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HomeMy WebLinkAboutBIL 159 Draft 01 2024-2026 AN ORDINANCE TO INITIATE AN AMENDMENT TO ARTICLES III, V, VI, VII, VIII AND X OF THE CHARTER OF THE COUNTY OF HAWAI‘I (2024 EDITION), RELATING TO THE ESTABLISHMENT OF A BIENNIAL OPERATING BUDGET AND CAPITAL BUDGET. BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAI‘I: SECTION 1. Purpose. The purpose of this ordinance is to amend the Charter of the County of Hawaiʻi to transition the County’s budget process from an annual budget cycle to a biennial budget cycle. Under the proposed amendments, the County would adopt an operating budget and capital budget covering a two-year period, with provisions for adjustments during the second year of the biennium through a supplemental operating budget. This change is intended to align the budget process with multi-year planning and capital programming, provide greater continuity in funding for County operations and infrastructure, provide insulation against revenue and expense disruptions, provide greater budget transparency, and allow for more efficient allocation of administrative and legislative resources in the development and review of the County’s budget. SECTION 2. Article III, section 3-18, of the Charter of the County of Hawaiʻi (2024 Edition) is amended by amending subsection (c) to read as follows: “(c) The county auditor shall submit [an annual] a biennial budget and a supplemental budget to the county council. The county auditor on behalf of the county council shall hire the necessary staff for which appropriations have been made by the county council.” SECTION 3. Article V, chapter 1, section 5-1.3, of the Charter of the County of Hawai‘i (2024 Edition) is amended to read as follows: “Section 5-1.3. Powers, Duties and Functions. The mayor shall be the chief executive officer of the county vested with all the executive powers of the county, except as otherwise provided by this charter. The mayor shall have the power to: (a) Through the managing director supervise and coordinate all executive agencies of the county, except as otherwise provided by this charter. (b) Appoint necessary staff for which appropriations have been made by the council. All positions in the mayor’s office shall be exempt from civil service laws and classifications. (c) Create positions, including position of deputy or assistant to each head of an agency where such position has not been created by this charter, for which appropriations have been made by the council and abolish positions with the consent of the council. (d) Make transfers of positions between agencies or between subdivisions of agencies subject to applicable civil service regulations. (e) Recommend to the council a pay plan for all officers and employees of the county or any of its boards and commissions, except those whose pay is otherwise provided for; provided that the salary of any officer or employee who is exempt from the civil service laws shall be subject to approval by the council and the mayor. (f) Submit an operating budget, an operating program, a capital budget and a capital program [annually] biennially to the council. (g) Submit to the council a supplemental operating budget for the second year of the biennium.” SECTION 4. Article VI, chapter 1, section 6-1.3, of the Charter of the County of Hawai‘i (2024 Edition) is amended to read as follows: “Section 6-1.3. Powers, Duties and Functions. The managing director shall: (a) Act as the principal management aide to the mayor. (b) Supervise the administrative functioning of all agencies, departments, boards, and commissions. (c) Recommend to the mayor the [annual] biennial operating and capital improvement budgets[.] and the supplemental operating budget for the second year of the biennium. (d) Evaluate the management and performance of each executive agency, and make reports to the mayor and the council on the findings and recommendations of such evaluation. A report shall be made to the responsible commission whenever an evaluation is performed on a department or agency under a commission. (e) Prescribe standards of administrative practice to be followed by all agencies under the managing director’s supervision. (f) Attend meetings of the council or of any board or committee, when requested by the mayor. (g) Attend meetings of the council and its committees upon request and make available such information as they may require. (h) Perform all other duties as required by this charter or assigned by the mayor.” SECTION 5. Article VIII, Section 8-2, of the Charter of the County of Hawai‘i (2024 Edition) is amended to read as follows: “Section 8-2. Water Board. The water board shall consist of nine members who shall be appointed by the mayor with the approval of the council in the manner prescribed in Section 13-4. Each of the nine council districts shall be represented by a resident appointed from that district. The manager-chief engineer of the department of water supply, the planning director and the director of public works or their designated representatives shall serve as ex-officio members of the water board without power to vote. The water board shall: (a) Manage, control and operate the waterworks of the county and all property thereof. (b) Adopt rules and regulations which shall have the force and effect of law relating to the management, control, operation, preservation and protection of the waterworks of the county. (c) Adopt [an annual] a biennial operating budget and capital budget for the department, including a supplemental