HILO — Anticipating a veto from Mayor Billy Kenoi and not enough votes to override it, Council Chairman Dominic Yagong on Thursday backed off his plan to amend the annual budget to put payments into the county’s retiree benefits account.
HILO — Anticipating a veto from Mayor Billy Kenoi and not enough votes to override it, Council Chairman Dominic Yagong on Thursday backed off his plan to amend the annual budget to put payments into the county’s retiree benefits account.
Instead, Yagong plans to introduce a bill Wednesday that will make payments to the fund automatic if the administration doesn’t budget for it and the county has money left over at year’s end.
The $365.1 million spending plan was approved 8-1 with only minor amendments. Yagong voted no, saying later, “a deferred budget is not a balanced budget.”
The budget, which goes into effect July 1, holds the line on property taxes, maintains monthly worker furloughs and eliminates the West Hawaii golf subsidy. It’s a scant 0.5 percent less than this year’s budget and 9.4 percent less than when Kenoi took office in 2008.
The retiree account, known as GASB 45, currently contains about $60 million, but the county last year stopped making annual payments of about $20 million. That means, if the current budget is approved by the mayor, the county will be short $40 million in payments to the fund. Kenoi and the county Finance Department have said withholding money to the fund won’t hurt the county’s financial status or bond rating.
Yagong told reporters outside the meeting he and his staff had crafted several pages of amendments but decided it wasn’t worth the effort because the mayor would likely veto the amended budget anyway.
“He would absolutely veto the budget. I know it,” Yagong said. “He has four votes locked in.”
Kenoi last year did veto the council budget, and the council majority didn’t have the six votes needed to override a veto. The same four no votes, from Hilo Councilmen Donald Ikeda, Dennis Onishi and J Yoshimoto and Puna Councilman Fred Blas, were likely this year as well had the budget been amended to account for GASB 45.
Several members of the public urged the council to find the money to pay toward GASB 45. They worried the county was losing what could amount to millions in interest or penalties.
“I know what my credit card balance looks like when I put off paying bills,” said Cory Harden, testifying from Hilo.
The council rebuffed amendments to the operating budget that would have taken relatively small amounts of money from the Legislative Auditor and Corporation Counsel. After hearing about Yagong’s proposed bill, South Kona Councilwoman Brenda Ford withdrew two amendments that would have taken $15 million from the fund balance, the amount the administration estimates it will have left over at the end of the fiscal year, to apply toward GASB 45.
Kenoi after the meeting praised his staff for crafting a budget that met so little resistance from the council. Previous years’ council hearings on the budget went into the late hours; this year, the council passed the budget before 3:30 p.m.
“I would still sign it if it were rational and logical,” Kenoi said, when asked about the chances he’d veto a bill that allocated money to the GASB account.
It’s not known how Yagong’s new bill will fare. Kenoi handed off a reporter’s copy of it to Corporation Counsel for review.
“There’s a budget process in place that works really, really well,” Kenoi said.
The bill to be heard Wednesday will amend county code so that any fund balance of more than $5 million will automatically be applied to the GASB 45 account, if the administration hasn’t made a payment of at least half of the actuary’s recommended payment into the account.
The fund balance at the end of the 2011-2012 fiscal year is about $16 million, with about $18 million expected to be left over by June 30, 2013, according to Ford.
Her attempts to take $65,000 of that amount and buy facilities management software, which she said could save the county millions by knowing which county facility most needs maintenance, was defeated 5-4. Her attempts to buy the software by transferring money out of corporation counsel’s budget died on a 2-7 vote.
Ford said the votes show the County Council and the administration just aren’t cognizant of how a small purchase of technology can save money in the long run.
“It’s painfully obvious that the majority that defeated this bill had no concept of how millions could be saved with this purchase,” Ford said.
