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HomeMy WebLinkAboutCOM 0246.000 2006-2008 °i" Lincoln S.T. Ashida ry Har Kim . ~ Corporation Counsel Mayor " Gerald Takase ;r,,, +r Assistant Corporation o% Counsel COUNTY OF HAVIWAI`I OFFICE OF THE CORPORATION COUNSEL 101 Aupuni Street, Suite 325 Hilo, Hawaii 96720-4262 (806) 961-8251 Fax (808) 961-8622 March 6, 2007 Sent via email and hard coov to all Council members f RlCEtYd1 tn:: ll:300, _ ~ Honorable Pete Hoffmann and Members of the ` } ~D~ Hawaii County Council CO1"h' County of Hawaii 25 Aupuni St. Hilo, HI 96720 Dear Chairman Hoffmann and Council Members: RE: Council Contingency Relief Funds Our Entry Nos: WRK 05-11119 and WRK 05-11187 The Office of the Corporation Counsel respectfully requests Chairman Pete Hoffmann agendize this communication for the next meeting of the Hawaii County Council to discuss a more efficient system of processing requests far the release and expenditure of contingency relief monies. At the onset, members of the Hawaii County Council should be recognized and commended for their generosity and foresight in funding needed (and often unexpected) shortfalls in County projects in County departments and agencies. The advent of the contingency relief account and the disbursement of funds by Council members over the years have allo4ved needed County projects to move forward despite unanticipated funding deficits; in sum, the value of the fund has been evident in those cases where the monies have been released and spent as intended. With four new Council members on board, and with an aggregate increase in the balance of each members' contingency fund account, we thought it prudent to review the public purpose doctrine and explore a more streamlined and expeditious system of processing these requests for the future. Enclosed is a communication dated February 9, 2007, sent by our office to Council Chair Pete Hoffmann. This communication includes a legal opinion authored by our office and issued July 14, 2006, concerning the parameters of contingency relief money spending. As mentioned aLiove, there are ~ur ne~r Z~(0 orprn. o Ref TQ..-._.~ Hawaii Cuunty is an Equal Opportunity Emplayer and Provider Dgfe AR 12 2007 _ _ ...w. Honorable Pete Hoffmann and Members of the Hawaii County Council March 6, 2007 Page 2 Council members and there has been a significant increase in the balance of the contingency relief accounts over the past few years. As our changing and evolving world and community presents new challenges for our elected officials and County to meet, we thought it prudent to facilitate a discussion concerning contingency relief monies with all Council members in the public view so that there is a consensus in understanding of the purpose (and limitations) of the release and spending of these monies. During preliminary discussions with Chairman Hoffmann and County Clerk Casey Jarman, it was suggested by our office a review of each request should be conducted by representatives from both the Council and administration. This would facilitate joint (Council and administration) support for the release and expenditure of the money, ensure compliance with the public purpose doctrine, and ensure a more prompt release of the money upon finding the appropriate County department/agency to have the money transferred to. During our discussion, we also hope to reemphasize to the public (and the Council) that private non-profit agencies supporting non-County related projects may still seek financial assistance from the County. However, funding of these organizations and projects should occur through the County's annual grant funding process and not through requests for contingency relief monies, as the latter requires• money to be expended for County related projects only. Thank you again for allowing our office to assist the Council in this matter. We look forward to discussing this matter with all of you in the hopes of developing a more efficient process to benefit our community and its members. V/efry~tr~uly yours, VV ~ ~'1~-~'' LINCOLN S. T. ASHIDA Corporation Counsel Encl. c: Honorable Casey Jarman, County Clerk (w/ encl.) S: DepartmenWCounciVCorresp.ILetter to Council re contlngency relief rund 3-5-07lLSAmr ox3Y Lincoln S.T. Ashida . Harry Kim Corporation Counsel Mayo. • Gerald Takase Assistant Corporation • o: x. Counsel COUNTY OF HAWAII OFFICE OF THE CORPORATION COUNSEL 101 Aupuni Slreet, Suite 325 Hib, Hawaii 96720.4262 (808) 961-8251 Fax (808) 961-8622 February 9, 2007 Sent via email: no hard copy will follow Honorable Pete Hoffmann Chair, Mawai'i County Council 25 Aupuni St. Hilo, HI 96720 Dear Chairman Hoffmann: RE: Discretionary Funds Our Entry Nos.: WRK 05-11119, WRK 05-11187 I come to you in writing to express concern regarding recent requests and proposals made by the Hawai i County Council in the use of Contingency Relief monies. Rule 33 of the Rules of Procedure and Organization of the Council of the County of Hawaii provides in pertinent part as follows (emphasis supplied): RULE NO. 33 COUNCIL MEMBERS, STAFF AND ALLOWANCES 3. Each Council Member shall have direct responsibility over the District Contingency Relief account. (a) Each Council Member is allotted $100,000 in annual contingency relief, when appropriated in the General Fund, to provide for county related projects, (b) In