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HomeMy WebLinkAboutMIN CHC 1989-07-20 \\ Minutes o! 1 � HAWAII COUNTY CHARTER COMMISSION July 20, 1989 CALL TO ORDER I . Chairman Bethea called the meeting to order at approximately 1: 20 p.m. at the State Building, 75 Aupuni , Conference Rooms B & C, Hilo, Hawaii. II . ROLL CALL Members Robert E. Bethea, Chairman Present: Sherwood Greenwell , Vice Chairman David Fuertes James O. Juvik Akira T. Omonaka Patricia M. Poppe Attorney: Christopher Yuen Secretary:R. Marie Jacobs Members Pamela F. Cushnie Absent: Francine Duncan H. Peter L'Orange Aileen Lum Steven T. Nishikawa Others Ralph L. Yost Present: Dick Miner Milton Papineau Sam Page, West Hawaii Committee Don Jacobs Helene Hale, Councilperson Merle Lai , Councilperson Harry Takahashi Dave Harada-Stone Gordon Pang Russell Kokubun, Council Chair Barry Mizuno Hugh Clark III. APPROVE MINUTES OF 06/07/89 The minutes were unanimously approved upon motion made by Sherwood Greenwell and seconded by 452 Patricia Poppe. All were in favor. Motion carried. IV. FINANCIAL REPORT A. Akira Omonaka submitted the figures expended by the commission through 6/30/89; it showed $14 , 706. 28 expenditures and encumbrances. The expenditures submitted by the Charter secretary showed a figure $5 , 000+ less , which will be justified at the next meeting. B. Approximately $8 , 000 of budgeted funds were not used and will , therefore, lapse. V. COUNCIL PRESENTATION By Helene Hale, Russell Kokubun and Merle Lai A. Welcome. Bethea: acknowledged receipt of Chairman Kokubun' s letter of 7/20/89 (Exhibit A hereto) . B. General . Kokubun: stated that the Charter we now use which became effective on January 2 , 1969 lays the basic framework of County operations. The first Charter review took place in 1979. 1 He proposes revisions and changes to strengthen the Charter ' s weaknesses. 1. Kokubun: from 1969 to 1989 , annual expenditures have increased from $13 . 5 million to $39 . 2 million dollars in 1979 and increased again in 1989 to $94 million dollars. C. Suggested Changes: 1 . Budget a) Kokubun: Section 10-2: Council , 1. Change deadline receives the budgets by May 1st of each for submitting year. The Council recommends changing the budget to Council deadline to March 1st to allow Council to March 1st more review time and time to present the budget to the public for feedback. b) Greenwell: the present budget review date doesn' t give Council time to review, have public hearing or veto. 453 c) Kokubun: at present a special Council meeting would have to be called to over- ride the mayor ' s veto. d) Hale: County should have the budget prepared and prioritized well before the close of the legislative session. Cuts or additions could be made according to prioities . e) Juvik: asked if Council would consider a biennial budget . Kokubun: reminded everyone how closely we are tied to the Legislature, but said that might be workable. Hale: Council does project for 2-3 years and has a list of priorities. f) Omonaka: questioned whether it would be advisable for the County' s fiscal year to start later. Hale/Greenwell: need to keep fiscal year same as state' s. g) Kokubun: other counties have a March 1st deadline and adjust their budgets after Legislature. h) Bethea: County doesn' t know amount of funds available until after Legislature. 2. Budget: approval a) Hale: mayor can certify additional funds and Council can appropriate them. b) Yuen: mayor can transfer operating funds within a department; if he transfers from department to department , he has to have Council approval (Sec. 10-9) . Sec. 10-11 , which requires that expenditures be made from duly appropriated funds , does not define what is duly appropriated. c) Bethea: Mr. Carpenter said Council should not be able to make changes in the operating budget after it ' s approved. Kokubun: Council does not have to agree with what mayor adopts; has Charter 454 authority to amend and may change budget with a 2/3 ' s vote. d) Kokubun: check language that talks 2. Reword..budget about budget being approved late; in that language, so it's case, would mayor ' s or Council ' s budget be understood whether in effect? Council or mayor budget is used, if e) Bethea: budget process too detailed budget submitted and complicated. late. f) Kokubun: departments should not be 3. Don't allow able to transfer funds to new accounts departments to which were set up after the budget is transfer funds to approved; because then it seems Council set up new accounts has no authority as a policymaking body. after budget is approved. g) Bethea: commission could set limit of amounts may could transfer within depart- ments without going to Council . h) Hale: would like to have a program budget where money given for that Parti- ' cular project only and departments have the freedom to spend money on anything for that project. 1 3 . Miscellaneous. a) Kokubun/Lai : Change the Charter language gender to make it neutral . 4. Change gender in Charter. b) Greenwell : consider city-manager type of government instead of mayor type. Kokubun: discussed but Council had no consensus. Hale: should have profes- sional manager , responsible to and elected by Council (1: 2: 10) ; manager would also select department heads (1 : 2: 5) . Bethea: suggested Council might approve qualifi- cations and not individual department heads (2: 1 :45) if that alternative were changed in the Charter. Omonaka: feels people should have right to say who manages County' s affairs . Omonaka: indicated a politically selected mayor is closer to the people. Bethea,: wondered whether a professional manager might in turn be managed by amateurs. Greenwell/Juvik: discussed how much politics would exist with city manager 455 and requiring qualifications for top ' positions . c) Juvik: questioned whether Council would prefer at-large or single-member district elections. Kokubun: would prefer that the public decide the issue, although being elected islandwide may give more accountability (2: 1 : 32) . Hale: may 5. Clean up need some elected at-large and some by , language where districts to maintain balance (2: 1: 27) state-County language conflict. d) Kokubun: Other proposed amendments (i . e. conflicting state-Charter provi- sions; Charter addendum referenging state laws applicable to the County; fund transfers) were referred to the Corpora- tion Counsel for review, but will be brought to the Charter Commission' s attention at a later date. e) Omonaka: asked Kokubun whether the Charter seems to function well and Kokubun answered that it did (2: 1 : 32) ; Hale believes it should be changed a city- manager type government. f) Juvik: County owns water system. Suggested also that the electric company i might be a municipally-owned utility (2: 1: 35) . Hale: the electric company should be owned by the people; the Public Utilities Commission does not do an adequate job of regulating the electric company. 