HomeMy WebLinkAboutBIL 127 Draft 02 2010-2012COUNTY OF HAWAII
STATE OF HAWAII
BILL NO. 127
(DRAFT 2)
ORDINANCE NO.
AN ORDINANCE AMENDING CHAPTER 2, ARTICLE 43, OF THE HAWAII
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.
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:
"Article 43. Budget Stabilization Fund.
Section 2 -219. Creation of fund; Purpose.
(a) 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 increases. The
(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:
(1) Revenue shortfalls to minimize the need for budget cuts or tax increases;
(2) 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 [
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. [ U c of fund. ] 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 [thi-s] 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.
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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.
, Hawai`i
Date of Introduction:
Date of 1st Reading:
Date of 2°d Reading:
Effective Date:
REFERENCE; Comm. 435.3
INTRODUCED BY:
COUNCIL MBER, COUNTY OF HAWAII
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