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HomeMy WebLinkAboutREP FC 112 2018/04/24 (2016-2018) REPORT OF THE COMMITTEE ON FINANCE DATE: April 24, 2018 Re: Comm. No. 840/Bill 127 PLACE: Council Chambers Kailua-Kona, Hawai`i TIME: 10:35 a.m. Council Chair and Members Hawai`i County Council Hilo, Hawai`i 96720 Your Committee on Finance, to which was referred Bill 127, reports as follows: Bill No. 127, transmitted by Finance Director Deanna S. Sako, via Communication No. 840 dated March 21, 2018, adopts a pay plan for persons employed by the County other than those whose pay is otherwise provided for, designates payroll periods, pay days, prescribes requirements with respect to official fidelity bonds, and repeals Ordinance No. 17-36 and all amendments thereto, said ordinance to be known as the Salary Ordinance. This bill establishes rates of compensation for appointed employees in the Legislative Branch and the Office of Housing and Community Development, the County Physician, and Student Helpers and Senior Community Services Aids for various County agencies. April 10, 2018 Council Member Eileen O'Hara referred to her Communication No. 840.1 and moved to amend Bill 127 with the contents of Communication 840.1. Ms. O'Hara stated that the Council has the ability to establish a pay scale for a very limited number of employees that are not covered by any of the bargaining units or the salary commission. She explained there are a number of employees that have no step up and, as presently structured, there are also people at the top level in their grade and that this amendment would allow for a future step by adding a step-up to the categories that represent Council Aide and Legislative Assistant positions. Council Member Valerie T. Poindexter stated that she does not support this bill because additional steps have previously been added. She mentioned that people come into the position knowing what the steps are. Council Member Dru Mamo Kanuha commented that this bill is not a guarantee that an individual will get a pay increase, and articulated that the only person to authorize a pay increase is the chairperson. Council Member Aaron Chung is in support of the bill at this time, but also said he needs time to digest the effects it will have. FC Report No. 112 FC-112 Page 2 April 24, 2018 Council Member Karen Eoff asked whether the potential step increases would change our overall budget. William Brilhante, Director of Human Resources, explained that in order to effectuate and address the salaries of employees who do not fall under the Collective Bargaining Agreement or the Salary Commission, this bill is provided to the Council on an annual basis. He noted that historically, Human Resources take the numbers from the previous year and presents them to the Council, and that it is incumbent on the Council to make a determination. He stated further that the Council Chair is the primary authority to set the pay for these individuals and this ordinance sets parameters as to what step or category the individual falls into. Deanna Sako, Director of Finance,,commented that it depends on what the department gives to Finance Department; if no one is placed on the higher step, then the budget will not change, so it depends on what is done internally and what is submitted to the department. If a Council Member feels someone should be moved to the next step, they would talk to the Chair and amend the budget. Ms. Sako noticed that whatever the department submitted will be in the March budget, but should a department want to make changes to the May budget, they would need to consult with Council Chair. Finance Department will not automatically change anything even if this amendment were to pass. Ms. Poindexter noted that since 2018 is an election year, Council Members will either remain or change in December. Jon Henricks, Deputy County Clerk commented that it is not uncommon, going into an election year, that departments would budget at the highest levels and that if any amendment to the Salary Ordinance passes, discussions will need to take place with the accountant, Council Chair, Clerk, and Finance Department to come up with a budget plan that is realistic. Council Member Jennifer Ruggles stated the staff are the nuts and bolts and face of the Council offices and commented that she also needs time to digest this amendment and understands the concerns of other Council Members. Mr. Brilhante stated that there needs to be an ordinance before July 1, 2018. Jennifer Sakamoto, Human Resources Manager, also responded that this is our authority to pay all the positions that are listed on the ordinance, and if the Council does not approve something, Human Resources will not have the ability to pay all the other employees that are affected by this bill. Mr. Brilhante referred the Council to Section 8 of the proposed ordinance language, which explains the time references as to the deadlines. Mr. Richards inquired with the County Clerk on the timeline working backwards as to when this bill needs to move forward. Mr. Henricks stated, June 6, 2018, for second and final reading would be the best estimate to allow for a possible reconsideration, veto by the Mayor and a veto override. Therefore, he noted the bill could be held in Committee up to May 8, 2018. Ms. O'Hara made a motion, seconded by Mr. Richards, to postpone this amendment until April 24, 2018. Mr. Chung stated he is against the postponement and is now ready to vote "yes." April 24, 2018 Ms. O'Hara confirmed Communication 840.1 is being discussed. This proposed amendment applies to a small group of employees who are not union employees or not under the Salary Commission. Ms. O'Hara stated that the amendment would add an extra step for CA-1, which is the Council Aide; and CLA-1, which is the Council Legislative Assistant, and the reason being FC-112 Page 3 April 24, 2018 once they reach the highest pay step, no matter how many years of service, they are unable to go any further. Ms. Poindexter restated her opposition to this amendment because it is not the right time to increase the budget. She also stated that there are other things that need to be taken into consideration along with the increases, such as unemployment taxes that would go up and other things that would be affected by a higher increase in pay. Ms. Lee Loy asked for clarification of Ms. O'Hara's statement of vacant positions. It was asked of Deanna Sako, Finance Director, for the positions that are budgeted but yet not filled, where do the funds go and are they still available? Ms. Sako stated that the money is available to the department for the entire fiscal year, but at the end of the fiscal year, if funds are unspent, then funds go back into the fund balance, which is budgeted as a revenue item for the following year to keep tax rates down. Ms. Lee Loy questioned whether there are minimum qualifiers for positions within the Salary Ordinance plan. Mr. Brilhante responded that because they are appointed positions, they do not have minimum qualifications. It is incumbent upon the Council person to thoroughly interview the applicant. Your Committee on Finance is in accord with the purpose and intent of Bill 127, as amended to Draft 2, and recommends its passage on first reading. dmm AYES NOES ABS EX Respectfully submitted, CHUNG X • DAVID x COMMITTEE ON FINANCE EOFF X KANUHA X LEE LOY X -411-• O'HARA X r� ' POINDEXTER x MAILE DAVID, CHAIR RICHARDS X FC REPORT NO.: 112 RUGGLES x ADOPTED: NAY 0 92618..