DEPARTMENT OF BUDGET AND FISCAL SERVICES (BFS)

January 2021 – December 2023

HNLPAY
On December 1, 2021, a major milestone in the City’s efforts to implement online payment transactions was accomplished with the first Hanauma Bay reservation system paid through HNLPay. This implementation was the first successful program in the City’s efforts to provide the community with an online payment platform using HNLPay.
1. HNLPay was a comprehensive initiative to create an online enterprise payment platform for the City. Led by BFS, the successful implementation over a four-month period was made possible through the dedication and persistent efforts of numerous team members from BFS, DIT and DPR. DIT led the development of the platform that addressed the challenges of high-volume online transactions, automated revenue reconciliations and integrated financial systems. The utilization of HNLPay was a cultural and technological change for the City and the City is committed to delivering expanded online services throughout the City’s agencies.
2. In 2023, through continued teamwork with DIT, BFS and DPR, the HNLPay online payment platform was implemented in August 2022 for use in the registration of Parks and Recreation Fall classes. Additionally, BFS and DIT worked with various City agencies to implement the HNLPay online payment platform for CSD’s motor vehicle renewals, DPR’s camping permits and DPP’s affordable housing permit applications, building permits and rent applications.
3. BFS continues to provide guidance and consultation to City agencies to develop, implement and monitor the recording, reconciling and reporting processes related to DIT’s HNLPay online payment platform, and the acceptance of credit and debit card payments for more City services and products.
HEALTH AND WEALTH FAIR FOR CITY EMPLOYEES
Coordinated and facilitated the first-ever Health and Wealth Fair hosted by the Employee Deferred Compensation Plan to educate and engage with City employees to help them save for financially secure and healthy retirements. Representatives from the Deferred Compensation Plan Record Keeper, the Employees’ Retirement System, the Employer-Union Health Benefits Trust Fund (EUTF), and EUTF carriers were able to interact with employees, which enabled employees to take advantage of the various City offered benefits. The Fair also had 45-minute educational breakout sessions provided by the benefit providers for employees on various benefit and wellness (physical and financial) related topics.
ACHIEVED AA+ BOND AGENCY RATINGS FROM BOTH S&P GLOBAL RATINGS AND FITCH RATINGS
BFS worked to achieve AA+ bond agency ratings from both S&P Global Ratings and Fitch Ratings, Inc., reflecting the City’s strong revenue framework, resilient/diverse economy, strong local management, prudent financial practices and high priority on funding pension and other post-employment benefit obligations. Strong creditworthiness results in very favorable “all-in” interest costs on general obligation bond sales, lowering debt service funding requirements and ensuring the long-term sustainability of the City’s capital improvement programs.
O‘AHU TRANSIENT ACCOMMODATIONS TAX (OTAT)
Act 1, 1st Special Session 2021, became effective on July 1, 2021, and repealed the State’s allocation of Transient Accommodations Tax (TAT) to the counties. Instead, Act 1 allowed the four counties the right to establish and administer their own transient accommodations tax at a maximum rate of 3%. Effective December 14, 2021, the City and County of Honolulu signed into law Ordinance No. 21-33 imposing an Oahu Transient Accommodations Tax (OTAT) at a rate of 3% on gross rental proceeds and/or fair market rental value attributable to Oʻahu if the taxpayer rents out the transient accommodation for less than 180 days. The establishment of an OTAT allowed Honolulu to restore revenue lost during COVID-19 when the Governor suspended TAT allocations to the counties.
1. The new law required BFS to set up a new OTAT section in the Treasury division of BFS to administer and collect this important new revenue program. BFS quickly and successfully established the OTAT section consisting of a team budgeted for four full-time employees and implemented a payment portal software system, which began collecting OTAT revenue in February 2022.
2. During the third quarter of FY23, the OTAT team successfully launched a new and improved full-service administration software and services solution. The new system, which is more than a payment portal, effectively handles every aspect of our OTAT administration, compliance and enforcement needs. The full-service solution includes personnel resources support focused on technical expertise, tax compliance (including taxpayer follow-up/underpayments/non-filers/missing documents), assessment of penalties/interest, delinquency and enforcement.
3. With more than 8,000 registered OTAT taxpayers, BFS launched a new OTAT website and mail notifications to inform taxpayers of the requirements for the new county tax. For FY22, OTAT revenue collected was on forecasted targets at $40.2 million. For FY23, OTAT revenue collected totaled $93.6 million, exceeding the budget of $85.8 million by $7.8 million. OTAT revenue collected from inception to date through November 2023 totaled $175 million.
CREATED PROCUREMENT EFFICIENCIES
Increased the use of master agreements and indefinite demand, indefinite quantity (IDIQ) agreements to delegate more procurement responsibility to City agencies and to provide better, more efficient service benefitting the general public. Today, there are more than 270 of these agreements and BFS is focused on establishing many more to move selected procurement actions for re-roofing, parking resurfacing, sidewalk and walkway replacement, painting, fence repairs, etc., quickly and efficiently for our communities.
