HomeMy WebLinkAboutCOM 0689.006 2012-2014 - '.• ''.•. . Walter K.M.Lau
" b4g. Managing Director
William P. Kenoi ';,•,,,F/, 1•:
Mayor •-- 's � Randall M. Kurohara
+J;• +e:'� Deputy Managing Director
•
•County of Hawaii
Office of the Mayor
25 Aupuni Street,Suite 2603 • Hilo,Hawaii 96720 • (808)961-8211 • Fax(8o8)961-6553
KONA: 74-5044 Ane Keohokalole Hwy.,Bldg.C • Kailua-Kona,Hawaii 96740 +v
(808)323-4444 • Fax(808)323-4440 ° n
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May 5, 2014 '."
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J Yoshimoto, Chair
And Honorable Members of the Hawai`i County Council co —
County of Hawai`i
25 Aupuni Street
Hilo, HI 96720
Aloha Chair Yoshimoto and Council Members:
As required by the Hawai`i County Charter, submitted with this message is the proposed
operating budget for the County of Hawai`i for the fiscal year ending June 30, 2015. This
balanced budget includes estimated revenues and appropriations of$416,915,831, and includes
the operations of eleven of the county's special funds as well as the general fund.
This FY 2014-2015 budget is $13,710,833 or 3.4 percent larger than the budget in effect when
this administration took office in 2008. This budget continues our strategic investments in county
services and infrastructure to support our working families and businesses, while carefully
controlling the cost of government.
We continue to see a gradual recovery from the past five years of budget challenges caused by
the national and international recession. We are finally experiencing a measured recovery in
property values, which allows us to address the new challenge of $20.9 million in additional
employee expenses in the year ahead. Most of these costs are the result of public worker
arbitration decisions and negotiated agreements that significantly increase salaries, wages, social
security contributions and retirement obligations.
A coordinated effort by the Hawai`i State Association of Counties and Hawai`i Conference of
Mayors this year helped to convince the state Legislature to allocate additional hotel room tax
funding to the counties, and we welcome this assistance. This revised budget commits all of that
additional funding to pay for future health care obligations for public employees.
This proposed balanced budget does not require any increase in property taxes.
// Comm.No 8 9' 6
J
)County of Hawaii is an Equal Opportunity Provider and Employer. Reef.Dote, lijAY A g 2,011
Honorable Members of the Hawai`i County Council
May 5, 2014
Page 2
Population vs. Budget
192,000 $430
190,000 $420
188,000 $410
$400
186,000 $390
184,000 $380 0
182,000 $370
18o,000 $360
$350
178,000 $340
176,000 $330
O� y0 1`� —f�Population
OOcb 00c/ Oti0 Oti1 OtiR% O,13 ,D`
t Budget
Investing In Our Communities
From the beginning of this administration, we have developed budgets that limit spending, but
also allow for targeted investment in our communities and our future. Through carefully selected
initiatives we created or improved parks and playgrounds, built or rebuilt roads and other public
infrastructure, and improved public services. Our primary objective has always been to make the
County of Hawai`i a better place for our families to live and work.
We have used the county's borrowing power and excellent credit rating to help stimulate the
economy and create jobs during a period of low interest rates and favorable bid prices. In Kona,
we answered residents' calls for relief from traffic congestion by advancing projects such as the
La'aloa Avenue Extension, the Ka`iminani Drive Reconstruction and the Ane Keohokalole
Highway, and we will soon begin work on the Mamalahoa Bypass. In Hilo, we are repairing
downtown streets starting with the Kilauea Avenue Reconstruction, followed by the
Kamehameha Avenue Reconstruction project. We will continue in the months ahead with repairs
and improvements to Ponahawai and Komohana Streets.
We have partnered with the University of Hawai`i at Hilo, which has emerged as a critical
component of our economy. Our university allows our young people to achieve better lives for
themselves while providing a skilled workforce to help our island economy to grow and
innovate. To help the university expand, we are advancing the Kapi`olani Street Extension to
open up lands for new student housing, additional classroom space, and to alleviate traffic
congestion.
