HomeMy WebLinkAboutMIN FC 2021/11/03 2020-2022 Committee on Finance
22nd Session
Hawaii County Building
25 Aupuni Street
Hilo, Hawaii
November 3, 2021
CALL TO The regular meeting of the Committee on Finance was called to order at
ORDER: 9:02 a.m., in the Council Chambers, Hilo, by Mr. Matt Kaneali`i- Kleinfelder,
Chair.
ROLL CALL:
Present: Mr. Matt Kaneali`i- Kleinfelder, Chair(via videoconference)
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(came in later)
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 individuals registered to speak and came forward when called
by the Chair:
Cory Harden: Comm. 461, comment.
Debbie Hecht: Comm. 461, comment.
Stephanie Donoho: Bill 81 (Comm. 449), comment.
(representing the Kohala
Resort Association)
Christopher Dean: Comm. 461, comment.
(representing Clean the
Pacific)
FC-22 November 3,2021
Carolyn Pellett: Comms. 461; 462; 471;
Res. 252-21 (Comm. 465);
Bill 81 (Comm. 449), and
Bill 82 (Comm. 464), comment.
Also, see the following written testimonies, which were presented at the meeting:
Robert DeCoito: Bill 81 (Comm. 449), in opposition.
(See Comm. 449.12)
Stephanie Donoho: Bill 81 (Comm. 449), comment.
(representing Kohala Coast (See Comm. 449.13)
Mark Gordon: Bill 81 (Comm. 449), in support.
(See Comm 449.14)
CHR KANEALII-KLEINFELDER: So, that brings us to the end of testimony.
Thank you very much to all of the testifiers who showed up today. We appreciate
your time and your energy in communicating with us as the Council. I would
like to now, pursuant to Rule 6(c) of our Council Rules, relinquish the chair to
Ms. Heather Kimball, my Vice Chair for the Finance Committee. I think that
would organize a better-running committee for today. So, let the record reflect
that I am relinquishing the chair to Ms. Heather Kimball. Ms. Kimball, could you
go ahead and run the meeting for me?
MS. KIMBALL: Absolutely. Thank you, Chair.
CHR KANEALII-KLEINFELDER: Thank you.
Relinquish Chair: At this time, the Chair relinquished the chair to Vice Chair Kimball.
ACTING CHR. KIMBALL: Mr. Clerk, we'll take things out of order today,
starting with Resolution 251, please.
Change Order As directed by the Chair and with no objection from the Council Members,
of Business: the following items were taken out of order:
Res. 251-21: CREATES ONE NEW FIRE CAPTAIN POSITION FOR THE HAWAII
FIRE DEPARTMENT
From Finance Director Deanna Sako, dated October 15, 2021, requests creation of
a supervisory position to oversee and assist with Fire Dispatch services.
Reference: Comm. 463
Intr. by: Mr. Kaneali`i-Kleinfelder(B/R)
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Motion to Approve: Mr. Kaneali`i-Kleinfelder moved to recommend
adoption of Res. 251-21. Seconded by Mr. Richards.
ACTING CHR. KIMBALL: We do have Deputy Fire Chief here in chambers.
Mr. Kaneali`i-Kleinfelder.
MR. KANEALI`I-KLEINFELDER: Chief, could you come forward please and
provide a little background information on the resolution in front of us, and the
need, and the concern?
(Note: At this time, Deputy Fire Chief Eric H. Moller came forward to
address the members of the Committee.)
MR. MOLLER: Good morning, and thank you very much for the opportunity to
address the body on this very, very important position. As you know, Chief Todd
is taking over as the Chief, and the change in administration is trying to handle
some very longstanding issues that we had.
Our top priority right now happens to deal with the dispatch. We are at a critical
stage right now with the personnel that are in there that were very close, bumped
up right against the potential mission failure because of the staffing levels that we
have. We feel that the addition of this position is going to greatly enhance our
ability to handle issues as they arise within this very hardworking environment.
The position itself will be providing a quality control, and enhance the capabilities
within the dispatch to make sure that we're providing to the public the services
that commensurate with the position itself. So just any of your questions.
MR. KANEALI`I-KLEINFELDER: Thank you very much, sir. Thank you for
being here, as well. I did have one question for you. You know, what is the
current amount of dispatchers that you have that cover the department?
MR. MOLLER: Presently we have eight personnel that are in there, and they're
working pretty much 24/7. The actual amount of time that they get down ranges
from about four to five days a month. It's very critical; if we lose any other
dispatchers, we will be at a point where we can't provide the 24-hour operations
through the Dispatch. We're hopeful with some moving around, some additional
leadership and some incentive programs, we'll be able to bump the numbers up.
We have people in training right now, and we're looking at probably another nine
months before we'll have people that can actually sit at the Dispatch Center.
MR. KANEALI`I-KLEINFELDER: I mean, our Fire Department and your first
responders are always very visible to the community, but that backup from
dispatch as the first call for the public to interact with, I think is sometimes
neglected because they're not visible to everyone. So, I appreciate the need. I
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appreciate you bringing this forward, and you'll have my support on this today.
Thank you. Thank you, Chair. I yield.
MR. MOLLER: Thank you.
ACTING CHR. KIMBALL: Council Member Richards.
MR. RICHARDS: Thank you, Chair. As always and this is probably no surprise,
question on funding. Deanna, how are we for funding for this? And it's my
understanding the need is great.
(Note: At this time, Finance Director Deanna Sako came forward to
address the members of the Committee.)
MR. RICHARDS: You said we have, I think, seven or eight dispatchers, but we
have a total complement of, I think, fourteen is the full-house, is that correct,
Chief?
MR. MOLLER: That is correct, sir. Yes.
MR. RICHARDS: Okay, so we're about a little bit over half-staff right now.
And having this leadership role take over, Deanna, are we good for funding to get
this handled?
MS. SAKO: It's going to be tight, but obviously with the vacant positions, that
funding is available. Some of it is being used to pay overtime for the current
dispatchers. But we believe they can eek it out. You know, it's kind of—it's one
of those they're at a point that they need this position, and it's critical.
There's other things going on even at the State level and the County level to
ensure to help support the dispatchers and to ensure they're being fairly paid, so
there are a lot of other things going on. So there probably are going to be a few
budget challenges in the Fire Department, but we're working with them to try to
help them out the best we can.
MR. RICHARDS: Okay, so from your perspective, you're confident that
budgetary-wise we're okay in going forward with this. You and I have had that
conversation
MS. SAKO: Yeah, even if we have to transfer from someplace else.
MR. RICHARDS: Okay.
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MS. SAKO: You know, later in the year or something, yeah. I mean, there's
been a lot of unexpected things, including the brushfires and things like that this
year.
MR. RICHARDS: Yeah, I'm keenly aware of that one. I appreciate, Chief, what
you're talking about, because burnout, and if you're running at half-staff right
now, there's a far greater cost to the County if we don't support the group. And
so I'm always mindful of the numbers; you know, Deanna, you and I have talked
about fund balance coming forward and all of that. But I think this is something
that we have to support if we're going to maintain our level of dispatch, and
coming out of the Fire Department, so I will be supporting it. I appreciate that.
Chair, I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Council
Member Villegas.
MS. VILLEGAS: Thank you for being here. I'm extremely grateful to have had
a conversation with Chief Todd, I believe it was last week, to get a better
understanding of the severity of the issue with Dispatch. And so I was grateful
for that even though it was kind of bad news. But my heart really goes out to the
staff of Dispatch, and how tremendously hard they work. As Council Member
Richards said, burnout. It's real and it's severe, and when things start to crumble,
they can go down really fast and we can't afford to lose that.
I also recently saw on the news the breaking-ground of a new Dispatch Center,
and I am hopeful that with kind of adjoining—well, with first off, for our
dispatchers to be in a facility designed for the work that they do, as opposed to
kind of just a backroom wherever there's space, for them to have that designated
area. And also, hopefully, collaboratively be able to combine the technologies,
and the workforce, and all that knowledge to benefit both Police and Fire by being
in a specified facility for that exact purpose.
So congratulations on that breaking ground. I'm sure—hopefully it could be done
tomorrow, but it's going to take some time. But I will definitely be supporting
this in the interim to bring the support necessary for this pivotal department and
the people that are working there. So,just sending my big mahalo to them for all
that they have endured during this time. And thank you, Deanna, for your
financial flexibility for funding. And with that, I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Villegas.
Anyone else? All right,just want to confirm with you, Council Member
Kaneali`i-Kleinfelder, that the motion on the floor is to move this
Resolution 251-21 with a favorable recommendation to Council?
MR. KANEALI`I-KLEINFELDER: Yes. Thank you, Chair.
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ACTING CHR. KIMBALL: All right, very good. All of those in favor of
moving Resolution 251-21 to Council with a favorable recommendation, please
say "aye."
Vote on Res. 251-21: The motion to recommend adoption of Res. 251-21 was
(Approved) carried by the following voice vote:
Ayes: Committee Members David, Inaba,
Kaneali`i-Kleinfelder, Lee Loy, Richards,
Villegas, and Acting Chair Kimball —7.
Noes: None.
Absent: Committee Members Chung and Kierkiewicz—2.
Excused: None.
ACTING CHR. KIMBALL: Can we please move now to Bill 82?
Bill 82: AMENDS ORDINANCE NO. 21-38, THE OPERATING BUDGET FOR
THE COUNTY OF HAWAII FOR THE FISCAL YEAR ENDING
JUNE 30, 2022
Increases revenues in the State Grants —West Hawaii Ocean Safety account
($27,399), and appropriates same to the West Hawaii Ocean Safety Salary and
Wages account, bringing the total appropriation to $1,252,785. Funds would be
used to fund operations at Hapuna Beach Park.
Reference: Comm. 464
Intr. By: Mr. Kaneali`i-Kleinfelder(B/R)
Motion to Approve: Mr. Kaneali`i-Kleinfelder moved to recommend passage
of Bill 82 on first reading. Seconded by Mr. Inaba.
ACTING CHR. KIMBALL: Go ahead, Mr. Kaneali`i-Kleinfelder, and
Deputy Fire Chief is still here for your questions.
MR. KANEALII-KLEINFELDER: Thank you. This bill is fairly
self-explanatory. And I really do appreciate that the State has continued to
provide funding. We were at risk of losing some of this funding earlier, last year
and this year. So I am very happy to see this increase in funding, to keep our
lifeguards and our Safety personnel at some of our westside locations, and our
beach parks moving.
So if there are any questions of the Council, I believe the Assistant Fire Chief can
answer those questions, as well. Thank you, Chair. I yield.
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ACTING CHR. KIMBALL: Thank you, Council Member. Anyone else?
Council Member Richards.
MR. RICHARDS: Yeah,just quick comment. We definitely need this support.
Hapuna is a great beach, and Makua Bay, as well. Anyway, I don't need to ask
questions, we just need to support. Yield.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Anyone
else? All right, we'll go ahead with the motion on the floor. All of those in favor
of supporting Bill 82, moving it to Council with a favorable recommendation,
please say "aye."
Vote on Bill 82: The motion to recommend passage of Bill 82 on
(Approved) first reading was carried by the following voice vote:
Ayes: Committee Members David, Inaba,
Kaneali`i-Kleinfelder, Lee Loy, Richards,
and Acting Chair Kimball—6.
Noes: None.
Absent: Committee Members Chung, Kierkiewicz,
and Villegas —3.
Excused: None.
ACTING CHR. KIMBALL: Relley, do we have Sharon Hirota on Zoom?
MR. ARACELEY: Kala mai, Madam Chair, we do not have Sharon but we do
have Royce.
ACTING CHR. KIMBALL: Okay. I believe he's testifying on Bill 84. So,
Mr. Clerk, can we move to Bill 84,please?
Bill 84: AMENDS ORDINANCE NO. 21-38, THE OPERATING BUDGET FOR
THE COUNTY OF HAWAII FOR THE FISCAL YEAR ENDING
JUNE 30, 2022
Appropriates revenues in the Federal Grants —Workforce Innovation &
Opportunity Act account($40,127), and appropriates same to the Workforce
Innovation & Opportunity Act—Adult Program 2020-21 account. Funds would
be used to provide adult workforce training to increase employment, retention,
earnings, skills, and literacy.
Reference: Comm. 466
Intr. by: Mr. Kaneali`i-Kleinfelder(B/R)
Motion to Approve: Mr. Kaneali`i-Kleinfelder moved to recommend passage
of Bill 82 on first reading. Seconded by Mr. Inaba.
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(Note: At this time, Housing and Community Development Specialist VI
Royce Shiroma came forward to address the members of the Committee.)
MR. KANEALI`I-KLEINFELDER: Thank you, Chair.
ACTING CHR. KIMBALL: Go ahead.
MR. KANEALI`I-KLEINFELDER: Mr. Shiroma, if you could just give us a
little background information on this. This is, I think, a great opportunity for our
opportunity for our County. But let us know what we're getting in.
MR. SHIROMA: This is Royce Shiroma from the County of Hawaii Office of
Housing. This appropriation we're requesting is to increase the Adult Program
for the 2020-2021 account for the WIOA, which is Workforce Innovation &
Opportunity Act account, by $40,127.
The reason why we're going for this amendment is because we inadvertently
increased our Youth account on the last increase in ordinance, and this adult
funding allocation was short by $40,127. What I mean short, is that we'll receive
an amount that has been appropriated by the State, which in turn is from the
Department of Labor; and in order for us to match that appropriation from them,
we needed to increase our County account, and this is the reason why we're
coming for this amendment to ordinance. I'll take any questions, if there is any.
MR. KANEALI`I-KLEINFELDER: Thank you very much, sir. Thank you for
the brief explanation. Chair, I'm going to yield for questions from the Council.
Thank you.
ACTING CHR. KIMBALL: Thank you, Council Member Kaneali`i-Kleinfelder.
Any questions from the body? No? All right. Hearing none, we will go ahead
and take the vote. All of those in favor of forwarding Bill 84 with a favorable
recommendation, please say "aye."
Vote on Bill 84: The motion to recommend passage of Bill 84 on
(Approved) first reading was carried by the following voice vote:
Ayes: Committee Members David, Kaneali`i-Kleinfelder,
Kierkiewicz, Lee Loy, Richards, Villegas, and
Acting Chair Kimball—7.
Noes: None.
Absent: Committee Members Chung and Inaba—2.
Excused: None.
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ACTING CHR. KIMBALL: We do have Ms. Hirota on the line, so let's go back
to Bill 83 quickly.
Bill 83: AMENDS ORDINANCE NO. 21-38, THE OPERATING BUDGET FOR
THE COUNTY OF HAWAII FOR THE FISCAL YEAR ENDING
JUNE 30, 2022
Appropriates revenues in the Federal—Hawaii Island Landlord/Tenant Mediation
Grant- American Rescue Plan Act account($69,000), and appropriates same to the
Hawaii Island Landlord/Tenant Mediation Grant- American Rescue Plan Act
account. Funds would be used to implement a landlord-tenant mediation program for
those impacted by the expiration of the moratorium on evictions.
Reference: Comm. 465
Intr. by: Mr. Kaneali`i-Kleinfelder(B/R)
Motion to Approve: Mr. Kaneali`i-Kleinfelder moved to recommend passage
of Bill 83 on first reading. Seconded by Ms. Lee Loy.
(Note: At this time, Housing and Community Development Specialist V
Sharon Hirota came forward to address the members of the Committee.)
ACTING CHR. KIMBALL: Council Member Kaneali`i-Kleinfelder.
MR. KANEALII-KLEINFELDER: Thank you very much, Ms. Kimball. We do
have online Ms. Sharon Hirota. Ms. Hirota, could you give us a little background
on this? Again, this is increase funding for our Landlord/Tenant Mediations.
This is going to be crucial. I'm already hearing rumblings in the community on
how many people this is affecting, and how great this mediation will be needed
and will do for our community. So could you, please?
MS. SHIROTA: Sure. Thank you. So this resolution is to accept funding, a
sub-award from the State, to support the implementation of the Landlord/Tenant
Mediation Program for Hawaii Island. It is not additional funding, but we
needed to because the State gave us funding from two different pots, we want to
make sure on our accounting books that we can track the different funds and that
it's not in the same account, so we wanted to come back and make sure we do it
correctly.
So, this is just to reflect the separate funding source that the money is
coming from. So $69,000, coming through as a sub-award from the State,
federally-funded to support the much needed services here on Hawaii Island.
MR. KANEALII-KLEINFELDER: Thank you, Ms. Hirota. Appreciate that
quick summary. You know, how is standing up the program going so far? How's
everything moving?
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MS. HIROTA: So thus far, the program isimplemented in early August. There
was some confusion in the beginning, I think, because of the CDC's (Centers for
Disease Control)position in regard to requesting for the continuation of the
allowance of not allowing evictions, and they had given an October 3rd deadline.
So there was some confusion between what was in place and what wasn't in
place. Shortly after that, the Supreme Court ruled that the CDC ruling was not
allowable, thus lifting moratorium on evictions.
We anticipated a larger impact. As of Septemberno, I'm sorry—as of
October 31", we saw about 60 households that came in for services, much lower
number than we anticipated. But, it's just the beginning, this program runs
through the end of next year. So, we will continue to provide the much needed
services need in Hawaii Island. Thank you.
