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HomeMy WebLinkAboutMIN COUNCIL 2020-05-13 2018-2020 Hawaii County Council Special Meeting 39th Session Hawaii County Building 25 Aupuni Street Hilo, Hawaii May 13, 2020 INVOCATION: Pastor Mark Zier of Crist Lutheran Church gave the morning's invocation. CALL TO The special meeting of the Hawaii County Council was called to order at ORDER: 2:03 p.m., in the Council Chambers, Hilo, by Mr. Aaron S. Y. Chung, Chair. ROLL CALL: Present: Mr. Aaron S. Y. Chung, Chair Ms. Karen Eoff, Vice Chair(via videoconference from Kona) Ms. Maile Medeiros David, Member (via videoconference from Kona) Mr. Matt Kaneali`i-Kleinfelder, Member Ms. Ashley L. Kierkiewicz, Member Ms. Susan L. K. Lee Loy, Member Ms. Valerie T. Poindexter, Member Mr. Herbert M. "Tim" Richards, III, Member Ms. Rebecca Villegas, Member (via videoconference from Kona) PLEDGE OF At this time, Ms. Kierkiewicz led the Council in the Pledge of Allegiance. ALLEGIANCE: STATEMENTS At this time, the Chair directed the Council to proceed to the next order of FROM THE business, Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: The following individuals registered to speak and came forward when called by the Chair: Leslie Crawford: Bill 169 (Comm. 926), in support. Charmaine Nalani Merrill: Bill 169 (Comm. 926), in support. Kristen Alice: Bill 169 (Comm. 926), in support. Hawaii County Council-39 May 13,2020 Dwight Vicente: Pledge of Allegiance; Res. 622-20 (Comm. 920); Res. 626-20 (Comm. 929); Bill 165 (Comm. 922); Bill 168 (Comm. 925); and Bill 169 (Comm. 926); comment Herbert Ushiroda, Jr.: Bill 169 (Comm. 926), in support. James R. Coe: Bill 169 (Comm. 926), in opposition. Eileen Lacerte: Bill 169 (Comm. 926), in opposition. Robert. A. Johnson: Bill 169 (Comm. 926), in opposition. (representing Kona SeaSpray) Edward Rapoza: Bill 169 (Comm. 926), in opposition. Dana Asis: Bill 169 (Comm. 926), in opposition. Teresa Eileen Wilkins Leicher: Bill 169 (Comm. 926), in opposition. Kawika Kauikamealohaponoiia Leicher: Bill 169 (Comm. 926), in opposition. Christy A. Logan: Bill 169 (Comm. 926), in opposition. David Hosbein: Bill 169 (Comm. 926), in opposition. (representing Lalamilo Homeowners Assn.) Tim Hosbein: Bill 169 (Comm. 926), in opposition. Carol Ann VonHoke: Bill 169 (Comm. 926), comment. CHR. CHUNG: Alright, let's go on to Order of Resolutions. ORDER OF The Chair directed the Council to proceed to the next order of business, Order of RESOLUTIONS: Resolutions. CHR. CHUNG: Mr. Clerk, Resolution 618-20. Page 2 Hawaii County Council-39 May 13,2020 Res. 618-20: TRANSFERS/APPROPRIATES AN APPROPRIATION OUT AND FROM A DESIGNATED FUND ACCOUNT AND CREDITS SAME TO A DESIGNATED FUND ACCOUNT Transfers $1,000 from the Department of Liquor Control, Public Programs account; and credits to the Clerk-Council Services —Contingency Relief account. Funds intended for the King Kamehameha Day Celebration are being returned as the event was cancelled due to the COVID-19 pandemic. Reference: Comm. 916 Intr. by: Ms. David (B/R) Waived: FC Motion to Approve: Ms. David moved to adopt Res. 618-20. Seconded by Ms. Eoff. CHR. CHUNG: Any discussion: MR. RICHARDS: Chair? CHR. CHUNG: Maile, do you want to say anything? MS. DAVID: Well no, this is pretty much self-explanatory. They're refunding the contingencies for I believe Council Members Villegas and Eoff because they couldn't use the funds. The event was canceled. CHR. CHUNG: So Mr. Richards has a question. Go ahead, Tim. MR. RICHARDS: Thanks, Chair. Thanks, Maile. Just a question. I understand why the refund is coming, but I think this is more of a question for the Administration. Because we have these incidences coming back. We're again in unprecedented times. What happens to the funding with this, and can we redirect? How do we handle this going forward? I have you know, I'd like to hear from the Administration, because we have things that have been approved that are getting hung up because the contracts aren't written, and we're running out of time to get the funding in to redirect for programs for our constituencies. I see Deanna's walked up here so she might have the start of an answer. (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Council.) MS. SAKO: Good afternoon. We generally, you know, once the monies are dispersed we just leave them dispersed and we don't return. This year is very different and because the events were actually canceled, and the nonprofits came back to us soon enough to say, "You know, we can't spend the money. We're trying to return it so that you guys can re-transfer back and use it for something Page 3 Hawaii County Council-39 May 13,2020 else." So if we are aware that it's a problem, we're returning as quickly as we can. We can try and talk to the departments to see if there's others, or if there's others you're aware of. MR. RICHARDS: Well, I appreciate, Deanna, you're talking about that, because we all recognize we're in a very unique time. For instance, I have a CRF (Contingency Relief Funds) out there for grad night celebration, and that's not happening. So what can we do with the funding? Can we adapt that? Does it have to be returned? If it gets returned, can I resubmit it for the feeding programs we have going? How do I get it through the system before I'm told I can't it through the system anymore? How do we handle this expediently and appropriately? Because I think just saying "Oh sorry, no can," is not the right answer. MS. SAKO: We have looked at whether this is something that could be waived in the Mayor's proclamation. But all of these grants are actually directed by Council, both these and the not-for-profit grant program that the current year is $1.5 million. So I think probably the preferential way is maybe to do a resolution or something to instruct the Administration how you would like them handled. So the ones we know about, we're happy to redirect back. There have been a couple requests from nonprofits. I'm not even sure we are able to talk to Council about them yet. They came up more recently, but it's actually part of the $1.5 million Council grants from the current year that they're afraid they're not going to be able to finish their program because of COVID. I mean they in good faith budgeted and applied for what they thought they needed, but because of COVID and social distancing, you know, it may be an after-school program or something like that, they're not able to see it through and they were able to spend all the money. So I think we're willing to follow whatever Council would like to do with that in terms of give them more time. I think every grant is a little bit different as well. Some of them—let's say it's an after-school program. Once school starts up again, they might be able to spend the money and finish it. If it was something else that is going to be impacted by our new normal, whatever that's going to be, you know, maybe they won't be able to do it. So we're willing to have a discussion and listen. It won't take us very long to amend grant agreements. If it's chosen to give them an extension, we can do that. But yeah, Corporation Counsel might want to weigh in on this, but yeah. MR. RICHARDS: Are you speaking for the Administration, or would it be best if we asked the Administration? We could Roy to come down. MS. SAKO: We have talked to Corporation Counsel about it, because recently there has been more and more requests about what to do with the money or do they need to return it, or you know, what the process is going to be. So we just Page 4 Hawaii County Council-39 May 13,2020 started having those conversations. So I'm happy to, you know, go back. But I thought that Corporation Counsel mentioned, you know, getting direction from the Council. MR. RICHARDS: Okay, what I'm concerned about is running out of time. If our fiscal year ended September or December, it would be different. But realistically, Clerk, to follow full protocols as far as getting a resolution through, even if we waive through committee, when do we have to have something on our dais to get this through? MR. HENRICKS: I don't know what this is right now, and I think that's what they're trying to figure out. Do you want to approach this as a collective effort or through individual situations? I think it's difficult to say. Then what needs to happen as a follow through? Say the resolution is adopted, what steps does the Administration need to take that might have to occur before the end of the fiscal year in order to effectuate whatever the purpose of the resolution was. I can't say at this time without more details and what kind of outcome and objective we're looking for. Singular, collective, it's very difficult to say. MR. RICHARDS: Well, in talking to some of the departments, though we are getting beyond their usual date for accepting this, they are being accommodating because we're trying to get—and so my concern is we—and I don't think, I know I'm not speaking just for myself. I'm sure other Council members have funding that is a little bit in limbo right now, and if we can't direct it to where we wanted to, when is the last moment we can direct it to one of these other programs? And that's the final question. And we need help getting that done because what I don't want to do is, "Oh we have a procedural error, so I'm sorry these kids don't get MS. SAKO: I hear what you're saying, and I think the departments have been very accommodating and will continue to be. We've been trying to spend it on things that are needed between now and the end of the year. But if that's not able to be done, you know, perhaps transferring it to the Capital Projects Fund that are set up for each district for that purpose might be an easier way. And then that money would be available for the next three years actually. MR. RICHARDS: Okay, so I think what I'm hearing is that the—and I assume you're speaking for the Administration, that they're going to make every effort to accommodate these requests going forward, and if not then we have someplace we can park the money to still try and take care of all of our concerns. MS. SAKO: Well I think our trains too late. We'll try to spend whatever we can. And like money going to a department like for a scoreboard or for Summer Fun that may be happening or not or something like that, that's usually for the departments to spend. Giving it to another nonprofit, if it's COVID related we'll Page 5 Hawaii County Council-39 May 13,2020 do our best. And if not it's probably best just to put it into just the Capital Fund appropriation. MR. RICHARDS: Okay. Chair, I'll yield. Still thinking. Thank you. I'll yield. CHR. CHUNG: Okay. You know, and I have a question. You guys getting kind of chummy, yeah. Try to move over. Social distance. You know, obviously this is something that needs more discussion, you know, as Tim brought up. But, you know, I also wanted to bring up this matter. You don't have to answer it today. But, you know, some of our contingency relief requests have been bounced, right, by the Mayor's Office. And the justification for the rejection has been that we are in a state of austerity and that things have to be related to COVID. And I certainly understand that, and I never raised a fuss. And after that I would ask in advance, you know, if these things would be approved. And I've respected it. But I'm just kind of wondering, you know, these are discretionary funds on the part of the Council. And you know, the road to recovery doesn't only mean we have to respond to COVID right now. You know, there's some degree of normalcy that has to occur when things get better, right? And that's all part of the grand plan. So I just want you to think about that and take that back to the Mayor because this may be the subject of more discussion. I don't want to take up more time. But I think, you know, coming off the heels of what Mr. Richards brought up. And I know some other Council Members have shared that concern as well. And this is something that we might have to discuss later on. Okay? MS. SAKO: I'm happy to take that message. CHR. CHUNG: Alright. Thank you. Anyone else? Val, go ahead. MS. POINDEXTER: Yeah. Thank you, Chair. Yeah, and I want to ditto what Aaron said because, you know, I know dealing with COVID-19 and the immediate needs are important. But just as important is the health and well-being of our communities. So when I was told that I couldn't give to the Portuguese Chamber that bothered me and it was pulled back. And, you know, even if it was going in for something maybe they could have it amended to talk about community health and building, you know, that mental health portion that the Mayor spoke about. So he cannot just look at the immediate health crisis with COVID-19 and not include the mental health piece because he talked about mental health. And so that whole community relationship and things that they do for our communities and for the people are very critical to their mental health as well. And then with what Council Member Tim Richards was asking, I just want to acknowledge that one year I had an excess of, I had some money left. So I parked it in Parks and Rec. and I didn't use it just for capital stuff. But it was used for Page 6 Hawaii County Council-39 May 13,2020 some of the needs that I had in different areas throughout my district. You know, whether it was funding hot water panels for the pool, or paint for the pool, or some improvements. But not just capital improvements, different things. MS. SAKO: Sort of like the capital improvement fund. So like the solar panels, the paint, those kinds of things we can do all those R&M activities, Repair and Maintenance activities, out of the capital project fund. MS. POINDEXTER: It would be under the