HomeMy WebLinkAboutCOM 0420.000 1996-1998 Hawaii State Association of Counties
Counties of Kauai, Maui and Hawaii. City 8,~ounty of-Honolulu
a
Uly 28, 1997 A,\i'd~.'.••
To: James Arakaki, Chairman
and Members of the Hawaii County Council
From: AI Smith, Secretary-Treasurer
Hawaii State Association of Counties (HSAC)
Subject: HSAC Executive Committee Meeting -June 27, 1997
The following highlights of the HSAC Executive Committee Meeting of June 27, 1997 are hereby
submitted.
The Secretary's Minutes of the Executive Committee Meeting of May 23, 1997 were approved and
placed on file (attached for information).
The Treasurer's Report for the month of May 1997 was approved and placed on file (attached for
information).
Under NACo Reports, President Mansho reported that we are now in the process of putting
together a bid proposal to host the 1999 NACo Annual Conference in Honolulu in the event that
St. Louis, Missouri cancels their bid. She is working closely with the Hawaii Visitors and
Convention Bureau and the Department of Business, Economic Development & Tourism.
NACo officials are supposed to meet on Monday, June 30, 1997 with St. Louis officials to
confirm what will be happening in 1999. Should St. Louis withdraw their bid to host the 1999
Conference, a bid will be submitted from Hawaii for those same dates. If the bid for 1999 is not
available, Hawaii will also put in a bid for the next available date which will probably be in 2002.
President Mansho suggested that when we do get a bid, we will then go back to our County
Councils for support. Oahu will be the host county and HSAC will be asked to participate.
Under WIR Reports, Second Vice President Kouchi presented the Executive Committee with a
Projected Financial Status Report on the 1997 Western Interstate Regional Annual Conference
which was hosted by Kauai County on May 21-24, 1997. The report, showing outstanding
receivables of $9,400.00, projected that HSAC's contribution to this event would be $5,490.00
(attached for information). O
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Ref J(1L ~ 0 1997 ~ '
,
James Arakaki, Chairman
Page 2
July 28, 1997
The WIR Conference drew a record attendance of over 600 delegates, well over a planned
attendance of 500, and as such, revenues had to be supplemented. NACo, who realizes all
registration revenues, will be providing an additional $4,900.00 to offset unanticipated costs. VP
Kouchi also extended his appreciation to the neighbor islands for their support of the conference,
both as attendees and in staff support. He also suggested that for future conferences, that there be
a clear delineation of staff responsibilities so that the host county doesn't end up holding the bag.
President Mansho reported that the Department of Business, Economic Development & Tourism
will be providing HSAC with a financial impact report of what kind of money the WIR
Conference generated on Kauai and on the neighbor islands and remarked that it will be
interesting to see how much money was returned to our economy in comparison to HSAC's
expenditure of $5,490.00.
Under Unfinished Business, all four counties reported the adoption of the Proposed HSAC Budget
for Fiscal year 1997-1998; the nomination of HSAC Second Vice President Ron Kouchi as the
HSAC Representative to the NACo Board of Directors; the nomination of HSAC First Vice
President Dennis Nakamura as a Minority At-Large Appointee to the NACo Board of Directors; the
nomination of HSAC President Rene Mansho as the HSAC Representative to the WIR Board of
Directors.
Action on the proposed slate of HSAC officers for fiscal year 1997-98 was deferred pending
action by the Maui County Council. Until such time as the slate is approved by Maui County, and
until such time as the slate is approved by the HSAC General Membership, the current officers
shall continue in the same office.
Finally under Unfinished Business, it was reported that the Governor had signed into law as Act
262, Senate Bill 37, SDI, HD2, CD1, Relating to Enterprise Zones. As the HSAC position of
urging a veto of Senate Bill 37, SD1, HD2, CD1 is no longer valid, the matter was filed.
Under New Business, the Executive Committee discussed the endorsement of candidates for NACo
First Vice-President and Second Vice-President. First Vice-President candidates are: Vernon Gray
of Howard County, Maryland, and Gerry Hyland of Fairfax County, Virginia. Second Vice-
President candidates are: Jane Hague of King County, Washington, and Carol Roberts of Palm
Beach County, Florida. No action was taken on the early endorsement by HSAC of Gerry Hyland
and Jane Hague as both Oahu and Hawaii County did not have an opportunity to address this matter.
Should Oahu and Hawaii County not address this matter by July 10, attendees at the NACo
Conference in Baltimore will caucus and decide on this matter.
Next under New Business, the Executive Committee referred Honolulu Council Resolution 97-
126, CDI, urging the United States Department of Transportation to recognize Hawaii's geographic
constraints during air rights negotiations to the counties for consideration (copies attached). The
-
James Arakaki, Chairman
Page 3
July 28, 1997
resolution points out that in recent U.S. -Japan air rights negotiations, 40 percent of a segment of
Japan-Hawaii routes were eliminated as part of the U. S. Department of Transportation's position,
which drastically reduced a growing part of a segment of Hawaii's tourism base. The resolution
urges the U. S. Department of Transportation to recognize Hawaii's geographical isolation and
dependence on air transportation routes and air traffic for both passengers and cargo for its
economic viability and asks that our State be given special consideration similar to that being
granted to Guam and Alaska. The resolution further urges Hawaii's Congressional Delegation to
oppose efforts which diminish air routes to Hawaii and encourages the U. S. Department of
Transportation to negotiate air agreements which economically benefit the State and does not
reduce flights to the islands. A position in support of Honolulu City Council Resolution 97-126,
CDl by the Hawaii County Council is recommended. Action Requested.
