HomeMy WebLinkAboutREP FC 163 04/19/2010 2008-2010 REPORT OF THE
COMMITTEE ON FINANCE
DATE: April 19, 2010 Re: Comm. No. 711 /Bill No. 211
PLACE: Sheraton Keauhou Bay Resort and Spa
78 -128 `Ehukai Street
Kailua -Kona, Hawai`i
TIME: 10:52 a.m.
Council Chair and Members
Hawai`i County Council
Hilo, Hawai`i 96720
Your Committee on Finance, to which was referred Bill No. 211, reports as follows:
Bill No. 211, transmitted by Mayor William P. Kenoi via Communication No. 711, dated
March 1, 2010, submits for consideration the proposed Operating Budget for Fiscal Year
2010 -11, totaling $375,367,419 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 I, Volume II), which describes the
departments and their programs, program objectives, highlights, program measures,
expenditures, and positions.
Additionally, Communication No. 711.1 from Director of Finance Nancy Crawford, dated March
1, 2010, transmitted a booklet containing reports titled Six Month Progress Report on Program
Objectives for FY 2009 -10 and Final Status Report on Program Objectives for FY 2008 -09.
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 2008-
09 fiscal year.
The highlights of the operating revenue proposal are as follows:
• Real Property Tax — Net real property tax values are projected to decrease by 9.62 %.
However, real property tax revenue is the same as the FY 2009 -10 budget, based on a
revenue - neutral rate proposal.
• Fuel Tax — Fuel taxes are expected to decrease by 9.7 %, or $788,000 due to reduced fuel
consumption. This decrease is on top of a similar decrease in the current fiscal year.
• Licenses and permits — The 12% drop in this revenue category is due to decreases in liquor
licenses ($238,000), construction- related permits ($730,000) and vehicle /trailer weight taxes
($995,000).
• Revenue from Use of Money and Property — Interest earnings are expected to decrease by
$1.3 million due to the low yield on investments, which is reflective of the current economy.
FC Rept. No. 163
Communication No. 711
Bill No. 211
Page 2 of 7
• Intergovernmental Revenues — The $3.3 million, or 5.7% increase in intergovernmental
revenues includes funding increases in housing voucher assistance and emergency medical
services.
• Charges for Services — Revenues from this source are expected to decrease by $4 million
due to reductions in automotive charges to special revenue - funded departments, sewer fees
and landfill charges.
• Other Revenues — The elimination of the current year budget item in the amount of $8.2
million for land sales is the primary factor in the $8.3 million reduction in other revenues.
• Fund Balance Carryover — Carryover savings are based on current projections of fund
balance.
The highlights of the operating expenditure proposal are as follows:
General Government
• Finance — The budget for building rents has decreased by $649,000 due primarily to the
reopening of the Hawai`i County Building, which allowed the county to vacate leased office
space.
• Planning — The department's budget has decreased with the absence of funding for new
community development plans.
• Public Works — Reductions in estimates for fuel expense, janitorial services, electricity,
insurance and facility repairs contributed to a net decrease in budget.
Public Safety
• Prosecuting Attorney — The Prosecuting Attorney's budget reflects a reduction in grant
funding of $799,000.
• Flood Control — The decrease in flood control funding is due to transferring drywell cleaning
costs to the Highway Fund.
• Animal Control — Current contract negotiations with the service provider for animal control
are expected to result in reduced costs.
Highways and Streets
• Mass Transit — The Transit office is projecting a $910,000 increase in grant- funded
expenditures.
• Highways — The Department of Public Works is earmarking $1 million for work on roads -in-
limbo.
Health, Education and Welfare
• Housing — An increase in grant funding results in a $2.2 million increase in voucher rental
subsidy payments.
• Social Services — Despite declining revenues and shrinking budget, the County's budget for
distributing funds to non - profit agencies will be retained at $1.5 million in the FY 2010 -11
budget.
FC Rept. No. 163
Communication No. 711
Bill No. 211
Page 3 of 7
Culture and Recreation
• Bands — The Hawai`i County and West Hawai`i bands have been removed from this budget
proposal.
Sanitation and Waste Disposal
• Solid Waste Division — The Solid Waste budget has decreased with the reductions in contract
services, cover material costs and recycling expenditures.
• Vehicle Disposal — The Vehicle Disposal budget will decline from approximately $4 million
to about $3 million, a reduction of about 25 percent.
Health Fund
• Health Benefits — Health costs, including post - employment benefits, are expected to increase
with the continuing increase in premium rates. 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.
A summary of estimated FY 2010 -11 revenues and expenditures are shown below:
REVENUES
FY 2009 -10 FY 2010 -11 FY11 -FY10 FY11 -FY10
Account Description Budget Estimate $ Variance % Variance
General Fund Revenues
Taxes
Real Property Taxes 217,150,000 217,150,000
Public Svc Co Tax 8,630,000 8,730,000 100,000 1.16
TTL Taxes 225,780,000 225,880,000 100,000 0.04
Licenses & Permits
Bus. Lic & Permits 3,276,281 2,904,384 (371,897) (11.35)
Non -Bus. Lic & Permits 3,964,389 3,331,089 (633,300) (15.97)
TTL Lics & Permits 7,240,670 6,235,473 (1,005,197) (13.88)
Intergovernmental Rev.
