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HomeMy WebLinkAbout02-08-16 CCC Approved Minutes COUNTY OF KAUAI Minutes of Meeting OPEN SESSION Board/Committee: Cost Control Commission Meet ing Date February 8, 2016 Location Mo`i keha Building – Liquor Conference Room Start of Meeting : 1:33 p.m. End of Meeting : 2:30 p.m. Present Chair elect Joanne Nakashima ; Vice -Chair elect James Whitfield; Members: Dirk Apao, Jan Hashizume, Glen Takenouc hi, Laurie Yoshida Also present: Board & Commissions Office Staff: Support Clerk Mercedes Omo ; Administrator Jay Furfaro; Deputy County Attorney Matthew Bracken Excused Absent Tricia Lynn Yamashita SUBJECT DISCUSSION ACTION Oath of Office Pri or to calling the meeting to order, Eddie Topenio Administrative Assistant to the County Clerk, gave the Oath of Office to Commissioner Laurie Yoshida 2 nd Term ending on 12/31/2018. Call to Order Chair Yoshida called the meeting to order at 1:33 p.m. wi th six (6) members present constituting a quorum. Election of N ew Chair and Vice Chair Chair Yoshida opened the floor for nominations. Hearing no objections from the Commissioners who were present , Chair Yoshida called for a motion. Commis sioner Takeno uchi moved to nominate Commissioner Joanne Nakashima as the new Chair and Commissioner Jame s Whitfield as the new Vice Chair. Commissioner Hashizume seconded the motion. The motion carried 6:0 Approval of 2016 Meeting Schedule Chair -elect Nakashima cal led for a motion to approve the 2016 Meeting Schedule. Commissioner Yoshida moved to app rove. Commissioner T akenouchi seconded the motion. The motion carried 6:0 Approval of Minutes Regular Open Session Minutes of October 12, 2015. Vice Chair -Elect W hitfield requested that the se cond sentence of the third paragraph on p age 2 be amended to reflect that the correct word is Cost Control Commission Regular Open Session Minutes of February 8, 2016. Page 2 SUBJECT DISCUSSION ACTION “worthwhile ” and not worth with. Ms. Omo stated that she would make the correction s . With no further comments or corrections to the meeting minutes, Chair - e lect Nakashima called for a motion to approve the meeting minutes as amended. Commissioner Takenouc hi moved to approve the meet ing minutes of October 12, 2015, as amended. Commissioner Yoshida seconded the motion . The motion carried 6:0. Presentation by Boards and Commissions Administrator Jay Furfaro on the County’s CAFR and TAT and Payroll Tax Administrator Furfaro distributed the following five (5) documents to the Commissioners: 1. County of Kaua‘i Single Au dit Reports for fiscal year ending June 30, 2015 ; 2. Management Advisory Report for fiscal year ending June 30, 2015 ; 3. C opy of a memorandum dated December 11, 2015 to the Salary Commis sion; 4. C hart reflecting year to year comparison s of th e Transient Accommoda tions Tax collections including the Kaua’i’s share of the TAT with and without the c ap ; 5. A news a rticle titled, “Should Counties Get a Bigger Share of Hotel Tax Revenue ”. Administrator Furfaro stated that the audit that was conducted by the Offic e of the County Auditor for Fiscal Year ending on Jun e 30, 2015, comprised of basic financial statements contained within the County’s Comprehensive Annual Financial Report (C AFR), a Management Advisory Report comprised of current findings and recommendations to im prove internal controls over pCard purchases, review treasury trust accounts, and improve monitoring of delinquent receivable accounts and a single audit comprising of the County’s operat ing costs and the actions that was taken by the County to reconcile i t’s sick leave and vacation time. Cost Control Commission Regular Open Session Minutes of February 8, 2016. Page 3 SUBJECT DISCUSSION ACTION Administrator Furfaro stated that although there wa s less to reconcile this year compared to the previous years they are still having difficulty trying to obtain a pure re conciliation statement from the departments whos e responsibility is to keep a record of all accrued vacations . V ice C hair W hitfield asked how many sick leave and vacation hours can a county employee accumulate to which Administrator Furfaro replied up to 720 hours for vacation and another 720 hours f or sick leave which is consistent with the other counties through policy negotiations. Administrator Furfaro stated that other discrepancies found in the report is the reconciliation of the P -card purchases and the County’s lack of monitoring delinquen t accounts on a timely basis particularly , the County’s commercial landfill receivables. Relative to the delinquency accounts, Vice Chair -el ect Whitfield asked if any legal action can be taken to recover some or all the funds to which Administrator Fur faro replied that there have been discussion on the issue, but in ter ms of any legal strategy he would refer the question to the Office of the County Attorney. With no further questions or comments from the Commissioners regarding the County’s CAFR Repo rt, Admini strator Furfaro moved onto the Transient Accommodation T ax portion of his presentation . Administrator Furfaro explained that the original formula for the Transient Accommodation Tax (TAT) is on the gross rental or gross rental proceeds derived from the furn ishing of transient accommodations at a 9.25% rate, and l ike the general excise tax, it is a tax levied on gross income. Cost Control Commission Regular Open Session Minutes of February 8, 2016. Page 4 SUBJECT DISCUSSION ACTION He further explained that about five (5) years ago , a percentage of the total collection was distributed to the counties and the balance went to the s tate convention c enter special fun d and the tourism special fund. The counties share was capped at $93 million but a working group created by the Legislature recommended that the capped by removed whereas, the state would get 55% of the total, with the counties splitting the remaining 45%, or $103 million. Of that remaining amount, the City and County of Honolulu would get 44.1%, Maui would get 22.8%, Hawai‘i County 18.6% and Kaua‘i County would get 14.5% or $13 million. In other words for the last four (4) to five (5) years the county has lost half of what it should be entitled to. Administrator Furfaro stated that based on the percentage the county is supposed to get next year will be critical because no cost restraints h ave been placed on public services. He added that if the Legislature is willing to give the counties the option of adding a half -cent county surcha rge to the General Excise Tax that alone would generate (over a ten (10) year period) about $19 million for each year, which the same amount the county is already put ting in for its roads and housing. However , the Legislature is saying that it wants 75 percent of the GET collected to go bac k into the ARM for roads and the other 25 percent to transportation , whi ch is tied to the City and County of Honolulu to ma ke up for its short fall. Vice Chair -elect Whitfield commented in other words the county is subsidizing the C&C of Honolulu’s rail project. Commissioner Takenouchi questioned what are chances does the county have to win back its share of the TAT being that the City and County of Honolulu has the lion’s share of representatives. Administrator Furfaro state d that the Commission is going to have a tough time trying to identify high controls as well as f inding ways to reduce Cost Control Commission Regular Open Session Minutes of February 8, 2016. Page 5 SUBJECT DISCUSSION ACTION spending if neither the TAT nor GET comes through. He added that although the county h as $5.5 million it will be used to cover salaries and wages. Commissioner Apao commented that when it comes to the salaries and wages negotiatio ns with th e unions plays a very big part. Administrator Furfaro stated that the negotiations are based on the fact that th e governor gets four (4) votes, the state hospital system get s one vote and the mayors gets one vote each, and out of the nine (9) po ssible votes, if the go vernor secures one of the mayor s vote it’s a done deal. Commissioner Yoshida asked if the half -cent surcharge to the General Excise Tax would remain on Kaua‘i to which Administrator Furfaro stated that 90 percent will remain on Ka ua‘i and the other 10 percent will go to the S tate’s general fund. Commissioner Yoshida stated that from the Cost Control Commission needs to look at what is actually being proposed that will have a long term effect on the county’s operational budget. With no further comments or questions, Chair elect Nakashima moved onto the next agenda item. Business CCC 2016 -01 Discussion