We are investing in parks, gyms, and playgrounds across the island where our families can
engage in positive activities, and where our coaches can teach our youth respect, discipline, and
teamwork. We opened covered play courts at Pana`ewa Park in Hilo, and built the Kamakoa Nui
Park in Waikoloa. We have added seven playgrounds islandwide, and will soon be opening the
new Ka`u District Gym & Shelter. We renovated popular recreational facilities such as the
Honorable Members of the Hawai`i County Council
May 5, 2014
Page 3
Waiakea Recreation Center, Edith Kanaka`ole Stadium, Laupahoehoe Pool, Keokea Beach Park,
and Pahoa Pool. We will soon make the largest investment in recreation in the history of the
county by constructing district parks in Pahoa, Waimea and Kona.
Despite the budget challenges of recent years, we continue to invest in alternative energy and
agriculture because we understand those sectors are essential for a sustainable economy. We
installed solar arrays on county buildings to reduce oil consumption and utility costs, and will
use wind power at Lalamilo to provide clean energy to supply water to our communities. We are
encouraging growth in agriculture by investing in training and support for farmers, and provided
1,739 acres of county-owned lands for ranching and community-based agriculture at the
Kapulena Agricultural Park. We joined in a public-private partnership to upgrade the Pa`auilo
Slaughterhouse and provide a new rendering facility to support our grass-fed beef industry.
At the same time, we have preserved funding for public safety and essential core services. We
funded additional police officers for the Puna and Ka`u communities, and opened the new
Makalei Fire Station. We protected funding for nutrition, recreation and other services for
seniors, and preserved and expanded programs for our children and youth. We maintained
county funding to non-profit organizations serving the people most in need in our communities.
Employee Count
2,800
i
2,750
2,700 f �..
2,650
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Fewer Employees, Growing Costs
We want to thank our county workers for their efforts during the Great Recession, which was a
time when people across our island made sacrifices. Many of our employees accepted furloughs
even as overtime was cut and staffing levels in county agencies were reduced because of hiring
restrictions. County employees' workloads increased, but their hard work and dedication allowed
us to continue to deliver essential county services and protect public safety.
During these many challenging budget years, the size of the county workforce declined from
2,787 in November 2008, to a total of 2,632 more than five years later.
Honorable Members of the Hawai`i County Council
May 5, 2014
Page 4
Even with that smaller workforce, the new negotiated collective bargaining agreements will
significantly increase our employee costs in the year ahead. Wages, salaries and fringe benefits
including health care and retirement for all of our employees will increase in all departments by a
total of$20.9 million in Fiscal Year 2014-2015, with most of that increase attributable to these
new agreements.
County of Hawai`i tax collections in the year ahead will be $8.24 million or 3.6 percent more
than the amount of property taxes collected when this administration began in 2008. However,
the combined cost of employee wages, fringe benefits and health care expenses has grown by
$31.1 million or 17.3 percent during the same period.
This year the Hawai`i State Legislature agreed to raise the cap on the amount of transient
accommodations tax that is distributed to the counties, and the new hotel tax allocation will
provide an additional $1.86 million to the County of Hawai`i. This revised budget adopts the
fiscally responsible strategy of investing that entire amount into pre-funding future employee
health benefits, also known as GASB 45. That allows the county to increase its contribution to
GASB 45 to $6.09 million for Fiscal Year 2014-2015, which is nearly double the contribution
budgeted for the current fiscal year.
Significant Changes to February 28, 2014 Revenue Estimates
General Fund
• Real Property Tax — Revenue projections have increased by $1,700,000, as the result of
upward valuation adjustments and a reduction in the tax appeal allowance.
• State Grant in Aid—As the result of state legislative action, the Transient Accommodations
Tax (TAT) allocation to Hawai`i County increased by$1,860,000.
• Fund Balance Carryover — Carryover projections have increased by $770,000, which
represents an increase in current year expenditure savings as a result of restrictions on hiring,
travel, equipment and other spending.
Solid Waste Fund
• Beverage Container Deposit Program — Revenue was reduced by $217,307 to reflect the
revised grant amount from the Department of Health.
• Transfer from General Fund — An increase to general fund transfer was included to
provide additional revenue of $412,742 to meet the critical operational needs of the Solid
Waste Division.
