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HomeMy WebLinkAboutMIN FC 2022/09/06 2020-2022 Committee on Finance 42nd Session Hawaii County Building 25 Aupuni Street Hilo, Hawaii September 6, 2022 CALL TO The regular meeting of the Committee on Finance was called to order at ORDER: 3:27 p.m., in the Council Chambers, Hilo, by Mr. Matt Kaneali`i- Kleinfelder, Chair. ROLL CALL: Present: Mr. Matt Kaneali`i- Kleinfelder, Chair Ms. Heather L. Kimball, Vice Chair Mr. Aaron S. Y. Chung, Member Ms. Ashley L. Kierkiewicz, Member Ms. Susan L. K. Lee Loy, Member Mr. Herbert M. "Tim" Richards III, Member (came in later) Ms. Rebecca Villegas, Member Absent& Excused: Ms. Maile Medeiros David, Member Mr. Holeka Goro Inaba, 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: Patrick L. Kahawaiolaa: Res. 521-22 (Comm. 958), comment. Garth Yamanaka: Bill 156 (Comm. 739), support. CHR KANEALI`I-KLEINFELDER: Mr. Clerk, with that,public testimony is closed. But let's get on to our first order of business, sir. COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. FC-42 September 6,2022 Comm. 30.35: REPORT OF FUND TRANSFERS AUTHORIZED: JUNE 16–30 AND JULY 16 –31, 2022 From Controller Kay Oshiro, dated August 8, 2022. Vote on Comm. 30.35: Ms. Kimball moved to close file on Comm. 30.35. Filed Seconded by Ms. Lee Loy and carried by the following voice vote: Ayes: Committee Members Chung, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder–7. Noes: None. Absent: Committee Members David and Inaba–2. Excused: None. Comm. 31.42: REPORT OF CHANGE ORDERS AUTHORIZED: JULY 16 –31, 2022 From Finance Director Deanna Sako, dated August 2, 2022, transmitting the above report pursuant to Hawaii County Code Section 2-12.3. Motion to Close File: Ms. Kimball moved to close file on Comm. 31.42. Seconded by Ms. Lee Loy. CHR KANEALI`I-KLEINFELDER: Any discussion? Ms. Kierkiewicz, go ahead. MS. KIERKIEWICZ: Thank you, Chair. Director Sako, I have a quick question. It's related to the Kuleana Health Program and the contract extension, $2 million contract, $273,000 for a contract extension. Is that related to the—is that funding coming from the federal grant that we received, or is that coming from County funds? Just curious. (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: I'm trying to make sure I'm on the right report because I am not seeing that change order. What was that amount again? MS. KIERKIEWICZ: $273,500, Kuleana Health Program, third from the bottom. MS. SAKO: Oh, sorry. MS. KIERKIEWICZ: That's okay. MS. SAKO: Yes, that should be coming from the federal grants. Page 2 FC-42 September 6,2022 MS. KIERKIEWICZ: Okay, great. Just wanted to confirm, thank you. Thank you, Chair. CHR KANEALI`I-KLEINFELDER: Any other discussion? Seeing none. The motion is on the floor, all in favor? Vote on Comm. 31.42: The motion to close file on Comm. 31.42 was carried by Filed the following voice vote: Ayes: Committee Members Chung, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members David and Inaba—2. Excused: None. CHR KANEALI`I-KLEINFELDER: Communication 31.43, please. Comm. 31.43: REPORT OF CHANGE ORDERS AUTHORIZED: AUGUST 1 — 15, 2022 From Finance Director Deanna Sako, dated August 17, 2022, transmitting the above report pursuant to Hawaii County Code Section 2-12.3. Motion to Close File: Ms. Kimball moved to close file on Comm. 31.43. Seconded by Ms. Lee Loy. CHR KANEALI`I-KLEINFELDER: Any discussion, Council Members? Mr. Richards. MR. RICHARDS: Yeah. Thanks, Chair. Deanna? (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: Good afternoon. MR. RICHARDS: Good afternoon. Thanks for being here, Deanna. I've raised this question. It looks like we have an extension. The first one, for the $100,000 for Arizona State, are we contracting this for multi-year? MS. SAKO: My understanding is not multi-year,but there probably are option years when they did the original contract. MR. RICHARDS: Okay. So can we see a copy of that and see when this thing is expiring? I've raised this question repeatedly, and so I'd like to see when this expires, so I appreciate that. Thank you, Chair. I yield. Page 3 FC-42 September 6,2022 CHR KANEALI`I-KLEINFELDER: Thank you, Mr. Richards. Ms. Kierkiewicz, go ahead. MS. KIERKIEWICZ: Thank you, Chair. Director Sako, is it possible that we all get a copy of that contract? I remember this particular resolution coming before Council, and there was a little bit of heartburn from some of the members about Arizona State being a participant and advocate for the County, and PUC (Public Utility Commission) dockets, and why we were seeking that sort of outside support when there are a lot of folks here in the islands that actually possess the knowledge and expertise as it relates to our energy system. So I think we're all curious. MS. SAKO: Not just when it's expiring, but the entire contract? MS. KIERKIEWICZ: Yes, that would be helpful. Just want to confirm that. Thank you, Chair. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Kierkiewicz. MR. RICHARDS: Thank you, Chair. CHR KANEALI`I-KLEINFELDER: Thank you, Mr. Richards. And Deanna, seeing no further discussion, PUC docket reports, what is that? MS. SAKO: When there are things like HELCO (Hawai`i Electric Light Company), or somebody has like a rate increase or other types of changes before PUC, then they would monitor and help us respond to those. CHR KANEALI`I-KLEINFELDER: Okay, thank you. Thanks for being here today. All in favor of closing file on Communication 31.43? Vote on Comm. 31.43: The motion to close file on Com. 31.43 was carried by the Filed) following voice vote: Ayes: Committee Members Chung, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members David and Inaba—2. Excused: None. Comm. 85.6: FOURTH QUARTER CLAIMS REPORT: APRIL 1 —JUNE 30, 2022 From Claims Investigator/Adjustor Clifford D. Victorine III, dated August 1, 2022, transmitting the above report pursuant to Section 2-9 of the Hawaii County Code. Page 4 FC-42 September 6,2022 Vote on Comm. 85.6: Ms. Kimball moved to close file on Comm. 85.6. Filed Seconded by Ms. Lee Loy and carried by the following voice vote: Ayes: Committee Members Chung, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members David and Inaba—2. Excused: None. CHR KANEALII-KLEINFELDER: And per the request of Mr. Chung, can we go to you wanted the bill or the resolution, Mr. Chung? MR. CHUNG: The resolution first. CHR KANEALII-KLEINFELDER: Okay. Resolution 521-22, please. Change Order As directed by the Chair and with no objection from the Council Members, the of Business: following items were taken out of order: Res. 521-22: AUTHORIZES THE OFFICE OF THE MAYOR TO ENTER INTO AN AGREEMENT WITH THE STATE OF HAWAII DEPARTMENT OF HAWAIIAN HOME LANDS PURSUANT TO HAWAII REVISED STATUTES SECTION 46-7, FOR A GRANT TO THE HAWAII COUNTY RESEARCH AND DEVELOPMENT DEPARTMENT Allows for the receipt of$500,000 by the County,which would be used to renovate the Feed Mill at the University of Hawaii at Hilo and to study the potential of new feedstock sources. Reference: Comm. 958 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Motion to Approve: Ms. Lee Loy moved to recommend adoption of Res. 521-22. Seconded by Ms. Villegas. CHR KANEALII-KLEINFELDER: Council Members, discussion? Mr. Chung. MR. CHUNG: Yeah, and thank you, Mr. Chairman, for accommodating me on this. I just have some members from the public who are here, and I don't know how long this audit report thing is going to take. And we have Pomai (Freitas), Ivar (Kaluhikaua), and of course Pat(Kahawaiolaa) here. You know, Mr. Freitas is the one who brought this matter to my attention maybe a year ago, yeah? Yeah but I don't know Pomai, you want to give a brief talk about how this thing came up? Page 5 FC-42 September 6,2022 It's really up to you. I wanted to give you that opportunity if you wanted to. Not too long, of course. (Note: At this time, Pomai Freitas, President of Hui Ho`olako for Hawaiian Initiatives, came forward to address the members of the Committee.) MR. FREITAS: So we CHR KANEALI`I-KLEINFELDER: I'm sorry, if you could state your name for the record? Go ahead. MR. FREITAS: Oh, my name is Pomai Freitas. CHR KANEALI`I-KLEINFELDER: Thank you. MR. FREITAS: President of Hui Ho`olako for Hawaiian Initiatives. It's a nonprofit 501(c)(3). We started this project actually pre-pandemic, about a year and a half before the pandemic, two years. We found a way to develop animal feed out of invasive species, gorse, which as Uncle Pat said earlier is taking up over 30 acres on Mauna Kea, of Hawaiian Home Lands. So, we developed a way to make feed. We can make feed with trade byproducts on the island, where we can get protein higher than corn. So we've been working on that for four years, and through the grace of hard work, determination, and keep pushing, we finally got some funding. So there's a feedmill that was built over in Pana`ewa on UH-Hilo property. It was built by HPU(Hawai`i Pacific University) and a bunch of donors from that project started in the late '80s, early '90s. The project finally finished in 2017 but hasn't run since. I'm in the middle ofI'm in the back-end of closing the deal for a licensing agreement for the mill so we can start this project and get one. It's all for community development. Prior to the pandemic, we had 93 farms on the island. After the pandemic, we had 24; and 24 of them are running at 50 percent capacity, because no more hotels, no more schools, and no more food for the pigs. So that's where we started, we started with the pigs. We could be able to feed pigs, cows, goats, and sheep, and then we're working on chickens at the same time. So, that's where we're at right now with things, and the direction we're going. MR. CHUNG: You know, Pomai, this is a good thing on several levels, right? But how did you guys come up with this idea? Page 6 FC-42 September 6,2022 MR. FREITAS: So I was working, luckily, over at Kawaihae, at the Millennium Carbon Plant. We were making biochar out of macadamia nut shells. So that plant actually fell through a couple of owners who fell on hard times, but I had the resources working there, of working with the universities on the mainland. So while I was there, I would send them samples; "Hey, what do you guys think of this?" Send them gorse, send them Albizzia. Send them all these different stuffs, and then they would give back the information. And after that I, went—and I ended up working with Michael DuPonte from the UH Agriculture Extension, and ever since then he and I have been working on this project together. So the use of this is for past, of course. We can grow eucalyptus, we can grow albizzia, we can do a lot of things. We've go so much resources on the island that are either getting thrown away or not used. MR. CHUNG: All right. Well, I just wanted to give you that opportunity. And thank you, Mr. Chairman, for you allowing me that leeway. MR. FREITAS: Thank you, guys, for everything too. MR. CHUNG: Yeah, congratulations. MR. FREITAS: I'm glad we finally got the County for catching on, because I've been yelling at the State for couple of years. Thank you, guys. MR. CHUNG: Okay. CHR KANEALI`I-KLEINFELDER: Thank you, Mr. Chung. Thank you, Mr. Freitas. Mr. Richards. MR. RICHARDS: Yeah, I was just going to say, "Keep yelling. Keep pushing," because this is a good thing. And Uncle Pat is right, the gorse up at Honolulu is huge, but there's also a real potential resource here by thinking outside the box like they are. And we can do a lot of agriculture if we do that thinking, if we have the mill, if we have the raw product. Just need someone to keep yelling, that's all. So thanks, Chair, CHR KANEALI`I-KLEINFELDER: Thank you, Mr. Richards. Ms. Kimball. MS. KIMBALL: Thank you, Chair. I just want to super mahalo you for engaging in this project. I don't get to brag about it very often, but I actually did my master's thesis on gorse. If you guys want some reading material, I'm happy to share it with you. But we were looking at the growth rate from that location where it is, how quickly it spreads out. That buggah, you know, they just—in 20 years that whole area was Page 7 FC-42 September 6,2022 going to just be covered, you know, every time I drive by there. I did my master's thesis in 2016, so it's been that long, watching it go, and go, and go. It's heartbreaking because that stuff sticks around forever. The seeds are super resilient. So I am just so thrilled to see somebody taking action, and I just really want to thank you for that effort. And then, Uncle Pat, to answer your question, no,you're not going to get your $1 million, sorry. So our procedure here is the resolution is one part of it, and then bill is another part of it, and they go together. So it is $500,000; if it were up to me, I would give you $1 million, no problem. So,yeah. Thank