Action by the Executive Committee on Tom Russi's and Ms. Christine Paul's concerns relating to
the HMSA's Reimbursement and Discount Contract with State Community Hospitals was deferred.
It was pointed out by Councilmember Tyler that Councilmember Yagong on the Big Island had
accepted the lead on this issue and that this matter was still pending in Hawaii County.
On the issue of Privatization, President Mansho indicated that Mayor Yamashiro had suggested that
HSAC take a position in support of a special session The three neighbor island counties all
reported having taken a formal position on this matter. This matter was deferred pending action by
the Honolulu City Council.
Finally under New Business, City Council Resolution 97-212, relating to homerule and urging the
Hawaii State government to comply with Section 209E-4 of the Hawaii Revised Statutes, which
authorizes counties to designate enterprise zones was referred to the counties for consideration an
support (copy attached, Action Requested).
There being no further business, the meeting was adjourned. The next HSAC Executive Committee
meeting is scheduled for August 22, 1997 at 9:00 a.m. in the Honolulu Council Committee Room.
Attachments
Hawaii Sta~z Association Lr~ Counties
Counties of Kauai. Maui and Hawaii. City 8. County of Honolulu
. ~ .~t!
HAWA[[ STATE ASSOCIATION OF COUNTIES (HSAC)
EXECUTIVE COMMITTEE MEETING
May 23, 1997
Kauai Marriot Resort
Kipu Room, Kauai, Hawaii
I. CALL TO ORDER
The HSAC Executive Committee was called to order by President Rene Mansho at 1:13
p.m. The following members present made up a quorum:
City and County of President Rene Mansho
Honolulu Staff Elaine Lee
County of Maui First Vice President Dennis Nakamura
Staff David Raatz
County of Kauai Second Vice President Ronald Kouchi
Kauai Alternate Jimmy Tehada
Staff Cyndi Ayonon
County of Hawaii Secretary-Treasurer AI Smith '
Staff Gerald Monden
Also present: Kauai County Mayor Maryanne Kusaka
Hawaii County Council Member Curtis Tyler _ _
Maui County Council Member Charmaine Tavares
Connie Kiriu, Legislative Auditor, Hawaii County
1[. EXECUTIVE COMMITTEE MEETING MINUTES
The minutes of the April 1 1, 1997 meeting of the HSAC Executive Committee were
approved as circulated.
III. TREASURER'S REPORT
f,,_,~ The Treasurer's Report for the month of April 1997 was approved as circulated.
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It was also suggested that the counties begin to educate the public on the impact of
the Supreme Court Decision and what some of the trade-offs and compromises will
be in terms of dollars, services, and programs.
B. Proposed Slate of HSAC Officers for Fiscal Year 1997-98
With each of the counties appointing one of its members to serve as an officer of
HSAC, a slate of HSAC Officers for Fiscal Year 1997-98 was proposed by the
appointees. As the slate was being formulated, Secretary-Treasurer Smith shared
with the Executive Committee, a recommendation from Hawaii County that the
officers of HSAC serve on a rotational basis. Due to circumstances that the Kauai
County Council had already approved their slate, the current slate composed of:
President Rene Mansho, Honolulu Council Member
First Vice President Dennis Nakamura, Maui Council Member
Second Vice President Ronald Kouchi, Kauai Council Member
Secretary-Treasurer AI Smith, Hawaii Council Member
was submitted to the other counties for review and its appropriate action.
C. Proposed HSAC Budget for Fiscal Yeaz 1997-98
Action on the HSAC budget for fiscal year 1997-98 was deferred pending action by
the Honolulu Council on May 28, 1997. All other counties have reported their
approval of the HSAC Budget for Fiscal Year 1997-1998.
VI. NEW BUSINESS
A. Nominations to the National Association of Counties (NACo) Board of Directors
For Fiscal Year 1997-98
The nomination of representatives to the National Association of Counties (NACo)
Board of Directors For Fiscal Year 1997-98 was deferred pending action by the
counties. Incumbent representatives are Ronald Kouchi as the HSAC
Representative to the NACo Board and Dennis Nakamura as a NACo Presidential
Minority At-Large appointee.
Under this item, there was discussion as to whether the Association had to ratify
the appointment of the NACo Presidential Minority At-Large appointee. NACo
Bylaws provide that ten (10) At-Large Directors shall be appointed by the NACo
President. Appointees shall be elected officials from active members of NACo.
However, in recognition of the effoRs by each county, participating as HSAC, in
promoting Hawaii and its members, an endorsement by HSAC is considered
appropriate.
3
B. Nomination to the Western Interstate Region (WIR) Boazd of Directors For Fiscal
Year 1997-98
The nomination of a representative to the Western Interstate Region (WIR) Board
of Directors For Fiscal Year 1997-98.was also deferred under New Business
pending action by the counties. The incumbent representative is Rene Mansho.
C. Nominations to the NACo Steering Committees for Fiscal Yeaz 1997-98
Nominations of HSAC Members to NACo Steering Committees for fiscal year
1997-98 remain open. Hawaii County's nominations of Curtis Tyler to the
Environment, Energy, and Land Use Steering Committee and AI Smith to the
Public Lands Steering Committee were accepted. Maui Council Member expressed
an interest in the Community & Economic Development Steering Committee.
D. Requesting a Veto of Senate Bill 37, SD1, HD2, CD1, Relating to Enterprise
Zones.
