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HomeMy WebLinkAbout120211_OPEN SESSION_APPROVED Kauai County Salary Commission Minutes of Meeting OPEN SESSION 9:00 a.m. December 2, 2011 With a quorum being present, the regular meeting of the Salary Commission of the County of Kaua'i was called to order by Chair Charles King at 9:00 a.m. at the Mo'ikeha Building, Meeting Room 2A/2B. Members present: Charles King, Chair Robert Crowell, Vice-Chair William Dahle Trinette Kaui Sheri Kunioka-Volz Absent/excused: Members Randy Finlay and Michael Machado Others in attendance included: Alfred Castillo, Jr., County Attorney; Deputy County Attorneys: Mona Clark, and Mauna Kea Trask; John Isobe, Administrator; Paula Morikami, Administrative Aide; and Mercedes Youn, Support Clerk. Public members testifying: Council Chair Jay Furfaro, Horace and Phyllis Stoessel, and First Deputy Prosecuting Attorney Jake Delaplane. Approval of Minutes Meeting Minutes of August 5, 2011 Chair King: I would like to call the meeting to order. Thank you all for coming. We have the minutes of the August 5, 2011 regular meeting minutes in front of us. I would like to have a motion to approve the minutes. Ms. Kaui: So moved. Mr. Crowell: Second. Chair King: Thank you, any comments or corrections. 11 Page Mr. Dahle: On? Chair King: The minutes. Hearing none, those in favor? Ms. Kaui: Aye. Mr. Crowell: Aye. Chair King: Opposed? Thank you. On a motion made by Ms. Kaui and seconded by Mr. Crowell, to approve the meeting minutes. Motion carried 5:0 Election of Officers for 2012 Chair King: Next, we have the election of Officers for 2012. Mr. Dahle: In light of the fact that three of our members are going to be done at the end of this year and we have two missing. I don't want to say anything yet until you guys had the chance to talk about it. Council uses a...I am thinking about making a deferral and I'm wondering if anybody has ideas...I know that we can't discuss it after the deferral and the motion has been made, so I was just thinking that do you want to hold that today, or do you want to hold off until our first meeting next year? Chair King: We could do that. What members will be off? Mr. Dahle: You, Randy Finlay and Trinette is gone. Chair King: Trinette. Mr. Dahle: Is gone...technically she can hold off until the 15. Mr. Isobe: There are only two members; oh I'm sorry, there is only one member that cannot be re-appointed and that's Ms. Kaui. Mr. Dahle: But they haven't been re-appointed yet? Mr. Isobe: Right, but all of the members can hold over. 21 Page Mr. Dahle: Until the 15 correct? Mr. Isobe: For 90 days. Mr. Dahle: But if you chose Randy to be Vice-Chair since we know that Bob is probably going to be the Chair. Mr. Crowell: I don't think so. Mr. Dahle: Well under the circumstances... Mr. Crowell: We need to nominate someone else. Mr. Dahle: You see we've got a problem here, we're going to have to do this again apparently if we have people who are not necessarily...(inaudible) Chair King: Well I agreed to be reappointed, and I knew that Randy and Mike were going to be reappointed and since both Mike and Randy weren't going to be here, I did ask them that if they were nominated if they would stand. Both of them said that they thought they were to new to the Commission to serve as Chair. But, Mike did say that he would be willing to serve as Vice- Chair. So,with that I think that I cannot serve. Mr. Dahle: Bob did you express an interest in not wanting to be Chair? Mr. Crowell: Yes, as a matter of fact I thought there was a much better candidate in Bill Dahle. Mr. Dahle: I have reservations about that. But I guess under the circumstances, (inaudible) you guys have any objections? Because we're all going to be here the day after January, you guys are entitled to say no. Chair King: I don't know. Ms. Clark, are we bound to elect officers at this point? Ms. Clark: It does say to elect annually. Chair King: Okay. I am looking for a motion so that we can discuss. Mr. Crowell: What's that? 31 Page Chair King: I am looking for a motion so that we can discuss. Mr. Crowell: Or postpone it? Mr. Dahle: No we can't discuss that(inaudible)we can't discuss the choice. We can vote on yes, but no one has made a motion yet. Mr. Crowell: I move to defer. Chair King: Can I get a second on that? Ms. Kaui: Second. Chair King: Those in favor say aye. Opposed? It's deferred. On a motion made by Bob Crowell and seconded by Trinette Kaui,to defer the election of 2012 officers, motion carried unanimously by voice vote. Mr. Dahle: Until the first meeting of the New Year. Chair King: Right. Communications Chair King: Thank you for waiting for all of that. We have two communications, Council Chair Furfaro has submitted something and he would like to speak to us. You're up Jay. SC 2011-10 Communication dated 10/24/11 from Council Chair Jay Furfaro requesting time at the next meeting to provide testimonregarding several concerns relating to Salary Resolution 2011-1. Mr. Furfaro: I'd just want you to give me a moment, Chairman; I have some things that I want to share with you. I believe I may have distributed some earlier narrative to you and I have some more to add. My name is Jay Furfaro and I am the current Chair of the Kaua'i County Council. I would like to first of all thank you for your service, your volunteer service to the County of Kaua'i. I'm here today based on some particulars of concerns I have that demonstrates some leadership at my level at the Council. I have some very mixed approaches to some of your recommendations that actually have been breached in a form of a legal question amongst various council members. I myself have chosen not to join on that issue, earlier, which was approached 41 Page at the Ethics Commission and the role of the Salary Commission's staff. I don't see that anything was out of line as being able to advise you as such by the Administrator of the Boards and Commissions. That is not an issue for me today. My background as you may or may not be aware of is, that I have served for 30 years as a hotel executive. I have worked in many very structured environments that the activities of fair compensation are a regular application by those companies. Four years ago, with the recommendations that we had gotten from the previous Salary Commission, I participated in some documents that dealt with the rationale in arriving at those salaries and I wanted to make sure that I gave another set of those documents to Mr. Isobe and his staff. They included when I was regional manager for ITT Sheraton, their salary review the Outrigger Enterprises Corporation structure of compensation and benefits and when I was the operations officer for the Princeville we had some salary comparisons by specific job descriptions. We had some documents that dealt with the performance reviews. I need for you to know that currently I think that is another area that we are very weak on. In fact, I have made at least two presentations to the Civil Service Commission on the review process breaking it down into the acronym known as TOPS which are the performance standards that