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HomeMy WebLinkAboutMIN COUNCIL 2024-05-30 2022-2024 Special Hawaii County Council 401h Session Special Session Hawaii County Building 25 Aupuni Street Hilo, Hawaii May 30, 2024 INVOCATION: Pastor Eric Anderson of Church of the Holy Cross gave the morning's invocation. CALL TO The special meeting of the Hawaii County Council was called to order at ORDER: 9:01 a.m., in the Council Chambers, Hilo, by Ms. Heather L. Kimball, Chair. ROLL CALL: Present: Ms. Heather L. Kimball, Chair Mr. Holeka Goro Inaba, Vice Chair Ms. Cindy Evans, Member(via videoconference with Kona) Ms. Michelle M. Galimba, Member Ms. Jenn Kagiwada, Member Mr. Matt Kaneali`i-Kleinfelder, Member Ms. Ashley L. Kierkiewicz, Member Ms. Susan L. K. Lee Loy, Member Ms. Rebecca Villegas, Member (via videoconference with Kona) PLEDGE OF The Chair directed the Council to the next order of business, Pledge of ALLEGIANCE: Allegiance. (At this time, County Clerk Jon Henricks led the Council in the Pledge of Allegiance.) PETITIONS, The Chair directed the Council to proceed to the next order of business, Petitions, MEMORIALS, Memorials, Certificates of Merit, and Expressions of Condolence. CERTIFICATES OF MERIT, AND (There were none.) EXPRESSIONS OF CONDOLENCE: STATEMENTS The Chair directed the Council to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: (There were none.) Hawaii County Council-40 May 30,2024 ORDER OF The Chair directed the Council to proceed to the next order of business, Order of RESOLUTIONS: Resolutions. Res. 525-24: DETERMINES THE REAL PROPERTY TAX RATES FOR THE COUNTY OF HAWAII FOR THE FISCAL YEAR JULY 1, 2024, TO JUNE 30, 2025 Proposes lowering the tax rate from $6.15 to $5.75 per $1,000 of net valuation for buildings and land in the Affordable Rental Housing classification and the Homeowner classification. Reference: Comm. 883 Intr. by: Mr. Inaba Public Hearing: May 29, 2024 (Note: Comm. 883.1, from Council Member Holeka Inaba dated May 29, 2024; Comm. 883.2, from Council Member Holeka Inaba dated May 30, 2024 transmitting additional information regarding the proposed 2024 Real Property Tax adjustment; and Comm. 883.3, from Council Member Holeka Inaba dated May 30, 2024, transmitting proposed amendments to Res. 525-24, were circulated.) Motion to Mr. Inaba moved to adopt Res. 525-24. Seconded by Approve: Ms. Galimba. CHR. KIMBALL: Vice Chair Inaba. MR. INABA: Thank you. We did have the Public Hearing last night regarding potential amendments to our Real Property Tax rates. And what we have before us here in Communication 883.1 is just a potential break down of options we have if we take up reducing our Homeowner and Affordable Rental classes. Well, budgeted right now is $5.95. The resolution before us is to bring it down to $5.75. So, it's to double the benefit that was proposed in the Operating Budget. So, if we pass the resolution as is, it results in a $2,741,239 reduction in our Real Property Tax revenue. As part of the Budget discussion later, I do have amendments prepared that would give us options to consider to balance this revenue reduction and those options are listed here in Communication 883.1. But essentially, for every $100,000 of worth of Real Property, there would be a reduction of$40 for these Homeowner and Affordable Rental classes. So, a property valued at$1 million would see a $400 reduction for the fiscal year. And I'll leave that kind of general and up for discussion now, but did work with Finance and Real Property Tax to balance essentially what would be a shortfall in our revenue, should we pass this resolution. Perhaps, we'll just call them up now and have Director Nakagawa chime in on the proposed resolution as it stands. Page 2 Hawaii County Council-40 May 30,2024 (Note: At this time, Finance Director Diane Nakagawa, came forward to address the members of the Council.) MS. NAKAGAWA: Good morning, Council Members. Thank you. As the Councilman did say, he did work with us to look at the reductions. So, we worked, of course, we our team who's here today from Real Property Tax just to determine what the numbers would look like with the proposed rates. So, based on this recommendation and the rates, that's the information that we provided. MR. INABA: Perfect. Thank you, Director Nakagawa. With that I'm happy to take questions at this time regarding the resolution or anything contained within Communication 883.1. Mahalo. CHR. KIMBALL: Thank you, Vice Chair Inaba. Any questions, comments. MS. EVANS: Chair. CHR. KIMBALL: Yes. Go ahead, Council Member Evans. MS. EVANS: Thank you. So, we're trying to get a copy of Comm. 883.1. We don't yet see the communication. So, we're working on that right now with Scott (Ruedy). But while we're doing that, I am looking at Resolution 525-24. And just to the maker, when I look at the rates, you're proposing 20 sets in affordable rental housing, which I really like. I want you to know I felt we needed to do more in that category. We have to really encourage folks to do long-term rentals. I think this is one way to do it. I've talked to people, and I related to couple people who have their homes in this Affordable Rental Housing program. But they feel like they really want to help people get into housing, and this is a little bit of encouragement for them. So, I like what you did on that. And can you tell me what other besides affordable housing again, did you change any other one? MR. INABA: Affordable Rental and the Homeowner classes have been reduced or are proposed to be reduced to $5.75 for every $1,000 of worth. MS. EVANS: Okay, so you're looking at B and C, which is 2-1 and 2-2, which is, oh B and J? MR. INABA: No, Homeowner class and Affordable Rental. MS. EVANS: Oh, you're looking at"J". So, you're proposing to reduce it by another 10 cents? MR. INABA: The current rate for those two classes is $6.15. The rate proposed by the Mayor, which the Operating Budget is built on is $5.95. It's a 20-cent Page 3 Hawaii County Council-40 May 30,2024 reduction. What's in the resolution is a $5.75 rate, which is an additional 20 cents from the Mayor's proposed rates. So, a 40-cent reduction in comparison to current rates of$6.15. MS. EVANS: Okay, I'm very supportive of this, but I thought you were proposing—and why is because it's unbelievable what the assessed values that are going up. I can say that in North and South Kohala, the price of housing and the assessments and the calls I got; people saying they couldn't believe how much their houses went up, and how their taxes now, they can see what's coming, and they're very worried. I personally was looking at the cap that we have, the three percent, the assessed value that the taxes are based on. The local people capping at three percent a year in terms of raising the assessment. I was taking a look at that, but this is another way of addressing that. So, I'm very supportive of it, and thank you for bringing this forward. And we're still looking for the communication that you're referring to. Thank you. CHR. KIMBALL: Here, Council Member Kagiwada. MS. KAGIWADA: Thank you, Chair. So, I guess I am really happy to see us looking at both helping anyone that's doing long-term rentals like the Affordable Rental Program, and also helping homeowners. I guess I'm a little concerned about the out-size benefit to wealthy. You know, high-end property versus those who are struggling people. So, if your home is worth $200,000, you would see an $80 savings per year in taxes. But if your home is worth $2 million, you save $800 a year. So, I guess I'm a little bit concerned just about why we'd be helping people with $2 million dollar homes so much when we know it's people that are struggling to just make ends meet are the people that really need help. So, that would be my biggest concern with this. Not, which groups have been targeted, but kind of how it's going to play out, as opposed to increasing an exemption, which tends to be more fair to the lower end homeowners. So, that would just be my comment on this. Thank you. CHR. KIMBALL: Thank you, Council Member Kagiwada. Anyone else before I go back to Vice Chair Inaba? Council Member Lee Loy. MS. LEE LOY: Thanks, Mr. Inaba. I actually or maybe this is more of a question for Lisa or Keita. You know, we know there's all kinds of levers, right? Page 4 Hawaii County Council-40 May 30,2024 And the rates is just one lever. One question I had is do we have any evidence that when we adjust the rental rates that that savings is actually passed on to the renter? (Note: At this time, Real Property Tax Administrator Lisa Miura, came forward to address the members of the Council.) MS. MIURA: Good morning, Lisa Miura, Real Property Tax Administrator. I do not. I think the better group to ask would be Housing. All I can say that is we noticed that when the monthly allowed rent was increased in this last Affordable Rental, we did not see everybody jump up to that new monthly allowed. And we did get more applicants in the program. So, I can say that much. MS. LEE LOY: Okay. And there's the Mayor's proposed rates, and then this one. And maybe Mr. Inaba, help me again on what the actual cost savings would be to be passed on. I know you mentioned it, like per $1,000. MR. INABA: It was $40 for every $1,000, which would be $400 for $1 million. Sorry, $40 for $100,000; $400 for $1 million. MS. LEE LOY: Okay, I'll let that set in. The other lever that we also have is the cap, right? How does this kind of play into that cap? And we keep touching these levers, but we don't let it set long enough. MS. MIURA: So, the assessment cap is the three percent, it can only go up three percent on your assessed value. So, some in the public get confused and think it's three percent on the taxes, but it's not, it's on the assessed value. From that assessed value, you have your exemptions applied to it for homeowners. There's no exemptions for affordable rentals. Then the tax rate is applied to your net taxable value. So the tax rate affects the taxes immediately, where your three percent cap is in a different area. MS. LEE LOY: Got it. Okay. Thanks Lisa, really appreciate it. You know, I want to sit with this a little bit, if that's okay. There's a few other levers that I'm playing in my head. The real incentive I was looking for is definitely that cost savings that we pass on to our homeowners. Great, rental, but I'm not really feeling that. I think the bigger jerk that I'm more concerned about is our homeowners who are going to be looking around the corner at their insurance coverage. Either being unavailable or at astronomical rates. So, I like that we're trying to provide them some relief. I'm not sure if it's going far enough. And if we could spread the wealth a little bit. You know,places like our commercial businesses. I see so many vacancies there. And when we talk about economy as a whole, I would love to see some cost savings in other areas, Page 5 Hawaii County Council-40 May 30,2024 too. Specifically, commercial, so we can start to really rebuild our economy here. But those are my initial thoughts. Loving the homeowner's space. Kind of thinking through the rental space, and if there's another area that we could actually offset. Thanks for letting me share my thoughts. CHR. KIMBALL: Thank you, Council Member Lee Loy. Did you have a specific question to respond to, Mr. Inaba? MR. INABA: Yes, I just wanted to address the concern, or you know, the statement regarding affordable rentals. Right now, whatever rate we adjust the Homeowner class to, we need to also adjust the Affordable Rental class to. So, they came as a pair. So, if we're going to give benefit to the Homeowner, the Affordable Rental follows. Thank you. CHR. KIMBALL: Thank you. MS. LEE LOY: Follow-up, real quick. For the maker, in your communication, this 2.7 ($2.7 million), is that on top of what the Mayor had proposed originally, or is this the whole package. So, is it more like $5 million? Because when he proposed the first rate, he mentioned it was a $2.6 million cost savings. MR. INABA: So, if this resolution passes, as is, it would be a reduction of $2.7 million from the proposed budget. So, $5.4 million from if we don't touch the tax rates at all. MS. LEE LOY: Thank you for clarifying that. I yield. CHR. KIMBALL: Thank you for that clarification. I wanted to check in with Kona to see if you've gotten the communication yet? MS. VILLEGAS: Yes. Aloha, thank you, Chair. This is Rebecca. We do have the communication, and I just had a couple things. CHR. KIMBALL: Sure, go ahead, Council Member Villegas. MS. VILLEGAS: Thank you. I want to start off by thanking Council Member Inaba for his thoughtful approach and attention to detail. I can tell by the way he brought this forward and you looking at all the different classes and the amounts associated with them, as well as what's been proposed here, that you really took into consideration every penny and how it would affect our different departments. As well as how it affects our people, those that live here that continue to struggle to pay all the bills, and the mortgage, and the taxes, and all those different things. I have received a number of phone calls and emails from constituents who are not only grateful for you taking the initiative to put this forward. But also, the blessing that you know, you're asking to bring to them. So, I've been receiving a lot of support from this. Page 6 Hawaii County Council-40 May 30,2024 Anytime we look at numbers, you know, as Council Member Lee Loy said, there are a bunch of different levers. There are all different ways and places to manipulate and navigate these numbers and the system that exists and is at play right now. I really have great appreciation and will be supporting your endeavor and want to thank you for your courage and the decisiveness that it took to not only—and the courage to bring this forward, and then the decisiveness and your ability to identify the places where the reductions could happen and the increases can happen. That balancing takes a lot of thought, and it takes a lot of attention to detail, and it takes a lot of consideration. So, I just first off, want to thank you for that Because that is not easy to do on this Council and in any role. But as we all sit here, you know, there are things I would love to see change. Thank you, Council Member Kagiwada for your comments about the inequity for very, very high-end homes, and the amount of money garnered from that tax base for those property taxes. But I just really have great appreciation for you bringing this forward and making sure you dotted all the "I's" and crossed all the "T's" and have come up with all kinds of different scenarios in order to make this work. And that is incredibly thoughtful, takes a lot of courage. And your attention to detail is impressive. So, thank you for that. I, you know, continue to be interested to hear the comments from my colleagues. But in the broader sense, based on principal and what I've heard from my constituents thus far, I will be supporting this. And I hope that my colleagues can see the time and care and attention to detail that's been put into this, and that the rewards would outweigh the risks. So, with that, I yield. CHR. KIMBALL: Thank you, Council Member Villegas. Council Member Galimba. MS. GALIMBA: Thank you, Chair. Guess I would like to echo what Council Member Villegas just said as far as being grateful to the work that Council Member Inaba put into this, and the attention to detail; and the spirit of it. I wanted to just maybe ask the Administration, either Deanna or Diane or whoever would be most appropriate. I just want to maybe ask for—we did talk about sort of the general budget during the first session and sort of what our considerations are. And perhaps if you could run through that again in light of this resolution. That would be really helpful. Sort of what are our considerations that we're kind of thinking about. I know we have a fund balance, but like you know, we also have some potential claims on that fund balance. So, I just wanted to refresh on that. MS. NAKAGAWA: I apologize, I was multi-tasking. I was answering another question. If you could just repeat? Page 7 Hawaii County Council-40 May 30,2024 MS. GALIMBA: Right. I just kind of wanted to get a sort of high-level refresh of our budget and the fund balance and considerations around that in light of this $2.7 million, but also sort of$5.4 or $3 million total. And perhaps while you're at it, even maybe you could talk about the three different options that we have on that Communication 883.1, if you have any thoughts on that, that'll be really helpful. MS. NAKAGAWA: Sure. Happy to run through that, Council Member Galimba. So, when we were here a couple weeks ago, one of the things that we talked about extensively was our fund balance and our Stabilization Fund, which makes up our Reserve fund. And the considerations there and the caution we have to make sure that that fund balance and reserve is within the five to 15 percent. So, we kind of walked through what the fund balance is with budget stabilization and also, our General Fund expenditures at the time and looked at, we were at about 10.5 percent. We also talked about potential obligations that we need to keep in mind that would come from this fund balance. I did take a look at the further amendments that we made a couple of weeks ago to add an approximate $1 million and did that calculation with the new General Fund balance, and we're at 10.36 percent with the additions made two weeks ago. So, that kind of gives you an idea of what these types of amendments will do to that percentage and where we're at. Still keep in mind that there are unknowns that are significant that will play into where we are at the end of the day with a comfortable reserve for us. So, that is the big consideration that consideration remains today as we walk through some of our options. Our big concern is to make sure we're prepared for anything that comes our way, and we're prepared cautiously for the future. So, I hope that answers your question. MS. GALIMBA: Yes, thanks for that refresher. And do you have any thoughts on the options that we have before us? MS. NAKAGAWA: So, I think the Council Member has put together—we're just taking a look at it now of some various options for Council to discuss. I think those are all the options that we have to look at expenditures. I think there's a lot of different needs in all the departments and a lot of competing priorities. MS. GALIMBA: Thanks very much. I yield. CHR. KIMBALL: Thank you, Council Member Galimba. Before I go to you, Council Member Kaneali`i-Kleinfelder, the folks in Kona, we have two more communications on this item; 883.2 and 883.3. Just wanted to see if you've received those yet? Page 8 Hawaii County Council-40 May 30,2024 MS. EVANS: Chair, we have not. We will ask Scott to look. Thank you. CHR. KIMBALL: Great. Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you, Chair. Ms. Nakagawa, can you come up? Thank you, sorry. Just in kind of summary, we have a proposal brought forward by Council Member Inaba. This is on top of the proposed drop already. So, by the Mayor, it was brought forward already. So, instead of$5.95, $5.75. So, our total decrease in revenue from property tax is going to be double $2.7 (million). So, about$5.4 (million), is that right? MS. NAKAGAWA: Yeah, $2,000,659 million was the original and then we're adding the $2.7 (million). MR. KANEALI`I-KLEINFELDER: Okay. So about$5.5 million as a reduction from this property tax decrease, right? MS. NAKAGAWA: Reduction in revenues. That's correct. MR. KANEALI`I-KLEINFELDER: What I do appreciate about this is, is it's thoughtful, as Ms. Villegas said, but it takes a lot of work, and what Mr. Inaba has shown is an understanding of the different effects it'll have on multiple accounts that follow as far as getting a certain percentage every year from our revenue base. Then decreasing across the board all departments to match what's being done. There are a number of other options being brought forward. But this to me, demonstrates a clear understanding of how our budget works and the impacts we'll see. And I appreciate the time and effort that was put into this. Thank you for helping. I had one more thing, Chair. I was reflecting on this over the past few years. During COVID, we saw massive shifts of people moving to our island, and our assessments and our values skyrocketed. And of course in government, we're not going to complain because that's an increasing amount of revenue for us. Because the higher the assessments go, the higher the values go, the more property taxes we bring in. We didn't change our rates, but everyone's assessments went crazy. So, it was at that time, in hind sight, we should have adjusted these rates down to balance that growth and assessments. That's what I see should have happened, but we didn't. Fast forward to 2024 where we sit today, we now have an opportunity to provide some remedy to this situation. And that's where I see this landing, is to me, too late. From the constituents' point of view, but it's a good place to be in, I think to Page 9 Hawaii County Council-40 May 30,2024 provide our residents a little bit of relief from the impacts of what we've seen during COVID and to today. So, I like where this sits, and will hear about the other proposals as well, Mr. Inaba. Thank you. CHR. KIMBALL: Alright. Anyone else over here. Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. Thank you for putting this forward. I think. Director, please don't leave yet. You can't, sorry. I know over the last year; we've talked about tinkering with these particular rates. So, I really appreciate you putting this forward. And you know, to Council Member Lee Loy's point, I hope that we give it some time to sort of marinate and settle in so that we can see the longer-term impact. Director, there are options that are presented here that I just want to understand, comfort-level wise. Because I know you're trying to balance ensuring that we have enough fund balance. And funding in our Budget Stabilization Fund to be able to continue County services and pay any future obligations, such as temporary hazard pay. Would Option 3, dipping into fund balance to cover the existing proposed budget, be something that you could live with? Because it's that or it's having departments kind of reduce their budgets. And I know that there was a lot of work since September of last year to architect a very precise budget where folks are getting what they need, first and foremost, and a little bit more of the things that they've been wanting for a long time because they've been feeling so challenged. So, is Option 3 something that the Administration can live with? MS. NAKAGAWA: Sorry, I'm just making sure I'm looking at the MS. KIERKIEWICZ: (Communication) 883.1, which is the entire reduction that's being proposed through this resolution being covered by fund balance. MS. NAKAGAWA: Okay. Sorry, I'm just getting confused with the different amendments that are coming forward. So, you know, the message remains the same. The comfort level is with the budget we put forward. For all the same reasons we have discussed, keeping our reserves to a level to protect for future payments, and future obligations, and anything that comes our way. The rates as decided at the will of the Council, is something that we will have to look at how it's adjusted, which is your question about what we can live with. Any reduction in our fund balance will just reduce that percentage. So, yes, it's a very difficult decision in looking at,there are needs that the departments have, and we have worked for months on a budget that has gone through all the different needs of each of our departments. And the budget that Page 10 Hawaii County Council-40 May 30,2024 was put forward reflects those needs. And in many cases, some additions to their budget. So, those reductions would be difficult with what we've already planned for, and what the departments have planned for. Fund balance reduction will also be something difficult that we'll have to deal with. So, not an easy answer. Each will come with different consequences. One is, you know, service reduction if it's looking at the department level expenditure reductions. And one is in our financial reserves. MS. KIERKIEWICZ: I would hate to take away from departments. Especially, if we're looking at utilizing some of the funding from the vacancies. Only because so many of them are very proactive in trying to find folks that meet the requirements to fill these positions that we need filled, right? Because I think they compromise our ability to fully function as a County. MS. NAKAGAWA: The departments have continued to work on filling these vacancies while it is challenging MS. KIERKIEWICZ: They're stretched, and a lot of folks are having to wear multiple hats, not because they want to, but because they're kind of forced to, right? County needs to continue delivering these essential services. With Option 3, dipping into fund balance, will we still be in what the Code requires us to be at five to fifteen percent? MS. NAKAGAWA: I'll go do the calculation. MS. KIERKIEWICZ: If you could do that calculation and just let us know. That's the option I'm leaning towards supporting. But I could also live with Option 2, which is having the departments to some kind of reduction. But again, it compromises their ability, I think to go out and recruit folks to fill critical positions. MS. NAKAGAWA: Like I mentioned, this is the process that we've gone through on our budgeting process over the last six months. This is what they need in the budget. MS. KIERKIEWICZ: Okay. Could you run the numbers and let us know about Option 3? MS. NAKAGAWA: Will do. MS. KIERKIEWICZ: Thank you. I yield. CHR. KIMBALL: Thank you, Council Member Kierkiewicz. Council Member Kagiwada. Page 11 Hawaii County Council-40 May 30,2024 MS. KAGIWADA: Just wondering, are we able to discuss the things in these proposed amendments or are we waiting for them to be CHR. KIMBALL: They need to be moved to the floor. MS. KAGIWADA: Okay, so even though we were discussing Comm. 883.1? CHR. KIMBALL: Comm. 883.1 is a communication with respect to the resolution. So, that can be discussed. What cannot be discussed is the amendment proposed in Comm. 883.3, until that's been brought to the floor. MS. KAGIWADA: Okay. And Comm. 883.2? CHR. KIMBALL: That is tied to the amendment, I believe, Council Member. Go ahead. MR. INABA: We're working with Options 1-2-3 right now, and if we get to a point where we can't agree on that, and we still want to give the break to Homeowner and Affordable Rental, we can increase other property tax classes to balance out this reduction. But I didn't want to throw in great movement at the same time. So, that is an option that is outlined in Communication 883.2. And technically we could discuss it, but I was trying to keep as clean and neat as possible with just the three options contained in Comm. 883.1 MS. KAGIWADA: Okay. Thank you. I don't really love the options in Comm. 883.1. So, I guess I'm looking to discuss those other options. But I will wait if we need to wait on that. Point of Order: MS. EVANS: Point of order. CHR. KIMBALL: Go ahead, Council Member Evans. MS. EVANS: I believe we're only talking about Comm. 883.1, because we haven't brought forth Comm. 883.2 and Comm. 883.3 yet. And I'm still focused on Comm. 883.1 and would like to add additional comments on Comm. 883.1. CHR. KIMBALL: Yes, agreed. I'll recognize you if you want to make your comments now on the resolution itself and Communication 883.1. MS. EVANS: Thank you. You know, I think there's another benefit for the reduction that we're talking about. And that is, I'm a believer that we're in a very uncertain time where we could have a recession. There're things I've read recently about, you know, the tourists and the amount of people coming up talking to retail merchants in my district, not feeling confident about the numbers of tourist and visitors. So,people are kind of tentative about, Page 12 Hawaii County Council-40 May 30,2024 you know, what is this next year going to look like? And I think approving this and passing it puts cash into the hands of local people who are the ones that keep our economy going and thriving when we get into these situations of downtime potentially a huge part of our economy, which is if you like it or not, tourism. So, I think putting cash into people's hands so that they can spend it, you know, consumer spending, it could help us. So, it's another reason that I do support us moving forward with the proposed reductions. So, anyway, thank you. I yield. CHR. KIMBALL: Thank you, Council Member Evans. Staying over there in Kona, Council Member Villegas, any further comments? MS. VILLEGAS: Not at this time. Thank you, Council Member Kierkiewicz for asking for this specific number for what this does to our percentage of fund balance, as dictated by our Code. So, I am hopeful that it doesn't put us, with just my medial-mind math, with the $900 million budget and the numbers that were spoken about and the $2.7 million reduction in fund balance. If we were at ten percent, I am hoping that does not reduce us into the five percent. I believe you said the percentages we had to stay in was between five and fifteen percent. So, I'm interested to hear what that percentage comes back at. CHR. KIMBALL: I think our director is rapidly doing the math right now, but not quite ready to respond. So, as soon as she's got that number, I'll let you know. We'll come back here to Hilo. Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you, Chair. To the Department of Finance, the reduction in rates is being balanced by funds being pulled from Salary and Wages, correct, across the different departments or is that a different one? CHR. KIMBALL: Go ahead and respond, Vice Chair. MR. INABA: That's one of the three options. Option 1 is reduction across departments; Option 2 is reductions and some fund balance; Option 3 is all fund balance. And Option 3 is what Director Nakagawa is checking right now to see if we would have our five to 15 percent. MR. KANEALI`I-KLEINFELDER: Thank you, Mr. Inaba. I yield, Chair. CHR. KIMBALL: Thank you. Council Member Galimba. MS. GALIMBA: Just to give Diane a little time to run her numbers, could I ask Director Lisa Miura to come up if she wouldn't mind. I'll let her come up. Good morning. I just wanted to ask something following up on Council Member Kagiwada's mention of using exemptions to achieve some of the same things that Page 13 Hawaii County Council-40 May 30,2024 we're trying to achieve here. But in a way that would be more progressive. I'm wondering, number one, would it be possible to do something similar, give a similar kind of benefit with exemptions and the timing of that? MS. MIURA: That's a great question. Real Property Tax Administrator Lisa Miura. My Director is Diane Nakagawa. But I just wanted to clarify, I know for the public, there's confusion that we're a Division under Finance. So, for exemptions, the exemptions actually show on the assessment notices that we already mailed out in March. So unfortunately, to change the exemptions, if you did it at this late time, it would require us to redo all of the properties that have an increase and an exemption amount. We'd have to re-mail out all those assessment notices as an amendment, and we would need to provide them 30 additional days to appeal. So, I think that would be difficult and timely to do at this point. So, I believe your option is the tax rates if you were going to go ahead and try and lower it for this upcoming tax year. Other counties, when there has been, after the effect of a large fund balance or funds that didn't get spent, they would do credits. And that can go directly to a tax bill. I think we're definitely way too early to know what there will be. So, I don't think we can go there. So, I believe at this point in time, unfortunately, your only option is a tax rate reduction to hit the bills that we need to have to our vendor by July 3rd MS. GALIMBA: So, if we were to do it for next year, when would we need to get that ordinance passed? And also is it possible to do a similar size reduction with exemptions? MS. MIURA: Yes. So, the exemptions can be done throughout this calendar year as long as we know what they are before we do our assessment notices. And it would have to be effective January 1st So, there was an ordinance that you all passed last year to create the age 80 and above, that affected for this year. And the previous year, you did the additional amounts in the exemptions plus the, I think it was 65 to 69; then 74-79. So, they were all done through the year, and it would affect the next year. So, there's time for that for the 2025 to 2026 tax year and fiscal year. MS. GALIMBA: Okay, thanks very much. I yield. MS. MIURA: You're welcome. CHR. KIMBALL: Vice Chair Inaba. MR. INABA: I just want to speak to the idea of bills for amending our Real Property Tax Code. We've seen a lot of tinkering in my short four years here, and Page 14 Hawaii County Council-40 May 30,2024 I have concern if we keep messing with the Tax Code, rather than just providing direct relief for homeowners via a resolution, which does the rates. So, I just want to state that for the record. We keep playing with it and we've seen Administrator and Assistant from Real Property Tax come before us many times. So, I would urge my colleagues if we're going to give a tax benefit or reduction to do it via the resolution. Thank you. CHR. KIMBALL: Any further questions, comments? Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: I just have one. I mean we are on (Communication) 883.1, and we have three options in front of us which is provided by this, and they're all different. My point, I guess to this body and to the Administration, in looking at this, thinking about the one that addresses Salary and Wages decreases. My question is going to be, how many positions do we have filled? Because what I've heard across the board is we're about 70 percent full. Meaning every department, if they're around 70 percent filled positions, then there is a cushion there for us to work within to decrease Salary and Wages without affecting our level of service. That was going to be my point to the Administration. So , if that's something to be taken into account or not? Just throwing it out there. Thank you. CHR. KIMBALL: Thank you. Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. I think, if we're waiting on Ms. Nakagawa, either we can table this. I feel like we're just filling dead air at this point. CHR. KIMBALL: I also have a few comments to fill the air, but I'll let the Director go ahead. MS. NAKAGAWA: Thank you for your patience while we walk through this exercise and triple check this to make sure we are on target. So, if were to increase our fund balance in the fiscal year with the rate reduction, the $2.7 million, we were just under 10 percent. I do think it's important, though, to communicate the importance of a higher percentage as we walk through this. As a recent example, as the Bond Rating agencies do, they go through different criteria reviews. In the last two weeks, between the last two meetings, had a review with different criteria. And a significant part of this discussion, as we are under review, which we kept our rating and we were very happy about that, it was maintaining our fund balance at that 10 percent. And that was our intent and that was one of the questions. So, with the timing of it all even over the last two Page 15 Hawaii County Council-40 May 30,2024 weeks, I just thought it was important to communicate some of the discussions that we have and some of those critical financial decisions that we make and how that impacts us as we've discussed. But under 10 percent, 9.9 percent. CHR. KIMBALL: Alright. Any additional questions for the director, or comments on this matter? Council Member Kagiwada. MS. KAGIWADA: Just for the public who may not see this, I just wanted to bring up from this Communication 883.1, the issues that if we go and correct me if I'm wrong. If we go with any of these Options 1, 2, or 3, we will still see these reductions for some of these funds that we have. Currently, PONC (Public Access, Open Space, and Natural Resources Preservation Commission), PONC Maintenance, and Emergency/Disaster. So, I just wanted to bring that up, because I don't know if everybody can see that. Thank you CHR. KIMBALL: Thank you, Council Member Kagiwada. Anyone else? I'll take the opportunity to make a few comments. You know, appreciate certainly what is being proposed and the intention behind it. The big concern I have is that fund balance, and I feel strongly that it's fiscally irresponsible to cut and just stick in a fund balance. With a lot of the additions that we made in the first reading of the budget, they were coming from fund balance, and so, I think that we have to be serious about this duty to balance the budget. So, I would not feel comfortable with Option 3, which is just to say this is coming from fund balance. That said, I'm not comfortable moving forward with the resolution until we've had the conversation about the budget and where we're going to make those cuts, and if we're going to be able to support those. I'd also like to highlight, like we're kind of exclusively focusing on the Operating Budget here and the impact. And we have this whole other outstanding CII' (Capital Improvement Project), which is the wish list, which has some pretty critical projects. And you know, $2.7 million, it could be dedicated to getting some of those projects moving forward. So, it's not just what we have to be considered in the Operating Budget, but all of these pretty critical CIP infrastructure projects. Then there's the elephant in the room, which is that we have this huge outstanding uncertainty about what's going to happen with the Hazard Pay settlement, and my inclination is to be cautious. I know that in the past, Council Member Lee Loy has proposed a rebate, and I voted against it, and she's still mad at me for that. But I think that this might be the appropriate time where we say, okay, we have this big uncertainty, let's see Page 16 Hawaii County Council-40 May 30,2024 how that plays out, and then if at that time, we have a comfortable space between fund balance and our Operating Budget and where we are, we look at providing a flat-rate rebate. That kind of addresses Council Member Kagiwada's concern, where you know, it's not the smaller benefit for the lower value households. And it also kind of speaks to Council Member Evan's comment about, you know, getting money back in the hands of the community. A rebate or a payout, let's say we do $250 or something like that. That's going to have a big impact, probably less so than you know, $100 that they're not having to pay towards a property tax bill. So, I'm not inclined to support this until we've had the conversation about where we would really cut in the budget. I see you have another proposed amendment, which I'm willing to discuss. But you know, I suggest we, at the very least table this till we've had some of the discussions about where we might cut and what additional amendments might be proposed to the Operating and CIP budgets. So, that's where I am on that. Okay, any further comments. Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. Thanks for your, you know, very thoughtful kind of dissection of what we are discussing right now. Director Nakagawa, thanks for confirming how much fund balance we are looking at having as a County. Less than 10 percent makes me really nervous. I think that when you folks put forth the second version of the budget, you were very thoughtful around how much relief we could provide, which is why you suggested a reduction in Homeowners and Affordable Rental in the way that you did. It was something that we can afford. And do we want to do more? Absolutely. But you also mentioned something that was very important to me, which is our bond rating. And that impacts our ability to leverage additional funding to pay for very critical Capital Improvement Projects that need to happen. Like I'm thinking about Fire Stations, bridges, all of the infrastructure that we house our employees in. That's just, you know, some of the things that come top of mind. So, after what you shared with me, I'm reconsidering my support of what's being proposed, and I can't support for the reduction of the rates. Because I don't think we have enough saved to pay for obligations. Thank you, Chair. CHR. KIMBALL: Thank you, Council Member Kierkiewicz. Council Member Galimba. MS. GALIMBA: Thanks. I'm just following up on Council Member Kierkiewicz's comments. I think we could potentially, shoot ourselves in the foot in that, if our ratings were affected then we would have higher interest rates which Page 17 Hawaii County Council-40 May 30,2024 then makes us less able to function. So, we could actually be going backwards to a certain degree. So, I also find that number that we went down below 10 percent very worrisome. MS. VILLEGAS: Excuse me, Council Member Galimba, we're having a hard time hearing you guys from over here. If you could just speak a little bit closer to the microphone and a little more volume. MS. GALIMBA: Thanks, Council Member Villegas. Do I need to repeat? MS. VILLEGAS: That would be amazing. I can hear your clearer; couldn't before. MS. GALIMBA: So, I just wanted to say that the fact that we'd be going down below 10 percent even by just a little, given that the rating agencies wanted to keep us targeted above 10 percent, is a really significant fact in my mind. Because the rating agencies' ratings determine the interest rates that we pay on the bond floats. And those bond floats then allow us to invest in a really critical infrastructure or basic infrastructure that is our duty as a County to perform. So, it is really significant number for me as well. CHR. KIMBALL: Thank you, Council Member Galimba. Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you. Ms. Nakagawa, we're discussing our bond ability basically. Where are we right now with our bonded debt. What is our percentage? MS. NAKAGAWA: Can you give me a second to grab that? CHR. KIMBALL: Council Member Kaneali`i-Kleinfelder, I'm going to have you yield the floor. We'll quickly check in with Kona while we're waiting for a response to that. Council Member Evans or Villegas, any comments? MS. EVANS: No, thank you. CHR. KIMBALL: Well, we'll just wait for Director, then. MS. NAKAGAWA: Thank you again for your patience. As budgeted, the total debt services estimated at 7.99 percent of general expenditures. MR. KANEALI`I-KLEINFELDER: Okay. I guess where I'm going is, are we looking to pull further bonds? And is our bond ratings—are we shooting ourselves in the foot? Page 18 Hawaii County Council-40 May 30,2024 MS. NAKAGAWA: You know, one of the things that we have continued to talk about, all our CII' needs and specifically, our ever-growing needs in our wastewater infrastructure. So, with those improvements that are necessary, more funding will be necessary to address all of the issues and priorities of the County. So, it is critical that our bond rating remains as high as it can be in order for us to borrow at the best rate. MR. KANEALI`I-KLEINFELDER: What is the maximum amount of debt we are allowed to go into? MS. NAKAGAWA: Fifteen percent of General Fund expenditures. MR. KANEALI`I-KLEINFELDER: We're at eight right now? MS. NAKAGAWA: We are at 7.99 percent. MR. KANEALI`I-KLEINFELDER: Okay, so is it a possibility to go another seven percent. Then our bond rating would need to be good. Oh, here comes the Managing Director. I said something wrong. (Note: At this time, Managing Director Deanna Sako, came forward to address the members of the Council.) MS. SAKO: No everything you said is accurate, but I want to remind the Council that we have been preparing for Hilo Wastewater Treatment Plant, which is expected to cost us over $200 million. So, we have been submitting those bond authorizations. So if everything that's been authorized was issued, then we're at $13.88 percent. So,just to keep that all in mind. MR. KANEALI`I-KLEINFELDER: Okay, and the bonds that have been authorized, need to have a rating to be authorized or are they already issued? MS. SAKO: We already issued, but because we have this extremely large project coming up, we're going to have to go out to the bond market more frequently to be able to make the payments to our contractors as they come due. And it's not the only project we have out there as well. MR. KANEALI`I-KLEINFELDER: Okay, that is helpful. I'm trying to gauge is, you know, bond rating and how we are performing; what we need to do in the future. If we're looking at the next five years as being nothing, we're going to go to major projects, then we could look at something like this in front of us today. MS. NAKAGAWA: It's not the case. MR. KANEALI`I-KLEINFELDER: But it's not the case. Okay, that's helpful. Thank you. I'm going to state too, it would be really helpful because we're Page 19 Hawaii County Council-40 May 30,2024 missing one department in this room today. If we knew what projects were coming and where we stood with our CIP budget to really help us understand where we're headed. And I would say, our Planning Department has been a little remiss this year in providing any good data on where we stand and making time to be in front of this body to that end. Thank you. CHR. KIMBALL: Thank you, Mr. Kaneali`i-Kleinfelder. Okay, I'm going back to the maker. MR. INABA: Okay, you know, I think this conversation always gets messy, but what's before us, is we're going to give property tax reductions to our Homeowners and the Affordable Rentals that come with it or not. Because when we take up the budget discussion, if we're going to agree to this resolution, we know we need to find $2.74 million in some form of expense reduction or increase to the fund balance. But if we're going to bring in conversation, I think we're going to get even more confused. So, in my opinion, we really need to decide, do we support the reduction and the benefit to our homeowners or not? And if we want to provide that reduction, and nobody wants to increase fund balance or decrease expenditure, then we increase the rates for other classes to balance all this reduction. That's where we are. So, I don't want us to go down a rabbit hole of confusion, tinkering back and forth between the resolution, which is very clear, and the thousand possibilities of amending the Operating Budget. So, I'll leave that there. Thank you. CHR. KIMBALL: Thank you, Council Member. Anyone else? Yes, Council Member Evans. MS. EVANS: Thank you. So, I'm in support of the resolution and the reduction. You know, we agreed to reduce by .10 cents, and now we're adding another .10 cents. But I was just wanting to comment that the assessments again, in North and South Kohala went up so drastically in my district, of course. Thank goodness we have the cap at three percent, so in terms of how it's impacting our local people. You know, I think they just need to keep remembering they're going to be the beneficiary next year of that three percent as it keeps marching forward. There's going to be a lot of increases and a lot more taxes coming, and I also want to comment that there's a lot of construction going on in my district and it's housing. So, there's going to be a lot more property tax collection coming our way next year. Page 20 Hawaii County Council-40 May 30,2024 I just think this is a good thing to do. I think it's going to be good for the economy to get the cash back into people's hands. So again, I'm in strong support of the reduction. Thank you, I yield. CHR. KIMBALL: Thank you, Council Member Evans. Alright, seeing no more comments, we'll go to a roll call vote please. Vote on Res. 525-24: The motion to adopt Res. 525-24 was carried by the (Adopted) following roll call vote: Ayes: Council Members Evans, Inaba, Kaneali`i-Kleinfelder, and Villegas —4. Noes: Committee Members Galimba, Kagiwada, Kierkiewicz, Lee Loy, and Chair Kimball —5. Absent: None. Excused: None. MR. HENRICKS: The motion fails. CHR. KIMBALL: Alright, Mr. Clerk. On to the next item,please, unless folks want a quick break. Okay, let's take a five-minute break. Come back at 10:10. We are in recess. Recess: At 10:04 a.m., the Chair called for a recess. Reconvene: The meeting reconvened at 10:11 a.m. CHR. KIMBALL: We are back in session. Mr. Clerk if we could go to the Bills for Second and Final Reading. ORDER OF The Chair directed the Council to proceed to the next order of business, Order of THE DAY the Day (Second or Final Reading). (SECOND OR FINAL READING): Bill 136: ESTABLISHES AN OPERATING BUDGET FOR THE COUNTY OF HAWAII (Draft 3) FOR THE FISCAL YEAR JULY 1, 2024, TO JUNE 30, 2025 Draft 3 includes estimated revenues and appropriations of$921,068,024. Reference: Comm. 755.28 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Public Hearing: May 14, 2024 First Reading: May 16, 2024 and Page 21 Hawaii County Council-40 May 30,2024 Comm. 755.29: From Council Member Holeka Goro Inaba, dated May 20, 2024, transmitting (Memo No. 1) proposed amendments to the General Fund expenditure accounts by increasing the Contingency Relief account by $472,500 and decreasing the Grants to Nonprofit Organizations account by the same amount. (Note: Comm. 755.30, from Council Member Inaba dated May 28, 2024; Comm. 755.3 1, from Council Member Lee Loy dated May 29; Comm. 755.32, from Council Member Inaba dated May 29, 2024; Comm. 755.33, from Council Member Inaba dated May 30, 2024; Comm. 755.34, from Council Member Kaneali`i-Kleinfelder dated May 30, 2024; Comm. 755.35, from Council Member Galimba dated May 30, 2024; and Comm. 755.36, from Council Member Inaba dated May 30, 2024, transmitting proposed amendments to Bill 136, Draft 3, was circulated.) Motion to Approve: Mr. Kaneali`i-Kleinfelder moved to approve Bill 136, Draft 3. Seconded by Ms. Lee Loy. CHR. KIMBALL: Discussion. I know we have some amendments. I'm going to suggest perhaps we start with yours; Council Member Lee Loy, since Council Member Inaba is out of the room. MS. LEE LOY: Chair, thank you. You know, based on the previous discussion, I'm going to hold off any further on doing anymore tinkering. I want to remind the public that, although we didn't have the tax decrease that we wanted, contained within this budget is still a tax decrease in the Mayor proposed budget. So, there will be some relief. But based on the conversations that we've had from our Finance Director and some of the tinkering that we already did, I'm willing to not propose this at this time, because I think there's another opportunity as we move forward. Maybe four months from now; six months from now when we see how the departments are operating to make more refined adjustments, as needed. So, thank you, Chair. I'm going to not be proposing any amendment at this time. CHR. KIMBALL: I'll go ahead then, Vice Chair Inaba, are you ready to work on your amendment? Motion to Amend: Mr. Inaba moved to amend Bill 136, Draft 3, with the with the contents of Comm. 755.29. Seconded by Ms. Lee Loy. CHR. KIMBALL: Vice Chair Inaba. MR. INABA: Thank you. As we know, we had the communication, I believe, two weeks ago with the proposed recommendations for this upcoming fiscal year, Waiwai Grant Program. We are not projected to award out the full $2.5 million. So, this communication, this amendment to the budget, pulls out the funds that are not going to be awarded and moves it over for this one year to the Contingency Relief Funds. Page 22 Hawaii County Council-40 May 30,2024 So, the funds that weren't programed via Waiwai can still go out to, you know, the goal is the nonprofits. It's ultimately up to the Council Members if they might give some to the departments as well. I want to make that clear, you know, we aren't restricted in that sense. But if we don't pass this amendment, the money will go unprogrammed, and $472,000 will just lapse if we don't pass this. So, happy to take any questions. We'll be actually taking up the actual resolution for the awarding of the Waiwai grants next week on Tuesday and ask for your support. So, that these funds can be used to support programs and services across our island and all nine district. Thank you. CHR. KIMBALL: Thank you, Vice Chair Inaba. Council Member Kagiwada. MS. KAGIWADA: Thank you, Chai. And thank you, Vice Chair for putting this forward. In full support. Yeah, there were some critical community programs that we were not able to fund through Waiwai this year. Some of them because of small technical issues. Like they had, you know, eight things that they listed they want to fund, and one of them was a tiny thing we couldn't fund, and there was no way for us to work with the organization to make that click correctly. So, I'm looking forward if we pass this to try to use those additional funds to really work with those organizations and make sure that we could help fund our work and our community do so legally and ethically the way we want to. But make sure that some of those really important organizations get funded. So, I really do appreciate this and will be fully supporting. Thank you. MS. EVANS: Chair. CHR. KIMBALL: We'll go to Council Member Lee Loy and then we'll come over there to Kona. MS. LEE LOY: Thank you, Chair. Yeah, in support of the mechanics. I think it stays in the vein of the Waiwai Grant Program. I know my office kind of funds contingency fund in a similar matter; we ask for all of the documentation, we ask for a budget sheet. So, I appreciate how we're actually moving it from one area into an area that uses the same mechanics. In support, and then maybe Council Member Inaba, you and I later on can put our heads together about modifying the Code itself on how we should address spillover in the future. I would rather it be done that way, so there's a bright line of understanding that there's money there. And if there is an event where it's not spent down or not, we're not able to program that it's codified. So, the larger public can become better aware. But I appreciate this coming forward. I yield. CHR. KIMBALL: Thank you, Council Member Lee Loy. Recognizing, I believe it was Council Member Evans. Page 23 Hawaii County Council-40 May 30,2024 MS. EVANS: Yes. I'm going to support this kind of reluctantly, but I want it going on the record saying, I think it's unfortunate that we got to this place that the process that we had, and the amount of nonprofits that submitted for funding, we weren't able to, through our process, be able to award the grants or were not awarded because we have to vote on it next week, I know. But it's a very thoughtful process. It's meant to have nonprofits really think through on their budget; their deliverables; their measurable outcomes. It's what is expected when nonprofits write for grants. So, I'm just hopeful from lessons learned this year, that we can do some more training; some more public outreach, and make sure that our nonprofits can achieve getting awarded. The other thing I just wanted to note, is we did put a cap on the amount of money each nonprofit could get. And I do think that had a huge influence as to why we are here today the way we're here. Because in the past, some people were able to get$100-$150-$200,000 to a nonprofit. We do not do that anymore, which I think is a good thing that we've limited the amount of money a nonprofit can ask for through this program. But the impact is, I think maybe why we are here today, having this discussion. And I also wanted to thank Member Lee Loy in pointing out we could put in Code and codify, if in fact, there is there is funding still sitting there that is not awarded that what will be done and how it will be distributed. Because again, I can tell you nonprofits are part of our economy. And if I was to look at what drives our economy, I think nonprofits are a huge part of our economy and we should acknowledge how we leverage these dollars through their volunteer work or the communities that support the nonprofits. We can give them $1 and probably get$4 in return of—so again, it's a huge part of our economy. So, I'm very supportive that we for sure give this money out to these deserving nonprofits and the work they do. Thank you, I yield. MS. VILLEGAS: Chair. CHR. KIMBALL: Yes. Council Member Villegas. MS. VILLEGAS: Sure. Once again, I want to commend Council Member Inaba for your courageous and creative process on this and insuring that the funds that weren't able to be utilized to support our nonprofit organizations here on island, could be reallocated into arenas that Council Members could then allocate to the organizations and different departments relative to our districts. This was a really creative way to ensure that the monies just didn't fall back, and we didn't lose the opportunity. I'll be supporting this. I also, as challenging as it's been over the last year to navigate some of the more stringent parameters around Contingency Relief Funds (CRF), I am also very grateful for that. Because it gives us a more aligned and specific course for what CRF funding can Page 24 Hawaii County Council-40 May 30,2024 be utilized for; what the organizations need to provide, how it needs to happen, which allows for every one of us as Council Members to avoid any potential conflicts of interests, or just any other legal issues around utilizing public funds for public greater good. So, while this is very out-of-the-box thinking, and when I first saw it, it was a little bit like, wow. I just commend you for your creativity in finding a place that this could get plugged in and benefit the people for which these funds are intended to benefit. Also,just a quick shout-out to the Administration. For years, we had to come and sit on this dais and go back and forth about even putting in Contingency Relief Funds into the budget, and that's changed. And we have been provided each year and that's changed. And we have been provided each year annually for the last couple of years taking that whole conversation off the table. But now we have this opportunity for this next level of consideration. And I'll be supporting this today. I don't see, unless I'm missing anything that Corporation Counsel could share or Finance that would be concerning from a legal capacity. I think for myself from a principle standpoint, it makes sense for these funds to transition into these accounts and for us, as Council Members, to have the opportunity for the funds to be distributed equitably across the island. And support our nonprofit organizations and our departments for some of their needs to help plug some of those holes and fulfill a number of resources for equipment or whatnot for the different departments in our districts. So, with that, I yield. CHR. KIMBALL: Thank you, Council Member Villegas. Going to Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you. I spent a lot of time talking about with Corporation Counsel about our Contingency Relief Funds; thoughtful uses of and making sure we're doing things right in the last six months. But one thing she reminded me of is when this first started, Contingency Relief Funds were more of a way for the Council Members to provide funding for different departments to take on initiatives and projects that we didn't have in the budget. So, I like this because there's been a number of things I've been trying to address and with a limited amount of funding, we really can't take on a County project, because the cost is prohibited. So, with this increase of about"52"per Council Member, I think that would allow us the ability to take on some of these kind of mid-range projects that the departments wanted to do. Whether it's Parks and Recreation, DEM (Department of Environmental Management), anybody that we see really does a public benefit, and take those projects on with a little bit more funding. So, I appreciate this move to be helpful in the coming years. Thank you. Page 25 Hawaii County Council-40 May 30,2024 CHR. KIMBALL: Thank you. Did you have a quick response to anything? Okay, Council Member Galimba. MS. GALIMBA: Thank you, Chair. I just wanted to ask a few questions about technicalities. Generally, in support. So, this amount of money would be going into the CRF fund. One question would be, given that it's a year where we would be getting half of our CRF funds, and then half after the election. Would that be the same to you know? And also, second question, Would we need to track the funding separately than our regular CRF funding? CHR. KIMBALL: You may respond, Vice Chair Inaba. MR. INABA: No, if we make this transfer, the funds in that line item for CRF are treated the same as the other CRFs. We wouldn't track it separately, and we would have access to 50 percent, as is allowed with the current CRF funds that are budgeted. MS. GALIMBA: Thank you very much for clarifying. I yield. CHR. KIMBALL: Thank you. Vice Chair Inaba. MR. INABA: Thank you. I just want to speak to the concept of us not having programmed the full amount. We've