public testimony at this time we shall assist anyone wishing to give public testimony by you know where the time you have three minutes to give your testimony to this committee the green light means please speak at the yellow lady it informs you have thirty seconds to conclude and the ridley means your time is up we shall also go to our various district offices and i would also ask everyone to either  place your hand how do you voices or other modes of communication silent or on the off mode i will enforce decorum today we got a lot of work to do members so this morning good morning chair okama good morning council members this morning i'm coming here for you because i must as the chief executive of this county i must take action when deliberate acts of omission should result in wrongdoing against the county or our community after approximately two years since the creation of the county auditor he has submitted to you his first official audit the audit of the treasury division of the department of finance my instrument ministrations look forward to receiving this audit as we do with also in seer honest audits its honest unbiased audits provide genuine opportunity for improvement you can imagine the immense disappointment we felt after reviewing this first product and discovering that it was seriously flawed we were even more disappointed when the auditor released this flawed audit and attempted to mislead the council and the public into believing that my administration and specifically the director of finance was at fault for losing the county over twenty one million dollars in speculative interest income what is it excusable is that a simple and easily research facts were purposely left out of this report members of this very council sat through meetings when it was discussed that we should not submit these funds to the state until such time as a state was ready with the fun and the fund was solvent a cursory review of the minutes of your meetings would have revealed this truth however your caught your auditor conveniently chose to omit this very important piece of information even after he was informed in writing by the finest director was not for why it was not forthright and transparent but then again that would not be a headline grabber instead he went for the sensationalism of twenty one million dollars lost at the expense of one of our dedicated public servants failing to include relevant facts and willfully submitting a flawed audit is a serious violation of public trust willfully attempting to discredit a fellow public servant under false pretense is another serious violation of trust where will it end where is the integrity where is the oversight who's guarding the guards this audit has false fraudulent misleading deceptive unfair statements take for instance the comment about every county making contributions to the except for my wee county a brain easily research away also did not remit funds to the e t f during the same period of time as ma a county and for the same reason a simple call to each of the counties would have brought this for fact to light and perhaps the over one million dollar budget a year this audit could have been done a lot better and all of you know that because he said because calvert sat here and gave us the facts not once but several times and then calls member  by said will verify we also had separate meetings with calvert to discuss this the auditor would have known this should have known this he sat in these very meetings listening to this and he was warned that this was something that the auditor's ability to be independent i question his ability to be able to do good audits as a former employee of the council and hired by the council disconsolate organization chart his salary is determined by the council is office is going to troll by the council the staff members are primarily former council members we cannot take this auditor as being anything but a council auditor and the direction and repeated to choose to be able to audit clearly all the suggestions that we made for him to audit because there are issues within our county that need to be addressed and we want audit we want the public to know that we don't have a perfect situation there are many things we need to work on none of those so we're going to take this flawed audit and we're going to send it to the cost of government commission have them investigated further and i just ask that you examine the auditor and his most motivations for putting this audit together and for these flawed issues because he knew about it if you didn't know about it we wouldn't be saying anything about it but he was forewarned on to the second issue be twenty three and that has to deal with environmental management and the budget of environmental management i've been quiet on this for quite some time but i'd like to remind all of you of several things first of all this council council has wanted us to get away from having to take general fund money to supplement the independent areas we wanted to make the the different departments self sufficient and we've asked the departments to try and budget accordingly and we're going to continue to that in that trend but the comments that i'm hearing seem to be contrary to that also i want to be able to point out to you all of you that you know before last last year we warned this council that the budget that was being proposed was insufficient and that this council told us if it's insufficient please come back and we'll do a reallocation to make it right we counted on that which is why we got to the situation we did neuer we were short we were in this council early in the year that we were going to be short and what the proposal was and i want to make a correction in them that was in the mall when you counsel chair by i said i we did not agree that there would be a supplemental budget the only thing we agreed on was that we would delay the discussion we'd pull it back until after the elections because this was getting mired in the elections there was no agreement on a supplemental budget and i want to be very clear because i was in the in the ma in use and she should not be blamed for something that did not occur we did not want this issue to the public that never or should meet to be discussed with the elections the issue never went away the challenge that we had within the department  never went away we delayed the discussion to after the election and now it's coming back this is same discussion we had prior to the election the department should not be taking funds that are committed from for one item and then moving it around this council has made it very clear in other issues that we don't want to move money allocated for one project and stick it in another project you're the ones that want to have control over and say over where those monies were being spent now it's being recommended that we take money from a fund this dedicated for something else to be expended for something else and move it to make up the deficit make up your mind for us it's easier to just move money around from one fund to another to try and make up those deficits but that's not the way our system is put together we very deliberately have been told do not do this so we don't do that don't change the rules just to be able to get through a situation the fact of the matter is we do need the extra money for that for the different programs if we didn't if we could move money you guys are perfectly willing to move money there's money in the department that can be moved that's why we have carry over savings we know that's deliberately left in the budget do not pretend that this is something that has not been discussed and considered and what you proposing as as a solution is not the solution we agreed on if you're going to change the rules in the middle of the game fine i'm willing to work with those rules but don't pretend that this those solutions were available to department because they were not available according to our agreements if you have any further if you guys want to discuss any further we are more than happy to discuss it because i'm trying to adhere to our agreements with this council and how the budget should be expended remember if you're going to make an exception for environmental management that we can go to different funds and raid those funds and put all the other places i should be able to do the same thing with every department some and i know you don't want to do that can you please repost your to some way please mr mayor when i'm basically done i'm just asking you to seriously consider what you're what you're asking for in light of the entire t and what we have to be able to do we are trying to make this community better we've agreed on certain goals we've agreed that we're going to be able to and have to increase our budget for certain things to catch up on a lot of the deficits that were there we know that they're there we've discussed it at  um so don't pretend otherwise if you don't want to reach the goals just say we don't want these goals as the council can determine that just tell us administration we don't want you to fix all the roads we don't want you to fix all the parks we don't want you to fix all the sewer lines and we can do the deficit we can balance a budget but if you want everything done give us the budget to do our job thank you very that the mayor was just speaking about i don't have any staff that provides me stuff the folks here are wonderful in terms of producing papers when i do ask them having read twitter in the binder i'd like to just take a look at how we got an auditor this was back on may thirty first of twenty thirteen that i'm reading from and it's a nice history that's in there three minding us that on november sixth of two thousand and twelve the voters  approved an amendment to the charter to establish the office of county auditor from year one until that time there was no auditor here that's all available in the county of pages eighty four and eighty five these are available for anybody who would like them just ask in the county offices it speaks in here about the fact that the commission approved a salary for the would be county auditor that would be effective on july thirty want in july one thousand and thirteen keeping in mind that all commissioners are appointed by the mayor and then the approval after that comes from the council and at that point in time the commission salaries was didn't already have a salary attached to this i went to that meeting and in my total ignorance of it was pleased to see community members there and it turns out that the salary commission and subsequent to that did come up with a salary that was significantly out of whack and lower from the expertise that would be required to do that work and from the salaries some of the administrators in the county government so a couple of people resigned from that commission the commission then met again and they upped the salary by a significant amount remember i'm reading from a thirty one twenty thir needed to do this auditing the educational background for that the experience background for that in the field of accounting and as a member of our community on maui so it's it something long time in coming nobody was racing from day one to have an auditor three minutes we have one i read through the material that was in that it's available again upstairs there were five criteria for coming up with this and two of them the folks agreed with and three of them they did not that was some of the previous testimony that just went on this morning so i'm encouraging you to take