FACILITATED THE RAIL INSURANCE PROGRAM AND ASSET TRANSFER
BFS successfully developed, implemented and administered the insurance program for the City’s rail operation and property assets transfer. The comprehensive insurance program demonstrated the ability to address unique challenges associated with the initiation of interim rail passenger service and the transfer of $1.8B of assets from HART to the City. This involved thorough risk assessments, identification of potential risk exposures, property valuations and the development of risk mitigation strategies. Effective communication and collaboration were key achievements in ensuring that all parties were aligned with the program’s goals. Mechanisms for ongoing performance monitoring include regular evaluations, adjustments to risk strategies and continuous improvement efforts, all incorporated into the program.
INCREASED COMMUNITY OUTREACH ON REAL PROPERTY ASSESSMENTS
BFS significantly increased community outreach efforts by BFS’ real property assessment and treasury divisions to educate, problem solve and address taxpayer issues and concerns in Council district town halls, board of realtors meetings, bankers conferences, and other special interest groups, and created and posted online two informational videos about the real property valuation and appeal process to better serve real property taxpayers, who provide the City’s primary source of revenue.
EARNED A THREE-YEAR QUALITY PUBLIC PROCUREMENT DEPARTMENT ACCREDITATION
BFS earned a three-year Quality Public Procurement Department (QPPD) accreditation from the National Institute of Government Purchasing (NIGP) Governing Board, formally recognizing the City’s excellence in public procurement. This achievement acknowledges BFS’ commitment and adherence to accepted best practices in the areas of responsibility, mission and organization, automation and eCommerce, processes and continuous improvement and professional staff and development. BFS is the only purchasing department in the State to receive the accreditation.
RECEIVED CERTIFICATE OF ACHIEVEMENT FOR EXCELLENT IN FINANCIAL REPORTING
Received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada (GFOA) in August 2023 for the 21st consecutive year (and 2nd consecutive year under the Blangiardi Administration). The Certificate recognizes excellence in the City’s Annual Comprehensive Financial Report (ACFR) for the fiscal year that ended on June 30, 2022. The award represents the highest form of recognition in the area of government accounting and financial reporting, and its attainment represents a significant accomplishment by a government and its management.
RECEIVED THE DISTINGUISHED BUDGET PRESENTATION AWARD FROM THE GOVERNMENT FINANCE OFFICERS ASSOCIATION FOR THE FY24 BUDGET
BFS received the Distinguished Budget Presentation Award from the Government Finance Officers Association of the United States and Canada (GFOA) in September 2023 for the 2024 fiscal year budget. This award is the highest recognition in governmental budgeting and the attainment of this award for twenty-two consecutive years (and 2nd consecutive year under the Blangiardi Administration) represents a significant achievement by the City and County of Honolulu’s Department of Budget and Fiscal Services’ Fiscal, Capital Improvement Programs and Budget Program Administration Divisions.
INTERNAL CONTROL DIVISION
BFS persevered in building a robust, talented, internal control division (ICD) currently staffed with an ICD administrator and audit supervisor and two audit-in-charge analysts with ongoing recruitment activities to grow the ICD to six total audit professionals and a secretary. The ICD team has been enhancing its quality assurance, training and retention programs, redeveloping and updating its fraud and internal control resources and documentation and commissioning projects to improve internal controls both within BFS and throughout the City and County of Honolulu for a city-wide risk assessment process.
ONE-TIME REAL PROPERTY TAX CREDIT IN FY24
BFS proposed as a part of the Mayor’s 2024 fiscal year executive operating budget and secured through Council approval in June 2023 the largest real property tax credit to homeowners with active homeowner exemptions for the July 2023 through June 2024 (FY24) tax year. The tax credit of $350 per eligible parcel is the largest one-time tax credit in City history that is equivalent to providing an additional, one-time $86,000 homeowner exemption for the 2023-2024 tax year, providing immediate tax relief at a critical time when many of our residents struggled financially following the pandemic.
COMPREHENSIVE AND ON-GOING EFFORTS TO REFORM THE HONOLULU LIQUOR COMMISSION
Conducted an internal investigation and appointed a new Administrator and four new Liquor Commissioners committed to reform, objective operations and fair enforcement.
UPGRADED THE CITY’S ENTERPRISE RESOURCE PLANNING SYSTEM
Successfully completed a major upgrade of the City’s Enterprise Resource Planning system for financials, payroll and budgeting to improve the City’s financial reporting, payroll, budget and analytical capabilities for all City agencies. This was the culmination of months of extensive testing to identify and resolve potential issues.
REINVIGORATED FRAUD RISK MANAGEMENT PROGRAM
BFS reinvigorated the City’s Fraud Risk Management Program, which includes the updating of the City’s fraud awareness information and new procedures to conduct fraud risk assessments across the City. BFS also managed and coordinated reported cases to the City’s Integrity Hotline.