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Home My WebLink AboutORD 1995-138 1994-1996COUNTY OF HAWAII STATE OF HAWAII BILL NO. 161 (DR71FT 4) ORDINANCE NO. 95 138 AN ORDINANCE AMENDING CHAPTER 2, ARTICLE 25, HAWAII COUNTY CODE 1983 (1995 EDITION), RELATING TO APPROPRIATION OF FUNDS TO NONPROFIT ORGANIZATIONS. BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII: SECTION 1. Purpose. The Council finds that there is a need to improve the existing process of reviewing and appropriating funds to nonprofit organizations. This bill changes the solicitation timeframe to allow for adequate review of the growing number of nonprofit applicants by the Council during its annual budget review. In addition to conducting site visitations prior to making a decision on the County budget, an interim report of awarded contracts must be submitted by the organizations for the purpose of monitoring the grants. SECTION 2. Chapter 2, Article 25 of the Hawaii County Code 1983 (1995 Edition) is hereby amended to read as follows: "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. Section 2-136. Definitions. (a) 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 funds to a nonprofit organization for a specified public purpose. (4) "Nepotism" means appointing persons to positions on the basis of their blood or mazital relationship to the appointing authority, rather than on merit or ability. (5) "Nonprofit organization" means an organization organized for other than profit- making purposes[.] and which has a current 501 (~) 3 tax-exemption from the Internal Revenue Code. (6) "Perquisite" means a privilege furnished 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. Section 2-137. Eligible organizations. (a) 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 chaztered 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 for 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 be determined by the County. (4) The nonprofit organization has a governing board whose members serve without compensation and 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 -2- (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 conflict 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. Section 2-138. Conditions for grants or purchase of service agreement. (a) Nonprofit organizations to whom a grant has been made or a purchase 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 not to use any public funds for purposes of entertainment or perquisites; (4) Comply with such other requirements as 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. -3- Section 2-139. Procedure for awarding grants. (a) All grants made to a nonprofit organization by the County shall be made in accordance with the following procedure: (1) Annually, before [December 31] November 30, the director shall, for the purpose of soliciting applications, establish a sum of at least $900,000 to be available in the ensuing fiscal year for funding requests by nonprofit organizations. In any event, the maximum amount to be made available for grants shall not exceed one percent of real property tax income. The director shall publish a notice soliciting applications in [a] ~¢ newspapers. of general circulation within the County of Hawaii by [December 31] November 30. (2) All applications for grants shall be submitted to the director on or before [February 28] 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 vici a ions of nonnrofi organizations submittine eomnlete aonlicationc chap be conducted after Tanuary 31 but prior to final action on the operate budget bylhe rn,~nril These cite visitations shall be conducted in a manner rhat allows flexible councilmember ar i .~pation and designated staff su°nort. (4) Upon favorable action by the council to appropriate funds for the grant, the director shall prepare a contract with the nonprofit organization for the purpose of the grant 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 lggiclative auditor or council to effectively monitor and evaluate the use of the grant. Agencies shall be notified by the director of their funding or lack thereof by July 31. -4- Section 2-140. Procedure for awarding purchase of service agreements. All purchase of services made to a nonprofit organization by this County shall be made in accordance with the following procedure: (1) Annually, before [December 31] November 30, the director shall, for the purpose of soliciting applications, publish a notice soliciting applications in [a] ~ newspaperg of general circulation within the County of Hawaii by [December 31] (2) All applications for purchase of services shall be submitted ro the director on or before [February 28] 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 nonnrofi organi .a ions c ~bmittine ro ggpplicarionc shall be conducted after January 31 but prior to final action on h op ra i s.Slg~.y~he rnnnril These cite visitations shall be conducted in a manner that allows flexible councilmember ap rticipation and designated staff sun~ort• (4) Upon favorable action by the council to appropriate funds for the purchase of service, the director shall prepare 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 of service. Agencies shall be notified ]ly the director of their funding or lack thereof by July 31. Section 2-141. Applicability to noncounty funds; cosponsored activities. (a) 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 -5- 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. (b) The County expending agency, director of finance, or County council may request periodic written reports on the use of County funds. [By January 31, the nonprofit organization shall submit a report to the County expending agency and the council which describes how the County funds are being used and the public benefits derived from their use.] jai In order that the council and the legislative auditor may monitor comnliance with the executed contract. the nonnrofi organization shall submit a written report to the legi la ive auditor within cixty1601 day,F after June 30 of the contractual year and an interim re op rt no later than January 31 of the contract period. The report shall include. but not be limited to. a detailed description of how the countkfunds were used. public benefits derived from their use and a breakdown of other funding sources and their expenditures. Section 2-142.1. Rules. The director shall adopt rules as may be necessary to meet the requirements of this article. Section 2-142.2. Interim Procednrec for Awardine r nts and Service Agreements. Notwi hctandi~~v provision contained in this Article to the contrary. in order to rp oxide a reasonable transition following adoption of this ordinance for fiscal year 1996-97. the director ghall publish a notice coliciting_lnnlications for the numose of awarding grants or the purchase of service ag~ements in two ney~paners of general circulation within the County of Hawaii by i)erPmber 31 1995 All applirarionc shall be submitted to the director on or before January 31 1996. Applications shall be on forme provided byJhe director. Applications not in conformance with the requirements of the County .od . ma~r~j d. The remaining procedures set forth in ce~tionc 2-139 and 2-140 shall be followed." SECTION 3. Material to be repealed is bracketed. New material is underscored. In printing this ordinance, the brackets, bracketed material, and underscoring need not be included. -6- SECTION 4. In the event that any portion of the ordinance is declared invalid, such invalidity shall not affect the other parts of this ordinance. SECTION 5. This ordinance shall take effect upon its approval. INTRODUCED BY: COUNC L MEMBER, OUNTY OF HAWAII Hilo, Hawaii Date of Introduction: Novanber 1, 1995 Date of 1st Reading: November 1, 1995 Date of 2nd Reading: November 15, 1995 Effective Date: December 5, 1995 REFERE."iCC: Cce::;. .,,...7,~~_,9.3.-.-- JR:BB t':• _ .. -.`:fT~ <~s to _ , i " ~."3,x1'i'~l I COCP+f'1 Or HAWAII Dare ---1 ~- ~ ~--- t -7- OFFICE OF THE COUNTY CLERK County of Hawaii Hilo ,Hawaii . . Introduced By: Date Introduced: First Reading: Published: REMARKS: John Ray November 1, 1995 November 1, 1995 November 8, 1995 ROLL CALL VOTE AYFS NOES ABS EX Arakaki X Bonk-Abramson X Childs X De Lima X Domino X Osorio }{ Rath X Ray X Smith X 8 1 0 0 (DRAFT 4) Second Reading: November 15, 1995 To Mayor: Novenber 17, 1995 Returned: Novanber 28, 1995 Effective: December 5, 1995 Published December 7, 1995 REMARKS: ROLL CALL VOTE AYES NOES ABS EX Arakaki X Bonk-Abramson }{ Childs ){ De Lima }{ Domingo }{ Osorio 7{ ~~ X ~Y X Smith ){ 6 0 3 I DO HEREBY CERTIFY that the foregoing BILL was adopted by the County Council and pub ' hed as indicated above. COUNCIL CHAIRMAN COUNTY CLERK Approved/~eayrpreard this of day 19 MAYOR, COUNTY OF HAWAII Bil/ No.: 161 (DRAFT 4 ) Reference: C-744 SUBCOMM. on HS-1 Ord No.: