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HomeMy WebLinkAboutMIN GOEAC 2024/07/09 (2022-2024) Committee on Governmental Operations and External Affairs th 35 Session Hawaiʻi County Building 25 Aupuni Street Hilo, Hawaiʻi July 9, 2024 CALL TO The regular meeting of the Committee on Governmental Operations and ORDER: External Affairs was called to order at 2:30 p.m., in the Council Chambers, Hilo, by Ms. Cindy Evans, Chair. ROLL CALL: Present: Ms. Cindy Evans, Chair Ms. Susan L. K. Lee Loy, Vice Chair (came in later) Ms. Michelle M. Galimba, Member Mr. Holeka Goro Inaba, Member Ms. Jenn Kagiwada, Member Mr. Matt Kāneali‘i-Kleinfelder, Member (came in later) Ms. Ashley L. Kierkiewicz, Member Ms. Heather L. Kimball, Member Ms. Rebecca Villegas, Member STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: The following individuals registered to speak and came forward when called by the Chair: Robert Golden: Res. 556-24 (Comm. 928), in support. Gordon Lindquist: Res. 556-24 (Comm. 928), in support. CHR. EVANS: Mr. Clerk, would you let the record reflect, we have two other Council Members who have joined us. Member Holeka Inaba and Member Ashley Kierkiewicz. Okay, Mr. Clerk, would you please read in Communication 10.8. GOEAC-35 July 9, 2024 COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. Comm. 10.8: HAWAIʻI STATE ASSOCIATION OF COUNTIES’ APRIL 5, 2024, EXECUTIVE COMMITTEE MEETING MINUTES AND OFFICER’S REPORTS From Council Member Heather Kimball, dated May 31, 2024. Motion to Close File: Ms. Kimball moved to close file on Comm. 10.8. Seconded by Mr. Inaba. CHR. EVANS: Member Kimball. MS. KIMBALL: Thank you. Just wanted to take the opportunity to note a change that has happened with the HSAC (Hawai‘i State Association of Counties) meetings, which is, for the County reports, I’ve asked that the counties actually put that in writing and submit that, so that it could be included in the minutes. The reason I like that is because we often refer to in our conversations about bills that we’re putting through our Council and whatnot. And having that documented in such a way that we can refer back to it in case there are pieces of legislation that we’d be interested in emulating in our own County. It’s much easier to find in these reports. They’re not always captured in the notes. So, I encourage you to look through at least the County reports in the minutes. Because I think it really is a nice way to highlight the activities in each county that are happening. Thank you and ask for my colleagues’ support. CHR. EVANS: Thank you. Members, any questions or comments? I just have one question. Is this quarterly? How often will we see this? MS. KIMBALL: It’s monthly. Well, we meet monthly. I don’t submit the minutes to you folks until they’ve approved and are approved by the Executive Committee. So, that’s why you’re seeing April. Well, we actually missed a meeting. So, they were approved in June, and then it’s coming here now. CHR. EVANS: So, we’ll see them maybe. MS. KIMBALL: You should see them every month or every other month. CHR. EVANS: Every month or every other month. Okay, thank you. We have a motion before us, all in favor? Any opposed? Page 2 GOEAC-35 July 9, 2024 Vote on Comm. 10.8: The motion to close file on Comm. 10.8 was carried by (Filed) the following voice vote: Ayes: Committee Members Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Villegas, and Chair Evans – 7. Noes: None. Absent: Committee Members Kāneali‘i-Kleinfelder and Lee Loy – 2. Excused: None. Comm. 920: REQUESTS A DISCUSSION REGARDING THE 2025 HAWAI‘I STATE ASSOCIATION OF COUNTIES’ LEGISLATIVE PACKAGE From Council Member Heather Kimball, dated June 13, 2024. Motion to Close File: Ms. Kimball moved to close file on Comm. 920. Seconded by Mr. Inaba. CHR. EVANS: Member Kimball. MS. KIMBALL: Thank you. So, I would like to just have a little bit of time here. Hopefully, you all received from HSAC, the Legislative timeline. And so, pursuant to that timeline, it was shared. This is the stage where we have some conversations about priorities and potential bill proposals that we will then share with the Executive Committee. And then we have to go through the whole procedure so that it’s done in time for the HSAC package. Usually, late November or early December. So, at this time, I’d like to just ask for my colleagues to give me a few ideas of State Legislative items they would like to identify as potential conversation pieces. They’re not priorities yet, but ideas for priorities. Then, I would also like to just note that the Executive Committee made the decision to expand our Executive Director’s contract. Nahe (Nahelani Parsons) is going to take over the lobbyist position. So, as we move forward in terms of drafting legislation, you’re welcome to contact her directly. She will be the one now that will be helping to draft bills and whatnot on behalf of HSAC. So, we’re excited to have her in that capacity. CHR. EVANS: Okay. Member Kagiwada. MS. KAGIWADA: Thank you. Couple ideas; I think a couple might have been similar from last year. But I’d like to look at prioritizing; making sure that there’s improvement and increase to maternal health, prenatal care, and birth services. Especially, as it relates to traditional and customary practices; and especially, rural Page 3 GOEAC-35 July 9, 2024 access. Also, reproductive health. So, hope we can look at that as something we can prioritize. The other one is something specific around game management and feral pigs, perhaps goats. Yeah, so ungulates. Then this is just, I don’t know what other people are thinking, but potential funding pool for cesspool conversion. Those are some of my first thoughts. Thank you. CHR. EVANS: Okay. Member Galimba. MS. GALIMBA: Thanks. You know, I really just have one. And it’s somewhat related to cesspool conversion, and it’s really a result of that meeting that we had down in Miloliʻi with all of the experts from everywhere. And one member from WAI (Wastewater Alternatives and Innovations) and I forget his name, but he was basically, “These are all very good ideas, but unless we change DOH (Department of Health) regulations, like forget it.” So, you know, that continues to frustrate me, that we’re going to septic, but probably there’s a better solution. But we’re being stopped by a little rule. So, that’s as specific that I can get right now, but I think that would be great. CHR. EVANS: Okay. Member Kierkiewicz. MS. KIERKIEWICZ: Thank you. I certainly agree with everything that’s been shared by Council Members Kagiwada and Galimba. And I do want to note, Council Member Kagiwada, that Research and Development has actually funded a group here to start looking at some more localized solutions related to the feral pig problem. It’s an 18-month program, and my hope is that a plan will be developed that can be shared with Council Members, but also the State Legislature, so we can work in collaboration. So, definitely, more funding to deal with invasive species. Particularly, things like Albizia, which is something that is prevalent throughout the islands. But we’re also seeing a proliferation of other pests that are really potentially hurtful to our agricultural industry. I’d like to see more investment in workforce development opportunities. And a stronger pipeline for youth to enter the workforce and having opportunities for internships, apprenticeships, fellowships for youth and residents. I’d also like to look at how we might expand use of agricultural land, just in recognition of all the other things that people need to do, in order to make a farming operation pencil out. Page 4 GOEAC-35 July 9, 2024 Something very close to my heart is really to get mental health support, substance abuse rehabilitation. One of my family members was assaulted over the weekend, and assaulted by an individual who was out on conditional release for a crime they had committed some very cruel acts to animals. They went through a mental health evaluation, and they were deemed mentally fit and stable to go through trial. And I’m concerned because the person he attacked was a kupuna. So now, it’s a felony. And I think, what if this was a more tragic situation where she, you know, was unfortunately killed. And I think about ways in which we are ensuring that folks are getting the treatment and support they need. So that we can prevent these violent acts from occurring. So, that is something that I’d love to find ways to, you know, just strategize around potential solutions. I think we have solutions. I think it’s about our State delegation really stepping up bringing the funding home, so that we can implement these projects and build up the infrastructure both through the built environment and building the capacity of people to deliver the services. Then with so much being discussed about how we can better prepare ourselves, our households, our communities for the next disaster. I’d really like for the State to work with the counties to invest in community emergency plans. To my knowledge there are only a few communities that have an actual plan. Hawaiian Paradise Park and Volcano. I think Waikoloa has half a plan, but it’s like 10-years-old. Every single community needs to be involved in developing these plans and understanding government’s role and their role to kind of step up. But, also, if something happens, where to go. Where to go for information; where to go to evacuate. So, that is a very extensive but important planning process. If I could get a little latitude, Chair, the Governor had his veto list today, and I just want to let everybody know, HB (House Bill) 2581, that was something we had all talked about a couple years ago. That’s related to an emergency power in our statute where the Governor or Mayor had the ability suspend electronic media communications. That was in our statute. We finally got that removed. So, we can ensure the flow of information during times of emergency and crisis. So, thank you to everyone on this body that did contribute to testimony to that. Thank you. MS. KIMBALL: Chair, if I may ask one follow-up question to Council Member Kierkiewicz? CHR. EVANS: Yes, please. Page 5 GOEAC-35 July 9, 2024 MS. KIMBALL: Council Member Kierkiewicz, could you just give me a brief additional explanation around the expansion of use of agricultural lands? Would this be agritourism? MS. KIERKIWICZ: This is related to agricultural tourism. MS. KIMBALL: Yes, thank you. CHR. EVANS: Member Inaba. MR. INABA: Sure. So, a few topics, some of which we’re taken up on our own already, and I’m not sure if in this last session, the Legislature finally got to it. But going back a term, I think two out of the four counties right now, are doing Sunscreen codes, or one other county, if we can have the State revisit that. Because it doesn’t make sense that visitors going to different islands have different options; or there would be confusion across the islands there. And I think the models of our island, and I believe Maui County have stood up and have not caused significant issues for retailers across the islands regarding tobacco. I’m not sure if that provision was removed. It doesn’t look like it. So, if we could get a revisit of that, being that this Council took up that measure, and you know, is ready to go, should that part of the statute be repealed. Then, there is an issue right now at our airports. I know Kona Airport just got rid of parking passes for non-employees. But on the visitors’ side, you know, we do still have those windows of time where there are no rent-a-cars. So, checking to see what kind of effort, maybe on the legislative side, could be done to create more space for owner-rented vehicles, like Turo to be offered. And again, that’s kind of the car version of Airbnb, you know, in providing that other source of income for our residents. Then I can’t emphasize enough in support of what Council Member Kagiwada brought up with the goats, the sheep, the pigs, especially here on Hawai‘i Island. Those crossing over between Hilo and Kona, and especially on the top road in Kona. I’m not sure what the situation is in Puna, but we have just so many feral animals getting hit, and it’s dangerous for residents. I thought of different versions of whether we would look at allowing hunting on those public lands, and what kind of hunting? But I think we need to get creative. DLNR (Department of Land and Natural Resources) has some solutions, but I don’t think it’s within our scope as a County to address those issues. So that’s a significant issue we need to bring up. Then lastly for now, you know, there is a ban on selling certain things like hīhīwai, which are our fresh water ʻopihi, and at this point, I don’t know if that’s Page 6 GOEAC-35 July 9, 2024 something we need to consider for regular ʻopihi too. Not that you can’t collect, but you can’t be selling. Because I know, on some of the other islands, they’re selling ʻopihi from this island marketed as Big Island ʻopihi, and its natural resources just being from this island, and essentially being depleted. So, the selling of ʻopihi would be something that we would need to consider. But besides that, look forward to what the other counties have to share. Thank you for this opportunity. CHR. EVANS: Member Villegas. MS. VILLEGAS: You know, our County passed legislation, we no longer spray glyphosate in our County