capital, okay. Because I know I've parked money there and then I don't know if I did some things with seniors that wasn't really for building improvement kind of stuff, you know. So that kind of stuff, you should be able to speak with the departments you need to speak with and, you know, still be able to massage that in a way. And especially with what we're going through right now we should have some exemptions made. You know, where it's a little more flexible because we were thrown into this situation and we still need to help our people. So I think being a little bit more flexible on how that money can be spent is important. So I would ask that, if you can look into that with the Mayor. I yield. Thank you. CHR. CHUNG: Thank you. Good points, Val. Matt. MR. KANEALI`I-KLEINFELDER: I share the sentiments of my Council Members. And Tim brought up a good point; Aaron, a very clear common sense approach which is we gave the funds and now we have toI'm being asked right now to have them return the funds back to the County because they won't use it in the right amount of time. And it seems that it could be some very simple fixes, maybe just allowing us one year if it's for the same purpose next year so that won't have to return and redo. Because there's no guarantee that we'll have this amount of funding next year as well for our CRFs. And then I have a concern giving it to different departments because I have seen funding from other Council Members previous to me that has yet to be spent by those departments. So I would prefer to give it directly to those who need the funding versus giving it to a department that may or may not spend it with the current situation and with what I've seen from previous experience. So I agree and I would ask for a little leniency from the Administration for people to use the funds that were given in this time period. And I agree, Aaron, I've had multiples come back saying that our CRFs are not being processed at this time. And with what remaining CRF funds I have, knowing that I can't process a CRF before the end of the fiscal year that money is going to get rolled back into General Fund. And I'd rather see it go towards a nonprofit or an agency that needs it. So whatever you can do to help would be very good. Thank you. CHR. CHUNG: Ms. Lee Loy. Page 7 Hawaii County Council-39 May 13,2020 MS. LEE LOY: Thank you. And I agree with everything all of my colleagues said. I have experienced every single one; return of the money, another agency not wanting to process the paperwork in a timely manner when it was actually COVID response, other contingency money from prior Council Members that has not been expended. So taking all of that back. But I also want to you mentioned a resolution from the Council, right, that the Administration and or the Corporation Counsel was looking for some direction from us. Is that something that we can work towards? We're trying really hard to be flexible and deliver to our community. What would that resolution look like? Just some exceptions, some lenience MS. SAKO: Let me go back to Corporation Counsel because I think what we were initially looking at was to do something like picking a spokesperson or, you know, like in this case. But at the time we were talking about the not for profit grant program. So, you know, we just didn't want to have to wait for a meeting to make every single decision. But I can get back with Corporation Counsel and try see what we can come up with. MS. LEE LOY: Thank you, Chair. I'm going to yield. I think Deanna heard enough as far as all of our frustration on trying to deliver to our community. I yield. CHR. CHUNG: Thank you. Anyone in Kona want to talk? MS. DAVID: Go ahead now, Ms. Villegas. MS. VILLEGAS: Aloha, Deanna. Thanks for being here today. And I just wanted to thank you for—being new to this process, this year I want to put out a big thank you to my staff for helping me identify the allocations of the CRF funds that have already been made a few months ago. And as we looked into the future for events that were going to be happening in June and July, I want to thank Deanna and the other members of the Administration and the departments for helping us to pull those back. And you'll see some of those on the agenda today. So thank you for helping us navigate that. And I feel for the Council Members that are currently having to manage some of these circumstances because we are in a time that is so distinctly different than other times in the history of our County. But I just wanted to put out that mahalo. I yield. CHR. CHUNG: Okay. Thank you. And I wanted to mahalo Maile for her Resolution 618. It allowed us to kind of get off the track and talk about different things. So thank you, Maile. Anyway, we have a motion on the floor MS. DAVID: My pleasure. CHR. CHUNG: Anyway, we have a motion to approve Resolution 618-20. All those in favor signify by saying "aye." Page 8 Hawaii County Council-39 May 13,2020 Vote on Res. 618-20: The motion to adopt Res. 618-20 was carried by the (Adopted) following voice vote: Ayes: Council Members David, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair Chung—9. Noes: None. Absent: None. Excused: None. CHR. CHUNG: Motion carried. Res. 619-20: TRANSFERS/APPROPRIATES AN APPROPRIATION OUT AND FROM A DESIGNATED FUND ACCOUNT AND CREDITS SAME TO A DESIGNATED FUND ACCOUNT Transfers $4,000 from the Department of Liquor Control, Public Programs account; and credits to the Clerk-Council Services —Contingency Relief account. Funds intended for the West Hawaii Explorations Academy's Regional Robotics tournament are being returned as the event was cancelled due to the COVID-19 pandemic. Reference: Comm. 917 Intr. by: Ms. David (B/R) Waived: FC Motion to Approve: Ms. David moved to adopt Res. 619-20. Seconded by Ms. Villegas. CHR. CHUNG: Any discussion? MS. DAVID: This one is both Council Members Villegas and Eoff's refund. So if they want to say something. I yield. CHR. CHUNG: Okay. Ms. Villegas or Ms. Eoff? MS. EOFF: No. Just thank you for this process. MS. VILLEGAS: I just wanted to mention that we are extremely proud of our WHEA (West Hawaii Explorations Academy)robotics team and their ability to participate in this tournament. I know they were really devastated to not be able to go. But we are super grateful for the timeliness of their reaching out and being able to process all the paperwork to make sure that the refunds could happen and we wish them the best and hope that we'll be able to support them as we move into next year and hopefully a more normalized life. I yield. Page 9 Hawaii County Council-39 May 13,2020 CHR. CHUNG: Okay. We have a motion on the floor. All those in favor signify by saying "aye." Vote on Res. 619-20: The motion to adopt Res. 619-20 was carried by the (Adopted) following voice vote: Ayes: Council Members David, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair Chung—9. Noes: None. Absent: None. Excused: None. CHR. CHUNG: Motion carried. Res. 622-20: TRANSFERS/APPROPRIATES AN APPROPRIATION OUT AND FROM A DESIGNATED FUND ACCOUNT AND CREDITS SAME TO A DESIGNATED FUND ACCOUNT Transfers $950,000 from the Provision for Compensation Adjustment—GF account; and credits to the Workers Comp —G, Miscellaneous Charges ($600,000) and Transfer to Golf Course Fund($350,000) accounts to cover unanticipated worker's compensation costs and address lower than anticipated Golf Course revenues. Reference: Comm. 920 Intr. by: Ms. David (B/R) Waived: FC Motion to Approve: Ms. David moved to adopt Res. 622-20. Seconded by Ms. Villegas. CHR. CHUNG: Maile, you want to say anything? MS. DAVID: Yeah. Is Deanna still there? CHR. CHUNG: Yes. MS. DAVID: Okay, great. I see her. (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Council.) MS. SAKO: Did you want me to explain? Page 10 Hawaii County Council-39 May 13,2020 MS. DAVID: Yes. Hi, Deanna. Yes, I want you to give us a general explanation of the breakdown of this $950,000, if you can please? MS. SAKO: Yup. I just have to get to the right bill. So some of you may or may not know but we have a new person in charge of our Workers Comp. Division, Summer. And she is phenomenal and she's been doing a great j ob. But there's a few things, some out of her control and some within. Medical costs are going up. As I approve the invoices I see that each day. And so things that maybe cost a few thousand before are costing a few thousand more now. So that's part of it. In addition to that, we were short staffed in that section. And so we are catching up and processing claims that have kind of gotten behind. So she's closing out things. That increases our one-time cost but actually saves us money in the future. And then she's doing other things to follow up and I'll leave it at that. So that—but things to save us money in the future. So it is costing us more now but it should cost us less in about two years from now. And then the Transfer to Golf Course Fund is because that fund has had difficulties with revenue. Their costs haven't increased but they are having, you know, rain days and of course they were closed because of COVID. So their revenue structure or streams have been impacted. We do not want that fund to go into negative fund balance. So that's the gist of it and if you have more detailed questions I'm happy to answer those. MS. DAVID: Thank you. And that Transfer to Golf Course Fund is coming out of this particular account, why? MS. SAKO: So the Provision for Compensation Adjustment, we believe we're not going to have to pay raises in the current fiscal year and that they're probably going to get deferred to next year. In addition, we don't ever give the departments more than they actually need. So even if we end up having to pay the raises between now and June 30'h we would still have $950,000 left over for these two departments. And typically Parks and Rec. would have enough to cover golf course fund but unfortunately this year they've had additional security costs due to homeless and other situations. So they don't have enough this year. MS. DAVID: I see. Okay, great. Thanks for that explanation Director Sako. I yield. CHR. CHUNG: Okay. Anyone else? Mr. Richards. MR. RICHARDS: Yeah. Thank you, Chair. I understand the $350,000 for golf course and revenues, and I got that and weren't able to collect. But the $600,000 for Workers Comp., that's staggering. Now I know we are self-insured. Is this payout on previous claims? That's huge. Page 11 Hawaii County Council-39 May 13,2020 MS. SAKO: They're all ongoing claims. But some of the claims maybe should have been closed out sooner and weren't. So that's sort of the catch-up piece that we're going through right now. MR. RICHARDS: So has this been sitting out there for some time. It's just it's a huge number. MS. SAKO: There's different strategies to going it, definitely. That's a nice way to put it. Yes, the more aggressive strategy is to pay them out now to save costs in the future and that may not have always been the strategy. But we would like to get our total cost down on an annual basis. But it's not only that. I mean it's definitely increased cost and everything. I'm just trying to explain all the different pieces of it. MR. RICHARDS: Okay. Just it's a huge cost. Thank you, Chair. I yield. CHR. CHUNG: Matt. MR. KANEALI`I-KLEINFELDER: Thank you, Deanna. I'm going to follow up on Tim's question. I think two weeks ago or a month ago we did a transfer for, was it$300,000? Or there was a substantial amount that went from MS. SAKO: For one of the funds. MR. KANEALI`I-KLEINFELDER: Yeah. The Highway Fund. Within the Highways Fund was the roads in limbo account got drained of the $300,000 to put into the workers comp fund. And now we are increasing that by $600,000. What is our total workers comp adjustments that we made so far this year? MS. SAKO: I'm aware of those. I can't say for sure if there were any other funds. MR. KANEALI`I-KLEINFELDER: So about a million dollars? MS. SAKO: Some of it—no, that would be $900,000. MR. KANEALI`I-KLEINFELDER: Close to a million. And we already had funds in a Workers Comp. accounts in those different areas that we moved into? MS. SAKO: The bulk of the money is in the General Fund. Each of the funds do budget for workers comp based on previous experience. But the number of claims can vary. And so in Highway Fund, part of that was a number of claims in addition to increased cost and then being a little more aggressive on closing out. MR. KANEALI`I-KLEINFELDER: Understood. Is now the time to be doing something that's going to save us money in two years? Page 12 Hawaii County Council-39 May 13,2020 MS. SAKO: This was started prior to COVID. I mean we were kind of on this path before we knew what was going to happen. So at the time we thought it was a good plan, yes. MR. KANEALI`I-KLEINFELDER: Can we pull back a little bit or is it already moving? MS. SAKO: They are pulling back a little bit. But there's definite costs that we have that we need to cover. And some of the medical bills are definitely going up and we'd be having to transfer money anyway. MR. KANEALI`I-KLEINFELDER: So these workers comp costs increased by what we were expecting because we budgeted a certain amount for this year. And that's a pretty substantial increase to have to transfer $900,000 to cover increased costs. That's not a small number. MS. SAKO: No, I know. I'm just saying I look at it by fund. But, yes. MR. KANEALI`I-KLEINFELDER: And then can you share, I mean you talked about medical increase, medical expenses. I mean what else is there, what else happened? If it's not a COVID-19 related workers comp issue but, what has happened here? MS. SAKO: You know, I cannot share the type of claims you mean. There are some claims that cost more than others, yes, depending