6. Allow Council g) Bethea: believes County should have a to contract own share in geothermal royalties some day. experts (i.e. financial) . h) Hale: in 1968 Big Island followed Honolulu' s charter. Feels today that corporation counsel should be elected position, same as prosecutor (2: 1 :40) . 4 . Contracts a) Kokubun: Council should be allowed to contract experts for consultant services , 456 said contracts to be "limited to areas 7. Give mayor and regarding legislative prerogatives and Council equal formulation of public policy. " authority/more authority to b) Kokubun: Council ' s consultant approve contracts. services would not always be used against the administration. c) Kokubun: before Council can execute a contract , a resolution expressing the Council ' s need/desire must be adopted. d) Kokubun: Charter says mayor has total capacity to write contracts; this was confirmed by Corporation Counsel . There is a conflict where the Charter says administrative rules and regulations need to be approved by the Council also. Corporation Counsel has given an opinion that this conflicts with state law and state law prevails . e) Greenwell/Lai: Council needs the opportunity to review contracts. Hale: wants Council to have the final approval of contracts. Juvik: suggests both Council and mayor might sign contracts equally. f) Kokubun: bond counsel contract is reviewed by Council. 5 . H.R.A. NOTE: New Rules a) Kokubun: That the Hawaii Redevelop- , of Procedure ment Agency not be "incorporated" into the adopted. Charter. b) Bethea: H.R.A. sent a letter to the Charter Commission stating its functions , but did not request a change in its Charter status . D. General Comments 1. Bethea: commission will be reviewing Charter, provision by provision. 457 2. Hale: will submit own ideas later (see Exhibit B hereto) (1 : 2: 37) . VI. COUNSEL' S REPORT A. A motion was made by Mr. Greenwell to adopt the recently revised Rules of Procedure; the motion was seconded by Dr. Juvik. 1. Omonaka questioned (1) the wording of a draft copy of the Rules , page 5 , Sec. XIII , C, whether he was bound to support the decision of the majority of the commission; Bethea: rules don' t require members to support majority opinion after a vote is taken. and (2) page 3 , Sec. VIII , whether a conflict of interest can exist when voting; Yuen: says you can declare a potential conflict of interest. 2 . After discussion, all voted unaminously to accept the Rules. VII . GENERAL A. Questionnaire form: Mr. Bethea said Ms. Lum has submitted the first draft. B. Charter changes: Mr. Bethea said commission will eventually have to decide whether major or minor changes should occur to the Charter. Discussion followed: 1 . It was the consensus that the public needs to be educated via the commission receiving the information and disseminating it in simplified form. 2. Juvik: suggested controversial and housekeeping amendments be separate. 3 . Greenwell: suggested public be given choices of voting for present form of government , or another form of government. 4 . Each discussed how he/she sees his/her role as Charter commission member and how each will use the input of Charter informational 458 meetings , experience and public input to decide which changes should be brought to the 1 public' s attention; and that the public will be informed in simplified terms of how these changes will affect them. It was unanimous that such changes will reflect a more efficient County government. VIII . SET NEXT MEETING The next two meetings have been scheduled: (1) August 9 , 1989 at 2:00 p.m. in the Liquor Conference Room; (2) August 24 , 1989 at 2:00 p.m. in the County Councilroom. IX. ADJOURNMENT Upon motion made by Mr. Fuertes and seconded by Ms. Poppe, the meeting was adjourned at approximately 4: 15 p.m. All were in favor. Respectfully submitted, 72e-,0(-/-*/ R. Marie Jacobs Secretary 1 459 IIPP"F .ate. RUSSELL S.KOKUBUN , o�� oFq�i9'. Chairman&Presiding Officer - v•_- &b/•� y i * lK r(:*1 •''�TF•6-,•‘;00 -.-- ' COUNTY COUNCIL County of Hawaii Hawaii County Building 25 Aupuni Street Hilo,Hawaii 96720 July 20 , 1989 Mr . Robert Bethea, Chairman and Members, Hawaii County Charter Commission 25 Aupuni St . Hilo, Hawaii 96720 Mr . Chairman and Members of the Second Charter Review Commission. Thank you for this opportunity to participate in the second ten-year review of the County Charter . The original Charter, which became effective on January 2, 1969, provided the basic framework by which our county government would organize and operate. This Charter provided for a mandatory review every ten years . In 1979, the First Charter Review Commission concluded its assignment when ten of thirteen proposed revisions were adopted by the electorate at a special election held on November 3, 1979 . That First Charter Review Commission mandated that another review be conducted in 1989 and every tenth year thereafter . Today, Mr . Chairman and members of the Second Charter Review Commission, you are charged with the awesome and challenging task of reviewing our Charter and determining what revision, if any, are warranted . Since the last charter review, changes have occurred that directly affect county government . Many challenges have tested this basic government structure created by the charter doctrine. These challenges have exposed certain strengths and weaknesses, and there is now an opportunity to address those areas which need I clarification. Since 1969, the year our initial charter went into effect, annual operating expenditures have grown from $13 . 5 million to $39 . 2 million in 1979 and to expenditures of $94 million recently adopted for 1989 . These figures are presented to illustrate the degree of growth being experienced by the County. Growth is not confined to monetary expenditures alone, and as you are well aware, that growth is reflected in the complexity' of government operations . 460 EXHIBIT A (3 pages) Mr . Robert Bethea, Chairman and Members, Hawaii County Charter Commission July 20, 1989 Page 2 Your county government has been and will continue to be dynamic and responsive. Our county charter must recognize that our society is in a constant state of evolution and as such, it must provide both the Legislative and Executive branches the flexibility and wherewithal to meet new responsibilities . The County Council stands ready to accept and meet its responsibilities, however, the Council has experienced its share of frustrations because of shortcomings in the Charter . We believe that the Charter still remains a sound document that can be made more effective by certain revisions . The following are a few of the suggested changes the Council would like to submit for your consideration. 