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Home My WebLink AboutREP FC 051 04/21/2009 2008-2010REPORT OF THE COMMITTEE ON FINANCE DATE: Apri121, 2009 PLACE: Sheraton Keauhou Bay Resort & Spa 78-128 `Ehukai Street Kailua-Kona, Hawaii TIME: 12:34 p.m. Council Chair and Members Hawaii County Council Hilo, Hawaii 96720 Re: Comm. No. 151/Bill No. 36 Your Committee on Finance, to which was referred Bill No. 36, reports as follows: Bill No. 151, transmitted by Mayor William P. Kenoi via Communication No. 151, dated February 27, 2009, submits for consideration the proposed Operating Budget for Fiscal Year 2009-10, totaling $386,279,510 in estimated revenues and appropriations (Part I-Volume I), and includes the operations of eleven of the County's special funds as well as the General Fund. Also submitted is the Operating Budget Proposal (Part 1, Volume II), which describes the departments and their programs, program objectives, highlights, program measures, expenditures, and positions. Additionally, Communication No. 151.1 from Finance Director Nancy Crawford, dated February 27, 2009, transmitted a booklet containing reports titled Six Month Progress Report on Program Objectives for FY2008-09 and Final Status Report on Program Objectives for FY2007-08. These reports provide information to the Council to assist in the evaluation of program accomplishments during the first six months of the current fiscal year and for the previous 2007-08 fiscal year. The highlights of the operating revenue proposal is as follows: • Real Property Tax -Taxable real property values will decrease by 5.6% or $12.3 million, due to a 3.64% decrease in taxable values. • Fuel Tax -Fuel taxes are expected to decrease by 9.6%, or $800,000 due to a decrease in fuel consumption. • Revenue from Use of Money and Property -Interest revenues are expected to decrease by $4 million due to the low yield on investments, which is reflective of the current economy. • Intergovernmental Revenues -The increases in a number of grants are more than offset by the decreases in housing voucher assistance and transient accommodations taxes, resulting in a net decrease of $1.6 million. • Charges for Service. Overall revenues from this source are expected to increase by $870,000 with increases in automotive charges exceeding the decrease in construction permit revenue. • Other Revenues. Other revenues are expected to increase, primarily from the anticipated sale of Hamakua property budgeted for $8.2 million, as well as the $2 million transfer of funds from the Budget Stabilization Fund. • Fund Balance Carryover. Carryover savings are expected to decrease by approximately $10 million due to the current year's revenue shortfalls in TAT, real property tax, building permits and others. Fund Balance is expected to be much lower than last year, but we will continue to monitor and adjust in the May budget if necessary. FC REPORT NO. 51 Communication No. 151, Bill No. 36 April 21, 2009 Page -2- In addition to the cuts made by the departments major changes in projected expenditures are as follows: General Government • Clerk/Council. Election's budget has been reduced in this non-election year. The Council's $900,000 contingency account has been eliminated. • Office of Management. Funding for coqui frog eradication has been removed from the budget request. • Data Systems. Funding restrictions prevent the department from proceeding with expansion of the document management project. • Finance. Savings resulted from closing out a financing lease, postponing a real