a look at the report number fourteen dash zero one from april twenty fourth dean that has to do with this will be no legislative action taken today on that as per today's agenda loads of food for thought and lots of material available so please make yourselves a partner to all of that thank you thank you correspondence dated april second two thousand and fifteen from the auditor transmitting their report entitled the examination of the treasury function of the department of finance and this is report number fourteen to the pro his audit as well this is discoveries and findings and recommendations so mr if you would thank you charles comma and members of the budget and finance committee thank you for this opportunity to discuss the office of the county auditor's report number fourteen dash one entitled examination of the treasury function of the department of finance i realize that your committee has a full agenda this morning so i'll keep my opening comments as brief as possible the office of the county auditor issued a report number fourteen dash one on april second two thousand and fifteen i would like to take this opportunity to express our appreciation and with the cooperation and assistance provided by the department of finance as well as others who assisted us throughout the course of this audit my senior analyst scott kind of sheen and i am prepared to answer any questions on the report that members may have as you are aware our audit presents five findings and recommendations which can be found in the executive summary on page seven however before we get started i just wanted to say a few things first we stand by our report its findings and most importantly its recommendations i understand audit reports will be attacked from time to time i was warned of this possibility early on by my peers throughout hawaii and on the i just never realized he would come so soon this is unfortunate the people of the county we deserve better the office of the county auditor will always deliver the facts to the public even if those facts are popular am confident that the public is a lot smarter than some people think second the final recommendations of our report are significant which is why we reiterate that our opinion is based on our review of a body of cooperat evidence across multiple sources it doesn't hinge on a single phone call or a single piece of correspondence a more detailed description of the methodology we apply to this audit can be found on page two of our report third it is unfortunate that the mayor draws parallels between sending funds to the u t s and put in a dollar on the roulette wheel in las vegas as he did so in his opinion this is ridiculous every day county employees retirees their beneficiaries have access to health care because of the u t m surely when the other counties send in their prepayments between fiscal two thousand and ten and fiscal two thousand and thirteen las vegas roulette and gambling with public funds were the last things on their mind finally the findings of the findings to pass is a pass we need to move forward that's why to some degree more important than the finding themselves other recommendations i say this because it is t implementation of the recommendations that will improve the county in the future in other words we need to acknowledge the past learn from it make adjustments and move forward to better serve the public thank you c if you turned to the executive summary  on page seven seven the first finding is that the funds held by the treasury were not sent to the hawaii or hawaii employer union health benefits trust fund for nearly end of june two thousand and fourteen to delay resulted in the county losing out on over twenty one million dollars of interest earnings those earnings could have paid down some of the county's three hundred forty four million unfunded liability for health benefits already earned by current and retired county employees we recommend funds appropriated to the company's other post employment obligations fun be sent to the e u t f at the beginning of the fiscal not appear to be in compliance with state law and the counties on investment policy specifically securities issued by the federal agricultural mortgage corporation and if federal farm credit bank are not listed in the statutes section forty six test fish fifty the section of the state law which restricts investments of the county money into sixteen specific investment types we recommend that the treasury up came clarification from legal counsel if continued investment in these securities is appropriate we also recommend the treasury create procedures to address situations where the description of the tent troll investments or issuers do not really agree with the plain meaning of the law third finding is that the counties investment portfolio was over concentrated in a single business sector on average ninety two percent of the county's investment portfolio or two hundred fifty million dollars was in the securities of a single business sector the mortgage industry over constant over concentration in the single business sector could expose county funds to unnecessary risks we recommend that the county's investment policy be reviewed to consider best practice issued by the government finance officers association best practices relating to the over concentration of investments in a single business sector are not feasible the management should incorporate that decision and any related rationale in the investment policy finding number for the delegation of multiple critical tasks to a single staff accountant exposes the church free to uncertainty further review by management is warranted we observe the delegation of multiple critical tasks to a single staff accountant into treasury in addition to managing over three hundred and seventy five million dollars of the counties of the treasury's cash and investments the staff accountant is also responsible for the creation maintenance and day to day operation very complex cash flow and investment spreadsheets which are used to ensure the county has enough cash on hand to fund county operations we recommend management ensure adequate managerial oversight and support be provided to the treasury given the sizable amount of cash investments and its custody and finally so ten cash handling activities of the treasury adequate segregation to cash handling tasks more processing sewer exception payments lacks adequate segregation of duties specifically the same staff accountant is assigned to generate customer bills receive payment from customers enter payment into the county's system deposit payments with banks enter payment into the county's a county system and reconcile accounting cash receipts reports to valid bank deposit slips we recommend the cash family and activities of the treasury be reviewed by management to ensure written policies and procedures adequately address any potential weaknesses and internal controls we also recommend management develop and implement appropriate mitigating controls to address the segregation of duties related to sewer exception payments adequate internal controls are important because they protect the employees against inappropriate accusation or charges of mishandling funds and minimize the potential for loss of revenue to the county thank you thank you very much has also is various different values the penny when you would look at the deeds of potential prepayment so i think the range from thirteen million and a gucci but first if we're able to review the investment policy that the administration uses to make determinations of types of funds yes in the course of the audit we carefully review the county's investment policy and in your view was there any areas of concern that this committee needs to be aware of where the frequency of meeting who makes up the investment community or it well i don't know if there is any investment community and whether  specifically target the investor investment policies in our findings there were certain things about the investment policy and how the committee  t the committee rules were versus what the treasury roles were and i think the investment policy w yeah i think the investment policy was last updated somewhere in about two thousand and twelve but we did not have a finding record investment policy treasury and their responsibilities we interview the treasurer the finest director and each member of the treasury staff to determine their roles what they were responsible for and what the what duties to perform were able to interview those that make up the so called investment community and no we did not interview the individual members of the investment com you know in your frame being i would agree i think one of the areas of concern is the conformance to state statute regarding types of investments so at this time were you given any  responses after the submittal of the audit that you could share with us that changes the status of your comments as part of the procedures of our audit we request a response from the audit t and we incorporate the response in the audit report so if you look at attachment one includes our response to the finance directors response comes in as a third party is interested in the end imbalances at the end of the year in general funds or yes some call it unrestricted general fund some call that carry over  thing to show plainly something million dollars less in the book i'm sure the level of liquidity or the cash we get to play with is a big difference to me is that something that you folks review or  these investments were authorized from the external auditors position they deal with materiality limit and in terms of this particular issue we did point out that it does not qualify as the letter of the law but our recommendation is  this should be vetted before you make the investment and we shouldn't make these investments without considering these factors the primary emphasis for us would be to talk to legal counsel get an opinion agree in general would some of the mayor's comments let's put it in the right thing frame of when we were concerned about prepayment and being given the hundred percent credit of the counties prepayment versus the time of the we knew that our report states that if you turn to exhibit two dash three on page ten exhibit two the ash trees shows a cumulative payments held by the e u t f if you look at that schedule it clearly shows that horry county did not summit in fiscal two thousand and twelve and two thousand and thirteen if you refer to the timeline schedule that we have passed out to you and you look at the bottom part of that timeline we also know that hoity county had no budget appropriation during fiscal two thousand and twelve to two thousand and thirteen so they would have no monies to send in because they did not have an appropriation in fiscal two thousand and twelve it starts at thirteen we're not trying to misleading anyone the facts are in the report three or four saying by the gov hospital twenty four ninety one i would still as i guess be forty three trust i don't believe it was comments questions they prefer no comments at this time if you have a question and this is the time to hear it and we'll have time for you to share comments later mr wharton question for the auditor by a significant amount of time beginning in are you suggesting that the earnings would have been achievable following the passage of activity four or three or four or or an earlier date customer when you are recommendation is that it was fiscally prudent to turn the money in in the beginning of fiscal year two