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Home My WebLink AboutFY 2018 Budget Presentation (Department of Finance) COUNTY OF KAUA'I Department of Finance 2018 Budget Presentation April 4, 2017 Ken M. Shimonishi Director of Finance Sally A. Motta Deputy Director 201 8 Budget Presentation Department of Finance Page 2 DEPARTMENT OF FINANCE I. Mission To provide effective financial services to the people of K aua'i and to all that we serve by establishing and maintaining a financial system that can properly account for its activities. The Department of Finance Budget Presentation for FY 18 addresses a number of initiatives, successes and achievements that are attributable to our department. The Department of Finance is comprised of nine separate divisions; Administration, Accounting, Information Technology, Treasury, Driver’s License, Motor Vehicle, Real Property Assessment, Real Property Collections, and Purc hasing. These divisions continue to perform despite limited resources and financial constraints. Division reports highlight the various initiatives, challenges, successes and goals for the future. II. Successes and Achievements 1. Significant completion of Lo ng Term Financial Plan (LTFP) project with Government Finance Officers Association (GFOA) consulting and guidance. Held workshop with invitation to council members on January 27, 2017 and presented project status, Risk -Based Analysis of General Fund Reser ve Requirements for Kaua'i County, and three policies, 1). Structurally Balance Budget; 2). Reserve Fund; and 3). Long Term Financial Planning. Subsequently, Council adopted resolutions on “Structurally Balance Budget Policy” and “Reserve Fund Policy.” 2. S uccessfully created additional financial transparency reports on the OPENGOV platform to include “Debt Service”, “Annual Operating Budget Ordinance”, and “Budget Comparison” reports. This allows greater access for any user, including the public to otherwi se voluminous amounts of data in a user friendly interactive graphical web -based platform. 3. February 22, 2017 - Fitch Rating Services upgraded its bond rating for the county from AA - to AA, with reasons stated that include: “general fund revenues and tot al revenue growth has been strong historically, exceeding overall U.S. economic performance over the past 10 years.”, “Based on recent spending practices and continued strong revenue performance, Fitch expects that county expenditure increases will be in l ine with to marginally above revenue growth.”, and “The county is well positioned to address economic challenges as a result of limited anticipated revenue volatility and reserves that remain substantial despite large drawdowns between 2011 and 2013.” III. G oals & Objectives 1. Adhere to LTFP resolutions adopted under “Successes and Achievements”, item #1. 2. Continue the LTFP project with GFOA, including the adoption of the following policies, “Debt Management”, “Investment”, “User Fees”, and “Capital Improvemen ts/Asset Management”. Prepare a multi -year outlook of the county’s financials within the guidelines of these policies to identify resources, challenges, and recommendations to move the county forward with sustained financial stability. 201 8 Budget Presentation Department of Finance Page 3 3. Pursue new bond is suance of $23 million to address critical and pressing capital projects for which the county lacks sufficient resources to self fund. 4. Execute succession and training of employees through the utilization budget proviso Section 3, specifically where near fu ture retirements are evident and specialized skills required. 5. Continue enhancements on OPENGOV to possibly create: a. An executive overview of staffing and labor information in order to better manage staffing resources, which currently accounts for 65.0% of the county’s total operating budget, and 83.3% of the General fund’s operating budget. b. Real property tax parcel data. c. Department specific data requests, including non -financial reports. d. Other requests. IV. Budget Overview – Finance Administration The bud get for Finance Administration saw a reduction of $186,781 or -3.9%. This was due in large part to the aggregate reduction of $300,000 in the allowance for general liability claims and Puhi Metals remediation work, offset by increases in Liability Insuran ce for the addition of a Pollution policy of $125,000. Benefits reflect anticipated ERS contribution increase and an allowance for collective bargaining. FY 2017 FY 2018 $ + / -% + / - Salary and Wages 364,100 363,446 -654 -0.2% Benefits 158,786 176,225 17,439 11.0% Utilities 135,000 135,000 0 0.0% Vehicle/Equip, Lease 1 1 0 0.0% Operations 4,086,199 3,882,633 -203,566 -5.0% 4,744,086 4,557,305 -186,781 -3.9% 201 8 Budget Presentation Department of Finance Page 4 201 8 Budget Presentation Department of Finance Page 5 Budget Overview – Finance Department Totals Overall the Finance department’s budget show min imal growth with a 1.1% increase when compared to FY 17 as indicated by the tables and charts below. FY 2017 FY 2018 $ + / -% + / - Administration 4,744,086 4,557,305 -186,781 -3.9% Accounting -1,624,976 -1,581,672 43,304 -2.7% Information Technology 2,811,654 3,078,293 266,639 9.5% Treasury 276,431 294,288 17,857 6.5% Drivers License 618,654 660,022 41,368 6.7% Motor Vehicle 807,715 804,164 -3,551 -0.4% Real Property Assessment 2,091,537 2,110,819 19,282 0.9% Real Property Collections 429,882 410,151 -19,731 -4.6% Purchasing 1,124,017 1,070,099 -53,918 -4.8% 11,279,000 11,403,469 124,469 1.1% Department: FINANCE FY 2017 FY 2018 $ + / -% + / - Salary and Wages 4,762,065 4,749,400 -12,665 -0.3% Benefits 2,482,544 2,788,912 306,368 12.3% Utilities 192,320 192,320 0 0.0% Vehicle/Equip, Lease 17,645 110,896 93,251 528.5% Operations 3,824,426 3,561,941 -262,485 -6.9% 11,279,000 11,403,469 124,469 1.1% 42% 22% 2% 0% 34% FY 2017 Operating Budget Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations 42% 24%2% 1% 31% FY 2018 Operating Budget Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations 201 8 Budget Presentation Department of Finance Page 6 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations FY 2017 and FY 2018 Comparison FY 2017 FY 2018 Risk Management (Provided by Atlas Insurance) Coverage Policy Limits Deductibles FY16 Premiums FY17 Premiums Forecast Change % FY18 Forecast Property $25M $100K $355,912 $334,976 3.00% $345,025 Excess Liability $20M $1M $465,257 $465,260 5.00% $488,523 Crime $5M $25K $13,972 $14,101 3.00% $14,524 Cyber Liability $1M $50K $22,540 $23,496 5.00% $24,671 Excess WC/EL $25M/$2M $500 K/$500K $198,293 $207,448 15.00% $238,565 Aircraft Hull and Liability $25M/$2.2M 2%/$1K $28,481 $28,481 0.00% $28,481 Liability: Subsidized Police Vehicles* See Below See Below $45,616 $49,162 0% $1,329 per veh $49,162 37 vehicles 3 7 vehicles 37 vehicles TOTALS $1,130,071 $1,122,924 $1,188,951 Environmental / Pollution $10M $50K Awaiting quotations 3 -yr term $75,000 FORECAST with POLLUTION $1,122,924 $1,263,951 *Subsidized Police Vehicles: 35 vehicles as of March 2016 Bodily Injury (each person, each accident) $100,000 Property Damage (each accident) $300,000 Additional Personal Injury Protection $100,000 201 8 Budget Presentation Department of Finance Page 7 Uninsured Motorist -Unstacked $100,000/$300,000 Underinsured Motorist -Unstacked $100,0 00/$300,000 Wage Loss Benefit $1,000/$6,000 Funeral Expenses $2,000 Physical Damage Coverage Not Covered Non -Owned, Hired, Other Driver Not Covered Property: Pursuant to your request for insurance premium projections for the budget proc ess please review the attached chart. My projections are our best estimate of the renewal terms the County should receive when the insurance program renews at the end of the year. This forecast is based upon our recent experience renewing other client’s pr ograms, the current and projected state of the marketplace and the assumption the County will not have a significant loss event before the renewal on November 1 st . Excess Liability, Aviation Liability, Cyber Liability and Crime: The premium forecast for these lines of coverage have modest increases factored into the renewal and absent a severe loss occurring pre -renewal should provide the County with adequate funds to renew the programs. Excess Workers Compensation/Employers Liability: The forecast for this line of coverage is problematic for a number of reasons. First and foremost is the lack of competition for this particular line of coverage. The number of viable carriers willing to underwrite the County’s account is basically two, the incumbent Safe ty National and Midwest Employers Casualty Company. We have approached both for renewal terms in the past and Midwest has not price competitive. The second significant reason driving premiums upwards are the escalation in the severity of claims and the inc reased cost of medical services to the injured employees. This places the carriers in the position of having to raise premium levels or exit the marketplace. We budgeted a 15% increase in this premium to reflect market conditions. Subsidized Police Autom obile Liability: We have the renewal terms and pricing which we have utilized for the budget. This program has grown significantly over the last two years since it was incepted by the County. An important factor to consider during the budget process is th e premium is auditable. This means as vehicles are added to the schedule there will be additional premium charged to the County. We have included the rate per vehicle ($ 1,329) and if KPD can provide you with an approximate number of additional vehicles be ing added to the program the additional premium can be built into the budget Pollution Liability: We have included in the budget forecast a line item for Pollution Liability. We are currently waiting for underwriters to provide quotations and will forwar d them to the County upon receipt. Based upon our recent experience with a similar Hawaii public entity we believe the County could secure a $10 Million Limit Policy with a $50,000 retention which has a three year term for approximately $75,000. 201 8 Budget Presentation Department of Finance Page 8 Departm ent of Finance Organizational Chart Mayor Department of Finance Director of Finance Pos. E -10 Deputy Director of Finance Poss. E -11 Accounting Information Technology Purchasing Real Property Treasury Licensing Accounting Systems Administrator EM -07, Pos. 200 Executive Assistant to the Mayor EM -05, Pos. E -90 Assistant Chief Procurement Officer EM -05, Pos . 102 County RP Tax Manager EM -05, Pos.254 Treasurer EM -05, Pos. 208 Chief Examiner & Motor Vehicle Inspector SR -24 – Pos . 288 *See Accounting Org Chart *See Information Techn ology Org Chart *See Purchasing Org Chart *See Real Property Org Chart *See Treasury Org Chart *See Licensing Org Chart 201 8 Budget Presentation Department of Finance Page 9 Finance Administration Organizational Chart 201 8 Budget Presentation Department of Finance Page 10 Finance Accounting Organizational Chart 201 8 Budget Presentation Department of Finance Page 11 Information Technology Organizational Chart 201 8 Budget Presentation Department of Finance Page 12 Treasury Division Organizational Chart Treasurer EM -05, Pos. 208 Accountant III ER -22, Pos. 227 201 8 Budget Presentation Department of Finance Page 13 Driver’s License and Motor Vehicle Registration Divisions Organizational Chart Key: * - State Funded Deputy Director of Finance 201 8 Budget Presentation Department of Finance Page 14 Real Property Tax Assessment & Real Property Collections Divisions Organizational Chart 201 8 Budget Presentation Department of Finance Page 15 Purchasing Division Organizational Chart 201 8 Budget Presentation Department of Finance Page 16 COUNTY OF KAUA'I Department of Finance Accounting Division 201 7 Budget Presen tation April 4 , 201 7 Ken M. Shimonishi Director of Finance Sally A. Motta Deputy Director 201 8 Budget Presentation Department of Finance Page 17 Department of Finance Accounting Division I. Mission To provide oversight and maintain the accuracy and integrity of the County’s financial system. II. Success a nd Achievements The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the County of Kaua'i for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2 015. The County has received this award for the 23 rd consecutive year. This award signifies that the County’s 2015 CAFR has achieved the highest standards in financial reporting in accordance with Generally Accepted Accounting Principles (GAAP) and applic able legal requirements. We remain hopeful the current CAFR will meet the Certificate of Achievement Program’s requirements. III. Challenges The Accounting Division continues to operate seamlessly despite operational challenges and risks. Our philosophy is to maintain operations by cross -training and cross -functioning to the extent possible; however, our efforts to successfully maintain efforts continue to be challenging due to unanticipated leaves of absences. On the horizon, is the potential retirement of