MR. KANEALI`I-KLEINFELDER: Mahalo. Yeah, I just keep hearing from the
community, you know, even people still looking for different sources of funding
for mortgage assistance or rental assistance. So I think as people start to face the
reality of what's happening and then look for help, you're going to see a bigger
influx in number. So, I appreciate what you're doing to date.
MS. HIROTA: Thank you.
MR. KANEALI`I-KLEINFELDER: Chair, I yield.
ACTING CHR. KIMBALL: Thank you, Council Member. Council
Member Inaba.
MR. INABA: Thank you. I just wanted to disclose that I do sit on the Board of
Mediation—one of the mediation centers, so I'll be recusing myself from the vote
on Bill 83 as well as Resolution 252-21. Thank you.
ACTING CHR. KIMBALL: Thank you, Council Member Inaba. Anyone else?
All right. Mr. Clerk, before we take the vote here, I want to make sure I'm okay.
I should have done the resolution first and then the bill, but it's okay if I go ahead
with this? All right, okay. So the motion on the floor is to move Bill 83 to
Council with a favorable recommendation, all of those in favor?
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Vote on Bill 83: The motion to recommend passage of Bill 83 on
(Approved) first reading was carried by the following voice vote:
Ayes: Committee Members David, Kaneali`i-Kleinfelder,
Kierkiewicz, Lee Loy, Richards, Villegas, and
Acting Chair Kimball—7.
Noes: None.
Absent: Committee Member Chung— 1.
Excused: Committee Member Inaba— 1.
ACTING CHR. KIMBALL: And then please read in Resolution 252-21, please.
Res. 252-21: AUTHORIZES THE OFFICE OF THE MAYOR TO ENTER INTO AN
AGREEMENT WITH THE STATE OF HAWAII DEPARTMENT OF
BUDGET AND FINANCE PURSUANT TO HAWAII REVISED STATUTES
SECTION 46-7, FOR A GRANT TO THE OFFICE OF HOUSING AND
COMMUNITY DEVELOPMENT
Allows for the receipt of $69,000 in federally derived funds, which would be
used to implement a landlord-tenant mediation program for those impacted
by the expiration of the moratorium on evictions.
Reference: Comm. 465
Intr. by: Mr. Kaneali`i-Kleinfelder(B/R)
Vote on Res. 252-21: Mr. Kaneali`i-Kleinfelder moved to recommend adoption
(Approved) of Res. 252-21. Seconded by Ms. Villegas and carried by
the following voice vote:
Ayes: Committee Members David, Kaneali`i-Kleinfelder,
Kierkiewicz, Lee Loy, Richards, Villegas, and
Acting Chair Kimball—7.
Noes: None.
Absent: Committee Member Chung— 1.
Excused: Committee Member Inaba— 1.
ACTING CHR. KIMBALL: Okay, from there we'll take it back to the top of the
agenda, 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.
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Comm. 31.22: REPORT OF CHANGE ORDERS AUTHORIZED: SEPTEMBER 16 —30, 2021
From Finance Director Deanna Sako, dated October 7, 2021, transmitting the
above report pursuant to Hawaii County Code Section 2-12.3.
Vote on Comm. 31.22: Ms. Lee Loy moved to close file on Comm. 31.22.
Filed Seconded by Mr. Richards and carried by the following
voice vote:
Ayes: Committee Members David, Inaba,
Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy,
Richards, Villegas, and Acting Chair Kimball—8.
Noes: None.
Absent: Committee Member Chung— 1.
Excused: None.
ACTING CHR. KIMBALL: Next item,please, Mr. Clerk.
Comm. 460: REPORT OF UNCAPITALIZED DONATIONS: IST QUARTER
(JULY—SEPTEMBER 2021)
From Finance Director Deanna Sako, dated October 15, 2021, transmitting the
above report pursuant to Resolution Number 176-21.
Motion to Close File: Ms. Lee Loy moved to close file on Comm. 460.
Seconded by Mr. Richards.
ACTING CHR. KIMBALL: Any discussion?
MR. RICHARDS: Yes, Chair.
ACTING CHR. KIMBALL: Council Member Richards.
MR. RICHARDS: Yes,just a quick thing on this. This is part of what we're seeing
coming forth. On the list, number six and number seven, these are donations that
we received and set up through the County, where we could take those funds for the
fire relief. And so this part of the funding that will help with some of the Pu`ukapu
relief, so I just wanted to highlight that. And thanks to Finance for getting the
worked out for us. Chair, I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Council
Member Kierkiewicz.
MS. KIERKIEWICZ: Mahalo nui, Chair. Thank you, Deanna, for putting these
reports together. These are really helpful so that we don't have to do a number of
resolutions.
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I just wanted to highlight. There's a comment here for number four. This donation
was to support the Revitalize Puna Activation that we have kicked off, our office in
partnership with the Recovery Team. And so we were able to secure donation from
Target to get food items for students that are going to be participating in this work,
and then a number of binders and binder-inserts for playbooks that we are building
as a community. And I just wanted to note, if any of you here at the Council and
the community have community projects, Target does do donations through efforts.
So definitely hit them up and let them know, and then we can easily take advantage
of this donation process that we set up, and easily move these donations through
community to support our work. So, mahalo nui.
ACTING CHR. KIMBALL: Council Member Kierkiewicz. Council Member
Lee Loy.
MS. LEE LOY: Yeah, thank you, Chair; and thank you, Deanna, for bringing this
forward this way. And I'm trusting your office, if not, a letter from the Council
Chair, acknowledging the donations and appreciation will be delivered to them.
But I did also want to highlight those two things; as Mr. Richards said, is the k6kua
that we're seeing Pu`ukapu fire and what great partners Target is for our
community. They're also doing another program that—Helpers and Heroes coming
up. And so I just really wanted to acknowledge all of their support for community.
But not only the east side but the west side, too. So, thank you very much. Chair, I
yield.
ACTING CHR. KIMBALL: Thank you, Council Member Lee Loy. Anyone else?
All right. All of those in favor of closing file on Communication 460,please say
Ic aye.
Vote on Comm. 460: The motion to close file on Comm. 460 was carried by
Filed the following voice
Ayes: Committee Members Chung, David, Inaba,
Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy,
Richards, Villegas, and Acting Chair Kimball–9.
Noes: None.
Absent: None.
Excused: None.
ACTING CHR. KIMBALL: Okay, go ahead to Communication 461. Please,
Mr. Clerk.
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Comm. 461: REQUESTS A DISCUSSION WITH THE ADMINISTRATION REGARDING
THE PUBLIC ACCESS, OPEN SPACE AND NATURAL RESOURCES
PRESERVATION FUND
From Council Member Herbert M. Richards III, dated October 14, 2021,
requesting discussion on implementation of Hawaii County Charter amendments
approved at the November 3, 2020, General Election.
Motion to Close File: Mr. Richards moved to close file on Comm. 461.
Seconded by Ms. Lee Loy.
ACTING CHR. KIMBALL: Council Member Richards.
MR. RICHARDS: Yeah, we have Deanna here, so I'd like to bring her up.
(Note: At this time, Finance Director Deanna Sako came forward to address
the members of the Committee.)
MS. SAKO: So, we did prepare a presentation. Thank you to our Property
Management Division for doing that. Just get up to speed on what the fund has
done since its initiation in 2006, and PONC (Public Access and Open Space, and
Natural Resources Preservation Commission) Maintenance Fund since it was
initiated in 2013.
(Note: At this time, Ms. Sako provided a PowerPoint presentation to the
members of the Committee. For viewing of the subject presentation,
please see the DVD copy of the meeting proceedings on file in the Clerk's
Office, or the video archives online from the County's homepage at
www.hawaiicounty.gov. A hard copy of the presentation is made a part of
the record, see Comm. 461.1.)
MS. SAKO: So, I know there are a lot of questions over it, But we have been
waiting until Parks and Recreation gives the full, you know, everything under grants
over to Finance. I want to be real clear that the Charter amendment was not to
create a position. The Charter amendment was that Salaries and Wages could be
charged to the fund.
The fund encompasses, both funds I should say, encompasses a lot of different
activities, you know, both the purchase of lands, the stewardship of lands, with the
Maintenance Funds. So it would be difficult to find one person. So already in
Property Management as well as Planning, Corporation Counsel, and various
departments, including Parks and Recreation, we have a lot of individuals that have
these skillsets already. And then once Finance has the full workload with the
stewardship grants, then we'll determine if we need additional staffing or not.
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We also want to be good stewards of the fund, because whatever we spend on
Salary and Wages, then we don't have that money to go forth to buy parcels that
may be in need of being purchased.
I know when you go on the website, and you might see that there's $19 million in
the fund, that doesn't include what's already been encumbered or spoken for,
parcels that are in process. So, there's actually less, about$8 million, once you take
everything that we're in the process of buying, and they are looking at parcels for
the rest of those. Some of the parcels do take longer to acquire than others, it just
depends on the situation and if we can reach an agreeable price. So there's not—
you
otyou know, it's not like it's being stockpiled, but unfortunately our Charter also
requires that we have to be able to certify funds. So, the funds have to be there.
Also, sometimes when parcels become available that we weren't expecting, we do
want a little bit of money there so that we can move on those quickly, especially if
there's concern over immediate or impending development.
Okay, I think I covered everything I was going to cover. I'm not sure if I answered
all the questions, but I'm happy to take any questions.
ACTING CHR. KIMBALL: Thank you, Director. And just a note to my
colleagues, we have Mr. Ventura on the line too, Property Manager, if you have
questions for him. Back to you, Council Member Richards.
MR. RICHARDS: Thank you, Chair. I appreciate that, Deanna, and thanks for
articulating where we are with so much of the PONC funding, and where we are in
the transition and all. And you answered probably one of the most pressing
questions, do you need more staff to manage this? And what I heard was the short
answer, is "No, not yet. We think we can manage the way that it is." Okay, which
is great.
I had a question concerning the Maintenance Fund, which is the .25 percent. That
gets capped, whereas the PONC fund is not. Do you foresee in the near term this
being problematic as we are going to be managing more properties? Do you think
that cap is going to be a problem?
MS. SAKO: It could be. Right now we actually are—we have reached the cap
already. Now that we're going to be having three years worth of grants going on at
the same time, I do not believe we'll be capped for the next few years. Right now,
it seems manageable. But obviously the more parcels that are acquired, and
whether or not we own them or we have a conservation easement on them, that's
going to make you know, difficult to know how much work is going to have to be
done.
MR. RICHARDS: Okay.
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FC-22 November 3,2021
MS. SAKO: But so far it's been adequate. But if we start to see that, you know,
we're definitely running out of funds or it would limit the number of grants we were
going to award, we would definitely come to Council with that need.
MR. RICHARDS: Okay, and I appreciate that. So thanks for the quick summary
on that. Like you said, some of this is land purchases outright; some of it is
conservation easement, which is what we're talking about for Mahukona. It's not a
one-size fits all by any stretch, so I appreciate that. With that, Chair, I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Council
Member Kierkiewicz.
MS. KIERKIEWICZ: Thank you, Chair. Mahalo, Deanna, for the update. Just had
a few questions based on your presentation. And I don't know if you're the best
person to answer this, because prior to the Charter amendment and Finance taking
this over, everything was being shepherded by Parks and Recreation. But you
mentioned something about Parks and Recreation reviewing the applications and
wanting to ensure that the work is aligned with the Charter. Where are you seeing
that there might be some, like clarity, confusion on community's end as to how the
funds could be utilized so that they can properly steward?
MS. SAKO: I think Parks probably would be the best one to answer. But
sometimes an application may come in for not one of the parcels that we actually
own or that is in the program. So it does have to be one of our PONC parcels. And
then I think—it's very specific in the Charter as to what to type of work can be done
on the lands. And I want to say there are couple of questions related to that, if it
was an allowable use under the Charter. But obviously Parks is going to work with
the stewardship group and the applicant, you know, to make sure that there's a
mutual understanding of what can and cannot be done.
MS. KIERKIEWICZ: Okay. And then I think we as a body saw Parks come before
us. I think, June committees, with recommendations of applicants they wanted to
move forward with. Have those contracts been executed yet?
MS. SAKO: Not that I am aware of. I can follow up with them.
MS. KIERKIEWICZ: Would anyone—Corporation Counsel maybe happen to
know why there is a hang-up? We reviewed and weighed in on the
recommendations. I'm just really curious as to—we have so much money and a
willingness by community to do the work.
(Note: At this time, Assistant Corporation Counsel J Yoshimoto came
forward to address the members of the Committee.)
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FC-22 November 3,2021
MR. YOSHIMOTO: Good morning, Council Members. In terms of the June
MS. KIERKIEWICZ: So the June committee meetings, we were to go over
applications that were submitted in 2020, last year.
MR. YOSHIMOTO: Okay. Yeah, no I'm not aware of the status as to what's
happeningI mean, I advise Parks, as well, so I can confirm that there are issues in
terms of the applications, whether they fit within the parameters of what's allowed
under the Charter. You know, oftentimes there's back and forth trying to find ways
to succeed rather than just to say no.
MS. KIERKIEWICZ: Right.
MR. YOSHIMOTO: So that's part of the process. And part of the process too is,
you know, in evaluating the applications, as the Council is well aware, there are
other laws that implicate whether you're you know, an SMA (Special
Management Area)permit, you know, things of that nature. So I think Parks is
doing a thorough job in terms of vetting them appropriately before they come to
Council so the Council has all the necessary information to make that
determination.
But in terms of the JuneI can follow up on that, Council Member Kierkiewicz,
because I'm not aware of those coming through our office yet.
MS. KIERKIEWICZ: Okay. Because I do believe—haven't been on the Council
long, but I do remember us adopting stewardship grant resolutions
MR. YOSHIMOTO: Correct.
MS. KIERKIEWICZ: And moving that forward once the recommendations had
been sort of adopted by us, contracts in place. I think Moe is walking over. I would
loveI think we would all, and members of the community, would love to hear a
little bit more as to why there is a hang-up,particularly because there was a lot
longer period of time to review the applications.
MR. YOSHIMOTO: Right.
MS. KIERKIEWICZ: And then when we talk about vetting and aligning with the
Charter, to me it needs to happen as you're vetting the application, not after you
make the recommendation.
MR. YOSHIMOTO: Right. Right, so
MS. KIERKIEWICZ: Because I feel like once the recommendation has been made,
we should be moving forward, working with Finance to execute on the grant.
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FC-22 November 3,2021
MR. YOSHIMOTO: Right.
MS. KIERKIEWICZ: Does that make sense, guys? Okay.
MR. YOSHIMOTO: Yes. So my understanding is once the Council approves the
applications, then it moves forward. I don't—I'm not aware of any subsequent
amendments, unless there's a request to amend the budget. I've seen budget
requests get amended based upon change of circumstance; maybe they want to
focus on this particular area, so those things—again, like I said, I can verify those
things have happened. In terms of the June applications though, I have no
knowledge of that.
MS. KIERKIEWICZ: No, those weren't June applications. We got a presentation
at Committee about applications that were submitted in 2020.
MR. YOSHIMOTO: Oh, I got you. Okay, so those.
MS. KIERKIEWICZ: Yes. We've still haven't gotten any presentation on
recommendations for applications that were submitted this year. I think the
deadline was August. So, assume there's a little bit of a period in which things need
to be reviewed.
MR. YOSHIMOTO: Right. And just to explain the process. Since there's a
backlog, right, many times the applications are related to each other by virtue of
groups continuing to work and steward one particular property. So part of the
process is to make sure they align, as you mentioned Council Member. Because if
you submit a project, say this year, right, and that's pending approval; and then, of
course, you follow the process and apply for it next year, so they need to again, you
know, match up with each other so there is no duplication. In other words, you're
not—you know what I'm trying to say, right? So, yeah.
MS. KIERKIEWICZ: We do.
MR. YOSHIMOTO: Anyway, I'll defer to Director.
(Note: At this time, Parks and Recreation Director Maurice Messina
came forward to address the members of the Committee.)
MS. KIERKIEWICZ: Good morning, Director Messina. So good to see you.
MR. MESSINA: Good morning, everyone.
MS. KIERKIEWICZ: Good morning.
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FC-22 November 3,2021
MR. MESSINA: I'm Maurice Messina, Director of Parks and Recreation.
MS. KIERKIEWICZ: Thank you. I'm just going to re-ask the question that I asked
of Corporation Counsel and Director Sako. In June of this year, during Committee,
you provided us with a number of recommendations for stewardship grant
applications that you felt confident we could move forward with. It's November,
and so we were just wondering what the status is of executing those contracts.
Because my understanding, and this is just past practices, the Council does adopt
resolution so that we can transmit the funding to these nonprofits.
MR. MESSINA: So for the ones that we reviewed, we sent out letters to all the
PONC steward applicants, and we said, "These are the questions that we have about
your budgeting," and we asked them to do a revised budgeting. Over the last week
so, we started actually receiving some of those back from those applicants.
MS. KIERKIEWICZ: And those letters were sent when?
MR. MESSINA: Not far after our meeting. I'm not sure exactly when we sent the
letters out.
MS. KIERKIEWICZ: Okay. Is there—okay, I'm just I guess I'm a little
confused about the process, because if you're recommending we move forward with
certain folks, shouldn't that vetting of budget questions and what they're going to
be spending money on happen prior to the recommendations coming to Council?
MR. MESSINA: So when we did our recommendation to Council, we said that
these are all the questions that we had.
