FY12 supplemental budget $21 million higher

LIHU‘E — Kaua‘i County Council Chair Jay Furfaro has  been saying for the last three weeks that the county should rely on a reserve fund rather than on a budget surplus. His wish may just have come through.

Mayor Bernard Carvalho Jr. released the supplemental budget for the county Fiscal Year 2012 on Friday, adding a $26.26 million reserve fund to the original March 15 budget submission.

“Establishing the reserve fund and policy is important from many standpoints,” Carvalho said in the Friday submittal, adding that the reserve fund will provide a buffer for natural and man-made disasters, create a basis for higher credit ratings and insure financial stability.

The original March 15 budget submittal proposed an operating budget of $164.98 million. On Friday Carvalho’s supplemental budget reduced operation costs by $3.3 million. But with the proposed reserve fund, the operating budget totals $185.97 million.

“We recommend that the reserve balance be established in the range of 20-25 percent of the previous year’s actual operating general fund expenditures plus general fund transfers and encumbrances, as identified in the county’s Comprehensive Annual Financial Report,” Carvalho said.

Capital Improvement Projects

Capital Improvement Projects suffered a small reduction in the supplemental budget. The administration on Friday proposed a CIP budget for FY12 at $83.1 million, which is $2.4 million shorter than the March 15 submittal.

The ‘Ele‘ele wastewater treatment plan improvement lost $1.6 million in funding. The next phase construction work will be funded with state revolving funds rather than bond funds, according to the supplemental budget submittal.

The Lihu‘e wastewater treatment plan chemical lab funding, initially estimated at $1 million, was reduced by $550,000. Bids came in lower, so the funding was adjusted.

The Kekaha Landfill lateral expansion lost $2.3 million due to an adjustment to include only line items that will be initiated in the next 18 months.

The proposed Adolescent Drug Treatment Center lost $1.5 million. The facility was left with $500,000 to reflect the cost of pre-design and conceptual planning, which is expected to be spent in the time-frame set by the administration for CIPs, 12-18 months.

The General Plan Update, a $1.25 million project, was dollar-funded. But a new line item, General Plan Technical Studies, was added, at a $424,999 price tag.

Additions

Besides some CIP cuts, the administration also boosted funding for some projects and created others.

The realignment of Kahuna Road in Kapahi got an additional $1.8 million, increasing the county’s share of the project to $3.6 million.

Safe Route to School project got an additional $55,000. Based on Public Works Department, the project will cost $155,000.

The Information Technology Imaging Initiative — a long-term investment — received $160,000 more to cover the project’s phase II.

New CIP projects include a $400,000 repair work at Wailua Wastewater Treatment Plant, $350,000 for sewer pump improvements at Coco Palms and $100,000 for safety improvements at Lae Road near Elua Reservoir in Kalaheo.

Revenues

Real Property Tax revenues came in at $79,28 million, reflecting an additional $2.7 million from the administration’s initial projection.

The county’s share of the Transient Accommodation Tax was capped by the state Legislature for three years at $93 million annually. Kaua‘i’s share of the TAT will be approximately $13.5 million, which was originally budgeted in the March 15 submission.

A recalculation of the contribution to debt service showed a $2.7 million reduction, based on the actual data from the 2010 bond float versus projection used in budgeting for the current fiscal year.

Added operational expenses

The supplemental budget added American Red Cross’ $20,000 annual allocation, inadvertently omitted in the March 15 submittal.

The administration is proposing $50,000 for a Washington DC lobbyist.

The Office of Prosecuting Attorney is being funded an extra $101,068 for an additional deputy position, and to dollar-fund new special investigator and receptionist positions.

The Office of Economic Development will receive an extra $25,750 to attend the Philadelphia International Flower Show 2012, which draws a 260,000 crowd. The grant’s total amount, if approved, will climb to $30,000.

Carvalho’s submittal proposed $100,000 to be spent on the Kaua‘i Economic Development Plan Feasibility Studies.

The budget is also asking for $25,000 to cover expenses to attend monthly Asia Pacific Economic Cooperation Conference meetings on O‘ahu.

The second-year lease of a Kaua‘i Police Department vehicle — at a cost of $90,000 — was inadvertently left out of the March 15 submittal, and was introduced in the Friday submittal.

The administration budgeted $20,000 to make sure the Official Kaua‘i Beach Guide continues to be printed.

The Civil Air Patrol recently had a state funding reduction, which prompted the administration to increase their annual grant to $30,000 from $15,000.

Public Works asked to move a dollar-funded position from Solid Waste to the Engineering Division, to fund a civil engineer position III at $45,576.

A shortfall in grants at the Agency on Elderly Affairs would be covered with additional $15,712 county funds.

The Planning Department had two dollar-funded positions established, which will be funded through development plans and General Plan Technical Studies.

The council will start scrutinizing Carvalho’s new budget version on Monday at Nawiliwili Council Chamber at 9 a.m. Discussions are scheduled to continue Tuesday, starting at 9 a.m.

Go to www.kauai.gov for more information.

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