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HomeMy WebLinkAbout121012_Agenda Packet Dirk Apao R E L,E I t+ E P Members: Chair Sandi Sterker Arryl Kaneshiro Lawrence Chaffin,Jr. 12 NOV 30 0 4 :18 Glen Takenouchi Vice-Chair Laurie Yoshida UF - THE CiJr. COUNTY P COUNTY OF KAUAI COST CONTROL COMMISSION NOTICE OF MEETING AND AGENDA Monday, December 10, 2012 1:30 p.m. or shortly thereafter Mo'ikeha Building, Liquor Conference Room 3 4444 Rice Street, Lihue, HI 96766 CALL TO ORDER APPROVAL OF MINUTES Regular Open Session Meeting Minutes of November 8, 2012 COMMUNICATIONS CCC 2012-17 Email dated 11/13/12 from Public Works Building Supervisor Brian Inouye to the Commission Control Commission,responding to the Commission's inquiry as to what is the normal life span of an air conditioning unit more specifically the unit housed in the County's Police Department. BUSINESS CCC 2012-13 Discussion on the County's travel budget,per diem policies, and expenditures (On-going) (c) Communication dated 11/9//12 from Chair Apao to Ernest Barreira, Purchasing and Budget Director,requesting his presence to answer questions the members have pertaining to his report on the County's Expenditures for Travel (General &Training) CCC 2012-15 Discussion on the County's real property tax age exemptions. (On-going) (a) Communication dated 11/9/12 from Chair Apao to Steve Hunt, Real Property Division Appraisal Officer, regarding request for information relating to the real property tax age exemptions. (b) Communication dated 11/30/12 from Wallace Rezentes, Jr., to Chair Apao and Members of the Cost Control Commission, regarding a information on Homeowners Age exemptions. An Equal Opportunity Employer CCC 2012-16 Discussion on the County's special counsel contracts and expenditures to date (On-going) (c) Communication dated 11/9/12 from Chair Apao to County Attorney Alfred Castillo,Jr.,regarding request for additional information and presence to discuss questions the members have pertaining to special counsel contracts. (c) Communication dated 11/15/12 from County Attorney Alfred Castillo, Jr., to Chair Apao and Members of the Cost Control Commission, regarding additional information on the County's special counsel contracts. CCC 2012-18 Discussion and decision-making on a draft of the 2012 Cost Control Commission Annual Report CCC 2012-19 Discussion and decision-making on the 2013 Cost Control Commission Meeting Schedule CCC 2012-20 Election of Chair and Vice-Chair for 2013 ANNOUNCEMENTS The next meeting: Monday, January 14, 2013, at 1:30 p.m. at the Mo'ikeha Building, Liquor Conference Room 3. NOTICE OF EXECUTIVE SESSION Pursuant to Hawai'i Revised Statutes §92-7 (a),the Commission may, when deemed necessary, hold an Executive Session on any agenda item without written public notice if the Executive Session was not anticipated in advance. Any such Executive Session shall be held in pursuant to H.R.S. §92-4 and §92-9 and shall be limited to those items described in H.R.S. §92-5(a). Discussions held in Executive Session are closed to the public. ADJOURNMENT 21 Cost Control Commission—December 10, 2012 PUBLIC COMMENTS and TESTIMONY Persons wishing to offer comments are encouraged to submit written testimony at least 24-hours prior to the meeting indicating: 1. Your name and if applicable, your position/title and organization you are representing 2. The agenda item that you are providing comments on; and 3. Whether you will be testifying in person or submitting written comment only. 4. If you are unable to submit your testimony at least 24 hours prior to the meeting, please provide 10 copies of your written testimony at the meeting. The length of time allocated to person(s)wishing to present verbal testimony may be limited at the discretion of the chairperson or presiding member. cc: First Deputy County Attorney Amy Esaki Send written testimony to: Cost Control Commission Attn: Mercedes Omo-Your Office Boards and Commissions 4444 Rice Street, Suite 150 Lihue, HI 96766 E-Mail: myoun(a)kauai.gov Phone: (808) 241-4920 Fax: (808)241-5127 SPECIAL ASSISTANCE If you need an alternate format or an auxiliary aid to participate,please contact the Boards and Commissions Support Clerk at(808)241-4920 at least five(5) working days prior to the meeting. 3 � Cost Control Commission—December 10, 2012 D�R'AFT 'To Bye A� ��ro�u�eld . �10,14 COUNTY OF KAUAI .r1 Minutes of Meeting OPEN SESSION Board/Committee: COST CONTROL COMMISSION Meeting Date: I November 8,2012 Location Mo'ikeha Building—Meeting Room 2A/B Start of Meeting: 1:39 p.m. End of Meeting: 3:30 p.m. Present Chair Dirk Apao; Vice-Chair Lawrence Chaffin, Jr.; Members: Sandi Sterker and Arryl Kaneshiro Also present: Deputy County Attorney Mona Clark; Board &Commissions Office Staff. Support Clerk Mercedes Youn; Administrator Paula Morikami; Economic Development Specialist Ben Sullivan. Member of the Public: Mr. Jim Satterfield Excused Members: Glen Takenouchi and Laurie Yoshida Absent SUBJECT DISCUSSION ACTION Call To Order With a quorum being present, Chair Apao called the meeting to order at 1:39 p.m. Approval of Regular Open Session Minutes of October 8, 2012 Commissioner Sterker moved to approve Minutes the minutes as circulated. Vice-Chair Chaffin seconded the motion. Motion carried 4:0 Chair Apao indicated that he would move item CCC 2012-14 before item CCC 2012-13. Business CCC 2012-14 Communication dated 10/10/12 from Chair Dirk Apao to Economic Development Specialist Ben Sullivan, requesting an update of the Cost Control Commission's Energy Savings recommendations. Chair Apao called for a motion to receive item CCC 2012-14. Commissioner Sterker moved to receive item CCC 2012-14. Vice-Chair Chaffin seconded the motion. Motion carried 4:0 Cost Control Commission Regular Meeting- Open Session November 8, 2012 Page 2 SUBJECT DISCUSSION ACTION Mr. Sullivan provided the Commission with an update on the Commission's six (6)recommendations on energy savings for County facilities. Recommendation 1. The Department of Water and the Wastewater Division of the Department of Public Works should be required to develop cost-saving opportunities for their operations, through energy efficiency and conservation measures and the use of alternative energy sources (for example,methane, wind and solar power). These alternatives should be considered for implementation particularly during expansions or renovations to existing facilities and the construction of new facilities. With regard to the Wastewater Division, Mr. Sullivan stated that the County has been actively engaged with negotiations to implement an Energy Savings Performance Contract(ESPC) for the Public Works Wastewater Division with Chevron Energy Solutions. He indicated that although he could not provide more details regarding the project, there is potential that the contract would be approved and that the project could be executed within a few weeks to a month. Vice-Chair Chaffin asked how long have the negotiations being going on? Mr. Sullivan said that the contract negotiations started in January 2012 and that the contract consists of 100 pages that include specific details on how much savings would be achieved by using baseline energy measures and alternative energy sources for County facilities,what it would cost individually, and how would the savings be calculated. Cost Control Commission Regular Meeting- Open Session November 8, 2012 Page 3 SUBJECT DISCUSSION ACTION Vice-Chair Chaffin voiced his concerns on the amount of time it takes to approve a Performance Contract to its final execution. Mr. Sullivan stated that he agrees,but once the contract is approved the implementation of the project would be expedited. He explained that the process is different from the typical County project in that it is not an isolated procurement of an individual measure because of its broad scope. Once the contract is agreed upon, it would takel0 months to a year to complete the project. Commissioner Sterker asked whether Chevron Energy Solutions have done this type of project before. Mr. Sullivan said that after a lengthy review and ranking process, Chevron Energy Solutions received the highest rank out of four competing proposals. He explained that the County refers to a list of pre- qualified ESCO's (Energy Services Companies)that is made available through the State DAGS (Department of Accounting and General Services). Mr. Sullivan said that there are two major components to be considered for the project. He explained that the first component is the traditional wastewater scope that includes pumps and motors; the second component which is more than half of the proposed cost is to purchase a large size battery operated photovoltaic power system. The total capital cost projected for the project is well over$10 million. Vice-Chair Chaffin questioned what would happen if the County changed its mind and decided not to proceed with Chevron; have they received any payment so far? Mr. Sullivan stated that Chevron is at a risk which is standard when it involves an ESPC (Energy Savings Performance Contract) and that the escrow is significant in the IGA(Investment Grade Audit). Cost Control Commission Regular Meeting- Open Session November 8, 2012 Page 4 SUBJECT DISCUSSION ACTION He explained that payments are proposed if they are deemed to have met their scope of work and that the County would decide on its own whether or not to proceed with the contract. However,that is so far down the road and is not expected. Vice-Chair Chaffin indicated that he would like the minutes to reflect Mr. Sullivan's statement that once the contract is approved it may take up to 10 months to a year to complete the project. He voiced his concern that the time and effort expended to approve the contract may not result in the completion of the project. Mr. Sullivan said that the best thing for him to do is to check with the County Attorney's Office on whether he would be able to disclose any additional information at this point on the schedule proposed construction projects. Mr. Sullivan explained that because of the different types of components some projects could take up to a year for completion, while others are completed on time. He mentioned like any other construction project there is a possibility of having significant delays in which they do not have total control over. He further explained that the process is expedited because you are dealing with just one contractor. Mr. Sullivan noted for the record that he can safely say that the proposed time to complete the project is approximately within the range of a year. Commissioner Sterker asked if the land has already been procured for the project. Mr. Sullivan stated that most of the measures in regard to the Wastewater process are in place which is basically exchanging one piece of equipment for another. He further indicated that there would be no further delays because there is no additional land procurement for the proposed hotovoltaic systems. Cost Control Commission Regular Meeting- Open Session November 8, 2012 Page 5 SUBJECT DISCUSSION ACTION Recommendation number 2. All Departments should be asked to read the Energy Use Survey Guide and to follow the recommendations outlined therein. Mr. Sullivan stated that although he could not respond specifically to the Energy Use Survey Guide,he knows that the County is doing its part to increase energy efficiency for the County. Recommendation number 3. Execute a new Energy Savings Performance Contract to improve energy efficiency in the County's buildings and facilities. Mr. Sullivan stated that the Office of Economic Development has been doing a lot of work in preparation of its next phase which is to focus on its resources in completing the Energy Savings Performance Contract for Wastewater. This second ESPC is expected to cover most of the County's non-water and non- wastewater facilities. He stated that the task to implement the energy efficiency recommendations requires equipment or fixture retrofits for the buildings and would proceed either way with or without a contract, which would result in significant energy savings over the next several years. Commissioner Sterker asked what is being done with the County's aging air conditioning units. Mr. Sullivan stated that he is not familiar with how the County deals with the aging air conditioning units and as for the upgrades he suggested that the Commission contact DPW Officer Brian Inouye to get the information. He indicated that the air