ties the department heads to the performance measurements against their budget, as well as a second set of standards that deal with the values that are important to manage the philosophy and put into Hawaiian values. That testimony I gave almost a year and half ago; I have a sample of those pieces. I was told by the Civil Service Commission that they were close to evaluating the documents that they currently use and that both the TOPS performance reports, as well as the value statement would be incorporated in some new draft. It's been a year and a half and I seen nothing. So, I can assure you that I think part of the problem stems we have very weak guideline and parameters for performance reviews to begin with. That authority does not rest with you. That authority rests with us at the Council for the Council and the Audit department, and it rests with the Mayor and his Administration for other departments. The only one I believe that is not able to modify the recommendations by you, in fact, and I want to make a statement I believe is the Mayor. When you establish the salary for the Mayor, he has no reporting authority to do a review and so forth. What you set is set for him. Now he is a generous lad that lives aloha and has made some gestures, but if you structure it accordingly, there has to be another vehicle for him to give money back that he doesn't want in his salary. Because you are the decision makers in that. So, along those lines, I would like to submit these surveys which also include the most current occupational employment wage and salary guideline from the Hawai'i Employer's Council. I have been in contact with Kathy Keholani who is one of the administrators and I think that it would be very good for you to have these on your files when you do your periodic reviews. 51 Page I would also like to share with you that much of what I'm going to read in my testimony is referenced in Article 2 of the Codes of the County of Kauai. As we interpret ordinances and so forth, and I am struggling with the members now. For every Chapter of the County Code, they want to put in the definition for the words "shall", "may", and"must" and so forth, and I'm saying that it is very clear to me in the County Code what those words mean. I will read from Article 2 and it signifies on item(f) "must" and"shall" and"may"the term"must" and"shall" are mandatory. Only the term"may" is permissive that's in the County Code. And so, I liked to I share that with you because it ties into my testimony that I would like to read. The only other exemption...the only other exemption for performance reviews that you have is with the County Auditor. How do I know that? Because that was a Charter amendment introduced to the Council by me to take the politics out of it. You will find that definition here available to you in the Charter that basically appoints the individual. I am very sorry; someone took the tags off of my pages. As the scribble through this, anyway if you read that section, the Auditor is appointed for a six year period. His salary is solely at the discretion of this Commission so that we can take the politics out of it. To remove the Auditor for cause we have to have at least a super majority of the Council that deal with the performance issue. That is the only way the Auditor has any challenges to his position. Otherwise, he is the one position that what you decide for the Auditor is final; it takes the politics out of it. So, I think that it's on page four that I was referencing of the Charter. Now, I have some expanded testimony for today and I don't' know if I am duplicating what I already sent,but this is what I would like to pass today and just read my testimony into the record, then I would be glad to take any questions. Again, I am not part of the lawsuit that has been filed, I voted to reject your recommendations for the statements that I will make now and I did not necessarily think that this was an ethics question that dealt with the administration and the role of Mr. Isobe as the administrator. At the same time I want to let you know that your work is greatly appreciated,but I think that we missed something in the term of these responsibilities. I will be giving a printed copy to Mr. Horace Stoessel who served on the previous Salary Commission and also the media since I have a different position then the other members. I am submitting this testimony regarding the Salary Commission Resolution No. 2011-1 as a member of the Kaua'i County Council. The first Section 19.02 of the Kaua'i County Charter requires the Mayor to submit an annual budget ordinance to the Council on or before May 15. This is a"shall" in the Charter the Section 29.03 of the Charter that states the Commission's salary findings shall be adopted by resolution of the Commission and forwarded to the mayor and the council on or before March 15. It is clear that the Charter intended for the Salary Commission's finding to be a significant part of the budget discussion and process. The main function of the County Council is to approve a budget and manage the County's finances. There is a sequence of planning that is important to do this. For example, we begin the budget process 61 Page on or before March 15. By May 1 we are looking at a second draft with the amendments from the Mayor. As such, after our preliminary discussions, then and only then, we move into the revenue cycle to pay for the expenses that we anticipated we would have to provide an equal and reasonable amount of revenue to balance the budget. We have 60 days to make that happen, and if by June 30 the budget is not finalized, then last year's budget takes action at a margin of no more than 5% from the previous year of budget. So,you can now see how critical this schedule is to identify the appropriate expenses and then identify the appropriate revenues of which 70% comes from property taxes set by the Council. Second, the Salary Commission is meant to be an independent body. It appears from the language in Resolution 2011-1 the Salary Commission however well intended, was heavily influence by a letter from the Mayor in preparing that Resolution. The purpose of my statement there is back to the Mayor; the Mayor does not have the appointing authority on his salary. He can't arbitrarily say that he is going to take 15% less. You passed a resolution that established his salary. He has no appointing authority other than the people of Kaua'i who elected him; he should take the salary. The reason why I say that and I put some emphasis on it, there were statements made to the Garden Island newspaper about the previous clerk getting his salary illegally. I disagree with that. The fact of the matter is if a council member or two disagree with the salary established by you folks, they need to put an agenda item on the Council table; if not, your recommendation is the authorized salary. Third, the Salary Commission has two tasks. The first under Section 29.01, it establishes the salaries of all Councilmembers and all officers and employees included in Section 3-2.1 of the Kaua'i County Code. Second, it