1 . Section 10-2 provides that the mayor shall submit the operating budget, operating program, capital budget, capital program and budget message no later than May 1 of each year to the county council . Taking into consideration publication requirements of meetings and public hearings, the mayor ' s 10 days to review the adopted budget and the requirements imposed upon the council for consideration of any vetoed items, the council ends up with a two to three week period to review the budget requests. With an operating budget approaching $100 million, two to three weeks is not adequate for a meaningful review. The Council recommends that the mayor submit these budgets to the council no later than March 1 . 2 . The Council has also realized that the complexity of county government does not allow the council to afford a staff with all of the required expertise to address all issues. An alternative is to allow the council to contract for consultant services. Said contracts would be limited to areas regarding legislative prerogatives and formulation of public policy. 3 . The Council also asks that gender neutral language be considered by the revisor of the Charter . 4 . The Council also understands that the Hawaii Redevelopment Agency (HRA) has requested that they be formally recognized as a county agency in the charter. The Council has taken ;a position that the HRA is a creation of State statutes and said statutes recognize that the agency' s existence can be terminated. It is then the recommendation of the Council that your Commission deny the request of the Hawaii Redevelopment Agency to be incorporated into the Charter. 461 Mr . Robert Bethea, Chairman and Members, Hawaii County Charter Commission July 20 , 1989 Page 3 The foregoing recommendations were unanimously approved by the Council . Other proposed amendments were discussed and have been referred to the Corporation Counsel for language review and development . These will be submitted to you at a later date . Issues addressed include : 1 . The need for a review of provisions in State Statutes that conflict with Charter provisions such as the authority to contract and approval of administrative rules . 2 . The need for an addendum to the Charter serving as a reference to State laws that are applicable to County powers and provisions . 3 . The need to clarify the apparent conflict between the Mayor ' s ability to transfer funds within departments and the requirement that appropriations be made in accordance with expenditures duly made. As our Federal government seeks to rid itself of its huge budget deficit, state and local governments will certainly be expected to take a more participatory role . Your decisions on the charter will determine the framework by which our County will operate over the next ten years. Your decisions will establish the wherewithal by which the county government will be able to provide for the quality of life of our citizens . In closing Mr. Chairman and Commission members, we congratulate you for your willingness to accept the responsibilities of this review. We also ask that the communication lines be kept open so that we may work in unison in establishing a charter that will be responsive and effective over the next ten years . We have taken the liberty of drafting language in ramseyer format which is submitted for your perusal . ' ncerely, Russell S. Kokubun, Chairman Hawaii County Council 462 , HELENE H.HALE I,: `.' ;d S Councilwoman .)'. �MO P\ COUNTY COUNCIL County of Hawaii Hawaii County Building 25 Aupuni Street Hilo, Hawaii 96720 REPORT TO CHARTER COMMISSION • AUGUST 1, 1989 This paper is on my behalf only. It does not represent the position that the council as a whole has taken as given to you by our Chair, Russell Kokubun. We are in the process of refining some other areas and these will be also given to you by Russell . 111 The reason I am so interested in your work is the first Charter Commission was under my administration as Chairman and Executive Officer in 1963 and I feel that I do have some valuable experience to pass on to you. Having operated under both the Board of Supervisors and the Council/Mayor system as has my former colleague Sherwood Greenwell I want to urge you to consider combining the best of both systems. Now that we have had 20 years of charter government you have a real opportunity to think broadly about your responsibilities . The first charter commission' s recommendations were not passed, and it took three elections to sell charter government to our people . So don' t be afraid or discouraged if you proposed something that doesn' t pass . You may be planting seeds that will sprout later . I believe that your job should be to present the best possible form of government to our people. If you are going to just tinker with our charter, it was not necessary to have you do all the work you are doing. Certainly the general public will never realize how much you have given to this process, and if you are just going to propose what incumbent politicians think, it is a waste of your time . At any time the council can agree on items to be changed they have the power to put them on the ballot without a commission. 463 EXHIBIT B 0 (3 pages) Charter Commission Page 2 August 1, 1989 • I have the followingsuggestions for charter changes : g9 1 . Give the voters a definite choice between the present system and council/county manager system with most of the council members elected by districts . I would prefer seven members as the old Board of Supervisors but nine might be more palatable . I believe it should be non-partisan for party politics should not play a part in planning, zoning, roads, parks, sewers or any of the services the county provides but this is not a major problem. Counties do not have major tax or statutory decision powers. My suggestion is that the head of the county be a Mayor who runs at large for the council and is both chair of the council and performs ceremonial functions of the Mayor but that management of the County be in the hands of a county manager who must have majored in administration and have five years experience and appointed by the council and responsible to the council. The manager should serve at the pleasure of the council but once appointed should be dismissed only with cause. This can be refined. The mayor should be the one with the highest vote among at-large council candidates or should run island-wide for the position. The county manager would • appoint all department heads now appointed by the mayor with confirmation by the council. 