The key parts of this article refer to union contracts. “Fewer employees,higher costs.” “Most of these costs are the result of public worker arbitration decisions and negotiated agreements that significantly increase salaries, wages, social security contributions and retirement obligations.”
Kenoi submits 2014-15 operating budget
Mayor Billy Kenoi submitted the proposed operating budget for the County of Hawaii for fiscal year 2014-2015 Monday to the Hawaii County Council.
Below is the message that accompanied the budget:
Aloha Chair Yoshimoto and Council Members:
As required by the Hawaii County Charter, submitted with this message is the proposed operating budget for the County of Hawaii for the fiscal year ending June 30, 2015.
This balanced budget includes estimated revenues and appropriations of $416,915,831, and includes the operations of eleven of the county’s special funds as well as the general fund.
This FY 2014-2015 budget is $13,710,833 or 3.4 percent larger than the budget in effect when this administration took office in 2008.
This budget continues our strategic investments in county services and infrastructure to support our working families and businesses, while carefully controlling the cost of government.
We continue to see a gradual recovery from the past five years of budget challenges caused by the national and international recession. We are finally experiencing a measured recovery in property values, which allows us to address the new challenge of $20.9 million in additional employee expenses in the year ahead.
Most of these costs are the result of public worker arbitration decisions and negotiated agreements that significantly increase salaries, wages, social security contributions and retirement obligations.
A coordinated effort by the Hawaii State Association of Counties and Hawaii Conference of Mayors this year helped to convince the state Legislature to allocate additional hotel room tax funding to the counties, and we welcome this assistance.
This revised budget commits all of that additional funding to pay for future health care obligations for public employees.
This proposed balanced budget does not require any increase in property taxes.
Investing In Our Communities
From the beginning of this administration, we have developed budgets that limit spending, but also allow for targeted investment in our communities and our future. Through carefully selected initiatives we created or improved parks and playgrounds, built or rebuilt roads and other public infrastructure, and improved public services.
Our primary objective has always been to make the County of Hawaii a better place for our families to live and work.
We have used the county’s borrowing power and excellent credit rating to help stimulate the economy and create jobs during a period of low interest rates and favorable bid prices.
In Kona, we answered residents’ calls for relief from traffic congestion by advancing projects such as the Laaloa Avenue Extension, the Kaiminani Drive Reconstruction and the Ane Keohokalole Highway, and we will soon begin work on the Māmalahoa Bypass.
In Hilo, we are repairing downtown streets starting with the Kilauea Avenue Reconstruction, followed by the Kamehameha Avenue Reconstruction project. We will continue in the months ahead with repairs and improvements to Ponahawai and Komohana Streets.
We have partnered with the University of Hawaii at Hilo, which has emerged as a critical component of our economy. Our university allows our young people to achieve better lives for themselves while providing a skilled workforce to help our island economy to grow and innovate.
To help the university expand, we are advancing the Kapiolani Street Extension to open up lands for new student housing, additional classroom space, and to alleviate traffic congestion.
We are investing in parks, gyms, and playgrounds across the island where our families can engage in positive activities, and where our coaches can teach our youth respect, discipline, and teamwork.
We opened covered play courts at Panaewa Park in Hilo, and built the Kamakoa Nui Park in Waikoloa. We have added seven playgrounds islandwide, and will soon be opening the new Ka‘u District Gym & Shelter. We renovated popular recreational facilities such as the Waiakea Recreation Center, Edith Kanakaole Stadium, Laupahoehoe Pool, Keokea Beach Park, and Pahoa Pool.
We will soon make the largest investment in recreation in the history of the county by constructing district parks in Pahoa, Waimea and Kona.
Despite the budget challenges of recent years, we continue to invest in alternative energy and agriculture because we understand those sectors are essential for a sustainable economy.
We installed solar arrays on county buildings to reduce oil consumption and utility costs, and will use wind power at Lalamilo to provide clean energy to supply water to our communities.
We are encouraging growth in agriculture by investing in training and support for farmers, and provided 1,739 acres of county-owned lands for ranching and community-based agriculture at the Kapulena Agricultural Park.
We joined in a public-private partnership to upgrade the Paauilo Slaughterhouse and provide a new rendering facility to support our grass-fed beef industry.
At the same time, we have preserved funding for public safety and essential core services. We funded additional police officers for the Puna and Ka‘u communities, and opened the new Makalei Fire Station.
We protected funding for nutrition, recreation and other services for seniors, and preserved and expanded programs for our children and youth.
We maintained county funding to non-profit organizations serving the people most in need in our communities.
Fewer Employees, Growing Costs
We want to thank our county workers for their efforts during the Great Recession, which was a time when people across our island made sacrifices. Many of our employees accepted furloughs even as overtime was cut and staffing levels in county agencies were reduced because of hiring restrictions.