thousand and thirteen so essentially somewhere around the time of about july of two thousand and twelve hour basis for that recommendation can be found on page five of the report and let me based upon the consideration of a combined effect of the following one the county was committed to prepare you to unfunded liability is so in the continuous the annual appropriation of taxpayer funds to the count of the e t f since fiscal year two thousand and eight prepayments received from the colonies were held in a separate agency account accordingly interests earned on those p p minutes were allocated to the counties balance had the potential to earn higher returns in the treasury given its greater flexibility in making investments and the retention of professional investment managers five the factors in leading to our conclusion that it was fiscally responsible to turn it in and as of the beginning of fiscal two thousand and twelve i also want to know that we recognize that people can disagree with that finding and part of the and that's part of the reason why we also included exhibit two dash one the following on page six and basically here we give you a calculation based upon the interest that could have been earned the opportunities that could have been for interest to be earned if we started sending in a different time frames was formed and as of june thirtieth two thousand and thirteen so that's the final number there so we did recognize that fact we put into the report because of that and  that's all within our audit report we wanted to give a fair presentation to the people there read the one of the one of the concerns that i know we had had was whether or not our county would be given whether my we counties contributions would be seen as being more held in trust for maui county only my recollection was that it was inferred to us that the the way it was it was not set up yet to accept monies and protect them as well with those belonging just to maui county do you know at what point in your determination was it such that the trust was going to be able to accept customer why the e u t f since fiscal year two thousand and eight held prepayments by various counties in separate agency accounts and the allocated interests to those accounts so from if you go back to our findings on page five so since two thousand and eight they acted in a manner that sygate all those people in a contribution then it was held in separate agencies trusts when and if you go back to the time line one is brought to their attention that the government a county standard board has a nonprofit agency debt problem gates best practices for financial reporting and what they said was that in order for this to be in order for the counties to get better financial statement presentation there were certain aspects that had to be addressed into the trust but the driver for  the e t f to get the compliance was primarily more for to get the financial statement presentation the preferred financial statement presentation on the individual counties and you have to understand that the e t f for his agency that we utilize to provide health care benefits for all of our counties employees active and retirees and their view did you find any documentation of how the county would have been notified or what was available for the counties review to determine whether they are investments into you t f would be safe or not unsafe or lost but safe are being taken to be used by other counties or the state i guess that in other words how would it how would it have been easily possible for for the department of finance to to understand or be told that  we are aware of the november twenty three two thousand and eleven letter from the e u t f to the various counties when you look at the letter it talks  you read the letter it says that basically it says that the current structure of the e t f is compliant except for one spectacular aspect truss the second part of it plan assets are legally protected from creditors of the employer and the plan and ministry eight or so those two aspects were already covered within the current form of the not soley established for retirees and the beneficiaries in other words the current structure of the e t f had employees retirees and beneficiary all within the trust fund in order for accounting letter i think i can read to you the final comment from the u k it was the data that letter for november twenty three two thousand and eleven and you know i can make a copy for you what we consider was that the e u found out that they needed to create a trust within a trusts to comply with gadsby forty three and get the preferential accounting treatment they took action they proposed a bill to the way state legislature and if you look at your timeline you can see which was which ended up to become act three or four which was passed when we're saying that yes i can tell you that i was in contact with mr young as of yesterday and he has verified for your cheer me of the facts that sharing with you today it's a is place and i've been here right through my question really amounts to the fund with the two funds that were used for investment purposes that you mentioned on of the roman numerals i should say excuse me and that was the federal the federal agricultural mortgage corporation and the federal farm created bank which are not listed on the h r s excess cash in doesn't explicitly mention the federal ira which are mortgage corporation or the federal farm credit banks those are both government sponsored enterprises us forty six fifty does allow for investment in u s agencies that has the full fee thing credit of the united states government  the federal agricultural mortgage corporation and the federal farm credit bank do not have the explicit full faith and credit of the united states government so with that said what the finding is it's not it's not real clear we don't see in the report that they're illegal we see you should get guidance from your legal counsel and that's what we're seeing we're not seeing there any less safe more safe anything like that to say if you money you should have authorization clear authorization any of the investments this county puts forward that is specifically listed under your criteria based upon investment nine the council adopted a resolution that said the director me invest in accordance with forty six fifty so it kind of just refers back to forty six fifty and that's that's where the authority comes from and it was this in response to and i remember mr com i'm not sure if you were here during those couple years when we had that the buckle with student loans or something of that nature that was you know you will remember was this in failing in doing what is the right thing for retirement systems and stuff like that what predicated this pacific h r s i believe there's two there's two parallel pieces of  or origination it looks like both of them were born at the same time but you know as we all know legislative drafting sometimes when you have two parallel pieces in the cold it gets messy so what was really clear to me is at they were born at the same time but over the years some parts on the state side were twee and some parts on the county side wasn't too weak i wasn't able to come up to any sort of conclusion that it was done consciously or if it was jest an omission you know because both sides were advised by the ledge at different points in time before and after the student loan issue so in seeing that in reviewing you know the the committee reports of the of the ledge and i wasn't clear why the county of mali was it or the excuse me the counties in forty six fifty weren't explicitly authorized to invest in these things so that's that's all we're saying we just you know we need to get legal clearance clearan in when one we're not going to put in i would like to see an actual timeline i think the public deserves that to make sure that what we're discussing today really falls into somebody not doing their job correctly or following the direction of council and i know i heard many a time we should have put money in there until they guaranteed if they were going to get coverage or they were going to get credit for it i remember all these did to divert this guy exactly when where and how i mean i can go back and pull all the minutes but i think it would be good if we had a specific timeline so that we can see here this should have been done i know you mentioned in two thousand and eleven when the audit or not the audit but the t f report was brought up right you mentioned something about that and i can't remember exactly what you just said about the that the money would be credited to the county at that point in time am i correct in hearing what you said earlier and if i'm wrong i apologize  agency accounts they were invested combined but everyone was given credit for the amount of money they sent in and they were given credit for their on that amount of money since two thousand and eight well that's funny because when i was in two thousand and seven two thousand and eight two thousand i remember the discussion about we're not sure it's not showing up as a credit i mean is that your you can verify what i'm saying i my memory is not super great that but i remember a lot of this and not being numerous can conversations with calvert young you know what's again our finding doesn't hinge on a single statement by a particular person but against the body of evidence calbert did question some funds were still not sent however you know he preferred to not get into the details on the record because he you know he doesn't really want to criticise  someone else isn't is not his job right he's he's he's moved on since being the administrator for the state budget you know if this body would like to hear from a civil young i'm you know i would suggest you might want to give memory big to say something not right at this point in time with all the all the discussion i mean two thousand and eight two thousand and nine two thousand and ten i hate to mention but mr young was our budget director and maybe there's some corrective measures that need to be done maybe some legislation like you always see maybe we should make shown ordinances to make sure things are done correctly in the future that my recommendation get your recommendations many times that year and i appreciate th let others ask questions and if i if i have some other questions that are not asked and then you come around the second time i will bring them up at that point in time but thank you mr chair thank you for the committee's information this is not public testimony so the chair is accepting this as the in your investigation or research and reviewing the county of mal investment policy it appears that it was revised in july twenty four twenty twelve do you know what sections were actually revised changes the changes appear to be more in the organization of the investment company that that type of thing but it didn't appear to have materially changed from the previous version to the point where we felt obligated to create some sort of crosswalk and again we reviewed the investment policy but it wasn't a specific objective of the audit but you can follow up so you mentioned investment committee correct and as part of some of the changes made in two thousand and twelve and i'm going to refer to page six the bottom of the page there number eight investment to me was that the invents investment community membership changed because in this document that i have before me which is the most current policy says the vestment community should be comprised of