you, Chair. I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Kimball. Ms. Lee Loy, go ahead. MS. LEE LOY: Yeah, thank you. And I too just wanted to mahalo Pomai just for that tenacity. I actually sat it in on an earlier conversation back in 2016 with R&D (Research and Development) trying to get this up and going. But like Ms. Kimball, my work with gorse actually started in the late '90s, when we were master planning Hum`uula, Pi`ihonua with DHHL (Department of Hawaiian Home Lands) and identified gorse as a challenge; and to find this product now being utilized to kind of—to feed our animals is just a wonderful testament on how we identified that as a problem, but now it's actually a solution. So thank you again, Pomai, for just keeping your shoulder to the grindstone on this one. I'll look forward to advancing this to the Council. Thank you. I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Lee Loy. Ms. Villegas. MS. VILLEGAS: Just real quick. I also just want to mahalo you. This is just a returning to circular economy. It's identifying resources that are on-island even though we didn't really want them here to begin with. But what a phenomenal example of utilizing a pest that has caused problems and turning it into a resource that adds value. And wow, if we can continue to do that with other resources, I think you guys are creating a template that is replicable and priceless, and part of that returning to the wisdom of our host culture, which is that circular economy, and utilizing everything we have here to the greatest capacity. So congratulations on this funding, though. That is no small feat, so mahalo you for that. Really appreciate it. Can't wait to see how this progresses. Mahalo. CHR KANEALI`I-KLEINFELDER: All right. Thank you, Council. Thank you, Mr. Chung, for bringing this forward. Sorry, for asking to bring it up sooner. And I ditto all the comments so far. We've talked about sustainability. We see an issue that needs to be addressed, we see a secondary issue that needs to be addressed, Page 8 FC-42 September 6,2022 and you put it all into one solution. That's really the epitome of being akamai right there, so thank you. Thank you for doing that. And I've heard this kicked around, I've talked to Mike DuPonte, and I kept seeing this kind of rolling around in the background, so this to me is solidifying that move. Good job. Keep it up, and let us know if you need anything else. Okay, with that, we have a motion on the floor to forward Resolution 521-22 to Council with a favorable recommendation. Council Members, all in favor? Vote on Res. 521-22: The motion to recommend adoption of Res. 521-22 was (Approved) carried by the following voice vote: Ayes: Committee Members Chung, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members David and Inaba—2. Excused: None. CHR KANEALII-KLEINFELDER: And while we're at it, can we go to Bill 206, please? Bill 206: AMENDS ORDINANCE NO. 22-63, AS AMENDED, THE OPERATING BUDGET FOR THE COUNTY OF HAWAII FOR THE FISCAL YEAR ENDING JUNE 30, 2023 Appropriates revenues in the State Grants —Gorse Pilot Program account ($500,000); and appropriates the same to the Gorse Pilot Program account. Funds would be used to renovate the Feed Mill at the University of Hawaii at Hilo and to study the potential of new feedstock sources. Reference: Comm. 958 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Vote on Bill 206: Ms. Lee Loy moved to recommend passage of Bill 206 (Approved) on first reading. Seconded by Ms. Villegas and carried by the following voice vote: Ayes: Committee Members Chung, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members David and Inaba—2. Excused: None. Page 9 FC-42 September 6,2022 CHR KANEALI`I-KLEINFELDER: And we're going to go back to Communication 942, please. Return to Order The Chair directed the Committee to return to the order of business. of Business: Comm. 942: FOLLOW-UP AUDIT REPORT: CASH HANDLING AT COUNTY OF HAWAII MASS TRANSIT AGENCY From County Auditor Tyler J. Benner, dated August 9, 2022, transmitting a follow-up report to Audit Number 2018-01,pursuant to Hawaii County Charter Section 3-18(d)(3). Motion to Close File: Ms. Lee Loy moved to close file on Comm. 942. Seconded by Mr. Richards. CHR KANEALI`I-KLEINFELDER: We do have Mr. Benner joining us today. If you can give us a little background on the report? (Note: At this time, County Auditor Tyler J. Benner came forward to address the members of the Committee.) MR. BENNER: Good day, Council. My name is Tyler Benner. I'm with the Office of the County Auditor. We're here today to discuss the Mass Transit Agency Cash Handling Follow-up Report No. 2022-03, issued August 9, 2022. That report was a follow-up to an original report conducted in April 2018. It's very important to note that MTA (Mass Transit Agency) suspended bus fares in January 2022 by way of Bill 105, voted on and approved by this body. That bill suspended fares until December 31, 2025; as such, a number of the original recommendations were rendered no longer applicable, and our scope of work was limited to shared-ride services, curb-to-curb van services, and non-fixed bus services. The scope of this audit included a review of procedural improvements made between May 2018 and June 2022, and of shared-ride and taxi licenses from January 2022 to June 2022. The objective of the audit was to determine if Mass Transit Agency had implemented recommendations made during that initial report. The original report had 30 recommendations. At the conclusion of our report, we determined that MTA fully implemented 14 of the recommendations, partially implemented seven, and had not implemented one. Because of the change in operation, eight of the original recommendations were determined to be non-applicable. Page 10 FC-42 September 6,2022 Mike Cordova, who joins me today in chambers, was our lead auditor for this audit. The first question, especially for newer Council Members or the public, might not have been familiar with the situation is why we conducted the original 2018 audit. To be frank, MTA had a completely broken cash handling process which employees were acutely aware of. Cash and ridership were not being reconciled. Cash for multiple routes was being dumped into a single cash pile or co-mingled. Deposits were different than the amounts that were being received. Access to the cash was not being safeguarded. Dual control, segregation of