2 . The corporation counsel should be elected . Under the Board of Supervisors our county attorney was both prosecutor and corporation counsel . There has been conflict in the past between the administration and council and the only way, in my opinion, to solve such problems is to have an independent attorney. The solution of having the council hire its own attorney could mean having major decisions decided by the court. This would not be necessary under a council/manager system. 3 . The Planning Commission should be advisory only and each of the council districts should have its own citizen advisory planning committee. In Honolulu they have elected neighborhood boards. I favor this system but perhaps we are not quite ready for the expense. However, if planning and zoning decisions were reviewed by a local committee I suggest the heads of the committees could form the Planning Commission which would act as an appeal board for contested local decisions. • 464 Charter Commission Page 3 August 1, 1989 411 4 . The legislative auditor ' s department should be the research arm of the county, appointed by the council . Their duties could be expanded to include the present research responsibilities of the Department of Research and Economic Development. 5 . I would prefer that Planning and Economic Development be combined, for I feel it is not good policy to encourage industries or development without the coordination with planning. 6 . I believe that 15% should be lowered to 10% for initiative and referendum petitions. I am in favor of encouraging more citizen participation. 7 . Code of Ethics . Under "Penalties" I believe the "or" in the third sentence should be changed to "and" . I certainly don' t expect you to agree with all my ideas but I present them to stimulate your discussion, and I would be happy to meet with you again to further explore their implications if you desire. I would like to challenge you to do a thorough job of examining our system of government and not to be afraid to make fundamental changes . • if , Helene H . Hale Councilwoman 465 411 • ".cq OF y'N, RUSSELL S.KOKUBUN C �...,: TAKASHI DOMINGO Chairman&Presiding Officer *, 4I�i„ i j*: HELENE H.HALE - LORRAINE R.INOUYE MERLE K LAI �'•.,�rq°��NA Yci: P.;= ROBERT H.MAKUAKANE Vice-Chairwoman ''...,4'app NP`s,`. HARRY S.RUDDLE , COUNTY COUNCIL STEPHEN K.SCHUTTE STEPHEN K.YAMASHIRO County of Hawaii Hawaii County Building 25 Aupuni Street Hilo,Hawaii 96720 August 3, 1989 Mr . Robert Bethea, Chairman and Commission Members Hawaii County Charter Review Commission Hilo Lagoon Centre, Room 235 Hilo, Hawaii 96720 Re : County Council Concerns Relating to Appropriations and Transfers Attached please find copies of a report from the Legislative Auditor relating to Appropriations and Transfers (Comm. 736 ) and excerpts from the Council meeting of August 2 , 1989, regarding said communication. These items are being referred to your Commission for your review and clarification. The Council has persistently expressed its concern regarding transfers of funds and whether such transfers constitute an appropriation duly made for the purpose of Section 10-11 . The Legislative Auditor ' s report is submitted for background information, as the Council did not unanimously agree with the i recommended Charter proposal . We ask that your Commission clarify the intent of these sections. Loose interpretation of the present transfer authority could render the budget approval process meaningless. Should you have any further questions, please feel free to call •n us . S.112:411 I _ sell S. Kokubu COUNCIL CHAIRMAN Enc. : Comm. 736 (13) 45 . 1 Council Minutes (13) • 0 \,,____" ,M OFN JOHN A. WAGNER o� ''. -1.'--- ;;''', 4 v��'• TOMIO FUJII CountyClerk o• . .\\A'/;:\'s Deputy CountyClerk ��� Yu y .4. �K / HARRY A. TAKAHASHI ysr4'°%.,--_-_,_=-41:,w:rgYyjP Legislative Auditor OFFICE OF THE COUNTY CLERK County of Hawaii Hawaii County Building 25 Aupuni Street Hilo,Hawaii 96720 July 25, 1989 • Mr . Russell S. Kokubun, Council Chairman and Members of the Council Hawaii County Council Hilo, Hawaii Subject : Charter Amendment - Appropriations and Transfers At its July 19, 1989 meeting, the Council expressed its concern to Section 10-9 relating to Appropriations : Reduction and Transfer and Section 10-11 relating to the definition of an "appropriation duly made. " The primary concern to Section 10-9 was in relation to the mayor ' s ability to unilaterally transfer funds within an agency or department . Interpretations by Corporation Counsel , the most recent in Communication 488, supports the mayor ' s ability to transfer unencumbered funds and finds that said transfers qualify as "appropriations duly made. " During your discussions, it was inferred that such interpretations render the budget approval procedure a nullity. We have researched both concerns and submit the following. g Black ' s law dictionary defines "appropriation" as public law as follows : "The act by which the legislative department of a government designates a particular ,fund, or sets apart a specified portion of the public revenue or of the money in the public treasury, to be applied to some general object of governmental expenditure, or to some individual purchase or expense. 465 . 2 . COMM. No. 70 6_--___. no: Council • OFFICE OF THE COUNTY CLERK HAWAII COUNTY BUILDING 25 AUPUtiI STREET • HILO.HAWAII 96720 Mr . Russell S . Kokubun, Council Chairman and Members of the Council Page 2 July 24, 1989 "An element of the definition of "appropriation" is that the money appropriated be out of the general revenues of the state. An "expenditure" is the expending, a laying out of money, disbursement , and is not the same as "appropriation" , the setting apart or assignment to a particular person or use. " A review of all four county charters provides the following regarding transfers within an agency or department . HAWAII COUNTY: "The mayor may at any time during the fiscal year transfer part or all of any unencumbered appropriation balance between classification of expenditures or programs within an agency or executive agency; and if at any time the mayor so requests in writing, the council, by resolution effective immediately upon adoption, may transfer , part or all of any unencumbered appropriation balance from one agency or executive agency to another. " MAUI COUNTY: "Upon written request of the mayor part or all of any unencumbered appropriation balance may be transferred within a department by resolution or from one department to another by ordinance. " CITY AND COUNTY OF HONOLULU: "The mayor may at anytime transfer an unencumbered appropriation balance or portion thereof within a division or between divisions in the same department, and a report of such transfers shall be made to the council . Transfers between departments shall be made only by the council by ordinance upon the recommendation of the mayor. " KAUAI COUNTY: "The mayor may at anytime transfer an unencumbered appropriation balance or portion thereof within a division or between divisions in the same department. Transfers between departments, boards or commissions shall be made only by the council by ordinance upon the recommendations of the mayor . " 465 .3 111 OFFICE OF THE COUNTY CLERK HAWAII COUNTY BUILDING 25 AUPUNI STREET HILO.HAWAII 96720 Mt. Russell S. Kokubun, Council Chairman and Members of the Council Page 3 July 24, 1989 The following table depicts the means by which transfers are made. • Within Department Department/Department Hawaii Mayor Resolution at request of mayor . Maui Resolution at Ordinance at request request of mayor. of mayor. City & County Mayor w/report to Ordinance at request Council . of mayor . Kauai Mayor Ordinance at request of mayor . Based upon the foregoing information Hawaii County Charter is the most lenient in transfer procedures . Maui County seems to be most restrictive. In order to clarify the definition of an appropriation and the procedures for the transfer of unencumbered appropriation balances, the following charter language amendments are proposed . Section 13-1, Article XIII, General Provisions, relating to Definitions be amended by adding a definition for "appropriation. " "Appropriation" means the act by which the legislative branch designates particular funds, or sets apart a specified portion of the county budget or of the money in the county treasury, to be applied to some general object of county expenditure, or to some individual purchase or expense. Said appropriation shall be in accordance with the provisions as established by this charter . Section 10-9, Article X, Financial Procedures, relating to Appropriations : Reduction and Transfer, be amended by the following: "Section 10-9 . Appropriations : Reduction and Transfer . If at any time during the fiscal year it appears probable to the mayor that the revenues available will be insufficient to meet the amount appropriated, he shall report to the county council 465 .4 411 411 OFFICE OF THE COUNTY CLERK • HAWAII COUNTY BUILDING 25 AUPUNI STREET HILO.HAWAII 96720 Mr . Russell S . Kokubun, Council Chairman and Members of the Council Page 4 July 24, 1989 without delay, indicating the estimated amount of the deficit. For that purpose the council may by ordinance reduce one or more appropriations ; but no appropriation required for debt service may be reduced and no appropriation may be reduced by more than the amount of the unencumbered balance thereof or below any amount required by .law to be appropriated. [The mayor may at any time during the fiscal year transfer part or all of any unencumbered appropriation balance between . classifications of expenditures or programs within an agency or executive agency. ] Upon written request of the mayor part or all of any unencumbered appropriation balance may be transferred within a department by resolution; and if at any time the mayor so requests in writing, the council by [resolution ] ordinance effective immediately upon adoption, may transfer, part or all of any unencumbered appropriation balance from one agency or executive agency to another . But no transfer shall be made from appropriations for debt service or for estimated cash deficit ; and no appropriation may be reduced below any amount required by law to be appropriated . " We hope that this report provides the Council with the suggested language it seeks in clarifying the issue of transfer and the question to the definition of when an appropriation is duly made thereby authorizing payments and obligations pursuant to Section 10-11. Please note in the case of transfers, the most stringent requirements have been incorporated. With the adoption of both amendments, transfers will require either a resolution or ordinance be approved by the council . Only upon the approval either by resolution or ordinance, as the case requires, will a duly made appropriation be established. A.\04-Cd/Z-VA Harry A. Takahashi Legislative Auditor 465 . 5 Hawaii County Council August 2,. .1989_ THE FOLLOWING IS A PORTION OF THE AUGUST 2, 1989, COUNCIL MEETING, REGARDING THE DISCUSSION THAT WAS HELD ON COMMUNICATION 736 : REFERRALS The Chair directed the Council to proceed to the next TO THE order of business, Referrals to the Council. COUNCIL: COMM. 736 : From Legislative Auditor Harry A. Takahashi dated July 25, 1989, submitting a report on IGR Committee Report 22, relating to Appropriations and Transfers, was read. CHR. KOKUBUN: As Councilmembers will remember at our last meeting, we did address the proposed amendments to the Charter and this was one issue that we asked for more research to be done on. We have the Legislative Auditor ' s report which has reponded to that request . I think it ' s very interesting to note the comparison on how the four different counties address transfers. It seems that in reviewing all the four alternatives, that the measures used here in Hawaii County are the most lax. It seems that the measures utilized by Maui County provide more input to the Council, decision making by the Council in regard to transfers, so I don' t believe there is anything that really prevents us from doing such. Mr . Takahashi also included on the last page, page 4, appropriate language that would make our provision similar to that of Maui . The major consideration there is that in Maui County whenever there is a transfer within a department, upon written request of the Mayor, part or all of any unencumbered appropriation balance may be transferred within a department by resolution or from one department to another by ordinance. I think that would help to clarify our budget process . I don' t think it ' s asking too much of the Administration as, obviously, it ' s being done in another county with a larger budget, they ' re able to accommodate that measure. So after discussion, the Chair ' s recommendation would be to approve of the recommended change or the change that ' s proposed on page 4 and forward that on to the Charter Review Commission. 465 . 