the director of finance the deputy director of finance the managing director the budget director and the accounting system says that the director of finance shell chair the investment committee meaning and can you also double check that section was amended and the sentence afterwards where it number seven which is the section above that seven delegation authority prudence and ethics because in this section it says that the treasurer who shall act in accordance with the stablish written procedures and internal controls for the operations of the investment program consistent with this investment policy it's like chargers being delegated authority but then in the next section to treasurer is the secretary and section section eight so i'm getting a little bit confused treasure the secretary or the person that is supposed to be the authorized  person i guess what does it mean in charge of operations of the investment program so it looks as though there might have been a little bit of tweaking going on so i just want to know which is which exactly was being  you're limiting your membership to certain people and i don't even know if these are qualified to make investments i don't know but i just would like to have that checked on it could be you know it's   first of all and like to ask the operator you know like a mr big to reno i've been sitting here and when this all began in two thousand and seven when we arrived and we were working on the budget and we talked about setting aside  the money to pay and i believe we're talking about twenty three thousand and finally we decided it was less than that and we went back and forth and later on many things on several occasions i remember very clearly has not set in yet i totally agree with mr victory you know it was said we're not over and over here that we should not send their money in because the state could not properly account for it and so we should wait and during this time mr young was our finance director so that's in the back of my mind and i'm having a real hard time with the retro active deciding that maybe we should have done something else so to help us with the memory loss do we have a minutes of the meetings where we would discuss this in approving audit budgets where we talk about this issue i have not been able to see any comfort young about some of that statements and i question is do we have minutes and make could we see them you know this is becoming he said you said i said i met with him you met with him i think it's time for us to really look at something that is in writing so that we know you know i don't have any problem the fact is the money was not sent in and we know when it was sent in but i think there is good reason why it wasn't sent in and it was discussed over and over so i want to make sure that that is viewed properly it wasn't a backroom deal it was something that we all talked about openly that we were going to hang on to this money until we were sure that the state could properly i'm coming for it so that's where i'm coming from i'd like to see that the other thing is i would like to ask you know we do annual audit every year and we have an independent auditor and in that audit they show the assets cash in the bank and things that we have here in the county it's part of the audit report i don't believe that it was ever questioned why we didn't send their money in and that was the time to look at it if we hadn't sent it in they should have said hey how come this money sitting in the county bank or wherever it sits and we should send it in so you know again we're reaching back with your activity and pointing fingers and i don't know if that's going to solve anything i agree with your approach which is to create legislation that says from now on you send this money at this time and there's and we do it but you know i'm just having a really hard time with trying to pretend that we didn't know we knew thank you thank you we all knew well we all knew to a degree i would say that's more accurate and that is why part of your chit is issues this morning this morning is we seem to be forgetting the findings and the recommendations for how to get from here and do it better in the future so i'm going to force feed it to the administration through religious thank you chair and i want to thank our newly elected they're hired auditors for their job and standing by their recommendations and findings my questions so a lot of us have spoken for is the fact about investment policies and that you are folks recommendation was to consult corporation counsel so sitting here today do you know if they have cochrane the appendix where you have the response by the finance director if you look on page six i think the director said   thank you for that but it does an issue it doesn't address the issue of the current situation today that is to the chair this is to you know to change and to change things around but i mean how are we we need to know if what we did in the past is is up and up not change something to make it up or not is what my kind of question you know wondering of what's what has happened and did they follow through to make sure i that's fine and dandy you want to change things around at the state legend whatever but i'm talking about our current practice our policies and procedures now and you know it was looked into so i appreciate that insight but again it doesn't lend to the solution oriented that we need to look into how we do things and if it's proper or not as clear thank you thank you very much and i'd like to i guess on that behalf but my second question chair if you don't mind is in regards to the the money that was not sent down either here nor there did we say yes or no or whatever the bottom line on this is probably for director to answer the monies that were not sent what did earn or do you know that on average the moneys in the colonies years average ten percent the targeted investment percentage that you t f is targeting when you put folio investments you balance your portfolio  target at seven percent but in the years that we're talking about detroit far greater percentage than that so the are finding as to the opportunity has lost an investment or needs is the difference between the earnings of the e t f versus the kani treasury for those two years time we said should have been sent in and that amounts to over twenty one million dollars ok all right thank you share  you said you looked at some of the minutes of the council meeting i notice on your report on page three that you looked at legislation committee reports and other documentary approved by legislature the state or why but nothing in there about the council minutes because i think it's very key to this whole issue is the council m so you said you looked at some but did you look at them all for the period of time that discussed ok well i'm just warning if some of the comments in the minutes let's just say i'm going to pull april twenty second twenty thirteen for the budget and finance committee were it says quote and if i had a little bit more confidence in the investment portion maybe we would be more confident shifting our funds so let me ask about the component since you know it because of the discount as you mentioned the is that ability to invest right and then mr young talks about in terms of whether or not those funds will be invested actually in investment production that one i would tell you that i think the e t f is right now in the midst of a stablish ing investment managers and that needs get into place so actually having the money is in a diversified investment portfolio with product is probably going to be coming within the next before the end of this calendar year which is two thousand and thirteen so that's way after you said we should have put that stuff in there would that a comment like that have caused you to look a little bit further into why this wasn't moved in and we did look you have to understand that when we do our audit we look at a variety of evidence and we investigate and we find and we try to  what is the correct statement and we got to the stand and made by a director young at that time and i said you know we had conversations with him you can call him you know a lot of times when we call people they hesitate to provide us information because the fact that we have an audit oftentimes you know we don't want to comment regarding someone else's responsibility but if i bring you back of seven percent so by seven one two thousand and eleven he hired professional consultants for fiscal year two thousand and paul which is a year before we said th s was basically prudent to send it in the e u t f achieved a five point nine investment return for fiscal two thousand and twelve so once again i understand what you're saying but when we do an investigation we look at various documents that we obtained through the e t f and from talking to the have so we can determine that this occurred at that point you know we look at the  stack of minutes april twenty fifth two thousand and twelve calbert young mr young says so i did look at the strategy initially in two thousand and two thousand nine of the time one of the considerations of it was the fact that he couldn't guarantee segregation on maui and have that attributed to the maoi financial statements that issue might be resolved with batches of the bill and this is april twenty fifth two thousand and twelve way after the eleven so i just confused because we all like everybody said we all sat in your and as much as early as two weeks ago carol comma chided mr x a lot for sending the money to  three o four actually i have a copy for everybody if they're interested but says this memo is to advise you that as of june thirtieth two thousand and thirteen you t f established a qualified trust fund to receive funding contributions that college we are aware of that letter we have read that letter it was part of the attachments with the finance directors response and i understand what the letter says i also want to bring to your attention that in a meeting prior to that dated march twenty fifth two thousand and fourteen the according to the employer union health funds trust fund minutes of the march twenty we're talking about a sizable of almost one hundred million dollars you know ninety something million dollars is being held in the county treasury i think there's some due diligence that needs to be done in terms of when should we send it in considering the potential ernie's that could be achieved in our view waiting for a letter to somebody tell you ok send it in you kind of should be doing due diligence prior to that so you know i agree with you that july for you know making our ordinance saying as of july first of the fiscal year that we submit the money that's not the issue the issue is those two the money in and to not have that information in this audit makes me concerned if they just said yes we sat here in this and we still think it was prudent then i'd be ok but that what concerns me that's the only thing that concerns me all the facts weren't included in the audit thank you cha you thank you chair thank you for being here you know could you tell me what they've submitted it is how much of the pay down of our unfunded liabilities have occurred the amount ok so according to your audit i think was three hundred forty four dollars of unfunded liabilit that the director submitted on june twenty fifth two thousand and fourteen i believe he sent in ninety seven million dollars at that point in time so the total summited at that time would be the in fiscal two thousand and eight we sent