MS. KIERKIEWICZ: Okay.
MR. MESSINA: My recollection is there was only one that we said was good to
go. There was one that we said did not meet any of the standards, and we did not
think that they were appropriate. And the rest of them, in our letter to the Council,
we said these are all the issues we have with these ones.
MS. KIERKIEWICZ: Okay.
MR. MESSINA: So we didn't come in saying all these were good to go. We came
in saying these are the questions that we have from our deep-dive that we did.
MS. KIERKIEWICZ: Got it. Is there a reason why it takes so long to work with
the nonprofits to resolve the issues? Is there a need to strengthen like internal
organizational capacity, either within the nonprofits or within your department?
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FC-22 November 3,2021
MR. MESSINA: I guess the best way to answer that is we are very cognizant about
when we review the applications, and we understand that this money is going out to
these organizations. When I came in I said, "We are not going write a blank check
to anyone." If they are submitting stewardship applications to take care of these
lands, we want to make sure that they are going to be following what the code says.
And also, that whatever their scope of operations is, if it requires a permit, an SMA,
an EA (Environmental Assessment) or anything like that, we want to be able to
identify that, and then we want to help them work through it. The easiest thing to
do would be to say, "Okay, you asked for this grant. We're going to give you this
grant, and we're going to follow it." That's not good management.
And so the process is taking longer I think because of what we did. That's the best
answer I've got for you. Because we were so deep---we did such a deep dive in
every one of these. I believe our transmittal letter to the Council was probably the
longest transmittal letter we've ever sent, and paragraphs upon paragraphs for each
one of the applicants.
MS. KIERKIEWICZ: It was very thorough. But I guess I'm concerned because
now you're talking about doing all this due diligence and not wanting to write a
blank check. Are you alluding too, that less scrutiny was provided in years passed
and that there may have beenI wouldn't say mismanagement of funds, but
expenditures that were not aligned with Charter?
MR. MESSINA: No, I'm not saying that.
MS. KIERKIEWICZ: Okay.
MR. MESSINA: What I'm saying is we don't have the mechanism or the personnel
right now to really follow up on every one of these grant applicants. That's why
one of the things that Deanna has been speaking about is hiring someone to actually
oversee this program, and that is their job.
We get quarterly reports. We follow up with the reports. But to actually be going
out to every one of these sites and talking with every one of these individuals, we
just do not have the capacity to do that. So, we follow up on the quarterly reports.
When we see that there's an issue with the quarterly reports, we reach out to them.
But, it's a daunting task. Especially within our own department that we're handling
it right now, we have over 300 other sites to manage as it is.
And to go out—so when we look so deeply into their applications, that's one of the
things we're looking at; do we feel that they have the capacity to do this with the
money that they're asking for, and is their management plan sound? If they say
they're going to buying a lawnmower, is the lawnmower appropriate? Is it an
appropriate lawnmower for the land that they're asking for? I mean, somebody's
asking for a zero turn. We've got to say, "Okay, they want a zero-turn out here.
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FC-22 November 3,2021
That's an expensive lawnmower, but where they're mowing, it's going to bust up
that zero-turn mower. So it's all those little, little bitty things that we've got to
that we're looking at when we look at these.
MS. KIERKIEWICZ: I agree with you that we need a person, or several, dedicated
to working hand-in-hand with our nonprofit partners to steward these properties. I
think that there's a range in, I think, abilities and capacities, and so these people can
help elevate, uplift, get folks to next level of their stewardship game. I think that's
really possible.
Director Sako, are those plans that Finance has to bring on a few folks, outside of
Hamana(Ventura) and, you know, his team, to really dedicate to some of the things
that Director Messina is bringing to light?
MS. SAKO: Yes. But as I said, we want a chance. You know, once we actually
have the grants, to evaluate what the staffing needs will be.
MS. KIERKIEWICZ: Okay.
MS. SAKO: Because we're not ready to say how many people or what that might
entail. You know, it's really going to depend on how many grants end up being
awarded from the last two years; so how many are in place. And if those are the
same applicants, both years or different ones, you know, what's the total number of
stewardship grants that are out there, the different community organizations we'd be
working with.
MS. KIERKIEWICZ: Got it. So doing your assessment and then going from there?
Okay, that's a sound strategy.
Just a final question that I have. Of the parcels that we have, how many are actively
being stewarded, either with County grant or other grants? Do you guys keep track
of that?
MS. SAKO: Hamana may know. The person that normally takes care of it isn't
here today. So I'm not sure exactly how many different parcels, but it's several of
them.
MS. KIERKIEWICZ: Hamana, do you have any more details?
(Note: At this time, Real Property Manager Hamana Ventura came forward
to address the members of the Committee.)
MR. VENTURA: Well, let's see, Waipi`o, Kawa, `O`oma you know, I think
we're up to six active parcels that are being worked on currently.
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FC-22 November 3,2021
MS. KIERKIEWICZ: Using PONC monies?
MR. VENTURA: Yeah, with money. And in Kohala, and then we keep on adding
to that, and so our partners in Kohala are going to be coming in with additional
requests.
MS. KIERKIEWICZ: Okay, thank you for those details. I know the Planning
Department has a fellow that is actively mapping all of the PONC parcels, which is
going to be really exciting, and then also identifying who the stewardship partners
are and what their needs might be. Because oftentimes this work is so daunting,
there's so much to do, and they often rely on volunteers. And this is an opportunity
for other groups, schools even, to get involved in caring for `aina.
Final question, any considerations of partnering with groups, such as Kupu, who
run Youth `Aina Corps programs, so that we are building up next generation of
green workforce? Is there any talk about collaboration engagement with these
entities so that we can steward more of our parcels?
MS. SAKO: I think we said we would make the parcels available, but I think we're
going to need either a County person or a community group to help them in that,
and then to ensure that it's in accordance with the Resource Management Plans that
we have in place, as well.
MS. KIERKIEWICZ: Got it. Thank you very much, Directors, both of you for
being here and answering our questions. Chair, I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Kierkiewicz. I believe,
Council Member Villegas, you were first, and then Chair David.
MS. VILLEGAS: Thanks for coming over, Moe;jumping right into the hotseat.
And thanks for the presentation, Deanna, providing some background information
as well as kind of future, looking forward.
The one property I didn't see on here, which I'm really grateful for is Pu`apua`a,
that was purchased off of Alii Drive last year. Close to 13 acres, I think. Hamana
has been working so hard with community groups. And they've got the goat-dozers
there. I'm sure my colleagues have heard a lot from our constituents about this
recently and people's very vocal concerns, especially from those that were part of
the inception of the two percent land fund for—you know, different terminology on
this.
The pervasive understanding from a lot of those people was the desire, and their
understanding was that what did get passed in the last election was the change of
the Charter; that there would be a staff member. The belief system from those that
created this program was that they want one person that is the pivotal kind of person
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FC-22 November 3,2021
responsible for this. As Moe so wonderfully articulated, "It is a lot to manage."
Even six sites with maintenance funding is a lot, and Parks is already overextended
and under a lot of pressure. So it sounds like, from Parks and Recreation, there is a
recognition of the need for somebody assigned specifically to that, but it sounded
more almost from you, Deanna, like it was split up between all these people.
So in the interest of my constituents, who are in my ear constantly about this—and
also with you know, I've worked with Kohaniki `ohana since I was very young.
And the `O`oma project, they don't have any money; and now they can't keep
doing the work. I'm not officially a part of the organization anymore, but having to
utilize other funds to keep people even working there. And so we are at such a
backlog now that the requirements for reporting on funding that they still haven't
received.
So we're kind of bass-ackwards here, and how we get ourselves caught up?
Reminiscent of the Epic system, for some reason in my mind. And we're so far
behind, how do we get caught up and execute and get the money to these people?
Because of a lot of them are doing work and having to put forth their own funding
or just having to stop the work; and if they stop the work, then they can't do the
reports, then they can't—so we're kind of in that—
MR.
hatMR. MESSINA: Right, so that's on my department.
MS. VILLEGAS: Okay.
MR. MESSINA: Okay. We've made awe told the administration that the current
ones that we have, that we are going to have all of our reviews completed by the
end of this calendar year. That's not—the ones that we have that we sent back out,
I believe it was five of them.
MS. VILLEGAS: And that's for 2020?
MR. MESSINA: For 2020 and 2021.
MS. VILLEGAS: Okay.
MR. MESSINA: Yeah, so we're doing the review right now for 2021; we have
nine reviews to do. We completed the five reviews for the 2020, and those are the
revised budgets that we're receiving right now. So that's on my department.
MS. VILLEGAS: Okay.
MR. MESSINA: And so it has taken awhile. It has taken awhile.
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FC-22 November 3,2021
MS. VILLEGAS: Do you anticipate in the transition to finance that this will flow a
little quicker?
MS. SAKO: No, I was just going to say that the PONC Commission has reviewed
the 2022 grants, the ones that just came in, and so we are looking at those to make
recommendations. I think the confusing part that you alluded to is that it is possible
that one applicant may have applied three times to each of the three years, and so
we probably want to do like some kind of joint agreement to make sure what
they're going to accomplish.
For the ones that we're going to purchase equipment or something like that to help
them, they can go purchase that, and then the grant may be done. But if it was to
cover other things that are a longer period of time, we just want to make sure that
we're also not paying them three different times for the same work that they're
doing. So, we're just trying to kind of sort that out right now. But we're ready to
move forward with the current year.
MS. VILLEGAS: Yeah. And hopefully taking into consideration some of the work
on these properties is the same work, but you have to keep doing it in order to really
steward property. I mean, as we all know, with land you can go pick weeds or plant
something, but if you're not there to maintain it and to continue that daily or weekly
care—so that must be one of the challenges in these applications, because it can
look like it's just—you're doing the same thing, getting paid for the same thing.
But it's actually the longevity of long-term care. So, I hope that that's taking into
consideration.
I appreciate the fiscal responsibility. And there's got to be that balance of them
micromanaging, as well. And making it—these are, like Council Member
Kierkiewicz said, a lot of volunteers, a lot of people with great heart and intention,
but may not be professional grant writers, so there's a real balance in that. And the
understanding and gratitude for them doing the work, and not making it too hard to
accomplish or receive the grant funding.
So I personally really feel like it is important that we create a position and hire
somebody to manage this. I think it will benefit the program. It will benefit the
County. It will benefit all the other departments. I mean, working with Hamana
has just been fantastic on the different properties in District 7, but I know even he
has his hands full. So to have somebody that's assigned to this, and it can create
those relationships. Go visit the locations and have that keener understanding
and real connectivity there, I think there's a lot of value for that. Because the
money, we do have the money to do that. I think that would be wise as we continue
with this program. We are only going to end up with more applications, hopefully,
because we have lots of land to be stewarded, and hopefully we'll have more and
more people enthusiastic to do that.
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But right now, it's kind of disheartening and frustrating for a lot of people. Not just
those that are working on these properties and have been relying on this grant
funding, but for those who visioned this program to begin with. So, I'm very
hopeful.
And thank you, Moe. I'm sure that you inherited a bunch of different challenges
and opportunities where this is concerned, stepping into this role, but I am confident
under your leadership and your diligence that this is going to get processed and the
people are going to get their funds. So, thank you for confirming that with us and
that commitment. I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Villegas. Chair David.
MS. DAVID: Thank you, Chair Kimball. Mahalo, Directors Messina and Sako, for
being here. I just have a couple of questions, and that's on the five applicants that
requested to resubmit. Are they all completed at this point and time? Have they all
resubmitted, and is there a timeline on your review? And if you did review it, have
they succeeded in fulfilling the request?
MR. MESSINA: I do not believe all of them came back in yet.
MS. DAVID: Ahh.
MR. MESSINA: I'm sorry, I was at another meeting—when I ran over here real
quick. But I can find that information and I'll send it to you, Chair.
MS. DAVID: Yes, because I think that's really important; because based on what
everyone is saying, in 2020, that's almost two years of having done the work and
not being compensated through that grant process. And I'm not sure how long
these people can afford—given COVID, given the financial and economic situation
we're in, and I'd hate to see a program like this just fall through cracks because of
something like that. And I really want—if you can let me know how many, at least
the 2020 ones that were resubmitting.
MR. MESSINA: I will. And so, Chair, there's also there has been money given
out. It's not a zero sum.
MS. DAVID: Okay.
MR. MESSINA: There has still been money expended to the stewards.
MS. DAVID: And that's coming in under the current applications that they've
submitted? Or, how does that—?
MR. MESSINA: Yeah, the previous ones.
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FC-22 November 3,2021
MS. DAVID: The previous ones?
MR. MESSINA: Yes.
MS. DAVID: Okay. All right. And that's my concern, because I did have calls
from these community stewards that are having a hard time. I just don't want them
to give up, and we need them. So if you could get me that information, that will be
great.
MR. MESSINA: Agreed.
MS. DAVID: Okay, mahalo. Thank you, Chair.
ACTING CHR. KIMBALL: Thank you, Chair David. Council Member Lee Loy.
MS. LEE LOY: Thank you. Thank you, Deanna, Moe, for being here. There seem
to be a lot inaccurate assertions and misrepresentations about the fund, but I also do
hear my colleagues, about—especially the stewardship piece. And I had a question
aroundI'm not sure if it was you, Moe, or Deanna, when they are going before the
Open Space Commission and applying, I think some of what's going on is this
concern about their stewardship being in alignment with the Charter. Deanna, could
you share a little bit about that?
Here's my concern. All too often—and actually this was what the fund was for, is
to purchase a lot of very special places that would held in perpetuity in open space
for our community. And because of this basically special and unique qualities, I'm
having—even I'm having a challenge on how we take this kind of rigid colonial law
and have our cultural stewards augment into this. And so I'm just trying to
understand that a little better.
MS. SAKO: So like I said, some of the issues in the current year were, I think,
applying for parcels that were not on the list, and then in other cases,just making
sure that it does fit within the 17 items listed under the Maintenance Fund. And so
as we've said numerous times, when things are written in the Charter, they cannot
be amended other than by the voters. So when it gets specific, you know, we have
to ensure that they are complying with each and every one, and there's not any
wiggle room because this was approved by the voters. So, yes.
MS. LEE LOY: I'm just wondering, if through our stewards, there's ways to
actually meet some of these 17 criteria in a more cultural way that may not be as
specific than as the Charter, but in the stewardship they actually are kind of needing
the restoration or wildfire prevention.
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MS. SAKO: I think the restoration and the preservation, and a lot of those areas,
are some the ones they come in under. But I think we've been working with each
group,just to make sure they understand. And many of them are very aware, they
know which parcels we have the management plans on and they're very familiar
with those plans, so I think they work well together with both Parks and Property
Management.
MS. LEE LOY: Perfect. And then I kind of wanted to step into the process of the
purchase, right, because oftentimes there is a requirement to do the 343 compliance
because we're using County funds. Oftentimes, and I'll disclose right now, one of
the properties on the fund actually was a client of mine, and so I recognize there
was an SMA, a Conservation District Use application we had to do. There was a lot
of entitlement work on that property prior to even purchase. Is that made available
to our stewards, because oftentimes there's already a Cultural Preservation Plan or
Mitigation Plan in a lot of these background documents?
MS. SAKO: My understanding it is. Hamana can confirm.
MR. VENTURA: Thank you. So if we have that type of information, whether it's
arch (architectural) studies, Burial Treatment Plans, all of those things, we
definitely will make them available so that everyone is on the same page; like you
said, to figure out if we have to go in for an SMA determination and so forth. So
now that it's transitioning back to Finance, maybe it's going to be a little bit easier
for them to gather that information. Perhaps in the past, when they were working
Parks, maybe they weren't aware that we had access to that type of information.
But whatever we have on file, we would like to share it.
MS. LEE LOY: Thanks, Hamana. You know, I just want to see this evolves. I
know there seems to be this perception of an individual person, but as I look at
these different spaces, they're all very unique onto itself, and I just find it really
challenging that one person would hold all the information on that particular parcel
or know how to steward that, and then pass that on. And I almost feel like there's
different people within the Department of Parks, in Finance, at Corporation
Counsel, or even in Planning, because we have a Cultural Resource Commission
who actually could lend their expertise to some of this.
Yeah, I would love to see how this evolves. But Moe, if we could start really
moving the old applications forward? I just—I'm really excited about this
stewardship program and how it could actually become an outdoor classroom for so
many of our students, to not only malama these spaces but understand everything
that goes with it and why it was set aside in perpetuity to be preserved. Thank you,
both of you for being here. Chair, I yield.
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FC-22 November 3,2021
ACTING CHR. KIMBALL: Thank you, Council Member Lee Loy. Council
Member Kaneali`i-Kleinfelder, if you still there, did you have any questions?
Okay, we'll go to Council Member Inaba.
MR. INABA: Thank you, Chair. Okay, so we have the last—the previous two
years being taken care by Parks and RecreationI'm just trying to wrap my head
around this—and the current year being taken care by Finance. Deanna, for you,
are we waiting for Parks to clean up what they're doing before you're going to
proceed with the current year or are you going ahead?
MS. SAKO: There was a little bit of confusion over that, and we were waiting, but
we may just go ahead and move forward. I have not had a chance to see the
applications. The PONC Commission and our team has looked at it. And so we
just I think what we do want to do is make sure there's not duplication. And I get
it that some of the groups may have been continually working during this time, but
we just want to make sure that each one didn't ask for the same lawnmower or
something like that. We just want to double-check those type of things.