been getting better every year at trying to make our application process more clear in providing more guidelines. And this year we took the greatest care in making sure that we're following the Code. We're not giving awards that don't align with the Code, whether it be over 10 percent in Administrative overhead costs, or not in line with public purpose. That's why we are where we are. And the next year's application process we can be even more clear in providing, not a comprehensive, but you know, an exhaustive list as possible that shows what we won't fund. With that, I do want to say on the record, if future Councils ever look back at this hearing, this is a one-time thing. We're only going to see this amount, unless the future Councils go and move money over on their own. But this was a collaborative attempt to get the funds out with the Administration. So, next year we start fresh with whatever comes in our CRF line in the budget, and we work with that amount. But we shouldn't expect to see over a million dollars in our CRF line. Just want to state that on the record. And with that, yes again, ask for your support. Thank you. CHR. KIMBALL: Alright. Thank you. I'd like to actually get some clarification on a couple of things with respect to this. We will have our resolution with the recommendations from the Ad Hoc Committee at the next committee meeting. Page 26 Hawaii County Council-40 May 30,2024 Wanted to ask, I'm not sure if this is a Clerk question, author question, or a Corporation Counsel question, what is our ability to amend or even reject the resolution that authorizes the distributions of the GIA (Grant-In-Aid)? MR. HENRICKS: Just like any other resolution, the Council could do, as you say; modify, reject, or approve. CHR. KIMBALL: Okay. I think I'm going to be maybe the lone standout here and say I'm not super excited about moving this into the CRF and would rather keep it programed within the GIA, and actually, take a deep dive into some of the organizations that did not, per the ad hoc's decision-making, meet the criteria, and determined if we can actually, as a body, have a discussion about whether or not they actually did meet the criteria. In other words, I'm saying, I'd like to have a conversation about who we've rejected GIA funding for and see if we can come to an agreement that they actually meet the criteria and should be funded. And you know, I think that the GIA process is very robust, and I do appreciate all the work that went into that. I feel it's a little bit more robust than the CRF programing in sort of the evaluation piece of it. We're getting better on CRFs, and I think once we have our new grant support person in place, we'll be much improved. But that's where I am with this. I appreciate not wanting to lose the opportunity to give this money to the important nonprofits that are doing important work. I'm just a little bit more comfortable with doing it through GIA than I am through CRFs. So, that's the position I'm going to take on this. With that, any further discussion? Yes, Council Member Villages. MS. VILLEGAS: Yes. You know, Chair Kimball, I appreciate your perspective on that, but I suppose these are issues that we've had every year, at least in the last couple of years since we've gone to this different process for the Grant-In- Aid and with the application and the numerification of scaling. I think we missed the mark by not having an appeals process, and it was very heavy-handed "no." If the documentation was deemed incomplete in any way, and I know I've heard from a number of nonprofit organizations who are very upset and claim to have provided all the correct information. And kind of as a dynamic with us sitting on Council, we have to navigate between the organizations in our community and the Department of Finance and mitigate, you know, the difference stories we were told without actually always having first- hand knowledge of how the applications come in. So, while I agree that there's a lot of challenges when it comes, and just the percentage of nonprofits that didn't meet the mark, and were left disqualified immediately, to me brings up great questions about what's going on here because Page 27 Hawaii County Council-40 May 30,2024 it's happening too often to just be a one-off. But I think that we as a Council then need to in the next cycle, bring forth an Appeals process. But to allow the opportunity for this funding to then come to us, to then be utilized. Public funds utilized for public good by the people who the funding comes from, going back to the people for which the funds are meant to support in this avenue through Contingency Relief Funds, I believe is the highest best use and a great avenue to insure that this doesn't just fall backwards. And I do think that we need to look forward to the next round and have an appeals process and have a means for recalibrating somehow what's happening here, because so many organizations are finding themselves incredibly shocked and baffled by how they don't even make the mark to be considered on the outset. So, that's my humble opinion, and I hope for the support of our colleagues for Dr. Inaba's putting forth this amendment and reallocation of resources so that these funds can get into the hands of the people sooner rather than later. I yield. CHR. KIMBALL: Thank you, Council Member Villegas. Any other comments? Seeing none, we'll go to a roll call vote on the amendment. Vote on Motion to The motion to amend Bill 136, Draft 3, with the with the Amend: contents of Comm. 755.29 was carried by the following roll (Approved) call vote: Ayes: Council Members Evans, Galimba, Inaba, Kagiwada, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, and Villegas —8. Noes: Council Member Chair Kimball — 1. Absent: None. Excused: None. MR. HENRICKS: The motion carries. CHR. KIMBALL: Thank you, Mr. Clerk. I believe we have another amendment from you, Vice Chair Inaba, which I think is unnecessary now, given the previous; Comm. 755.30? MR. INABA: Yeah, I do have another amendment based on us not having changed the real property taxes. So, I'd ask if this body would support tabling Bill 136. CHR. KIMBALL: We have one more amendment, I believe from Council Member Kaneali`i-Kleinfelder. So, we can take that while we're waiting, and if we don't get that by the time we go on, we can certainly table. So, I'll pass the floor or Council Member Kaneali`i-Kleinfelder. Page 28 Hawaii County Council-40 May 30,2024 Motion to Amend: Mr. Kaneali`i-Kleinfelder moved to amend Bill 136, Draft 3, with the with the contents of Comm. 755.34. Seconded by Ms. Lee Loy. CHR. KIMBALL: Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you, Chair. You know, I was a little hesitant to bring this forward, given the last meeting we had and the discussion about fund balance. But in a meeting I had with our community, they asked me where we stood with this. And they said, you know, we passed Bill 82; we came, we presented; we made sure it got done, and are we going to fund? And that was the follow-through on the bill. As we can make the bill; we can create the level, but we have to fund the program to be able to help with the maintenance of private roads. So, in response to the community, I spoke to the department. Mr. Pause was positive on this, because we are going to be starting that program about the first quarter next year. So, to have the funding available first quarter next year would allow us to be able to actually move forward in starting to maintain some of the roads as the different agencies are coming in to apply. So, the hope today is for the support of this amendment. This is for $250,000. Originally, I was going to request more, but I think this is a good place to start. I do want to mahalo Mr. Nakagawa for working with me to create an account that we could land the funds in. That was half the battle, because we've never done this before. So, thank you for being here. Do you have anything you want to add from the department's end? Please introduce yourself? (Note: At this time, Public Works Business Manager Kelsey Kalua-Lewis, came forward to address the members of the Council.) MS. KALUA-LEWIS: I'm Kelsey Kalua-Lewis, Business Manager, Public Works. I discussed this a bit with Director Pause yesterday. Of course, if this body chooses to pass this amendment and appropriate the $250,000, we are more than happy to try, to the best of our ability, to spend these funds next fiscal year. I know that Bill 82 requires the director to come up with kind of like a ranking system, look at the criteria submitted by each applicant for the projects. It also requires DPW (Department of Public Works) to then go to other departments. I believe, Police, Fire,just a few of them. It'll be a timely process, and I just want to state that I cannot guarantee that Public Works has the ability to spend within the fiscal year just due to resource constraints. The fact that this is in General Fund versus Highway Fund, kind of puts more restraints on us. Because all of this type of work that's usually done is completed by our Highway Maintenance Division which falls in Highway Fund. Page 29 Hawaii County Council-40 May 30,2024 MR. KANEALI`I-KLEINFELDER: Thank you, Ms. Kalua-Lewis. Yeah, all that was discussed in the hearings for Bill 82. Then, in hearing that, it was going to be processed to create and to grasp as a department and being brand new, we did give a year for the department to wrap their heads around how they could perform; what they're going to need to do. But without the funding piece, there's nothing that can be done. So, the goal today is to see if this body is willing to put some funding on the table, and I think that helps kind of expediate for the department where we want to be and what the community is asking for. And when you are able to put this program forward, you have a small amount of funding to get started with. And hopefully, it'll make a difference in our communities. Thank you for that. MS. KALUA-LEWIS: Understood, and we will try our best. MR. KANEALI`I-KLEINFELDER: I appreciate that. That's what the community is hoping to hear. Thank you. Okay, Chair, I yield. CHR. KIMBALL: Thank you, Council Member Kaneali`i-Kleinfelder. Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. Kelsey, great to see you. So, Public Works has until January of next year to develop the program framework per the ordinance. MS. KALUA-LEWIS: Correct. MS. KIERKIEWICZ: So, we're about halfway through this calendar year. What kind of progress has been made to design that program? Do you have someone in the department that's sort of like the lead architect on how it would function? MS. KALUA-LEWIS: So basically, it's been Steve, Director Pause, kind of consulting with the Highway Division Chief to see what some of the needs are. Of course, coming up with a way to, you know, properly these projects. It's always a battle, right, especially if at a director's discretion. How do we prioritize? How do we choose aside from what's outlined in Bill 82, is it traffic studies, is it using our ranking system that we currently use? That is still discussions that are currently ongoing. We spoke to our Highway Division Chief. Just to do this kind of work, he would need additional staffing. Maybe five employees in the district. Of course, that would be needed from Gen (General) Fund. So if we get this appropriation, yes, we'll have the $250,000 for materials, but how are we going to get the work done? That's something we're still working on. Page 30 Hawaii County Council-40 May 30,2024 MS. KIERKIEWICZ: There's an application process that is supposed to be created through the ordinance we passed. How close is the department to completing that? Are we 10 percent there; 50 percent there? MS. KALUA-LEWIS: I can get back to you on that. I would have to check with Director Pause. MS. KIERKIEWICZ: Okay, MS. KALUA-LEWIS: He couldn't be here today. He is at a deposition. So, he sends his regrets. MS. KIERKIEWICZ: No worries. Thank you for being here. You are an excellent stand in. My concern is how we pay for the program. So, as you mentioned, there's money that's being set aside to do the work. But I still don't have a total understanding of what it's going to take personnel wise to stand up the program. And 250,000 (dollars) is really pennies when you think about the number of private roads we have across Hawaii Island I would feel a lot more comfortable if we had a presentation from the department where you can present, okay, this is all of the work that we have done so far to work towards meeting the obligation of the ordinance that the Council passed; here's where we're a little bit stuck, these are the resources that we need. If we're serious about really making this program happen, let's fully fund it. Because I still don't know how the roadwork is going to get done because our Highways guys are their salary and wages comes from General Fund or Highway Fund? MS. KALUA-LEWIS: That comes from Highway Fund. MS. KIERKIEWICZ: We cannot use Highway Fund to do work on private roads? MS. KALUA-LEWIS: No, it's very stated in the HRS (Hawai`i Revised Statutes). MS. KIERKIEWICZ: So that again, I want to figure out. But it's hard to do that today during Budget. But we need to do it with you folks. So, I think a public conversation about how you are moving forward to implement and what it's going to cost us to really get off the ground is probably the most sensible thing to do. I mean, it's nice to have,putting this money in the budget, but realistically, I haven't heard how we can actually get the work done. So again, this was about managing expectations of our community. So, I think we need to be honest with them about what we're going through; the constraints, but Page 31 Hawaii County Council-40 May 30,2024 beyond that, how we're going to fix it that we can actually implement and make improvements to private roads. So, that being said, I appreciate the effort and intention of this amendment, but I would feel more comfortable if we got a presentation from the department to understand where we are and how we are going to meet what was adopted by ordinance. MS. KALUA-LEWIS: Yeah, I can definitely discuss that with the Director, but fully agree that we are constrained with our resources, from the laborers in Highway to the equipment that currently fall under the Highway Division, Highway Fund. It's a fine line when you try and use that type of equipment for General Fund projects. We're even having trouble with the support staff of, you know,just hiring clerks in multiple of our divisions. So, even the support staff to kind of track these things. We do have to compile reports for Council, I believe every January. It'll be a challenge in that stuff that we definitely want to share openly and publicly. But that is Public Works' Challenge. MS. KIERKIEWICZ: Okay, that's extremely helpful. And I think that was a common sort of theme that was brought up as this body as were deliberating the bill, is what's it going to cost and how are we going to pay for it? Again, I would feel more comfortable having those details before we make any decisions at this moment. Thanks for being here. Chair, I yield. CHR. KIMBALL: Thank you, Council Member Kierkiewicz. Before I go back to the maker, I want to check in with Kona. Council Member Evans or Villegas? Go ahead, Council Member Evans. MS. EVANS: Thank you. I'm in strong support. I really like Member Kaneali`i-Kleinfelder putting a little bit of memory to what took us a long time to get across the finish line, and the Mayor signing it. And you know, everyone coming on board, and we had lots of hearings and I see Pause (Director) coming on board and his staff. And I think this sends a strong message to the Department of Public Works that your County Council really thinks this is something worthy of working on. I think this is a part of moving us in the right direction, and that's setting up an account; putting a little bit of money into it. So, it's kind of like one of those sayings, you know, "You put up or shut-up." And I think this is a put up. This is saying to the Department of Public Works and to that community that Member Kaneali`i-Kleinfelder represents that, we're going to put some money in this. Get in the game, and we're going to expect the department; give them the 250,000 (dollars), it's a really bit of incentive to the department saying, "You have the money, you have to communicate, you have to set priorities, and we'll see you at the end of next year in budget hearing and budget process when you go over all your programing, and you tell us what you're doing and how you're doing it. Page 32 Hawaii County Council-40 May 30,2024 This will be an opportunity for you. We could focus on this 250,000 (dollars). Did you find a way to make a difference in the community and how did you do it?" I think a little bit of money into it really kind of says we are as a Council really behind this program, and I think it's brilliant actually, that we've done this. And I think it says a lot of the Council to, even if it's a small amount to some of us. I think a small amount is really saying, we really like this program. And I can tell you, there's a lot of roads where some people's lives are at risk because some of these roads are impassible. So, thank you very much, the maker of the amendment, and I yield. CHR. KIMBALL: Thank you, Council Member Evans. Council Member Villegas. MS. VILLEGAS: Thank you. I, once again, want to thank Council Member Kaneali`i-Kleinfelder for the courage and determination in stepping outside of the box here. And you established a new expense account through this piece of legislation, which is thinking outside of the box and putting pen to paper and created the `umeke, the place for funding to go, which is a first step. I know we would love to be able to solve the bigger, broader problems, and challenges, and needs, and desires of our communities with, you know, a grander scale of solutions. But oftentimes it's the small steps that gets us closer. I think this right here is a reflection of that kind of effort, and that kind of program, and that kind of project. While the amount of money is not, you know, inconsequential. It's also not so vast that it would do harm or jeopardize our fund balance. But it creates this expense account, private non-dedicated and non-surrendered roads. And that's a huge thing for that to be created and actually exist on the books. So as we move forward and identify other funding sources, which shout out to DPW and their amazing work funding grants; funding for all kinds of road projects around our island and that are coming into effect in the next few years. I see this as being space being carved out on the books for future work and also validates all the people that have been coming forward and talking to us for so long about their needs and desires to be included with allocation of public funding to support the challenges that they navigate. I also formally recognize a lot of the challenges related to the volcano and the volatility of building in areas that are jeopardized due to the nature of living on an active volcano. But I really support this, and I am grateful. And I commend you Mr. Kaneali`i-Kleinfelder for establishing this new expense account which becomes the portal for the funding to be allocated to his important work. I yield. Page 33 Hawaii County Council-40 May 30,2024 CHR. KIMBALL: Thank you, Council Member Villegas. Over here to Council Member Lee Loy. MS. LEE LOY: Thanks Chair. Kelsey, you really are a great representation of the department. Excellent. I'm not going to be supporting this, because I think what's bothersome to me and maybe what my colleagues are not hearing, is this is the one department that gets General Fund and Highway Fund. And those Highway funds are restrictive, and this amendment muddies how there are very specific bright lines on the spend down of that money. Not only does it muddy the use of the funds, but I'm really concerned it will put us in a position to have to answer to different type of liabilities as it related to using restrictive funds in areas that we're not supposed to, including people's time and their equipment. That's my first heartburn with this. While I do like the establishment of a line item for these funds, I'm still a big proponent of, this is a great opportunity to establish a Special District