Parks and Recreation facilities. And DPW (Department of Public Works) took it upon themselves to transition that practice for our roadways. Unfortunately, the State doesn’t abide by that same thing. I have been driving and actually took a video as a huge truck came barreling behind me, and they must have just had a valve, because out of the front of the truck, it just sprayed. And while it’s not glyphosate, glufosinate is actually worse. And just sprayed all over the road, barely on the bushes. We have to come up with better ways of managing on how we maintain our roadways. I just think that if that came from a State level, I know herbicide companies are coming hard for any municipalities to have passed legislation regarding that. So, from a State level, I think it would behoove us, especially as we are navigating a time when especially on Oahu, their water sources have already been compromised. So, that’s something that hits home. I’m not sure if this is appropriate or necessarily for HSAC, but State funding for things that’s been on the books for years for Kona for expansion of our highway. And you know, with the desire to infill and add development, we have to have concurrency of infrastructure improvements. Thank you. CHR. EVANS: Member Lee Loy, I think I’ll comment and then maybe you want to add? I think one of the big things are the rising costs of home insurance. And the other thing is, the apartments. I have low-income—I actually have a call into Susan Kunz. I haven’t heard back yet, but I believe all of the affordable housing units, I think they just got a 500 percent increase in their property insurance, like in the last few months. So, you want to talk about affordability, we’re going to have to somehow come together and talk about what we’re going to do with this homeowner’s insurance. Which leads me to where I’d really like to see our congressional delegation work with us on doing floodplain studies. The other thing is we’re on an island and everything is downslope. Page 7 GOEAC-35 July 9, 2024 I was surprised when, you know, we put money in the budget to look for a floodplain study from Waikoloa down to Puakō, and I was kind of surprised. I assumed, you know, that FEMA (Federal Emergency Management Agency) and the Corps and everybody with flood insurance, that we were going around the island and doing these studies. Come to find out, there is a few, but it’s not the norm, that they’re running around. So, I think we should look at floodplain studies because of the storm water runoff and the chemicals, and the things that are going into our ocean and our nearshore waters, or it’s kind of a water pollution thing. I think the two other things. One is, just how we’re dealing with solid waste, and I’m going to throw in junk cars on that. I mean, thank God, Representative Ilagan put some effort into junk cars, but we just have to figure out a way. Because we just got vacant lots all over this island that are just filling up with junk cars. You know, which means we’ve got a lot of cars coming on the island, and I don’t know how we keep track of cars. But maybe with AI (Artificial Intelligence) maybe there’s a way. I don’t know. But I know with Google Earth or whatever, you know, even if you can’t get on the property, you can Google Earth and look down, and there’s a vacant property out in North Kohala that’s got over 200 cars. You can see them if you Google Earth and go, oh my gosh, and you drive down the road. It’s very full of you know, it’s overgrown, but right at the beginning, you can see like 30 or 40 and they’re all junk. Anyway, so I’m really worried about junk cars. The other thing is sirens. I really would love to have the State Legislature and the County leaders talk about these sirens. Because HI-EMA (Hawai‘i Emergency Management Agency) is the one that buys them, installs them, and prioritizes to install them. Then the County participates in the maintenance of them by testing them, and there’s just something wrong with that picture. You know, because, even if we identify and know we need them, we may not get them because it’s being run by the State HI-EMA. So, lot of communities just say, why don’t we have a siren? Well, you know, we at the County level aren’t controlling that. It’s being controlled by that State agency, and that’s frustrating to me. Because it’s a high need, and I don’t know why we can’t fill that need. There were other ones that have already been mentioned that I feel strongly about. And invasive species, please, we’ve got to tackle that. It’s terrible. This rhinoceros coconut beetle can destroy our palm trees, our avocado trees. We know something is here. I’ll tell you what. Tell them they need a rapid response team. They need to be much better. If they think about it as a coordinated rapid response team with the Federal agencies, the State agencies, and the County agencies. Like almost an Emergency Declaration. Maybe something around that. Thank you. Do you have anything, Member Lee Loy? Page 8 GOEAC-35 July 9, 2024 MS. LEE LOY: Thank you, Chair. Awkwardly, who knows where I’ll be in six months? So, I might be receiving this. That being said, absolutely agree with Council Member Evans on revisiting the insurance. We know families are already getting letters that they’re not going to be able to get insurance. I’m not sure if my other colleagues have touched on this, the GE (General Excise) and the Sunset. I think Hawai‘i County has done an excellent job at what we do to align our money with our transportation system. And using that as a model to demonstrate why some counties may want to opt to take it after the Sunset deadline. I think the other one at the State level is the HiRUC (Hawai‘i Road Usage Charge) program that’s going to be delivered down to the counties when it comes to fuel tax. And pay by the mile now that we’re transitioning over to a lot of electric vehicles. I’ll leave it at that. I learned over time that an HSAC package has to be very succinct and in line with the other counties. So, those are definitely three areas that I think in the HSAC package, that all of our counties, Maui, Kauai, and City and County of Honolulu, can actually get behind. Because those are things that are going to be decided at the State level but impact our local communities. So, Chair, thank you for the opportunity to comment. I yield. CHR. EVANS: Thank you. Member Kimball. MS. KIMBALL: I just want to mahalo everybody for their input. And yeah, Council Member Lee Loy is correct. We do whittle this down quite a bit to probably five bills’ tops. And then, we additionally adopt some priorities. So, if there are areas where we’re not providing the bills, we have already acknowledged that we’ll provide support. So, I will take this back to the group. I will also just mention that we have not historically issued a Council package. It is certainly something we have the opportunity to do. So, if we get to the point where we are looking at this Legislative package for HSAC, and there are things that we really feel need to be included. But you know for the example of the roadway expansion in Kona, I don’t expect that the whole broader HSAC would support something like that. But we could look at putting things like that in a Hawai‘i County Council package. Maui Council does one. So, we certainly could do that as well. Alright, thank you, Chair, I yield. CHR. EVANS: Okay, thank you. So, we have a motion on the floor to close file, all in favor? Page 9 GOEAC-35 July 9, 2024 Vote on Comm. 920: The motion to close file on Comm. 920 was carried by (Filed) the following voice vote: Ayes: Committee Members Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Evans – 8. Noes: None. Absent: Committee Member Kāneali‘i-Kleinfelder – 1. Excused: None. ORDER OF The Chair directed the Council to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Res. 548-24: REQUESTS THE OFFICE OF THE COUNTY AUDITOR TO CONDUCT A FINANCIAL AUDIT OF THE DEPARTMENT OF LIQUOR CONTROL TO ENSURE THE EFFICIENT ALLOCATION AND UTILIZATION OF FUNDS IN COMPLIANCE WITH SECTION 281-17.5, HAWAI‘I REVISED STATUES Areas of emphasis include the allocation and utilization of funds for travel for the department, Liquor Commission, and Liquor Control Adjudication Board and compliance with statutory requirements for the expenditure of funds received from licensing fees. Reference: Comm. 919 Intr. by: Mr. Inaba (Note: Comm. 919.1, from Council Member Holeka Goro Inaba dated July 9, 2024, transmitting proposed amendments to Res. 548-24, was circulated.) Motion to Approve: Mr. Inaba moved to recommend adoption of Res. 548-24. Seconded by Ms. Kierkiewicz. CHR. EVANS: Member Inaba. MR. INABA: Thank you. The Liquor Department is a self-funded department, as we’re reminded every year during the Budget season. And the Hawai‘i Revised Statutes require the fees that the department collects are direct in proportionate in relationship to the costs and the expenses required to run the department. In our Budget hearings, I pointed out that the Travel Budget for this department is sky-high. I believe this current fiscal year has a Travel Budget between the Liquor Department Commission and Adjudication Board is $124,000. Page 10 GOEAC-35 July 9, 2024 There’s been some discussion regarding the lack of use of some of the funds, especially regarding our High School Project Grad or other community Education Programs. There’s been some discussion regarding return of the fees that are not used. But I think at this point, a comprehensive look is required, and an audit might be the best options. So, we have our County Auditor here today, Tyler Benner. We also have Deputy Corporation Counsel who is assigned to the Liquor Department here in Chambers, Cody (Dekota) Frenz. Ultimately, this is just to make sure that we are using the funds as required and we’re not collecting anything that is not directly proportional to the costs required to operate the Department and the Commission and Adjudication Board. So, want to give the opportunity to our County Auditor to make any comments at this time. Mr. Benner. (Note: At this time, County Auditor Tyler Benner, came forward to address the members of the Committee.) MR. BENNER: Thank you, Council, appreciate it. My name is Tyler Benner, I’m with the Office of the County Auditor. I don’t have a lot to say on this. I’m fairly benign and just kind of wanted to find out the temperature of this body, as to whether or not that’s something that they wanted to move forward with. The two comments that I might have was a report of a financial audit. The Hawai‘i County Charter 3-18, Section B, requires that financial audits be conducted by a CPA (Certified Public Accountant). And so, we would have to outsource that audit unless it was converted to a performance audit. So, I wanted you to be aware of that. Secondly, there are some resource constraints within our own office as the moment. So, if this body intends to approve of that, then we would probably opt to do some field work to see if we can answer those questions adequately. And if they raise more questions than they solve, then you know, we would continue moving forward through a full audit. And if they do answer them to satisfaction, then we would probably cut and discontinue at that point. MR. INABA: Thank you, Mr. Benner. And I do have an amendment today. I want to give the opportunity to Deputy Corporation Counsel. No comment at this time? Okay. So, with that, I’ll make a motion to amend. Motion to Amend: Mr. Inaba moved to amend Res. 548-24, with the contents of Comm. 919.1. Seconded by Ms. Kierkiewicz. Page 11 GOEAC-35 July 9, 2024 CHR. EVANS: Member Inaba. MR. INABA: Thank you, and just to clarify, this is Communication 919.1, and this addresses the point that the Auditor brought up. It changes to Financial Audit to Performance Audit, and in the third “Be it Resolved,” it asks that the Liquor Department take appropriate action in accordance with the findings and recommendations and provide a progress report to the Council within 180 days of the Comprehensive Audit Report. And that’s assuming that, you know, the whole process goes through, and that report is created if there’s inadequate response or some concerns that are raised in the initial field work. So, ask for your support on this amendment. CHR. EVANS: Auditor Benner, do you want to comment on the difference between Financial and Performance? MR. BENNER: Yes, thank you. Financial Audits are focused on verifying the accuracy and completeness of an organization’s financial statements; ensuring that they’re free from material misstatements and in compliance with the County’s standard. And Performance Audits assess the efficiency, effectiveness, and the economy of an organization’s operations, programs, or activities; and aimed at determining if resources are being used optimally to achieve intended outcomes. CHR. EVANS: Okay, thank you. Members any questions or comments? Okay, we have a motion on the floor. All in favor? Okay, none opposed? Vote on Motion The motion to amend Res. 548-24 with the contents of to Amend: Comm. 919.1, was carried by the following voice vote: (Approved) Ayes: Committee Members Galimba, Inaba, Kagiwada, Kāneali‘i-Kleinfelder, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Evans – 9. Noes: None. Absent: None. Excused: None. CHR. EVANS: Member Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. Auditor