MR. INABA: Okay. And we `re looking to have this at least be up to date, by
when? Do we have some kind of timeframe?
MS. SAKO: So Parks committed to finishing up by the end of the calendar year.
MR. INABA: Okay.
MS. SAKO: And so we're kind of looking at the same thing. We're working on
wrapping up the PONC Commission report and recommendations for the calendar
year, and then hopefully their grants would be ready, and we can just ensure no
duplication.
MR. INABA: Got it. And within each of your departments, how many people are
working on this? I know we're talking about not having one person kind of hold all
of the eggs, but what does it currently look like within each of your departments?
MR. MESSINA: So in Parks, we have a team of our Planner, one of our Project
Managers, our Business Manager, and myself.
MR. INABA: Okay.
MS. SAKO: So in Finance, you know, we have a couple of different people
looking at it, but the Property Management Division has four individuals. The
PONC Commission has looked at it as well as Corporation Counsel.
MR. INABA: Okay. And then in terms of the Maintenance Funds, what have been
the, I guess in the last couple of years, the total amount, either requested or
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FC-22 November 3,2021
expended from organizations who are doing that maintenance work on our PONC
lands?
MR. MESSINA: I don't have that number with me right now, but I can get it to
you.
MS. SAKO: I didn't look at it in the last couple of years. I know we've spent
$653,000 on stewardship grants over the years. There are still four grants which
still have balances, so I believe payments are still being made out, and they range in
size. So unfortunately the way it was recorded online, it was hard for me to tell the
total grant amount, but you know, the payments vary from $5,000 to $15,000 each
quarter.
MR. INABA: Okay.
MS. SAKO: Per grant, sorry.
MR. MESSINA: So we'll get you those figures for 2018 and 2019, I think, is what
you're asking for.
MR. INABA: Yeah, for me it's just a little bit I mean, the whole situation
obviously we're having this discussion because there's been some mishaps maybe,
and obviously we want to make sure that the funds are being spent appropriately;
but at the same time, we want to make sure that the funds are actually going out and
that we're not sitting on $3 million or not spending so that we're not having to put
in. And that's what I'm little concerned about, because I think everyone on this
Council is aware of the effort and the resources it takes to manage land. And it
doesn't really, for me, make sense that we aren't spending more of this money with
knowing how much effort and resources it takes.
MR. MESSINA: Yeah. And for me personally, it's the same thing. When I was a
Deputy at Parks, I made relationships with some of the stewards, and going out and
visiting and seeing what they were doing; and then realizing,pretty much January
of this year, how far behind we were. It was pretty disheartening. So that's why I
made the commitment to do with their overview, but also make sure we can get
them done at the same time. I know that COVID and everything put basically a
stop on a lot of things. But we're not going to make excuses in my department,
we're just going to get them done.
MR. INABA: Thank you. And then lastly, Deanna, I know you kind of have a
team working on this. And of course we're not proponents of spending money on
Salary and Wages when we don't need to, but sometimes we need to, to get the job
done, yeah? Is that I mean, once your department fully gets
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FC-22 November 3,2021
MS. SAKO: Yeah, we just want an opportunity to evaluate the need. Because
there's so much that goes into the fund, from the acquisition side to the stewardship
side. So we just want to see what the true needs are and where are holes are.
Because our staff has a lot of skillsets as does Planning and other people that have
been mentioned, so we just want to fill in, you know, what are the skillsets that
we're missing. And then, of course, recruiting internally to give our employees
opportunities.
MR. INABA: Great. Thank you.
MS. SAKO: And just to clarify one thing, while the stewardship grants might not
have been going out, doesn't mean we're not spending anything and not continuing
to do the work. As Council Member Villegas mentioned, you know, we have the
goats out there grazing and doing things, and are paying for luas at various sites, as
well. So there's still money being spent, and it's not like just trying to stockpile it
or whatever.
MR. INABA: Yeah.
MS. SAKO: And management plans, other things are still being done.
MR. INABA: Great, okay. And Moe, if you could send those numbers over to all
of us. And thank you. Mr. Richards, for bringing this forward. Perhaps we can
revisit this conversation again early next year, once we have everything wrapped up
at the end of the year. Thank you, Chair.
ACTING CHR. KIMBALL: Thank you, Council Member Inaba. Anyone else?
Okay. I'll ping Council Member Kaneali`i-Kleinfelder again. Any questions?
Nope, I didn't think so. Okay.
MR. KANEALI`I-KLEINFELDER: Not at this time, Chair. Thank you.
ACTING CHR. KIMBALL: Thank you, Matt. Thank you, Council Member
Richards for bringing this forward. Important discussion to have today. And thank
you, Director Sako and Director Messina, for being here and responding to the
questions.
I just had one follow-up question. And you said, Director Sako, that you had not
actually seen this year's set of applications. I'd be curious to know if they seem a
little better. In terms of what you've highlighted, Director Messina, with the
various nonprofits as gaps in their existing applications, if they've gotten a little
better in 2022, so if you can follow up with that. Expand potentially, do you have
any intentions to improve the application process so that it is more clear to our
nonprofit partners, what sorts of things are acceptable as part of their plans?
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FC-22 November 3,2021
MS. SAKO: We can definitely take a look at it. One of it is, you know, even
sometimes, though, we advertise for a list of parcels, that sometimes you can give a
lot of information, it doesn't mean people see it or recognize it. But we can
definitely make our staff more available to help people throughout the process,
because I know sometimes it does get confusing with the paperwork part.
ACTING CHR. KIMBALL: Great. Thank you. Oh, I believe we have a comment
from Corporation Counsel.
(Note: At this time, Deputy Corporation Counsel Jean Campbell came
forward to address the members of the Committee.)
ACTING CHR. KIMBALL: Ms. Campbell, please turn on your mic, introduce
yourself to the chamber.
MS. CAMPBELL: Hello, everyone. Jean Campbell, Deputy Corporation Counsel.
Among my other duties there, I represent the PONC Commission. And just to
follow up on your question, one of our PONC Commissioners has requested to form
a permitted interaction group, which is sort of a sub-committee that's allowed by
the Sunshine Law, to do exactly what you have articulated. They would like to put
together a more streamlined and more user-friendly process to allow for the
stewardship grants to come in; and for not only the Commission but the County
staff to kind of put together an application package and a process that will work
more smoothly.
So yes, the Commissioners themselves are actually taking that on, and the staff and
myself are doing everything we can to support that effort. It's going to be coming
up at their next meeting, which I believe is next Monday, to form that permitted
interaction group. So, that is taking place.
Since I have only worked with PONC for the last year, since I've been with the
County, I can't compare to any previous applications that we got. But I can let you
know that there was only one of the applications that we got this year that had
noncompliant items in it. Everything else was stuff that was compliant with the
Charter. And I don't knowI don't have the history to know whether that's the
result of the work that was put in by Parks and Recreation or whether we got lucky
this year. I don't know. But we only had one. That one was, I think, a sort of
we're just going to throw everything in there and hope that something sticks kind of
effort. And so that one didn't get through. But everything else looked really good.
They were great applicants, and we were really pleased to see them all. They were
very good applications.
ACTING CHR. KIMBALL: I'm glad you were here to address that. Thank you.
Those are both bits of great news. But the applications looked improved this year,
and that the Commission is taking the initiative to evaluate the application process.
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FC-22 November 3,2021
Please give our mahalo to the Commissioners that took that on. We definitely
appreciate that effort.
My one final comment—actually for the record, since we're talking about thisI'm
sure there will be a newspaper article, Director Sako, could you tell us roughly what
is the income to the PONC fund in the last couple of budget cycles?
MS. SAKO: So it is roughly $7 million per year, is transferred to the PONC fund,
and then one-eighth of that is transferred to the PONC Maintenance Fund.
ACTING CHR. KIMBALL: Thank you for that.
MS. SAKO: Whatever that works out to for the rest of the money.
ACTING CHR. KIMBALL: Yeah, great. Thank you. The last comment I'll make,
is I agree with my colleagues and support your inclination to evaluate the staffing
level needs for something like this. There is a lot of different pieces to this puzzle.
If we have the capacity already, I'd certainly rather keep more money to buy
properties and to fund stewardship than to just pay for administration. But just keep
us abreast of that, if you will. Hopefully we do have that capacity internally
already, to address the administration portion, then we can just spend more on
acquisitions and stewardships.
Thank you both for being here. With that, we'll move forward with the vote. All of
those in favor of closing file on Communication 461?
Vote on Comm. 461: The motion to close file on Comm. 461 was carried by
Filed the following voice
Ayes: Committee Members Chung, David, Inaba,
Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy,
Richards, Villegas, and Acting Chair Kimball–9.
Noes: None.
Absent: None.
Excused: None.
ACTING CHR. KIMBALL: Next item on the agenda, please, when you're ready.
Comm. 462: NOTIFICATION OF FUND BALANCE AS OF JUNE 30, 2021
From Finance Director Deanna Sako, dated October 15, 2021, transmitting the
above pursuant to Section 2-124, Hawaii County Code. The total budgetary fund
balance is $52,683,427.32.
Motion to Close File: Mr. Inaba moved to close file on Comm. 462. Seconded
Seconded by Ms. Lee Loy.
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FC-22 November 3,2021
ACTING CHR. KIMBALL: Any discussion?
MR. INABA: Yes, Chair.
ACTING CHR. KIMBALL: Council Member Inaba.
MR. INABA: Director Sako, if you could please come. I know you provided the
letter, but I need explanations on the letter. So your just a quick summary of what
we're looking at here. So yeah, I'll just leave it at that for now.
(Note: At this time, Finance Director Deanna Sako came forward to address
the members of the Committee.)
MS. SAKO: Thank you. So this is a requirement per the County Code that we
would put on the Fund Balance each year, by October 15''. So our staff are still
finalizing and working on our CAFR (Comprehensive Annual Financial Report)
and the audit. However, in the meantime we wanted to make sure we transmitted
the fund balance.
So the total fund balance for the entire General Fund only, is $52,683,427.32. Of
that amount, we did budget$32,101,447 in the current year, FY (Fiscal Year) 2022
budget. So we already have put that in as a revenue source and basically returning
it to the taxpayers.
So that leaves another $20,581,980.32 for Excise Fund Balance, that we can put as
we start to prepare the FY 2023 budget. Or if there are current year needs that may
have been discussed earlier, like at the Fire Department or something like that, these
would be funds that could go back into the current year, as well. And there
definitely are some needs that have come up this year.
A big portion of this is because when COVID (Coronavirus Disease) started, when
we were preparing the FY 2021 budget, you know, you heard about people being
laid off, losing their jobs, so we budgeted very conservatively and we allowed for
kind of like a percentage that would not be able to pay their real property taxes. We
were very fortunate that most of our taxpayers were able to pay. There were a few
taxpayers that couldn't. Many of them that maybe weren't able to pay last fiscal
year have actually caught up this fiscal year.
So some of the large taxpayers that we thought might struggle with their tax
payments actually were able to pay and are caught up now. That's not to say we
don't have any delinquencies. We still do. But some of the ones that we thought
would be challenges, they were able to pay, and we're very grateful for that.
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FC-22 November 3,2021
MR. INABA: Got it. Thank you. And when you say that$32 million was applied
to this current fiscal year, how exactly did that work?
MS. SAKO: So when you guys review the budget year, there's the revenue section
and the expenditure section, in the revenue section, and I'm sorry I didn't bring my
budget with me, there is actually fund balance from prior year; is one of the revenue
items, and that was $32 million.
MR. INABA: And are there expenditures that correspond with this?
MS. SAKO: It's not a direct correspondence. It's just like any other revenue item,
using it to help balance the budget for the current year.
MR. INABA: Got it. Okay, thank you so much.
ACTING CHR. KIMBALL: Thank you, Council Member Inaba. Any others?
Council Member Villegas.
ACTING CHR. KIMBALL: Aloha, Deanna. Okay, so $52 million. That's a pretty
big fund balance moving forward, correct?
MS. SAKO: Yes.
MS. VILLEGAS: So I'm just putting it out there, because I've got a lot of people
in my ear. Especially with Animal Services saying, "How can we be saying that we
don't have the money for certain things when we have a really sizable fund
balance?
MS. SAKO: So, yes. And I should have also mentioned part of this is because we
were—had a lot of federal funding last year, especially with CARES Act
(Coronavirus Aid, Relief, and Economic Security)Act.
MS. VILLEGAS: Yes.
MS. SAKO: But when people say they don't have funding, they mean their
appropriation is not big enough.
MS. VILLEGAS: Yes.
MS. SAKO: Which is why I was saying that we were aware of some needs, one of
which is Animal Control for the current year.
MS. VILLEGAS: Okay. Right,
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FC-22 November 3,2021
MS. SAKO: So we're waiting to see kind of what happens with the year. You
know, they also had some start-up costs, so to speak. We're evaluating the current
facilities to see if those are going to be able to be utilized or if we need new ones.
So, there are a lot of things. But I think we need a little bit more time to determine
what is needed before we would come in with a budget amendment.
MS. VILLEGAS: Okay, great. Thank you for that. And can you remind meI
know that you presented it in another—at another time what our rating is as a
County.
MS. SAKO: To mean, the bond rating?
MS. VILLEGAS: Yeah.
MS. SAKO: Yeah, so our the highest possible is triple-a(AAA), and we're a
double-a plus (AA+) for Fitch. I think S&P (Standard and Poor's 500), we're at
double-a(AA); and Moody's, we're an AA, too.
MS. VILLEGAS: Great. So, that's awesome. And I appreciate that high-level of
fiscal responsibility. I always loved getting A's in school, so that feels good too.
But as we continue to navigate these challenges with our wastewater facilities and
with a number of other infrastructure issues, I just—I'm feeling kind of a need to
encourage or request that perhaps we consider letting our rating you know,
extending ourselves a little bit with a little more risk in order to get things done.
Because as it is, to have that AA rating when we're pumping two-million gallons of
raw sewage into our ocean ecosystems, because we don't have the infrastructure
facilities we need, there just seems to be back in the day in college, I remember
kind of balancing like. okay if I put this much in I could still get the c or the b, but I
end up with this other, you know, big accomplishment or whatnot.
So I'm just hoping for some consideration, as we need to look at being a little more
fiscally-brave in order to—it's only going to get more expensive. So thank you for
taking that into consideration.
MS. SAKO: So I hear what you're saying. Also, that rating directly impacts the
rate of interest we pay on the money to borrow to fix the sewer plants.
MS. VILLEGAS: Right.
MS. SAKO: So this high-rating that we have also allowed us to apply for the
WIFIA (Water Infrastructure Finance and Innovation Act) Loan Program, which
has a lower rate of interest; which we just found out that we do qualify to apply for
the now, the full-blown application.
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FC-22 November 3,2021
MS. VILLEGAS: Wow.
MS. SAKO: So we did pass the first phase. So because those bond ratings were
high, we also have opportunities to apply for low-interest loans, that we are trying
to take advantage of many of those programs as possible.
MS. VILLEGAS: Got you. So there is a real dance there, because it sends a
message to creditors
MS. SAKO: Yes.
MS. VILLEGAS: That we are good for it, right? We're good for it. So thank you
for doing that, Deanna, and protecting the rating, but also navigating with courage
the opportunities for us to get the resources we need to, even if there's some risk
involved. So, thank you for that. I appreciate it.
MS. SAKO: Sure.
MS. VILLEGAS: I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Villegas. Council
Member Richards.
MR. RICHARDS: Thanks, Chair. Deanna, you didn't touch on, but it's something
we've discussed. On the horizon we have our pension contributions coming forth,
and I think a few comments for the public are warranted. We have a liability ahead
of us that we didn't have to pay because of the declaration, but we have been
payingI think we're probably one of the counties ahead of most of the other
counties as far as our coverage. But I think probably a few comments concerning
our OPEB (Other Post-Employment Benefits) contribution are warranted. So,
please?
MS. SAKO: So both in Fiscal Year 2021 and 2022, first one was in the Governor's
Proclamation; second one, FY 2022 is by the Legislature. We do not have to pay
our full OPEB or other post-employment benefits,which is the retiree medical. We
do have to pay the premiums, you know, for the insurance. However, even though
the Legislature waived it for FY 2023, I am hearing rumors that will be taken away,
and so we should anticipate paying that.
So the portion we did not pay, or budget for I guess I should say, is about
$21 million, is that additional actuarial amount. In FY 2022, we did budget$5
million of that, but that would still leave $16 to $17 million that we have to add
back into the budget next fiscal year.
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FC-22 November 3,2021
MR. RICHARDS: Yeah, so I think to the point, though we have this fund balance
coming forward, and there's nobody more critical of the Fund Balance than me, and
you've heard that for years. But that being said, I think you said both the income
streams that we've had through the CARES Act(Coronavirus Aid, Relief, and
Economic Security Act) and all the stuff out of D.C., we're a little bit in funny
quandary.
MS. SAKO: This was an unusual year. I am hearing that many government
entities across the country did have some higher fund balances because of the
CARES Act, you know, things that we didn't have to pay for out of our own pocket.
We are also you know, the real estate market on our island right now for
residential properties is insane. Yes, that's a good word, thank you. So, it is quite
high. So we've been fortunate with that, as well. But there's definitely some bills
we didn't pay.