where the entire community can have tax offsets or have tax rates that get poured into providing what they need in their district. It's been a hard nut to crack, but this is just a band-aid when really, we need the information on this application process. We need real smart people putting their heads together on how to pave these roads which we know flood, right? And more importantly, managing the expectation that this is not a one off. So, that's my position on this particular bill. I think the Council Member needs to get more creative and outside the box. But this is a perfect example, we do special districts for sewer lines; we can do special districts for paved roads. And maybe that's something that our director can look into. And this is an area that's zoned Ag, and when I look at the rates, our Ag districts are one of the lower rates also. So, there might be ways to collectively look at offsetting those rates by a special district. Those are my thoughts on this bill or on this amendment. But I'm going to be opposing it, because I cannot see us commingling funds just out of desire to say, hey, I did this, I made it happen. So, those are my thoughts. I yield. CHR. KIMBALL: Yes, Council Member Evans. MS. EVANS: Chair, I believe you can't comment on another member's intention. CHR. KIMBALL: Thank you, Council Member Evans. Yes, let's keep the comments to the matter at hand, and refrain from good or bad, speaking to the intentions of the makers. Council Member Galimba, please. MS. GALIMBA: Thank you. I appreciate the intention of this bill, but I think it sounds like it's a little bit premature. And I just don't want to put the department Page 34 Hawaii County Council-40 May 30,2024 into a bad spot by giving them money when the process isn't developed, so that they could spend the money, because I just worry then they're kind of put in a double bind. So, that's my position, and I won't be supporting this. Although I definitely will support, you know, funding for these private roads when the timing is a little better. Thanks. CHR. KIMBALL: Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you. You know, given Ms. Nakagawa is in the bathroom; I was going to ask a question. Mr. Brown, I don't know if you can assist until Ms. Nakagawa comes back? (Note: At this time, Finance Deputy Director Aaron Brown, came forward to address the members of the Council.) MR. BROWN: Good morning, Aaron Brown, Finance. Good morning, Mr. Matt Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you, Mr. Brown. Thank you for being here. I'll keep it high-level. We're on an amendment to the budget, and you understand this process well. So, comments from the Council as to the ability of the County to pay for work done through a department that is bi-funded through field tax and General Fund. In our discussions, lengthy discussions for Bill 82, a lot of these things were hashed out. And what I remember was we can find ways of billing through General, or work being done for roadways under this program. So, I'm just looking to clarify that for the body so it's not a point of confusion for anyone and for the public. MR. BROWN: This is something new. I don't want to, you know, speak to the mechanical end exactly how we would do that. I can speak for, historically, there has been General Funds that have helped out the Highway Fund in general, especially before the fuel tax was increased, the General Fund was supplementing some of the Highway Funds shortfall. How we go directly to paying invoices for particular paving, I am not exactly sure how that would work yet. That hasn't been fully fleshed out. But the fact is, that yes, the General Fund has supplemented the Highway Fund when there was revenue shortfall in that special fund. MR. KANEALI`I-KLEINFELDER: Okay, Ms. Nakagawa did join us, and I appreciate that answer. It's helpful, because it's providing some clarity. And then for the department, completely understanding this is going to be something new, and new is always scary. But it's also fun, because we get to do things we haven't done before. Page 35 Hawaii County Council-40 May 30,2024 So, I have two expectations. One, we're going to figure out this program in the time allotted, because that was more than I wanted to give in the first place. But I wanted some ability for you folks to take this on. And then, two, we did this through a long series of deliberations in fully understanding what we can and cannot do. And if we couldn't do this, then there wouldn't be a State allowance for it, and we wouldn't have passed the bill. So, we're here because we got here, and we unanimously supported that bill to make it happen. So,just giving that to the body today. Ms. Nakagawa, if you could, MS. KALUA-LEWIS: I think that, you know, I read over Bill 82, and it's very clear on what the program is and what Public Works will do. But it's a project, that yeah, we get this criteria, but we also have to watch for, me being a fiscal person, we also have to watch for making sure we pay attention a little more, and that's something that I still have to develop as the Business Manager of how I guess, when we cross funds, how it will look. I know there's examples now where we do bill, you know, back to bill back to joint fund. And joint fund helps with other funds. Currently, our Highway Maintenance Department, I believe outside of flood control and more public safety issues that requires their time and attention and your need for the work, outside of that, they don't really do much work that gets billed back to the General Fund. MR. KANEALI`I-KLEINFELDER: Thank you. Ms. Nakagawa. So, we're discussing, maybe not rightly so, we're discussing some of the details of Bill 82 under this amendment, because we're putting funding towards the bill, potentially. So, the question has come up from the Council, as far as funding from the General, which we know is appropriate and allowed. But more so, if the department was able to take on the work in the coming fiscal year, how they would do so under the General without commingling funds or creating waves. MS. NAKAGAWA: Thank you for the question. Sorry, I stepped out for just a minute. So, I think as we've talked about today, the department is still working on how to do this; putting a process together and a plan in place on how to do that. And part of that will be on the accounting side. And so we talked about before, the staff resources that would be needed to do this, are not in the General Fund. So, there would be necessary accounting work of the time that is spent on this work. So, that's one of the areas I think we can definitely work with DPW on making sure that all of that is accounted for in the funding that's identified. So, things to work on. You know, I think, as mentioned, they are still in that planning process and an area to consider. MR. KANEALI`I-KLEINFELDER: Thank you. So, it's not that we can't because it's new, and that we're going to find a way to do it, is what I'm hearing. Page 36 Hawaii County Council-40 May 30,2024 We had these discussions during the bill, and also,just to work out these details, so that it wouldn't be a problem and it couldn't be a problem. So, thank you for stating that, Ms. Nakagawa. Just for the body, we have road improvement district process. And it's been in existence for a long time. That's always an option, that's completely separate. But I don't want to confuse what's on the table today. This is something that we worked hard towards. And this is applicable not only to the Puna area; this applies to the entire island. So, this is something all of us can now use to propel in our community certain roads that meet the criteria with the director's discretion to enhance our abilities to provide for our communities and do our level of service that is adequate in some areas that just can't get those services now. So, I look for everyone's support on this, and I do appreciate the comments from Public Works, thank you and from our Finance Department. And I yield, Chair. CHR. KIMBALL: Thank you. Alright, seeing no further lights on, I'll just make a couple of comments. I like the Bill 82 program. I've already expressed today, my concerns about dipping more into the fund balance with some of the uncertainty that exists. Given the source of the funding for this proposed amendment and what I'm hearing from the department about them not being quite ready, I'd be more comfortable proposing this as a budget amendment as we get a little closer to the implementation date. Support the program. Support putting funding towards it. I know that the State Legislature has evaluated a couple of times. I don't think it's passed, and correct me if I'm wrong, that they would allow for Highway Funds to be used to some extent on private roadways. It's certainly something we can look at there. But yeah,just being real cautious about continuing to dip into the fund balance, and want to give the department time to set up this program and recognizing that we have an avenue, that if once they're ready, we can do a budget amendment through a bill that would get that funding when they're ready to go. So, that's my position. Go ahead, Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Just more a policy question. Mr. Clerk, if this amendment were to be voted on and then failed, could a budget amendment be brought up in the coming fiscal year for the same purpose? MR. HENRICKS: That would be up to the Council to decide at that time. MR. KANEALI`I-KLEINFELDER: Okay, thank you. CHR. KIMBALL: All set. Okay, with that, Mr. Clerk, roll call on the amendment contained in Communication 755.34. Page 37 Hawaii County Council-40 May 30,2024 Vote on Motion to The motion to amend Bill 136, Draft 3, with the with the Amend: contents of Comm. 755.34 was carried by the following roll (Approved) call vote: Ayes: Council Members Evans, Inaba, Kaneali`i-Kleinfelder, and Villegas —4. Noes: Council Members Galimba, Kagiwada, Kierkiewicz, Lee Loy, and Chair Kimball —5. Absent: None. Excused: None. MR. HENRICKS: The motion fails. CHR. KIMBALL: Thank you, Mr. Clerk. I'm going to ask at this time, we need to take a quick recess. It is 11:00 o'clock. Okay, we can reconvene at 11:15. We are in recess. Thank you. Recess: At 11:05 a.m., the Chair called for a recess. Reconvene: The meeting reconvened at 11:19 a.m. CHR. KIMBALL: Calling this session out of recess. Given that we are waiting for a couple of additional amendments to Bill 136, I'm going to request a motion to table. Vote on Motion to Mr. Inaba moved to table Bill 136, Draft 3, as amended. Table: Seconded by Ms. Galimba and carried by the following (Approved) voice vote: Ayes: Council Members Evans, Galimba, Inaba, Kaneali`i-Kleinfelder, Kierkiewicz, and Chair Kimball —7. Noes: None. Absent: Council Members Lee Loy and Villegas —2. Excused: None. CHR. KIMBALL: If we can now go on to the next item on the agenda. Page 38 Hawaii County Council-40 May 30,2024 Bill 137: RELATES TO PUBLIC IMPROVEMENTS AND FINANCING THEREOF FOR (Draft 3) THE FISCAL YEAR JULY 1, 2024, TO JUNE 30, 2025 Draft 3 of the proposed Capital Budget for the fiscal year ending June 30, 2025, includes 67 projects requiring a total appropriation of$531,335,000. Reference: Comm. 756.27 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Public Hearing: May 14, 2024 First Reading: May 16, 2024 and Comm. 756.28: From Council Chair Heather L. Kimball, dated May 22, 2024, transmitting a (Memo No. 1) proposed amendment to add the Parks and Recreation Department's Honoka`a Swimming Pool Repairs project in the amount of$750,000. (Note: Comm. 756.29, from Council Member Kaneali`i-Kleinfelder dated May 29, 2024, and Comm. 756.30, from Council Member Kierkiewicz dated May 30, 2024, transmitting proposed amendments to Bill 137, Draft 3, were circulated.) Motion to Approve: Mr. Kaneali`i-Kleinfelder moved to approve Bill 137, Draft 3, as amended. Seconded by Ms. Kagiwada. CHR. KIMBALL: Alright discussion members. I do have an amendment and I'm going to pass the chair to Vice Chair Inaba, while I introduce that amendment. Relinquish Chair: At this time, Chair Kimball relinquished the chair to Vice Chair Inaba. ACTING CHR. INABA: Thank you, go ahead. Let the record reflect I assumed the chair at 11:22 a.m. MS. KIMBALL: Thank you, Vice Chair Inaba. Motion to Amend: Ms. Kimball moved to amend Bill 137, Draft 3 with the contents of Comm.756.28. Seconded by Mr. Kaneali`i-Kleinfelder .. ACTING CHR. INABA: Chair Kimball. MS. KIMBALL: Thank you, Vice Chair Inaba. I don't know if you guys saw the excellent testimony that was submitted with regard to this particular CII' (Capital Improvement Project) addition, it reflected the entire history of this Honoka`a pool. Page 39 Hawaii County Council-40 May 30,2024 What I think is really remarkable is the amount of collaboration has happened between the community and private entities, and then the County to keep this pool. Well, actually getting initially built and then keeping it running. The history of this is that about two years ago, the community banded together and was able to get pro bono engineering services to look at the machine room and actually do the repairs with the blessing of Parks and Rec. (Recreation) Really appreciate their support on that. At that time, we were told that those repairs would last us about five years. So, we wanted to get this item in to the CIP budget now. The community does think that they can do some additional fundraising within the community to help support this project. But given that we were additionally given the life of the repairs of about five years, we need to think about moving forward on this project in the next three years to continue to keep the pool open. So, asking for my colleagues' support. Again,just really proud of this example of community private sector and County collaboration for a critical piece of recreational infrastructure. Thank you, I yield. ACTING CHR. INABA: Thank you. Any further discussion? All those in favor of amending Bill 137, Draft 3 with the contents of Communication 756.28,please say "aye." Any opposed? Vote on Motion to The motion to amend Bill 137, Draft 3, with the with the Amend: contents of Comm. 756.28 was carried by the following (Approved) voice vote: Ayes: Council Members Evans, Galimba, Kagiwada, Kaneali`i-Kleinfelder, Kierkiewicz, Kimball, Villegas, and Acting Chair Inaba—8. Noes: None. Absent: Council Member Lee Loy — 1. Excused: None. ACTING CHR. INABA: Motion carries. Relinquish Chair: At this time, Acting Chair Inaba relinquished the chair to Chair Kimball. CHR. KIMBALL: Thank you Vice Chair Inaba. Good counting. We will move now to the next budget amendment. Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Mahalo Chair. Page 40 Hawaii County Council-40 May 30,2024 Motion to Amend: Mr. Kaneali`i-Kleinfelder moved to amend Bill 137, Draft 3, as amended with the contents of Comm.756.29. Seconded by Mr. Inaba. CHR. KIMBALL: Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you very much, Chair. This is a project I'm going to get moving this year. In review of all the documents that guide our Puna area, PCDP, Puna Regional Circulation Plan, Mass Transit Master Plan, and all of them point to Kea`au as the mass transit primary Hub location, which is very logical, and it's the next step out of Hilo. I think I'm going to do a quick apology to the community in being remiss and not doing this earlier. But it took a few years to really wrap my head around what is needed for our area. So, we have a Police and a Fire Station coming; we have Shipman Park Master Plan and Community Center CIP amendments that were done earlier this year. And this Mass Transit Hub proposal will round out the overall Kea`au buildout for County as we see the density and population increase expedientially every year. So, this is not the final piece, but this is just an integral piece to how we, the County, will fit into the Kea`au area as it grows. And really starting to shape for the coming generations, how we plan to build out efficiently and effectively to provide decent levels of service and good infrastructure in the area. So, I look forward to everyone's support for this. I did speak with the Department of Mass Transportation. They are in favor and found the documents that I have referred to earlier in this conversation. And we can move forward planning this year and possible land acquisitions. So, that is for the suggested $250,000 for this coming fiscal year. I yield. CHR. KIMBALL: Thank you, Council Member. Any further discussion from the body? Council Member Kagiwada. MS. KAGIWADA: Thanks. I'm just wondering, is the Mass Transit Director available? There he is. (Note: At this time, Mass Transit Administrator Victor Kandle, came forward to address the members of the Council.) MR. KANDLE: Yes, I am available. MS. KAGIWADA: Awesome. Great, thank you so much for being here. Just wondering how this, you know, fits in with your overall vision for the County, and just your level of support for this. I'd just love to hear a little more. Page 41 Hawaii County Council-40 May 30,2024 MR. KANDLE: Yes, so, thank you to Council Person Kleinfelder. I appreciated him bringing it to our attention about a month ago in a separate meeting and then a follow up last week, it is part of the Multimodal Transportation Plan. It's also part of the transportation oriented development items that we're tracking. So, I like him, feel a need to apologize for not having thought about the needs in advance of needing to create this extra effort. I would have appreciated having done that as part of our budget presentation. So, I apologize for that. I'm very much supportive of it. I know that we have a location there is Kea`au where there's a stop where multiple busses interact. I know that one of the locations there is well noted with a sign and a shelter. And I know that the other direction does not even have a bus stop sign, and it's difficult to know that that's there. So, very supportive of an effort to properly identify and put together a viable transit Hub there. I think that while we have the location in mind, or we have the location that we have right now, I think that it's also suitable to consider other locations in the area as it fits,perhaps the needs of the various schools, the parks, and Police and Fire, etcetera; and how it fits into that community, which I'm sure that Matt's more familiar with. So, we did discuss it pretty thoroughly, and I'm very supportive of it. MS. KAGIWADA: Terrific. Thank you so much. I think this sounds like it could be a really important step for the overall Multimodal Plan. So, thank you and thank you for bringing it forward. I'll support. CHR. KIMBALL: Thank you, Council Member Kagiwada. Any further discussion from the body? Seeing none, all those in favor of amending Bill 137, Draft 3 with the contents of Communication 756.29, please say "aye." Any opposed? Vote on Motion to The motion to amend Bill 137, Draft 3, with the with the Amend: contents of Comm. 756.29 was carried by the following (Approved) voice vote: Ayes: Council Members Evans, Galimba, Inaba, Kagiwada, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Villegas, and Chair Kimball—9. Noes: None. Absent: None. Excused: None. CHR. KIMBALL: I believe we have another amendment from Council Member Kierkiewicz. Page 42 Hawaii County Council-40 May 30,2024 Motion to Amend: Ms. Kierkiewicz moved to amend Bill 137, Draft 3, as amended with the contents of Comm. 756.30. Seconded by Mr. Inaba. CHR. KIMBALL: Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. This also has to do with the Mass Transit Agency. I think folks are aware of earlier this year, in March, a drafted Environmental Assessment(EA) was published for the co-located Pahoa Bus Hub and Library. There is a preferred site that has been identified; a parcel of land in between the Pahoa Marketplace and Puna Kai Shopping Center. So, because that very important document has been completed, now we can move through the permitting process, which is expected to be completed this year with construction commencing in 2025. And because this particular site would be containing activities and services from both the County and State, there was a wonderful cost sharing that is happening here. If you noticed in the fiscal impact statement, I've also very optimistically, have identified some funding support potentially from our Federal government