Honorable Members of the Hawai`i County Council
May 5, 2014
Page 5
Significant Changes to February 28, 2014 Expenditure Estimates
General Fund
• Police — Funding from the Hawai`i Impact Grant is expected to increase by $129,000.
Additionally, funding is included for community safety programs.
• Fire — Funding was increased by $320,000 in the Ocean Safety Division, for salaries,
equipment and miscellaneous costs to support a pilot jet ski program.
• Prosecuting Attorney—Additional staffing was provided to meet the increased demand and
workload placed on office staff by changes in judiciary requirements, increasing the budget
by about $186,000.
• Parks & Recreation — Funding of approximately $180,000 was provided for staffing to
accommodate increased parks maintenance responsibilities related to new facilities and to
respond to increased use of existing facilities.
• Transfer to Solid Waste — Subsidy to the fund has been increased by $412,742 to support
additional recycling program needs and solid waste operations.
• Transfer to Debt Service— Budget was increased by $291,793 based on anticipated activity
on State Revolving Fund (SRF) funded projects.
• Post-employment Benefits — Funding in the amount of $1,860,000 was added in the
expectation of making a larger contribution toward the County's unfunded future health
benefits liability(GASB 45).
Solid Waste Fund
• Solid Waste — The recycling program appropriation decreased $217,307 due to a reduction
in the Beverage Container Deposit Program grant funding, and costs increased in glass
recycling and organic recycling by $202,000. Funding for cover material at the Hilo Landfill
increased by$132,000 to ensure state Depth talent of Health requirements are met.
Honorable Members of the Hawai`i County Council
May 5, 2014
Page 6
Position Changes from February 28, 2014 Budget Proposal
This amended budget proposes 10 new positions and an increased time element for one position.
Department Position Title
Information Technology Information Systems Analyst III
Fire—Ocean Safety Water Safety Officer II (4)
Prosecuting Attorney Deputy Prosecuting Attorney
Prosecuting Attorney Legal Clerk III (2)
Prosecuting Attorney Legal Clerk I
Parks and Recreation Park Caretaker I
Parks and Recreation Park Caretaker I (1/2 to Full Time)
Conclusion
This proposed budget represents a collaborative effort by our departments to address the growing
needs of our growing population in a way that is both responsive and fiscally responsible. Our
years of careful planning and conservative budgeting have positioned us to invest in our
communities while maintaining core services and meeting our obligations to our employees.
The recent, modest gains in property values point to a gradual economic recovery, and we
remain cautiously optimistic that the economic and budget outlook will continue to improve. We
believe our efforts to promote renewable energy, agriculture and higher education are an
investment in the future of our island. We will continue to invest in recreational projects to
support our youth and families and to protect public safety, and we ask for your support in these
efforts.
We look forward to working closely with the County Council to address our community's new
and continuing demands for public services while also maintaining a balanced and responsible
budget.
Aloha,
William P. Kenoi
MAYOR
Attachment
NARRATIVE SUMMARY OF BUDGET AMENDMENTS
OPERATING BUDGET FY 2014-2015
GENERAL FUND
REVENUES:
Real Property Tax revenues have been adjusted to reflect the certified net taxable
real property values.
The Transient Accommodation Tax was adjusted to reflect the State Legislature's
adjustment to the cap to the Counties.
Other revenue increases include Federal/State grant amounts for Police
Department's HI Impact Grant and Planning Department's CZM program, and
Parks & Recreation's Coordinated Services Program. The Elderly Recreation
Section was amended due to increased program participation.
Fund balance carryover increased due to revised estimates.
EXPENDITURES:
Legislative
Elections division has amended its overtime and miscellaneous salary and wages
accounts for anticipated Election year expenses.
Office of Management
Funds were provided to the Office of Management for a clerk to staff the
Immigration Office to better service patrons.
Information Technology
The amended budget reflects one additional position for the Department of
Information Technology to better serve the technology demands of the County's
internal and external customers. The department will implement managed network
firewall services to better protect the County's network infrastructure.
Finance
The salary and wages accounts in the Finance Department have been amended to
reflect the needs of the divisions. Armored car services will be utilized for Real
Property Tax, Vehicle Registration & Licensing (VRL), and Treasury daily deposits.
