Loading...
HomeMy WebLinkAboutMIN FC 2021/10/19 2020-2022 Committee on Finance 21st Session West Hawaii Civic Center 74-5044 Ane Keohokalole Highway, Building A Kailua-Kona, Hawaii October 19, 2021 CALL TO The regular meeting of the Committee on Finance was called to order at ORDER: 1:06 p.m., in the Council Chambers, Kona, by Mr. Matt Kaneali`i- Kleinfelder, Chair. ROLL CALL: Present: Mr. Matt Kaneali`i- Kleinfelder, Chair(via videoconference from Hilo) Ms. Heather L. Kimball, Vice Chair Mr. Aaron S. Y. Chung, Member Ms. Maile Medeiros David, Member Mr. Holeka Goro Inaba, Member Ms. Ashley L. Kierkiewicz, Member(via videoconference from Hilo) Ms. Susan L. K. Lee Loy, Member Mr. Herbert M. "Tim" Richards III, Member Ms. Rebecca Villegas, Member STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: The following individual registered to speak and came forward when called by the Chair: Stephani Donoho: Bill 81 (Comm. 449), comment. (representing Kohala Coast (See Comm. 449.4) Resort Association) Also, see the following written testimonies, which were presented at the meeting: Georjean Adams: Bill 81 (Comm. 449), in support. (See Comm. 449.2) Dr. Richard Bennett: Bill 81 (Comm. 449), in support. (See Comm. 449.3) FC-21 October 19,2021 Mufi Hannemann: Bill 81 (Comm. 449.5), comment. (representing Hawaii (See Comm. 448.5) Lodging & Tourism Association) Bronsten Kossow: Bill 81 (Comm. 449), in support. (See Comm. 449.6) Lee McIntosh: Bill 81 (Comm. 449.7), in opposition. (See Comm. 449.7) CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Donoho. Appreciate you signing in today and providing us the testimony. I had a follow-up question for you. If you would, what platform were you using to estimate the numbers for our vacation rentals here? MS. DONOHO: Thank you. It's a platform called AlltheRooms.com, and it is a subscription platform that operates similar to a Zillow platform, and that it is for people who are looking to purchase short-term vacation rentals. So there's a lot of data. If you purchase a subscription, that tells you about how often an accommodation is rented, what the average daily rate for that accommodation was using. MS. DAVID: Excuse me, Mr. Chair? CHR KANEALI`I-KLEINFELDER: Yes? MS. DAVID: Thank you. I know it's your privilege for chairing, but I think if we could ask Ms. Donoho to hang around afterwards for any questions so we could proceed with our testimonies, or our people that are MS. DONOHO: I'm happy to do that. MS. DAVID: Thank you. Thank you, Chair. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. David. I wanted to clarify that with her. It was an interesting point that she had made. I think it ties in very well to our Planning Department and how we track. Thank you, Ms. Donoho. We will keep you on, if you like, or if the Council would like, for maybe some follow-ups during Bill 81 discussion, Because you raised some very good points so far, thank you. Okay, with that, that provided the end of our testimony. Correct, sir? Okay, so we're going to go ahead and close public testimony and move to—let's see here, I wanted to do—Mr. Clerk, if we could, we have Director Sako, Deputy Director Page 2 FC-21 October 19,2021 Steve Hunt, and then we have Mr. Leopoldino—our Director Leopoldino here. And if we could, take our 89-day contract, which would be Communication 84.3. Change Order As directed by the Chair and with no objection from the Council Members, the of Business: following items were taken out of order: Comm. 84.3: FIRST QUARTER REPORT OF PERSONS EMPLOYED UNDER A CONTRACT FOR LESS THAN 90 DAYS: JULY 1 –SEPTEMBER 30, 2021 From Acting Human Resources Director Waylen L. K. Leopoldino, dated October 1, 2021, transmitting the above report pursuant to Section 2-12.5 of the Hawaii County Code. Motion to Close File: Ms. Lee Loy moved to close file on Comm. 84.3. Seconded by Ms. Kierkiewicz. CHR KANEALI`I-KLEINFELDER: Again, Director Leopoldino, could you come up, since you were nice enough to be here today? (Note: At this time, Acting Human Resources Director Waylen Leopoldino came forward to address the members of the Committee.) CHR KANEALI`I-KLEINFELDER: And just provide us a little background on the communication in front of us, please. MR. LEOPOLDINO: Good afternoon, Chair and members of Council. Waylen Leopoldino, Acting Director of Human Resources. This is our quarterly report on 89-day contracts that we have in place. I have met with both departments, the Prosecuting Attorneys Office as well as the Police Department, on the status of both programs. The Police Department, as you may all know, that the Animal Control program, it's a challenge with the Police Department, but they're doing a great job with standing up contract positions to help with the needs in the community. These contracts, although they're currently at 89 days, they need more than that, so they're likely going to be extended to the end of the fiscal year, until they can figure out what to do with the program long-term. But the Drug Diversion Program Specialist, that's a grant-funded position. That's a great program that the Prosecuting Attorney's Office has in place to come up with programs as alternatives for offenders going mainstream into getting convicted and going through the judiciary process. So, they have that specialist position funded temporarily through grant funds. CHR KANEALI`I-KLEINFELDER: Okay. Thank you, sir. Council Members, any questions for the Acting Director? Ms. Kierkiewicz, go ahead. Page 3 FC-21 October 19,2021 MS. KIERKIEWICZ: Thank you, Chair. Mahalo, Director. Just one clarifying question on the Animal Control Specialist. If there is a need to engage more individuals to support this particular program, does anything inhibit Police Department and your office from standing up more contracts to fill more potential short-term positions? MR. LEOPOLDINO: At this time, if there is a need, the department has been, so far, been readily available to stand up more positions as they need it, so I don't see any issues with that. MS. KIERKIEWICZ: Okay. And then the success of how the program is currently being administered could inform permanent positions within the County? MR. LEOPOLDINO: Yes. Yes, yes. MS. KIERKIEWICZ: Okay. Great. Thank you for those details. I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Kierkiewicz. Any questions in Kona? Okay, hearing none. We have the motion on the floor to close file on Communication 84.3, all in favor? Vote on Comm. 84.3: The motion to close file on Comm. 84.3 was carried Filed by the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR KANEALI`I-KLEINFELDER: And let's go right to the top of the order. You know what, actually let's change it up. Let's go right to Bill 81. Bill 81: AMENDS CHAPTER 2, OF THE HAWAII COUNTY CODE 1983 (2016 EDITION, AS AMENDED), BY ADDING A NEW ARTICLE TO IMPLEMENT A COUNTY TRANSIENT ACCOMMODATIONS TAX Establishes a three percent transient accommodations tax to be levied on all gross rental, gross rental proceeds, and fair market rental value considered taxable, under the definitions of Section 237D-1, Hawaii Revised Statutes, beginning on January 1, 2022. Reference: Comm. 449 Intr. by: Ms. Kimball Page 4 FC-21 October 19,2021 and Comm. 449.1: From Council Member Heather L. Kimball, dated October 11, 2021, transmitting the Kauai Transient Accommodation Tax Bill (Exhibit A) and the Maui Transient Accommodation Tax Bill (Exhibit B). Motion to Approve: Ms. Kimball moved to recommend passage of Bill 81 on first reading. Seconded by Ms. Villegas. CHR KANEALI`I-KLEINFELDER: Council Members, discussion? Ms. Kimball, if you could lead us off. MS. KIMBALL: Thank you, Mr. Chair. Thank you. I just want to start by thanking the numerous people that helped contribute to putting this piece of legislation together, particularly our own Judge Strance, from Corp. Counsel; Director Sako and Deputy Director Hunt, from our Department of Finance; the Director and Deputy Director, from State DOTAX(Department of Transportation), and of course Donna Eckersley, in LRB (Legislative Research Branch), who helped put the final thing together. It's pretty straightforward. This is the piece of legislation that establishes the three percent TAT (Transient Accommodation Tax) for the County. We are the last County to begin consideration of this. Kauai and Maui County have already passed their bills, and City and County of Honolulu is working on theirs currently. A couple of things. So as our testifier mentioned, there was a bill within the Legislature to establish this three percent TAT, and to withdraw the portion that was contributed to the counties. That actually died; but while it was in progress, I did write testimony in opposition to it. Because on the matter of principal, you know, the TAT was established to help the counties deal with the infrastructure impacts of the visitor industry. Though that bill died through various mechanicians, it did end up being the law of the land through Act 340. There'sI'm sorry, through the Act 1. A couple of the things about how it's written. First of all, the State cannot collect this for us and give it to us. We have to collect it. We also have to calculate the three percent, which is a little bit unusual. But the language of the bill requires that we actually do the calculation. Fortunately, DOTAX has been willing to work with the counties and come up with a mechanism, where from the user end it will appear as if it's a seamless process; but at one point, the payees will actually diverted it to a county site to calculate that three percent, collect the payment. So, some of the language in here has to do with that. As we have further discussion, I'm curious to hear what my colleagues think. There are a couple of things that I wanted to highlight, one is that I included Page 5 FC-21 October 19,2021 Kaua`i's and Maui's TAT bills. Which you had an opportunity to review them, they're much lengthier than ours. And I want to really credit Deanna(Sako) and Judge Strance for helping to pare this down to what we actually needed to do rather than just putting all of the Hawaii Revised Statutes (HRS) language into our bill. I think as a result, we have a much more clear and elegant piece of legislation. However, I did include those because I want everyone's eyes on it, just to make sure that we crossed all of our t's, dotted our i's, and brought over everything from the HRS that we needed to. The second two things that I will mention—we continue to have some discussion with DOTAX around the appeals. We think our language there is okay at this point, but the next time we hear this, there may be some amendments. They're continuing to work with their attorney, and I'll let Judge Strance delve into that in a little bit more detail. And then finally, we need to revisit the reference in terms of the payment of the tax to the return. We've gone back and forth about a return versus a voucher, versus nothing at all. So there may be some language clarification around that, as I mentioned, that has to do a little bit with the limitations of the law and how we can actually collect the tax, and having to calculate that three percent. So please give us your feedback, I'm looking forward to hearing what everyone has to say. The comments that were made by the testifier about some of the other considerations, I'm certainly taking those into account, as well. And hopefully we can have Finance talk a little bit more specifically about the actual expectations as far as revenue with the implementation of this legislation. Thank you, Chair. I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Kimball. Deanna, if you want to come up. I'd like to hear your feedback a little bit on this before the Council really digs in the questions. (Note: At this time, Finance Director Deanna Sako and Deputy Director Steve Hunt came forward to address the members of the Committee.) CHR KANEALI`I-KLEINFELDER: And thank you, Ms. Kimball, for bringing this forward. It is very much appreciated. And for Kona, we have Mr. Hunt and Ms. Sako here. MS. SAKO: Good afternoon. You know, so yeah, so the Legislature puts the counties in this awkward position of, you