in twelve million of those three would be the total contributions been provided to so is it correct to say that the finance department was willing to take us back you laid of risk on on the investment because of some of the quotes that was said before by you know he's always been quoted by mr young and according to his reply on item four is based on the state of what is budget and finance website the average annual rate of return on say treasury investments in twenty eleven twenty twelve twenty thirteen or point seven nine point four nine  point five zero respectively so is it fair to say that on their behalf that perhaps they were not willing to base their investment findings provide gravity in terms of our recommendation right but i've said in the opening of my statement as well as i've constantly been saying this the benefits of the audit it's  its recommendation we can't do anything about the past that's past we've got to move forward and our recommendation is that we should send these moneys if appropriated as in the beginning of the fiscal y as much as possible because then we can earn more interest then we could earn in the counties treasury you know i understand the gravity of  debated myself personally ok what should we say you know twenty one is such a big number or should i say may be a million you know maybe we should say that understand the repercussions i understand the criticism and quite frankly i understand some of the members concerns because you know way when i did the finding i don't  significant finding and yes it's subject to attack and criticism that's fine but my hope is that we focus on the recommendation because it is a recommendation that can put this county in a better place missed opportunities a missed opportunity and i understand that i just want to form what i'm hoping is that we applied a recommendation going forward to this date i have not received any indication is whether or not the recommendation we followed or not you know i have received a lot of criticism of making the determination that twenty one million dollars was in lost opportunity and and that's my boy and i i made that decision but please i think we should kind of move forward and take a real hard look at the recommendation because i believe we have the capacity to send it in the beginning of the year if we sent in the fiscal two thousand and fifteen piece in the beginning of the fiscal year we could depend upon what the difference between the e t f earns and what the company earns we could earn up to another million dollars in investment ernie's to be applied that's my point you know i understand the debate on the finding and that's fine but once again i would hope that the emphasis of this report is looking at its recommendations for improvement and not to bring anybody i was just trying to get clarification as to some of the comments that came back then so i i do appreciate the work that you have done ready for this type of requirements of the committee's work so we're going to continue a second round of questions at this time so mr white we have another question for the audit county of maui by two thousand and nine had two point five million dollars in the account what did you find in the way of balances showing that we were getting that kind of a return member white believe your question is how do we make that determination that that rate was no actually i wasn't really looking for the determination i was just looking to see i can't speak to i can tell you that the e t f meetings are public just like any other board of in the state the documents produced are public  don't i don't know if i'm answering your question well i guess if we had a balance in there of twenty five million by two thousand and twelve and in fiscal year two thousand and twelve what was restricts in a very similar manner the types of investments that can be made so you're going to get a very similar return however as of seven zero one two thousand and eleven that u t s investment pool which has a whole  for maui county in the financial statements you'd see probably about twenty five million dollars maybe closer to twenty six they improve the way they reported in fiscal fourteen they got a new set of auditors that picked up all the earnings not just realized so i can get that from probably from the e t f the exact balance as of the end of fiscal twelve what always balance was but i guess what i'm going to director i attended one of those meetings in two thousand and fourteen at the meeting they discussed the returns that they're achieving and the future investments at that point in time they also but i don't want to i don't want to hold anyone to a higher level of of scrutiny if the other finance directors weren't being advised that there were significant returns then it's not really fair for us to hold mr zogby responsible for not advising us that as you stated earlier it is a public you know the meetings are public  and so maybe there's a responsibility on those of us in the council maybe it's on the budget director maybe it's on the finance director but it sounds to me like and in some respects the returns were not well d i don't i'm not aware of the exact beach that was done by the e t f at that point in time because as of july as of a july first two thousand and thirteen meaning the strike side was still advise you know us that he could get a better rate of return by keep it in the accounts and the cash accounts and county which we which we can see by your work but that's probably not the best place to put it but i'm trying to be fair and just you know how else that that information is dispersed i don't know perhaps you know if you want to talk to the director and ask him because as far as i don't know why that statement was made considering actually investment earnings but i can't answer that what their returns were you i didn't i didn't obtain any on the record comments from the finance directors from the counties i did receive comments that led me to review the actual payments remitted to that you have and we show those payments sent on page ten exhibit two three with regard to the level of outreach performed by th i can't speak to it was there room for improvement maybe but again i go back to their public board everything's posted the movements of the state ledge that's all public but i understand your concern that how do it talks about the portfolio mixed allocation the investment committee members make decisions as to what type of asset allocation they want to do to a chain obtain their goal of seven percent those types of things ok so if we had if we had looked for it we could have found it i believe so thank you thank you so is it clear in our understanding that all of the counties were taught the same thing at this executive meetings regarding investment returns that this is the meeting i attended i think all the counties were representative those are are those are instances where to make it simple a water meter doesn't exist sewer payments are calculated more or less on the basis of a water meter reading in certain  says you know it's only about ninety accounts coal that's what those are it's not all of the sewer payments that's handled by the department of water supply these are these kind of one off type of  payments ok and so i guess the trailer the way it's received in and track and paid and you're saying there should be some type  of oversight i guess to prevent you list a couple what caught my eye was minimize the potential for loss of revenue for the county and these accounts i guess her payments range from nine dollars up to one hundred forty thousand dollars so that one hundred forty thousand dollar payment is a big chunk if some kind of oversight or lack whatever so how that is there it is their determination as to there has been losses or you're saying there's a potential and you're not sure because this isn't really the scope of this thank you for the just just to be very clear we didn't find any evidence that there has been any misappropriation in this area i just want to be very clear all we're seeing is in general a colony cash handling the person receiving the money should be separate from the person entering it into the system  they say got bounced around over the years this current group doesn't really know why i think it's just a matter of they had a body to do it but again we didn't find any evidence of misappropriation all it is  saying they should they should if they can they should look at it and see if there's anything they can do to get somebody else to check either one side or the other ok thank you and one follow up care thank you  because you know there are was inherited transferred over to collections in between the in the right in the middle of the scope of this audit we made a determination in our planning phase to not include that because you consider the requests thanks to coach  thank you the specific action should probably should be left to the department you know that's that's a management function they know the needs of their organization better than we do i don't know what the answer is another body split up the accountants current responsibilities i don't know if it's a reorganize don't know if it's a outsource of a certain aspect i don't we don't know that the rector and the department has a better grasp of that particular thing all we're saying it's a big amount of money cash investments if that person gets hit by a bus as we say in the finding  a separate i guess separate people handling is ninety transactions even though the top one is one hundred forty thousand dollars is that  somebody else overlooking the work or what member whether or not that requires an additional person i think is a decision that it would be up to the finance director and the treasurer i would believe that it's going to be dependent upon all the a not only need to improve disaggregation of duties but also if there are other areas where that person could be useful obviously you know we cannot have a perfect situation in all cases because sometimes having to additional person would not justify any cost savings right because sometimes you have so little transactions like you said doesn't justify you know an additional person but there are other mitigating things that could be done in terms of trying to tightening up their internal control because it is a risk all we identified is that there's a risk know or you know audit we didn't find an instance where money was taken or anything like that we want to make that clear but we just pointing out that there should be some thought into how to improve the situation ok and the jurors i'm i'm not sure i wouldn't like to have this audit be an impetus for the department to say oh we need five more people because they said so so i'm just trying to gauge the the level of off you know the policy was last cash only policy was last updated in two thousand and six and the standard department had a level of turnover in the people that were supposed to lead the charge in updating that you know people leave people go but  it's one of those things they tried it but it's not i don't want people to think that nothing was in place there's something in place it's just that it's like mr  did and had not sent it previously have been working with the administration and also the counsel here i have heard many times the concern everyone that we i have heard a lot today i have well come the audit of the department of treasury with open arms and i have work with them as acknowledged by the  have some concern about the conduct of the audit specially on this finding