VRL will be upgrading software for compatibility to access the City & County's
database and will be purchasing currency counters to improve efficiency. Property
Management will need to extend the lease for the Police Warehouse in Kona until a
new site is completed.
Corporation Counsel
There were minor offsetting changes in salary and wages, and other current
expenses to meet the department's needs.
Planning
The salary and wages account was amended to meet the needs of the department
for County and CZM positions.
Research & Development
The salary and wages account was amended to reflect personnel changes and
payroll requirements. Funds for the Transmedia Accelerator Program have been
moved to the Film Office.
Public Works
The salary and wages accounts in various Public Works divisions have been
reduced based on estimated payroll requirements. Funds were provided to review
and enhance the building permit process.
Police
The salary and wages account was amended to reflect personnel changes and
payroll requirements. Additional funding was provided for increased maintenance
expenses of the l'olehaehae Radio site in Hamakua, and for a community safety
program. Funds were also added for the anticipated increase in award for the HI
Impact grant program.
Fire
The budget was amended to continue the Project Lifesaver, which had been
previously funded by a grant and to implement a pilot Jet Ski Program in East and
West Hawai'i.
Prosecuting Attorney
The salary and wages account was amended to fund three new legal clerks and
one deputy prosecuting attorney to address serious staffing shortages. The budget
also includes funding for a juvenile delinquency prevention program and funds to
replace PCs that are no longer supported.
Mass Transit
The salary and wages account was amended to reflect personnel changes and
payroll requirements.
Parks and Recreation
The Coordinated Services section was amended for the anticipated increase in a
grant award for transportation services. The salary and wages account
amendments in various divisions reflect adjustments to RSVP, Hawai'i County
Band, Admin and Aquatics. The amended budget includes funding for one
additional park caretaker and increasing a 1/2 time caretaker to full-time. It also
includes a recreation position for North Hawai'i. This budget includes funding for
community ocean programs and additional elderly recreation activities.
Environmental Management
The salary and wages account was amended to reflect personnel changes and
payroll requirements.
Miscellaneous
The subsidy to Solid Waste fund has been adjusted as a result of their budget
revisions. The transfer amounts for the Public Access, Open Space and Natural
Resources Preservation and Maintenance Funds have been adjusted to reflect the
increased real property tax revenue projection. Transfer to debt service was
increased for anticipated additional State Revolving Fund (SRF) funded
construction activity. Additional funding has been allocated for Post-employment
Benefits (GASB 45).
HIGHWAY FUND
REVENUES:
There was a minor reduction in the fund balance from previous year.
EXPENDITURES:
The budget reflects minor adjustments to salary and wages based on estimated
payroll requirements.
SEWER FUND
EXPENDITURES:
The salary and wages accounts have been slightly reduced based on estimated
payroll requirements. The resultant savings were appropriated to the Replacement
Reserve account.
SOLID WASTE
REVENUES:
Revenues reflect a reduction in the Beverage Container Deposit Program grant as
a result of the department's competitive bidding and reduction of program costs.
The budget also includes an estimated increase in a glass recycling grant, and an
increase in the General Fund subsidy to meet expenditures and anticipated
changes in state funded programs.
EXPENDITURES:
The salaries and wages account was amended to meet the needs of the
department. Grant appropriations for the Beverage Container Deposit Program
and for glass recycling were adjusted to match the changes in grant revenue. The
budget for organic waste recycling was increased to provide mechanical mulch
loading. Funding was also increased to provide additional cover material for Hilo
landfill operations, and for environmental planning.