on possible recommendations as it relates to Section 28.04 Article XXXVIII of the Kaua‘i County Charter. Commissioner Yoshida indicated that the purpose of the discussion is to identify an area and then make a recommendation on ways to r educe cost while maintaining a reasonable level of service. Commissioner Takenouchi asked if it was possible to request the presence of the Co unty’s Space Planner at the next meeting to provide an update on the Cost Control Commission Regular Open Session Minutes of February 8, 2016. Page 6 SUBJECT DISCUSSION ACTION plans for the old Big Save space. Co mmissioner Yoshida stated that it would also be a good idea to ask Mr. Sullivan if he could be present at the next meeting to update the Commission on the county -wide electricity costs. Commissioner Hashizume asked if it was po ssible to ask the Vacancy Review Committee for a written report on all employment requisitions that was submitted by the departments for consideration including a justification f or the hire and the source of funding within the approved budget. Administrator Furfaro noted that if a position is vacant and they want to fill the positon in the future the department would dollar fund the position , but if it’s not dollar fund the po sition it could disappear. Staf f acknowledged the Commissioners request and will send to the appropriate county agencies. With no further discussion, Chair -elect Nakashima moved onto the next agenda item. CCC 2016 -02 Discussion or input on possible r ecommendations for improvement to Article XXVIII Cost Control Commission of the Kaua‘i County Charter. Administrator Furfaro stated that the Charter Review Commissi on wants to lock everything into place by March 28 th . Commissioner Yoshida stated that if that’s the case , and the Com mi ssion does not come up with any new recommendations by today , than the issue is moot. Admin istrator Furfaro stated that the Commission could go to a councilmember to in troduce a recommendation if it wanted to. Commissi oner Takenouchi commented that h e is not sure what other changes c ould be made to the Charter to expand the scope of work for the Cost Cost Control Commission Regular Open Session Minutes of February 8, 2016. Page 7 SUBJECT DISCUSSION ACTION Control Commission. Vice Chair el ect Whi tfield que stioned whether it would be an issue to review the bu dget or would i t interfere with another Commission s responsibility. Commissioner Takenouchi noted that it shouldn’t be an issue because in the past , the Commission had the opportunity to see a presentation on the budget. Admini strator Furfaro stated that currently th e County Council looking into creating a County Manager form of government and the Charter Review Commission (amongst other issues ) is revisiting County D istricting . He stated that if the proposals are submitted to the voters , and it passes , it w ould chan ge the entire Charter. He added although the Commission is schedule d to sunset at the end of the year after a ten year period, the C ommission ers may propose a new amendment to make it permanent . Commissioner Yoshida stated that if they don’t extend the Charter Review Commission the only other way is to recreate another Charter Review Commission or propose an amendment s to the C ouncil to which Administrator Furfaro replied that is correct. Commissioner’s Yoshida and Takenouchi both indicated that they had no recommendations to make at this time. Cha ir -elect Nakashima stated that since there are no recommendation s to be made she would move onto the announcements. Announcements Next quarterly meeting – Monday, April 11, 2016, at 1:30 p.m. at the M o`ikeha Building, Liquor Conference Room. Cost Control Commission Regular Open Session Minutes of February 8, 2016. Page 8 SUBJECT DISCUSSION ACTION Adjournment Chair -elect Nakashima called fo r a motion to adjourn the meeting. Commissioner Yoshida moved to adjourn the meeting. Commissioner Takenouchi seconded the motion. The motion carried 6:0 At 2:30 p.m . the meeting adjourned Submitted by: __________________________________ Reviewed and Approved by: _________________________________________ Mercedes Omo , Staff Support Clerk Joanne Nakashima , Chair -elect (X ) Approved as circulate d on April 11, 2016 ( ) Approved as amended . See minutes of ___________ meeting.