on the accident and what happened. MR. KANEALI`I-KLEINFELDER: Is that an executive session kind of stuff? MS. SAKO: Yes, it is. MR. KANEALI`I-KLEINFELDER: Can you share with us privately in an email form? MS. SAKO: I will not put it in writing, no. MR. KANEALI`I-KLEINFELDER: Just trying to figure it out. We're in charge of the funding on this side of the dais. MS. SAKO: I'm just saying I will not put it in writing nor speak about it publicly. MR. KANEALI`I-KLEINFELDER: Okay. Okay. MS. SAKO: You have another option. You'll figure it out. Page 13 Hawaii County Council-39 May 13,2020 MR. KANEALI`I-KLEINFELDER: Okay. Well I think more than one of us are asking. That's why I'm saying it might be easier versus have a—okay. So you can't share with us but we have increased by what we're expecting by almost a million dollars which is large. MS. SAKO: Yeah. And just so you guys do know we do try to keep the medical cost down. We actually hire a third-parry reviewer to review the claims to get us the cheapest rate possible with all of the facilities and providers. MR. KANEALI`I-KLEINFELDER: Okay. Thank you for your time. I appreciate it. CHR. CHUNG: Anyone else? If not we have motion on the floor. All those in favor signify by saying "aye." Vote on Res. 622-20: The motion to adopt Res. 622-20 was carried by the (Adopted) following voice vote: Ayes: Council Members David, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair Chung–9. Noes: None. Absent: None. Excused: None. CHR. CHUNG: Motion carried. Let's skip over to Resolution 626-20. Change Order As directed by the Chair and with no objection from the Council Members, of Business: the following items were taken out of order: Res. 626-20: TRANSFERS A REVENUE OUT AND FROM A DESIGNATED FUND ACCOUNT AND CREDITS SAME TO A DESIGNATED FUND ACCOUNT Transfers $350,000 from the following Golf Course Fund accounts: Golf Restaurant($28,000), Green Fees ($225,000), and Pro Shop/Driving Range ($97,000); and credits to the Transfer From General Fund account to address lower than anticipated Golf Course revenues. Reference: Comm. 929 Intr. by: Ms. David (B/R) Waived: FC Motion to Approve: Ms. David moved to adopt Res. 626-20. Seconded by Ms. Villegas. CHR. CHUNG: Any discussion? Page 14 Hawaii County Council-39 May 13,2020 MS. DAVID: Ms. Villegas wants the floor. CHR. CHUNG: Okay. Alright. MS. VILLEGAS: You know, as we listened to so many constituents talk about their concerns about the County budget and spending and allocation of our resources. It doesn't escape me that we continue to subsidize this golf course with tremendous amounts of money. And I guess I would encourage Parks and Rec. and those in charge of managing this golf course that perhaps we need to take a look at what we're charging for golf fees and what not because this course continues to be a great expense to the County as opposed to a money maker and also a source of challenged feeling about the fairness about not having a municipal golf course on the west side. So I just would like to put that forth as we do look at our budget. And I understand the frustrations of our constituents when we have to vote on something like this to patch something with, you know, a third of a million dollars. So with that I yield. CHR. CHUNG: Okay. Anyone else? There being none, all those in favor say Ic aye. Vote on Res. 626-20: The motion to adopt Res. 626-20 was carried by the (Adopted) following voice vote: Ayes: Council Members David, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair Chung—9. Noes: None. Absent: None. Excused: None. CHR. CHUNG: Motion carried. Page 15 Hawaii County Council-39 May 13,2020 Res. 630-20: TRANSFERS/APPROPRIATES AN APPROPRIATION OUT AND FROM A DESIGNATED FUND ACCOUNT AND CREDITS SAME TO A DESIGNATED FUND ACCOUNT Transfers $3,000 from the Department of Research and Development, Tourism Promotion account; and credits to the Clerk-Council Services —Contingency Relief account. Funds intended for the Malasada Shuffle 5K and Family Fun Festa Radiothon are being returned as the event was cancelled due to the COVID- 19 pandemic. Reference: Comm. 931 Intr. by: Ms. David (B/R) Waived: FC Motion to Approve: Ms. David moved to adopt Res. 630-20. Seconded by Mr. Richards. CHR. CHUNG: Any discussion there? Ms. David. MS. DAVID: No. Yeah, this is the same reimbursement so I can funnel the funds within this short timeframe and put it the feeding, feeding our people, Food Basket, etcetera. Thanks. CHR. CHUNG: Alright. No further discussion. All those in favor say "aye." Vote on Res. 630-20: The motion to adopt Res. 630-20 was carried by the (Adopted) following voice vote: Ayes: Council Members David, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair Chung—9. Noes: None. Absent: None. Excused: None. CHR. CHUNG: Motion carried. Let's go on to Bills for Ordinances, First Reading. Bill 165. BILLS FOR The Chair directed the Council to proceed to the next order of business, Bills for ORDINANCES Ordinances (First Reading). (FIRST READING): Page 16 Hawaii County Council-39 May 13,2020 Bill 165: AMENDS ORDINANCE NO. 19-73, AS AMENDED, THE OPERATING BUDGET FOR THE COUNTY OF HAWAII FOR THE FISCAL YEAR ENDING JUNE 30, 2020 Increases revenues in the Federal Grants —Housing Choice Voucher Program account($500,000); and appropriates the same to the Voucher Rental Subsidies account, for a total appropriation of$19,727,430. Funds would be used for housing assistance payment subsidies for eligible participants and to cover various expenses due to the COVID-19 pandemic. Reference: Comm. 922 Intr. by: Ms. David (B/R) Waived: FC Motion to Approve: Ms. David moved to pass Bill 165 on first reading. Seconded by Ms. Kierkiewicz. CHR. CHUNG: Any discussion? Ms. Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. If I could ask Housing Administrator Duane Hosaka to come forward? I have a few questions, please. (Note: At this time, Housing Administrator Duane Hosaka came forward to address the members of the Council.) MR. HOSAKA: Duane Hosaka, Housing Administrator. MS. KIERKIEWICZ: Hi Duane,just a couple of questions. The $500,000, is this a one-time thing from the federal government or can we count on that increased appropriation in, you know, upcoming fiscal years? MR. HOSAKA: Well because of the, I guess the clients or the people either being laid off or reduction in pay we had to give more to the housing vouchers. So we asked HUD (Housing and Urban Development) for this extra $500,000 to cover. So this $500,000 will cover about 600 families, 600 homes. MS. KIERKIEWICZ: Six hundred families. And then are you doing this allotment by district or are you looking at your waitlist and serving those families first? Just trying to understand how you're getting the vouchers out. MR. HOSAKA: Yeah. This should cover whoever is in need of, you know, the extra money. MS. KIERKIEWICZ: So your waitlist or anyone can apply? MR. HOSAKA: Not on the waitlist. They're already receiving assistance. It's not new people. They're already on the system. Page 17 Hawaii County Council-39 May 13,2020 MS. KIERKIEWICZ: So okay, I'm a little confused now. MR. HOSAKA: So say if we MS. KIERKIEWICZ: How were they being supported without this $500,000? MR. HOSAKA: Say we were paying out$800 a month in rental assistance. Because they're income went down we may have to be paying $850 a month. MS. KIERKIEWICZ: I see. Okay. MR. HOSAKA: Because of this extra money we didn't anticipate having to pay that extra. So we asked HUD for this extra money to help cover the cost. MS. KIERKIEWICZ: So you are helping 600 families kind of fill in the gap? MR. HOSAKA: Yes. MS. KIERKIEWICZ: Okay. Thank you for that clarification. I wasn't under the impression if we were going to serve an additional number of families. But it just seems that we're going to serve existing clients. Thank you for going after those funds. I appreciate it. MR. HOSAKA: So we have about 2,000 on average of families receiving assistance. MS. KIERKIEWICZ: Okay, great. Thank you for the clarification. I appreciate it. MR. RICHARDS: Excellent timing, Chair. CHR. CHUNG: Thank you. Mr. Richards. MR. RICHARDS: Thank you, Chair. Duane, what is the projected length of this additional help? What are planning on, how many months? What do you think the funding will last? MR. HOSAKA: This should last them for a couple months at least. If we need more we can ask for more money. MR. RICHARDS: Okay. So for this project, program, however you want to characterize it, maybe three or four months' worth and possible renewing if we need to? MR. HOSAKA: Yes. Page 18 Hawaii County Council-39 May 13,2020 MR. RICHARDS: Okay. Thanks. I yield. CHR. CHUNG: Anyone else? If not we have a motion on the floor. All those in favor signify by saying "aye." Vote on Bill 165: The motion to pass Bill 165 on first reading was carried by (Approved) the following voice vote: Ayes: Council Members David, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair Chung—9. Noes: None. Absent: None. Excused: None. CHR. CHUNG: Motion carried. Let's go back now to Resolution 625-20. Return to Order The Chair directed the Council to return to the order of business. of Business: Res. 625-20: AUTHORIZES THE OFFICE OF THE MAYOR TO ENTER INTO AN AGREEMENT WITH THE STATE OF HAWAII Allows for the receipt of Federally-derived funds to cover unanticipated costs for necessary expenditures incurred due to the COVID-19 pandemic. Reference: Comm. 925 Intr. by: Ms. David (B/R) Waived: FC Motion to Approve: Ms. David moved to adopt Res. 625-20. Seconded by Mr. Richards. CHR. CHUNG: Any discussion? MS. DAVID: I believe if Director Sako is still there she could actually explain this. I believe it creates the method of the County receiving the funding from the State. So, Ms. Sako. (Note: At this time, Finance Director Deanna S. Sako came forward to address the members of the Council.) MS. SAKO: Good afternoon again. So these particular funds are from the CARES act and they're coming through the State because we are a County with less than 500,000 population. So City and County got their share directly but Maui, Kauai and us did not. So they're coming through the State. So we need a Page 19 Hawaii County Council-39 May 13,2020 resolution to enter into agreement to get those monies from the State. And then there's a related Bill 168 that would provide the funding that we can discuss separately. CHR. CHUNG: Okay. So Deanna, this is for the CARES package that is currently before the legislature? MS. SAKO: Yes. Well I have Senate Bill 75 here now. CHR. CHUNG: Yeah. Correct. Let me just make a comment. The current version that we've seen of this bill has some provisos as they relate to the respective counties. And as best as I can recall it says that these monies shall have oversight by the respective County Councils. So I just want to make sure that this does not, I mean, that requirement is still protected under whatever agreement we authorize today. MS. SAKO: So the MOU will be coming, is our understanding from the State. And then in addition to that, yes, we do have an amendment later to the bill which sort of is authorizing it in piecemeal. But as with anything when the leg. is in session requirements keep changing and keep getting asked for different things as well as getting mixed signals between the house and the senate. So we are doing the best we can with the information we have. And that's initially why we're only appropriating part of the money, to kind of explain this is how we're spending this. And then as we have our plan together we can discuss the rest of it. CHR. CHUNG: Right. But, you know, we want to fast track this. As soon as it's approved we want to be able to get that money here as soon as possible. I think we're all in agreement with that. MS. SAKO: Yes. CHR. CHUNG: I don't think you answered my question though. How are we given? MS. SAKO: Appropriation pieces is what I was trying to explain. As we appropriate that's kind of we're explaining how we're spending it. CHR. CHUNG: Okay, okay. So this will in no way compromise our ability to be involved in the way those monies are appropriated? MS. SAKO: Correct. CHR. CHUNG: Okay. Ms. Lee Loy. MS. SAKO: But it does allow us to enter into the agreement. Page 20 Hawaii County Council-39 May 13,2020 CHR. CHUNG: Right. Okay. MS. LEE LOY: And thank you, Chair. That actually was my question. And I too am looking at that Senate Bill 75. All the counties got it. But as Chair Chung mentioned there's a proviso that the administration would consult with the Council. You've answered that. But there's also another piece beginning June 1, 2020 the County of Hawaii shall submit a monthly report to the governor and the legislature that details all allocations and expenditures. How will this body see that? Because the way it's structured it's administration to the Governor and then legislature. How can we see how those funds are being expended? MS. SAKO: We can copy you on the report just like how we do a lot of other reports that we submit on a regular basis. MS. LEE LOY: And then one other question. And this is very fluid. It's happening very fast. One request that I've seen that just came out was the senate Ways and Means Committee is requesting that the Mayor of the County of Hawaii, actually all the counties,provide a detailed budget plan on how their allocated CARES Act funding will be spent. That is due on Friday, May 15, at noon. Are you guys prepared to do that and can this body see a copy of that expenditure or plan as it's transmitted? Is that something we can also get, Deanna? MS. SAKO: Yeah. I don't think the Mayor would have a problem copying you guys as we transmit it. Obviously, we'll be working on that tomorrow. That was part of the mixed signals, you know, we're