know, taking away our share of the TAT, but allowing us to, I guess, implement up to three-percent surcharge, or an additional TAT tax. Page 6 FC-21 October 19,2021 So as you know, Kauai and Maui passed it already. Theirs—it was effective October 1st. And Maui is the island that is expected to generate the most revenue. So there was an allocation of the $103 million between the four counties, and it wasn't exactly proportional to what was collected in TAT by each island. We were very fortunate that we got a larger percentage because we were the Big Island and have more island to cover, more parks to cover, more infrastructure being utilized by tourists. So we are the County that—it's going to take us probably, based on the State's estimates, two or three years to get back up to what we were making prior, the $19.158 million from the State. So for Fiscal Year 2022, if it had been enacted for the entire year, the State's projection would be that Hawaii County would get$13.1 million. In FY (Fiscal Year) 2023, they project$16.7 million, and I think this based a lot on the Council and revenues, and then in Fiscal Year 2024, we would be up to $18.8 million. Of course, all of this is dependent on the pandemic, as well. I mean, we've all seen the swings on tourism. You know, this summer there were a lot of visitors here, then the Governor kind of asked people to stay home and the hospitals got full. So, you know, it's just going to depend on what tourism does. So these are obviously based on Council of Revenues, based on their best estimates with the information they have. But then by Fiscal Year 2025, it hopefully would be up in the $20.9 million and then slowly creeping up. But in Fiscal Year 2019,which was the full year of visitors prior to the pandemic, if that was the income, it would be approximately the same amount that we had been receiving, which was just under $19.2 million. CHR KANEALI`I-KLEINFELDER: Thank you, Deanna. Question,just to follow up,just to get a little bit of a better overview. I mean, what—do you know what our portion of TAT that we provided to the State? Not what we get back from them, but what is that number that goes to the State from our island? Do you have that number? MS. SAKO: So now that they're going to kind of be they had to break it out by island; we have that information. Previously it was all consolidated, I believe. Steve's been kind of tracking that. CHR KANEALI`I-KLEINFELDER: Okay. What is that number, Steve, that we provide to the State in TAT, from our island, our County? MR. HUNTER: I would have to look at that. I do have that information; I just don't have it at hand. But they are—in the past, they used to break out the hotels, that may have chain hotels, and they might have report it in one jurisdiction. For the past two years they've actually required them to report by their area where they're generating the revenue, so we can track how much revenue is being Page 7 FC-21 October 19,2021 produced, what those net taxable proceeds are by county, and then we can tell you how much is going to the current allocation, at ten and a quarter, how much is going to the State directly now for our share, I guess, of contribution to the State. CHR KANEALI`I-KLEINFELDER: Okay. Do you think you can get that information before we end the meeting today? MR. HUNT: Yes. CHR KANEALI`I-KLEINFELDER: Okay, good. Good. Okay, I'm going to let the other Council Members go ahead with their questions. Kona, questions, concerns? MR. CHUNG: Yeah, Mr. Chairman. This is Aaron. I just have a—it's a question, I guess to the Chair or anyone else, staff. A reference was made by one of the—well, the only speaker, Ms. Donoho, about something that was sent to us, a written communication. Does anybody have that? CHR KANEALI`I-KLEINFELDER: Her written testimony? MS. KIMBALL: If I may, Chair? It's in Laserfiche, under testimony for today (see Comm. 449.4). MR. CHUNG: Where is it? MS. KIMBALL: It's in Laserfiche, for the testimony for today. MR. CHUNG: Oh, yeah. MS. KIMBALL: I can have it printed real quickly, if you'd like? MR. CHUNG: Oh, so we don't have a copy then? MS. KIMBALL: No, we don't have a physical copy. CHR KANEALI`I-KLEINFELDER: It was provided via the written testimony. MR. CHUNG: Yeah. Well, I'm just wondering if we can get a copy while we're discussing things. CHR KANEALI`I-KLEINFELDER: Okay. Did you have anything else, Mr. Chung, while we work on that? MR. CHUNG: Yeah, not right now. Page 8 FC-21 October 19,2021 CHR KANEALI`I-KLEINFELDER: Okay. Thank you, Mr. Chung. Kona, questions, concerns, comments? MR. RICHARDS: Chair? CHR KANEALI`I-KLEINFELDER: Mr. Richards, go ahead. Thank you. MR. RICHARDS: Yeah, thank you. Anytime we start talking about new taxes, I get a little leery, especially when we're in our financial recovery phase. That being said, I think there's a definite way forward on dealing with this. Since it was highlighted by Ms. Kimball concerning the whole intent of TAT, and I think voted in '86, came to fruition in '87, at that time the State collected approximately $60 million of which 95 percent went to the counties, divided by the formula. Fast forward to where we are today, let me back up, maybe a year or two ago, we were collecting somewhat over $600 million in TAT, but it was capped at $103 (million) for the counties, and our allocation was about$19 million. The whole intent of TAT was a tourism impact fee, for a lack of a better term, to help us take care of our structures, infrastructures, parks, and recreation, et cetera, that would be impacted by the increase in tourism, and so I think the concept was very sound. So like I said, thinking a way going forward. When we are looking at this tax, and I don't know if this is a question for Ms. Kimball or if it's a question for Deanna, Director. The intent of the collections out of this three percent, I can fully support if it is specified that it goes into essentially what it was originally destined for, taking care of Parks and Recreation,you know, substantial of that going to Parks and Recreation to deal with that, and some of the other things that could directly be impacted by tourism. For instance, we've talked about management of tourism: Waipi`o Valley; my side, Polulu Valley, if we have the structure. So I guess my question is, how are we going to administer? Where is this funding going to go? Is it going into a tourism mitigation fund, that we then have that figured out, or what's the plans for the funds? How are we going to deal with this? Chair, do I ask Ms. Kimball, or is this a question for Ms. Sako? MS. KIMBALL: I can respond initially, and then pass it to Director Sako. (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MR. RICHARDS: That's good for me. Page 9 FC-21 October 19,2021 MS. KIMBALL: Yeah, so the way the bill is written, as of right now the funds from this collection will go directly into the General Fund, and the logic behind that is that's where the TAT funds that we used to get went. I believe it's in Ms. Donoho's letter that there is concern from the visitor industry that we have some sort of clarity around where these funds go and how they relate to tourism, and Deanna can elaborate on this more. That's a difficult thing to do, because if you say you know, if you've got a lifeguard, you know, part of the time they're saving local folks and part of the time they're saving visitors. You've got a roads. Part of the time locals are out driving on that,part of the time the visitors are driving on it. So there have been efforts in the past to try to say, "Okay, these are visitor specific impacts." But I think it's difficult to do. And we still have bills to pay. You know, this is $20 million that was removed from the General Fund, and we still have expenses to cover. Director Sako, do you want to expand that? You can probably speak more eloquently. MS. SAKO: So when the TAT was reduced in FY 2020, and then reduced to zero in FY 2021, and that's actually what's budgeted for FY 2022, the current fiscal year, we didn't reduce the expenditures to like Parks and Recreation, Fire, Police, and others that may have been dealing with visitors. What we did reduce was our OPEB (Other Post-Employment Benefits) because that was allowed by State law. So we still have these expenditures. So if we're going to make a special fund or something like that, we would have to come up with a way to shift those costs from the General Fund to that fund. But as Council Member Kimball said, it's kind of hard to break it out. That's not to say we couldn't come out with a formula, but it has to be based on averages. I don't think we're going to ask the lifeguards to ask each person at the beach that they have to warn, to back-up or whatever. You know, keep away from the ocean, the waves are big, or something like that to track was that a tourist or a local person. But we need to continue to service the tourists and the locals alike. I'm not sure if that answered the question. MR. RICHARDS: Yeah, Deanna, actually that does start going towards the answer that I'm looking for. I'm not about creating a huge bureaucracy to administer the funds. That being said, I'm also not of the mindset that I would support something that could get swallowed and then kind of sidelined for something else. And again talking to constituency along the coast, and they are—and you've heard Ms. Donoho support this, and I'm going to say a conditional support,provided we use the funds—what the whole intent was back in the past. I am very mindful that we can get ourselves in a situation where we have some sort of event, or catastrophic event, where we need to divert funds for a period of Page 10 FC-21 October 19,2021 time or something like that. And so I think there needs to be a way of managing the funds. But what I don't want to allow to happen in government, which you see more often than not, that these funds get siphoned away and end up not dealing with what they need to. Because we're talking about redesigning tourism. Okay, if we're going to do these funds, do we have a management fee? Now, there were comments being made about vacation rentals. Do we hire people to manage that and go after the people that are not paying the TAT? I think we need to talk story about that. Like I said, I can support this, especially the fact that the constituency is supporting if we expend the funds right. And one the questions for Director, collecting the funds, I'm assuming this would come directly to the County and we would administer, is that your intention? MS. SAKO: Right now, it is. We're working with the other three counties to have a statewide system, so that for those vendors that may have properties on all four islands, or all four counties rather, that they could just use the same system to report. One of the things that we do know is that we are going to—in order to exchange information with the State, we have to have a tax department, so to speak, or a Division of Finance, that would be called like our Tax Division. So if this passes or moves forward, we would be coming forward with a resolution to create additional positions. MR. RICHARDS: Which gets back to the comment I made earlier. And I would be supportive of that as long as those positions also went after seeking more the people that are not paying the tax. MS. SAKO: Right, the enforcement portion. MR. RICHARDS: Yes. And so with that, I just wanted to throw that on the table; I don't take the Council's time. I am generally supportive if we target where this is going to go, and we target how we're going to do expenditure. So with that, Chair, I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Mr. Richards. Good questions. Okay, Mr. Chung. Go ahead. MR. CHUNG: You know, regardless of how one votes on this matter, I think we really owe a debt of gratitude to Ms. Kimball for taking the bull by the horns on this pretty significant fiscal measure. You know, we were looking at a deadline, because the effective date of this per the Hawaii State statute is, I think, in January of 2022, right? And I know Ms. Kimball worked with Corporation Counsel as well as the Finance Page 11 FC-21 October 19,2021 Department. You