MR. RICHARDS: Yeah. So I think I just wanted to make sure that people
understood. Though it looks high, there are some reasons for that and there are
some liabilities ahead of us we've got to take care of, and so striking that balance.
Anyway, I appreciate that. Thanks, Chair. I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Council
Member Kierkiewicz.
MS. KIERKIEWICZ: Thank you. Mahalo nui, Deanna. I think it's not stated
enough how you keep really close tabs on our County coffers. And yes, this is a
higher than usual fund balance, but it's not an excuse to go on a big spending spree.
MS. SAKO: Um-hum.
MS. KIERKIEWICZ: As you say, there are liabilities that we have to take care of.
MS. SAKO: Yeah.
MS. KIERKIEWICZ: And I just want to make sure that while we have these
problems that have proliferated for a number of years, it's not just blank checks
across the board; that we're going to have plans, systems, people in place.
MS. SAKO: Right.
MS. KIERKIEWICZ: So that we can execute with confidence on these projects
like the wastewater system, like standing up an Animal Control Division.
MS. SAKO: Right.
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FC-22 November 3,2021
MS. KIERKIEWICZ: And I really appreciate, you know, speaking of that,
appreciating Police's approach to work with community partners and demonstrate
what this could look like before saying, "This is what we need to run the division."
So I like the approach that folks are taking to "let's pilot this idea"before we put it
in our budget as a line item. I think that's a really smart tactful approach. So, thank
you. I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Kierkiewicz. Anyone
else? Council Member Lee Loy.
MS. LEE LOY: Yeah, thank you. Thank you, Chair. Thanks, Deanna. I will
admit, when we were having this conversation two weeks ago and I saw the fund
balance, it was sticker-shock. I was like whoa, this is the highest I've ever seen it.
So, thank you for explaining it.
But I think what I'm trying to drill down on is what Council Member Richards
touched upon, which is the OPEB payment. Can you share with me again those
numbers? Because we not that we didn't have to pay, we just basically—we got a
hall-pass that we didn't have to pay those years, but now we're going to have to go
back and pay it. Can you share those numbers again with me?
MS. SAKO: Um-hum. So we did pay some into—additional over and above what
we call the pay-as-you-go amount, towards that actuarial portion last year. You
know, our spiking bill for ERS (Employee Retirement System) wasn't' quite as
high—different things. So if there was money available, we did put it in. But for
the current year, the total amount that we're supposed to pay is, and I want to say,
$42 million. And we are about$16 (million) or $17 million short in the current
year.
But again, we have that hall-pass, so we don't have to pay it. So it is a good
opportunity to work with, like Wastewater for example, on planning and
determining what the full picture is. But we don't want to forget about that
amount; because what we don't pay currently, the interest rate that they accrue
at, I think the actuarial rate they use is seven percent. Never mind the bank was
only paying you point zero two (.02)percent to have your money in the bank, what
we—our liability grows much more quickly by leaps and bounds, when we're
talking about pension and other post-employment benefits.
MS. LEE LOY: Yeah, thank you. People work for those benefits. And so of the
$16 million that we still have to pay, and if we don't get a hall pass for this next
fiscal, is it due all the same time or is this another pay-as-you-go?
MS. SAKO: So FY 2023, we are anticipating having to pay the full $43 million,
but it's based on the actuarial computation; so the amounts that we didn't pay last
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FC-22 November 3,2021
year or we might not be able to pay this year, would be amortized out over the next
several years. So it's not like it's going to come due all at one time, like a
$40 million bill, but instead of$43 million each year, maybe we're going to be
paying $45 or $46 million each year, and that's on top of the normal rising
healthcare costs that are probably going to increase that bill, as well.
MS. LEE LOY: Yeah, I just did that quick math, $43 million with the $16 million
we owe, that's $59 million, so $60 million. And then that you hit on it, which is
the rising healthcare cost. And I don't think people have come to recognize COVID
going cost us in healthcare premiums, and unless we hunker down and look around
the corner a little bit about these healthcare costs that I have friends in the industry
who are really concerned about the healthcare premiums, and I cannot help but just
be mindful of that as we go into this, definitely this next fiscal, but definitely this
next four years of healthcare premiums. People are going to see a big jump in what
their premium costs are,just because healthcare got real expensive because of
COVID.
Thank you, Deanna, for sharing this. I know we have another conversation with
another item coming up, but this is very helpful for that conversation. Chair, I
yield.
ACTING CHR. KIMBALL: Thank you, Council Member Lee Loy. Council
Member Chung.
MR. CHUNG: Hi, Deanna. First let me just say, and we've said it many times
before, we really do appreciate the skill by which you, you know, refinance and do
all of these things so that we can maintain that high-bond rating. I mean, you are
just absolutely wonderful.
In terms of fund balances, what is the highest Fund Balance that you've seen prior?
I'm guessing this
MS. SAKO: This is the highest.
MR. CHUNG: So what's the highest you've seen in the past in your ?
MS. SAKO: So last year was the highest, which was $40 million.
MR. CHUNG: But all attributable to federal ?
MS. SAKO: Yes.
MR. CHUNG: I mean, well infusion of my—how about prior to the COVID relief?
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FC-22 November 3,2021
MS. SAKO: So usually it's more like $20 (million), $27, $29. We were in the $30s
(million); you know, and like 2013 we hit$37 million. But I also remember 2002,
which was on my first years as Controller, and we were at a million.
MR. CHUNG: Right.
MS. SAKO: So, yeah. We almost didn't make what we budgeted. There have
been years we haven't made what we budgeted.
MR. CHUNG: And I think all of that really is a tribute also to your fiscal
management. But now that we have this huge amount, and largely attributed to
infusion of money, right, from outside sources, what can you—and you might not
be the right person to do it, it actually should be the Mayor, I think. But what can
you tell the public to dispel any notion that we haven't done enough to address the
COVID situation? I mean, these are monies that are coming to the County for
COVID relief and other things. I don't know exactly what the earmarks were on
that, but we have this huge amount of money. County of Hawai`i not really doing
too well, you know. I mean, everything is trending downwards, of course. You
know, I think by all measures we're probably the worst in the State. So what—at
least if you can dispel any notions or thoughts on the part of public, that we haven't
done enough with that money and then now we have this stockpile.
MS. SAKO: In the very beginning, you know, I think we've been trying to sanitize,
control group sizes, you know, do a lot of things, but most recently it's definitely
been the testing and making sure it's available, and trying to encourage people to
stay home when sick, so that we don't spread it. We were one of the few well, we
were ones that started like the airport testing and doing all of that to catch those
cases. Because once it comes in and it spreads, then we all know the doubling-
effect that it has. So I think we've spent a lot of money trying to protect everyone
on our island. We continue to do that.
But as well as the programs that we have, with the rental assistance, the
homeowners assistance programs and whatnot, where people you know, a lot of
people suffered through the pandemic. They lost jobs. You know, unemployment
wasn't always enough. So those programs were also in place, many of which that
are in R&D (Department of Research and Development, and Housing providing, as
well.
MR. CHUNG: Thank you, Deanna. I just wanted to give to you and the
administration an opportunity to address that. Thank you.
ACTING CHR. KIMBALL: Thank you, Council Member Chung. Council
Member Kaneali`i-Kleinfelder, any questions?
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FC-22 November 3,2021
MR. KANEALI`I- KLEINFELDER: I do, Chair. Thank you. Thank you,
Ms. Sako. I appreciate the update. I was reading through some of our State tax
law, and an interesting thing caught my eye, and I wanted to ask for your guidance
on this. But when there's a surplus in the budget of more than five percent over two
fiscal years, then there's actually a refund given to the taxpayers. I wanted to touch
base with you, is the same thing applied to the County?
MS. SAKO: I'm not aware of any law, which is why we put our fund balance back
into the future budget, the next year's budget.
MR. KANEALI`I- KLEINFELDER: Okay. Are you aware of the State law,
though?
MS. SAKO: I know that's why sometimes we've have a $1 credit on our State tax
return, yes.
MR. KANEALI`I- KLEINFELDER: It was very interesting to see such a big
surplus come forward after COVID. I did appreciate your areas where you thought
we've grown. Do you have a number for the real property tax increase?
MS. SAKO: Do you mean what we collected over what we budgeted, or what the
value is?
MR. KANEALI`I- KLEINFELDER: Yes, that.
MS. SAKO: I think that accounted for pretty much the entire $20 million, was the
real property tax additional collection.
MR. KANEALI`I- KLEINFELDER: Wow. And what is your forecast for this
coming year? We're going to hold steady or you think it's going to grow?
MS. SAKO: So we did because there were some significant taxpayers that didn't
pay everything in Fiscal Year 2021, we did have an uncollectible amount, of I want
to say four percent in the current year budget. But we're running just about a little
over 50 percent of the budget in the current year, which is what we would expect
after the first-half payment.
MR. KANEALI`I- KLEINFELDER: Okay. But are you looking at a continued
increase in real property taxes or you think we're going to level off?
MS. SAKO: So for the coming year it will most likely increase based on the
current real estate market, but I'm thinking at some point there will be a correction.
I don't want to be the doom-sayer, but what goes up usually comes down. So we're
hoping not to tank, but there will be a correction. I think there's a lot of high sales
right now. A lot of people moving around due to COVID and different things. If
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you're going to work from home, work from home in Hawaii. it's a beautiful day
out today.
MR. KANEALI`I- KLEINFELDER: So when I've heard the same thing and I can't
get a line on anyone with a solid answer on whether we're going up or down or
what the future forecast would be, because we depend on real property taxes for our
budget for almost everything. I was kind of wondering what your take was.
MS. SAKO: Right now the values are still going up. Our valuation date is
January I", so that's two months away.
MR. KANEALI`I- KLEINFELDER: Yeah.
MS. SAKO: But right now the sales continue to remain high, yes.
MR. KANEALI`I- KLEINFELDER: Okay, so we're going to be in flux in your
eyes for a while, and most likely we'll see growth, but possibly looking at a
decrease at some point?
MS. SAKO: Yeah, but it's a combination. Even if the values are going up, the
taxpayers still have to be able to pay those taxes. So a lot of our businesses and
hotels, you know, they've been in flux throughout COVID. And you know with the
Delta variant spike, that impacted many of the businesses, so going forward is going
depend if there's other variants or whatnot, and if we have any variants or whatnot,
and if we have any more spikes.
MR. KANEALI`I- KLEINFELDER: Okay. Thank you, Deanna. Thank you,
Chair. I yield for now.
ACTING CHR. KIMBALL: Thank you, Kaneali`i-Kleinfelder. Any other
discussion. All right, seeing none. Director Sako, again thank you for being here.
Thank you for answering everybody's questions. I appreciate the thoughtful
discussion from all of my colleagues. I think we've covered everything, although I
will say that your statements, that last year was unusual, probably wins the
understatement of the year award.
With that, we'll move forward with the vote. All of those in favor of closing file on
Communication 462, please say "aye."
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FC-22 November 3,2021
Vote on Comm. 462: The motion to close file on Comm. 462 was carried by
Filed the following voice
Ayes: Committee Members Inaba, Kaneali`i-Kleinfelder,
Kierkiewicz, Richards, Villegas, and
Acting Chair Kimball–6.
Noes: None.
Absent: Committee Members Chung, David, and
Lee Loy –3.
Excused: None.
ACTING CHR. KIMBALL: We'll go ahead and—let me just take a beat of the
room, do we need a ten-minute break before we take the next couple of items?
Okay, I'm going to recess for ten minutes, Mr. Clerk. Thank you.
Recess: At 11:00 a.m., the Chair called for a recess.
Reconvene: The meeting reconvened at 11:22 a.m.
ACTING CHR. KIMBALL: All right, folks, it is 11:22. I'm going to call this
meeting back into order. Mr. Clerk, moving on to Communication 471, please.
Comm. 471: REQUESTS AN UPDATE FROM THE ADMINISTRATION REGARDING
KILAUEA ERUPTION EMERGENCY DISASTER RELIEF FUNDING
SOURCES AND EXPENDITURES
From Council Member Matt Kaneali`i-Kleinfelder, dated October 14, 2021.
(Note: Comm. 471.1, from Finance Director Deanna S. Sako dated
November 2, 2021, transmitting information relating to the 2018 Kilauea
Recovery expenditures, was circulated.)
Motion to Close File: Mr. Kaneali`i-Kleinfelder moved to close file on
Comm. 471. Seconded by Ms. Lee Loy.
ACTING CHR. KIMBALL: Mr. Kaneali`i-Kleinfelder.
MR. KANEALI`I- KLEINFELDER: Thank you, Ms. Sako, could you come up
to the front?
(Note: At this time, Finance Director Deanna Sako and Disaster Recovery
Officer Douglas Le came forward to address the members of the
Committee.)
ACTING CHR. KIMBALL: Director Sako is here as well as Mr. Le from
Planning.
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FC-22 November 3,2021
MR. KANEALI`I- KLEINFELDER: Okay. It would be good to have both of
them. Thank you for being here, Mr. Le and Ms. Sako. Mr. Le, why don't you
start us off. if you can run through what's in front of us? We were provided a
nice spreadsheet via the Finance Department(see Comm. 471.1),just run through
the numbers, give us an update. And I'm not going to lie, we're here because the
community asked for an update on what's going on. There was some concern
raised regarding some of the funds that have been proposed for projects in other
areas that were outside of the recovery area. You know, that will be touched on,
I'm sure. But I just want you to kind of lay out what's in front of us. Give us
your take and what's going on recovery-wise. And I appreciate your time this
morning.
MR. LE: Good afternoon, Chair Kaneali`i-Kleinfelder and Chair Kimball.
Douglas Le, Disaster Recovery Officer with the County of Hawaii. In support of
today's conversation on this communication, our team did work rather closely
with the Finance Department to prepare a spreadsheet of the numerous funding
sources that have been made available to the County in the immediate response,
but more in particular the recovery effort from the 2018 Kilauea eruption. You
know, it's challenging to talk about spreadsheets without the context of program
and activities, so I'll try to kind of make the connections as we talk through this.
Specific to the spreadsheet, the first item was really—and a lot of these funds
were made possible, not only kind of from the work of folks at the County to
identify resources and really articulate needs, but also close partnership with the
Governor's Office and State Legislature as well as our federal partners, to be able
to secure these funds for these very high-priority needs.
And so the first grant you see before you on the list was a grant specific to
disaster response. Meeting those immediate needs, and the days, and weeks, and
months that follow the eruption that was provided by the Governor's Office. And
following that was also a series of private donations that were received by the
County, that were allocated towards specific County projects to support recovery
and a kind of long investment in our communities following the eruption.
From there, we start to get into some of the more project-specific funds. So in
particular, this FHWA, which stands for Federal Highways Administration grant,
which was appropriated, a significant good amount. But I think it was a good
example of a project that was done very effectively and efficiently. I believeI
remember the blessing, around Thanksgiving if I'm not mistaken, of that year.
And so for Highway 132, that was reopened, both the federal side and the funds
on the County side that were identified for match.
As time went on, really kind of theagain,partnerships with the Governor and
the State Legislature made it possible to identify additional resources. The line
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where you see lava disaster recovery relief state is a $10 million grant from the
Governor's Office, and those funds are allocated to support the operations of our
team, to make this happen and work with community and work with our state and
federal partners. So that is a pretty focused operational use. It also supported the
funding for the Kilauea Recovery and Resilience Plan, which we released last
December.
The next items that are allocated from FEMA (Federal Emergency and
Management Agency) and for the County are for FEMA assistance related to the
more immediate disaster response and recovery, so not necessarily the large road
projects, the Water Supply infrastructure of the parks, that we're also working
diligently on moving forward. But for the other needs that existed, for example
costs related to establishing shelter facilities at the Pahoa Regional Park and then
bringing those facilities back online once the shelter needs were no longer there.
As we move further along, you will see the State loan from the Legislature,
identified early on and later on. These funds are allocated toward local match
towards our larger FEMA grants that are forthcoming for the significant
restoration projects, the water infrastructure, as well as parks. And mechanically,
I'll have Director Sako address questions,just a reappropriation that is needed for
that in our CIP (Capital Improvement Projects).
The $20 million that you see was really a part of that partnership with the State
Legislature. They saw our need as a community as we were navigating the
federal side. The expenditures to date on that side have supported the inaugural
year of our Kilauea Recovery Grant Program that went to help restore private
road networks. We establish farms and support community programming to the
tune of about$3.7 million. This program is also made possible by changes to the
Code in partnership with the Council. And our inaugural year of the Puna Strong
Grant Program, which is a partnership with the Hawaii Community Foundation,
is also supported out of this $20 million.
The next grant, which came under FEMA, supported the Disaster Case
Management Program, that the County initiated with Neighborhood Place of Puna
as our partner, supporting those immediate needs of folks who are still recovering
from the disaster. You know, in the end many of the nearly 200 households that
were served represented some of our kind of highest critical need members of our
community who are recovering, especially kupuna, kind of really facing housing
security.
Through this program, we were able to not only secure, I believe, an initial
$2 million of FEMA assistance to folks who kind of struggled with our process
early on, through the advocacy and case management work. But also, we were
able to allocate just over $800,000 of donations and other types of assistance to
folks who are rebuilding catchment systems, re-establishing their farms, through
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FC-22 November 3,2021
the Kilauea Funders Hui, so that's Salvation Army, Habitat, you know, those
partners that were very much critical to the recovery effort.