getting from the House and the Senate. You know, this whole process has been a little confusing. There's a lot of different funding streams on not just this corona relief fund but also other sources. And so every department is applying for every grant that they can. And Duane didn't say it but there's several more bills that are going to be coming before you from all varying in sizes of amounts. I mean, no amount is too small. They're going after it. MS. LEE LOY: Alright. Thank you, Deanna. Thank you, Chair. I yield. MR. KANEALI`I-KLEINFELDER: Thank you, Chair. This kind of brings you back to Mauna Kea a little bit. Are we using Section 46-7 to do this transfer into an agreement? MS. SAKO: I think that's what it says but I don't recall. MR. KANEALI`I-KLEINFELDER: That's how we do it, yeah? And then the MOU you have or you don't have? MS. SAKO: We have not received it from the state yet. Page 21 Hawaii County Council-39 May 13,2020 MR. KANEALI`I-KLEINFELDER: But once we sign off on this resolution then we are approving the MOU? MS. SAKO: Yes. But the state will also have to follow what's in the act. MR. KANEALI`I-KLEINFELDER: Okay. I agree with MS. SAKO: And this moneyI want to clarify something because this money is a little bit different. Even though it's coming from the state these are federal funds coming through the state. So we have to abide by the federal requirements that was in the initial law that come down. So those are very specific and so that's why we're still working on the entire plan of what's available to spend the money on. MR. KANEALI`I-KLEINFELDER: Agreed. But I think what I'm hearing right now is that the Council wants to make sure that we're still in the loop as far as how and when expenditures are made, yeah? MS. SAKO: No. And we're happy to do that. I'm just trying to clarify that this isn't like other state money where it's come to us and we have a lot more freedom maybe of how we can spend it. This is pretty specific in the CARES Act. MR. KANEALI`I-KLEINFELDER: It is. I think we've all been, even Nancy, has been busy trying to figure out what we can spend this on and how we can spend it and by when. There's some very certain criteria that we have to meet. But given if we did get$80 million, if this County were to spend that appropriately we could do some good for our community. That brings me to my next question, how have you been tracking expenses? MS. SAKO: So we have our project accounting software which is part of our, you know, County software and we code it to COVID-19. And then in addition if someone forgets to code it then we also double-up follow back with departments to make sure they're reviewing their list of expenditures so that they can give us any additional one that they have missed. MR. KANEALI`I-KLEINFELDER: Okay, good. It's very similar to how we handled the Mauna Kea expenditures, Deanna. I was thinking about that before I came into the meeting today. MS. SAKO: Yup. MR. KANEALI`I-KLEINFELDER: Okay. I yield today. Thank you. CHR. CHUNG: Thank you. Tim. Page 22 Hawaii County Council-39 May 13,2020 MR. RICHARDS: Thanks, Chair. And thanks, Deanna, for following through. And I agree we've had CARES Act 3, 3.5, which maybe 4, whatever. And so the different funding windows are, they're all over in that. And I was on a call earlier today discussing specifically that and how we might qualify. And it's my understanding in the new legislation before Congress that there should be direct funding to counties of less than $500,000 coming forth in that. And as I read this, this is our venue to transfer funds from the State into the County for us to have. And we understand that. Is this again to streamline things, can we use this for the federal assuming that would come forth or are we going to come back with more legislation to do that as well? MS. SAKO: I'm happy to amend this if that's what this body wants to, you know, add in any agreements with the federal government also related to COVID if that's what it takes to fast track it. But you know, if the preference was to come back, we're fine with that too. Obviously, I don't have a lot of information about CARES 4. We've been monitoring it daily. Steve's on it, let me tell you. But it is, you know, sometimes it gets lost in the whole political shuffle. And so we don't know when that will be. MR. RICHARDS: Right. So Chair,just throwing that out. Again trying to fast track as quickly as possible. And either way I'm,based upon the call today I think it's reasonable to assume that we will have direct federal funding, because only something like three percent of the counties in the nation qualified for that $500,000 and greater. So they are trying to fix that. And I just throw that out, Chair. I don't want to hold this one up because we want the funding to come forth especially in light of Senate Bill 75. But there may be other ways. I just want to fast track it. And Steve, I got a spreadsheet I want to share with you later. We'll talk story. MS. SAKO: He has some too. He can probably share with you too. MR. RICHARDS: Okay. Thanks, Chair. I yield. CHR. CHUNG: Ashley. MS. KIERKIEWICZ: Thank you, Chair. Thanks, Deanna. I know that you and your staff have been working really hard to monitor these funds and make sure we get our fair share. It's very reminiscent to me of lava and when the legislature, you know, appropriated the $60 million to ensure that, you know, legislative and administrative branches were working together. And so I like that they've taken this approach with the CARES Act as well. I think we're going to be better for it in the long-term in terms of like just being more unified in how we proceed as a County and as an island. Page 23 Hawaii County Council-39 May 13,2020 You know, I saw the article in the paper about, you know,just some of the things money can or cannot be spent on. Just wondering if there's any additional insight you can, you know, shine a light on with that? MS. SAKO: So, you know, definitely the money—well Steve's here too. But there's a whole list online. But, you know, it cannot be spent on anything that's already included in our budget. But it can be spent on anything that's necessary for public health and safety. It has to be spent for expenditures incurred between March I" and December 30'h of this year. So we have to spend it all by December 30''. And spent, out the door spent. Not just encumbered. MS. KIERKIEWICZ: We can't just encumber? It has to be checks written out the door. MS. SAKO: Yup. MS. KIERKIEWICZ: That's an insane amount of money to be spending. MS. SAKO: Yes. So but one of the things we can use it for over and above whatever cost we might have for the County or different packages is definitely economic stimulus. And the part we're still kind of making sure, and Mr. Richards might have additional information, but we have to make sure there's no duplicate benefit to people. And so that's the part that there's so many programs out there that we have to ensure that there's no duplicate benefits. So we're trying to come up with programs that almost like guarantee that there wouldn't be a duplicate benefit because no one else is doing it. MS. KIERKIEWICZ: I see. Okay. MS. SAKO: So if someone applied for the PPP (Paycheck Protection Program) loan through their financial institution, one of the businesses. And they received it for, you know,payroll and continue payroll. We can't then also give a grant that would cover those same payroll dollars. They would have to be able to prove that they spent more than that. MS. KIERKIEWICZ: I see what you're saying. MS. SAKO: There's a lot of the duplication of benefits that we really need to prevent. MS. KIERKIEWICZ: Okay. And just to confirm, we are not able to spend any of this CARES Act money on food. So supporting Food Basket or any of the hot meal service that Boys and Girls Club is providing. MS. SAKO: We have asked for this. We have asked about FEMA (Federal Emergency Management Agency) funding. They're fine with delivery. You Page 24 Hawaii County Council-39 May 13,2020 know, schools get the money to feed the students. And so it's getting it to them so we can pay for delivery. But we cannot pay for food. MS. KIERKIEWICZ: I see. Okay. So it's in partnership here with maybe DOE (Department of Education). Okay, got it. Are we going to have to bring on any temporary folks to manage these monies? I mean I'm worried about claw back if there isn't proper oversight and management of every dollar. MS. SAKO: So far given the time period our staff are doing it. So, you know, doing it well. But we're very anal about claw back and we haven't had to really payback and we don't intend to want to start ever. So we try really hard to make sure up front that we're not going to have duplication of benefits or anything like that. But if we need to we will,just like we brought on temporary workers to help with disinfecting and other things like that. MS. KIERKIEWICZ: Okay. I just want to be really, really mindful because, you know, when we uncovered the thing with Mass Transit last budget hearing, I just want to make sure that your team, as excellent as it is, gets all the support it needs to manage these funds. You know, I'm also curious to see if there's a way that I can be helpful. And I'm wondering, you know, as GRED Chair, Government Relations, Economic Development, I'd like to offer myself up. Potentially even my Vice Chair to help you do the heavy lifting. You know that I can. We've set up a couple of programs together already. So I'm happy to assist in any way. One question I have, we're ready to launch the emergency resilience loan program next week with Hawaii Community Assets. Thank you for your help on that. Can any of that CARES Act money be then positioned to help fund that program even further? MS. SAKO: Yes. That's some of what we're looking at and reading the guidelines to make sure we're not, you know, double benefiting anyone. MS. KIERKIEWICZ: Okay. And we are working really closely with Sharon and others in your office to make sure that we're setting up a system where kokua can go far and wide, and we're taking care of everybody first before we then figure out how do we, you know, help you again. MS. SAKO: I think that was kind of set up as an initial like pilot almost to see what the need was because no one was sure exactly what it would be. MS. KIERKIEWICZ: Yeah. And I mean the conversations we had over the weekend to talk about how the program would be structured and set up. All very exciting, and we would anticipate a very successful launch and that we could easily stand up a phase two to go even further and really drive some social impact investment in our community. Okay, happy to assist in any way. Really interested to see the strategy that's going to be put forth. I want to make sure that Page 25 Hawaii County Council-39 May 13,2020 we're braiding all of these federal monies together to make the most impact here in our County. You know, texting some friends at the leg now it seems that this bill is going to be voted on, on Friday. And I assume our County is going to have a little extra time to submit that report. I'd love to be involved in those conversations. If possible, Chair, I'm going to kind of appoint myself to maybe be the voice of the Council on this one and report back to colleagues where it's appropriate. Anyway thank you, Deanna, for your time. Chair, I yield. CHR. CHUNG: Val. MS. POINDEXTER: Yeah. I'm hoping that the CARES Act will also help fund, if any department is going to have a major impact it's Parks and Recreation and it's because of all of their facilities and, you know, they're dealing with the community. And they're definitely going to have to change how they do their programs. So it's going to cost so much more. So I'm hoping—and, you know, the senior programs. And we need to keep those going. They're the heartbeat of the community, those facilities. So is the Mayor considering that, is that on the list or has that been talked about? MS. SAKO: We've talked about Parks and Rec. a lot actually because we do know that they need to revamp their program. A lot of the departments, in order to reopen we need to make changes, you know, even if our staff are far apart sometimes our customers are not. So all of those types of costs are going to be covered by this grant. MS. POINDEXTER: Right. And it's not just our gyms. MS. SAKO: No. MS. POINDEXTER: We look at the pools, you know, our seniors. And people use the pools for therapy. So a lot of them are just anxiously waiting to get back into their own therapy. But a lot of changes at the pool and how that's going to happen. It's going to be interesting. I don't know how you guys are going to roll that out. But I'm hoping that a lot of this money will get used for the community and that's for Parks and Recreation. Thank you. MS. SAKO: I think, yes, they know that and they know that money is available. MS. POINDEXTER: Thank you. I yield, Chair. CHR. CHUNG: Thank you, Val. Okay, we have a motion on the floor. MS. LEE LOY: Chair, I'm sorry. Page 26 Hawaii County Council-39 May 13,2020 CHR. CHUNG: Yeah, go ahead. MS. LEE LOY: I have one follow up question. CHR. CHUNG: Alright. MS. LEE LOY: I'm sorry. Thank you, Chair. In addition to everything that was discussed, the CARES Act in this senate bill talks about the liquidity information. And that actually helps us with our bonds. Correct, Deanna? Can you expand on that? I think that's really important to share because in addition to this $80 million which is a crazy amount of money as Ms. Kierkiewicz mentioned, there's also some actual safety mechanisms that are going on in this piece of legislation that the legislature is actually helping take care of us. MS. SAKO: So we have had