adopts salary findings in a resolution and forwards the resolution to the Mayor and the Council by March 15. The Charter leaves to the appointing authority, these are positions other than the Auditor that we appoint across the street and their terms are only with the Council that was elected during that period. So, we're going through a very critical interview processes to identify the new clerk and that we're the appointing authority of that clerk and we set the salary for that clerk in an appointing position that does not exceed your recommendations, but can be at the maximum you set. So, to imply that nobody brought it up that the clerk had an illegal salary is very questionable in my mind. Especially, since we voted to approve the budget which would reflect his salary at the time. No one put a new item on the agenda to set that salary lower. Now we have done that with some of our other appointees because of time and exposure and position in the job and we are the ones that can lower that, not the Salary Commission. The Charter does not authorize the Salary Commission to direct the Council or the Mayor to take any action before determining the salaries of their appointees. Given this limitation, it appears that Article I, paragraph(d) of the resolution,which requires the Council to evaluate its appointment before setting its salary, is invalid. Quite frankly, this is one of the reasons I'm driving with the Civil Service Commission to have a more parameter review 71 Page not only on financial performance but also on the values that you feel are important to this County, through the value review. We at Council do upward appraisals of which the staff gets to evaluate the performance of the clerk. That's called an upward appraisal when you go across and say okay let's have the Planning Commission comment on the clerk because they work at the same level; that's a 360. We don't have those things, but there are available to us to do fair and reasonable reviews. I say that because for 13 years I was on the Salary Review Committee for the Outrigger Hotels, for 8 of them I was on the Salary Review Commission for ITT Sheraton, which if you talk to any company under ITT,they were very structured because they had so many federal contracts. So, that's some of the material that I am sharing. I respectfully hold a difference of view on the meaning of the word"shall" as it is used in Section 29.03 of the Charter for the following reasons. First, the timeline of the budget process requires the Mayor to submit his proposed budget to the Council by March 15, and it is not by coincidence that the Charter requires for that the Salary Commission for this resolution. Because this is the beginning of the critical path to perform a budget. We identify salary grades and performance levels and the expenses associated with that before we then enter into the rational to fund a balance budget whether it's for license fees, property taxes and so forth. We have to pass a balance budget. I am only trying to expand with you my 38 years of management experience which is the biggest single piece that we can do in this County to retain good employees, qualified employees, and a fair evaluation based on the caps that you put to apply. It is not your job to do the reviews; it is your job to set the parameters and you"shall" do it in a timely manner so that the Council has your recommendations. The other issue that I would like to address is the provision in the Salary Resolution that requires that the appointing authority to conduct evaluations prior to giving the appointed employee a raise. The last section in 29.03 reads that the respective appointing authority may set the salary of the appointee at a figure lower than the established salary. I am very concerned that I saw something in the Salary Resolution that basically says...you know I am a short timer on the Council... I am the first one off with the Charter provision limiting, I have one more term, so I am not doing this for myself, and I want to re-emphasize that is what you do with Council's recommendation; you have to remember, it lags two years. Because no Councilmember can be voting for an increase in the year for which they serve a term. So, for you to put another condition in there that the Council needs to wait until such time that the Mayor's groups get caught up, I have a problem with that because in the previous salary reviews which was headed by Alan Smith, it was determined, and you can see with what I given to you with the Maui County, it was determined that we were substantially behind the grades. And to provide the equity, it was decided we can't jump immediately; but we could do 25% or 7, 7, 7. That was to get us to an equity level. What we've done now is say oh, you know that last step...it's deferred and not only that it was deferred, it is deferred until after the Mayor's group catches up. To 81 Page catch up you would have to wait another two years. The goal of the previous Salary Commission was to get us back to fair compensation for the size of the corporation known as the County of Kaua'i which has a $185 million operating budget and a $151 million CIP budget. That is our responsibility; we are the Board of Directors for the County of Kaua'i. The Mayor is the Chief Executive Officer. We need to remember that sometimes in the structure. At the end of the day, remember that it is the appointing authority that has the jurisdiction where they place the salaries. What we get from you is the maximum recommendations. I think that this very important enough that I share my perspective and again now I am balancing two different opinions from a set of council members and four sets of opinions from another. To me it's very clear what the code says "shall" or"may" mean especially if it's attached to the critically path of our number one responsibility which is to do the budget. So, I have come to do what I wanted to do and I want to thank you for your work. I appreciate it very much, but I don't want to get involved in the other pilikia. I just want to tell you that 10 years on the Council... this is how I read it, this is what I think what the Code and the Charter intended us to do. When it comes to the single biggest item in our budget of which 70% of our budget is tied to salaries and wages. Thank you for listening to me. Chair King: Thank you for coming Chair Furfaro. Does anyone have any questions? If not, I was wondering if the Hawai'i Employer's Council material you gave to John has governmental salary information. Mr. Furfaro: Yes it does. Chair King: Thank you. Mr. Furfaro: The other one is from the developer's conference that was extracted in the Princeville piece covers other equities that we have to have to face like a golf course superintendent or you know, it's all in there. I really appreciate you letting me come to speak Charlie. Chair King: I really appreciate you for pointing out what I see is a great disconnect which is us setting the salaries and as I saw that piece where you pointed out we can't say that we have to have a review, I mean that it's just even (inaudible) a piece, and it's nothing, but at least it's making an attempt, the way I saw it to say that at least you have to have a review and I see that as a(inaudible) 91 Page Mr. Furfaro: And again, as I shared with you I will be giving to Mr. Isobe's group the draft of the total operating performance standards that touch on things like the objectives of each department and the financial accomplishment the image that is obviously tied to what the Mayor would like to complete in his strategic overview of the direction of the County and also the managing of the employees, I will be turning this over. This was developed by Mr. George Kanahele with the Hawaiian values and it ties into doing things right for the right reason; for the right people and understanding those values. So, I will be submitting this to the Salary Commission (inaudible) about a year and a half ago I already gave it to Civil Service. Thank you very much. I am just going to sit quietly in the back. Mr. Dahle: I just wanted to continue that thought about the evaluation. You indicated...well we all know that we don't have any evaluation authority. But you indicated that it's the Salary Commission's responsibility to set the parameters for the evaluation. Can you give me a rough idea or example? Mr. Furfaro: Yes, I think let me give you a real rough example. I am actually encouraging you to have some dialogue with Civil Service on setting some of these pieces and one of them right now, I went to the mainland with the Mayor to float our bond, we have 200 million worth of debt in this county, now in these financial times we should be finding ourselves if we had a little after we have established a reserve. We should try to pay down that debt, but we should be safe in the review of engineering department; we should measure them two ways. We have a 187 capital projects; 81 of them are floated on a bond. If we don't complete them in 3 years, we start paying a penalty on the money we borrowed, so, this should be understood. Do we just let the CIP list grow and grow until it almost becomes unmanageable, or do we set some goals on what we can accomplish within a reasonable time so that we can get them done, before there are any penalties? That would be is just an example for engineering. Since 1999 until now, the County has not grown that much; we actually only added in a 10 year period when you think of all of the services that we have only some 86 jobs. Well HR should get some credit for that because somewhere along the line we are doing more with less in the way of staffing. Those are the kinds of things that I would think that a committee can look into. I hope I kind of answered your question; I was not prepared for it. Mr. Dahle: Who would be doing the evaluation? A committee, a special committee, a committee appointed by HR? Give me a rough idea of where you think the people should come from. Mr. Furfaro: That is going to take me to a new place because I am one of the supporters that says we need a HR department. That is the first piece that we are missing. We now have a Personnel Department who basically oversees the structure and the standard relating to the 101 Page bargaining units. It's not a HR department that now says this standard is for appointed employees, this is standard and they should be governed by an HR department. I am a supporter of that step. The Executive Assistant, Finance Director, and the HR Director, that's the core group that should make that review. Mr. Dahle: Is the Council expecting to hear from the Salary Commission on a recommendation since we're talking about parameters? Mr. Furfaro: The recommendations that you sent over became law and became the guidelines, but you know you should be going through that process again soon, because before you know it, in 6 months we'd be back in budget. Mr. Dahle: But if we are talking about a recommendation for the parameters we're not really talking about establishing a law. We are talking about the Council basically trying to integrate that into a HR program or something to that effect as an example. Mr. Furfaro: Yes. Mr. Dahle: Okay. Mr. Furfaro: And I have appointed a subcommittee on the Council of three members to do the HR for the Council. Mr. Dahle: Do they have a deadline? Mr. Furfaro: They have just finished their reports. Chair King: Just to point it out, Jay, it's not 6 months, it's a little closer to 4 months. I think that when you first started reading your testimony just technically for Mercedes, I think when you said that the annual budget to the Council on or before March 15. I think you said May 15. Mr. Furfaro: Oh, there's March and then there's a revised budget in May, thank you. Mr. Furfaro: I will sit in your audience for a little while. Thank you again for serving and thank you for all of the work the County Attorney's Office does. 111 Page SC 2011-11 Communication dated 11/03/11 from Horace Stoessel requesting time at the next meeting to discuss what may/should be included in salary resolutions. Chair King: Okay,we have a second communication and I am wondering if Mr. Horace Stoessel and I don't know, Mr. Stoessel would you like to address the communication. Chair King: There is one piece that was handed to us today and I think everyone has it. Mr. Stoessel: Good morning, my name is Horace Stoessel. Mr. Chair, you didn't call for any commentary on Mr. Furfaro's presentation. I would like to make a short commentary on my material if I may. I am delighted to see the Chairman of the Council dialoging with the Salary Commission. I always felt that one of the biggest problems with the salary process is the absence of communication and in connection with the subject matter that Mr. Furfaro presented. I would like to add a small piece of information to the record, regarding, this matter of the March 15 deadline. Back in 2007 the first Commission that was charged with producing a resolution presented its preliminary findings on March 15 and its first salary numbers on April 18. I'd like to just quote a couple of pieces from the minutes of the Salary Commission from the very first meeting in 2007. At that meeting, it is very clear that everyone understood the mandatory nature of the March 15 deadline and the reasons for it. When Mayor Baptiste convened, the Commission, and there were at that time only 4 members who had been sworn in and approved, the minutes say this Mayor Baptiste informed the Commission that through the Charter amendments which were being made 3 months before, some of the processes have changed albeit from the past and they relied on Lani Nakazawa and the Attorneys to guide the Commission. Lani Nakazawa at that time was the Mayor's Executive Assistant who also was recently been the County Attorney. For a second quote, me to finish Mayor Baptiste's statement, he knows a report is to be in the hand at Council approximately a month; that was February 7 so that was a little bit more than a month. Based on the verbiage that is in the Charter amendment on the next page of the minutes, and I will only read a part of the paragraph, the Commissioners inquired about