HomeMy WebLinkAboutREP FC 151 11/01/2011 2010-2012REPORT OF THE
COMMITTEE ON FINANCE
DATE: November 1, 2011
PLACE: Council Chambers
Hilo, Hawai`i
TIME: 1:53 p.m.
Council Chair and Members
Hawai `i County Council
Hilo, Hawaii 96720
Re: Comm. No. 435/Bill 127
Your Committee on Finance, to which was referred Bill No. 127, reports as follows:
Bill No. 127, transmitted by Director of Finance Nancy Crawford, via Communication No. 435
dated October 17, 2011, is a bill for an ordinance amending Chapter 2, Article 43, of the Hawaii
County Code 1983 (2005 Edition, As Amended) by amending Sections 2 -219, 2 -220,
2 -221, 2 -222 and 2 -223 and adding a new section, relating to the Budget Stabilization Fund.
The purpose of this bill is to clarify the purposes of the budget stabilization fund, increase 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 administrations appropriate and prudent
management of the County's finances.
Two proposed amendments were transmitted from Council Member Brenda Ford. Those
amendments contained in Communication 435.1 dated October 25, 2011 were unanimously
approved. Ms. Ford commented this proposed amendment as housekeeping amendments. Those
amendment contained in Communication 435.2 dated November 1, 2011 were unanimously
approved. Ms. Ford commented this proposed amendment as providing clarity in Section 2 -220.
Council Member Ford worked with the Finance Department Deputy Director Deanna Sako on
this. Ms. Ford stated the need to increase the budget stabilization fund annually as its estimated
current balance is about $2,000,000. This minimum amount of $250,000 may be increased by
administration recommendation or the council could amend the budget for a higher amount.
This "rainy fund" will be available should the County experience a revenue shortfall.
Furthermore, a policy statement precludes the use of the funds for any reason listed in section 2-
219. This situation may be viewed positively by the rating agencies when evaluating
government's credit quality if this policy is established in the Hawaii County code. She also
added prudent financial management was set by Government Finance Officers Association
(GFOA) recommended standards which could be found on their website. Ms. Ford seeks the
support of the members.
Finance Department Director Nancy Crawford and Deputy Director Deanna Sako appeared
before Your Committee. Ms. Crawford stated their support, but is concerned with setting the
minimum annual contribution amount with the County's unknown fiscal situation.
FC Report No. 151
FC -151 Page 2 November 1, 2011
Your Committee members commented on the following: 1) concerned with not knowing the
fiscal state the County currently is in and not raising real property taxes; 2) past council action
transferring excess budget stabilization funds into the contingency account; 3) the minimum
amount is not at issue, it is symbolic the Council's commitment to set moneys aside in the budget
stabilization fund which use is approved by the Council.
Committee Member Ikeda voted "kanalua" twice.
Your Committee on Finance is in accord with the purpose and intent of Bill 127, as amended to
Draft 2, and recommends it pass first reading.
dkr
Respectfully submitted,
COMMITTEE ON FINANCE
BRENDA FORD, CHAIR
FC REPORT NO. 151
ADOPTED: NOV 16 2011
AYES
NOES
A &E
EX
BLAS
X
FORD
X
HOFFMANN
X
IKEDA
X
ONISHI
X
PILAGO
X
SMART
X
YAGONG
X
YOSHIMOTO
X
Respectfully submitted,
COMMITTEE ON FINANCE
BRENDA FORD, CHAIR
FC REPORT NO. 151
ADOPTED: NOV 16 2011