By PETER SUR
By PETER SUR
Tribune-Herald staff writer
Mayor Billy Kenoi vetoed a bill that would have required the county to make payments into a county retiree benefits account and denounced it as being “fiscally irresponsible.”
In his message of disapproval released Thursday, Kenoi repeated his contention that the bill introduced by Council Chairman Dominic Yagong is an “ill-conceived, shortsighted piece of legislation that does not effectively address the fiscal needs of the county of Hawaii.”
“That bill is just clearly fiscally irresponsible,” Kenoi said. “It’s not a strategic fiscal management piece of legislation.”
He pointed out that the council had three months to amend the budget but took no action. “We ended up with an 8-1 passage of our budget bill (Yagong dissented). This legislation was introduced with absolutely no support from bond underwriters, from insurers, from investors.”
Yagong, a 1st District councilman and mayoral candidate who has said Kenoi’s continued deferrals of millions of dollars of the recommended payment amounts to “stealing from future generations,” does not have the support on the County Council to override Kenoi’s veto unless someone changes his or her vote. The bill was approved last month on a 5-4 vote.
Yagong has said he was introducing the bill because he was certain the dozens of amendments that he planned to introduce to cut the county budget would be vetoed by the mayor, but as it turns out the alternate route he chose has met the same fate.
Reached by phone from Waimea, Yagong said he was seeking clarification from the clerk and the corporation counsel over whether the bill had been vetoed.
“There’s a difference between disapproval and a veto,” he said. However, the County Charter says a bill that receives a notice of disapproval from the mayor is “deemed lost” unless approved by a supermajority of the council within 30 days.
Kenoi’s message echoes the concerns raised by the county Finance Department: namely, that Yagong’s bill would draw down the county’s fund balance to unacceptably low levels and threaten the county’s bond rating.
The fund balance is the amount of unencumbered money that Hawaii County has at the end of every fiscal year. The bill that Yagong introduced would have required that any fund balance in excess of $5 million be applied to the account, also known as GASB 45, until 50 percent of the actuary recommended payment has been made.
The goal of Yagong’s bill is to require the mayor to make payments into the fund to manage the shortfall. The Kenoi budgets in the previous and the current fiscal years have deferred those payments for a total of about $34 million.
Kenoi’s veto message called the fund balance “a safety net that allows the county to withstand a variety of fiscal difficulties tht could occur.” He argues the money should be kept in reserve and that “the actual funding of contributions against the calculated liability is optional.”
Kenoi also cited a comment from a concerned bond underwriter who called the lack of liquidity as “a serious, near term credit problem that would very likely outweigh any benefit from maintaining progress on long-term (benefit) funding.”
Finance Committee Chairwoman Brenda Ford, who has often clashed with the mayor on budget matters, said Kenoi was the one being “fiscally irresponsible.”
“I think it’s fiscally irresponsible not to be paying our bills. … It creates a liability on the county, and whoever follows this mayor, whenever they do, will inherit a disaster that the only way we will dig out of it is to raise taxes,” Ford said. “This is extremely poor fiscal management. Very disturbing.”
Email Peter Sur at psur@hawaiitribune-herald.com.