Loading...
HomeMy WebLinkAbout05/25/2011 Special Council Meeting re: budget and rptSPECIAL. COUNCIL MEETING May 25, 2011 The Special Council Meeting of the Council of the County of Kauai was called to order by Council Chair Jay Furfaro at the Council Chambers, 3371 -A Wilcox Road, Lihu`e, Kauai, on Wednesday, May 25, 2011 at 9:20 a.m., after which the following members answered the call of the roll: Honorable Tim Bynum Honorable Dickie Chang Honorable KipuKai Kuali`i Honorable Nadine K. Nakamura Honorable Mel Rapozo Honorable JoAnn A. Yukimura Honorable Jay Furfaro, Council Chair APPROVAL OF THE AGENDA: Mr. Bynum moved to approve the agenda as circulated, seconded by Ms. Yukimura, and unanimously carried. Council Chair Furfaro: Thank you, first communication on the agenda, please. COMMUNICATION: PETER A. NAKAMURA, County Clerk: Mr. Chair, the first matter on the agenda is a communication for receipt, Communication C- 2011 -159, a communication from the mayor submitting his supplemental budget communication for Fiscal Year 2011 -2012 and proposed amendments to the budget bills, pursuant to Section 19.02A of the Kauai County Charter. A public hearing was held this morning at 8:30 a.m. C 2011 -159 Communication (05/05/2011) from the Mayor, submitting his supplemental budget communication for Fiscal Year 2011 -2012 and proposed amendments to the budget bills, pursuant to Section 19.02A of the Kauai County Charter: Mr. Rapozo moved to receive C 2011 -159 for the record, seconded by Ms. Yukimura, and unanimously carried. Council Chair Furfaro: Thank you very much. On that note, we are welcoming Ms. Lynda Liesse and her class. This is the third grade class at Island School and they are learning about federal, state, and county governments, the three political subdivisions related to government activity. So they are joining us today. There are some familiar individuals in the class, including Kaeo Rezentes, I guess maybe a future leader, finance director for some political subdivision. But Mr. Rezentes, I believe that's your son and thank you for organizing this. Children, may we say, welcome. Ms. Yukimura: Aloha. Council Chair Furfaro: On that note, should we finish the rest of our agenda before I ask the instructor, Ms. Liesse, to come up? Mr. Nakamura: Yes. SPECIAL COUNCIL MEETING - 2 - May 25, 2011 Council Chair Furfaro: So, we're going to go through the rest of our special agenda and then I'll call you up. Thank you very much. The next committee reports. Mr. Nakamura: Next matters for approval are Committee Reports from your Committee of the Whole, committee reports CR -COW 2011 -15, CR -COW 2011 -16, CR -COW 2011 -17, and on page 2, CR -COW 2011 -18. COMMITTEE REPORTS: COMMITTEE OF THE WHOLE A report (No. CR -COW 2011 -15) was submitted by the Committee of the Whole recommending that the following be received for the record: "COW 2011 -07 Communication (05/11/2011) from Committee of the Whole Chair Furfaro, transmitting the proposed increases to, deductions from, and other proposed amendments (plus /minus sheet) to the Mayor's Fiscal Year 2011 -2012 Annual Operating and Capital Improvements Budgets," Mr. Chang moved for approval of the report, seconded by Mr. Rapozo, and unanimously carried. A report (No. CR -COW 2011 -16) was submitted by the Committee of the Whole recommending that the following be approved as amended: "Resolution No. 2011 -45, A RESOLUTION ESTABLISHING THE REAL PROPERTY TAX RATES FOR THE FISCAL YEAR JULY 1, 2011 TO JUNE 30, 2012 FOR THE COUNTY OF KAUXI," Mr. Chang moved for approval of the report, seconded by Mr. Rapozo, and unanimously carried. (See later for Resolution No. 2011 -45, Draft 1) A report (No. CR -COW 2011 -17) was submitted by the Committee of the Whole recommending that the following be approved as amended on second and final reading: "Bill No. 2402 — A BILL FOR AN ORDINANCE RELATING TO THE OPERATING BUDGET AND FINANCING THEREOF FOR THE FISCAL YEAR JULY 1, 2011 TO JUNE 30, 2012," Mr. Chang moved for approval of the report, seconded by Mr. Rapozo, and unanimously carried. (See later for Bill No. 2402, Draft 1) A report (No. CR -COW 2011 -18) was submitted by the Committee of the Whole recommending that the following be approved as amended on second and final reading: "Bill No. 2403 A BILL FOR AN ORDINANCE RELATING TO CAPITAL IMPROVEMENTS AND FINANCING THEREOF FOR THE FISCAL YEAR JULY 1, 2011 TO JUNE 30,2012," Mr. Chang moved for approval of the report, seconded by Mr. Rapozo, and unanimously carried. (See later for Bill No. 2403, Draft 1) SPECIAL COUNCIL MEETING - 3 - May 25, 2011 Council Chair Furfaro: Thank you. As I mentioned earlier, when we get into the resolutions, if councilmembers would like to speak on the operating budget, I will allow time for all members to speak at that particular time. The next resolution for approval, Mr. Clerk. Mr. Nakamura: Council Chair, the next resolution for approval is Resolution No. 2011 -45, Draft 1. RESOLUTION: Resolution No. 2011 -45, Draft 1, A RESOLUTION ESTABLISHING THE REAL PROPERTY TAX RATES FOR THE FISCAL YEAR JULY 1, 2011 TO JUNE 30, 2012 FOR THE COUNTY OF KAUAI: Mr. Chang moved to adopt Resolution 2011 -45, Draft 1, seconded by Mr. Rapozo. Council Chair Furfaro: May I ask if there is anyone in the audience who wishes to speak on this? If not, members, is there anyone that wishes to speak? Mr. Bynum. Mr. Bynum: Yes, I'm going to vote to approve all of these bills this morning, but I wanted to mention that the last time the County of Kauai changed tax rates was in the 2006 -2007 budget, and as our assessed values in many categories are falling, I think it's appropriate for us to have a more robust discussion about revenues and tax rates. Other counties are adjusting those rates as the assessed values fall, not to increase taxes, but to keep them from decreasing dramatically as the assessed values fall. So I'm hopeful that next year during our budget process, which may be revised in terms of timetables, that we have a more robust and thorough discussion about the revenue side and tax rates. So thank you. Council Chair Furfaro: Thank you, Mr. Bynum. Is there anyone else before I make a comment? Yes, Mr. Rapozo. Mr. Rapozo: Yeah, I just want to make a comment regarding the property taxes because I think oftentimes the public will compare us to the other counties. And I think what we must understand is at a time that the economy was really roaring, the other islands saw significant increases in property values and economic activity, the County of Kauai had suffered two major hurricanes. And at a time when everyone else had the opportunities to really thrive, we didn't. We set procedures and policies to really protect our landowners. That's the reason why we're behind. We never had that opportunity to catch up. But the other counties didn't suffer. And many will argue that people here on Kauai today still haven't fully recovered from the hurricanes. We know that. And yes, many have, but there are still some segments of the community that haven't. So I think it's important to understand when we're talking about tax revenues and comparing to other counties that the other counties didn't suffer what we had. The other counties weren't forced to hold back on property tax increases because their communities simply couldn't afford it. So I think it's a separate scenario for us and them, and yes, there is an opportunity for us to slowly catch up. But I think the economic times today, we have to be really cognizant of what the public is experiencing. So I just wanted to make that clarification that we did have to make tax adjustments, revenue adjustments because of the natural disasters that Kauai had that the other counties didn't. I just wanted to make that point clear. Thank you. Council Chair Furfaro: Okay, now I would like to offer a closing comment. Before I do, Councilwoman Yukimura. SPECIAL COUNCIL MEETING - 4 - Ms. Yukimura: I can go after you, Chair. May 25, 2011 Council Chair Furfaro: No, I would prefer that you go first. As I mentioned, I would like to make the closing comment, so. Ms. Yukimura: Okay, that's fine. All right. Well, first of all I want to thank Councilmember Bynum for keeping a close eye on the dynamics that is happening here in terms of taxes. Taxes, and I think it is important for us to understand that taxes, whether you're a hotel or a homeowner, are determined by tax rate times assessed value. And so when assessed values go down, like they are tending to go down now, when you raise the rate, you're not necessarily raising taxes. You may just be lessening the decrease in taxes and actually trying to keep taxes the same. And so it's inaccurate to say that by raising tax rates