And the last two line items are specific to the Community Development Block
Grants for Disaster Recovery, CDBG-DR, funds that are receiving from HUD
(Housing and Urban Development). These funds came through three separate
allocations; and in our work with HUD, these funds are supporting the Volunteer
Housing Buyout Program as well as a voluntary, I'm sorry, a housing relocation
services. Kind of helping people with rental assistance or mortgage assistance, as
appropriate. And so, this covers the bulk of the resources that had been available.
You know, I think living and breathing the work, you look at these numbers
and it really requires you take a step back and take a breath sometimes. Each
line item you see here requires a lot of really close coordination and due
diligence, but also creative thinking in terms of working within our County
family and with our partners at the state and federal level, and you know, really
trying to be that 120 percent communicator with members of our communities,
too. To help them understand where we are, why we are not where we think
we should be, and what's coming next in terms of this really critical recovery
effort.
And I think the last area that I haven't touched upon is, you know, more recent
efforts to kick off our resilience capacity areas with community collaboration
across youth, and economic development, and the built environment. A lot of this
work has actually been time, blood, sweat and tears, so the time of staff and the
time of community members to come together and build this work. Close
partnership with Council Member Kierkiewicz and her team as well, besides some
operational expenses to kick off our Revitalize Puna event back in June. A lot of
that work has been "in-kind"resource, let's say, from both the County and a lot
from the community in terms of the time and contribution.
So I hope that's a helpful overview. Really look forward to a discussion and
clarifying any questions that we can.
MR. KANEALI`I- KLEINFELDER: Thank you, Mr. Le. Looking over the
appropriation amounts, I mean there's a couple line items for $40 million
regarding a state loan, but I see that they lapsed and then they were
reappropriated. But in the appropriation total, is that considering—and all those
were brought into the County and then we're looking at a grand total for all of
those funds? I mean, is there double reporting going on in this number of total
appropriations?
MS. SAKO: The $40 million is the only one I think that's doubled up. But yes,
that one is doubled.
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MR. KANEALI`I- KLEINFELDER: Okay. So we're actually looking at about
$274 million?
MS. SAKO: $274 million, yeah.
MR. KANEALI`I- KLEINFELDER: Okay. And that's almost—so what we
received in funding and in grants across the board, and I know one of these is a
match, looks like from the County for ais that correct, the County match for the
lava flow damage projects?
MS. SAKO: Yes, there was some match that the County did put forward. I
believe that might be another one that may have lapsed and would need to be
reappropriated. But now that we are in to more of the permanent work for
FEMA, that should be coming from that state loan.
MR. KANEALI`I- KLEINFELDER: Okay. The one that was reappropriated, on
the last item, correct?
MS. SAKO: Yeah, that was in the current Capital Project Budget.
MR. KANEALI`I- KLEINFELDER: Okay. Okay, I mean besides a few of these,
we have some double reporting going on and some County matches. I mean,
we're almost half of—our annual County budget has been received in the form of
grants for lava recovery. And then the outstanding number, remaining balance, is
about$240 million, sorry. So where do we stand on catching up?
MS. SAKO: So, you know, Douglas and his team has been very busy accepting
the Buyout applications for the CDBG-DR program. They just opened up Phase
Two, but with Phase One, I don't—I'm not sure that much has gone out yet
because there's a lot legal requirements that we have to accomplish, and hurdles
to meet. Anytime there's real property-type transactions, those are necessary. So
a lot of that money will be flowing out the door shortly.
The other large portion of that is the FEMA amounts. First of all, the Federal
Highway amount probably won't be spent unless we renegotiate something else
with the Feds, so that's most likely just going to be sitting there. It's not
something that we're allowed to spend anymore. But the big one is the FEMA
projects, and those are ones for 480 projects that have been taking time to agree
on the alternative projects, with FEMA. FEMA was slow in getting us the
amounts, and so those are the ones that have been being discussed by Douglas and
his team with the community.
MR. LE: Yeah, to add on to what Director Sako shared specific to the Buyout
Program, you know, the funds that we are expecting from HUD are a pretty
significant chunk of the recovery funds available.
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We have started Phase Two for second homes and long-term rental properties just
this week. We have a pipeline of just under 300 properties that applied for
Phase One, so that is primary homes. You know, it's been a lot of investment of
staff time, of course, since our program kicked off in April of this year. But we
are working kind of—these are 300 households for now, serving and working
through their situations.
And so these dollars, when we do start to move towards closing, you know, the
applications, the vetting, the compliance requirements, the thorough process that
we may have all experienced through our own kind of title/escrow processes, is
the same kind of paperwork that we go through in the acquisition of these
properties by the County. Those dollars will start flowing once we're able to get
to the closing table with our Phase One applicants.
MR. KANEALI`I- KLEINFELDER: Okay, that is good to hear. Can I follow up
on the Highways funding with you, Ms. Sako?
MS. SAKO: There's been a lot of time that's elapsed since then. So Douglas will
correct if I'm wrong, but initially there was going to be temporary and permanent
work, and the permanent work I believe went away and they just improved the
temporary. So there was a lot of discussions that happened initially, right after the
flow on that road. So I believe everything that's down and paved is what it's
going to remain.
So we came in with the appropriation, assuming there's going to be this
temporary work and then the permanent work. But that money is no longer
available. And so at some point, we will lapse it off.
MR. KANEALI`I- KLEINFELDER: Is there any way toI think I missed
something, but is there any to apply those funds towards further roadwork in the
area?
MS. SAKO: That was specifically for Federal Highway, so it would have to be
on a federal highway, and there are not that many down in that area.
MR. KANEALI`I- KLEINFELDER: Which, federal? Sorry, State or Federal
Highways?
MS. SAKO: That one is Federal Highway, and that was Highway 132.
MR. KANEALI`I- KLEINFELDER: 132 is a federal highway?
MS. SAKO: It is considered. I previously had federal funding, which is why it
continues to be classified as that, but only certain roads qualify for that funding.
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MR. KANEALI`I- KLEINFELDER: Interesting. Is there any portion ofeh,
never mind. Okay, moving on. Thank you.
MS. KIMBALL: Was it yourI wasn't sure if that was a yield? Go ahead.
MR. KANEALI`I- KLEINFELDER: What is the Buy-out Program? You're
talking about 300 homes, but what is that looking like finance-wise?
MR. LE: So a really key part of the process to move our initial applications
toward acquisition, and we're really in the thick of it now, our team, with
Phase One, is understanding not only kind of the household income, which must
be documented based on HUD requirements. Income certification is an important
piece. It's been a challenging piece, which is not uncommon among federal
Disaster Recovery programs like this. But then also, duplication of benefits. And
so how assistance has folks received from FEMA, from insurance payouts, all of
this needed to be documented, as well.
At this point, among the 300 applications or so that we've received for Phase One,
our team has, in our internal phrasing, green lit, about 100 of those applications.
You know, we know that from page 1 to page 120 everything is in place, that we
could make an offer to purchase. And that's really important, because that helps
to answer the Chair's question around, you know, we frame as, "What is the
commitment of funds to date?"
So of the 100 applications or so that are at that green-lit stage, we're committed in
about$17 million, but if we do the math it is about one-third of our Phase One
application pool. You know, I think not surprising, when we looked at income
certification, currently of the 100 or so applications, 77 percent of those
applications are identified as low to moderate income. That statistic will shift, as
more people make it through, the process will likely shift too as kind of second
homes and under-developed parcels come into way. But that is kind of what
we're looking at in terms of a commitment of funds,just for Phase One to date.
MR. KANEALI`I- KLEINFELDER: Thank you. You know,just—because it
came up today, with our current increases in real property tax values, is that be
accounted for with homes that are being bought out?
MR. LE: So in our policies and the design of the program, we are looking at 2017
appraised market value in terms of determining the acquisition cost. So this is a
pretty standard practice across federal recovery assistance programs, especially
buyouts, looking at pre-disaster value. In other disaster cases, post-disaster value
generally doesn't get to rebound; and in our case with the lava eruption, they have
not changed, right? I think Finance did right by our taxpayers in terms of holding
the zero-value study for taxation purposes, given everything that occurred. And
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FC-22 November 3,2021
so we are looking at pre-disaster 2017 appraised market value. So that is not
reduced at all by any assessments, like homeowner exemptions, for example. So
it's a higher end of the value that RPT (Real Property Tax) issued.
We are also capping the program at a maximum grant of$230,000, so that was
one way of really being able to serve as many people as we could, and we landed
on that figure by looking at the 2017 values that were impacted by eruption,
$230,000 being that median value across all actual recorded property values. But
we also saw that 75 percent of the homes that were impacted were under
$300,000. So we used this specific data points to kind of set and design any
maximum grant award.
MR. KANEALI`I- KLEINFELDER: Thank you, Mr. Le. You know,just as a
follow-up to our lapsing in question, how many funds—how much funds do you
think are going to lapse?
MR. LE: In general or to any specific programs?
MR. KANEALI`I- KLEINFELDER: In general, as far as total appropriations and
what we think is going to lapse here.
MS. SAKO: I think the main one is at Federal Highways account, where it
didn't—the program itself didn't get carried out the way it was originally
intended. But I think the rest are going to carry out through to the end, and should
be spent.
MR. KANEALI`I- KLEINFELDER: Okay. Now, moving on to a little more
current. You know, the community wasI know there is some reach out to the
community. By the way, where is the funding coming from for these activate
Puna events?
MR. LE: So where we have had expenditures, like our June 9h Revitalize Puna
event in Leilani Estates
MR. KANEALI`I- KLEINFELDER: Sorry, yeah the revitalize events, so I
apologize.
MR. LE: Some those costs came out of our team's Operating Budget. And so
again, a lot of the supplies and equipment that folks who experienced during the
event, we collected from across our County family, and also Leilani Estates had
equipment on place that we could also use: chairs, tables, carts. And so the real
expense there was just in printing, and then also meal vouchers that we provided
for participants. So really a lot of the time was in staff. The cost was in staff time
and some of the volunteer contributions from members in the community.
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FC-22 November 3,2021
MR. KANEALI`I- KLEINFELDER: Okay. That was a very good event. I
appreciate your department putting that together. Thank you.
MS. KIMBALL: Matt, can you summarize like the next 30 seconds, otherwise I
want to move on to some of our colleagues.
MR. KANEALI`I- KLEINFELDER: Sure. So community concerns were
brought up regarding projects that are outside of the district or the area and I
wanted to address that, as far as I think there was a golf course expenditure that
was slated for $500,000, that was then dropped to $190,000. But I just wanted
you to speak to your thoughts on recovery projects that are slated, and building
outside of what we called the inundation area.
MR. LE: So I can address that question by saying that in this reinvestment of this
federal assistance and state assistance that County received as part of this
recovery process, we recognize that the physical impacts and the impact of
people's lives were very much in the Puna makai area for island. You know,
there's no question about that. Whether it be the Housing Assistance, or the
Buyout Program, or Rental Assistance, the significant infrastructure investment
around the FEMA assistance on restoring Highway 137 and also Pohoiki Road.
The water projects that are also under consideration, that we had I think a really
robust conversation about with members of our communities last week. It was
very much centered on Puna makai area.
For the relatively small, and I say relatively small, because for the Parks and
Recreation grant that we're expecting from FEMA, we identified damages very
much above the $4.9 million that FEMA awarded us, with the inundation of a
significant portion of Isaac Hale Beach Park and also the complete inundation of
the Ahalanui Beach Park. The County and the department is really invested and
working with community to re-envision what Isaac Hale Beach Park would be,
post eruption, and also where investments should go. There's also significant
equipment investment that is to support of a lot Parks facilities, for maintenance
in the lower Puna area. And so we're kind of grappling with these priorities and
wanting to have kind of open engagement and dialogue with communities about
where these investments could go.
ACTING CHR. KIMBALL: Thank you, Mr. Le. Mr. Kaneali`i-Kleinfelder, I'll
come back to you, if you have more questions.
MR. KANEALI`I- KLEINFELDER: I would askChair, I don't know if my
five minutes was up.
ACTING CHR. KIMBALL: Yes, the buzzer rang.
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MR. KANEALI`I- KLEINFELDER: But my specific question was to the Golf
Course funding, which was a huge concern of the community, and I'd like to hear
that addressed.
ACTING CHR. KIMBALL: Okay, I'll allow that question then we'll move on.
Thank you.
MR. KANEALI`I- KLEINFELDER: Thank you, Chair.
MR. LE: Director Messina in the Parks department could more specifically
address that question; however, we work really closely with them. So of the, you
know,just under $2 million that could be reinvested in equipment, there is just
about$189,000 towards specialized lawn mower equipment, essentially, that
could service the golf course. You know, that is the piece of it. There is a
number of users from Puna who utilize the golf course. This part of equipment
needs that also, I think the County had to take a hard look at. You know, this is
why we're having this dialogue, right? To kind of be clear on where the priorities
are and what the considerations need to be.
ACTING CHR. KIMBALL: Thank you, Mr. Le.
MR. KANEALI`I- KLEINFELDER: Okay. Thank you for that explanation.
Chair, I yield for now.
ACTING CHR. KIMBALL: Thank you. Council Member Kierkiewicz.
MS. KIERKIEWICZ: Mahalo nui, Chair. Mahalo, Director Sako, Douglas, for
being here. It's been quite a journey representing the inundated area and being on
it from day one. I really appreciate your having an open-door policy with me and
embracing my office as a partner in all of this work, owning the good stuff and
the junk stuff, because there's a mix of that, but there's so much more good to
celebrate.
And because I keep tabs on everything, I noticed that there are a few line items
missing, and correct if I'm wrong, but the RPIC (Rural Placemaking Innovation
Challenge) money, is that going to be added here once the monies are actually
received from USDA (United States Department of Agriculture)?
MR. LE: Yes, that grant from USDA, which we worked through Council for an
appropriation resolution, we would be adding—we still don't have grant
agreement signed, and so we're working on paperwork right now with the Federal
Agency.
MS. KIERKIEWICZ: But that's $225,000, if I'm correct?
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MR. LE: Yeah, correct.
MS. KIERKIEWICZ: Yes. And then maybe you mentioned it, I don't see it here,
money from the EDA (Economic Development Authority), I believe there was a
matching of$250,000 in order to complete the Economic Recovery Strategy, by
ISD (Institute for Sustainable Development).
MR. LE: Yes, that is correct.
MS. KIERKIEWICZ: Okay.
MR. LE: So thank you for identifying that. And we worked closely with
Research and Development who received that$250,000 grant, and kind of led the
Economic Recovery Strategy process. From what I understand, we've closed out
that grant at this point and time to Research and Development.
MS. KIERKIEWICZ: Okay, great. I think it would be great to see it reflected on
the spreadsheet, and I know all this information is on your website. And I'm
going to do a little gentle nudge, would be great to have a visual dashboard so
folks can see in real-time how this money is being expended. Spreadsheets are
great, but I think those info-graphics are even more helpful and more digestible.
And then the Hazard Mitigation funds, are they part of one of these line items, or
because these funds could be applied island-wide, they're not necessarily listed on
this spreadsheet? I think it was $6 million.
MR. LE: So the Hazard Mitigation funds are tied to this kind of disaster
assistance, but in the way that they're administered through HI-EMA (Hawai`i
Emergency Management Agency), we do track them separately because they
aren't specific to disaster recovery from the 2018 eruption. The scope of the
Hazard Mitigation funds are pretty multi-faceted, you know, by design, in the way
that FEMA developed the program, to mitigate against different disaster risk, and
agnostic to specific disaster events.
MS. KIERKIEWICZ: Got it; which is why it's not here. But there are ways in
which Puna could benefit, and other communities benefit from that funding
stream?
MR. LE: Uh-hmm.
MS. KIERKIEWICZ: Okay. And your office is bottom-lining that in partnership
with other departments, that particular plan?
MR. LE: In the way that these Hazard Mitigation grants are being received by
any of the departments, we are part of the conversation in terms of keeping an eye
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on it, because we do have very close relationships with HI-EMA, for example,
who does administer those grants, down to kind of the StateI'm sorry, County
and State are recipients. But the grants really live at each of the departments that
are receiving those grants; for example, the recent Public Safety building
upgrades, the Phase One design that was recently approved.
MS. KIERKIEWICZ: Okay,perfect. I just want to emphasize there's been a lot,
a lot of work this particular year; a lot of movement for recovery. And when I
take a look at how much money has been spent, I really do wish a lot more money
went out the door. But when I take a step back and look at everything that's
happened with recovery, everything here has been built from scratch. Your
office, all of these programs. Bringing multi jurisdictional agencies from across
state and federal government together on a regular basis is not easy.
We had a police officer here yesterday. We honored him with the Haweo award,
and we mahalo'd him for being able to bring State partners together for executing
a warrant on seven fugitives. And so I just want to recognize the magnitude of
the work that you continue to lead and to step into courageous spaces, Douglas,
because it's a lot. And I often don't think that you thanked enough, your staff is
thanked enough, for everything that you do. And I know because I see you every
week, if not more, to execute on a lot of the projects that we are doing together,
and it allows me to be able to communicate with my constituents twice a month.
They have very long emails from me about what's happening with recovery and
where we are with things.