conditioning units that are housed in the Police Department are due for significant retrofitting, if not replacement in terms of the mechanical equipment. Cost Control Commission Regular Meeting- Open Session November 8, 2012 Page 6 SUBJECT DISCUSSION ACTION He further indicated that although funds have been budgeted for equipment replacement and fixture retrofits, there have been talks to delay the project to decide whether or not to pursue another Performance Contract or have another aggregated vehicle to proceed with the project. He added that a decision would soon come in a form of an IFP (Invitation for Proposal)document that would allow the project to begin as soon as early next year. Commissioner Sterker asked what other fixture retrofits needed to be done at this point. Mr. Sullivan stated that the fixture retrofits vary from facility to facility and that the Civic Center master plan cites all improvements including the parking area and landscaping around the facility. Vice-Chair Chaffin expressed his disbelief that the life span for air conditioning units that are housed in the Police Department are only for ten(10)years. Commissioner Sterker requested that the Commission be provided with information on what is the normal life span for an air conditioning unit, particularly the unit that is housed in the Police Department. Staff acknowledged the Commission's request and will make an inquiry with DPW Officer Brian Inouye to see whether the information is available. Recommendation number 4. The County should develop cost savings opportunities for its operations through energy efficient and conservation measures by exploring the issuance of a new Performance Contract proposal solicitation for County facilities. Cost Control Commission Regular Meeting- Open Session November 8, 2012 Page 7 SUBJECT DISCUSSION ACTION Mr. Sullivan stated that he is unsure whether the update for this recommendation is similar to updates for recommendations 1, 2, and 3. Commissioner Sterker indicated that the update for this recommendation is the same as recommendations 1-3. Recommendation number 5. The County should form a Count Dgpartmental Green Team Committee to assess work environments, identify opportunities and make recommendations to reduce waste and improve efficiencies in their daily work. Mr. Sullivan stated that the County has implemented an energy efficiency program known as the Green Team. The Green Team is made up of County staff level employees whose purpose is to tackle projects to improve the County's resources management that will result in cost-savings and reduce the County's carbon footprint. Some of the Green Team projects include establishing a policy on thermostat settings in County offices; develop and encourage a ride-sharing program for County employees; promote a paper reduction campaign; and promote a"disposable to reusable's" campaign for County offices. Mr. Sullivan informed the Commissioners that the County is hosting an Open House on Thursday,November 16th at the Lihue Civic Center. He invited the Commissioners to attend the event which is also open to the public. The purpose of the event is an effort to get the public's input and suggestions on how to make the County of Kauai more energy efficient. Cost Control Commission Regular Meeting- Open Session November 8, 2012 Page 8 SUBJECT DISCUSSION ACTION Recommendation number 6. The County should engage and promote employee awareness,understanding, and sense of personal and departmental responsibility among all l employees for how they use energy and other resources and how they can reduce waste and improve efficiency in their daily work by creating an"Employee Green Team"in the County. Mr. Sullivan stated that in addition to the Green Team program, the County has a solution that they are hoping to have in place as early as the first quarter of next year. He explained that over the last nine months, the County has gone online collecting information from outside sources on various products used to collect numerical energy use data. He indicated that their efforts were successful in locating a tool that would take numerical energy use data of each County facility,visualize it and make the data accessible to the user so that they could compare energy usage on a month to month basis and even show energy usage from a year ago to the present. He added that the tool would also provide information on anomalies which would be very useful to help improve energy efficiency within the County. Mr. Sullivan left the meeting at 2:10 p.m. Chair Apao indicated that he would move item CCC 2012-16 before item CCC 2012-13. CCC 2012-16 Discussion on the County's special counsel contracts and expenditures to date. (a)Communication dated 10/24/12 from County Attorney Alfred B. Castillo, Jr.,to Chair Apao and Members of the Cost Control Commission, regarding the County's special counsel contracts. Cost Control Commission Regular Meeting- Open Session November 8, 2012 Page 9 SUBJECT DISCUSSION ACTION Chair Apao called for a motion to receive item CCC 2012-16 (a). Commissioner Sterker moved to receive item CCC 2012-16 (a) for the record. Vice- Chair Chaffin seconded the motion. Motion carried 4:0 Mr. Jim Satterfield,member of the public, distributed a list of questions as it relates to this issue. Mr. Satterfield expressed his concerns on the amount of tax payer's money that is spent each year for outside attorney fees. He asked what are the criteria used in the hiring of contract lawyers when the County should have the ability to utilize its own attorneys on staff. Commissioner Sterker explained that the Cost Control Commission's responsibilities are to eliminate or consolidate overlapping or duplicate programs and services and to scrutinize for reduction any County operation. She stated that she is unsure whether it is within the Commission's power to place pressure on anyone to alleviate the time and cost to work a case. Deputy County Attorney Clark stated that she is unable to provide any specific details as to questions regarding special counsel contracts. Ms. Clark gave a very broad explanation that if the County decides to pursue a case, it believes that it has a valid legal base on which to act and that it would be more