HomeMy WebLinkAboutCOM 0528.000 2020-2022 i
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Mitchell D. Roth ,NtvaoF„�� Deanna S. Sako
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Steven A. Hunt
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County of wi`i
Finance Department
25 Aupuni Street,Suite 2103 • Hilo,Hawaii 96720
(808)961-8234 • Fax(808)961-8569
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November 18, 2021
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Maile Medeiros David, Council Chair and ,-
Members of the Hawaii County Council
Hawaii County Council 77>
25 Aupuni Street
Hilo, Hawaii 96720
Re: Operating Budget
The United States Department of Commerce, Economic Development Administration is
providing $500,000 to the Department of Research and Development for the American
Rescue Plan Act Build Back Better Regional Challenge. These grant funds will be used
towards the economic recovery efforts that are needed due to the effects of the
coronavirus pandemic.
Enclosed is a resolution to enter into an agreement to accept these funds. Also enclosed
is a bill for an ordinance amending the Operating Budget by appropriating this $500,000
to the Department of Research and Development's FY 2021 Economic Development
Administration American Rescue Plan Act account.
The Department of Research and Development is requesting that this bill be waived from
Finance Committee and be placed on the December 8, 2021 Council agenda in order to
expedite the receipt of these funds. If there are any questions, please do not hesitate to
call Sarah Freeman, of the Department of Research and Development at 961-8582.
to P-4—
Deanna S. Sako
Director of Finance
Enc.
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Hawaii County is an Equal Opportunity Employer and Providercf. nate
FormB-52
7l18/91
DEPARTMENT OF FINANCE
REQUEST FOR COUNCIL ACTION
DEPARTMENT: Research and Development DATE: November 15, 2021
Sarah Freeman, Food Systems
STAFF CONTACT: Specialist PHONE: 961-8582
A. REQUEST:
This is a request to accept the$500,000.00 Phase 1 grant award from the FY 2021 Economic Development
Administration {EDA}American Rescue Plan Act Build Back Better Regional Challenge. The Challenge is
designed to assist communities nationwide in their efforts to recover economically from the coronavirus
pandemic and to build up local economies that will be resilient to future economic shocks. These funds will
be used to provide technical assistance to develop and support eight projects, by coalition, members to grow
in a regional cluster.
Request to waive the Finance Committee and the 5-day holdover period due to the short time period to
distribute the funds to the coalition members to prepare for Phase 2 proposal. Request a bill for an
ordinance to appropriate funds to an account.
B. BACKGROUND AND JUSTIFICATION (USE ADDITIONAL SHEETS AS NEEDED):
Only a small fraction of locally grown agricultural products are sold in mainstream retailers in Hawaii. All of
the projects detailed in the attached narrative are designed to provide the necessary certifications for
training, facilities, value-added processing, and distribution to allow locally produced food to be sold at all
retailers, grocers, and clubs across our island state. We believe these investments, interventions, and greatly
expanded markets, will help accelerate workforce development, wage growth, overall economic growth, and
industry innovations, while collectively scaling meaningful growth and opportunities for all stakeholders.
See the attached narrative.
SIGNED:
DATE
Department Head
GRANT SUMMARY
(Supplement to B-52,Request for Council Action)
Type of Grant Appropriation bein requested: (New or an additional appropriation)
® New(for this fiscal year period). OR ❑ Additional appropriation (to an existing grant);
Is a draft agreement attached? Has the original grant notification been transmitted to
❑ Yes ®No Council? ❑ Yes ❑No
Name of Grant Program: FY 2021 Economic Development Administration American Rescue Plan Act
Build Back Better Regional Challenge
Grantor: Economic Development Administration, U.S. Department of Commerce
County Grantee Department or Agency: Research and Development
County Grantee Contact Person: Sarah Freeman Phone Number: 961-8582
Amount of Grant: 500,000.00
Grant Period (Commencement& Completion): 12/812021 - 6/30/2022
Purpose of Grant: Funds are to provide technical assistance to develop and support eight projects in
Hawaii County's coalition cluster.
Funding Source: ❑Federal ❑Federal, passed-through state ❑State
*If Federal, passed-through state, provide Federal Agency:
County Match required?: ❑ Yes ®No
If yes, Matching Amount? Budgeted in account#
In-kind? Explain:
Explanation: N/A
County's personnel requirements: Amount of new position(s)?