So, thank you for allowing me to be a partner and get this information out. And
some of it, like the golf course expenditure, absolutely not my preference. I said
it during revitalize Puna activation, I'll continue to say it again, "Not a dollar to
that facility;"not when, Director Sako, we get$52 million in Fund Balance, right?
There's just an opportunity to really invest in what the community has been
pining for, for decades.
And I know when the initial announcement of how that$4.9 million was going to
be spent by Parks and Recreation, not as much was going to Pohoiki. I think it
was less than $1 million. And literally overnight, moving conversations,
negotiations with Mayor, by Douglas, myself, Director Kern, we were able to get
almost$3 million spent directly into how we could potentially reimagine the
Pohoiki area.
So, I'm confident that maybe we can do more. I really do think so. But it's
incremental, and it's only going to be happening if we continue to get this
information out to community,just as we have been with the June activation, with
the virtual activation that happened on October 12�'.
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And I welcome additional opportunities to host meetings with your office,just
like we did with Water Supply, but to also host them with Parks and Recreation so
that community has a chance to kind of dive into the details with the department,
and weigh in before final decisions are made on those expenditures.
Final question on that one. Because there is a May 2022 deadline to let FEMA
know how we plan to spend money for alternative projects, when are we hoping
to wrap up those recommendations? Because I think once we narrow it down our
list, we can start to do the hard work of explaining what is entailed in order to
make that work happen.
MR. LE: So the May 2022 deadline is an internal one that we, and the State,
and FEMA have in terms of finalizing the scopes that will be funded through the
grant agreements that have been made available to the County. So that is the, you
know, $82 million for roads, the $40 million for Water, $4.9 million for Parks.
Twenty-five percent of each of those figures is local-match requirements the
County provides.
You know, we really want to spend the next couple of months clarifying what
isof the projects that have been lifted up and identified as fundable and eligible,
you know, where the priorities fall, from Water to kind of Parks. I think it's very
clear what the roads priorities are at this point. So I'm happy to keep on working
and move those forward, to restore (Highway) 137 and Pohoiki Road.
And so it's really, kind of November, into December we want to really clarify,
because we want to do our due diligence with members of our communities that
really could benefit from these reinvestments, not only in their neighborhoods but
in terms of economic development and the quality of life. But also, to give
FEMA proper time, because all that's needed is proper time to look at what we're
putting forward, ask questions, get clarity. So really, we can land that deadline of
May 2022, because that's going to be really critical to moving these projects
forward.
MS. KIERKIEWICZ: Thank you. Chair, if I just may make one final statement;
I heard the buzzer. Thank you.
Our next activation, second to say, January 11, 2022, I would love for us to be in
a position to share with community that final list of projects for the federal
dollars, that way departments have enough time to do all of the necessary hard
work on the backend, any information folks want about recovery. Very robust
website, recovery.hawaiicounty.gov. If you had a backslash, revitalize Puna, you
can see all of the work that's happening in collaboration with community. Thank
you, Chair. I yield.
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ACTING CHR. KIMBALL: Thank you, Ms. Kierkiewicz. Council Member
Lee Loy.
MS. LEE LOY: Yes, thank you, Chair. Yeah, I first of all, when I saw this
spreadsheet, I will admit I was like, "Oh, we still got a ways to go." But
Ms. Kierkiewicz really touched upon it. It really was built from the ground up.
This is so significant, and it really does become the playbook on how we truly
recover. So thank you, Deanna; thank you, Douglas. But also, thank you,
Ms. Kierkiewicz. I know your heart and soul is in that community, but also in all
of this documentation.
I did have a question. Because ironically we just had a conversation about the
Open Space Fund, and there's a property, Pohoiki, down there. And I'm just
wondering if this is another opportunity, Ms. Kierkiewicz, to actually take some
of the assets that we actually have down in Pohoiki with that stewardship money,
and partner that money so that we can begin to leverage and spend in other areas?
I'm just offering that as a suggestion, because all this money is getting reported.
I'm seeing there's a need to spend it, if not it lapses. But also, as we recover that
area, it would be integral, I think, to also identify some assets in that community
that's already available and has possible sources of funding. Deanna, I see you
looking right now. Is that a possibility?
(Note: At this time, Finance Director Deanna Sako came forward to
address the members of the Committee.)
MS. SAKO: Yeah, I just want to confirm which parcel it is. But we'll look into it
and let you guys know.
MS. LEE LOY: The first one on the top of your list, it's right in the bay.
MS. SAKO: Yeah, that's part I was trying to picture, is where it was. Right on
the map of the (inaudible).
MS. LEE LOY: Yeah. So down at Pohoiki boat ramp, there's the red house, and
then it's actually right adjacent to that. As I mentioned, that was a client of mine.
It was really interesting because as we were moving it through its entitlement
processes, the Department of Land and Natural Resources had approached us,
asking if it was possible to expand that for the boat ramp, because they wanted it
off their shoulders a little bit. But I pointed them to the Open Space Fund and the
guardrails for that, and so it was never intended to be an expansion of the boat
ramp.
But I'm just looking at it from a perspective of, there's a source of funding
through the stewardship grant that we could actually utilize to help revitalize and
lift up that community. But thank you again, Douglas. Go ahead.
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MR. LE: No, I appreciate you raising that opportunity. You know, our team has
come together to accomplish a mission, and once the mission is done, we know
that there still will be needs to kind steward the investments, maintain the
investments, that are made possible as part as recovery process. And so we do try
to bring that lens in terms of those opportunities to make those connections.
I wish we had more tools in out toolbox right now, but this is a good example
of what it could look like. And I think aligned with the partnership that we have
to establish and continue with the State you know, as we were thinking about re-
envisioning the Isaac Hale Beach Park and the Pohoiki area, to make sure that
DLNR (Department of Land and Natural Resources), who is responsible for the
boat ramp, and had similar kinds of sources to re-establish boating access. That
we are working in concert, as well.
MS. LEE LOY: Thank you, Douglas. Thank you, Deanna. But again,
Ms. Kierkiewicz, really, a lot of your blood, sweat, and tears is in all of these
numbers, so congratulations for really taking care of your community. Chair, I
yield.
ACTING CHR. KIMBALL: Thank you, Council Member Lee Loy. Council
Member Richards.
MR. RICHARDS: Yeah,just a follow-up. I remember when this all was
happening, back in 2018, and part of the problem was nowhere in the nation have
dealt with a lava recovery like this, and so it would appear that you guys are
writing the federal handbook on how to deal with lava recovery coming forward.
And big kudos to you, Douglas, for doing what you're doing. Again, Deanna
because how we go through this, if you recall, and I think it was last Council,
when we went to go back to start building roads, the lava was still 800 degrees,
and the blacktop would melt. So all that had to shift. But then I was thinking
back, when this all came forward, and the time we spent down at the Legislature
trying to seek the funding. Ashley, I was with you when we went through—and
Sue. So, kudos to that. I mean this is, to me, the manual on how to try and get
this lava recovery done because it's very different than anything else.
So I appreciate all the efforts and work that has gone into this and what has been
done coming forward. Ashley, thank you so much because the community is very
lucky to have this team in place, and all the efforts that you women did to get the
funding coming forward. Excellent, and I'm very curious to see this play out.
I am concerned about lapsing funds, but that being said, I know pushing hard
nothing moves quickly in any of this stuff, and I'm finding that in the fire
recovery. So anyway, thank you, Chair. I yield.
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ACTING CHR. KIMBALL: Thank you, Council Member Richards. Anyone
else? Council Member Kaneali`i-Kleinfelder, you have any more comments or
questions?
MR. KANEALI`I- KLEINFELDER: Chair, I do have one follow-up for Mr. Le.
ACTING CHR. KIMBALL: Go ahead.
MR. KANEALI`I- KLEINFELDER: Mr. Le, where do we stand on Kikala
Keokea?
MR. LE: So for Kikala Keokea, I know we've been talking about the four-acre
park site that is in that subdivision, and how, you know, back when the
subdivision was created, there was an environmental assessment from what I
understand, but the park uses, the open space uses, was really, not only did it
predate our current kind of rules and regulations related to environmental review,
but it did not have the depth that we need to be able to move forward with it.
You know, one part of the ongoing work with Parks and Recreation and FEMA is
to understand, you know, every project that we bring up we want to make sure it's
eligible, and actually, that these funds that have been identified can be used for it
even as we work through priorities. You know, what I currently am hearing is
that there is a question about whether an environmental assessment, which is
necessary to move forward for any park uses at Kikala Keokea, on that site, may
be eligible for FEMA funds. And the clincher is really a question around the
position that FEMA takes is, you know, if FEMA funds are not being used to
implement the full project, other challenges around funding, the prework that's
necessary, like an environmental assessment.
So that is kind of something we're working through in terms of what we
understood and what we've come to understand, which is part of kind of the tough
part here.
MR. KANEALI`I- KLEINFELDER: Okay, that's good to know you're
continuing to work on it. The community was excited about that, and being that
it's within that inundation area, I think it would be very beneficial to the
community as well as being serviced by County water, adding facilities, and being
designated as a park already. And with what we've lost in Puna, I think it makes
sense.
So I appreciate the continued perseverance in looking into that project. I think it
will be very beneficial to the community. I appreciate what you're doing, Mr. Le,
thank you. And, Ms. Sako, thank you for taking the time to put this together as
well with Mr. Le. And I appreciate the conversation today. Thank you, Chair.
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ACTING CHR. KIMBALL: Thank you, Mr. Kaneali`i-Kleinfelder. Anyone
else? All right, thank you. Thank you, Mr. Le and Director Sako, for being here
today and responding to everybody's questions. And thank you to both our Puna
Council Members for all of your efforts in revitalizing your community.
At this time, I will take a vote on closing file on Communication 471, all of those
in favor?
Vote on Comm. 471: The motion to close file on Comm. 471was carried by
Filed the following voice vote:
Ayes: Committee Members David, Inaba,
Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy,
Richards, Villegas, and Acting Chair Kimball—8.
Noes: None.
Absent: Committee Member Chung— 1.
Excused: None.
ACTING CHR. KIMBALL: What I'm going to do at this time is recess us
until after the Council meeting. We're obligated to start the Council meeting at
1:00 p.m. I want to give everybody a chance to have lunch. So we'll take up the
last item, Bill 81, after we've finished our Council meeting. We're recessed.
Thank you.
Recess: At 12:15 p.m., the Chair called for a recess.
Reconvene: The meeting reconvened at 3:10 p.m.
ACTING CHR. KIMBALL: We are now going to reconvene the Finance
Committee. Mr. Clerk, you want to go ahead and read in our last item of the day?
ORDER OF The Chair directed the Committee to proceed to the next order of business,
RESOLUTIONS: Order of Resolutions.
(Note: Items in this category were taken up previously, out of order.)
BILLS FOR The Chair directed the Committee to proceed to the next order of business,
ORDINANCES: Bills for Ordinances.
(Note: Items in this category were taken up previously, out of order.)
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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
Postponed: 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).
(Note: There is a motion by Ms. Kimball, seconded by Ms. Villegas, to
recommend passage of Bill 81 on first reading.)
(Note: Comm. 449.8, from Council Member Heather Kimball and Comm. 449.9,
from Council Member Matt Kaneali`i-Kleinfelder, both dated October 28, 2021,
transmitting proposed amendments to Bill 81, were circulated.)
ACTING CHR. KIMBALL: Thank you, Mr. Clerk. So we have a motion on the
floor. Council Member Richards.
MR. RICHARDS: Thank you, Chair. We have a motion on the floor, and I
would like to move to adopt an amendment—and I'm looking for the number,
forgive me449.8. I move to adopt that.
Motion to Amend: Mr. Richards moved to amend Bill 81 with the contents
of Communication 449.8. Seconded by Mr. Inaba.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Go ahead.
MR. RICHARDS: Yeah, thank you. A lot of this is housekeeping. And we have
Deanna here in chambers, so I think it would be best if you would come up and
explain that.
(Note: At this time, Finance Director Deanna Sako came forward to
address the members of the Committee.)
MS. SAKO: I think there was some concern last time, and we had kind of
brought it up but we weren't sure how to fix it quite yet, about remitting the
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payment to the Director with the periodic return, because the return is actually
going to be held by the State. And so but we still needed a mechanism for
people to pay. And the more meetings we have between the State and everyone,
we realize that some pay multiple times and different periods. So the voucher
system will replace the return, but the return is still going to be filed with the
State.
And then I think the other one was Corporation Counsel wanted to ensure with the
appropriate State of Hawaii Court,just in case anything is ever renumbered, that
we just didn't want to be so specific, has to be located within the Third Circuit.
You know,just to—State of Hawaii Court they felt was sufficient.
MR. RICHARDS: Thank you, Deanna. Again, articulating some of the
housekeeping to make sure that we keep the flow of any intent of the bill going
forward. So with that, Chair.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Any other
discussion on the amendment on the floor? Seeing none, we'll go ahead. All
those in favor of amending Bill 81 with these amendments, please say "aye."
Vote on Motion The motion to amend Bill 81 with the contents of
to Amend: Comm. 449.8 was carried by the following voice vote:
(Approved)
Ayes: Committee Members Chung, David, Inaba,
Kaneali`i-Kleinfelder, Kierkiewicz, Richards,
Villegas, and Acting Chair Kimball –8.
Noes: None.
Absent: Committee Member Lee Loy – 1.
Excused: None.
ACTING CHR. KIMBALL: Mr. Clerk, do we need to suspend the rules if want
to continue discussion on Bill 81?
MR. BROWN: Yeah, that would be safer.
ACTING CHR. KIMBALL: Thank you, Mr. Clerk. Council Member Richards.
MR. RICHARDS: Yeah, move to suspend the rules. I believe it's Rule 5 (sic)to
continue our conversation.
MS. DAVID: Second.
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Vote on Motion to Mr. Richards moved to suspend Council Rule 24 to waive
to Suspend the holdover for the substantive amended to Bill 81.
(Approved) Seconded by Mr. Inaba and carried by the following
voice vote:
Ayes: Committee Members Chung, David, Inaba,
Kaneali`i-Kleinfelder, Kierkiewicz, Richards,
Villegas, and Acting Chair Kimball —8.
Noes: None.
Absent: Committee Member Lee Loy — 1.
Excused: None.
ACTING CHR. KIMBALL: Okay, we're back to the main motion. Any
discussion?
MR. KANEALI`I- KLEINFELDER: Chair, if I could?
ACTING CHR. KIMBALL: Yes, Council Member Kaneali`i-Kleinfelder.
MR. KANEALI`I- KLEINFELDER: Thank you, Chair. I would like to make a
motion to amend the contents of Bill 81, as amended, with the contents of
Communication 449.9.
Motion to Amend: Mr. Kaneali`i-Kleinfelder moved to amend Bill 81,
as amended to Draft 2, with the contents of Comm. 449.9.
Seconded by Mr. Richards.
ACTING CHR. KIMBALL: Go ahead, Mr. Kaneali`i-Kleinfelder.
MR. KANEALI`I- KLEINFELDER: Thank you. I submitted a communication
everyone; it's a slight amendment to the bill. My gripe is that the people of
Hawaii County, specifically the people of the State or for that matter the people
of Hawaii County, already pay for the infrastructure, for roads, for parks, and I
feel that with the present situation and the removal of the TAT (Transient
Accommodation Tax) from our County coffers directed to the State, the
implementation of the County TAT, I think residents should get a break.
And so I am putting this forward. I know there was some concerns from
Corporation Counsel regarding tax discrimination, but I feel like it's warranted
that we at least discuss it, and this amendment allows for discussion. So, I'd love
to hear from Corporation Counsel on their thoughts. I did my research. I'd like to
hear from Corporation Counsel.
ACTING CHR. KIMBALL: Thank you, Council Member. Corporation Counsel
is coming to the table.
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(Note: At this time, Deputy Corporation Counsel J Yoshimoto came
forward to address the members of the Committee.)
MR. YOSHIMOTO: Good afternoon, Madam Chair and members of the Council,
and Council Member Kaneali`i-Kleinfelder. Okay, where do you want me to
begin?
MR. KANEALI`I- KLEINFELDER: I figured this is one good way to discuss it,
and this is how. So here we go, here's a bill, it would exempt residents from
paying the County Transient Accommodation Tax. We're not transients. We
already pay for infrastructure on the island. And I'm looking for Corporation
Counsel's input on whether or not we can exempt residents from having to pay
County Transient Accommodation Tax.
MR. YOSHIMOTO: Okay, that's a straightforward question. Thank you for the
opportunity. You know, so the analysis begins with the enabling statute, right?
We look at Act One in terms of what the statute or HRS (Hawai`i Revised
Statutes) allows us to do. So when you look at the statute, it talks about, "The
county transient accommodation tax, if adopted, shall be imposed," and it goes on
and it says—it references "all written contracts." And so when you look at the
specific language of the statute, it's a"shall" and it's and "all." As I read the
statute, there are no provisions that allow the County to make any modifications
to that. But if there were modifications to be done, it would be done at the State
level.
So the concern is, is that if this amendment should pass, then it might be
legally deficient, challenged, and it may affect the entire statute. I recognize
that the you know, the bill talks about—I'll look to the specific section. Hold
on one second here. There's a severability clause in the bill. But I'm still
concerned that if we—or if the Council should enact legislation that's not
permitted by the HRS, then it might deem to be entirely deficient and then we
would not be able to implement this tax.