an election year (July-December), the Council Member shall be allotted 50% of the appropriation. The remaining 50% (January- June) shall be allotted in January. (c) Expenditures shall be transferred to County agencies using the appropriate ?egislative mechanisms for thebeneFtofthe agencies to provide for the public. (d) A//purchases of equipment must fo/%w the procurement law and be domiciled in the County Departments. Equipment, supplies and products are the property of the County. Hawaii County is an Equal Opportunity Employer and Provider Honorable Pete Hoffmann February 9, 2007 Page 2 (e) Transfers between the DAE and Contingency Relief accounts are prohibited. (f) Transfers from a district account to other district accounts are prohibited. The above rule is consistent with our research and legal opinion concerning the legal and prudent use of government funds. Recent requests have raised concern on the part of some County departments and our office regarding compliance with the above rule and law. Often, by the time County departments or agencies consult our office regarding requests received from the Council, verbal or other commitments have been made to the financial beneficiaries. As you can imagine, this creates a very difficult and oftentimes embarrassing situation for all involved. We humbly ask you re-review the enclosed legal opinion from our office dated July 14, 2006. I would be more than happy to meet with you to discuss possible alternatives for resolving this issue and situation. Thank you for your assistance in this matter. I look forward to hearing from you. Very truly yours, LINCOLN S. T. ASHIDA Corporation Counsel Encl. c: Honorable Casey Jarman (w/encl.) S: DepartmentslCounciVLSA CorrespJLetter to Council re contingency funds 2-&07/LSAmr . Lincoln S.T. Ashlda ~ ~ Co ore Harry Kim ~ rp tion Counsel Mayor . Gerald Takase a•c• Assistant Corporation l"von +t~~ Couns6l COUNTY OF HAWAT`I OFFICE OF 7HE CORPORA7tON COUNSEL 101 Aupuni Street, Suite 325. Hilo, Hawall 96720.4262. (808) 961.8251 . Fax (808) 961-8622 July 14, 2006 Sent via email to all Council Members: hard coov also to Chair Honorable Stacy K. Higa and Members of the Hawaii County Council County of Hawaii 25 Aupuni St. Hilo, HI 96720 Dear Chairman Higa and Council Members: RE: Contingency Funds and the Public Purpose Doctrine Our Entry Nos.: WRK 05-11119, WRK 05-11187 On Apri{ 3, 2006, a meeting was held concerning the Hawaii County Council's use of contingency fund monies. At this meeting, it was decided our office would provide the Council Chair some written thoughts concerning legal considerations in the use of contingency fund monies to fund various organizations and projects within our community. These thoughts and considerations are prospective, and are submitted with the intent to aid and guide the Council in the future expenditure of contingency fund monies. Rule 33 Rule 33 of the Rules of Procedure of the Council of the County of Hawai i (as amended July 7, 2005), provides in pertinent part as follows: Each Council Members shall have direct responsibility over the District Contingency Relief account. (a) Each Council Members is allotted $100,000 in annual contingency relief, when appropriated in the General Fund, to provide for county related projects. (b) In an election year (Ju[y-December), the Council Member shall be allotted 50% of the appropriation. The remaining 50% (January-June) shall be allotted in January. Nawal'i County Js an Equal Opportunity Employer and Provider Honorable Stacy K. Higa and Members of the Hawai i County Council July 14, 2006 Page 2 (c) Expenditures steal] be transferred to County agencies using the appropriate legislative mechanisms for the benefit of the agencies to provide for the public. (d) Ali purchases of equipment must follow the procurement law and be domiciled in the County Departments. Equipment, supplies and products aze the property of the County. (e) Transfers between the DAE and Contingency Relief accounts are prohibited. (f) Transfers from a district account to other district accounts are prohibited. The Publtc Puraose Doctrine It is well settled across our country that all appropriations or expenditures of public money by municipalities and indebtedness created by them, must be for a public and corporate purpose, as distinguished from a private purpose. Brown v. Longiotti, 420 So.2d 71 (Ala. 1982); Schroeder v. Irvine City Council, 97 Cal.App.4s' 174, 118 Cal.Rptr.2d 330 (4a' Dist. 2002). Generally, a municipality has no power, unless expressly conferred by constitutional provision, charter or statute, to donate municipal monies for private uses to any individual or company, not under the control of the municipality and having no connection with it. Noble v. Martin County Health Facilities Authority, 682 So.2d 1089 (Fla. 1996); Texas Municipal League Intergovernmental Risk Pool v. Texas Workers' Compensation Commission, 74 S.W.3d 377 (Tex. 2002). The Pubtic Puraose Doctrine - Hawal'i Law and Cases Article VII, Section 4 of our Hawaii State Constitution provides as follows: No tax shall be levied or appropriation of public money or property made; nor shall the public credit be used, directly or indirectly, except for a public purpose. No grant shall be made in violation of Section 4 of Article I of this constitption. No grant