The City Council's Economic Development, Planning, and Tourism Committee has
requested that Governor Cayetano veto Senate Bill 37, SDI, HD2, CD1, Relating to
Enterprise Zones. Section 209E(4), Hawaii Revised Statutes clearly specifies that
the counties are the governing bodies with regard to the establishment of enterprise
zones, while the state serves as the approving entity. The intent of Senate Bill 37,
SDI, HD2, CD1, which extends the boundaries of the Waialua Enterprise Zone, is
to encourage and support county-driven economic initiatives. This intent, however,
counters that principle of home rule by authorizing the state government to establish
zones, as opposed to approving them as stipulated by the original law. Recognizing
that this is a home rule issue, President Mansho has requested that HSAC consider
taking a position of urging a veto of Senate Bill 37, SD 1, HD2, CD 1.
VII. COMMUNICATIONS
The following communication were placed on file:
1. From President Mansho to Executive Committee Members, dated April 11, 1997,
referring an item for action by the county councils.
2. From John Desoto to Honolulu County Councilmembers, dated Apri14, 1997,
appointing Rene Mansho to serve as the Honolulu County's representative to
HSAC.
3. From Michael Hightower, NACo President, to State Association Executives, dated
May 1, 1997, regarding nominations to the NACo/NACoRF Board of Directors.
4
4. From Larry Naake, NACo Executive Director, and Reggie Todd, NACo Legislative
Director, to State Association Executives, dated May 5, 1997, regarding balanced
budget agreement.
Vll[. ANNOUNCEMENTS
A. The final accounting of the fiscal year 1996 HSAC Mid-Year Conference resulted
in a net gain of $6,102.40, which was deposited in the HSAC general checking
account. See the communication from Ronald Kouchi, HSAC Second Vice
President, to HSAC President Mansho, dated April 10, 1997.
B. Next Meeting: HSAC Year-End Conference: 8:00 a.m., June 27, 1997, Hawaii
Naniloa Resort, Hilo, Hawaii.
IX. ADJOURNMENT
There being no further business, the meeting of the Executive Committee was adjourned at
2:30 p.m.
Very truly yours,
~j,~-~,~
AL SMITH
Secretary-Treasurer
Hawaii State Association of Counties
5
Hawaii Sta~z Association o~~ Counties
Counties of Kauai, Maui and Hawaii. City 8. County of Honolulu
AEI r
June 10, 1997
The Executive Committee Members
Hawaii State Association of Counties
Dear Sirs:
Please find enclosed the report of the Association's revenues collected and
expenses paid for the fiscal period May 1 to May 31, 1997.
Very truly yours,
AL SMITH
Secretary-Treasurer
Hawaii State Association of Counties
Enclosure
J,.....~
.
HAWAII STATE ASSOCIATION OF COUNTIES
REVENUES COLLECTED AND EXPENSES PAID
Fiscal Period : May 1 through May 31, 1997
FUND BALANCE AT BEGINNING DATE $39,782.99
This Year to
Period Date Budget
Receipts
001 Membership Fees $0.00 $28,000.00 $28,000.00
010Conference Income $0.00 $11,386.36 $6,000.00
0301nterest Income $117.24 $1,428.91 $1,400.00
090 Miscellaneous $0.00 $252.08 $0.00
Total $117.24 $41,067.35 $35,400.00
TOTAL RECEIPTS THIS PERIOD $117.24
Disbursements
Executive Committee
201 Travel $0.00 $1,736.00 $3,960.00
202 Auditing Services $375.00 $4,333.31 $4,500.00
203 Stationery $0.00 $719.08 $800.00
209 Miscellaneous $0.00 $5.00 $500.00
Special Committees
301 Travel $0.00 $0.00 $1,320.00
309 Miscellaneous $0.00 $0.00 $100.00
NACo
401 Travel $0.00 $3,365.72 $6,000.00
402 Promotional $0.00 $0.00 $500.00
403 Dues $0.00 $18,992.00 $18,992.00
409 Miscellaneous $0.00 $0.00 $500.00
WIR
501 Travel $0.00 $1,343.75 $2,000.00
502 Promotional $0.00 $5,746.48 $25,000.00
503 Dues $0.00 $2,200.00 $2,200.00
509 Miscellaneous $0.00 $0.00 $0.00
Conferences
606 FY 95-96 Annual $0.00 $0.00 $0.00
607 FY 96-97 Mid Year $0.00 $0.00 $0.00
609 Miscellaneous $0.00 $0.00 $0.00
TOTAL $375.00 $38,441.34 $66,372.00
TOTAL EXPENSES THIS PERIOD $375.00
FUND BALANCE AT END OF PERIOD $39,525.23
- J{~Y o f ~-0
COUNTY COUNCIL u ~ ~ OFFICE OF TIIE COUNTY CLERK
n.
MARY TNRONAS, CHAIR r C. RUN1I SHIMOMURA, County Cierk
RANDAI. VALRNCIANO, VIC6CIIAIR ~9j'c BRNI?ST'O G. PASION, Deputy County Clcrk
RILL "KAIFO" ASING or
BRYAN RAP'CIS'fli Ph.(808)241-6371
RONALD KOIJCHI 4396 R1CR ST., RM. 206 Cax(808)241-6349
TAMES TRIIADA LIIIUL', KAUAI, HI 96766-1399
JAMBS TOKIOKA
M e m o r a n d u m
To: IISAC Executive Committee Members
Prom: Ronald Kouchi, IISAC Second Vice President
12E: PROJEC'1'ED FINANCIAL S`1'A`I'US REPORT ON TIIE
1997 WESTERN IN'PERSTA'1'E REGION ANNUAL CONFERENCE
Uate: June 25, 1997
I'or your information, I would like to provide an update on the
financial status of the 1997 WII2 Annual Conference which was hosted
by Kauai County on May 21-24, 1997.