Benner don’t go just yet. I will be supporting this resolution. Auditor, you know, one of the “Be it further resolves” here is regarding the Travel Budget for the department, Commission, and Adjudication Board. Page 12 GOEAC-35 July 9, 2024 Corporation Counsel, correct me if I’m wrong, but does the Liquor Commission appoints the Director, Administrator of the Department of Liquor. Yes, the Liquor Commission does, okay. So, in addition to the allocation and utilization of resources, I’d also like for you, if possible, to have the determination around the ethics of a body appointing a director that has discretion on who gets to travel. MR. BENNER: We can conduct an inquiry on that. MS. KIERKIEWICZ: I don’t think that is appropriate. But I don’t know if there are policies in place to set up those guardrails that allow the director to have that kind of discretion. So, as part of your audit, I’d like for you to identify appropriate procedures for that. MR. BENNER: Thank you for the comment. MS. KIERKIEWICZ: Thank you, I yield. CHR. EVANS: Okay, Member Galimba followed by Member Lee Loy. MS. GALIMBA: Thank you. Just briefly, you did mention sort of being limited by resources. And I just wanted to ask you to maybe kind of a list, or what does that mean? I know we’ve given you few tasks, and I’ve kind of forgotten what they are. Could you go over what you’re working on at this time? MR. BENNER: Currently, we’re working on concluding an audit of bridges and coverts with the Department of Public Works. We are also working on an audit of permits with Public Works. And we have recently published our Annual Audit Plan for the coming year, which we haven’t yet discussed in Committee. So, I won’t go over that. But there are a couple of items, including one new audit and one follow-up. I also have two employees that are out on medical leave, which means I’m down to two analysts, and one of those analysts have had to fulfil the functions of my administrative assistant, which means that they’re only available part-time. So, we are resourced constrained. CHR. EVANS: Thank you. Member Lee Loy. MS. LEE LOY: Thank you so much, Chair. Thanks, Auditor for being here. I was just wondering about the timeline. You just mentioned some staffing shortfalls. Some things that are already in the pipe. And then an overall audit plan. Because I’m in support of this. Ironically, I like audits. It’s a pathway to help. I always see it that way. Page 13 GOEAC-35 July 9, 2024 But I also know that the timing of it is also critical when it’s related to like a budgetary issue. Tell me about the timeline and your anticipated schedule. MR. BENNER: I mean we’re pretty good at being able to juggle multiple projects at the same time. In addition to what I’ve laid out, you know, there’s also a discussion in this body of Research and Development in doing a fairly deep dive and comprehensive audit of a number of functional areas of that department. I mean, we would try and intergrade it in and throughout the other projects that we’re doing. This isn’t an extremely complex department. I did pull five years of their financial data. I would say that with regards to travel, the $124,000 is a number that we find in fiscal year 2020 and moving forward with the exception of COVID (Coronavirus Disease), and they have 29-line items in their budget. Their budget is expensed pretty consistently. So, there isn’t a whole lot of deep diving to do there. This is really an audit regarding management tolerance to what they consider, you know, qualitative versus what we might say is an investment in personnel versus whether or not they’re exercising proper judicial discretion on the expenditures related to travel. MS. LEE LOY: Great. Thank you for that. You know, having heard that, not to create any pressure, but ideally, getting something like this by the fourth quarter of the year, so that you know, this body when they’re walking into that next budget cycle in 2025, I think will be helpful. I’m trusting you can get it across the finish line by then. MR. BENNER: We always endeavor to do our best. I guess it’s just a matter of the conversations that we have and the questions that we ask. MS. LEE LOY: Great. Thanks Auditor. Always a pleasure having you here. Chair, I yield. CHR. EVANS: We have a motion on the floor. All in favor? Page 14 GOEAC-35 July 9, 2024 Vote on Bill 548-24: The motion to recommend adoption of Res. 548-24, as (Draft 2) amended to Draft 2, was carried by the following voice (Approved) vote: Ayes: Committee Members Galimba, Inaba, Kagiwada, Kāneali‘i-Kleinfelder, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Evans – 9. Noes: None. Absent: None. Excused: None. Res. 549-24: AUTHORIZES THE MAYOR TO ENTER INTO AN AGREEMENT WITH THE DEPARTMENT OF THE ARMY PURSUANT TO HAWAI‘I REVISED STATUTES SECTION 46-7, REGARDING AN AQUATIC ECOSYSTEM RESTORATION STUDY OF KAHALU‘U BAY Allows for a 50 percent cost sharing agreement to conduct a study to identify and evaluate alternatives and recommend a solution for aquatic ecosystem restoration of Kahaluʻu Bay. Reference: Comm. 921 Intr. by: Ms. Evans (B/R) Motion to Approve: Ms. Lee Loy moved to recommend adoption of Res. 549-24. Seconded by Ms. Galimba. CHR. EVANS: It’s pretty common. I know, it’s by request from me. Is there anyone from the department? (Note: At this time, Parks and Recreation Director Maurice Messina, came forward to address the members of the Committee.) MR. MESSINA: Good afternoon, Council. Maurice (Mo) Messina, Director of Parks and Recreation (P&R). CHR. EVANS: Thank you. MR. MESSINA: So, this is quite a few years in coming. We have a lot to do at Kahaluʻu Bay. That is the one beach park out of our 30 or so in our inventory that is affected most by sea level rise. When we had the Tongan volcano eruption, that was the only beach park on our island that took significant damage. Every time we have very high surf, especially during king tides, that park also suffers damage. We’ve been pretty successful in the last few years for coral spawning. We’ve been closing down the beach park for about a month to let that happen. Page 15 GOEAC-35 July 9, 2024 We’ve been seeking funding through the State Legislation for about three or four years as well, trying to get some studies done. Because as soon we understand exactly what’s affecting the ecosystem there, and flooding; and we got some runoff happening there as well. We’re going to be able to start putting a plan on how actually restore that beach park. The agreement was that anything over $100,000 for the study would be a 50-50 match with the County. Our Finance Director was able to get that into our budget this year, so we’ve got that. If they put together a viable study and a liable plan for restoration, and permitting, and design, there will be a 35 percent match from the County to go along with that. That’s about two years away. So, we’ll know before that happens if that’s something that’s going to happen. But this is very important to us. We need to replace the aging infrastructure of that beach park, and we can’t do anything right now. We don’t even know if we can put the pavilions back exactly where they are. So, we’ve got a lot of issues there, and this is going to help us actually move forward. CHR. EVANS: Okay. Member Villegas. MS. VILLEGAS: Thank you, Director Messina. As representative of this district and a lover of Kahaluʻu Bay and the park there, my second birthday party was at that park. I spent a lot of time there and in the water. Worked very closely with Reef Teach and Cindi Punihaole. And you have done excellent work collaborating with them and identifying funding sources in order for us to move forward with these projects. If any of you haven’t seen them, the reports that have come out about the projected sea level rise and how it will affect that area. It is very drastic. I know community’s incredibly frustrated and doesn’t necessarily understand why the pavilions haven’t been fixed and why things are in a state of disrepair, as far as the facilities there. Please know that it is top of mind. Work is being done to do it appropriately and responsibly so that public funds are not wasted, and proper consideration is being given to where and how the relocation can happen. So, I just am deeply grateful to support this. It’s all taken a lot longer than we’d like. However, you have helped move this project forward in ways that haven’t been seen in decades. So, your commitment to the renovation and restoration of the parks in Kona, I am deeply grateful for. And just want to thank you personally and professionally and ask for continued patience from our community. Please know things are being worked on. Solutions are part of the plan that’s Page 16 GOEAC-35 July 9, 2024 happening right now in order to mitigate the challenges we are facing due to climate change and sea level rise. All of that tied in with the sewer improvements. Hopefully, getting that sewer so that our ocean ecosystems are safe from the impacts of the cesspools along that part of the coastline. So, thank you, Mo, appreciate you. I yield. CHR. EVANS: Member Kāneali‘i-Kleinfelder. MR. KĀNEALIʻI-KLEINFELDER: Thank you. Two times in one day we get to see you, Director of Parks and Recreation, Mr. Messina. Thank you. Just briefly, what does an aquatic ecosystem restoration encompass? MR. MESSINA: There’s potential runoff that’s affecting the reef in that area. So, part of the study is going to be, if they can confirm that runoff is affecting that marine ecosystem. How do we divert that aging infrastructure of the park itself? We have very high seas that are hitting the seawalls, and we’ve got concrete and stuff in those seawalls. So, they really want to come out and look at it. The study is going to be like an all-encompassing study. Because even when we talked to Army Corps of Engineers, they’re saying, well if there is a big flood, there’s a lot of flood damage in this area. It could even affect the electricity transmission lines going along the highway there. So, they want to do an all-encompassing study that will help us decide. Do we actually fix these pavilions, or do we turn this into a passive beach park with only bathrooms and allow the ecosystem to recover and catch back up? Do we remove all the rock walls and the concrete that is around? So, this is all just going to help us. They don’t even know a hundred percent what the study is going to tell us, but we’ll be able to at least move forward with some options. MR. KĀNEALIʻI-KLEINFELDER: Okay, appreciate that. I yield Chair. CHR. EVANS: Members? I have a question. Given that this is affecting aquatic resources, where does Department of Land and Natural Resources and the other—because it is State controlled land below the shoreline. Are they engaged with you in this? MR. MESSINA: Yes. In fact, we met with DLNR and DOBOR (Division of Boating and Ocean Recreation) this morning. So, the study is going to help us actually decide what we need to do; what processes we need to go through. Because the permitting isn’t just going to be on the County side, it’s also going Page 17 GOEAC-35 July 9, 2024 to be on the State side. So, all landowners and players are going to be affected by the study. CHR. EVANS: Just had a thought, because the Legislature will gather again in January, and will need people to talk to them in December about certain needs. Do you think you could have something for the State Legislature to maybe consider in December? I know sometimes it takes a while to roll out the contracts and get everybody signing things. Is it a possibility to have even a preliminary to the Legislature? MR. MESSINA: So, we’ve been trying for about the last four years to get a bill through the State Legislature. But if we’re already doing one study, I don’t know that doing the same study twice? CHR. EVANS: It’s not a study. It’s more just like informing them and getting them on board maybe through a resolution or something. But I know that part is just so amazing. I just see them having to have to partner, you know, on this somehow. Just a suggestion, if you can get something in December that you can share with the Legislature on the island, you know, kind of what’s going on there and forewarn them. Because they can maybe be supportive of DOBOR or DLNR and maybe see somewhere there, you know, helping. Because it’s so valuable. MR. MESSINA: We’ve been in personal contact with all of our representatives and senators of the area. We met with them numerous times with the Kohala Center as well, and they’ve all supported our recent legislative efforts. Just haven’t been able to get it through. CHR. EVANS: Okay, alright. Thank you. Okay, we have a motion on the floor. MR. KĀNEALIʻI-KLEINFELDER: Chair, sorry, I have a follow-up. CHR. EVANS: Member Kāneali‘i-Kleinfelder. MR. KĀNEALIʻI-KLEINFELDER: Thank you, Ma’am. So, we’re not doing any improvements on the property because we’re worried about inundation by coastal waters? MR. MESSINA: We don’t know if we can build where we currently are building. Our plan right now is to actually remove the aging infrastructure that we have. One old bathroom, both pavilions, and possibly the rock walls. I can’t do any repairs right now on any of the structures. And we’ve got to do it in a safe manner, which means following all hazmat protocol so that nothing goes into