you are necessarily raising taxes. You may just be trying to keep the equity of previous years and that is something we have to look at and it's a normal process of setting real property taxes. And I think we are due to look at it. I'll be voting for this resolution, but I do think that as a council, it would be good for us to look in detail at what's happening with assessed values and adjust tax rates accordingly so that there will be enough for the operations of our county and there'll be equity and fairness between categories of property. Council Chair Furfaro: Okay, are there any more comments? If not, I would like to say that first of all I would like to correct a number that was reported in the Garden Island. This is in comments to Mr. Bynum, my third opportunity to convey that the administration has promised us to have a look at the property taxes within the next 45 to 90 days. I think the Garden Island reported within the next 15 days, and that might have been partially due to some attempt as Mr. Bynum has introduced a tax bill that as chairman I have up to 120 days or so as proposed in the next rules change to put on the agenda. But I acknowledged that I would like to put his bill on the agenda within the next 15 days. So I think there was some confusion that needs to be so noted. The administration has agreed to work with us in the next 45 days to 90 days on a very comprehensive overview of the tax pieces. In the meantime, as chairman, I have agreed to move on Mr. Bynum's first tax bill in the next 15 days, of which I've fulfilled because it's currently on the agenda. So some clarification on that. And also I think it behooves us as a body to really work closely with the administration on a very strategic overview and a very comprehensive one on the taxes in the County of Kauai. So those will be coming up on the future agendas. And on that note, I would like to see if I couldn't call for a vote on this resolution. Mr. Clerk? Mr. Nakamura: Council Chair, we have a motion and a second to adopt Resolution No. 2011 -45, Draft 1. The motion to adopt Resolution No. 2011 -45, Draft 1 was then put, and carried by the following vote: FOR ADOPTION: Bynum, Chang, Kuah'i, Nakamura, Rapozo, TOTAL — 7, Yukimura, Furfaro AGAINST ADOPTION: None TOTAL — 0, EXCUSED & NOT VOTING: None TOTAL — 0. Mr. Nakamura: Seven ayes, Mr. Chair. Council Chair Furfaro: Thank you. Next item, Mr. Clerk. SPECIAL COUNCIL MEETING - 5 - May 25, 2011 Mr. Nakamura: Next matters are Bills for Second Reading. First bill for second reading is Bill No. 2402, Draft 1. BILLS FOR SECOND READING: Bill No. 2402, Draft 1 - A BILL FOR AN ORDINANCE RELATING TO THE OPERATING BUDGET AND FINANCING THEREOF FOR THE FISCAL YEAR JULY 1, 2011 TO JUNE 30, 2012: Mr. Bynum moved to adopt Bill No. 2402, Draft 1 on second and final reading and that it be transmitted to the Mayor for his approval, seconded by Mr. Chang. Council Chair Furfaro: Thank you, members,. there's been a motion to approve and a second. I will ask if there are comments from the audience, but at the same time I want to reinforce my earlier statement that if you're pursuing some questions to earlier testimony in the public hearing, I think it will come from the narrative and the floor time I'm going to give to various councilmembers. But if there's any additional testimony at this point? Seeing none? Does that mean you're waving a paper? You want to testify? ROB ABREW (in the gallery): Yes, if you're on the budget right now. Council Chair Furfaro: Yes, we are specifically on the operating budget. You may or may not have heard me, in some of the narrative time I'm going to give to the various members on this item, we might have an opportunity to answer some of your earlier questions during the public hearing. Sir, you have the floor. The rules are suspended. There being no objection, the rules were suspended. Mr. Abrew: Aloha, Councilmembers, Rob Abrew for the record.. Just so we hear and people watching on H6`ike watch it, this year with the end of fiscal year 2011, the county has a fifty million, two - hundred and sixty -nine thousand, two - hundred and five hundred (sic) surplus from money that has been collected from the citizens of Kauai. Council Chair Furfaro: Okay, first of all I want to re- emphasize what I said. I didn't comment on this when you gave testimony. I will comment on it afterwards. But when I do comment on it, I'll be able to give you the reconciliation, so $50,269,000 is on record and I will be noticing. Please go on with your six minutes. Mr. Abrew: Yeah, my understanding is it's in the paperwork that was given to me from the council's (inaudible). Out of that we're going to, I understand, and this is a good move, is put $23,387,077 into a reserve fund. So we're using half the money we've collected from the taxpayers of Kauai into a reserve fund, which I think is the best thing. Now we don't have to carry the surplus in the general fund. Also I'd like to state so that leaves us $26,882,173 still in our surplus. So out of that surplus we're going to ... there's some contributions to some funds and everything and the general fund is going to start out with $12,318,855. So the total money in the county that is going to be in a surplus and a reserve fund is $35,705,932. I'd like to remind you that is taxpayer money. That's money that has been taken from the taxpayers of Kauai, from the county council and the administration to fund things. We have saved that much money. The diligence of the Kauai citizens has saved that much money. I think there needs to be a break for the citizens of this county, not an increase in property taxes, not an SPECIAL COUNCIL MEETING - 6 - May 25, 2011 increase in services because we've been funding them all along. So why are we starting now to have increases when we have $35 million? That's all I have to say. Council Chair Furfaro: Thank you. Is there anyone else that would like to testify at this point? If not, I will call the meeting back to order. There being no one else wishing to testify on this matter, the meeting was called back to order, and proceeded as follows: Council Chair Furfaro: And members, we are on Bill No. 2402 as the operating budget and I will provide opportunity, again, for all of you to comment. This is your time. You want to start, Mr. Bynum? Mr. Bynum: Sure. Council Chair Furfaro: Go right ahead, you have the floor, and if we could stay within the reasonable six minutes (inaudible). Mr. Bynum: Oh yeah, I intend to. First of all this vote right now is a culmination of literally months of work. The hardest work probably by our council services staff that has done an outstanding job of coordinating questions and answers between the administration and the council. I think the budget process this year was much improved from the previous year and I would account the leadership of our council chair for that. We had a very robust kind of discussion about the delivery of council services. We heard from all of the departments about their challenges, the things they're excited about, the things that are doing well. And overall and I've said this before, I'm very proud of the County of Kauai and the people who work for the county, who work really hard every day delivering services to the people of Kauai. In the budget process it was really collaborative this year in terms of every councilmember at this table asked a lot of important questions. The administration responded in writing and responded with the supplemental submittal of the budget that incorporated a lot of the comments that councilmembers made. And that's good leadership from the mayor that he paid attention to that and made adjustments. Then we went through a decision - making process where most of us here proposed changes, increases or decreases. Some went through and some didn't, and that's the democratic process. And we ended up with a budget that, I think, meets the goals that the mayor set. I want to comment on a couple things that the public has said. I don't know about putting the surplus into the budget. That was a decision that was made. I don't really personally think that's necessary. The surplus is a fact. It's something that happens at the end of the year when we consolidate all of our books. Either we had more revenue coming in than we expended, in which case the surplus increases, or we spent more than we had revenue coming in, and the surplus decreases. These budget issues are complex. But the reality is we have had a growing surplus. That has positive things and it has negative things. But this budget is not a huge increase in spending because the administration and this council moved aggressively when the fiscal