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HomeMy WebLinkAboutMIN FC 2022/10/18 2020-2022 Committee on Finance th 45 Session West Hawaiʻi Civic Center 74-5044 Ane Keohokālole Highway, Building A Kailua-Kona, Hawaiʻi October 18, 2022 CALL TO The regular meeting of the Committee on Finance was called to order at ORDER: 1:04 p.m., in the Council Chambers, Kona, by Mr. Matt Kānealiʻi- Kleinfelder, Chair. ROLL CALL: Present: Mr. Matt Kānealiʻi- Kleinfelder, Chair Ms. Heather L. Kimball, Vice Chair Mr. Aaron S. Y. Chung, Member (came in later) Ms. Maile Medeiros David, Member Mr. Holeka Goro Inaba, Member Ms. Ashley L. Kierkiewicz, Member Ms. Susan L. K. Lee Loy, Member Mr. Herbert M. “Tim” Richards III, Member Ms. Rebecca Villegas, Member STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: The following individual registered to speak and came forward when called by the Chair: Dwight Vicente: Res. 584-22 (Comm. 1049), comment; Bill 156 (Comm. 739), comment; and Bill 226 (Comm. 1041), comment. CHR. KĀNEALIʻI-KLEINFELDER: Mr. Clerk, can we—we’ll go out of order today. Can we go to Bill 156, as we have the (inaudible) here? 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: FC-45 October 18, 2022 Bill 156: AMENDS CHAPTER 19, ARTICLE 7, SECTION 19-53, OF THE HAWAIʻI 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, May 17, and September 6, 2022 (Note: There is a motion by Ms. Lee Loy, seconded by Mr. Richards, to recommend passage of Bill 156 on first reading.) ; and Comm. 739.15: From Council Member Susan L. K. Lee Loy, dated October 3, 2022, transmitting a The proposed amendment to Bill 156. CHR. KĀNEALIʻI-KLEINFELDER: Ms. Lee Loy, go ahead. MS. LEE LOY: Thank you, Chair. For my colleagues, I have one amendment that’s proposed on your boards, and the second one in your pinkie, so point one five (Comm. 739.15) and point one six (Comm. 739.16). With everyone’s indulgence, what I’d like to do is move both amendments in, have a big broad discussion around the bill itself, and kind of hear everybody’s comments. Thank you, Lisa, for being here today. Lisa Miura from Real Property Tax Office is here today, too. I did speak with Finance Director Sako, so I think we’re going to agree to disagree on a few things. But for my colleagues, and in the true essence of transparency, if I could amend Bill 156 with Communication 739.15? Motion to Amend: Ms. Lee Loy moved to amend Bill 156 with the contents of Comm. 739.15. Seconded by Mr. Inaba. CHR. KĀNEALIʻI-KLEINFELDER: Ms. Lee Loy, go ahead. MS. LEE LOY: Thank you, Chair. What Comm. 739.15 does is really set the parameter of this idea of a cap both up and down, so the 15 percent would go up and be capped; but should our rates go down, if it went down 50 percent, it would be capped at the 15. So it would kind of hold firm, kind of setting the ceiling and the floor. That’s what this amendment does. Page 2 FC-45 October 18, 2022 And if I could also take the liberty to amend Bill 156, as amended, further with Communication 739.16? CHR. KĀNEALIʻI-KLEINFELDER: Motion by Ms. Lee Loy. MR. HENRICKS: We need to dispose of the subsidiary that’s on the motion first before another one can be made. MS. LEE LOY: Oh, sorry. Thank you. With that being said, I’d love to hear your feedback. Again, it’s capping it up and capping it down. Really creating the ceiling and the floor as far as what Real Property Tax collections would look like, regardless of the volatility of the market going up and down. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. Lee Loy. Council Members, discussion? Mr. Inaba. MR. INABA: Thank you. Administrator Miura, can you please come and give thoughts on the amendment before us right now, 739.15? (Note: At this time, Real Property Tax Administrator Lisa Miura came forward to address the members of the Committee.) MS. MIURA: Good afternoon, Council. Lisa Miura, Real Property Tax Administrator. I can understand, and I think Real Property Tax and Finance understands the frustration with the current volatility of the market, to move away from market assessments is going to cause a lot of other unintended consequences. Council Member is correct, we disagree with the bill, but we respect the Council as well in trying to appease a lot of the taxpayers that were very upset this year. Likewise though, the market is the market, and that is what we go to. Anytime you’re going to have an increase or decrease in certain categories, you are limiting yourself to what you can do. Should this bill advance to Council with any kind of recommendation, that is when we’ll bring in our Bond Counsel and the International Association of Assessing Officers (IAAO) to explain to County Council in better detail. While the merits of this bill may seem positive, there are a lot of long-term negative consequences. MR. INABA: Thank you. So to restate, the division’s stance is that we don’t want to commit ourselves to a ceiling or a floor, is that correct? MS. MIURA: That’s correct. MR. INABA: Thank you. Chair, I yield. Page 3 FC-45 October 18, 2022 CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Mr. Inaba. Council Members? Ms. David. MS. DAVID: Thank you, Chair. Again, I’m looking at your last—when this came up before the postponement, I believe I was here and so were Mr. Inaba and Mr. Chung. So thank you for that explanation, Administrator Miura, because while I certainly can vouch for the number of calls that have been coming in, especially during COVID (Coronavirus Disease), and then the market just went crazy—I’m listening to what you’re saying. At first glance, this looks like a really good thing, you know, that there’s a cap, and also you can’t go below a certain amount, as well. I’d like to hear a little bit more, from the discussion part of this, since I missed it the first time. I’m kind of sensing that this might be sort of a reactionary process for an attempt because of what the community has been expressing, given the market. So I just want to say that I’m kind of—I’m curious and want to understand about the Bond Counsel, their explanation about this, and what the other long-term negative impacts are going to be. Because I think, for me, sometimes when I make a decision, or anticipate making a decision, there are other things that I’m not really aware of. And I appreciate the fact that you folks are wanting to bring that forward. So at this point, I’m going to yield for now. Because I believe those are important issues that you folks raised, being the department that oversees this complicated process that I’m not really familiar with, so I really depend on your folks’ input. I’ll yield at this time. Mahalo. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. David. Anyone else? Mr. Richards, go ahead. MR. RICHARDS: Yeah, thank you, Chair. Hi, Lisa, don’t run away yet. So first of all, Chair, if I may speak to Ms. Lee Loy about this question, if I understand this correctly, if we had a $400,000 property and the market dropped to $300,000 for that property, under this bill it would only drop to $350,000 or thereabouts, just a little bit under? Okay. And so if I’m hearing—then if the property was sold, it would actually drop to $300,00, is that correct, because the market would set that? And so if I understand what I’m hearing from you, Lisa, we’re obviously talking about one property, but if we’re talking about a marketplace, and you’ve made reference to our bond, our valuation—what the potential valuation out there would be in question because of artificial support or artificial suppression. MS. MIURA: I believe it’s more that there is going to be additional hindrance on top of what can be done in regards to raising funds to pay for the bonds. So right now, the County has no oversight by the State, and it is strictly based on the Page 4 FC-45 October 18, 2022 market, but the Council has basically free rein to change the tax rates. We noticed from this past program that’s not as easy as it sounds, but you can change the tax rates. That’s your avenue now. To go in and put a cap, whether it’s an increase or decrease on top of the market values, is really another roadblock that you’re putting in, not just for our office that can’t administer this. I know there are other things coming up later that let’s us build up to it. We don’t have the staff to do a 15 percent cap or any kind of cap. It’s a lot of work, and we can talk about that after we get out of the 739.16. But our concerns, whether it’s an increase or decrease, are going to be the same; but with the decrease, you could have local owners paying a certain amount, and then somebody moves in and they’re going to be at a lesser amount because of the decrease. I think most of us are just looking at the increased issues right now, though. But if I’m not mistaken, we’re mostly talking about 739.16. MR. RICHARDS: Okay. Thanks, Chair. I yield. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Mr. Richards. Back to you, Ms. Lee Loy. MS. LEE LOY: Thank you, Chair. Lisa, thank you. Through this process—and actually, that’s why I really appreciate Lisa being here. I did a lot of this stuff kind of one-on-one. I spoke to Lisa, I spoke to Deanna, and I even spoke to Steve, to really evaluate the impacts, right? My first question was related to the bond rating, but still, trying to figure out a way to thread the needle because my goal was creating some level of expectation for the community so that they could budget properly. And some of the maybe the unintended consequences that are being felt by the Administration kind of is this actually larger goal for me personally, where it’s kind of budgeting for outcomes, right? If we know how much our real property tax collection is going to look like, it would force kind of the Administration and us to really focus those dollars. Again, it was a long process that I took with Lisa, Deanna, and Steve, and I just wanted to kind of shed light on why it was such a complex process. Not as simple as the reaction of steering from our constituency about—while my property value jumped up 150 percent, and as business owners, we just passed that on in rent to our business community. And this was my way of trying to do that. If my colleagues would just indulge me, and we can vote on the amendment as is so that I can also add in the contents of Communication 739.16, and then vote up or down, however my colleagues feel. But I just really want to round out this discussion because this was done, and Lisa correct me if I’m wrong, maybe eight months in the works now, and I’m just trying to share that with the rest of my colleagues. So, if we could call for the question. Page 5 FC-45 October 18, 2022 Motion to Call Ms. Lee Loy moved to call for the question. There for the Question: was no second. CHR. KĀNEALIʻI-KLEINFELDER: Okay, so motion on the floor is to amend Bill 156 with the contents of Communication 739.15. Mr. Clerk, roll call vote, please. Vote on Motion The motion to amend Bill 156 with the contents of to Amend: Comm. 739.15 failed by the following roll call votes: (Failed) Ayes: Committee Members David and Lee Loy – 2. Noes: Committee Members Inaba, Kierkiewicz, Kimball, Richards, Villegas, and Chair Kāneali‘i-Kleinfelder – 6. Absent: Committee Member Chung – 1. Excused: None. MR. HENRICKS: The motion fails. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Mr. Clerk. Okay, moving on, so Communication 739.16. Ms. Lee Loy. MS. LEE LOY: In light of the previous amendment failing—you know, I’m going introduce it, move it in, and we can have a conversation on it. Motion to amend Bill 156 with the contents of Communication 739.16. Motion to Amend: Ms. Lee Loy moved to amend Bill 156 with the contents of Comm. 739.16. Seconded by Mr. Inaba. CHR. KĀNEALIʻI-KLEINFELDER: Council Members, discussion? Ms. Lee Loy, go ahead. MS. LEE LOY: Thank you. This amendment actually set the adoption date, or implementation date, all the way out to 2028. I was being very thoughtful on that reactionary piece, and my colleagues know we adopt additions, amendments to our budget that has leases for three to five years. We’ve actually spent—some amendments that we put in have already impacted budgets three years out, just based on our lease agreements, our Memorandums of Understanding (MOU). And so in an effort to not shock the system, based on the business decisions that we have made in the past, this amendment was a tool to set that date way out to give the department an opportunity to adjust, take a good hard look at those unintended consequences, address the bond rating, even some of our contractual issues with our employees, I’m looking for my colleagues’ feedback. But thank you for letting me share the thought process behind this. Page 6 FC-45 October 18, 2022 CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. Lee Loy. Any discussion? Ms. David. MS. DAVID: Thank you, Chair. I just wanted to clarify that—you know, I really think that a good discussion would have been okay, and that was the reason why I voted “yes” on your proposed amendment because I think that having your thought process in full discussion would help, looking at your entire proposal. But other than that, that’s all I have to say. Mahalo. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. David. Anyone else? Ms. Miura— MR. RICHARDS: Chair? CHR. KĀNEALIʻI-KLEINFELDER: Oh, Mr. Richards, go ahead. th MR. RICHARDS: Yeah, just thinking on this 28 enforcement date, and I do appreciate what you’re saying here because that does make sense, trying to project out. I want to look back at Ms. Miura again, does that help—I realize you’re on the revenue side, do you see value in putting this date out there? MS. MIURA: Well, we’re definitely not ready to implement this next year, so I can understand why there would be—it be more appealing to push it out five years and several months. It would—I would need to confirm with the Finance Director because there are a lot of other issues that come into play. And I understand what Ms. Lee Loy is saying about the three to five years with the leases. I guess my concern with any time that I see a bill that’s so far down the future is one, I would love to retire prior to this actually coming to be, and two, a lot of this Council won’t be here to see what havoc it wreaks or the benefit it wreaks on the other side. So I guess I can’t really vote, I mean, or give a suggestion either way, maybe more on the bill itself. But if it actually comes to reality, I would rather it not be next year. I don’t like this, but I don’t like the way it was either. MR. RICHARDS: Okay. All right, thank you. Thanks, Chair. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Mr. Richards. Ms. David, you had your light on. MS. DAVID: Well, just one more. I really appreciate your comments on this one because this amendment, I’m thinking going this far out, is almost like predicting something that’s pretty much unpredictable. Who knows what we’re going to be facing as far as the economy and taxes at that point in time? So on this one, yeah, Page 7 FC-45 October 18, 2022 I think I have some reservations on this amendment. And thank you for your input. I yield. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. David. Anyone else? Seeing none. Ms. Lee Loy. MS. LEE LOY: It doesn’t take a genius to figure out how this is going to go. Again, I really wanted to go through this exercise. And Lisa, just thank you for sticking in there with me. We’ve had these conversations kind of in our office. They were a lot more colorful, I think, and we’re being very politically correct around here. But I was trying very hard to figure out, can we at least set some hard corners and then give us some time to tailor in what we needed? I am generally concerned, like Ms. Miura; and then even, Deanna, with our bond rating and how that impacts us, so I was being very sensitive to that. And I just want to make one more pitch to my colleagues. Keep in mind this budget cycle started with a $52 million fund balance, and I offered up a $250 credit, and then we went through the process. You know, we did our work, but we left this budget with $8 million unprogrammed because we passed more revenues than programming it. I think when you sit in this seat long enough and you go through the cycles long enough, you begin to see how some of what can be very small decisions, like leasing a copier for three to five years, really begin to stack up. So I just hope that my advancing this conversation really expresses how complex this system is. But we have a lot of deadlines with real property tax collection, when the notices come out, when the appeals can happen, it is just a briar patch of thorns. I’m going to ask for my colleagues to think long and hard. I’m going to be supporting in favor of it. You’ve heard the concerns of the department. I really think we can do better. There’s got to be a way for us to do better, just with this entire budget cycle on top of the taxes that our constituencies pay. So, thank you. Chair, thank you for letting me and giving me that latitude. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. Lee Loy. Any further discussion? Okay, seeing none. Ms. Miura, I want to ask, just as far as the bill itself, what is the—? There’s got to be one or two major drawbacks that are causing you to be more on the “no thank you” side to this bill. What is it? What exactly is it that really has peaked your radar? MS. MIURA: So can I—is it the bill I can address now or just the amendment? CHR. KĀNEALIʻI-KLEINFELDER: The bill. You can go to the bill. MS. MIURA: Oh, it is the bill. Okay, sorry. Just the amendment, yeah? Page 8 FC-45 October 18, 2022 CHR. KĀNEALIʻI-KLEINFELDER: Okay. MS. MIURA: If I can talk about the bill, I got my list. CHR. KĀNEALIʻI-KLEINFELDER: I mean, let me come back. Let me come back to that. Okay, so we have on the floor the motion to amend Bill 156 with the contents of Communication 739.16. Council Members, seeing no more discussion, Mr. Clerk, roll call again. Vote on Motion The motion to amend Bill 156 with the contents of to Amend: Comm. 739.16 failed by the following roll call vote: (Failed) Ayes: Committee Members Chung, Lee Loy, Richards, and Chair Kāneali‘i-Kleinfelder – 4. Noes: Committee Members David, Inaba, Kierkiewicz, Kimball, and Villegas – 5. Absent: None. Excused: None. MR. HENRICKS: The motion fails. CHR. KĀNEALIʻI-KLEINFELDER: Okay, so back to the motion then, Bill 156. Council Members, discussion? Okay, good. Seeing none, I can ask my questions. Okay, Ms. Miura, what are the major drawbacks to this, from your viewpoint? Because I see why, I think, but I’d like to hear just from you, what are those? Like major one, two points? Just pick your top two. Top two? Top three? If you want to go top three, let’s hear it. MS. MIURA: Okay. Well, the top one that comes to my—now, which—the homeowners has the three percent cap. The biggest confusion among other homeowners or other people that purchase property is, how come my neighbor’s property is valued at the tax way less than mine? No matter how many times we explain that the homeowners, they’re in a special category, it depends on how long they live there, that takes a while for the staff, but they get it. The homeowners have a protection. This protection would go to every other classification except residential because technically speaking, residential could go into the homeowners. But honestly, the same thing can be said about the agricultural program or properties in the agricultural tax class, and I think the one that bothers me, even more, is probably the apartment tax class, which is our multi-family. All the condominiums, all of those in hotel resort areas, such as your less than your 180 days rentals. I’m trying to be very careful about how I call that because I know there are different meanings for everybody, but when you’re renting it for less than 180 days, those guys are going to have a 15 percent cap. I don’t think that’s Page 9 FC-45 October 18, 2022 the intent of the bill; is to protect that class, to be honest. I think the intent was to try and put safeguards in place for the businesses more than anybody else. But that is part of the issues that are going to come up. You’re also going to have people that maybe don’t want to sell their property and hang on to it a lot longer because they’ve got this long-term cap going, and people can view that as negative and positive. I just would be very cautious about all of the tax classes that are being looked at, being given this opportunity to have a cap. It looks like we—the Council did not pass the decrease so you can split the market, but you can only increase so much. The other thing that was removed was the new effective date. That didn’t pass, so that means this would go into effect right away, so my staff cannot implement this right now. The main problem with it—I know it doesn’t sound like it’s a big deal, there’s the cap, what’s the issue? Any time a property transfers or sells, that cap has to go away. You’ve got to remember people are always transferring into their trust, so it’s not like it’s just a computer-generated thing that takes eyes on the property. The way it’s written, even with the homeowners right now, if you do any renovations to a property, that is not protected by the cap, so we have to go manually into the system and do a cap override. So, there are certain things that occur that are not just keeping in line with a mass appraisal. We’re getting into each individual case. And when you’re going through that many tax classifications, it’s hard enough now for the staff on just the homeowners and the affordable rental, but we get it. You know, those are the guys; they live here. They’re the ones that get the break. But when we’re doing it for all these other tax classes, it makes it very difficult for us to manage. CHR. KĀNEALIʻI-KLEINFELDER: Okay. Okay, thank you. MS. KIMBALL: Chair? CHR. KĀNEALIʻI-KLEINFELDER: Ms. Kimball. MS. KIMBALL: Yeah, I just want to thank Council Member Lee Loy for bringing this forward. It is super complex. There are a lot of levers and dials. Yeah, I think for me, I have mentioned that in any other conversation, it’s really—it ultimately comes down to fairness. You know, because we have different mechanisms for valuations, sometimes it’s based on market sales, sometimes it’s based on a calculation. We have markets across this island that move at different paces, and properties get exchanged at different paces. I think that what could potentially end up happening, and I said this from the very beginning, is we see a different, basically, treatment of taxpayers in Hilo than we do in Kona because of that fixed frequency. So basically what I’m trying to Page 10 FC-45 October 18, 2022 explain is, there could be a scenario where in Kona they hit fifteen percent every year, but then in Hilo, you know, it’s five, it’s three, that they get. Then there’s a big market, and then they suddenly hit 15, and so you’re going to—a big shift in the market, it may go up to 15. So you would see it different—ultimately impact on the valuations. That would be disparate between different areas. I would love to actually have the International—what do they call the—? MS. MIURA: The IAAO, International Association of Assessing Officers. MS. KIMBALL: Yes. I would love to have them come and actually talk to us, and have a broader conversation around tax policy. I had a great conversation at the NACo (National Association of Counties) annual conference, with the president, and I learned a lot, just over the course of a half-hour discussion about why you want to be careful about pulling levers and caps, is definitely one of them. So I can’t support it. I think there’s room for discussion in the future. But I really do appreciate you bringing it forward because it’s important in our roles, as this is the major mechanism we have to understand what we can and cannot do. So, thank you. I yield, Chair. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. Kimball. Anyone else? Ms. Kierkiewicz, go ahead. MS. KIERKIEWICZ: Thank you, Chair. I just—mahalo nui Council Member Lee Loy for being so responsive to the business community. I think we were all inundated with calls and emails, every single one of us, Finance, Lisa as well, just by folks being incredibly shocked at their assessments. But there was a process, I think, to resolve for that. Administrator, can you just share with us the stats from this year, how many appeals were filed, resolved, and how that compares over previous years? MS. MIURA: Sure. I’m really glad I brought this now because you didn’t give me a heads-up, but I thought I’m just going to bring up my appeal information. We just finished our appeal hearings, and so I asked Keita Jo to prepare the numbers. By the end of the year, we had 835 appeals; 454 were filed from East Hawaiʻi, and 381 from the west. We had 237 withdrawals, so that means they didn’t even take it to the hearing. They decided to withdraw after the staff spoke to them, shared the comparables, explained maybe what they saw in the increases. There was one case that went to hearing, where the board came in lower than what we had recommended or what we asked for. Everything else sustained at what we Page 11 FC-45 October 18, 2022 had asked. That went to the board, except for nine others, where we had recommended a lower value, but they didn’t want to settle with us. Now when it comes to the settlements, I want to clarify that our staff is not allowed to settle just based on the fact that, “Oh, I think I don’t want to go to the Board of Review Hearing. I’d rather settle outside.” A settlement is when it gives our staff an opportunity to go to the property, to take a look, to remeasure the property, and to see if maybe our condition is wrong. You know, most places are in average condition, and they’re kept up. Others, you get there and you realize there was no upkeep, there is deferred maintenance. Maybe they tore down a part of the building or the whole building, and didn’t file a building permit, or a demolish permit—excuse me, demolition, and we need to remove it. So, we did have 527 cases that were settled and those need to be reviewed by the supervisor or somebody above them. Of all of the cases, the total reduction and value—and remember we come—when we come before you with our certified reports, we have to take, by County Code, 50 percent of the value under appeal. So basically the total percentage in reduction was 15.7 percent, which means we did better or certified anticipated, and we did better than what we had budgeted. Now, it’s not a huge miraculous amount. It’s over $1 million in tax revenue, but the appeal process is very long. We mailed out the assessment notices in March. Everybody had until April 11, th because April 9 was a Saturday, to appeal; and then our poor Board of Review had 15 hearings in both Kona and Hilo, which they heard all of the cases and they went through them. It was a long process, and we got to make a lot of friends and some people who will prefer never to talk to us again, but I think there’s a lot more understanding because of it. I know there are a lot of misconceptions that if you filed an appeal, then we’re going to come down 20 percent automatically, and like I said, the total average reduction and assessment was only 15.7 percent. So that kind of tells you it’s not as high, and that’s out of 835 appeals filed. Do you have more questions on the appeals? MS. KIERKIEWICZ: So 835 this past year, how does that compare historically? MS. MIURA: So our highest year was the last time the market went up, in 2000’s. I want to say it was 2007. We had over 1,500 appeals. MS. KIERKIEWICZ: 1,500. Page 12 FC-45 October 18, 2022 MS. MIURA: But if you compare it to last year, where it was the middle of COVID, we weren’t really going up that much in the market. As far as our office, even though sales started to happen, we only had 300—we went up by 345 cases. So we definitely increased this year, but we had a lot more sales, unfortunately, as well. MS. KIERKIEWICZ: Okay. Thanks for all that data, and thank you for your very blunt and honest assessment earlier. That’s kind of weighing heavily on my decisions, and not being able to support the legislation that’s in front of us. Just concerned about the long-reaching implications that this might have, and I certainly don’t want to hamstring our ability to be pulling one of the only levers that we have to fund County government, which is real property tax. We’ve got something else on the agenda today, related to leveraging bonds. I think we’re needing to do a bit more of that, and so we’re really going to have to make sure that we’re bringing in the RPT (Real Property Taxes) to be able to cover those long-term payments. So thank you again, Council Member Lee Loy, for advocating for the business community and putting forward some kind of solution so that we could have this informed conversation. I agree with my colleague, Council Member Kimball, that it would be interesting to talk to that body about, you know, what are some things that we can consider in terms of updating our Code to make tax policy more equitable. Thanks, Administrator, for being here. Chair, I yield. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. Kierkiewicz. Anyone else? Mr. Richards, go ahead. MR. RICHARDS: I’m going to echo a lot of what Ms. Kierkiewicz just said. And Sue, I totally get it, we kick this around really hard, concerning what do we do with the businesses as we’re trying to struggle through this. So I am curious what that body would bring. And information, borrowing from Ms. Lee Loy, good information gives us the ability to make good decisions. So, I do appreciate you bringing this. Yield. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Mr. Richards. Anyone else? Bringing it back to Ms. Lee Loy. Go ahead. MS. LEE LOY: Yeah, thank you. And thank you to my colleagues, really. This is really what I wanted to get out of this. Lisa was blunt, definitely blunt in our office. It was, like I said, a good conversation. But I just kept trying. I just kept trying to tailor it and pushing up on all the questions that my colleagues asked today, Lisa, right? I was like, “Well, what if we do this, what if we do that?” And so I do really appreciate this. Page 13 FC-45 October 18, 2022 I’m going to say here and now though, every time we do the lease extensions, every time we execute an MOU we’re already borrowing from our children’s taxes for two, three, five years down the road, and I just wanted everyone to have that consciousness around that. I don’t think this is done, Lisa. Well, we’re probably going to read this stuff a few more times to get to that equity piece that I think we’re all striving for. So thank you, Chair. Thank you, everyone, for the latitude and just allowing this conversation to happen. I yield. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. Lee Loy. Okay, seeing no further discussion. We have the motion on the floor to forward Bill 156 to Council with a favorable recommendation. Mr. Clerk, a roll call, please. Vote on Bill 156: The motion to recommend passage of Bill 156, as amended, (Draft 2) on first reading failed by the following roll call vote: (Failed) Ayes: Committee Members Lee Loy and Richards – 2. Noes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Villegas, and Chair Kāneali‘i-Kleinfelder – 7. Absent: None. Excused: None. MR. HENRICKS: The motion fails. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Mr. Clerk. Let’s proceed to Resolution 577-22, please. Res. 577-22: AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR AGREEMENT FOR SERVICES TO INSPECT AND IDENTIFY MAINTENANCE AND REPAIR REQUIREMENTS OF LAND MOBILE RADIO SITE INFRASTRUCTURE FOR THE CIVIL DEFENSE AGENCY Authorizes the Mayor to enter into a three-year agreement with an approximate annual cost of $50,000. Reference: Comm. 1042 Intr. by: Mr. Kāneali‘i-Kleinfelder (B/R) Motion to Approve: Mr. Inaba moved to recommend adoption of Res. 577-22. Seconded by Ms. David. CHR. KĀNEALIʻI-KLEINFELDER: We do have joining us today Mr. Ron Solemsaas and Barry Periatt in our Hilo Chambers. Gentlemen, would you like to speak to the matter before we go into discussion with the Council? Page 14 FC-45 October 18, 2022 (Note: At this time, Civil Defense Administrative Officer Barry Periatt and Radio Stems Manager Ron Solemsaas came forward to address the members of the Committee.) MR. PERIATT: Good afternoon. I am Barry Periatt, Administrative Officer with Civil Defense. No, we have nothing to say at this time. CHR. KĀNEALIʻI-KLEINFELDER: Okay. Discussion, Council Members? Mr. Richards, go ahead. MR. RICHARDS: Yeah. So I see this authorizing, but for where? Am I missing that? Some place? Oh, it’s on the back page. That’s