of public money or properly shall be made except pursuant to standards provided by law. What constitutes a "public purpose° has been the debate of relatively few legal opinions in our State. in State ex rel. Amem/ya v. Anderson, 56 Hawaii 566, 545 P.2d 1175 (1976), an action for declaratory Judgment was brought by the Hawaf'i State Attorney General against the Hawa1'i State Director of Finance, to resolve the question of whether the Director could issue, sell and deliver antipollution revenue bonds and enter into a project agreement with a private, for-profit utility to finance agovernment-mandated antipollution project with the proceeds from the bond sales. At the time, the State sought to issue, sell and deliver twenty million dollars ($20,000,000) worth ofanti-pollution revenue bonds, and enter into a ~ . Honorable Stacy K. Higa and Members of the Hawa1'i County)R~'fl Juty 14, 2006 Page 3 "project agreement" with Hawaiian Electric Company (hereinafter "HECO").' In sum, the project agreement called for an expenditure of government monies to HECO to allow it to operate, maintain and repair the Kahe project. In turn, HECO would pay to the State during the term of the agreement rates and charges in the form of rentals or installment sales payments sufflclent to "(a) pay the principal and interest on the revenue bonds issued including any premiums payable upon any required redemption; (b) establish or maintain such reserve, if any, as may be required by the instrument authorizing or securing the revenue bonds; (c) pay the fees and expenses of the paying agents and trustees for such revenue bonds; and (d) pay the expenses incurred by the Department in administering such bonds or in carrying out the Kahe (P)roject or the project agreement." Amemlya, supra, 56 Hawaii at 569. The Attorney General argued, inter olio, that the underlying legislation, Act 161, violated the Hawaii Constitution, as it appropriated public money or public property or used the public credit for other than a public purpose. The Supreme Court of Hawai i begun its analysis by recognizing what constitutes a public purpose is generally a question for the legislature to decide. Anderson v. O'Brien, 84 Wash.2d 64, 70, 524 P.2d 390, 394 (1974); County of Alameda v. Janssen, 16 Cal.2d 276, 281, 106 P.2d 1 i, 14, 130 A.L.R. 1141 (1940). Amemiya, supra, 56 HawaPf at 574. The Court further noted that in the present case, the legislature fn fact declared in Act 161 that the "financing of such anti-pollution measures through the assistance of the State (through the issuance of revenue bonds) is a public purpose." Amemiya, supra, 56 Hawaii at 574. "Though the legislature's determination is not conclusive, it Is given wide discretion and should not be voided by the courts unless it is manifestly wrong, l.e. the purpose involved is clear{y a private one. (Citations omitted):' Amemiya, supra, 56 Hawaii at 574. Balanced against this genera! maxim, the Court noted that "However, '(w)hen a constitutional question is properly presented, it is the duty of the court to ascertain and deGare the intent of the framers of the Constitution and to reject any legislative act which is in conflict therewith...The presumption, however, is in favor of constitutionality, and all doubts must be resolved in favor of the act: (Citations omitted) " Amemlya, supra, 56 Hawaii at 574-575. Applying the above analysis, the Supreme Court of Hawaii found the purpose of Act 161 constituted a public purpose. The Court declared the following factors as significant in finding a public purpose: Act 161, Session Laws of Hawaii 1973, authorized the State of Hawai 1 to issue $20,000,000 of ant(-polluticn revenue bonds to finance the correction of a thermal pollution problem at the time caused by the discharge of heated water close to the shores off Kahe, Oahu. Honorable Stacy K. Higa and Members of the Hawai i County Council July 14, 2006 Page 4 1. An examination of the minutes of the 1968 State Constitutional Convention revealed a discussion by the Committee On Taxation and Finance wherein it was Implied that the issuance of industrial bonds was fora "public purpose;" 2. The Court recognized that virtually every State appropriation, financing or lending of credit results in some private benefit. The crucial factor, the Court held, is the ultimate objective of the Act; the fact that incidental benefits accrue to private interests is Immaterial; and 3. The Court cited an excerpt from a North Carolina Law Review article (52 N.C.L.Rev. 859 [1974]) stating that "the exigencies of modern state government virtually compel the use of tax exempt financing as an incentive to publicly desirable activities in the private sector...Just so, the public purpose doctrine need not be a static barrier to state activity in areas of consuming publlc importance " Amemiya, supra, 56 Hawaii 575-576. Spears v. Honda, 51 Hawaii 1, 449 P.2d 130 (1968), rehearing dented, 51 Hawaii 103 (1969), represents a suit for declaratory judgment brought by concerned citizens, challenging the Department of Education's use of State funds to provide bus transportation subsidies to sectarian and private school students. By legislative act taking effect in 1965, the State assumed responsibility for several governmental functions previously delegated to the various county governments, including "the transportation of school children. (Internal citation omitted)." Spears, supra, 51 Hawaii at 2-3. In 1967, the legislature further authorized the State Department of Education "to provide suitable transportation for all school children in grades kindergarten to 12 and in special education classes...and to promulgate rules and regulations relating thereto with a view to providing equal opportunity for education to the school children of the State. (Internal notes omitted)." Spears, supra, 51 Hawaii at 3. On August 1, 1967, the Board of Education adopted Rule 1 of the State School Board. This rule established regulations for the granting of subsidized bus transportation to school children attending both publlc and nonpublic (sectarian or parochial, and private) schools. Under the regulations, the children paid the first ten cents of the cost of a bus ride, and were subsidized only for the remaining cost of the ride (usually fifteen cents). Spears, supra, 51 Hawaii at 3. Through an arrangement established by the State with the non-public schools, tickets for were Issued to qualifying students at the non-public schools. The total amount of the government subsidy attributable to the non-public schools for the school year 1966-67 was approximately $42,000. However, prior ._.r. _ ..~~.m_ Honorable Stacy K. Higa and Members of the Hawaii County Council July 14, 2006 Page 5 to this sum being disbursed to the non-public schools, the instant lawsuit was filed. The plaintiffs in this case argued the enabling legislation and Board of Education rule violated the State Constitution in that funds were appropriated for the "support and benefit" of nonpublic educational institutions, anon-public purpose. Spears, supra, 51 Hawaii at 5. The State in turn argued there was no constitutional violation, since the money was intended (and arguably did in fact) benefit the children, and not the non-public school Itself. The Court referred to this as the "Child Benefit Theory" ' found in other cases throughout the country. Spears, supra, 51 Hawaii at 5-6. The Supreme Court of Hawaii found no public purpose existed In the subsidization of bus service for non-public school students, and declared those portions of the enabling legislation and Board of Education rule unconstitutional. In sum, the Court found that a review of the legislative history of the Constitutional Convention of 1950 revealed an express intent to reject the "Child Benefit Theory" in Hawai'l, with respect to the appropriation of public monies for non-public school students. The Court's opinion discussed the need to balance State regulation and supervision ofnon-public schools (a necessary component of prudent governance) against the appropriation of public funds to non-public schools (a prohibited act). Spears, supra, 51 Hawaii at 8. The Public Purpose Doctrine -Comparison of case law from other States A majority of courts in the United States follow afour-part test In making , the determination whether funds are fora "public purpose." This process is as follows: 1. Determine the ultimate goa{ or benefit to the public intended by the project. 2. Analyze whether public or private parties will be the primary beneficiaries. 3. Consider the speculative nature of the project. 4. Analyze and balance the probability that the public interest will be ultimately served and to what degree. Generally, a public purpose has for its objective the promotion of the public health, safely, morals, general welfare, security, prosperity, and contentment for all, or at least a substantial part of, the inhabitants or residents. Noble v. Martin County Health Facilities Authority, supra, 682 So.2d 1089 (Fla. 1996). Otherwise stated, the test of a public purpose should be whether the expenditure confers a direct benefit of a reasonably general character to a significant part of the public, as distinguished from a remote or theoretical benefit. Honorable Stacy K. Higa and Members of the Hawaii County Council July 14, 2006 Page 6 Town of Beloit v. County of Rock, 259 Wis.2d 37, 2003 WI 8, 657 N.W.2d 344 (2003). The law additionally provides well defined limitations on the expenditure of public funds. For example, without express authority, a municipal corporation may not appropriate the public revenue for celebrations, entertainments, sports and games, etc. Such power cannot be implied. Brandes v. City of Dee~eld Beach, 186 So.2d 6 (Fla. 1966). The "express authority" referenced above generaliy requires specific enumeration in a governing document, such as our Hawaii County Charter. The County's Annual Grant Process Chapter 2, Article 25 of the Hawaii County Code 1983 (2005 ed.) (hereinafter "Hawaii County Code"), provides for the annual granting of County funds to private non-profit entities in our community. This article is reproduced in its entirety and enclosed as an attachment hereto. Non-profit status is not the sole condition precedent to the receipt of County monies. The private entities are required to comply with a number of conditions, including the non-use of these monies for entertainment purposes, and evidencing a "public purpose" as defined in detail above. Further, grant funding is not a "year-round" process. There are specific requirements prov(ding for grantees to apply for funds by a specified date, and submitting