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Home My WebLink AboutREP FC 090 04/15/2003 2002-2004RF,PORT OF THE COMMITTEE ON FINANCE DATE: April I5, 2003 PLACE: Council Chambers f[ME: 3:15 P.M. Council Chair and Members Hawaii County Council Hilo, Hawaii 96720 Re: Comm. Nu. 140/Bill No. 59; Comm. Nos. 140.9 and 140.10; Comm. No. 140.14 Your Committee on Finance, to which was referred Bill No. S9, reports as follows: Bill No. 59, transmitted by Mayor Harry Kim via Communication No. 140. dated February 28, 2003, submits for consideration the proposed Operating Budget for the County of Hawai' i for the Fiscal Ycar July I, 2003 to June 30, 2004. The Operating Budget Proposal (Part I-Volmne 11) describes departments and their programs, program objectives, highlights, program measures, expenditures and positions. It also includes the operations of eleven of the County's Special Funds as well as the General Fund. "The proposed operating budget totals $218,665,135 in estimated revenues and appropriations (Part I- Volume f). 'fhe proposed budget reflects an increase of S 13,278,000 in expenditures, or 65`% more than the FY2002-03 budget. Revenues reflect a 10.49% increase in estimated pct real property tax collections, preliminary to valuations certified in April. 2003. No increase in property tax rates is proposed. Major increased expenditures include an additional $3,230,300 in county contributions to the Employees Retirement System Q'sRS) and $1,200,000 for projected arbitrated salary increases. To buttress public safety and fund the "War on Ice;' $836.000 is proposed ibr private contract cellblock security and the reassignment of 14 police officers to create hvo special "Ice Teams" in Kona and Milo (6 officers) and supplement patrol services in Waimea, Puna and Ka'u (8 officers). Various computer software to replace the County's Wang system and facilitate new case tacking for the Prosecutor's Office and new permit planning for the Planning Department totals 5755.000. Additional landfill costs account for an increase of $1.3 million and vehicle disposal costs increase by $I.I million. I~he expenditure plan calls for no personnel layoffs. Four new funded positions are proposed, as tbllows: • One county-funded Deputy Director position for the Office of Enviromnental Management; • Three (3) fedeally funded Hnucing & Cmm~n~nr!_v Der~elnpmen~ Speci~ilisl f' positions. Two of those hires will work on housing projects in Waikoloa; the other position will oversee CDBG projects. In an exhibit (Exhibit 2) dated March 10, 2003 attached to an advisory memorandum to Council members prepared by the Legislative Auditor's Office (Communication No. 140.14), a total of 263 vacant funded positions are depicted in the worksheets supplied for Bill 59. Operating revenue projections include an additional $ I Q i 85,000 in real property tax collections, an increase of $1,132,000 in new annual fees for abandoned vehicles, an additional 5382,000 in fuel taxes, and $2,028,000 in intergovernmental revenues Based upon the most recent projection from the Council of Revenues, Tansient Accommodations "fax (I'AT) revenue is estimated to be $15,781,000. However, interest income ("revenues and use of money ~md property") is expected to decline by $ L675,000 due to a record low investment market. Additionally, the Pund Balance Carryover is reduced by 5456,000 (7.4°/u). Annual debt service is calculaicd to increase by $1,780,000 and comprises 10.7"% of Hie budget. Revenue Summary Account Description FY2003 FY2004 $ Variance % Variance Budget Estimate General Fund Revenues Taxes Real Property Taxes 107,037.196 117,222,000 10,184,804 9.52 Public Svc Co Tax 5,215.000 5,215,000 - - TTL Taxes 112,252,196 122.437,000 10,184,804 9.07 Licenses & Permits Bus. Lic & Permits 2,053.573 2,410,590 357,017 17.39 Non-Bus. Lic 8 Permits 2.772,219 2.839,472 67,253 2.43 TTL Lics & Permits 4.825.792 5.250,062 424,270 8.79 Intergovernmental Rev. Federal Grants 2,234,570 2,418,711 184,141 8.24 Federal Grants 1,891,.503 2,224207 332,704 17.59 Federal Grants 202,948 84,792 (118,156) (58.22) State Grants 27.680,441 29,139,699 1,459,258 5.27 State Grants 81@234 676.585 (739,649) (17.11) TTL Intergovernmental 32,825,Ei96 34,543.994 1,718,298 5.23 Rev Charges for Services General Government 1,972371 2,272,346 294,975 14.92 Public Safey 25,000 23,000 (2,000) (8.00) Highways & Streets 580,000 580.000 - - Parks & Recreation 687,050 704,650 17,600 2.56 TTL Charges for 3,269,421 3,579,996 310,575 9.50 Services TTL Fines & 907,500 1,039,500 132,000 14.55 Forfeitures Miscellaneous Revenues Interest Earrnngs 3,200,000 1,500.000 (1,700,000) (53.13) Rents 