okay. I yield. CHR. KĀNEALIʻI-KLEINFELDER: I think that’s a good question, Mr. Richards. Being that Mr. Richards asked, can you state for the public where these sites will be, Mr. Periatt? MR. PERIATT: Yeah. So this maintenance, it’s actually an inspection we’re going for. So we have 20 LMR (Land Mobile Radio) sites right now. We have maintenance contracts and everything in place for the radio equipment, but the actual inspection and maintenance of the facilities, be it the equipment sheds, the towers and that, we don’t have that in place, and that’s what this puts in place. CHR. KĀNEALIʻI-KLEINFELDER: Okay, thank you for clarifying. Ms. Kierkiewicz, go ahead. MS. KIERKIEWICZ: Thank you, Chair. Aloha, Barry, great to see you. So, I just have a question. We have a Land Radio Manager, what exactly does that position entail, and is this individual not—you know, do they not have the ability to be able to go to each of these sites to check on their feasibility and make recommendations on maintenance? If Mr. Solemsaas is there, that’ll be great. Thank you. MR. PERIATT: Thank you, Ashley, I’ll have Ron address that. He is the Radio Systems Manager. MS. KIERKIEWICZ: Perfect. Aloha, Mr. Solemsaas, great to see you. MR. SOLEMSAAS: Good afternoon. MS. KIERKIEWICZ: Just wondering how this maintenance contract can help you in your duties and functions as the LMR Manager. MR. SOLEMSAAS: Okay, great question. There’s some structural analysis that are required on the towers, as with the building and the equipment inside the Page 15 FC-45 October 18, 2022 building. I’m not an engineer. What I’ve done, and what I’m attempting to do here, is bring some of the lessons learned from a previous job that I had on the mainland and instill them here so we could have each radio site inspected at least once every three years. There are 21 total sites. This will allow us seven sites per year, and it will identify things coming up that we can budget for the following year, rather than having a bunch of surprises because somebody hasn’t climbed the tower in a decade and noticed that there is some structural damage to the tower. So we’re trying to get ahead of the game so we can budget appropriately from here on out. MS. KIERKIEWICZ: Okay, great. So no plan exists right now? MR. SOLEMSAAS: I’m sorry? MS. KIERKIEWICZ: There’s no plan that exists right now that allows Civil Defense to be proactive in ensuring that these sites are well maintained? MR. SOLEMSAAS: That is an accurate statement. I do go out to the sites frequently along with some of our radio technicians that work at the radio shop for the Police Department, but none of us are structural or civil engineers. MS. KIERKIEWICZ: Okay. In light of there not being a plan, I’m going to be fully supporting this contract. I know that when we had discussions about Bill 195 related to Emergency Management, it was very evident amongst the community, amongst my colleagues, that we are in a position to have all the infrastructure in place to ensure solid communications. That’s absolutely something we need to make sure is happening for our first responders, so I will be in support of this. Since 195 has passed, I think we would appreciate having an update at Council, at the appropriate time, to see how this plan is shaping up; and we would also expect our new budget cycle to be in a position to understand what’s needed in order to make sure these sites are well maintained going forward. MR. SOLEMSAAS: Excellent. Thank you. MS. KIERKIEWICZ: Thank you. I yield. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. Kierkiewicz. Mr. Inaba. MR. INABA: Thank you. Do we have an idea of who we would be contracting with? Page 16 FC-45 October 18, 2022 MR. SOLEMSAAS: There are three or four opportunities for people to bid on this project once if it’s moving forward, but I cannot state who will be awarded that at this time. MR. INABA: So we’re approving up to $50,000 a year, you’re not going to put it out for a flat $50,000 a year, or how will this work when you do put it out for bid? (Note: At this time, Deputy Corporation Counsel Dakota (Cody) Frenz came forward to address the members of the Committee.) MS. FRENZ: Good afternoon. Deputy Corporation Counsel, Cody Frenz. This is merely to get permission to enter into a multi-year agreement, solely for that, for the purpose already articulated by both Ron and Barry. So the amounts, I don’t have that at this time. We’d have to put it up for procurement. MR. INABA: Okay. Thank you. Chair, I yield. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Mr. Inaba. Any further questions? Okay, seeing none. You know, gentlemen, I’m reading over the background and the justification, and what I’m reading is redundant, but I’m just wanting to check in with you. It says there’s an existing maintenance contract in place for the LMR radio system hardware at each location. There’s also a separate maintenance contract for the microwave system hardware. There are three other maintenance contracts supporting LMR that control generator maintenance and air conditioner maintenance. This is another contract, or this is all inclusive of those? MR. PERIATT: No, this is another contract. All the—we included all those in there to let you know what is happening with the radio system, and the missing piece there is, as Ron stated, the infrastructure, the towers, the equipment sheds, where all this equipment—what the air conditioner is supporting, what the generator is supporting, and all that. So we take care of the components, but the house isn’t being taken care of. That’s where we stand right now. CHR. KĀNEALIʻI-KLEINFELDER: How many contracts do we have at these sites? MR. PERIATT: Okay, we have—all the contracts we have supporting the maintenance sites are listed there, so that’s the pest control, the generator maintenance, the air conditioner maintenance; and then we have the system’s maintenance. So that’s actually the radio system hardware that’s housed in the equipment sheds, and the antennas on the tower. And then we have the microwave system, which is shared between the radio system and the IT (Information Technology) and our internet system. So those are, in total, there are five contracts that are right now supporting the different structure or the different Page 17 FC-45 October 18, 2022 components of the system. The one thing, as I stated, we’re not really taking care of, and we haven’t been taking care of, is the actual infrastructure, the real property, if you will, the equipment shed and the tower. CHR. KĀNEALIʻI-KLEINFELDER: Would it be possible for us to have one contract for this instead of multiple contracts and one contractor who takes care of this, or is that an impossibility? I’m trying to look at this more as an efficiency move. MR. SOLEMSAAS: I get it. I get it. The problem is you’re not going to find a contractor that’s skilled in every level that we’re looking at. There’s a Motorola piece, it’s a proprietary equipment. Motorola has a skin the game. The microwave equipment, it’s Nokia, there’s some proprietary—well, it’s actually not proprietary on the Nokia side, but there are specially trained folks on this island just for the Nokia support. And same with generators, same with a/c’s (air conditioners). What I’m trying to get this through—the purpose of getting this through is to avoid an “oh, no” moment, where we realize that 20 years ago we should have been painting a tower; it hasn’t been painted, therefore it needs to be replaced; when you could have painted something for $50,000 instead of building a new tower for $1.5 million. So the idea is to just get all of our—everything in order so that we can determine what, you know, what our budgetary outlook is going to look like two, three, four years in advance. CHR. KĀNEALIʻI-KLEINFELDER: And this is purely for a dispatch facility. We got Police, Fire, and what is this, alternate, correct? MR. PERIATT: No the dispatch facilities are separate entities. What we’re talking about are the land mobile radio sites, where the towers are, where the microwave system is. So this is the communication across the island that the dispatch centers use to communicate police officers and firemen in the