necessary paperwork. it is Important to note that deviation by the Hawaii County Council from these established guidelines as required by our ordinances may result in claims of denial of equal protection of the law by those aggrieved or even claims of malfeasance of office on the part of any Council Member that abridges these requirements. The lesson in this area is simple. Contingency funding, in our opinion, should generally not be used to fund organizations that would otherwise qualify for grant funding pursuant to Chapter 2, Article 25, Hawaii County Code. This is because in the case of our annual grant funding, there are built-in safeguards (i.e., the requirements of the ordinance and the Council's review process) that ensures that grantee organizations qualify. Further, once the money is transferred to the grantee organization, the County generally bears no liability for any occurrence down the road. With contingency funding, given the legal requirement the County maintain a degree of control over the project Noble v. Martin County Health Facilities Authority, supra; Texas Municipal League intergovernmental Risk Pool v. Taxas Workers' Compensat/on Commiss/on, supra), there is a more colorable argument Honorable Stacy K. Higa and Members of the Hawaii County Council July 14, 2006 Page 7 the County will bear some liability.z This is exactly the reason contingency funds are presently "funneled" through existing County projects in the respective County departments. This process ensures there is a recognized and valid "public purpose" in the expenditure of County funds. Examples Some examples of legally prohibited uses of contingency fund monies would be the transfer of funds to a church in order to advance religious purposes or objectives. Clearly, such an appropriation would violate the establishment clause of the First Amendment of the United States Constitution. American Civil Liberties Un/on v. City of Birmingham, 791 F.2d 1561 (60' Cir. 1986). This is not to suggest County funds may not be expended for any activity having any nexus to a religious organization or activity. For example, the County's funding of its annual Christmas open house at the County Building is permitted, as the objects on display are secular in nature, and are more akin to a seasonal celebration than a religious ceremony. Another legally prohibited use of contingency funds would be monies given to school organizations for the purpose of funding entertainment activity. As provided in Brandes v. City of Dee~e/d Beach, supra, and the progeny of case law that follow it, absent an express provision in our governing laws (i.e., our Charter) that allow such expenditure, no such authority to expend money maybe Implied.3 Permitted uses of contingency funds include the funding of supplemental equipment used by our County emergency medical services, so long as the equipment become the property of the County; and the funding of traffic safety barriers on County right of ways, fronting schools or churches, since such projects benefit the public at large, and not simply the school or church. Again, our laws instruct us that if the primary objective is to subserve a public municipal purpose, it is immaterial that private ends may be Incidentally advanced. Bryant v. City ofAtlantic City, 309 N.J.Super. 596, 707 A.2d 1071 (App. Div. 1998). Thus, in the traffic safety barrier case above, if the primary objective is to protect motorists, pedestrians, and area residents alike, the 2 We do not concede the County is absolutely liable for any damage occasioned simply by virtue of fhe County's funding of a project. We simply recognize that it Is a more colorable argument. A further concern is the inappropriateness of transferring County funds to State organ(zations, absent swell-defined and legally recognized and memorialized agreement, In the case of schools, the State government is charged with providing for the education and welfare of our children. If the State does not allow fhe expenditure of public funds for entertainment activity, the County should clearly not allow such expenditure. This is why social organizations at our public schools privately fundraise to cover these expenses (i.e., sport clubs, grad nite activity, etc.j. Honorable Stacy K. Higa and Members of the Hawai i County Council July 14, 2006 Page 8 expenditure of monies is not prohibited if the school or church benefits from the construction. Summary 1. All expenditures of public money and resources must be fora "public purpose." 2. Courts will generally defer to the legislative law-making body's determination of what constitutes a "public purpose." However, if there is a constitutional challenge to such funding, courts will turn to the intent of the framers of the constitutional provision that prohibits such non-public purpose expenditures for guidance. 3. Expenditure of contingency account funds should run through County departments with existing projects to ensure compliance with the public purpose doctrine. 4. All private non-profit organizations that seek County funds should be encouraged to apply for such funds through the County's annual granting process. The Council should examine all requests for monies from private non-profits that are not part of this annual process very closely. 