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HomeMy WebLinkAboutFY 2023 (Department of Finance)DEPARTMENT OF FINANCE FY 2023 BUDGET AND OPERATIONS SYNOPSIS Reiko Matsuyama Director 1. Department: FINANCE Fund: GENERAL FUND FY 2022 to FY 2023 BUDGET COMPARISON Department: FINANCE FY 2022 FY 2023 $ +- Salary and Wages 5,337,778 5,568,108 230,330 4.3% Benefits 3,238,819 3,783,712 544,893 16.8% Insurance 2,218,740 2,725,544 506,804 22.8% Auto/General Liability 623,455 623,455 0 0.0% Animal Control 1,003,000 1,092,504 89,504 8.9% Utilities 170,001 170,502 501 0.3% Vehicle/Equip, Lease 15,977 11,677 -4,300 -26.9% Operations 1,289,108 1,238,740 -50,368 -3.9% 13,896,878 15,214,242 1,317,364 9.5% FY 2022 Operating Budget FY 2023 Operating Budget 0% ■ Salary and Wages 0% ■ Salary and Wages 1% 1%} ■ Benefits S45 ■ Benefits ■ Insurance 4% Insurance 5%� ■Auto/Genera l ■ Auto/General Liability 18% Liability ■ Animal Control ■ Animal Control ■ Utilities Utilities FY 2022 and FY 2023 Comparison 6,000,000 5,000,000 4,000,000 3,000,000 t 2,000,000 1,000,000 0 tea• S�wS �e et• x \¢5 ate• c5 � 4¢ P J 0 FY 2022 0 FY 2023 1 2. MAJOR CHANGES AND/OR VARIANCES IN OPERATIONS BUDGET The Department of Finance is requesting a FY23 operating budget of $15.2 million, which is an increase of $1.3 million or 9.5%. Salary & Wages — Requested increase of $230K or 4.3% In addition to known collective bargaining increases and reallocations that are included in the individual positions, we are also requesting position adds: • Real Property Appraiser I (currently vacant position moved from KEMA): Our Real Property Assessment Division is going from a very experienced appraisal and analyst team to recruiting new talent from the bottom and training them to higher levels. This is a tremendous loss of decades of historical knowledge as well as technical analytical skills. The assessment team is responsible for bringing in the primary source of general fund revenue. To avoid tax rate increases, they need to be staffed and trained to find assessed value across the County and then defend those values at the Board of Review. • IT Specialist IV (new position number): This position will be focused on cybersecurity. Due to the ever-increasing number of cyber and ransomware attacks being reported, even at a local level, it is imperative that we dedicate a full-time position towards maintaining a high level of cyber security awareness for our County. Most recently, we have been placed on "high alert" for cyber-attacks and all counties are directed to report anything suspicious to Homeland Security. This position will focus on keeping our servers and workstations secure, following up on the dozens of attempted system compromising attacks that we experience each month, and maintaining a cyber security training, response and remediation plan for the County. • IT Specialist I (new position number): As we add new technology to the County, the demand on IT support continually increases. This position will support our IT Help Desk to keep up with the demand for services. This is important in that a failure to address user support issues in a timely manner can lead to frustration and discontent among County employees as well as a significant loss in productivity. IT strives to deliver superior customer service as we move forward with deploying many new technologies across the County. Offsetting these increases are decreases in 001-0501-512.01-04 (Salaries/Adjustments — Admin) that was previously used as a placeholder for collective bargaining increases and 001-0502- 512.02-01 (Overtime —Accounting) which was previously used for preparation of the ACFR. Benefits — Requested increase of $545K or 16.8% Benefit expense is made up on social security, health fund, retirement contributions, and other post -employment benefits (OPEB) for all divisions. Increases to these accounts are due to proposed increases in OPEB and projected collective bargaining increases that are outside of our control. Insurance — Requested increase of $507K or 22.8% While our excess liability coverage was cut in half from $20M to $10M during our November 1, 2021 renewal, our annual premium increased by $356K. To fund this in the FY22 budget, we needed to pass a money bill through the Council. In addition, the premium for cyber liability insurance more than doubled due to the increased risk exposure on an international scale. 2 While we don't expect that kind of drastic increase to repeat itself, we are probably going to see another increase come the 2022 renewal date. We are requesting an increase over the 2021 premium amounts per Atlas Insurance. See chart below for reference. FY22 Budget FY22 Actual FY23 Budget % Increase over Actual Excess Liability $ 635,954 $ 919,068 $ 973,753 6% Lifeguard Liability $ 148,164 $ 148,164 $ 148,164 0% Cyber Liability $ 27,000 $ 62,735 $ 62,735 0% Subsidized Vehicles $ 65,120 $ 64,441 $ 65,120 1% Auto/General Liability —flat No anticipated changes. Animal Control — Requested increase of $90K or 8.9% The Kauai Humane Society is requesting an increase to their contract of $90K to accommodate for increases in wages for staff that are covered under the County contract. 2% across-the-board increases have already occurred, and the County funds a portion of 34 full-time employees. In addition, they are seeing an increase in the calls for livestock investigations and have added increased capacity in that area. The County contract does include a provision to reimburse the County for unspent funds to include personnel vacancies that may happen throughout the year. While this reimbursement is not budgeted, it will contribute to the lapse and increase the general fund balance when received. In FY21, the reimbursement to the County was approximately $44K. In addition, we have also secured a multi -term contract with the Kauai Humane Society for the next 5 years. The requested annual increase is still under the prorated not -to -exceed amount in the multi -term contract. Utilities — Requested increase of $0.5K or 0.3% 001-0503-512.10-07 (Internet/Cable/Data - Accounting) — Increased the requested budget amount by $1,500. 