Maui Mayor Richard Bissen has appointed Maria Zielinski as the next Department of Finance director, a position that had been held by Scott Teruya until Feb. 2 when he was put on paid administrative leave without explanation.
The appointment is subject to County Council approval and will be taken up at its meeting on Friday.
Zielinski, 71, was tapped more than a month ago to serve as acting finance director to fill the void created by Teruya’s departure, which came at the critical time of finalizing Mayor Richard Bissen’s proposed budget. The position is a step up from the role she previously held as county budget director.
The county has repeatedly declined to provide the reason why Teruya, whose salary this year was roughly $150,000, was put on paid leave, saying only that it was a personnel matter.
The Department of Finance has been the subject of critical audits in recent years, including one over Maui’s collection of transient accommodations taxes that was completed in December. The report said the department failed to collect nearly $17 million in TAT and that another $9.3 million in TAT was past due as of June 2022.
In the audit, conducted by the Office of the County Auditor, Teruya said: “Many of these shortcomings were the result of the short time period in which to implement the program as well as a lack of staffing.”
Starting in November of 2021, all short-term rental owners on Maui are supposed to report and pay a 3% tax on their gross rental earnings to the county.
The audit said the department never established a system to successfully administer the new tax in the long term, apparently out of a misguided mindset that the tax was voluntary.
After a few months, the deputy finance director abandoned efforts to establish an accurate list of people who owed the tax and issue collection letters, the audit said.
“There is no excuse for county government to levy a tax without fully knowing how much is due and who has or hasn’t paid,” the audit said.
Zielinski was questioned about the audit during a March 5 County Council budget committee meeting. She said the department is working to collect that money which is especially needed with the county dealing with Aug. 8 fire recovery costs and an affordable housing crisis.
On Monday, she said finance personnel are working with in-house revenue staff, the county auditor, the county’s independent accountants, the county’s current software vendor and the state Department of Taxation to reconcile the existing delinquencies and respond to audit recommendations to create a better process going forward.
“While this is a high priority for the department, resolution will be somewhat time-consuming,” Zielinski said.
Zielinski has had her own controversies.
In 2017, she abruptly resigned as the state tax director amid claims that her department interfered with the work of a consulting firm that was supposed to provide independent monitoring of a $60 million tax system modernization project, the Honolulu Star-Advertiser reported.
In 2017, she told Pacific Business News that it was common practice to have an open dialogue with independent auditors or consultants and to suggest corrections.
And on Monday, she said the tax modernization report was not the reason for her resignation.
“I was asked to sign off on a personnel matter which I could not support in good conscience,” she said.
Four months after she resigned as the state tax director, Maui County Council voted 8-1 to appoint her as director of its Office of Council Services, which provides research, clerical and logistical support to council members and committees.
At an April 2018 council meeting to approve her appointment, council members praised Zielinski. None asked about her resignation, according to MauiTime.
She served in that position until January 2023, when Bissen appointed her to be the budget director in his new administration. Lesley Milner is now serving as acting budget director.
Zielinski said her biggest priorities as finance director would be to address numerous vacancies in various divisions to operate more effectively while maximizing revenue collection, and to invest in staff training and mentoring.
She sees the biggest challenge as determining the most financially sound ways to fund significant capital projects for fire recovery.
Zielinski previously held positions as the deputy comptroller for the state and as chief financial officer for several organizations, including the California School Employees Association and Haleakala Ranch.
Civil Beat’s coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.
