The URL can be used to link to this page

Home My WebLink AboutFY 2022 Budget Presentation (Department of Finance)DEPARTMENT OF FINANCE FY 2022 BUDGET AND OPERATIONS SYNOPSIS Reiko Matsuyama Director Department: FINANCE Fund: GENERAL FUND 1. FY 2021 to FY 2022 BUDGET COMPARSION Department: FINANCE FY 2021 FY 2022 $ + / -- Salary and Wages 5,279,326 5,338,534 59,208 1.1% Benefits 3,197,004 3,238,819 41,815 1.3% Insurance 1,978,740 2,218,740 240,000 12.1% Auto/General Liability 983,454 623,455 -359,999 -36.6% Animal Control 1,113,000 1,003,000 -110,000 -9.9% Utilities 196,801 170,001 -26,800 -13.6% Vehicle/Equip, Lease 15,980 15,977 -3 0.0% Operations 637,345 1,067,139 429,794 67.4% 13, 401, 650 13, 675, 665 274,015 2.0% FY 2021 Operating Budget 0vo ■ Salary and Wages 2% 5% ■ Benefits ■Insurance •Auto/Genera l 00.41 Liability ■Animal Control 14 ■ Utilities 04 Vehicle/Equip, Lease Operations 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 FY 2022 Operating Budget ■ Salary and Wages 0% ■ Benefits ■Insurance ■Auto/General Liability ■Animal Control ■ 1 Vehicle/Equip, Lease Operations FY 2021 and FY 2022 Comparison acasl sec � zJt c a�a Sad 'w P 9 FY 2021 0 FY 2022 1 2. MAJOR CHANGES AND/OR VARIANCES IN OPERATIONS BUDGET The Department of Finance is requesting a FY'22 operating budget of $13.7 million, which is an increase of $274 thousand or 2%. Salaries & Wages/Benefits — Requested overall increase of $101K or 0.7% Salaries and related fringe benefits make up nearly 63% of our overall budget. The primary increase is due to a position transferred to our Information Technology division from another department. This new position will assist with the proposals outlined in the Holomua strategic plan and will help to achieve modernization initiatives countywide. The Department of Finance has reallocated some of our internal resources during FY21 in moving positions to the areas of our operation with critical needs. Retirements and other vacancies allowed us to be creative in thinking on a department -wide level about how we can better align with the Mayor's RISE program. We would like to pursue reallocations as necessary for succession planning and retention and will fund those with internal operational savings. Insurance — Requested increase of $240K or 12.1% The market is still trying to correct itself and we are suffering from worldwide cost adjustments as insurers have sustained catastrophic losses over the last decade without rebalancing premiums. Our property insurance increased by 12% during our November 1, 2020 renewal period and our broker, Atlas Insurance, expects that trend to continue with our November 2021 renewal. Auto/General Liability — Requested decrease of $360K or 36.6% Soil testing for the Puhi Metals recycling center ($360K) was removed from our claims account in anticipation of the work being encumbered in FY21. Animal Control — Requested decrease of $110K or 9.9% Predator control management previously budgeted in FY21 at $50K has moved to the Parks and Rec budget to consolidate all costs associated with our Kauai Habitat and Seabird Conservation Plan. The remaining decrease in this account comes from reduction to the Kauai Humane Society contract. I am pleased to report that our relationship with KHS has greatly improved and we are working to rebuild the trust between our organizations through transparency. They have done a deep dive into their financials to find efficiencies in their operations to include reducing staffing levels. In addition, they have revisited their allocations to the different programs including their charges to the County. This revealed even further cost savings for our contract. In FY21, we were able to expand our scope of service while maintaining a flat level of funding. In FY22 through a reduction of positions, their cost to the County will be even further reduced. 2 Further, we are working closely with KHS to propose two separate ordinance changes related to microchipping. This effort will eliminate the licensing program that costs the County approximately $30K each year. Utilities — Requested decrease of $27K or 13.6% We are reducing our telephone expense by $27K. Vehicle/Equip Lease —flat We are not anticipating any changes to our equipment leases. Operations — Requested increase of $430K or 67.4% IT represents over 61% of the operations budget, much of that amount is not specifically for IT or the Department of Finance alone. The IT budget carries many of the annual license renewals and software upgrades that are required by other departments throughout the County and includes individual security and software on each individual computer. The significant increase is primarily IT related and is due to the countywide rollout of Microsoft Office 365 ($185K increase) and CrowdStrike antivirus protection ($220K increase). To support our teleworkers, increase network security, and provide a platform for collaboration and remote connectivity, we procured additional licensing. This included SharePoint online, Microsoft Teams, Microsoft Stream, Online Azure, and Microsoft Exchange Online, among others. To keep pace with the security risks presented by a largely remote workforce, we contracted with CrowdStrike, a premier antivirus company, to provide 247 monitoring of all our systems and provide immediate remote remediation of any virus infected or compromised system. During 2020, the CrowdStrike Team has responded to dozens of virus or system -compromising events with real time response around the clock. This service is now vital to the continued security of our computer systems amid present emergent threats being encountered across the globe in regard to cyber-security. 