duties, compensating controls, and policy and procedures all had major deficiencies or were nonexistent. In short, MTA could not verify that all the money received in route would make it to the baseyard and had no way to prevent, detect, or respond to actual or potential theft or loss, and could not ensure that all monies at the baseyard made it to the bank because of a weak control environment. I will not walk you through every recommendation status of the report. That can be found in our executive summary. But I will try to answer the question of how it looks today. First, we should note that MTA's cash handling today looks nothing like it did in 2018, and we applaud the improvements. Even prior to our current Administrator, MTA created policies and procedures as well as several safeguards. The further reduction in cash handling, led by the Administrator through the Fare Free initiatives, potentially reduces the severity of the loss, so both likelihood and severity are reduced. However, we also recognized that the program has a tentative sunset date and that MTA should be prepared to resume cash handling at full capacity when that time comes. So what's still challenging? The primary item is still challenging MTA is a difficult-to-fill vacancy in a position that's keystone to the cash handling activity process. Some compensating controls that are being viewed as internal controls, supply-chain disruptions and budget constraints. Specifically, MTA needs to fill its Administrative Service Assistant position; not all of the camera system is operational or is regularly monitored; some locations are operational with a single person; and MTA has to introduce the electronic fare boxes in phases as buses age out or are replaced. We received a management response on August 5, 2022. Management noted partial agreement and disagreement with some of what they categorized as the "findings." MTA was also asked to express general agreement or disagreement with the report. They declined to address the report in aggregate,preferring instead to focus on the individual responses, and as such, we made note that they were unable to determine if they agreed or disagreed. Page 11 FC-42 September 6,2022 We've added the results to our remediation tracker, which can be found on the Hawaii County website on our department page, and we look forward to verifying completed items once MTA has realized those improvements. We would just take the opportunity to thank MTA for the cooperation, and coordination of the Council's discussion, if you should have any. CHR KANEALI`I-KLEINFELDER: Thank you, Mr. Benner. We do have John Andoh here today. Do you want to add anything to the conversation? Sorry, Director. (Note: At this time, Mass Transit Administrator John Andoh came forward to address the members of the Committee.) MR. ANDOH: Top of the afternoon, Council. John Andoh, Mass Transit Administrator, Mass Transit Agency. We are pleased to work with the County Auditor in relation to this follow-up report. There were a few things that the agency does disagree with in the report, however,we are committed to addressing each of those items. I did note some of those disagreements and partial agreement items in our management's response to the audit. But we're very appreciative that this follow-up was conducted, and we're glad that significant improvements have been made before I arrived and while I'm also here as Administrator presently today. CHR KANEALI`I-KLEINFELDER: Okay. Thank you, gentlemen. Appreciate it. I'm going to the Council. Council, discussion if any? Mr. Richards. MR. RICHARDS: Yeah, thank you. Thank you, Auditor, and thank you, Administrator. Couple questions. I think this goes back—well, first question. You had one thing that was not implemented, what was that specifically? And I know you're not going to dig into it deeply, but wasn't implemented? MR. BENNER: Let's see here. Really, the not implemented item had to do with independent oversight and review, which is not going to be completed until that ASA (Administrative Services Assistant) is hired. MR. RICHARDS: Okay. So there's a reason for not being implemented? MR. BENNER: There is. MR. RICHARDS: Okay, so MR. BENNER: Yes. And in fact, at the time that I had started with the County that position was there, and that employee did an internal department move, and so created the vacancy while we were there. So actually they made a number of steps Page 12 FC-42 September 6,2022 forward, and then unfortunately with that vacancy being created, it took them a step or two back. MR. RICHARDS: Okay, so I just want to be clear this wasn't something that the department is not doing. It's something that we can't do it right now. So as of this day, we cannot do it? MR. BENNER: Yeah. And as we were distributing another report last week, we ran into the Mayor and the Managing Director, and they voiced the fact that they've aggressively been trying to recruit for this position. MR. RICHARDS: Okay. All right, so that answers that question. If I recall back right, I think I was just on Council when this first came up and I think it was Ms. Lee Loy, they have helped highlight this. This was a glaring blackeye for Mass Transit, and so I fully appreciate the fact the steps have been made to correct it and moving forward. So Administrator, I really appreciate the fact because this was a problem, a big problem, and I'm glad things have been tightened up. So I appreciate the efforts. And I will be reading that report because I want to dig into the concerns. But I guess that in there where it says, "not implemented," I just want the public to know it's not implemented because of where things are at this point. MR. BENNER: That's correct. MR. RICHARDS: So thank you. I appreciate that. MR. ANDOH: Council Member? MR. RICHARDS: Yes, please. MR. ANDOH: If you don't mind? Actually, that's one of the items we do disagree. While we don't have the Administrative Services Assistant(ASA), myself, in that role, has been doing that on an as-needed basis, so that's one of the notions that I mentioned in our management response, that it is being done. It's not being done as frequently as it was under the previous ASA. MR. RICHARDS: Okay, and I appreciate that. And like I said, so I'm going to go back and read your full report, and then if there are any questions, I'll contact probably both of you. So with