Position 253, Accountant III. The incumbent will have 32 years of service in July 2017 and is tasked with Fixed Assets, cash receipts, account reconciliations, and serves as the pCard Administrator for the County’s pCard Program. Effective implemen tation of cross -training proves to represent an important risk management tool by sharing, spreading, and capitalizing of individual retained knowledge in specialized functions. However, due to consistent year -after -year staffing issues, the goal of cross -training and creating standardized procedures continue to be challenging. For example, we have experienced: 1) increases in pCard transaction volume; 2) increases in leased equipment purchases; 3) increases in capital asset purchases and construction -in -progress activity; 4) additional requirements surrounding compliance with GASB Statements directly impacting the County and 5) requests for technological changes that will further strain the capacity of the Accounting Division. IV. Goals and Objectives The Accounting Division’s primary objectives are to: 1) Report accurately, all financial related information in a timely manner and 2) Strive to promote transparency, streamline processes to increase efficiencies, effectiveness, and consistency throughout Cou nty -wide operations. V. Budget Overview Accounting Division’s budget remained relatively flat to the prior fiscal year. Budget Variances Overall budget for the Accounting Division remains relatively flat to the prior fiscal year. 201 8 Budget Presentation Department of Finance Page 18 -3,000,000 -2,500,000 -2,000,000 -1,500,000 -1,000,000 -500,000 0 500,000 1,000,000 Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations FY 2017 and FY 2018 Comparison FY 2017 FY 2018 FY 2017 FY 2018 $ + / - % + / - Salary and Wages 603,715 621,265 17,550 2.9% Benefits 309,528 344,233 34,705 11.2% Utilities 0 0 0 0.0% Vehicle/Equip, Lease 1 1 0 0.0% Operations -2,538,220 -2,547,171 -8,951 0.4% -1,624,976 -1,581,672 43,304 -2.7% Compar ative Charts The large negative budget figure shown in operations is a result of having the Accounting Division act as the clearing house for county wide central services that are paid by the general fund and subsequently charged back to certain funds suc h as, Highway, Liquor, Solid Waste, Sewer, Golf, and Housing funds, in accordance with the County’s Cost Allocation Plan . 201 8 Budget Presentation Department of Finance Page 19 COUNTY OF KAUAI Department of Finance Information Technology Division 2018 Budget Presentation April 4, 2017 Ke n M. Shimonishi Director of Finance Sally A. Motta 201 8 Budget Presentation Department of Finance Page 20 Department of Finance Information Technology Division I. Mission To provide the Mayor’s Office, County Agencies, and the County Council with information technology solutions which enable them to serve the public in a cost -effective and efficient manner by fulfilling 5 key functions. 1. Deliver quality customer service and expert technical services that empower County employees through the availability of accessible and useful information, as wel l as the use of automated systems that improve their productivity. 2. Provide County employees with easily accessible technical support and timely responses via a centralized Help Desk service. 3. Maintain and enhance the County’s technical infrastructure to e nsure reliable, efficient, and secure operations. 4. Assist County agencies with the procurement and implementation of new systems that will increase operational efficiencies, as well as enhance the services available to our citizens. 5. Recommend solutions an d strategies that will leverage the power of technology to address countywide needs. II. Vision The Information Technology Division (IT) is a centralized service organization whose customers include all County departments and agencies, as well as members of the public that utilize technology when interacting with the County. We continually strive to deliver quality customer service in all functions of our Mission, but realize that current staffing and fiscal constraints are such that there will always be m ore work than we can handle within the existing environment. In order to address these operational challenges and achieve the best results possible, IT has adopted the following key tenants as part of our overall vision for the County. 1. Sustainable Budget ing Through Innovation – The IT Division’s operational expenses have already been reduced to minimum levels based upon our existing environment. Going forward, IT will pursue new, innovative strategies that can alter the County’s technology portfolio such that overall operational costs are maintained at current levels or reduced without sacrificing productivity or security. In some cases, this may require upfront investment to achieve future savings, both within IT, and across the County as a whole. Associ ated cost savings will be used to reinvest in IT where appropriate in order to continue progress. 201 8 Budget Presentation Department of Finance Page 21 2. Improved Efficiencies Through Policy/Process Re -engineering – There are many existing policies and processes within the County that can be modified to improv e the efficiency of IT operations. IT will review these areas to pursue appropriate changes that eliminate unnecessary overhead from IT, and/or optimize the roles that are assigned to IT staff. In all cases, we will seek solutions that benefit everyone, a nd ensure that IT continues to deliver the best service possible. Some of the changes identified may require that employees outside IT assume more ownership of their assigned areas so that IT can focus on its core responsibilities. IT will partner as nec essary with affected agencies to manage any associated transitions. 3. Countywide Prioritization Through Strategic Planning & Accountability – IT is constantly processing requests for new equipment, application solutions, infrastructure, technical support/co nsulting services, and large -scale automation projects. These requests come from all departments and agencies based upon their specific needs, but are rarely aligned or prioritized from a countywide perspective. Balancing IT support for these needs along with efforts to maintain and improve core/shared technology services is an ongoing challenge that requires a more strategic, unified approach. IT will address this need by developing a Strategic Planning Methodology and Road Map that consolidates future re quirements from all County departments/agencies into a single plan with centralized governance. This will be used to establish clear IT priorities that give resource, scheduling, and funding preference to projects that deliver maximum return on investment. Additionally, the new methodology will be designed to increase business owner accountability in terms of justifying their IT requests and providing leadership/management for their approved projects. Executing on the above will allow the IT Division to m aximize operational results and focus more of our efforts on longer term, strategic initiatives that will advance County IT. In addition to completing key operational projects as detailed throughout this report, our vision for IT over the next 3 -5 years i ncludes achievement of the following major milestones. 1. Additional No/Low Cost IT Capacity - Create additional capacity for County IT services through the implementation of volunteer and/or intern programs that involve technically skilled members of our co mmunity who are willing to participate in selected projects. 2. Alternative IT Funding/Revenue - Secure alternative funding sources to support the advancement of County IT operations including grants, donations, business partner agreements, and/or legislatio n. Additionally, research opportunities to create new revenue streams by leveraging County technology and information to provide valued -added services for our citizens, local businesses, and visitors. 3. Paperless Operations - Implement technology -based sol utions that eliminate the need for paper documents and wet signatures when conducting County business on a going forward basis. Additionally, establish policies/procedures that allow for the timely destruction of all historical paper documentation that has been scanned and stored electronically. 4. IT Capital Investment Planning - Develop a 5 -year plan for capital investments that are required for core IT infrastructure and services in the future. As part of this, create new processes to ensure that associate d documentation is maintained on an annual basis. Over the last year we have continued to pursue our vision for County IT. Progress has been slower than we would like due to limited resources and competing priorities, but we are actively working towards k ey tenants and major milestones as reflected in the updates below. 201 8 Budget Presentation Department of Finance Page 22  Key Tenants Update o Sustainable Budgeting Through Innovation – After holding the IT budget flat for several years while concurrently expanding the County’s technology services and infrast ructure, IT operational expenses for the FY18 budget will increase by approximately $266K or 9.5%. This includes $85K in salaries and benefits , primarily due to anticipated increase in ERS contributions and an allowance for collective bargaining . For the remaining non - salary/benefit portion of the increase ($181K), over half is allocated to replace end -of -life generator equipment (required every 20 -25 years), while nearly another third is the result of transferring system maintenance contracts and their fu nding from other departments to the IT budget. Excluding the above increases, that leaves about $36K or a 1% increase to move County IT forward. By finding other areas to decrease our IT expenses, we are still able to fund improvement of our cyber security posture to help keep pace with evolving worldwide threats, as well as the completion of critical projects associated with expanding hardware/software demands across the County. o Improved Efficiencies Through Policy/Process Re -engineering – IT is actively working on revising current policies and/or implementing new policies to streamline operations. Current examples include new policies being developed for Supplemental Computer Requests and Electronic Discovery, as well as partnering with KPD to better shar e the demands associated with maintaining their mobile data terminals. o Countywide Prioritization Through Strategic Planning & Accountability – IT continued work on developing a new methodology and roadmap for managing our strategic technology -based initia tives. Going forward, IT will be requesting that each department/agency designate one of their staff as an IT liaison to work directly with IT as a single point of contact on future IT planning for their respective operations. A data gathering tool has be en created/approved and will be distributed to the assigned IT liaisons in late Q1 2017, to be comp l eted in Q2 2017. Results will be shared with the IT Steering Committee who will use the information to set future IT priorities and create a countywide pla n to be completed in Q3/Q4 2017.  Major Milestones Update o Additional No/Low Cost IT Capacity – Continued assessment of internal projects and tasks that would be appropriate for assignment to volunteers/interns. Plan to revisit talks with Kauai Community C ollege in Q3/Q4 2017 once we get further along with the internal planning process. o Alternative IT Funding/Revenue – No progress to report other than ongoing review of grant options, logistics, etc. There appears to be some opportunity to work with the st ate on securing Homeland Security Grant funding for future cyber security initiatives. Plan to revisit in Q3/Q4 2017. o Paperless Operations –Selected vendor and purchased a cloud -based service for implementing a countywide electronic forms/workflow/signat ure solution. Working towards a pilot rollout of this solution in Q2 2017, as well as the development of associated policies/procedures governing the use of electronic signatures. Rolled out the Employee Self Service solution in Q1 2017 which provides var ious capabilities including online review of paystubs setting the stage to eliminate the printing of paychecks in the future (pending policy 201 8 Budget Presentation Department of Finance Page 23 decisions by management). Continued work with various departments/agencies on their individual automation initiativ es to reduce use of paper. o IT Capital Investment Planning – No progress to report. Plan to revisit in Q3/Q4 2017 after completing the new methodology and roadmap for managing strategic technology initiatives as noted in the key tenants update above. III . Fiscal Year 2016 -2017 Successes and Achievements 1. Bringing County Services Closer to Home – Made excellent progress on all key projects identified by our Citizen Technology Survey that was developed in conjunction with the Mayor’s Holo Holo 2020 initiati ve for Bringing County Services Closer to Home . All projects are either completed or remain on schedule for completion by the end of FY16. i. New On -line Services: Provide new on -line services to sign up for events, reserve parks/facilities, apply for campi ng permits, and pay for associated fees on -line using website transactions or smart phone applications. This is a multi -phase project with the initial phase being focused on event registration with on -line payments. [UPDATE: Completed Phase 1 in Q4 2016. Implementation in progress for Phase 2 which will support online facility reservations including camping permits. Phase 2 scheduled for completion in Q4 2017.] ii. Paratransit Management & Fleet Tracking System (PMFTS): Implement a real -time bus tracking sys tem that will help the County to efficiently manage routes and dispatch buses. Work closely with the Transportation Agency to procure and implement the PMFTS based upon well - defined requirements and a phased implementation plan. [UPDATE: Completed. System went live in Q2 2016.] 