the ocean. Page 18 GOEAC-35 July 9, 2024 My plan right now is to remove those pavilions, create a new roof over the bathrooms; create a storage area for Kohala Center, who’s actually managing the park and the Reef Teach program for us now. Until we can get the study complete, and then they can tell us exactly or give us an idea of what should be the next steps. So, we’re not just sitting back and just waiting for this. We finally have money now through our budget, we can do some of these things. MR. KĀNEALIʻI-KLEINFELDER: I mean, just thinking out loud, a lot of our infrastructure is at risk in all of our coastal areas. Not just this one park. MR. MESSINA: True. But for this department, for Parks Department, that is our most at-risk area. I would rather us try to fix something now, other than something bad happen; a hurricane come in or whatever. And those pavilions and everything end up in the water. We want to try to get them down now that we finally have the funds to actually do it. MR. KĀNEALIʻI-KLEINFELDER: It’s too bad that you have to take them down. I mean I hate hearing that because it’s such a nice park, and the community loves it, and visitors love it. MR. MESSINA: Yeah, they can’t be repaired. They’re done. MR. KĀNEALIʻI-KLEINFELDER: They’re nice though, or they were nice at one point. What is the hotel that was next door that’s now taken over by Kamehameha Schools? MR. MESSINA: I don’t know what the name of the hotel was, not since I’ve been here. MR. KĀNEALIʻI-KLEINFELDER: I think it’s Kamehameha Schools. Are they partnered in this? MS. VILLEGAS: Chair, could I provide a little bit of insight on this? CHR. EVANS: Okay, please. MS. VILLEGAS: Kamehameha Schools (KS) actually owns the property, and they took down what was the prior Outrigger Hotel. And years prior to that, the Longhouse. And the hotel that was next to it, all that property has been allowed to rest for the last few decades and has been transitioned from their commercial properties to being an education center that’s focused on youth. The project that was done, I want to say it was CARIT (Center for Applied Research in Information Technology). They did digital mapping of sea level Page 19 GOEAC-35 July 9, 2024 inundation, and they actually overlapped and covered the KS properties as well to show some of the potential impacts on those properties. MR. KĀNEALIʻI-KLEINFELDER: Thank you. Given that Kamehameha Schools is involved in the property next door directly abutting our County property, it may be good to work with them, collaborate in any form. MR. MESSINA: We actually do. So, right across the street from the area that Council Member Villegas was talking about, we’re working with them to create a parking lot and ADA (Americans with Disabilities Act) accessibility route to come actually to Kahaluʻu Beach Park. So, we met with them I think the last time, maybe three or four months ago. MR. KĀNEALIʻI-KLEINFELDER: Okay, good. So, you did know the owners? MR. MESSINA: No, I didn’t know the hotel. MR. KĀNEALIʻI-KLEINFELDER: Oh, the hotel itself is gone. Okay. Thank you very much, Mo. I appreciate it. I yield, Chair. CHR. EVANS: Thank you. We have a motion on the floor. All in favor? Any opposed? Vote on Res. 549-24: The motion to recommend adoption of Res. 549-24, (Approved) was carried by the following voice vote: Ayes: Committee Members Galimba, Inaba, Kagiwada, Kāneali‘i-Kleinfelder, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Evans – 9. Noes: None. Absent: None. Excused: None. STATEMENTS The Chair directed the Council to proceed to the next order of business, FROM THE Statements from the Public. PUBLIC ON RES. 556-24 The following individuals registered to speak and came forward when called by (COMM. 928):the Chair: Kris Adair: In support. Joshua Montgomery: In support. (Representing Ohana Aina Association) Page 20 GOEAC-35 July 9, 2024 Res. 556-24: REQUESTS THE DEPARTMENT OF RESEARCH AND DEVELOPMENT TO PROCURE A COMPREHENSIVE STUDY ON THE ECONOMIC AND FISCAL IMPACTS OF THE TRANSIENT ACCOMMODATION RENTAL INDUSTRY IN HAWAI‘I COUNTY Seeks an assessment and analysis of rental listings including available rentals, occupancy rates, pricing, geographic distribution, market value of the land/buildings, proximity of owners, number of structures, and other key metrics; economic contributions of the transient accommodation rental industry to Hawai‘i County’s economy; the impact on housing availability and affordability for Hawai‘i County residents; and the potential feasibility of conversion to long-term housing. Reference: Comm. 928 Intr. by: Ms. Kierkiewicz Motion to Approve: Ms. Kierkiewicz moved to recommend adoption of Res. 556-24. Seconded by Ms. Lee Loy. CHR. EVANS: Member Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. I’m advancing this resolution at the request of a number of community members islandwide that would like some hardline very specific Hawai‘i County data related to the impacts of transient accommodation rentals here on our island as a way to insure that, you know, the work that’s being advanced through Bill 121 is appropriate and the right fit for our County. I think we’ve seen over time how the tourism industry has kind of evolved, and transient accommodation rentals, I think, we all recognize provide an opportunity for residents to become entrepreneurs. And that is something that is really empowering. And with the cost of living just, you know, soaring here on the islands, our residents are looking for all sorts of tools to be able to afford to live here. Vacation rentals do play a role in providing folks that additional income that sort of opportunity. But what we’re trying to do here with Bill 121 is strike the right balance where we are trying to balance a variety of different things. Tourism, our economy, lifestyle, housing. But again, also recognizing that vacation rentals are the mode in which a majority of travelers are looking to utilize when they travel. There was a report that was done for Maui that noted that here on our island in 2023, 43.7 percent of visitors opted to stay in a vacation rental. So, that is petty significant. There’s been a call from community to just better understand the economic and fiscal impacts related to this industry. And so, thankfully, the Department of Page 21 GOEAC-35 July 9, 2024 Research and Development (R&D) has really stepped up to the plate and has agreed to help sort of procure the information that we are looking to gather through this resolution. And the Finance Director has certainly made her department available to supporting R&D in this. I thought about using the Auditor, but it seemed most appropriate to be in R&D, only because there is an economic development component that rests in your department, Director Adams. And I think there’s actually a lot of data and insight that your team could potentially offer in scoping this out. So, just as a very high level, and I’d love everybody’s thoughts on how we might strengthen what we are looking to achieve through this study. But looking at a third-party data and analytics platform AirDNA, which identifies TARS (Transient Accommodation Rentals) that are being rented out around our island. And that could also help to inform where it’s most appropriate to identify and designate visitor destination areas or VDA’s as we talked about. There was also a lot of discussion around Chapter 19 and current Real Property Tax Code. And again, thinking about the evolution of our communities. And I’d really like an objective standpoint from our economist about ways in which we could potentially adjust the Real Property Tax Code in light of Bill 121; in that whole suite. Then again, looking at what impact TARS have specifically on Hawai‘i Island. There’s a lot of data that is very broad-brush, or maybe more pertinent to how Honolulu County or Maui County. But I think the way that TARS are operated on Hawai‘i Island are just a bit differently. There’s a lot more folks that are utilizing this to supplement their income. I ran into an individual, he’s a contractor. He actually rents out a vacation rental and uses that income to keep the rents lower for local families that are renting from him. So, I thought it was a very interesting strategy for him to utilize a TAR to keep rents low in his rental units. Then, I think it’s really important for us to understand what is the feasibility of converting some of these rentals into long-term housing units? Because that is a belief, I think, there’s data that supports that in some communities across the country. But I’d really like to understand how that would play out for Hawai‘i Island. Director, if you could just come forward and maybe speak to R&D’s ability to be able to do this? And then, we can get into the fun stuff about financing. So, maybe Director Nakagawa, you want to come forward about that in a little bit, too? Thank you. Page 22 GOEAC-35 July 9, 2024 (Note: At this time, Research and Development Director Douglass Adams, came forward to address the members of the Committee.) MR. ADAMS: Thank you, Council Members, Doug Adams, Director of Research and Development. The key element initially will be developing the scope and making sure that, frankly, if we go too broad, then it will be very expensive. So, the idea is to make sure that we’re addressing some specific information needs that are tied, I think, to the legislation. Because the idea is to understand what the legislation would lead to, making sure that our scope is addressing those things and not just addressing current situations, but also potential future situations is going to be important. It’s clearly our intent to make sure that as we do this, I can look at other areas that we have responsibility for in the department, as we put together our scopes of services for any number of areas. One of the most recent ones that you’re familiar with, of course, is the feral pig area. We have been working on that issue for going on three or four years directly. So, the idea of being able to make sure that we had that wealth of information and experience talking to folks on the island that are concerned about that issue helps us when we were bringing together that scope of service. And also, the help that you provided. So, this will be one of those areas that definitely help to do that as well when we’re putting this together. MS. KIERKIEWICZ: Thank you, Director. And if folks are curious on how I landed on a report by February. I was able to just have a brief conversation with local economist Paul Brewbaker, and he suggested that, you know, based on some of the work that he’s done, that six months is the right amount of time based on the scope that has been articulated in this resolution. Thank you, Director, for your willingness to collaborate and help us kind of see this project through. Director Nakagawa, if you could just indulge me. I just have one more question about the financing piece, if that’s okay? MS. EVANS: Okay, yes, I’ll allow one question. MS. KIERKIEWICZ: Thank you, Chair, I appreciate it. Director, so the fun stuff. We just passed our budget, and this is something that, you know, wasn’t discussed during our budget hearings. So, just wanted to have, you know, a public conversation about how the County can be financing something like this. A few strategies that you and I had discussed were taking a look at potentially using the current STVR, Short-term Vacation Rental Fund that is being managed by the Planning Department that is based on fees that are currently collected by unhosted rentals. Page 23 GOEAC-35 July 9, 2024 All Council Members also got an additional $50,000 in contingency money. And so, if everybody ponies up $5,000, that’s $45,000 right there that goes towards this particular study. So, I’m committed to doing that, and I hope that my colleagues will follow suit, and if there’s additional funding that R&D has in discretionary funding, that could go towards this. Those are some of the ways that we could finance this. But would love your thoughts on how we might proceed. (Note: At this time, Finance Director Diana Nakagawa, came forward to address the members of the Committee.) MS. NAKAGAWA: Absolutely. Thank you, Council Member Kierkiewicz. Yes, in our initial discussions, we are in our new fiscal year. So, welcome to the new fiscal year. We just passed our budget. So, in looking at these unanticipated items, in the recommendations that we looked within our budget, we just started. So, these are some of the ways that we’ve discussed. There may be other opportunities, I think, as Director Adams pointed out. The first step is really the scope. So, we can figure out what’s the size of the budget that we’re looking at. And particularly looking, you know, in R&D and what data is already available and what our expert resources can provide to supplement this type of report. So, it doesn’t get as large of a budget, but absolutely looking at some of those areas’ existing budget. MS. KIERKIEWICZ: Thank you, Director. I appreciate the latitude, Chair, I yield. CHR. EVANS: Thank you. Member Inaba. MR. INABA: Thank you. Totally in support of this resolution. Thank you, Council Member Kierkiewicz for bringing it forward. I think for myself, just looking at the “Be It Further Resolved,” the second bullet says, “the direct and indirect economic contributions of the TAR industry to Hawai‘i County’s