5. All requests should be examined on a case-by-case basis, taking into account the unique facts and circumstances of each request. We hope this analysis has assisted the Council in examining requests for expenditures of contingency monies. As is often the case In our County work, our opinion serves as a guide only, and every request should be examined on a case-by-case basis, taking into account the unique factual circumstances presented. Please feel free to contact our office any time legal assistance or guidance is sought or required. Very truly yours, ~V_~ LINCOLN S. T. ASHIDA Corporation Counsel Encl. c: Honorable Harry Kim, Mayor (wi encl.) Honorable William T. Takaba, Finance Director (w/ encl.) Honorable Constance Kiriu, County Clerk (w/encl.) S: DepartmenlslCounctl/LSA CorrespJLetter b Council re contingency funOs 3.10.06lLSAmr ADMINISTRATION § 2-134 Article 24. Payment to County, Subsequently Dishonored. Section 2-134. Service charge assessed. In all instances where money due the County of Hawaii is dishonored when presented for payment, the County may assess and collect a service chazge in the amount of $20 against the payor. Payment of this $20 service chazge shall be made in U.S. currency or other form acceptable to the director of finance. Ali fees collected pursuant to this section shall be placed in the custody of the finance d'uector for deposit in the general fund. (1981, Ord. No. 708, sec. 1; Am. 2003, Ord. No. 03-104, sec. 1.) Article 25. Appropriation of Funds to Nonprofit Organizations. Section 2-135. Purpose. The purpose of this article is to establish standards for the appropriation of funds to nonprofit organizations providing programs and services which the County has determined to be in the public's interest. (1982, Ord. No. 774, sec. I.) Section 2-136. DeCnitions. As used in this article, unless the context otherwise requires: (1) "Conflict of interest" means a substantial probability that action taken by an individual will result in measurable direct benefits accruing to the individual as opposed to benefits accruing in general to an industry, (2) "Director" means the director of finance of the County. (3) "Grant" means an appropriation of public fwds to a nonprofit organization for a public purpose, (4) "Nepotism" means appointing persons to positions on the basis of their blood or marital relationship to the appointing authority, rather than on merit or ability. (S) "Nonprofit organization" means an organization organized for other than profit-making purposes and which has a current 501(c)3 tax-exemption from the Intemal Revenue Code. (6) "Perquisite" means a privilege famished or a service rendered by an organization to an employee, officer, director, or member of that organization to reduce the individual's personal expenses. (7) "Purchase of service" means the exchange by an agency of goods and services to be delivered by a nonprofit organization to the general public for cash payments substantially equal in value to such goods and services. (1982, Ord. No. 774, sec. 1; Am. 1986, Ord. No. 86-52, sec. 2; Am. 1995, Ord. No. 95-138, sec. 2; Am. 1947, Ord. No. 97-103, sec. 2.) ' Section 2-137. Eligible organizations. All grants and purchase of service payments made by the County to nonprofit organizations are to be made in accordance with these standards so that the funded nonprofit programs yield direct benefits to the public and accomplish public purposes. No grant or purchase of services contract to a nonprofit organization shall be made unless the nonprofit organization meets the following criteria: (1) The nonprofit organization is chartered or otherwise authorized to do business in the State for charitable purposes and exempted from the Federal income tax by the Internal Revenue Service. (2) The purposes fot which the nonprofit organization is organized provide benefits to the people of the County. (3) The service or activity to be provided by the nonprofit organization, and funded by the County, shall address educational concerns, culture and the arts, the needs of the poor, youth, the aged, those with physical or emotional disabilities, victims of crimes, or victims of health or social crises as may 6e determined by the County. 2-45 2-137 HAWAI`1 COtJNT'Y CODE (4) The nonprofit organization has a governing board whose members serve without compensation end have no conflict of interest between their regular occupations and the services provided by the nonprofit organization. (5) the nonprofit organization has bylaws or policies which describe the manner in which business is conducted, including management, audit, and fiscal policies and procedures, policies on nepotism, and policies on management of potential confliM of interest. (6) The nonprofit organization has at least one year's experience with the service or activity for which the appropriation is sought or can otherwise demonstrate to the satisfaction of the County sufficient expertise to successfully carry out the service or activity. (7) The nonprofit organization must be licensed and accredited in accordance with applicable requirements of Federal, State and County laws. (1982, Ord. No. 774, see. l; Am. 1986, Ord. No. 86-52. sec. 2.) Section 2-138. Coadittoas far grants or purchase of service agreement. Nonprofit organizations to whom a grant has been made or a ptuchase of service agreement awarded shall agree to