HomeMy WebLinkAboutREP FC 170 2014/05/01 (2012-2014) REPORT OF THE
COMMITTEE ON FINANCE
DATE: May 1, 2014 Re: Comm. No. 689/Bill No. 208
PLACE: Council Chambers
Kona, Hawai`i
TIME: 9:05 a.m.
Council Chair and Members
Hawai`i County Council
Hilo, Hawai`i 96720
Your Committee on Finance, to which was referred Bill No. 208, reports as follows:
Bill No. 208, transmitted by Mayor William P. Kenoi, via Communication 689 dated
February 28, 2014, submits for consideration the proposed Operating Budget for the County of
Hawai`i for the Fiscal Year July 1, 2014 to June 30, 2015. This balanced budget includes estimated
revenues and appropriations totaling $412,608,475 (Part I-Volume I), and includes the operations of
eleven of the County's special funds as well as the General Fund. This budget is 2.3 percent larger
than the budget in effect when Mayor Kenoi's administration took office in 2008. This budget
reflects those efforts to control the cost of government while always maintaining essential police, fire
and other core county government services.
The Mayor's budget message discusses highlights of the operating revenues and expenditure
proposals. It attaches informational tables comparing 1)budgeted expenditures for FY 2013-14 and
proposed for FY 2014-15 for each fund; 2) a summary of projected FY 2014-15 revenues from
various sources and the change in those from the current budget; and 3) a summary of projected
FY 2014-15 expenditures and the change in those from the current budget. Also listed are significant
changes to operating expenditures in several categories.
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. 689.1 from Mayor William P. Kenoi, dated February 28, 2014,
transmits a booklet containing reports titled Six Month Progress Report on Program Objectives for
FY 2013-14 and Final Status Report on Program Objectives for FY 2012-13. 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 2012-13 fiscal year.
The highlights of the operating revenue proposal are as follows:
• Real Property Tax—Real property tax revenues are expected to increase by 5.9%, or
$13 million, due to new construction and an increase in taxable values.
FC Report No. 170
FC-170 Page 2 May 1, 2014
• Public Utilities Franchise Tax—Decreased public utility revenues are expected to result in
a decrease of$520,000, a reduction of 4.5% in franchise tax revenue.
• Licenses and Permits— Increases in vehicle registration revenue and vehicle weight tax
revenue have contributed to an increase of$2.2 million, or 11.3% in this revenue source.
• Intergovernmental Revenue—Reductions in grant revenues of about $1 million reflect
those grants we are aware of at this time.
• Fund Balance Carryover—This budget reflects a higher projection of carryover savings
($3.3 million) from the current year operations.
The highlights of the operating expenditure proposal are as follows:
General Government
• Planning. Appropriations are increased by $495,000 for work on the General Plan
update.
Public Safety
• Prosecuting Attorney. Three temporary, grant funded positions have been added for
victim services.
• The majority of other changes in public safety are attributable to salary and wage
increases explained above.
Highways & Streets
• Public Works Road Maintenance. Approximately $350,000 is appropriated for
additional maintenance equipment.
• Mass Transit Agency. Increased appropriations of approximately $1.3 million are
attributable to an increase in the cost of insurance and bus driver contracts.
Culture & Recreation
• Parks and Recreation Department. Eight positions to provide maintenance and
recreation are being added for new locations that will be serving the public, including
Ka`u District Gym & Shelter and `O`oma shoreline.
• The majority of other changes in culture and recreation are attributable to salary and
wage increases explained above.
Sanitation & Waste Removal
• Vehicle Disposal Fund. An increased appropriation of approximately $1 million will
provide additional funding for environmental cleanup.
FC-170 Page 3 May 1, 2014
• Solid Waste Fund. The appropriation for landfill tonnage costs has increased by about
$1.7 million because of increased operations costs.
Debt Services
• Transfer to Debt Service. As the result of refinancing old bond issues, there is a
reduction of debt service cost of$1.5 million for the upcoming year.
Pension & Retirement
• Retirement Benefits. Contributions to the employee retirement system will increase by
approximately $4.3 million, or 12.2%, as the result of new salary and wage costs and rate
increases established by the state legislature.
Health Fund
• Health Benefits. Contributions to the state employee health system will increase by
$1.9 million, which includes an increase of$1 million for future post-employment health
benefits.
Miscellaneous
• Provision for Compensation Adjustment. This provision contains the estimated cost of
salary and wages pursuant to contract negotiations that have not been fully approved, and
increased by about $2 million. The $5.8 million appropriation is related to pending
increases for Unit 11 Fire employees.