SPONSOR CONTRI6U'1'IONS: $34,910.00
OU4'S`1'ANDING SPONSOR CONTRA3U'PIONS: 9,400.00
SLJRTOTAL AMOUNT OI' CON1'RIRUTIONS: 44,310.00
IISAC CON'I'RIBU'PION: 10, 000.00
'TOTAL AMOUN'P OP' CON`I'RIUU'I':CONS: 54,310.00
'T'OTAL ESTIMATED EXPENSES: -50, 000.00
PROJECTED REIM6URSEMENT TO IISAC: $4,310.00
FROJEC'1'ED ACTUAL IISAC CON'1'I2ILiUTION: $5, 490.00
't'he conference drew a new record attendance of over G00
delegates. 1: extend my thanks to all the counties for thier
support and efforts in malting the WIR Conference a success.
Although, we are still awaiting three (3) add:i.tional sponsor
checks at this Lime, we antioipate a reimbursement to IISAC in the
amount of $4,310.00 once we secure the outstanding sponsor
contributions in the amount of $9,400.00.
'thank you for the op),IOrtwiity to present this status report to
the FISAC Executive Committee.
ca/
AN CQUAI. OI'I'C1RTI1NfIY IiMI'LOYIiR
i
`R ~ CITY CO..NCIL ITEM a 6
CITY AND COUNTY OF HONOLULU
• HONOLULU, HAWAII No, 97-126, CDl
RESOLUTION
URGING THE UNITED STATES DEPARTMENT OF TRANSPORTATION TO
RECOGNIZE HAWAII'S GEOGRAPHIC CONSTRAINTS DURING AIR RIGHTS
NEGOTIATIONS.
WHEREAS, Hawaii is the moat geographically isolated state in
the United States and ie therefore totally dependent upon air
transportation routes and air traffic for both passengers and
cargo for its economic viability; and
WHEREAS, two major venues are now poised to greatly impact
Hawaii in terms of air access and Hawaii's economy: U.S.
bilateral air rights negotiations and "Open Skies Air Agreement";
and
WHEREAS, moat in Hawaii are unaware of the severe negative
impact both venues may have on Hawaii's competitive visitor
industry position and its fragile economy if Hawaii's interests
are not included in development of both venues; and
WHEREAS, in recent U.S.-Japan air rights negotiations, 40
percent of a segment of Japan-Hawaii routes were eliminated as
part of the U.S. Department of Transportation's position, which
drastically reduced a growing part of a segment of Hawaii's
tourism base and was part of an effort by the U.S. negotiating
team to create pressure on Japan negotiators for increased U.S.
carrier access to Japan, and will negatively impact Hawaii's
economy; and
WHEREAS, an Open Skies policy which does not lead to an
increase in air traffic from as many points in the Pacific should
be opposed by leaders of the State; and
WHEREAS, other geographically isolated parts of the United
States, such ae Guam and Alaska, have been spared the economic
displacement and impact of the international air rights debates,
having been identified by the U.S. Department of Transportation
as "uniquely impacted geographically isolated areas" and provided
unique air rights status, thereby establishing a U.S. Department
of Transportation precedent for special consideration of air
rights; and
WHEREAS, Alaska and Guam subsequently have been given the
authority for freedom in air rights practices to include cabotage
and increased international route authorities, uniquely and
separately negotiated from the rest of U.S. States and
Territories and not constrained or impacted negatively as Hawaii
has been in U.S. bilateral air rights disagreements; and
CC800527.R97
1
CITY COUNCIL
CITY AND COUNTY OF HONOLULU +5 „ • '
HONOLULU, HAWAl1 NO. 97-126, CD1
RESOLUTION
WHEREAS, Hawaii, in the early 1990'x, created formal and
informal venues with the U.S. Department of Transportation
regarding air rights to ensure that Hawaii had a voice in such
negotiations as they impacted Hawaii's economy; and
WHEREAS, Hawaii should receive the same unique statue
granted to Guam and Alaska; now, therefore,
BE IT RESOLVED by the Council of the City and County of
Honolulu that the U.S. Department of Transportation is urged to
recognize Hawaii's unique geographic isolation, and provide the
State with similar special consideration that is granted to Guam
and Alaska; and
BE IT FURTHER RESOLVED that Hawaii's congressional
delegation is urged to oppose efforts which diminish air routes
to Hawaii and encourage the U.S. Department of Transportation to
negotiate air agreements which economically benefit the State and
does not reduce flights to the islands; and
BE IT FURTHER RESOLVED that the Governor pursue formal and
informal venues of discussion with the U.S. Department of
Transportation regarding air route negotiations that impact
Hawaii; and
BE IT FURTHER RESOLVED that the Honolulu City Council
encourage private sector and other public sector organizations to
educate business, labor and community representatives on the
importance of the air rights issues and their potential impact on
Hawaii; and
-2-
- r ~
RESOLUTION
BE IT FINALLY RESOLVED that the Clerk is directed to
transmit certified copies of this Resolution to Hawaii's
congressional delegation, the Governor of the State of Hawaii,
and the Secretary of the United States Department of
Transportation.
INTRODUCED BY:
Mufi Hannemann
John Henrv Felix
Rene Mansho
Councilmembers
DATE OF INTRODUCTION:
April 17, 1997
Honolulu, Hawaii
(OCS/060497/ct) -3-
CITY COUNCIL ADOPTED
CITY AND COUNTY OF HONOLULU Reference:
HONOLULU, HAWAII
Report No.
