HomeMy WebLinkAboutREP FC 192 02/20/2002 2000-2002 REI'OIIT OF TIIE
CO1VI1dIITTEE ON FINANCE
DATE: February 20, 2002 Re: Comm. No. 458.2/Bill No. 158
PLACE: Council Chambers
TIME: 9:07 A.M.
Council Chair and Members
Hawaii County Council
Hilo, Hawaii 96720
Your Committee on Finance, to which was referred Bill No. 158, reports as follows:
Bill No. 158, transmitted jointly with Bill No. 159, Bill No. 160 and Resolution No. 165-02 by
Director of Finance William Takaba, via Communication No. 458.2, dated January ] 0, 2002,
amends Ordinance No. O l -55, as amended, the Operating Budget, ending June 30, 2002. The
amendment is as follows:
On January 9, 2002, Mayor Harry Kim presented to the County Council the administration's
revised revenue expectations and the action that it is taking to address these changes. This fiscal
year the latest figures indicate that the County's revenues are expected to drop by $5,106,303.
The following is a proposed breakdown:
Reverz~!e Reductions:
Fund Balance -$2,371,855
Nansay Collection - 3,052,200
Transient Accommodations Tax (TAT) - 3,593,000
Other General Fund Decreases - 123,459
Subtotal -$9,140,514
Rever7us Increases:
DHHL, Delinquent Tax Collection 611,564
Health Fund Reserve Refund + 664,372
Naniloa Delinquent Tax Collection + 800,000
General Fund Revenue Increases + 671,275
Public Service Company Tax + 1,287,000
Subtotal +$4,034,211
NET IZEI3UCTION -$5,106,303
The administration has been working since August with all County departments and agencies to
address the projected revenue shortfall by reducing budgeted expenditures. They have also
explored different ways to increase revenues.
FC REPORT NO. l92
Page 1 of 3
Details of the proposed appropriations are:
Revenues
The Real Property delinquent tax accounts have been adjusted to reflect
• The payment restructure of the Nansay delinquency is ($3,052,200). The County tivill collect
$832,800 this year and the remainder will be paid over the next three years.
• The anticipated collection of delinquent tax for homestead lessees from the Department of
Hawaiian 1-lomes Lands is $6l 1,564; and
• The anticipated collection of delinquent tax on the Hawaii Naniloa Hotel property is
$800,000.
The Public Service Company Tax estimate has been revised to be more in line with current
collections by an increase of $1,287,000.
The Council on Revenues has reduced the Transient Accommodations Tax (TAT) estimate to
reflect the latest TAT projection, which is a decrease of ($3,593,000).
Transfer from Other Fund includes the transfer from the County Housing Revolving F~rnd for an
unfulfilled mutual benefit agreement of $500,000.
The original Fund F3alance budget estimate has been reduced to the actual amount of carryover
funds from FY 2000-01 of ($2,371,855).
The Health Fund Refund, a new revenue item, accounts for the refund of the County's share of
the State Health Fund reserves of $664,372.
Expenditures
Departments, other than Police. Following various administrative directives, departments have
submitted budget adjustments resultir_g in the least impact on critical programs and services. ~n
submitting adjustments, departments were asked to evaluate:
• The hiring of new staff;
• Overtime and temporary assignments;
• Reallocation;
• Purchases of new and replacement equipment;
• Travel to conferences, seminars, and workshops;
• Out-of--state travel;
• Contract services;
• The possibility of delaying purchases;
• Repairs a<nd maintenance projects and contracts;
• Projects and programs that have not yet been started;
• Studies that can be delayed, etc.
FC REPORT NO. 192
Page 2 of 3
The Police Department's budget is being supplemented by $181,308 to cover their projected
budget deficit due to an increase in operating costs for utilities, fuel, insurance, and forensic
services.
The Solid Waste Fund and the Golf Course Fund have been reduced by $1,187,095 and $45,519.
The debt service transfer has been reduced by $584,069 to meet our debt service obligations after
utilizing the excess available funds in the debt service funds.
The Health Fund account is being increased by $176,390 due to the underestimation of the
Health Fund premium increase.
The Provision for Compensation Adjustment is being reduced to zero ($1,005,000) as the-
collective bargaining increases for the firefighters and UPW employees are accounted for in the
affected departments' salaries and wages adjustments.
Discussion
Originally heard on January 23, 2002, this measure was deferred pending additional research and
information. V
During today's discussion, Your Committee questioned a discrepancy in Section 10-9 of the
Hawai`i County Charter regarding reducing an appropriation by more than the amount of the V
encumbered balance. While the intent was explained by Corporation Counsel,the matter will be
clarified in the interim.
For informational purposes, Mr. Tyler voted kanalua twice.
Your Committee on Finance is in accord with the purpose and intent of Bill No. 158 and
recommends it pass first reading.
smc
AYES. NOES A&E EX Respectfully submitted
CHUNG X V
PISICCHIO . x COMMITTEE ON FINANCE
ARAKAKI X
ELARIONOFF X
JACOBSON X 1
LEITHEAD-TODD X
SAFARIK X AARON S.Y. CHUNG, CHAIR
TYLER X FC REPORT NO. 192
YAGONG X ADOPTED: MAR 0 8 2002