operating budget for the second year of the biennium, subject to the hearing and advertising provisions of Section 10-4. (d) Have the power to acquire by eminent domain, purchase, lease or otherwise, and to sell, lease, or otherwise convey real property in the name of the water board. (e) Have the authority to issue revenue bonds under the name of the water board. (f) Have such other powers and duties as may be provided by law.” SECTION 6. Article X, section 10-2, of the Charter of the County of Hawai‘i (2024 Edition) is amended to read as follows: “Section 10-2. Preparation and Submission of [Budget] Biennial Budgets and [Capital Program.] Programs. (a) No later than March 1 of each odd-numbered year, the mayor shall submit to the county council: [An] A biennial operating budget for the ensuing [year.] two fiscal years. An operating program for the ensuing three fiscal years. A biennial capital budget for the ensuing two fiscal [year.] years. A capital program for the ensuing six fiscal years. An accompanying message. The mayor shall submit amendments to the operating budget, operating program, capital budget, and capital program, together with an accompanying message, to the county council within ten working days after the close of the state legislature but not later than May 5 of each odd-numbered year. (b) On or before the date specified by the mayor, the head of each county agency and executive agency shall furnish the mayor: (1) [Estimates] Actuals for the preceding fiscal year and estimates for the current fiscal year and ensuing two fiscal years covering the revenues and expenditures of the agency or executive agency concerned. (2) Estimates of any capital improvements pending or proposed to be undertaken within the ensuing two fiscal [year] years and within the [five] four fiscal years thereafter. (3) Such other information as the mayor may request. (c) The mayor shall review all the estimates furnished. The mayor may hold public hearings thereon and may revise the estimates in such manner as the mayor deems advisable in preparing the budgets and programs. (d) Upon submission, the budgets, the programs and messages shall be a public record in the office of the clerk of the county council and shall be open to public inspection. The mayor shall at the same time make available copies of the budgets, the programs and messages for distribution to interested persons.” SECTION 7. Article X of the Charter of the County of Hawai‘i (2024 Edition) is amended by adding a new section to be appropriately designated and to read as follows: “Section 10-__. Supplemental Operating Budget for the Second Fiscal Year. (a) No later than March 1 of each even-numbered year, the mayor shall submit to the county council a supplemental operating budget for the second fiscal year of the biennium, together with an accompanying message. (b) The mayor shall submit amendments to the supplemental operating budget no later than May 5 of each even-numbered year. (c) On or before the date specified by the mayor, the head of each county agency and executive agency shall furnish the mayor revised estimates of revenues and expenditures for the second fiscal year of the biennium and other information as the mayor may require. (d) The supplemental operating budget shall contain comparative statements identifying all proposed changes to revenues and appropriations by agency and program. (e) The mayor’s message accompanying the supplemental operating budget shall: Present a revised financial plan for the second fiscal year of the biennium and explain all proposed changes to revenues and expenditures. Identify material changes in fiscal conditions, economic assumptions, policy priorities or programmatic needs since adoption of the biennial operating budget. Describe the impact of proposed adjustments on county services, programs and capital improvements. (f) The county council shall: Hold at least one public hearing on the supplemental operating budget in the manner provided in Section 10-4. Hold first reading of the supplemental budget after May 5 of each even-numbered year. Adopt the supplemental budget, with or without amendment, by ordinance on or before June 30 of each even-numbered year. In amending the supplemental budget, the council may add new items or increase items and may decrease or delete items, excepting appropriations required by law and appropriations for debt service; provided that, in all cases, the estimated revenues for the ensuing year shall be at least equal in amount to the proposed expenditures. If the council fails to do so, the supplemental budget as submitted and as amended by the mayor shall be deemed adopted by the council. (g) If the mayor disapproves of the bill adopting the supplemental operating budget or of any part thereof, the mayor shall return the bill or the portions vetoed with a written statement of objections to the clerk for further council action within ten calendar days of receipt of the bill. (h) The adopted supplemental budget shall be in effect on and after the first day of the fiscal year to which it applies. (j) Nothing in this section shall limit the authority of the council to make supplemental or emergency appropriations pursuant to Section 10-8.” SECTION 8. Article X, section 10-3, of the Charter of the County of Hawai‘i (2024 Edition) is amended by amending subsection (a) to read as follows: “(a) The biennial operating budget shall present a complete financial plan for the [current] operations of the county and its agencies and executive agencies in the ensuing two