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Honorable Members of the Hawaii County Council <br />February 27, 2015 <br />Page 5 <br />Debt Service <br />• Transfer to Debt Service. As the result of previously refinancing old bond issues, <br />there is a reduction in debt service cost of $1.9 million for the upcoming year. <br />Pension & Retirement <br />• Retirement Benefits. Contributions to the employee retirement system will increase by <br />approximately $4.1 million as the result of new salary and wage costs and rate increases <br />established by the state legislature. <br />Health Fund <br />• Health Benefits. Contributions to the state employee health system will increase by <br />$1.8 million, which includes an increase of $1.2 million for future post -employment <br />health benefits. <br />Miscellaneous <br />• Provision for Compensation Adjustment. This provision contains the estimated cost of <br />salary and wages pursuant to contract negotiations that have not been fully approved, and <br />decreased by about $3.8 million. The $2.0 million appropriation is related to pending <br />negotiations for Bargaining Units 2, 3 and 4. <br />Conclusion <br />This proposed budget represents our departments' best efforts to meet the needs of our growing <br />community in a timely and fiscally responsible fashion. Our administration is committed to <br />investing in our future, maintaining core services and meeting our obligations to our employees. <br />Our economy is in a state of gradual recovery. We believe our investments in infrastructure, <br />renewable energy, and parks and recreation are critical to the future of Hawai'i Island. We look <br />forward to working closely with the County Council to put forth a balanced budget that ensures <br />public safety and meets the needs of our community. <br />Aloha, <br />William P. Kenoi <br />MAYOR <br />Attachment <br />