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HomeMy WebLinkAboutCOM 0801.001 2010-2012BRITTANY SMART Councilmember Hawai `i County Council District 6 Upper Puna, Ka `u, South Kona DATE: August 14, 2012 Hawaii County Council County ofHawai`i 25 Aupuni Street Hilo, Hawai `i 96720 TO: Dominic Yagong, Chair and Members of the Hawai`i County Council FROM: rBrittany Smart, Councilmember Phone: (808) 961 -8263 Fax: (808) 961 -8912 bsmart@co.hawaii.hi.us SUBJECT: Proposed Amendments to Bill No. 287 Relating to Appropriation of Funds to Nonprofit Organizations Please find attached proposed amendments to Bill No. 287. The proposed amendments are illustrated below by Ramseyer format with respect to the contents of Bill No. 287. Section 2 -142, as provided in Bill No. 287, is amended to read as follows: "Section 2 -142. Records, reporting, and fiscal accountability requirements. (a) The nonprofit organization shall follow generally accepted accounting procedures and practices and shall maintain books, records, documents, and other evidence which sufficiently and properly account for the expenditure of County funds. The books, records and documents shall be subject at all reasonable times to inspection, reviews, or audits by the County expending agency, the director, and the legislative auditor, or by their representatives. (b) The County expending agency, director of finance, or County council may request periodic written reports on the use of County funds. (c) The nonprofit organization shall submit a written report to the council within sixty days after June 30 of the contractual year and an interim report no later than January 31 of the contract period. The report shall include, but not be limited to, a detailed description focusing on specific, measurable outcomes of how the County funds were used, public benefits derived from their use,, and a breakdown of other funding sources and their expenditures. (d) In addition to any other remedy provided by law, if the nonprofit organization fails to comply with the reporting requirements contained in this section, the County shall require the nonprofit organization to return all grant funds awarded and deem the nonprofit / Comm. N :No Ref. To: I455 C Ref. Dote U(1 4 2O1' Serving the Interests of the People of Our Island Hawai'i County is an Equal Opportunity Provider and Employer ineligible to receive future grant awards for a period of five years[ if the nonprofit (e) Should the final report be deemed by the County to contain insufficient information, the nonprofit organization shall be notified of the deficiencies and shall provide the additional information within thirty days of notice or the nonprofit organization will be deemed to be in violation of this section." Attached is a draft copy of Bill No. 287 Draft 2 with these amendments incorporated. Mahalo. BS:no att. AN ORDINANCE AMENDING CHAPTER 2, ARTICLE 25 OF THE HAWAII COUNTY CODE 1983 (2005 EDITION, AS AMENDED), RELATING TO APPROPRIATION OF FUNDS TO NONPROFIT ORGANIZATIONS. BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII: SECTION 1. Chapter 2, article 25 of the Hawai`i County Code 1983 (2005 Edition, as amended), is amended to read as follows: "Article 25. Appropriation of Funds to Nonprofit Organizations. Section 2 -135. Purpose. The purpose of this article is to establish standards for the appropriation of funds to nonprofit organizations providing programs and services which the County has determined to be in the public's interest. Section 2 -136. Definitions. As used in this article, unless the context otherwise requires: (1) "Conflict of interest" means a substantial probability that action taken by an individual will result in measurable direct benefits accruing to the individual as opposed to benefits accruing in general to an industry. (2) "Director" means the director of finance of the County. (3) "Grant" means an appropriation of public funds to a nonprofit organization for a public purpose. (4) "Nepotism" means appointing persons to positions on the basis of their blood or marital relationship to the appointing authority, rather than on merit or ability. (5) "Nonprofit organization" means an organization organized for other than profit- making purposes and which has a current 501(c)3 tax - exemption from the Internal Revenue Code. (6) "Perquisite" means a privilege furnished or a service rendered by an organization to an employee, officer, director, or member of that organization to reduce the individual's personal expenses. [(7) "Purchase of service" means the exchange by an agency of goods and services to be delivered by a nonprofit organization to the general public for cash payments substantially equal in value to such goods and services.] Section 2 -137. Eligible organizations. All [:. . - . - . - - - -] grant payments made by the County to nonprofit organizations are to be made in accordance with these standards so that the funded nonprofit programs yield direct benefits to the public and accomplish public purposes. No grant [ef ] to a nonprofit organization shall be made unless the nonprofit organization meets the following criteria: (1) The nonprofit organization is chartered or otherwise authorized to do business in the State for charitable purposes and exempted from the Federal income tax by the Internal Revenue Service. (2) The purposes for which the nonprofit organization is organized provide benefits to the people of the County. (3) The service or activity to be provided by the nonprofit organization, and funded by the County, shall address educational concerns, culture and the arts, the needs of the poor, youth, the aged, those with physical or emotional disabilities, victims of crimes, [ef] victims of health or social crises, or public health and welfare of the people and the environment, as may be determined by the County. (4) The nonprofit organization has a governing board whose members serve without compensation and have no conflict of interest between their regular occupations and the services provided by the nonprofit organization. (5) The nonprofit organization has bylaws or policies which describe the manner in which business is conducted, including management, audit, and fiscal policies and procedures, policies on nepotism, and policies on management of potential conflict of interest. (6) The