economy.” And I guess I would just want to focus on the monies that are really staying here, and I don’t know if we have a way of distinguishing right now. Like we don’t have operator versus owner-hosted at this time. So, I don’t know if the County has those metrics. But, what good is it to know monies that are going out to private individuals not in Hawai‘i versus large companies not in Hawai‘i. I think it’s really important for us to know the economic impact that is staying within the County of Hawai‘i. So, how it’s helping our ohana and our residents here in the County. Then, really have you focus on housing availability. I know that’s been in discussion and it’s kind of mentioned in the “Whereas” here. But in talking about creative opportunities for funding, right now, I guess Director Adams, in your Page 24 GOEAC-35 July 9, 2024 budget, we have line items for Destination Management under Tourism Promotion, we have Hawai‘i Island Promotion and then Impact Grants. Are those funds something that can be tapped into since it’s what we’re talking about here? They have some crossover between Tourism and Housing. So, on the Tourism front, are those funds available? MR. ADAMS: Thank you, Council Member. I think that we have to take a look at our entire budget to see where the scope will touch it. And so, if possible that there will be funds available. I anticipate not using any of the impact grant funds initially. We’ll see where those RFP (Requests for Proposals) goes. In fact, if we receive anything. So, I would anticipate those funds being available initially. But the other funds that we have identified as sub-accounts. If there’s a connection that can be made between the scope of this work and what those funds are designed to be for, then yeah, we could see using those. MR. INABA: Perfect. That’s all for R&D at this time. On the other half for this, we see it as a tourism thing, but we also see it as a housing situation. So, I just want to throw it out there, Ordinance 22-26, says that it’s for County-sponsored programs designed to address housing or homelessness, and I don’t know how broad we’re going to take that. But it’s not very specific and this thing does potentially touch on housing availability based on the scope right, and I know we haven’t awarded out those funds. So, that might be an opportunity, and there’s you know, I think $12 million in the homeless side; and then we also have the Housing Production ordinance, which was to support Affordable Housing Production. I think that one might be a little bit more of a stretch. But big pockets of money that we’re all aware of there that could be partially related on the Housing side since this resolution talks about Housing. With that, I’ll yield, thank you. CHR. EVANS: Member Lee Loy. MS. LEE LOY: Thank you, Chair. In support of this resolution. I think this was something overdue at this point. Just focusing on the four bulleted items on the “Be It Further Resolved,” and as it relates to the fourth one, “Potential ad feasibility for transient accommodation rental units to be converted into long-term housing units.” Love these things, but oftentimes, they give us a lot of numbers, but they don’t tell us how to drive the policy to make this work. So, to the maker, I like when there’s reports that have a crosswalk of, here’s the data; here’s what the data is showing us, and here’s an area of policy refinements or edits that help accomplish the goals and objectives of the decision making. Page 25 GOEAC-35 July 9, 2024 I don’t know how to word that in this. But you know, if there’s a way that we can actually give us tools as policy-makers on how to edit better, I would love to see something like that, and I’m willing to pass it right here, right now, and maybe work with the maker or she’s completely capable of understanding what the ask is. And maybe we could see like a refinement or an amendment kind of around that. What is the policy crosswalks that we need to be working on here besides Bill 121, 122, and 123. Those are my thoughts in support. I yield. MS. EVANS: Thank you. I have suggestions, but I’m waiting because I’m Chair. Member Kimball. MS. KIMBALL: Thank you. And thank you, Council Member Kierkiewicz for putting this together. Wanted to suggest that we add a little bit more clarity around the direct and indirect economic contributions. Particularly, around taxation and tax revenue; both GE, TAT, and property tax. In particular, because you know, every county deals with transient accommodations in a very slightly different way. But one of the things that is pretty consistent on the other counties is that they have the different taxation, right, for unhosted versus owner-hosted. You know, for example, Maui calls it Residential Commercial, and it’s just slightly above the residential rate. Part of what Bill 121 is about and getting everybody registered, just understanding how many we have to figure out. Okay, can we push that lever a little bit? Give a tax break to the owner-hosted; the Bed and Breakfast. Without knowing those numbers it’s hard to make that assessment. So, with that, comes some specificity I’d like on that item. Then with respect to the long-term units, you know, one of the attestations that’s been made on a lot of the data that I’ve shared around this issue, has been the— it’s not so much the units itself, but the pressure that it has on the overall market in rental rates. Because the economic benefits of doing STVR’s over long-term rentals really inflate the prices. So, I’d just like to add a phrase there about including impacts on overall rental rates in the County. Thanks. MS. EVANS: Member Villegas followed by Member Kagiwada. MS. VILLEGAS: Yeah, great point, Council Member Kimball. I would love to see something added in there not only how it directly affects rental rates, but the cost of homes. Because what we saw or I saw directly happening was that all of the sudden, people could rent a house as a short-term vacation rental and make $10,000 a month, which then drastically escalated the perceived value of that home. Page 26 GOEAC-35 July 9, 2024 Then once houses started selling at radically inflated prices, you know how real estate works; then the next home that’s sold gets compared in pricing. And then everything just keeps climbing. So, I see that as what’s being contributed to the incredibly inflated price of homes. The difference between value and worth, I think, is pretty relevant. On Oahu, I mean, somebody posted a photo the other day of a home that was literally a shell; single wall, tiny; selling for a million dollars with nothing in it. So, once again, we go value versus worth. But we’re pricing our people out of paradise. I wanted to thank you, though, Council Member Kierkiewicz for bringing this forward. This was actually something that I started to work on and then was told, you were already managing it. So, thank you for this. This provides me with a level of comfort and confidence that the answers from the people who are freaked out by the TAR legislation coming forward, that we can provide them with data and information, and we can make the best decision possible with the information that we have. So, when I saw this come up in Laserfiche, I was comforted by that, and I do look forward to seeing what can be discovered and providing us with a clear path forward. We are constantly hearing in the news about the housing crisis and no homes and whatnot nationally, everywhere. But I haven’t seen data that brings forth and shows scientifically, the connection. Because I think there’s a lot of socioeconomic issues that are related here and a lot of disparity and wealth. And workforce displacement. We’re seeing all of those issues in our community. And in order to have a healthy community, we need diversity; we need access to affordable workforce housing. And this is all part of that. So, thank you for your initiative and moving forward with this. I yield. CHR. EVANS: Member Kagiwada. MS. KAGIWADA: Thank you, Chair. Yes, I also want to thank the maker for putting this forward. I think it’s a useful tool. I do think it’s kind of interesting, because one of the things I thought we were trying to do, you know, with the registering vacation rentals was to figure out what we have and what kind of circumstances they’re in. Are they owner-hosted or you know, those kinds of things. And this, we’re trying to get some of that before we have all that data. I’m just wondering how we’re going to collect data on illegal or you know, unregistered, unpermitted places that are not necessarily operating legally now. Also, just wanted to second and third; I guess third what was said earlier that we look not only at—or we look at the costs to our community of these in addition to Page 27 GOEAC-35 July 9, 2024 the benefits that we really do look at. What is it costing our community to have these here in the numbers we have in the way we have them? I just want to mention to this one “Whereas” about looking to see what the actual likelihood of existing vacation rentals being converted to long-term housing. I think the other thing is being converted to selling those properties and letting somebody buy them and live in them. It doesn’t have to just be long-term rentals. People could decide that if it’s not worth it to them, that they’ll just sell that extra property they’re not living in, and somebody who lives here could buy it. Then I know there’s been a lot of talk from people running these businesses that they provide jobs. I don’t want to go too far. The Director cautioned not going to far with the scope. But I really think it’s important to drill down on what those jobs are. Are they good jobs? Are they jobs that have security and benefits? You know, if we’re saying that this is a sector that is providing for our people to have jobs, what kind of jobs are they? What happens when somebody get sick? We heard stories from Maui that, you know, people would say, “Well I’m paying $75 an hour. So, that’s a good rate, right?” But then, we heard from the other side, saying, “Yeah, they’re paying me $75 an hour but they expect me to clean the entire unit in one hour, and I have to hire two other people to do that.” So, there are these ways that people say, you know, it’s a good job because I pay this much. But there’s a lot of kind of funny business in some cases. You know, paying under the table. Some people like that. I heard testimony, that you know, flexibility is important, and I understand that. But so is making sure if you get hurt on the job, you get disability or workers’ comp. And if you’re not paying into that as a job, you’re not going to get that service. So, I’m just going to go back and double emphasize that I think figuring out where the dollars are going; are they going to our people who are living here? And it’s a supplement that you mentioned earlier for their income, or are these people that live somewhere else, and this is just a way that they, you know, make money and take that money off our islands? So, looking forward to seeing how we can drill down on some of this and how it can really—I think with going ahead with registering people still seems totally fine to me. It seems like this information would be super important when we get to looking at, if we’re going to do differential taxing for these different programs and such. So, I think that’s where it would be so important to have all this data that’s been gathered. Thank you so much for putting this forward. I support. CHR. EVANS: Member Kimball followed by Kāneali‘i-Kleinfelder. Member Galimba, sorry. Page 28 GOEAC-35 July 9, 2024 MS. GALIMBA: Thank you, Chair. I just want to add on to some of the previous Council Members. I’d definitely would support this if it was more balanced in terms of looking at impacts and costs, and externalities, which I think you know, there’s been some academic research on externalities. So, I think those are resources that you could look at. I mean, a very traditional economist like Mr. Brewbaker probably isn’t necessarily looking at those. Maybe he didn’t ask about them, but I think it’s really important that we look at it as a whole and not just in a sort of old school economic sense. More of that larger sense of the entire community and its issues. But it is a good start and look forward to iteration that would include both sides. Thank you. CHR. EVANS: Member Kāneali‘i-Kleinfelder. MR. KĀNEALIʻI-KLEINFELDER: Thank you. I might go the other way on this. I’m thinking about yesterday, and I’m looking at the Hawai‘i County TAR Draft Proposal website. Who runs the Hawai‘i County TAR Draft Proposal website? Okay, you guys made this, the wording in it. Okay. I read through this resolution. I was interested, I like the idea. What caught my attention was the fifth and sixth Whereas. “Whereas there is a belief that existing transient accommodation rentals, if phased out or restricted, will be converted to long-term housing units, thereby increasing the availability of housing for residents and potentially alleviating housing affordability issues;” and the next Whereas; “Whereas, it is important to assess the validity of this assumption …” And if I read the Hawai‘i County TAR Draft Proposal website, “Finally, the bills aimed to address housing affordability for residents by keeping more housing in the long-term rental market.” Then I