County employees’ workloads increased, but their hard work and dedication allowed us to continue to deliver essential county services and protect public safety.
During these many challenging budget years, the size of the county workforce declined from 2,787 in November 2008, to a total of 2,632 more than five years later.
Even with that smaller workforce, the new negotiated collective bargaining agreements will significantly increase our employee costs in the year ahead.
Wages, salaries and fringe benefits including health care and retirement for all of our employees will increase in all departments by a total of $20.9 million in Fiscal Year 2014-2015, with most of that increase attributable to these new agreements.
County of Hawaii tax collections in the year ahead will be $8.24 million or 3.6 percent more than the amount of property taxes collected when this administration began in 2008.
However, the combined cost of employee wages, fringe benefits and health care expenses has grown by $31.1 million or 17.3 percent during the same period.
This year the Hawaii State Legislature agreed to raise the cap on the amount of transient accommodations tax that is distributed to the counties, and the new hotel tax allocation will provide an additional $1.86 million to the County of Hawaii.
This revised budget adopts the fiscally responsible strategy of investing that entire amount into pre-funding future employee health benefits, also known as GASB 45. That allows the county to increase its contribution to GASB 45 to $6.09 million for Fiscal Year 2014-2015, which is nearly double the contribution budgeted for the current fiscal year.
Significant Changes to February 28, 2014 Revenue Estimates
* Real Property Tax – Revenue projections have increased by $1,700,000, as the result of upward valuation adjustments and a reduction in the tax appeal allowance.
* State Grant in Aid – As the result of state legislative action, the Transient Accommodations Tax (TAT) allocation to Hawaii County increased by $1,860,000.
* Fund Balance Carryover – Carryover projections have increased by $770,000, which represents an increase in current year expenditure savings as a result of restrictions on hiring, travel, equipment and other spending.
Solid Waste Fund
* Beverage Container Deposit Program – Revenue was reduced by $217,307 to reflect the revised grant amount from the Department of Health.
* Transfer from General Fund – An increase to general fund transfer was included to provide additional revenue of $412,742 to meet the critical operational needs of the Solid Waste Division.
Significant Changes to February 28, 2014 Expenditure Estimates
* Police – Funding from the Hawaii Impact Grant is expected to increase by $129,000. Additionally, funding is included for community safety programs.
* Fire – Funding was increased by $320,000 in the Ocean Safety Division, for salaries, equipment and miscellaneous costs to support a pilot jet ski program.
* Prosecuting Attorney – Additional staffing was provided to meet the increased demand and workload placed on office staff by changes in judiciary requirements, increasing the budget by about $186,000.
* Parks & Recreation – Funding of approximately $180,000 was provided for staffing to accommodate increased parks maintenance responsibilities related to new facilities and to respond to increased use of existing facilities.
* Transfer to Solid Waste – Subsidy to the fund has been increased by $412,742 to support additional recycling program needs and solid waste operations.
Transfer to Debt Service – Budget was increased by $291,793 based on anticipated activity on State Revolving Fund (SRF) funded projects.
* Post-employment Benefits – Funding in the amount of $1,860,000 was added in the expectation of making a larger contribution toward the County’s unfunded future health benefits liability (GASB 45).
Solid Waste Fund
* Solid Waste – The recycling program appropriation decreased $217,307 due to a reduction in the Beverage Container Deposit Program grant funding, and costs increased in glass recycling and organic recycling by $202,000. Funding for cover material at the Hilo Landfill increased by $132,000 to ensure state Department of Health requirements are met.
Position Changes from February 28, 2014 Budget Proposal
This amended budget proposes 10 new positions and an increased time element for one position.
Department Position Title
Information Technology Information Systems Analyst III
Fire – Ocean Safety Water Safety Officer II (4)
Prosecuting Attorney Deputy Prosecuting Attorney
Prosecuting Attorney Legal Clerk III (2)
Prosecuting Attorney Legal Clerk I
Parks and Recreation Park Caretaker I
Parks and Recreation Park Caretaker I (1/2 to Full Time)
This proposed budget represents a collaborative effort by our departments to address the growing needs of our growing population in a way that is both responsive and fiscally responsible.
Our years of careful planning and conservative budgeting have positioned us to invest in our communities while maintaining core services and meeting our obligations to our employees.
The recent, modest gains in property values point to a gradual economic recovery, and we remain cautiously optimistic that the economic and budget outlook will continue to improve.
We believe our efforts to promote renewable energy, agriculture and higher education are an investment in the future of our island.
We will continue to invest in recreational projects to support our youth and families and to protect public safety, and we ask for your support in these efforts.
We look forward to working closely with the County Council to address our community’s new and continuing demands for public services while also maintaining a balanced and responsible budget.
William P. Kenoi