001-0507-512.10-07 (Internet/Cable/Data - Real Property) — Reduced the budget by $1K. Vehicle/Equip Lease — Requested decrease of $4K or 26.9% 001-0507-512.89-03 (Computer & Accessories - Real Property Assessments) — Reduced by $4,300 the need for computer replacements. Operations — Requested decrease of $50K or 3.9% 001-0501-512.31-00 (Dues & Subscriptions — Admin) — The reduction of $53K is due to the Amplifund contract being moved from the Finance Admin accounts to Economic Development and Housing who are the users of the software. 001-0501-512.35-00 (Special Projects — Admin) — The reduction of $150K is due to the Kukuiolono water tank expenses already being encumbered in the prior year. This was a shared cost with the Department of Water. 001-0502-512.61-03 (Controlled Assets — Accounting) — The increase of $41K is to purchase new 3 furniture and partitions for the office cubicles. No new money was requested as amounts were reduced from other Operations line items as well as a significant reduction in their budget for overtime. 001-0503-512.31-00 (Dues & Subscriptions — IT) — The increase of $72K is to fund increases in our annual maintenance costs to include Netmotion for teleworking capabilities, the Microsoft Enterprise Agreement, and LaserFiche licenses. 001-0503-512.43-05 (R&M Computers — IT) — Reduced by $216K primarily due to the one time costs for County website upgrades that were included and encumbered in the prior year for $175K. 001-0503-512.62-00 (Computer Peripherals — IT) — Requesting an increase of $140K for countywide computer replacements of laptops, tablets, and desktop computers. This is to keep up with our replacement schedule for all hardware equipment across the County. 001-0504-512.30-00 (Other Services — Treasury) — The increase of $22 thousand is primarily due to the new transient accommodation tax collection now being housed in the Treasury division. This will be for maintenance of the online payment platform. 0505 accounts (all) — We have eliminated all budget amounts associated with the 0505 accounts and combined them with the 0506 accounts to facilitate the integration of the DMV. Motor Vehicle and Drivers Licensing act as separate divisions and we are currently in progress to fully integrate the DMV into one functional division. Once trained, all DMV windows will be able to accommodate all types of DMV transactions. This will decrease the appointment horizon time, should decrease the wait time for customers who choose to walk-in, and will improve overall customer service at the DMV. 0506 accounts (all) — These accounts appear to have all increased primarily due to the movement from 0505. There are some increases in budget requests noted below. 001-0506-512.43-05 (R&M Computers — DMV) — We are requesting an estimated $30K to modify our queueing software to allow for the integration discussed above. Our clerks will now need to be able to pull all ticketed numbers and we will need to modify the customer check -in workflow. In addition, we have included money to purchase new equipment to furnish the DMV to include eye test machines and credit card terminals that will now be needed at all windows. 001-0507-512.24-00 (Training — Real Property Assessment) — Requesting an increase of $15K for training of our abstractors and assessors. 3. OPERATIONAL CHALLENGES The Finance Department is having significant issues in attracting and retaining qualified candidates. The State class specifications set the minimum qualifications very high while the pay for those positions is relatively low. While we have redescribed positions to the lowest level to recruit and train from the bottom up, this approach relies on the fact that we need to retain these new hires to reap the benefits of their training in the long-term. 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 4 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 2022 Kauai Transient Accommodations Tax (KTAT) While we are still experiencing growing pains with the KTAT, we have successfully stood up our own program to collect our 3% tax. Compliance is growing by the day as we intake hundreds of phone calls and email inquiries. We do not offer walk-in services as all payments occur on our DirectBiller website. In the coming months, we will be working on getting a contract with a new vendor who will not only do collection but assist us in reconciling and auditing the data as well. Setting up the KTAT was a monumental task that was accomplished in a very short timeline, and it was a necessary step in becoming less dependent on the State for essential functions. Efficiency Improvements (Ongoing) The COVID-19 pandemic may have been the push we needed to modernize many of our paper - driven processes in Finance. All of our divisions are now utilizing LaserFiche to route, scan, file, track processes, and so much more. The Accounting Division acts as the central repository for nearly all things fiscal which means that their processes touch all departments. Over 10 of their initiatives went from a manual paper workflow to electronic submission, review, and processing — and they are currently working on more. Purchasing is following close behind as they move many of their procurement forms from fillable word documents to LaserFiche to enhance process flow and increase the speed of approvals. With LaserFiche being the internal routing and processing mechanism, Elements XS (our Land Information Management System or LIMS) is the platform for external forms. Real Property is moving towards electronic submissions for long-term affordable rent applications, use surveys, home exemptions, and appeals. Investment in our Workforce Despite COVID-19 challenges, we conducted several training opportunities to include all -day customer service and team building exercises for staff members. We even closed the DMV for an entire afternoon to enable them to meet and learn together. For Real Property, we had them audited by the International Association of Assessing Officers (IAAO) which had been desired for several years. They came down and analyzed our market modeling approaches and other best practices and provided immediate improvements and areas to focus on in the coming years. In addition, we made some of our staff members stars of video productions which are now being featured in the lobby of the DMV. These videos are instructional to provide customers with information on how to save money and time. We hope to continue creating more videos in the months to come.