REP FC 131 2018/08/07 (2016-2018)

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REPORT OF THE COMMITTEE ON FINANCE DATE: August 7, 2018 Re: Comm. No. 997/Bill No. 169 PLACE: Council Chambers Hilo, Hawai`i TIME: 9:15 a.m. • Council Chair and Members Hawai`i County Council Hilo, Hawai`i 96720 Your Committee on Finance,to which was referred Bill No. 169, reports as follows: Bill No. 169, transmitted by Finance Director Deanna S. Sako, via Communication No. 997 dated July 20, 2018, amends Ordinance No. 18-68, as amended, the Operating Budget for the County of Hawai`i for the fiscal year ending June 30, 2019. This bill establishes General Excise Tax Surcharge revenue account and appropriates $10 million into this account as anticipated revenue, and establishes and applies these funds to two new General Excise Tax Surcharge Mass Transit expenditure accounts, as follows: Other Current Expense($4,412,145) and Equipment ($3,587,855). The remaining $2 million would be appropriated to the Transfer to Capital Projects Fund expenditure account to be used for bus shelters and road improvement projects, including Oneo Land and the Ane Keohokalole extension. Council Member Herbert M. "Tim" Richards, III, stated the recent approval of the 2.5 percent surcharge was to help balance the budget. He recalls the discussion was that the rough estimate of the shortfall in the budget was about $5 million and that the estimated income stream would be $10 million. From that $10 million, $5 million would balance the budget and the other$5 million would be held in a special Council fund for a period of time until the situation with the volcano is known. Mr. Richards feels the money would not be spent nor should it be spent at this point in time. Mr. Richards is supportive of taking $5 million to put into the budget to make sure there is a balanced budget but cannot support the bill as written. He previously agreed to the quarter percent and the $5.million being held in reserve. Deanna Sako, Director of Finance, feels that the Finance Department has been consistent throughout this process. When asked what the general excise tax revenue would be spent on, the response was always consistent, it would be spent on starting to implement the Mass Transit master plan. The funds would go towards more buses, bus stops and shelters, expansion of various programs, increasing routes, and improving the fare collection system. Council Member Karen Eoff recalls that the general excise tax surcharge can only be used for Mass Transit, so it is limited for now. Ms. Eoff stated, from what was previously discussed, Finance then created the General Excise surcharge account so the funds can be better tracked. FC Report No. 131