and private groups. I know that Council Member Lee Loy has been a big champion on how we might get more of our philanthropic dollars and private citizens involved in sponsoring some of our County assets. So, we would like to think very creatively about how we might finance this project, so that it really is a kakou thing. But very excited for there to be positive and forward momentum on this project, and looking forward to shovels getting in the ground and this becoming a reality for the Puna community. Looking for everyone's support. Thank you, I yield. CHR. KIMBALL: Thank you, Council Member Kierkiewicz. Yes, Council Member Evans. MS. EVANS: I'm sorry, I just need a little more information in understanding this. When you look at what we've just talked about, the Kea`au Mass Transit; there was one year for planning, one year for design, and one year for construction. And so, I was looking at fiscal year 2024 and 2025; 2025-2026; 2026-2027. And this particular amendment; there is no planning, no design. And its construction dollars in fiscal year 2024-2025, which starts July 1st, so it would lapse, but it doesn't get committed. It would lapse June 2025. So, I'm kind of confused by process, and maybe someone can inform me, what am I really agreeing to? Thank you. CHR. KIMBALL: I'll let you respond to that, Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. I don't know if Administrator Kandle is still on Zoom, but we did check with his office to ensure the accuracy of the fiscal impact statement. I don't think you were on the Council, Council Member Evans, when there was a lot of work that was actually done to design this facility and Page 43 Hawaii County Council-40 May 30,2024 move forward with an EA. So, a lot of that initial work has already been done. So, we are now able to move forward with the construction phase of the project, but I'll go ahead and let Administrator Kandle answer more of those technical questions that you might have. MR. KANDLE: I would respond with, there is a lot of history on that project leading it to where we are today, where we have the final Environmental Assessment being published, I believe by the end of July. So, we really are entering the phase of land acquisition, which I've already reached out to our real property partners in the County. I think to what Councilwomen Kierkiewicz is saying here is that, we really do need to aggress this project with the funding, and I think that it may have been an oversight on my part to not be attending to that in quite the most encompassing manner. So, I think that she's probably very interested in making sure that it's properly supported in the potential lack of my oversight of that. I say that in only that I just barely been here a year, and it's been a lot of catch up. And as I've gotten more and more familiar with the projects and everything, this is definitely one of the highlights. So, I'm very supportive of her interest in moving this forward and getting the construction going. We do have solid partnerships with the library via the State, and it really is ready to move forward. I don't know if that answered your question. MS. EVANS: Yeah, it kind of does in the sense that the planning has been done, the design's been done, you're going to acquire the land here in a couple months. So, you have everything in play. So then you could, at that point in time, go out to bid for construction at where you're really at. I need to know where you're at. MR. KANDLE: So, where we're really at is we have a conceptual design in place that we used for the draft and then the final Environmental Assessment. There's not a final design that's in place. While we have the concepts and we know where we want to enter. There's been studies of traffic, etcetera, and all of that, where the actual pull outs would be. And some of those features would be something that would have to be finalized before actual construction. MS. EVANS: Yeah, and that's where my concern comes, in that usually doing construction documents in all that can take at least a year. And then you have to go out, you know, we have to get the funding. I'm just thinking, we have this in fiscal year 2024-2025. I'm a little confused why it's in fiscal year 2024-2025, and not in fiscal year 2025-2026. And maybe I could ask Diane, is the Budget Director there? CHR. KIMBALL: Yes, the Director is here. Just a reminder, Council Member Evans, that the CIP budget is a wish list of sorts, and there is the opportunity for Page 44 Hawaii County Council-40 May 30,2024 the calendar and the timing to slip a little bit, as needed per relationships of the projects. Things live on the CII' budget for three years. Go, ahead Director Nakagawa. MS. EVANS: So, my question, Director, is more about doing your bond float and you have to check the CIP projects that you're going to fund. So, I'm just looking at this knowing that I've looked at other fiscal impacts and how they play out over the years. What's the impact of this all being put in fiscal year 2024-2025. Let's say for example, you put$4 million into design and construction documents in 2024-2025; then you put the actual construction dollars in 2025-2026. What is the impact of having it all land in fiscal year 2024-2025? Does it impact us going out for bond floats? It would lapse at the end of 2025; it just doesn't feel right seeing it all in one spot in fiscal year 2024-2025. MS. NAKAGAWA: Council Member Evans, thank you for the question. As with the other CIP items that we have discussed through this process, this is placing it to request to get it on to our CIP. So, that's the first step. And this will remain the CIP for three years. Now, then there is the funding and looking for allocated funding. That would be the next step. So, really today, as we've done with all the others, this is just to get it on to our CII'. MS. EVANS: So if we say, "yes"to this $40 million, it will lapse June 30'', 2027? MS. NAKAGAWA: So, the money hasn't been allocated yet. This is to get it on to the CIP, and it will remain on the CIP for the three years. MS. EVANS: Okay. MS. NAKAGAWA: So, this is not yet with funding. This is to get it on to our CIP. MS. EVANS: Right. So, at this stage it's irrelevant, because you have fiscal year 2024-2025, all $40 million. So, what you're saying is it's irrelevant. Just getting it on there this year, it's automatic it'll stick there for three years? MS. NAKAGAWA: This is just the first step to get the appropriation. MS. EVANS: Okay. MS. NAKAGAWA: Not the allocation of funding. MS. EVANS: Alright. Thank you, I yield. Page 45 Hawaii County Council-40 May 30,2024 CHR. KIMBALL: Thank you, Council Member Evans. Any further discussion? Seeing none, all those in favor of amending Bill 137, Draft 3 with the contents of Communication 756.30,please say "aye." Any opposed? Vote on Motion to The motion to amend Bill 137, Draft 3, with the with the Amend: contents of Comm. 756.30 was carried by the following (Approved) voice vote: Ayes: Council Members Evans, Galimba, Inaba, Kagiwada, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Villegas, and Chair Kimball—9. Noes: None. Absent: None. Excused: None. CHR. KIMBALL: Am I missing any amendments for the CIP budget? I think we've covered everything. Alright, back to the main motion. Any discussion on the adoption of Bill 137, Draft 3 as further amended? Seeing none, all those in favor please say "aye." Any opposed? Vote on Bill 137: The motion to pass Bill 137, Draft 3, as amended to Draft 4, Draft 4 on second and final reading was carried by the following (Approved) voice vote: Ayes: Council Members Evans, Galimba, Inaba, Kagiwada, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Villegas, and Chair Kimball—9. Noes: None. Absent: None. Excused: None. CHR. KIMBALL: The CIP Budget, Bill 137, Draft 3 as further amended, is adopted. We're going to take lunch now. We are in recess. Thank you. Recess: At 11:42 a.m., the Chair called for a recess. Reconvene: The meeting reconvened at 12:22 p.m. CHR. KIMBALL: Good afternoon everyone, we are taking this meeting out of recess. Can I have a motion to remove Bill 136, Draft 3, from the table? Page 46 Hawaii County Council-40 May 30,2024 Vote on Motion to Mr. Inaba moved to remove Bill 136, Draft 3, from the Remove from Table: table. Seconded by Ms. Galimba and carried by the (Approved) following voice vote: Ayes: Council Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Lee Loy, Villegas, and Chair Kimball —8. Noes: None. Absent: Council Member Kaneali`i-Kleinfelder— 1. Excused: None. CHR. KIMBALL: We are back to the main motion on Bill 136, Draft 3. Council Member Galimba, you have an amendment contained in Communication 755.35. Motion to Amend: Ms. Galimba moved to amend Bill 136, Draft 3, with the contents of Comm. 755.35. Seconded by Mr. Inaba. CHR. KIMBALL: Council Member Galimba. MS. GALIMBA: Thank you. So, this is a communication that would increase the Fund Balance of$200,000 and increase the County Auditor External Audit Miscellaneous Contract Services expense account to do a Strategic Economic Analysis and Forecast of our County revenue sources; the state of the economy and where we might be going. Obviously, an economic analysis is just to, you know, a certain perspective. So, can't tell the future, but I think we are going through a lot of changes. And I for one, would have loved to have something like this already have happened. So, to discuss some of the things that we were discussing this morning, especially around changing the real property tax rates, the ones that were going down and the ones that were potentially going up. Because I just feel like sort of doing it blind to a certain extent. So that is what I am thinking. Also, when we were talking about the TAR (Transient Accommodation Rentals) bill, where there's calls for an economic analysis. And I feel like this also could potentially help in that discussion, or would have helped if we'd had it already in place. Another way that I think this economic analysis could be helpful, is that, looking at the overall tax burden of folks in our County including you know, the State burden, then the real property tax burden, and the other fees and taxes that we impose. So,just trying to get a better sense and sort of common information for all of us so that we can make better decisions. The concept would be that we would develop an RFP (Request for Proposal) in the next year. It's going to be in the County Auditor's department, and he's already expressed support and willingness to help with developing that scope as have others in the Administration. Then we will be selecting a consultant to be Page 47 Hawaii County Council-40 May 30,2024 doing this work. And I think the word strategic is important because we would want it to be focused on the things that we want to do as a County, and how do we do them? So, that's my pitch. Hope that everyone will support, and I yield. CHR. KIMBALL: Thank you, Council Member Galimba. Anyone else on the amendment? Checking in with Kona. Vice Chair Inaba. MR. INABA: Do we have the auditor available to comment on this? Okay. I understand the intent. I don't think I can support. I am working to balance the budget without dipping into fund balance in light of the concerns expressed. And I didn't support any other amendments at the first reading, so I can't support this either. Thank you. CHR. KIMBALL: Thank you, Vice Chair Inaba. Council Member Evans. MS. EVANS: Thank you. To the maker of the amendment, Member Galimba, I understand what you're trying to achieve. One of the things since I've been here, is I've been wondering what the Department of Research and Development (R&D) does for the County. Sometimes I see these different divisions and different forecasting. You know, they do number crunching and census, and I'm just kind of wondering if we can't look at that department, and maybe come up with some amendment to code or whatever and have them come forth with some economic forecasting. I do think they've already helped the County move forward. I kind of think I'd like to see more come out of that department. And so, for that reason, I'm not going to support the amendment today. But I do think there's a way to achieve what you want. I yield. CHR. KIMBALL: Thank you, Council Member Evans. Council Member Kagiwada. MS. KAGIWADA: Thank you, Chair. Similar to my colleagues, I really do understand the reason that you brought this forward, and I think it's really smart and something we should do. Given the kind of pains we've been going through to try to not dip into the General Fund more, I would hope there might be another way, possibly to fund this, or come back maybe later after we've met all our looming obligations to maybe look at this again. So, I will reluctantly be voting, "no" on this today. CHR. KIMBALL: Thank you, Council Member. Council Member Lee Loy. MS. LEE LOY: I'm going to actually stand in support just to put a stake in the ground that this is something that, I think, will be incredibly valuable and can be used in good decision-making processes going forward. You know, I'm not going to be around when something like this comes, but I know I could have really Page 48 Hawaii County Council-40 May 30,2024 appreciated having this kind of information. Whether it's where we put our money, how we're collecting our taxes; you know, areas of improvement for infrastructure. However we architect a budget going forward, I think this information would be incredibly helpful. And for those reasons, I'm going to support it on its intention. Not sure where it's going to go, but that's where I stand. I yield. CHR. KIMBALL: Thank you, Council Member Lee Loy. Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. Question for Council Member Galimba. I know that UHERO (University of Hawaii Economic Research Organization)puts out an economic forecast for all four counties. So, I wondered how this particular forecast would differ from what they currently put out on an annual basis. I think they just released a report, maybe March or April of this year, and I fully agree and support that there is a need for this. But I wonder how different it will be what you're asking for from what is being currently produced on a regular basis by UHERO. MS. GALIMBA: So I think my concept of it, it would start with the UHERO information. And basically,just go into more detail than what is provided by those reports. And like I said, really looking at what our priorities are as a County, and how our sources of revenue could be optimized for achieving those goals, basically. MS. KIERKIEWICZ: Okay, that's really helpful. Thank you. Director Nakagawa, sorry to put you on the spot here, help me think through this. Because it sounds like folks want to be supportive. It's just the source of funding we may not be able to get on board with. And the other thing is how might we help to set the intention for what we want included in this report? So, my wondering is, I don't know when we got our latest monthly budget summary. I know you produce something during budget hearings. So my wondering is, at the end of this fiscal year, if there's any departmental surplus perhaps within R&D, could that maybe be positioned to support doing an economic forecast that Council Member Galimba is describing. And perhaps by resolution, we as a body could identify the key points that we want included. That way it is a product that we know will be useful for our intentions. Is that something that we can look at doing? MS. NAKAGAWA: So, I think the timing is something that we need to take into consideration. We are really close to end of year, and to be able to meet procurement deadlines to get something out. We are at May 30''. An RFP is out on the street for 30 days. So, we wouldn't be able to meet that with an RFP. We Page 49 Hawaii County Council-40 May 30,2024 could look if there are professional services available, but that does take a review and a contract, if we're talking about this current year's funds to be done within the next couple of weeks. MS. KIERKIEWICZ: Got it, okay. How might we go about funding something like this without dipping into fund balance? Is there something that, you know, is maybe coming to mind for you? I know we have our million-dollar training fund. This is not applicable, but again, are there other funds that we currently have line items in the budget to fund this sort of project? MS. NAKAGAWA: Not for a fiscal study. I can't think of another funding source at the moment. Not for this effort. MS. KIERKIEWICZ: I guess the question to the maker is, would you be open to seeing how things settle this fiscal year, and coming forward with a resolution that identifies the goals and objectives of this particular economic forecast? That way this entire body can feel really comfortable about the intention. And that way, there's a direct scope that the Auditor's Office can use to develop a contract. And then, I think in a couple of months Director Nakagawa will be able to say, this is what we can comfortably support and where we may be able to pull funding. MS. GALIMBA: Absolutely. This is really in some ways just to bring this idea forward while we're having this kind of discussion. So, yes, I'd be very open to that. MS. KIERKIEWICZ: Okay, happy to work with you. Wonderful. Sounds like we have a path forward. Thank you, Council Member. Thank you, Chair, I yield. MS. GALIMBA: So, I guess I'll withdraw. CHR. KIMBALL: Okay, before you do that, I'd like to just make a comment, which is, I can't believe I'm saying no to data. But I'm going to day "no"today. But I actually shared the concern that I'd like to have more specificity around this, especially to make it distinct and clear from what is provided from UHERO and share my colleague's concern about, do you think some of this is R&D's kuleana, and so, I'd like to see them step up and provide that. And they may have some, it's just not being reported to us. With that said, there's been some conversations around some decision tools that I think are foundationally based and what kind of data we want to have. So, I'd like to include in our conversation about what sort of data we would collect and desire from an analysis like this. How we might then, incorporate it into these decision-making tools that I hope will become available to us. So, yeah, appreciate your openness to the conversation here and putting it forward so we could discuss it. But I think we're not quite ready for prime time to quote our esteemed Aaron Chung. Page 50 Hawaii County Council-40 May 30,2024 MS. GALIMBA: Thank you for your comments, and I will withdraw the motion, but we'll probably be coming back. Withdraw Motion Ms. Galimba withdrew her motion to amend Bill 136, to Amend: Draft 3, the with the contents of Comm. 755.35. CHR. KIMBALL: Alright well done. Thank you for that. So the motion to amend Bill 136, Draft 3, with the contents of Comm. 755.35 has been withdrawn. Vice Chair Inaba, where are we? Are we still waiting? Okay, we're just getting numbered, so I guess we need another ten minutes? Okay, we'll recess until 12:45 (p.m.). Ten more minutes. Apologies folks, we have some corrections we need to make. So, we are in recess until 12:45 p.m. Recess: At 12:37 p.m., the Chair called for a recess. Reconvene: The meeting reconvened at 12:46 p.m. CHR. KIMBALL: We're going to take this meeting out of recess. The time is 12:46 p.m. We are on the motion to approve Bill 136, Draft 3 as further amended. Vice Chair Inaba. Motion to Amend: Mr. Inaba moved to amend Bill 136, Draft 3, with the with the contents of Comm. 755.36. Seconded by Mr. Kaneali`i-Kleinfelder. CHR. KIMBALL: Vice Chair Inaba. MR. INABA: Thank you. The resolution earlier to amend the property tax rates to reduce them failed. As a result, the Operating Budget, as presented was based on $5.95 for the Homeowner and Affordable Rental Classes. Being that we haven't amended the rates to actually be $5.95, and as of now, remain at$6.15. There's a surplus of revenue of$2,659,000. So, what this amendment is doing is reflecting that actual surplus in the Real Property Tax revenue line. At the first reading of the budget, the amendments passed by the Council totaled $968,227. So, this amendment reduces or undoes the increase to the fund balance that happened at first reading. And then, because there's an overall increase in real property tax collection, there is a subsequent