that, Chair, I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Mr. Richards. Ms. Kimball. MS. KIMBALL: Yeah thank you, Chair. I thank you both for being here. I appreciate your time. On page 29 of the bound report that we were given, Page 13 FC-42 September 6,2022 Recommendation 10.6, I just want to ask a little bit about the table that's in there. That's the ridership of the—one of our—Auditor Benner, I can share it with you. You know, four data points, certainly don't make a pattern, but it looks like it's kind of all over the place. Any sense of what's going on there between those discrepancies? MR. BENNER: This is a question for the Administrator. MR. ANDOH: So in November, we were previously reporting the ridership data since we were doing the fare collection. Under the contract of Robert's Hawaii, they're responsible for collecting the ridership data and reporting that to the agency. So we implemented that in November. It appeared that there were minor discrepancies from the review in relation to what they put they put in their daily ridership counts and then what they put in their monthly summary. So I've been actually in discussions Robert's Hawaii to go back to November of 2021 to re-reconcile to ensure that those numbers are matching in relation to what the drivers fill out, what is being put into the daily ridership spreadsheet, and then what is being transposed into the monthly summary spreadsheet. I'm waiting on a response actually from Robert's Hawaii on that, but I suspect it was a more likely clerical error in that. And then as it relates to us, once we get that then we do random spot-checks to just validate that those three items are matching. And we've now instituted a process, so we can do that going forward, especially with the fare-free initiative. MS. KIMBALL: Okay, great. Thank you. That actually helps a little bit, because my concern was moving forward. Like how much of it was under our control, and the ability to manage, and how much was under the control of the vendor, and had to do with our systems and processes? But sounds like you're going to do this spot-check, and that will hopefully keep them MR. ANDOH: Correct. MS. KIMBALL: Yeah, okay. MR. ANDOH: But we've actually now taken our hands completely out from doing the ridership count; and whereas before, I think that's where a lot of the discrepancies were occurring because the agency staff plus the vendor was both doing it, and they weren't reconciling. MS. KIMBALL: Got it, okay. Auditor Benner, any comments on that? Does that seem like a satisfactory solution to that particular item? Page 14 FC-42 September 6,2022 MR. BENNER: I mean we'd like to see the three elements of, you know, cash receipts and ridership all being reconciled against each other on a daily basis for a tie-out. These kinds of cash activities, those kinds of reviews, those kinds of reconciliation should be happening on a daily basis. Spot checking is good in the absence of the position. But page 23, section 103, one of the accounting manual for the County of Hawaii, which is not in the document that you have, does require a separation of duties with concern to recordkeeping and accounting reports from those concerned with operations or asset custody. So at this point— while ointwhile we appreciate that the Administrator is filling that role, that there should be a segregation of duty; that we have somebody is devoted and can do it on a daily basis to ensure that it's being done properly. MS. KIMBALL: Yeah, thank you for that. MR. ANDOH: Just to be clear, we're talking about the monthly ridership reconciliation? MR. BENNER: The three elements really should be: ridership, to receipts, to cash. And if you all three of those things being done on a daily basis, then you know the number of people on the bus equals the revenue that you're getting, and that the revenue that you're getting also makes it to the bank and back. MR. ANDOH: So in relation to the cash portion of it, since we're not collecting cash, that piece is not considered at this point. The monthly the ridership, though comes to us on a monthly basis not on a daily basis, so that's when the agency staff is doing the spot checking, to reconcile that to what is being reported on their daily ridership spreadsheet that's submitted monthly to the monthly summary. MR. BENNER: Previously the ASA was doing it daily. MR. ANDOH: No, I understand that, but that's when we were collecting cash and when we were getting the reports monthlyno, daily. Now, we're no longer getting them daily, per the contract with Robert's. We get it monthly, by the fifteenth. So this exercise is done on a monthly basis, which is consistent with other contracted transit operations that contract out with a private vendor. MS. KIMBALL: I'm going to jump in here and venture to say this seems to work. Sounds like maybe in this area that needs to happen. I appreciate the recommendation that there should be that separation. And as much as I admire how much you are capable of doing, Administrator Andoh, maybe some stuff is appropriate to pass off, and you can focus on other areas. MR. ANDOH: Agree. Page 15 FC-42 September 6,2022 MS. KIMBALL: And it sounds like we have until 2025 when the cash starts potentially flowing in. Hopefully, we can get some more grants and that won't be a thing. I'm glad I brought it up because I had a lack of clarity, and it seems like there is still some work to be done there. Thank you, Chair. I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Kimball. Ms. Lee Loy. MS. LEE LOY: Yeah, thank you. Thank you both for being here. As Mr. Richards, he and I were in Council that very first budget cycle. You know, pulling this audit and encouraging this audit really was a wonderful tool to get us back on track, so thank you both for being here. I wanted to springboard off of something Ms. Kimball was talking about, and Mr. Andoh. Yes, there was the daily cash collection, but it sounds like your hands are a little tied, because the contract is written in a manner where the information comes to us monthly. Is there a need to revisit that, so we can actually kind of dovetail, or fold in the audit standards of daily counts? Is that something ? MR. ANDOH: I don't think so, because normally in a contract to transit operation, you don't get a rider or trip reports daily. Because normally the contractor is responsible for the cash collection, and they're responsible for putting their reports together, and then the submit it as part of their monthly invoice. Because of our intricacies and being a part of all that, I think that's where a lot of the confusion came into play. I think reconciling on a monthly basis is sufficient and can give us the necessary controls that we need, as well as doing random audit's spot-checks, which is allowable under the contract; where we actually go to the contractor, watch them count the money, reconcile that to trip receipts, and then give them any other feedback. But I think it's very erroneous on the agency's part to do it on a daily basis, especially when we're paying a contractor to handle doing that responsibility. But it's up to us to do appropriate contract monitoring to ensure it's done properly. And that's where that monthly reconciliation since that November shift, that's where now it's coming into play, where we're reconciling monthly. MS. LEE LOY: Okay. Auditor Benner, tell me about the shelf-life about this audit, because clearly some of what we've accomplished—congratulations again, I mean this is all the hard work from the audit and then the administration. But there are some things that happened partially implemented; and clearly, some that have been put on pause because we've got free ridership now. So tell me about the shelf-life of this; how long do we keep going back, and then at what point do we say we've successfully achieved all the ? Page 16 FC-42 September 6,2022 MR. BENNER: Yeah, thanks for that question. Because I know that when the original audit was presented to this body, there was a question about recurring reports and how they were going to keep this body updated on those types of things. So it's not something that we've gone over in great detail with this body, but we have included now on our website a remediation tracker, where we have put the status of those items. So one thing that we've said is that we do not want to put departments in a position where they can't gain a win. And because of that, they can contact us after they've implemented an item, and we've set some timelines that we want to see maturity take place. Make sure that it's not, you know, what we'd say, a change that was stood up with bubble gum and masking tape, and that it actually takes hold for some period of time. And then we're happy to come back in and check those items off. And so because of that, it might be a little bit harsher than if we were to contract an audit firm that was leaving and never coming back. We might take some of the considerations. You know, how severe—is this as severe as it's going to be? But in our case, because they have access to us—and we can come back at any time and give them that win, we really don't feel like we have to make that compromise. So we're in that position right now, whereas they feel like they've achieved those things. If it's a daily activity, we probably want to see it stood up for at least a month. If it's more of monthly activity, we would probably want to see it stood up for six months. And then, we're happy to come back in and verify those things and make those changes to that tracker. MS. LEE LOY: Great. I don't know if this is bragging or not, but the original audit won like an audit performance standards. I kind of look forward to winning how we implement all of the changes to kind of really get this kind of audit satisfied, and look forward to, you know,just both you Auditor Benner, and you Mr. Andoh,just really checking this stuff off the list and really bringing back that trust in government that we all desperately need. And for the viewing public, you know, on the very back is "Fraud, Waste and Abuse." You know, on the very back page it says, "We do not note any instances of waste, fraud, or abuse during this audit," and I think it speaks volumes to where we've been and how far we've come. Thank you, Chair. I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Lee Loy. Thank you, both. Thank you for the report and the audit. Mr. Andoh, thank you for being here today. I appreciate your patience. Just as a reference, what kind of amount of funds are we talking about, as far as the cash handline, pre-2018 to 2022? Yearly or monthly,just estimate. Page 17 FC-42 September 6,2022 MR. BENNER: I don't know what they were receiving at that time. I mean, I thought that I had understood that there was $35,000 sitting in the breakroom in a cash canI mean in a coffee can. So at that time,the safe had overflowed with cash, and they were putting it in bank boxes in an unsecured closet, so it was quite egregious. The scope and scale of it today is greatly diminished as a result of the fare-free. That's as close as I could get to it. John would be the best one to have those numbers, I suppose. CHR KANEALI`I-KLEINFELDER: Okay, okay. I guess that helps me, because like $150 a day, okay, that's one thing; but if we're talking, you know, couple thousand dollars a day that's not being watched, like you said, ridership revenue and receipts matching, then you have a potential for loss. Doesn't make sense to me. MR. ANDOH: We were out—what I got here, collecting cash, we were about $8,000 to $9,000 a day. We're now down to about$150 to $300 a day, and it's basically taxi permits and taxi coupons. CHR KANEALI`I-KLEINFELDER: Okay. MR. ANDOH: With the proposed changes that we have with the Shared Ride Taxi Program and shifting away from selling coupons to go into a more of a subsidy amount, that amount would basically diminish to basically just taxi permits, so we'll be talking close to $100 a day or less. CHR KANEALI`I-KLEINFELDER: Okay. I like the accounting side: ridership, revenue, and receipts, that makes complete sense to me. But we do have a very long grace period, and this is just one of the items that really was egregious. So, we have some time to address. I appreciate both of your time today. And look forward to seeing you working together, agreement or disagreement, how we figure it out, but as long as it's in the betterment of the County. MR. BENNER: Absolutely. MR. ANDOH: Absolutely. MR. BENNER: I appreciate your time. CHR KANEALI`I-KLEINFELDER: Thank you, gentlemen. With that, we have the motion on the floor to close file on Communication 942. Council Members, all in favor? Page 18 FC-42 September 6,2022 Vote on Comm. 942: The motion to close file on Com. 942 was carried by the Filed) following voice vote: Ayes: Committee Members Chung, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members David and Inaba—2. Excused: None. CHR KANEALII-KLEINFELDER: Can we please go to Resolution 519? ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. (Note: Item in this category was taken up previously, out of order.) Res. 519-22: AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR LEASE FOR ONE PITNEY BOWES DIGITAL MAILING SYSTEM FOR THE HAWAII COUNTY POLICE DEPARTMENT Authorizes the Mayor to enter into a five-year lease agreement with an approximate monthly cost of$160.99. Reference: Comm. 956 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Vote on Res. 519-22: Ms. Lee Loy moved to recommend adoption of (Approved) Res. 519-22. Seconded by Mr. Richards and carried by the following voice vote: Ayes: Committee Members Chung, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members David and Inaba—2. Excused: None. Res. 520-22: CHANGES TIME ELEMENT OF A HALF-TIME CUSTODIAN/GROUNDSKEEPER I POSITION TO FULL-TIME Requests increased time element to service the Police Department's Honoka`a and Laupahoehoe stations. Reference: Comm. 957 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Page 19 FC-42 September 6,2022 Vote on Res. 520-22: Ms. Lee Loy moved to recommend adoption of (Approved) Res. 520-22. Seconded by Ms. Kimball and carried by the following voice vote: Ayes: Committee Members Chung, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder–7. Noes: None. Absent: Committee Members David and Inaba–2. Excused: None. Res. 522-22: AUTHORIZES THE CONTINUED EMPLOYMENT OF LEONG KUNIHIRO BROOKE & KIM AS SPECIAL COUNSEL TO REPRESENT THE COUNTY OF HAWAII, DEPARTMENT OF HUMAN RESOURCES, WORKERS' COMPENSATION DIVISION Extends the retention of special counsel services with additional compensation of$50,000 and total compensation not to exceed $660,000. Reference: Comm. 959 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Motion to Approve: Ms. Lee Loy moved to recommend adoption of Res. 522-22. Seconded by Mr. Richards. (Note: At this time, Deputy Corporation Counsel Keyra Wong came forward to address the members of the Committee.) CHR KANEALII-KLEINFELDER: Council Members, discussion? Ms. Kimball. MS. KIMBALL: I would actually like to invite our Corporation Counsel up briefly to discuss this one and the additional two resolutions that all pertain to this. Don't recall during my tenure thus far I've seen this come before us. So if you don't—I'm humoring me, and just to let me to be educated by our Corp. Counsel about this aspect. (Note: At this time, Deputy Corporation Counsel Keyra Wong came forward to address the members of the Committee.) MS. WONG: Excuse me, Mr. Chair, if I may? CHR KANEALII-KLEINFELDER: Yes,please introduce yourself. MS. WONG: Thank you. Good afternoon, Keyra Wong, Deputy Corporation Counsel. Thank you for the opportunity to appear today before you. Page 20 FC-42 September 6,2022 Just a little bit of background. Resolution 522-22, as you might be aware, our office employs Special Counsel is the law firm who represents us for all Worker's Compensation Division matters. And we have a current contract with this law firm, we've had it since 2015. We are seeking with this resolution the Council to approve an additional $50,000 to cover our expenses for this law firm. The next two resolutions, 523 and 524, if you might recall, Mr. Chair, back inI believe September 2020 a question was brought up about the procurement of professional services. Our office took a look at the process, the procurement code, and the statutes, and thought that it would be best in the spirit of procurement to go back and post notice for professional services for any vendors who would be interested in providing this service to our County, and that's what we did. A selection committee was convened with three law firms on that list, and the same law firm happened to be ranked the first of that list of three firms. And so the next two resolutions, the authorization for this Council is to give us the power to enter into a new contract with the same law firm, with the budget of $300,000. I'm available to answer any questions. And I also believe Summer Tokuhiro and Danny Patel are also in Hilo Chambers to answer any questions, as well. Thank you. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Wong. Ms. Kimball. MS. KIMBALL: Yeah, thank you very much. I appreciate you filling in, going over what has happened here. Sounds like this is not exactly standard procedure, but how we've operated for some time. As far as capacity, it makes sense. So that's all I have, as far as questions. Thank you. I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Kimball. Anyone else? Okay, seeing none. Thank you for that, Ms. Wong. I appreciate it. I recall somewhere in there that we had a discussion about procurement, and I appreciate you going through the steps. Although time consuming it's appropriate, so mahalo for that. Do you guys want to add anything? Good for now? Okay. Okay, so we have the motion on the floor. Seeing no further discussion. Council Members, all in favor of forwarding Resolution 522-22 to Council with a favorable recommendation say "aye." Page 21 FC-42 September 6,2022 Vote on Res. 522-22: The motion to recommend adoption of Res. 522-22 was (Approved) carried by the following voice vote: Ayes: Committee Members Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—6. Noes: None. Absent: Committee Members Chung, David and Inaba—3. Excused: None. Res. 523-22: AUTHORIZES THE HIRING OF LEONG KUNIHIRO BROOKE & KIM AS SPECIAL COUNSEL TO REPRESENT THE COUNTY OF HAWAII, DEPARTMENT OF HUMAN RESOURCES WORKERS' COMPENSATION DIVISION Allows the Office of the Corporation Counsel to retain special counsel for legal services with specific expertise in workers' compensation matters, with funds not to exceed $300,000. Reference: Comm. 960 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Vote on Res. 523-22: Ms. Lee Loy moved to recommend adoption of (Approved) Res. 523-22. Seconded by Ms. Villegas and carried by the following voice vote: Ayes: Committee Members Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—6. Noes: None. Absent: Committee Members Chung, David, and Inaba—3. Excused: None. Res. 524-22: AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR AGREEMENT WITH SPECIAL COUNSEL FOR LEGAL AND PROFESSIONAL SERVICES COVERING WORKERS' COMPENSATION MATTERS Authorizes the Mayor to enter into