field. CHR. KĀNEALIʻI-KLEINFELDER: You know, I have a question that is really vaguely tied to this, but when they push out that dispatch that’s picked up by our officers or our different agencies, you’re using the dispatch and they have an LMR site, correct? Is that done on a—is like a cell signal or is that done as a digital output? I mean, what is that, you know, signal that goes out from those sites? MR. SOLEMSAAS: It’s actually an independent radio infrastructure, owned by the County. It has nothing to do with cellular, and we have actually licenses assigned to the County for the purpose of strictly dispatch. Page 18 FC-45 October 18, 2022 CHR. KĀNEALIʻI-KLEINFELDER: Okay. Thank you for that. Okay, well efficiency wise I can see how some of these are tied together, but others would not. If it’s proprietary, that makes sense; but if we have a general maintenance contract, I mean it would be amazing to put these into one: a generator, an a/c, equipment. I think you know what I’m getting at. So if and when possible, if we can combine so you have multiple contracts running for different things, that would be my only suggestion. Other than that, I’ll be supporting this today. MR. PERIATT: Okay, in response to that, if I may? For the generators and the air conditioners, the County has contracts to cover all of that, and we are merely a part of those contracts to further the air conditioner maintenance and the generator maintenance. CHR. KĀNEALIʻI-KLEINFELDER: Okay. Okay, good, Thank you. That is—I like that efficiency piece. Okay, I’ll be supporting this today. Thank you. Council Members, no further discussion. All in favor of forwarding Resolution 577-22 to Council with a favorable recommendation? Vote on Res. 577-22: The motion to recommend adoption of Res. 577-22 (Approved) was carried by the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Lee Loy, Richards, Villegas, and Chair Kānealiʻi-Kleinfelder – 8. Noes: None. Absent: Committee Member Kimball – 1. Excused: None. CHR. KĀNEALIʻI-KLEINFELDER: And going back to—let’s take care of Lisa Miura here, Bill 227, please. Bill 227: AMENDS CHAPTER 19, ARTICLE 13, SECTION 19-104 OF THE HAWAI‘I COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO REAL PROPERTY SOLAR WATER HEATER TAX CREDIT Eliminates eligibility for the tax credit when the installation of a solar water heater is required by law and increases the tax credit from $300 to $400. Reference: Comm. 1050 Intr. by: Mr. Chung Motion to Approve: Mr. Chung moved to recommend passage of Bill 227 on first reading. Seconded by Ms. David. CHR. KĀNEALIʻI-KLEINFELDER: Mr. Chung, go ahead. Page 19 FC-45 October 18, 2022 MR. CHUNG: Yeah, thank you. As you may or may not recall, because I can’t recall myself, but there was another bill that I had introduced relating to the same subject matter. It was based on what the real property working group had come up with or suggested, where we do away with this solar water heater tax credit because it’s required already for new construction. But as it became readily apparent during the course of testimony, we were overlooking pre-existing dwellings. So while it’s okay to take away an incentive, well, a credit, for something that’s already required, we should still be providing an incentive for people who are not on solar water heaters to now retrofit their homes to put in solar water heaters, from a public policy standpoint. So, that’s all this bill does. And in the process, I talked with Deanna, and I talked with Lisa and asked them, “Okay, maybe can we bump the amount of the credit up,” and they all said, “Yeah, bump them up,” so I moved it up $100. If you guys want to make it more, it’s more up to you folks, really. But that’s all this bill is. Thank you. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Mr. Chung. Discussion? Okay, seeing none. My only compliment to this bill, thank you for doing it, I would bump it up higher. Maybe up to five. Inflation is disserving right now, and it’s about $5,000 to do a solar water install, yeah. Okay, thank you. Okay, that’s all I have. Council, discussion? Seeing none. Okay, mahalo, Mr. Chung. Motion is on the floor to forward Bill 227 to Council with a favorable recommendation, all in favor? Vote on Bill 227: The motion to recommend passage of Bill 227 on (Approved) first reading was carried by the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Lee Loy, Richards, Villegas, and Chair Kānealiʻi-Kleinfelder – 8. Noes: None. Absent: Committee Member Kimball – 1. Excused: None. CHR. KĀNEALIʻI-KLEINFELDER: We have our DEM (Department of Environmental Management) Director here waiting for us. Let’s do Bill 223, please. Page 20 FC-45 October 18, 2022 Bill 223: AMENDS ORDINANCE NO. 22-64, AS AMENDED, RELATING TO PUBLIC IMPROVEMENTS AND FINANCING THEREOF FOR THE FISCAL YEAR JULY 1, 2022 TO JUNE 30, 2023 Adds the Environmental Management Hilo Waste Water Treatment Plant Upgrades – State Revolving Funds project ($17 million) to the Capital Budget. Funds for these projects shall be provided from State Revolving Funds ($17 million), and would be used for improvements to the wastewater treatment plant in Hilo. Reference: Comm. 1038 Intr. by: Mr. Kāneali‘i-Kleinfelder (B/R) Motion to Approve: Ms. Lee Loy moved to recommend passage of Bill 223 on first reading. Seconded by Ms. Villegas. CHR. KĀNEALIʻI-KLEINFELDER: Council Members, discussion on Bill 223. We do have the director, as I understand, hopefully still with us on Zoom as well as Mr. Eric Takamura. There’s no one there, gentlemen. Council Members, discussion? Mr. Richards, go ahead. MR. RICHARDS: Yeah. Did you say Ramzi’s on? CHR. KĀNEALIʻI-KLEINFELDER: That is what I understood from my notes. They may have jumped off. I’m not hearing them right now. MR. RICHARDS: Okay. I just wanted a brief summary from him. CHR. KĀNEALIʻI-KLEINFELDER: Okay. Seeing that they’re not on— (Note: At this time, Environmental Management Business Manager Robin Bauman came forward to address the members of the Committee.) MS. BAUMAN: This is Robin, the Business Manager. CHR. KĀNEALIʻI-KLEINFELDER: Well, thank you, Robin. Mr. Richards has a question. Did you hear Mr. Richards’ question? MS. BAUMAN: Yes. Was he just asking for a summary? MR. RICHARDS: Yeah, brief summary. MS. BAUMAN: Yes, so Bill 223 and companion Bill 225 are to appropriate capital improvement funds from SRF (State Revolving Funds) funding source. We want to be able to take advantage of the opportunity to utilize SRF funding to fund this project. Page 21 FC-45 October 18, 2022 CHR. KĀNEALIʻI-KLEINFELDER: Mr. Richards, you have the floor. MR. RICHARDS: Well, Chair, I’ll yield for now. CHR. KĀNEALIʻI-KLEINFELDER: Okay, mahalo. Any discussion? Ms. Lee Loy, go ahead. MS. LEE LOY: Oh, thank you. For my colleagues, I really do urge and encourage and support this. For our Wastewater treatment facility in Keaukaha, we have heard a lot of news around this, about the failure of this particular system would be devastating to our coastlines. Robin, if you have that the information, or maybe, Deanna, the SRF funds, this is low-interest loans, can you share a little bit about this SRF fund and how it’s really advantageous for us to utilize this funding mechanism? MS. BAUMAN: Yes. The SRF funding program offers low-interest loans for our Wastewater projects. I don’t have the actual rate in front of me right now, but it’s typically something like a quarter percent interest and one percent loan fees, for a much better rate. (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: You know, the interest rates have been going up, but this is still very good compared to what our bond rates would be, so we try to take advantage of the SRF funding whenever possible. MS. LEE LOY: Yeah. Thanks, Deanna. Thanks, Robin. If I could get my colleagues’ support. I think this is—you know, some of the mechanisms—we had a conversation about our real property tax, but this one makes sense, with the low interest and the rates, and it’s funding that’s provided to us from the State. Thank you, I yield. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. Lee Loy. Ms. Villegas, go ahead. MS. VILLEGAS: Yeah, I just want to say thank you for bringing this forward. We’ve had lots of conversations over the last four years, some of them being about our exemplary bond rating as a municipality. As we have seen the risk and rewards of keeping the high bond rating but not having resources to fix our wildly deteriorated infrastructures, especially when it comes to Wastewater, I wholeheartedly support this effort on behalf of the Administration to secure funding at such low-interest rates in order to provide the much-needed resources to fix the tragic state of some of our Wastewater treatment facilities. Infrastructure is at the top of everyone’s mind, right along with Workforce Page 22 FC-45 October 18, 2022 housing, and so I’m going to be supporting this wholeheartedly. Thank you for bringing this forward. I yield. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. Villegas. Mr. Richards, back to you. MR. RICHARDS: Yeah, just coming back. So Robin, if I’m reading this right, you’re looking at the $17 million for design and planning, is that correct? MS. BAUMAN: That’s correct. MR. RICHARDS: Okay, yeah, because I recall, we were approaching $200 million for the repair. Is there a reason for not going—taking a little bit more, or is it you think that will cover it? It looks like you have a combined total of $30 million for the planning, is that accurate? MS. BAUMAN: No. Actually, that $30 million is kind of duplicate to—right now, we have started the design with bond funds, so that’s kind of why you’re—it looks like $30 million. But we will actually be—if we’re able to get the SRF funding, we will be shifting those expenses from the bond funding source to SRF. MR. RICHARDS: Okay, and that makes sense. Yeah, I—that facility really needs help. All right, fully support it. Thank you. I yield. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Mr. Richards. Anyone else? Ms. Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. I don’t know who can answer this question, but I’ll just ask it. You know, the materials provided in our B-52 referenced a master plan related to this project. Is it possible to get a copy of that? I am wondering if we can just keep this in Committee if there are time constraints because we are going after the SRF. But this is just for the completion of the design phase, and I’d like to see in totality what has been recommended in the master plan so that we can budget accordingly as a Council. I just feel like passing the budget is one of our biggest responsibilities, so just want to have a global understanding of all that’s needed to fix this wastewater treatment facility. Again, Council Member Lee Loy, I know this is in your district, antiquated, and needs a lot of help. There could be some catastrophic consequences, right, but I also want to make sure that we are making the most fiscally responsible decision, and that we have done our homework in looking and exploring all different funding opportunities. MS. SAKO: I was just going to say, I think the amendment on the design contract is currently floating through for the signature processes right now; and so since Page 23 FC-45 October 18, 2022 this would have two readings at Council, if we could maybe move it forward while DEM provides you with the requested information? MS. KIERKIEWICZ: Okay. I’m willing to move it out of Committee, but I do want to see that master plan and margin report, that way we know what we’re getting ourselves into. I know we all want to make those investments, but I just want to make sure that we’re walking in with our eyes wide open. Thanks, Director Sako. Is Director Ramzi not on Zoom today? MS. BAUMAN: I’m sorry, he was earlier and had another meeting. He had to leave. MS. KIERKIEWICZ: Thanks, Robin. Good to hear your voice. If you could just convey our comments and our request to the Director, that would be appreciated. Thank you. MS. BAUMAN: I will. MS. KIERKIEWICZ: Thanks. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. Kierkiewicz. Mr. Inaba. MR. INABA: Ms. Kierkiewicz, sorry, can you point me to the reference for the master plan? MS. KIERKIEWICZ: It’s on the companion measure. MR. INABA: Thank you. Chair, I yield. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Mr. Inaba. Okay, seeing no further discussion. We have a motion on the floor to forward Bill 223 to Council with a favorable recommendation, all in favor? Vote on Bill 223: The motion to recommend passage of Bill 223 on (Approved) first reading was carried by the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kānealiʻi-Kleinfelder – 9. Noes: None. Absent: None. Excused: None. CHR. KĀNEALIʻI-KLEINFELDER: Can we please go to Resolution 580, please? Page 24 FC-45 October 18, 2022 Res. 580-22: AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR AGREEMENT FOR MANAGED SERVICES FOR THE DEPARTMENT OF INFORMATION TECHNOLOGY Authorizes the Mayor to enter into a three-year agreement with Hawaiian Telecom for cybersecurity protection, with an approximate monthly cost of $3,088.20. Reference: Comm. 1045 Intr. by: Mr. Kāneali‘i-Kleinfelder (B/R) Motion to Approve: Mr. Inaba moved to recommend adoption of Res. 580-22. Seconded by Ms. Lee Loy. CHR. KĀNEALIʻI-KLEINFELDER: Mr. Uehara is joining us in the Hilo Chambers. Sir, if you could give us some background? (Note: At this time, Information Technology Director Scott Uehara came forward to address the members of the Committee.) MR. UEHARA: Good afternoon, Council. Scott Uehara, Director of Information Technology. This is for professional services with Hawaiian Telcom, which monitors our cyber security posture for our internet connectivity. It monitors all our internet traffic, 24/7, 365, for all County connections. CHR. KĀNEALIʻI-KLEINFELDER: Thank you very much, Director. Council Members, are there any questions on Resolution 580 for the Director? Ms. Kierkiewicz, go ahead. MS. KIERKIEWICZ: Thank you. No questions, but I just really appreciate it, Director, for your presence here today, but also, how you are potentially saving our County money. I just appreciate the math that you did in the B-52. Thank you. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. Kierkiewicz. Director, one question. I did read over the savings, but my question for you right now is, what do we have in place to protect our network? MR. UEHARA: In terms of hardware, we have multiple pieces of equipment; standard things, like Firewall, and we have other equipment. You know, I’ll be more than happy to talk to you privately, over public communications. You know, this is kind of our defense posture. So I can definitely go into more details behind-closed-doors. I wouldn’t want to give away kind of all our defensive measures out in the public. Page 25 FC-45 October 18, 2022 CHR. KĀNEALIʻI-KLEINFELDER: Okay. But is it working? MR. UEHARA: Yes, it is working. Like in the B-52 justification, you know, on a daily basis, we do get alerts from Hawaiian Telcom currently, and we address it very quickly. You know, without some of these notifications, our staff would have to be monitoring it themselves. We don’t have 24/7 staff to monitor all these alerts, so when we do get these alerts, it really puts us in a better position to address it quickly. CHR. KĀNEALIʻI-KLEINFELDER: Okay, $3,000 a month, Director? MR. UEHARA: Yes, correct. CHR. KĀNEALIʻI-KLEINFELDER: Okay. And this would be substantially better protection than what we have now? MR. UEHARA: It adds to our protection. So kind of the old adage that a lot of network security professionals use is the idea of an onion, where we have multiple layers of defense, so it adds one more additional layer of defense. These people who—or organizations who try to infiltrate networks, you know, they have their own team and they are trying to get in around the clock, you know, when they know we’re not sitting at our desk, that’s when they like to go on the offensive. And this helps us, protect us, you know, while we’re not in the office. CHR. KĀNEALIʻI-KLEINFELDER: Okay. And we have this currently, is what the B-52 says? MR. UEHARA: Yes. CHR. KĀNEALIʻI-KLEINFELDER: So this is an extension of the same agreement? MR. UEHARA: Yes. CHR. KĀNEALIʻI-KLEINFELDER: Okay. Was the price similar before, or is it the same price? MR. UEHARA: There was a slight increase in price, and we have adjusted that increase in our budget. CHR. KĀNEALIʻI-KLEINFELDER: Okay, thank you. That’s all my questions. Seeing no further lights on this end. We have the motion on the floor to forward Resolution 580 to Council with a favorable recommendation. Council Members, all in favor? Page 26 FC-45 October 18, 2022 Vote on Res. 580-22: The motion to recommend adoption of Res. 580-22 (Approved) was carried by the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kānealiʻi-Kleinfelder – 9. Noes: None. Absent: None. Excused: None. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Director, for being here. Let’s move to Resolution 579-22, please. Res. 579-22: CREATES ONE NEW HUMAN RESOURCES PROGRAM SPECIALIST POSITION FOR THE DEPARTMENT OF HUMAN RESOURCES Establishes a Program Specialist SR-24 position for the Recruitment and Examinations Division. Reference: Comm. 1044 Intr. by: Mr. Kānealiʻi-Kleinfelder (B/R) Vote on Res. 579-22: Mr. Inaba moved to recommend adoption of (Approved) Res. 579-22. Seconded by Ms. Lee Loy and was carried by the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kānealiʻi-Kleinfelder – 9. Noes: None. Absent: None. Excused: None. CHR. KĀNEALIʻI-KLEINFELDER: Let’s move to—let’s do the companion measure for the $17 million bond. So Bill 225, please. Page 27 FC-45 October 18, 2022 Bill 225: AUTHORIZES THE MAYOR OF THE COUNTY OF HAWAI‘I TO ENTER INTO AN INTERGOVERNMENTAL AGREEMENT FOR A STATE WATER POLLUTION CONTROL REVOLVING FUND LOAN FOR WASTEWATER PUBLIC IMPROVEMENT PROJECTS; AND AUTHORIZES THE ISSUANCE OF $17,000,000 GENERAL OBLIGATION BONDS OF THE COUNTY OF HAWAI‘I FOR THE PURPOSE OF FINANCING QUALIFIED WASTEWATER PUBLIC IMPROVEMENTS OF THE COUNTY OF HAWAI‘I The issuance of General Obligation Bonds would serve as security for the repayment of funds loaned to the County via the State Revolving Fund program. Reference: Comm. 1040 Intr. by: Mr. Kāneali‘i-Kleinfelder (B/R) Vote on Bill 225: Mr. Inaba moved to recommend passage of Bill 225 (Approved) on first reading. Seconded by Ms. Lee Loy and was carried by the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kānealiʻi-Kleinfelder – 9. Noes: None. Absent: None. Excused: None. CHR. KĀNEALIʻI-KLEINFELDER: Moving to, let’s go to the top of the agenda, Communication 30.38. 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. Comm. 30.38: REPORT OF FUND TRANSFERS AUTHORIZED: SEPTEMBER 1 – 15, 2022 From Controller Kay Oshiro, dated September 19, 2022. Page 28 FC-45 October 18, 2022 Vote on Comm. 30.38: Ms. Lee Loy moved to close file on Comm. 30.38. (Filed) Seconded by Mr. Inaba and carried by the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kānealiʻi-Kleinfelder – 9. Noes: None. Absent: None. Excused: None. Comm. 31.45: REPORT OF CHANGE ORDERS AUTHORIZED: SEPTEMBER 1 – 15, 2022 From Finance Director Deanna Sako, dated September 19, 2022, transmitting the above report pursuant to Hawai‘i County Code Section 2-12.3. Vote on Comm. 31.45: Ms. Lee Loy moved to close file on Comm. 31.45. (Filed) Seconded by Mr. Inaba and carried by the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kānealiʻi-Kleinfelder – 9. Noes: None. Absent: None. Excused: None. 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) Res. 584-22: AMENDS RESOLUTION 743-20 AUTHORIZING THE PLANNING DEPARTMENT TO AWARD FUNDS TO VARIOUS NONPROFIT ORGANIZATIONS THROUGH THE KĪLAUEA RECOVERY GRANT PROGRAM Amends Exhibit A to change the fiscal sponsor for Vacationland Hawaiʻi Community Association to Men of Paʻa. Reference: Comm. 1049 Intr. by: Mr. Kāneali‘i-Kleinfelder (B/R) Motion to Approve: Ms. Lee Loy moved to recommend adoption of Res. 584-22. Seconded by Mr. Inaba. Page 29 FC-45 October 18, 2022 CHR. KĀNEALIʻI-KLEINFELDER: Council Members, discussion? Ms. Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. I’ll be supporting this, and I just encourage my colleagues to do the same. I’m sure you recall a number years back, our County was awarded to pot the funding from the State, $20 million in very flexible funding, to support Puna’s recovery following the eruption, and $40 million, that is a loan, that can be used as a matching for federal awards. So with the $20 million, we were able to establish through ordinance the Kīlauea Recovery grant program, and so one of the awardees is needing to change their fiscal sponsor, and so that is what this resolution is designed to do so that we can ensure Vacationland’s—Hawaiʻi Community Association, is still able to move forward with their survey and preliminary design work for their private road restoration. So again, just ask everyone’s support on this. Thank you, Chair. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. Kierkiewicz. Any discussion? Seeing none. Motion is on the floor, all in favor? Vote on Res. 584-22: The motion to recommend adoption of Res. 584-22 (Approved) was carried by the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kānealiʻi-Kleinfelder – 9. Noes: None. Absent: None. Excused: None. 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) Bill 224: AMENDS ORDINANCE NO. 22-64, AS AMENDED, RELATING TO PUBLIC IMPROVEMENTS AND FINANCING THEREOF FOR THE FISCAL YEAR JULY 1, 2022 TO JUNE 30, 2023 Adds the Planning Kona Open Space Network Plan – Fair Share project ($250,000) to the Capital Budget. Funds for this project shall be provided from Fair Share Contributions ($250,000), and would be used to enhance opportunities for residents and visitors to engage in recreational, educational, subsistence, and gathering activities. Reference: Comm. 1039 Intr. by: Mr. Kāneali‘i-Kleinfelder (B/R) Page 30 FC-45 October 18, 2022 Vote on Bill 224: Ms. Lee Loy moved to recommend passage of Bill 224 (Approved) on first reading. Seconded by Mr. Inaba and carried by the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kānealiʻi-Kleinfelder – 9. Noes: None. Absent: None. Excused: None. Bill 226: AMENDS ORDINANCE NO. 22-63, AS AMENDED, THE OPERATING BUDGET FOR THE COUNTY OF HAWAI‘I FOR THE FISCAL YEAR ENDING JUNE 30, 2023 Appropriates revenues in the Federal Grants – State Homeland Security Program Fiscal Year 2018 account ($26,057.96); and appropriates the same to the State Homeland Security Program Fiscal Year 2018 account. The funds would be used by the Civil Defense Agency for its Hilo Emergency Operations Center Enhancement Project. Reference: Comm. 1041 Intr. by: Mr. Kānealiʻi- Kleinfelder (B/R) Motion to Approve: Ms. Lee Loy moved to recommend passage of Bill 226 on first reading. Seconded by Mr. Inaba. CHR. KĀNEALIʻI-KLEINFELDER: Any discussion? Ms. Lee Loy, go ahead. MS. LEE LOY: I don’t know if this is a wonky question, but it’s Fiscal Year 2018, and we’re in 2022, so I just wanted to understand. I don’t know if anyone from Finance is available. Oh, there’s Deanna. Thank you, Ms. Sako. (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: Hi. Sorry, Civil Defense had to leave. But yes, I believe it’s federal Fiscal Year 2018. We have three years to spend it, and they had extra funding that another grantee, or the State, or whoever couldn’t spend, and they’re offering it to us. We have multiple needs, so we’ll gladly accept it. MS. LEE LOY: Thank you, Ms. Sako. I yield. CHR. KĀNEALIʻI-KLEINFELDER: Thank you, Ms. Lee Loy. Seeing no further discussion. Motion is on the floor, all in favor? Page 31 FC-45 October 18,2022 Vote on Bill 226: The motion to recommend passage of Bill 226 on (Approved) first reading was carried by the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR. KANEALII-KLEINFELDER: Moving on to our last measure. Oh no, that's it. That's the end of our agenda. May I have a motion, please? ADJOURN- There being no further business, at 2:27 p.m., Ms. Lee Loy moved to adjourn MENT: the meeting. Seconded by Mr. Inaba and carried by the following voice vote: Ayes: Committee Members Chung, David, Inaba, Kierkiewicz, Kimball, Lee Loy, Richards, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR. KANEALI`I-KLEINFELDER: Mr. Clerk, you have nine members in favor of adjourning our meeting. That brings us to the end of our agenda. We're adjourned. Approved: Ada Mr. Matt Ka,eali`i-Klein •lder, Chair (D te) Finance Co mittee MK/na Page 32