Qty: 0 Permanent: ❑ Temporary: ❑, Duration:
Full-time: ❑ Part-time: ❑, Time Element:
Qty: 0 Contractual: ❑ Explain:
Explanation: N/A
B-52 Grant summary Form
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Proposal Narrative
Coalition Vision. The shared vision of the Hawaii Island ' Coalition is of an Agricultural
Cluster that builds its capacity to sustainably generate new jobs and income suited to the Island's
unique resources and communities. Hawaii Island's Agricultural Cluster represents the region's
greatest asset and potential for economic growth and innovation. The island's immense
geographic size (4,028 square miles), abundant land and ocean resources, and variety of growing
climates together create the necessary base for building a closed-loop economic system that j
provides quality jobs, natural resource protection, equitable economic development, and linkages
to high-tech innovation and commercialization opportunities.
The County's most recent CEDS, attached as an appendix,reflects Agriculture as a targeted
cluster for development and lists the cluster goal to `Build a sustainable agricultural industry that
can provide a living that is satisfying and financially rewarding for island farmers, cattlemen,
aquaculturists, and agricultural sector workers and mitigating exports."While the Regional
Growth Coalition defines Hawaii County's targeted cluster as Agriculture, it is important to note
that this cluster connects across value-chain and supply-chain domains to other supporting
clusters including transportation, warehousing, value-added processing and manufacturing,
scientific research, diagnostic testing, educational services, business services, waste
management, environmental services, wholesale, retail, marketing, and finance. It is this larger
interconnected web that we define as the Agriculture Cluster.
Economic Opportunity. Hawaii County has a unique opportunity to Build its Agricultural
System Back Better through a collection of projects that correct past systemic barriers to growth
and respond to the current pandemic-related downturn by providing the physical and human
capital needed to create a robust agricultural economy that is in line with our diverse
communities' values. The cluster has an exceptional opportunity to grow the agricultural
economy within Hawaii. The state imports around 90%of its food, equating to three billion
dollars leaving the state each year, diverting just 20%of that capital to local producers would
double the sector's market share and every 10%that is diverted would represent 2,300 new jobs.
With the Hawaii-made brand the economic growth potential within the specialty export market
is expansive.
At this time, only a small fraction of locally grown agricultural products are sold in mainstream
retailers. All of the projects detailed below are designed to provide the necessary certifications
for training, facilities, value-added processing, and distribution to allow locally produced food to
be sold at all retailers, grocers, and clubs across our island state. We believe these investments,
interventions, and greatly expanded markets, will help accelerate workforce development, wage
growth, overall economic growth, and industry innovations,while collectively scaling
meaningful growth and opportunities for all stakeholders.
Coalition Members
County of Hawai`i's Department of Research and Development(COH R&D) is the local
economic development agency for the County and the lead coalition member. The Director of
R&D is the project's Regional Economic Competitiveness Officer. The County has chosen
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Hawaii County Build Back Better Regional Challenge Phase I Proposal Narrative 1
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coalition members based on organizations that are committed to integrated solutions that meet
the community's economic, equity, and sustainable development goals.
The Food Basket Inc., Hawaii Island's Food Bank, provides services in every community
island-wide and serves low-income and ethnic minority populations. The Food Basket supports
local producers through innovative programs that promote the purchase and consumption of }
locally grown foods in partnership with food retailers across the state.
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The Hamakua Institute is a team of international development professionals committed to
supporting market systems development using collective action. They serve as the convener and I
facilitator of HIAP's action teams and committees.
The Kohala Center is an independent research, education, and `aina(that which feeds)
stewardship non-profit for healthier ecosystems. The Kohala Center's agroecosystems work has
three main initiatives: 1) Rural and Cooperative Business Development Services, providing
assistance to rural businesses statewide in the form of collective business models, capitalization
services, and food systems development; 2)Namoku, a 7-acre demonstration farm serving as a
waihona, or nursery, for native plants and people; and 3) Hawaii Public Seed Initiative,
promoting biodiversity and food security via the production of and education around locally-
adapted seeds.
Ma`ona Community Garden is a non-profit organization established to increase the capacity
and sustainability of rural food systems. Over the past eight years Ma`ona has been working to
prototype the equitable organic waste management systems to capture and localize food and
paper waste recycling for the benefit of agricultural producers and underserved communities.