2. Virtual Desktop Infrastructure (VDI) – Over the last year, IT has implemented the required infrastructure for this initiative, conducted multiple rounds of testing, adjusted the environment as needed, and partnered with OED on the i nitial pilot rollout in Q4 2016. After resolving some minor glitches with the pilot, and we are planning to expand VDI usage into other areas later in 2017. In addition to OED, IT has successfully deployed the VDI technology in our IT Training room. The eventual rollout of VDI will allow the County to reduce its future PC replacement and maintenance costs while also providing increased workstation performance with reduced overhead for technical support (i.e. allowing IT Help Desk services to become more efficient). 3. Centralized Land Information Management Solution – Worked with the cross -departmental task force to move the County towards a centralized Land Information Management Solution (LIMS) that will meet the needs of all affected agencies. Secured p rofessional facilitation services to help accelerate progress, formalize the process, and build consensus. Coordinated logistics for and participated in various meetings with our consultant facilitators and several business process design teams. Completed detailed analysis and planning reports to define current/desired states, identify gaps, and establish future system requirements along with recommendations on how best to move forward. The final report in this process was the “LIMS Roadmap and Requireme nts” which was completed in October 2016. This report documents agreed upon solutions to address all identified gaps and provides the County with tangible requirements that may be translated into an RFP for a future enterprise software purchase, and/or pa ckaged into smaller more focused projects in the short - term. A detailed market scan was also completed to provide the County with a current picture of the available vendor solutions, how those would fit with County requirements, and what the estimated 201 8 Budget Presentation Department of Finance Page 24 cos ts would be for budgeting purposes. Current efforts are being focused on improving GIS -related data sets, as well as formalizing governance and business process definition in order to prepare for a future system implementation. The plan is to develop and r elease an RFP for bid by the end of 2017 (assuming that budget is available for the project). 4. Major Systems Upgrades – Partnered with departmental teams to provide technical support and successfully complete multiple, high -priority system upgrades includ ing: the Spillman CAD/RMS system for KPD, the Tyler iasWorld Real Property system for Finance, and the Esri Canada Assessment Analyst system for Finance. All off these systems are now in production and functioning well. Additionally, signed contract and facilitated implementation activities for the new iNovah Cashiering system from System Innovators which is scheduled to go -live in Q2 2017. 5. Cyber Security – Procured and completed an independent, third -party cyber security assessment through SecureWorks (a highly respected vendor in this space). Received detailed analysis and findings reports identifying room for improvement and initiated action plan to address all items identified. Signed contract/agreement to become a member of the Center for Internet S ecurity (CIS) Multi -State Information Sharing and Analysis Center (MS -ISAC). The MS -ISAC is a voluntary and collaborative effort based on a strong partnership with the Office of Cybersecurity and Communications within the U.S. Department of Homeland Securi ty (DHS). The MS -ISAC has been designated by DHS as the key resource for cyber threat prevention, protection, response and recovery for the nation’s state, local, territorial and tribal (SLTT) governments. The MS -ISAC has built and nurtured a trusted env ironment of collaboration and cooperation that is improving the cyber posture of SLTT governments. Initiated efforts to procure the CIS Netflow/Intrusion Detection System Monitoring and Analysis Service, known as Albert. This service is a near real time au tomated process that identifies and alerts on traditional and advanced threats on a network, enabling the identification of malicious activity and facilitating rapid response to threats and attacks. Albert provides 24x7x365 monitoring by the CIS Security O perations Center, potential threat analysis by their experienced security analysts, and expert recommendations for remediation when necessary. We plan to procure and implement the Albert service in 2017 based upon available funding. 6. GIS Initiatives – Ass isted various agencies in their efforts to improve public services by developing maps and applications based upon GIS technology. Projects included: Kauai Bus Stops and Routes Map, Extreme Tsunami Evacuation Zone Maps for Kauai and Niihau, Emergency Manag ement Tsunami Siren Inspection Map, and Fire Hydrant Inspection Map. All maps and their associated applications are actively being using to support County operations and provide important information to the public. In addition to these maps, a full updat e for the County’s GIS Parcel/CPR layers will be completed by the end of Q1 2017. As part of this data update project, we are establishing GIS data governance policies to ensure that these critical layers are continually updated on a bi -weekly basis. IV. Fiscal Year 2016 -2017 Challenges 1. Managing change required to move away from paper -based processes and implement next generation solutions can be very difficult due to a general resistance to change. IT can help to lead the way, but will require strong su pport from affected agencies and stakeholders in order to be successful. 2. The adoption of new technologies required to move the County forward demands additional IT effort, research, and training, thus stretching our already limited resources. Additionall y, there are 201 8 Budget Presentation Department of Finance Page 25 many needs across the County which demand immediate attention from IT resources, including everything from day -to -day support efforts to new systems implementations and statewide projects. Current responsibilities exceed our staffing capacity , thus making it difficult to provide quality customer service and address strategic, long -term planning efforts for the County at large. 3. Projects involving new systems require leadership, expertise, and resource commitment from the department(s) associat ed with that initiative since they are the business owners. In some cases, a department will rely heavily on IT to define and drive the project rather than act in a supporting technical role. This can be challenging, and is not the ideal way to move for ward since IT does not have the same level of knowledge or authority as senior department staff. 4. Competing priorities and limited resources have prevented IT from making significant progress on several key goals for FY17. These include implementation o f new, formalized methodologies for IT Projects and Strategic Planning; as well as full implementation of a comprehensive, cloud -based Electronic Procurement system. IT projects and planning continue to move forward based upon existing methods that must u ltimately be reworked in order to realize better efficiencies. Procurement automation efforts have continued and now include formal Construction Bids as well as formal Goods & Services bids, with informal procurement methods under consideration for going e lectronic in the future. Additionally, IT is partnering with Purchasing on the implementation of electronic purchase orders to be implemented in late 2017. All of these goals remain a priority, and will continue to be pursued despite initial delays. As su ch, they will all be included with our IT goals and objectives for FY18. VI. Fiscal Year 2017 -2018 Goals and Objectives 1. IT Project Methodology - Create and implement a formalized methodology for projects involving technology -based systems to ensure that rol es and responsibilities are clearly outlined upfront. Ensure that the methodology incorporates well -defined standards for various project -related activities such as funding, procurement, project planning, status reporting, resource allocation, etc. 2. IT St rategic Planning Methodology & Road Map - Create and implement a formalized methodology for departments to assist IT staff in creating a strategic plan that addresses their system and technology needs going forward. The methodology will be used by IT to gather standardized information from assigned leaders in each department and craft this into a department -specific IT plan. The departmental plans will then be layered on top of each other, optimized for alignment of commonalities, and adjusted as needed to develop a cohesive, countywide plan for all. As part of this, IT will work in partnership with departments to review all major systems and supporting infrastructure across the County in order to develop a long -range “road map” for infrastructure, appli cations, services, reporting and technology. This methodology will also allow us to identify funding and staffing required to execute the associated plans. 3. Electronic Procurement - Implement a comprehensive, cloud -based electronic procurement system to e nable solicitation posting, bid submission, and award granting over the Internet to realize huge internal savings on efficiency, as well as expanded vendor partner services and conveniences. Continue to partner with the Division of Purchasing and consider future project phases that would automate informal procurement methods, either using the existing Public Purchase solution in place for all formal procurements, or via some other method to be determined. Additionally, pursue implementation of electronic pu rchase orders within the Sungard ERP/Financial system. Project specifics and timelines will be defined by Purchasing based upon their internal requirements and rollout plans. 201 8 Budget Presentation Department of Finance Page 26 4. Cyber Security Infrastructure & Services Plan – Complete all related tasks result ing from the SecureWorks cyber security assessment. Procure and implement the CIS Netflow/Intrusion Detection System Monitoring and Analysis Service known as Albert in order to further improve the County’s cyber security posture. Additionally, engage with local, state, and federal partners to review ongoing cyber security threats as they affect the County’s assets. Work with these partners to leverage all available resources in order to identify and address potential threats/vulnerabilities associated wit h the increasingly sophisticated cyberattacks that are occurring worldwide. Determine what is required in terms of future cyber security investments that will ensure our County assets remain as secure as possible. Create a strategic framework and formaliz ed plan for managing the County’s cyber security operations, including additional enhancements where needed. 