HomeMy WebLinkAboutCOM 0149.012 2022-2024 1600
bi113'2-
COM . W
From: Chelle Pahinui
Sent: Wednesday, April 12, 2023 6:37 PM
To: Council Testimony
Subject: Bill 32
Bill 32
I would like to oppose Bill 32 and ask that the bill be tabled until appropriate wording is decided upon.
r#
III 32:AMENDS CHAPTER 2,ARTICLE 25,SECTION 2-138,OF THE HAWAII COUNTY CODE 1983(2016 EDITION,AS
AMENDED), RELATING TO APPROPRIATIONOF FUNDS TO NONPROFIT ORGANIZATIONS
Clarifies that public funds may only be used for the actual costs of expenditures directly applicable to the service or
activity covered by the grant award agreement and that public funds may not be used for the repayment of debts.
Bill 32 adds the highlighted and underlined language to Chapter 2 of the County Code that will apply to ALL grants
that the County funds to nonprofits(Council Contingency, Research&Development Innovation and others; Puna
Strong Grants,WaiWai Grants in Aid, Lava Recovery Grants,Stewardship Grants et.al.).We are primarily concerned
with Item#5 which threatens to remove the 10%administrative allowance which applies to all the indirect costs
involved in standing up a nonprofit.
Section 2-138. Conditions for grants.
Nonprofit organizations to whom a grant has been awarded shall agree to comply with the
following conditions before receiving the grant:
(1) Employ and appoint persons on the basis of merit and ability;
(2)Comply with applicable Federal and State laws prohibiting discrimination against any
person on the basis of race, color, national origin, religion, creed, sex, age, or handicap;
(3) Agree not to use any public funds for purposes of entertainment or perquisites;
(4) Public funds shall not be used for the repayment of debts held by the nonprofit
organization;
(S) Public funds shall only be used for the actual cost of expenditures that are necessary and
directly applicable to the service or activity covered by the grant agreement:
The language effectively removes the 10%Administrative Allowance that is currently allowed in nonprofits budgets.
That 10%SHOULD BE the minimum, not the maximum allowed amount as other jurisdictions and public grant sources
allow 15%and up to 25%for administrative allowance. Further,this Bill should be used to create a uniform method for
the County of Hawaii to award grant funds instead of deny nonprofits the administrative allowance.
At this point,there is NO DEFINITION for Administrative Allowance and discussions with the two Councilmembers,
Kimball and Kierkiewicz brought to light that they were trying to differentiate between administrative expenses related
to a grant activities versus administrative expenses related to the nonprofit operations. In truth, there is no such
distinction. Administrative allowance should be allowed and covers general liability and directors/officers insurance,
accounting, facility costs, professional services such as legal costs, salaries/wages and office equipment.These costs DO
NOT NEED to be parsed out and divided up between the many projects and services a nonprofit is providing.That is time
consuming and it would be difficult to be accurate.
Comm. .!) 'DA`12
1 Ref. To: 0 1 SIU wq
Ref. Date__-_ 13-2023
We need a bill that maintains a minimum of 10%administrative allowance for all County grants.The only time it makes
sense to establish 10°l administrative allowance as the maximum is in those situations where the nonprofit is fiscally
hosting a community group that is not a 501c3.
FROM , the a ai'i Assn of Nonprofits and the National Council of
Nonprofits are especially useful.
Investing for Impact: Indirect Costs are Essential for Success: https://www.councilofnonprofits.org/trends-and-
po I icy-issues/state-pol icy-tax-I aw/investing-i m pact-i ndi rect-costs-a re-esse ntia I-success
® Nonprofits Win Key Victory in Overhead Battles With
Government: https://www.councilofnonprofits.org/opinions/nonprofits-win-key-victory-overhead-battles-government
Mahalo for this opportunity to submit testimony,
Chelle Pahinui, Executive Director
Na'alehu Theatre
i