would have to ask, are the bills based on an assumption? Because I thought we were basing this on a need. That was clearly defined and has been ay Appleseed reports, UHERO (University of Hawai‘i Economic Research Organization) reports. Except now, we’re calling it an assumption. And that worries me, when we start making bills based on assumptions, which I’m willing to state in a resolution to the same effect. So, that is concerning to me in reviewing this resolution. Mr. Adams, my second concern is two-fold for your department. Can you take this study on and come back with what’s being requested? And do you feel confident in what you’ll bring back will be something we can use to define legislation going by February 2025? (Note: At this time, Research and Development Director Douglass Adams, came forward to address the members of the Committee.) Page 29 GOEAC-35 July 9, 2024 MR. ADAMS: Thank you, Council Member, Doug Adams, Director of Research and Development. I feel confident, Council Member, that we can come back with something that the Council will use. If I may, Chair, I’m just going also make a comment off of something that Council Member Lee Loy remarked on. I am concerned about being asked to do the Policy piece. Now, a Policy piece traditionally, when you ask for that, just for somebody to do that, it can be expensive. So, I feel confident I can do the numbers, right, we can get that information. The key will be the scope, as we talked about. So, make sure that we develop the scope properly so that we can gather the information that’s necessary for that. Then, we will provide internally, and I don’t mean just within the department, but I mean internally within the County. Because clearly the Department of Planning has to be involved in this. An analysis that would include the information that we’ve gathered as a part of the scope that we’ve gone out with. So, we’ve got the timeline; we’ll develop the scope; we’ll provide you with the information that you need. MR. KĀNEALIʻI-KLEINFELDER: I am concerned about the Legislative piece. I’m really concerned about the deadline. Because the information you’re being asked to come back with—I’ve heard Real Property Tax; I’ve heard Planning all come back, and usually they can’t tell us what the result of this will be because we don’t know what the private industry will do in response to legislation. MR. ADAMS: Again, anytime we go out to try and develop some type of forecast. One, we’re going to be asking for information. It’s gong to be based on what’s current, and then we’re going to be taking a look at what the impacts of this particular legislation would be, that would be a forecast. Forecasts are as good as they are. They’re not guarantees; they’re not perfect information. We all make decisions, not with perfect information. So, we will give you the best that we can give you. MR. KĀNEALIʻI-KLEINFELDER: Do you have an economist in mind or one registered in our professional services? MR. ADAMS: So again, our professional services list is just being restructured because the fiscal year has just started. So, we’re receiving vendor information coming in, and we’re going through the process of vetting those. As of this morning when I checked, we had not received any vendors that had identified that they were economists or put themselves in the economist area. But we will take a look at whether or not the economist category is the correct category to look at. It may be that some of the other categories would be better for this particular mission. So, we’re in the process of looking at that. I don’t Page 30 GOEAC-35 July 9, 2024 have an economist in mind to be direct. Even if I did, that would be inappropriate for me to actually say. MR. KĀNEALIʻI-KLEINFELDER: So, if we don’t have one in professional services, then we either have to RFP this proposal out, which would take I would guess a certain amount of months. MR. ADAMS: It would, and that would put us well behind. MR. KĀNEALIʻI-KLEINFELDER: Okay. Like I said, I have concerns about the deadline being presented. And I don’t think that’s a deal-killer, but I think that’s needs to be real, and if this is hinging on legislation in front of us, I don’t know where that leaves us. And I’m also not willing to setup with a department to come back to us with something they may or may not be able to provide just because part of your duties and scope is tourism. I just won’t put you in that position. MR. ADAMS: Council Member, if I may? Part of our job is to try and do the job. And we’re going to make sure that we get you what we’re being asked to get you. That’s what we have to do. MR. KĀNEALIʻI-KLEINFELDER: Okay, thank you. When you do, look for an economist, and please make sure the party is neutral. MR. ADAMS: Of course. MR. KĀNEALIʻI-KLEINFELDER: To the maker, I will not be contributing part of my contingency or relief funds to this project. And I understand this was requested by the community, and I understand this will pass. I will be saying, “no” today, and I will not be contributing funds to this. Thank you. CHR. EVANS: Okay, Member Inaba. MR. INABA: Thank you. Just hoping we can wrap this conversation up with any other points that we might want to see as part of this agreement, and we can move this forward. Thank you. MS. EVANS: I wanted to weigh in. To the maker, consideration. If this is coming back in two weeks, either postponed with a bunch of amendments—I don’t know how you’re going to propose it moving forward. But one of the thoughts I had in mind with Member Lee Loy is, there is that the State has a State economist, and they have a Division on Research and Analysis. Plus, we have the Office of Planning. These people are amazing. Plus, you were involved in Vibrant Hawai‘i, and you know we have our CEDS (Comprehensive Economic Development Strategy) and Jackie Hoover . Page 31 GOEAC-35 July 9, 2024 My take on it is, one step back might be to invite them to help us put together a real solid scope that would take data that we could, not only maybe use as we consider these Short-Term Vacation Rental bills, but also, it’s kind of point in time. Because it’s going to be a measurement; I see it as a measurement piece. So, whatever the data is, you will know the real impacts six months or a year from now, right? So, it would be important to have data that I think that you can compare. Then what is the data that would really be true data, that you could say, and we can all say from COVID, from that March in 2020 or forward, we can see how things started shifting. We could get the data as a measurement tool if we pass these bills. And then that’s going to be the measureables. I think that if you get already the professionals—they’re already measuring this stuff, and they’re there. Maybe they would be willing to come in front of our Council in two weeks and invite them under a communication and come and sit in front of us; and tell us how they’ve been measuring things in terms of Maui. Because clearly Maui and the Council has made a huge decision, and it’s going to change things there. So, even the Council there, I hope, is putting together a measurement tool and a fiscal impact and asking, like Maui Economic Opportunity Council which is their equivalent to ours and put together their CEDS. You know, ask them, so what is your baseline? What are you going to do to measure this to make sure that this policy that we’re doing is successful? I think there’s experts already there. My concern is, we have to have a really good scope, I think, for R&D to be successful. And if we don’t get that scope where it needs to be just really solid, I just don’t want to spend the time and energy and not have it that effective for us. And I think if we just nail the scope right, I think we’ll get probably what you’re trying to get. I think those people are already out there that’ll be willing to stand up and help us and give us stuff we need. Even Mufi Hannemann and his Hawai‘i Tourism Association. They’ve got to be measuring stuff too. You know, so, I think there’s people out there measuring. We just need to be clear when we ask; and the scope, if we’re going to ask him to get it? Maybe there’s enough there that maybe somebody will do it for us. Helpful, you know, but that’s my thoughts. I think it’s kind of one step. I think we should step back one step. Get them to the table. You could write a bill that says we’re going to do a taskforce working group and call them together. But I think they’d come if you invited them. My gut tells me, because they care a lot. Everybody’s caring about this issue because of what happened to Lahaina. So, it’s another way to look at it. So, that’s my take. Okay, Member Kierkiewicz. Page 32 GOEAC-35 July 9, 2024 MS. KIERKIEWICZ: Thank you. I appreciate everyone’s very thoughtful comments on how this resolution can be improved so that we get the information we need to make grounded policy decisions. I’m a busy person, but I’m willing to work with the Department of Research and Development and Finance. I don’t just introduce resolutions for fun. I make sure that I work with the departments to make sure that they are seen through. So, I will be working closely with you, Director Adams and Director Nakagawa to craft an appropriate scope of work that really gets us the information we need. And I do believe that you folks do possess the capacity to get this done in the timeframe that’s been articulated in this resolution. Support it, don’t support it. Totally up to you. We all have the freedom to be able to do that today. But I hear pretty loud and clear from members of our community, written and oral testimony, they want to see the data. So, I’m supporting our community in getting that information. Just a high-level recap. I’d like to be able to move this resolution forward to Councl and believe I can craft amendments that really bring to light all of the great insights folks shared including what is this industry costing us? Not just in terms of financially, but the impact to our society and our natural and cultural resources. Understanding workforce opportunities and the real quality in these jobs that are being provided. Clarity on the various tax revenue streams, GET, TAT, RPT (Real Property Tax), and also kind of looking at other county’s tax costs and rates. Really understanding how much money actually stays here in our Hawai‘i Island economy. And then impacts on overall rental rates and costs of homes. I totally hear you, Council Member Lee Loy when you talk about policy recommendations. I think we have to be very thoughtful and specific around the kinds of policy recommendations that would be useful to this body. So, I’ll think about that a little bit more and offer us some suggestions as part of this resolution. That way we can have a really tight scope of work that we are putting out there and shopping around on the vendors list. Thank you, Chair, I yield. CHR. EVANS: Okay, we have a motion on the floor. Roll call? Page 33 GOEAC-35 July 9, 2024 Vote on Res. 556-24: The motion to recommend adoption of Res. 556-24 was (Approved) carried by the following roll call vote: Ayes: Committee Members Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Evans – 7. Noes: Committee Member Kāneali‘i-Kleinfelder – 1. Absent: Committee Member Galimba – 1. Excused: None. CHR. EVANS: Okay, Mr. Clerk, we have the last one. BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. Bill 176: AMENDS CHAPTER 2, ARTICLE 25 OF THE HAWAI‘I COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO APPROPRIATION OF FUNDS TO NONPROFIT ORGANIZATIONS Adds and amends existing definitions and amends provisions regulating requirements for nonprofit organizations to be eligible for County funding, conditions placed on the receipt of grant awards, and procedures for the awarding of grants. Reference: Comm. 918 Intr. by: Mr. Inaba (Note: Comm. 918.4, from Council Member Holeka Goro Inaba, dated July 8, 2024, transmitting proposed amendments to Bill 176 was circulated.) ; and Comm. 918.1: From Council Member Holeka Goro Inaba, dated June 18, 2024, transmitting results from County Auditor Tyler Benner’s Grant-In-Aid Review of awards to nonprofit organizations for Fiscal Year 2022-2023. ; and Comm. 918.2: From County Auditor Tyler Benner, dated June 20, 2024, transmitting a slide deck regarding the Grant-In-Aid Review results for Fiscal Year 2022-2023. ; and Comm. 918.3: From Council Member Holeka Goro Inaba, dated June 27, 2024, transmitting proposed amendments to Bill 176. Motion to Approve: Mr. Inaba moved to recommend passage of Bill 176 on first reading. Seconded by Ms. Lee Loy. Page 34 GOEAC-35 July 9, 2024 CHR. EVANS: Member Inaba. MR. INABA: Thank you. I think there’s been a lot of discussion around the awarding of grants, especially around the Waiwai Grant-In-Aid program. but part of that discussion has led us to really evaluating and taking a holistic look at the way we award grants out; countywide. But specifically, to the Waiwai section, we did reach out to the County Auditor to review our Waiwai program, and I had held off on providing the report and numbering it when he first provided it a couple months back, so that it could be fresh and part of this discussion. So, the County Auditor is here today. He has a presentation to share about his review of the program and his findings and some of his recommendations. Then we can cue right into the bill itself. But in our board, it is Communication 918.1. That is the actual results. Then, Communication 918. 