I hereby certify that the foregoing RESOLUTION wes
adopted by the COUNCIL OF THE CITY AND COUNTY OF
HONOLULU on the date and by the vote indicated to the
"°h`' Resolution No.
ATTEST:
97-126, CD1
GENEVIEVE G. WONG JOHN DeS0T0
City dark CHAIR AND PRESIDING OFFICER
DeteO
r ~
Hawa i i
Air Service
Economics
Challenges
Aviation Development Office
Airports Division
department OF 1 ransportation
06%OJ~Ai 16:00 $808 87J J111 CAMPBELL ESTATE ~ 0021018
~ , ,
AYIG~fOfl Deve~opmen} affiae
DOT Airports
Presenfiotion Topics
Why Airlines Don't Make Money
Serving Hawaii
2 Airline Alliances Creating Global Networks -
New Challenges 8~ Opportunities for Hawaii
OO:OJ:A7 1b:00 RT808 87J J111 CAMPBELL ESTATE
Aviotion Development Office
DOT Airports
Airline Market Shares for
Honolulu International Airport
(Source: Officol Airline Guide Schedules for 1995/6)
Other: 27.1956 I UnUed: 21.O7X
Total Ove rseasTraffi c
70% US
CoMinemal: 5.7~ Nottnwest: 13.75%
30% Foreign
Hewsiian: 7.8756
Japan Altli~ 12,08
AmCIICen: 7.87°.6
Delta: 8.625'.
Othx: 10.2N6
~t~
Canadien:5.57'X ~ I
United: 228176
ContinentN: 8.2876
Westbound
HoAhwed:1267T.
AMeriean: t8.60Y.
Hewelhn:13.~4T. Delta: t3.B2% Othq:9.78X
EVA: 22476
Aaaro: 2~h Jepen Akllnes: 38.89
Ctllne Atr: 3,21X
KOlean: 8.22"R
Eastbound oent~:..~56
Ftew zeelana: 5.e7•b
Connnertal:asa56 Northwest: 17.7656
united: 71.48Y.
~~;p~.Q~ 15:01 '$`80A X111 1AD11bCLL tSlAlt
V
Aviation Development~ffice Alrllne
DOT Airports (=COnOm ICS
Why Airlines
Think Twice About Hawaii$tPart
LOW Yle~~ (Revenue) '
Yield =Fares _ (Passengers x Miles)
• Yield for Hawaii = 4¢ to 7~/passenger mile
• US Avg. = 13a/passenger mile
21.4
20.0 19.2 19.1 18.8 _
~ 20
n
IS
~ 11.7
19.9
y
~ to e.ffi
s
0
Atlanta Dadlas ChlCagoNew York Hauaton Oeholt Mlaml San Fran LA. Seattle Les Vegas Hawall
Source: Airlines Committee of Hawaii
• OB:OJ: A7 15:02 '8'808 87J 5111 CAMPBELL ESTATE fm 005/OlA
Aviation Development0(fice Airline
DCn Airports Economics
Yield Comparisons
(Cents/Passenger Mile)
Business Routes
New York-Boston b 1.1
New York-Washington 52.8
Boston-Washington 32.0 Average
Chicago-Detroit 31.6 Business 38.3
Chicago-Dallas 27.4
Boston-Chicago 24.7
Business 8~ Leisure
~icago-San Franasao 13.8
New York-San Fronasao 12.2 Average
Chicago-Los Angeles 11-9 Business & Leisure 12.3
New York-Los Angeles 11.4
Leisure Routes
New York-0rlando 12.3
New York-W. Palm Beady 11.9
C~icaogo-Orlando 11.3 AVel~ge
New York-Fort Lauderdale 10.9
New York-Son Juan, P.R. 8.3 LeiSUre 9.4
C1~iaogo-Las ~fagas 7.4
Honolulu-San Francisco 6.9
Honolulu-Los Angeles 6.1
Interisland Routes
Kahului-Honolulu 38.0 Avern99e
Lihue-Honolulu 38.3 /nterislond 29.6
Kano-Honolulu 25.2
Hilo-Honolulu 16,7
fScnimr.• Avi1~s Sem~~ C~ierter 19961
08%OS,9i 15:02 $`808 Bi4 5111 CAMPBELL ESTATE 1Od008!O19
Aviation Developmem ot~ Airline
ppT Airpo~b Economics
Airlines Compete in Almost Every
Mainland-Hawaii Market
= Lower Fares Seattle
= Lower Yield "A
Portland
HA
Chicago
UA AA
San Francesco ATA
UA AA
NW HA
DL 00
ATA
St. LOUIS
Honolulu TM~A
\ Phoenix
Los Angeles ATA
a as
ATA
Atlanta
Average a
West Coast Yield Dallas
Houston
ao
OU:OJ:P7 15:OJ 'aAOA 13i1 J111_ CAIIPBELL ES1'ATE__ _ _ vuiw~__~~u_
n,?~a, t~?~p~t o~ Airline
DOT Airports Economics
Honolulu Only US Airport
With Gampetitive
Japan Regional Service
S°P°a ro Expected to lncrec~se
222
Sendai Downward
Pressure
2~z on Yield
Nagoya
~ Nw
as
Tokyo Honolulu
~
an uA
ctit?
~°k° Average
uA Japon-Hawaii Yield
o
? 10~ - 15~
Fukuoka
~,u t~vv
OH-05~9i 15:04 '$808 Bi4 J111 CAMPBELL ESTATE ~1pU8/U19
- -
Aviafion Development Offite AIrIUIe
DOR Airports Economics
How Airlines Countervailing
Traditionally Hawaii Market
Increase Fares/Yield Forces .