Big Island Resource Conservation and Development Council assists people in the County in
achieving sustainable development while caring for and appreciating their natural environment,
seeking to ensure broadened economic opportunities in ways that conserve, enhance, and
promote the economic, cultural, and natural environment of Hawaii.
East Hawaii Community Development Corporation is a nonprofit corporation organized to
undertake community economic development, research, and charitable activities that seeks to
revitalize local processing facilities to increase food entrepreneurs' access to certified kitchen
facilities and business services.
University of Hawaii as coalition member, represents many sectors of the University of
Hawaii system such as The University of Hawaii College of Agriculture, Forestry &Natural
Resource Management(CAFNRM), Aquaculture & Coastal Resources Center's (PACRC),
University of Hawai`i College of Tropical Agriculture and Human Resources (CTAHR),
GoFarm Hawaii, Hawaii Community College, Big Island Invasive Species Committee(BIISC),
and The Data Sciences Institute.
Component Projects. The Coalition projects represent strategic interventions derived from an
agriculture and food system study completed in April 2021 that analyzed the opportunities for
market growth within the cluster. It was conducted by the Hamakua Institute for HIAP and in
partnership with the Hawaii Island Food Alliance (HIFA). Our proposed projects within the
cluster are designed to support the development of a circular economic system, a model which is
ideal and increasingly achievable for island states, and fall within three broad categories: (1)
Value Chain Development, which will increase infrastructure and services for expanding the
availability of diverse Canoe crop varietals to producers, aggregation to increase farms access to
market, shared facilities for value-added production, and integrated systems within the cluster
that utilize closed loop waste strategies and renewable energy to reduce the cost of production;
Hawaii County Build Back Better Regional Challenge Phase I Proposal Narrative 2
(2) Market Development, which will increase the island's collective capacity to build its
economic competitiveness and sustainability within the cluster; and (3)Workforce
Development, Research and Innovation, which will increase agribusiness employment and
technical skills, innovate through research, and combat invasive species and the impacts of
climate change, culminating in the Island of Hawai`i's status as an Agricultural Knowledge
Center of Excellence in the Pacific. The nature of this cluster's design is to develop closed loop
systems which means that most projects touch each of these three categories.
Value chain Investment Projects
1. Build Hawaii Island Agricultural Innovation Industrial Park(AIIP) and Food Systems
Campus that is inclusive of The Food Basket's facilities, in collaboration with the Hawaii
County Regional Coalition, and implement out shared strategic objectives to: a) increase
value-added processing capacity on Hawaii Island, supporting a network of certified
kitchens and food hubs, and establishing a centralized facility for aggregated production and
shared high-volume processing; b) explore and support new models of aggregation,
processing, and distribution, particularly from small farms, regularly utilizing online
information and establishing partnerships around food standards; c) increase support and
efficiency of agricultural products transportation and distribution, identifying strategic
opportunities for shared for-profit and nonprofit use of equipment and facilities; d) increase
incentives and mechanisms for cooperation to lower costs and increase opportunities for
small farms; and e) increase collaboration among all stakeholders in the system using (HIAP)
and (HIFA)platforms.
2. Improve existing"Mika Meats" industrial space to be utilized for shared use processing
facilities and business services. The project will serve the immediate demand for these
facilities, before the AIIP build-out is complete.
3. Implement expanded breadfruit agroforestry production and processing on Hawaii Island by
upgrading an East Hawaii Island processing facility for dried and milled flour products
centered around breadfruit and other high-demand agroforestry crops.
4. Expand the availability of Canoe crop varietals through nursery expansion and educational
programming to increase traditional food production and preservation within public and
private organizations, and with families across the island.
5. Integrate closed loop waste strategies within the cluster and catalyze job growth throughout
the waste management value chain by coordinating with existing business and investing in
flexible, climate-resilient green infrastructure.
Market System Development
6. Implement Market Development Program teams to support the diverse set of agriculture
markets within the cluster. The teams will identify high potential growth opportunities,
where there is demand for shared equipment, processes, and services that stimulate
production and job growth, and build sustainable demand for these support functions to
continue stimulating cluster growth beyond the period of the grant. The teams will monitor
the economic impacts of their interventions to grow the cluster using a Diffusion of
Innovation model for identifying how introduced changes create a multiplier effect
throughout the market system.