know, this is something that I thought, you know,just intuitively, there's no real hard and fast rule to this, but this is something that needed to be generated from the Council instead of the administration; that's just my thought, of course. And that's why I just wanted to recognize Ms. Kimball in that regard. I will be supporting it, though. I mean, there are several ways of looking at this measure. There are some public policy implications, as well. But I just look at it simply, everybody else is doing it throughout the State, we cannot put ourselves, or hamstring ourselves, particularly as a visitor, if I go to Honolulu, I've got to pay that three percent for Honolulu, or Maui, or Kauai; when they come here, they don't have to. I don't think that's fair. I mean, we should be uniform throughout the State. That's my thoughts. I'll be supporting this. Thank you. CHR KANEALI`I-KLEINFELDER: Thank you, Mr. Chung. MR. BROWN: Mr. Chair, we have Council Member Lee Loy and Council Member David with their lights on in Hilo. CHR KANEALI`I-KLEINFELDER: Okay, I'm going with Ms. Kierkiewicz, and I'll come back to Kona. MS. KIERKIEWICZ: Thank you, Chair. Mahalo nui, Council Member Kimball, for bringing this forward; I'm glad someone was. I reached out to the administration to make sure someone was on it, and they said somebody was, so I'm glad it was you. Really appreciate how thoughtful you were around this. You know,just pinging upon what Council Member Richards brought up, you know, he was speaking my love language there for a second, talking about fiscal responsibility. As much as I want to support this measure before us, I would like to have a discussion around providing a bit more specificity for where these funds go. Only because as a body we had adopted the second-tier residential, which brought in a stream of funding, and tax values have increased, and so I don't think we're bleeding for money. And so we have the opportunity as policymakers, as the Legislative Branch, to set priorities and fund what's really important to us. So couple things to consider, because we have said in I think last Committee, when we were talking about the inclusionary zoning policy, a resolution. We're losing housing stock to transient accommodations. Housing is a real need here. The other thing, Parks and Recreation, visited by residents and tourists. I will also share with all of you that last week there was a presentation by Parks and Recreation on $4.9 million for lava recovery. Half a million was proposed to be spent at the Hilo Golf Course. They reduced it to $200,000. But there's a clear need to support Parks and Recreation. It should not be on the backs of the Page 12 FC-21 October 19,2021 Puna community. So I would like to consider that the department get its fair share to this stream of funding. I would love to talk story with Director Sako about the kinds of formulas that you have in mind to be able to set or support the legislative priorities that we as a body can get behind. So, I just want to throw that out there for discussion. Thank you, Chair. I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Kierkiewicz. Okay, back to Kona. Let's go with Ms. David. MS. DAVID: I believe Ms. Lee Loy had her light on first. CHR KANEALI`I-KLEINFELDER: Okay, Ms. Lee Loy. MS. LEE LOY: Thank you. You know, I have a lot of questions, and I'll start with you, Deanna. And, Ms. Kimball, thank you for putting this forward because it actually made me roll up my sleeves and figure out where we were fiscally. My biggest challenge, Deanna, was the most recent budget summary that we have in the office was June, and so this idea of how far are we in the hole was very cloudy to me. It's challenging for me to support at this time without really having a lot of that information in front of us because we're—let's start there. Deanna, is there a way that we could get the budget summary and where all of our expenditures are, you know, how much we still have in various department accounts that haven't been expended? MS. SAKO: Just to clarify, you mean for the current fiscal year? MS. LEE LOY: Yeah, you know, we always get the bluebook. MS. SAKO: So last week, they finished closing last fiscal year, so now they'll start, and hopefully quickly, close the current fiscal year to prepare the bluebook. But we do have all the information. Everything that's been collected to expended is recorded in our software, so we can produce a version that may not be the final numbers for the month since there are some additional adjustments that have to be made. MS. LEE LOY: Yeah, that would actually help me understand fiscally where we are, because if we want to start planning for the future and assigning some of this TAT into the areas like parks that are utilized by residents and tourists alike, I think that would be incredibly helpful. And then earlier you mentioned the OPEB payment, and we hear that every year during our fiscal cycle—our budget cycle. That's always such a huge number and we felt this year was like, oh, thanks that we didn't have to pay it. But now we've Page 13 FC-21 October 19,2021 got to pay it. What does that OPEB payment look like? And then based on the ability to collect this TAT, what you mentioned earlier, and correct me if I'm wrong, is it would take the better part of three years to make back the loss. Could you please expand on that? MS. SAKO: So if we were at our tourism counts that we had in Fiscal Year 2019, I want to make sure I got the right year, that was the last full year of tourism, then—and we had that same revenue and applied the three precent, we would be approximately equal as to what—with this three percent versus what we were getting from the State. However, since then we had a decline. So all we can go off of is the Council on Revenues' projections for each island. And they're saying that in Fiscal Year 2022, you know, instead of like $19.2 million, they're forecasting revenue of$13.1 million, although I believe that was based on the full fiscal year, and we would be starting in January. And then Fiscal Year 2023, they're projecting $16.7 million versus the $19.2 million or $19.158 million that were getting. So by Fiscal Year 2024, it's pretty much break even, at$18.8 million versus $19.2 million. But again, you know, with the pandemic everything is a projection. No one knows for sure until tourism kind of rebounds again. But, that would be the approximate amounts. So because the State waived the requirement of having to pay the OPEB, we did fund, I want to say $5 million in the current year, but that left us short, approximately $16 million of what we should have been paying. But we also did add funding to Parks, for example, to their maintenance account, you know, in their current operating budget, and that is intended to remain there for future years as well because we know they were you know, they definitely needed additional funding for our parks. MS. LEE LOY: Great, Deanna. And then I want to talk a little bit more about some of the other taxes that we've increased, GE(General Excise). Do we know what that forecast looks like around our GE? I know the Council on Revenues, put out some information, and I know that GE was tied to our mass transit and some of our roads. What does that forecast look like? MS. SAKO: So for both of the pandemic, FY 2021 and I think 2022, we forecasted a 25 percent decrease, and we went based on what we thought was going to be a full year of$50 million. So it actually was coming in. It wasn't a full 25 percent decrease. So we did collect what we budgeted and a little bit more in GET (General Excise Tax), which is also tourism-based. MS. LEE LOY: Perfect. And see—what happens is although we had projection, we collected a little bit more, and I'm just wondering how that collection will then offset the rest of the General Fund. And then, the Fuel Tax? Page 14 FC-21 October 19,2021 MS. SAKO: So the General Excise Tax cannot be utilized for any General Fund operations. We have moved whatever we could to both the Highway Fund and the General Excise Tax Fund when we were having those budget, you know, difficult years. So for example, like I think Traffic, is now sittingsorry, Police Traffic Enforcement, I should be clear, is sitting in the Highway Fund because that could be related, and fell under the allowable purposes of the law, and then—as supported by Corporation Counsel—but at the time, Corporation Counsel said it didn't fall under General Excise Tax. So that remaining fund balance does sit in the General Excise Tax Fund. We've also transferred part of it to our Debt Service Fund to support the debt on roads that we've built over the time as well as just—into Capital Projects Fund, so that the mass transit, and roads, and bridge projects can be funded, as well as you might recall that we also set some aside for the Hurricane Lane match because a lot of the bridges were damaged in the Hamakua District. MS. LEE LOY: Thank you, Deanna—and then Fuel Tax. That's why I'm back to if we had seen the bluebook, we would actually have a better picture. MS. SAKO: Yeah. So I think the discussion—well, actually it only was for General Fund. So on Friday we did submit the Fund Balance letter to Council for General Fund. It doesn't have each fund in it. Highway Fund, the fuel tax was little bit over. But also, the other tax in there that I am escaping the name of—Franchise Tax, thank you, Steve, was a little bit under. So there's definitely some things that offset each other in that fund, on the revenue side. MS. LEE LOY: Yeah. Thanks, Deanna. We're having to do this, because sometimes that information would have been available to us so we could've gotten a bigger picture. And the one thing that's unknown to me right now related to the General Fund, and I know the rest of my colleagues have seen this, is we see a number of postings for vacant positions that have yet to be filled, and I don't understand how much of the General Fund hasn't been utilized because those positions have stayed vacant for three, four, maybe even up until this point maybe nine months vacant. Is that possible for us to get that information, also? MS. SAKO: When we discuss the Fund Balance letter, I think staff did put that on the spreadsheet, as how much was that. Part of that Salaries and Wages (S&W) savings in the last year though was also because we had CARES (Coronavirus Aid, Relief, and Economic Security)Act, and we were able to transfer some of the S&W there because we knew some of the shortfalls would be that would be like the lifeguards, for example, didn't get funded fully by the Page 15 FC-21 October 19,2021 State, and things like that. So some of the lapsing is not all entirely due to vacancies. But there is some, that's also why we try to fund, you know,partial year rather, you know, for some of the vacancies, as well. In addition though, when there are vacancies, that usually means that the other employees have to pick up the slack, and so there's usually part of that money is used for overtime to help cover. MS. LEE LOY: Thanks, Deanna. And then, you know, we know we're going to have to plug a hole in our Fire budget because of the Mana Road Fire. MS. SAKO: Yeah. MS. LEE LOY: So I share all of this with colleagues because not that this legislation is not ready, it is. I don't think I'm ready to vote in favor of this without getting a clearer picture. You know, whether it's holding it here in Committee for one more meeting, or pushing it forward with the understanding that Finance will get us some of that information so that we can make better decisions. Because I'm also hearing from my other colleagues, like we want to focus the money to really address some of the areas that community really, really needs. We know Ms. Kimball needs bridges in her district. You know, everybody's got parks. With that, I'm going to yield my time. Thank you. I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Lee Loy. Ms. David, go ahead. MS. DAVID: Thank you, Chair Kaneali`i-Kleinfelder. Just wanted to say thank you, Council Member Kimball, for bringing this forward. I think everyone, myself included, when we were—got noticed that we would not