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HomeMy WebLinkAboutFY 2026 (Department of Finance) DEPARTMENT OF FINANCE FY 2026 BUDGET AND OPERATIONS SYNOPSIS Chelsie Sakai Director 1 Department: FINANCE Fund: GENERAL FUND 1. FY 2025 to FY 2026 BUDGET COMPARISON FY 2025 FY 2026 $ + / - % + / - Salary and Wages 6,820,943 6,990,664 169,721 2.5% Benefits 4,281,333 4,693,938 412,605 9.6% Utilities 171,461 282,502 111,041 64.8% Vehicle/Equip, Lease 9,479 1,750,009 1,740,530 18362.0% Operations 8,273,809 9,320,447 1,046,638 12.7% 19,557,025 23,037,560 3,480,535 17.8% 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000 Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations FY 2025 and FY 2026 Comparison FY 2025 FY 2026 35% 22% 1% 0% 42% FY 2025 Operating Budget Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations 30% 20% 1% 8% 41% FY 2026 Operating Budget Salary and Wages Benefits Utilities Vehicle/Equip, Lease Operations 1 2. MAJOR CHANGES AND/OR VARIANCES IN OPERATIONS BUDGET The Department of Finance is requesting a FY26 operating budget of $23 million, which is an increase of $3.4 million or 17.8%. Salary & Wages – Requested increase of $169K or 2.5% We remain committed to reallocating resources for employees working at a higher level of responsibility. We are requesting to dollar-fund our eight (8) positions in the Department of Motor Vehicles (DMV) that are funded by the State. Not only would this provide for stability for our deserving associates, but this will provide us with flexibility and thus greater efficiency in how we utilize the State funding. Benefits – Requested increase of $412K or 9.6% To ensure we are adequately positioned to meet future obligations, we have made a strategic decision to increase the allocation of our Other Post-Employment Benefits account across all our divisions. This will provide for flexibility in addressing any potential increases. Insurance – Requested increase of $780K or 20.7% The Finance Department bears the cost of insurance premiums on behalf of the entire County. Our FY25 renewal was 9.6% over what we had budgeted. For FY26, as done in prior years, we are estimating a 10% increase over the current year’s actual expenses. Claims and Judgements/Auto – Requested increase of $26K or 211.4% In consultation with the Office of the County Attorney, we are requesting to increase this line item based on actual expenses that have been increasing over the years. To date, we have already exceeded our FY25 budget. Utilities – Requested increase of $111K for 64.8% 001-0503-512.10-07 (Internet/Cable/Data – IT): We are requesting a new 10 Gb Internet Uplink to increase our bandwidth. As we utilize more laptops and notepads from locations away from County facilities, the demands on the VPN increase so the additional bandwidth will provide support for that. Vehicle/Equip, Lease – Requested increase of $1.7 million or 18362% 001-0503-512.89-05 (Leased – IT): We are requesting $1,750,000 to lease our new Enterprise Resource Planning (ERP) system. This will replace our current Central Square (AS400/Naviline) system with a more advanced, cloud-based solution. This project aims to modernize and streamline our current account and finance system. Operations – Requested increase of $1 million or 12.7% The significant changes are noted by account below. 24-00 (Training – All): Requesting a $38K increase in training accounts across the Department of Finance to continue to invest in our employees and their professional development. Our goal is to provide ongoing opportunities for growth, as we believe this will ultimately lead to increased staff retention. 56-xx (Travel – All): Requesting a $54K increase in travel accounts across the Department of 2 Finance to more accurately budget for our anticipated travel needs. 001-0501-512.31-01 (IT Arrangement (SBITA) – Admin): An increase of $46K is requested for our annual subscription to our newly acquired financial reporting software. This program will provide a platform for financial transparency, bank reconciliation, asset management and ACFR development. 001-0502-512.30-00 (Other Services – Accounting): An increase of $8K is requested to account for actual expenses within this account. 001-0502-512.31-01 (IT Arrangement (SBITA) – Accounting): An increase of $2K is requested for an audit binder package to assist our staff with the ACFR development, and working with the auditors. 001-0503-512.31-00 (Dues and Subscriptions – IT): An increase of $99K is requested as adjustments were made to accurately budget for the costs of many of our countywide software subscriptions. Notable additions include Variphy ($12K) for call logs to assist with troubleshooting, Thousand Eyes ($25K) for network monitoring, and Cloudflare ($25K) for DNS hosting. 001-0503-512.31-01 (IT Arrangement – IT): An increase of $38K is requested due to new/additional licenses, as well as contractual adjustments. Notable additions include Zoom Enterprise ($20K) and Vermont Systems ($30K) to assist Parks & Recreation with moving their servers to a cloud-based platform. 001-0503-512.43-05 (R&M Computers – IT): An increase of $5K for contractual adjustments. 001-0504-512.30-00 (Other Services – Treasury): An increase of $35K is requested for our Transient Accommodation Tax (TAT) collection software. We currently have taxpayers who do not report properly and make payment errors. This could be rectified with a better payment collection system. 001-0504-512.31-01 (IT Arrangement – Treasury): An increase of $32K is requested to account for the actual cost of our liquidity monitoring and treasury analysis software, as well as adding an investment tracker and bond database. 001-0506-512.30-00 (Other Services – DMV): An increase of $20K is requested to account for anticipated increases in the actual costs of the various forms and identification cards. 001-0506-512.31-01 (IT Arrangement – DMV): An increase of $44K is requested for our queueing software contract’s actual cost. 001-0506-512.43-02 (R&M Equipment – DMV): An increase of $1K is requested to allow for minor repairs to office equipment. 001-0506-512.67-00 (Other Commodities – DMV): An increase of $9K is requested to account for anticipated increases in the actual costs of license plates, as well as an increase in interpreter services. 3 001-0506-512.68-00 (Postage and Freight – DMV): An increase of $1K is requested based on actual expenses expected. 001-0507-512.32-00 (Consultant Services – RPA): An increase of $43K is requested to increase our budget for expert witnesses so we can expedite our cases that are at Tax Appeal Court. We are also requesting an increase for a special benchmark project that our appraisers will be working on. 001-0507-512.62-01 (Other Small Equipment – RPA): An increase of $5K is requested to purchase small equipment for our offices, as well as for when our appraisers are out in the field. 001-0508-512.62-01 (Other Small Equipment – RPC): An increase of $1K is requested to purchase various small equipment items for the office. 001-0509-512.68-00 (Postage and Freight – Purchasing): An increase of $7K is requested due to anticipated increases. 3. OPERATIONAL CHALLENGES Our primary operational challenge remains staffing. Despite our efforts to recruit for available positions, we face difficulty competing with the private sector due to our inability to offer competitive salaries. Consequently, we often have associates move within our own department to address vacancies, without an overall increase in staffing levels. We are committed to investing in the professional development of our current associates, aiming to retain them by enhancing their skills and career growth opportunities. 4. OPERATIONAL HIGHLIGHTS FROM FY 2025 Kapa‘a Satellite DMV Office In December, we proudly launched a soft opening of our highly anticipated Kapa‘a Satellite DMV Office, with its full opening occurring in January. This new location has been thoughtfully established to better serve our east Kaua‘i community, offering convenient, appointment-only services tailored to meet the needs of our residents. At this time, we are providing motor vehicle transactions, utility payments, bus passes, and tipping coupons. Looking ahead, we are excited about the potential to expand the services available at this satellite office, with plans to eventually offer driver's license services, further enhancing the accessibility and convenience for our community members. The opening of this site represents a significant milestone, and its success is the result of a true collaborative effort. The seamless operation of this new office would not have been possible without the invaluable support and dedication from various divisions, including IT, Treasury, and Accounting, who, alongside the DMV, worked tirelessly behind the scenes to ensure that all aspects of the operation would run smoothly, efficiently, and effectively. This new satellite office is a testament to our commitment to improving public services and delivering an elevated level of convenience to our residents, and we look forward to the continued 4 success and growth of this important initiative. Build America Bond Refunding In January, we successfully completed the refunding of the outstanding Build America Bond (BAB) portion of our Series 2010A Bonds, totaling $56,640,000. This strategic move was met with strong market demand, as we received $224.1 million in orders throughout the order period, resulting in a highly favorable 3.9x oversubscription rate. This overwhelming response highlights the strong confidence investors have in our financial position and the attractiveness of the refunding opportunity. As a result of this refunding transaction, we were able to realize substantial net present value savings of $304,500, further enhancing our financial flexibility and long-term sustainability. More importantly, the refunding of the BABs serves to significantly reduce the County’s exposure to the future risk of losing the federal subsidy associated with these bonds. This proactive move safeguards the County's fiscal health by mitigating potential uncertainties related to changes in federal policy. Overall, this successful refunding transaction not only provides immediate financial benefits but also demonstrates our commitment to sound fiscal management and our ability to capitalize on favorable market conditions to benefit our community for years to come. Positive Pay – Fraudulent Check Through the implementation of Positive Pay, we successfully prevented five fraudulent checks, totaling $119,000 in potential losses. This system has proven to be a crucial tool in safeguarding our financial operations and protecting against fraudulent activity. By proactively identifying and stopping these fraudulent transactions before they could be processed, we not only saved a substantial amount of money but also demonstrated our commitment to maintaining the highest standards of financial security and integrity. This is just one example of how we are continuously enhancing our processes to mitigate risk and ensure the protection of our resources.