A summary of estimated FY 2014-15 revenues and expenditures are shown below:
REVENUES
FY 2013-14 FY 2014-15 FY 15-FY 14 $ FY 15-FY 14
Account Description Budget Estimate Variance % Variance _
General Fund Revenues
Taxes
Real Property Taxes 219,400,000 232,400,000 13,000,000 5.93
Public Svc Co Tax 10,145,000 10,340,000 195,000 1.92
TTL Taxes 229,545,000 242,740,000 13,195,000 5.75
Licenses&Permits
Bus. Lic & Permits 4,272,668 4,712,505 439,837 10.29
Non-Bus. Lic& Permits 3,355,500 3,673,300 317,800 9.47
TTL Lics & Permits 7,628,168 8,385,805 757,637 9.93
Intergovernmental Rev.
Federal Grants 3,044,785 3,1 13,269 68,484 2.25
Federal Grants 814,050 715,050 (99,000) (12.16)
Federal Grants 382,500 641,067 258,567 67.60
State Grants 34,843,325 34,931,433 88,108 0.25
State Grants 3,256,773 1,584,972 (1,671,801) (51.33)
FC-170 Page 4 May 1, 2014
Federal Grants 3,149,917 1,017,912 (2,132,005) (67.68)
Federal Grants - 2,050,000 2,050,000 -
TTL Intergovernmental Rev 45,491,350 44,053,703 (1,437,647) (3.16)
Charges for Services
General Government 5,780,561 5,609,460 (171,101) (2.96)
Public Safety 112,123 111,368 (755) (0.67)
Highways& Streets 1,476,500 1,212,000 (264,500) (17.91)
Parks & Recreation 1,341,900 1,442,500 100,600 7.50
TTL Charges for Services 8,711,084 8,375,328 (335,756) (3.85)
TTL Fines&Forfeitures 1,373,500 1,399,500 26,000 1.89
Miscellaneous Revenues
Interest& Dividends 200,000 400,000 200,000 100.00
Rents 218,040 177,860 (40,180) (18.43)
Disp of Fixed Assets 31,000 31,000 - -
Contrib/Dons FR Prvt Src 530,000 538,000 8,000 1.51
Reimbursements& Transfers 25,493,878 29,324,822 3,830,944 15.03
Sundry& Misc 330,500 279,100 (51,400) (15.55)
TTL Miscellaneous Revenues 26,803,418 30,750,782 3,947,364 14.73
TTL General Fund Revenues 319,552,250 335,705,118 16,152,598 5.05
Other Fund Revenues
Highway Fund 34,523,878 35,596,983 1,073,105 3.11
Sewer Fund 9,757,204 10,743,202 985,998 10.1 l
Cemetery Fund 10,000 10,000 - -
Bikeway Fund 171,000 171,000 - -
Beautification Fund 182,670 451,812 269,142 147.34
Vehicle Disposal Fund 2,475,035 3,655,000 1,179,965 47.67
Solid Waste Fund 25,367,511 26,514,911 1,147,400 4.52
Golf Course Fund 1,206,445 1,232,664 26,219 2.17
Geothermal Rel &Comm
Rev Fund 1,700,000 1,700,000 - -
Housing Fund 17,410,440 17,275,771 (134,669) (0.77)
Kulaimano Elderly Hsg Fund 314,112 325,759 11,647 3.71
Ouli Ekahi Hsg Fund 335,550 367,425 31,875 9.50
Geothermal Asset Fund 300,000 50,000 (250,000) (83.33)
FC-170 Page 5 May 1, 2014
TTL Other Funds 93,753,845 98,094,527 4,340,682 4.63
TTL Funds 413,306,365 433,799,645 20,493,280 4.96
Less: Interfund Transfers 18,987,841 21,191,171 2,203,329 11.60
Estimated (e)
Net Revenues(All Funds) 394,318,524 412,608,475 18,289,951 4.64
EXPENDITURES
FY 2013-14 FY 2014-15 FY 15-FY 14 FY 15 -FY 14
Account Description Budget Estimate $ Variance %Variance
General Fund
Expenditures
Legislative 4,262,904 4,245,753 (17,151) (0.40)
Elections 904,598 821,905 (82,693) (9.14)
Legislative Auditor 793,955 753,318 (40,637) (5.12)
Executive 1,492,014 1,580,511 88,497 5.93
Information Tech 2,441,339 2,727,186 285,847 11.71
Finance 11,062,763 11,580,494 517,731 4.68
Law/Corp Counsel 2,677,876 2,654,373 (23,503) (0.88)
Planning 3,274,512 3,866,026 591,514 18.06
Human Resources 1,833,258 1,915,916 82,658 4.51
Research &
Development 3,520,714 3,692,461 171,747 4.88
Building 5,078,894 4,929,426 (149,468) (2.94)
Public Works Admin 1,390,004 1,480,676 90,672 6.52
Automotive 5,948,589 5,694,196 (254,393) (4.28)
Engineering 1,33 5,168 1,416,892 81,724 6.12
Police 55,084,045 57,544,831 2,460,786 4.47
Fire 38,642,008 38,744,008 102,000 0.26
Protective Inspection 2,150,702 2,474,596 323,894 15.06
Flood Control 330,000 330,000 - -
FC-170 Page 6 May 1, 2014
Animal Control 1,982,500 1,982,500 - -