conditions became difficult. And we froze many positions. We took many measures to cut the budget over a two- or three -year period. This year the mayor and his budget message said hey, we need to restore some of those positions that we cut, not necessarily new positions all, but mostly restorations that came. We still have many positions that are on the books that are not currently filled because we continue to take this conservative approach as we're not out of the woods with the economic realities. I do agree that we haven't made adjustments in tax revenues and I presented here the fact that the homeowners are paying an increased burden of the tax revenue and I think we need to address that. SPECIAL COUNCIL MEETING - 7 - May 25, 2011 That's why I have a bill before the council now to try to send some of those surplus funds back to the homeowners on Kauai. Maybe not as much as we should, but it's better than not doing anything. But overall, this is a budget I can support. I don't like every element of it. That's what the democratic process is about. And councilmembers did, I think, an outstanding job of identifying critical needs, identifying areas where we could cut and we did. So overall, I think this was a good budget process, and I'm happy to vote for it today. Council Chair Furfaro: Okay, anyone else who wants to speak at this time? Members? This is ... hey, if not, oh, Councilmember Kuali`i, okay, and then Councilmember Rapozo. Mr. Rapozo: (Inaudible). Mr. Kuali`i: Mr. Rapozo: Mr. Kuali`i: Council Chair Furfaro: I'm sorry. You're going to go? Oh no, up to you. What did you say? I'm giving you the floor. Mr. Kuali`i: Thank you, Mr. Chair. So the first thing I wanted to say is that I have to say thank you to the staff, especially because I have been here on the council now, this is my sixth week, I believe, and I came right in at the start of this budget, and I was able to jump right in and hit the ground running, if you will. That's what I'm hearing from a lot of people as well. And only because of the incredible support that I've received from all of our staff, from the county clerk to the analysts, all of the staff. And of course I want to thank my fellow councilmembers for being patient with me and showing me the ropes, and helping me out. For me, the budget process was a little frustrating because I think it was somewhat hurried. I know you received the first budget from the mayor in March and then when I started on April 12th you were already hearing the budget presentations, two weeks' worth of presentations. I'm so glad I was here . for that because I think I learned a lot throughout those presentations. But then when we got the modification from the mayor in the first week of May, like May 5th or 6th, I think it was Thursday, and then getting back ... you know, all of the councilmembers asked a lot of really probing questions during that two -week presentation. But by the time we received a lot of our answers, we were left with a weekend, with two or three days to do a full, thorough analysis of this, the entire county's budget. And then we had to make decisions on the following Monday and Tuesday. So I was a little frustrated with that. I feel like I needed at least two weeks, if you will, to do a thorough analysis of the entire budget and to be able to contribute and analyze and go back with working with the administration on the answers that we got to our questions. Some of the highlights from the budget, for me, were that we are investing in our IT, information technology's infrastructure improvements. I see that as something that will return to the county many times over the next few years. So our return on investment is really, really good. I'm also happy and proud that we were able to increase the grant to the Kauai Independent Food Bank from $5,000 to $38,000. I think the $28,000 that is going to the SNAP Outreach Program and the SPECIAL COUNCIL MEETING - 8 - May 25, 2011 $10,000 that's going to the Farmers Market Program will not only help our families by putting food on the table, but it will also help our farmers. And I think that's again another investment that will return many times, many times. Now the last thing and probably the biggest thing I want to talk about with regards to the budget is ... and one more thing before I say that about the decision - making process. So it was our charge, I believe, that on decision - making day we would do plusses and minuses, and that we would, perhaps, add things that we felt needed to be in the budget that was not, and then reduce things, make cuts. But during budget decision - making time, even after hearing from the governor's representative about the budget dilemma with the state, the state has a shortfall of $215 million this current fiscal year. The anticipated deficits or shortfalls for fiscal year 2012 is $539 million, for 2013 it's $498 million, and they are having to make many, many tough decisions on how they're dealing with that. They talked about utilizing the remaining $46 million in their rainy day fund, utilizing what remains in the hurricane relief fund $117 million, capping the county TAT, our transient accommodation taxes that we're well aware of, suspending the GE exemption, increasing the alcohol tax, repealing state tax deductions, and on, it goes on, reductions to staff in the collective bargaining agreements. And then Senator Kouchi came before us as well and he talked about still having some unknowns out there and the council of revenues having to make their predictions or their forecasts more solid and that was happening. Maybe it's happening now. And that the legislature may have needed to come back into session and potentially could even effect reducing the TAT that we're receiving. So based on a lot of those, I felt that we should have been more prudent and more... figured out that maybe there were some meaningful cuts that we could have made in areas that is not critical to next year's operations. So anyway, the last thing then is in regards to positions, and it's a big thing. (See Attachment No. 1) On May 6th, in a positions matrix we received from the director of finance, we had a report of, I think, about 24 new positions or changed positions, and at least five of those positions, five that I'd like to highlight included a grant coordinator position for $57,000.00 that became an executive assistant to the mayor, a manager in civil defense, I think is what CD is for, for $96,000; a commission support clerk, department of water to the mayor's administrative aide for $73,000; a program support technician II to a special assistant to the housing director $70,000; a civil engineer VI to an environmental services officer $98,748; and a risk management officer to a risk management administrator $92,460. So four of these five positions were dollar - funded positions. So this represents additions to the budget that the mayor chose to make and we're choosing to approve or support. The total for those five positions is $430,000 just on the salary and then the benefits on that is $208,000. So those five positions mean $638,000 more salaries expense. On the matrix, the 24 positions totaled $1.3 million with benefits of $658,000 for a total of $2.01 million. So there are significant salary costs and benefit costs that have been added to this budget. And these five positions are especially or obviously on the top end. I was happy that I was at least able to get the council's support for an operating budget proviso that stated "appropriations or authorizations for positions in this ordinance shall constitute establishment of such positions. Departments having sufficient funds may hire dollar- funded positions provided that the council is informed of the hiring of such positions. The mayor shall inform the council on a monthly basis of any actions relating to the reallocation, reclassification or abolishment of any position." So I was told with advice from the county attorney that this was the best we could do at this time, so the mayor having to report to us. SPECIAL COUNCIL MEETING - 9 - May 25, 2011 But it is my belief that we need to have more than that. The council needs to be able to approve. So the council needs to have full budgetary powers in order to protect the interest of our citizens by being a check and balance of the administration on all expenditures, especially salaries. If it takes changing the law, then that needs to happen. The people want and deserve a law that requires the administration to obtain approval from the council prior to the reallocation, reclassification or abolishment of any positions. Requiring council approval only for the creation of positions is not