6 1 Hawaii County Council August 2 , 1989 We have two Councilmembers who would like to discuss that . Mr . Yamashiro, followed by Mrs . Hale. MR. YAMASHIRO: I think, you know, that is a step toward clarifying the existing situation. But I think it leaves out the most important problem we have because I don' t have any problem with the transfers . My question is, does a transfer constitute an appropriation? Where we have problems is if we appropriate enough for, say, one position; under the current interpretation by the Corporation Counsel and past Corporation Counsels, the Mayor, by transfer, could enlarge that appropriation and hire 2, 3 , 4 , 5 positions . I think that is the thing that has to be answered, whether or not the transfer constitutes an appropriation of money that may be lawfully expended in accordance with the present Charter . The present Charter requires that no money may be expended except in accordance with appropriations duly made, and I still have strong questions whether or not a transfer constitutes an appropriation. I don' t think that administrative transfer amounts to a legislative determination that the money should be spent, although that is the interpretation that has been taken. I think what you look at, under the present situation in the aggregate with the change in interpretation on the Salary Ordinance, with the interpretation of transfers, our whole budget process presently is meaningless. Because we have no idea how many people are being hired, we have no idea of any reallocations, we have no idea of how the moneys are being spent within the department because the present interpretation--I 'm not saying Charter provisions and maybe the problem is not the Charter provision itself, but is within the Corporation Counsel ' s Office and the interpretations that have been made. We now see a complete change in interpretation from one week to another on another matter . But I think what we should have the Charter Review Commission do, first, is clarify what their intent is with regards to having the Council set the budget and set policy. Once that is determined, have them 465 . 7 2 Hawaii County Council August 2, 1989 clarify what constitutes an appropriation and then perhaps we don' t need a Charter change. But under present circumstances, the Council really is meaningless. The Council has no authority or oversight over the Administration, the only recourse we would have is probably to bring a lawsuit for wrongful expenditure of funds or hiring of personnel to try to correct the situation in accordance with that provision that says money may not be expended, except in accordance with appropriations . I don' t think anybody wants to resort to that but I think the constant interpretations that have been given to us are going to force us into that position some point in time in the future . We still have not received the opinions of the Corporation Counsel as to when Charter prevails and when Statutory language prevails or Hawaii Revised Statutes prevails, cause that also could render the zoning process invalid or void in the Council because, if the interpretation is correct that rules and regulations can be amended by the respective departments or agencies and become effective upon filing without review of the Council, the SMA line could be moved to the top of Mauna Kea and all of the island would then fall into the SMA, which would then be subject to the Planning Commission' s final review without any oversight by the Council . I don' t think these results were ever the interpretation of the framers of the Charter . It bastardizes the situation or the structure we have tremendously but, like I said, I don' t think it requires structural change, I think we should clarify the intent of the framers of the Charter as well as proceed with your change. I 'm not speaking against this proposed change. I 'm just saying I don' t think the change will address the situation totally. That we have to really define what is an appropriation and what is the Administration ' s authority to expand an appropriation. Does the fact that we create an account--you know, like we just did for Mr . Mizuno so that Planning could buy a FAX machine--does the fact that we create that account now authorize them to transfer money into that account and buy something else by transfer, not by appropriation by transfer? 465 .8 3 Hawaii County Council August 2, 1989 I think that the procedures that they are interpreting, that would be a legitimate expenditure of funds . Thank you. CHR. KOKUBUN: Thank you . Mr . Yamashiro, just a question though, you ' re not arguing that this wouldn' t help but, in a sense, clarify and give more definition to the budget process? MR. YAMASHIRO: It would--- CHR. KOKUBUN: You just have an additional request for clarity on the appropriation? MR. YAMASHIRO: Well, I 'm saying is if we ' re talking about transfers, are we saying that if we do it by resolution, it raises the transfer to the status of an appropriation because we ' re doing it or could we still have an appropriation? You know, we just transferred money to the salary and wage account, does that mean that they can hire anybody they want? Or if in the budget we say you want 5 firemen and they decide they don' t want 5 firemen, they want 5 clerk-stenographers in the Fire Department and they take the money out of the salary and wage account and hire 5 clerk-stenographers, you know under the present interpretation, that ' s possible . Or they could transfer money into another salary and wage account and make those hires. CHR. KOKUBUN: Right, in the present interpretation. But if, in fact, the Charter was amended to include language such as found in Maui ' s Charter, then the Administration would have to--- MR. YAMASHIRO: Come to usfor the transfer, but--- CHR. KOKUBUN: And to verify exactly what the purpose of that transfer was . CHR. YAMASHIRO: The purpose of the transfer . But once the money is in the account, does that constitute an appropriation which would let them expend it any way they want? Cause that is the problem we have right now. 465 . 9 4 Hawaii County Council August 2 , 1989 CHR. KOKUBUN: Thank you. Mrs . Hale, followed by Mrs . Inouye . MRS. HALE : I look at it a little bit differently, Mr . Chairman. I 'm glad to get this report from the Legislative Auditor about the different things but, frankly, I feel that we cannot tie the Administration' s hands too tightly. If we ' re going to have the Mayor system--and I 'm advocating another system--but if we ' re going to have the Mayor ' s system, I think the Mayor should be allowed to use money within a department. I prefer the language in the City and County of Honolulu, whereby we at least would know what ' s going on but the Mayor could make transfers within a department and then notify, and a report of such transfers shall be made to the Council . I prefer that language to the Maui County language. But I do also agree with Mr . Yamashiro, we aren' t clearing up the matter of when an appropriation is an appropriation. But I think, within departments, the Mayor should have some flexibility, but that ' s assuming that we have a Salary Ordinance; and without a Salary Ordinance that makes a difference. I was always assuming that we still had a Salary Ordinance and there should be some way that the Mayor is not allowed to hire additional personnel without coming to the Council for an appropriation because that is an increase in cost all the way down the line. Just buying a FAX machine is a one-time cost and I see no harm in that; but to be able to shift personnel around, I really think the whole problem needs more study. Perhaps, you would like to refer this back to the IGR Committee and let us consult with the Legislative Auditor and see if we could go into some language clarification for Mr. Yamashiro ' s concerns but also leave some flexibility for the Mayor. CHR. KOKUBUN: Thank you. I can appreciate those comments and I think my only additional comment would be that, obviously, it ' s functioning in Maui County. 