several discussions with them. And, you know, so again we're—even I think in this case I can't remember if City and County can apply on their own. But you're supposed to go through your state. And be able to get this liquidity. So when we issue bonds we normally, you know, it's based on our bond rating and we get very good interest rates. But because,just like the stock market, the bond market has had a few ups and downs, this is facility so that the feds would buy the bonds directly, and so we'd have that source. We were planning on going out for bonds in September. So let's say the bond market hasn't really recovered and maybe the interest rates are really high or we're not sure, then we could actually use this facility to go borrow so that we wouldn't have to pay those higher interest rates. MS. LEE LOY: Thank you, Deanna. Chair, I yield. CHR. CHUNG: Okay. Anyone else? There being none we have a motion on the floor. All those in favor say "aye." Vote on Res. 625-20: The motion to adopt Res. 625-20 was carried by the (Adopted) following voice vote: Ayes: Council Members David, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair Chung–9. Noes: None. Absent: None. Excused: None. CHR. CHUNG: Motion carried. Bill 168, yes. Page 27 Hawaii County Council-39 May 13,2020 Bill 168: AMENDS ORDINANCE NO. 19-73, AS AMENDED, THE OPERATING BUDGET FOR THE COUNTY OF HAWAII FOR THE FISCAL YEAR ENDING JUNE 30, 2020 Appropriates revenues in the Federal Grants —Coronavirus Relief—CARES Act account($1); and appropriates the same to the Coronavirus Relief—CARES Act. Establishes an account for the receipt of an undetermined amount of Federal funds to be used to cover unanticipated costs for necessary expenditures incurred due to the COVID-19 pandemic. Reference: Comm. 925 Intr. by: Ms. David (B/R) Waived: FC Motion to Approve: Ms. David moved to pass Bill 168 on first reading. Seconded by Mr. Richards. Motion to Amend: Ms. David moved to amend Bill 168 with the contents of Comm. 925.1. Seconded by Ms. Villegas. CHR. CHUNG: Go ahead. MS. DAVID: Thank you. And I believe Ms. Sako, this amendment, could you explain this amendment as it relates to Bill 168. MS. SAKO: So you know, we did read the Senate Bill 75 coming in from the house and consulting with Council and all of that. So we wanted to, I guess, appropriate what we know we kind of plans for spending right now or have spent already. Then we get the request to say how you're going to spend the whole $80 million. So there's a little bit of inconsistencies and I'm still extremely grateful for the money. So we're trying to come up with the plan at the same time while waiting for CARES 4, which we hope is separate from this $80 million. But the CARES 4 is to balance the budget. But if they morph together there is concern that if we spend all the $80 million then we won't have anything left to help balance the budget and modify revenue sources. So this $11 million is for PPE, and disinfection, and sanitation, and temporary people, and everything we're spent so far as well as to continue those activities through the end of the year where there have been some small other economic stimulus funds. There's the loan program. There's, you know, a variety of things that have been included in here. And one of the things that's also in Bill 75 is the I think it's contact tracing, that it looks like maybe it's being passed down from the Department of Health to the counties. We're not real sure about that. So we did include a little bit of money for that as well just in case we do have to carry that out. Right now the Department of Health is doing it. Our staff, and when I say our staff I mean the entire County specifically Police and others that have been helping them to trace those contacts as well. Page 28 Hawaii County Council-39 May 13,2020 MS. DAVID: Thank you. And basically the amendment, now that you have some amounts certain, the $11 million that you're talking about it just, the amendment puts in the actual figure and takes out the one dollar placeholder that initially was prepared for the bill, right? MS. SAKO: Correct. And the total actually coming through Bill 75 is $80,009,671. MS. DAVID: Okay. And then future expenditures you noted. MS. SAKO: So now that the Senate is asking for a complete plan and hurry up and come up with your plan and how you're going to spend this, you know, don't be surprised if next week at second reading perhaps we amend it to the full amount. MS. DAVID: I see. MS. SAKO: But we would have a plan with that that we would be discussing at the same time. MS. DAVID: Okay. That was my next question. So thank you for answering that. MS. SAKO: I will tell you that while it seems like a long time till December, that's not a lot of time to spend this amount of money. MS. DAVID: Yes. I can believe that. Thank you. I yield. CHR. CHUNG: Okay. We have a motion on the floor. All those in favor signify by saying "aye." Vote on Motion The motion to amend Bill 168 with the contents of to Amend: Comm. 925.1 was carried by the following voice vote: (Approved) Ayes: Council Members David, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair Chung—9. Noes: None. Absent: None. Excused: None. CHR. CHUNG: Motion carried. MR. HENRICKS: So that amended the bill. So we have the main motion as amended on the floor. Page 29 Hawaii County Council-39 May 13,2020 CHR. CHUNG: Right. Okay. So let's get back to the main motion. That was on the amendment. MR. HENRICKS: Correct. CHR. CHUNG: So let's go back to the main motion. Any discussion there? If not, all those in favor say "aye." Vote on Bill 168: The motion to pass Bill 168 on first reading, as amended to Draft 2 Draft 2, was carried by the following voice vote: (Approved) Ayes: Council Members David, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair Chung—9. Noes: None. Absent: None. Excused: None. CHR. CHUNG: Motion carried. Bill 169: AMENDS CHAPTER 19 OF THE HAWAII COUNTY CODE 1983 (2016 EDITION, AS AMENDED), ARTICLE 6, BY ADDING A NEW SECTION TO CREATE TWO TIERS FOR THE RESIDENTIAL CLASS; AND ARTICLE 11, SECTION 19-90, BY ADDING A NEW SECTION AUTHORIZING COUNCIL TO SET TAX RATES FOR EACH TIER, RELATING TO REAL PROPERTY TAX Establishes two tiers of tax rates for properties classified as Residential; Residential Tier One Property and Residential Tier Two Property. Residential Tier Two property tax rates would apply to properties in the Residential class with an assessed value of$2 million or more that are not receiving a home exemption, or properties in the Residential class that are vacant land with an assessed value of $2 million or more. Reference: Comm. 926 Intr. by: Ms. David and Mr. Chung Waived: FC Motion to Approve: Ms. David moved to pass Bill 169 on first reading. Seconded by Ms. Villegas. CHR. CHUNG: You want me to start this off, Maile? MS. DAVID: Sure, Chair. Go right ahead. Page 30 Hawaii County Council-39 May 13,2020 CHR. CHUNG: Okay. If you guys don't mind I'll just speak from this seat. You know, there's been a lot of discussion about this thing, not just lately but over the years. I just wanted to give you guys my thinking and I think it's probably shared by Maile. But, you know, there's a very subtle but significant difference between our position, or my position, and the administrations. What I'd intended to do and I've always been toying with this and we're waiting for a little bit more direction from a situation with the City and County, but I wasn't intending to have this thing surface this fiscal year. It was actually for next year where we could, you know, have a little bit more thorough vetting when COVID had cleared itself and we could have a lot of participation. But as it turns out COVID has hastened the necessity for something like this. Now we have the CARES Act that's going through the legislature. And it's very possible that we may be able to balance our budget this year. But things are so fluid that it's very difficult to tell at this point. I think this is a handy tool. You know, I kind of jerked when I say, you know, a $3.50 increase in this second tier that was, you know, advanced by the administration. Even if this measure passes today I cannot guarantee that they'll have my support on a$3.50 rate increase for that second tier. And again, you know, it's kind of coincidental that HOPE Services, whom I had never spoken to on this matter before, should come because it had always been my idea that whatever revenues were generated via this increase could be in part or in total used for affordable housing and homelessness. And it was my further hope that those persons who were affected could see clearly what their monies were being used for even if, you know, I certainly can understand their angst. But at least if they could see that it was specifically earmarked for a very, very important social purpose, that they'd be a least a little bit more amenable or accepting of the proposal. But you know, things have changed. And now we're looking at having to try and balance our budget. And so I certainly again understand how people might be feeling that now, you know, we're balancing the budget on their backs. That's a bitter pill to swallow. I certainly understand that as well. But you know, when I looked over the people who testified today, a lot of them were in the real estate business. So, you know, they have vested interest and their points of view of course are very, very important and they make good points. The people who are being affected by this are not using up our resources here whether it be healthcare or others. They're only here for about a month. And at the same time they're paying a huge amount of taxes and they're also employing our workforce. So there's a lot of benefits. But at the same time, you know, on the other side I think to myself, $2 million second home. You know, our local community, we don't even have a $2 million first or a $500,000 first home. But$2 million second home. You know, and that addresses some of the concerns that were brought up by some other folks. You know, they were saying, "Well, what's to prevent the Council for moving the threshold from $2 million down to $1 million." I think that's highly unlikely. Page 31 Hawaii County Council-39 May 13,2020 And that's not the proposal before us anyway. More than likely that$2 million is going to go up higher over the years, I think as valuations get higher. And there was another fellow where two people, the Leichers, who are worried about how this might affect their property down in Keauhou Bay. But I believe that it won't affect them, and I wanted to assure them because they are homeowners. And there was even some talk that it might've been on ag land, too, and that's not going to be covered by this. This is specifically only for residential properties that are not part of a homeowner exemption. So the person who's living there, if they're living there it's not going to be affected by this two-tiered rate. I am concerned though about this thing withI don't even know how you pronounce their last names. I think it was David and Tim Hosbein or something like that, you know, who've had their properties for a long time, you know, and especially it's through the foresight of their parent or grandparent. But, you know, it's possible that we could think of some ways of carving out exceptions for persons, you know, in those types of situations. And that can be done later. I am concerned about that. But, you know, I think this is a tool that we should try to advance. If we don't apply it this year well so be it. But at least, you know, we're looking at a really bad situation next fiscal year. I think people don't realize it. It's going to be worst next fiscal year than this fiscal year. So maybe if we can just hold this. If we don't use it this year, we can use it next time. If we have to use it this year, well then so be it. But that's just my thoughts and I just wanted to give you a little, share the difference between my view of this and how the administration was going at it. They're there to balance the budget and, you know, unfortunately that's the reality of the situation. I was looking at it a little differently. It wasn't going to be used this year. But here we are, so that's that. Maile, you want to say anything? MS. DAVID: Yes. Thank you, Chair. And thank you for that explanation. And the fact that I've agreed to co-introduce this was because I really believe that this bill establishes or creates the process to implement or to put within our Code a tier tax section or tier tax rate. So we're creating the process and I wanted to dispel some of the concerns that people were assuming that if we passed this bill we've already raised the tax. But this is to create the process. And like you said, in order to affect a tax increase whether it's the increase being proposed by the administration at this time, there is a separate process for that. And that will involve coming forward with a resolution, and then also the public hearings to inform the public and get public input. So for the reasons you've stated and I believe I think there is a fair process in order to really look into this matter and have it available in case we do need it. I also feel that if this goes through and we get that fourth federal funding that Page 32 Hawaii County Council-39 May 13,2020 Ms. Deanna Sako is talking about, then it's probably not going to happen. So I really think that we need to have this within our procedures as does the City and County of Honolulu and also Maui County, because I think they did it way before we did and it's a useful tool. And like you said, it's not set in stone and it can change as we move forward. So I'd like to hear from the rest of my Council Members at this point. So