i have asked the orator to please do not use this as a finding because it doesn't have any basis because of the documents that i have which he read today but he never mention it in his those numbers that he can see there when he made th findings twenty three twenty eleven that was when i was warned that the trust funds does not qualified as gas before three requires i understand that he understand gas before  three or any gas be pronouncement but when he talked to you today and say that is not a governing body through but gas be pronouncement our best same reason we doing this we have not done any gas b pronouncement with thinking it through so we try our way the gas bill requirements because we just send our money to them we don't take chances with the chair and in my basis holding that is exactly what he also show you that in april three twenty four eighteen i was earnings at that time so it's really really a very this this is so yes misplaced thank you very much and i understand you know this must be a very difficult was in our car for that it is said there that it could be insolvent eleven months after i sit there i got a memo from the u t abseiling that it's not now qualified for gas b forty three and exactly what the audit or explain that this could be car corrodes for the payment for the health funds for other members members us not only pull the retirees so they give us that warning and then on april three twenty fourteen that is the first memo that i have received so in a way i should have been attending every meeting that the d f board should do the thing is mr chair if i look at all the turns of even was not even doing their job there is supposed to be in act two sixty eight the force to form a subcommittee to address all these issues which is our mayor is a member and i s audit conducted just because we did not include all the pertinent information but again mr chair i listen to your sentiment when i sit here on this chair that you wanted me to make sure that our money is safe our money is safe he won us the senate july one twenty two zero one year from july one now he wanted me to send it one year before that when we are still discussing the we might opt out in this era bookable trust that we cannot take the money back i think in i think we should look at this particular findings and for us to trust other findings that will come from this office we should ask for a rebuke of this particular findings and it becomes out committee i appreciate you know the opportunity for mr to answer and i know it's difficult for you to stick to the subject but he never answered my question which was why did you finally send i heard a lot about why we didn't send it why  sixty days after i received a letter saying gar untying that the trust fund is already complete qualified and ready to receive our payment so you felt at that point it was safe and policy i guess last update was twenty twelve have you recently updated or in the process of mr i know that the late belated ok are you looking t and if they're truly allowable and if that question was ever given to our corporation counsel to that through to give us a definitive clear clarification yes or no  investment instrument that they say that it's not listed in hours were included in thirty six twenty one twenty ten or forty six fifty was not mended at that time and i have discussed this with senator our garonne to see if we can amend the county's portion of the short term investment in the eight our ass and it's some things in order to make it clear on how we do our investments currently i mean that it's sorry but set aside what you want to do and are looking with senators and what have you right here right now the question for moderator is is our current investments truly allowed in our policies and our you in our current policies and procedures i guess and there are simple recommendation was to just run it by a corporation counsel but i guess you choose not to but instead choose to go up to the state level  instance i cannot do what are to count these doing it because you really me on this particular number only it's the pro thing to do because right now this investment is th state investing on it the count the other counties investing on it so the thing that i would like to see happen here is that is this really a questionable investment th to see safety liquidity and then we can get some earnings i can tell you that we didn't just buy this because we want this they are the best investment instrument when our investment investment much yours and we need to reinvest it when we get a bid we can see what's the best rates i know this panel here they want the best rates ever that we can get but you know i asked the ok do you want me to liquidate it today they can tell me it's not listed there any then i have to liquidate it is that what we want or do we want the particular in this one as the especially the front page that i have got then and we say oh that's ok then we would allow a jet to findings we shouldn't because the churches opinion the best he could and so i don't want to continue the same question for the director i sense that will of all of us so if you would have another question for the director that would be fine and finding three you know in most cases it did seems to be prudent to diversify your funds and it says over ninety two percent of the county's investment portfolio was in the securities of a single business sector the mortgage industry in your opinion i know you don't disagree with that what kind of a benefit would it be to have that ninety percent two percent of that money in there if there's a potential one sector going bad because you know in two thousand the mortgage sector went way down so i'm just curious as to why you're still sticking to the ninety two percent secure they're insured mr chair so we're not we're not bench during a new investment so these investment according to a there's no minimum because they are insured investment so we're trying to get the most we can get in that particular investment because when our investment matures we look for the best  yielding in that particular time that we have it might not be the best today but when we bought it it was the best at that time in the brains of investment one year two years five years so in in asking for diversification that is for security when we buying something that is not safe for our short term investment mr chair as i promised you from the beginning that i'm here i will keep those investment in the short term that money we have in a safe liquid manner yes or just one quick follow up so you're saying because it is insured we don't risk losing the actual corpus if you well we may if the mortgage industry takes a dive again we could lose any interest we gain but not the initial recommendation from the auditor that the funds appropriate it be sent to the e u at the beginning of the fiscal year as as going forward would you agree think it's important for you to understand that this audit is in my view not aimed just at you and your department because i think it's clear from the minutes that saying the creation of a some trust but just this legislation that is one of the benefits of a distillation trusts are safeguarded from the overall liability this is important for small employers like mouat county because if you look at the total liability the state of oil is the largest player actually he used the word animal so it's very difficult to move the total liability or satisfy unfunded liability of the state doesn't create fun and so he's basically basically goes on to speak of the law that was passed at the in the legislative session in two thousand and twelve saying that it's safe to put your money there so you know we heard that and you heard that and i think we all kind of respond and similarly at the same time you know you've been the lead finance guy and i depend on your you know your recommendations on a lot of things and so the only thing that i feel a challenge with that as our lead financial guy we do depend on you to do the do the research and know exactly what what the options are and what the best options are so  in fact i think it's in your i was here last week i think it was and i was asking for the budget amendment if this body would like to do the fall are a few say we're not going to do it and then privileges being your chair to do this in general i like the party and i see that not being facetious to the finance in not having the county earn type of interest that i would like to have had my share of that responsibility as a council member and so even for the council we can learn from this about it because i think it speaks to the council also besides just the department of administration to my friend s thereafter i would tell him to please look at that this is also a reflection of the council not just the department we all must take our share of responsibilities and i would say this is one of the areas i think you made an error of judgment about the safety and i don't think we question the sincerity of the committee or the council in protecting the people's money and you think we maybe we could have made some better decision see if we had better information but that's hindsight that's monday morning quarterbacking everybody is the perfect quote about after the game so i would say that we can learn from this also to help the county move forward and we can work with the department of finance to make us go forward and do things better because i am with the you know we're not perfect we do informing the employees like us what we needed to do in future contributions to avoid that but the issue so for me the chair there was never an issue of insolvency we never got to that point we avoided it saying that members and i respect i know mr carr has been waiting very patiently to give comments but i'm going to bring this issue back because i would like us to move forward and i'm going to head that next  to give you my recommendations on how you can do its part department in a ministry to do things better in the future and i will take my show the responsibility you know and that's why investment portfolio abilities to earn interest earnings to assist us to defray dishan no taxes for general fund requirements but it's a multi step process and we're going to need comments any input from the department through its director we're going to have all of you participate but i see this as something positive to move us forward and i hope we can all look at it in that manner this is to improve the company's performance will get a few review and we will review the investment policy we will review the investment community structure and if appropriate will make the appropriate adjustments through legislation and or whatever instrument the council has at it disposal to assist the county moving forward and i have my recommendations being put together now and i will share that at the next meeting which is intent is to recess this meeting because we have two more important items of the morning agenda and then to recess this one forty five the thing is to start the one thirty meeting and i would like to at least because those that planned to testify may committee any questions for you chair i know it's a long day members but small things we need to do a question here i hate to ask but i need to know because i have to cancel something this evening yes ma'am do you intend to take a dinner additional discussion by the committee has well as consider some recommendations on how we can improve our results on behalf of the people regarding investments and carry over sea