beneficial to the County to pursue it then to let it go. Ms. Clark stated that one must consider the facts and circumstance of each case and the legal issues to know the basis of the appeal or the court case. Commissioner Sterker questioned whether it is normal practice for the County Attorney's Office to hire outside law firms to handle nine(9) of its cases. Cost Control Commission Regular Meeting- Open Session November 8, 2012 Page 10 SUBJECT DISCUSSION ACTION Vice-Chair Chaffin expressed his concerns on hiring outside counsel and asked why the County Attorney's Office doesn't have a law firm here on the island on retainer. Commissioner Sterker stated that she would like the County Attorney to be present at the next meeting so that he could address some of the Commission's questions as it relates to what is the criteria used in determining the selection of special counsel; what are the time limits and expiration date on the contracts; and what are the reasons for hiring special counsel as opposed to using in-house attorneys in the County Attorney's Office. Staff acknowledged the Commission's request and will send a letter requesting for the information and the presence of the County Attorney at the Commission's next meeting in December. CCC 2012-13 Discussion on the County's travel budget,per diem policies, and expenditures. (a) Communication dated 10/11/12 from Budget and Purchasing Director Ernest Barreira to Chair Dirk Apao,relating to a request for travel and related costs information. Commissioner Kaneshiro pointed out that he would have liked to see the actual budget for each department. Commissioner Sterker voiced her concern that the travel expenditures for the Fire Department had increased significantly from $42,789 in 2010 to $106,916 in 2012. Commissioner Kaneshiro questioned how the County gets Federal and State travel grants. Ms. Clark indicated that she is unsure of how the County obtains those type s of grants but would guess that if a seminar held by a State or Federal Cost Control Commission Regular Meeting- Open Session November 8, 2012 Page 11 SUBJECT DISCUSSION ACTION agency,the County may be able to apply for a grant to attend the seminar if it is beneficial to the County. Commissioner Sterker suggested that the Commission defer this matter for continued discussion and request that Staff contact Budget and Purchasing Director Ernest Barreira and ask him to be present at the December meeting. Chair Apao called for a motion to receive item CCC 2012-13 (a). Commissioner Sterker moved to receive (b) Communication dated 10/12/12 from Director of Finance Wallace item CCC 2012-13 (a). Commissioner Rezentes, Jr. to Chair Dirk Apao and Members of the Cost Control Kaneshiro seconded the motion. Commission, relating to information on travel and per diem policies. Motion carried 4:0 Vice-Chair Chaffin questioned whether the quarterly per diem rate of$22.50 includes meals, lodging, and transportation. Commissioner Sterker replied yes, and that same day travel per diem is based on a flat rate of$20.00. Staff informed the Commission that per diem for traveling within the state (inter-island) for more than one day amounts to $90 per day in which$50.00 would go towards lodging. Travel to the mainland would amount to $145 per diem in which$85.00 would go towards lodging. Vice-Chair Chaffin asked whether the$90.00 a day per diem is deducted from the person's pay. Commissioner Sterker said no and that per diem is allowable for business travel only. Commissioner Sterker moved to receive item CCC 2012-13 (b). Vice-Chair Chaffin Chair Apao called for a motion to receive item CCC 2012-13 (b). seconded the motion. Motion carried 4:0 Cost Control Commission Regular Meeting- Open Session November 8, 2012 Page 12 SUBJECT DISCUSSION ACTION CCC 2012-15 Discussion on the County's Real Property Home Owners Age Tax Exemption. Commissioner Sterker stated that she would still like to make a recommendation that with the exception of people ages 65 years and older, homeowners who fall below that age range would pay just a flat rate. Commissioner Kaneshiro stated that he is unclear on how it would affect the taxpayers and where the County is now as far as its revenues, and how much time it would take for the real property tax division to implement the change into their system compared to having the tax rate remain the same. Commissioner Sterker stated that the tax rate would actually come out even and would lessen the amount of work for the staff at the Real Property Tax Division because there would be only two tax categories for the staff to process as compared to how the system is currently set up. Commissioner Kaneshiro questioned whether the recommendation is an attempt to adjust the real property rate structure or make it more efficient for the staff at the Real Property Tax Division. Additionally, Commissioner Kaneshiro questioned how the Commission would decide on the ages. Commissioner Sterker stated that the Commission should come to a general conclusion on how the members would want to proceed on this issue by either acting on it or leave things the way they are. Commissioner Sterker stated that what she is proposing is to increase the home use exemption from$48,000 to $88,000 for all ages and eliminate the other home use age exemption. Cost Control Commission Regular Meeting- Open Session November 8, 2012 Page 13 SUBJECT DISCUSSION ACTION She recalls a statement that was made by Mr. Hunt at a previous meeting in which he said that there were a significant amount of people on the island whose age is 70 plus. Commissioner Sterker further stated that most people who are over age 60 are well enough along that they do not need the extra$30,000 in exemption, and that those who are under age 60 could really benefit from the extra$40,000 deduction. With regard to the people who are older and who really need the exemption they would fall under the low income exemption. Commissioner Kaneshiro voiced his concerns on whether it would be worth the trouble to present it to the County Council because he didn't want to place Mr. Hunt and Ms. Motta under fire by the Council as they were when they went before the Council for the minimum real property tax exemption increase. Commissioner