Federal Grants 3,579,067 4,302,607 723,540 20.22
Federal Grants 709,000 688,000 (21,000) (2.96)
Federal Grants 1,885,920 2,173,000 287,080 15.22
State Grants 34,178,412 35,305,591 1,127,179 3.30
State Grants 1,945,492 1,869,792 (75,700) (3.89)
Federal Grants 2,440,800 1,645,800 (795,000) (32.57)
TTL Intergovernmental Rev 44,738,691 45,984,790 1,246,099 2.79
FC Rept. No. 163
Communication No. 711
Bill No. 211
Page 4 of 7
FY 2009 -10 FY 2010 -11 FY11 -FY10 FY11 -FY10
Account Description Budget Estimate $ Variance % Variance
Charges for Services
General Government 4,974,416 4,006,626 (967,790) (19.46)
Public Safety 158,878 159,878 1,000 0.63
Highways & Streets 276,000 293,000 17,000 6.16
Parks & Recreation 988,726 1,011,255 22,529 2.28
TTL Charges for Services 6,398,020 5,470,759 (927,261) (14.49)
TTL Fines & Forfeitures 1,675,500 1,796,100 (57,000) (3.29)
Miscellaneous Revenues
Interest Earnings 2,600,000 1,250,000 (1,350,000) (51.92)
Rents 117,677 120,907 3,230 2.74
Disp of Fixed Assets 8,233,000 31,000 (8,202,000) (99.62)
Contrib/Dons FR Prvt Src 435,000 426,572 (8,428) (1.94)
Reimbursements & Transfers 19,978,563 16,500,422 (3,478,141) (17.41)
Sundry & Misc 277,250 229,000 (48,250) (17.40)
TTL Miscellaneous Revenues 31,641,490 18,557,901 (13,083,589) (41.35)
TTL General Fund Revenues 317,474,371 303,925,023 (13,549,348) (4.27)
Other Fund Revenues
Highway Fund 27,599,091 27,474,015 (125,076) (0.45)
Sewer Fund 9,995,362 9,643,225 (352,137) (3.52)
Cemetery Fund 10,000 10,000
Bikeway Fund 171,000 171,000
Beautification Fund 225,000 240,000 15,000 6.67
Vehicle Disposal Fund 4,004,278 2,968,163 (1,036,115) (25.88)
Solid Waste Fund 31,152,457 26,392,925 (4,759,532) (15.28)
Golf Course Fund 1,201,521 1,129,482 (72,039) (6.00)
Geothermal Rel & Comm Rev Fd 550,000 550,000
Housing Fund 15,006,400 16,975,023 1,968,623 13.12
Kulaimano Elderly Hsg Fund 373,862 377,212 3,350 0.90
Ouli Ekahi Hsg Fund 315,860 336,890 21,030 6.66
Geothermal Asset Fund 50,000 50,000
TTL Other Funds 90,654,831 86,317,935 (4,336,896) (4.78)
TTL Funds 408,129,202 390,242,958 (16,925,488) (3.99)
Less: Interfund Transfers 21,082,999 14,875,539 (6,207,460) (29.44)
Estimated (e)
Net Revenues (All Funds) 387,046,203 375,367,419 (11,678,784) (3.02)
FC Rept. No. 163
Communication No. 711
Bill No. 211
Page 5 of 7
EXPENDITURES
FY 2009 -10 FY 2010 -11 FY 11 -FY 10 FY 11 -FY 10
Account Description Budget Estimate $ Variance % Variance
General Fund Expenditures
Legislative 3,711,862 2,993,271 (718,591) (19.36)
Elections 875,026 1,104,898 229,872 26.27
Legislative Auditor 776,880 758,007 (18,873) (2.43)
Executive 1,576,662 1,468,414 (108,248) (6.87)
Data Systems 1,225,045 1,335,876 110,831 9.05
Finance 12,328,970 10,546,964 (1,782,006) (14.45)
Law /Corp Counsel 2,932,050 2,651,059 (280,991) (9.58)
Planning 3,638,039 2,895,548 (742,491) (20.41)
Human Resources 2,109,154 1,756,375 (352,779) (16.73)
Research & Development 2,640,927 2,298,605 (342,322) (12.96)
Building 6,467,046 5,126,431 (1,340,615) (20.73)
Public Works Admin 1,307,915 1,368,740 60,825 4.65
Automotive 5,678,866 4,469,049 (1,209,817) (21.30)
Engineering 2,052,011 1,562,191 (489,820) (23.87)
Police 52,534,179 53,066,353 532,174 1.01
Fire 37,054,571 37,083,254 28,683 0.08
Protective Inspection 2,410,194 1,996,434 (413,760) (17.17)
Flood Control 1,017,502 537,440 (480,062) (47.18)
Animal Control 2,280,269 2,000,000 (280,269) (12.29)
Civil Defense 1,793,842 1,678,137 (115,705) (6.45)
Liquor Control 1,617,581 1,381,184 (236,397) (14.61)
Prosecuting Attorney 9,231,981 7,851,466 (1,380,515) (14.95)
Mass Transit 4,820,711 5,749,381 928,670 19.26
County Physicians /Health 133,825 133,825
Aging/Health & Welfare 2,679,022 2,440,940 (238,082) (8.89)
Cemeteries 341,462 323,237 (18,225) (5.34)
Schools 58,500 58,500
Non - Profit Grants in Aid 1,500,000 1,500,000