the March 15 deadline; Ms.Nakazawa said the Commission has to produce a report by the 15th of March and that date is intended to coincide with the budgetary submission by the Administration to Council. So back then everyone understood about the March 15 business and this was further borne out; I don't have in mind exactly, but when the salary resolution came to Council, what it did eventually with the resolution was to refer it to the budget process. So, there shouldn't be any question that the fundamental pattern in this salary process that was so eloquently outlined by Mr. Furfaro. I will now move to my own testimony. I sent first a request and I thank you for putting this subject of the Salary Resolution 2011-1 on the agenda. I need to begin with a correction of 121 Page myself I said near the end of my testimony that I sent that six (6) members of the Commission approved the last resolution. The fact is six (6)members voted to adopt the resolution and five (5) members signed it. In regard to the content of the resolution, I don't feel any need to read through it now; you have had copies and had a chance to access it and develop any responses that you may have to it. Mr. Stoessel: So, I think that I will say I welcome any questions or any responses that you may have to what I have submitted. Chair King: Mr. Stoessel, we just received your testimony this morning when we came in to the meeting. Mr. Stoessel: Well maybe I should read through it then. Chair King: We can all read through it but I am not sure that we can digest it all. Mr. Stoessel: Well let me suggest this. Let me read through it and as I go through it please feel free to interrupt me at any point if you have any questions or comments. Is that okay? Mr. Dahle: May I interrupt you on the point that you were talking about earlier in the third paragraph at the end of your prepared testimony. You talked about Mr. Isobe talking about amending the resolution final draft about the six members who signed it...you were not making an issue about that. Is that correct? Mr. Stoessel: No. Mr. Dahle: So the other question that you asked has been answered then? Mr. Stoessel: Are you referring to what I said about where there was a breakdown in due diligence? Mr. Dahle: Yes. Mr. Stoessel: I don't remember answering that, do you? Mr. Dahle: No, basically your reference to breakdown refers to the prior paragraph. Is that correct? Mr. Stoessel: Yes. 13 1 Page Mr. Dahle: Okay,thank you. Mr. Stoessel: My point was that this particular statement went through the whole process and came out in the resolution and nobody caught it. Mr. Dahle: I was under the impression that there was a note made on the signature page that the person who didn't sign it was not able to sign it. Mr. Stoessel: I am not questioning who signed it or not, I was just correcting my own mistake. Mr. Dahle: Okay, thank you. Mr. Stoessel: So not to take anymore of your time, I will read my testimony. Thank you for making time on the agenda to discuss Salary Resolution 2011-1. At some point, the Commission will produce a new salary resolution. What will you include in the resolution? I would like to see the Commission do something it has never done before and that is to start from scratch. Make a conscious decision about every word, phrase, sentence, and section you put in the resolution. If that sounds far-fetched I ask you this, would you in your personal and business affairs, sign a document that you had not carefully reviewed? A salary resolution is the work product of the Salary Commission and the members are solely responsible for its contents. In my opinion, every person who signs a resolution should be prepared to explain and defend everything in the resolution. In light of this fact, I find what happened in September to be very strange. On September 7 the County Council rejected Resolution 2011-1 then voted on September 21 to reconsider the rejection, then failed to approve the resolution on September 27 and allowed it to take effect automatically. At no point in the process did the County Council call on the Salary Commission to explain and defend its resolution, and at no point did a member of the Commission, either officially or unofficially, offer to explain and defend the resolution. Getting back to the main point, starting from scratch means starting with the Charter. The Charter requires the Salary Commission to establish executive salaries by resolution and to submit its salary findings to the Mayor and Council on or before March 15th. I interpret salary findings to include any changes in salaries and any reasons for making those changes. I believe that anything else you include in the resolution should be carefully scrutinized. I predict that if you start from scratch and start with the Charter, you will wind up with a greatly simplified resolution and you will minimize chances for confusion and miscommunication to occur or be perpetuated. 141 Page By the way of contrast, here is an illustration of what can happen under the procedure you have been following. The last paragraph in Draft Resolution 2011-1 prepared by Mr. Isobe says this " Be it Finally Resolved", the County Clerk shall transmit to the Salary Commission, Mayor, Finance Director, and Personnel Director a final approved copy of the resolution and note any amendments thereto within 30 days after the effective date of this resolution. The Resolution was adopted but not finalized on Aug 5. During the August 5 meeting the following dialogue occurred: Mr. Dahle: Is the intent to get Resolution 2011-1 to the Council as soon as possible? Mr. Isobe: Yes, because the Council would still have the opportunity to amend the Resolution if they choose to. Chair King: If they amend the Resolution, does the Commission have to schedule another meeting? Mr. Isobe: It would come back, but only to inform the Commission of its amendments if there are any. Other than that, no further action will be required of the Commission. Ms. Clark: They actually would not be amending it but may reject the whole Resolution or part of it. Following the Aug 5 meeting Mr. Isobe included the same language about amending the resolution in the final draft and five members signed it. I asked where was the breakdown in due diligence that allowed this mistaken information to go public under the signature of the commission? If you start from scratch and start with the Charter, I predict that you will identify other questions about what to include in the salary resolution that have hitherto gone unnoticed. My intention has been to bring this issue to your attention, because I believe that you addressing this issue is in everybody's interest. Chair King: Thank you. Commissioners do you have any questions for Mr. Stoessel? No questions, thank you Mr. Stoessel. Mr. Stoessel: You're welcome. Mrs. Stoessel: Mr. Chair, I would also like to testify Chair King: Yes. Mrs. Stoessel: I would like to testify. Ms. Youn: Chair, can you please entertain a motion to receive the two communications SC 2011-10 and SC 2011-11? 