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HomeMy WebLinkAboutCOM 0435.002 2010-2012BRENDA J. FORD Council Member District 7 - Central Kona Phone: (808) 323 -4277 Fax: (808) 329- 4786 E -Mail: bford @co.hawaii.hi.us HAWAII COUNTY COUNCIL County of Hawaii West Hawaii Civic Center 74 -5044 Ane Keohokalole Hwy. Kailua -Kona, Hawaii 96740 ca •c C) © -L-4 -J -< DATE: November 1, 2011; CrIP TO: Dominic Yagong, Chairperson, and Members of the Hawai`i County Council FROM: Brenda J. Ford, Council Member SUBJECT: Proposed Amendment to Bill No. 127; An Ordinance Amending Chapter 2, Article 43, of the Hawai`i County Code 1983 (2005 Edition, As Amended) By Amending Section 2 -219, Section 2 -220, Section 2 -221, Section 2 -222, and Section 2 -223, and Add a New Section, Relating to the Budget Stabilization Fund Please find attached proposed amendments to Bill No. 127, section 2 -220, Funding. Amendments are illustrated below via Ramseyer format with respect to the contents of Bill No. 127 (material to be deleted is bracketed and stricken through, material to be added is underscored): Section 2 -220, as provided in Bill No. 127 is amended to read as follows: "Section 2 -220. Funding. (a) Each fiscal year [following the creation of these budget stabilization fund, moneys shall be transferred to this fund as recommended by the mayor and approved by the council; however, ] , the minimum amount transferred into the budget and stabilization fund [ ch fiscal year] shall be $250,000. (b) The council hereby establishes a policy to accumulate between five to fifteen percent (5 -15 %) of the general fund total expenditures based on a combination of the fund balance and the budget stabilization fund. This policy does not preclude the use of the funds for any reason listed in section 2 -219 even if the targeted percentage is not met." Attached is a draft copy of Bill No. 127, Draft 2, with these amendments incorporated therein. BJF /dkr att. Serving the Interests of the People of Our Island Hawai`i County Is An Equal Opportunity Provider And Employer Comm. No. Ref. To: Ref. Date Nil „_],,,7 ft . 3S. AN ORDINANCE AMENDING CHAPTER 2, ARTICLE 43, OF THE HAWAII COUNTY CODE 1983 (2005 EDITIION, AS AMENDED) BY AMENDING SECTION 2- 219, SECTION 2 -220, SECTION 2 -221, SECTION 2 -222, AND SECTION 2 -223, AND ADD A NEW SECTION, RELATING TO THE BUDGET STABILIZATION FUND. BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII: SECTION 1. Purpose. Governments should maintain a prudent level of financial resources to protect against reducing service levels or raising taxes and fees because of temporary revenue shortfalls or unpredicted one -time expenditures. Such a policy identifies how to guide the financial actions in the event of temporary cash flow shortages, emergencies, and unanticipated economic downturns from a financial management perspective. The County of Hawai`i will increase the minimum targeted amount in the budget stabilization fund based on a percentage of operating expenses to address these potential problems. Bolstering the County's financial resources in advance of such situations may be viewed positively by the rating agencies when evaluating a government's credit quality. This ordinance clarifies the purpose of the budget stabilization fund, increases the minimum amount to be appropriated annually, establishes a policy of accruing between five and fifteen percent of the operational expenses excluding state and federal grants, codifies dissolution of the fund, and continues to demonstrate the administration's appropriate and prudent management of the County's finances. SECTION 2. Chapter 2, Article 43, of the Hawai`i County Code 1983 (2005 Edition, as amended), is amended to read as follows: "Section 2 -219. Creation of fund; Purpose. Pursuant to section 10 -12, Hawai `i County Charter 2000, a special fund to be known as the budget stabilization fund is created. [for the purpose of meeting general fund revenue shortfalls and to minimize the need for budget cuts or tax increase:,. The budget stabilization fund shall be a temporary supplemental source of funds for the County to use during times of financial hardships while a plan for cost reduction or revenue enhancement is developed.] (b) The purpose of the budget stabilization fund shall be a temporary, supplemental source of funds for the County to use during times of financial hardships while a plan for cost reduction or revenue enhancement is developed. Additionally, the fund may be used to insulate general fund programs and current service levels from: Revenue shortfalls to minimize the need for budget cuts or tax increases; A revenue reduction due to a change in state or federal legislation; or (3) Slower revenue growth that typically occurs during an economic recession. Section 2 -220. Funding. (a) Each fiscal year [following the creation of the budget stabilization fund, moneys shall be transferred to this fund as recommended by the mayor and approved by the council.] , the minimum amount transferred into the budget and stabilization fund shall be $250,000. (b) The council hereby establishes a policy to accumulate between five to fifteen percent (5 -15 %) of the general fund total expenditures based on a combination of the fund balance and the budget stabilization fund. This policy does not preclude the use of the funds for any reason listed in section 2 -219 even if the targeted percentage is not met. Section 2 -221. [ Usc off nd. ] Expenditures. [This] The budget stabilization fund may be used only when there is a reduction in budgeted revenue and the director of finance determines that such use is necessary to prevent a reduction in the level of public services. Section 2 -222. Appropriations. Appropriations from [this] the budget stabilization fund may occur only upon the following: (1) Written determination by the director of finance that such appropriations are necessary; and (2) Passage of an appropriations ordinance by two - thirds vote of the council. Section 2 -223. [Prohibition.] Prohibitions. Appropriations from the budget stabilization fund to fund the acquisition, construction or alteration of a facility as part of a general capital improvement program or balance the budget for an upcoming year shall be prohibited. Section 2- 223.1. Dissolution of the fund. The budget stabilization fund shall not be dissolved unless such dissolution is approved by the finance director and a two - thirds vote of the County council." SECTION 3. Severability. If any provision of this ordinance or the application thereof to any person or circumstance, is held invalid, such invalidity does not affect other provisions or applications of the ordinance which can be given effect without the invalid provision or application, and to this end, the provisions of this ordinance are to be severable. SECTION 4. Material to be repealed is bracketed and stricken. New material is underscored. In printing this ordinance, the brackets, bracketed and stricken material and underscoring need not be included. SECTION 5. This ordinance shall take effect upon its approval.