property tax software purchase, reducing Hague Convention costs for real property tax sales and distributing the budget for advertising. • Public Works. Additional costs for janitorial services and fuel offset the reduction in budget for Flood Insurance Rate Maps updates. Public Safety • Police. Offsetting the decrease from the postponement of the police fleet transition and the omission of the grant match for the interoperable communication system aze increases in fuel costs and police officers' wages from a previously negotiated collective bargaining contract. • Fire. The budget includes fire fighters' salary increases from a previously negotiated contract and is reduced by the elimination of the prior year budget for helicopter purchase. • Civi/ Defense. Included in the budget is the projected $1.1 million State Homeland Security grant. Health, Education and Welfare • Housing. A drop in grant funding results in the $1.7 million decrease in the department's budget. Culture and Recreation • Administration. Excluded from Parks Administration's budget are funds for the Veterans Center match, the Mahukona Boat Ramp study and the Kahalu'u Park Ranger programs. The Lava Viewing program will continue. The West Hawaii Golf program subsidy has been reduced to $500,000. Sanitation and Waste Disposal • Solid Waste Division. The Solid Waste budget has decreased with the reductions in miscellaneous contractual services and cover material expenditures. FC REPORT NO. 51 Communication No. 151, Bill No. 36 April 21, 2009 Page -3- Debt Service • Debt Service. Debt service is projected to decrease with the delay in issuing bonds and the use of bond anticipation notes. Pension and Retirement • Employees Retirement System. The Employees Retirement System cost is expected to increase by $1.7 million due primazily to an increase in the salaries and wages for Police and Fire. Health Fund • Health Benefits. Health costs, including post-employment benefits, aze expected to increase by $2.2 million due to rising rates for both active employees and retirees. The health insurance rates For next fiscal year have not yet been set by the Employer Union Trust Fund, so increases to this budget item are possible. Miscellaneous • Transfer to Disaster & Emergency Fund. This transfer has been reduced to $100,000, the minimum set by the County Code. • Transfer to Self Insurance Fund. No funds aze being transferred, due to County's financial condition. • Transfer to Public Access, Open Space and Natural Resources Preservation Fund. This budget proposes a moratorium on this code requirement. • Transfer to Budget Stabilization Fund. Instead of transferring funds into this fund, this proposal seeks to withdraw from this "rainy day" fund as a means to balance the budget. • Sewer Fund Replacement Reserve Repairs. Scheduled repair projects have been reduced to $1.5 million. • Other. Provisions being reduced include vacation and unemployment compensation, which were increased in the current budget for this election year. Provisions were reduced for workers compensation, claims and judgments, and disaster/emergency due to our current financial environment. A summary of estimated FY2009-10 revenues and expenditures are shown below: REVENUES FY 2008-09 FY 2009-10 FY 10-FY 09 $ FY 10 -FY 09 Account Description Budge[ Es[ima[e Variance % Variance Account Descrip[ir General Fund Revenues General Fund Revenues Taxes Taxes Real Property Taxes 232,244,000 219,930,000 (12,314,000) (5.30) Real Property Taxes Public Svc Co Tax 8,305,000 8,630,000 325,000 3.91 Public