fiscal [year,] years, showing all funds and reserves. Capital expenditures to be financed from [current] revenues in the ensuing two fiscal [year] years shall be included in the operating budget as well as in the capital budget. Appropriations for such expenditures shall be included in the operating budget. Except as otherwise provided by law, the operating budget shall contain at least the following: (1) A simple, clear, general summary of the detailed contents of the operating budget. Such summary shall itemize all new positions being requested. (2) The proposed expenditures, including provisions for any estimated cash deficit for the fiscal year currently ending, debt service requirements for the ensuing two fiscal [year,] years, and all other expenditures for the ensuing two fiscal [year,] years, capital and otherwise, to be met from [current] revenues; and the proposed expenditures shall be shown by agencies and programs. (3) A comparative statement of the actual expenditures for the preceding two fiscal [year,] years, and the estimated expenditures for the fiscal year currently ending and the ensuing two fiscal [year.] years. (4) The sums recommended for appropriation on the basis of the proposed expenditures, which sums need not be itemized further than by agencies and programs. (5) The estimated revenues shown by estimated cash surplus, if any, for the fiscal year currently ending, proposed tax levies and other sources. (6) A comparative statement of the actual revenues for the preceding two fiscal [year,] years, and the estimated revenues for the fiscal year currently ending and the ensuing [year.] two fiscal years. The estimated revenues for the ensuing two fiscal [year] years shall be at least equal in amount to the proposed expenditures.” SECTION 9. Article X, section 10-3, of the Charter of the County of Hawai‘i (2024 Edition) is amended by amending subsection (c) to read as follows: “(c) The mayor’s message shall explain the biennial operating budget and capital budget both in fiscal terms and in terms of work to be done. It shall outline the proposed financial policies of the county for the ensuing two fiscal [year,] years, describe the important features of the operating budget and capital budget and means of financing the budgets. It shall indicate any major changes in financial policies and in expenditures, appropriations and revenues as compared with the preceding year and the fiscal year currently ending, and shall set forth the reasons for the changes. As to the capital budget, the message shall include a list of pending and proposed capital improvements together with the mayor’s comments on such list. It shall itemize and explain each pending capital improvement and each capital improvement proposed to be undertaken within the ensuing two fiscal [year,] years, showing the estimated cost of each improvement and the pending or proposed method of financing it. The message shall also include such other supporting or explanatory material as the mayor deems desirable. The mayor’s budget message which accompanies the amendments to the biennial operating budget and [to the] capital budget shall describe the changes in proposed expenditures and in revenue projections from the budgets which had been submitted on or before March 1[,] of each odd-numbered year, and shall describe the intervening changes in circumstances which justify the changes in the proposed expenditures and projected revenues.” SECTION 10. Article X, section 10-4, of the Charter of the County of Hawai‘i (2024 Edition) is amended to read as follows: “Section 10-4. Operating Budget and Capital Budget: Notice and Hearing. The council shall hold a public hearing on the biennial operating budget and capital budget at any time after March 1[,] of each odd-numbered year, but prior to the first reading on the budget bills. At this hearing all persons interested shall have an opportunity to be heard. At least one week before the hearing, the county council shall publish in at least two daily newspapers of general circulation in the county as well as via an electronic medium, such as the Internet, the general summaries of the biennial operating budget and capital budget and a notice setting forth the time and place for public hearing thereon and for their consideration by the council. The council shall also allow public testimony at any meeting at which the biennial operating budget or capital budget, or amendments thereto, are considered.” SECTION 11. Article X, section 10-5, of the Charter of the County of Hawai‘i (2024 Edition) is amended to read as follows: “Section 10-5. Operating Budget: Council Action. After the public hearing, and after the submission of the amendments to the biennial operating budget and [to the] capital budget, the county council may adopt the operating budget as amended with or without further amendments. First reading shall be after May 5[.] of each odd-numbered year. In amending, it may add new items or increase items in the operating budget. It may decrease or delete items, excepting appropriations required by law and appropriations for debt service. But in all cases the estimated revenues for the ensuing [year] two fiscal years shall be at least equal in amount to the proposed expenditures. The council shall adopt the biennial operating budget on or before June 30[.] of each odd-numbered year. If it fails to do so, the operating budget as submitted and as amended by the mayor shall be deemed adopted by the council as the operating budget for the ensuing two fiscal [year.] years. If the mayor