comply with the following conditions before receiving the grant or purchase of service agreement: (1) Employ and appoint persons on the basis of merit and ability; (2) Comply with applicable Federal and State laws prohibiting discrimination against any person on the basis of race, color, national origin, religion, creed, sex, age, or handicap; (3) Agree rtat to use any public funds for purposes of entertainment or perquisites; (4) Comply with such other requirements az the director may prescribe to ensure adherence by the nonprofit organization with Federal, State, and County laws, and established standards for fiscal and program management; and (5) Allow the director, the committees of the council and their staffs, and the legislative auditor access to records, reports, files, and other related documents in order that the program, management, and fiscal practices of the nonprofit organization may be monitored and evaluated to assure the proper and effective expenditure of public funds. (1982, Ord. No. 774, sec. l; Am. 1986, Ord. No. 86-52, sec. 2.) Section 2-139. Procedure for awarding greats. (a) All grants made to a nonprofit organization by the County shall be made in accordance with the following procedure: (1) Annually, before November 30, the director shall, for rho purpose of soliciting applications, establish a sum of at feast 5900,000 to be available in the ensuing fiscal year for funding requests by nonprofit organizations. The director shall publish a notice soliciting applications in two newspapers of general circulation within the County of Hawaii by November 30. (2) All applications for grants shell be submitted to the director on or before January 31 preceding the County's fiscal year, which begins on July 1. Applications shall be prepared on forms provided by the director. Applications not in conformance with the requirements of the County Code may be rejected. (5) The director shall submit to the council all qualifying applications for its review and appropriation of funds. Site visitations of nonprofit organizations submitting complete applications may be conducted by the council and its designated staff, as deemed necessary by the chair of the appropriate committee, after January 31 but prior to final action on the operating budget by the council. Any site visitations shall be publicly noticed and conducted in a manner that allows flexible councilmember participation and designated staff support. (4) Upon favorable action by the council to appropriate funds for the grant, the director shall notify agencies of their funding or lack thereof by July 31 and award the grant in compliance with this article. 2-46 _ _ . ~.W_ . ADMINISTRATION § 2-139 (b) In the event that a grantee nonprofit organization is unable or unwitting to provide the public service(s) for which a grant was appropriated, the mayor may direct the finance director to solicit applications from eligible nonprofit organizations to fulfill the specific public purpose(s) for which the funds were originally appropriated for the remainder of the fiscal year. The director shall forwazd recommended application(s) and appropriation measure(s) to the council for its decision. Funds appropriated to a successor nonprofit organization shall not exceed the balance of wexpended County funds awarded to the original grantee nonprofit organization. (1482, Ord. No.774, sec. 1; Am.1986, Ord. No. 86-52, sec. 2; Am. 1942, Ord. No. 92-151, sec. 2; Am. 1995, Ord. No. 95-138, sec. 2; Am. 1997, Ord. No. 97-103. sec. 3; Am. 1999, Ord. No. 99-56, sec. I; Ord. No. 99- [03,sec. 2; Am. 2001, Ord. No. OI-ib, sec. 2.) Section 2-140. Procedure for awarding purchase of service agreements. A11 purchase of services made to a nonprofit organization by this County shall be made in accordance with the following procedure: (1) Annually, before November 30, the director shall, for the purpose of soliciting applications, publish a notice soliciting applications in two newspapers of general circulation within the County of Hawaii by November 30. (2) All applications for purchase of services shall be submitted to the director on or before January 31 preceding the County's fiscal year, which begins on July 1. Applications shall be prepared on forms provided by the director. Applications not in conformance with the requirements of the County Code may be rejected. (3) The director shall submit to the council all qualifying applications for its review and appropriation of funds. Site visitations of nonprofit organizations submitting complete applications shalt be conducted aRer January 31 but prior to final action on the operating budget by the council. These site visitations shalt be conducted in a manner that allows flexible councilmember participation and designated staff support. (4) Upon favorable action by the council to appropriate funds for the ptuchase of service, the director shall prepaze a contract with the nonprofit organization for the purpose of the purchase of service award which shall meet all legal requirements of the County and shall include program, fiscal and audit reporting requirements sufficient to allow the director, the legislative auditor or council to effectively monitor and evaluate the use of the purchase ofservice. Agencies shall be notified by the director of their funding or lack thereof by July 