Svc Co Tax TTL Taxes 240,549,000 228,560,000 (11,989,000) (4.98) TTL Taxes Licenses & Permits Licenses & Permits Bus. Lic & Permits 3,346,576 3,276,281 (70,295) (2.10) Bus. Lic & Permits FC REPORT NO. 51 Communication No. 151, Bill No. 36 April 21, 2009 Page -4- (REVENUES -Continued) FY 2008-09 FY 2009-10 FY 10-FY 09 $ FY 10 -FY 09 Account Description Budge[ Estimate Variance % Variance Account Description Non-Bus. Lic & Permits 4,055,797 3,584,389 (471,408) (1 L62) Non-Bus. Lic & Permits TTL Lies & Permits 7,402,373 6,860,670 (541,703) (7.32) TTL Lics & Permits Intergovemmental Rev. Intergovemmental Rev. Federal Grants 4,033,823 3,527,837 (505,986) (12.54) Pederal Grants Federal Grants 708,820 706,000 (2,820) (0.40) Federal Grants Federal Grants 2,001,523 1,878,920 (122,603) (6.13) Federal Grants State Grants 36,736,462 35,016,938 (1,719,524) (4.68) State Grants State Grants 1,524,100 1,905,492 381,392 25.02 State Grants Federal Grants 500,000 2,440,800 1,940,800 388.16 Federal Grants TTL Intergovemmental Rev 45,504,728 45,475,987 (28,741) (0.06) TTL Intergovemmental Rev Charges for Services Charges for Services General Govemment 4,299,995 5,327,585 1,027,590 23.90 General Government Public Safely 153,878 158,878 5,000 3.25 Public Safety Highways & Streets 242,500 276,000 33,500 13.81 Highways & Streets Parks & Recreaton 873,070 889,600 16,530 1.89 Parks & Recreation TTL Charges for Services 5,569,443 6,652,063 1,082,620 19.44 TTL Charges for Services TTL Fines & Forkitures 1,732,500 1,675,500 (57,000) (3.29) TTL Fines & Forfeitures Miscellaneous Revenues Miscellaneous Revenues Interest Earnings 6,650,000 2,60Q,000 (4,050,000) (60.90) Interest Earnings Rents 70,500 99,992 29,492 41.83 Rents Disp of Fixed Assets 35,000 8,233,000 8,198,000 23,422.86 Disp of Fixed Assets Contrib/Dons FR Prvt Src 416,000 435,000 19,000 4.57 Contrib/Dons FR Prv[ Src Reimbursements & Transfers 20,000,707 15,870,448 (4,130,259) (20.65) Reimbursements & Transfers Sundry &Misc 311,300 277,250 (34,050) (10.94) Sundry &Misc TTL Miscellaneous Revenues 27,483,507 27,515,690 32,183 0.12 TTL Miscellaneous Revenues TTL General Fund Revenues 328,241,551 316,739,910 (I 1,501,641) (3.50) TTL General Fund Revenues Other Fund Revenues Other Fund Revenues Highway Fund 27,473,575 27,566,859 93,284 0.34 Highway Fund Sewer Pund 11,638,442 9,995,362 (1,643,080) (14.12) Sewer Fund Cemetery Fund IQ000 IQ,000 - - Cemetery Fund Bikeway Fund 171,000 171,000 - Bikeway Fund Beautification Fund 225,000 225,000 - - Beautification Fund Vehicle Disposal Furd 3,543,129 4,004,278 461,149 13.02 Vehicle Disposal Fund Solid Waste Pund 33,971,323 31,152,457 (2,818,866) (8.30) Solid Waste Fund Golf Course Fund 1,201,521 1,201,521 - - Golf Course Fund 200,000 57.14 Geothermal Rel & Comm Geothermal Rel & Comm Rev Fd 350,000 550,000 Rev Fd Housing Fund 16,725,714 15,006,400 (1,719,314) (10.28) Housing Fund Kulaimano Elderly Hsg Fund 373,862 373,862 - - Kulaimano Elderly Hsg Fund Ouli Ekahi Hsg Fund 312,880 315,860 2,980 0.95 Ouli Ekahi Hsg Fund Geothermal Asset Fund 50,000 50,000 - - Geothermal Asset Fund TTL Other Funds 96,046,446 90,622,599 (5,423,847) (5.65) TTL Other Funds TTL Funds 424,287,997 407,362,509 (16,925,488) (3.99) TTL Funds Less: Inlerfund Transfers 21,082,999 21,082,999 - - Less: In[erfund Transfers FC REPORT NO. S I Communication No. 151, Bill No. 36 April 21, 2009 Page -5- EXPENDITURES Account Description FY 2008-09 Budget FY 2009 10 ~ Estimate i FY 10 FY _ -09 $ Variance '- FY 10 -FY 09 Variance General Fund Expenditures }I} Legislative 5,890,539 4,021,328 1 (3173) Elections 1,348,672 866,470 (35 75).,:.: ,:. (482;202) Legislative Auditor 791,292 ~ 791,292 IEDIV/01 :' Executive 1,888,537 1,618,376 ~ -.