5. Key Operational Projects – As part of the annual budgeting process, the IT Division reports on progress for the key operational projects that we have initiated as part of our goals and objectives for the current/previous fiscal years. Additionally, IT defines new projects associated with our goals and objectives for the next fiscal year. Our goal is to complete all currently defined projects belo w by the end of FY18. Key Operational Project Name FY Initiated Percent Complete FY Completion Status/Comments Electronic Procurement (Multi -phase) FY14 100% FY17 Phase 1 completed for construction projects. Phase 2 completed for Goods and Services pr ojects. Future phases under consideration for informal/small purchases. Centralized Land Information Management Solution (LIMS) FY14 30% FY18 Facilitation services secured and analysis project completed. Market scan completed and projects ongoing. RFP rel ease by end 2017. Forms Management & Workflow FY14 50% FY17 Delayed due to competing priorities and limited resources, as well as evolving research and requirements. Will pursue initial pilot Q1/Q2 2017 with countywide rollout to follow. IT Project Meth odology FY17 40% FY18 Postponed and restarted in FY17 due to competing priorities and limited resources. IT Strategic Planning Methodology & Road Map FY17 40% FY18 Postponed and restarted in FY17 due to competing priorities and limited resources. Parat ransit Management & Fleet Tracking System FY15 100% FY16 Completed. New system is now live in production. New On -line Services (Phase 1 of Multi -phase) FY15 100% FY16 Phase 1 completed with online registration and fee payment for events launched in late 2016. Subsequent phases to support online facility reservations including camping permits. IT Policy Review & Development (Initial Target Policies) FY16 100% FY17 Completed. All target policies officially published in FY17. Additional policies under re view. IT Security Audit & Response Plan FY16 90% FY17 Selected SecureWorks for security audit and completed assessment. Working to address all identified items by the end of FY17. Cyber Security Infrastructure & Services Plan FY17 20% FY18 Initiated CIS/MS -ISAC relationship and activities in 2016. Planning to expand CIS services and develop the formal cyber security plan in 2017. 201 8 Budget Presentation Department of Finance Page 27 VII. Budget Overview The FY18 budget for our Finance/IT Division increased by approximately $266K or 9.5%. This is due to salarie s and benefits ($85K), related to anticipated ERS contribution increases and an allowance for collective bargaining. O perational expenses increase of ($181k) is primarily associated with replacing a critical, end -of -life generator for our primary data cent er ($95K), annual system support/maintenance fees being transferred from other department budgets to IT ($50K), and maintaining server/storage infrastructure along with Microsoft licensing to address increased demands across the County ($50K). The standar d budget chart for our FY18 IT budget is provided on the following page. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 201 8 Budget Presentation Department of Finance Page 28 201 8 Budget Presentation Department of Finance Page 29 VII. V acant Positions & Succession Planning The current IT Manager (E -90) will be resigning from the County as of 4/1/2017. T he IT Manager is working with the Mayor’s management team on a transition plan for this appointed position. Other than the IT Manager vacancy starting in April, the IT Division does not have any current or anticipated vacancies. The IT Division is not req uesting any new positions for FY18. Reallocations for some of our existing IT staff will need to be considered for FY18 as we have trained selected team members to take on greater responsibilities in an effort to address evolving IT demands across the Cou nty. IT will work with DHR to facilitate this evaluation/transition, and also with Department of Finance management to address any funding needs within our proposed budget constraints. Positions under consideration include 240, 245, 264, and 563. Other t han the IT Manager vacancy noted above, there are no impending retirements or departures (within 2 -3 years) for positions within the IT Division. Employee retirement plans/intentions are not always shared with management and are subject to change on short notice. However, this status accurately represents our understanding of IT operations at the time of this report. VIII. Grant Funds The IT Division does not currently utilize grant funds to support our operations. More specifically, IT does not have any posit ions that are funded by State or Federal grants. Given the above, IT will not include an attached worksheet detailing grant funds for the division. 201 8 Budget Presentation Department of Finance Page 30 Ken Shimonishi Director of Finance Sally Motta Deputy Director of Finance Brandon Raines IT Manager COUNTY OF KAUAI Department of Finance Division of Information Technology Fisca l Year 2018 Budget Presentation Appendix CIP Project Summary April 4, 2017 201 8 Budget Presentation Department of Finance Page 31 INFORMATION TECHNOLOGY DIVISION CIP PROJECT SUMMARY Project Summa ry There were 5 projects assigned to the IT Division in the CIP budget for FY17. Below is a summary table of these projects showing high -level status, as well FY17 funding amounts and sources. Project Name Status FY17 Funded Amount Funding Source PLANNIN G, ZONING/ENGINEERING SYSTEM In Progress (Electronic Plan Review) $70,587 $2,181 Bond Fund General Fund DOCUMENT IMAGING PROGRAM In Progress (Multi -phase) $136,821 Bond Fund IT INFRASTRUCTURE IMPROVEMENTS Completed (Multi -phase) $231,246 Bond Fund PAYRO LL/PERSONNEL SYSTEM In Progress / Redefined $146,396 Bond Fund CASHIERING SYSTEM UPGRADE In Progress (iNovah) $180,000 Bond Fund Project Status Updates Progress on CIP projects assigned to IT has been generally slow over the last fiscal year. This has been due to limited IT resources, transitions in affected departments, and increased demands from other competing initiatives across the County. The following details are provided as an executive level update.  PLANNING, ZONING/ENGINEERING SYSTEM Followin g approval of the FY12 budget, these CIP funds were allocated to pursue a solution for Electronic Plan Review (EPR) which was implemented as a cloud -based solution and has been on -line since FY13. EPR provides an on -line repository of plans, allows citize ns to submit plans electronically via the Internet, automates internal/external workflows associated with plan review/approval, and provides efficient email communications/notifications between County plan reviewers and citizens. At this point, IT continu es to work with PW Buildings and other affected agencies to review/improve processes as we progress toward going fully paperless. There is approximately $73K remaining in the allocated CIP funds for this project which will be used for supplemental impleme ntation services and expanded automation. These additional considerations include adoption of on -line permit applications and on -line permit payments, as well as implementation of revised EPR workflows to further optimize operations. Procurement for on - l ine permit applications and on -line payments is in progress to be completed Q2 2017 with implementation to follow later in 2017. Implementation of revised EPR workflows remains under discussion with decisions on next steps to be finalized in Q2 2017. If t here is a decision to move forward with the revised workflows, vendor design discussions will be planned for Q3/Q4 2017. DOCUMENT IMAGING PROGRAM Following completion of Phase 2, this initiative was redefined based upon lessons learned from previous pha ses and review of industry best practices in order to ensure greater success going forward. The new project direction required that candidate departments commit to scanning all 201 8 Budget Presentation Department of Finance Page 32 current documentation and resolving their organization/access methods prior to moving forward with any contracts to scan their document backlog. IT has continued to provide technical support to departments/agencies wishing to pursue document imaging, but overall progress has been minimal due to competing priorities and limited sta ffing in affected departments/agencies. Moving toward new procedures that include structured, timely scanning of documents on a “current day forward” basis has proven to be challenging due to other operational demands. Again, this fundamental process cha nge must be implemented before successfully pursuing backlog scanning projects. Given the minimal progress over the past fiscal year, management has decided to terminate this CIP project and reallocate the associated funding to other projects that are r eady to move. As of the FY18 budget proposal, there are no funds allocated to this project. Going forward, departments/agencies will need to allocate operational budget funding to pursue future scanning initiatives. The need to achieve “current day forw ard” scanning operations before pursuing backlog scanning will still apply. IT will continue to provide training and support to other agencies who are working independently to implement/manage their respective document imaging programs, but it will be the responsibility of the departments/agencies to drive these initiatives forward based upon their business needs. The Council resolution on electronic records storage has helped to facilitate document imaging by allowing departments/agencies to dispose of paper records that have been scanned. Managing the physical storage of paper records has long been an issue for the County, and this resolution makes it clear that our current paper storage needs can be nearly eliminated by adopting operational changes t hat incorporate scanning of records. Eliminating the requirement for paper record storage provides additional incentive to make record/document scanning a priority. When document imaging efforts expand, it is anticipated that additional software licensing and disk storage will be required along with future funding to support backlog scanning projects for departments that are not able to complete this effort on their own. Additionally, there may be the need for new scanning equipment as more agencies trans ition toward electronic records. As noted above, this will be funded via operational budgets on a case -by -case basis.  IT INFRASTRUCTURE IMPROVEMENTS The scope of this project was expanded for the FY13 budget cycle to include deliverables addressing Critic al Maintenance, Improved Access to Information & Services, Architecture Foundation Improvements, and Scanning Capabilities & Paper Elimination Solutions. As expected, our FY17 infrastructure projects used up the remaining balance of approved CIP funds lea ving no additional funds to address critical infrastructure projects going into FY18. Following discussion with management, a decision was taken to allocate an additional $100K in CIP funds (General Fund) to the IT Infrastructure Improvements project for FY18. IT expects to use all of these funds in FY18 to complete a countywide server and storage expansion project required to meet growing demands and maintain services, continue with planned network enhancements, and address countywide needs for system ac cess licensing. The following list represents some key achievements on this project for FY17. o Completed major upgrades to increase Internet bandwidth as required to address growing access demands including remote/mobile operations, webcast streaming (e.g . Council meetings), website transaction processing, and expanded use of cloud -based solutions. As 201 8 Budget Presentation Department of Finance Page 33 part of this, negotiated cost -effective vendor agreements to maximize services at minimal costs, and staying within budget. o Improved and expanded our virtua lized server environment to provide better performance, flexibility, and redundancy for all server -based functions. Continued the transition of older servers into the virtual environment, and successfully completed a pilot for Virtual Desktop Infrastructu re (VDI). VDI technology will provide an alternative to traditional PCs and could have major benefits including reduced costs associated with end -of -life replacement as well as ongoing maintenance. Future VDI deployments will be pursued in FY18 where appr opriate. o Upgraded network infrastructure to improve performance and reliability for all computer - based communications. Additionally, partnered with State DCCA to leverage their available franchise agreement credits to expand the County’s fiber network t o new locations that were underserved. Applied savings from eliminating older telecom circuits having monthly fees and replacing them with no -cost fiber access to implement a new circuit serving the landfill operation and their expanding technology needs (e.g. computers, phones, network access, etc.) o Implemented high -performance storage to better support ongoing use of the County’s document imaging system (Laserfiche). Established plans to migrate from the older/aging environment by the end of FY17 thereb y migrating to an efficient environment with sufficient space to meet our growing demands associated with document scanning/storage. o Completed procurement and started implementation for a Forms Management & Workflow solution that will reduce paper and inc rease efficiencies across the County by eliminating the need for paper forms, automating workflow associated with forms processing, and allowing for electronic signatures on forms without the current print/sign/scan/email process used today. The current s chedule is to complete a pilot rollout with targeted training in Q1/Q2 2017 before expanding use with departments/agencies later in 2017.  