rains by two point three zero five million dollars and in amending section three point b point four point under county away costs by deleting the original thirteen million appropriation and being the additional carry over sebring so that the total amount for open for this fiscal year would be fifteen point three zero five million dollars fiscal year we received a notification from the state that the one hundred percent payment of our fifteen million three hundred five thousand dollars and as you know we've strive to pay one hundred percent of our for these these years money from the general fund to the special fund and payment out of that special revolving fund to the state and should the council pass a solid as soon as it's certified as an ordinance thoughts with the members for your consideration while yes we would like to pay the full park or annual report contribution for our county but a few things i would ask you to keep in mind where we are in the current fiscal year we're in the fourth quarter we're at the end of the fourth quarter so a few things that you cheer takes into consideration d certified and finance more than likely because this over the pan is going to make me to make our arrangements to send a fifteen million dollars check to you in looking at the importance of the overall county's budget a one month interest as well as then combining it should this committee recommend to full council to pay the two thousand and soon as possible at least the thirteen million that could is currently appropriated so mr at least thirteen million is going to go if not this month in june depending on in fact i would think you'd want to send the thirteen million now and then just deal with the two million later if we're going or if we're not that's fine too i think this council said let's do thirteen million because one of the things i recall was that the they so i'm thinking if we just have them pay the thirteen million off and then we can deal with the two million next fiscal year or just leave it at that what it was you know add it for the i can tell you th made no payment as of today but again depending upon how we deliberate and dispose of this i you know when we could determine a factor yes  he can send thirteen million yeah and then if you interest on that for the two months or whatever and it's going to go regardless the thirteen million correct so that would be a compromise to send that off right away and then we can deal with this but following up on your comment right now but we are now charged to add an additional two million that is the requests by finance through mr buzz and   for this item and i think it was transmitted for an additional item as well but for fiscal year two thousand and fifteen the annual required contribution amount of trust fund contribution to fully fund arc is fifteen million three hundred five thousand dollars that's why the the department has requested an additional two million three hundred five thousand dollars to meet one hundred percent of the fully fund for this period for june for fiscal year two thousand and sixteen you'll see in the proposed budget which i think we discussed yesterday fourteen million one hundred thirty thousand is the amount to fully fund our so thank you mr cochran thank you chair yeah i'm trying to read the note here it's started at twenty million and then they dropped it down to fifteen three and we set aside thirteen so how that's a huge decrease i mean that's a nice if you know we had a drop like that all the time but i explain that members this letter the received one july fourteenth by the director was in response to if you remember him saying that you know we were going to be paying reflects that payment they weren't initially going to do that they were going to wait till the next fiscal year but he you convince them to if we paid and there was a small fee of about twenty five hundred dollars they would present this report to us  so the difference between that twenty million one hundred thirty four thousand dollars that's in the baseline valuation column is from their original actuarial and it's from their original report and if you go back to their fiscal year thirteen report  ending report you'll see that that's the amount that we're supposed to have paid this new amount is what has been reduced by ninety seven point two million dollars payment that we made in two e t f so what they're saying is  that based on that based on that payment our actuarial amount that we have to pay in for to fully fund this year is five million six hundred thousand dollars less which is ye wonderful it's not going to happen again unfortunately because we're not never going to make us huge payment again this this every year it may get reduced but that was a one time function of us paying that whole ninety seven point two million dollars committee wants to support the including the additional requests of two point three zero five million i would tell you that means we have that much less in the fiscal year two thousand and sixteen consideration that's the only difference i'm going to be chopping away so you know it's a good and bad we can add more money now but we take in money for the next cycle and that's the only difference and so i'm hoping as you chair that we can work the budget any way we want but you know that's where we are so i'm hoping to figure out how to make the budget work that's our job thank you thank you thank you mr chairman and i agree the whole fifteen million but it's the method in which we do it if we if we do it the way it's in here  we won't pay the fifteen until about like you said middle of june potentially whereas if we paid the thirteen now and we can request to the director and i can tell mr get three in a recess with me it was a very open me then i would see i mean it's something we have to think about and if we do a general provision in the new budget is they have to pay in the first month of the fiscal year need thoughts did you want to share but my feeling is we can you know we have had some challenges with departments living within their budgets this year so i tend to feel that you know we can we can move along with our budget for two thousand and sixteen and move back to the full funding that time i think it's important you know i  think we all want to make sure that we're getting care of our liabilities but at the same time i think it's important to point out that act two sixty eight actually allows the county's contribution to in the neighborhood of five billion dollars so three so from that perspective we're spending we're putting ten million dollars more into the pot than required so i think it's also important for us to look at this from the taxpayers standpoint if we're putting if we're putting ten million dollars more into the state fund that's money that effectively being taken out of our economy being taken out of the reach of taxpayers to invest in their own retirement or on health care so i'm i'm comfortable with the thirteen million that we set aside in this year's budget i agree that it should be sent off post haste but i i feel that we should just withhold the additional request and use it in two thousand and sixteen budget are liability is our liability whether repay it today tomorrow you know or as required by act one sixty eight previously not being at all until you something happens but  that interest revenue as well so i think this this morning's meeting was opening for all of us and as far as how much that means you know we just talk about numbers here or there  health care costs in our health care costs are increasing significantly the total cost is about eighteen thousand dollars per employee per year that's that's not the that's what we're talking about that's the that's what it cost per year per employee so my my concern is that we're talking about thirteen million dollars that is being put in the t f for future benefits for our county employees these are benefits that very few people the private sector will ever see in their retirement so we need to at least be cognizant of the fact that when we're taking money out of we're taking ten million dollars out this year another fifteen million dollars out in the next budget some of those monies are coming from people whose whose health care and with tyrant is their own and they've got to take care of themselves so i think we you know we need to be at least responsive to the fact that as we feel we need to take care of the commitment to our county employees we also have a commitment to the rest of the taxpayers that we be somewhat kind and gentle to them on the way to taking care of funding the liabilities this is just one of our liabilities is just the health care  we're not even discussing at this point the liability so i guess i'm a little sensitive to it because i've got a bunch of employees who whose retirement does not include health care and whose retirement paychecks aren't anywhere near the size of county retirement checks so i decided to add that the chair appreciates your comments i appreciate every members comments about our current employees but i do take into account their group that is already retired and dependent on the benefits that they agreed we agreed upon during their employment for me i balance it off with this additional requests with potential interest that he could earn at the state and further reduce the obligation that lessens the general fund requests chess or do and seven to ten percent potential from the state and reduce our further with those type of returns does not guarantee i understand it we understand  to pass this amendment i don't have a problem as your committee chair to take that additional task of helping to find ways of reducing the impact of this reduction in carry over savings regarding the fiscal year opinions and i respect but i'm just saying it was your chair my experience this is all i'm looking at it so before i take it emotions i'm happy to let you ask a question or show your point of view members out will take care of the you know the potential seven to ten percent and i understand mr white's concerns but we had a pretty interesting meeting this morning and a part of it was about us paying our our full bill so in the interest lost so that's why i brought the the motion forward thank you thank you some other thoughts involve but heartburn is here at the end of the fiscal year at this point so funny you should mention timing because i was going to mention it to the thing is we're making  measure but i just felt i had to share my reservations because we do represent a whole lot of taxpayers that are not going to be as well off in retirement and just as the county employees are and i appreciate you making those comments because we need to think of our other components of our community thank you for sharing that any of the comments or discussion members missed a victory no thank you for that recommendation in the beginning but right now we're obligated let's get it done and i don't want to get school in the future i don't want any other council to get school that saying well you should've put your money dear instead of keeping it here that was the message we got this morning and i want that to me made perfectly clear that the solid waste fund management fiscal year two thousand and fifteen budget and this resolution is to transfer one hundred fifty thousand dollars from the administration program to the  in court nation with my office able to find additional and dedicate some additional resources so the total amount that we can transfer into this always operations program is two hundred