31. (1982, Ord. No. 774, sec. 1; Am. 1992, Ord. No. 92-151, sec. 3; Am. 1995, Ord. No. 95-138, sec. 2.) Section 2-141. Applicability to noncounty funds; cosponsored act[vltfes. Nothing in this article shall be construed to apply to the appropriation of funds: (1) Provided to the County for a stated purpose by any person, private entity, or governmental entity; or (2) Made to an agency for any activity or program co-sponsored by the agency and a private or governmental entity ar entities. (1982, Ord. No. 774, sec. l.) 2-47 § 2-142 I3AWA1`1 COIJNTYCODE Section 2-142. Records, reporting, and fiscal accountability requirements. (a) The nonprofit organization shall follow generally accepted accounting procedures and practices and shall maintain books, records, documents, and other evidence which sufficiently and properly account Cor the expenditure of County funds. The books, records and documents shall be subject at all reasonable times to inspection, reviews, or audits by the County expending agency, the director, and the legislative auditor, or by their representatives. tb) The County expending agency, director of finance, or County council may request periodic written reports on the use of County funds, (c) In tha case of purchase of service agreements, the nonprofit organization shall submit a written report to the legislative auditor within sixty days after June 30 of the contractual yeaz and an interim report no later than January 31 of the wntract period. The report shall include, but not be limited to, a detailed description of how the County funds were used, public benefits derived from their use and a breakdown of other funding sources and their expenditures. (d) In the case of grants, the nonprofit organization shall submit a final written report to the legislative auditor within sixty days after June 30 of the fiscal year. The report shall include an explanation of the ' public benefits derived from the awazding of the grant, a complete accounting statement of all expenditures supported by County of Hawaii grant funds, and a listing of other funding sources and amounts obtained during the awazd period. (1986, Ord. No.86-52, sec. 2; Am.1995, Ord. No. 9S-I38, sec. 2; Am. 1997, Ord. No, 97-103, sec. 4; Am. 1999, Ord. No. 99-103, sec. 3.) Section 2-142.1. Rules. The director shall adopt rules as may be necessary to meet the requirements of this article. (1986, Ord. No. 86-62, sec. Z.) Section 2-142.2. Interim procedures Car awarding grants and service agreements. Notwithstanding any provision contained in this article to the contrary, in order to provide a reasonable transition following adoption of this ordinance for fiscal year 1996-97, the director shall publish a notice soliciting applications for the purpose of awarding grants or the purchase of service agreements in two newspapers of general circulation within the County of Hawaii by December 31, 1995. All applications shall be submitted to the director on or before January 31, 1996. Applications shall be on forms provided by the director. Applications not in conformance with the requirements of the County Code may be rejected. The remaining procedures set forth in Sections 2-134 and 2.140 shell be followed. (1995, Ord. No. 95.138, sec. 2.) Article 26. Salaries for Deputies to the Office of the Corporation Couasel and the Office oC the Prosecuting Attorney. Section 2-143. Definitions. (a) "Deputies" means deputies in the office of the corporation counsel and the office of the prosecuting attomey. (b) "Appointing authority" means the corporation counsel or the prosecuting attomey. (1983, Ord. No. 845, sec. l.) Section 2-144. Salary schedule. The appointing authorities shall set the salaries for deputies within their offices; provided no deputy shall be compensated at a rate which is less than fifty percent nor more than ninety percent of the salary which has been established for the prosecuting attorney or cotporntion counsel, whichever is higher. The department head 2-48 PETE HOFFMANN ~ BRENDA FORD Chair & Presiding Officer +''~r STACY K. HIGA DONALD IKEDA K. ANGEL PILAGO BOB JACOBSON vice chair EMILY I. NAEOLE ~;;i~°•+~ DOMINIC YAGONG tpj µl J YOSHIMOTO HAWAII COUNTY COUNCIL County of Hawai `i Hawa `ii County Building 25 Aupuni S(reet Hifo, Hawaii 96720 Mazch 12, 2007 Pete Hoffmann, Chair Hawaii County Council 25 Aupuni Street Hilo, Hawaii 96720 RE: Communication No. 246 :Council Contingency Relief Funds. Pursuant to Section 2(g) of Rule 4 of the Rules of Procedure of the Council of the County of Hawaii, this written request is submitted with my approval that the above-referenced matter be waived from the Finance Committee to the full council for immediate action. In reviewing this matter, timely approval is crucial It is therefore advantageous that approval is granted and the matter placed onto the next Council agenda for review. However, in the event this request is denied, for whatever reason, I understand the matter shall be referred to the Finance Committee for placement on its future agenda. Sin~~y, ~ ~M~~. Dominic Yagong, Chair Finance Committee Ap arve to C un il: Disapproved/Date/Refer to FC: Pete Hoffmann, Chair Pete Hoffmann, Chair Hawaii County Council Hawaii County Council DY/smc Serving the Lnterests of the People of Our Island Hawaii County Is An Equal Opportunity Provider And Employer