enough to allow the necessary check and balance. So as it stands now the administration is required to obtain council approval for transfers of unencumbered appropriation balances between departments; boards and commissions; applications by the county for new grants from the federal, state or any outside source; and expenditures for emergency purchases of equipment, furniture and vehicles in excess of $6500. It is a disservice to our citizens to have a law that gives the council budgetary oversight of the administration when it comes to taking on new expenditures in excess of $6500 for equipment, furniture and vehicles in the middle of the fiscal year, but not have a law to prevent the manipulation of vacant or dollar - funded positions resulting in several new positions, each costing well over $100,000, positions that some citizens have brought to my attention as unnecessary political hires. Having the council approve these changes to positions in between budgets and prior to any actual hiring would prevent the administration from acting alone and would restore the public's confidence in our county hiring process. Additionally, it would eliminate the current situation where if a council majority did not agree with a mid - budget hire by the administration, they would actually have to lay off the administration's new -hire by eliminating the position during the budget process. We all know that even though this may be the prudent thing to do in this circumstance, when it comes to cutting a live body, a real person's livelihood, it is practically impossible. Surely that is what happened once again in this year's budget process due to the current rules. My motivation is to work to change the rules so that we all together serve the people more openly and better. To make the strongest point on this matter, I have been seriously considering voting no to this budget. However, I have decided, recognizing that I've only been in this position for six weeks now and in deference to Chair Furfaro and the other councilmembers, I will reluctantly vote yes to this budget. Thank you, Mr. Chair. Council Chair Furfaro: Thank you, councilmember. Mr. Rapozo. Mr. Rapozo: Thank you very much. Thank you, Mr. Kuah'i. I think I agree with everything that you said. You've highlighted a lot of the issues that I was going to touch on and I appreciate your ... it's quite impressive. You stepped in here days into the budget. We had already started the process. I'm quite impressed with your ability to grasp the process and more importantly, the political process because that's what this is. This budget is a political process and I think you highlighted quite a few of the issues. The only thing I disagree with is that if you don't agree with the budget, then you vote no. And that's what I'm going to do today. I'm not going to support this budget. I had a problem with the mayor's budget when it first came over. And if you think about it, our current fiscal year budget is $147.6 million. When the mayor's first budget came over it was $164.9. It was a substantial increase. Granted there are some fixed costs between $10 and $15 million. But at $164.9, it was quite disturbing because of the positions that Mr. Kuali`i talked about, the fact that those positions were brought in mid - budget year. I didn't agree with that, but I could SPECIAL COUNCIL MEETING -10- May 25, 2011 probably live with that budget. We had the budget reviews. We had a lot of discussion on a lot of the items. On the May 5th submittal, the supplemental budget, it jumped to $185.9. I guess when we started this year and again I had two years' of civilianism from the outside looking in, but when I got back, I guess I was under the impression that this county, this council was going to really consider reducing the spending, simply because of the economic times that this whole country is going through. But as the budget process started going I was quite surprised to see all the additions of positions and services. I believe that the council's job, the county's job is to provide core functions, core services, public health and safety, and to some extent recreation and so forth. As we went through the process, I kept asking the question, we gotta remember we gotta cut something if we're going to add. If we're going to add something, we make sure we know where we're going to cut from. But we continued to add. And as we got further in, it was clear to me that my gosh, we're going to have a lot of things to cut at the end. There were opportunities that we had to cut we didn't take. There were actions taken by the council that was trying to implement things for the administration. In fact at one point the mayor came up here and pounded his chest and said enough, stop, you're giving me too much. What are you guys trying to do? I'm the mayor. Please let me do my... get my direction going and I appreciate the support, but I have a plan and let me do my plan. And this council continued to try to give him more. And yes, some of those things are good ideas and I think good initiatives. However, it's the administration that determines the direction that they go. The people voted for Mayor Bernard and they expect him to follow through on his goals and objectives. So I was very pleased to see the mayor come up and pound his chest and say stop, thank you, but no thank you. I'm having a hard enough time with this situation and the economy to make things work. The budget, I think, puts some unrealistic expectations on this administration. And then when it doesn't get accomplished, we're going to blame them, and that's a concern of mine. We have a duty. We have an obligation to provide the core services to the public and I think I discussed some of that earlier, public health and safety. We heard from our state delegation. Senator Kouchi came up and I understand the rest were here while I was away on a trip to Washington, and I think the message from the state legislature was quite clear. We're in some dire financial times and it's not going to get better. It's not going to get better. I just came back from a trip to Washington for a regional county conference and from the members of congress to the local mayors and council members throughout the western region, it's the same message. It's going to get worse. It's going to get worse. Save your money, cut your spending because it's going to get worse. The feds are telling us, we had people from the cabinet of President Obama, we're going to cut, not only to the state, but we're going to cut certain programs and services to the counties. The state is telling us we're going to cut. So the county gets it twice. We get it from the feds and from the state. When we budget, we gotta make sure we realize that. Although it's an annual budget, it is my sincere belief that we as a council have to look at it much like the state does as a biennium budget. We gotta anticipate revenues for the next two years, not just this year, maybe even the next three years. We gotta look at inflation. We gotta look at unemployment and we gotta program our budget in that fashion. If we spend all the money this year, what happens next year when the state says hey, we gotta reduce TAT? I think that is critical. I think that's the first step that we must all and I'm hoping that the mayor SPECIAL COUNCIL MEETING _11- May 25, 2011 and the administration will look at the same thing as they look forward into next year, look at a biennium formula so that we can make sure our citizens are protected. We are going to get reduced revenues. Property taxes are going to bring in less money unless we raise property taxes, and that's something that I do not agree with at this time. The people don't need it. We're going up with trash pick -up, we're going up with sewer fees, we're going up with all of these fees. I think to increase the property tax is the wrong thing to do. I think that what we need to do as leaders is look at reducing, much like you have to reduce because you pay $12 a month for trash pick -up and your sewer fees are going to go up. As you gotta adjust your budget, we need to do the same. The reserve policy is a good one. And Mr. Furfaro, I think that has been his passion for quite a while now and we finally saw it come to fruition. I think the process to get there was ... I thought we were going to reduce the budget to allocate moneys to the reserve and that reserve, obviously, and I think Mr. Furfaro will probably touch on it, will be reserved for certain things. We bumped the budget, we got more money for the reserve and that is what creates a lot of this perception of a surplus, that we have all this extra money flying around when it's