HomeMy WebLinkAbout2019-06-18 Letter to Aaron Chung re Bill 30 (Draft 4) Fiscal Year 2019-20 Operating BudgetHarry Kim
Mayor
CCouutu Patinilt`i
Wil Okabe
Managing Director
Barbara J. Kossow
Deputy Managing Director
Mffirt of fir Atavor
25 Aupuni Street, Suite 2603 • Hilo, Hawai'i 96720 • (808) 961-8211 • Fax (808) 961-6553
KONA: 74-5044 Ane Keohokalole Hwy., Bldg C • Kailua-Kona, Hawaii 96740
(808) 323-4444 • Fax (808) 323-4440
June 18, 2019
Aaron Chung, Council Chair, and
Members of the Hawai`i County Council
County of Hawai`i
25 Aupuni Street
Hilo, Hawai`i 96720
RE: Bill 30 (Draft 4), Fiscal Year 2019-20 Operating Budget
COUNTY CLERIC
COUNTY OF HAWAII
RECEIVED
Time 2 0 c By "
I have returned Bill 30, Draft 4, the Operating Budget for Fiscal Year 2019-20, to take effect
without my signature. The major points of concern which led to the return of the bill without my
signature are as follows.
Fiscal Responsibility
The amendments adopted by the County Council increased the budget by $1,589,618, which
does include two grants that were added to the budget. Fund Balance was increased by
approximately $1 million, of which $630,000 went to Council Contingency Funds. While the
fund balance increase is still within our estimates, we need to be conservative in our spending. It
should be pointed out that the expected fund balance is primarily the result of departments being
urged to cut spending where possible because of the anticipated fiscal year 2019-20 collective
bargaining and other needs. As noted in the budget message, the provision for compensation
adjustment was our largest increase between March and May. As we enter fiscal year 2019-20,
we have yet to complete collective bargaining/arbitration for five of our eight bargaining units.
While we have budgeted the expected impact of this in our Provision for Compensation
Adjustment, the actual outcome is unknown and our estimate may not be adequate. In addition,
the fourth and final Employees' Retirement System rate increase will be effective in fiscal year
2020-21. As you know that increase will be another sizable one.
Impact on Operations
One of the amendments adopted was to transfer the overtime in the General Fund to the Finance .
Department. While this amendment did not grow the budget, the resources necessary to enact
this provision are too great. It is understood that this amendment was to have better oversight
and transparency on this issue, but in reality it does neither. Our Administration does share your
County of Hawai`i is an Equal Opportunity Provider and Employer.
Members of the Hawai`i County Council
June 18, 2019
Page 2
concern on overtime. We are committed to controlling the overtime and are working with
departments on tighter controls. Like you we want to make things better and this will be one of
our priorities for the coming year.
Conclusion
It is fully recognized that the County Council has the power to amend the budget as presented by
the administration. However, I cannot sign the budget with approval because of the stated
reasons.
Aloha,
Harry Kim
Mayor
cc: Deanna Sako, Finance Director
Ted Schrey, Budget Administrator