PAYROLL/PERSONNEL SYSTEM Due to fiscal constraints precluding the purchase of a new, single -system solution (estima ted cost over $1.0M), the Director of Finance made a decision in FY14 to pursue an integrated solution by leveraging our existing systems with add -on modules and minor software customizations applied as necessary to meet the County’s business requirements in the affected areas. Additionally, an internal task force was created to help move these efforts forward based upon our in -house knowledge of the systems, processes, business requirements, and challenges. This working group, known as the HRIS Task Force, includes representation from HR Administrative Services and HR Payroll, as well as support from IT. Overall progress on this project continues to be slow due to several factors including operational transitions within DHR, and systemic issues with the Pa yroll process involving multiple agencies. DHR has filled key vacancies which has allowed them to dedicate project staff on a more full - time basis. This has helped to accelerate ongoing efforts to push existing projects forward while concurrently developi ng a strategic plan for how DHR will manage their expanded operations. This plan will assist with identifying specific business requirements that can be used to drive 201 8 Budget Presentation Department of Finance Page 34 additional changes and automation. Despite these collective challenges, the HRIS Task F orce has achieved the following in FY17. o Sungard Employee Self Service – Completed procurement for a Sungard add -on module that will provide employees with on -line access to pay stubs, “what if” benefit calculations, demographic change requests automatica lly routed to DHR, and other functions. This will allow the County to pursue an electronic pay stub initiative, and eventually eliminate the need to print pay stubs on paper with each payroll cycle. The new Employee Self Service add -on module went live i n February 2017 following some delays for completing required hardware/software upgrades to the Sungard ERP system. o NeoGov Performance Evaluation – Continued implementation efforts for this add -on service. This new module will allow departments/agencies to automate and streamline their performance review activities while providing DHR with centralized insight and management capabilities. Currently focusing on a pilot implementation with KFD which is scheduled to go -live in Q2 2017. Based upon lessons l earned from the pilot and subsequent planning, rollout to other departments/agencies will follow in FY18. o Executime Time/Attendance – Continued implementation efforts for this new Time/Attendance solution that will be tightly integrated with our Sungard E RP system. Executime is a strategic partner with Sungard and has successfully implemented their software with many other Sungard clients. The contract is structured as a multi -phase project with the initial phase being a small, pilot rollout for selected groups. The initial contract includes “design” services for all County departments/agencies in order to ensure that we develop a comprehensive implementation plan that will be used to drive the phased rollout. The initial pilot phase is expected to go -li ve in Q2 2017 with rollout to other departments/agencies following in FY18. Our Time/Attendance implementation was temporarily delayed when Executime was acquired by Tyler Technologies and required contract revisions were made as part of that transition (a s required by code). We are continuing to evaluate other options in order to achieve further automation efficiencies with our existing Sungard ERP modules, and plan to complete this process before considering further projects. Once this is done, HR and I T will evaluate pursuing the HR Core module for Sungard as a new project for FY18. There remains approximately $141K in CIP funds allocated to this project, and we anticipate that this funding should allow us to achieve the project goals and timelines stat ed above.  CASHIERING SYSTEM UPGRADE The Council approved $180K in CIP funds for this project as part of the FY15 budget cycle. The scope of the project includes all software and implementation costs required to upgrade from our current, end -of -life cash iering solution. The County’s cashiering system is used extensively by Motor Vehicle Registration, Real Property Collections, and Driver Licensing to support various revenue collection activities including: real property taxes, motor vehicle registrations and tags, sewer fees, landfill fees, and other miscellaneous payments. Upgrading this system to a new, modern solution is required to sustain and improve our revenue collection operations as we move forward. iNovah is the most recent product offering fro m our current cashiering vendor - System Innovators. As part of the initial System Innovators implementation, the County worked with this vendor to implement many complex customizations and interfaces that are required for cashiering integration in our ope rational environment. Due to the highly integrated nature of our existing 201 8 Budget Presentation Department of Finance Page 35 system and the historical knowledge of our current vendor, we have planned to pursue an exempt procurement with System Innovators so that the County can seamlessly upgrade our cashi ering system to iNovah. The contract for procuring the iNovah solution from System Innovators was completed in 2016. Project implementation efforts are well underway and the go -live is currently scheduled for late May 2017. There remains approximately $131K in CIP funds allocated to this project, all of which have been encumbered through the contract and will become due for payment at various milestones as the project progresses. 201 8 Budget Presentation Department of Finance Page 36 COUNTY OF KAUA'I Department of Finance Treasury/Driver License/Mot or Vehicle Registration Divisions 2018 Budget Presentation April 4, 2017 Ken M. Shimonishi Director of Finance Sally A. Motta Deputy Director 201 8 Budget Presentation Department of Finance Page 37 Department of Finance Treasury/ Driver’s License/ Motor Vehicle Registration I . Mission To provide pr udent financial management, Motor Vehicle Registration and Driver License services to the people of Kaua‘i and the government agencies (County, State and Federal) that we serve. II . Successes and Achievements 1.) REAL I.D. (Act of 2005) – commencing May 11, 2008, full compliance was achieved on August 27, 2013 and continues today to balance the Department of Homeland Security’s (DHS) responsibility to ensure that driver’s licenses and identification cards intended to be used for official Federal purposes meet certain statutory and regulatory requirements. “Official purpose” as defined in the Act and the regulations includes, but not limited to, accessing Federal facilities and boarding Federal regulated commercial aircraft. a.) The facility Security Floor Plan (SFP) is near completion. The County of Kauai (all counties’) SFP is necessary and an integral part to help the State of Hawaii maintain “Real I.D. Full Compliance”. The SFP includes: security cameras, motion detectors, entry/exit devices, Fraudulent Docum ent Recognition training (FDR) and Security Awareness Training (SAT) for all Driver Licensing staff members. The SFP intent is to prevent public access to sensitive equipment, card production materials storage locations, Sensitive Security Information (SSI ) and Personal Identifiable Information (PII). The SFP will monitor the Driver License Division during hours of operation and during closing time . b.) Upgrades of IT infrastructure or systems overhaul (including modernization of IT systems to ensure all in -Sta te DMVs are interoperable), software upgrades to improve the ability to protect personal identity information, and ensuring the ability to use electronic immigration verification system. c.) Document security enhancement, including the development of more tamp er -resistant documents with enhanced security features, and the use of facial recognition software to detect a person with multiple identity documents or social security numbers. d.) Equipment upgrades, including document scanners, high -resolution digital scan ners, and high -speed printers, and e.) Reengineering of business practices, including converting to over the counter issuance to a more secured central issuance process, minimizing the potential for insider fraud. 2.) LEGAL PRESENCE (Act 38, SLH 2010 and Sec. 19 -122 -305 HAR) – enacted by the State to comply with the REAL I.D. ACT. This requires that the county examiner of drivers to verify that a person applying for a driver’s license is legally present within the State by providing evidence of lawful status, and ties length of stay with the Hawai‘i learner's permit, driver’s license, and state identification card's expiration date. Act 310, transfer of State ID (SID) function to respective County’s Driver License Department, effective January 02, 2013. 3.) Hawai‘i’s LIMITED PURPOSE DRIVER’S LICENSE, PROVISIONAL DRIVER’S LICENSE AND INSTRUCTION PERMIT, effective January 2016. 201 8 Budget Presentation Department of Finance Page 38 A Limited Purpose credential does not require documentary proof of “legal presence” and/or proof of a social security number. The term “lega l presence” is defined as a person who is either a U.S. citizen or is legally authorized to be in the U.S. The Limited Purpose Driver’s license are issued as a license to operate a motor vehicle on public highways. Limited purpose credentials are not REA L ID compliant and therefore, not exclusively accepted by the TSA to board a commercial aircraft or enter federal facilities. Additional screening and/or documents may be required. In addition, these credentials are not accepted for federal official purp oses and do not establish eligibility for employment, voter registration, or public benefits. 4.) The Motor Vehicle Registration division processed over 128,500 transactions in FY16. In addition to registering trucks, vehicles, and motorcycles for the public , all island car dealers and rental car companies, the MVR division also issues bus passes, collects sewer payments, issues and collects solid waste tipping fee coupons and payments, collects commercial refuse payments, and registers bicycles and trailers. MVR is also responsible for assembling the cash receipts as well as retaining the payment records. Remarkably, all of this is done with a staff of only 10 employees, which explains why there are often long customer lines at the MVR division. 5.) Driver’ Li censing administered the Legal Presence program during FY13, the Hawai‘i Limited Purpose Driver License in January 2016 and has been enforcing the federally mandated REAL ID Act. These new programs require a significant increase in the types of legal iden tification required before Driver’s Licensing can issue a state driver’s license or State ID card, the latter which became a County function in January 2013. Both customers and staff have had to adapt to these more rigorous licensing and identification re quirements. While the number of licensed drivers on Kaua‘i has not significantly increased, currently estimated at over 55,500 for FY2016, the processing time for validating the applicant’s legal identification has been lengthened substantially to meet st ate and federal requirements. 6.) Driver Licensing safety glass was installed, October 2015, at each work station where employees interact with the public. This requirement was finally fulfilled from growing concern from the Driver License Staff about employ ee safety. III . Challenges Staffing For Motor Vehicle Registration (MVR), our staff to work ratios make it difficult to provide quality customer service, while concurrently trying to maintain timely reporting. This is due to absenteeism, normal volume growth, unfunded mandates and the piling on mentally of County, State and Federal government leadership without additional resources. There are certainly peak periods, daily around lunchtime, after a weekend or a holiday and at during the first and last weeks of month. Our customer line for payment processing of sewer payments, tipping fee coupons, bus passes, landfill payments, commercial refuse collection and vehicle registration is typically much longer during these peak times. Trying to find a balan ce between providing the public with quality customer service and servicing our internal departments with timely reports continues to be a challenge. In addition, for Driver’s Licensing the increased volume of documents needed to be processed, due to a n umber of federal and/or state government mandates have led to additional requirements or processes for the County. All of these factors make it difficult to maintain and provide quality customer service. 