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HomeMy WebLinkAboutComm No 0015.03 - Testimony - Art I - XVI - General Discussion - Proposed AmendmentsDraft : 3 A CHARTER AMENDMENT TO THE HAWAII COUNTY CHARTER 2018 (2018 EDITION, AS AMENDED) UNDER ARTICLE X, FINANCIAL PROCEDURES ADDING A NEW SECTION 10-16 RELATING TO THE CREATION OF THE DISASTER AND EMERENCY FUND. HAWAII COUNTY CHARTER CHAPTER 2 ADMINISTRATION ARTICLE X FINANCIAL PROCEDURES Purpose. The purpose of this charter amendment is to allow the electorate to vote to move the budget stabilization fund from the Hawaii County Code to the Hawaii County Charter, to require that deposit of monies annually at appropriate levels to provide a temporary, supplemental source of funds for the County to use during times of financial hardships while a plan for cost reduction or revenue enhancement is developed, to increase fund transparency by placing line items in the revenue and expenditure sections of the budget indicating how the monies of the fund are received and expended, to set a $2,000,000 minimum from the certified real property tax revenues received each fiscal year to be placed in the fund, and set a targeted amount of $30,000,000 after which the deposit of certified real property tax revenues may be temporarily suspended until the targeted amount falls below $30,000,000. Passage of this amendment by a simple majority of the voters voting in the election in which this charter amendment is on the ballot is required. If the associated Charter Amendment placing the budget stabilization fund in the Hawaii County Charter fails to pass the electorate, then this ordinance to remove this section of the Hawaii County Code becomes null and void and Sections 2-219 through 2-223.1 remain in the Hawaii County Code and remain in force. The Hawaii County Charter shall be amended to read as follows: Section 10-17. Budget Stabilization Fund (a) Pursuant to section 10-12, Hawaii County Charter 2018, a special fund to be known as the budget stabilization fund ("fund") is created. (b) The purpose of the fund shall be a temporary, supplemental source of monies for the County to use during times of financial hardships while a plan for cost reduction or revenue enhancement is developed. The fund may be used to insulate general fund programs and current service levels from: (1) Revenue shortfalls to minimize the need for budget cuts or tax increases; (2) A revenue reduction due to a change in state or federal legislation which reduces revenue to the county; or (3) Slower revenue growth that typically occurs during an economic recession or depression. Comm. No. 15.3 (c) The policy for this fund is to accumulate over time a targeted amount of $30,000,000. This targeted amount shall not include the fund balance. (d) In adopting each fiscal year's operating budget, the county council shall appropriate a minimum of $2,000,000 of the certified real property tax revenues received in the fiscal year, including penalty and interest, to the fund. (1) Once the fund reaches its targeted amount, only the annual monies from certified real property tax revenues including penalty and interest may be temporarily suspended for that fiscal year. If any other monies are received as grants or from any other source to repay this fund, those additional monies shall continue to be deposited. (2) If the fund drops below its targeted amount either: (A) the full $2,000,000 from the certified real property taxes shall be deposited annually in the fund until it reaches $30,000,000 per (c) above, or (B) if only a partial annual deposit of real property tax revenue is necessary to bring the fund to its targeted amount then the appropriate but smaller amount of money shall be deposited until the targeted amount is reached. (3) This policy does not preclude the use of the funds for any reason listed in section (b) above even if the targeted amount is not met. (4) The targeted amount may be increased by each successive charter commission or the county council and becomes effective with a simple majority of the voters voting in the election in which such a charter amendment is on the ballot. (e) Deposits to the fund from certified real property tax revenue shall occur, at a minimum, on a quarterly basis. (f) This fund may be used only when there is a reduction in budgeted revenue and the director of finance determines that such use is necessary to prevent a reduction in the level of public services. The director's decision must be in writing to the county council and an appropriations ordinance must be passed by a two-thirds majority vote of the council. (g) Appropriations from this fund for acquisition, construction or alteration of a facility as part of a general capital improvement program or to balance the budget for an upcoming year shall be prohibited. (h) To increase fund transparency to the public and the county council, there shall be line items placed in the revenue and expenditure sections of the budget identified as the budget stabilization fund to indicate how the monies of the fund are received and expended. (1) Revenue funds shall be identified by subcategories indicating the individual funding sources. (2) Expended funds shall be identified by subcategories indicating how and on what monies from this fund were used. (i) This fund shall not be dissolved since it protects the county from financial disaster and protects its credit rating. RAF171 :i H ASI"UNIY. (I,1301 Purpose. The purpose for the removal of the budget stabilization fund from the Hawaii County Code is to place similar information in the Hawaii County Charter in order to mandate the deposit of the annual targeted percentage of funds to be held in reserve but allow the funds to be used during temporary financial hardships. Therefore, Article 43. Budget Stabilization Fund is repealed. HAWAII COUNTY CODE CHAPTER 2 ADMINISTRATION ARTICLE X Scction 2 219. Creation of fund; purpose. (a) Pursuant to flection 10 12, Hawaii County Charter 2000, a Upccial fund to be known as the budgct stabilization fund is created. (b) The purpooe of the budgct Utabilization fund Uhall be a temporary, Uupplcmcntal urcc f fundo f r the C unty t uUc during timed f financial hardohipo while a plan f r cost rcduction or rcvcnuc enhancement is developed. Additionally, the fund may be uUcd to (1) Revenue shortfalls to minimize the nccd for budgct cuts or tax incrcaUcs; (2) A rcvcnuc rcduction due to a change in state or federal legislation; or (3) Slower rcvcnuc growth that typically occurs during an economic recession. Scction 2 220. Funding. (a) Each fiUcal year, the minimum amount transferred into the budgct and stabilization fund shall be $250,000. (b) The council hereby eotablioheo a policy to accumulate between five to fifteen percent f the general fund t tal cxpcnditureo baUcd n a c mbinati n f the fund balance and the listed in flection 2 219 cvcn if the targeted percentage is not met. Scction 2 221. Expenditures. reduction in the level of public cervices. Section 2 222. Appropriations. Appropriationo from the budget otabilization fund may occur only upon the following: (1) Written determination by the director of finance that ouch appropriationo arc necc-nary; and (2) Pa -nage of an appropriations ordinance by two thirds vote of the council. Section 2 223. Prohibitions. Appropriations from the budget stabilization fund to fund the acquisition, construction or alteration of a facility as part of a general capital improvement program or balance the Section 2 223.1. Dissolution of the fund. the finance direct r and a tw thirdo v to f the C unty c uncil.