increase for the PONC (Public Access, Open Space, and Natural Resources Preservation Commission), PONC Maintenance, and Emergency and Disaster funds. Council Member Lee Loy was going to introduce an amendment earlier this morning for a position, a Media Relations Specialist position. And that was to be funded by the fund balance being that we have extra RPT revenue, I'm proposing that same idea,just having it be funded by the surplus in real property tax. Page 51 Hawaii County Council-40 May 30,2024 Also, we have the opportunity to put$297,000 into our Budget Stabilization fund. We would also be increasing the Repair and Maintenance budget of Parks and Recreation by $1 million, which we know our parks are in, you know, a lot of need across the island. Director Messina was here until just a few minutes ago. I guess I want to say, he did articulate clearly that the department was happy with the budget that was worked on with Finance in that we had arrived at this morning. But there is always more need across our parks. So, this $1 million is being inserted. Then lastly, is an increase for Police OCE(Other Current Expenses), and that's for, it's called Nuance Dragon Dictation Software, and it helps with the efficiency of our officers out in the field. I did ask Chief Moszkowicz of the Police Department to join and want to give him the opportunity to speak to both of those police increase in expense line items. Chief. (Note: At this time, Police Chief Benjamin Moszkowicz, came forward to address the members of the Council.) MR. MOSZKOWICZ: Thank you very much. My name is Ben Moszkowicz, I'm the Chief of Police for Hawaii County. The two requests that we had—we submitted a supplemental request through the Mayor's Office, but it officially didn't make the May 3rd budget. First is a position that is created by the May 3rd budget, but it is not funded. So, one position was created by the May 3rd budget that was left unfunded. And that was for what we're calling a Media Relations Specialist type position. So, the justification for that is this, I currently have what we call a Community Relations Specialist or Public Relations Specialist; that one person works for the Police Department. Since I've been here, their work has increased about three to four-fold, and that person has been working five to six-days-a-week in excess of 12 hours a day sometimes; and is on-call seven-days-a-week to handle an increase in media inquiries. That's I guess, my fault when you think a little bit more of a proactive stance and sharing information with the community, which is important. But professionally it's not, it's draining our resources. So, we have one employee who's working a ton of hours. So, finally the idea is to split that into a second position which should result in some cost savings from the first position in terms of overtime. Also, to have this second new position be responsible for supervising the first position, and finally to have this new position be focused more on strategic communication planning, which is something that I'm actually doing some by myself and the Deputy Chief has been doing some himself. So, kind of branching out away from our primary responsibility into one person who can focus on Page 52 Hawaii County Council-40 May 30,2024 strategic planning and strategic communicating, long-term projects and planning with the community and public stakeholders and government organizations. So, the first request was to fund that position. The second request is, back in December we did a low-cost pilot program with Nuance, the company is called Nuance; the product is called Dragon. Basically, what it is, this project would allow us to install basically a hand-held microphone kind of looking device right into the officer's MDT's (Mobile data terminals) in their cars and make it interact with the computer based on their voices; opposed to having to stop and interact with the computer in their car by typing. So, they can grab the mic and ask the computer to run license plate, and that would happen through the computer as opposed to through the dispatcher. I would also allow to take that microphone and dictate the reports, which they can then see being typed and populating in front of them on the screen. So, we estimate that a significant return on investment in terms of lost time or available time, and officers rather than typing reports can use this dictation software in the field to automatically generate reports for them. Normally, we do a four-week pilot program because we were specifically worried that, you know, once we ask it to type Kukio Beach or Kalaniana`ole Highway or Kanoelehua that we would have problems, but we didn't. The software adapted to each officer's own kind of speaking style. And the results were really fabulous. So, that$185,700 will allow us to purchase the equipment we need, as well as the first years' worth of software. And if we roll it out and it turns into a fabulous thing, then there may be some future years' worth of money that we would ask for, but at least this would get us to a full-scale trial version for a year to see if we can actually utilize some of those cost savings that we expect. MR. INABA: Thank you, Chief. With that, the communication before us right now essentially creates expenses that balance out the excess in revenue in comparison to what is currently in the Operating Budget, and I just ask Director Nakagawa, if you could? There is a lot of query with the fund balance. So, by putting back the $968,000 that this Council had added at the first reading, where do we land percentage wise? MS. NAKAGAWA: Yes, thank you, Council Member. With this amendment, we are at 10.5 percent. MR. INABA: Okay, thank you very much. So, happy to take any questions from my colleagues. This is something that was reviewed by Finance and the Managing Director. And we think we have our numbers correct, and thank everyone for their patience in trying to make sure that we pass a budget that is representative of the actual funds coming in. Thank you. Page 53 Hawaii County Council-40 May 30,2024 CHR. KIMBALL: Thank you, Vice Chair Inaba. So before we proceed,just to clarify. So, the Mayor's budget proposed tax rates of a 20-cent reduction for homeowners and affordable, but the only way that rates are passed is through resolution approved by this body. So at this time,we have not approved those tax rates. And Vice Chair Inaba's amendment is based on no change to the real property tax rates. This body does have until June 20'h to set those tax rates, but just wanted to clarify what the conversation is here with these amendments being proposed by the Vice Chair. Can I go to Council Member Kierkiewicz, please. MS. KIERKIEWICZ: Thank you, Chair, and a little latitude. Actually, my question is more related to the comments you just made right now. Does this body need to adopt the budget before the Real Property Tax resolution is adopted? What is the timing on that? MR. INABA: There's been conversation with Corporation Counsel, but essentially, it would come to the conclusion, that,yes, we can. Well, we can't shortfall our revenue by reducing the property tax rates after we pass the budget. MS. KIERKIEWICZ: Okay. So, if I'm understanding this correctly, a resolution reducing the rates, as the Mayor as proposed, must be adopted before we pass this budget. CHR. KIMBALL: That is not my interpretation. We have to adopt those rates by the 20'h of June. Clerk, can you elucidate the timing in a more concise clear way. MR. HENRICKS: You're correct, Section 19-90 of the Code provides the Council until June 20 to adopt tax rates. The Charter states that the budget must be adopted on or before June 30''; then naturally, we have to allow in time for the Mayor to review the budget and those things, which is why we're doing this today. CHR. KIMBALL: So, we could adopt the budget today and still adopt the resolution before the 20th that sets the tax rates and be in compliance. The question, I think that exists for this body, is does the fact that the previous resolution we discussed today and its failure—would a new resolution be significantly different enough that it could be discovered or is it better to reconsider the resolution that was proposed today. My argument would be that a new resolution with the rates set by the Mayor would be significantly different enough that it could be considered without being in violation of our rules or Charter. MS. KIERKIEWICZ: I would agree with your assessment that a new resolution reflective of the Mayor's proposed rates would be significantly different from what we voted down today. I'm not going to be supporting the amendment that's been brought forward today. I think we need to honor the fact that the public is Page 54 Hawaii County Council-40 May 30,2024 under the impression that they're going to be expecting reduced rates in these classes. And so, it's really incumbent upon us to be introducing the resolution to ensure those rates are passed down to our taxpayers. And just because we have the money doesn't necessarily mean we need to spend it. So, not in support of. Although everything that's described here is very worthy, I would like to make sure that, you know, our residents are benefiting with the reduction in rates that were proposed by the Mayor, thank you. CHR. KIMBALL: Thank you, Council Member Kierkiewicz. Before I come back to you, Vice Chair Inaba, I want to check and see if there's anybody in Kona? Go ahead, Council Member Evans. MS. EVANS: Thank you. So I'm fine with moving this forward, but I kind of playing it out in my mind. If we do an amendment today, then it forces us into another meeting on it because of our rules, right, because you mentioned you have to let it sit in time? CHR. KIMBALL: That rule actually doesn't apply to the budget. MS. EVANS: Okay, so we could pass this today, the budget? Okay, between now and June 20'', we come up with some revision to tax rates, basically, we're back and assumed to a similar conversation about how does it impact our bond rating? Because as long as we achieve a balanced budget and we do not negatively impact our bond rating, then we could approve a reduction in our real property tax rate in a week or two whenever we meet. I'm making this kind of what if it happens. I think we could still reduce the tax rates assuming we're going to have the same discussion about bond rating and making sure we have a balanced budget. Is there any other thing we would have to consider if we did a real property tax rate reduction? CHR. KIMBALL: Would you like to respond, Vice Chair Inaba? MR. INABA: I'm not sure what the question is. CHR. KIMBALL: So, Council Member Evans, if we were to approve the amendment that is before us right now in Communication 755.36, that would balance the budget without a reduction in real property tax rates. So, in order for us to later approve a reduction in real property tax rates via resolution, we cannot also approve this amendment, because this anticipates no change in rates. Page 55 Hawaii County Council-40 May 30,2024 MS. EVANS: However, I heard the comment, by Code we could still come back and ask for a change. I just was under the impression from what the Clerk said, that by Code we could come back with a resolution reducing. CHR. KIMBALL: Yes, but then our budget would not be balanced. MS. EVANS: Okay, so we go to the next fiscal year, can we at that point in time, reduce tax rates? Are we basically forcing ourselves into a corner today, like we have to do it today? I mean, can't we do it three or four months from now? CHR. KIMBALL: No, we are required to adopt the rates by the 20'h of June. MS. EVANS: We can only do it once a year? Okay, thank you, I yield. CHR. KIMBALL: Coming back to Vice Chair Inaba. MR. INABA: I think this is extremely frustrating. Because this Council has added expenses in the first hearing, and now can't support something that balances our budget. If the body wanted to honor the Mayor's proposed budget, I'm not sure why no one proposed an amendment to the resolution, which we could have taken care of today, which is still an option. I do think it's very similar if we bring a new resolution that's 20 cents different than what was in the resolution we took up today. So, people are changing their ideas depending on the day, and now, we're stuck. So, if the body isn't going to support this amendment, which balances the budget based on no changes to the tax rates, I guess we can present the resolution that puts homeowners—or I would prefer to amend my resolution that was voted down to reflect the $5.95, as proposed by the Mayor. But this is getting tiring already, and nobody else is coming up with solutions that balance. So, it's kind of silly. CHR. KIMBALL: One moment, Council Member Villegas. So,just to explain procedural options, there is still the option to bring back the resolution for reconsideration, although it would have to be moved by somebody on the winning side of that particular vote. So, that is an option before us today before the meeting is adjourned. Go ahead, Council Member Villegas. MS. VILLEGAS: Council Member Inaba, you just nailed it. Hit the nail on the head. It's much easier to dissect and find reasons to vote "no" for something than bring forth a better piece of legislation. And I just want to commend you on your courage, your determination, and your creativity for continuing to find solutions; and researching and navigating all the different ways to bring us into balance and provide a pathway for some relief to our constituents, as well as support to our departments. Page 56 Hawaii County Council-40 May 30,2024 So, I'll be supporting this wholeheartedly, and I take very much to heart, your comments and your frustration, and just want to encourage you that I see you, and I appreciate your calling a spade a spade and really nailing it on this one. So, I'll be supporting. And you know, at this point, I'm hopeful that perhaps some of the people who were on the, I guess you call it the winning side, by voting down the prior legislation you brought forward, might reconsider and bring that back. If they don't like this one better, that they're taking into consideration what's before us now, and you've done the work and you've done it well and the solutions you've presented are honorable, and they're good. So, I'll be supporting this. I yield. CHR. KIMBALL: Thank you, Council Member Villegas. Council Member Galimba. MS. GALIMBA: Thank you. Not exactly sure how to word this, but I would like to ask for a reconsideration of the resolution, so we can revise the rates at the Administration's suggested rates, which I thought was what we were doing this morning. I was very confused. CHR. KIMBALL: I'm actually going to recommend that we table Bill 136, which is still the motion on the floor, then we'll take up your motion to reconsider. Okay, we're on the communication, so we've got a motion to table. Clerk, what do you recommend to make this as clean as ? MR. CLERK: If you're trying to clear the floor for a motion for reconsideration, you just table the motion. Everything carries with it, including the motion to amend. CHR. KIMBALL: Okay. So, may I have a motion to table the amendment— MR. mendmentMR. CLERK: You're just tabling the entire thing,table (Bill) 136. CHR. KIMBALL: Okay, tabling the entire thing. May I have that motion? Vote on Motion to Mr. Inaba moved to table Bill 136, Draft 3, as amended. Table: Seconded by Ms. Galimba and carried by the following (Approved) voice vote: Ayes: Council Members Evans, Galimba, Inaba, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Villegas, and Chair Kimball–8. Noes: None. Absent: Council Member Kagiwada- 1. Excused: None. Page 57 Hawaii County Council-40 May 30,2024 CHR. KIMBALL: I'll now take the motion to reconsider from Council Member Galimba. Motion to Reconsider: Ms. Galimba moved to reconsider Res. 525-24. Seconded by Mr. Inaba. MS. VILLEGAS: Chair Kimball, can you speak into the microphone a little more clearly. I'm sorry I can't hear you over here. Thank you. CHR. KIMBALL: My apologies. We have tabled(Bill) 136 and then, there's a motion by Council Member Galimba, seconded by Vice Chair Inaba, to reconsider Resolution 525-24. Discussion on the motion to reconsider. Vice Chair Inaba. MR. INABA: Based on what I'm hearing, the Council wants to pass the Mayor's proposed reductions from $6.15 to $5.95. If that's correct, then LRB (Legislative Research Branch) is working on an amendment to this resolution that reflects that rate change. CHR. KIMBALL: Okay, further discussion on the motion to reconsider. All those in favor of the motion to reconsider Resolution 525-24, please say "aye". Any opposed? Vote on Motion to The motion to reconsider Resolution 525-24 was carried Reconsider: by the following voice vote: (Approved) Ayes: Council Members Evans, Galimba, Inaba, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Villegas, and Chair Kimball—8. Noes: None. Absent: Council Member Kagiwada- 1. Excused: None. CHR. KIMBALL: So, Resolution 525-24 is back on the table. I believe we need to wait until we get the amended language. Council Member Lee Loy. MS. LEE LOY: So we now have Resolution 525 to discuss as far as rates, correct? CHR. KIMBALL: That's correct. MS. LEE LOY: Maybe this is a question for Deanna. I'm going to ask Deanna because she's been around this a lot, lot longer. What I heard this body go Page 58 Hawaii County Council-40 May 30,2024 through is we want to give homeowners and our residents a tax break. The previous amendment kind of set the floor, right, at a budget that didn't include any tax breaks for homeowners and residential class. (Note: At this time, Managing Director Deanna Sako, came forward to address the members of the Council.) MS. SAKO: So, I'm not sure if I understood your question, but when we submitted the budget, it took into account a reduction of 20 cents for homeowners and affordable rentals. That resolution wasn't what was presented, it was Council Member Inaba's resolution that then decreased it 20 cents more. The entire resolution failed and went away. So, either you guys need to present a resolution or amend the resolution with the $5.95 for both homeowner and affordable rental. Then, the budget would be balanced as presented. But if you do anything other than that, the budget would need to be amended. MS. LEE LOY: So, basically what we have now,what we're going to consider is basically a budget that does not provide any relief to homeowners, unless we adopt a resolution dialing it to what the Mayor proposed? MS. SAKO: Correct. MS. LEE LOY: Okay. My next question is, because we have different tools available to us. The previous amendment basically set the budget and set the expenditures without dialing back the rates. MS. SAKO: Right. The last amendment to the operating budget, yes. MS. LEE LOY: The last amendment that we put on the table. My question is, is it possible to still do that but go back to the rates and still dial back homeowners' rates but go up in other categories where we still match the budget? MS. SAKO: Right, we would just want the revenue to be revenued in full. MS. LEE LOY: Exactly. So we still have another tool available for us that we could still dial down homeowners and residential and go up in other categories, correct? And my question is, is it possible to still do that, but go back to the rates, but go up in other categories were we still match the budget? MS. SAKO: Yes, that's at the Council's MS. LEE LOY: As long as we get to this number or over it, not under it to balance. Because we can have extra income, but not excessive expenditures. Thank you for walking that all out. I wanted to acknowledge there might be other Page 59 Hawaii County Council-40 May 30,2024 options available. And when we're looking for solutions, we're not just pigeonholing ourselves into 20 cents or 10 cents. Technically, we can play with all the rates, correct? MS. SAKO: That's up to the Council, yes. MS. LEE LOY: Alright. Thank you, Chair. I yield. CHR. KIMBALL: Thank you for that clarification for everyone. Vice Chair Inaba. MR. INABA: Yep, and that speaks to Communication 883.3, which balances the short fall of$2.7 million with increases to the hotel resort conservation and tier two classes. And we have amendments that make the necessary budget adjustments, if that is to take place. So right now, we're on the