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HomeMy WebLinkAbout121012_CCC_Minutes_APPROVED_1m_Il(tt) COUNTY OF KAUAI Minutes of Meeting OPEN SESSION Board/Committee: COST CONTROL COMMISSION Meeting Date December 10, 2012 Location Mo'ikeha Building—Liquor Conference Room 3 Start of Meeting: 1:31 p.m. End of Meeting: 2:25 p.m. Present Chair Dirk Apao; Members: Sandi Sterker; Arryl Kaneshiro; and Glen Takenouchi Also First Deputy County Attorney Amy Esaki; Board& Commissions Office Staff. Support Clerk Mercedes Youn; Administrator Paula Morikami; Administrative Aide Teresa Tamura; Purchasing/Budget Director Ernest Barreira; and Ken Shimonishi Budget Analyst. (Entered into the meeting at 1:40 p.m.) Public testimony: Mr. Jim Satterfield Excused Commissioners: Lawrence Chaffin, Jr., and Laurie Yoshida Absent SUBJECT DISCUSSION ACTION Call To Order Chair Apao called the meeting to order at 1:31 p.m. Approval of Regular Open Session Minutes of November 8, 2012. Commissioner Sterker moved to approve the Minutes minutes as circulated. Commissioner Takenouchi seconded the motion. Motion carried 4:0 Chair Apao indicated that a minor correction needed to be made to a communication listed under business item CCC 2012-16 of the agenda which relates to a communication dated 11/15/12 from County Attorney Alfred Castillo, Jr. be amended to show the item as item(d) and not (c). Communications CCC 2012-17 Email dated 11/13/12 from Public Works Building Supervisor Brian Inouye to the Cost Control Commission, responding to the Commission's inquiry as to what the normal life span of an air conditioning unit is, more specifically the unit housed in the County's Police Department. Cost Control Commission Regular Open Session Minutes December 10, 2012 Page 2 SUBJECT DISCUSSION ACTION Commissioner Sterker stated that she was curious as to why the air conditioning units housed in the Police Department needed to be running 24 hours a day, seven days a week. She questioned whether there are other alternative energy solutions that could be utilized to alleviate having the air conditioning units running 24 hours, 7 days a week. Commissioner Takenouchi stated that the reason the air conditioning units in the Police Department must remain on 24/7 is because the Police Department is a 24 hour operation. Chair Apao questioned the cost of the A/C units and what would the expense be when the units have to be replaced within the next five (5) years. Commissioner Sterker requested that Staff contact Economic Development Specialist Ben Sullivan to see whether this type of information is available and that he send a written response to the Cost Control Commission in time for the meeting in January 2013. Commissioner Sterker moved to receive. Chair Apao called for a motion to receive item CCC 2012-17. Commissioner Takenouchi seconded the motion. Motion carried 4:0 Business CCC 2012-13 Discussion on the County's travel budget,per diem polices, and expenditures. (On-going) (c) Communication dated 11/9/12 from Chair Apao to Purchasing and Budget Director Ernest Barreira, requesting his presence at the December meeting to answer questions pertaining to his report on the County's Expenditures for Travel (General & Training) Cost Control Commission Regular Open Session Minutes December 10, 2012 Page 3 SUBJECT DISCUSSION ACTION Chair Apao called for a motion to receive item CCC 2012-13 (a). Commissioner Sterker moved to receive. Commissioner Takenouchi seconded the motion. Mr. Barreira introduced Budget Analyst Ken Shimonishi who was instrumental in putting together the report pertaining to the County's Expenditures for Travel (General & Training). Commissioner Kaneshiro said that it would help the Commission to better analyze the report if the Commission had the original 2012 budget numbers. He noted that although the Commission could compare the numbers year to year, he wondered whether it was a common practice for the departments to request for more funds for a particular reason. For clarity, Mr. Shimonishi asked Commissioner Kaneshiro whether he was asking for the original budget numbers or what was adjusted. Mr. Shimonishi explained that there were instances where some funds would be transferred to another line amount to cover the unexpected travel shortages. Mr. Barreira added that all money transfers must be approved by the Administration and offered to provide the Commission with the starting budget numbers although it might differ substantively from where it ends up at the end of the fiscal year. Commissioner Kaneshiro stated that he would be satisfied if they could provide just the starting numbers for fiscal year 2012 and the adjusted amounts. Commissioner Kaneshiro asked who would be the appropriate authority to go to when modifying the travel budget. Cost Control Commission Regular Open Session Minutes December 10, 2012 Page 4 SUBJECT DISCUSSION ACTION Mr. Barreira said that it was an Administrative process and as long as it is not an interdepartmental adjustment, the Administration has the authority to make adjustments if they felt that appropriations needed to be made. Chair Apao stated that he noticed in the report that there were two (2)types of grants, one for the Federal and the other a State grant. He asked if it was right for him to assume that on the federal grant side, the department would receive the grant first before any travel could commence, and the same would go for the state. Mr. Barreira explained that there is a little bit of accountability for the grant source because the monies appropriated from the grant must be used specifically for that purpose. Chair Apao asked what happens if the money is not expended; where does the money go and are they obligated to spend the money in its entirety. Mr. Barreira explained that it largely depends on the conditions noted within the grant, however, the General Fund is less complicated because if the funds are not utilized it would simply lapse back into the General Fund. Mr. Shimonishi clarified that the budget would be pre-approved up front for the grant and then one would submit for reimbursement from the grant. Commissioner Sterker asked what does the negative numbers represent, specifically the numbers in the Civil Defense column. Mr. Shimonishi replied that the negative numbers reflect an adjustment in the actual line item or the actual expense; he noted that he would have to do further research on the specifics although it could have been a recording for that certain line item. For example, if it was something that was charged to a grant in error which should have been charged to the General Fund the adjustment would reflect in the numbers. Cost Control Commission Regular Open Session Minutes December 10, 2012 Page 5 SUBJECT DISCUSSION ACTION Commissioner Sterker voiced her concern that $60,000 could be spent in one year and then the following year the expenditures are less than $4,000. Mr. Shimonishi replied that he needs to do more research to be able to respond to that question. Commissioner Sterker felt that it was a concern that the travel budget also seemed to have doubled from the previous years. Mr. Barreira explained that the report is an ongoing document and that the numbers reflected in the report may increase in 2013. He indicated that the Budget Analyst's in their budget instructions are asking the departments to account for travel related costs differently so it's not an apple to apple comparison when looking at the figures. Mr. Barreira stated that if it's the Commission's general concern on whether the County is spending too much money on travel they are in current dialogue as they prepare for fiscal year 2013. Commissioner Sterker asked whether most of the travel has to do with training. Mr. Shimonishi replied that he can't say whether most of it is related to training however, what they use to capture the report's information is the account numbers that are associated with general travel and travel training. Mr. Shimonishi indicated that he does not have the information on the components associated with general travel and travel training but is willing to do the breakdown at the request of the Commission. Commissioner Sterker indicated that it would be helpful for the Commission to have that information. Cost Control Commission Regular Open Session Minutes December 10, 2012 Page 6 SUBJECT DISCUSSION ACTION Mr. Barreira mentioned that the training elements usually involve airfare, per diem, transportation, room and board and incidentals and that the cost would be substantial. Mr. Barreira informed the Commission members that as of February 2012 the Purchasing Department now has a fully integrated budget team as opposed to a one man team which at the time was Mr. Alvin Honda who oversaw the County's entire budget. Mr. Barreira stated that as the department begins to move forward with its budget exercise it seems to be getting better as far as being able to itemize each cost and resulting in getting a better analysis. With no further discussion, Mr. Barreira and Mr. Shimonishi left the meeting at 2:05 p.m. Chair A ao called for the vote to receive item CCC 2012-13 (a). Motion carried 4:0 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 Real Property Division Appraisal Officer Steve Hunt, regarding a request for information relating to the real property tax age exemptions. Chair Apao called for a motion to receive item CCC 2012-15 (a). Commissioner Sterker moved to receive. Commissioner Takenouchi seconded the motion. (b) Communication dated 11/30/12 from Finance Director Wallace Motion carried 4:0 Rezentes, Jr., to Chair Apao and Members of the Cost Control Commission, regarding information on Homeowners age exemptions. Cost Control Commission Regular Open Session Minutes December 10, 2012 Page 7 SUBJECT DISCUSSION ACTION Chair Apao called for a motion to receive item CCC 2012-15 (b). Commissioner Sterker moved to