Mayor Bernard Carvalho’s State of the County Address was presented Monday, March 18, 2013 in Moikeha Courtyard
Aloha Kaua‘i and Ni‘ihau!
Let’s have a big round of applause for our Tongan friends: Fofo`anga Kaua‘i…and for our Hawaiian Chanter – Kaeo Bradford!
I think it’s always important to recognize and celebrate the cultural diversity of our island.
A few weeks ago…when I had a visit with our Tongan friends…they helped me understand how much they want to weave their history and culture into Kaua‘i’s rich cultural mix.
So I thought…what better time to acknowledge our Tongan friends than here at the State of the County.
I look forward to this time every year when we can come together as a community and celebrate the truly wonderful things that are happening all around us. It’s also a time to think seriously about the challenges we face.
Most of all…it’s a time to come together and set aside our differences to see what we CAN agree on…and how we can make things better for everyone on Kaua‘i.
Before I get started, I wanted to introduce some special people here today:
- My Family
- Representatives for our Congressional leaders
- Gerald Ako for Senator Mazie Hirono
- Clyde Kodani for Senator Brian Schatz
- Dennis Esaki and Kaulana Finn for Congresswoman Tulsi Gabbard
- Governor’s Representative
- Wanda Shibata
- Council people
- Chair Jay Furfaro
- Vice-Chair Nadine Nakamura
- Councilmember Tim Bynum
- Councilmember Gary Hooser
- Councilmember JoAnn Yukimura
- Prosecuting Attorney – Justin Kollar
Now…to get to the heart of the matter…a discussion of where we are…an explanation of how we got here…and a challenge for all of us on what we must do to move forward.
By now…you may have read about the proposed budget that I delivered to the County Council on Friday.
I have to admit…that if I had the chance to just create a budget out of thin air…without having to deal with the tough realities we face…it wouldn’t have looked much like that document we delivered on Friday.
But I don’t have that luxury. I have to deal with realities. We have to deal with realities. Because we are a community…and as a community…we face things together.
It reminds me of sitting at the dinner table together. I know for MY family that is a great place to talk about what’s happening and the challenges we have…and to work things out as best we can…even when we disagree.
We celebrate the good…and we work through the not-so-good. And we do so with aloha and respect.
That’s what makes Kaua‘i special.
So let’s start today…with what’s good.
I wanted to spend a few moments talking about some of the positive things happening on Kauai…things that I hope have touched your life in a positive way.
- First of all…we know that the economy is improving…especially for the visitor industry. Last year, we were up more than 7 percent in visitor arrivals from 2011…and in January of this year…we were up more than 10 percent from January of last year.
- Visitor counts on direct flights are up 26% so far in 2013 versus last year.
- Unemployment is down. In January, our unemployment rate was 6.5 percent. That’s almost two percentage points down from January 2012…when the unemployment rate was 8.3 percent.
- The number of unemployment claims made so far this year is nearly 14% lower than during the same period last year.
- Construction is a good indicator of how our economy is doing. The value of building permit applications in the first quarter of this year was nearly $9 million. That’s almost TWICE the value of applications that were received in the first quarter of last year.
- Home sales are also improving. Real estate sales are up 23% so far this quarter over 2012 numbers. And they are expected to climb even higher in the second quarter of this year.
So…the economy is looking up…and it looks like all of these indicators will continue to improve as we move into the next quarter…according to the County’s economic analyst…Ken Stokes.
Aside from the economy…there are many good things happening all over our island. We just completed a series of four public meetings…with our entire cabinet coming out to the community to provide some updates and to hear what you have to say.
We had GREAT turnout in Kekaha…Hanapēpē…Kapa‘a…and Kōloa…and had a very productive dialogue about issues and projects all over our island.
We will continue to do this outreach throughout the year…and I hope that each and every one of you will attend at least ONE meeting and let us know what’s on your mind.
Still focusing on the positive…as Mayor I have tried very hard…with the support of my team…to make internal systems changes…so we can better meet the needs of our community. Changing long-standing systems is not easy. It’s especially hard on our employees…who have to continue to do their jobs while adjusting to new realities. But I am happy to say that we have made great progress in this year. And I wanted to take a moment to report back to you on some of the things we promised to when I spoke to you last year:
- Having adequate equipment in good working order is essential to providing excellent service. As promised, we have completed the formation of a “small equipment maintenance” team that is housed in the Transportation Agency. This team of mechanics focuses on small equipment that our parks and public works employees depend on…which frees up our automotive repair shop to focus on vehicles. Since getting the shop up and running in October, they’ve completed 139 repairs. More than half of these are completed within one week, and a quarter are completed within two days. This is great news…because less equipment downtime translates to greater productivity for our workers. When their mowers, weed whackers and other machinery are in good working order…our parks and roadsides are better maintained. Simple as that.
- The reorganization of the Department of Personnel Services was completed in October AS PROMISED, and the agency is now functioning as a full “human resources” department with four distinct divisions: Administrative Services and Benefits; Recruitment and Exam; Classification and Pay and Labor Relations; and Employee Development and Health Services. We were able to do this without adding a single new employee…and we are already seeing results. A new employee orientation program has been established…months have been shaved off of the new police officer recruitment process…and we have centralized many functions such as: maintaining personnel files, conducting exit interviews, and offering vehicle and equipment training. In addition, there is now a centralized electronic space for personnel policies and forms through the SharePoint portal site.
- We have successfully completed the terms and conditions of our probation agreement relating to endangered sea birds…and have been deemed by the Justice Department to be in full compliance. Mahalo to the County Attorney’s Office, Parks and Recreation, Public Works, and to some extent every employee of the County of Kaua‘i. We are now off probation and were able to do so without any additional fines.
- I am passionate about going “paperless!” Last year I reported on our move to a completely on-line procurement system. This year, we have focused on getting ready to launch our “e-plan review” initiative, and we will be launching it next month. E plan review will allow you to submit your building plans on line – no more photocopying! The plans will then be transmitted electronically to all reviewing agencies – including the State Department of Health. This allows for simultaneous review and eliminating expensive copying. E Plan Review will save the public and the county time and money, and will allow all parties to track the progress of the application on-line in real time. And by the way…for several years now we have been posting our entire budget on-line. You can find our entire proposal for next year on the County’s home page. Additionally…this year we will be delivering all of our departmental budget reports electronically to the Council. No hard copies!
- Overtime is a big expense for us and one we must control. A year ago we informed you of some internal reorganization in the Department of Public Works that we thought would save up to $300,000 in overtime costs. This involved the separation of duties between the Solid Waste Division and the Roads Division. Guess what? Our current projection for overtime savings in public works for this year is $438,000, with most of the savings coming from solid waste collections and baseyard operations.
- We all know that “going green” can save money. Our staff-level green team is up and running, and is already moving on a number of initiatives. Their goal is to help the county develop innovative programs across departments that save money…support local businesses…improve quality of life…and protect the environment and public health. Green Team projects this year have included replacing eight energy-guzzling office refrigerators – with more to come…a paper reduction campaign…offering re-usable dishes and flatware to departments instead of disposables…and encouraging employees to drive less. We have definitely realized savings this year, and our utility costs for next year are projected to be down 2.2% based partly on these efforts.
One tool we are using to build morale and increase productivity throughout these major shifts in operation is through regular meetings among our secretaries…or administrative professionals…in each department. Led by my Executive Secretary, Cathy Simao, this ongoing collaboration has led to great cross-sharing of best practices…and an opportunity to bring in guest speakers to better equip our administrative team for the critical role they play in supporting our department heads. They have great energy and great ideas…and now they have a way to share them with all of us.
Now…with all of that good news in mind…let’s turn to a discussion on the budget proposal for next year.
If I had to sum up this budget proposal in one word…I would call it “BOLD.”
- It is bold because it will require the County as an organization to be more efficient than we have ever been before…and to focus in on the services that are most important to our people…basically to spend less and do more
- It is bold because it requires each and every business and resident on Kaua‘i to give a little bit more…so we can get where we need to go and provide the services you need and expect. We must bring our taxes and fees in line with present day realities
- It is bold because it will not make everyone happy; but it will make us as a community stronger. if we all share in the burden together we have a better chance of prospering together.
Let’s get the toughest stuff out of the way first.
We all know that in order to balance a budget…any budget…you can’t spend more than you bring in. It sounds simple…and it IS simple in concept. But putting it into action…as we all know can be very complex.
So the big challenge we had this year was that our current revenue streams are not sufficient to cover our basic operating costs.
Plain and simple. Fixed costs go up…and if revenues don’t go up…you come up short.
I took office in late 2008…and at that time we were coming off of some of the greatest economic prosperity we have ever seen…and going into a steep economic downturn.
For the past three years…we’ve been able to buffer the difference and avoid tax and fee increases. We’ve been able to do this because we built up a healthy unassigned fund balance and special fund balances prior to the economic downturn in 2009. We were able to live off of those fund balances even when real property values plummeted. During the toughest fiscal times of 2009-2011 we were able to hold off asking residents to pay more.
Always, we were mindful to insure all current County employees kept working. We implemented furloughs…left positions vacant and dollar-funded other positions…deferred equipment purchases…restructured our debt, and implemented many other measures to keep expenses in check while revenues fell.
But the reality is…we can no longer defer revenue enhancements. Thankfully, the economy has been steadily improving for the past two years, making this a much better time to address revenues.
We’ve given great thought to how to implement them at this time in the most fair and equitable way. And before we even discussed revenues…we made sure we had scrubbed our expenses as close to the bone as possible.
Here are some of the cost cutting measures we’re proposing for next year:
- Payroll is by far our biggest expense. Salaries and related costs take up more than 60% of our operating budget. We worked hard to achieve a 3.5% decrease in salaries and related costs for next year. That’s a $3.8 million reduction, and we’ve done that through a moratorium on new positions in our administrative departments…and also by dollar funding fourteen positions that are presently not filled.
- As mentioned earlier, our “green” initiatives are now starting to bear fruit. In addition to getting power from photovoltaic systems at Waimea Wastewater Treatment Plant, Līhu‘e Civic Center Piikoi Building and the Kaiākea Fire Station…we’ve implemented energy efficiency measures like using more efficient lighting systems at our sports fields…replacing old office refrigerators…and automatically shutting off our chillers at 4:30 pm. We’ve projected a $160,000 decrease in utility costs for next fiscal year, and we expect that savings to grow for many years to come as new “green” projects come on line.
- Vehicles are another huge cost for us. The Kaua‘i Police Department has come up with an innovative way to deal with aging vehicles and save the county significant dollars. For unmarked police vehicles, we are proposing to launch a pilot “subsidy” program next year, whereby eligible personnel will receive an auto allowance in exchange for using their private vehicles. Buying fifteen new vehicles would cost more than $500,000. With this program, there would be a first year cost of $213,000 – which includes purchasing lights and other equipment for the private vehicles. After the first year…the program would cost just over $100,000 for the allowance. Under this arrangement, the county will also achieve savings in maintenance costs – because maintenance will be the responsibility of the owner.
- Beyond this KPD initiative, we are repositioning our vehicle replacement program to insure that we’re getting maximum life out of each vehicle. In past years, a vehicle would be replaced after roughly five years in service. Going forward, we will be looking at mileage…and assessing at what point the vehicle must be replaced for safety concerns. In this way, we extend the life of each vehicle and begin to strategically reduce our fleet of cars. We are also working toward establishing a “pool” of vehicles for departments that use them infrequently, and will be encouraging greater use of our electric and hybrid vehicles across departments. This year, we have budgeted only $91,700 in vehicle leases – for replacement of ten marked police vehicles only. This compares to vehicle replacement cost for the current fiscal year of nearly $300,000…and more than $500,000 for fiscal year 2012.
- We need to expand capacity at the Kekaha landfill, and we are recommending that we suspend activities for the planned lateral expansion…and proceed with expedited permitting for a vertical expansion of Phase II. The reasons for this are twofold. First, we are finding through discussions with the Department of Health that permitting for the lateral expansion is much more complicated than originally thought. We need this expansion on line by next April, and we simply don’t have time to work through the issues for a lateral. Secondly, there is no construction cost associated with a vertical expansion, and that could save the county up to $8 million in the short run. Moving vertical at this time does not mean we are abandoning the lateral expansion, it will just allow us more time to work through permitting concerns…and to defer that large construction expense. We are also moving forward on our plan to provide some visual mitigation…in other words, landscaping…at the landfill in order to address the current and future vertical expansions.
- Travel is necessary…but I feel we can do a much better job of controlling annual travel expenses. We asked each administrative department to reduce travel expenses significantly next year…and the overall travel budget is down more than $100,000 from the current year.
We asked our department heads to dig deep for next year…and they definitely did. These initiatives are just a sampling of the trimming that has been done over the past few weeks and totaled nearly $8 million compared to this year’s budget.
This tightening of the belt is difficult, and it will challenge our department heads to manage manpower and dollars with the utmost efficiency. However, they understand the overall picture, are dedicated to the goal, and are ready for the task.
As I mentioned before, even with these deep operating cuts, we find that revenues are not sufficient to provide an acceptable level of service.
We are proposing increases in the following fees for next year:
- VEHICLE WEIGHT TAX: A point-zero-zero-seven-five cent increase is proposed, which would result in roughly a $25 annual increase for an average size vehicle. Per state law…this tax would not go into effect until January 1.
- VEHICLE REGISTRATION FEE: We propose to raise this fee by $5.00 to a total of $17.00. This fee would also not go into effect until January 1, 2014 in accordance with state law.
- We are proposing to raise the GASOLINE TAX by two cents per gallon. That’s an additional 30 cents per 15-gallon fill up. At a rate of two fill-ups per month, this increase will cost the average driver $7.20 per year.
- Per the recommendation of the Kaua‘i Multimodal Land Transportation Plan, we are proposing to increase fares for the KAUA‘I BUS to $30 for a monthly pass – which is a $5 increase…and to $300 for an annual pass – which is a $60 increase. This is the first in a proposed three-year sequence of bus fare increases, which was recommended by the plan. Fares for the Kaua‘i Bus haven’t been raised since 2010. Since then, we have added eighteen vehicles to the fleet…incorporated six additional routes…extended hours of operation into the late evening and also on Sundays and most holidays…and we have established six park and ride sites. Since 2010 our full-time employee base has grown from 52 to 78. Please note that we have also discontinued the waiver of fees for county employees. Even with this increase, bus service is heavily subsidized. It costs us $5.16 to operate the bus for every passenger ride…while the actual cost is $2 or less to the customer.
- We are asking to increase the SOLID WASTE TIPPING FEE for commercial deliveries from $90 per ton to $119 per ton. This will generate additional revenues…and will hopefully motivate businesses to reduce, reuse and recycle…saving them money and saving all of us precious landfill space.
- Most of the fees charged by the PLANNING DEPARTMENT haven’t been adjusted since 1972, and they no longer reflect the complexity of enforcement of our zoning laws. We also feel it’s time to reassess fees related to Transient Vacation Rentals. A new fee structure will soon be proposed…which eliminates “bundling”…and provides for an individual fee for each type of permit. In addition, there will be new proposed fees for shoreline determination and subdivision applications.
We are also asking for increased rates for real property taxes in all categories except the homestead class. We realize there is never a good time to raise tax rates; however, we feel that a comprehensive review and adjustment of rates is appropriate at this time. These new rates would bring Kaua‘i in line with statewide averages on all classes of property. Rates for the homestead class…representing the homeowner who lives in his or her home…will not change under this proposal.
In all, these revenue enhancements will generate an additional $14 million for next fiscal year.
As far as capital projects go, we continue with our strategy of funding only those projects ready to move – or “shovel ready” – in the next 18 months.
So far we have spent $13.7 million in CIP projects for the current year, with another $6.4 million pending award. Some recent projects include:
- Civic Center ADA site improvements
- ‘Ele‘ele wastewater treatment plant improvements
- Seat replacement at the Kaua‘i War Memorial Convention Hall
- Hardy Street improvements
- Island wide resurfacing
- Kapa‘a Stadium improvements
- Kokee Road resurfacing
- General Plan Technical Studies
- Land acquisitions for Līhu‘e Elderly Housing at Rice Camp…and the Sheehan parcels in Hanalei
For next year, some of the priority C-I-P projects are:
- Moving forward on the General Plan Update once the technical studies are complete ($825,000)
- Completing the 800 megahertz radio system upgrades…for improved emergency response ($3 million)
- Kekaha Gardens Park final design and construction ($2 million) – we plan to be in construction by the end of this calendar year. This park will be completed!
- Hanalei Courthouse renovations and improvements ($750,000) – our goal is to get this facility ready to use as quickly as possible. We are currently in design and hope to start construction by September.
As I mentioned, we will be focusing our attention back into our core services…and by that I mean keeping our parks and public facilities up to a basic standard that will insure customer satisfaction at all times. In fact, the effort has already begun.
To be sure, this task will take time and requires a major re-prioritization of resources. However, I am confident we can make significant strides in the next 18 months. There are three focus areas right now:
- Moving our Public Works Roads Maintenance Program from a manual to an automated tracking system. Our Public Works team learned of software programs that could be used during the first roads statewide conference that was held here on Kaua‘i. Once implemented, the system will allow for better scheduling and monitoring of its various activities including: road maintenance, litter control, pothole repairs, vegetation control, and sign repairs. The new system will give public works greater ability to prioritize and manage projects…and will increase accountability and efficiency.
- Creating a Parks “Rapid Response Team” that will address high-priority repairs in our parks facilities. Along with having the manpower available when needed…we are reassessing how our work order system is prioritized…so we can insure the most important jobs get the most immediate attention. The Rapid Response team will be deployed to insure that leaks are fixed, vandalism is addressed, and, above all, health and safety issues are identified and addressed in a timely manner. And by that I mean IMMEDIATELY.
- Finally, while most departments experienced broad, sweeping budget cuts, we were careful to reserve adequate funds – and in some cases increase funding – for essential repair and maintenance work in our parks and facilities. Insuring that our bathrooms are clean and operational…fields are striped…leaky pipes are repaired…and graffiti is removed…and our plan to upgrade fixtures at our most popular beach parks such as Poipu and Lydgate…are but a few of the priorities that will not suffer for lack of funding.
I call this effort “Raising the Bar” – making sure that when you visit one of our parks or public facilities you have a great experience. There is much room for improvement in this area…so instead of taking on new projects…we will be focusing on basic repairs and upkeep…and make sure that we have the resources and processes in place to make it happen on a daily basis.
I would be remiss if I didn’t touch upon the progress we’re making on our Holo Holo 2020 vision. You can find a full update of the 38 initiatives on the County website on the Mayor’s page, so I’ll just touch upon a few highlights here:
- The siting study for the new landfill and resource recovery park is complete…and the environmental impact statement and R-R-P feasibility study are well underway. We expect to have the draft E-I-S out for public comment this summer. The community has been involved from day one…through numerous public meetings…opportunities to comment on-line…and even a bus tour to the proposed Maalo site. After nearly 15 years of starts and stops in the effort to site a new landfill…we have made significant strides that were not achieved in the past. At the same time we continue to look for new diversion opportunities – such as increasing the number of electronic and hazardous materials recycling events we offer – and our diversion rate is now roughly 30%. We are moving forward aggressively on ALL FRONTS to manage our solid waste more responsibly.
- Our Complete Streets and Safe Routes to School program makes our streets safer and more inviting for bicyclists and pedestrians of all ages and abilities. These programs also calm traffic, and improve connections to transit. Get Fit Kaua‘i has been a great partner in coordinating “walking school bus” events at every elementary school…so we can see firsthand the improvements that are needed. Since then, we’ve incorporated measures such as restriping and improving crosswalks at Kekaha Elementary…Kilauea School…in Hanapēpē…on Kawaihau Road which services Kapaa Elementary, Kapaa High School, and St. Catherine’s School…and we are getting underway on Poipu Road near Koloa School. For Koloa Elementary…we will soon install our first “lighted” crosswalk. Our new transportation planner is playing a key role in moving these projects forward…as we seek new funding sources and continue to partner with organizations such as Get Fit Kaua‘i. This is a great example of how our public-private partnerships can truly make magic…and help initiatives come to life faster than we could ever do on our own.
- As part of the Holo Holo vision I’ve said that every bus stop will have a shelter. In October or November of this year, we will begin construction on the first eight of 46 bus stop locations that are currently being designed. The design includes not only shelters…but also ADA accessibility improvements and solar lighting wherever possible. Many community organizations will assist in building the structures once the design and preliminary construction is complete.
- Construction is complete on portions of the Kawaihau spur of Ke Ala Hele Makalae (our coastal path). Work has also been completed on Papaloa Road…and the portion fronting Wailua Beach should be complete in the next two months. We are currently wrapping up preparation on the remaining portion between Papaloa and the Lihi Park, and expect to have the full length from Lydgate Park to Kuna Bay complete by 2015.
- We have acquired three riverside parcels formerly owned by Hanalei River Holdings, LLC…and are poised to begin a master planning process for Hanalei/Black Pot Beach Park. The master plan will incorporate this land…along with the Hodge parcel that was acquired roughly two years ago…and that funding is provided in next year’s budget.
- Our Holo Holo 2020 plans for an adolescent residential drug treatment center are moving along, with our feasibility study is nearly complete. The study has demonstrated that this type of support is needed for our youth…and our consultants are now working with the architects and engineers…as well as researching service model options that will insure long-term sustainability of the facility. This project is absolutely essential to offering our youth critical support in their recovery from the devastation caused by substance abuse. We will continue to pursue the Līhu‘e location that has been identified…as it can provide proper islolation and yet a basic level of integration so that these kids can remain connected to their families and the community as they recover.
As I close today…I want to remind you that this is really a good news story. There is much to be thankful for. We are on the road to economic recovery…and we live in a community that is resilient…connected…and strong.
Just as we embrace our Tongan friends this morning…we need to embrace all people from all walks of life in this effort to preserve what is special about Kaua‘i and Ni‘ihau. Each of us has something valuable to contribute.
Let’s not just “raise the bar” in our parks…let’s all dig a little deeper…and commit ourselves in a greater way…to our community and our beautiful island home.
To the public at large, I ask you to stay engaged with your County government. Come out to community meetings. Involve yourself in this budget process. Read the budget on our website. Attend Council hearings…or watch them on-line.
Let us know what is important to you…and work with us to find new opportunities and solutions. Communicate and partner with us to help County government become more responsive and responsible.
To my fellow leaders at all levels in government – Federal, State and County…let’s focus on teamwork…rolling up our sleeves…putting people first…respecting each other and engaging in healthy conversations. Let’s agree to disagree with respect. There are too many challenges facing government today for us not to “Raise the Bar” as high as we possibly can!
Specifically to the members of the County Council…I have no doubt that we will disagree on many of our budget proposals. Let’s commit ourselves to a respectful dialogue that focuses on finding understanding and compromise.
Over the next two months…I challenge you to come forward not just with criticism…but with support for what we can agree on…and with alternative solutions where we might disagree. Like ‘ohana at the dinner table…the goal is to build up…not to break down.
You have great, visionary leaders in Chair Furfaro and Vice-Chair Nakamura…and I am confident that…working together…we can all “Raise the Bar” a little bit more…every day. Let’s all start…today.
Mahalo and aloha!