully implemented new computerized cashiering system. Accuracy and quality of real property database continues to improve; data files display promise of establishing additional revenue source; however, County fails to establish definitive policy on electronic data, i.e., accessibility, availability, eligibility, cost. 3. WHAT EMERGING TRENDS OR ISSUES PARTICULAR TO YOUR DEPARTMENT MAY IMPACT YOUR BUDGET OR OPERATIONS? Accounts Division: We are concerned about two areas: One is the year 2000 and its impact on our accounting and payroll programs, as assessment of these programs has not been completed yet. Another emerging issue is the proposed change in measurement focus for governments, as well as changes in financial reporting standards that are being considered at the present time by the Governmental Accounting Standards Board. Once these changes are finalized and implemented, they may have a tremendous impact on how the County has to keep its accounting records and prepare financial reports. When the proposed changes are finalized and an implementation date is set, we will have to assess what measures are necessary for the County to maintain its accounting records in a manner that will provide the necessary information to prepare financial statements that are in compliance with governmental GAAP. Data Processing Division: Possible establishment of Data Systems Department via charter amendment. Rapid growth in use of computers County -wide beyond the division's ability to provide in depth support. 14 U Purchasing Division: Legislature continues to alter procurement laws, making education and training of users difficult; continuing effort and resources needed just to keep rules, regulations and procedures current. Continued use of procurement law to promote other issues and agendas contributes to confusion (i.e., requiring tax clearances for bids, new preferences, etc.). Privatization/civil service law conflict continues to require additional resources in paper flow. Real Property Tax: Chapter 19 revisions may severely impact operations. New trends in marketplace affecting property values may impact operations. Movement into new office at One Pauahi Place may impact operations. 15 ORG CHART -2 DEPARTMENT OF FINANCE Director of Finance Deputy Director of Finance Pension Board Real Property Tax y Accounts Data Processing Real Property Budget Purchasing Treasury Division Division Tax Division Division Division Division DEPARTMENT SUMMARY: FY 98-99 REQUEST FINANCE DEPARTMENT DEPARTMENT PERSONNEL (Total Positions As of 1-31-98) NAME OF PROGRAMS POSITIONS ESTABLISHED POSITIONS FUNDED POSITIONS UNFUNDED POSITIONS FILLED POSITIONS VACANT POSITIONS NEEDED TOIMPLEMENT PROGRAMS Administration/Budget 6 6 - 6 - 6 Accounts Division 10 10 — 10 — 10 Purchasing Division 6 6 — 6 — 6 Treasury Division 16 16 — 16 — 16 Real Property Tax Div. 48 48 — 42 6 48 Data Processing Division 13 13 12 1 13 Kaiko'o Annex DEPARTMENT TOTALS 99 99 — 92 7 99 17 This page intentionally left blank. 18 E PROGRAM SUMMARY: FY 98-99 Request FINANCE DEPARTMENT PROGRAM ACTIVITY: Real Property Tax Division SUB -ACTIVITY OR DISTRICT: 1. Assess all real property in the County of Hawaii in an equitable and uniform basis for real property tax basis. 2. Collect all real property taxes owed to the County of Hawaii. 3. Idaintain an active educational and informational program on real property taxation. 19 Q This page intentionally left blank. 20 R Funding Significant Budget Changes (+/- FY 98) Comments Attachments Budget Summary - Finance Department Real Property Tax Division Prepared by the Legislative Auditor's Office 1998-99 Budget Estimate: $2,273.844 1997-98 Budget: $2.323.213 Prior Year Funding: (Actual) 93-94 94-95 95-96 $2,050,867 $1,886,597 $2,026,442 None March 11, 1998 Change: - $49369 (2% decrease) 96-97 $2,083,292 The Real Property Tax Division included the following comments about emerging trends or issues: • Chapter 19 revisions required immediately; • Changes in the market place which will affect property values are anticipated to occur shortly; and • Movement of office to one Pauahi Place will affect operations. (See pg. 25) The following supplemental materials were submitted by the Real Property Tax Division Program Budget pgs. 22-23 Program Description pgs. 24-25 1997-98 Objectives: Outcomes to Date pgs. 26 Personnel Summary pgs. 27-29 21 PROGRAM SUMMARY: FY 98-99 Request DEPT: Finance PROG. ACTIVITY: Real Property Tax Division SUB -ACTIVITY OR DIST: Expense Category Salaries & Wages / OT % I OCE FY 96-97 Actual 1,392,904/ .40 678,896 PROGRAM BUDGET FY 97-98 Appropriation 1,608,513/ .90 677,600 FY 98-99 Request 1,591,344/ 1.0% 627,500 FY 98-99 Change (17,169) (50,100) Equipment 11,492 37,100 55,000 17,900 --——————————————————————————————————————————— Program Total 2,083,292 2,323,213 2,273,844 (49,369) neil-CRIIIIJMaj a County: 100'0 Other Government: Other: FY 97-98 EXPENDITURES BY COUNCIL DISTRICT: Unavailable; too many overlapping functions/districts. WA d PROGRAM SUMMARY: FY 98-99 Request DEPT: Finance PROG. ACTIVITY: Real Property Tax Division SUB -ACTIVITY OR DIST: PROFESSIONAL SERVICES CONTRACTS NEED/JUSTIFICATION: VALUED AT $25,000 & ABOVE: N/A N/A 23 DEPARTMENT: FINANCE PROGRAM ACTIVITY: REAL PROPERTY TAX DIVISION SUB -ACTIVITY OR DISTRICT: Actual Est. Est. PROGRAM DESCRIPTION: WORK DATA: 1996-97 1997-98 1998-99 Assesses all real property situated within the County of Parcel Count 129,720 131,185 135,800 Hawaii for purposes of real property taxation. Collects all taxes Number of Tax Bills 181,689 182,000 186,000 imposed by Chapter 19, Hawaii County Code. Number of Agency Records 21,500 21,700 22,000 Assessment Appeals 1,230 1,200 1,200 Number of Condominium Units 8,974 9,193 9,850 Curr. Yr. Bal. at 6/30 (millions) i 5.21 $ 6.54 $ 5.00 Prior Yr. Bal. at 6/30 (millions) 6.68 11.89 10.00 Delinq. Taxes at 6/30 (millions) $11.89 18.43 15.00 GOALS: 1. Assess all real property in the County of Hawaii in an equitable and uniform basis for real property tax purposes. 2. Bill taxpayers accurately and in a timely manner. 3. Collect all taxes due the County. OBJECTIVES FOR FISCAL YEAR 1998-99. 1. Maintain sales assessment mean ratio of ± 10% from the 100% assessment. 2. Maintain a co -efficient of dispersion at ± 15% of the mean ratio. 3. Conduct field inspections of building permits issued or on file for all new construction. 4. Continue with efforts to clean up data files on the computerized on-line tax assessment system. S. Maintain an active educational and informational program on real property taxation. 6. Initiate proceedings for two real property tax foreclosure sales to reduce the number of delinquent accounts and dollar amount of delinquent taxes owed to the County of Hawaii. 24 I PROGRAM SUMMARY: FY 98-99 Request DEPT: Finance PROG. ACTIVITY: Real Property Tax Division SUB -ACTIVITY OR DIST: CHANGES FROM PRIOR FISCAL YEAR: EMERGING TRENDS OR ISSUES: NONE A. Chapter 19 revisions required immediately. B. Changes in market place affecting property values anticipated to occur shortly. C. Movement of office into One Pauahi Place. 25 PROGRAM SUMMARY - ACCOMPLISHMENTS FY 97-98 DEPT: Finance PROG. ACTIVITY: Real Property Tax Division SUB -ACTIVITY OR DIST: STATUS OF ACCOMPLISHMENTS (FY 97-98): Objectives 1) Maintain sales assessment mean ratio of± 10% from the Outcomes to Date / Explanation: Mixed results: 100% assessment. Vacant Property Patio - 0.9686 Improved Property Ratio - 0.8896 2) Maintain a co -efficient of dispersion at ± 15% of the Achieved: mean ratio. Vacant Property COD - 14 , 2095 Improved Property COD - 13.0506 3) Conduct field inspections of building permits issued or Completed on file for all new construction. 4) Continue with efforts to clean up data files on the on-going effort computerized on-line tax assessment system. 5) Maintain an active educational and informational On-going effort program on real property taxation. 6) Initiate proceedings for two real property tax Completed foreclosure sales to reduce the number of delinquent accounts and dollar volume. M. r? PROGRAM SUMMARY: FY 98-99 Request DEPT: Finance PROG. ACTIVITY: Real Property Tax Division SUB -ACTIVITY OR DIST: la-wom CGU '_. , •2RZT � Total Positions Established (Funded and unfunded as of 01-31-98): 48 Status: a. Positions Filled / Percent: 42 / 8 7.5 Positions Vacant / Percent: 6 / 12.5 b. Positions Funded / Percent: 4 8 / 10 0 Positions Unfunded / Percent: 0 / 0 Cate¢orv: a. Permanent / Percent: 48 / 10 0 Temporary / Percent: 0 / 0 Other / Percent: 0 / 0 b. Civil Service / Percent: 48 / 100 Appointed / Percent: 0 / 0 Fund Source: County / Percent: 48 / 100 State or Federal / Percent: 0 / 0 Other / Percent: 0 / 0 Total positions needed to implement program: 48 Comments: 27 ORGCHART-RP Appraisal Section (Residential) Real Property Appraiser V SR -24 Real Property Appraiser 1V SR -22 (7 positions) West Hawaii Services Center (see separate listing) Appraisal Section (Commercial) Real Property Appraiser V SR -24 al Property Appraiser II SR -18 REAL PROPERTY TAX DIVISION County Real Property Tax Administrator EM -7 Clerical Services Section Supervising Real Property Tax Clerk II SR -16 Real Property Tax Clerk SR -12 (8 positions) 28 Real Property Valuation Analyst III SR -24 Collections Section I I Tax Map Section I I Data Processing Sec. Accountant II SR -20 Tax Maps & Records Supervisor II SR -22 Tax Collections Assistant - SR -15 (3positions) Sen. Account Clerk SR -13 Real Property Tax Clerk SR -12 (3 positions) Cashier II SR -12 Cashier I SR -10 RP Drafting Tech III SR -17 RP Drafting Tech II SR -15 Abstracting Asst III SR -13 Abstracting Asst Il SR -11 (4 nositions) Data Processing Systems Analyst II SR -24 ORGCHART-RP-WHSC WEST HAWAII SERVICES CENTER Asst. County Real Property Tax Administrator EM -3 R P Appraiser IV SR -22 R P Appraiser I SR -16 0 RP Tax Clerk SR -12 (3 positions)