Sterker stated that the basic home use tax exemption for the County of Kauai is $48,000;her proposed recommendation would amend the home use tax exemption to a flat rate of$88,000 for all age categories and eliminate the other home use age exemption types. She indicated that by doing it that way, it would lessen the workload for the staff at the Real Property Tax Division and bring in more revenue for the County. Commissioner Kaneshiro stated that he still feels uncomfortable with the recommendation and would like to see the ramifications on how this recommendation would affect the County, as well as the taxpayer. Commissioner Sterker asked Staff to see whether they could request the information from the Real Property Tax Division as it relates to the total number of homeowners who are under the age of 60, 60-69, and those who are Cost Control Commission Regular Meeting- Open Session November 8, 2012 Page 14 SUBJECT DISCUSSION ACTION age 70 and older. In addition, Commissioner Sterker requested for information on the total real property tax revenues from each of the three(3) age groups. Staff acknowledged the request and will follow-up to obtain the information from the Real Property Tax Division before the meeting in December. Announcements Next meeting: December 10, 2012 at 1:30 p.m. in the Liquor Conference Room 3. Adjournment Vice-Chair Chaffin moved to adjourn the With no further discussion, Chair Apao called for a motion to adjourn the meeting at 3:30 p.m. Commissioner Sterker meeting. seconded the motion. Motion carried 4:0 Submitted by: Reviewed and Approved by: Mercedes Youn, Staff Support Clerk Dirk Apao, Chair ( ) Approved as circulated(add date of meeting approval). ( ) Approved as amended. See minutes of meeting. From: Brian Inouye To: Paula Morikami Cc: Mercedes Youn Subject: RE:Question from the Cost Control Commission Date: Sunday,November 11,2012 9:59:18 AM Paula, There are so many variables that will affect the life span of any type of equipment, including AC equipment. The existing units at the Police Station are 10-years old,and certain parts of the unit are scheduled for replacement this current fiscal year. The units at the Police Station are susceptible to a corrosive salt air environment and are in operation 24/7. With those conditions and operating times, I feel the units have done fairly well over the last 10-years. A complete replacement of the units will probably need to be done within the next 5-years. Due to the importance of the Police, Prosecuting Attorney,and Civil Defense facility,it is important to be proactive in making such replacements before the units have any major breakdowns,which would affect the use of the facility. Hope this helps. Brian From: Paula Morikami Sent: Friday, November 09, 2012 10:26 AM To: Brian Inouye Cc: Mercedes Youn Subject: Question from the Cost Control Commission Good morning Brian,Yesterday the Cost Control Commission met and discussed energy savings measures being taken by the County. Ben Sullivan gave them an update. The commission members want to know what is the normal life span of an air conditioning unit for a building---such as the one housing our Police Department. They were relatively surprised that in a couple of years, that unit will need to be replaced. They asked staff to get this information from you. Whatever you can provide will be appreciated.Thank you Brian. Aloha, Paula Paula M. Morikami Administrator Office of Boards and Commissions 4444 Rice Street, Suite 150 Lihue, HI 96766 Phone: (808)241-4922 Dirk Apao Members: Chair Sandi Sterker Arryl Kaneshiro Lawrence Chaffin,Jr. ) Glen Takenouchi Vice-Chair Laurie Yoshida COUNTY OF KAUAI COST CONTROL COXVHSSION November 9,2012 TO: Ernest Barreira,Purchasing and Budget Director FROM: Chair Dirk Apao,and Members of the Cost Control Commission VIA: Paula Morikami,Boards and Commissions Administratorgyo CC: Gary Heu,Managing Director Wally Rezentes, Director of Finance SUBJECT: Request your presence at the next Cost Control Commission Meeting At the Cost Control Commission meeting held on November 8,2012,the members discussed your report on"Expenditures for Travel(General&Training)." The Commission would like to request your presence at our next meeting scheduled for Monday,December 10,2012 at 1:30 p.m. at the Mo'ikeha Building in Liquor Conference Room 3 to answer some questions the members have pertaining to your report. Please contact Mercedes Youn at(808)241-4920 or e-mail myoun(&*auai.gov to confirm your attendance or if you have any questions. Thank you. An Equal Opportunity Employer Dirk Apao Members: Chair Sandi Starker a Arryl Kaneshiro Lawrence Chaffin,Jr. Glen Takenouchi Vice-Chair Laurie Yoshida COUNTY OF KAUAI COST CONTROL CONMSSION November 9,2012 TO: Steve Hunt,Real Property Division Appraisal Officer FROM: Chair Dirk Apao, and Members of the Cost Control Commission VIA: Paula Morikami,Boards and Commissions AdministratozCy&Yl CC: Gary Heu,Managing Director II Wally Rezentes,Director of Finance SUBJECT: Request for Information relating to the Homeowners Age Tax Exemption The Cost Control Commission met on Thursday,November 8,2012 and continued discussion on real property tax exemptions. The members would like to know if you could provide the following breakdown: • The total number of homeowners who are under the age of 60 • The total number of homeowners who are age 60-69 • The total number of homeowners who are age 70 and older Also,can you please provide the total real property tax revenues generated from each of the three age groups listed above? If you can please send this information to the Office of Boards and Commissions by December 3,2012,we would appreciate it. The Commission plan on discussing this matter at its next meeting on Monday,December 10,2012. If you have any questions,please contact Paula Morikami at(808)241-4922 or e-mail pmorikami(%kauai.8°V Thank you. An Equal Opportunity Employer Bernard P. Carvalho,Jr. 9� Wallace G. Rezentes,Jr. Mayor Director of Finance n Gary K. Hen A Sally A. Motta Managing Director Deputy Director of Finance DEPARTMENT OF FINANCE County of Kauai, State of Hawaii 4444 Rice Street,Suite 280,Lihu`e,Hawaii 96766 TEL(808)2414200 FAX(808)241-6529 I j NOV 3 0 2012 Li) L BOARDS & COMMISSION! ' TO: CHAIR DIRK APAO, and Members of t e Cost Control Commission --- - VIA: GARY K. HEU, MANAGING DIRECTO FROM: WALLACE G. REZENTES,JR., DIRECTOR OF FINANCE At,-N\ RE: RESPONSE TO NOVEMBER 9, 2012 REQUEST TO STEVE HUNT REGARDING HOMEOWNERS AGE EXEMPTIONS DATE: NOVEMBER 30, 2012 ----------------------------------------------------------------------------- As exemption codes used for Home Use exemptions are the same regardless of age, there is no definitive way to segregate the amount of taxes paid by any specific age bracket. The counts of exemptions within each of the four exemption types is generated by a report which establishes the minimum and maximum birthdates ranges; however there is no current report that ties those exemptions to the actual property taxes paid by age. It would be near impossible to isolate the impact of the additional home exemption for age as there can be layered exemptions for low income, disability, or multiple owners with multiple home use exemptions. Moreover, the PHU tax cap also impacts whether an owner-occupant will actually enjoy the full amount of the exemption(s) or not depending on the property value. The only financial impact that could be estimated is the potential tax relief that the exemption provides. Please review the attached chart for the existing breakdowns that we can provide. Cc: Sally A. Motta, Deputy Director of Finance Steve Hunt, Real Property Division Appraisal Officer The exemption counts by age for the 2012 assessment list are broken out as follows: Under 60 5,255 Fee Simple—One Home 16 Leased (15-year)—One Home 20 Fee Simple—Multiple Homes 2 Leased (15-year)—Multiple Homes Total 5,293 Age 60—69 2,345 Fee Simple—One Home 8 Leased (15-year)—One Home 1,115 Fee Simple—Multiple Homes 22 Leased (15-year)—Multiple Homes Total 3,490 Age 70+ 255 Fee Simple—One Home 9 Leased (15-year)—One Home 3,081 Fee Simple—Multiple Homes 158 Leased (15-year)—Multiple Homes Total 3,503 The only financial impact that could be estimated is the potential tax relief that the exemption provides. Here are the calculations for potential real property tax savings for properties with home use exemptions: Tax Relief Per Exemption Under 60 5,293 x $48,000= $254,064,000 x($3.05/$1,000) _ $774,895 $146 Age 60-69 3,490 x $96,000= $335,040,000 x($3.05/$1,000) _ $1,021,872 $293 Age 70+ 3,503 x $120,000= $420,360,000 x($3.05/$1,000) _ $1,282,098 $366 Dirk Apao Members: Chair Sandi Sterker f Arryl Kaneshiro Lawrence Chaffin,Jr. �°�1 Glen Takenouchi Vice-Chair Laurie Yoshida COUNTY OF KAUAI COST CONTROL COMMISSION November 9,2012 TO: Alfred Castillo,Jr., County Attorney FROM: Chair Dirk Apao,and Members of the Cost Control Commission VIA: Paula Morikami,Boards and Commissions Administrato�.�y� CC: Gary Heu,Managing Director �� 11 SUBJECT: Request for additional information and the presence of the County Attorney to attend a meeting of the Cost Control Commission The Cost Control Commission met on November 8,2012 and discussed your report on the County's special counsel contracts. The members had specific questions regarding special counsel contracts which include: 1. What are the criteria used in determining the selection of the a special counsel 2. Is there a time limit on contracts?Is there an expiration date? 3. What are the reasons for hiring special counsels rather than using the attorneys in the County Attorney's Office? The members of the Commission would like to request your presence at their next meeting to discuss these questions and other questions they may have. Our next meeting is scheduled for Monday, December 10,2012 at 1:30 p.m. at the Liquor Conference Room 3. Please let us know if you will be able to attend. If you have any questions,please call Paula Morikami at(808)241-4922 or e-mail her at pmorikami&kauai.8ov Thank you. An Equal Opportunity Employer Dirk Apao Members: Chair Sandi Sterker o Arryl Kaneshiro Lawrence Chaffin,Jr. ,n Glen Takenouchi Vice-Chair �'� Laurie Yoshida tQ- 1� nrn h e: COUNTY OF KAUAI COST CONTROL COMMISSION o o November 9, 2012 C' T; rt) TO: Alfred Castillo, Jr., County Attorney FROM: Chair Dirk Apao, and Members of the Cost Control Commission VIA: Paula Morikami, Boards and Commissions Administrato Wy1f,"', CC: Gary Heu,Managing Director SUBJECT: Request for additional information and the presence of the County Attorney to attend a meeting of the Cost Control Commission The Cost Control Commission met on November 8, 2012 and discussed your report on the County's special counsel contracts. The members had specific questions regarding special counsel contracts which include: 1. What are the criteria used in determining the selection of the a special counsel 2. Is there a time limit on contracts? Is there an expiration date? 3. What are the reasons for hiring special counsels rather than using the attorneys in the County Attorney's Office? The members of the Commission would like to request your presence at their next meeting to discuss these questions and other questions they may have. Our next meeting is scheduled for Monday, December 10,2012 at 1:30 p.m. at the Liquor Conference Room 3. Please let us know if you will be able to attend. If you have any questions,please call Paula Morikami at(808) 241-4922 or e-mail her at pmorikamia,kauai.gov Thank you. An Equal Opportunity Employer Bernard P. Carvalho,Jr. o� �� Alfred B. Castillo,Jr. Mayor County Attorney O Gary K. Hen o Amy I. Esaki Managing Director First Deputy OFFICE OF THE COUNTY ATTORNEY County of Kauai, State of Hawaii 4444 Rice Street,Suite 220,Lihu`e,Hawaii 96766-1300 TEL(808)241-4930 FAX(808)241-6319 November 15, 2012 1 �j Nov 2 0 2012 i Dirk Apao, Chairperson _ and Members of the Cost Control Commission ' 6OARD3 & COMNli Ir',` 4444 Rice Street - - Uhu'e, Hawai'i 96746 Re: Additional Information on County's Special Counsel Contracts Dear Chair Apao and Members of the Cost Control Commission: We received your memorandum dated November 9, 2012 requesting our office to respond to three questions relating to the County's hiring of Special Counsel. Our responses are as follows: 1. What are the criteria used in determining the selection of a special counsel? The criteria used in determining the selection of special counsel is contained in HRS Section 103D-304. HRS Section 103D-304 requires contracts for professional services to be awarded based on demonstrated competence and qualification for the type of services required and at fair and reasonable prices. It also requires the selection criteria in descending order of importance to be: (1) Experience and professional qualifications relevant to the project type; (2) Past performance on projects of similar scope for public agencies or private industry, including correction actions and other responses to notices of deficiencies; (3) Capacity to accomplish the work in the required time; and (4) Any additional criteria determined in writing by the selection committee to be relevant to the purchasing agency's needs or necessary and appropriate to ensure full, open, and fair competition for professional services contracts. 