151 Page Chair King: Yes, can we have a motion to receive the two communications? Ms. Kaui: Move to receive. Mr. Crowell: Second. Chair King: Those in favor, say aye. Opposed? Motion carries. On a motion made by Trinette Kaui and seconded by Bob Crowell, to move to receive the two communications, motion carried unanimously by voice vote. Mrs. Stoessel: Mahalo, my name is Phyllis Stoessel. I have observed the salary process now and I have come to the conclusion that most, if not all, of the problems and confusion that have resulted in the last few years could have been avoided if the salary resolution had included a fiscal year recommendation for salaries, rather than a multi-year recommendation for salaries. With this in mind, I would encourage you to put into your policies or your rules or wherever it belongs in the statement that the resolutions will include fiscal year recommendations and not multi-year recommendations. Chair Kind: Thank you. Mr. Dahle: Could I ask that you to clarify one thing please? Mrs. Stoessel: Sure. Mr. Dahle: You're talking about the resolution that discusses proposed increases. Mrs. Stoessel: Over multi-years. Mr. Dahle: Is that based on a calendar year other than fiscal year? Mrs. Stoessel: Yes, it was multi-years, actually the budget is a fiscal budget. Mr. Dahle: Correct, I understand. I am wondering if those segments were to be put there as an attempt to achieve the 777 plan. I don't know what the philosophy was at that time. Is that your concern? Mrs. Stoessel: Well, it has created a lot of difficulty and I contend that this Commission, for instance, has authority over the next fiscal year. But when you go beyond the next fiscal year, 161 Page you are exerting the power of the following Commission and also you are putting a figure into the budget consideration and that you don't know what the financial situation of the County is going to be. That's when we had so much trouble with furloughs and the lack of finances in the multi-year approach. I have seen this done another time that I'm aware of and it resulted in a large problem then as well. The County Council was also trying to give back their salaries because monies were not available and anytime that a resolution goes multi-year, it seems to cause problems. Mr. Dahle: Thank you. Mr. Delaphane: Good morning, I am the First Deputy Prosecutor and I here to provide testimony very briefly on the two communications. I have written testimony from the Prosecuting Attorney that I would also like to submit,but at the end of my testimony. I will be very brief. You know I appreciate what Chair Furfaro came up and testified about today, in addition to Mr. Stoessel's. Both of them have some very good points that I think this body should definitely take them into consideration. The croc's (sic)that I would like to talk about very briefly today is this issue of Section 29.03 shall and may. I think that is something that has been possibly overlooked in this whole process with the use of the phrase on or before because I think that's pretty clear and there is no question about what on or before means. There have been quite a bit of discussion for the Council when Resolution 2011-1 came before the County Council and in the reading the minutes of what went on with this body when Resolution 2011-1 was being sort of batted around, as far as the phrase "shall" and whether its directory or its permissive and that sort of thing. Again, I think that the case is clear. The Supreme Court has addressed this issue in many ways and the only time the "shall" doesn't necessarily mean"shall" is when there is some sort of injustice that would come if you use it as a mandatory type language. In here I just don't see an unjust result, I don't see any kind of absurd result and having that"shall"be absolutely directory. I don't think that any of the exemption really applies that you can hang your hat on and say with good faith that you know in this situation the word"shall" does not necessarily mean"shall". Again, the testimony that I am going to submit goes over that in great detail and I'm sure there are going to be many discussions to come after seeing the agenda today. I just wanted to bring it to your attention and say it out publicly. Again, I do not want to belabor this point to much. You know there are two things here that have been crossed over...its just common sense you don't have to be an attorney or be well versed in public policy or in politics to understand this. When Section 29.03 of the County Charter says "on or before March 15", and use that as a deadline date which clearly it is, cannot be interpreted any other way, it's on or before March 15 and not after and that is something that is up to interpretation. The very fact is that March 15 even appears in Section 29.03 as a date that provides some sort of guidance and it should be given weight. If we're just saying that 171 Page March 15 doesn't matter then why would it be in Section 29.03? It doesn't make sense to say well you can comply with that deadline, but you don't necessarily have to. It absolutely makes no sense and I don't feel that it is a fair reading of Section 29.03. With that I will wrap it up, and again I would like to submit the written testimony from our office. If you have any questions, I will be happy to answer them. Chair King: So, the testimony is from your office and not from you individually. Mr. Delaphane: Yes. It's actually, Shaylene's testimony and signed by Shaylene. I am just here to deliver her testimony. Mr. Dahle: I don't think that we have any authority over that. No offense. Mr. Delaphane: Sure. Chair King: Past tense. Mr. Delaphane: I was just providing testimony on what's been talked about. Chair King: Thank you. Mr. Dahle: Do you have any thoughts about March 15 (inaudible)? Mr. Delaphane: You know that's a different agenda item entirely. Chair King: Is there anyone else who wants to testify? If not, may I have a motion to accept Mr. Delaphane's testimony? Mr. Dahle: So moved. Ms. Kaui: Second. Chair King: Those in favor. Opposed? Thank you. Ms. Kaui moved to receive the testimony. Ms. Kunioka-Volz seconded the motion. Motion carried 5:0 Business 181 Page Chair King: The next order of business is agenda item SC2011-12. Mr. Isobe, could you help me with this? SC 2011-12 Discussion and possible decision-making on whether the County Council, as the appointing authority, should be the body to evaluate the performance of the County Auditor as provided for Section 32.02 D of the Charter. Chair King: I am a little lost on this one. John, can you help me out on this? Mr. Isobe: This agenda item was originally based on testimony provided by Councilwoman Yukimura who raised that question and as a result of that testimony some of the Commissioners felt that they would want to have that discussion. Chair King: We should be or the Council? Ms. Morikami: The Salary Commission. Mr. Isobe: Yes, and her testimony I believe and I don't have it in front of me but, I believe that Councilwomen Yukimura suggested that somebody other than the County Council be the evaluating authority. Ms. Morikami: On page six of the minutes that you have in front of you, Mr. Finlay made a motion to place this issue of the County Auditor's performance review and salary on the next meeting agenda. Chair King: Page six (6) of the minutes. Ms. Morikami: Yes. Chair King: Perhaps we could move this forward to the next meeting. Mr. Dahle: Are you talking about the comments made in bold? Chair King: Is that a motion? Mr. Crowell: Yes. So moved. Ms. Kaui: I second. 191 Page Chair King: Thank you, any discussion? Those in favor of moving this forward to the next meeting, opposed? Thank you. Mr. Crowell moved to defer item SC 2011-12 to the next meeting. Ms. Kaui seconded the motion. Motion carried 5:0 Chair King: The next item is the SC 2011-13 Discussion and possible decision-making on the possible hiring of a consultant to conduct a review of salaries including but not limited to fringe benefits of council members and all officers and employees included in Section 3-2.1 of the Kaua'i County Code. Chair King: I think that this item is an also request from Commissioner Finlay. We may have some information provided from Council Chair Furfaro relating to the salaries of the positions from the other counties and how the numbers fluctuate. It might also be a good time to update the materials that we do have in relation to the other salaries on how they have been fluctuating. The other counties because they also (inaudible) Mr. Furfaro: Is there another opportunity where I can make another statement? Chair King: Yes. Mr. Furfaro: First of all, on the Auditor, I think that the review process should remain with the Council...I wanted to share that with you, because of the way it's written that you set the salary, but with a super majority. We may engage in a performance review issue that can only relate to an issue on cause. Another thing I would like to caution you on when you come to look at the County Council's Staff as a unit. Most of our appointees are in fact not covered by an employment contract, like the Police Commission, our clerk is an appointee at will, the deputies, these are appointees that they are voted on whether they continue or be terminated with the new body. Again, I think my statement is clear that the goals need to be left under the appointing body. The Fire Chief and the Police Chief are contracted; they are not appointees at will. I just wanted to share that. Chair King: Are the other counties similar? Mr. Furfaro: Yes, they are similar. Mr. Dahle: Basically,we understand that the Council is the appointing authority for the County Auditor. 201 Page Mr. Furfaro: In fact, with the other counties, if you call them to request information for a job description for a County Clerk, they won't have a description. We do. So there is a performance measure. Mr. Crowell: Is the Deputy County Clerk appointed by the Council or he appointed by the clerk? Mr. Furfaro: He is appointed by the County Clerk, and he gets to unplug the contract. Thank you for letting me clarify that. Chair King: Yes, Mr. Stoessel. Mr. Stoessel: Not having heard anything else except for what is on the agenda, I reserve the right to change my position. But at this moment, I would object to the Commission's hiring of a consultant to conduct whatever operations that you are intending by this. I don't see why the Commission can't do whatever it needs to do; besides, the Commission has resources that are available. I would also remind you that the last time a consultant was brought into this process which was in 2007 there was what I would consider mass confusion. That consultant has been hired in connection with the personnel department to a study there for$50,000. When the Commission convened early in 2007 that consultant was brought into this process. I don't know if he was paid extra money for what he did with the Salary Commission or not. This Commission was informed at some point, I don't know the exact date in 2010, by Mr. Heu that the Administration had rejected the recommendations of that consultant. To me that was a very confused process. Whatever it is that you are looking for, I would like to hear in your discussion a justification for why you need to spend money on a consultant, when one of the biggest concerns in the last couple of years at least has been the tight budget and how that affects the salaries that you recommend. I will be glad to answer any questions to what I just said. Chair King: I appreciate your point of view. Mr. Dahle: Is SC2011-13 the item that Mr. Stoessel is referring to and do we need to make a decision today? Chair King: Yes, it's an item that needs discussion and possible decision-making. We do have the information from the Hawai'i Employers Council provided by Chair Furfaro. My experience with the compensation committee is that the consultants have more access if you will in putting together peer groups, salaries, and benefits. If we're looking at just our peer group that being just for Hawai'i that is something perhaps that we can vote on whether hiring a consultant would 211 Page be necessary. I think that the data is valuable. What I would propose is to circulate the information we have today and schedule another meeting in January 2012 to discuss this. Mr. Dahle: Back in 2007 when there was talk about the Nash Report...the only two veteran Commissioners is Trinette and Bob. Did the Salary Commission pay for any of that? Mr. Crowell: No, they were contracted by the Personnel Department. And I believe that their findings were prior to us even being on the Salary Commission. I don't believe that the Nash Study had anything to do with the salaries of excluded or appointed officials. Am I correct John? Mr. Isobe: Yes. The Nash Study looked at the excluded managerial individuals who are the layer of managers' right below the department heads; they are all the divisional managers. As a result of that study, I wasn't here either, but as a result the reason from that study as what I understand brought before the Salary Commission is to then have the Salary Commission look at given what the salary structure were for the division heads, what then should be the salaries for the department heads who oversees those individuals. Mr. Crowell: Back then the big talk was about the inversion and that's why back in 2007 our first recommendation was for a 5% increase for the appointees. And that didn't even bring their salaries to what was comparable. Chair King: And the multi-year structure was to show the salary increases. This can get confusing. Mr. Dahle: Everyone knows that we are not in a situation where we're going to make recommendations for more increases when people are saying we shouldn't in the first place. I guess the key to this is how long this will be going on and is there is a better time to go with a consultant who might have more information rather than what's going on now. Think that we should stay abreast on what's happening and we can do that by talking to the other counties. This is kind of a timing issue more than anything else. It all depends if the Salary Commission...It is law correct? Do you understand it now that the so called freeze for lack of a better