1. Reduce Capacity 1. Charters Enter/Increase
-Eliminate Flights Service in Market
- Downsize Aircraft Lower Operafing Costs
Lower fares
Thus, Longer for Scheduled
b Re-Enter Market
2. OFfer Non-Sbp Service 2. Interisland Codesharing
(Neighbor Islands) More Economical
3. Upgrade Cabin Service 3. Leisure Travellers Sacrifice
Amenities for Lower Fares
4. Change Seating 4. First/Business Class
Configurations Mostly FF Upgrades
5. Pursue New 5. Hub Connecting Flights
"Feeder Markets" Have to be Rescheduled
- Less Competition & Longer Flights -Mare
Connections Less Desirable
~6%07%A7 15:04 '8'808 874 J111 CAMPBELL ESTATE 0091019
Aviation DevelopmentcJFfice Airline
t70T Airports Economics
Low Hawaii Yield Due to:
#1 High Leisure vs. Business Fare Mix
#2 High Competition =Lower Fares
#3 Increase in Low Fare/Cost Charter Flights
#4 Redemption of Frequent Flier Mileage
Earned Elsewhere
08i0J/97 15:05 $808 874 0111_ ~Adlk'bnLL nainlr. -
Aviotion bevelopmentOfFice AII'~Ine
bCJT Airports Economics
Why Airlines
Think Twice About Hawaii?(Part 2)
High Operating Costs
• Lang Haul From Everywhere
- More Fuel
- Less Turnarounds
• Higher Crew Lodging/Transportation
• Higher Passenger Meal Costs
• landing & Cher Airport Fees
Hawaii Cost/Available Seat Mile = Ga
More Seats/Plone
7a~ Yield - 6~ Cost/ASM = Higher Loud Foetors
Smaller Planes
Cess Planes
Od.-OJ 07 15:05 4S80A Old J111_ CAMPBELL ESTATE _ X011/019
Aviation p~„elopmentotfice Airline
D07 Airports Economics
US Airlines Average Domestic Load Factors
Most Airlines Actual Load Factors Well Above Breakeven
National Average for All U.5. Airlines: 72i~a'
Hawaii Westbound Average: 8g~
Interisland Average: e5e5~
90 Hawaii Avera e
~s
Bo
75
Aetad
~ Break Even
70
50
Amerlean CotttMeMal Delta tlertnwast Southwest TWA Uolted USAIr
$oura>s: AVITAS, Inc. (Data Through Third C~uarter 1996)
HVCS for Avq. Hawaii Load Factor; Aviation Daily for Irrteris{and Load Factor
08.0097 15:08 $808 07d Jill CAMPBELL ESTATE ~ u12iu19
~ `
Aviation t Ofttiae
DpT Airport~ds ECO
Om Cs
Japanese Airlines vS. US Airlines
Higher Costs
Less Competitive
Unit Cost (Cents) Per Ton/Mile
JAS
Japan Asia
ANA
JAL
US Avg
0 25 b0 76 100 125 1b0 176 700 225 260
Source: Asian Aviation News Based on Data {rom
International Civil Aviation Organization
First Quarter 1997
08 03 A7 15:Oi '8'803 8i4 3111 C.1~IPBELL ESTATE ~Uia~uln
Aviation Development OFfice
DOT Airports Eco om~ics
Landing Fees Are One of the Smallest
Airline Cost Components
landi~~e:`~ Interest 2%
Advertising 2%
Food 4%
Commissions 10% L.af~or 97%
Aircraft 11%
OAaintensnCe 14%
Fuel 17%
(Source: AVITAS, Third C~uarter 1996 Data)
OB;OJ-P7 15:07 $`808 874 3111 CAMPBELL ESTATE ~ui.,u.n
Aviation Development Office Airline
DOT Airports Economics
Hawaii Landing Fee Revenues
Hawaii Airports Receive IVO State Tax Revenue
• Historically Landing Fees Very Low
• Increase After 1992 Due to Loss in Concession (Duty Free) Revenue
• Fees Have Fallen About 30°~ Since Peak in 1995
5D
45
40
3S
d
30
p 25
20
15
10
5
0
1985 1986 1987 19$8 1989 1990 1991 1992 1993 1994 1995 1996
Souroe: Hawaii Department of Transportation
08.09:97 15:08 '8'808 Bi4 9111 CAEIPBELL ESTATE ~EIU15i019
Aviation DevelopmenrOifice Airline
DOT Airports Economics
Airports Revenue Before and After
Duty Free Reduction
a~r,~
1992
Outy Free e7'h
Airllne9 6:K
1
Other 26°h
Duty Freo 35%
199
Interest 9%
Airlines 30%
Source: Hawaii Department of Transportation
OB/OJi87 15:08 $808 Bid J111 _ CAMPBELL ES1Alh_ ~
Aviofion De„elopmentoffice Airline
DOT Airports Economics
Airports Division 6cpenditures
• 1996 CIP About On@-Tenth of 1993 CIP
• 1993 J~~°~ci Expenditures Were Construction
~ 4°/~ in 1996
• Operating Costs Cut $8.7 Million in FY 1996
Golfing Construction Only Meaningful Way to
Signifiaa?ntly Reduce Expenditures
eoo
550 ® ore
Soo GP
480
400
~~j 350
v ]00
200
t5o
too
50
0
1997 7994 1995 1996
5ourae: Hawaii Department of 7ransportatian