465 . 10 5 Hawaii County Council August 2 , 1989 MRS. HALE : Not necessarily obviously it ' s functioning, we don' t know how well it ' s functioning. We only know what their wording says, we don' t know how well it ' s functioning . Nobody has done a study of whether it ' s functioning. CHR. KOKUBUN: Well, I think there is, yeah, I don' t know whether there needs to be a study but in my conversations with Councilmembers on Maui , there is a very good working relationship with the Mayor and this presents no problem to the relation between the Mayor and the legislative body. MRS . HALE : Well, they've had the same Mayor for a long time and they' ve been able to work out a relationship. We 've had a change in Mayors and different philosophies and, maybe, we have to anticipate that kind of change. CHR. KOKUBUN: Mrs. Inouye. MRS. INOUYE: Thank you, Mr . Chairman. I , too, want to say thanks to the LA' s Office, you know, for their in-depth report . I can understand and I support most in part of Mr . Yamashiro ' s concerns and comments but whether we ' re limiting the Administration or the Mayor ' s hand or what the future will be for that position, whether it be a Managing Director, I don ' t think that matters. Because I think what ' s good that is given to the Mayor, I think should also apply to the Managing Director because I think it will be worse if in the later ' s position because I think the Managing Director or his responsibilities, I think, would be carefully looked at, more scrutinizing would have to be done by the Council . But there needs to be clarification and I ' ll support the change, whether it be by policy or a Charter amendment, to recognize, you know, our dilemma or our problem. You know, I support wholeheartedly Steve' s concerns, you know about an interpretation. Thank you. One thing, Mr . Chairman, I think I do support and I believe I support that City and County' s ordinances, where it says the Mayor can make any transfers within 465 . 11 6 Hawaii County Council August 2 , 1989 • the department, but to report it to the Council, but that any transfers should be done by ordinances . Thank you. CHR. KOKUBUN: Thank you. Mr. Yamashiro, followed by Mr . Domingo. MR. YAMASHIRO: One last thing I would like to point out, also. You know, this Council took great pride in hammering out the budget in open session, making all decisions in the open. I think what we have here now is a situation where all these decisions that were made in the open can be undone by the stroke of the pen behind a door that nobody can look to. And that is the situation I don' t think, you know, the framers of our Charter, with their desire for openness and sunshine in government, really contemplated. And I think, as I said before, the interpretations that result in a situation that could result in those things happening has done a disservice to the people of this County. CHR. KOKUBUN: Again, Mr . Yamashiro, if this was adopted, then, certainly, all actions would be done in a public forum, so I would suggest and--- MR. YAMASHIRO: Not necessarily so, until we clarify the situation with what constitutes an appropriation. We may transfer into a fund, but if that fund--and we by resolution say we ' re transferring money from x-fund to x-fund for such purposes--but whether or not that limits it to that purpose or not, is the question we have. Or can they then take the money that ' s in that account and then expend it for another item within that account? You know, one of the things that I have long tried to do away with, and found it very impossible with the Administrations in the past, is if you look at the Miscellaneous Contractual Service accounts in our budgets and the Miscellaneous accounts in total , you will find a tremendous amount--- MRS. HALE: A couple of million dollars . MR. YAMASHIRO: Not a couple of million, probably 10 or 12, maybe 14 or 15 million dollars, maybe 20 percent of our budget is in there in a Miscellaenous account . So, if we transfer money into 465. 12 7 Hawaii County Council August 2 , 1989 a Miscellaneous account for the purpose of doing a certain thing, does that limit them from doing that? Cause they have other purposes within that account which moneys have already been "appropriated" and that ' s why I firmly believe the question of appropriation has to be answered . CHR. KOKUBUN: Thank you. Mr. Domingo, followed by Mrs . Hale. MR. DOMINGO: Thank you, Mr . Chairman. I can appreciate some of the concerns expressed about tying down the hands of the Administration. But I think what we ' re looking and what we ' re treading on is a fine line as to whether we are actually doing that or whether we ' re really trying to grab hold of the budget and make the budget a meaningful document . I think what ' s proposed by the Legislative Auditor ' s Office is appropriate in the correct direction in trying to address their concern. In addition to that, Councilman Yamashiro ' s suggested that or asked the question of when does a transfer constitute appropriations of some sort? I think we should have that cleared. If we can get that cleared and with the appropriate language, as recommended by the Legislative Auditor ' s Office, would be sufficient . CHR. KOKUBUN: Thank you. Mrs. Hale, followed by Mr . Schutte. MRS. HALE: I just like to say, unless we eliminate the Miscellaenous Contractual accounts in every department, we ' re still going to have the same problem. MR. YAMASHIRO: That ' s right. MRS . HALE : So, it depends on how detailed you want the budget to be and I don' t think that this body is in a position to anticipate for a whole year how much you ' re going to spend on supplies and how much you ' re going to spend on paper and to detail it that much. I ' d like to also warn this Council that a number of individuals here probably have ambitions one day to be Mayor . Don' t tie your hands so much that you ' re going to find it difficult to administer . I ' d just 465 . 