Elderly Activities 3,627,799 3,493,375 (134,424) (3.71)
Parks & Recreation 18,152,970 16,663,791 (1,489,179) (8.20)
Environmental Mgmt 1,072,178 913,910 (158,268) (14.76)
Transfers to Other Funds 21,182,999 15,075,539 (6,107,460) (28.83)
Transfer to Debt Svc 40,610,744 41,047,829 437,085 1.08
Pensions & Contribs 64,274,589 66,738,000 2,463,411 3.83
Miscellaneous 3,759,000 3,857,000 98,000 2.61
Block Grants
Home Grants
Housing Grants
TTL General Fund 317,474,371 303,925,023 (13,549,348) (4.27)
Expenditures
FC Rept. No. 163
Communication No. 711
Bill No. 211
Page 6 of 7
FY 2009 -10 FY 2010 -11 FY 11 -FY 10 FY 11 -FY 10
Account Description Budget Estimate $ Variance % Variance
Other Fund Expenditures
Highway Fund 27,599,091 27,474,015 (125,076) (0.45)
Sewer Fund 9,995,362 9,643,225 (352,137) (3.52)
Cemetery Fund 10,000 10,000
Bikeway Fund 171,000 171,000
Beautification Fund 225,000 240,000 15,000 6.67
Vehicle Disposal Fund 4,004,278 2,968,163 (1,036,115) (25.88)
Solid Waste Fund 31,152,457 26,392,925 (4,759,532) (15.28)
Golf Course Fund 1,201,521 1,129,482 (72,039) (6.00)
Geothermal Rel & Comm Rev Fund 550,000 550,000
Housing Fund 15,006,400 16,975,023 1,968,623 13.12
Kulaimano Elderly Hsg Fund 373,862 377,212 3,350 0.90
Ouli Ekahi Hsg Fund 315,860 336,890 21,030 6.66
Geothermal Asset Fund 50,000 50,000
TTL Other Fund 90,654,831 86,317,935 (4,336,896) (4.78)
Expenditures
Total Funds 408,129,202 390,242,958 (17,886,244) (4.38)
Less: Inter -Fund 21,082,999 14,875,539 (6,207,460) (29.44)
Transfers
Estimated (e)
Net Expenditures 387,046,203 375,367,419 (11,678,784) (3.02)
Your Committee originally reviewed the Operating Budget in conjunction with departmental
program reviews on March 29 through March 31, 2010. Pursuant to Section 10 -4, Hawai`i
County Charter, the Council also conducted public hearings on the proposed FY 2010 -11
Operating and Capital Budgets in Hilo on March 22, 2010 an, via video conference, from the
Kona Council Office and the Waimea Council Office.
During the budget review, Mayor William P. Kenoi reviewed his proposed budget for the
Council. He reminded the Members that the departments reduced their budgets by 5% last fiscal
year, then another 10% in the current budget year. For fiscal year 2010 -11, they have reduced
expenditures by up to 20 %. The budget includes the implementation of two furlough days per
month for employees other than those in SHOPO Bargaining Unit 12 and Firefighters Bargaining
Unit 11. Included in the furlough plan are elected officials, appointees and excluded managerial
employees and the furloughs will result in a 9.23% pay reduction for all affected. Mayor Kenoi
said an agreement had also been reached and ratified by UPW Bargaining Unit 1, after the
current budget had been submitted, and they too will be participating in the furlough plan.
FC Rept. No. 163
Communication No. 711
Bill No. 211
Page 7 of 7
The Department of Parks and Recreation in particular had a difficult challenge, as they were
required to reduce spending and at the same time protect programs essential to the well -being of
our seniors and children. The most difficult decision of the entire budget process was made and
funding for the Hawai`i County Band and the West Hawai`i Band has been eliminated.
Upon review of the Mayor's amended budget submittal on May 5, 2010, the Council may
propose amendments as necessary.
Your Committee on Finance is in accordance with the purpose and intent of Bill No. 211 and
recommends it pass first reading.
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AYES NOES A &E EX Respectfully submitted,
ENRIQUES X
FORD X COMMITTEE ON FINANCE
GREENWELL X
HOFFMANN X
IKEDA X /
Iv
NAEOLE - BEASON X
ONISHI X DENNIS "FRESH" ONISHI, CHAIR
YAGONG X FC REPORT NO. 163
YOSHIMOTO X ADOPTED: MAY 1 9 2010