08i0Ji97 15:09 '8'808 874 J111 CAMPBELL ESTATE ~U17~U19
_ _ _ _ -
( ~
Aviation Development Office Airline
DOT Airports Economics
Landing Fees/Airport Use Charges
Total Landing Fees for FY 1996 = $35,775,477
Redud~ion in FY`96 Landing Fees
~ ~ lncrease in Landings
Landing Fee Categories
Overseas Rate (Per 1,000Ibs) $1.93
Interisland Rate (Per ~ ,ooolbs) .69
International Arrivals Fee (Per Passenger) $3.39
Overseas Terming) )Dint Use Rate (HIA Per Londing) $439.39
Interisland Terminal Joint Use Rate (H~A Par landing) $58.67
UB%U~~Ni 15:10 2SaUa U7a J111 ~.~•n~~~.... -
Aviation Development Office AIrIU'1e
DOT Airports Economics
Typical Landing Fees/Use Charges
~dFe~e Terminal use Passmen~
United DC10 $702 + $439.39 = $1,141
Aloha 8737 $72 + $58.67 = $130
JAL 6747 $1,047 + $439.39 + $1,358"' = $2,844
('based on 400 passengers)
West Coast -Hawaii Costs $BQ,QQQ to Operate
Landing Fees Only $7QZ - Less Than ~ of Costs
Reducing (or Even Eliminating) Landing Fees By ~fS@~f
Will Not Increase Flights to Hawaii
Have to I ncrease Yields Reduce Costs
Od~UJ:07 15:10 'L3bUb U7a J111 wiu~~lr.. ~a,:~_~ -
Aviation Development Office
[70T Airports Econom~tCs
Hawaii Is a Statewide Airport System of 16 Airports
Honolulu Generates $7% Statewide Revenue, but 63°,6 of Expenses
• Only Honolulu & Kahului Make a "Profit" _
¦
t~
0
HaaYdu
~o
18
18
1a
12
~o
a
8
4
2
0
Kahului Kona Lihue Hlto Others
Sourne: Hawaii Department of Transpoitotion
08 OJ-Pi 14:54 '8'808 Bit J111 CAMPBELL ES1A1L
( ~
c,u1~ ~ ~j
~1ey~ C~-~ cS
l
UIi~U~~Hi 11: ao 'Q'JUJ u,a a~ii _
AVlatlotl (~g1/BiOF]RIBflY
DOT Airports
Conclusions
1 Why Airlines ,Don't Make Money
Serving Hawaii
Low Yields Dve to Low Fares
Low Yields Bigger Problem than High Costs
No Easy Answers to improving Yield
2 Airline Alliances Creating Global Networks -
New Challenges & Opportunities for Hawaii
Alliances & Open Skies Creating New World
Do We Approach Alliances as Threat or
Opportunity?
~~b~~~)~QI LY. SrJ ,~~/VV ul~ J111 A.Il1 ULLL LJ I:•~L ~
~ A ~ ~ ~
Avwrtion Devebpmenr Offiae
DOT Airports
6cample of
Alliances to Come
nth Asian Open Skies
Each Partner Operates Their
Own Region
Shares Traffic and Revenue
Reduces Costs Lufthansa
London
Paris Stadchalm
United
Frankfurt
A~,fAL2 Washington' Roe _~Asia
Beijing ~ \
~O"l Middle
Guangzfwu \ / Chicago Fast
\ TOkyo San Fronasod 1 Miami
Hong Kong 8` C~aka ~ ~9~~ \
\ Honolulu Caribbean
Bangkok South America
Jakarta
- VU. VJ'<i JV Vv ~~v gala u..
Y ~
~1VIahOn ~eVBIOpTent
DOT Airports
2 Alliance Examples
Northwest S~.ad`hdm
London Frankfurt
Seattle -r t`~+^' Y~ Paris ~ ~
Seoul \r?eapolis ` / I~LrI
~'~"'g Detroit
Shangha\ / \ ~r~Am\erdam
Taipei- To o / Memphis ~ Rome ~mbaY
Los es
~g~ Madnd
Hong / Honobllu Cairo Rryadh
Kong
Bangkok
Singapore
Lufthansa
~ London Paris Stockholm
Ury 1~7 t`om' York/ Frankfurt
seam Washington DC~ / ~~-Bombay
Ram
Begiog Chicago Madrid
Shangha\ San Frandsao /
Taipei-- Tokyo
Los Angeles \ Rryadh
Elor, / ~tio
olulo \ Miami ~ Cairo
g 1
~,g Son Jvan
Mexivo
ga,gk~ G{J, Johannesixrrg
Singapore
RIO d8
Janeiro
08.OJ%97 14:58 '6`bUb Ui~1 :1111 ~.i~~rbn~.. co.:~.:.
- -
Aviation Development OR`~ae
ppT Airports
Two Major Trends in
International Aviation
Open Skies
De-Regulates Access Between (not Within) Countries
Began in Europe 3 Years Ago - 11 Countries Now + Canada '
Asia Now a Priority:
Singapore, Taiwan & Brunei Signed
Korea, Malaysia, New Zealand Targeted
Godeshari ng/Alliances
CAdesharing: 2 or More Airlines
Market/Operate Cane Route
- Ead~,4irline Puts their "Code" on the Flight
Airlines Form Alliances to Develop Global Networks
Reduces Costs -Partners Only Operate in Their Region
Share Tinffic/Revenues Worldwide
"Thinner Routes" More Feasible
Gitical Success Factors:
Anti-Trust Immunity -Coordinated Scheduling, Pricing
Traffic Consolidation at Global Hubs
"Behind Gateway" Traffic
UBi U9~ N7 14:07 _ TStlUb 67a o111 u......