twenty thousand dollars based on the april ninth resolution or yes is there any issues of concern from you that would forbid the committee to use this as a vehicle for making the appropriate requests chair thank you for that this afternoon with mr baez we have her deputy mr mike from the department of environmental management so mr you have any opening administration program to our operations program along with this action we have redefined the source of funding for design services that are currently being performed in operations programs to meet our ne the current fiscal year two thousand and fifteen thank you the amount we estimate is very sclerosis of the amount that was submitted in december of two thousand and fourteen were just a little over seven hundred thousand were looking to shift the two hundred eighty as council member why point out from our operations to ours and the two hundred twenty from this resolution would help us get closer to seven hundred twenty and there's other internal funds that we can put on the lay so that we can meet our requirements  not we can shift funds from the design funds into the project so we had to make sure that these projects had a good enough definition of scope of services for example if the projects said you could do only construction it would be could be made available in operations going through this review director we've identified the two hundred eighty two eighty two hundred eighty thousand eight hundred sixty that council member white had brought up with  not sufficient to help take care of your premium or any other incidental expenses up to june thirtieth of this year not in it's by itself i mean you can help us along with the two twenty to help us meet those requirements so you need more than half a million for potential premium over time it's not just premium paid self some of the other expenses that we have about needing a resolution because i've been hearing all throughout this budget process about unencumbered things that are just unencumbered and moved to carry over and that's in the so i don't understand why now we're having this here in front of us myself i think mr bosler mentioned the other day three hundred thousand dollar contract that was on encumbered that was carried over that was right in ever saw that in a resolution before us so and that was a solid waste but yet they're still asking so there seem to have been a few hundred thousand dollar under cover of fun gotten and i don't know where it is but that's what i heard so i don't really have a whole lot of questions just that was the main general fortune question but you had just stated it yourself is what made up part of the carry over savings and you know i have to actually go back and check and see if that was two thousand and thirteen or two thousand and fourteen fiscal year that they had that carrier savings i  question the departments when when there's a significant amount of carry over savings in their operations especially after the discussion that has been on the floor of this council for the last couple of years about salo its operations and of that contract does not allow for the department to expend that monies that since it's not originally appropriated for that fiscal year the department can't utilize those funds they have to actually have to be recognized as carry over savings and then appropriated in a future fiscal year so that's kind of the way that that ms made up i'd have to do more research to figure out exactly what that what that was or maybe i don't know if the recognized rio a result like we're seeing here today if it were not i mean not knowing where it is and what it came from are you seeing that you know just in coming in or prior you're for the following year that would need to have been that type of function and the resolution in front of you is different than that ordinance because it's not recognizing carryover savings what what's happening with this resolution is that the department's a dignified currently appropriated funds that they're not going to be spending in these different areas and transferring that money to the solid waste operations so we're not actually increasing the department's budget we're just moving the money around by this resolution  so so it's a different function from recognizing carry over savings and actually adding the money to their budget this is just moving the money around in their current budget understand of payroll side because there was a significant amount there but these transfers are coming from and ministry overhead which as we've been discussing  an inflated charge anyway and from fica payments so i'm not happy with the source but i do appreciate the departments taking another look at it and and realizing that it's their actions that of brought this upon them and all but others ask questions and make no questions just the fact that at least they're moving it around but when you say operations what is its actual application mr director money's going to be used to maintain our operations at all of our landfills are central to cover shortfalls that are projected in those budgets due to increased operational costs ok thank you thank you mr coach questions for the questions from the community it's coming thank you and operations of that mean in regards to landfills hauling of green waste say from if i remember i thought the handle a contract has already been negotiated so that's pretty well said it's you know the other costs that have increases with some of our contractors like some of our or what  for like an hour or greenwich contract has gone up previously we charged zero dollars for greenway said residential that was brought to the landfill because that was done to try and encourage the greenways program so we didn't charge people to bring greenways to the landfill the current contract charges thirty dollars a tonne for greenways to increase that amount and so there's other operational or we've had a lot of whether this year for the quantity  of cover material goes up anytime during we have erosion in them we need more cover material to fill those in because when you have erosion you start exposing trash and they call it flagging deal which doesn't like flagging so we have to go in and start doing a lot of that work we also have whenever it rains were required by our permit to rush out there and take water samples so that if any water touches trash it becomes it's defined as leach so we have to determine in our stormwater management pond so we supposed to do a lot more sampling and testing of that water that we've had a lot more this year than we've had in previous years and that's something that requires literally someone to get out there with you know we have staff operating the landfill so we have to try and get other stuff to try and get out there to do the sampling so we try to get the staff to do the sampling on overtime if they have fifty have time while they are working the face of the landfill so this is mainly for coverage shortfall for central mainly or central has the major major amount of the operating budget it is central the auto landfills you know it's based on quantity so you know it's very you know we had a lot of rain we get more green waste the quantity goes up that's the that's the challenge of these operational type divisions and  we can't predict how much green waste is going to come in we can't predict the trash it's going to come in probably the only thing that's been very fairly consistent for a solid week division is the amount of sludge that our wastewater division delivers to them that's the one fairly constant number transfer in two hundred eighty thousand for the berm my recollection was the contract with a beer was in the neighborhood of three hundred ninety seven thousand so are you leaving the the payments already made to a mare which i can remember them the number but are you leaving those payments as having come out of operations or is it possible to reclassify those amounts to the c i p amount was from a previous year so the services that they had done previously was paid for by that that fun so what's left for them for this year is a two hundred eighty eight hundred sixty thousand dollars that's that's what was budget in in this utilizing the expenditures were made this year yes so ok and so with respect to the caldwell brown and caldwell contract are you transferring any of the money from that ninety four thousand which is entered into fairly recently construction services so we're evaluating whether or not that other project needs those funds for the four hundred thousand so it's going to be either we transfer it and be short on the design funding come back and ask you for more design funds or we leave it where it is and go ahead and finish that design funds that are currently in c a p so it's and i appreciate the done the analysis but you know i'm i'm reasonably comfortable with this i've not been very comfortable with what has happened since personal issue because of the the mayor and others in the administration for me it's pretty clear that this was either caused by the department itself and by itself mishandling their cash and not being as creative as they should have been with the money that we provided them and over and cumbering one point seven million dollars it's sunday was constructed to go after those of us who were running for office again this past year and i think it's pretty clear to those of us who were targeted that this cutting of services back in august was aimed at us and people were told when when the calls are made to complain about the service you blame it on budget cuts blame it on that one percent less than one percent that was cut from the budget that defies explanation you also specifically blame it on and worked with you to resolve this and i appreciate mr bosler perspective on it and i'm as i said earlier i'm happy to move into the two thousand and sixteen budget with a positive attitude towards this department but it's really tough and so we'll we'll look forward to their discussions with us regarding their upcoming budget happy to have this on the verge of being resolved but i have to say it's been it's been a little concerning to see the actions of the administration when they're putting not only the public's interests at risk by threatening to close the landfills for a month and basically chokes off all the waste treatment  waste handling it has worried our county solid waste employees and so i'm happy to have this behind us but this is something that was manufactured by the administration and certainly not something caused by counsel cuts thank you thank you and any further discussion members questions for the department can be honest with you the outcome of this request so definitely determine my attitude to the fifteen two thousand and sixteen requests and the department through their director representing them this afternoon i appreciate this proposal before us but this is the would not have been my preferred approach the ch support and recommend your consideration this afternoon for moving this to council for adoption and that would be your chip is a recommendation at this time so are there any questions for your chair or the department or mr bar and fifteen budget discussion members having none only for of the motion please say i will say no motion thank you for requests after the second farter so you have basically three months to think about it because i have things that we i want to do under finance the component of budget and finance committee which is the part of our responsibilities so stating that this meeting is a