201 8 Budget Presentation Department of Finance Page 39 Succession Planning Civil service requirements make succession planning extremely difficult to implement, as vacant positions must be made available for either internal or open recruitment prior to the departure of present staff. These three divisions have a current position head count of 22 with thre e (3) positions vacant for a total of 25. The Treasury has 2 positions, MVR has 10 (2 State funded), and D/L has 13 (1 County position is vacant, 2 State funded are vacant, D/L has total of 6 State funded). A total of six (6) personnel, 2 in Treasury, 1 in MVR and 3 in D/L are eligible now or will become eligible to retire in 2017/2018. This does not include employees who may be searching for other employment opportunities which may leave even sooner. Structural The Treasurer is responsible for mana ging the collection, custody, protection of our moneys, investment portfolio, debt portfolio (which includes post -issuance compliance), and also for overseeing the MVR staff of ten (10) and the Driver License staff of thirteen (13). None of the other Coun ties in the State have their Treasurers acting as administrators for the Department of Motor Vehicle functions as part of their responsibilities. In fact, the other Counties have DMV Administrators at a salary level equal to or greater than their Treasure rs. As the duties and responsibilities at MVR/DL continue to grow, reassessing the Treasurer’s role as the MVR/DL supervisor should be and needs to be evaluated. IV . Goals and Objectives Start and increase the utilization of document imaging (scanning ) to reduce storage needs and to provide historic records that are readily retrievable at the Motor Vehicle Registration division. This area will need a scanning contractor for the backlog that has accumulated since the last contract. And, they will need document scanners at each work station to mitigate the ongoing accumulation of records. V . Budget Overview All three of these divisions have FY18 budget requests that show nominal growth in Treasury and Driver’s License a nominal decrease in Motor V ehicle Registration (MVR). No new positions were added. However, ideally, there needs to be at least one (1) new position added in MVR. 201 8 Budget Presentation Department of Finance Page 40 Department: FINANCE, Division: TREASURY FY 2017 FY 2018 $ + / -% + / - Salary and Wages 187,169 191,672 4,503 2.4% Benefits 89,254 102,608 13,354 15.0% Utilities 0 0 0 0.0% Vehicle/Equip, Lease 1 1 0 0.0% Operations 7 7 0 0.0% 276,431 294,288 17,857 6.5% 0 50,000 100,000 150,000 200,000 250,000 Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations FY 2017 and FY 2018 Comparison FY 2017 FY 2018 68% 32% 0%0%0% FY 2017 Operating Budget Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations 65% 35% 0%0%0% FY 2018 Operating Budget Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations 201 8 Budget Presentation Department of Finance Page 41 Department: FINANCE, Division: DRIVERS LICENSE FY 2017 FY 2018 $ + / -% + / - Salary and Wages 324,909 350,072 25,163 7.7% Benefits 190,995 210,200 19,205 10.1% Utilities 0 0 0 0.0% Vehicle/Equip, Lease 3,000 0 -3,000 -100.0% Operations 99,750 99,750 0 0.0% 618,654 660,022 41,368 6.7% 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations FY 2017 and FY 2018 Comparison FY 2017 FY 2018 53% 31% 0%0%16% FY 2017 Operating Budget Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations 53%32% 0%0%15% FY 2018 Operating Budget Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations 201 8 Budget Presentation Department of Finance Page 42 Driver’s Licensing Division Consolidation Worksheet with funding sources: ele obj acct desc General Fund State Funded Total 01 01 REGULAR SALARIES 562-VEHICLE REG AND LIC MANAGER - EM3 72,504 72,504 288-CHIEF EXAM AND MOTOR VEHICLE INSPECTOR - SR24 64,176 64,176 241-DRIVER LICENSE EXAMINER-SR15 40,128 40,128 213-SENIOR MOTOR VEH FIN RESPONSIBILITY CLK-SR15 52,752 52,752 301-DRIVER LICENSE CLERK II-SR12 35,676 35,676 308-DRIVER LICENSE CLERK II-SR12 43,368 43,368 234-SENIOR CLERK-SR10 30,468 30,468 243-MOTOR VEHICLE PROGRAM TECHNICIAN-SR17* 51,924 51,924 251-DRIVER LICENSE CLERK I-SR12* 35,676 35,676 238-DRIVER LICENSE EXAMINER & INSPECTOR-SR16* 42,684 42,684 252-MOTOR VEHICLE CONTROL INSPECTOR-SR18* 45,096 45,096 250-MOTOR VEH FIN RESPONSIBILITY CLERK-SR13* 48,792 48,792 247-DRIVER LICENSE CLERK II-SR12*38,592 38,592 339,072 262,764 601,836 02 01 REGULAR OVERTIME 5,000 5,000 03 01 PREMIUM PAY 6,000 2,700 8,700 05 01 SOCIAL SECURITY CONTRIBU 27,584 20,101 47,685 02 HEALTH FUND CONTRIBUTION 37,702 32,458 70,160 03 RETIREMENT CONTRIBUTION 66,723 44,670 111,393 04 WORKERS COMPENSATION TTD 1 1 05 WORKERS COMPENSATION MED 1 1 06 UNEMPLOYMENT COMPENSATION 1 1 12 OTHER POST EMPLOY BENEFIT 78,188 53,341 131,529 24 00 TRAINING 1,250 1,250 30 00 OTHER SERVICES 85,000 19,575 104,575 31 00 DUES AND SUBSCRIPTIONS 500 500 43 02 R&M EQUIPMENT 1,000 135 1,135 57 00 PRINTING 3,000 3,000 61 01 OFFICE SUPPLIES 3,500 480 3,980 02 OTHER SUPPLIES 2,500 2,500 67 00 OTHER COMMODITIES 3,000 3,000 68 00 POSTAGE AND FREIGHT 1,004 1,004 89 01 EQUIPMENT 0 03 COMPUTERS AND ACCESSORIES 0 05 LEASED 0 660,022 437,228 1,097,250 201 8 Budget Presentation Department of Finance Page 43 Department: FINANCE, Division: MOTOR VEHICLE FY 2017 FY 2018 $ + / -% + / - Salary and Wages 370,112 353,609 -16,503 -4.5% Benefits 188,874 192,152 3,278 1.7% Utilities 0 0 0 0.0% Vehicle/Equip, Lease 0 0 0 0.0% Operations 248,729 258,403 9,674 3.9% 807,715 804,164 -3,551 -0.4% 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations FY 2017 and FY 2018 Comparison FY 2017 FY 2018 46% 23% 0% 0% 31% FY 2017 Operating Budget Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations 44% 24%0% 0% 32% FY 2018 Operating Budget Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations 201 8 Budget Presentation Department of Finance Page 44 Motor Vehicle Regis tration Division Consolidation Worksheet with funding sources: ele obj acct desc General Fund State Grants Total 01 01 REGULAR SALARIES 153-DEPARTMENTAL ACCOUNTING TECH.-SR15 48,792 48,792 235-MOTOR VEHICLE REGISTRATION OFFICER-SR22 59,448 59,448 154-MVR ASSISTANT CLERK-EXEMPT 28,870 28,870 152-VEH. TITLES AND REGISTRATION TECH.-SR13 48,792 48,792 229-VEH. TITLES AND REGISTRATION TECH.-SR13 48,795 48,795 236-VEH. TITLES AND REGISTRATION TECH.-SR13 43,368 43,368 278-VEH. TITLES AND REGISTRATION TECH.-SR13*38,592 38,592 228-VEH. TITLES AND REGISTRATION TECH.-SR13* 38,592 38,592 287-TREASURY SUPPORT CLERK-SR11 35,676 35,676 242-SENIOR CLERK-SR10 30,468 30,468 344,209 77,184 421,393 02 01 REGULAR OVERTIME 7,900 185 8,085 03 01 PREMIUM PAY 1,500 1 1,501 05 01 SOCIAL SECURITY CONTRIBU 27,863 5,905 33,768 02 HEALTH FUND CONTRIBUTION 17,879 23,416 41,295 03 RETIREMENT CONTRIBUTION 67,427 13,121 80,548 04 WORKERS COMPENSATION TTD 1 1 05 WORKERS COMPENSATION MED 1 1,541 1,542 06 UNEMPLOYMENT COMPENSATION 1 1 07 COUNTY RETIREE PENSIONS 0 09 MILEAGE 1 1 10 OTHER EMPLOYEE BENEFITS 1 14,008 14,009 12 OTHER POST EMPLOY BENEFIT 78,978 15,834 94,812 30 00 OTHER SERVICES 70,780 70,780 05 R&M COMPUTERS 9,960 9,960 55 00 ADVERTISING 200 200 57 00 PRINTING 3,000 3,000 61 01 OFFICE SUPPLIES 6,000 6,000 03 CONTROLLED ASSETS 5,600 5,600 62 01 OTHER SMALL EQUIPMENT 1 1 67 00 OTHER COMMODITIES 162,862 162,862 804,164 151,195 955,359 VI Vacant Position(s): Pos. 562 – Vehicle Registration & Licensing Mgr. – contact applicants for interviews Pos. 238 – Driver License. Examiner (State funded) - revi ew MQ’s, recruit Pos. 243 – Motor Vehicle Program Tech. (State funded) - recruit 201 8 Budget Presentation Department of Finance Page 45 COUNTY OF KAUA'I Department of Finance Real Property Assessment Division 2018 Budget Presentation April 04, 2017 201 8 Budget Presentation Department of Finance Page 46 DEPARTMENT OF FINANCE Real Property Assessment Division I Mi ssion The Real Property Assessment Division’s mission is to accurately and uniformly assess all real property within Kaua'i County annually; maintain current ownership and taxpayer address records; create and maintain up -to -date tax maps; provide public s ervice education and information through our front desk and our website locations; and administer numerous tax relief programs in an efficient and fair manner. II Success and Achievements  RPA completed the Phase I of the Assessment Analyst geo -referencin g project that found approximately $18 million in missing improvement value by comparing the aerial imagery from Pictometry with the building sketches from the iasWorld assessment software. The initial phase was limited to the Līhu‘e district, but this a nalysis will be rolled out to all five districts on Kaua‘i once updated Pictometry imagery becomes available.  The continued refinement of “market modeling” has resulted in much tighter assessment -to -sales ratios, ranging from 97.2% to 99.9% in the three re sidential models, and from 100.8% to 103.8% for the three condominium models. The weighted average of the assessment -to -sales ratio throughout all our models was 100.0%.  Implemented during FY17 and effective for FY18, Ordinance 997 capped increases and limited decreases in assessed values to a maximum of 3% for properties that were classified as either Homestead or Commercialized Home Use. Eligible properties must not have transferred title between October 1, 2015 and October 1, 2016; have not changed t he property’s physical characteristics between tax years; and must have been classified as either Homestead or Commercialized Home Use in the preceding tax year.  The annual certification of the assessment list continues to be completed well before the Marc h 15 th deadline. This year’s 2017 assessment list was certified on February 22, 2017.  RPA’s tax relief measures were well utilized with 1,343 additional Home Exemption for Low - Income approved; 1,328 Long -Term Affordable Rentals receiving the Homestead tax rate; and 377 approved Very Low Income credit applicants. The number of properties that are classified as Homestead also grew slightly from 11,583 in 2016 to 11,603 in 2017. A total of 121 properties received income -based tax credits that limited proper ty taxes to 3% of gross income in -lieu of market calculated taxes.  The RPA division became fully staffed with the addition of the GIS Analyst II position which was filled on July 16, 2016. The immediate duties of this position are to bring the County’s pa rcel layer GIS maps current and to complete a new layer for the CPR maps.  An Agricultural Working Group, which was comprised of farmers, ranchers, tree farmers, and large landowners, was assembled to review the current agricultural dedication program and a ccompanying administrative rules. Over the course of approximately 18 months, this group came back with recommendations which they believe will encourage bona fide commercial agricultural activities, enhance enforcement efforts, and stagger the workload m ore evenly for the department’s staff. These recommendations are currently under review and will be drafted into potential ordinance amendments for the County Council to consider. 201 8 Budget Presentation Department of Finance Page 47 III Challenges Integrating Software There are a number of software integ ration efforts that are ongoing projects for RPA. These include utilizing the Marshall & Swift cost tables, importing and using GIS maps in iasWorld, and using Assessment Analyst from a mobile device. Many of these challenges will also be considered part of our goals for the upcoming fiscal year. Limitations on Office Space By trying to keep staffing levels flat for a number of years, we have invested heavily in technology, such as large dual monitors, large -scale scanners and printers, and other equipme nt that create in -office efficiencies but that also take up considerable space. Now that all of our vacant positions have been filled, we realize that additional space is needed for employees to operate effectively. To address the lack of space, we have cleaned out the storage room by disposing of broken and obsolete equipment and furniture, moved shelving and file cabinets from our work area to the downstairs storage room, and reduced the amount of desk space allocated to each employee. Yet, despite the se efforts, it appears that RPA will still need additional space to accommodate daily operations. This year’s CIP budget includes monies for designing an electrical plan for RPA, and Public Works Engineering has completed a conceptual office layout redesi gn which will involve moving the front counters several feet forward. Construction funding for this proposed renovation and build -out will be required in a future CIP budget request. Lack of Vehicles In years past, RPA used to utilize 5 dedicated vehicle s; today there are only 2 vehicles being shared by 9 staff that conduct site inspections weekly. Typically, appraisers are in the field about 2 -3 days a week. The lack of vehicles may result in some lost productivity and it will certainly require the sta ff to place a greater emphasis on scheduling and sharing the limited number of vehicles we currently have. RPA is hopeful that the soon -to -be -operational motor pool will resolve this challenge shortly. IV Goals and Objectives Marshall & Swift Implementa tion Originally intended to be implemented for the 2017 assessments, additional testing and data mapping was necessary to assure a smoother transition from the current cost tables to the new Marshall & Swift tables. Our variance reports indicate certain fields tend