GENERAL FUND
PART A ADJUSTMENTS
REVISED
2014-15 ADD 2014-15
ACCOUNT NO. DESCRIPTION ESTIMATE REDUCE ESTIMATE
REVENUES
3101.10 Real Property Taxes 230,000,000 1,700,000 231,700,000
3201.28 Liquor License Fees 1,904,505 -31,461 1,873,044
3301.15 Coordinatee Services 125,000 10,000 135,000
3302.98 HI Impact Grant 125,000 129,210 254,210
3304.01 State Grants-In-Aid 17,298,000 1,860,000 19,158,000
3304.56 CDL Program Income 561,686 3,564 565,250
3305.47 CZM 166,300 3,070 169,370
3305.53 West Hawaii Ocean Safety 467,786 3,078 470,864
3305.77 Driver License Program Income 178,886 4,112 182,998
3401.23 Auto Repair Charges 863,188 1,014 864,202
3401.46 Env Mgmt Dept Admin Chgs 1,053,902 -10,840 1,043,062
3407.16 Camping Fees 160,000 7,500 167,500
3407.28 Elderly Recr Section Activities 70,000 20,000 90,000
3607.02 Coordinated Svcs Prog Income 48,000 200 48,200
3609.10 Fund Balance from prey yr 24,775,000 770,000 25,545,000
TOTAL ADJUSTMENTS 4,469,447
EXPENDITURES
ELECTIONS
5107.01 Election Division -S&W 350,485 38,500 388,985
OFFICE OF MANAGEMENT
5113.01 Info &Assist Center- S&W 225,335 28,872 254,207
INFORMATION TECHNOLOGY
5118.01 Information Tech -S&W 1,132,296 48,168 1,180,464
5118.02 Information Tech -OCE 1,206,590 35,649 1,242,239
FINANCE
5122.01 Accounts- S&W 644,559 20,639 665,198
5122.02 Accounts- OCE 139,195 8,500 147,695
5125.01 Real Property Tax-S&W 2,184,222 (9,876) 2,174,346
5125.02 Real Property Tax- OCE 779,524 7,200 786,724
5127.11 Vehicle Regist-S&W 728,019 (640) 727,379
5127.16 Veh Regist- Eqpt 2,250 17,800 20,050
5127.21 Driver License- S&W 942,724 13,994 956,718
5127.22 Driver License-OCE 415,901 374 416,275
REVISED
2014-15 ADD 2014-15
ACCOUNT NO. DESCRIPTION ESTIMATE REDUCE ESTIMATE
5127.41 Comm Driv Lic Pgm- S&W 350,503 3,240 353,743
5127.42 Comm Driv Lic Prog -OCE 269,783 324 270,107
5129.02 Property Mgmt-OCE 1,809,970 8,829 1,818,799
CORPORATION COUNSEL
5131.01 Corporation Counsel -S&W 2,088,060 1,500 2,089,560
5131.02 Corporation Counsel -OCE 453,413 (1,500) 451,913
PLANNING
5141.01 Planning -S&W 2,655,706 30,985 2,686,691
5141.34 Coastal Zone Mgmt 370,300 3,070 373,370
RESEARCH & DEVELOPMENT
5161.01 Research & Dev-S&W 768,306 28,752 797,058
5162.99 Product Developmt Pgm-St 405,000 (5,000) 400,000
5163.18 Big Island Film Office- R& D 57,920 200,000 257,920
PUBLIC WORKS
5173.01 Public Works Admin-S&W 1,302,207 (5,952) 1,296,255
5173.02 Public Works Admin-OCE 41,623 200,000 241,623
5183.01 Engineering Division -S&W 1,350,592 (516) 1,350,076
5232.01 Bldg Inspctn-S&W 1,884,276 (19,716) 1,864,560
POLICE
5203.02 Police Adm Div-OCE 8,946,974 100,000 9,046,974
5203.61 Technical Sery-S&W 1,408,789 4,524 1,413,313
5205.01 Criminal Intel) Unit-S&W 798,408 3,498 801,906
5207.01 So Hilo Police-S&W 7,682,807 18,264 7,701,071
5209.02 Hamakua Police-OCE 51,686 10,640 62,326
5212.01 Kona Police-S&W 7,335,343 6,126 7,341,469
5219.93 Police Grants- HI Impact Grant 125,000 129,210 254,210
FIRE
5221.02 Fire Protection -OCE 2,854,113 5,000 2,859,113