disapproves of the bill adopting the biennial operating budget or of any part thereof, the mayor shall return the bill or the portions vetoed with a written statement of objections to the clerk for further council action within ten calendar days of receipt of the bill. The adopted operating budget shall be in effect on and after the first day of the first fiscal year of the biennium to which it applies.” SECTION 12. Article X, section 10-6, of the Charter of the County of Hawai‘i (2024 Edition) is amended to read as follows: “Section 10-6. Capital Budget and Capital Program: Scope; Council Action. (a) The biennial capital budget shall contain at least the following: (1) A simple, clear, general summary of the detailed contents of the capital budget. (2) The capital improvements pending or proposed to be undertaken within the ensuing two fiscal [year,] years, together with the estimated cost of each improvement, the estimated operating cost, and the pending or proposed method of financing it. Capital improvements shall be prioritized based on criteria aligned with the general plan, community development plans, emergency expenditures and other pertinent functional plans. (3) Capital expenditures to be financed from [current] revenues in the ensuing [year.] two fiscal years. (b) The capital program shall be used by the council for informational purposes and as a guide for the estimated costs of the proposed capital improvements of the county for the ensuing six fiscal years and shall contain at least the following: (1) A simple, clear, general summary of the detailed contents of the capital program. (2) The capital improvements pending or proposed for the ensuing six fiscal years, together with the estimated cost of each improvement and the proposed method of financing it. (3) Such other information as the council or mayor may request. (c) After the public hearing on the biennial capital budget, and after the submission of the amendments to the budget, the county council may adopt the capital budget as amended with or without further amendment. First reading shall be after May 5[.] of each odd-numbered year. In amending, the council shall request and consider, but need not follow, the recommendations of the mayor as to the proposed amendment. (d) The council shall adopt the biennial capital budget on or before June 30[.] of each odd-numbered year. If it fails to do so, the amended capital budget submitted by the mayor shall be deemed adopted by the council as the capital budget for the ensuing two fiscal [year.] years. The adopted capital budget shall be in effect on and after the first day of the first fiscal year[.] of the biennium. (e) At any time during the [fiscal year,] biennium, the council, by ordinance adopted by the affirmative vote of at least two-thirds of the entire membership, may amend the capital budget for that [year.] biennium. In amending, the council shall request and consider, but need not follow, the recommendations of the mayor as to the proposed amendment.” SECTION 13. Article X, section 10-7, of the Charter of the County of Hawai‘i (2024 Edition) is amended to read as follows: “Section 10-7. Budgets: Public Records. Three copies of the biennial operating budget and [the] capital budget as adopted shall be certified by the mayor and the clerk of the county council. One of these copies shall be filed in the office of the mayor and one each in the offices of the director of finance and the director of planning. The biennial operating budget and capital budget shall be made available to the county agencies and to interested persons, upon such conditions as the council may determine.” SECTION 14. Article X, section 10-10, of the Charter of the County of Hawai‘i (2024 Edition) is amended to read as follows: “Section 10-10. Lapse of Appropriations. General appropriations, except an appropriation for a capital expenditure, shall lapse at the close of the [fiscal year] biennium to the extent that the same has not been expended or encumbered. An appropriation for a capital expenditure that is not encumbered shall lapse at the end of two fiscal years following the fiscal year that the appropriation was made.” SECTION 15. Article VII, chapter 2, section 7-2.2(c), paragraphs (2) and (4), and chapter 4, section 7-4.6(b), of the Charter of the County of Hawai‘i (2024 Edition) are amended by striking “annual budget” and inserting “biennial and supplemental budgets” in lieu thereof. SECTION 16. Charter material to be repealed is bracketed and stricken. New charter material is underscored. When revising, compiling, or printing these charter provisions for inclusion in the Charter of the County of Hawai‘i, the revisor need not include the brackets, bracketed and stricken material, and underscoring. SECTION 17. Severability. If any provision of this ordinance, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this ordinance are severable. SECTION 18. Upon adoption of this ordinance, the Council, by appropriate resolution, shall provide that this charter amendment be submitted to the electorate of the County of Hawai‘i for approval in the 2026 general election. SECTION 19. Upon its approval by a majority of voters voting on this legislation in the 2026 general election, as duly certified, the charter amendment proposed in this ordinance shall take effect on January 1, 2029. INTRODUCED BY: _______________________________________ COUNCIL MEMBER, COUNTY OF HAWAI‘I _______________, Hawai‘i Date of Introduction: Date of 1st Reading: Date of 2nd Reading: Date of 3rd Reading: Effective Date: