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HomeMy WebLinkAboutPersonnel Services Dept, FY 2014-15 DEPARTMENTAL BUDGET REVIEWS 4/15/2014 DEPARTMENTAL BUDGET REVIEWS 2014-15 DEPT OF PERSONNEL SERVICES April 15, 2014 Department of Personnel Services (ss) Page 1 There being no objections, the Committee was called back to order at 1:37 p.m., and proceeded as follows: Department of Personnel Services Honorable Tim Bynum Honorable Mason K. Chock, Sr. Honorable Gary L. Hooser Honorable Jay Furfaro, Council Chair Excused: Honorable Ross Kagawa Honorable Mel Rapozo Honorable JoAnn A. Yukimura Chair Furfaro: Okay, good afternoon. We are back from our luncheon recess. We are going to finish up what was the original scheduled budget sessions ending today with the Personnel Department with two hours allocated. You are 83% of the cost in the County of Kaua`i, remember that. You are 83% of the cost. You get two hours. Okay then we will go to Council Services. Just a reminder to everybody, that will end our scheduled sessions and we do not come back into budget until April 21st. We have two hours set on the 21st for Solid Waste, an hour back for Life's Choices and the Finance Department to review the Humane Society for one hour. We have an hour for the Kaua`i Police Department on their subsidized vehicles and an hour and a half with the County Attorney. These are special call-back items. Tom, welcome. Ladies, welcome and I am going to suspend the rule and you have an opportunity to make your presentation. THOMAS T. TAKATSUKI, Acting Director of Personnel Services: Good afternoon, Chair Furfaro, Vice Chair Chock, and Councilmembers, for the record Thomas Takatsuki, Acting Director of Personnel Services and I have HR Manager Crystal Fujikawa, Janine Rapozo, and our Private Secretary Pua Borales. I would also like to acknowledge our Civil Service Commission Chairperson Mr. John Low and our Vice Chair Mr. Roy Morita who is in the audience today. Chair Furfaro: Welcome. Mr. Takatsuki: As you have received our budget presentation I would like to present a brief PowerPoint highlighting some of the Department's activities. First and foremost I would like to highlight the Department's mission, which has been expanded to include the proposed transfer of payroll services to our Office and therefore, our revised mission statement is the Department of Personnel Services shall service all County Departments and Agencies with the full range of human resources functions based upon merit principle and devoid of any bias or prejudice, including recruit and specification and pay, labor relation, payroll and benefit coordination, employee development and training, employer relation and health and safety for successful achievement of Countywide goals. During last year's budget session there were three items of concern that were discussed during our presentation. The first area was in recruitment. If you recall, the shaded slide was taken from last year's presentation as to how this issue was to be addressed in the current year. The Department was committed first to assist Departments in various phases of recruitment to expedite the filling of vacancies. Two, to proactively monitor vacancies and contact Departments on intentions whether there will be no changes to vacant positions or whether a re-description of the position description was needed due to changes in Departmental needs or if the Department wanted to recruit at an entry-level April 15, 2014 Department of Personnel Services (ss) Page 2 position. Finally, three, to provide support in reviewing and amending position descriptions, and in the interviewing and hiring process. We are pleased to report that all of our recruitment goals have been met and the Departments are receiving certified eligible lists...list of eligible applicants in a timely manner. In addition, our Department is also responsible for contracting applicants to present a conditional offer of employment, scheduling pre-employment requirements including physical, drug testing and background checks. Informing both the Department and applicant once all requirements are completed. Sending out a welcome letter and scheduling individuals for a new-hire on-board orientation program that is also done by our Department. It is now a full one-day program. The program used to be half a day and we extended it to a full day. We schedule interviews, conduct interviews, and publish letters, if requested. The second concern for supporting the Kaua`i Police Department with clerical assistance in their recruitment process. Last year the Department committed to meet with KPD to discuss the transfer of duties that were previously done by the personnel clerk. We are pleased to report after meeting with KPD, our Department is now assisting with clerical duties for processing applicant background investigation, assistance with non-selection letters and other clerical assistance as requested by the Kaua`i Police Department recruitment division. Finally the quarterly vacancy report was something that was brought up last year. Our Department has committed and met with the Council Chair to get a desired product. The short-term solution was working in-house to come up with a report that reduced manual production and finally the long-term solution was to have a report generated from our HRIS system. We are pleased to say that the vacancy report that is due to the County Council every quarter has been on time with the 3rd Quarter report already submitted. The report also now includes new-hires, transfers, reallocation, and promotions for the quarter. Aside from what was discussed, our Department has also been able to post 20 forms and other resource information onto the County's Sharepoint site. With the help of a short-term hire, all personnel employee files are being standardized. Ensure OSHA compliance by having mock inspection and ergonomic evaluations conducted by our insurance broker and respiratory protection and blood borne pathogen policies created, and OSHA training on ladder safety, fall protection, lifting and carrying and blood-borne pathogens. In addition, all employees were informed of the necessary steps for training on OSHA regulations for the new classification and labeling of chemicals. Training was held to develop employee skills on conducting performance reviews. Employment issues for supervisors, excelling as a manager / supervisor, reasonable suspicion drug testing and verbal judo. Employees received training on various employment issues such as workplace violence prevention, preventing workplace harassment, and employment issues for supervisors. The HRIS task force is led by one of our HR Manager and the IT Manager and four work groups have been formed to look at one, inventory of current customization on the system, reconciliation of leave accruals on the system, defining employee information needs and eliminating the needs for duplicate information and the review of the payroll codes. With the limited financial resources, the goal of the HRIS task force is now to pursue an integrated system leveraging our existing system with add-on modules and minor software customization versus the purchase of a new system. The proposed reorganization of housing the payroll functions in DPS will additionally provide for the centralization...centralized management structure for these heavily-dependent functions and for integrated solution. Another achievement this year was development of a customer service mission statement for the County. Through DPS' leadership, a committee of employees developed the following mission statement: The County of Kauai `ohana is committed to excellence by providing efficient and respectful service, offering effective and innovative solutions, and exceeding our customers' expectations and always remembering that Aloha begins with me. All of the employees have been provided with this mission statement on a business card to have it with them and to remind them of the importance of serving the public. New employees April 15, 2014 Department of Personnel Services (ss) Page 3 have the mission statement printed on the back of their County id. Also on the back of the business card including contact information for employees on various resources including retirement system, health insurance, and the County EAP program. Just in case you have not received your cards we have brought cards for all of you, along with a poster for your Department. Finally we are so proud of our three staff members who obtained Human Resources Management degrees in December of 2013. Namely we would like to congratulate Telissa Agbulos, Debbie Ponce, and Erin Takekuma on this huge accomplishment. We continue to experience a backlog of classification requests. Although the backlog has been reduced, the inability to hire another specialist in the classification and pay and labor relations Division has impacted the timeliness and response to this Division. Another challenge... Chair Furfaro: Tom can you speak up just a little bit or pull the mic closer. Mr. Takatsuki: Another challenge was the change in our Workers Compensation third party administrator. After ten year with Brandvold Ku, Inc., the company merged with First Insurance Company of Hawai`i, effective September 1, 2013. Although the County was very fortunate that our team of adjustors remained the same, there is still some uncertainty if changes may be forthcoming. The Department of Labor, Disability and Compensation Division continues to issue workers' comp decisions that heavily favor employees in compensability and other issues. Finally labor contract settlements with all four unions this past year made it necessary to process over 1,000 pay increase transactions thus far this fiscal year. Many settlements include two pay increases in each fiscal year, doubling the amount of transactions to be processed. Our goals for the upcoming fiscal year include one, to support all County Departments, employees and the general public with the full range of human resources functions. Two, to attract, value, support, and retain staff, qualified, and diversified workforce. Three, to continue to improve, support the effectiveness of individual employees and to encourage career and professional development. To foster a productive and safe work environment and to enhance the quality and delivery of service through technology. Objectives to each goal are listed in our budget presentation. Our primary goal remains to transition the various human resources functions from County Departments to DPS. The upcoming year will be no different with the proposed transfer of payroll functions to DPS. We are already working with the payroll staff in a number of initiatives. Number one, the first as part of the HR task force group, the reconciliation of leave accruals has been ongoing. For the past several years they have not been reconciled with the HRIS system. Through one of the work groups that include members of DPS and Finance Payroll, ten of the 19 Departments with accrual balance have been reconciled and work is ongoing with the other nine Departments. Payroll staff is working on the pre-tax benefit program for all County employees with a tentative rollout date of June of this year. Aside from making these strides, we want to ensure that the movement of three employees aside from making these strides we want to ensure that movement of three employees to the Department of Personnel Services will be seamless for all County Departments. That adequate space is available for payroll staff at DPS and the staff are allowed to provide input and are provided as much information as possible to ease this change and limit uncertainty. With the anticipated transfer of payroll staff of Finance to DPS, our organizational structure will have another Division as highlighted on the chart. The Payroll Division will be headed by a Central Payroll Accountant and two staff, including an Accountant III and Fiscal Specialist. All three positions are not new positions and are simply being transferred from the Department of Finance to the Department of Personnel Services. April 15, 2014 Department of Personnel Services (ss) Page 4 Other initiatives of note include the creation of a value statement. Now that we have a customer service mission statement, we want to forge ahead and create a value statement for the County, which will be our guiding principles and lets the public know what the County believes in and strives for. Along with the support of the Civil Service Commission, the Department is supporting at the end of the Charter Amendment to change the Department's name to "the Department of Human Resources" which will be in line with the expanded functions of the Department. Finally, we are working closely with HGEA and other jurisdictions and formulating an agreement for the new created Bargaining Unit 14. This includes our County Water Safety Officers. Our budget numbers for Fiscal Year 2015 reflect an overall increase of 33.7% from the current fiscal year. If we separated out the transfer of the payroll function basically the overall increase would be 16.4%. Salary increased by 50.5%. Again, if we separated out the payroll positions and the vacation credit payouts that were transferred from Finance, the percentage increase would be lowered to 27.5%, which are reflective of Collective Bargaining increases. The benefit increase of 21.4% is not reflective of the entire portion of the corresponding increase in salaries and wages due to the overall strategy of short funding OPEB benefits. If the payroll positions were not included, the corresponding benefit increase would be 2.9%. Operationally there was an increase of 16% over the previous budget. 6%, I am sorry. Although there are modest increases and decreases in the various funding categories the increase of costs was primarily due to arbitration costs, a cost item that will now be housed at DPS and an increase in training funds for OSHA-related topics specifically requested by Public Works, Roads Division, which will be centralized at DPS for opportunities for all Departments to participate in. The final thought, would it have been easier starting brand-new and creating a brand-new department to provide our employees and the general public with a full range of human resources functions, but the dedication and experience of our employees and the motivation of our members of our Department have created a great team that I am extremely proud of. Basically that completes our presentation. We are open to questions. Chair Furfaro: Can we please turn on the lights? When I look at the overall budget for the Department of Human Resources, how do you measure the overall increases of 16.4% compared to the previous year, Tom? Do I go to certain Departments and see what kind of percentage decreases? The Department is going from $1,729,000. It is going to $2,312,000. A $582,000 increase. 34%. These are my worksheets. Now when I make the appropriate adjustments, what does that tell me that we saved in the operating department that we transferred to and your increases at 16.4% represents how many dollars? Mr. Takatsuki: The increase for payroll moving to DPS just wages is $205,963. That does not include benefits, right? Chair Furfaro: Say that again, Tom. Mr. Takatsuki: $205,963. That is strictly wages only. It does not include the benefits. Chair Furfaro: Looks like about $91,000 in other PT&E. Mr. Takatsuki: Yes, there was an additional $150,000...I am not too sure what it was added to wages...it was the vacation payout that used to be in Finance is now being moved to our Office. April 15, 2014 Department of Personnel Services (ss) Page 5 Chair Furfaro: When you say "vacation payout" we moved accrued liability or paid out of the vacation? Mr. Takatsuki: If an employee retires, the vacation balance is normally paid out. Chair Furfaro: Here is how you tell the difference, an employee has a lot of earned vacation and retires, and retires staying on the payroll because he is then paid his vacation pay and is still an employee? Or the day he leaves the office, we actually give him a check? That is a payout. If he stays on the payroll, it is earned vacation and we are just reducing the liability. Mr. Takatsuki: It is paid out then. STEVEN A. HUNT, Director of Finance: Paid out. Chair Furfaro: So he is off the payroll, and we paid out what he earned? How much was that number, Tom? Mr. Takatsuki: $150,000. Chair Furfaro: $150,000. Go right ahead. Mr. Chock: Thank you, Tom. So I guess the way I am to understand, this is for people or a person who will retire in this coming fiscal period that you need to potentially pay out that vacation? Mr. Takatsuki: Correct. Mr. Chock: Thank you. How many do you expect? To retire? Mr. Takatsuki: It varies. What is the average? Chair Furfaro: So Steve, I want to reframe my question the employee stays on the payroll and is put on vacation drawing a check incrementally for each pay period that he qualifies for? Or he has banked that liabilities and gets paid out once he leaves? Mr. Hunt: He has banked the liability and gets paid out once he leaves. For budgeting purposes the instructions to the Departments were if you are aware of a person who has indicated that they would retire and has vacation payout to budget that. But we have a lot that come up that are not planned that we need to budget and house centrally and that had been in Finance-Accounting. That has now been moved to Tom's Department, DPS to cover that, the unexpected payout. It is just again based on historical patterns how many people retired in accrued vacation. There are some limits on how much time they can accrue. The 720 hours in vacation, so there is some compartmentalization of the risk so we do not have a huge run on the bank, if you will with a bunch of retirees with thousands of hours of vacation. So sometimes they have to burn vacation before end of year so that they do not accrue more than is allowed. Chair Furfaro: Where do we bank that liability? April 15, 2014 Department of Personnel Services (ss) Page 6 Mr. Hunt: That is...it is part of the accounting of the accruals. We put a dollar amount to it only at the time that that person retires because it is a moving target. It is based on their pay rate at the time that they retire. Chair Furfaro: Not at the rate that they earned it? Mr. Hunt: Not currently, no. Chair Furfaro: So a person moves up to the ranks, and goes from Park Worker IV...goes from Park Worker I to Park Worker II to Park Worker III and earned 120 vacation hours for each classification, but when he retires he is a Park Worker IV? Mr. Hunt: Correct. Chair Furfaro: And all of that is pay is based on Park Worker IV? Mr. Hunt: Right. It would be like a LIFO, FIFO kind of situation in accounting. Some of the hours that are taken to keep them off of that cap would be coming off at the lower rate so you would be continually moving up at the payout and it is assumed that the 720 hours max is at the current pay scale. Chair Furfaro: We have a negotiated understanding with our Civil Service and Bargaining Units agreements it may be earned at the lower rate, but it is always paid out at the higher? Mr. Hunt: I would defer to Tom. Chair Furfaro: Folks this is a liability to the County. If someone earns it when they were with the County ten years ago at such and such a rate that is what we book the liability at. You would practice that. When he earns it in his 20th year at a higher rate, all that we put in the vacation bank would be paid out at the rate that he earned at the time. What agreement do we have that says we pay them out at the last classified rate? What document do I have that I can go to? That is the Civil Service law...oh, that is the Bargaining Unit agreement. What do I have? Mr. Hunt: I am not sure, but I could speak to the vacation as you are taking vacation...you are essentially taking from your bank. So I would assume if you earned something 20 years ago, the next time you vacation, you are talking off there and putting in with your new vacation. I do not think it is tied to a specific date. It is a capped, fixed amount. So if you had earned thousands of hours of vacations, but are allowed only to carry out 720 that is being pushed out every year every time you do not take a vacation day that you earned more than...it is pushing it out. Chair Furfaro: I understand that. It is a pretty common practice you cannot bank more than "X" amount of hours. I am talking about the liability. What you are telling me that you cannot direct me to a document that tells me that we do not bank it what they earned it at, but we bank it at the hours that they are currently paid at? Mr. Hunt: I cannot point to the document. I do not know. April 15, 2014 Department of Personnel Services (ss) Page 7 Chair Furfaro: Tom? Mr. Takatsuki: Basically they get paid out at the dollar amount paid out is based on the last. Chair Furfaro: What do you have that says that? We will send it over as a question. I want to make sure that we are not inflating our liability exposure. So we will send it over as a question. Fair enough. You still have the floor. Were you finished with that follow-up? Mr. Chock: Thank you, Chair. So I was just trying to get an understanding of it, since it has come from the Director of Finance's Office to yours, is this amount reflective of people within our HR Department or across County services, other Departments? Because in our last presentation with Planning there was an amount that was directly for Planning. So I am just trying to understand. Mr. Takatsuki: I think originally we did our budget and they did request for a vacation payout for DPS, our Office. Subsequent to that, an additional amount was added to as the Finance Director said to cover unexpected retirements and vacation payouts. Because I think when we did for our Office for myself and tentatively Crystal. Chair Furfaro: Introduce yourself. JANINE RAPOZO, HR Manager: Just for clarification, the amount of vacation payoff in our budget reflects two different, I guess, accounts that would be some for our own staff, as well as the carryover, should a Department not have enough in their vacation payout in case they do not have expected, or have unexpected retirements. Mr. Chock: Clear now, thank you. Chair Furfaro: You have answered my question, if they are throwing it the bank and not telling ourselves the real liability that is what I am worried about. You understand what I am saying, Tom? If we are paying them that, I want to make sure that we understand what the potential liability is. Mr. Bynum and then Mr. Hooser. Mr. Bynum: I have a bunch of questions. I do not need detailed answers. I want to start where on the organizational chart, can you help me put names on the HR Managers. Like who is in which category? There is Health and Safety, Labor Relations, Recruitment.... Ms. Rapozo: I am sorry, what page is that? Mr. Bynum: The org chart. It is page 12. Good to have numbered pages. Ms. Rapozo: So on the lower half of the chart there is an HR Manager II for recruitment and examination is Crystal Fujikawa. HR Manager II Labor Relations and Classifications that is technically Tom right now, who is also our Acting April 15, 2014 Department of Personnel Services (ss) Page 8 Director. HR Manager II health safety employment that would be my position. I am not sure if you want but the Central Payroll Accountant will be Ken Villabrille. Mr. Bynum: Who? Ms. Rapozo: Ken Villabrille. Mr. Bynum: Oh okay. Thank you. I just wanted to know who... Eventually the Civil Service Commission will have...you are Acting now Tom? The staff members that got Master's Degrees, great, awesome. I was a middle manager in County before and we had lots of incentives for that kind of...do we currently have that in place where people are getting degree related incentives, support, or time off, or stipends towards... Ms. Rapozo: We do not have anything very specific like that. However, the Department has fully supported them. Luckily those classes were at night or on weekends so we were able to support them, if they needed time off to do their projects or things like that. Another thing we actually have one more HR Specialist that will be starting the program this year. So we are really excited and we have given her all the support that she needs to finish the program. Mr. Bynum: I went to the KCC graduation when Debbie was the speaker and now she has got her Masters? Ms. Rapozo: Yes. Mr. Bynum: It just seemed like she just got her B.A. Ms. Rapozo: That is correct. Mr. Bynum: Good job, she is really motivated. Real briefly when I was in Accounting we had three ways of training, training that was required, training that we identified as job-specific, and in those instances, time off work, tuition, support from the County. Then we had a third training that a pot of money that employees could look out in their professional career and make their own proposals. So there was a real strong support for that upward mobility and other Departments have been talking and even in Public Works, making people electricians. So I really support that and thank you. 720 days is the max...720 days right, not hours is the maximum accrued vacation? Ms. Rapozo: Hours. It is 90 days. Mr. Bynum: 90 days. Okay. Thank you for that clarification. Firefighters are a new HGEA? Ms. Rapozo: No, the Water Safety Officers. Mr. Bynum: So they are not in the Fire Union, they are in HGEA. Ms. Rapozo: Currently they are in Unit 3 and the Legislature passed the bill that has...it has been pending for a while. At least a couple of years and April 15, 2014 Department of Personnel Services (ss) Page 9 finally passed last year, I think. Created a new bargaining unit, which includes Water Safety Officers and the State has some positions as well. Is it Sheriffs? Mr. Bynum: So this will be consistent Statewide? Ms. Rapozo: Yes. Mr. Bynum: There was some discussion about them being in the Firefighters' Union, which is a different union. Ms. Rapozo: They were in white-collar clerical which really did not fit their needs and so the creation of the new unit for them. Mr. Bynum: I wanted to understand the situation with Brandvold Ku, our workers' compensation people for a long time and they merged with another company? Could you explain that? Ms. Rapozo: Actually, Ron, I think, was having a little bit of a hard time...Ron Brandvold, the owner of Brandvold Ku, so in order to try and assist his workers in getting them...having them continue working he did basically merge with First Insurance Company. So luckily for us, all of our adjustors moved with the merge. Mr. Bynum: Including Ron? Ms. Rapozo: Ron is kind of on as a consultant for the first year and then will retire, but he is still assisting. Mr. Bynum: Elle Wood? Ms. Rapozo: Elle Wood, Susan Tokuhama. Yes, we still have them, but it is just a different company. So we just have to see that everything will remain the same. We have had very good service from them. Mr. Bynum: Yes, I think we have been pretty happy with that team. So I just wanted to understand that better overall. It is not like anything is perfect, right? I love the card. Thank you, very much. Now I know where to find Sherri's number easily. I just love that. I want to understand your final statement Thomas. It would have been better if we just started from scratch, but we could not do that, right? We have Civil Service and we have the structure that we have in place, and we have the Charter. That was what you were referring to there? Mr. Takatsuki: Correct. Mr. Bynum: I want to concur and understanding the difficulties of making this transition in the County government and Civil Service with Charter issues. Looks all good to me. I think it is important to get to someday, the kind of employee support I was talking about that I think as a County who moved to HR sooner, that is the kind of benefits and very demonstrable reduction in liability costs for everything from injuries to harassment suits. So thank you for the good work. Hang in there with the transition and I will be interested to see how the leadership shakes out. Thank you. Chair Furfaro: Mr. Hooser. April 15, 2014 Department of Personnel Services (ss) Page 10 Mr. Hooser: Yes, good afternoon. I apologize if the question may have been asked already. I do not mean to be redundant, but I was a little distracted. The discussion on the vacation set aside, if you would for...what do you call it? It is like a bank. Vacation credit payout. So I understand the need to budget for that. The various Departments have to estimate who is going to retire and who does not retire. Are those funds in a lock box or something or can they be used for other purposes? So if you said aside "X" amount of dollars and they do not retire, those funds can be transferred for other purposes within that Office is that correct? Ms. Rapozo: I am going to defer to Steve on that one. Mr. Hunt: They are General Fund dollars so they either lapse with the budget or they could be used for other salary related expenditures. There would have to be a transfer request with the Department showing what is the justification and the need to move that. First would be, what employee did you budget that for did not retire or is there a commitment to stay on that changed that use. Mr. Hooser: So they could be used for dollar funded positions? Mr. Hunt: They could be. Mr. Hooser: What is the history of estimating the costs? Is it pretty good? Or is there traditional lots of funds that lapse or lots of funds that are used for other purposes? Mr. Hunt: The vacation payout primarily is based on actual payouts. When we do our estimate it is based on a historical trend and it is difficult from an accounting side to put a figure on who is retiring and at what pay level and how many hours they accumulated? So it is a best-guess I guess, but based on actual trends. At the Department level, again the budget request is that they try to budget within their own Departments for the known or people who have indicated that they will retire. Mr. Hooser: I understand that money is tucked here and there on different accounts. For good purposes but could be moved around. If that money is not budgeted and say there is say surprise retirement and they have to do a payout and those funds come from an internal transfer? Mr. Hunt: First it would be within the Department those are utilized first and if they budgeted for two employees and both had significant payouts, they would then come to currently Finance-Accounting to tap that fund for payout. Now it would be going to DPS. If it was massive retirements that hit beyond what is budgeted, including the Department and Finance-Accounting or now HR / DPS, then we would have to come before you for a money bill to pay that off, assuming there is fund balance left in the Unassigned Fund Balance account. Mr. Hooser: Thank you very much. That is all the questions that I have. I will have some other questions on other items. Chair Furfaro: You can continue with the floor. April 15, 2014 Department of Personnel Services (ss) Page 11 Mr. Hooser: I had a question on the vacancies. Is there going to be a... Chair Furfaro: We are going to get to that. Mr. Hooser: I will wait until the presentation on the vacancies. Thank you, Director. Chair Furfaro: Steve left. I am still on the same subject. Thank you, Steve. So we can move on here, we have the long-term employee retirement benefits on the separate place with the State and the vacation and sick-leave, the sick-leave, there is a conversion ratio somewhere, right? Going back to the same question I wanted to know about vacations staying on the payroll or payout and now I am on the sick-leave line. They have a conversion ratio? Mr. Hunt: It is not a direct payout. The compensable are the...sick leave is converted into years of service to be credited. Chair Furfaro: That liability, who checks that liability as a pretty accurate number for us? I guess it would be reported in the CAFR, right? Mr. Hunt: The CAFR makes reference to that as a potential liability, but it has also been part of our audit finding in terms of not having the accruals accurately booked. So until we know how much is out there and put an individual price tag based on the current employee's wages, it is something that we are guesstimating and we do not have an accurate booking of that. Chair Furfaro: This is not a reflection on you, but this is the second year that we had this kind of uncertainty here. What Ann is doing to book this liability that would show up in our CAFR is I guess to simplify we are taking this estimated average earning per employee, multiplying it times the number of employees who earned a vacation, times 96 hours and multiplied against the blended rate of earning? Something like that? Mr. Hunt: It is even more complicated than that unfortunately because you cannot predict how many hours remain at the time of retirement and some burn through their vacation, taking more time off. So you lose the production, but do not have a bankable payout because they are taking it while in service. Again, it depends on if you have someone who has maxed out at the 720 hours today, but is not planning to retire for 20 years, we do not know at the time that they retire what that amount will be. Again it is a moving target and the best we can do is track and compartmentalize and guesstimate how many will retire in any given years, but there are accruals into the future that we have to guesstimate a price tag on. Chair Furfaro: What I am asking, since you say it is a moving target and I did not explain all the details, but I certainly have the formula right, right? Who is going to try and tie that number down for us? Because you see, people are looking at that and maybe is that cash we can use? What I am just saying that I first want to make sure that we are very close to what the liability would be. Mr. Hunt: Just putting it in current dollar terms because we have do have moneys budgeted throughout budgeted in various Departments. We have April 15, 2014 Department of Personnel Services (ss) Page 12 $475,000 collectively budgeted for vacation payouts. Departments and in Accounting. Our current unencumbered balance of that is only $24,396 left. That is pretty tight, but again, most of the retirements occur typically end of year, December. So once we get through that hump we do not have that much through the remainder of the year. That is pretty tight budgeting for that number. Chair Furfaro: As the Finance Director, who do you see doing that? Is it Finance or the new Human Resources? Mr. Hunt: I believe it is a payroll function because you need to know their hourly pay and get through the reconciliation as was mentioned. Ten Departments have been reconciled and we still have nine to go and until we get to an agreeable accurate number and apply that rate to that, we can get an accurate number what that is. Assuming that they do not drawdown or add more, whatever, that is part of the annual process, but at least a ballpark to say this is where we anticipate that liability be as of today. Chair Furfaro: As the Finance Director, what is your targeted goal for that? December of this year? Mr. Hunt: Once we get through reconciliation and the HRIS. When the two is tied together and we know how much is being accrued and we can printout at any one point that this is the payout and their current rate, then it could be done almost simultaneously when a request is in. Until we have gotten through the reconciliation process, I do not want to commit to any time. Chair Furfaro: Okay. I can buy into that, but I think you know where I am driving this thing to the point it has got to be high on somebody's radar screen as far as getting us to the point. Mr. Hunt: It is and it is very closely tied to the HRIS system. So we are working in that direction. Chair Furfaro: Sounds like you feel comfortable. Mr. Hunt: I feel comfortable that we are making very good strides. I do not want to commit to a date. Chair Furfaro: Good answer. Thank you. Okay. That is all I had, Steve. So we can move on to another subject. Going around, new questions, Mr. Hooser, do you want to start with any new questions for HR? Mr. Hooser: Vacancy report. Okay. The vacancy report is a snapshot in time for this quarter is that correct? Ms. Rapozo: Yes. Mr. Hooser: In round numbers, I counted...not counting the Department of Water, about 112 vacancies or do you have a number? Ms. Rapozo: Yes, that was part of the original vacancy report that was submitted. This was a revised copy that just had a little bit more on the status. April 15, 2014 Department of Personnel Services (ss) Page 13 So based on the last...the 3rd Quarter Vacancy report there was a total, including Water of 120 vacancies, 20 were Water. So General Fund there were 64, Grant funds 14, Liquor 1, Golf 2, Highway 9, Solid Waste 5, and Sewer 4. Mr. Hooser: Okay. So General Fund was clearly are the more flexible positions in terms of funding. Sewer Fund, if those positions could only be used for sewer, etc. and Special Funds. Is it safe to say the way the vacancy works, so say this report there is 100 vacancies and if we did a report a month from now, there would be another 100 vacancies, as things fill, people retire, people quit at any point in time there is about 100 vacancies or only around budget time there is 100 vacancies? You understand what I am trying to say, because people come and people go and there are always vacancies. Ms. Rapozo: This year has been a little bit more challenging as far as filling vacancies, because there was also a directive from the Mayor to try to keep it vacant, to try to have some savings. So some Departments were trying to put on that six- month moratorium. This might be high because we were not able to fill...or because I guess it was kept vacant. If you are using that as the standard, it would be almost like they would always be the same amount of vacancies. We are trying to get that down, but people come and go all the time. A lot of them...there was a lot in certain Departments that we are trying to work with as far as promotions. It takes a little longer for certainly Departments to fill those and all that does is basically puts another hole in another position. Mr. Hooser: Thank you for that. So if we just pick a number, seems reasonable, 100 vacancies, six months from now, different positions, but the same vacancies. So do you have any amount of that what dollar amount equates to if you annualized that approximately? I know some are dollar-funded and others are not. Or daily? Ms. Rapozo: The 3rd Quarter represents about 75%. So we also have that figure based on the savings from all of those vacancies. If we take the positions...if we are just looking at General Funds for this particular budget year it was $1.2 million. Mr. Hooser: $1.2 million that were budgeted for the positions, but were not used for those positions? Ms. Rapozo: Yes. This was estimated salary savings for all vacant fully / partially funded positions from July 1, 2013 through March 31, 2014, for three-quarters. Mr. Hooser: I am sorry for repeating myself. Ms. Rapozo: It is okay. Mr. Hooser: $1.2 million for the year? Ms. Rapozo: Yes. Mr. Hooser: Estimate for General Fund positions? Ms. Rapozo: Well, that was for three-quarters. April 15, 2014 Department of Personnel Services (ss) Page 14 Mr. Hooser: So not for the year. For three-quarters. Ms. Rapozo: Yes. Mr. Hooser: We could average that out. Do we know whether those funds were used for other purposes or whether they lapsed? I do not mean to call the Director up...in general you do not know? Ms. Rapozo: Generally I would not know what each Department is doing with those funds. Sometimes if there is a vacancy, they may have a short-term hire in order to get the productivity up. So there may be some of those funds used for those purposes. Mr. Hooser: Okay. I think that is all I have right now. I will think of some more in a second, in case you were worried I did not have any more questions. Thank you, Janine. Thank you Chair. Chair Furfaro: Janine, just make sure that you folks understand, I will be sending over a question. If that million dollars in unused payroll for those that have the dollar amounts represents 75% of the year, the fact that with the current trend, the year will end at $1.3 million roughly or $1.33 million. If that is true, we would like to know of that amount, how much was directed or diverted to other areas. That is the question that I am going to be sending over. You are saying your estimates are how much? Ms. Rapozo: $1.2 million. Chair Furfaro: $1.2 million. So it is even more than that, for 75% of the year. That basically says that there is $400,000 each quarter that was not earmarked. So end of the year $1.6 million and if that is the true trend on the payroll indicators, how much of that was used or directed to other locations? That is what we would like to know, okay? I will just send that over as a question. I do not need it answered now. But we want to verify your forecast there. Mr. Bynum...I am sorry, Mr. Hooser. Mr. Hooser: Just a follow-up. See I have more questions. The way I understand how special funds work, Sewer Funds used in sewer, but I am guessing there are positions Wastewater, some funded by special funds and some funded by General Funds? I appreciate the answer to the General Funded that came out to the $1.2 million for the three-quarters, but special fund vacancies also are funds that we should know the same answers. Because those theoretically even though they can be spent say on Wastewater, we could supplant General Funds, are you following me? Ms. Rapozo: Yes. Mr. Hooser: If we have unspent Sewer Funds we could ship them over and save those General Funds. So if the same question that the Chair was asking, if we could have detail on. Ms. Rapozo: Yes, actually the detail is on the quarterly report that was submitted...think it is on the Council agenda next week, on the 23rd. April 15, 2014 Department of Personnel Services (ss) Page 15 Mr. Hooser: Okay. Ms. Rapozo: So you should be getting that. Mr. Hooser: Then we can look at that and ask more questions. Ms. Rapozo: If you want. Mr. Hooser: I am just playing with you. I appreciate your information. Thank you. Chair Furfaro: On that note, I do want...before I recognize Mr. Bynum, I do want to thank your Department for working closely with me on the vacancy reports. It has a new format and I wanted to ask the second part of the question, money was moved to go elsewhere, I mean, the Auditor's Department is a perfect example. I do not want us to be counting on money that was actually consumed elsewhere. That is why I would like to get the comparison from Finance. Ms. Rapozo: Right, just for clarification for this year, that figure is say a little higher as I stated because there were some Department Heads that were trying to follow the Mayor's directive as trying to hold off on those positions. Chair Furfaro: I think it is actually higher because I would like to give the Department Heads a little bit more credit than just follow what the Mayor said, they actually listened to what the Mayor said. Mr. Bynum. Mr. Bynum: Some questions that pop out to me after looking at the vacancy report and I am asking for your perspective, you might say you need to ask the Department that and if that is the answer, fine. Because I unfortunately missed some budget sessions. But having said all of that in the Police Department, there are all of these high-level positions. The report says promotion effective May 1. Now these are positions that people are officially promoted, but they are not actually vacant, but under filled by people who do not have that title and we do not have that many high-level vacant positions in the Police Department for that long, right? Ms. Rapozo: There are...those are vacancies and they are probably doing some kind of temporary assignment and a lower level position is probably doing TA, up into those positions so some of those costs would be incurred by the Department. Those are positions and the reason why they say they are going to be filled is that they are actually going through interviews tomorrow and Thursday. Mr. Bynum: I am referring to the positions Detective, Detective, Police Lieutenant, and Captain. Some of them vacant for 1,600 days, 800 days, I assume those positions maybe have not been officially filled, but somebody has been there doing those jobs, right? Ms. Rapozo: It is probably through a TA, a temporary assignment. They have not permanently filled that position. April 15, 2014 Department of Personnel Services (ss) Page 16 Mr. Bynum: So they are not real vacancies and the Chief says he is going to make all of these promotions is a very substantial number of promotions all on first of May? Ms. Rapozo: That is what the anticipated date is, correct. They are going through interviews right now and it is a matter of making the selections and moving those particular individuals. Mr. Bynum: I just need to understand that better. Maybe someone could help me, because I just need to understand that better. I do not believe all of these positions are vacant right now and I think they are TA'd. So I am confused. Mr. Takatsuki: The positions are basically vacant. Because they are vacant they have not filled the positions for whatever period of time it is. They have been temporarily assigning, say for the Captain's position, that they have been temporarily assigning a Lieutenant to perform the Captain's work. Mr. Bynum: I am surprised when I see these numbers that there is such a long backlog of promotions in the Police Department that have not happened. A Detective position opened for 1,600 days. A Police Captain opened for 835 days. I did not know that there had not been promotions for that long to fill out the upper structures. Is it not significant that the Chief is reporting this many promotions happening all on a high-level promotions, 8 positions that are pretty senior. Mr. Takatsuki: One of the Captain's positions was held by the Deputy Chief of Police. So I think they had the position kept open in the interim if the Deputy had rights back to his old position. I think for a period of time they kept it opened and did not fill the position. So what happened then they were basically temporarily assigning someone else into the position. Mr. Bynum: I understand how that happens in the County and for good purpose, to give people options and stuff, right? So that is one of these? Mr. Takatsuki: That is one of the positions. Mr. Bynum: I can follow-up later. It just kind of