3. OPERATIONAL CHALLENGES CnVI n-1 q The obvious challenge in FY20-FY21 has been the ongoing pandemic and the need to react quickly to pivot operations to meet health and safety guidelines while maintaining an adequate level of customer service. In some ways it feels like we lost a year of forward progress tending to COVID restrictions and spending CARES money. For example, the queueing system in the DMV was going to be something to highlight — enabling customers to make appointments at their convenience, get in line prior to leaving their home, or checking in and receiving a text when it is near their turn. The elaborate programming that facilitated these features needed to be revamped at a moment's notice to accommodate our current appointment -only system. We can tell the same story with the rollout of Microsoft 365 and the ability to use TEAMS for meetings. These initiatives were started long before COVID and should have been highlights in the administration's actions of forward progress, but instead will be viewed as more of a reactive response to the pandemic. Staffing Challenges The Finance Department had some key retirements occur during the last year. We have made band -aid fixes to our operations in some cases where filling the position has proven difficult. Because of the restrictive civil service system, we are forced to redescribe positions to the lowest possible level and then reallocate up as employees qualify for higher levels. This creative method of approaching the archaic civil service system has worked well — hiring from the bottom and promoting from within and reducing labor costs as higher paid positions retire. The State rating system has not changed for decades while the employment market has evolved. When we don't change to accommodate the market, that's where we lose any competitive advantage with the private sector. It facilitates an environment where we are just competing with our own internal resources and have extreme difficulty recruiting from the outside. 4. TOP 3 OPERATIONAL HIGHLIGHTS FROM FY 2021 COVID-19 Despite the challenges of COVID-19, it did necessitate the abandonment of some paper processes and force us to accommodate our customers without face-to-face interaction. Our Accounting division made great strides in automating many of their processes with the use of LaserFiche. Travel requests, budget adjustments, adjusting journal entries, and part of the accounts payable process has all converted from paper routing forms to LaserFiche processes. These initiatives will continue into FY22. IT had to work quickly to purchase and then customize over 250 laptops and tablets in order to accommodate teleworking employees. Real Property has effectively converted to an electronic paperless environment and will look to the LIMS project for moving to online public forms. DMV/Treasury Improvements In April 2020, we went live with our lockbox for sewer payments. Prior to this initiative, our motor vehicle division was receiving all sewer payments received via check and processing them individually. Since implementing the lockbox, First Hawaiian Bank has processed over 12,000 checks that have been forwarded to our lockbox. This has been a game changer in helping MVR keep up with their daily workload. In September 2020, the vehicle registration renewal kiosk went live at Ishihara Market in Waimea. To date, over 1,100 transactions have occurred at that kiosk alone for a total of nearly $300K in revenue. Next up is kiosk installation at Foodland Princeville (hopefully coming soon). We launched an online credit card portal for landfill payments and have a statement of work open to include commercial refuse payments. These initiatives will further relieve the workload of our motor vehicle clerks. Thanks to the Solid Waste division for supporting these initiatives. While we don't want to overpromise, we will shortly be rolling out the use of credit cards in the DMV starting with Drivers Licensing. This will revolutionize the payment process in the DMV and reduce the amount of checks received. 4 Real Property Ordinance Changes We were able to prioritize, pass, and implement certain important ordinance changes for our real property tax system. The first was to tighten up our home exemption law to make it more restrictive. In light of 'COVID refugees' who may be fleeing to Kauai as they have a newfound ability to telework or are relocating out of urban areas, this was a perfect time for this change. In addition to working the bill through Council, we have successfully changed our administrative rules to reflect the new law. In addition, we recently passed the ordinance to redefine the Residential Investor tax class. For the same reason listed above, this was an opportunistic time to introduce a creative revenue enhancement bill without raising tax rates. We are in the process of creating an outreach plan to educate owners that may be affected by this legislation. 5