receive. Commissioner Takenouchi seconded the motion. Commissioner Sterker said that she felt having just one tax assessment for people under 65, and one tax assessment for people over 65 would simplify things for the staff at the Real Property Tax Division. She explained that currently, the resident homeowners who are younger than age 60 receive a$48,000 tax exemption and once they reach the age bracket of 60 to 69 years old, their exemption doubles to $96,000, over 70, the tax exemption would increase to $120,000. Commissioner Sterker explained that by amending the current tax age exemption it would eliminate the middle age bracket which is for those 60 to 69 years old and delay an increased tax relief until the homeowner reach 65 years old, in which time they would receive a$120,000 tax exemption. She further explained that her proposal would create a two tier tax exemption; one for people age 65 and over who would receive a$120,000 tax exemption and the other is for people under the age of 65 who would receive a $48,000 tax exemption. Chair Apao stated that one of the reasons the Commission is recommending such a change is to alleviate the workload for the Real Property Division staff and possibly save time and money for the County. Chair Apao referred to a communication dated 6/21/12 from Deputy Finance Director Sally Motta. Cost Control Commission Regular Open Session Minutes December 10, 2012 Page 8 SUBJECT DISCUSSION ACTION He pointed out that the City and County of Honolulu have only two (2) tax brackets, one of which is for Basic Home Use homeowners who receive an $80,000 tax exemption, and the other is for people 65 and over who receive a$120,000 tax exemption. He further noted that Maui County has only one exemption type for Basic Home Use in which the homeowners receive a$300,000 tax exemption. Hawaii County has three (3) tax categories, the first is Basic Home Use tax exemption of$40,000, second, is for people age 60 to 69 years old, who receives an $80,000 tax exemption; and the third, is for people over 70 who receives a $70,000 tax exemption. Commissioner Sterker stated that her recommendation would place Kauai in line with the City and County of Honolulu. Commissioner Kaneshiro voiced his concern that the recommendation lacked certain key elements as far as what the ramifications would be to eliminate a middle tax age bracket and if the proposal would increase revenues for the County. He asked that the Commission send a request to the Real Property Tax Division to get input on changing the age and the exemptions. Commissioner Kaneshiro stated that if the recommendation ends up going before the Council, at least the Commission would have some justification whether than just trying to explain to Council that the reason the Commission is recommending this change is to make things simpler for the Real Property Tax Division staff. Cost Control Commission Regular Open Session Minutes December 10, 2012 Page 9 SUBJECT DISCUSSION ACTION Commissioner Takenouchi said that the issue is a two-fold issue because it doesn't just involve what the tax ramifications would be, but also whether or not it would be a real savings for the County. Commissioner Takenouchi stated that he agreed with Commissioner Kaneshiro to ask the Real Property Tax Division to do an analysis on the amount of savings the recommendation would have for the County. Commissioner Kaneshiro said that it would be impossible for the Real Property Tax Division to provide that type of information because regardless of the age there is no definitive way to segregate the amount of taxes paid by any specific tax bracket. Commissioner Sterker added that according to the Director of Finance, it would be nearly impossible to isolate the impact of the additional home exemption for an age because there can be layered exemptions for low income, disability or multiple owners with multiple home use exemptions. Commissioner Kaneshiro asked Commissioner Sterker whether she based her proposal on a comparison with the City and County of Honolulu. Commissioner Sterker replied that she picked age 65 because it's the age when people can retire and receive health care and social security. Chair Apao suggested that the Commission continue its discussion on this matter at its next meeting in January. He instructed Staff to send the Commission's inquiry to the Director of Finance as it relates to if the Age Exemption were broken out as under age 60 Cost Control Commission Regular Open Session Minutes December 10, 2012 Page 10 SUBJECT DISCUSSION ACTION and 60 an over; the under 60 at the rate of$48,000, and the 60 and over at the rate of$120,000; would you be able to run a before and after, as far as the tax relief, and what cost and time savings would amount to as far as reducing one of the age exemptions. With no further discussion, Chair Apao called for the vote to receive item CCC 2012-15 (b). Motion carried 4:0 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., requesting