MR. KANEALI`I- KLEINFELDER: So that power to enact this tax, does that
defer from the ability for the County to impose through ordinance taxation as one
of our powers of the counties?
MR. YOSHIMOTO: It differs, because in this particular case the powers are
specified in the statute, so we look within that statute. The County has other
taxation powers; like for example real property tax, and so we have purview
within that arena. So the concern is here, is that if we're trying to amend or
somehow change the authority granted under HRS, then we would need to request
that the Legislature amend the HRS provision. Because this goes, again, across
the board. It applies to all of the properties as described in the statute.
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MR. KANEALI`I- KLEINFELDER: Okay. Then if we were to provide a lesser
tax rate to residents, we would still be taxing them. Would that be something that
the Corporation Counsel would be agreeable to?
MR. YOSHIMOTO: When you say lesser tax rate, you're talking about
something else besides TAT?
MR. KANEALI`I- KLEINFELDER: When we have CTAT (County Transient
Accommodation Tax), and we also pay TAT. But let's say a resident were to go
to a hotel, instead of paying the three percent, residents paid .25 percent. We
haven't foregone the taxation, but we have decreased the taxation.
MR. YOSHIMOTO: So then your question, as I understand it, would be specific
to residents, is that correct?
MR. KANEALI`I- KLEINFELDER: This whole bill is specific to residents.
MR. YOSHIMOTO: Right, okay. And that was the question—my understanding
is that was the concern raised by Ms. Strance in terms of taxation, in terms of
equally applying the tax. So, that might be an issue. I haven't seenI guess the
best way to answer the question would be, we would have to look at the proposal.
I hear what you're saying.
And I would have to consult with Ms. Strance, because I'm not aware of
specifically what she mentioned the last time. But my thoughts are that's
something that would still have to be evaluated. But as it is now, in looking at
your proposal here, we do have concerns about this particular amendment.
MR. KANEALI`I- KLEINFELDER: Okay. I'm going to yield. I'd like to
hear from my fellow Council Members on their thoughts. And I may do some
follow-up questions for you, J. Thank you.
MR. YOSHIMOTO: And if I may, Madam Chair?
ACTING CHR. KIMBALL: Yes, please.
MR. YOSHIMOTO: You know, there are exemptions contained in Section
HRS 237D-3, and so those are exemptions that are specifically provided for—in
the HRS. So that's somewhere, you know, if there was a request to have the
Legislature, and our Governor of course, approve those kind of changes.
You know, the concern that I hear is a real one; it makes sense. I mean I don't
disagree with the policy. It's just the question of legally, you know, whether we
have the authority to do that. And based on what I can see, I don't believe that we
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have the authority to change something which has already been decided upon by
the State Legislature.
ACTING CHR. KIMBALL: Thank you for that. I'll recognize Council Member
Richards to speak on the amendment.
MR. RICHARDS: Thank you, Chair. In trying to follow the conversation, first
of all, I support what Mr. Kaneali`i-Kleinfelder is trying to get done here because
I don't disagree with the intent of that. I'm just trying to get the whole
jurisdictional deal, and that's the question I have in my mind. I'm still, I'm trying
to get my arms around that one.
Because I like the idea of taking care of the community. And the whole intent of
the TAT was a tourism impact fee to take care of the counties. That was why it
was established back in '86. Now it's evolved, and that's a conversation for later.
I like the concept of what he's trying to put forth, but do we jurisdictionally I
want to make sure we're clear on that, and so that's where my concern comes
from.
MR. YOSHIMOTO: So, we can take a look at this further. I haven't seen this
today was the first time I saw this amendment.
MR. RICHARDS: Yeah.
MR. YOSHIMOTO: And you can research it further because there's still time.
This is still in Committee as I understand it, right?
MR. RICHARDS: Yeah.
MR. YOSHIMOTO: So there is still time. I understand the Council needs to pass
this by the end of the year. Yeah, we would be happy to research the issue
further, and if we find something that is helpful, of course we could share it with
the Council.
MR. RICHARDS: Well again,just conceptually I like it, but I understand our
abilities are authorized by the State, and I don't know if we run into an issue by
that. So anyway, that's a question for you, J, not for us to answer. Okay, Chair, I
yield.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Any further
discussion? Council Member Lee Loy.
MS. LEE LOY: Thank you, Chair. J, I was actually more interested in the
definition. You know, I was trained a little bit around definitions. You create a
definition, and then you use it throughout the entire section of law, and so I'm
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more concerned about how this amendment is creating a definition in the
exemption piece. It's not available to us in HRS, and so that's the area of
deficiency for me.
MR. YOSHIMOTO: And that's an excellent point, because when we looked to
the definition section of Section 237, right, there is no definition for resident.
And again, that goes back to the beginning of the analysis, is whether the enabling
statute, the authority, allows us to do what's being asked. And again, I think it's a
great idea, we just got figure out how we can do it. But as I see it now, I don't
think it's possible.
MS. LEE LOY: Thank you, Chair.
(Note: At this time, County Clerk Jon Henricks came forward to address
the members of the Committee.)
MR. HENRICKS: Chair Kimball or the Committee,just to speak to that, the
procedure of including a definition was suggested to Mr. Kaneali`i-Kleinfelder by
our office,just to clarify that. It could have been written in away where it just
could have been like a person who is da, da, da, shall be exempt. But, you know,
upon actually my suggestion, I thought it read easier to create a definition to
separate who is eligible and then what are they eligible for. Just easier to read and
digest as opposed to trying to put everything together. So I just want to take
ownership of that concept. Thank you.
MS. LEE LOY: Yeah, thank you. Thank you, Jon, for that explanation. You
know, I'm sorry. I'm going to ask one question off-field, because I've got to go
in about 10 minutes. And I just wanted toJ, you mentioned that we had to take
this by January; we had to pass this TAT by January. I read the Act, and I'm still
challenged with that understanding. And is it more of a preference? Because if
we take it by January, we will have a whole annual year to collect it rather than
it's actually—we're actually bound to take it under the Act. I'm just asking
because there's a lot out there that people are wanting to clarify, and I think this is
the one-shot to get it right. And I'm not saying that I don't support any of this, I
just want to get it right and I don't want to rush.
MR. YOSHIMOTO: My understanding is the point of emphasis is the first part
you mentioned, right, that we wanted to be able to impose the tax to help us with
our budget. But Ms. Sako can better answer that question, but that's my
understanding.
MS. LEE LOY: Sure.
MR. YOSHIMOTO: But that's my
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FC-22 November 3,2021
(Note: At this time, Finance Director Deanna Sako came forward to
address the members of the Committee.)
MS. LEE LOY: Thanks, Deanna. And math-wise, I know it's easy. It's helpful
if we can project funds over more months.
MS. SAKO: I mean, in reality we didn't budget TAT in the current budget. We
weren't expecting it, you know, based on what the Governor had said, not
realizing what was going to happen when we were passing the budget. So right
now the budget is not expecting any TAT revenue. So any revenue that comes in,
whether it's six months, four months, three months, or two months, as long as the
Act doesn't prohibit it or have a deadline, that's just money that we would have to
help carry out our programs.
MS. LEE LOY: Okay, great. Thank you. Thank you, Chair. Regarding this
amendment, I'm not going to be supporting it,just because some of the
deficiencies that Corporation Counsel mentioned. I yield. And I might have to
skate out real quick. Thanks.
ACTING CHR. KIMBALL: Thank you, Council Member Lee Loy. Council
Member Chung.
MR. CHUNG: Yeah, like Mr. Richards, who can argue with trying to help the
residents of our island, right? We're trying to relieve them of additional fees,
especially when they're vacationing on their own island. Unfortunately, what
Mr. Yoshimoto said is, in my opinion, 100 percent correct.
You know, the taxing authority of the counties—well, taxing authority in the State
is reserved to the State of Hawaii unless specifically conferred upon the counties.
Now I think it's a constitutional provision that gives us the real property taxing
authority, so that's clear. But any other taxing authority has to be given to us by
the Legislature or by constitutional amendment. So whenever you have these
types of things like the GET or like this, the Transient Accommodation Tax, you
have to look very carefully at the enabling legislation, like Mr. Yoshimoto said.
And so the enabling legislation is this, the Act One of this year.
And when you look at the language here, it's not a matter of asking, "Where does
it say we can't do it?" No, you've got to look at this way, "Where does it say in
here that we can do it,"because they are the ones who are giving us the taxing
power. So it has to be really, really specific.
Now if you want a two-tier type of taxing rate, it has to be specified very clearly
in the enabling legislation, and it's not, it only relates to a rate. And the problem
is, you know, if we do try to—and you know, of course we're getting off the
topic, but if we just stick with the amendment itself, you know, this is going to
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wreak havoc. Even if we were able to do it, it's going to wreak havoc because
this is all on the gross rental proceeds, and so the operator would not be able to
peel these things away. It's going to be like crazy, you know, that's even if we
could do it. But my argument is as much as we'd like to see something like this
happen, it's just not allowed because they did not provide for it in the enabling
legislation.
That's it. I cannot support this. But any attempt to amend the enabling legislation
to allow for an exemption for residents, hey, I'm all for, yeah. I mean, who can
argue with that? Thank you.
ACTING CHR. KIMBALL: Thank you, Council Member Chung. Any further
discussion? Council Member Kaneali`i-Kleinfelder, any further discussion?
MR. KANEALI`I- KLEINFELDER: No. Thank you, Chair. Yeah, I just—you
know, I had the idea. It made sense. I questioned why we're double taxed as
residents. We pay for infrastructure on the backend via real property taxes, and
every other tax for that matter, and now we've been given the ability to tax to
increase our tax burden on tourists and residents alike to make up the difference
even though it won't make up the difference for the time being at least. So I
figure for discussion sake, bring it forward.
I do appreciate what's comment today. I would like to hear—so I've heard now
from Corporation Counsel. Well, you know what, I'd like to see it in writing.
Shoot it to me in writing that we cannot do it. I've heard Mr. Chung's comments.
For the most part, I agree. I'm going to be reaching out to our State Legislators to
help us possibly bend the rules a little bit, because it just makes sense. I'd like to
see in writing, you know, why we cannot,just to help me understand it better.
So again, thanks for the conversation today. I appreciate it. Thank you, J, and
Ms. Strance, if you're watching. But again, I'd like to see it in writing from
Corporation Counsels so I can better understand it for my own self. Thank you
very much.
ACTING CHR. KIMBALL: Thank you, Mr. Kaneali`i-Kleinfelder. I see
Mr. Chung has his light on.
MR. CHUNG: Yeah, and in response to Mr. Kaneali`i-KI einfelder's question or
rhetorical question perhaps, I'm going to be as blunt as I can. The Legislature
doesn't increase taxes. They make us increase the taxes, right? When is the last
time they increased taxes? GET, they could have done a blanket General Excise
Tax increase statewide. No, they make us do it. Something like this, they take
away our TAT and they make us they give us the ability to increase, right? So
that we can make up what we're supposed to be getting anyway.
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I mean, so that's the situation. We are the municipal corporation of the State of
Hawaii, so bad stuff flows downwards. That's the nature of the beast, right?
Thank you.
ACTING CHR. KIMBALL: Thank you, Council Member Chung. Council
Member Kierkiewicz.
MS. KIERKIEWICZ: Thank you, Chair. I appreciate the intent of this, but if
Corporation Counsel has concerns, I have concerns, as well.
I think at the last Committee meeting I had asked if Council Member Kimball or
other members of this body had talked to the hotel industry to see if in lieu of us
putting forward legislation, if there is a way in which we could offer some type of
kama`aina discount to offset this minimal tax increase. So just wondering if
anybody has had those follow-up conversations, because if there's an agreement
by industry to offer that, than there's no need for this. Thank you, Chair.
ACTING CHR. KIMBALL: Thank you, Council Member Kierkiewicz. Okay,
I'll take this opportunity to just make a brief comment to that note. And I think
you illustrated an important point, which is—and Council Member Chung
referred to this as well, is who this this tax is imposed upon. It's actually imposed
upon the operator.
So while I appreciate the intent, of saying give providing relief to folks in our
community that go and stay at a hotel, that's actually now who we are imposing
the tax on. We're imposing it on the operator. So a way to actually mitigate
passing on of that TAT to the folks that stay in the hotel is to work with the resort
industry on that.
I have not had that particular conversation since our last hearing with the resort
industry. I assume Stephanie has long left us but,you know, we'll continue to
have conversations around this. Between now and the next hearing, I'll reach out
and see what kind of feedback they have.
Yeah, I think it's really important that we're very clear to whom we were taxing.
It is the operators and not the people that go in and stay at the resort and hotels.
With that, we'll go ahead and take a vote on the amendment on the floor.
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Vote on Motion The motion to amend Bill 81 with the contents of
to Amend: Comm. 449.9, failed by the following roll call vote:
Failed
Ayes: Committee Member Kaneali`i-Kleinfelder– 1.
Noes: Committee Members Chung, David, Inaba,
Kierkiewicz, Lee Loy, Richards, Villegas, and
Acting Chair Kimball–8.
Absent: None.
Excused: None.
ACTING CHR. KIMBALL: Thank you. Okay, we'll proceed with the
discussion on the bill as amended, with the previous amendment but not this
amendment. Mr. Chung.
MR. CHUNG: Well, yeah. First of all, I thank you for bringing this forward.
I'm going to be supporting it. But I have a question for Deanna, and maybe even
Corporation Counsel. You can stay there though, J.
(Note: At this time, Finance Director Deanna Sako came forward to
address the members of the Committee.)
MR. CHUNG: You know, the Governor suspended, right, the TAT formula?
That statutory formula last year, is that correct? How did that work?
MS. SAKO: So what kind of happened was that, I think it just in general, they
have, based on the priorities and the TAT law, they were pretty confident they
were not to get to the County portion. So they kind of gave us a heads up, in
Fiscal Year 2020 we wouldn't get our full amount, and then last year they were
doubtful, in FY 2021, that they were rich enough to pay us TAT.
MR. CHUNG: But they must have done some kind of affirmative action to
suspend the law, right? No?
MS. SAKO: That may have been in the Governor's Emergency Proclamation.
MR. CHUNG: Okay. And were those guys—was the State paying us what we're
supposed to be paid all these years, the statutory amounts?
MS. SAKO: So it went from that percentages to a fixed amount of$103 million
for the counties.
MR. CHUNG: Right.
MS. SAKO: And they were paying it.
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MR. CHUNG: Okay.
MS. SAKO: Up to FY 2020. And then we have received a reduced amount that
year.
MR. CHUNG: And is it your understanding that our three percent now is going
to be in lieu of what we would have gotten before, or is it going to supplement
what we're entitled to?
MS. SAKO: My understanding is that we will no longer get our $19.158 million
from the State. That the three percent will replace that.
MR. CHUNG: And that's my understanding, too. Where is that in this enabling
legislation?
MS. SAKO: So I believe they took out the part that says $103 million will go to
the counties. But I do not have that Act with me right now, sorry.
MR. CHUNG: You know, my eyes are really bad. But I kind of look this thing
over, and over, and over today, and I couldn't find it.
MS. SAKO: Okay.
MR. CHUNG: So I'm just wondering if it's still in there, and that's where maybe
we need Corporation Counsel's assistance at some point, right? Because maybe
we can
MS. SAKO: Yeah, if we can get both, hey, we'll go for it man.
MR. CHUNG: We can get them both. Sue the State, right? So I just wanted to
bring that up.
MS. SAKO: Okay.
MR. CHUNG: Because I couldn't find it. I was looking all over for it, but
I couldn't find it. You would think that they would repeal that whole
Section (13)(4) of before 237D-6.5. You know, I just didn't see it. So,just food
for thought.
MS. SAKO: Okay.
MR. CHUNG: Thank you.
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ACTING CHR. KIMBALL: Thank you, Council Member Chung. Any other
discussion? Council Member Inaba.
MR. INABA: Real quick, sorry. Director Sako, you said we prepared didn't
include the TAT that we're the funds that we're talking about right now.
MS. SAKO: Yes. Our understanding was that we probably would not get TAT
from the State, so we did not use that as a revenue source. But what we left out
was our OPEB contribution, because they also said we didn't have to pay the full
amount in the current fiscal year. So that's how were able to keep the budget
balanced.
MR. INABA: Seventeen million dollars-worth?
MS. SAKO: Roughly, yeah.
MR. INABA: Got it, okay. And after this one year we didn't have to pay it, we
would then be in the hole again without this TAT?
MS. SAKO: Yes. At some point, we will need a revenue source to make up for
it, yes.
MR. INABA: Okay. Thank you. Just wanted to clarify. Mahalo, Chair.
ACTING CHR. KIMBALL: Thank you, Council Member Inaba. Any further
discussion? All right, seeing none. We will move forward with the vote on the
original motion, which was to move this to Council with a favorable
recommendation. All of those in favor?
Vote on Bill 81 The motion to recommend passage of Bill 81, as amended,
Draft 2): on first reading was carried by the following voice vote:
(Approved)
Ayes: Committee Members Chung, David, Inaba,
Kaneali`i-Kleinfelder, Kierkiewicz, Richards,
Villegas, and Acting Chair Kimball —8.
Noes: None.
Absent: Committee Member Lee Loy — 1.
Excused: None.
ACTING CHR. KIMBALL: With that, I will take a motion to adjourn?
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