a three-year agreement with the law firm of Leong Kunihiro Brooke & Kim to provide legal services on a continuous basis to maintain consistency in the management and handling of workers' compensation claims. Reference: Comm. 961 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Page 22 FC-42 September 6,2022 Vote on Res. 524-22: Ms. Lee Loy moved to recommend adoption of (Approved) Res. 524-22. Seconded by Mr. Richards and carried by the following voice vote: Ayes: Committee Members Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—6. Noes: None. Absent: Committee Members Chung, David, and Inaba—3. Excused: None. BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. (Note: Bill 206 was taken up previously, out of order.) Bill 156: AMENDS CHAPTER 19, ARTICLE 7, SECTION 19-53, OF THE HAWAII COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO REAL PROPERTY TAX VALUATION; CONSIDERATIONS IN FIXING Establishes that the value of property classified as apartment, hotel and resort, commercial, industrial, agricultural or native forests, or conservation cannot be assessed by the County at more than 15 percent than the previous year's assessed value for that property. Reference: Comm. 739 Intr. by: Ms. Lee Loy Postponed: April 19 and May 17, 2022 (Note: There is a motion by Ms. Lee Loy, seconded by Mr. Richards, to recommend passage of Bill 156.) CHR KANEALII-KLEINFELDER: Discussion? Ms. Lee Loy, go ahead. MS. LEE LOY: Yeah, thank you. You know, for the rest of my colleagues, my position has not changed; 15 percent I think does us, well, does our community a great service to plan for real property taxes in their upcoming year. It helps set rates for their rentals. It helps them plan better. It also even helps them plan if they want to do renovations, and what those costs would look like. I know we're looking at a recession coming forward. And so my position has not changed. I think 15 percent is fair. Earlier today, we heard testimony from Garth Yamanaka about the process that he's going through as far as appeals with the Real Property Tax office. And we saw those numbers, and just to refresh my colleagues' memories, you know, all of our rates jumped up from 15 to 36 percent Page 23 FC-42 September 6,2022 on average. Some people saw to 50 to 150 percent increases in their real property tax bill. But as Mr. Yamanaka mentioned, going through this process he's noted that there are a number of tools that are available for property owners to utilize, to use comparison data and/or tailor information that fits their property better; replacement values, consumer price index numbers. And for my colleagues, I've been talking to Finance: Lisa(Tada), Deanna(Sako), and even Steve (Hunt). Steve's left now. Just getting a lot more insight of the challenges that Finance has related to these values and how they assess them. So I think there are two things I want to do. One, I want to postpone one more time, till our October 17'h meeting. And I have some ideas, based on those conversations, along with the work that I've been doing with the private sector and our business community, on how to tailor some of the language in the bill, that gives them opportunities and lends itself to real property tax kind of coming up with a better idea on real property tax. One other thing we heard today from Mr. Yamanaka, is oftentimes when they're trying to appeal their values, getting the information and requesting that information through a(HRS) 92F request is longer than they actually have to have to go through the appeal. So I want to also be able to tailor some of that so that the community can get the information that they need, do the due diligence, and then make their respective case to Real Property Tax. So, there are some deadlines there that I think we can work on and tailor a little better. I'm still looking for feedback. I know Ms. Kimball has some ideas about rolling, or how we tie that; where we actually have a ceiling, but a floor, and how far we look back. So again looking to my colleagues for any other input. I'm only wanting to postpone till our October 17 meeting, because after that we're going to be into the throes of a new Council. And this will be the finish line, have it in Committee, advance it, and get it through with this Council before we see a new Council. So again open to my colleagues, and any other information they want to offer so that we can start tailoring those amendments. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Lee Loy. Council Members? Ms. Kimball. MS. KIMBALL: Yeah, thank you. And I'm happy to support the continuation of this conversation. Similarly, my position has also changed—it remains the same, which is just a static 15 percent cap. It generates a fairness issue between properties that move more quickly versus properties that move more slowly. And so one of the ideas that I suggested is maybe it's a sliding window to capture as much of that as possible. Page 24 FC-42 September 6,2022 The other thing I will mention is that at NACo (National Association of Counties) I did end up speaking to the president of the auditorsIAAO (International Association of Officers), and he makes it very clear to me, he said, "Don't muck with values." And so, you know, I think looking at the process here might be a better win for us. I can go into more detail off record or offline about why not muck with values. We talked for probably an hour about that particular topic. So anyway, but happy to continue with conversations. So I do appreciate what you're trying to do here with this, and I think we just need to find a right—we're making laws. This is how it works. Looks like sausage. So thank you, Chair. I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Kimball. Anyone else? Vote on Motion Ms. Lee Loy moved to postpone Bill 156 to to Postpone: October 18, 2022. Seconded by Mr. Richards and (Approved) carried by the following voice vote: Ayes: Committee Members Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder–6. Noes: None. Absent: Committee Members Chung, David, and Inaba–3. Excused: None. ADJOURN- There being no further business, at 4:32 p.m., Ms. Villegas moved to adjourn MENT: the meeting. Seconded by Ms. Lee Loy and carried by the following voice vote: Ayes: Committee Members Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder–6. Noes: None. Absent: Committee Members Chung, David, and Inaba–3. Excused: None. Page 25