The County Council has already added $1.1 million to Mayor Harry Kim’s record-setting $573.5 million operating budget. On Wednesday, council members are poised to add even more.
By law, the budget must be balanced. In order to increase spending in one area, council members must decrease it in another, unless they get an outside grant or want to raises taxes or fees.
But one source of funds has been ripe for the picking. The fund balance — the money budgeted for the prior year but not spent — has been increasingly tapped into as a way to pay for council member priorities. The unspent money is usually rolled over into the next budget year. It serves as a buffer against emergencies and is carried over to help fund future budgets.
The fund balance is higher than usual for the budget year ending June 30 because county departments were so busy responding to the volcano, hurricane and flooding disasters they didn’t have time to spend the money they had planned for less urgent projects.
Finance Director Deanna Sako has urged the council to not decimate the fund balance because the county will need it in the 2021-22 fiscal year, when Employees’ Retirement System contributions are set to again increase.
At the same time the county is spending an increasingly larger amount of taxpayer money on employee salaries and perks, the mayor proposes adding 93 new positions, mostly for police, environmental management and parks and recreation.
“In addition, fund balance is important to our bond ratings, which can impact the interest rates we pay on our bonds,” Sako said.
That fund had an estimated $32 million balance last month, but Sako said her department continues to update it against recent expenditures in order to provide a better estimate.
“We continue to update our fund balance projection,” she said Friday.
So far, with council agreement, Kona Councilwoman Rebecca Villegas added $250,000 in spending to bring back a voucher program to allow golfers to pay a discounted $25 in greens fees at participating West Hawaii golf courses.
Puna Councilwoman Ashley Kierkiewicz added $270,000 to give each council member $60,000 next year instead of the $30,000 each are currently allotted for their district contingency account. That’s money they can spend, with fellow council members’ approval, on county departments and nonprofits to address immediate issues and needs.
Contingency funds have most recently been used for festivals, surf contests and parades, Project Grad nights at local schools, the American National Red Cross Home Fire Campaign, art supplies for schools and the senior farmers market nutrition program.
Hilo Councilwoman Sue Lee Loy wants to pump up the contingency fund by another $360,000. She has an amendment to increase the fund to $900,000, giving each council member $100,000 to spend during the fiscal year that begins July 1. That money would also come from the fund balance.
Lee Loy said Friday she hasn’t discussed her amendment with the Finance Department, but she offered it in order to have a public discussion.
“I put it together to have the conversation with Finance in the interest of transparency,” Lee Loy said. “I’m just keeping the options open.”
It’s not yet known how many other amendments council members might bring to the budget, the third draft of Bill 30, when it comes to the council at 9 a.m. Wednesday in Hilo council chambers. Members have historically held their amendments close to the vest, bringing them out just shortly before, or on the day of, the final budget reading.
No other amendments were filed on the county documents site by press-time Friday.
The mayor has line-item veto power on any appropriations bills, according to Section 3-12 of the county charter. That means Kim has the authority to strike-out or reduce the amount of specific spending items in the budget. The council can override the veto by a two-thirds vote.
The annual capital improvement budget is also up for final vote Wednesday. Bill 31 is a $241.8 million spending plan containing 64 projects. The capital budget, unlike the operating budget, is a “wish list” that takes further council action before the projects can begin. It contains projects such as roads, bridges, parks and buildings.
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