COM 0689.006 2012-2014 - Laserfiche WebLink

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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.