to skew the results, therefore data scrubbing will be required on commercial properties where cost is driven not only by construction grade but also by occupancy type. Nonetheless, conversion to the Marshall & Swift valuations will provide be tter integrity for commercial and residential cost values, as they are the recognized leader is this field. Professionals in the real estate and insurance industries rely on Marshall & Swift, and now so do all the Hawai‘i counties. ESRI Assessment Analys t + Mobile Field Tablets With the completion of the geo -referencing of residential properties in the Līhu‘e district, the appraisers will now focus on the Waimea and Kōloa districts. In addition, we are looking to add mobile tablets to geo -reference new construction rather than wait until future aerial imagery is available for retrospective desktop reviews. Construction drawings for field inspections can be done within the Assessment Analyst application and then taken into the field to anchor geo -coordi nates for new structures. This process will 201 8 Budget Presentation Department of Finance Page 48 eliminate carrying paper files into the field and the duplicate work associated with redrawing these plans and “as builts” within the iasWorld CAMA system. Staff Training Training should include IAAO Standard s for Mass Assessment; Land CALP development; Market Modeling; Data Collection Standards; Software utilization; and customer service. Additional training in these disciplines should translate into workflow efficiencies and better data integrity of data fo r our annual valuations . GIS Maps RPA expects to have updates to the GIS parcel layer completed before the end of FY17 and will create a new CPR layer in FY18. These layers will give the staff appraiser’s visual tools to review their CALP models, find outliers, and share data on a GIS platform. These GIS layers will also serve as the backbone for the Land Information Management System (LIMS) project that corrals information from various departments and agencies into a shared data warehouse based by lin king data with geo -coordinates. Ag Dedications The results of the Agricultural Working Group’s efforts will be drafted into a codified form for legislative review and consideration in early FY18. These amendments, if approved, will be implemented by o ur Real Property Agricultural Specialist and appraisal staff on a go -forward basis. Finding ways to incentivize legitimate commercial agricultural activities while limiting land banking abuses has been a continual challenge to the Administration. The sug gested changes from this working group should reduce potential abuses for future dedications. Land Information Management System (LIMS) This is a multi -departmental effort that involves creating a share d platform to share information countywide. Real Pr operty seeks to provide key parcel layer and CPR layer data as a common platform from which all other departments can add their own customized ‘toolboxes’. The goal is to create greater efficiencies throughout the County by sharing access to frequently re quested data. V Budget Overview FY 2017 FY 2018 $ + or - Salaries & Wages 1,027,890 1,047,060 19,170 Benefits 544,391 650,679 106,288 Utilities 720 720 0 Vehicle/Equipment, Lease 6,002 7,252 1,2500 Operations 512,534 405,108 (107,426) Total 2,091 ,537 2,110,819 19,282 201 8 Budget Presentation Department of Finance Page 49 Salaries & Wages and Benefits are higher in FY18 due to the filling vacant positions, increased pay from collective bargaining and step movements, staff progression, and higher employer contributions towards the retirement system. The decrease in Operations for FY18 is due to the removal of a one -time contract extension to align the annual renewal date with the fiscal year monies allocated as well as the removal of the onsite business process and support from our assessment software vendor. During FY18, the business process and support will be provided from a centralized location in Colorado through a time and material charge that will be attended to on an “as needed” basis. 201 8 Budget Presentation Department of Finance Page 50 COUNTY OF KAUA'I Department o f Finance Real Property Collections Division 2018 Budget Presentation April 4, 2017 201 8 Budget Presentation Department of Finance Page 51 DEPARTMENT OF FINANCE Real Property Collections Division I Mission To provide prudent financial management and customer services to the people of Kauai as well as the departments and agencies we serve. The Real Property Tax Collection function is to administer the Tax Billing & Collection system and to assist with the custodial responsibilities for all Current and Delinquent Real Property Tax, RRCA (Residential Refuse Collections Assessments) and KKUCFD (Kukui’ula Community Facilities District) Tax Records. II Successes and Achievements  Payment Agreements Every effort is made to meet with taxpayers and establish manageable payment agreements to avoid filing tax liens and/or foreclosure proceedings. A good faith payment is required at the execution of the payment agreement. In addition, as long as the scheduled payments are continually made in accordance with the owner’s payment plan, no lien will be placed on property nor will any foreclosure action be initiated. As of March 15, 2017, Real Property Collections has 39 executed payment agreements that collectively generate an additional $65,000 a month in revenue to the County. III Challenges  Staff Turnover and Reduction in Workforce: o On October 31, 2016, the Tax Collection Assistant retired and recruitment efforts to replace that individual were unsuccessful. The primary responsibilities of this position were to handle correspondences with delinquent prope rty owner, file liens when necessary, and schedule tax sale foreclosures in accordance with the laws that govern such actions. o Temporary Appointment Tax Clerk (89 Day Contract) began July 2017 to assist with RPC’s busy billing period.  Renewed for (3) th ree additional 89 Day Contracts, through June 2017 to assist because of the inability to fill the vacant Tax Collection Assistant position. Due to our inability to attract qualified candidates, the Tax Collection Assistant position has been downgraded to an Account Clerk position and is presently in recruitment.  Cashiering System Upgrade: o The current Cashier System (SII/CFW) will be upgraded in May 2017. The IT department is currently working with RPC, Treasury and DMV to implement this new countywide we b -based cashiering system called iNovah.  Foreclosure Sale : o Kauai County usually holds a tax foreclosure sale for those properties that are 3+ years delinquent in their taxes. Unfortunately, due to the unfilled vacancy of the Tax 201 8 Budget Presentation Department of Finance Page 52 Collection Assistant position combined with a relatively new staff at RPC, the annual tax foreclosure sale has been postponed until further notice.  RPC’s interim plan is to focus on getting more payment agreements initiated as well as filing liens on properties that refuse t o enter into payment agreements.  Delinquency: o Hawaiian Home Land (HHL) Taxes – (FY2002 to FY2016 Delinquent)  As of March 15, 2017, the combined delinquency for 76 HHL parcels = $108,138.78 :  RP : $44,742.74  RRCA : $63,396.04  Collection efforts have been difficult since the County has no leverage to place liens or foreclose on HHL leased parcels. o State Leased Land Taxes – (FY2012 to FY2016 Delinquent)  As of March 15, 2017, the combined delinquency for 22 State leased Land parcels = $202,654.48  RP : $200,07 7.01  RRCA : $ 2,577.47  Collection efforts have been difficult. State documentation is often received years after the lease was initiated or terminated. And, similar to HHL lands, the County has no leverage to place liens or foreclose on State leased pro perties. o 3+ Years Delinquency – (FY1997 – FY2016 Delinquent)  As of March 15, 2017, the combined delinquency for 182 Parcels that are 3+ years delinquent = $2,096,205.77  RP : $1,990,884.81  RRCA : $ 105,320.96 IV Goals The primary goal of the Real Prope rty Collections Department is to bill, collect and account for all Real Property Taxes and other Special Assessments, such as the Residential Refuse Collection Assessment and the Kukui’ula Community Facilities District Tax, in an effective and efficient ma nner for the County of Kaua‘i. Our secondary goal, to the extent possible, is to manage the delinquency rate by actively pursuing all collection efforts. Objectives  Decrease the amount of our Delinquent Taxes o Work with delinquent tax payers to enter in to Payment Agreements o File liens when necessary o Work with the State, County and DHHL offices to reduce delinquent taxes for leased government properties o Last resort - Foreclosure Sale 201 8 Budget Presentation Department of Finance Page 53 V Budget Overview FY 2017 FY 2018 $ + or - Salaries & Wages 2 19,235 209,900 (9,335) Benefits 105,421 133,341 27,920 Utilities 0 0 0 Vehicle/Equipment, Lease 0 0 0 Operations 105,226 66,910 (38,316) Total 429,882 410,151 (19,731) The operational costs were reduced as RPC is not expected to host a tax sale auction in FY18. 201 8 Budget Presentation Department of Finance Page 54 Finance – RPA & RPC Vacant Positions FY 2018 Division Pos. No. Position Description/Title SR Salary Status RPC 233 Account Clerk SR11 $30,468 In Recruitment RPC 275 Tax Clerk SR10 $1 89 -Day Contract 201 8 Budget Presentation Department of Finance Page 55 April 4 , 201 6 Ken M. Shimonishi Director of Finance Sally A. Motta Deputy Director COUN TY OF KAUAI Department of Finance Purchasing Division 2018 Budget Presentation 201 8 Budget Presentation Department of Finance Page 56 Department of Finance Division of Purchasing I. Mission The Division of Purchasing (DoP) is tasked with the responsibility for all informal and formal procurement of Construction, Goods and Services for the County of Kaua‘i. In addition, the Division is responsible for: Contract for services, small purchases involving materi als, supplies and equipment; leases, rent, and the acquisition of real or personal property; maintain control of all surplus County equipment and process all inter -office and incoming/out -going mail, and postage. II. Vision The primary vision of the di vision is to ensure full and uncompromising adherence to the requirements of the Hawaii State Procurement Code and associated administrative rules. Of equal importance is to continue to pursue and develop an aggressive strategy and philosophy to harness al l available technological resources in order to better enhance our service delivery to both our internal and external customers. III. FY 17 Successes and Achievements A. Revision, Approval and Implementation of the General Terms and Conditions for Goods an d Services Contracts In FY 17, the DoP worked collaboratively with the Office of the County Attorney (OCA) in order to amend the Terms and Conditions for Goods and Services Contracts. The comprehensive revisions addressed a number of issues to include br inging the terms and conditions in line with procurement statutes, procedures, and administrative rules. The last formal revision to the general terms and conditions occurred in 2009. In addition to revising the General Terms and Conditions for Goods and Services Contracts, the OCA also created General Instructions to Offerors. Both documents are critical to more accurately define the various requirements for both competitive bids and for procurements that involve negotiated contracts (Professional Servic es, Sole Source and Exemptions). The update was a necessary component for the implementation of the second phase of electronic procurement for goods and services. All documents have since been published and are available electronically on the Division of Purchasing and County of Kaua‘i websites. B. Continued Expansion of Electronic Procurement and Paperless Initiatives – Goods and Services Procurement During the FY 17, after three years of various levels of research and development and the successful imp lementation of electronic procurement for construction contracts, the DoP launched its second phase of electronic procurement for Goods and Services projects, which also included concessions under HRS Chapter 102. As in the case of construction projects, t his second phase was launched via the use of the division’s electronic procurement system, Public Purchase, through The Public Group. The application allows for complete electronic and paperless application of procurement solicitations for goods and servic es projects. The solicitations are let electronically and contractors are able to submit their offers 201 8 Budget Presentation Department of Finance Page 57 electronically. It is a completely paperless application which has created a significant increase in division efficiency and effectiveness. This applicati on has also been beneficial to the goods and services community in terms of time and cost. In addition, the electronic procurement system allows for bid openings to occur via the Internet. As such, traditional bid openings that occurred in the past which mandated the physical presence of bidders are no longer necessary. Bid openings and other procurement information are conveyed via the Internet and are also immediately available to departmental personnel and members of the public. Results of bid openings are also immediately posted in our County of Kaua‘i web site so that persons who were not involved in the procurement may also have access to the bid information. This achieves the required transparency that is required by the procurement code. The imp lementation of the new initiative was seamless and has been utilized exclusively by the division for all of FY 17. C. Digital Signatures and Electronic Records During FY 17, the DoP successfully researched and implemented an electronic signature protocol at no cost to the County. The system utilizes the Adobe Acrobat application which allows for a digital signature that migrates through the County’s secure computer system. This process validates the identity of the person embedding the digital signature. The new digital signature protocol resulted in the division being able to achieve a completely paperless operation. It also provides the potential opportunity for other Country departments and agencies who access the DoP SharePoint Portal for use of var ious procurement forms and documents, to also take advantage of this resource. This would be in stark contrast to the past practice of procurement officers generating hard copies of these documents in order to affix a written signature. Upon successful ex pansion of this initiative allowing for an electronic signature protocol, these documents can be accessed and completed electronically and transmitted via the County’s email system to the DoP. The elimination of the need to create hard copy documents only to scan them as email attachments will result in a substantial savings in terms of time and money. The ability for the County to advance this initiative is as a result of the support of the Office of the County Attorney relating to Act 177, SLH 2005. Two separate legal opinions executed by DCA Nick Courson and approved by CA Mauna Kea Trask provided the legal and procedural pathways for this initiative. The division also extends its thanks to the County Council for its unanimous support of the Council Re solution 2016 -21 which enabled the County to advance these various electronic initiatives. D. Succession Planning The division’s succession plan is in its fourth year of implementation. During FY 17, two of the division’s three senior managers submitted notices of retirement which will occur on April 1 and July 1, 2017 respectively. The succession plan that was developed and expanded over the years was focused upon effectively addressing these retirement eventualities and being able to effectively carr y out the various responsibilities and mission of the division after these separations occurred. Effective in FY 17, all four senior specialists have been reallocated to the Procurement and Specification Specialist IV level. These specialists are “sup er journeyman” who have acquired the necessary skills and knowledge with regard to the various and diverse elements of the procurement code, related administrative rules, and internal policies and procedures of the DoP. Acquiring this level of procurement expertise was a critical component of the succession plan in terms of creating a cadre of workers who possess the knowledge, skills, and ability to ensure organizational and performance continuity. While additional job experiences and exposure to the comp lex areas of procurement will continue to hone these skills, the senior specialists and procurement technicians have advanced to the level of knowledge and expertise necessary to achieve operational continuity. 201 8 Budget Presentation Department of Finance Page 58 As has been discussed in prior presentations , succession planning in the public sector presents immense challenges in the presence of civil service system requirements governed by Chapter 76. Nonetheless, the creation of senior and seasoned specialists has created the vital pool of qualified worker s who, among others, will be able to apply for higher level positions after the departure of our senior managers. In addition, it will create the pool of personnel resources to deal with the next challenging phase of the succession plan when a new Assista nt Chief Procurement Officer will need to be hired to lead the division. The current ACPO is a 31 year veteran of government service and has qualified for retirement. Tentative plans to address this issue may come as early as 2020. The current successi on plan includes this component. IV. Challenges A. Electronic Purchase Orders One of the goals listed for fiscal year 17 involved the implementation of electronic purchase orders for the County. The DoP has assigned a designated work group who is leading the coordination with the IT division in order to advance this initiative. The accounting division is also involved in this project. This initiative will continue to be documented as a goal continuing in FY 18 since we did not achieve completion of the p roject in the current fiscal year. Numerous challenges have been encountered from both technical and procedural perspectives. While the system is capable of achieving this outcome, a substantial amount of coordination, planning, and execution will be nee ded. One of the challenges involved in the cleanup of the vendor database which has been unattended for a number of years. This would require additional coordination with the DoP, IT division, and the accounting division. A significant component of this in itiative will also require that each vendor is assigned an email address which will be the venue by which purchase orders will be communicated once the system is in place. Continued efforts will be made to deal with the numerous challenges involved in thi s project in order to move it forward successfully. 201 8 Budget Presentation Department of Finance Page 59 V. Goals & Objectives Fiscal Year 2017 -2018 The Goals and Objectives section for Fiscal Year 2017 -2018 for the DoP summarizes the Division’s key requirements that are deemed essential to b etter achieve our mission and service delivery to both internal and external customers. Summary of Fiscal Year 2017 -2018 Goals and Objectives 1. Development and Approval of a Digital and Electronic Signature Policy for the County One of the required elements of the legal opinions executed by the OCA with regard to the adaptation and implementation of digital signatures, required the development of policies and procedures defining the various legal and procedural requirements. This policy is essential to not only identify the technological requirements involved in the implementation of this initiative, but to ensure security and procedural safeguards with regard to signature integrity. A draft policy has been developed by the ACPO. The OCA will be wor king in partnership with the DoP to ensure legal validation of the policies and procedures. The DoP will also work closely with the IT division so that the policies closely adhere to the various technological requirements and resources of the County. Summary of Fiscal Year 2017 -2018 Goals and Objectives 2. Implementation of Electronic Procurement for Professional Services Contracts As noted in the accomplishments section, implementation of the electronic procurement initiative for construction and go ods and services contracts have been achieved. All construction and goods and services solicitations are now being supported through a fully operational e -procurement system. The third stage of this initiative now focuses upon professional services procur ement. While the division currently has a paperless system utilizing our County website and email system for the transmission of resumes and letters of intent, this third phase of our electronic procurement process will consolidate the professional servic es procurement within our existing e -procurement process. This will eliminate the technological redundancy that currently exists. Procurement specialists have been appointed as members of the workgroup assigned to move towards the implementation of prof essional services to be coordinated through our current procurement system effective in FY 18. The division will continue to focus on various other components of the procurement code with the intent of facilitating all work related to these various procure ment methods via our e -procurement system. 201 8 Budget Presentation Department of Finance Page 60 Summary of Fiscal Year 2017 -2018 Goals and Objectives 3. Succession Planning The DoP’s comprehensive and detailed succession plan has been presented to the Council in four consecutive budget presentati ons. The initiative will continue to move forward in FY 18. In fact, the execution of the succession plan in FY 18 is actually the culmination of the various work that has been committed in this area for the past four years. This is highlighted by the de parture of our two senior managers. Both highly skilled and qualified managers take with them more than 60 years of collective government and procurement experiences. Remaining objectives of the plan include: 1. Continued cross training, job -rotation, and job sharing among all procurement specialists and technicians involving the full scope of procurement duties and responsibilities focused on further developing and honing the knowledge and skills of our senior procurement specialists and technicians. 2. Responsible and effective recruitment and selection of a new working level supervisor to work in collaboration with the ACPO to provide daily management oversight for the division. The accurate identification of critical knowledge, skills, and abili ties that will be required of all applicants will be an important component of this plan. This will ensure that applicants will meet the requisite qualifications necessary to perform effectively and competently in the supervisory position. 3. Where pra ctical, temporary assignments to provide specialists with the opportunity to exercise and gain exposure to supervisory duties within the division will be pursued as the opportunities become available. 4. A new initiative which will be actively pursued beginning in FY 18 will be mandatory attendance for all procurement specialists and technicians at the annual National Institute of Government Procurement (NIGP) Conferences. This will be achieved by sending specialists on a rotational basis each year. The NIGP is the nationally renowned support resource for all government procurement entities. The annual conference provides the opportunity for procurement personnel to attend seminars, trainings, discussions panels, and other activities designated to fu rther develop competence within the field of procurement. The conference also advances the most modern resources and initiatives which will lend assistance to the DoP in keeping abreast of new and emerging trends in procurement so as to remain on the cutt ing edge of this important governmental process. 201 8 Budget Presentation Department of Finance Page 61 VI. Budget Overview 201 8 Budget Presentation Department of Finance Page 62 VII. Vacant Positions All positions in the DoP are currently filled. However, effective April 1, 2017 and July 1, 2017 respectively, two senior managers (Procurement and Specif ications Specialists VI, SR 26) will retire from the division. This will result in two corresponding vacancies for the division. The plan to address these vacancies is to seek approval from the HR Department to downgrade one of the PSS VI positions to an entry level PSS I position (SR 16). This position (No. 232) has been $1 funded for FY 18 proposed budget. As noted in the budget worksheets, this will result in a cost savings of approximately $70,000 in FY 18. Recruitment of an entry -level specia list will be required in FY 19 to provide the means for continuity of services as part of the broader succession plan that has been in place for the past four years. However, there is no intent to fill this position in FY 18 and as such, maintaining the l evel of funding even for the downgraded PSS I position would not be financially responsible. The second vacated PSS VI position will be downgraded to a PSS V position so as to maintain a mid - level, working supervisory resource for the division to work col laboratively with the ACPO. Internal recruitment will be pursued to fill this position. While there will also be a salary savings as a result of this action, the total will not be known until a new incumbent is selected. The end result of these personn el changes will be a formal reorganization of the DoP to seek structural realignment of the management of the division. The formal proposal has been submitted for review and approval. VIII. Grants The DoP does not rely upon any grant funds as part of the operating budget. The operation is fully funded by the general fund.