for additional information and his presence to discuss questions as it relates to special counsel contracts. Chair Apao called for a motion to receive item CCC 2012-16 (c). Commissioner Takenouchi moved to receive. Commissioner Sterker seconded the motion. Motion carried 4:0 (d) Communication dated 11/15/12 from County Attorney Alfred Castillo, Jr., to Chair Apao and Members of the Cost Control Commission, responding to the Commission's request for additional information as it relates to special counsel contracts. Chair Apao called for a motion to receive item CCC 2012-16 (d) Commissioner Takenouchi moved to receive. Commissioner Sterker 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, which is attached hereto. Mr. Satterfield expressed his concerns on the amount of tax payer's money being spent specifically on an ongoing case that involved his personal business. Cost Control Commission Regular Open Session Minutes December 10, 2012 Page 11 SUBJECT DISCUSSION ACTION Mr. Satterfield stated that he cannot believe that his case is still in limbo after ten (10) years even after the Judge dismissed the case and ruled in his favor, granting him the rights to continue his bottling water business. Commissioner Sterker explained that the Commission's responsibilities are to eliminate or consolidate overlapping or duplicate programs and services and to scrutinize for reduction of any County operation. Mr. Satterfield remarked that he had hoped that Mr. Castillo was going to be present at today's meeting so that he could address some of his questions and concerns directly to him as it relates to special counsel contracts. Specifically on whether the County has a ceiling on how much money can be spent on erroneous cases. He pointed out that according to Mr. Castillo's response it seemed like he has a Carte Blanche to spend on any appeal that he wants to and even if it goes to the Supreme Court. First Deputy County Attorney Amy Esaki stated that the County Attorney does not have a Carte Blanche when it comes to special counsel contracts. She explained that any time the County Attorney makes a determination that special counsel is needed for a case, he needs to go before Council and justify the need for special counsel. Once Council approves the request he can then move forward in obtaining special counsel. Ms. Esaki noted that for each case there is no retainer fee just a set contract amount which can be amended from time to time depending on the case. Cost Control Commission Regular Open Session Minutes December 10, 2012 Page 12 SUBJECT DISCUSSION ACTION Commissioner Sterker questioned whether it would be appropriate to request information from the County Attorney regarding hiring more staff for a Specialized Litigation Team in the County's Attorney's Office and whether it would reduce the need for special counsel and what would be the pros and cons. Staff acknowledged the Commission's request and would make an inquiry to the County Attorney's Office to see whether they could provide the information to the Commission. Mr. Satterfield left the meeting at 2:30 p.m. CCC 2012-18 Discussion and decision-making on a draft of the 2012 Cost Control Commission Annual Report. Commissioner Sterker moved to approve the draft of the 2012 Cost Control Commission Chair Apao called for a motion to approve the draft of the 2012 Cost Annual Report as circulated. Commissioner Control Commission Annual Report. Takenouchi seconded the motion. Motion carried 4:0 CCC 2012-19 Discussion and decision-making on the 2013 Cost Control Commission Meeting Schedule. The Commissioner's requested that the October 14th meeting be moved to Thursday, October 17th because it falls on Columbus Day which is a holiday for the Commissioner's. Staff acknowledged the Commission's request and would make the necessary changes. Cost Control Commission Regular Open Session Minutes December 10, 2012 Page 13 SUBJECT DISCUSSION ACTION Chair Apao called for the motion to approve the 2013 meeting schedule as Commissioner Sterker moved to approve the amended. 2013 Cost Control Commission meeting schedule as amended. Commissioner Takenouchi seconded the motion. Motion carried 4:0 CCC 2012-20 Election of Chair and Vice-Chair for 2013. Commissioner Kaneshiro nominated Sandi Sterker for Chair. Commissioner Takenouchi seconded the motion. Motion carried 4:0 Commissioner Sterker nominated Arryl Kaneshiro for Vice-Chair. Commissioner Takenouchi seconded the motion. Motion carried 4:0 Announcements Next meeting: Monday, January 14, 2013 at 1:30 p.m. at the Mo'ikeha Buildin , Liquor Conference Room 3. Adjournment At 2:25 p.m. Commissioner Takenouchi moved to adjourn the meeting. Commissioner Kaneshiro seconded the motion. Motion carried 4:0 Submitted by: Reviewed and Approved by: Mercedes Youn, Staff Support Clerk Sandi Sterker, Chair- Elect (X) Approved as circulated on January 14, 2013. ( ) Approved as amended. See minutes of meeting.