I'll yield. Thank you, Chair. CHR. CHUNG: Thank you. Mr. Richards. MR. RICHARDS: Thank you, Chair. I appreciate it coming forward and it seems like every year we're trying to do business and we get faced with another challenge coming forward. On principle I don't support this and I'll tell you why. We're in a financial problem and we've heard constituents testifying and I agree that we should be more interested in cutting a budget rather than trying to figure out how to fund the budget that's before us. And I was puzzled but when Chair Chung made the comment, and I agree with him, that if we were to come up with a program that was being funded by this two-tier situation, I might be interested in that. But I think the timing of this is wrong. And, Chair, if it's alright I'd like to, I see Lisa is in the audience. I'd like to ask a few questions about real property tax, if I could call her up please. (Note: At this time, Real Property Tax Administrator Lisa Miura came forward to address the members of the Council.) MR. RICHARDS: And it's going to be a tough year. And I agree with Chair that this year is hard and next year's going to be really hard. And we're going to have to be prepared for that. But, Lisa, I guess you have to identify yourself first. MS. MIURA: Lisa Miura, Real Property Tax Administrator. MR. RICHARDS: Okay. Lisa, thanks for coming up. Can you just give us a brief summary? Most everybody in the chambers knows it but for the listening public, real property tax collections are what percentage of our total budget and where does most of that come from? And then how will this proposed tax, if it were to go through—and again we're just putting the framework in there. We're not talking the tax. But if this were to go through based upon what was presented to us, where would that funding come from? MS. MIURA: Sorry. I just want to clarify the question. You want to know where all the tax collections that real property tax does, where does most of that funding go? MR. RICHARDS: No. Where does it come from? MS. MIURA: You mean on the island? Page 33 Hawaii County Council-39 May 13,2020 MR. RICHARDS: Correct. Typically. MS. MIURA: Okay. Typically in the past, 70 percent has been between Council Districts 9, 8, and 7. It's hard because Council District 6 covers a really large area now. So it's hard for us to say West Hawaii just versus East because Council Member David's district goes a little bit further. But that's typically how it's been set, 70/30. Some people take her district into account, then you'd be closer to 75/25. MR. RICHARDS: Okay. And if this, a tax like this were to be adopted, where would that funding come from? Again, you can do percentage wise. MS. MIURA: Sorry. I just want to clarify. You're asking the properties of residential tax class that are $2 million and over that is being written into this bill, which districts are those predominantly coming from? MR. RICHARDS: Correct. That would be affected by this tax. MS. MIURA: Okay. So the predominant district is going to be Karen Eoff's district which is District 8. The second would be District 9. The third is District 7, which would be Council Member Villegas. And the rest of the island makes up the other percentage. MR. RICHARDS: Okay. And so can you assign percentages to those, do we have those? MS. MIURA: Yeah. We have rough percentages. I just want to clarify with everybody, you know, we're still double checking every single property in this tax class and we're making sure that everything applies to this bill. There's a few words in here that makes it very specific. And so I know there's a lot of confusion that I heard from testifiers today. Somebody thought their property in Kealakekua Bay fit into it. There's not one property in Kealakekua Bay that we came across that was going to fit into here. So there is a lot of confusion. So I want to start with that. Approximately 55 percent is in Karen Eoff's district which doesn't surprise too many people because that's going to be your Kuki`o, your Hualalai, and your Kohanaiki Shores. Approximately 40 percent is in your district because that's going to include everything north of there. And the rest is about four percent in Ms. Villegas' district. And the one percent to the rest of the island. MR. RICHARDS: Alright. So it's going to track similar to a real property then more or less, collections. Okay. I appreciate that, Lisa, so thank you. I don't have any more questions for you right now. But going forward, again, we're talking about a budget that we need to balance. And I've always said even when I was first elected that the way to fund our government is not to increase taxes, it's Page 34 Hawaii County Council-39 May 13,2020 to expand our economy and let the tax base go up with that expanding economy. And we're seeing now a situation now in nobody's lifetime and I'm not sure, depending on how you compare it to the great depression back in the 20's, if it's going to be worse. I don't know how to measure that. I do know that California was getting nervous when their unemployment rate was approaching 20 percent and our state's at 37-38 percent. Our County, we don't have very good numbers with that but I have to imagine we're at least 40 percent if not higher. I can't see where increasing taxes at this point is going to be helpful to our economy as a whole because we have to rebuild our economy. Last year we were told by administration that we lost a billion dollars out of our economy, out of our $8.5 billion economy. So we lost a huge amount and that was because of the volcano and Hurricane Lane. We lost a huge amount. And now we're still knocked back on our heels and we're facing this coming forward. And one of the things that Mr. Ushiroda made a comment about having funding coming forward and funding the municipal golf course on the west side. I thought that was a very interesting idea, especially when we talked about use of the wastewater and all. And in a different time, in a growing economy time, I think that there's some merit to having it two tier or potentially a two tier when the economy is driving so we can look at that funding, which is kind of what Chair Chung has made the comment on, identifying a program or programs for a specific use of funds and I like that. I think we need to establish an affordable housing fund, revolving fund, whatever. But we don't have the funds to do that this year. I think we need to work harder on our budget and do some budget cuts. And we didn't do my continually requested ad hoc committees to work on the budget cuts this year because again things are all over the place. I think actually quite frankly we need to work harder on the cost control. When I took office back is 2016 our budget was $462 million or somewhere in that ballpark. And proposed for next year was $626 million. We're back at$585 million but that's only seven percent less than what we were initially proposed. So at$585 million, listening to other jurisdictions on these national calls they're talking 15 to 20 percent reduction. And I think next year's going to be really hard. So on principle I can't support this going forward at this time. A different time, I like the idea and I like some of the proposals people have put forth. But I think we have to work harder on the economy and work harder on our budget. And it's going to be tough. I think we need to look at, if we can, look at cuts for our payrolls. I think we need to look very hard because it's going to be a rough year and I'm very mindful of that going forward. So again I am for starting the economy. But I don't think taxing is a way to start the economy. I don't think that's the way to go. Chair, I'll yield. CHR. CHUNG: Matt. Page 35 Hawaii County Council-39 May 13,2020 MS. EOFF: Mr. Chair? MR. KANEALI`I-KLEINFELDER: Lisa, I have a question for you. CHR. CHUNG: Yes. I have Matt right now, he's going to speak. MS. EOFF: Okay. MR. KANEALI`I-KLEINFELDER: Thank you, Chair. Lisa, how many properties, we emailed back and forth a little bit about this. How many properties is this going to affect island-wide, percentage wise? MS. MIURA: So there's approximately 935 properties right now on this proposal that we are scrubbing through. There is a total of over 140,000 parcels on the island so it's about point six percent. So less than one percent. MR. KANEALI`I-KLEINFELDER: Less than one percent of the properties on our island will be affected by this bill. MS. MIURA: Correct. I didn't write the bill. But I did come up with the numbers. I just want to clarify that. MR. KANEALI`I-KLEINFELDER: I was just making a point. My previous employment took me to many parts of the island. And in some of those instances I've visited homes on the west side in the districts you just mentioned. And I put solar systems that could fire up a building of this size on some of them. And when I was there the homeowners were not present and the AC's were running, the pools were running, the maids were cleaning the house. There's some job, you know, creation there. But what I saw was a lot of utility use for a homeowner that is there I'd say less than three months out of the year. And I might be overestimating there time here. I appreciate them in our community. I know they do a lot for our community as was said in some of the testimony. But I also know the drain of those properties on our utilities here is large. And the rest of us pay for the usage as a whole. So I would agree with this bill. Timing-wise, it seems like nothing that we do timing wise seems to be good whether it be a bill or resolution or a CRF, nothing seems to be good timing. Doesn't matter how we put it forward. But here we are. Unfortunately for the point six of the population who has a property that will classify them as according to this bill that's being proposed. The other 99.4 percent will benefit. And even the point six percent will benefit too from the income we can take in from this property tax increase. So it's never, you know, it's never going to be seen as fair if we're going to raise property taxes on the rich, as it was being said. But at the same time, we have a cost as a County and this is one of the major ways we pay for everything in this County. Page 36 Hawaii County Council-39 May 13,2020 So I appreciate it being brought forward. I'm sure this wasn't an easy bill to write and put forward on behalf of Maile and Aaron. Tim, I can see your points. And I'm from Puna, I'm guessing there's not a lot of$2 million plus properties in my district. So I'm sure my district isn't going to come screaming down, you know, on me for this one. But for Kona side, for Karen, and Tim, and Maile, and Rebecca, this will be interesting. I'd like to hear Kona's comments before we move forward. But at this point, you know, I can see the merit of this bill. Thank you, Lisa. CHR. CHUNG: Okay. Karen, Rebecca, anyone? MS. EOFF: Thank you, Mr. Chair. CHR. CHUNG: Yeah, go ahead. MS. EOFF: And yeah, of course I've been giving this a lot of thought. And thank you for all of the discussion so far today. Mr. Chair, you pretty much nailed it with your explanation and looking at both sides of this discussion kind of objectively the first statement you made. Yeah, so for me, I've talked with the principles at Kohanaiki Shores. I've had long discussions with Lisa and Deanna. I'm trying to put some real figures together in my mind so I can see just what kind of impact this has. Lisa was nice enough to kind of help me through that because it's really not that complicated, but one of the things I learned in that exercise was that if this bill were to be put in place, and of course it doesn't do anything to the rates at this point it's just the structure setup, we would still have to actually propose a rate hike for that second tier. And my understanding now is that if we keep it at the $2 million that means the assessed value up to the $2 million would remain at the same rate as any other residential rate in tier one. But the value after the $2 million on up would then be assessed at a higher rate, whatever rate we set. So that was kind of comforting to some of the concerns that Kohanaiki Shores. They do have a lot of properties that are just maybe a little bit over $2 million. So it wouldn't really change too much in those cases. It's going to be the properties upwards of say $5 million that are going to have a larger contribution, a significant increase. I think the numbers are something like, if you're paying at the rate we have now on a$5 million home you're going to be paying about$55,000 a year. And you'd probably an additional a little bit over $10,000 more per year if we raised it to the 14 percent that the Mayor was proposing. Now hopefully, and this is also kind of consoling, is that we may be able to use CARES Act funds to patch this hole on our budget this year. And if that's the case we won't need to increase the rates on this second tier residential class. So I'm really hoping that happens. That would be just fantastic. Page 37 Hawaii County Council-39 May 13,2020 The other thing is, it's possible that if this is just a stop-gap measure right now because of everything that the County is facing, it's possible that if we did have to raise the rates at that point and time, that we could put maybe a sunset clause on it. That it was just a temporary fix. Then it doesn't mean that we would keep it at that rate, you know, forever. I know that may be far-fetched, but it's just something else to think about. And I had one more thought that I wanted to put out there. Of course this is a difficult decision but I thinkoh, I know, my other thought was that we could consider, and I did ask Deanna I think and Lisa about this but I'm not sure if I remember what the answer is. If we didn't set this at$2 million but maybe at $5 million, then we wouldn't affect many residents who have second homes on our island. Because I don't think many of those homesI mean I know there are a lot people here who own a second home live here. Maybe they inherited the home, maybe they built one and it has become very valuable, but it's probably not up to $5 million value. It's probably maybe $2 million and a little more. So I don't know what the numbers, dollar amount would amount to if we raise this threshold to higher. I'm not saying it has to be at$5 million. I think maybe it could be $3 million even. And that would exclude some people who just have homes that they inherited or built unexpectedly that it would become this valuable. You know, and I'm not proposing that now. I just wanted to throw it out there as something to consider if that makes sense. But thank you for the opportunity to speak. And like I said, we're not raising the rates with this bill. We're just putting a structure in place. And I think maybe it is important that we do that. The other counties, I've noticed their cutoff is at $1 million. They start having a second tier at$1 million. So we're already higher than that with this proposal. And I'll throw that out there. Thank you, Mr. Chung. CHR. CHUNG: Thank you. Rebecca, you want to weigh in anything? MS. VILLEGAS: Yes,please. Thanks, Chair Chung. CHR. CHUNG: Okay. MS. VILLEGAS: If I could ask a couple questions of Lisa. Is she still in the vicinity? CHR. CHUNG: Yes. MS. MIURA: Hi. I'm here. Lisa Miura, Real Property Tax Administrator. MS. VILLEGAS: Hi, Lisa. Thanks for being here today, and for all of your hard work and being so well prepared with those numbers and the percentages and the statistics. They are really helpful when looking at our island geographically and Page 38 Hawaii County Council-39 May 13,2020 financially and the location of a lot of these homes. I have a question. So you said there's 935 homes, approximately, based on what you guys are currently putting together. My question is, how many homes are there—and I'm just going to be honest about this. I've had a number of constituents come up to me and say, "Look, I know people that own second homes," and I want this to be very clear that this bill relates to second homes, having a second home worth over $2 million. So how many of these homes worth over $2 million are registered by corporations or trusts or businesses? Because I'm told by a number of different people that are already a number of these homes that are valued at, you know, over $2 million and up, they have incredible tax lawyers with incredible skillsets that know or even may have been a part of writing the loopholes used to evade paying, you know, the taxes on the actual assessed values. I wonder, is that an urban legend or an urban myth or is that something that is happening and that our County is currently already losing out on what it should be collecting in actual assessed value taxes? MS. MIURA: Okay. So there's a couple of points I just have to clarify for that. So with the actual 935 properties I need to be very clear and honest with everybody. We don't look at the names and the owners as we're going through this because it's very easy for people to start getting biased. The numbers and the percentages for Council district, we usually are figuring out the percentage per island-wide and things of that sort anyway. But when administration said to look at all properties over $2 million there's no target to West Hawaii or certain Council District or anything of that nature. Because at that point my job is not fair and equitable. And I realize that a lot of people already think we're not being fair and equitable when we're targeting over $2 million. But technically that's the only way we can do it at Real Property Tax. So I cannot look at who, what is which owner, do they have a Hawaii address so that we can make sure that our threshold is just above that level, because then that way we can make sure it's not just local people and their homes. You know, unfortunately in my role for the County, I can't do that. That would really put the County into really deep liability. MS. VILLEGAS: Thank you, Lisa. That's awesome. MS. MIURA: But the reality is, obviously now it's not saying that there are not $2 million homes on the rest of the island because I think this is where people get really confused. Most of our island is zoned agriculture. And so that's why you're not going to see a high percentage of$2 million plus properties in this tax rate. Administration did look at going into all sorts of ways or areas in what they were trying to do to make it fair. Page 39 Hawaii County Council-39 May 13,2020 Getting into agriculture category you can imagine is opening a huge can of worms. There are other tax categories so they purposely tried to just stick to residential to avoid the least amount of people possible. So with that, as far as who has property managers, who has big tax consultants, when we value these properties we value it on a market value. And that's how the property was assessed on January I". So of these properties there are people that are under appeal already. And it was prior to this tax tiered rate even coming up. So that's part of the reason we're really taking a good look at the numbers. But, Council Member Villegas, as far as they're really good at hiding the money. That might be on the income tax side but that's not going to really pertain to our side. They're in the residential class or they're in a certain tax class based on highest and best use. If they want to appeal the value they can come and appeal the value at the Board of Review. They can hire a fee appraiser. We would still come to the Board of Review with our information and support of our market value. And so I can't say that, you know, their really expensive attorney's or fancy tax advisors help them a whole lot when it comes to real property tax. MS. VILLEGAS: Thank you. That's incredibly helpful because that's one of the urban legends that's often filtered around and I want to make sure that's understood. Personally, I feel better hearing that coming from you. I guess in light of the testimony and the testifiers earlier, I do want to put out that, you know, the budget is a public document and people are welcome to take a look at it. I think it's easy to judge and say we need to reduce the budget, things need to be done. But to take the time to look at each line item and to really go through it which is a part of what our responsibility is on the County Council, I just want to remind the constituents of this island, that they can get access to that rink and they are welcome to go through that and take a look at it and make more specific recommendations. I think there's some ironies in recommendations for pay cuts or furloughs to cut a budget as opposed to what we've heard in the statistics is looking to the one percent to help potentially bridge a gap. Once again going back to what Karen said, nothing that's being passed right now in this piece of legislation has specific amounts attached to it. And hopefully it would not even need to be activated to that next level. But that creation of another tier I think is relevant and necessary. And being born and raised on this island and watching the transitions in property values, I can't help but recognize through the statistics that you shared with me that we're talking about less than one percent of the homes on our island. Less than one percent is being asked to pay a little more. And how that correlates to what we are witnessing globally, nationally, and statewide in the disparity of allocation of resources between the 99 percent, and the one percent that doesn't escape me. And I don't think it's appropriate for one percent to contain that much and not be flexible as we navigate these certain times. The numbers were really thank you, Lisa. That was really interesting to see that. Page 40 Hawaii County Council-39 May 13,2020 I also want to point out that the budget is a reflection of the increase in property values. And there's some irony in that as the property values are increasing and we can increase our budget and yet the County continually gets accused of increasing the budget. And they're associated and they're connected and it's a cycle that's connected and perpetuated by the public and the private sector. We do have a lot of room to improve our permitting processes and the system. And I am grateful that, you know, every communication I have they are working on that and identifying ways to improve those systems. But I just see a lot of upper level irony in the arguments being made against this bill. And I see an opportunity to look at a broader spectrum especially as we're navigating our way through a global pandemic and what it does and the disparity even between economy and health and those that are in line for food right now versus those that—yeah, this is hurting everybody. But the extremity of that pain and whether that pain is about not being able to afford their next meal versus, you know, allocation of resources on a spreadsheet. I struggle with that. And it's something that since I was young would've liked to see a more equitable system in our tax base, based on, once again I want to point out these are second homes valued at over $2 million. Second homes only in residential areas. And it represents one percent of this island. And, you know, I'll be supporting this bill today. And I will also be hoping that we don't have to allocate an amount onto this and that we'll be able to navigate our budget and we won't have to look to this tier for an opportunity to gather the resources. But I really want to thank Chair Chung and Council Member David for their courage and their creativity, and the administration for bringing this forward. This is the time when we've got really big questions and we have got really big opportunities to re-evaluate the ways and the means that we value our properties on the Big Island and that we value the ways that we develop, and what we require as investments in that capacity. And I'm grateful, and I have many friends and family members who have benefited greatly from a number of these homes and these developments. And I can say these because we pretty much know what they are. But I also think that it's time to re-evaluate the assessment of, you know, taxes and how we gather resources from the one percent. And with that I yield. CHR. CHUNG: Very nicely said, Rebecca. Anyone else? Ms. Lee Loy. MS. LEE LOY: Thank you, Chair Chung. Lisa, please stay. So I get it. I get it. It's the framework. And as we go through this process there'll be a dollar amount and you'll able to kind of calculate what potentially those dollar amounts would drive. I'm very interested in shaving off some of this for affordable housing or maybe even repairing our wastewater systems if we're really truly protecting the Page 41 Hawaii County Council-39 May 13,2020 environment. But is that going to be in a supplemental amendment to this or will that have to go somewhere else? That's my first question. And my second question is, because we already have the two percent open space. And so I'm wondering if thought is being given to whatever number this is generating, we're going to see some spill into the open space fund also. MS. MIURA: I'll clarify part of that question. And I know Deanna is here to answer the rest of it. So right now this is just one tier, one tool for this current budget. In order for this to be a permanent item going forward there's going to be other things that need to happen. You have to set the tax rate. You can change a lot of things in here. But if you're going to start designating that, that would definitely have to be done through Finance. It would be great for real property tax if it wasn't tied to us because all we do is we tax whatever you guys tell us to tax. Whether I like this bill or not or whether I like the tax rates you come up with or not, my job is to follow through on what you guys end up deciding on. And so this is one step. I agree this has come up before with previous County Councils and we were kind of on the opposite end stating, you know, let's wait and see what the other counties end up doing and what comes out of their lawsuits. But the way this is done right now, this tier is being rushed because of the current budget issue. So I think there's going to be a lot more talk if this is going to be a continual thing we plan to do going forward because there are changes I need to modify in our computer program. This doesn't provide us the time actually to do that. But we're willing to work with administration and County Council and what you need to balance the budget. And I'll let Deanna take care of the other parts. (Note: At this time, Finance Director Deanna S. Sako came forward to address the members of the Council.) MS. SAKO: I was going to say that on Chapter 19 which is the Real Property tax chapter, is not where we want to put those kinds of things. I know you've all heard me talk before about we shouldn't designate specific revenue for any particular purpose because we never know what's going to happen. And, you know, when the economy tanks or things get difficult, it's hard. It's hard for me to sit there and say $7 million is going to PONC (Public Access, Open Space and Natural Resources Preservation Fund) this coming year because that's the highest priority based on our Charter. So $7 million went to PONC and, yes, we have to pick up the pieces with everything else. So we want the flexibility to be able to change it when we need to. But, yeah, this is not the chapter to do it in. MS. LEE LOY: Thank you, Chair. I yield. CHR. CHUNG: Thank you. Val. Page 42 Hawaii County Council-39 May 13,2020 MS. POINDEXTER: Yeah. I just want to say thank you to Council Chair Chung and our Finance Chair Maile David for bringing this forward. I don't want to just repeat what everybody else said. I just want to say ditto to that, bringing this one tier. And like Lisa said, it's another tool. So thank you. I'm just supporting this. I yield at this time. CHR. CHUNG: Thank you. Maile? MS. DAVID: Yes, Chair. CHR. CHUNG: You want to make an amendment? MS. DAVID: Ready? CHR. CHUNG: Yeah. MS. DAVID: Okay. Wait. Ms. Villegas needs to say one more thing, please? CHR. CHUNG: I'm sorry. Well, Ashley, you never got to speak. Okay, go ahead, Rebecca. MS. VILLEGAS: Okay, thanks. I just wanted to--it was interesting to me, some of the conversations in the last couple of days. And one of the analogies that was brought up to me was to be careful because we don't want to pluck too many eggs from the goose that lays the golden egg or it might fly away. And what came to mind to me was we have the nene, and the nene is no longer on the brink of extinction. The nene is here to stay. And I'd prefer to support the continued recovery of our native nene than cater to the fickle temperament of a goose that values gold over everything. Because you cannot eat gold. And I just want, I guess, to make this a shout out to everyone on our island, residents, visitors alike, to recognize our own consistent resilience and our ability to utilize the resources we have and continue to thrive in a time of such challenge and crisis. And I look at the nene and I see all that's it's been through to come back to where it is now, And I firmly believe that we as an island and we as a people can continue to move forward, not in fear, but in courage with vision and resilience and self-determination. And cheers to the nene. With that I yield. CHR. CHUNG: Ashley. MS. KIERKIEWICZ: Thank you, Chair. Thank you, Rebecca for that. Cheer's to the nene. It's our new hashtag, maybe for our Council. Thank you, Chair Chung and Council Member David for putting this forward. I'm not opposed to it. You now, I've got a number of constituents obviously emailing, very supportive because they're about equity. The timing is very unfortunate. But we can't help that and I appreciate there's some foresight and at least putting Page 43 Hawaii County Council-39 May 13,2020 in the framework for something like this. My question though, because I heard what Council Chair Chung said about this being a lever we can pull to kind of activate and help fund and build affordable housing for our residents. But I'm curious to know from Finance Director Sako if this is a lever that we are absolutely going to pull to fill in the gap for this upcoming year fiscal budget. You know, we heard earlier that some of the CARES Act money might be able to help fill in that gap. But I guess I just want, you know, your very honest assessment about when you think you're going to be activating something like this? MS. SAKO: The proposed budget did come in with a rate for this particular classification. I do want to clarify about the CARES Act money, because there are multiple pieces of CARES Act and the money through Bill 75 coming from the State is the CARES Act 3 or 3.5 or whatever you want to call it. I think it was three. CARES Act 4 is the one that has the money that we can use to balance the budget and it's still in Congress. It hasn't passed yet. We have no dollar amounts. Council Member Richards is correct. They're trying really hard to give it to us directly to not have to go through the state. But I don't know what the outcome is going to be. I honestly can't say if we'll know by the time you guys have to pass the budget. But I can tell we are all monitoring it daily to see what might happen. So Lisa's right, it's another tool in the toolbox in case we need it. We tried to use whatever tools we could. But, you know, the $80 million that we're talking about right now, that cannot be used to balance the budget, at least the way it's written right now by the feds. So I just want to clarify that. MS. KIERKIEWICZ: Yes. The 3.5, that is just for emergency response. Budget shortfall potentially with CARES 4 Act money. So you're saying if we don't get that money in time, you do want to leverage this tool? MS. SAKO: We might have to. MS. KIERKIEWICZ: Okay. And like systems-wise, we're all set up. I mean, just thinking about unemployment benefits coming through from the state and like just the massive crash in IT (Information Technology) systems. I just want to make sure that everything on our side,process systems-wise, is ready to go. MS. SAKO: Lisa's right. We haven't modified our system yet. So they'll be doing it manually for this fiscal year, whatever happens. Yes. MS. KIERKIEWICZ: So, you know, the second iteration of our budget had the $40 million in cuts. Are you looking for cuts elsewhere? MS. SAKO: We, the administration cut and presented it to the Council. Page 44 Hawaii County Council-39 May 13,2020 MS. KIERKIEWICZ: I see that. And we have special budget hearing next week. Are we looking at making even more cuts is my question? MS. SAKO: Coming from administration? MS. KIERKIEWICZ: I'm just wondering. I know that my colleagues are most likely going to put some things forward. But I'm just curious if there is going to be potentially an amendment or a supplemental coming through from the administration? Or do you feel that all the cuts that needed to be made were made? MS. SAKO: We believe we cut what we could cut legally. MS. KIERKIEWICZ: Legally? MS. SAKO: Legally and safely. MS. KIERKIEWICZ: Can you expand on that? MS. SAKO: You know, there's a lot of things we have to pay on debt services first and foremost. And I believe it's stated that way in the Charter as well. Then we have employee costs and employee benefits. And I know people feel we should cut the budget but the General Fund which is the one where real property tax goes is 65 percent salaries, wages and benefits. While we are part of the collective bargaining, we are one vote. You know, the Governor gets four, each Mayor one. So we don't always get our way. And then we're bound by those collective bargaining unit agreements. To do furloughs or any other cuts or anything like that, that takes collective bargaining yet again. So a lot of those things are not going to be known by the time we have to pass the budget. So there's a lot of things going on and we have to follow whatever rules are in place at the time we presented the budget, and at the time you guys vote on the budget. MS. KIERKIEWICZ: And Bill Brilhante is our representative from this County at those conversations with collective bargaining units. MS. SAKO: Yes. MS. KIERKIEWICZ: I wish he was here right now. Are conversations happening right now about furloughs and cutting back on salaries? I'm just curious. MS. SAKO: There are a lot of conversations going on. MS. KIERKIEWICZ: Okay. Nothing set in stone? MS. SAKO: Right. Page 45 Hawaii County Council-39 May 13,2020 MS. KIERKIEWICZ: Okay. Alright, next week's discussion is going to be really interesting. I just want to make sure we're making the effort and I know you guys are because you know where all the monies are, Deanna. We're going our best to be efficient then cradling government and leveraging public private partnerships and making the investment in grant writers because those things pay for themselves. And then we're not leaving any kind of money on the table. You know, I just want to make sure that we are able to withstand the tough economic time that we're going to be hit with this year and likely in the years to come. So we're all here to work together as one team. Thanks, Deanna. Appreciate it. CHR. CHUNG: Maile? MS. DAVID: Yes. Thank you, Chair. CHR. CHUNG: Wait. Hold it. Matt's going to say something. MS. DAVID: Okay. I'm sorry. Go ahead. MR. KANEALI`I-KLEINFELDER: Deanna, I had a follow up question. So I'm guessing there must have been some discussion about what we'd be short or what this would bring into the General Fund as a revenue. Is there a general ballpark at the amount of funds this is going to generate? MS. SAKO: So this is the framework to create the second tier. So per dollar it was $4 million dollars. If the rate goes up one dollar it will raise $4 million dollars. MR. KANEALI`I-KLEINFELDER: And we are proposing a one dollar increase or it's $3.50, yeah? MS. SAKO: Yes. I'm just saying this is about the tiers. This isn't setting the rates. This is just to create the tier. So yes I can tell you, it's $4 million per dollar. MR. KANEALI`I-KLEINFELDER: So if we went 3.5 million we'd be just— MS. ustMS. SAKO: $14 million. MR. KANEALI`I-KLEINFELDER: $14 million dollars is what we'd be looking to increase our revenue by if we did a rate hike on residential? Okay. Thank you. CHR. CHUNG: Thank you. Maile? MS. DAVID: Yes, Chair. Page 46 Hawaii County Council-39 May 13,2020 Motion to Amend: Ms. David moved to amend Bill 169 with the contents of Comm. 926.1. Seconded by Ms. Poindexter. MS. DAVID: Thank you. And this is amendments proposed to correct some grammatical errors in language and that's no substantive corrections are contained. And everyone I think has the pinkie that sets forth the amendment. So I'm just asking that my colleagues support this proposed. CHR. CHUNG: Right. I agree there's no substantive amendments. They just changed like a phrase, a new section, subsection. MS. DAVID: Right. CHR. CHUNG: And it was only a few instances of that. So we have a motion and a second. All those in favor say "aye." Vote on Motion The motion to amend Bill 168 with the contents of to Amend: Comm. 926.1 was carried by the following voice vote: (Approved) Ayes: Council Members David, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair Chung—9. Noes: None. Absent: None. Excused: None. CHR. CHUNG: Okay, we're back to the main motion. Anyone else want to say anything on this? I just want to make a real brief closing remark on this. MR. RICHARDS: Chair, I'll make a quick comment. CHR. CHUNG: Okay. Let me just say something first. MR. RICHARDS: Yeah. CHR. CHUNG: Because it had to do with the, you know, everybody thinks that County Government is ballooning out of control. But I'm going to put this is real simple terms for everyone. We're looking at about a $40 million budget shortfall. And when you look at that$40 million it's easily dissected. The Governor took away $19 million of what we normally get in the form of a TAT (Transient Accommodations Tax). That's $19, almost$20 million out the door already. So we had to make that up. And then we're also going toI think we're looking at about a$13 million shortfall on the amount that is attributable to the increase in our GET (General Excise Tax). But we never had that money last year anyway. So basically all we're looking at isI mean but, you know, Page 47 Hawaii County Council-39 May 13,2020 we had to account for it. But we're just not going to be able to do as many projects as we had wanted to. And then we're looking maybe at about$5 million in a reduction in fuel tax and $2 million in Solid Waste Fund and maybe some other delinquent real property taxes. So that basically is the $40 million. But a huge chunk of that was wiped out when the Governor said we're not getting our TAT. So I just wanted to explain that too. But Mr. Richards, go ahead. MR. RICHARDS: Thanks, Chair. And your point is well taken. And a lot of good ideas going forward. Like I said, at a different time I could be supportive. I am keenly interested as we go forward that we work hard on building the economy because that's where we're going to solve the problem. Budget cuts are important but they're not going to solve it. It's going to have to build the economy. Anyway I appreciate the conversation. Got some pretty good ideas going forward, but still ethically I just can't do it. CHR. CHUNG: Okay. Anyone else? You know, and finally I just want to touch on one thing and it was kind of brought up by Ms. Villegas. And I'm going to put it in a different way. You know, of course we all admire, you know, I admire anyone who can make a success of themselves and get a $2 million-plus second home. Good for them. But I think what many of these individuals should try to understand anyway is that it has taken an emotional toll on our local population. You know, for those of us who have lived here for all of our lives or for many years, you know, I didn't really want it to come down to this but, you know, a lot of times we're put in the position of looking from, you know, the outside in with many of these beautiful properties. So there is an emotional price. And, you know, hopefully people can understand that too. Anyway we have a motion on the floor. Let's do it by roll call vote. Vote on Bill 169: The motion to pass Bill 168 on first reading, as amended to Draft 2 Draft 2, was carried by the following roll call vote: (Approved) Ayes: Council Members David, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Villegas, and Chair Chung—8. Noes: Council Member Richards — 1. Absent: None. Excused: None. CHR. CHUNG: Okay. We have, I think come to the end of our agenda, right? MR. HENRICKS: Yes, sir. CHR. CHUNG: Can I have a motion to adjourn? Page 48 Hawai`i County Council-39 May 13,2020 ADJOURNMENT: There being no further business, at 4:57 p.m. Ms. Lee Loy moved to adjourn the meeting. Seconded by Ms. Kierkiewicz and carried by the following voice vote: Ayes: Council Members David, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair Chung — 9. Noes: None. Absent: None. Excused: None. CHR. CHUNG: Motion carried. Meeting adjourned. Thank you, everybody. Approved: SEP 0 2 2020 411111161111w CO RK JH/tk/j a Page 49