33,600 44.800 11,200 33.33 Disp of Fixed Assets 47,100 47.100 - - Conlrib/Dons FR Prvt 304,000 304.000 - - Src Reimbursements& 7,275,168 7,369.972 94,804 1.30 Transfers Sundry & Misc 343,900 351,000 7,100 2.06 TTL Miscellaneous 11,203768 9,616.872 (1,586,896) (14.16) Revenues TTL General Fund 165,284,373 176,467,424 11,183,051 6.77 Revenues Highway Fund 18,376,220 17,591,245 (784,975) (4.27) Sewer Fund 6,785,473 7,895.905 1,110,432 16.36 Cemetery Fund 16.000 16,000 - - Bikeway Fund 180,000 181,000 1,000 0.56 Beautifcation Fund 200,000 200,000 - - Vehicle Disposal Fund 548,200 1,680,200 1,132,000 206.49 Solid Waste Fund 11,285,104 12,f66,010 1,380,906 12.24 Galf Course Fund 1,185.328 1 185,328 - Geothermal Rel Rev 150 000 150,000 - Fund Housing Fund 11,929.444 12.312,488 383.044 3.21 Kulaimano Elderly Hsg 362 800 406,900 44,100 12.16 Fund Ouli Ekahi Hsg Fund 236.000 245,560 9,560 4.05 Geothermal Asset 50.000 50,000 - _ Fund TTL Funds 216,588.942 231.048,060 14,459,118 6.68 Less: Interfund 11,201.771 12.382,925 1,181,154 10.54 Transfers Net Revenues 205,387,171 218,665,135 13,277,964 6.46 Op erating Bud act Summary Account Description FY2003 FY2004 Estimate $ Variance % Variance Budget General Fund Expenditures Legislative 2.567,984 2.481,620 (86,364) (3.36) Elections 614,302 483,986 (130,316) (21.21) Executive 963,694 1,062,238 98,544 10.23 Oata Systems 848,893 850,988 2,095 0.25 Finance 5,580,108 6,360,312 780,204 13.98 LawlCorp Counsel 2,826,404 2.838,196 11,792 0.42 Planning 1,749,643 1,963,108 213,465 12.20 Civil Service 1,297,145 1,378,677 81,532 6.29 Research & Development 1,745,969 1,609,751 (136,218) (7.80) Maintenance/Building 2,758,307 2,757,716 (591) (0.02) Public Works Admin 632,752 663,306 30,554 4.83 Automotive 2,048,3:,8 2,066,472 18,114 0.88 Engineering 1,268.490 1,309,677 41,187 3.25 Ponce 35,054.154 36,574,568 1,520,414 4.34 Fire 19,841,221 20,105,960 264,739 1.33 Protective Inspection 1,598,904 1,595.465 (3,439) (0.22) Flood Control 153,939 153,939 - - Animal Control 817,700 849,948 32,248 3.94 Civil Defense 441,S:i0 456,230 14,680 3.32 Liquor Control 1,049.023 1,081.590 32,567 3.10 Prosecuting Attorney 5,422.309 5,733,088 310,779 5.73 Mass Transit 1,234,352 1,293,874 59,522 4.82 County Physicians/Health 102,942 102,942 - - Aging/Health & Welfare 1,601,901 1,641,703 39,802 2.48 Cemeteries 245.402 248,816 3,414 1.39 Schools SS,000 55,000 - - Non-Profit Grants in Aid 900,000 900,000 - - ElderlyACtivities 2,750,184 2,769.727 19,543 0.71 Parks & Recreation 12,852,482 13,155.017 302,535 2.35 Environmental Mgmt 247,1 ^.1 357,039 109,928 44.49 Transfers to Other Funds 7,605,908 8,780,814 1,174,906 15.45 Transfer to Debt Svc 21,544,042 23,324,057 1,780,015 8.26 Pensions & Contribs 21,937,200 26.132,600 4,195,400 19.12 Miscellaneous 4,927,0(10 5,329.000 402,000 8.16 General Fund 165,284,373 176,467.424 11,183,051 6.77 Expenditures Highway Fund 18,376,220 17,591.245 (784,975) (4.27) Sewer Fund 6,785.473 7,895,905 1,110,432 16.36 Cemetery Fund 16.000 16,000 - - Bikeway Fund 180,000 181,000 1,000 0.56 Beautification Fund 200.000 200,000 - - Vehicle Disposal Fund 548.200 1,680,200 1,132,000 206.49 Solid Waste Fund 11,285,104 12,666,010 1,380,906 12.24 Golf Course Fund 1,185,328 1.185.328 - - Geothermal Rel Rev Fund 150,(100 150,000 - - Housing Fund 11,929.444 12,312,488 383,044 3.21 Kulaimano Elderly Hsg 362,800 406,900 44,100 12.16 Fund Ouli Ekahi Hsg Fund 236,(100 245,560 9,560 4.05 Geothermal Asset Fund 50,000 50,000 - - TTL Fund Expenditures 216,588,942 231,048.060 14,459,118 6.68 Less: Interfund Transfers 11,201,771 12.382,925 1,181,154 10.54 Net Expenditures 205,387,171 2111,665,135 13,277,964 6.46 Your committee originally reviewed the Operating Budget along with departmental program reviews on March 13, March 14 and March 17, 2003. Pursuant to Section 10-4, [lawai`i County Char[er, the Counci] also conducted public hearings in Hilo on March 17, 2003 and in Kona on March 19, 2003. Included in the Council's departmental review discussions during March 13-17, ?003 were the following questions and concerns: Office of Aging: • The Council wished to better understand where the 2.SM grant received and 1.2M grant revenues came from (Operating E3udget Proposal Part 1, Volume II); seemingly, S2.OM would cover the whole Oftce of Aging budget. Mass "Transit: • How can the Council better understand the receipt of federal grant funds not disclosed in the budget? (NOTE: A similar request was made ofthe County Housing Agency). • What utilization of buses could occur during downtime (7-8 hrs.) on the Hilo-Waikoloa route? • What can be recovered from the sale of abandoned buses after their