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HomeMy WebLinkAbout021411 Minutes Approved COUNTY OF KAUAI Regular Minutes of the Meeting of the Cost Control Commission Monday, February 14, 2011 Board/Committee: Cost Control Commission Meeting Date: I February 14, 2011 Location Mo'ikeha Building — Liquor Conference Room Start of Session: 1:30 p.m. I End of Session: 2:45 p.m. Present Chair Sandi Sterker, Vice-Chair Dirk Apao, Linda Faye Collins, Brant Fuchigami, Glen Takenouchi and Laurie Yoshida Also present: County Auditor Ernesto Pasion, Audit Manager Lani Nakazawa, Energy Specialist Glen Sato, First Deputy Amy Esaki, Director of Personnel Services Malcolm Fernandez, Boards and Commissions Administrator John Isobe, Administrative Aide Paula Morikami and Boards and Commissions Support Staff Mercedes Youn. Excused Commissioner Lawrence Chaffin Jr. Absent SUBJECT DISCUSSION ACTION Call To Order Chair Sterker called the meeting to order at 1:30 p.m. Approval of Vice-Chair Apao Agenda moved to approve the agenda as circulated; seconded by Commissioner Takenouchi and carried 6:0. Approval of Vice-Chair Apao Minutes moved to approve the minutes of December 13, 2010 as circulated; seconded by Commissioner Collins and carried 6:0. SUBJECT DISCUSSION ACTION Business CCC 2011-01 Update from County Auditor Ernesto G. Pasion, on the Pre-Audit Assessment on the Vice-Chair Apao feasibility of converting the Department of Personnel Services into a Human Resources Department moved to receive (a) Pre-Audit Assessment, dated January 14, 2011, from County Auditor Ernesto G. Pasion. the Pre-Audit Assessment as Chair Sterker acknowledged receipt of the pre-audit assessment and asked Mr. Pasion to provide a circulated; seconded brief history of the request for a pre-audit assessment survey relating to the possibility of centralizing by Commissioner the human resources functions within the Personnel Department. Yoshida and carried 6:0. County Auditor Ernesto Pasion Mr. Pasion explained that his office received a communication dated June 28, 2010, from the Cost Control Commission requesting that the County Auditor undertake a pre-assessment survey relating to restructuring the Department of Personnel Services into a Human Resources Department for the purposes of centralizing the personnel functions to increase efficiencies and to decrease costs for the County. Mr. Pasion stated that the use of the General Accepted Government Auditing Standards (GAGAS or the Yellow Book) as required by the County Charter, provided guidelines to assist with the pre-audit assessment. Audit Manager Lani Nakazawa Ms. Nakazawa stated that the Office of the County Auditor has been tasked with two matters. The first is the pre-audit assessment survey on the feasibility of expanding the Personnel Services Department into a full service Human Resources Department; second was a request to conduct an audit of what kinds of actions were taken on the 2008 and 2009 recommendations of the Cost Control Commission for the energy savings performance contract proposal. Ms. Nakazawa informed the Commission that a draft of the energy savings performance audit has been completed and expects to issue a draft of the report to the Commission by the end of this month. However, the draft must first be transmitted to the Administration for its review and comments then sent back to the auditor for another review with possible changes. In addition, Ms. Nakazawa stated that the Final Report would be available either in mid-March or end of March 2011. With respect to the pre-audit assessment, Ms. Nakazawa stated that after completing a survey of other jurisdictions, it appears that a Charter change is necessary in order for the Department of Personnel Services to expand because the prevailing legal opinion is that the department's activities is restricted by the language in the current Charter. She further explained that if it is the desire of the policy makers (referring to the Council, Commission and the Administration)to expand the responsibilities of the Personnel Department, a Charter change must be proposed in an election and voted on. Ms. Nakazawa explained that the table of comparison of the functions performed by the Department of Personnel Services and its counterparts in the other counties can be used as a reference for the SUBJECT DISCUSSION ACTION Commission in formulating recommendations. Ms. Nakazawa stated that if the Commission chooses to pursue their recommendation to change to the language in the current Charter, the Commission should obtain a legal opinion on the scope of the department's authority. Chair Sterker stated that this is something that the Commission may want to pursue. First Deputy County Attorney Amy Esaki Citing the County Charter, Ms. Esaki stated that the authority of the Cost Control Commission is to review personnel costs; in this case it relates to the request from the Cost Control Commission to the County Auditor to conduct a financial feasibility study of centralizing the functions of human resources within the Department of Personnel Services. In regards to seeking a legal opinion on whether a Charter amendment is required, it would be handled by the Office of the County Attorney. Commissioner Collins asked that when doing the financial feasibility study, did the County Auditor take into consideration ways that the County could save legal costs with more extensive human resources training. Ms. Nakazawa's answer was no, and she further explained that the auditor's feasibility study only encompasses the straight forward notation that if you are going to provide the same functions as the other counties, what are the relative personnel numbers and costs associated with the upgrade. Ms. Nakazawa stated that she was not able to provide the risk assessment because under the general accepted auditing standards, her office can only audit items against the stated criteria, such as specific requirements, measures, or defined business practices. However, if