2 will be the slides that he’ll be presenting from today. So, good afternoon again, Auditor Benner. Thank you for being here, and if you could just cue off our discussion with your results. Thank you. (Note: At this time, County Auditor Tyler Benner, came forward to address the members of the Committee.) MR. BENNER: Good afternoon, Council. My name is Tyler Benner. I’m with the Office of the County Auditor. (Note: At this time, Mr. Benner provided a PowerPoint presentation to the members of the Committee. For viewing of the presentation, see the DVD copy of the proceedings on file in the Clerk’s Office, or online at http://hawaiicounty.granicus.com. A hard copy of the presentation is made a part of the record. See Comm. 918.2.) MR. INABA: Thank you so much, Auditor Benner. And with that, I would encourage Members to reach out to the Auditor if there’s any question specific to the report. I asked him to present, just as an introduction to the bill, which is trying to address some of what is presented in the results and in the slide. So, thank you again. Bill 176 as presented to you folks today, there are portions of it that are housekeeping measures. For example, I’ll kind of go through the housekeeping measures and then things that are maybe a little bit more substantial in change to the Code. CHR. EVANS: Member Inaba, a question. Are you going to be proposing a couple amendments too, after this? Page 35 GOEAC-35 July 9, 2024 MR. INABA: Yes. Just one. CHR. EVANS: Okay. Thank you. MR. INABA: Alright. So, again addition definitions for Council for the department, what we’re defining as a nonprofit. Adding terms like material conflict versus conflict. Those were some of the recommendations by Corporation Counsel. Things like prohibiting nepotism rather than just having a policy on nepotism. Officially calling our program the Waiwai program. We had informally called it, but now that we’re taking up this Section of the Code, we will officially put it in as named by Council Members Lee Loy and Kierkiewicz. Then, when we looked at some of the more substantial changes and this is where we tried to address some of what was talked about by the Auditor. Department and Director, there was different ways that they were being used for the most part in this Section of the Code. It was in reference to the Finance Department and the Finance Director. But there are, as we know, other department heads in other departments who do take in grant applications and who are in charge of reporting. So, if it is a Finance Department or Finance Director item, it will say Finance. But other than that, as you see in the definitions, if it says Director or Department, it’s whoever or whichever department is in charge of accepting the application and working with those nonprofits. Our good old Public Purpose. We’ve had a lot of discussion here about Public Purpose, and in Section 2-136, the Definition Section of this bill, we’re inserting in the term “Public Purpose” means, a benefit to improvement or promotion of the interest of educational concerns, cultural and the arts, needs of the poor, youth . . .” And I won’t read the whole thing, but the last part of it says, “As may be determined by the County.” As we discussed previously, Corporation Counsel shared, you know, it’s not really their job to define or make the calling on what is Public Purpose and what is not. Is this the best definition? No, but I think we needed to get it in here, so we can have the conversation. Everything that’s outlined in these definitions, already comes from the Code, which was the best guiding tool we had as to what is or is not Public Purpose. Alright, and then, there’s a lot of language now. I know my time is about to run out, Chair, so if I could have a little bit of latitude to get through here? CHR. EVANS: Make sure you’re—because as you say, you have to get out of here. Page 36 GOEAC-35 July 9, 2024 MR. INABA: That’s right. Okay, 2-137 is the Eligibility criteria of these organizations. So, how we’re trying to envision this, and I did just want to take this moment, actually. I’m blasting through it, but everyone has been really involved from Corporation Counsel to the Auditor, to Finance Director, Deputy; Ted (Schrey), Lisa Tada. I mean, I think we were correcting our own corrections already. But what we see here is 2-137 being the information that is submitted to which ever department is accepting the applications. So, we know for certain that an organization is a nonprofit. First of all, that they have a governing board that serves without compensation and has no material conflict of intertest. The bylaws, the policies. As we know, a lot of documents are required to be submitted with the Waiwai applications. That step disqualifies a lot of folks. But that step is something that is supposed to be applied across the County for all grants that the County gives out. And I think there’s been a focus, especially on the Waiwai program, that we need all those documents. But this is kind of bringing to the forefront, that those documents, those bylaws, there’s a consistency required that they’re needed by all nonprofits when they’re submitting applications. So, that’s 2-137. Then 2-138, on the other hand, is more things that these applicants are agreeing to when they’re awarding funding. So, that they will employ based on merit and ability. That they agree not to use it for personal entertainment or private uses. Those types of things. So, we’re trying to really distinguish here who is in charge of what, is what the Auditor said, and that’s what 2-137 is. Who’s taking in the applications. We’re guaranteed to get all of those bylaws; all of that information off the top. Then, 2-138 is a secondary matter and that’s really what’s contained in the agreement. There’s been a little bit of clarification in the Waiwai section, which is Section 2-139 (a)(1)(A) and (B). Just making sure our timeline and our wording is a little bit more clear there. And I think that’s the meat of this bill. Right now, I’m going to just introduce one simple amendment. So, I will move to amend Bill 176 with the contents of Communication 918.4. Motion to Amend: Mr. Inaba moved to amend Bill 176, with the contents of contents of Comm. 918.4. Seconded by Ms. Lee Loy. CHR. EVANS: Member Inaba. MR. INABA: Thank you. We had gone back and forth in trying to again separate 2-137 and 2-138. So, what this amendment does it move Number (3) from 2-137 down into 2-138 (a)(2). Then it moves what is in 2-138 (6) up into 2-137. And Page 37 GOEAC-35 July 9, 2024 that’s just to ensure that we’re getting any disclosure of potential conflicts with leadership in the County off the bat when application is submitted to the County. With that, I wanted to give the opportunity to the Finance Department if they wanted to chime in on this amendment specifically. Or if you folks want to just wait till after. Okay. With that again, the intention is just to make sure we’re separating out duties clearly and we’re getting the information that we need from the get-go. So, ask for your support on this amendment and happy to answer any questions. CHR. EVANS: Any questions on the amendment? Okay, we have a motion on the floor. Okay, Member Kagiwada. MS. KAGIWADA: You said that this amendment lays out who’s responsible for what? You were back to the main bill when you just said that. MR. INABA: This is a correction to ensure that things are where they’re supposed to be. So, by moving 2-138 (6) up into 2-137, we’re going to ensure that we get the disclosure of any potential conflicts with leadership in the County as part of an application. MS. KAGIWADA: Okay, I have nothing on the amendment, sorry. MR. INABA: Thank you. CHR. EVANS: Okay, we have a motion on the floor. All those in favor? Any opposed? Vote on Motion The motion to amend Bill 176 with the contents of to Amend: Comm. 918.4, was carried by the following voice vote: (Approved) Ayes: Committee Members Inaba, Kagiwada, Kāneali‘i-Kleinfelder, Kierkiewicz, Kimball, Lee Loy, and Chair Evans – 7. Noes: None. Absent: Committee Members Galimba and Villegas – 2. Excused: None. MR. INABA: Thank you, and then, if I can just call Finance Department up at this time, and I’ll yield the floor. Thank you for the latitude, Chair. Just wanted to give you the opportunity to chime in on the bill and its intention to kind of put us in a uniform position as to the way we award grants from the County. (Note: At this time, Finance Director Diana Nakagawa, came forward to address the members of the Committee.) Page 38 GOEAC-35 July 9, 2024 MS. NAKAGAWA: Thank you, Council Member. And thank you to our County Auditor and team for your time and review. We are always looking for ways to improve, and it’s such a critical area. We always appreciate the assistance. And really, thank you to Council Member Inaba for really working with us and spending the time going through this line by line to make things more clear and easier for those looking for these funds. But no, we’re happy with the changes. We know that there’s probably more changes to come. We are looking at our Finance Director Rules, just wanted to point that out, and looking at updating those. We know that’s been some time in the making, and we will get to that. So, just appreciative of the efforts and open to making changes that make sense. MR. INABA: Thank you, Director Nakagawa, and I’m happy to take any questions from the body regarding this legislation before us. And again, I want to make sure that everyone understands this bill is for all County grants. The only section specific to the Waiwai is 2-139 (a)(1)(A). But everything else in the bill applies to all County grants. So, I want us to make sure we’re reviewing the bill in the context of a wide reach. Thank you. CHR. EVANS: Thank you. Member Kāneali‘i-Kleinfelder. MR. KĀNEALIʻI-KLEINFELDER: Thank you, Chair. To the maker, just checking the “Definitions” section. Does it need numbering, or that was intentional as far as removing all the numbering in that section? MR. INABA: That was a recommendation by LRB (Legislative Research Branch). MR. KĀNEALIʻI-KLEINFELDER: Okay, thank you. CHR. EVANS: Okay, Member Kagiwada. MS. KAGIWADA: Thank you. Relating to Section 4 (2)(A), says, “Requests for district contingency relief grants shall be made directly to Council Members on a form prescribed by the Council.” Do we have that form? I have my own form, but we have one prescribed by the Council? MR. INABA: Chair, may I respond? CHR. EVANS: Yes, please, Member Inaba. MR. INABA: So, I apologize. That was one of the other points that I wanted to focus on that I missed here. And the intention of that language is that we all use a uniform approach. So, we don’t have a form at this time, but the intention is that Page 39 GOEAC-35 July 9, 2024 we would all utilize the same form, so we’re getting the same information in the same format. And there’s consistency when nonprofits are reaching out to us individually in terms of what information we’re going to be collection. Thank you, Council Member Kagiwada, for that question. MS. KAGIWADA: Okay, great. I was hoping to hear that. And then, just another question. The way this is worded and where it is. The next sentence, “The Council shall determine whether requests meet the eligibility conditions of this article.” That is basically when we bring a resolution to Council, and we vote on it, and we discuss it. Is that when that happens or are you putting something else in here that currently we don’t do that we will be doing? For instance, prior to us bringing a resolution to the Council? What does that second sentence mean there? MR. INABA: Chair, if I may? CHR. EVANS: Yes, please, Member Inaba. MR. INABA: Council Member Kagiwada, sorry, can you point me to the exact place? MS. KAGIWADA: So, the same thing in (A), but the second sentence, “The Council shall determine whether requests meet the eligibility conditions of this article.” Is that just referring to when a Council Member brings a resolution to this body and we deliberate and vote on it, or are you suggesting that there will be something else that happens prior to us bringing something to the Council? MR. INABA: No change in procedure. It’s exactly as we are doing it now. MS. KAGIWADA: Okay, that’s what I just—alright. Then, you know, just a little leeway here, I still feel like we still need some internal work, not in the bill, but on how to proceed and how to deal with issues, especially around public purpose. Because I don’t know about the rest of you, but I’m getting you know, some of those requests now from people who did not get Waiwai grants. So, some of them didn’t get Waiwai grants because we said it didn’t need a public purpose, and I’m trying to figure out, you know, how to deal with that. So, I know there’s been some work on this. I’d love to know maybe the next steps if I may just have a little leeway since we’re talking about this. Thanks. MR. INABA: I’ll respond really quickly to that. Specific to the Waiwai program, I have a communication to stand up in Ad Hoc, as we did last year to address areas of improvement, including the application being more specific as to, you know, there weren’t any programs that were not in line with public