5223.01 Ocean Safety-S&W 1,618,992 162,400 1,781,392
5223.02 Ocean Safety-OCE 28,280 36,000 64,280
5223.06 Ocean Safety- Equip 56,780 121,600 178,380
0
0
LIQUOR
5251.01 Liquor Control-S&W 859,454 (26,064) 833,390
5251.02 Liquor Control-OCE 1,076,801 (5,397) 1,071,404
REVISED
2014-15 ADD 2014-15
ACCOUNT NO. DESCRIPTION ESTIMATE REDUCE ESTIMATE
PROSECUTING ATTORNEY
5271.01 Prosecuting Atty-S&W 4,287,528 152,556 4,440,084
5271.02 Prosecuting Atty-OCE 387,407 100,000 487,407
5271.09 Prosecuting Atty- Equip 200 70,490 70,690
5271.13 Kona Pros Atty-S&W 1,471,786 33,720 1,505,506
MASS TRANSIT
5311.01 Mass Transit- S&W 552,938 6,852 559,790
PARKS & RECREATION
5481.02 Coordinated Services-OCE 125,000 10,000 135,000
5482.01 R SVP-S&W 223,819 (17,952) 205,867
5501.01 Hawaii County Band -S&W 222,843 686 223,529
5503.01 P&R Adm -S&W 1,227,053 74,928 1,301,981
5503.02 P&R Adm - OCE 599,945 107,500 707,445
5505.01 Parks Maint-S&W 5,377,222 71,809 5,449,031
5505.02 Parks Maint- OCE 3,253,408 7,000 3,260,408
5507.01 Recreation Div-S&W 1,961,647 33,756 1,995,403
5513.61 Aquatics Pools- S&W 1,331,559 (12,840) 1,318,719
5519.79 ERS Section Activities 70,000 20,000 90,000
ENVIRONMENTAL MANAGEMENT
5671.01 Environmental Mgmt-S&W 999,502 (10,840) 988,662
MISCELLANEOUS
5801.35 Trans To Solid Waste Fnd 17,566,879 412,742 17,979,621
5801.52 Tr to Pub Acc/Op Sp Pres Fund 4,648,000 34,000 4,682,000
5801.55 Tr to Pub Acc/Op Sp PrEs Mnt Fnd 581,000 4,250 585,250
5803.01 Int On GO Bonds-County 15,079,607 11,046 15,090,653
5803.02 Gen Ser Bond Red-County 23,258,806 280,747 23,539,553
5902.09 Post-employment benefits 4,230,000 1,860,000 6,090,000
TOTAL ADJUSTMENTS 4,469,447
HIGHWAY FUND
PART B ADJUSTMENTS
REVISED
2014-15 ADD 2014-15
ACCOUNT NO. DESCRIPTION ESTIMATE REDUCE ESTIMATE
REVENUES
3609.10 Fund Bal From Prey Year 5,366,215 (2,784) 5,363,431
TOTAL ADJUSTMENTS (2,784)
EXPENDITURES
5281.01 Traffic Division-S&W 2,472,932 2,808 2,475,740
5301.01 Highway Maint. Admin-S&W 447,921 (5,592) 442,329
TOTAL ADJUSTMENTS (2,784)
SEWER FUND
PART C ADJUSTMENTS
REVISED
2014-15 ADD 2014-15
ACCOUNT NO. DESCRIPTION ESTIMATE REDUCE ESTIMATE
EXPENDITURES
5631.01 Wastewater-S&W 3,220,549 (13,548) 3,207,001
5902.17 Retirement Benefits 531,391 (2,236) 529,155
5902.20 FICA Employer Share 246,372 (1,036) 245,336
5912.93 Replacement Reserve Acct 654,413 16,820 671,233
TOTAL ADJUSTMENTS 0
SOLID WASTE FUND
PART H ADJUSTMENTS
REVISED
2014-15 ADD 2014-15
ACCOUNT NO. DESCRIPTION ESTIMATE REDUCE ESTIMATE
REVENUES
3305.06 Glass Recycling Program 70,000 58,000 128,000
3305.37 Beverage Cont Deposit Pgm 483,933 (217,307) 266,626
3609.11 Transfer From Gen Fund 17,566,879 412,742 17,979,621
TOTAL ADJUSTMENTS 253,435
EXPENDITURES
5604.01 Landfills-S&W 4,747,259 11,742 4,759,001
5604.02 Landfills-OCE 5,790,350 257,000 6,047,350
5607.02 Bev Cont Deposit Pgm-OCE 483,933 (217,307) 266,626
5607.28 Glass Recycling Pgm-St 70,000 58,000 128,000
5610.02 Recycling Programs-Cty OCE 3,343,400 144,000 3,487,400
TOTAL ADJUSTMENTS 253,435