resolution with $5.75. We're back on Communication 883.1; option 1, 2, 3, which we started at nine o'clock this morning. We have those options, or we can take up an amendment to the rates that adjust other rates, which is Communication 883.3. And we do have an amendment to the resolution coming that falls in line with the $5.95 adjustment as proposed by the mayor in the operating budget. CHR. KIMBALL: Thank you, Vice Chair Inaba. Council Member Galimba. MS. GALIMBA: Just to be clear, given this exchange here are Council Member Lee Loy's ideas about using other levers. We don't have to do that, is that correct because it's the fund balance and it's still over the ten (Note: At this time, Finance Director Diane Nakagawa, came forward to address the members of the Council.) MS. NAKAGAWA: I just want to be clear so we all understand your question, if you could rephrase that? MS. GALIMBA: Yes, so in the first reading we approved a certain number of amendments, which came up to I think about$900,000? MS. NAKAGAWA: That's correct. MS. GALIMBA: And those were funded by increasing the fund balance and that amount decreased our budgets. MS. NAKAGAWA: So, our percentage with the nine hundred plus thousand (dollars) took us to 10.63 percent. Page 60 Hawaii County Council-40 May 30,2024 MS. GALIMBA: Right, okay so that is not as big as 10.5 (percent), but it's still above that 10.10 number. So, it isn't that we would have to raise rates on other costs, but we could if we wanted to get back up to that higher number. Is that correct,just so that I understand things? MS. NAKAGAWA: So I think we're kind of mixing up some of the different options, so I apologize. I just want to be sure we're all on the same page. With the amendments that were passed at first reading,we're at 10.36 percent. MS. GALIMBA: Correct. MS. NAKAGAWA: And that was taken to the budget was taken into account the rate reduction as proposed by the mayor for $2,659,000. MS. GALIMBA: Got you, okay. I just wanted because there was a narrative here now that we needed to do some other tweaking, other than the reduction in the homeowners and the affordable. So, I just wanted to double check that was not necessary but something we might want to do, but not necessary. MS. NAKAGAWA: Yeah, with no changes to the rates, there is that revenue. So, there's options as discussed that the Council can do. MS. GALIMBA: Okay, thank you. I know that this is a lot of levers and numbers. Thanks so much. MS. NAKAGAWA: You're welcome. CHR. KIMBALL: Thank you, Council Member Galimba. Any further discussion on the reconsideration, the motion to adopt? MR. INABA: What is the motion? CHR. KIMBALL: We are reconsidering the motion to adopt the resolution in its original form without any amendments. We are waiting for amendments. MS. VILLEGAS: I'm sorry. Chair, I can't hear you. CHR. KIMBALL: I'm sorry. The motion on the floor is to adopt Resolution 525-24 unamended, that's what we're reconsidering. We are at this time waiting for an additional amendment. MS. EVANS: Chair? CHR. KIMBALL: Yes. Page 61 Hawaii County Council-40 May 30,2024 MS. EVANS: Clarity for anyone who's watching this when it gets replayed. So, we're back to the original resolution and the reduction to the affordable housing and for the homeowner rate, is it 20 cents per thousand? CHR. KIMBALL: No, we're on the reconsideration of the original 525-24, which proposed a 40 percent decrease for homeowners and affordable, which is more than was proposed in the budget by the mayor. MS. EVANS: Got it, so question. The mayor when he gave us his budget, had already assumed that a resolution would get introduced and maybe pass at reducing the property taxes to a level that he is proposing. So, we kind of either agree with the mayor and his budget with the reduction or we don't. And either we can go with a more reduction, but at this time, I kind of feel like I'm cornered a little bit because the budget that was developed by the mayor was assumed a resolution would be passed by us. CHR. KIMBALL: Before I respond to that. For clarity, Judge Strance is here. I don't know if you wanted to add at this juncture or I can respond for clarification? (Note: At this time, Corporation Counsel Elizabeth Strance, came forward to address the members of the Council.) MS. STRANCE: Good afternoon, Elizabeth Strance, Corporation Counsel. I have a procedural issue I want to bring before you. So, if you want to respond. CHR. KIMBALL: Okay, I'll respond to Council Member Evans first, then we'll take that up. So, Council Member Evans, at this stage we can still make adjustments to the rates, it's just that when we go back then to Bill 136; the Operating Budget, we will have to make the amendments then to balance the budget. So we have a lot of options, but at the end of the day we have to have a resolution that has rates that then match the revenue for real property tax in the budget and balance the whole thing. MS. EVANS: Got it. In the budget that was given to us by the mayor already assumed a reduction, knowing that we would have to pass a resolution? CHR. KIMBALL: I think it proposed yes, I think the mayor's budget was strongly suggesting that we do a resolution. But I don't want this to be a continuation MS. EVANS: I know, but what I'm saying is the budget we have had a reduction in it, and yet I didn't see a resolution by request coming from the mayor saying this is the reduction and my budget matches what I'm proposing. I didn't see that come forth. So I think that's why I'm a little confused that the budget that we've actually been working on, already made an assumption of a reduction. So, unless Page 62 Hawaii County Council-40 May 30,2024 I'm wrong, I think we were given a budget that assumed it. And I think that is important because that creates a little bit of why, I think we're having some confusion today, but thank you. I yield. CHR. KIMBALL: At the end of the day, regardless of the source of it, it is our kuleana to pass that resolution. I'm going to go to Judge Strance for the procedural question. MS. STRANCE: Thank you. Elizabeth Strance, Corporation Counsel. I just want to be sure that we know where we are in the voting because you vote to reconsider, the motion to reconsider passes, the resolution is back on the floor. If you move immediately into the vote on the resolution, then it's done without consideration of any other amendments. And so, I just want to make sure that if you're going to be considering anything other than the resolution as it was proposed, that you build in that time to consider those. And so, I was just worried that you were moving quickly and wasn't sure whether you were going to consider other CHR. KIMBALL: We are aware of that necessity, but thank you for the reminder. Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you. Ms. Nakagawa, I just want to summarize really quickly because that helps. There's always a check and balance between executive and legislative. So, what I'm understanding right now is we have to pass the budget today that provides the correct timelines for possible vetoing, and then passage, and then adjustment of property tax rates before a certain date so we can enter our fiscal year with a budget, correct? Okay, and if the budget did pass today the way we have up, down, wherever, real property tax rates can then be adjusted on the very back end to equal the final budget that was passed today? MS. NAKAGAWA: One more time please, Council Member. MR. KANEALI`I-KLEINFELDER: I like the process and it's good for us to do this because then we understand that process, so does everybody else. If we pass the budget today and it's not balanced and the mayor did go forward and say, heh you know, we like this. We can balance the budget through our real property tax rate adjustment before the 20'', is that right? MS. NAKAGAWA: I don't believe so. MR. KANEALI`I-KLEINFELDER: Okay, so let's say we pass the budget that's in front of us today. CHR. KIMBALL: We can do that. Page 63 Hawaii County Council-40 May 30,2024 MR. KANEALI`I-KLEINFELDER: And then we can adjust our rates accordingly? MS. NAKAGAWA: Depending on what gets passed, what budget gets passed, right. So you still need to have your revenues exceed your expenditures. MR. KANEALI`I-KLEINFELDER: So it's another check and balance in our process, is what I'm saying, because we go back and forth is what I'm saying. We go back and forth, we come up with a budget,we send it to the mayor, and then this last option is for us all to find a real property tax balance to find a way to get the budget equalized and out the door before the fiscal year starts. And to me it's neat, I didn't understand that was our process and that we had such a long time to do real property tax rate adjustments. That's an interesting step I didn't know existed. (Note: At this time, Finance Deputy Director Aaron Brown, came forward to address the members of the Council.) MR. BROWN: If you don't mind, Council. I wanted to make a comment, it's not as a procedural comment as much as what you're talking to, Council Member Kaneali`i-Kleinfelder, but I just want to point out that, I think what we're trying to accomplish is also trying to be responsible in our budgeting. So changing the rates after you approve the budget, depending on how you change it, right? I would want to caution, right? Especially a reduction, if you pass a budget at a certain rate and then you guys reduce rates later, right? I mean, it's just safe to look at it as a whole, I think. And we've had kind of conversations with Judge Strance and some of the Council Members and just keeping that in mind, kind of responsible budgeting to kind of look at it as a whole to make sure we know where the revenues are at. Then you guys can look at how you guys' kind of want to balance or exceed in revenue versus your expenditures. Sorry, this is Aaron Brown, Finance. MS. NAKAGAWA: So while the timing may allow for certain things to occur, there was careful consideration given to present options at a time when we can carefully look at the budget and make sure we have a balanced budget, while being able to discuss alternatives for rates. So while the timing may seem to provide you options, this was the best way forward in being able to evaluate, as Aaron mentioned, as a whole, right, having these discussions. MR. KANEALI`I-KLEINFELDER: No I completely understand, and I like it, it provides a little bit more clarity for me for the whole process from not just got to be done today and sent to the mayor for his veto or his approval and then onto our next fiscal year. It is that there is a wavering in this process in our budget brought forward at the end of today, that there is still a catch on the back side that can allow for the legislative body to change rates to adjust to whatever happened. It's Page 64 Hawaii County Council-40 May 30,2024 interesting and I didn't understand. I mean I know we can play with the rates, but until June 20'', was an interesting clarification for me today,just to see that last little catch in balance to our process. That's interesting. So, good discussion today and thank you. And I completely understand your point, Mr. Brown, and thank you, Ms. Nakagawa. I yield, Chair. CHR. KIMBALL: Thank you, Mr. Kaneali`i-Kleinfelder. Anyone else? I think we have to wait for an additional amendment to arrive, it's being numbered right now and printed. Point of Clarification: MS. LEE LOY: Chair,just a point of clarification. We are voting because we've reconsidered Resolution 525, and that's what we will be voting on based on what it is, if I could speak to that? CHR. KIMBALL: Sure. MS. LEE LOY: Chair, I'm going to again, be saying, "no". If there is a resolution that comes forward that matches the rates proposed by the mayor and we solidify that, that is great. That's how I'm voting on this particular resolution. CHR. KIMBALL: Thank you, Council Member Lee Loy. Vice Chair Inaba. MR. INABA: Thank you. Yes, as was stated, the amendment to the resolution with the proposed $5.95 from the mayor is coming on this communication being handed out right now. So with that, I'll make a motion to amend Resolution 525-24 with the contents of Communication 883.4. Motion to Amend: Mr. Inaba moved to amend Resolution 525-24 with the contents of Comm. 883.4. Seconded by Ms. Lee Loy. MS. VILLEGAS: Nothing yet. CHR. KIMBALL: Okay, I'm going to let Vice Chair introduce the amendment and we'll wait until you've had a proper chance to look at it before taking the vote, but I'll let Vice Chair Inaba introduce. MR. INABA: Thank you. Okay so with that, (Communication) 833.4, amends the resolution such that the affordable rental class and the homeowner class are reduced from the current $6.15 to $5.95, which is what the operating budget was built on. So if we pass this with no further amendments to the budget we're done, we've accomplished our goal for the budget process this year. So, there are different options for us to take up, but based on, I think, everybody's tracking of all those potential changes would be the most sensible at this point. So, Page 65 Hawaii County Council-40 May 30,2024 essentially it reduces collections by about$2.6 million as if we were not to touch the rates at all. But it does allow for a balanced budget because the budget was built on these numbers. Thank you, happy to answer any questions. CHR. KIMBALL: Thank you Vice Chair Inaba. Council Member Lee Loy. MS. LEE LOY: Thanks, Chair, in support of this. I understand everybody is getting frustrated, and the process really just lends itself to this. I do want to say that with transparency and the Sunshine Law, I actually have to listen to my colleagues and figure out what their bottom line is. And what I heard today is their bottom line is they want to provide some relief to our homeowners and our rental class; in support of that. How we carve it up after, that's on us. And we put up amendments and we have each one of us express how we feel about them. I'm in support of this, don't always get what you want, you get what you need and that's what this resolution with the amendment does. I yield. CHR. KIMBALL: Thank you, Council Member Lee Loy. And just to acknowledge for all of my colleagues, and I realize this day was probably a bit longer than you may have anticipated. This is probably one of the most important things that we do. So if it takes a long time and it's a little sausage that's okay, it's a good thing. Let's give everybody space and time to fully understand what we're doing and make sure we get it right. With that, anybody in Kona, have you received the communication? MS. EVANS: Surely, we have. Thank you. CHR. KIMBALL: Great. Any comments on the amendment before we move to the vote? MS. EVANS: No. CHR. KIMBALL: Alright. Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Mahalo, Mr. Inaba, for bringing this forward. This is what the mayor had proposed in his budget, provides us with a balance of what we were seeking. I do have to say, I like the other proposal better in Communication 883.3, but if this body does feel that 883.4 is the way to move forward then I will support that as well. Thank you. CHR. KIMBALL: Yes, somebody in Kona? MS. VILLEGAS: Yeah. I'll be supporting this and thank you, Council Member Inaba for once again, your courage and creativity and determination to get this to the finish line, and your abilities and your skillsets for navigating those very complex budgeting system in order to get us back so that we can be balanced. So, Page 66 Hawaii County Council-40 May 30,2024 just a personal and professional thank you for this. And I will be supporting this in this capacity because this seems to be the best that we can do today, and with the current circumstances and the current Council. So, appreciate you. I yield. CHR. KIMBALL: Thank you, Council Member Villegas. Seeing no further comments, the motion on the floor is to amend Resolution 525-24 with the contents of Communication 883.4. All those in favor, please say "aye". Do we have any opposed? Vote on Motion to The motion to amend Resolution 525-24 with the contents Amend: of Comm. 883.4 was carried by the following voice vote: (Approved) Ayes: Council Members Evans, Galimba, Inaba, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Villegas, and Chair Kimball—8. Noes: None. Absent: Council Member Kagiwada— 1. Excused: None. CHR. KIMBALL: Resolution 525-24 is amended, back to the main motion. Any further discussion? Vote on Motion to Ms. Lee Loy moved to suspend Council Rule 23 to waive Suspend Council the holdover for the substantive amendment of Res. 525-24. Rules: Seconded by Mr. Inaba and carried by the following voice (Approved) vote: Ayes: Council Members Evans, Galimba, Inaba, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Villegas, and Chair Kimball—8. Noes: None. Absent: Council Member Kagiwada— 1. Excused: None. CHR. KIMBALL: Now we are now back to the main motion, 525-24, as amended, any further conversation? Seeing none, all those in favor please say "aye". Any opposed? Page 67 Hawaii County Council-40 May 30,2024 Vote on Res. 525-24: The motion to adopt Res. 525-24 , as amended to Draft 2, Draft 2 was carried by the following voice vote: (Adopted) Ayes: Council Members Evans, Galimba, Inaba, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Villegas, and Chair Kimball—8. Noes: None. Absent: Council Member Kagiwada— 1. Excused: None. Vote on Motion to Mr. Inaba moved to remove Bill 136, Draft 3, from the Remove from Table: table. Seconded by Ms. Lee Loy and carried by the (Approved) following voice vote: Ayes: Council Members Evans, Galimba, Inaba, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Villegas, and Chair Kimball—8. Noes: None. Absent: Council Member Kagiwada— 1. Excused: None. CHR. KIMBALL: We return to the main motion. I believeactually, we were on the amendment. Withdraw Motion to Mr. Inaba withdrew his motion to amend Bill 136, Draft 3, Amend: with the contents of Comm. 755.36. CHR. KIMBALL: On the main motion, Bill 136, Draft 3, as further amended? Vice Chair Inaba. MR. INABA: Yeah, I just wanted to take this opportunity to thank the Finance Department, Corporation Counsel, LRB; Donna Eckersley, specifically, for dealing with all of our amendments, especially with our property tax rates. And while it's not the full amount that I thought our tax payers deserve in terms of reduction for homeowners, I'm happy that we came to a middle ground with some relief. So, until next year. Thank you. CHR. KIMBALL: Thank you, Vice Chair Inaba. Anyone else? Back to the main motion. MR. HENRICKS: Just prior to you calling for the final vote on the operating budget, if you could just give a recap. Do you concur there was just a singular amendment that was approved today? CHR. KIMBALL: Yeah, I think so, let me just double check. Yes, (Communication) 755.29. Seeing no further lights on, I would like to echo Vice Page 68 Hawai`i County Council-40 May 30,2024 Chair's appreciation to the Finance staff,Finance team, all of our Directors and Departments that have participated in the process, and particularly; our LRB and Council Services team that definitely work a little extra hard this time of year. We appreciate you and just finally mahalo to all of my colleagues for the in depth and thorough discussion. Like I said, I think this is one of the most important parts of our job. So, appreciate the attention and level of participation. With that,we will proceed with the motion. All those in favor of adopting Bill 136,Draft 3,the Operating Budget for our Fiscal Year 2024-2025, as further amended,please say "aye". Any opposed? Vote on Bill 136 : The motion to amend Bill 136,Draft 3, as amended to (Draft 4) Draft 4 on second and final was carried by the following (Adopted) voice vote: Ayes: Council Members Evans, Galimba,Inaba, Kaneali`i-Kleinfelder,Kierkiewicz, Lee Loy, Villegas, and Chair Kimball—8. Noes: None. Absent: Council Member Kagiwada— 1. Excused: None. CHR. KIMBALL: We are done with the budgeting process. Congratulations. OTHER The Chair directed the Council to proceed to the next order of business, Other BUSINESS: Business. (There were none.) ANNOUNCE- The Chair directed the Council to proceed to the next order of business, MENTS: Announcements. (There were none.) ADJOURN- There being no further business, Chair Kimball adjourned the meeting at 1:37 p.m. MENT: Council Approval: AUG 0. 7 2024 CO JH/dt Page 69