be getting any TAT, and then this was the only option. I pretty much felt that I think how everybody else feels, we have no choice in this matter, and this is the only way that we could recover some of the money that we desperately need to cover impacts from the tourist industry on all of our facilities. So, I definitely will support this. And I understand that I know we need more accounting at this time, but Deanna, thank you for your general breakdown of how you see this collection happening. And that was my question, are we geared up then to implement, collect the fees, and also address the enforcement part? Because I think that's very important. Thank you, Ms. Donoho, for pointing that out. I think we need to figure out just how many short-term rentals that we could be actually receiving funding from. Because that makes upI mean, if we're about half-and-half, that's a huge amount of money that we could possibly Page 16 FC-21 October 19,2021 So I think enforcement, for me, in moving forward with this. Enforcement is pretty much priority. And then if you guys are ready and geared up to implement this increase, and collection, et ceteraI just want to get your opinion on how whether you folks would be ready to do it by the time this becomes implemented. MS. SAKO: So Steve has been working with the other Finance departments at the other counties to try to come up with a statewide system. So they're getting ready to put out an RFP (Request for Proposal). We're trying to determine what solutions we want. So there may be like additives; for example, of enforcement, and having them do it statewide. You know, making sure that people are looking at it. And I should clarify that when we are giving the estimates from the State or our projections and calculations, it is based on what's currently being collected. So if there is a lot of revenue that's not being collected, obviously that would impact the numbers, as well. But we definitely are looking at it and working with Planning on that. But Steve has been working on it and is prepared, I believe, to start those collections January 1st, if needed. Kauai and Maui have started. So we're also obviously paying a significant attention to what they're doing, especially in the short-term, should the statewide system not be ready on January 1st MS. DAVID: Well, thank you for that, Director. Steve, do you wish to add something to that as far as our being able to gear up and implement this? MR. HUNT: Sure. Thank you, Council Member David. As far as timing I guess, knowing that we're looking at an effective date of January 1st doesn't mean the money actually starts flowing, because it closes at the end of January, January 31st, and then they have until February 20th to actually make the payment. So definitely, we want to keep that in mind. That as we're moving forward and working towards our Cooperative Purchase Agreement, we may not be able to stand it up with a four-county solution initially. But that is the goal, that we're trying to make it as seamless to the taxpayers, so they don't have to go on to both the State side and four different county sites to make payments and do those calculations. We're trying to have one landing site for all four counties to do that. But, we're also working under different timelines. Obviously, the most important is getting the ordinance passed and standing up, at least on paper, an organizational chart that shows we have a Tax Division, because that will trigger the MOU (Memorandum of Understanding) with the State. And the other portion that I really to get an early jump on is notifying those that have been, or at least in the last 18 months, have been paying taxes, TAT and TOT (Transient Occupancy Tax) taxes. And in order to get that mailing list from the State, those are the requirements. We have to have the Tax Division set up Page 17 FC-21 October 19,2021 structurally, and we also have to have an ordinance passed that allows us to initiate that three percent, or up to three percent tax. The sooner the better. In terms of positions, we're really trying to figure out what is the best position count, and whether that's a permanent or temp. A lot of that may depend on the results of the RFP and how much of that can be automated; how much of the reconciliation process can be automated. I think that's again part of that is dealing with an online payment system, but also those that are going to be mailing in payments. We can't preclude that. We would like everyone to do it online, but there are going to be some that are maybe smaller operators that want to do this manually, and we have to have a system that has the flexibility to take in those manual payments. We have to have a means of auditing. We have a reconciliation. And then, there's also a grandfather clause. So we would have to be able to look at those on an individual basis and make adjustments. So, it is a process. And again, as much as I want to make sure we get a good bill, I also want to make sure that I can stress the time is somewhat of the essence as we move forward towards that January 1st date. MS. DAVID: Thank you so much for that explanation. It answers quite a few of my questions. So just in closing, I just want to say that given the fact that we went through COVID, the things that we experienced in seeing how the impacts of tourism had on our parks, and our open spaces, I think I never seen a more healthy environment, or shoreline, or beaches that I've seen for many years, except during COVID. So while we speak of redoing or rethinking our tourism industry, I see this as a kind of a first step in that direction. So if we're really thinking about addressing those impacts and how much tourism does impact our natural environment and our culture, this is one way of putting our money where our mouth is and getting a head start on actually doing something that's positive. And I thank you guys for your work in trying to put together and implement this very complicated set of collections. So, thank you again. I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. David. Anyone else in Kona? MS. VILLEGAS: Go ahead, Mr. Inaba. Your light was on before mine. MR. INABA: Okay. Well, first of all, thank you, Council Member Kimball, and the team in Hilo and here in chambers in Kona, for getting this before us. And I know, I believe, Mr. Hunt probably spoke with his counterparts on Kauai. I know they've been working on this in June, when I stopped by their county building. Page 18 FC-21 October 19,2021 Like Chair David said, you know, we're kind of forced into acting on this. And I guess for the purpose of clarification, especially for those listening in from the public, what we're proposing here—all of this three percent, Ms. Kimball, is going to be going into the General Fund, is that correct? As it's currently written? MS. KIMBALL: Yes, as the legislation is currently written, it all goes into the General Fund. I will say that City and County of Honolulu are looking at earmarking, so it's definitely something that could be done. MR. INABA: Okay. I would say I'm going to be supporting today. And perhaps we might all think about areas that we are definitely in need. It came up, Parks and Recreation, and we know facilities across are island are in need of help. So, that might be my only suggestion. And I'll think of ways, based on what you provided, as a solid start for this bill. So thank you so much. Chair, I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Mr. Inaba. Ms. Villegas, go ahead. MS. VILLEGAS: Thank you. I want to thank everybody for their thoughtful comments, and especially Ms. Kimball, on the work that it's taken to take what was otherwise kind of another nail in a coffin, of our County budget, based on the State's managing of TAT, and working so hard with HSAC (Hawai`i State Association of Counties), you know, an alternate on our HSAC, representation for the County. And Ms. Kimball really works really hard with that group and this is one of the topics, hot topics, that's come up, as the rest of the counties, once again, look at ways to mitigate the challenges in the loss of this tax revenue. So thank you for taking the initiative and working with the administration to outline these things, and how we can move forward. I had an interesting piece of communication from a constituent this last week, in fact asking kind of where I stood on it. You know, I am going to be supporting this. It's something that I believe we're in a place that it needs to happen. And I agree with you that—and I agree very strongly with Chair David's reflections on I mean, we saw firsthand what happened when our tourism, sadly economy paused, but also with that pause in visitors, and impact on our natural resources, and our infrastructure pause, it became very apparent what happens and does happen when we don't have that kind of that overuse. And something I wanted to—somebody pointed out to me also, was you know, the article in the newspaper, it was stated by the CEO (Chief Executive Officer) of Hawaii Lodging and Tourism Association that it would—if this measure passed, that it would make Hawaii the state with the highest lodging tax in the nation. And I'm really incredibly grateful to Mr. Dennis Boyd for providing me with these are 2018 documents—and hospital itynet.org, and it's a whole urban centers, total lodging tax rate ranking as of 2018. And while Hawaii may garner the highest Page 19 FC-21 October 19,2021 lodging tax revenues of all the other states, we actually do not by any means have the highest lodging tax rate. We're actually ranked—we're here, on this one, Honolulu represents, for the State of Hawaii here, and it's ranked number 57, with Omaha, Nebraska rating number one at a 20.5 percent total lodging tax rate ranking; puts them in number one. So just in the broader spectrum of municipalities and how tax rates are utilized within these municipalities, I felt some sense of relief and comfort that we are not throwing ourselves way outside, what is being utilized in other municipalities. And I think this likens you know, nobody likes to raise taxes. Nobody likes taxes to begin with. I mean, you go back to futile economies and the history of taxes, and there are many ironies there. However,this is the means that has been identified to raise funds for our municipality, and it's within our responsibility to make decisions that allow for us to garner the resources necessary to take care of the infrastructure for the people that live here. That live here; for our people. And with tourism continuing to be a large portion of our economy—of course, the goal is to make it equitable. The goal is toI really also want to thank Stephanie, Ms. Donoho, for her comments and presentation, and her incredible attention to detail, and ability to articulate and identify the areas that we aren't covering, and that could provide a broader support and more equitable balancing of making sure that we're getting those dollars everywhere possible. So I thank you once again, Council Member Kimball, for bringing this forward. It took courage and determination to tackle this issue. All right, I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Villegas. I'm going to go back to Ms. MS. KIMBALL: Chair? Chair, this is Council Member Kimball. Judge Strance would like to make a comment on something. (Note: At this time, Corporation Counsel Elizabeth Strance came forward to address the members of the Committee.) CHR KANEALI`I-KLEINFELDER: Okay. Thank you, Ms. Kimball. Ms. Strance, go ahead. MS. STRANCE: Thank you, Chair. Elizabeth Strance, Corporation Counsel. I did want to just mention to Ms. Donoho that there is an attempt to address one of the concerns raised, about identifying an enforcement, and it allows the Finance Director to share information with other departments charged with permitting oversights for enforcement of transient accommodations. So there is some language in there. Page 20 FC-21 October 19,2021 I know that Council Member Kimball has talked about a collaborative process and that there would probable amendments to the bill before the next hearing on it. And if there are specific concerns or language that you would want considered, to please share them with Council Member Kimball so that we can work them in. Thank you. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Strance. Ms. Kimball, would you like to kind of sum up where we stand right now before I go to second round for Council Members? MS. KIMBALL: No. Council Member Lee Loy has her light on. I would like to ask you to just come back to me before you proceed with the vote on the matter. CHR KANEALI`I-KLEINFELDER: Okay, thank you. I'm going to go ahead to Ms. Kierkiewicz in Hilo. She has her light on. MS. KIERKIEWICZ: Thank you, Chair. Council Member Kimball,just curious because you are part of HSAC, if there has been any discussion among the counties to engage the hospitality industry to see if they would be willing to provide kama`aina discount of three percent, to kind of offset any impact by residents should they travel to other islands or want to do a staycation on island? Just wondering if there's any discussion about doing that. MS. KIMBALL: Thank you for the question, Council Member Kierkiewicz. I'm going to refer this to Judge Strance. But I believe,because it's taxation, offering a discount for some folks may not be legal, although the visitor industry could reduce the room rates to compensate for the three percent. But that's beyond the scope of your question, the answer is no, HSAC didn't discuss that particular item with the resort industry. MS. KIERKIEWICZ: Okay. Maybe that's something you can take up to the group to discuss. I think that would help to soften the blow a little bit by local residents, who do want to stay on other islands or do a staycation here on Big Island. The other thing is I hope that I know that you've been listening very intently to a lot of the conversation that we've been having here at the Council, and do hope that you plan to keep this measure in Committee at least one more time. Happy to work with you, or solo, to kind of follow up with Deanna about the formula that she mentioned to fund for various priorities that we've identified are really important. This has a potential to raise over $20 million additional for our County, and we would be remiss if did not leverage this moment and really direct funding streams to support particular opportunities and priorities, such as the Revolving Housing Fund, such as supporting our parks and recreational facilities. So I would love to go to work with you on that and hope that we can keep this Page 21 FC-21 October 19,2021 in Committee for a little bit longer to make sure that any issues that Council Members have are resolved. Thank you, Chair. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Kierkiewicz. MS. KIMBALL: Chair, this is Council Member Kimball, if I may? CHR KANEALI`I-KLEINFELDER: Go ahead, Ms. Kimball. MS. KIMBALL: Yeah, I just I wanted to note for folks that if you're a local resident and you're paying—staying in a room and you're paying the TAT and the purpose is for a business trip, you are able to deduct that as a business expense. And then just to your comment, happy to work with anyone that has amendments or suggestions. So please reach out after today's conversation. Thanks, Chair. I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Kimball. Okay, Kona? I know Ms. Lee Loy has her light on. Ms. Lee Loy, go ahead. MS. LEE LOY: Thank you. Following up the three percent, it goes into the General Fund, correct? Deanna, and this is no way a concern about the two percent Open Space Fund, but then does that increase? Because we've increased the General Fund, that more would be directed into our PONC (Public Access, Open Space, and Natural Resources Preservation Commission) fund? MS. SAKO: No. Both PONC and the Disaster Fund wording is very specific to real property taxes only. MS. LEE LOY: Okay, great. Thank you for answering that. Yeah, Ibecause I'm not seeing the complete fiscal picture, I would want to hold it in Committee. But if we don't' get there, I do want to work with the author; but actually with Deanna, to understand the different mechanisms of kind guiding certain funding into certain areas that we know are incredibly important for all of our County assets. But I'm just having a real hard problem of seeing the entire fiscal picture at this time. I know, Deanna, we can have an offline conversation, and we can get there, which would actually help me potentially look at amendments and/or ways to guide funding so that everybody else is getting what they need, in addition to having the staff that we need to account for all of this money. With that, I yield. MS. SAKO: I think we can put some slides together for next time,just to show the current status. And then I just wanted to clarify about the additional $20 million and our new funding stream. You know,just as a reminder, this is a replacement of what the State took away, and we're not paying all of our bills this Page 22 FC-21 October 19,2021 year because we didn't have that revenue. So while yes, we can definitely have a discussion about how we're going to direct it. We just have to keep the big picture in mind. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Sako. Thank you, Ms. Lee Loy. Kona? Going back to Kona. MR. BROWN: I don't see anyone's mic on, Chair. CHR KANEALI`I-KLEINFELDER: Okay. I have a few things to say. Ms. Kimball, do you want to say anything else before I speak? MS. KIMBALL: Chair, if you would like to. I'd like to make a motion to postpone, but I don't know if you want to contribute to the discussion before I make that motion. CHR KANEALI`I-KLEINFELDER: I would. I would like to say a couple of things first. MS. KIMBALL: Okay, if you just return it to me then when you're done. CHR KANEALI`I-KLEINFELDER: Okay. Thank you. Okay, well I appreciate the conversation today. I appreciate the bill. The bill is important. It allows us to make up the funds that we've lost. Today's discussion was good. What I got from our testifier, Ms. Donoho, I think that really sums this up well, is if we can't collect in full, then our funding source that we're trying to make up for is going to be limited, and that really pushes back to how we collect, and who we collect from, and what that mechanism is. She mentioned something called AlltheRooms.com, and I would be hopeful—because at this point, I believe that Planning is in charge of our short-term vacation rentals, that they are at least looking at this online source, and they're doing as much as they can to start tracking this. Because we have known that this CTAT (County Transient Accommodation Tax) has been available to us, if we do legislation; but more so, it's depending on who we can tax from. So is Planning aware of this? Are they tracking this? MS. SAKO: They are aware of it. Just to clarify, also it's a subscription. It's not just something you go online to do; you have to pay for it. They do have somethingI believe they are paying for. So they are looking at all the various options. And then part of that will also depend on, through the RFP, the enforcement piece, you know, if it seems reasonable to contract that out or not. Otherwise, you know, I mean if we're going to do it in-house, then definitely we'll be looking into those programs. Page 23 FC-21 October 19,2021 CHR KANEALI`I-KLEINFELDER: Okay. Because I mean basically collections based on the data, we don't have the data, we cannot collect in full, and then we're shorting ourselves. So there has to be a strong tie between Planning and Finance, and you've touched on that so far, that's pretty keyed to this conversation. I wanted to ask, TAT was not specifically directed, correct? Not the County TAT, but the actual the State TAT that we were getting a portion back. Was that specifically directed to any area of our budget? MS. SAKO: No, that was just a General Fund revenue that helped support all the departments. CHR KANEALI`I-KLEINFELDER: Okay. So to replace in a similar manner with the County TAT would be to do a General Fund replacement,just like the TAT was. I'm inclined to go on that route because it doesn't specify any one area, but allows these funds to be used across the board wherever they may be needed. That's more my inclination. Steve, did you get back a number on what ? MR. HUNT: I'll try to get that for you. CHR KANEALI`I-KLEINFELDER: Okay, and try get that for me. Ms. Donoho, I wanted to follow up with you. I mean, where in your eyes do you think the County could made some strides as far as getting ahold of our short-term vacation rental numbers and data? Where would be our best step? Because, I mean, you pulled some numbers out, and you're obviously you're on a track that was pretty solid as far as nailing down how to get the most bang out of our buck. (Note: At this time, Stephani Donoho came forward to address the members of the Committee.) MS. DONOHO: Thank you for that question. I'm not advocating necessarily, that the County purchase just directly from this platform. But there are data aggregator platforms that can be used. You know, it's hard sometimes, and we have the same problem at the Resort Association, when we don't directly own the asset. So a short-term vacation rental, even that is an allowable use, for example in Waikoloa Resort, or Mauna Lani Resort, or Mauna Kea, we might not know how often that property is rented, how much it's rented for, and so I think it's going to be very, very important for the County to have a process in place where that it is gathered. We use currently the STR(Smith Travel Research), it's Smith Travel Research is someone that we report our data to. I see HTA (Hawai`i Tourism Authority) does Page 24 FC-21 October 19,2021 a vacation rental report every month on what the occupancy looks like for vacation rentals, but I'm not certain how they're doing, you know, if they're touching vacation rental property, or is that like their visitor plan inventory, is a self-reported process. So eliminating, to answer your question overall, eliminating any barriers between cross-communication with the departments thank you for Corporation Counsel Strance, I really appreciate knowing that Finance and Planning, and R&D, and everybody who might be touching a component of this very important revenue source recognizes the role that they need to play. Because that's the biggest thing I think we can do as a County, is make certain we're not creating unintentional barriers that keep us from doing what we need to do. I completely understand Deanna Sako's comments about these are projections, and that's why I shared what our forecasted budget numbers are for 2022. As she accurately described, none of us know exactly what's coming, but I really believe that Hawaii County gets one big shot at making certain this happens fairly and equitably, and that the money gets invested in the ways that the County wants to see it invested. So I thank everyone for their comments, and thank you for allowing me to attend the full meeting and participate in this process. I'm happy if it does move forward into additional Committee hearings. I'm happy to have one-on-one conversations with anyone. I've done that already with Ms. Kimball and Mr. Richards, since she was the bill's introducer and Mr. Richards is the primary Council Member for our district. But I am very grateful that Hawaii County is in this process. Having previously worked for the County, I know I've been trying since 2008 to get a real sense of how many TAT licensed holders are there for Hawaii Island. I know it is a difficult task, so I thank everyone who is involved in this. CHR KANEALI`I-KLEINFELDER: Thank you. Thank you, Ms. Donoho. Last thing, we touched on collections. I mean, County levels, so—well, the State is not going to collect this and give it back. We have to, you know, in some sort collect this and find a platform to allow the people to pay their taxes. And you know what, you touched on it, Maile David, but that's really important to this. Because it could lead to more positions. If we don't collect, we don't collect, period. So can you just, I mean, dig in a little about that? MS. SAKO: So that's why we're kind of looking at different areas statewide with the enforcement