2. Is there a time limit on contracts? Is there an expiration date? Unlike other professional services contracts, contracts with special counsel do not have a specific expiration date. Instead, the termination of a special counsel An Equal Opportunity Employer Dirk Apao, Chairperson and Members of the Cost Control Commission November 15, 2012 Page 2 contract runs with the completion of the case. Litigation starts at the trial court level and may continue on appeal to the appellate courts. In some cases, the appeal may even continue to the U.S. Supreme Court, and the timing of appellate hearing is not within the control of this office. 3. What are the reasons for hiring special counsels rather than using the attorneys in the County Attorney's Office? The attorneys in this office handle a large portion of the cases that are either filed by or against the County. Recently, this office has hired special counsel with the approval of the County Council due to conflicts of interest or due to the complexity of the subject matter which potentially exposes the County to substantial financial exposure. Although most of our attorneys have had previous litigation experience as deputy prosecutors, the issues involved in the cases which special counsel have been hired for are complex and requires a specialty or expertise which can only be developed by handling many similar type of cases. If you have any additional questions, please feel free to contact me at 241-4930. Thank you. Sincerely, ALFRED B. CASTILCO, JR County Attorney ' cc: Gary Heu, Managing Director COUNTY COST CONTROL COMMISSION 2012 Annual Report Overview Established by Charter in 1988, the goal of the Cost Control Commission is to reduce the cost of county government while maintaining a reasonable level of public services. The Cost Control Commission is charged with the responsibility to review and scrutinize personnel costs, real property taxes, travel budgets, and contract procedures with the intent of eliminating, consolidating or reducing overlapping or duplicate County services and programs. The Commission is empowered to secure, through the Office of the Mayor or the Chairman of the Council, any reports or information from their respective departments or employees that are appropriate to accomplish its work. The Cost Control Commission conducted twelve (12) regular meetings and one (1) workshop on real property tax exemptions in the 2012 calendar year and is hereby submitting its Annual Report summarizing its recommendations which will be advertised as required in Section 28.05 of the Kauai County Charter. I. RELATING TO COUNTY REAL PROPERTY TAX EXEMPTIONS From June 2011, the Commission initiated a review of the County's real property tax exemptions to determine whether revisions to the existing exemptions would be recommended. The Commission reviewed in detail the multiple exemptions afforded in the Real Property Tax Code and realized the complexity of the Code. As a result, the discussion is still on-going. During the discussions with the Real Property Division staff, the Commission was made aware of the existing"bad check" fee as well as the minimum real property tax and the members decided that these needed to be increased. The members of the Commission would like to thank the Finance Department and the Real Property Tax Division, with special acknowledgement of Steven Hunt, for the information provided, assistance and cooperation. The Commission made two (2) recommendations in 2012 that were forwarded to the Administration and County Council for its consideration: Findings: 1. The Commission learned that the fee charged by the County for "bad checks" received has been $7.50 since 1985. It was also disclosed that according to Hawaii Revised Statute charging up to $30.00 is allowed. 2. The Commission was informed by the Real Property Tax Division that the County minimum real property tax exemption of$25.00 has been in effect since 1975-1976. The Commission was also informed that the minimum tax exemption on Oahu is $300; for Maui it is $250; and for the Big Island it has a tiered system where most of the tax payers pay$100. In addition, the Commission inquired and was told by the Real Property Tax Division that the cost to assess and collect taxes, including work done by the departments, amounts to approximately$71.76 for each taxable parcel. Recommendations: 1. Increase the service charge assessed relating to payments made to the County by check or negotiable instrument, subsequently dishonored. (Section 6-5.1, Kauai County Code 1987). The Commission recommended that the service charge be increased from $7.50 to $30.00. 