leaps out at you that wow we are going to have eight high-level promotions in these few days at the Police Department. That is going to be interesting. My other question I have never fully understood the relationship that we have with the Water Department and in your report you show all the Water vacancies and it seems like the Water Department is in crisis and they have all of these engineer positions open for a very long time. Then in the status it says, "not applicable." I would like to know the status. I would like to have...is it not the Council's ...maybe this is a legal question. I know we are semiautonomous, I never understood what that meant. I have some real serious concerns when I look at this report and I would like to have more information about what is the status of these...welder position for 4,837 days it has been vacant. Civil Engineer 525 and EM-7, Civil Engineer VII, all vacant right now, these are actually all vacant? How many engineer positions does the Water Department have? Ms. Rapozo: I do not have that information. April 15, 2014 Department of Personnel Services (ss) Page 17 Mr. Bynum: So we get that data because it is in personnel data. But we do not have status because the Water Department does not report that to you? Ms. Rapozo: That is correct. They pretty much control their own recruitment. However, we were asked to report on all vacancies in all funds. Mr. Bynum: Right. That is why I do not recall ever seeing this report before. Some of the things kind of leap out and cause you to ask questions. Would you agree? Is there a serious under filling of positions at the Water Department? That is what it looks like. Ms. Rapozo: It is a high percentage. However, I have to say in the last month or two, there have been a lot of positions that were filled from the Water Department, which it appears that they are trying to move on these positions. Mr. Bynum: Well, I do not know if there are any attorneys here, but I want to understand better what the Council's oversight role, if any, is over on these matters? It seems like we would have some role at least on the budget and personnel side, even though we do not have control over the budget at least on the personnel side. So I have never understood semiautonomous and what it comes to these matters why we have not received these reports in the past, I do not recall seeing Water vacancies...maybe I am wrong...these are just open-ended questions. Chair Furfaro: Can I add something to that? Mr. Bynum: Please. Chair Furfaro: You folks do not know, I have them coming to us on July 23rd. The Water Department. Okay? For certainly looking into their operating budget. I was trying to have them here, but they are going through a change of accounts and started their budget late and the whole process. On Thursday I am working with Ernie and Steve because I am going to their board meeting and I am going to pose some questions to them. I am just offering that to let you know what perception I have. Also I want to find out a little bit about some of their understanding about our role. Because they are actually borrowing money that the Council underwrites for their projects and I want to get an update on their water projects as well. So I will be touching base with them on Thursday. My questions are very similar to what Mr. Bynum has, but they will be in front of us in a Council Meeting on the 23rd, Mr. Bynum. Mr. Bynum: Can I continue? Chair Furfaro: Yes. Mr. Bynum: Thank you, I appreciate that. It is just that I love data. Data poses questions and then you get more data and answer them. So when you just look...when I see this, what numbers leap out, right? Of course long vacancies. 800 days, 1,000 days. Most of them have explanation. That is a dollar-funded position or we know this is a historically difficult position to fill, that kind of thing, but other numbers just leap out at you. Because we have tightened up our budgeting since Mr. Barreira has been here and we would not have a 4,000-day fully funded position in our budget, right? We would say hey, there is no intention to hire this. It is an important position, let us dollar-fund it and not leave it in our budget for 4,000 days. So those numbers leap out at April 15, 2014 Department of Personnel Services (ss) Page 18 me and I think I might be asking a larger legal question that might be inappropriate for you, but I would like to understand and someone give me a briefing where the Council has responsibility over this? Because in the charter we have fiduciary responsibility for the whole government. Thank you. Enough for now. Chair Furfaro: We have all had a very hectic time with members gone, so if we do not catch all the pieces, but I do have perfect attendance so far and the KPD report says there are 16 potentially sworn officers eligible for retirement and also identifying an additional three civilian vacancies, dispatchers and they are planning on promotions in May. So we can get some more detail here. That was in their budget presentation. Thank you. Mr. Hooser. Mr. Hooser: Yes, just a brief follow-up on the Police issue, so we can understand...so I can understand a little bit about how it works. So if I am a Lieutenant and this is a Captain, and the Captain is vacant. It will show up on the report...if I am TAing for the Captain, where is the vacancy? Ms. Rapozo: The Captain. Mr. Hooser: The Captain. Okay. And now if I am promoted to be Captain, now I am vacant? Ms. Rapozo: Correct. Mr. Hooser: So these vacancies will not change at all in terms of the numbers? Ms. Rapozo: The numbers, correct. Mr. Hooser: Okay. So the budget impacts will change a little bit, but there will be still be lots of funded positions that are still vacant? Even if it trickles down? Ms. Rapozo: True, except I think with the Police Department right now, they are dependent on these promotion because they have a new class starting May 5th and they need those positions, the lower-level ones and they are actually filling them quicker. So they are not going to be as many numbers vacancies because they are filling it right as the other promotions are being made. Mr. Hooser: The other question is a more general question for the public and for me to refresh me, how many employees...not counting the Water Department are employed by the County of Kaua`i in round numbers? Chair Furfaro: 1,180. Ms. Rapozo: That includes Water. Chair Furfaro: Yes. Mr. Hooser: 1,180 including Water. Ms. Rapozo: Water has about 80, 75-80. April 15, 2014 Department of Personnel Services (ss) Page 19 Mr. Hooser: 1,180. We have 120 vacancies. So just kind of giving me some context there. Thank you. Thank you, Chair. I should have none known, he knows all the answers. Chair Furfaro: Mr. Bynum, you have the floor. Mr. Bynum: It shows five new recruits starting...a new class is that five? Ms. Rapozo: That is why there is only five to start because we have to use the other numbers. Mr. Bynum: Right. So he has to do some of those promotions May 1st or they will not be freed up. Ms. Rapozo: Yes. Mr. Bynum: I knew...I was just surprised there had not been promotion in so long. Just for the general public it does not impact budget that much because people are TAing in those positions and getting the salary...when you TA, you get the higher salary, correct? Ms. Rapozo: Correct. Mr. Bynum: As it should be. Thank you. Chair Furfaro: I am going to come back to my original comments. So what I am looking is that we have this number, and you have got to be really careful with this, because I think Mr. Hooser summarized pretty good. You have what is called "the classification and budgeted dollars" and then over here, you have "the staffing guides with the number of employees." The number of employees here is kind of a moving target, because