Civil Defense 959,724 1,102,048 142,324 14.83
Liquor Control 1,844,268 1,978,505 134,237 7.28
Prosecuting Attorney 8,660,019 8,829,940 169,921 1.96
Mass Transit 3,461,171 4,389,126 927,955 26.81
County
Physicians/Health 133,825 133,825 - -
Aging/Health &
Welfare 2,636,208 2,566,353 (69,855) (2.65)
Cemeteries 360,498 374,313 13,815 3.83
Schools 58,500 58,500 - -
Non-Profit Grants in
Aid 1,500,000 1,500,000 - -
Elderly Activities 3,669,501 3,854,422 184,921 5.04
Parks & Recreation 18,658,588 19,774,533 1,115,945 5.98
Environmental Mgmt 1,069,283 1,053,902 (15,381) (1.44)
Transfers to Other
Funds 24,424,341 26,920,170 2,495,829 10.22
Transfer to Debt Svc 39,898,751 38,338,413 (1,560,338) (3.91)
Pensions& Contribs 61,262,000 66,796,000 5,534,000 9.03
Miscellaneous 6,750,000 9,600,000 2,850,000 42.22
Block Grants - - - -
Home Grants - - - -
Housing Grants - - - -
Housing Grants - - - -
TTL General Fund
Expenditures 319,552,520 335,705,118 16,152,598 5.05
FC-170 Page 7 May 1, 2014
Other Fund
Expenditures
Highway Fund 34,523,878 35,596,983 1,073,105 3.11
Sewer Fund 9,757,204 10,743,202 985,998 10.11
Cemetery Fund 10,000 10,000 - -
Bikeway Fund 171,000 171,000 - -
Beautification Fund 182,670 451,812 269,142 147.34
Vehicle Disposal Fund 2,475,035 3,655,000 1,179,965 47.67
Solid Waste Fund 25,367,511 26,514,911 1,147,400 4.52
Golf Course Fund 1,206,445 1,232,664 26,219 2.17
Geothermal Rel &
Comm Rev Fund 1,700,000 1,700,000 - -
Housing Fund 17,410,440 17,275,771 (134,669) (0.77)
Kulaimano Elderly Hsg
Fund 314,112 325,759 11,647 3.71
Ouli Ekahi Hsg Fund 335,550 367,425 31,875 9.50
Geothermal Asset Fund 300,000 50,000 (250,000) (83.33)
TTL Other Fund
Expenditures 93,753,845 98,094,527 4,340,682 4.63
Total Funds 413,306,365 433,799,645 20,493,280 4.96
Less: Inter-Fund
Transfers 18,987,841 21,191,170 2,203,329 11.60
Estimated(e)
Net Expenditures 394,318,524 412,608,475 18,289,951 4.64
Your Committee originally reviewed the Operating Budget in conjunction with departmental
program reviews on April 2 through April 4, 2014. Pursuant to Section 10-4, Hawai`i County
Charter, the Council also conducted a public hearing on the proposed FY 2014-15 Operating and
Capital Budgets in Kona on April 15, 2014, which was videoconferenced to the Hilo, Pahoa,
Kohala, and Waimea Council offices.
FC-170 Page 8 May 1, 2014
During the budget review, Mayor William P. Kenoi reviewed his proposed budget for the
Council. He reminded Council Members that for four consecutive years efforts were made to
reduce the size and cost of government in a strategic and responsible manner and to maintain
public services. This joint-effort was successful all four years and is unprecedented in the
history of County government. However, the 2014-2015 budget will be the first budget to
exceed the budget since taking office in 2008. The increase is attributed entirely to salary, wage
and benefit increases, both at collective bargaining and negotiated agreements and awards at
arbitration. Mayor Kenoi commented that despite the reduction in government, it has been a
priority to maintain core County services such as public safety, infrastructure and transportation,
and to create healthy and safe communities. Furthermore, in the coming year, the County will
realize a modest recovery in property tax evaluations and property tax revenues.
Upon review of the Mayor's amended budget submittal on May 5, 2014, the Council may
propose amendments as necessary.
Your Committee on Finance is in accordance with the purpose and intent of Bill No. 208, and
recommends its passage on first reading.
sc
AYES NOES ABS EX Respectfully submitted,
EOFF X
FORD _ x COMMITTEE ON FINANCE
ILAGAN X
KANUHA X
KERN X /41/
ONISHI X
POINDEXTER X VALERIE T. POINDEXTER, CHAIR
WILLE X FC REPORT NO.: 170
YOSHIMOTO x ADOPTED: MAY 11-2r)14