~ (14.31).. ) (270;161} Data Systems 1,578,029 1,158,880 (2656) ; (419,149) Finance 13,610,016 12,361,682 (9,17), (1,248,334) Law/Core Counsel 3,093,616 2,958,871 (4.36} ". (134,745) Planning 3,888,723 3,653,937 ~ l (6.04) (234,786) HumanResources(CivilSve) 2,116,180 2,109,154 (033) (7,026) Research & Development 3,147,217 2,652,003 ! (15.73) ~. ~ (495,214) Building 6,241,167 6,467,046 { .225,879 362 '. Public Works Admin 1,308,145 1,325,699 ~ ~ ! 17,554 1 34 ~: Automotive 4,847,184 5,678,866 ~ _ 831,682 1716 Engineering 2,800,987 2,024,870 (27.71) '. ..(776,117) Police 50,798,492 52,074,179 ,>1,275,687 2 51 :: ~ Fire 37,187,821 37,054,571 (0 36) ' (133,250} Protective Inspection 2,489,170 2,410,194 {3 17) t {78{976) Flood Control 1,017,502 1,017,502 ~ - E Animal Control 2,051,! 19 2,280,269 ~ 229,150 1l 17 Civil Detense 721,483 1,793,842 ~ '1,072,359 148 63 Liquor Control 1,663,076 1,617,581 = (2.74) (45,495} Prosecuting Attorney 9,053,649 9,143,659 (( 90,010 099 Mass Transit 4,983,244 4,695,711 ~ I: (5.77) ~ (287,533} County Physicians/Health 133,825 133,825 { ~~ Aging/Health & Welfare 2,692,827 2,671,006 ~ (0 8L) ~~ j (21,821) Cemeteries 354,134 341,462 ! ' (3.58) I ((2,672) Schools 65,000 58,500 (1000) ,J (6,500) Non-Profi[Gran[s in Aid 1,500,000 1,500,000 Elderly Activities 3,513,699 3,521,569 ~ 7,870 0 22 '. Parks & Recreation 19,462,522 18,144,720 ~ {6.77). (1,3:17,802) Environmental Mgmt 1,676,793 1,492,103 ~ (1 LO]). ...(184,690) ... Transfers ro Other Funds 28,820,999 21,182,999 (26.50) (7,638,000) Transfer to Deb[ Svc 43,379,348 40,610,744 IEIEIE (6 38) (2,768,604) Pensions & Contribs 59,681,836 63,548,000 ~ '3,866,164 6 48 NO. 51 Communication No. 151, Bill No. 36 April 21, 2009 Page -6- (EXPENDITURES -Continued) FY 2008-09 FY 2009 10 09 $ FY 10 -FY 09 % a Account Description Budget Estimate Vanance : Variance I Miscellaneous 5,236,000 3,759000 € (2821) { (1,477,000} Block Grants - € #llIV/0! Home Grants - i - #DIV/01 :. Housing Grants - #DIV/01 '~ ~ ; - #DIV/01 t TTL General Fund Expenditures 328,241,551 316,739,910 (3.50) ~ 1 (1"1,501,641) f i Other Fund Expenditures ' 7 Highway Pund 27,473,575 27,566,859 93,284 0.34 j Sewer Fund 11,638,442 9,995,362 E - ' (14 12) ~. ~ t F (1,643,080) Cemetery Fund IQ,000 IQ000 ~ - Bikeway Fund 171,000 171,000 ! - Beautification Fund 225,000 225,000 - Vehicle Disposal Furcl 3,543,129 4,004,278 i ' '461,149 3 13 02 Solid Waste Fund 33,971,323 31,152,457 (830) ~ ~ 1 (2,818,866) 1 Golf Course Pund 1,201,521 1,201,521 - ~ - Geothennal Rel & Comm Rev 350,000 550,000 ~ 300,000 57.14 " Fund ! Housing Fund 16,725,714 15,006,400 (1028)- (1;7l9,314) Kulaimano Elderly Hsg Pund 373,862 373,862 Ouli Ekahi Hsg Fund 312,880 315,860 2,980 i -0.95 ! Geothermal Asset Fund 50,000 50,000 ( J9? 7 TTL Other Fund Expenditures 96,046,446 90,622,599 (5.65} 4 (5,423,847) t( 1 Total Funds 424,287,997 407,362,509 ~: (3.99) (16,925,488} _ `S 21,082,999 21,082,999 ~ ~~~ Less: Inter-Fund Transfers ° ' Estimated (e) i 3 i Ne[ Expeuditmos 403,204,998 386,279,510 ~„,(16,925~,488) „ { _(4 20) ,__,,,,,,____°_, Your Committee originally reviewed the Operating Budget in conjunction with departmental program reviews on March 30 through April 1, 2009. Pursuant to Section 10-4, Hawaii County Charter, the Council also conducted a public hearing on the proposed FY2009-10 Operating and Capital Budgets on March 23, 2009, in Hilo. FC REPORT NO. 51