actually not the case. I'm going to highlight just a few things, Mr. Chair, and I have about a minute left. The positions, I'm not going to go into detail. Mr. Kuali`i did a great job. We had no say in that. The positions were hired; the people were hired in the middle of the budget term, budget year, so that this council had no say. The mayor took a chance, hired these people, hoping that this council would provide the funding in the following year. That's a dangerous thing to do and this council... and it looks like it's going to pass this budget. So those positions are going to be preserved. But there were some critical items in this budget that failed that I simply feel strong enough that I cannot support this budget. No. 1 is the $175,000 reduction in the recycling for Lihu`e. The curbside recycling was cut out of this budget by this council. I did not support that, but it passed. So we don't have that. There was also a reduction of $400,000 for the northern leg of the Koloa Western Bypass Road that was submitted by the mayor. That road is important for the Koloa community. That was removed from this budget. There were also some smaller items that I won't get into, but obviously the marathon funding, the marathon funding was put in there and I have a serious concern about that. Did I misspeak? On what? Ms. Yukimura: The northern bypass. Mr. Rapozo: It was passed? Ms. Yukimura: It's in there. Mr. Rapozo: Okay, I stand corrected. I was reviewing my notes here and it appeared that the... hang on .... I was looking at the plus and minus sheet. Huh? Hang on. Please stop my time because I don't want to misspeak to the public. Council Chair Furfaro: Wait a minute. Time -out, okay. You get your place. Mr. Rapozo: Okay. Council Chair Furfaro: You got it? SPECIAL COUNCIL MEETING -12- May 25, 2011 Mr. Rapozo: Yes. Okay, I stand corrected. The $400,000 is in. I apologize. I'm not going to mention names, but the handwriting on these notes is horrendous. As you can see, my eyeballs are going crossed already. But there are specific items in the budget that I think collectively I've never voted against the budget because I think we all have an opportunity to vote and the democratic process allows for the council to pick the best of the best and that's what goes through. My concern is not really with the spending. It's with the philosophy of the budgeting. As KipuKai clearly stated, we are the oversight. This council is the oversight. We are the check and the balance, and if we continue to vote yes on budgets that we disagree with, then the system won't change. It'll continue time and time again. The philosophy I thought this year was to reduce, we didn't. We increased and we increased substantially. I think we send the wrong message to the state. I think we send the wrong message to the federal government and more importantly, we send the wrong message to the voters and the residents of this island who are struggling. Believe me, I've spoken to all facets of this community from the hotels to the people that are struggling to the people that are comfortable, small business. I'm a small business owner, I'm struggling. And to see the government increase the spending as we've done and not cut where I felt the unnecessary expenditures should have been, could have waited till a better time, I'm just having a rough time supporting this budget. And for those reasons, I will be voting no today. Thank you. Council Chair Furfaro: Thank you, Mr. Rapozo. Councilwoman Yukimura, did you want to speak next? Ms. Yukimura: Yes, I will, thank you. I agree that we should reduce real property taxes for our homeowners and I believe the bill that Councilmember Bynum has introduced is a start at that and will help to offset some of the rising fees that we've been forced to, and I wasn't part of the council that did that, but still to do because we have not been doing good solid waste planning and programs. With that said, I want to say that this is our first budget together as a new council. We all took office about six months ago, and this budget isn't perfect for any councilmember or for any member of the public or for the mayor and his administration. Nobody's completely satisfied with it. There were lots of ideas during the session that surfaced about how we can improve the process, but it's basically, I think, a good budget. And where we're not completely correct, there will be opportunities in most cases for correction. I want to thank Chair Furfaro for his leadership through a very onerous and complex process. I want to thank my colleagues here at the table for your inquiring minds and your good questions. Everyone was really engaged in this budget, and I appreciated the passion, the J concerns and perspectives. And most of all, I appreciated the independent thinking because with this council it wasn't one group versus another group consistently always the same alliances. There were changing alliances depending on the issues, and as people looked at the pros and cons and the evidence and the arguments, every councilmember made up their mind, issue by issue, which is how I think it should be. And most of all, I think there was a lot of respect for each other. At the Older Americans Celebration, I mentioned that we're all learning to love one another on the council, and I don't know if we've gotten there yet, but respect is really the place where we all begin and it's kind of the bottom line. And I so appreciate how this council has shown respect and aloha to each other and to the public. SPECIAL COUNCIL MEETING -13- May 25, 2011 I want to thank our staff for their outstanding and extraordinary hard work. This budget is a very arduous process for councilmembers, but our staff begins before we begin every day and they end way after we end as councilmembers. So I really want to acknowledge and thank them. And I want to thank the administration and the mayor. It was great to get to know the new people in the administration and to welcome back the long -time people. I'm excited about the increased quality in the work in certain circumstances, and I remain concerned about the lack of proper planning and programming in other circumstances. I share Councilmember KuaWi's deep concerns about what has happened with positions, and as you may remember when the mayor came to present the budget to us, I said that one of our concerns is whatever positions are created, we need to see qualified people in these positions. Otherwise it's not only a tremendous waste of money, but it also causes a lot of long- term damage. And that continues to be one of my concerns. I am very concerned that there is no money in the budget for a materials recovery facility, which was recommended in the integrated solid waste management plan as the first year in our plan and I think we're now in year 3 and we haven't even begun to develop the MRF. And that's why curbside recycling will never be successful or cannot expand without a MRF. The cost of servicing the pilot project households went from $2,000.00 a month to $14,000.00 a month because we don't have a MRF and we just cannot continue this way. And so to stop the pilot project was an effort to set the priorities right so that we can have islandwide curbside recycling in the long run and divert the trash from our landfill, our current landfill in Kekaha, extend the life of that landfill and become much more sustainable as an island in solid waste management. I want to thank the administration and the mayor for their presentation and their work because I know that they've worked hard on it, and then I want to thank our state and federal delegates because this is a team effort, not just at this level of the county. As the council being a team or the council and administration being a team, but at all levels we're one team trying to service the people of Kauai and this budget process was part of it. And I want to say thank you to all of you for it. Council Chair Furfaro: Mr. Chang. Mr. Chang: Thank you, Mr. Chairman. This is my third budget that I sat through and I would have to say it was, in my opinion, the most challenging, the most spirited and I want to thank you, Chairman, for your supervision and your mana`o throughout this course. I actually, working through the staff and working with my councilmembers, found this to be very, very, very interesting simply because of the fact that we got a lot of great minds here, got a lot of experiences both the present and past within the political cycle. But sitting in this conversation with the councilmembers, the administration, the department heads, I realized how intelligent and how open- minded different people were that we could respect each other's opinion. Because I think when we lean one way, you kind of thought about another way, and there was really no alliance in any really given, it was an open- minded discussion all the way through. So one of the things that I noticed in the process, and Councilmember Nakamura helped me understand this a lot, when the department heads came up with their challenges or their solutions or their goals or when they did various presentations, some people did something really, really good and when you look at it, it would bring everything together, I think it's a great opportunity that we can say what we felt were the top - of -the -line or the A -plus in this line, in that line, and we could put everything together as a solution. Because I have to commend Councilmember Kuali`i for coming in in the fifth inning because it is a rapid, really fast - moving pace that we're looking at, and yes, there are many times that we don't have time to really absorb SPECIAL COUNCIL MEETING -14- May 25, 2011 it, but a decision has to be made. If we start the budget process just so we can get a little head start, but maybe make recommendations to the various department heads this is a good example of .. so when we get everything in front of us, there is a lot of ..everything is consistent. It's just one template that we can look at and we can expect to look at that and it's, in my opinion, going to be real easy to understand. But I also do want to say it's all of our responsibility right now in these tough economic times that we're going to be going through is that we all need to revisit, we all need to follow up, there are things that we did not approve, there are things we approved, but I do believe that it's our responsibility after six months or eight months or ten months to actually see what actually worked with those that we approved things with, but perhaps we can also look at with another eye some of the things that we might not have approved and had we, what's going to be going on. Our next item here would be capital improvement and I'll save my capital improvement thoughts for that item. But it was a thorough, thoroughly enjoyable and a very, very huge learning experience this time around. So I wanted to thank the staff, the administration, and most importantly our fellow councilmembers that I am glad and honored to be serving with. Thank you, Mr. Chair. Council Chair Furfaro: Thank you. Councilmember Nakamura. Ms. Nakamura: Thank you. This has been a steep learning curve for me. So I want to thank Budget Chair Furfaro, fellow councilmembers, and extremely capable council service staff for guiding me through this budget process. I believe this budget accomplishes three major things. Number one, it creates a sizeable, responsible reserve for future economic uncertainties. It provides Kauai citizens with a consistent level of services and what I'm most proud about is that it invests in our island's economic future. Looking at the budget process, I have three key observations. One is that departmental strategic plans are a great guide for this budget- making process. I commend the administration for initiating this for the first year. I noticed that some of the plans were well- articulated and action - oriented and others weren't. I also noticed that we spend a lot of energy generating lists of follow -up questions for departments, yet had little or no time to digest agency responses leading up to decision making. And third, there seems to be an increase in requests to fund social services as state funding is reduced or eliminated, but I'm not real clear if we have a strategic approach to address these needs. So I look forward to future discussions to strengthen our budgeting process and I thank you all again for your patience during the past few months. Council Chair Furfaro: Thank you. Well, first of all I want to say thank you to my colleagues here at the table. I thank you for your earlier comments and you know, leadership is about facilitating outcomes, outcomes that reflect win -win wherever possible. And although we didn't cover everything in the timeframe that we were allocated, we have become clearly aware of our need to, perhaps in the future, change the charter amendments that allocate certain dates and times that we are mandated to follow and that there should be some session of strategic thinking first as we prepare for the budget. I also want to thank the mayor's team. They used a new format. It was very much appreciated. It covered vision, mission, and outcomes. And it really helped us facilitate the what, why and how for this budget. I also want to confirm, I think, Vice Chair Yukimura's feeling, but I would rather say that through this budget process, we lived aloha. We all showed mutual respect, especially as opinions differed. The economy is a major concern and it is one of the items that really drove our need to establish a reserve. And although the numbers are not correct because SPECIAL COUNCIL MEETING -15- May 25, 2011 it was my desire as chair in following the template from the City of Denver to actually use the total operating costs of the county, the mayor's position and his team wanted to use only items that came from the general fund and the accounts that moneys were allocated to support certain funds rather than the total operating budget. The percentages that are there are things that we're going to discuss in the June opportunities that we'll have with the mayor to actually come up with a policy. But in this time when the state is negotiating right now about capping the debt ceiling and the state, as we see daily, is in difficult times, it really says to us how important it is for us to have a final reserve policy. Because whether it's some of the programs that Councilmember Kuah'i talked about, many of the demands within our local community are ending up looking for kokua from us, whether it's the Food Bank or the Y. It's a very difficult time and I concur with Mr. Rapozo. But without a reserve policy that is transparent and that's what we've tried to do in this budget session. We've aired all of our meetings. We want everybody to recognize the moving parts, and I think this was a big accomplishment for us televising our budget process. I do want to say that we need to really proceed with a very comprehensive look at taxes in our county, but I think that comes after establishing a firm policy on the reserve. Other parts of having a 15% operating reserve, having a 3% emergency portion, and 2% for other contingencies, such as a quick response to communities across the nation that deal with natural disasters and we are certainly prone to our location in the Pacific to have to deal with issues that we see globally now. But I wanted to commend the team here and the finance department. Although our number is not at the 32 that I want it to be, covering all operating departments, we are starting with a number that is closer to 24, but it's a start. And we look for the administration to help us refine this policy in the very near future. We also added to the mayor's budget. We added about $750,000 to the May 6th supplemental budget that came up because we saw the need. That's simply what it boils down to. We saw the need. And we also heard from our legislative body that perhaps glancing over to the other counties, and the TAT tax is not complete now. Our hotels are struggling. Over the last 12 months, the hotels on Kauai, reported by a number of accounting firms, have only run about 59% occupancy. And that compares about 12 points less than other islands and the state overall. The outcome in Japan is still totally unknown, and it is where we need to be very focused on in supporting and promoting our island in such a way that we can demonstrate people having the right kind of experience on our island. That will build occupancy, strengthen our position and hopefully in the future, with this reserve fund we can contribute to the reserve fund where necessary and then having its funding there, we can even look closer at more comprehensive tax reform. I think that certainly is our goal. And I want to make sure we understand, the budget is a forecast. You don't know how you're going to come out until the end of the year and we're still going to identify programs that may contribute at the end of this year to some additional surplus and then we can make additional decisions on what we're going to do. Please remember, a budget is simply a forecast. And with a reserve policy in place, I hope that we can go and look at opportunities to review meaningful tax revisions. I want to thank this council. We have a marketer here in Dickie. We have someone who has a strong labor background. We have an attorney. We have a land planner. We have a public safety officer. We have a social worker and then, of course, myself with my hotel business background. Although retired, I keep my SPECIAL COUNCIL MEETING -16- May 25, 2011 pulse on what is going on. But I have to tell you the points of view that I get from this body are extremely meaningful, extremely meaningful on how we focus and target going forward. I also want to thank every member of the public that came to our public hearings and gave testimony and raised concerns. We appreciate your participation. And finally I want to say thank you to the staff, a staff that kept track of all discussions, all points of views, when we got into the decision process. So we're getting ready to close this budget. I will be supporting it. And I will be calling for a vote very shortly. Yes, councilmember? I did not plan to have discussion. I just wanted everybody to speak before I called the vote. But I will recognize you again. Mr. Kuali`i: Not discussion, but I have an amendment or possibly two. Council Chair Furfaro: Okay. Is the clerk... are we working on an amendment? Is the clerk ... are we working on an amendment? Mr. Kuali`i: Okay, I need somebody to help me put it in writing then. Council Chair Furfaro: Okay, well, I'll tell you what. Why don't I excuse you from the table momentarily and while we're waiting for that I will ask Island School if they'd like to come up and talk to us. How's that? Mr. Nakamura: Council Chair, we should recess. There being no objection, the meeting was recessed at 10:22 a.m. The meeting was called back to order at 10:32 a.m., and proceeded as follows: Council Chair Furfaro: Mr. Clerk at this point, I'm going to recognize Councilmember Kuali`i. Councilmember? Mr. Kuali`i: Thank you, Mr. Chair. So my intention right now, having thought up two potential amendments was to be a start and to begin showing that it's a serious matter that this council must have a say on every type of creation of new positions, not just at budget time, but at any time throughout the fiscal year as well. But Mr. Chair as I have thought about it further, what I will do is I will be working on a bill to amend the budget with regards to positions and that'll come pretty quickly. I'll be working on it and perhaps after July 1st. And then I also think that I should have some discussions with the administration as well. So I will not be making amendments at this time. Thank you, Mr. Chair Council Chair Furfaro: So I just want to make sure I'm clear. Your intention then is to introduce a new bill that will address staffing issues within the county. Mr. Kuali`i: That's correct, including say dollar - funded positions. SPECIAL COUNCIL MEETING -17- May 25, 2011 Council Chair Furfaro: Okay, thank you very much. We'll look forward to having that discussion then in July. Mr. Kuali`i: Thank you, Mr. Chair. Council Chair Furfaro: Okay, Mr. Clerk? Mr. Nakamura: Council Chair, we have a motion and second on Bill No. 2402, Draft 1, which is a bill for an ordinance relating to the operating budget and financing thereof for fiscal year July 1, 2011 to June 30, 2012. Council Chair Furfaro: Shall we do a roll call? The motion to adopt Bill No. 2402, Draft 1 on second and final reading and that it be transmitted to the Mayor for his approval was then put, and carried by the following vote: FOR ADOPTION: Bynum, Chang, Kuah i, Nakamura, TOTAL — 6, Yukimura, Furfaro AGAINST ADOPTION: Rapozo TOTAL —1, EXCUSED & NOT VOTING: None TOTAL — 0. Mr. Nakamura: Six ayes, one no, Mr. Chair. Council Chair Furfaro: Thank you. We have another item during this special council session? Mr. Nakamura: Last bill for second reading is Bill No. 2403, Draft 1. Bill No. 2403, Draft 1 - A BILL FOR AN ORDINANCE RELATING TO CAPITAL IMPROVEMENTS AND FINANCING THEREOF FOR THE FISCAL YEAR JULY 1, 2011 TO JUNE 30, 2012: Mr. Rapozo moved to adopt Bill No. 2403, Draft 1 on second and final reading, and that it be transmitted to the Mayor for his approval, seconded by Mr. Chang. Council Chair Furfaro: Thank you. We have. a motion to approve and a second. Is there any public testimony on this? I will suspend the rules if there is. If not, seeing no one wishes to testify, councilmembers, is there any discussion before I call for the vote? Mr. Rapozo: Real quick, Mr. Chair? Council Chair Furfaro: Yes. Mr. Rapozo: I will be supporting the capital improvement budget. Obviously, I think it's been said many times we don't agree with all the projects, but I think this capital improvement budget under the direction of the county engineer, Larry Dill, and the administration, I think it looks promising. It looks like they're going to address a lot of the issues that have been neglected over the years. Again, there are some projects that I don't agree with. The other thing, I believe, there are some projects here that I don't believe will be able to be encumbered or initiated before the fiscal year, and I know it was the mayor's and the administration's objective to fund only the projects that we would get started within the next 12 -18 months. So I think that's a good policy. I think it's the first time that policy has ever been implemented. So we're going to see how it works. I SPECIAL COUNCIL MEETING -18- May 25, 2011 think it's a great start. So I will be supporting the capital improvement projects and would ask the administration to try to get to as many of these as possible. I believe again, like I said, under the direction of Mr. Dill, I see some good things happening this next fiscal year. Thank you. Council Chair Furfaro: Mr. Rapozo: Council Chair Furfaro: Thank you very much. One more thing. Go right ahead. Mr. Rapozo: I meant to say it at the end and it was to thank the staff as well. There's a lot of people out there that talk negatively about county workers and I will tell you that our staff here, all of them, the analysts, to the clerks, to the typists, every single one of them over here do a tremendous job and I will agree that we're understaffed, and yet I think part of the sacrifice that this council has shown and the conservatism that we haven't hired. We're going to get another secretary or maybe two more secretaries, I'm sorry. But that doesn't really affect the workflow and the workload of our analysts and the other staff. So I think we set a good example, this council did by not putting in for more positions that we actually do need. And I feel bad about that, but as the economy gets better and we can find efficient ways to work in our own department, I think we'll be fine. I just want to say thank you very much to our staff and appreciate all that they do. Thank you. Council Chair Furfaro: Thank you. I too would want to say that I'm very pleased with the start that Mr. Dill has in managing and the team he's put together. You know, we certainly wish him a very long period of time working for the county and his initial steps out of the block have been very well received. So, Mr. Bynum? Mr. Bynum: Sure. Council Chair Furfaro: Then Mr. Chang. Mr. Bynum: Okay, so we're voting now on the capital improvement budget. It differs from the operating budget in a number of ways. The operating budget is to do the ongoing business that the county's involved in, whether it's police, fire or parks or whatever. And that budget is in the year. If you don't spend those funds at the end of the year, they go back into the surplus. The CIP budget is for capital improvements or projects related to infrastructure usually, although it can be planning and other things. It differs in that if the funds aren't expended within a year, they don't lapse. They stay in the capital improvement budget and get reflected the next year. The administration did say this year and I think I also agree that it's good policy to not have things in the capital improvement that are going to just stay there for years and not actually be operated on because decisions aren't made by what you say, they're shown by what you actually do. Luckily we have a public record of everything we say and everything we do. And I think that's... since I've been in government, that public record is really important because people can make judgments on people's behavior, not just the words that they say. I do want to address one thing in the CIP budget, which I intend to support. That policy said if you're not going to spend the money, then we're going to take it out of the budget. And I'm very sad that solid waste initiatives that we have talked about and made commitments for ever since I've been on the council for five years SPECIAL COUNCIL MEETING _19- May 25, 2011 and this council with, again, the chair and every member who has been here a long time, talking about the importance of a materials recovery facility, a MRF. And so one of the controversial things this year and we've discussed it this morning is the council cut $175,000 for curbside recycling for the pilot project in Uihu`e and I want to say why because that's a very sad decision. We made it very clear for five years and our solid waste plan says that a MRF is a first -year effort. It should actually be completed during this fiscal year according to the plan and it hasn't begun. But we did start curbside recycling in Lihu`e and Puhi, which is popular and does help divert some materials from our landfill. But to process it, literally, that mixed recyclables rather than using a facility that's designed to sort it gets dumped in a big pile and hand - sorted. And initially it seemed like a great deal; we're only paying $2,000 a month just for that one section of the island. And it went up to $14,000 because we don't have a facility that does it and it is very labor intensive and costly. And the administration put money in the budget to continue it for now at a very high additional cost, but does not intend to continue it until we actually have a MRF, which would at a minimum if we worked at lightning speed is going to be three years probably because we haven't even identified a site. We have to have a site, land acquisition. Some of us pressed for an interim site, use a current county facility that we already have and set it up and get it going because diverting this from the landfill is important. So it was a very difficult decision, but very sad to see the MRF removed from the CIP budget, which basically says there's no intention to expend funds related to that during the whole next fiscal year. I'm really concerned about that. So as difficult as it is, we just need to make fiscally prudent decisions and not throw good money after bad. If we were going to commit to continue it and that's what a lot of us said at the beginning, don't call this a pilot project. Call it an early rollout of Phase I and move aggressively to get our materials recycling facility. But unfortunately that hasn't happened. So I just wanted to highlight that one thing. And I also want to say that what I said earlier. Overall, it's the nature of what we do here that we're going to discuss and focus on our disagreements, but overall, I think the mayor has done a good job in the three years he's been mayor, presenting us conservative budgets. I agreed with him this year that the budget he presented really restored some of the cuts that were made several years ago and does not reflect a giant increase in spending as it's been characterized. You can look at the public record and look at the dollars and cents, and see what the actual figures are. So I am going to support the CIP budget. Council Chair Furfaro: Thank you. Mr. Chang, you wanted to speak? Mr. Chang: Yes, Chairman, thank you. I just wanted to say I am very excited about our CIP projects. I want to congratulate our engineer Larry Dill. I think we all have come to know him and to respect him, and I think there's some real good life in our public works department. I wanted to say aloha out to Ed Renaud and Lyle Tabata. They have a lot of work ahead for them. We do have a CIP project manager Tommy Contrades. We want to say good luck to him and wish him well in all of our projects. I think it's going to be exciting when the entire island, different parts of the island see work actually being done for improvement of public safety, roads, etcetera. So I'm excited about the CIP Projects and I look forward to seeing that for the betterment of all of Kauai. So thank you very much. Council Chair Furfaro: Okay, any other members? If not, I did want to say my comments and best wishes to Mr. Dill as our new chief engineer should not be focused just on Mr. Dill, but also the team that he's put together. We certainly are SPECIAL COUNCIL MEETING -20- May 25, 2011 able to measure results in public works. Even if the building gets painted, we know where they left off the night before. So you can just trace it to the new paint. On that note, shall we call for a vote, please? The motion to adopt Bill No. 2403, Draft 1, on second and final reading and that it be transmitted to the Mayor for his approval was then put and carried by the following vote: FOR ADOPTION: Bynum, Chang, Kuali`i, Nakamura, Rapozo, TOTAL — 7, Yukimura, Furfaro AGAINST ADOPTION: None TOTAL — 0, EXCUSED & NOT VOTING: None TOTAL — 0. Mr. Nakamura: Seven ayes. Mr. Chair. No further business. Council Chair Furfaro: Thank you very much. This completes our business for the special meeting this morning. ADJOURNMENT. There being no further business, the meeting was adjourned at 10:44 a.m. Respectfully submitted, (Z� -'D` � - k--� PETER A. NAKAMU /wa County Clerk New Position Title Exec. Asst. to the Mayor (Mgr, CD) Mayor's Administrative Aide Special Assistant to the Housing Director Environmental Services Officer Pay Pos.No. Previous Position Title Pay $96,000 E -2503 Grant Coordinator Addt'l cost for benefits: $46,512 Total: $142,512 $73,044 E -63 Commission Support Clerk (DOW) Addt'l cost for benefits: $35,389 Total: $108,433 $70,000 9536 Program Support Technician 11 Addt'l cost for benefits: $33,915 Total: $103,915 $98,748 1443 Civil Engineer VI Addt'l cost for benefits: $47,843 Total: $146,591 Risk Management $92,460 289 Risk Management Officer Administrator Addt'l cost for benefits: $44,796 Total: $137,256 Totals (5): $430,252 $208,455 $638,707 Total (24): $1,359,682 $658,765 $2,018,447 Operating Budget Proviso 7 -0 5/10/11 KK's amendment $57,708 $1 $1 $1 $1 Appropriations or authorizations for positions in this Ordinance shall constitute establishment of such positions. Departments having sufficient funds may hire dollar- funded positions provided that the Council is informed of the hiring of such positions. The Mayor shall inform the Council on a monthly basis, of any actions relating to the reallocation, reclassification or abolishment of any position. The Council needs to have full budgetary powers in order to protect the interest of our citizens by being a "check & balance" of the Administration on all expenditures; especially salaries. If it takes changing the law, that needs to happen. The people want and deserve a law that requires the Administration to obtain approval from the Council prior to the reallocation, reclassification or abolishment of any position. Requiring Council approval only for the creation of positions is not enough to allow the necessary "check & balance ". As it stands now, the Administration is required to obtain Council approval for... a) Transfers of unencumbered appropriation balances between departments, boards or commissions [Section 19.08(F), Charter] b) Applications by the County for new grants from Feds, State or any outside source (Section 14] c) Expenditures for emergency purchases of equipment, furniture, and vehicles in excess of $6,500 [Section 17] It is a disservice to our citizens to have a law that gives the Council budgetary oversight of the Administration when it comes to taking on new expenditures in excess of $6,500 for equipment, furniture and vehicles in the middle of the fiscal year — but, not have a law to prevent the manipulation of vacant or dollar funded positions resulting in several new positions; each costing well over $100k; positions that some citizens have brought to my attention as unnecessary "political hires ". ATTACHMENT No. 1 Having the Council approve these changes to positions in between budgets and prior to any actual hiring, would prevent the Administration from acting alone and restore the public's confidence in our County hiring. Additionally, it would eliminate the current situation where if a Council majority did not agree with a mid - budget hire by the Administration, they would have to actually lay -off the Administration's new hire by eliminating the position during the budget process. We all know that even though this may be the prudent thing to do, in this circumstance when it comes to cutting a live body, a real person's livelihood, it is practically impossible. Surely that is what happened once again in this year's budget budget process due to the current rules. My motivation is to work to change the rules so that we all, together, serve the people better. To make the strongest point on this matter, I have been seriously considering voting "NO" to this budget. However, I have decided, recognizing that I've been in this position for only 6 weeks now and in deference to Chair Furfaro and the other Councilmembers, I will "reluctantly" vote "YES" to this budget.