people retire each year and people get hired and so forth. But people do not fill the job code immediately until they get the job. The job code stays vacant. But when they are in the staffing guide, they are being TA'd to the rate of pay that they earned in the temporary transfer. So that is the number that you have to deduct from just reading your job codes of vacancies from where these expenses are actually going. There are people that are...I went to the bank today at lunchtime and an acting teller and somebody behind her, part of the upwards staffing movement. You have to understand you and Finance have to do that number and not just throw a number out and say that is the dollar vacancy because some of that is spent in temporary transfers and that is what I want to get reconciled. Ms. Rapozo: That is correct and there are other issues as far as paying overtime, which is still in the salary column, but productivity-wise they may have to spend overtime because of the vacancy. So there are a lot of different items that need to be considered. Some of the Departments use the Section 3 of the Budget Ordinance to fill it with a short-term hire, which again would deplete the moneys. So I think absolutely this is not a correct figure. Chair Furfaro: I just want to clarify that. You know what my vacation pay is? Zero. You know that I come to work every day, but I am classified "part- time." We depend on you folks for those facts so we all have the right information. So please if you can work with Finance on the temporary transfers and staffing guides versus April 15, 2014 Department of Personnel Services (ss) Page 20 the job codes and vacancy, because nobody is in there permanently because they are there on temporary transfers. Fair enough? Ms. Rapozo: Yes. Chair Furfaro: How long do you think before you can get that to us? Give me something that you can live with, but it cannot be after May 8th? It is important. This is the big part of the County's operating expenses is tied to employees' salaries and benefits. Ms. Rapozo: I am turning around and am looking at the Finance staff because a lot of the numbers would be coming from them. Chair Furfaro: So two weeks or May 2nd, which is it? Ms. Rapozo: Which is longer? Chair Furfaro: Which is shorter? Ms. Rapozo: May 2nd. I think two weeks is what Ernie said. Chair Furfaro: We need it and we need it before we get to May 8th, okay fair enough, Ernie? ERNEST W. BARREIRA, Budget and Purchasing Director: Yes, sir. Chair Furfaro: Moving along here, any other questions in HR Department? Mr. Chock: Thank you, Chair. More of an observation I have been holding off on sharing. First of all I want to say that I am really excited about what you folks are working on and are moving us in the direction of pulling these resources together. I am a true believer that the right mission statement can really drive an organization if put together properly. I just wanted to recognize the work that you folks did with the customer service as well. I have been seeing, as I mentioned before in all of the presentations, mission statements come from each Department. The way I look at mission or if I was stated "vision" is what it looks like in the future about what we want. The mission statement is more about how it is we are going to get there. What is it that we are going to do to get there? From the leadership development standpoint, I thought it would be important to share and not to be critical and I am not critical of your Department, but more general in what I am seeing. What we are looking at is that if you can get the people together to work on and commit to, then you will see the words of your statement coming to fruition. Based on this research that I am aware of it would make sense that some of the mission statements are tangible and easy to remember. I can specifically recall or state that there are many mission statements that are very long and difficult to remember. So the idea would be that if you cannot remember it, you cannot recall it, it is not tangible and you cannot act on it. So I am an advocate of that. I would work towards that with every Department as I intend to. But it needs to be clear in order for us to invest and commit towards. That is something that I wanted to share earlier, Chair. Thank you for that time. Other than that, I had one question. I think I was phasing out when the preparation was going on with the payroll transition and then the space plan. I was not sure what the space plan was. If you could repeat that portion? How we are getting to space? April 15, 2014 Department of Personnel Services (ss) Page 21 Ms. Rapozo: We just want to ensure that the three staff feel that they have a place to come. So we have been working on making sure that we have basically three work spaces for the three people coming from Finance. Mr. Chock: Understood. Is that coming along? Ms. Rapozo: It is. It is. Mr. Chock: Thank you. Ms. Rapozo: You know we are separated right now. Mr. Chock: I understand. Ms. Rapozo: But that is fine, it works. Mr. Chock: It sounds like a common thing. I have heard that a few times and I am glad that everyone is paying attention to it and we hope that something materializes in this fiscal period. Chair Furfaro: We are coming up on a tape change and take a little caption break here. Do you know what company has a one-word mission statement? Mr. Bynum: IBM. Chair Furfaro: That is right. The one word is "think." That is their mission statement at IBM. We are on a caption break and tape change. 10 minutes. There being no objections, the Committee recessed at 3:05 p.m. There being no objections, the Committee was called back to order at 3:15 p.m., and proceeded as follows: Chair Furfaro: Okay we are back and just some final questions from me, if I can. I do not quite buy into the total amount that you have got on the vacation credit payout, but we will wait for that area. The only other areas that seem to basically bring some attention to me is the...this line that deals with "training." It seems awful low for all of the things that you need to be doing, and even on "consultant services" seems to be low. I appreciate it is low and it is a little higher than what you have had in the past, but for all that you have to do, are those numbers you are comfortable with? Training and consulting services? Ms. Rapozo: I think we are comfortable with that. A lot of our trainings we try to engage others to assist us as far as our insurance broker and so that they can come and provide some training at no-cost to us especially the OSHA-related ones. So we have been very fortunate on that. So we have been using a lot of other resources in order to try and minimize the cost for training and still be able to provide what we need. So I think I am comfortable with that, if you are comfortable with that? Chair Furfaro: Tom, same question, training and consultant services? April 15, 2014 Department of Personnel Services (ss) Page 22 Mr. Takatsuki: We are pretty comfortable with what we have at this time. We will try to use what Janine said, in-house training, as well as getting training from the State and other jurisdictions. Chair Furfaro: Let me go around the table and see if we have other questions. We have questions coming over, but before we call it a day with you folks, other questions? Mr. Hooser is fine. Mr. Bynum, you are fine? Mr. Bynum: Thank you, I am fine. Mr. Chock: Thank you, Chair. Chair Furfaro: Well, thank you very much. I do want to encourage you to try and reconcile that number for us on the staffing guides and the variances before the end of the month, please. Other than that, I thank you very much for your presentation, and you are finished for the day. There being no objections, the Committee recessed at 3:19 p.m.