purpose, but it was the specific request for funding that disqualified folks. Page 40 GOEAC-35 July 9, 2024 So, we’re going to really tune up our website; even redoing our training with training with Corporation Counsel for documents and compliance there. And we’re hoping that those new trainings can be used, not just for Waiwai, but you know, for all of 2-137; for any grants countywide. And that would be a uniform approach to use those resources as a tool. But yes, we will be standing up an Ad Hoc soon. CHR. EVANS: Okay, anymore? Okay, Member Kimball. MS. KIMBALL: Thank you. First, thank you to the maker for putting this together. Your detail-oriented approach is ideal for this sort of legislation. I wanted to, for those you who haven’t met before, Jessica Valdez, is over there. If you want to just say, “Hi” real quickly. So, as of the first of this month, Jessica is now acting as Special Assistant to the Chair, specifically focused on—I’m not actually going to make you come up to the podium in your first week on the job. Next week, maybe, yeah. But I did want to highlight because this all plays together in all of the pieces of the puzzle that we’re trying to put together to make the program really robust, easy for our nonprofits, and to access. And you know, the question about the form, I think, that is one of Jessica’s first objectives. She’ll be reaching out to all of you to kind of understand your intake process, so we can standardize that, as Council Member Inaba said. So, yeah, that referenced to kind of a standardized format as part of our whole progression here. So, I want to thank Jessica for taking on that kuleana. Just wanted to add too, with respect to your other comment, Council Member Kagiwada, with this amendment here in the Code, actually probably our Rule 23 doesn’t actually align with current practice or with the amendments in the Code. So, we’re going to have to bring forth a resolution to amend Rule 23, which is probably the better place to locate some of the specificity around public purpose if we want to get more nitty-gritty into that. So, just wanted to highlight, that will be a step, and I don’t know if that will be Council Member Inaba or myself that one of us will be introducing that in short order after this goes through. Thank you. CHR. EVANS: I have a question, if there’s no more. This is for Auditor Benner, since you’re here. It says in here, the Finance Director will publish a notice soliciting applications in two newspapers of general circulation. It just kind of seems like, you know, we’re moving away from—I can tell you that people just aren’t reading the newspaper, the social media piece to this. Has there been any, as you’re auditing the other departments of how or, is there any discussion on how we’re going to give notice to people. Using newspaper classified ads section or whatever to get this out? Page 41 GOEAC-35 July 9, 2024 MR. BENNER: No, there really isn’t. I mean a lot of these sections are in alignment with HRS (Hawai‘i Revised Statutes), and they’ve been on the books for a long time. We recognize that people are getting their information differently these days. But at this point, I’ve not been part of any discussions where they’ve talked about any alternatives. CHR. EVANS: Okay, so we’ll have to stay with this. But the other thing is when it gets posted on the Finance Director’s website, there’s no mention of that. I don’t know if you have to put that in there, but clearly I think getting the word out has been a big part of the challenge. Getting it out in a timely manner. Because if thst is in the newspaper by November 30 and you have to have it in by January 31, people are filling this out over their Christmas vacation and New Year’s. So, it just seems like it’s a real short timeframe in terms of notice. I don’t know, it’s just something to think about, Member Inaba. It just seems like the notice and the timing seems very—doesn’t look user friendly or public friendly, I guess is the way I would describe it. Any thoughts, Member Inaba? MR. INABA: I guess I’ll just respond. I don’t think there’s a concern with folks not knowing, looking at the number of applications that we got this past year; 196, just from within the County. And we limited to two applications per organization. So, it’s always a consistent thing. I don’t think there’s a concern that people don’t know about it. At this point, the efforts need to be made to improve the application, and the information we’re getting out. And that’s something that we had started on when Council Member Lee Loy and your office was leading the Waiwai program, and something that I’m continuing to work on fortunately, with Ms. Valdez now in the Chair’s staff. CHR. EVANS: Right. I just notice the same people come back every year. So, I just think that our communities’ changing. There’s some great nonprofits being started and people doing good work. It just something just to point it out, we don’t have to work on it now, but just something to point that out when this year comes up and look at that, just consider that. MR. INABA: Sure, and I would have Ms. Valdez be sure to let us all know so that we can push it out in our own circles as the application season is approaching; and when it opens and a reminder when it closes. Now, it’s wonderful that we have somebody dedicated, because it’s always been a district staff member, and it depends on which staff member Chairs the Committee. So, we’re in a good place, finally, to make these significant improvements. CHR. EVANS: Okay, thank you. Any other discussion? Member Kierkiewicz. Page 42 GOEAC-35 July 9, 2024 MS. KIERKIEWICZ: Thank you. I appreciate the very thorough updates to the Code, and I will be supporting this. Because there is a request here for CRF (Contingency Relief Fund) forms to be prescribed by the Council, you know, what came to mind for me is, if a nonprofit were to ask nine Council Members for funding, that is having to create a package of bylaws, conflict disclosure, and all that stuff. There’s a whole suite of paperwork that is required in order to process the request. This information is also required if you want a grant from any other County Department such as R&D, Waiwai, CRF. So, I bring this up because every year the County has a Professional Services Vendor list where you get essentially qualified for when you’re on this list. I wonder if part of the strategy with Jessica joining the Chair’s office is to now start giving nonprofits an opportunity to be vetted. Once a year, we have all of their paperwork. That way they’re free to apply for any grant opportunity in the County and not have to make sure they’re sending the most current version of their board of directors’ list or bylaws. So, I’m wondering if that is part of the equation at some point, because I think that would take a huge workload off of the nonprofits. But just create more efficiencies across the County in applying for and vetting the different nonprofit grant applications. CHR. EVANS: Yes, Member Inaba. MR. INABA: Yes, Council Member Kierkiewicz, I think that’s something that had come up as part of our budget discussion in trying to figure out what is the best way, you know, that’s something that I was hoping the Department of Research and Development could take up for us in researching a software or a database in which all of our nonprofits could live. You’re talking about, you know, our other procurement procedures, and you know, I think there could be overlap there, and I’m definitely supportive of something like that. Not just within the Council’s programs for Waiwai and CRF, but across all agencies of the County. MS. KIERKIEWICZ: Just putting it out there. If anybody’s starting an Ad Hoc to build this, I’m game. I love systems and I love forms. Thank you, I yield. CHR. EVANS: Thank you. Member Kimball. MS. KIMBALL: Yeah, I was just going to say, you know, I like the way that Council Member Inaba has set the language in this, because of the way it’s worded because I at least, interpret that the direct request for contingency funds to Page 43 GOEAC-35 July 9, 2024 Council Members can imply all of us in one way. So, one of the conversations was around having, like the vendor registration form that Jessica or the person in that role would maintain. So, when the request came in a centralized way, all of the information could be sent out to the Council Member’s office. Hopefully, reducing some of the time that your aides need to spend drafting legislation and checking all of that stuff down, which is one of the other objectives of all of this, is having that centralized there. So, I will also note that, you know, a further objective beyond this bill with a little latitude, is that we’re currently required to then go through a department. Ideally, if we can make our own internal system robust, I’d like to kind of move away from event that, and have it be all internal, but we want to make sure we have sufficient checks and balances to accomplish that. CHR. EVANS: Thank you. Member Lee Loy. MS. LEE LOY: Thank you, Chair. First of all, having sat on this Committee since day one, I really like where we are compared to where we were. So, thank you, Member Inaba for advancing this. Absolutely on board if there’s like a universal form that we need to develop, I’m on board. The other thing, and just looking for some guidance from the maker, is we had an incident where we weren’t able to program all of our funds. And I know this is an area which it would be addressed, and if the strategy is to let this get fixed and get fixed and get set; update our Council Rules and Procedure, and then refine and tailer the spillover, should monies not be programmed, I’m open for it. Just looking for some strategies if we do the fix now or just wait. Because the spillover would only occur, in this situation, more than likely, third quarter of the fiscal year. So, when we get the budget. Just putting it out there for food for thought, I don’t mind editing that area. Just let me know where we’ve got to go. Thank you, Chair, I yield. CHR. EVANS: Member Inada. MR. INABA: Sorry, if I could clarify. So, the question is regarding Section 2-139 and whether there’s excess Waiwai funds and what happens to them. MS. LEE LOY: Chair, if I might. There’s the 2.5 ($2.5 million) that’s been Codified in that section. Just so happened this particular year, we didn’t program all $2.5 million of it, and we moved it into our contingency fund. Again, a business decision that was allowed, but managing people’s expectations, when we’re not in these seats, you know, how does that work? Just, do we codify it Page 44 GOEAC-35 July 9, 2024 here and prescribe what happens when we don’t program all the funds, or do we leave it to each legislative body at the time that things occur? That’s my question. CHR. EVANS: We could have that discussion right now. Do you want feedback? Nobody wants feedback, okay. But maybe the Ad Hoc committee could take that up. MR. INABA: That might be something we can take up, yes. Currently, the Code is directive of the Finance Director to appropriate the $2.5 million, and that’s why we have that leeway to move out the unprogrammed funds. But there’s always a first, but I’m pretty sure that’s the last time that would ever happen, especially with the intention that all of our resources for solid applications are going to be provided next year. So, I don’t anticipate that being an issue again, yes. CHR. EVANS: Okay, thank you. MR. INABA: While I have the floor, Chair. Just two more comments. I do want to note that the Finance Department specifically Budget, they were the initial drafters of this bill, probably over a year ago, and it’s been a continuous work-in- progress. So, I want to recognize that it was a Finance Department initiated endeavor, and then it lived on with me through these different rounds. Then, I also want to take note, in the Auditor’s recommendation, it’s not directly in this bill, but we might go back and revisit some of the recommendations at some point in terms of predetermining certain categories and areas of funding that we want to support in community. I just didn’t think it was appropriate to try and take that up via this bill right now. But you know, that is what the Federal Government does, and there are recommendations that have been provided in that report, so that might be something we take up at some point, and I just want to state that now, because I think it was a really valuable part of the report. With that, I just wanted to check in if Corporation Counsel or Finance had any concerns right now before we take the vote today. Okay, we can take it up next time if there’s validated concerns then. Thank you, Chair, I’ll yield. CHR. EVANS: Okay, we have a motion on the floor, all in favor? Any opposed? Page 45 GOEAC-35 Vote on Bill 176 Draft 2 (Approved) Approved: July 9, 2024 The motion to recommend passage of Bill 176, as amended to Draft 2, on first reading was carried by the following voice vote: Ayes: Committee Members Inaba, Kagiwada, Kaneali`i-Kleinfelder, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Evans — 8. Noes: None. Absent: Committee Member Galimba — 1. Excused: None. Seeing no further business, Chair Evans adjourned the meeting at 4:50 p.m. M Ms. Cindy Evans, C it Committee on Governmental Operations and External Affairs CE/dt i (Date) Page 46