the Charter amendment were to pass and the department is up and running, at some point in the future the office of the County Auditor would be able to proceed with an audit. It would determine whether the full range of functions, as required by the new Charter amendment, is being performed and whether it resulted in cost savings in the form of fewer lawsuits brought against the county and if the amount of settlements being paid out have lessened. Ms. Nakazawa added that the audits are not prospective but more retrospective. Commissioner Collins stated that because training is not provided, all that the auditor can do is determine whether it is cheaper to have the training done or not. Ms. Nakazawa stated that if the training function is in fact being performed by someone, it becomes auditable. Commissioner Collins asked who defines the training functions and its adequacies. Ms. Nakazawa stated that no one. Commissioner Collins asked what would be the Commission's next step. Ms. Nakazawa stated that if the Commission is specifically concerned about how much training is being done and whether or not having more training would be cost effective, it would be best addressed by the administration (Mayor's Office)to look into it and provide the Commission with a written summary of who is providing the training and to what extent. Ms. Nakazawa further stated that if the response of the SUBJECT DISCUSSION ACTION administration confirms that there is a training program in place, then the County Auditor has the authority to conduct an audit for its efficiencies and effectiveness. Commissioner Yoshida stated that by comparing the functions of each county, it appears that Kaua'i is performing the same functions as Maui, and that O'ahu and Hawai'i counties are performing additional functions (i.e., benefits, safety, worker's comp, health and workforce planning)and asked whether Kauai is looking to add these functions. Referring to the Charter, Commissioner Yoshida pointed out that it is her understanding that the County Auditor can conduct an audit on a department's functions to assure that its functions are being carried out and that the only way the County Auditor can conduct a feasibility study is to change the Charter in order to give the County Auditor's office the authority to conduct the study. Commissioner Yoshida noted that if the County Auditor's Office is not the office to conduct the feasibility study, is there is an agency within the county who can, or should the Commission itself conduct the feasibility study relating to consolidation and the true cost of having a Human Resources office versus Personnel Services. Mr. Pasion stated that the Mayor as the CEO of the Kaua'i County Corporation has the authority to bring in experts in the field (i.e. consultants). Commissioner Yoshida questioned whether the next step of this Commission is to request that the Mayor do a feasibility study conducted by an outside consulting firm. Mr. Pasion stated that it would be more cost effective to bring in human resource consultants rather than to continue paying the County Attorney's Office to help with the lawsuits filed against the county. The lack of training and orientation given to the respective employees should be implemented by the Human Resource Department. Based on his experience in the private sector, Vice-Chair Apao pointed out whether it would be necessary to have a representative from each labor union in the Human Resources department participating with the bargaining contracts, because one of the reasons for requesting the pre-audit assessment was to compare what the other counties are doing, and hopefully, bring our county up to par with them. Vice-Chair Apao stated that amending the Charter may be a good thing because with today's current issues such as sexual harassment etc., the Charter has never been amended, and on a going forward basis, this something that the Commission should consider. Ms. Esaki agreed with Mr. Apao, noting that at the time when the Charter was being written, the count didn't have cases such as sexual harassment, workplace violence; what the county had at that SUBJECT DISCUSSION ACTION time was the Civil Service Merit System. Chair Sterker stated that even though having a Human Resource Department would be expensive, it would definitely save the county money in the long run especially in the claims area. Mr. Pasion stated that bringing in human resource consultants to make recommendations would be very helpful in looking at changes to the Charter amendment. He advised the Commission not to change the Charter until the recommendations were submitted. Commissioner Collins stated that she would like to have further discussion on the possibility of changing the Charter. Ms. Esaki informed the Cost Control Commission that the Office of the County Attorney is currently working on an opinion on what exactly the Department of Personnel Services can do under the current Charter language. Executive Assistant John Isobe Mr. Isobe suggested to the Cost Control Commission to wait for the County Attorney's Office to render an opinion because there seems to be presumptions made that a Charter amendment is required, and he has not heard from the attorney's office confirming it. Secondly, based on the attorney's opinion, he is hoping that the opinion would provide some clarity for the Commission as well as the many other individuals in the administration as well as the County Council who are interested in seeing a transition from Personnel Services into a Human Resource Department. Mr. Isobe stated that there have been numerous discussions on who should be conducting the training. Looking back at the years that he has been with the County, all trainings were being conducted by the Department of Personnel. The assumption today is that the responsibility lies with the Administration and Finance, given the fact that the Charter(which had no changes) requires that all trainings should be conducted by the Department