2017-05-05 Hawaii County Budget -- Mayors Msg May 2017

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o�.• of p d' Wil Oka be VrtZManaging Director Harry Kim klayor Barbara J.Kossow +r; hIM•t3 ` OF.H►'��` Deputy Managing Director Cant of Patuari ®fftcl? >xf f.'r Atapr 25 Aupuni Street,Suite 2603 • Hilo,Hawai`i 96720 • (808)961-8211 • Fax(808)961-6553 KONA: 74-5044 Ane Keohokalole Hwy.,Bldg.C • Kailua-Kona,Hawai`i 96740 (808)323-4444 • Fax(808)323-4440 May 5, 2017 The Honorable Valerie Poindexter, Council Chair, and Members of the Hawai`i County Council County of Hawaii 25 Aupuni Street Hilo, HI 96720 Aloha 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, 2018. This balanced budget includes estimated revenues and appropriations of$491,241,880, and includes the operations of eleven of the county's special funds as well as the general fund. This proposed balanced budget for fiscal year 2017-18 is 6.1 percent larger than last year's budget. When we submitted the March budget proposal, there were many revenue and expense items that were unknown at the time. Many of those items are now known. While many of the significant changes are explained below, I would like to highlight a few items. EXPENDITURES The largest expenditure change since March was for salaries and wages related to the collective bargaining unit agreements. While all eight bargaining unit agreements end on June 30, 2017, we have only received arbitration awards for five of the bargaining units. We used the awards we received to estimate the other three bargaining units. These wage increases are reflected in the Provision for Compensation Adjustment for each fund. Another area of increase was in health benefits that were expected to increase by 6%, but the actual increase is now 10%. This increase was offset by a reduction in our expected payments for retirement benefits. The rates passed by the state legislature were slightly lower than anticipated in the March budget. In addition, the funding for some items have been partially restored, such as Fire overtime and the Council contingency funds. In addition, some much needed equipment was added to the budget. The budget includes $600,000 to replace some of our aging police vehicles that were purchased in 2008. Also included is $600,000 for the bus system to ensure that we can meet riders' needs. County of Hawai`i is an Equal Opportunity Provider and Employer.