13 8 Hawaii County Council August 2, 1989 like to say that, you know, this happened to me back in the early 1960 ' s, where the Board of Supervisors had to take control of the executive department and the hands were tied so much, that I had a very difficult time as Chairman and Executive Officer, so I 'm passing that on to you for your experience . CHR. KOKUBUN: Thank you. Mr . Schutte. MR. SCHUTTE: Thank you, Mr . Chairman. I don' t know if we should consider what Councilwoman Hale is saying or disregard any future plans that she may be contemplating. But in any case, I think what my colleague across the way has mentioned, I think we have to define appropriation. Because since you can move funds within a department and it ' s presently not required, we ' re what we re trying to do is to tie down the specific items so that we can adjust to the items as funds are being dispersed for whatever. I can go along with a resolution that would specifically make an appropriation for a specific designated item. I think all we want to address, and we shouldn't get away from it, is the intent of that resolution, and it is to keep track of the dollars that we have appropriated and allocated in the budget for the various items . If we ' re going to have a budget and we ' re going to take the time and effort to work on it, then I think we should, throughout the remainder of the year, try to enforce it to the extent, and make sure and certain that those items that we want to see take place and purchased, and projects taken care of and done should be done accordingly. That moneys that should not be spent for certain items should not be randomly spent . If we can control that by making all transfers done only by resolution, I think that ' s what we should look into. I would have no problem in moving in favor of using the resolution in which to make these transfers. But if we go by ordinance, I think it ' s very time-consuming because then, we 've got to go by two readings in that respect and the intent is just to keep track and scrutinize the various appropriations as they may be contemplated by the Administration. Thank you, Mr . Chairman. 465 . 14 9 Hawaii County Council August 2, 1989 CHR. KOKUBUN: Thank you. I think it was the policy, actually, of the Council to pass on recommended changes to the Charter Review Commission, if there was unanimity from the body. Otherwise, any Councilmember really can do his or her own presentation to the Charter Review. Maybe the recommendation at this time then, after hearing all the discussion, is that this communication be referred back to the Inter-Governmental Relations Committee for more clarity in regard to appropriation and the relationship of appropriation with expenditure . Is that the request, Mr. Yamashiro, primarily? Mrs . Hale moved to refer Comm. 736 to the Inter-Governmental Relations Committee. Seconded by Miss Lai . CHR. KOKUBUN: Even though I know you would vote for it if we brought it up for a vote now, you still would like clarification in that area? MR. YAMASHIRO: I don' t care where it goes, I just would like to see that it gets to the Charter Commission for their consideration and not be bogged down in our own procedural questions because I don' t think we ' re going to, you know, it ' s not for us to make the final decision. You know, we can hammer out the fine-tune language of what we want, but I think it more important we get the thought to them along with the proposed language and let them take it from there. CHR. KOKUBUN: Maybe along those lines then, why don' t we leave it at the Council level , have the Legislative Auditor provide more clarity to the. appropriation, I guess more than what is already included here, and then we can decide at that point in time whether to refer it on and, procedurally, we can deal with it at this level and not have it' go back and forth. Mrs . Hale . MRS. HALE : We have a motion. Even if it goes back to Committee, it would still come back to this ; Council by the next meeting, so I don ' t see it makes much difference. 465 . 15 10 Hawaii County Council August 2 , 1989 CHR. KOKUBUN: I don' t think there is a motion at this point . MISS LAI : There is a motion. MRS . HALE: There was a motion that was made and seconded. You suggested a motion to refer it to Committee, I made the motion and Miss Lai seconded it. CHR. KOKUBUN: Oh, okay. Mr. Schutte. MR. SCHUTTE: You know, Mr . Chairman, the Charter Commission is going to be running short of time and no matter how fine we tune this item when it goes to them, they' re going to tear it apart and come up with something maybe entirely different . I think what we want to get across to them is what we are thinking about and what we ' d like to have incorporated in there to be able to get a handle on these various transfers within the departments or from department to department. I think the main intent is to give them that thought now and say how are we going to do it . Is by resolution appropriate and, if so, what can you do in which to make it happen? Putting it back to committee is only going to prolong that. Run it through, pass it off, so we can see how we can fine-tune this and have it scrutinized by the Council so that it can' t just be moved within the department. CHR. KOKUBUN: Maintains the integrity of the budgeting process . MR. SCHUTTE : Yeah, that ' s all. I don' t think keeping it in Committee is going to help it . MRS. HALE : I withdraw my motion, Mr . Chairman. CHR. KOKUBUN: Fine, okay. Then clearly there is not unanimity as far as proposing any specific change to the Charter. All we would want to do then is to send a report over to the Charter Review Commission that outlines all the concerns that were raised here . Can we agree to that? MR. SCHUTTE : Yeah, just say define appropriation, and tell us how to move it, and do we move it by resolution? 465 . 16 11 Hawaii County Council August 2 , 1989 CHR. KOKUBUN: Okay. Mrs . Hale. MRS . HALE: Mr . Chairman, we don' t need unanimity to pass it on, you only need a majority vote. So, why don' t you put it to vote? CHR. KOKUBUN: Well, I think the policy, though, that was adopted, really, by the body in regard to proposed changes to the Charter was that we act as a body, if it were going to come from the body and, again, any Councilmember can make their own specific recommendation that they' d like. Then, the Chair would take it upon himself to work with the Legislative Auditor, incorporate all the comments that were made today and present that to the Charter Review Commission for their information and ask that, in their wisdom, they determine what is the best route for budget integrity. Thank you . So with that, can we close the file on this particular communication then? Mr . Schutte moved to close the file on Communication 736 . Seconded by Mr . Makuakane. CHR. KOKUBUN: It ' s been moved and seconded that we close the file on Communication 736 , subject to the report from this body going to the Charter Review Commission. Vote on the Motion: Unanimously carried. 465 . 17 12