nonprofit organization has at least one year' s experience with the service or activity for which the appropriation is sought or can otherwise demonstrate to the satisfaction of the County sufficient expertise to successfully carry out the service or activity. (7) The nonprofit organization must be licensed and accredited in accordance with applicable requirements of Federal, State and County laws. Section 2 -138. Conditions for grants [ : ]. Nonprofit organizations to whom a grant has been [made or a purchase of service agreement] awarded shall agree to comply with the following conditions before receiving the grant [or purchase of service agreement] : (1) Employ and appoint persons on the basis of merit and ability; (2) Comply with applicable Federal and State laws prohibiting discrimination against any person on the basis of race, color, national origin, religion, creed, sex, age, or handicap; (3) Agree not to use any public funds for purposes of entertainment or perquisites; (4) Comply with such other requirements as the director may prescribe to ensure adherence by the nonprofit organization with Federal, State, and County laws, and established standards for fiscal and program management; and (5) Allow the director, the committees of the council and their staffs, and the legislative auditor access to facilities, personnel, records, reports, files, and other related documents in order that the program, management, and fiscal practices of the nonprofit organization may be monitored and evaluated to assure the proper and effective expenditure of public funds. (6) Each nonprofit organization shall submit a disclosure form along with its grant application which lists any board member, officer, director or administrator that may have a conflict of interest or potential conflict of interest, including any familial relationship with any of the following: (A) A member or members of the council; (B) Staff appointed by a member of the council; (C) The mayor; (D) The managing director; (E) The director of finance; or (F) The corporation counsel, the assistant corporation counsel, or a deputy corporation counsel. The disclosure form shall specify any and all mitigation measures to avoid, in fact or appearance, any conflict of interest. Section 2 -139. Procedure for awarding grants. (a) All [grants] grant awards made to a nonprofit organization by the County shall be made in accordance with one of the following procedures: (1) Grants -in -aid awarded annually in operating budget: (A) Annually, before November 30, the director shall, for the purpose of soliciting applications, establish a sum of at least [$900,000] $1,000,000 to be available in the ensuing fiscal year for funding requests by nonprofit organizations. The director shall publish a notice soliciting applications in two newspapers of general circulation within the County [of Hawai`i] by November 30. (B) All applications for grants shall be submitted to the director on or before January 31 preceding the County's fiscal year, which begins on July 1. Applications shall be prepared on forms provided by the director. Applications not in conformance with the requirements of [the County] this Code may be rejected. All application forms shall include detailed information on specific, measurable outcomes and public benefits to be derived from the expenditure of County funds. (C) The director shall submit to the council all qualifying applications as provided in Sections 2 -137 and 2 -138 for its review and appropriation of funds. Site visitations of nonprofit organizations submitting complete applications may be conducted by the council and its designated staff, as deemed necessary by the chair of the appropriate committee, after January 31 but prior to final action on the operating budget by the council. Any site visitations shall be publicly noticed and conducted in a manner that allows flexible councilmember participation and designated staff support. [(D) Upon favorable action by the council to appropriate funds for the grant, the award the grant in compliance with this article.] (D) Upon favorable action by the council to appropriate funds for the grant, a written contract shall be prepared with the nonprofit organization which shall meet all legal requirements of the County and shall include program, fiscal, and audit reporting requirements sufficient to allow the director, the legislative auditor, or council to effectively monitor and evaluate the use of the grant funds. Agencies shall be notified by the director of their funding or lack thereof by August 31. (2) Grants From District Contingency Relief: (A) Appropriations from the district contingency relief [grants]account shall be transferred to an accepting County department /agency via resolution identifying the nonprofit organization and the specific program, project, or event for which the grant shall be used. (B) All purchases of equipment for organizations must follow procurement law and be domiciled in the County departments. Equipment, supplies, and products are the property of the County. (C) At any time during the year, the council may, by resolution, direct that a portion or all of a councilmember's district contingency relief funds be granted for use by a designated non - profit organization. A contract shall be prepared with the nonprofit organization which shall meet all legal requirements of the County and shall include program, fiscal, and audit reporting requirements sufficient to allow the legislative auditor or council to effectively monitor and evaluate the use of the grant funds. (3) Other Grants: (A) [Grants] Grant awards in excess of $25,000 to nonprofit organizations shall specifically identify the organization receiving the grant funds and the purpose for which the grant funds shall be used in an ordinance or resolution. (B) [Grants] Grant awards in excess of $25,000 to organizations that do not qualify as nonprofit organizations shall specifically identify the purpose for which the [grant] funds shall be used in an ordinance or resolution and be subject to competition in compliance with chapter 103D of the Hawai`i Revised Statutes. (C) [Grants] Grant awards of $25,000 or less may be authorized by the finance director for public purpose projects or programs upon written request of a funding agency or department. Such [grants] grant awards shall not be limited to nonprofit organizations but shall specifically identify the organization and program, project or event for which the grant funds shall be used and comply with the rules and regulations of the director of finance. (b) In the event that a grantee organization is unable or unwilling to provide the public service(s) for which [a grant was] grant funds were appropriated, the following procedures shall apply: (1) For [grants in aid] grant awards authorized as prescribed in 2- 139(a)(1), the mayor may direct the finance director to solicit applications from eligible nonprofit organizations to fulfill the specific public purpose(s) for which the funds were originally appropriated for the remainder of the fiscal year. The director shall forward recommended application(s) and appropriation measure(s) to the council for its decision. Funds appropriated to a successor nonprofit organization shall not exceed the balance of unexpended County funds awarded to the original [grantee] nonprofit organization. (2) For [grants] grant awards from the district contingency relief, the council may direct the return of the full appropriation or the balance of unexpended funds. (3) For other [grants] grant awards as prescribed in section 2- 139(a)(3), the finance director may direct the return of the full grant amount or balance of the unexpended funds. Section 2 -140. [ accordance with the following procedures: [ Reserved. applications, publish a notice soliciting applications in two newspapers of general circulation within the County of Hawai`i by November 30. (B) All applications for purchasc of services sh not in conformance with the requirements of the County Code may be rejected. (C) The director shall submit to the council all qualifying applications for its review complete applications shall be conducted after January 31 but prior to final action on the operating budget by the council. These site visitations shall be conducted in a manner that allows flexible councilmember participation and designated staff support. service, the director shall prepare a contract with the nonprofit organization for the purpose of the purchase of service award which shall meet all legal requirements of the County and shall include program, fiscal and audit reporting effectively monitor and evaluate the use of the purchase of service. Agencies (A) At any time during the year, pursuant to resolution, the council may direct that a portion or all of a councilmember's district contingency relief may be used by a designated nonprofit organization. the purchase of service or good which shall meet all legal requirements of the County and shall include program, fiscal and audit reporting requirements sufficient to allow the legislative auditor or council to effectively monitor and Section 2 -141. Applicability to noncounty funds; cosponsored activities. Nothing in this article shall be construed to apply to the appropriation of funds: (1) Provided to the County for a stated purpose by any person, private entity, or governmental entity; or (2) Made to an agency for any activity or program co- sponsored by the agency and a private or governmental entity or entities. Section 2 -142. Records, reporting, and fiscal accountability requirements. (a) The nonprofit organization shall follow generally accepted accounting procedures and practices and shall maintain books, records, documents, and other evidence which sufficiently and properly account for the expenditure of County funds. The books, records and documents shall be subject at all reasonable times to inspection, reviews, or audits by the County expending agency, the director, and the legislative auditor, or by their representatives. (b) The County expending agency, director of finance, or County council may request periodic written reports on the use of County funds. (c) [ • - ] The nonprofit organization shall submit a written report to the [County] council within sixty days after June 30 of the contractual year and an interim report no later than January 31 of the contract period. The report shall include, but not be limited to, a detailed description focusing on specific, measurable outcomes of how the County funds were used, public benefits derived from their use and a breakdown of other funding sources and their expenditures. [(d) In the case of grants, the nonprofit organization shall submit a final written report to the (d) In addition to any other remedy provided by law, if the nonprofit organization fails to comply with the reporting requirements contained in this section, the County shall require the nonprofit organization to return all grant funds awarded and deem the nonprofit ineligible to receive future grant awards for a period of five years. (e) Should the final report be deemed by the County to contain insufficient information, the nonprofit organization shall be notified of the deficiencies and shall provide the additional information within thirty days of notice or the nonprofit organization will be deemed to be in violation of this section. Section 2- 142.1. Rules. (a) The director shall adopt rules as may be necessary to meet the requirements of this article. (b) All application forms shall include a right to audit clause. (c) All application forms shall include, "As part of this application, you acknowledge that any funds awarded will be restricted for the purposes stated in the application except for a maximum ten percent for administrative and overhead costs." [Section 2 142.2. • . . general circulation within the County of I4awai`i by December 31, 1995. All applicatiens mall be submitted to the director on -er before January 31, �•.. •.. • with the requirements of the County -Cede may be rejected. The-remaining procedures set forth in Sections 2 139 and 2 140 shall be followed.]" SECTION 2. Material to be repealed is bracketed and stricken. New material is underscored. In printing this ordinance, the brackets, bracketed material and stricken material and underscoring need not be included. SECTION 3. If any provision of this ordinance, or the application thereof to any person or circumstance, is held invalid, such invalidity shall 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 declared to be severable. SECTION 4. This ordinance shall take effect upon its approval.