2. Increase the minimum real property tax. (Section 5A-6.3,Kauai County Code 1987) The Commission recommended that the minimum real property tax be increased from $25.00 to $150.00. H. RELATING TO COUNTY EMPLOYEE TRAINING AND CONSOLIDATION OF PERSONNEL FUNCTIONS -UPDATE The Cost Control Commission recommended in May 2011 that the Administration conduct an internal review to determine the feasibility and cost implications if personnel from the various departments who were performing personnel and/or human resources functions were transferred to the Department of Personnel Services to consolidate responsibilities and eliminate the duplication of work. In June 2011, the Mayor established a Human Resources Task Force made up of five (5) members. The Taskforce members spent eleven (11) months and many hours in its research, review, and determination of the best and cost-effective way to consolidate the personnel functions of the various departments into the Department of Personnel Services. In May 2012, the Human Resources Task Force published a report on its findings and recommendations and presented it to the Administration and the County Council. In addition, the Task Force also made presentations before the Civil Service Commission, Charter Review Commission, and the Cost Control Commission. As stated in the report, `By consolidating and taking the core personnel functions out of the individual administrative departments and centralizing it under the Department of Personnel Services, the proposed structure is intended to: • Centralize human resources functions and technical expertise within the Department of Personnel Services; • Add technical staff expertise within the Department of Personnel Services to increase its capacity and capability to provide improved human resources support and advice equally and consistently to all departments and agencies; • Eliminate the duplication of work effort between the Department of Personnel Services and the various departments; • Streamline and improve employment processing for all departments and agencies including service to individual employees related to employee benefits, employee relations, recruitment,classification and pay, labor relations and employee development; • Improve consistency in the development, implementation and interpretation of countywide policies and procedures throughout all departments and agencies; • Reduce the demands of departments and agencies in performing personnel functions thereby affording the existing departmental staff formerly assigned human resources duties to work on other unattended responsibilities for the department/agency; • Increase responsiveness to all departmental and agency needs; • Coordinate and conduct countywide training efforts for all County employees; • Expand the full range of human resources functions including employee benefits,workers' compensation, health and safety,training,Americans with Disabilities Act and Equal Employment Opportunity; and • Decrease cost over time through the mitigation of personnel risks and reduction in legal claims against the County." From August 2012 the physical and functional transition of the consolidation began and by the end of this year it will be completed. The Cost Control Commission wants to express its appreciation to the members of the Task Force who included: Marc Guyot, Deputy County Attorney; John Isobe, Boards and Commissions Administrator; Karen Matsumoto, Personnel Program Analyst; Kris Nakamura, Human Resources Specialist 1; and Janine Rapozo, Risk Management Administrator. III. RELATING TO COUNTY ENERGY SAVINGS—UPDATE The Wastewater Division is currently in the process of negotiating an energy savings performance contract which, if successful, would yield significant energy savings across the treatment plants in Wailua, Lihue, and Eleele. Additionally, alternative energy sources are being considered under the same contract. It is anticipated that construction on the project could begin in early 2013. Other Public Works facilities are currently being studied for efficiency retrofits, and efforts are being made to assure that energy efficiency is considered during any renovations or expansions. The Water Department is semi-autonomous and takes on their energy planning efforts independently. The County continues to utilize the 2007 Energy Study as it develops a more comprehensive energy plan internal to the County. All departments have access to the Study and it has been discussed by the County's leadership. This Study will be referenced with the departmental Green Team members as they develop departmental level energy plans. The County has formed the Departmental Green Team whose responsibilities will include developing policy, planning for more effective energy and sustainability practices, and moving related projects forward effectively. A Staff Level Green Team was formed in early 2012 to stimulate a "bottom-up" change in awareness about energy savings and other sustainable practices that can be incorporated into County operations. This Green Team has selected several small but impactful projects to work on that help create awareness among employees regarding waste management, energy conservation, etc. The Staff Level Green Team held their first Open House in November that was well attended by other employees and offered another opportunity for them to share the Green Team initiatives. The Commission wishes to thank Ben Sullivan, Economic Development Specialist- Energy, for briefing the Commission on the County's on-going efforts in energy savings. IV. RELATING TO COUNTY PARK AND RECREATIONAL FACILITY FEES The Commission requested an update from Lenny Rapozo, Director of Parks and Recreation, on the fees charged for use of county parks and recreational facilities. Mr. Rapozo indicated that in 2007, increases in fees and deposits were proposed but they did not pass. The Department decided that due to the economic conditions on Kauai, it is deferring any recommendation of increases at this time. After the presentation from the Director and based on his recommendation, the Commission decided not to recommend any increases of deposits and fees charged to the public. The Commission would like to thank the Director for his participation in their discussions. Respectfully Submitted: COST CONTROL COMMISSION By Dirk Apao, Chair Lawrence Chaffin Jr.,Vice Chair Arryl Kaneshiro, Commissioner Sandi Sterker, Commissioner Glen Takenouchi, Commissioner Laurie Yoshida, Commissioner Date Submitted: December 10,2012 2013 Cost Control Commission Meetings Mo'ikeha Building, Liquor Conference Room 3 (Pending approval of the Commission) All meetings will occur on the 2nd Monday of each month starting at 1:30 p.m. or shortly thereafter Schedule is subject to change. January 14, 2013 February 11, 2013 March 11, 2013 April 8, 2013 May 13, 2013 June 10, 2013 July 8, 2013 August 12, 2013 September 9, 2013 October 14, 2013 *November*14, 2013 - Thursday December 9, 2013 *Denotes a Holiday schedule CCC 2012-19