LIHU‘E — The Kaua‘i County Council passed several bills to cover a budget shortfall caused by suspended tax revenues, retroactive salary increases and COVID-19 operations.
The six bills, numbered 2807 through 2812, were all passed unanimously on second reading by the newly elected, seven-person council on Wednesday.
The county’s fiscal-year 2021 budget, which covers July 1, 2020 to June 30, 2021, features a $250 million operating budget and $33.6 million capital improvements project budget. The county must have a balanced budget to be in compliance with the Kaua‘i County Charter.
Gov. David Ige suspended the distribution of the transient accommodations tax, which typically brings in about $14 million in revenue to the county each year. Bill 2807 takes about half of that, $7,467,500 from the county’s reserve, and moves it into the general fund.
“This was a ‘roll-with-the-punches,’ real-time-type of situation, where we are only being able to react as we are able to see activity come in,” Managing Director Michael Dahilig explained at an Oct. 21 meeting when the bills were up for first reading.
Dahilig said it’s possible that a restart of the tourism economy could change this, but the county will, at least, not receive six months of TAT funds.
Bills 2808 and 2809 defunded improvements for a piece of county property near Ho‘olako and Ka‘ana streets in Lihu‘e, adding $1.4 million back to the general fund from the CIP budget. Another bill revised $3.1 million from the bond fund for these improvements to the assigned fund balance. These bills, Dahilig explained, pulled money from a land-swap acquisition.
Adjusting for raises and personnel
Over 550 employees across 17 departments will receive raises as part of a Hawai‘i Government Employees Association collective-bargaining agreement signed by the state. Included are those clerical, clerical supervisory, scientific and professional and ocean-safety positions. This resulted in a $1.63 million shortfall in the county’s budget.
Bill 2810 addressed the retroactive raises. The county’s fiscal-year 2021 budget had $2.229 million for these raises, but the additional $1.63 million was unaccounted for.
Another bill, 2812, assists the county in moving forward with a new human-resources, payroll and management system, using $1.225 million from the CIP contingency fund ($127,411), land-information-management system ($1 million) and Salt Pond Wastewater Improvements ($97,589) for additional funding to procure this system.
The county scrapped or partially defunded some projects, including agriculture services from the Office of Economic Development. The Kaua‘i Fire Department cut its public education/safety trailer, and junior and keiki lifeguard program.
COVID-19 mitigation efforts
In preparation for federal Coronavrius Aid, Relief, and Economic Security (CARES) Act money expiring at the end of this month, Bill 2811, Draft 1 takes $2 million from the unassigned fund balance to assist in COVID-19 operations.
This includes $1.2 million to the Kaua‘i Police Department, $300,000 to Kaua‘i Emergency Management Agency for regular salaries, $200,000 for KEMA regular overtime, $270,000 for KEMA’s special projects, and the remaining $30,000 to the Department of Finance.
Council Chair Arryl Kaneshiro expressed that a time like this is why the county continues to funnel money into the reserve.
“This is the exact situation where that money comes in handy and what the money is used for,” Kaneshiro said Oct. 21. “This is an economic downturn that the county is experiencing and it is exactly why we budget so hard and be disciplined with the reserve all these years, to get these monies through times like this.”
Sabrina Bodon, public safety and government reporter, can be reached at 245-0441 or email@example.com.