word... is until the revised date even through there is a dispute about the preparation of the resolution and the number of freezes for lack of a better word is still in effect? Is that correct? Ms. Clark: The Salary Resolution has a date of 2013 of July for part one and its records (inaudible) to Section 2. Mr. Dahle: Okay. 221 Page Chair King: This is kind of moving on to item 14 which is discussion and decision-making on establishing salaries for fiscal year 2012-13. While we did submit something that is in question now, it doesn't preclude us from offering a new salary resolution by March 15, even if it's the same one. Mr. Dahle: I understand that these are not amendments to the existing Resolution but an actually new product. So, if we submit a new product prior to March 15, can we discuss something more than just the salaries, can we discuss the changing of the dates to a fiscal year? Is this what we're talking about, Mr. Stoessel? On you initial testimony, taking away all of the stuff that kind of twisted this whole thing. Are you adamant about it and should we follow this matter and deal only with salary increases or discussion on salary? Mr. Stoessel: And the reasons for that. Mr. Dahle: Right. Do you have any concerns then, if that same resolution that you say should discuss salaries, and the reasons for them, would also contain a provision that would change the method from whatever dates are set now to a fiscal year as proposed by your wife. In the same resolution. Mr. Stoessel: Well, the resolutions have all contained an effective date and it seems to me that answers your question. Mr. Dahle: Just change the date without asking any questions. Mr. Stoessel: Well I purposefully in my testimony stayed away from getting into complications in this process for the past five years. My own view is that this Commission should not have put the multi-year raises and that when they did, the Council should have the rejected(inaudible). In 2009, when the question came up about deferring the last of the raises, instead of deferring the matter, the Commission should have eliminated that last phrase and you could have brought it back at anytime on a fiscal year basis. And if the Commission didn't do that, I think that the County Council should have said in 2009 we reject this deferral. You now guessed three different times as when a deferral might take effect and up to this point the guesses have been wrong I have said this to the Council, in terms of what currently exists, why not simply eliminate the full phase that comes all the way back from 2007 and say when conditions permit we still believe this raise ought to occur and we will bring it back. So, all of this to me is implied in that if you get firmly on a fiscal year basis it will be a lot easier going forward and it will eventually correct any confusion or what has occurred in the past. I hope that answers your question. Mr. Dahle: No, but you're very close. 231 Page Chair King: I think that if we stick to presenting something by March 15 it should roll right into the new fiscal year. Mr. Dahle: Good point. I gotcha on that. I know what you're talking about; he's got a better idea on what you're talking about. Thank You. Mr. Stoessel: You're welcome. Mr. Dahle: So then the objective would be to take again Phyllis's discussion on this and or limited discussion on this, and bring the other items up at the same time as this one. Which is the performance and the fiscal year thing? Chair King: Are we talking about deferring? Mr. Dahle: That is what I'm thinking about until the next meeting. Chair King: I think that will give us time to review the Hawai'i Employer's Council document. Mr. Dahle: Yes. Do we need to make a decision on item SC 2011-13, the hiring of a consultant? Chair King: I think that we should defer until we review the information that was submitted. I think that we can have discussion and decide to look at the salaries for fiscal 2012-13 to see whether we want to put forth a resolution to Council. Mr. Dahle: By the 15 of March. Chair King: We can look forward to... Do we need a motion to defer that? Ms. Youn: Yes. Ms. Kunioka-Volz: I so move. Mr. Dahle: Second. Chair King: Any further discussion? All those in favor? Opposed? Motion carries. 241 Page SC 2011-14 Discussion and possible decision-making on establishing salaries for the fiscal ye 2012/2013 for council members and all officers and employees included in Section 3-2.1 of the Kaua'i County Code. On a motion made by Sheri-Kunioka-Volz and seconded by Bill Dahle, to defer items SC2011-13 and SC2011-14 to the next meeting, motion carried unanimously by voice vote. Executive Session At 10:30 a.m. Chair King cited the Hawai'i Revised Statutes to bring the meeting into Executive Session. Chair King: Do I have to read this? Ms. Clark: I think that it would be a great idea just to read it into the record. Chair King: Okay and this would also need a motion. Pursuant to the Hawai'i Revised Statutes §§92-4, 92-5 (a0 (4) and(8), the purpose of this Executive Session is to consult with the Commission's legal counsel on issues pertaining to the Commission's and the County's powers, duties, privileges, immunities, and/or liabilities as they may relate to this item and to deliberate or make a decision upon a matter that requires the consideration of information that must be kept confidential pursuant to a state or federal law, or a court order. ES-1 Complaint filed in Fifth Circuit Court by Council members Mel Rapozo and Kipukai Kuali'i naming the County of Kaua'i, several members of the County Council, and the Salary Commission as defendants which seeks declaratory judgment concerning the interpretation of Section 29.03 of the Charter, specifically that the word"shall contained in Section 29.03 of the Charter is mandatory rather than directory and that Resolution 2011-1 is void as it was submitted after March 15, 2011. Chair King: Do I hear a motion? Mr. Dahle: So moved. Ms. Kaui: Second. Chair King: All those in favor to go into Executive Session. Opposed? Motion carries. On a motion by Bill Dahle and seconded by Trinette Kaui, to go into Executive Session, motion carried unanimously by voice vote. 251 Page At 10:35 a.m. the meeting entered into Executive Session. Return to Open Session At 11:15 a.m. the Salary Commission returned to Open Session. Chair King: I would just say that if anyone who would like a particular item on the agenda prior to the meeting being called,just let me know and I will call it in and have it put on. Mr. Dahle: We can reach you anywhere in the world? Chair King: And with that, I would still entertain a motion to adjourn. Mr. Crowell: Move to adjourn. Chair King: Thank you. Ms. Kunioka-Volz: Second. Chair Kind: Those in favor say aye. Opposed? Motion carries. Adiournment On a motion made by Bob Crowell and seconded by Sheri Kunioka-Volt, to adjourn the meeting, motion carried unanimously by voice vote. At 11:17 a.m. the meeting adjourned. Submitted by: Mercedes Youn, Staff Support Clerk Reviewed and approved by: Charles King, Chair Approved as circulated on: February 1, 2012 261 Page