LIHU‘E — On March 15, the administration will hand over their proposed budget for Fiscal Year 2014 to the Kaua‘i County Council. For the first time in 14 years, Finance Director Wally Rezentes Jr.’s signature won’t be in the document.
It also could be the first time during Carvalho administration that the proposed budget came within 20 percent of the actual budget, which has been caused millions of dollars of surplus.
“It is a frightening proposition to move without Wally, but at the same time he has left a wealth of information that we can build upon,” Budget and Purchasing Division Director Ernie Barrera said Monday at a Cost Control Commission meeting.
Rezentes’ last day on the job was Friday: He resigned to return to the private sector after working for three different administrations.
Mayor Bernard Carvalho Jr. said in a press release Friday that until a replacement comes onboard, Deputy Finance Director Sally Motta and Barrera will assume the Finance Department’s responsibilities.
Carvalho praised Rezentes for keeping the county’s bond rating consistently high and for boosting the administration’s online reach, especially with the roll-out of a web-based electronic procurement system which reportedly saved the county thousands of dollars.
And then there was last year’s establishment of a new division — Budget and Purchasing — tasked with managing the budget process all year.
“Working with the County Council to develop the annual budget and then implementing and monitoring it properly requires appropriate resources,” said Rezentes in the release announcing his retirement. “I am confident that our budget team is ready to handle the task during this time of transition and will be able to bring the new director up to speed quickly.”
Barrera, who was initially the county’s assistant chief procurement officer, took the Budget and Purchasing director position about a year ago. He said the Finance Department’s biggest challenge is losing Rezentes, and had he known the seasoned finance director would be leaving his post, he would probably have remained in his former position.
One of the challenges that Carvalho’s administration will certainly face in the next 60 days will be how to propose a tighter budget, as all of Carvalho’s four budgets so far have been off by more than 20 percent at the end of the fiscal year, causing millions of dollars in surplus.
Council members will be watching closely.
At least one council member, Mel Rapozo, has questioned if the county surplus has to be lawfully returned to the people.
Recently, the council began discussions about creating a permanent reserve, fund, which would incorporate some of the surplus and add restrictions on how the administration can use it.
Furfaro’s requests
The top 10 county departments and agencies have a combined under-spent budget of approximately $4 million in FY 2013, according to Council Chair Jay Furfaro, in a communication dated Jan. 4 to the Cost Control Commission.
In the previous fiscal year, the top 10 county departments or agencies under-spent $11.86 million, according to a chart provided by Furfaro.
“My concern is that these departments/agencies are consistently tying up much needed funds which could go to other services or to produce efficiency savings,” said Furfaro in the communication.
He also asked the commission to request from the administration a fair evaluation on forecasted utility expenses for the upcoming FY 2014.
“I have requested this information from the Administration multiple times but have received no response as of yet,” Furfaro said in the communication.
Additionally, Furfaro asked the commission to conduct a thorough investigation of the actual budgeted versus paid indexes for the various payroll, taxes and benefit charges, and any requirements where these indexes may be increased when utilizing federal or state funds.
“This area is the top operating expenditure for the county and a thorough review is needed,” Furfaro said in the communication.
His last request to the commission was for a review on the administration’s proposed use of the site of the former Big Save supermarket in Lihu‘e, which has sat empty for more than a year and that could be used to generate additional revenues for the county.
A Dec. 17 memorandum from the administration states the removal of hazardous materials from the site will be completed by the end of March.
After that, the administration plans to use a significant portion of the space for storage and archival purposes.
“I am estimating that the departure of Big Save, Inc. may result in approximately $234,000 in loss revenue for the county,” Furfaro said in the communication.
Community involvement
Barrera said at the commission meeting Monday that the Finance Department will look into their current budgeting processing in terms of revenues and expenditures, and also look to their budgeting for outcomes.
Finding a better way of allocating resources based on a comprehensive review of practices and charges to the public, and making sure adequate resources are allocated is a “very big initiative” for the department in terms of planning, Barrera said.
But the community should also have a say in it, he said.
“The community is really the ultimate beneficiary in everything we do, so they should be actively involved and engaged,” Barrera said of the budgeting process.
Two months from now, at the end of the day on March 15, Carvalho’s proposed operational and CIP budgets for Fiscal Year 2014 are due.
The council will soon begin a series of budget review sessions, which will prompt a supplemental budget submittal from Carvalho at the beginning of May. The council will then scrutinize Carvalho’s revised proposal and ultimately handle it back to the administration for the last time.
The new fiscal year begins on July 1.
• Léo Azambuja, staff writer, can be reached at 245-3681 (ext. 252) or lazambuja@ thegardenisland.com.