useful life ends? Police Department: • Should drug testing of police ollicers he performed by the Department of Civil Service? • Could be department efficiently consolidate the DARE & Hl-PAL programs? • Could civilians be deputized to tag abandoned vehicles? • Request that the Chief correspond with Shipman re: donation of land for Puna station • Request that the SHOPO written agreement for contract cellblock security be provided to the Council • Could Data Processing piggyback on the Police microwave communication system? At the Kona public hearing o^ March 19, 2003, Alan J. Pratt, board president of the West Hawaii Crime Stoppers, Inc., provided a report and quote proposing that subsidized automobiles used by officers of the Hawaii County Police Department could be replaced with newly purd~ascd fleet of marked police vehicles at a savings of $250,000 annually. The Chief of Police was requested to talk to Mr. Pratt about his proposal for further Council consideration of a transition to a "black & white" motor pool fleet. Prosecutor's Office: What federally funded positions need to he convened to county funded positions? What are the needs to hire more clerical staff for Records Management Indexing? What must be undertaken to update the Financial Disclosure Form? Parks & Recreation: • The Council wished to know why the Muni Golf Course was not paying debt service for its loans (other departments not paving either). • What is the timetable for water installation at the West Hawaii Veteran Cemetery? • What steps will be undertaken to correct the disproportionate numher of I?ast Hawaii vs. West Hawaii advisory board members for the Wcst Hawaii Veterans Cemetery? • What is the department's stance toward an admittance fee for the Panaewa 'Loo and its ability to continue to operations of the zoo? Can non-residents and/or tour companies be charged? • What are the proposed schedule of fees for the Keaukaha Gym, Panaewa Equestrian Center, Summer Fun programs, etc.? Environmental Management: What problems were occurring in the planning for design of the East Hawaii sort station and selection of the type of system for disposal? County Clerk: • Arc funds available for the Elections ballot printing? Specific requests made of administration departments included the Ibllowing • Research &Development was asked to provide a list of awarded Hawaii "hourism Authority grants. • Public Works was asked to bring forward a proposed fuel tax increase. • The Finance Department was asked to submit the upcoming bond counseVunderwriters report to the Council. • Public Works (Highways Fund) was requested to furnish an inventory of all "roads in limbo." • The Council requested an update on the status of asbestos cleanup of the county building and the timetable for relocating county agencies into vacant space in the county building. • The Planning Department was asked to explore possible re-programming of the Relocation and Geothermal Asset Funds. • Data Systems was asked to consider changing its name to the Information 'technology Department. • Finance Committee Chair Chung requested that the Mayor's Ottice provide a briefing nn the "War on [ce" and upcoming apportionment of $4 million in federal monies. • Council Member'1'yler asked Automotive (equipment) to detail the increase of the 5181.61-480 account in future years (PY05, FY06). With respect to the County's depleting fund balance, Chairman Arakaki proposed the adoption by ordinance of a dedicated contingency for disaster fund. Council Member Jacobson urged the administration to broadly undertake action to till tunded vacant positions. I ursuant to the March 13-17 departmental review meetings, Finance Committee Chair Aaron Chung submitted a letter dated March 20, 2003 (Communication No. 140.9, attached) requesting the mayor's comments on (1) TAT revenues; (2) Indebtedness and Fund Balance; (3) Status of ERS Suit; (4) Supplemental budget requests; and (5) "additional considerations" relating kI fees, fuel taxes, and other matters. Mayor Kim's response (Communication 140.10, attached) dated April 15, 2003 clarified the administration's position on a number of issues and provides guidance for further Council deliberation on Draft 2 of the Operating Bud~~et. Upon review of the Mayor's amended budget submittal in May 2003, your Committee may propose amendments as necessary. Your Committee on Finance is in accord with the purpose and intent of Bill No. 59 and recommends that it pass tirst reading. !rf 1RAKAKI t CHUM1C X E1,.IRIONONF x IIOI SCIII 11 x Luouso~ x R4.1'~,AOLUS X 5.1 P'A RIK X 71'LN:R X AARON S. Y. CHtwG, CHP FINANCE RGPORT nooPrEDMf~2 Respectfully submitted: