Kauai County Council Budget Reviews: Finance, Economic Development, Planning – April 4, 2025
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Kauai County Council Budget Reviews: Finance, Economic Development, Planning – April 4, 2025
The Finance and Economic Development Committee continued its departmental budget reviews for Fiscal Year 2025-2026 on April 4, 2025, hearing from the Department of Finance (including its divisions and the Kauai Humane Society contract), the Office of Economic Development, and the Planning Department. The meeting focused on staffing, technology modernization, revenue collection, and program funding.
Discussion Items
Department of Finance
- Director Chelsea Sakai explained that the department’s budget focuses on staff training, software to ease workflows, and modernizing processes. Increases were driven by contractual raises, insurance, and corrected travel budgets. The Hoike contract was inadvertently removed when moving it to a new account; a supplemental will restore it. The postage machine lease also fell off and will be fixed.
- Treasurer Nancy Rebelis was praised for generating $8.7 million in interest income (up from $500,000 anticipated) through strategic investing and negotiating higher rates. She noted the Build America Bond refunding saved money, and the positive pay system prevented five fraudulent checks totaling $119,000 in potential losses.
- IT Manager Dell Sherman reported that the ERP (Enterprise Resource Planning) system replacement is a 3-5 year project with a “big bang” cutover after extensive training. The budget includes a new 10-gigabit internet uplink for public safety and other needs, as well as cybersecurity software. The LIMS (Land Information Management System) is transitioning from CIP to operating expenses.
- Real Property Tax Manager Scott Turick described a reorganization and potential use of Desktop Review (DTR) software with aerial imagery to identify untaxed improvements. He estimated that a $70,000 annual investment (software + staff) could yield a tenfold return, especially in the first few years, and would improve fairness. Council members expressed strong support for exploring this.
- Motor Vehicle Manager Jeremy Lee reported that CDL testing is now available with a one-week wait, and general road test waits have dropped from four months to one week. The new Kapaa DMV office is fully staffed and busy. Online renewals and kiosks are working well; a Westside kiosk is being considered.
- Purchasing Chief Ernie Brewer noted that construction costs remain high due to inflation and supply issues, and that a 30-40% increase in shipping rates (as proposed by Young Brothers) would significantly impact project bids. He explained that once a sealed bid is awarded, no escalation is permitted, so contractors must account for market forces.
Kauai Humane Society
- Executive Director Patrick Gallagher, Finance Director Jess Bacco, and COO Ben Osaro presented. The county contract is about 15% of revenue; the rest comes from grants, donations, and fees. In the past year, intake was ~2,000 animals, adoptions hit a record 1,640, and spay/neuter surgeries reached ~3,000. The shelter is operating at 200% capacity for dogs. A new veterinarian has allowed seven-day-a-week services.
- The field trip program (6,000 outings) increases exposure and adoption. The community care clinic provides low-cost services but strains staff. Humane officers (ACOs) were difficult to hire; the salary was raised to $34/hour, and two new officers are starting. The shelter holds dogs seized by KPD for evidence, sometimes for years, costing the shelter approximately $200,000 in care and lost revenue. The county contract does not fully reimburse these costs. Council members expressed concern about the financial burden of court-ordered holds.
- Act 224 (dangerous dogs) will take effect in June 2025, which may increase the number of seized animals. The shelter is collaborating with San Diego Humane Society for best practices.
Office of Economic Development
- The budget is an 11% increase, reflecting directed projects. The film commission grant coordinator position was moved from the Mayor’s Office. One business specialist position is open (interviews underway).
- Council members discussed the need for additional funding for invasive species education (little fire ant, coconut rhinoceros beetle). The department has received $200,000 from the state Department of Agriculture and is developing a communications plan. Film industry interest on Kauai is declining due to lack of affordable hotels and tax credit uncertainties.
- The Kekaha Community Advisory Committee facilitator (funded at $150,000) helps administer host community benefit funds from the landfill. The mobility hub project is entering a new phase with the Hanalei Initiative to develop a shuttle and mobility options.
Planning Department
- The budget includes a 15% increase, largely for the C grant program (requested to return to 90% funding). The department is averaging 1-2 week waits for building permit sign-offs, currently 3-4 weeks due to increased volume and absences, expected to normalize.
- Enforcement: The department actively monitors illegal vacation rentals via MOU with Airbnb/VRBO (70% of market) and monthly “scorched earth” web searches. This month they found 14-15 illegal listings, higher than usual. Fines collected: $80,000 (2021), $45,000 (2022), $93,000 (2023), $45,000 (2024). Enforcement findings are shared with Real Property Tax to ensure correct taxation.
- Long-range planning: The East Kauai Community Plan (covering Wailua, Kapaa, Kapahi, Anahola) will begin community workshops summer 2025, with a draft expected by fall 2025 and Planning Commission review by spring 2026. The Climate Adaptation Plan is also underway.
- Council members discussed the possibility of obtaining MLS access to verify properties when permitting records are missing. The Administration noted that MLS requires a real estate license, so it may not be feasible for the department. Council members suggested exploring alternatives.
Key Outcomes
- Supplemental Budget Fixes: The Finance Department will restore the Hoike contract and postage machine lease in a supplemental budget.
- Granicus Payment Follow-Up: The Council directed staff to investigate whether Granicus was paid by the county but failed to pay Hoike for services rendered, and to seek recovery if warranted.
- Desktop Review (DTR) for Real Property: Council members expressed strong interest in funding DTR software and a staff position (estimated $70,000 annually) to correct under-assessed properties and improve fairness. The Director of Finance was asked to prepare a proposal.
- Kauai Humane Society Contract: The Council acknowledged the shelter’s financial strain from holding KPD-seized animals and indicated a desire to revisit reimbursement terms in the next contract.
- C Grant Funding: The Planning Department’s request to increase the C grant program to 90% funding was supported by the Mayor’s Office and noted favorably by the Council.
- Next Steps: The committee will reconvene on Monday, April 7, 2025, for the final day of budget reviews, featuring the Transportation Agency, Housing Agency, Agency on Elderly Affairs, Office of the County Auditor, and Office of the County Clerk.
Meeting Transcript
Good morning, Carol. Can you type something? Thank you. I see you. Good morning. I'd like to call back to order the Finance and Economic Development Committee and the fiscal year twenty twenty-five, twenty twenty-six departmental budget reviews. On the schedule today, we'll be hearing from Department of Finance, Office of Economic Development, and Planning Department. As we do each morning, we'll take public testimony at the beginning relating to any of the departments or agencies that we are reviewing for the day. Is there anyone in the public wishing to testify? Seeing none, I will suspend the rules. And um, with that, we'll get started with Department of Finance. And you have a list of the departments we're gonna go through. We're gonna start with admin, accounting, IT, Treasury, motor vehicle, rural property tax, RPT collections, purchasing, and then and with quite humane societies contract. Um but yeah, if you wanna uh just go over the synopsis first and then we'll hit the budgets after. Good morning, Chelsea Sakai, Director of Finance. Um so our approach to our budget this year um again was a large focus on our staff. Um so that includes uh training for them as well as finding software things that can help them make their jobs easier. Um we've had the benefit of having fresh eyes looking at a lot of our processes, myself included. Um so a lot of the things that we are asking for was with the intention of making things easier for our new staff coming in and the existing staff and kind of modernizing a lot of our processes. Um of our increases come from contractual increases, our insurance um goes up every year, so we increased our insurance there. Um we took a closer look at our travel budgets uh for a lot of our divisions. We did not necessarily budget specifically for travel, and we would just need money throughout the year. So this year we tried to true up what our travel budgets actually look like. And of course, our biggest is asking for um the lease for the ER key. Um there were a couple of things that I noticed after the fact that we will have to fix in supplemental. Um in an attempt to move the Hoike contract to the right account, it kind of just disappeared, so we do have to put that back in, as well as the very last line of our budget, the lease for our postage machine for purchasing also kind of just fell off. So we will have to fix that in supplemental. Okay, any questions on the synopsis? Council member called it. I I do, and um, hey, by the way. So is she in there? Would be next, our treasurer. Um thank you. Very, very good. Very, very good. Um so um I just wanted to see this thing about claims and auto adjustments. It's kind of like only that, like what what kind of claims and auto adjustments do we have? Um, like damages to automobiles. To our own automobiles or other when people sue us, okay. When there's claims against us. I would think we would have more than that. And then um our insurance, is that like property insurance? Is that the kind of insurance? Property liability workers' comp. Okay, and um we can really do um in the items by items, but um the build America bond refunding. That's good that we were able to accomplish that. And um who did that? Uh Nancy, our treasurer. Okay, thank you again. Um, those those kind of things really make a difference.
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