7. Develop a stronger agricultural economy by providing businesses with equitable and
sufficient access to technical assistance in business development, marketing, efficiency
planning, and capitalization through an assessment of and an informed investment in existing
services island-wide.
Hawaii County Build Back Better Regional Challenge Phase I Proposal Narrative 3
Workforce Development,Research, and Innovation
8. Implement critical investment and system improvement strategies within the UH system that
address needed infrastructure, equipment, curriculum, research,technology, data, and staff
needed to address the challenges and opportunities with the Agriculture Cluster.
Preliminary Metrics of Success
A stable local economy is a requirement for strategic growth and innovation. This proposal
recommends projects that will serve island residents and small business owners who have
persevered in the face of repeated economic and geopolitical shocks resulting from natural
disasters including hurricanes, tsunamis, earthquakes, flooding, and volcanic eruptions; and
pandemics such as SARS and now COVID-19. This series of events has stretched the limits of
the region's endurance, making clear that the need to restructure the local economy quickly is
critical to building resilience for the future. The most important metrics of success will indicate
improvements in labor force participation, income and wages, and poverty rates of the estimated
200,629 residents of Hawaii County (U.S. Census, 2020). While Hawai`i's unemployment rate
has recovered significantly from the effects of the pandemic, Hawaii County's employment rate
lags behind the State and the United States.Nonfarm unemployment rates for August 21, 2021,
for the County, the State, and the United States were 6.9%, 6.6%, and 5.2%, respectively.
We will evaluate the proposed projects success in the following ways: Value chain
infrastructure: new and improved value chain infrastructure(#and sq ft); amount(#) of waste
diverted and Amount(KWH)of energy saved from renewable energy integrated within the
facilities; average income of farmers and food producers, by demographics who utilize cluster
infrastructure and technical assistance services; #of producers who incorporate new canoe crops
within their production; Market Development Services: clients and industry associations
engaged; # of new financial structures deployed; # and $ of new capital investments placed by 4
sector investors/grantors (government, philanthropy, and the private sector); demographics of
investment and grant recipients; analysis of capital placed. Workforce Development,Research,
and Innovation: amount(#)of agriculture and manufacturing technologies that are implemented
into systems that increase efficiency; #of university students hired into the local agricultural
cluster; and#of trainings and#trained, by demographic groups. Whole system metrics: overall
cluster job creation; wage growth; reduced unemployment; and anticipated regional GDP
growth. Resiliency metrics: #of green build/energy projects; # and strength of disaster response
plans and public-private sector networks; #of businesses implementing resilience strategies and
type of strategy; etc.
Accessibility of Matching Funds for Phase 2
Coalition members have strong ties to the foundation community and R&D's Food System
Specialist participates in the Food and Farmers Working Group, a statewide alliance of
foundations, investors, and local government departments dedicated to working together to
elevate Hawai`i's community food system through strategic investment. The Coalition has
received letters of support from Stupski Foundation, Hawaii Community Foundation, and The
Harry and Jeanette Weinberg Foundation expressing their support and interest in investing in the
proposed projects. In addition, The Food Basket has a potential match from CDBG funds for the
Agriculture Innovation Industrial Park and Community Food Center and can bring additional
investment into the local economy through their 6,500 plus individual donors, private, County,
State and Federal grants, facilitating and building on their trusted relationships with stakeholders
Hawaii County Build Back Better Regional Challenge Phase I Proposal Narrative 4
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in our region. The Big Island Resource Conservation and Development project with Hawaii
`Ulu Cooperative has two million dollars committed to their facilities improvements. The
Hamakua Institute will utilize private sector investment for their market system development
project. The East Hawaii Community Development Corporation intends to secure a loan and
private sector investment to match funds for Miko Meats Facility improvements. Lastly, The
Kohala Center and Ma`ona Community Garden will draw upon their robust foundation network
to provide matching funds for their project activities.
Barriers to Implementation. Ilawai`i Island's agricultural cluster has its roots in a self-
sustaining Polynesian agricultural systems that were disrupted with over a century of plantation
sugar production until the sugar industry on the island closed 27 years ago. Since then. there has
been a steady increase in the number of small farms on the island and a significant diversity of
crops produced from them. The island's agricultural production and private investment has
dramatically changed, yet our island's infrastructure, services and government support have not
kept up, holding back the growth of our agricultural industries.
The agriculture and food system study completed earlier this year, identified six main market
system constraints: 1)the lack of available processing and packaging infrastructure, equipment
and services; 2) limited transportation and aggregation services and storage infrastructure to
enable aggregation of small farm production into larger quantities to access larger markets; 3)the
lack of an integrated public-private system for efficiently managing food waste and extracting its
optimal value in enhancing food production; 4) a limited pool of affordable expertise and
experienced workers to support agricultural growth; 5) a dearth of market data and shared market
analysis to help guide local producers and other value chain actors to more effectively compete
local products with cheaper imports; and 6)fractured and inconsistent efforts at building a shared
brand image for local agricultural products in Hawaii and in key target markets on the
continental U.S. and overseas. Our strategic system investments within the clusters value chain
paired with comprehensive market development services and investments within the University's
departments will actively work to mitigate these barriers to success within the cluster.
General Implementation Timeline. The Coalition will utilize EDA technical assistance phase
one funds to develop detailed implementation timelines for each project that will then be
submitted for consideration within our phase two proposals. We know that during year one,
infrastructure projects, after the Phase one planning, design, and partner engagement is
completed, will start construction or construction preparations of new and improved
infrastructure development projects. Construction project timelines will vary depending on
permitting processes and material and labor availability; all projects will be completed before
September 30, 2027. The Hamakua Institute will structure and develop HIAP as a mechanism for
facilitating the public-private collaboration throughout the cluster and design the AIIP
management structure. The Kohala Center will focus on technical assistance and the economic
viability and sustainability of project investments, and will be engaged in activities throughout
the project, strengthening relationships, initiatives, and networks designed to be sustained
beyond the project term. The University will begin implementing investments and strategies
identified in phase one.
Hawaii County Build Back Better Regional Challenge Phase I Proposal Narrative 5
AARON S.Y.CHIJNG
MATT KANEALI`I-KLEINFELDER °' "" q,� MAILS MEDEIROS DAVID
Chairperson ' HOLEKA GORO INABA
*� �* ASHLEY L.KIERKIEWICZ
HEATHER L.KIMBALL SUSAN L.K.LEE LOY
Vice Chairs��°,HA,�y;'�p.� HERBERT M."TIM"RICHARDS,III
OF NP REBECCA VILLEGAS
HAWAII COUNTY COUNCIL
County of Hawai`i
Hawai`i County Building
25 Aupuni Street
Hilo,Hawai`i 96720
November 23, 2021
Maile Medeiros David, Council Chair
Hawaii County Council
25 Aupuni Street
Hilo, Hawaii 96720
RE: RESOLUTION NO. 277-21 : RESOLUTION AUTHORIZING THE OFFICE
OF THE MAYOR TO ENTER INTO AN AGREEMENT WITH THE UNITED
STATES DEPARTMENT OF COMMERCE, ECONOMIC DEVELOPMENT
ADMINISTRATION.
BILL NO. 96 : AN ORDINANCE TO AMEND ORDINANCE NO.
21-38,AS AMENDED, THE OPERATING BUDGET FOR THE COUNTY OF
HAWAII FOR THE FISCAL YEAR ENDING JUNE 30, 2022.
Pursuant to Section 2(g) of Rule 4 of the Rules of Procedure of the Council of the County of
Hawaii, this written request is submitted with my approval that the above-referenced matter be
waived from the Committee on Finance to the full Council for immediate action. In reviewing
this matter, timely approval is crucial. It is therefore advantageous that approval is granted and
the matter be placed onto the next Council agenda for review. However, in the event this request
is denied, for whatever reason, I understand the matter shall be referred to the Committee on
Finance for placement on its future agenda.
Sincerely,
Matt Kaneali`i-Kleinfelder, Chairperson
Committee on Finance
A ate6 o Council: Disapproved/Date/Refer to FC:
Maile Medeiros avi , Council Chair Maile Medeiros David, Council Chair
U Hawaii County Council WOV 2 3 202_1 Hawaii County Council
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Hawai`i County is an Equal Opportunity Provider and Employer