Aviation Development Office International
DOT Airports Aviation
Existing Coclesharing Far Hawaii
United
& Lufthansa Frankfurt -San Francisco -Honolulu
Northwest
& KLM Amsterdam - LA - Honolulu
Northwest Seoul -Honolulu
& Asians
United Northwest Ma;nland -Neighbor Islands
8~ Aloha & Hawaiian
~1eflC°n Vancouver -Honolulu
& Canadian
Qantas Australia
Air New Zealand Honolulu -Canada
& Canadian New Zea{and'
Air New Zealand Auckland -Tonga -Honolulu
8~ Royal Tongan
Air New Zealand Apia,W. Samoa -Honolulu
& Polynesian
Aviation Development Office International
DUT Airports Aviation
Air Routes .ore an Economic Development Asset
- gut only ?f Tl~ey~re used
~ Flight Between Japan 8~ Honolulu =
$3Jr' MIIIIOn~Year Direct Visitor Expenditures
Countries with Hawaii Routes & Flights
Japan 165/week Australia 10/week
Korea ~ ~/week New Zealand 7/week
Taiwan 7/,week Indonesia 4/week
Phillipines ~/week
Canada 11 /week year round + Seasonal
Countries With Hawaii Routes - No Flights
Hong Kong China
Singapore Thailand
Malaysia Vietnam
Mexico
Vtl%VJ%NI 14: J0 VOUO uiy eu.
J
'
Aviation Development office International
DOT Airports Aviation
What Is Covered By
a Bilateral Agreement?
• Service Points (Airports) =
• Frequencies
• Number of Airlines
• Type OT ROUte (Passenger, Cargo, Combination)
• Capacity/Frequency Limits
• Beyond Rights
• Codesharing
US has over 200 bilateral agreements
ranging from Liberal fo Restrictive
'JUN 30 '97 02~39PM CITY COUNCIL (8081 523-4220 P.2i3
r_ CITY CC 'NCIL _ '
CITY AND COVNTY OF HONOLULU (o]
~i V ~ N1N
HONOLULU, H4wgil NO.
f?~SOL.UTION
URGING THE HAWA STATE GOVERNMENT TO COMPLY WITH SECTI^""..209E-4
OF THE HAWAII REVISED STATUTES, WHICH AUTHORIZES COUNTIES TO
DESIGNATE ENTERPRISE ZONES.
WHEREAS, pursuant to Section 209E-4 of the Hawaii Revised
Statutes, the counties nominate sites for designation as
enterprise zones, while the governor must approve the
designations; and
WHEREAS, the purpose of the enterprise zone program is to
encourage.county-driven economic initiatives and stimulate
certain types of business activity and employment in areas where
these are most needed oz most appropriate; and
WHEREAS, in accordance with State law, the City designated
in 1995 an enterprise zone encompassing the area from Haleiwa to
Waialua, which the State approved in the summer of 1996; and
WHEREAS, the State had knowledge that the City Council and
Administration were engaged in a community-based planning process
to review existing enterprise zones and, specifically, to develop
a proposal to expand the North Shore enterprise zone to benefit
agricultural businesses; and
WHEREAS, the 1997 Legislature approved Senate Bill 37, SD1,
HD2, CD1, which expands the county-established North Shore
enterprise zone; and
WHEREAS, the legislation directly contradicts the intent and
spirit of Section 209E-4 of the Hawaii Revised Statutes by
usurping county home-rule and empowering the State to establish
the boundaries of economic zones, rather than to approve them as
mandated by State law; and
WHEREAS, the designation of enterprise zones by the State
raises questions about whether businesses located in such zones
qualify for State and/or county enterprise zone incentives, and
the period of time those incentives will be in effect; and
WHEREAS, the State Department of Business, Economic
Development and Tourism have always expressed serious concerns
about Che bill; and
WHEREAS, the State's action sets a bad precedent for future
enterprise zones across Oahu and the Neighbor Islands; now,
therefore,
CCP00569.597
'JUN 2a '97 02:39PN CITY COUNCIL (888) 523-4220 P.;;i2
RESOLUTION
BE IT RESOLVED by the Council of the City and County of
Honolulu that the Hawaii State government is urged to comply witl'
Section 209E-4 of the Yataii Revised Statutes, which authorizes
counties to designate enterprise zones; and
BE IT FIivALLY RESOLVED by this Council that the ~_erk-is
hereby directed to transmit cert_fied copies of this resolution
to the Governor of Hawaii, the Hawaii Senate, the Hawaii House
of Representatives, the State Department of Business, Economic
Development and Tourism, the Hawaii State Association of
Counties, the Mayor of the City and County of xonolulu, the
Mayors of the Neighbor Island Counties, and the County Councils
of the Neighbor Island Counties.
INTRODUCED BY:
r
DATE OF INTRODUCTION:
JUN ~ 41997
Honolulu, Hawaii Councilmembers
(OCS/062497/mg) "2"
CITY COUNCIL ADOPTED
CITY AND COUNYY OF HONOLULU MEETING HELD
Reference:
HONOLULU, HAWAII
E Report No.
I hereby certify that the foregoing RESOLUTION was EiA1NUM
adopted by the COUNCIL OF THE CI7V AND COUNTY OF FE I
HONOLULU on the date and by the vote indicated to the HANN MANN
right. HOLM ES
KIM Resolution No.
AYYE57: MANSHO
MIRIKITANI
YOSHIMUR
GENEVIEVE G. WONG JOHN OeS0Y0 De OT ry~ T~
Chy Cic,t CHAIP ANO PAESIniHG OrFlGER 9 ( N1,Z~
7Ye0