piece, because we do realize how important it is. So they've seen a couple demos just to make sure there's some products out there that will meet our needs. So in term of basic needs and training, like the total revenues collected for that month and then times them by the three percent, and allowing them to Page 25 FC-21 October 19,2021 automatically pay that online, that piece, you know, there are multiple vendors. There's not as many that do the enforcement piece. So how many staff we need is going to depend how automated the system is and whether we contract out the enforcement. So we don't want to grow government unnecessarily, but we definitely want to have staff in place to make sure it's equitable to everyone, which is I think everyone's concern. It's that enforcement piece of making sure everyone's paying. CHR KANEALI`I-KLEINFELDER: That is strange, yeah. Because, I mean, the State handed us this as a way to make up for our TAT that we have lost, and yet threw it back in our hands as far as how to collect, how to enforce. I mean, that's huge,just those two aspects alone. MS. SAKO: Yeah, the Act actually prohibited the State from collecting on our behalf. CHR KANEALI`I-KLEINFELDER: That was very beautifully done on the State's behalf, wasn't it? Yeah. Steve, you have a number for TAT collected. This is TAT. Not a County TAT, but the original TAT for the State. MR. HUNT: Correct. CHR KANEALI`I-KLEINFELDER: What was that number that Hawaii Island, or our County of Hawaii ? MR. HUNT: Hawaii County. And I'll give you two sets of numbers, because one is TAT and one is TOT. CHR KANEALI`I-KLEINFELDER: Okay. MR. HUNT: Which is the timeshare contribution. CHR KANEALI`I-KLEINFELDER: Okay. MR. HUNT: So on TAT, Hawaii County, for Fiscal Year 2021, which is the most I have recent on, was $41,961,516. The TOT was $1,996,895. CHR KANEALI`I-KLEINFELDER: Wow, so almost—well, say about $42, $43 million that we produced in TAT that goes to the State. MR. HUNT: Yeah. CHR KANEALI`I-KLEINFELDER: We get zero back, and now we've been allowed to further increase people's taxes for staying here on the island, which I Page 26 FC-21 October 19,2021 think is good, but at the same time it's still more tax on visitors and residents alike. Is there a way for residents to not pay this tax? MS. SAKO: That will be a question for Judge Strance. (Note: At this time, Corporation Counsel Elizabeth Strance came forward to address the members of the Committee. CHR KANEALI`I-KLEINFELDER: Judge Strance, is there a way for residents to not pay this tax if f County residents ? Because this has been on my mind since day one when I saw this come up, can County residents not pay this tax? MS. STRANCE: Ms. Strance, Corporation Counsel. I'm not prepared to give individual legal advice to taxpayers. I don't know the answer to the question. But tax law tends to be fairly complicated, and I would hate to give a blanket answer, but it's a general statement, if there's a tax imposed, people are expected to pay it. CHR KANEALI`I-KLEINFELDER: Is the decision rested within the confines of this bill in front of us, whether we choose or not to impose this tax on residents of the State of Hawaii, or more so, visitors to the State of Hawaii? Is there a possibility for us to do that? It's not a tax question. MS. STRANCE: I would have to look into that a little bit more. But the Transient Accommodation Tax—and we've been pretty careful in the way that this bill has been drafted to mirror the State's tax in terms of who is obligated to pay it. Once we stray very far from the model that the State has set up, then there may be unintended consequences that we haven't thought through. So since the first bill was introduced, there's been a distillation process over time, where the bills have become more and more tailored and tied to the Hawaii Revised Statute construct. And so this is aTransient Accommodation Tax is a particular type of use. It's based upon the type of use, and so once you start slicing out for the same use, some people have to pay it and some people don't have to pay it, it opens up a can of worms that I'm certainly not prepared to talk about today. CHR KANEALI`I-KLEINFELDER: Okay. I mean,just common-sense reason I'm asking. We the residents of Hawaii County and all the counties of the State of Hawaii already pay our taxes. We already put in to the pot. We live here. We get taxed every day for living here, and we put our funds towards everything that we see as government-funded. It's all taxpayer-funded. So on the back end of that, it's hard for me to swallow why the taxpayers also have to pay for the impacts of the visitor industry. Because we are impacted by Page 27 FC-21 October 19,2021 the visitor industry, period. So that's really the reason I'm asking. You know, we're basically taxing the residents two times. We're going to say, "The visitors are going to come. We're going to tax them, and if you go partake in this industry on the island that you live on that you call home, we're going to tax you, too,"I have a hard time with that. It's hard for me to swallow. It's never made sense to me that we pay these fees, because we live here and we support these industries in one way or another. Whether it's through our work that we do, whether it's through government, whether it's through taxes, we do already. So I'd be very interested to understand the ins and outs of that conversation, and how that applies, and if we can or cannot. I'm going to need a follow-up on that, Ms. Strance. Deanna, do you have anything to add to that? Do you know anything that I don't know, or maybe Ms. Strance doesn't know, regarding revolving around this? MS. SAKO: I was going to say in general State law trumps County law, so I think if there's not an exemption already established in State law, I'm not sure we can exempt it. But I agree with Judge Strance, it is something that would have to be researched. It's not something that's known at this time. But in general, I would say State law trumps County. CHR KANEALI`I-KLEINFELDER: Yeah, there's always the State precedent, which we always follow, but we write and we impose the tax at the County level, so that does open up possible leeway in there somewhere. MS. SAKO: Yeah. Well, we do impose it at the County level, it's only with the authorization granted by the State, so I think that's how they tie it together. But I'm sure Judge Strance and her team can maybe look into it a little more. CHR KANEALI`I-KLEINFELDER: Okay. Well, I appreciate the answers. Again, I'm just asking. Common sense, you know, why do we tax our residents on a tax specific like this? So I'd love to have an answer back from our Corporation Counsel, sooner rather than later, so I can make a decision about where I stand on something. But yeah, that was a good discussion today. Council Members, I appreciate it. I'm going to go back to Ms. Kimball. I know you wanted to make the motion. Before you make that motion, I would say I would like to see this bill move forward one way or the other, because I think in the end we're all going to say yes to this bill. It's just a matter of what it looks like when we get to the end. I yield for now. Go ahead, Ms. Kimball. MS. KIMBALL: Thank you, Chair. I just wanted to add a couple of comments based on what you said. Page 28 FC-21 October 19,2021 You know, I'm certainly not an attorney, much less a tax attorney, but I think Judge Strance was heading in the right direction, when the TAT is a usage fee, and if you say that it's a fee for some people and it's not for other people, you begin to get into a constitutional issue. I would venture to say that is something we could not do as much as all of us would like to, because of potential constitutional violations. The other thing I wanted to draw everyone's attention to, on page four, the section having to do with the Director of Finance's abilities to enforce this article, particularly Section 5, (Section 2- . Director of Finance, subsection (a)(5)) we talked a lot about the compliance requirements. One of the added benefits of this piece of legislation, is it provides something that we haven't had in the past, which is a way to reconcile our STVR(Short-Term Vacation Rental) registrations with the TAT. And so I think that is an important provision. I know we've talked about it a little bit, but I wanted to make sure that was called to attention. But the final thing, the latest number I have on the latest average room rate for our County is about$280 a night. So when we talk about three percent, we're talking about$9 a night, which I know you know, some of these places is $40 just for parking overnight, where there's a resort fee of$30. So as much as we all hate raising taxes, it is a pretty nominal fee given the benefits. With that, what I would—it is my preference to keep a working bill in Committee until it's ready to go forward to the Council, so I'm going to make the motion to postpone to the November 2nd Finance Committee meeting. Motion to Postpone: Ms. Kimball moved to postpone Bill 81 to November 2, 2021. Seconded by Ms. Lee Loy. CHR KANEALI`I-KLEINFELDER: Council Members, any discussion on the motion? MS. LEE LOY: Yes, on the postponement. CHR KANEALI`I-KLEINFELDER: Yeah, on the motion to postpone? MS. LEE LOY: Yes. CHR KANEALI`I-KLEINFELDER: Ms. Lee Loy, go ahead. MS. LEE LOY: Thank you. And thank you, Ms. Kimball, for this motion, because I just wanted to lay the foundation of some of the information that I would like to see, you know, over the next two weeks. Page 29 FC-21 October 19,2021 So, Deanna,just a better snapshot of where we stand fiscally with all of our expenditures and revenues. I know you mentioned a slide or some type of presentation. That would be great. You know, what our OPEB payments would look like; some information from the Council on revenue as far as our GE collection; and just that bigger fiscal picture to help us understand where all the taxes are. You know, in my book this is what we have: GE, fuel, real property tax, TAT twice, so that's five different taxes. And so I'm just looking out for the community to kind of get a big picture of how we collect our revenues and how we're expending them here. Thank you, I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Lee Loy. Anyone else on the motion to postpone? MR. BROWN: I don't see any more lights, Chair. CHR KANEALI`I-KLEINFELDER: Thank you, Mr. Brown. Then for me, Heather, I do not support your motion. I'd like to see this move forward to Council. You can hold it in Council, but at that point it's ready to go. I really don't think that this bill is going to get voted down. It will change form slightly, I'm guessing, but I don't think it's going to get voted down. So, that's my two cents. But with that, barring any further discussion, there is a motion on the floor to postpone Bill No. 81 to the Committee meetings on November 2nd, all in favor? Vote on Motion The motion to postpone Bill 81 to November 2, 2021, to Postpone: was carried by the following voice vote: (Approved) Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, and Villegas —8. Noes: Committee Chair Kaneali`i-Kleinfelder— 1. Absent: None. Excused: None. CHR KANEALI`I-KLEINFELDER: So the motion to postpone has been found in favor, and I think that brings us to the end of our discussion for Bill 81. Ms. Donoho, I do appreciate you being online. If you're still there, thank you very much. I appreciate your information. Ms. Sako, thank you. Mr. Hunt, thank you very much. And, Mr. Clerk, if we could move on to our next order of business. MR. BROWN: Sorry, Chair,just to clarify, you want me to start at the top of the agenda? Page 30 FC-21 October 19,2021 CHR KANEALI`I-KLEINFELDER: Yes,please. Return to Order The Chair directed the Committee to return to the order of business. of Business: COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. (Note: Comm. 84.3 was taken up previously, out of order.) Comm. 30.17: REPORT OF FUND TRANSFERS AUTHORIZED: SEPTEMBER 1 — 15, 2021 From Controller Kay Oshiro, dated September 20, 2021. Vote on Comm. 30.17: Mr. Inaba moved to close file on Comm. 30.17. Filed Second by Ms. Lee Loy and was carried by the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR KANEALI`I-KLEINFELDER: Moving onto Communication 31.21. Comm. 31.21: REPORT OF CHANGE ORDERS AUTHORIZED: SEPTEMBER 1 — 15, 2021 From Finance Director Deanna Sako, dated September 23, 2021, transmitting the above report pursuant to Hawaii County Code Section 2-12.3. Motion to Close File: Mr. Inaba moved to close file on Comm. 31.21. Seconded by Ms. Lee Loy. CHR KANEALI`I-KLEINFELDER: Council Members, any discussion on Communication 31.21? MS. KIMBALL: Chair, this is Council Member Kimball. CHR KANEALI`I-KLEINFELDER: Ms. Kimball, go ahead. MS. KIMBALL: Do we still have Director Sako in the room? CHR KANEALI`I-KLEINFELDER: Yeah, she's still here. Did you want to come up? Page 31 FC-21 October 19,2021 (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MS. KIMBALL: I would just like an update on where we are with the Rental Assistance Program. I see that was one of the big changes. And I know we had a lot of outstanding funds there, are we making some headway getting that distributed? MS. SAKO: Yes. I believe Housing did meet all of their spenddown deadlines. And the reduction in the contract, I think it was so it could be shifted to a different account and program. There was ERAP, which is the Emergency Rental Assistance Program One, the Emergency Rental Program Two, and then now we have the Housing Assistance Program—so those that own their home. So, I believe it's just being shifted into some of those other programs, but I'll confirm with Housing before the next meeting. But I believe they did meet all of their deadlines. MS. KIMBALL: Great. Thank you, Director. I yield, Chair. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Kimball. Anyone else in Kona? Okay, hearing none. Ms. Sako, I have a question for you. The change order for Big Island Scrap Metal, for the acceptance and recycling of propone tanks, it looks like this is the option year beginning July 1, 2021, but there's no cost at all. What's the deal with that? MS. SAKO: A lot of these are price term agreements, so we only pay for utilize the service. CHR KANEALI`I-KLEINFELDER: Okay. MS. SAKO: And in that particular one, I'm not sure how the payment is, if it's like per tank, or weight, or what it is. But we pay them as it's utilized. CHR KANEALI`I-KLEINFELDER: Because I actually went to recycle a propane tank. I didn't know where to go, so I went to the County landfill. I threw it in the bin, and no one caught me. No, I'm kidding. No, I talked to the guys at the scrap metal facility, and they'll take them. But they cannot—they have to be open or have a hole in them. But then if we recycle it for free for our County residents. And so I'm just wonderingI'm kind of wondering about this program, and if they're taking full tanks, they're opening tanksI mean, what the basis is. And we're not even using it looks like. MS. SAKO: No, we—so again, our price term agreements is we're agreeing to a price ahead of time; and then as we use it, they bill us. Page 32 FC-21 October 19,2021 CHR KANEALI`I-KLEINFELDER: Okay. MS. SAKO: But if the contract doesn't have an amount, it just means that we haven't agreed or encumbered that money. So when we do a price term Agreement, it specifies that we may use it zero, so it just depends if we use it. I think that one we do utilize it. But I can get more information from DEM (Department of Environmental Management). CHR KANEALI`I-KLEINFELDER: It's not a life not a gamechanger, but I'm just wondering about it. Because I think I've had people asked me too, "Where do I take a propane tank when it's done?" I mean, it happens a lot. Okay, if you have information on that, I'd appreciate it. Thank you, Ms. Sako. Okay. Thank you, Council. Okay, no further discussion? Okay, hearing none. We have a motion on the floor to close file on Communication 31.21, all in favor? Vote on Comm. 31.21: Mr. Inaba moved to close file on Comm. 31.21. Filed Second by Ms. Lee Loy and was carried by the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR KANEALI`I-KLEINFELDER: Next order of business, sir. Comm. 405: 2020-2021 ANNUAL REPORT FROM THE KAIL,UA VILLAGE BUSINESS IMPROVEMENT DISTRICT From Jay Rubenstein, Board President, of the Kailua Village Business Improvement District, dated September 9, 2021. Postponed: October 5, 2021 (Note: There is a motion by Mr. Inaba, seconded by Ms. Villegas to close file on Comm. 405.) (Note: At this time, Ross Wilson, representing Kailua Village Improvement District, came forward to address the members of the Committee.) CHR KANEALI`I-KLEINFELDER: Okay. So, Mr. Clerk, there's no motion needed. We can just go right into our discussion? Page 33 FC-21 October 19,2021 MR. BROWN: That is correct. CHR KANEALI`I-KLEINFELDER: Thank you very much, Mr. Brown. Okay, Council Members, discussion on Communication 405. And I do see, I think, Mr. Rubenstein joining us today via Zoom. Is that correct? Ross Wilson? MS. VILLEGAS: Ross Wilson. MR. WILSON: Jay Rubenstein broke a tooth, and as we speak he's in the Emergency Dentistry in Waimea. CHR KANEALI`I-KLEINFELDER: I hope he gets better. Well, thank you for joining us today. MR. WILSON: You're welcome. Happy to help. CHR KANEALI`I-KLEINFELDER: Okay, Mr. Wilson is here to answer any questions. Kona Council Members, I'm going to go right to you. Do you want to start off the discussion? MS. VILLEGAS: Yes,please. CHR KANEALI`I-KLEINFELDER: Okay, Ms. Villegas, go ahead. MS. VILLEGAS: Thank you, Chair Kaneali`i-Kleinfelder. Thank you, Mr. Wilson, for being here today. And I'm sorry to hear about the tooth, Ouch, dental procedures are always painful. Thank you for being here today in lieu of Mr. Rubenstein and for your provision of this Kailua Business Improvement District Annual Report for the Fiscal Year 2020 to 2021. I believe everyone has a copy of the report in your pinky folder. And I'm going ahead and turn this over to you, Mr. Wilson, to share the talking points and get everybody up to date. MR. WILSON: Well, the Kailua Village Business Improvement District works with two county departments primarily. We work with the Finance Department, and we work with the Police Department. And I've got to give a shoutout to both departments. All of you Council Members should know that they work at the highest levels, and I, we, I have nothing but praise for the Finance Department Police Department. As a bit of background, the Kailua Village Business Improvement District was formed in 2007. It's one of three Business Improvement District in the State. Fort Street has one, Waikiki has the other, and we were the third that was started in the State. Page 34 FC-21 October 19,2021 Our focus are clean and safe initiatives, and we enhance, and we do not replace County services. The organization is healthy as you can see by the report. Let me see, we focus on landscaping, cleaning, and maintenance, and we also focus on security. Our biggest issue in the village continues to be homeless issues, like a lot of downtown areas. 2020 we experienced a lot of the pandemic impacts. As you went through the Annual Report, you saw the number of businesses that were closed. 2021 started out moving in the right direction, and summer was actually good. Businesses came back, and people started to go to work again, and we got healthy. And unfortunately in the Fall business tapers off, and Governor Ige messaging for visitors not to come, really threw the bottom out for a lot of the businesses in Kailua Village. Right now, again we're back to businesses are struggling. So we're looking for a sense of normalcy pretty soon, as our COVID numbers decrease. I'm happy to go through any part of the Annual Report that you have, and I can answer any questions on the Kailua Village Business Improvement District and Historic Kailua Village. CHR KANEALI`I-KLEINFELDER: Ms. Villegas, did you want to continue? MS. VILLEGAS: Excuse me, yes. I first off wanted to thank Mr. Wilson for recognizing Finance and the Police Department. This year we transitioned. Our community policing Sergeant is now Mr. Michael Hardie, Sergeant Michael Hardie, and he has been incredible to work with, as well as the rest of his community policing team. They are active. They are around. They are engaged. They are personable, and humble, and kind; also, getting things done, following through, and enforcing many of the laws and the rules as they relate to the Business Improvement District. So I wanted to echo that mahalo and just share that gratitude and appreciation. I have enjoyed working with the Business Improvement District, and getting to know a lot more about the ins and outs, and the nuances, especially in this most interesting time. But I'm going to go ahead and yield to any of my colleagues, if they have any questions here. I know last year we went through—had some—kind of—we dug down really deep in order for me to get a better understanding. And I'm just grateful for the organization and the way that they continue to improve and serve our community in this capacity. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Villegas. Anyone else in Kona? MR. INABA: Chair? Holeka. Page 35 FC-21 October 19,2021 CHR KANEALI`I-KLEINFELDER: Mr. Inaba, go ahead. MR. INABA: Aloha, Ross. Thank you for being here today; and mahalo to you folks for bringing together this presentation. I think perhaps if you could just share real quick about what you folks are doing with regards to homelessness, because I think oftentimes we know it's a combine effort, but I think it would be this is a great opportunity to highlight the work that you folks do contribute to with regards to the homeless problem down Alii Drive. MR. ROSS: We contract with Block by Block, and they provide security services in the village, and they're walking door to door through the village. Our security services, what we don't have, any enforcement. So if there's criminal activity or activity that should not happen, our security services call the police. As I said, we have a great working relationship with the community police, and leadership in the Police Department. Everybody wants a safe community, and we're working hand-in-hand. In addition to that, we have an outreach coordinator, Kehau Gomes, and she works with not only with community police, the security that we have in the village, but also the providers, to provide services for the homeless individuals. And we interact both with Susan Kunz from the Housing Department and Sharon Hirota. We sit in all of the committees. We interact with Chambers Homeless Committee; and we provide the statistics for a lot of the groups, not only the Chambers Homeless Committee, but also West Hawaii Community Health Center so that they can apply for grants. It's a work in progress. We've taken out areas that were friendly to homeless. We've landscaped. We also have cleaned areas like Niumalu Beach so that it's more inviting to both visitors and locals and less inviting to homeless, and we're constantly looking at solutions to the problem. What we're trying to do is find solutions and start to peel away some of the issues. We're working with the County, and we're excited about Kukuiola. As we can provide housing, we can start to take some of the homeless off the streets. Unfortunately, Council Member Inaba, we have about 100 chronic homeless that really cause all of the problems, and the chronic homeless are those that either don't want help—actually don't want to help. The either have alcohol, or drug, or mental health issues, or all the above. And we've worked with the Department Health to try and find stabilization beds. It's a work in progress, and in the words of somebody else, it takes a village to make it work. MR. INABA: Great. Thank you so much for providing that update. I guess I'll just end by sending a mahalo out on behalf of this body to those workers who are on the ground. Those who are pressure-washing the sidewalks down there, patrolling, because they're really, you know, what's keeping our community safe, Page 36 FC-21 October 19,2021 and allowing a pleasant experience for both our kama`aina and malihini alike. So thank you again for your presentation today. Chair, I yield. MR. ROSS: Council Member Inaba, one last thing. The other thing we've done is when there's criminal activity in the village, we work with the Prosecutor's Office to geo-ban them from the area, so they can't come into the village, the confines, for a year. So, we're all working together and trying to be solutions-oriented, how's that? MR. INABA: That's awesome. Mahalo. CHR KANEALI`I-KLEINFELDER: Thank you, Mr. Inaba. MS. DAVID: Chair? CHR KANEALI`I-KLEINFELDER: Ms. David, go ahead. MS. DAVID: Thank you very much. Mr. Wilson, I just wanted to say also mahalo nui to you and your organization for all the years of hard work. I think you folks have a long way. You've demonstratedI believe when we created—we voted on creating this Kailua Village Business Improvement District, I think I was working for Council Member Pilago at that time. And I believe—in hindsight, I'm listening to you and your report, and thinking back when it was first formed. You folks have done an extraordinary job in Kailua Village. Every time when I do drive by, I see everything. I see the improvements, and I see all the hard work that you folks are doing. And I just wanted to say I'm just really proud and thankful for you and the Village Design, the organization, because I think you folks a prime example of more Business Improvement Districts being established on this island, because it's very helpful and it's very community-oriented and beneficial. So just wanted to say mahalo nui for everything you folks have done over the years because you folks have done an excellent job. And I yield, mahalo. CHR KANEALI`I-KLEINFELDER: Thank you, Chair. Are there any other discussion from Kona? MR. RICHARDS: Yeah. Chair? CHR KANEALI`I-KLEINFELDER: Mr. Richards, go ahead. MR. RICHARDS: Yeah, thank you. Thanks, Mr. Wilson, for being here. And just from the economic standpoint, it's been a tough, almost two years now, year and a half. Your village, have we lost a lot of businesses? Page 37 FC-21 October 19,2021 MR. ROSS: We lost a lot of businesses. The small mom and pop retail left. We lost restaurants. We started to see at the beginning of this year some movement and others filling their spots. We're not back to where we were by any means, but as you see from the report, there's new businesses and there's some new retail. Probably what was most striking, in the middle of the pandemic, to walk through the Kona Inn Shopping Village and see how devasted that was. You know, if you look through that report, I forget what month it was, maybe April, where we had 400 visitors in the month. You know, if you stop the flow of money into these establishments, either retail or restaurants, there's only so long that they can last. The good news is it looks like the worst is over, and it's starting to move forward again. So, fingers crossed. MR. RICHARDS: Okay. Yeah, I saw those numbers and it's almost shocking. You think it's a typo. But anyway, I appreciate that. Thanks. Chair, yield. CHR KANEALI`I-KLEINFELDER: Thank you, Mr. Richards. Any further discussion from Kona? Okay, hearing none. There's no lights on in Hilo. Mr. Wilson, I appreciate your time today. Thank you for the presentation. Good to see some hard numbers and hard data to look at. I understand where you guys have come and where you're headed. Also, I see you have a very good board. I mean, I see Toby Taniguchi on there. I see Riley Smith. You got some good people on your board so that should definitely help you guys along, as far as making some progress as we look into the oncoming years. Thank you very much, sir. I appreciate your time. MR. ROSS: You're welcome. Aloha. CHR KANEALI`I-KLEINFELDER: Aloha. Okay. Mr. Clerk, we have a motion on the floor by, I think, Ms. Villegas, and a second by Mr. Inaba, correct, from last time? MR. BROWN: Sorry, no. The motion is by Mr. Inaba, seconded by Ms. Villegas, to close file on Communication 405. CHR KANEALI`I-KLEINFELDER: Oh, thank you. Okay, we have the motion on the floor by Mr. Inaba and a second by Ms. Villegas to close file on Communication 405, all in favor? Page 38 FC-21 October 19,2021 Vote on Comm. 405: The motion to close file on Comm. 405 was carried by Filed the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR KANEALII-KLEINFELDER: I believe that takes us to Bill 80. BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. Bill 80: AMENDS CHAPTER 2, OF THE HAWAII COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO EXPENDITURES FROM FUND FOR THE WORKFORCE INNOVATION AND OPPORTUNITY ACT PROGRAM Provides a clerical amendment with no change to policy or function. Reference: Comm. 448 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Motion to Approve: Ms. Kierkiewicz moved to recommend passage of Bill 80 on first reading. Seconded by Mr. Inaba. CHR KANEALII-KLEINFELDER: Council Members, I hope we have Ms. Kunz on in our Zoom meeting; if not, we can get her on. Oh, I see somebody. (Note: At this time, Housing and Community Development Specialist VI Royce Shiroma came forward to address the members of the Committee.) MR. SHIROMA: Oh, Ms. Kunz cannot make it to the meeting, so if you have any questions, I can answer them for her. CHR KANEALII-KLEINFELDER: Okay, thank you. And is this Royce Shiroma, for the record? MR. SHIROMA: Yes, Royce, yeah. CHR KANEALII-KLEINFELDER: Okay, thank you, Mr. Shiroma. Council Members, any questions about Bill 80? Ms. Kierkiewicz, go ahead. Page 39 FC-21 October 19,2021 MS. KIERKIEWICZ: Thank you, Chair. Royce, this does seem straightforward, but I'm wondering if you could provide a little bit more clarification here. MR. SHIROMA: Sure. Initially it was just a housekeeping change to eliminate the Office of Housing. As you know, we're transitioning the program, the WIOA (Workforce Innovation and Opportunity Act)Program to the R&D (Research and Development) Department. So we kind of looked at it, and we felt that whole paragraph doesn't really match that section called"Expenditures from Fund," so we eliminated the whole paragraph altogether. MS. KIERKIEWICZ: Yeah. Thank you. I thought it had something to do with the transition. And so, Director Sako, maybe your opinion here, too. Is there a need to specify Research and Development and their leadership now that they are going to be responsible for the Workforce Development Board, which sets the Action Plan for the WIOA monies? (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: I think there probably needs to be someone mentioned as to who is kind of in-charge of that fund, and I do get it that we're kind of in a transition right now. So there's actually, I believe, future legislation, where there's a dividing line of, I think, Housing is taking up to Fiscal Year 2020 program funds, and then after that, R&D. So at some point, I think we need to clarify. I think it would be good to have a department associated with that. With the fund, whether it's expenditures or just maintained somewhere in the language. MS. KIERKIEWICZ: Thank you, Director. And I know that this bill was promulgated by Housing. Your opinion, and maybe Judge Strance too, should we be putting a pin in this until we get a few more of those details sorted out? MS. SAKO: I think Housing and R&D have worked it out. I thinkI didn't get a chance to review the bill, but will take a look at it before the next meeting. MS. KIERKIEWICZ: Okay. Chair, if I might, I'd like to from all my other colleagues, as well. But I'd like to actually postpone this measure. Happy to work with R&D and Housing on this; only reason why is becauseoh, here is Director Adams. (Note: At this time, Research and Development Director Douglass Adams came forward to address the members of the Committee.) MS. KIERKIEWICZ: Hi, Director. We were just talking story about your office now being the home for Workforce Community Development Board, and was just looking for opinion from Finance Director, Judge Strance, but now yourself, Page 40 FC-21 October 19,2021 about I mean, should any of this language actually be updated to mention your department given the transition? MR. ADAMS: We `re in the process, and Mr. Shiroma will correct me where I'm inaccurate and unprecise, but in the conversations with Office of Housing and Community Development, the removal of the specific department doesn't actually cause any harm. The Mayor is still the individual that's responsible for the funding being expended under the Workforce Innovation and Opportunity Act as it is provided to us from the State's Department of Labor and Industrial Relations Workforce Development Division. And so we operate under the guide of the Mayor, the Mayor has the responsibility. And this just creates the flexibility for whichever department on who will be managing it. There's no problem that we're going to be doing it. It creates the corporate firewall between us in the event it hasn't had responsibilities for some of the programs. That way, there's no issues between on who has responsibility for the funding and who's actually implementing the funding under a particular program. Royce, is that your understanding, as well? MR. SHIROMA: Yes, that is my understanding. And we also discussed it with Corporation Counsel, and that was their interpretation, also. That we didn't need to be on there. This was more an item that we could take out. MS. KIERKIEWICZ: Thank you for that. Royce, follow-up question, any rules, regulationI mean if we're eliminating this, it's safe to assume that any rules, regulations, developed by your office as it relates to this particular program, do those disappear? MR. SHIROMA: No, they do not. That area is just part of the entire section, Article 39, for the Workforce Innovation and Opportunity Act Program, which specifies that it's you know, like Mr. Adams stated, that it's under the Mayor, under the County, and we are responsible to follow the program rules and regulations. So that was just one little area that we kind of cleaned up a little bit. MS. KIERKIEWICZ: Okay. MR. SHIROMA: The overall section, the article, explains everything. MS. KIERKIEWICZ: Thank you, Royce, for your patience, for being here today and for those details. Thank you, Director Adams. It seems like things are still in the formation phase. And as more details become clearer, we'll have subsequent legislation to support whatever has been decided. Director, is that the case? MR. ADAMS: It is our understanding that this would—it is frankly my understanding that this would take care of any of the transition work. The other Page 41 FC-21 October 19,2021 transition work that's required is at a departmental level, and making sure that we're managing the human resources and financial piece of this, but there wasn't necessarily legislation that was going to be required. So, that's my understanding at the moment. MS. KIERKIEWICZ: Okay, thank you. I'll be following up with you on this. I just see a lot of opportunity for us to be leveraging these funds to be supporting local jobs, programs, and further economic development. So, thank you for your work on this. Chair, I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Kierkiewicz. Kona, discussion? MR. BROWN: No lights are on at this time, Chair. CHR KANEALI`I-KLEINFELDER: Thank you. Okay. Well, I think Ms. Kierkiewicz brought up a good point. Yeah, so there might be some possible amendments coming forward to this. For now, is there any motion besides the main motion? Okay, well we have a motion on the floor to pass Bill 80 from Committee to Council. All in favor, Council Members? Vote on Bill 80: The motion to recommend passage of Bill 80 on (Approved) first reading was carried by the following voice vote: Ayes: Committee Members David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—8. Noes: None. Absent: Committee Member Chung— 1. Excused: None. CHR KANEALI`I-KLEINFELDER: That does bring us to the end of our agenda, I believe. ADJOURN- There being no further business, at 3:03 p.m., Ms. Kierkiewicz moved to adjourn MENT: the meeting. Seconded by Mr. Inaba and carried by the following voice vote: Ayes: Committee Members David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—8. Noes: None. Absent: Committee Member Chung— 1. Excused: None. Page 42