of Personnel Services. He asked if that is the case, then why aren't they doing it. Mr. Isobe stated that he still is unclear on who is responsible for the training and has not had the opportunity to research the Charter. Until then, he suggested that all presumptions be placed on hold until this Commission receives the opinion from the County Attorney. In light of Mr. Isobe's statement, Ms. Nakazawa informed the Commission that their Pre-Augit Assessment is based on a written opinion (which they were in receipt of)which narrowly defines the scope of the department's responsibilities described in the Charter. Referring to the Pre-audit Assessment, Ms. Nakazawa noted that the information about the training being limited and mostly conducted by the Mayor's Office and Finance was based on information that she received through field interviews. SUBJECT DISCUSSION ACTION Director of Personnel Services Malcolm Fernandez Mr. Fernandez stated that it is his understanding that the trainer who was employed at the county Commissioner level at that time, (20 years ago)was Mr. Marvin Tanglon, and he was stationed in the Department of Collins moved to Personnel Services and reported directly to the Mayor. table further discussion and There were concerns expressed by the Commissioners regarding changing the Charter language to decision making expand the responsibilities of the Department of Personnel Services and therefore requested that the pending an opinion matter be tabled until the Commission receives an opinion from the County Attorney's Office. from the County Attorney's Office on what exactly can the Department of Personnel do under the current Charter language; seconded by Commissioner Yoshida and carried 6:0. CCC 2011-02 Update from County of Kaua'i Energy Specialist Glenn Sato on the status on the County's Energy Savings Performance Contract RFP (Request for Proposal). Mr. Sato provided a brief history on the Energy Savings Performance Contract. Back in 1995 and 1996 the County did what is called a Performance Contract, which is basically the hiring of a third party energy service company to come in and audit the county facilities and to find ways to save energy. Mr. Sato stated that back in 1995 & 1996 the County looked at all of the facilities under the Building Division which included parks and recreation and wastewater. The consultants at that time were Honeywell and they found that they could generate a Performance Contract for the buildings that would include the lighting retrofits for twenty-nine small county facilities (neighborhood centers, police substations, fire department and the golf course facilities). The project itself cost$600,000 dollars with a ten (10)year performance contract (fifteen years ago). The intent today is to execute a new Energy Savings Performance Contract. The following is the update from Mr. Sato on Energy Performance Contract Request for Proposal timeline: • Wastewater RFP (request for proposal)was issued on 02/10/11 • There was a mandatory pre-proposal conference for all interested energy service companies scheduled for 02/23/11; and a mandatory technical technical energy assessment site visits scheduled for 03/01/11. SUBJECT I DISCUSSION ACTION • Proposals are due on 04/18/11, with a tentative award date of 05/17/11 for the Wastewater Performance Contract. • Mr. Sato indicated that because he is still trying to complete the work on two (2) stimulus grants; he has not begun the work on the Building & Parks and Recreation departments and provided no timeline. • Pertaining to the ESCO's completion of the investment grade audit, Mr. Sato stated that some of the information will remain confidential until the contract is fully executed. Chair Sterker asked if it were possible for Mr. Sato to provide another update in June on the selection of the Wastewater Performance Contract and status of the Building Department and Parks and Recreation Department. Mr. Sato stated that he would only be able to provide information on which Commissioner energy service company was awarded the contract. As for the updates on the Building Department Collins moved to and Parks and Recreation Department, there really won't be anything to report because it depends on receive; seconded how long the ESCO would take to complete its investment grade audit, and as he stated before, the by Commissioner information would have to remain confidential until the execution of the new Energy Savings Takenouchi and Performance Contract is confirmed. carried 6:0. With no further discussion, Chair Sterker called for the motion to receive his report. CCC 2011-03 Discussion and possible decision making with IT Manager Brandon Raines on various Vice-Chair Apao issues relating to the County's Internet Usage Policy. (a) Copy of the County of Kaua'i Information moved to defer this Technology Team Division Computer, Email and Internet Usage Police. item to the next meeting of the Cost Chair Sterker called for the motion to defer to the next meeting due to Mr. Raines not being available. Control Commission scheduled for March 14, 2011 meeting; seconded by Commissioner Takenouchi and carried 6:0. SUBJECT DISCUSSION ACTION Announcements Chair Sterker announced that the next meeting of the Cost Control Commission will be on Monday, March 14, 2011, beginning at 1:30 p.m. or shorter thereafter, at the Liquor Conference Room. She also requested that the members think of items they want to place on future agendas for discussion. Commissioner Collins requested that the matter regarding future agenda items be placed on the next meeting's agenda for discussion. Adjournment Commissioner With no further business to discuss, Chair Sterker called for the motion to adjourn the meeting. Yoshida moved to adjourn the meeting; seconded by Commissioner Takenouchiand carried 6:0. Submitted by: Reviewed and Approved by: Mercedes Youn, Staff Sandi Sterker, Chair (X) Approved as is. (Approved on 03/14/2011) ( ) Approved with amendments. See minutes of meeting.