2010-07-30 Cost of Government Commission Minutes

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also prepare their goals and objectives, and there’s a program budget that also goes along with the financial portion as well. We have two budgets, the Operating Budget, which is the basic financial obligations of the General Fund and our Special Revenue Funds. And then we have the Capital Budget which is basically our construction projects. The Budget Division is also part of the Finance Department so they’ll review each budget as it comes in, and then in January, they meet with each and every department to go over the numbers they submitted, why they need that amount, the reasons, if they have any suggestions or changes to recommend to them. Then the Finance Department meets with the Mayor who obviously has the final say in what to submit to Council. And the first draft to the budget goes to the Council on March 1. The Council then gets to review it and hold budget hearings with both the public and the departments. With the departments, it’s usually the last week of March. Then as we get additional information and our real property tax values have been certified, which doesn’t happen until April 19, then the May 5 budget goes in with the new amendments. Hopefully by then we also know any changes that the legislature may have made. So the May 5 budget is then submitted as the Mayor’s budget, that’s the final form, submit it to the Council. At that point, the County Council can start amending if they wish. The budget needs to be approved by the Council by mid-June so that it can be enacted into law before July 1. If for some reason action wasn’t taken, the Mayor’s budget would then be enacted on July 1. So, that’s kind of the quick and dirty process. At the same time the Operating Budget is being submitted to the Council, the Capital Budget is also being submitted. The Planning Department is responsible for compiling and submitting that information on behalf of the Mayor. One thing that’s different about the Capital Budget – it doesn’t have any funding sources that go in with it. So people can propose projects. And usually the source for funding is said to be bonds or fund balance or any general sources of revenue. That doesn’t mean we have money in place. So that project is just put on the budget and then as we do a bond ordinance or get additional financing, then that money is what we call allotted to each project and then they can start spending. Just because you have a capital project in the budget doesn’t mean you’re allowed to go and spend the money. Versus the Operating Budget, revenue and expenses have to balance. We must be in balance or we would be out of compliance with the Charter. So, that has funding sources. We have revenue sources listed, expenditures listed. They net out to zero, and so you are allowed to spend from the Operating Budget. As we go throughout the year, we also monitor the budget. We complete the monthly budget status report which list the expenditures and how they’re doing. It has the revenue, expenditures and the balance sheet the departments can look at. But now that we have our FRESH accounting system, it’s actually Financial Resource Enterprise System for Hawai‘i County, which is provided by Eden. Our software is purchased from a vendor called Eden. Basically the departments can go in run reports anytime they want to. It used to be on the Wang system, in-house system and finally in 2004, we were able to change over, and so now we have more of an interactive and live data base system. So, each department enters their invoices, it’s reviewed several times, several different levels before it’s paid. We usually cut checks once a week to each of 6