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HomeMy WebLinkAboutMIN CRCOC 2024/07/23 (2022-2024)Committee on Communications, Reports, and Council Oversight 31st Session West Hawaii Civic Center 74-5044 Ane Keohokdlole Highway, Building A Kailua-Kona, Hawaii July 23, 2024 CALL TO The regular meeting of the Committee on Communications, Reports, and ORDER: Council Oversight was called to order at 2:48 p.m., in the Council Chambers, Kailua-Kona, by Ms. Rebecca Villegas, Chair. ROLL CALL - Present: Ms. Rebecca Villegas, Chair Ms. Jenn Kagiwada, Vice Chair Ms. Michelle M. Galimba, Member Mr. Holeka Goro Inaba, Member Mr. Matt Kdneali'i-Kleinfelder, Member (came in later) Ms. Ashley L. Kierkiewicz, Member Ms. Heather L. Kimball, Member Ms. Susan L. K. Lee Loy, Member Ms. Cindy Evans, 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: (There were none.) CHR. VILLEGAS: Mr. Clerk, if you could go ahead and read in Communication 931. COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. Comm. 93 1: ANNUAL AUDIT PLAN FOR THE FISCAL YEAR 2024-2025 From County Auditor Tyler J. Benner, dated June 28, 2024, transmitting the above audit plan pursuant to Section 3-18(d)(2) of the Hawaii County Charter. Motion to Close File: Mr. Inaba moved to close file on Comm. 931. Seconded by Ms. Kagiwada. MS. VILLEGAS: Mr. Benner, the floor is yours. CRCOC-31 July 23, 2024 (Note: At this time, County Auditor Tyler Benner came forward to address the members of the Committee.) MR. BENNER: Thank you very much. Aloha Council, my name is Tyler Benner, I'm with the Office of the County Auditor. Good to be with you today, and we are here today to present our Annual Audit Plan for Fiscal Year 2024-2025. It's our mission to serve the Hawai'i County Council and the citizens of Hawai'i County by promoting accountability, fiscal integrity, and openness in local government. The performance of financial audits of County agencies; the Office of the County Auditor examines the use of public funds, evaluates operations and activities, and provides findings and recommendations to elected officials and citizens in an objective manner. Our work is intended to assist County government in its management of public resources, delivery of public services, and stewardship of public trust. Performance audits encompass a wide range of objectives including but not limited to assessing efficiency and savings, review controls and compliance, protecting assets, verifying transactions, legal compliance, evaluating programs, and reviewing past audits to ensure the issues have been resolved to satisfaction. So in presenting our Annual Audit Plan to you folks, I'm just going to go through the activities that we've kind of enumerated in and through it; kind of in the order as they appear. And then at the end, I'll open it up for any questions that you folks might have. So, looking at those items mandated by Charter. In accordance with the Hawai'i County Charter, Section 10- 13, our office will monitor the contract of the external auditor, Accuity LLP, to complete audits of the Annual Comprehensive Financial Report, Single Audit of Federal funds, landfill assurance, Section 8 housing vouchers, and financial audit for the Department of Water Supply for Fiscal Year ending June 30, 2024. Other programs to be evaluated as determined by the Scheduled Expenditures of Federal Awards or SEFA. And this is the first year of a five-year contract. Moving on, Audits in Process. We have completed an audit of the Department of Environmental Management, Abandoned Vehicles, which is on today's agenda. It was published on July 3 d 2024. The second was Department of Public Works, Highways and Engineering Divisions, Bridges and Culverts. That audit is completed but awaiting some management communications. Page 2 CRCOC-31 July 23, 2024 Our next scheduled meeting is at the beginning of August. It's currently unpublished, and we have a second audit with the Public Works regarding building permits, which is in a fieldwork stage, and is as of yet unpublished. Regarding Self -Initiated Audits. We are going to be doing an audit with the Department of Information Technology, Cyber Security Phase 1; it's also known as cyber hygiene. And this will be one of a three-phase audit. So, in Phase 1, we will evaluate the efficiency and effectiveness of the County cybersecurity hygiene by aligning the Center for Internet Security, CIS version 8, and the National Institute for Standards and Technology or NIST with actual practices. We will assess all cybersecurity elements from asset inventory and control through incident response and recovery to ensure robust, compliant, and streamline cybersecurity posture that mitigates the risks and protects critical assets. Because of the sensitive nature of this audit, a high-level overview will be provided. In detailed report, findings will remain unpublished and confidential as we work with the department to address the concerns. We will also be doing a follow-up audit at the Hawaii County Fire Department. This is a follow-up to a Performance Audit, Report No. 2022-02, which was published March 21', 2022, titled "Hawai`i Fire Department Performance Audit," to determine the progress and implementation status of 13 recommendations that were previously identified. So next, Council -Initiated Audits. The office will consider Council -related audits and projects brought forward by resolution, and Performance Audits approved by Council resolution and agreed to by the County Auditor. We've agreed to an audit of the Department of Research and Development by way of Resolution 539-24, requesting a Performance Audit. And we are aware of Resolution 548-24, which has not yet been passed and we will consider our capacity to conduct that work. Next, Special Projects. Grant -In -Aid. Our first review tested the entire population for Fiscal Award Year 2022-2023. Moving forward, we will continue to review but limiting our population to a representative sample, shifting our focus from qualitative improvements to improve the program to strict participant compliance with the program. Next, Remediation Tracker. We plan to follow-up on some of the nonapplicable partially implemented or not implemented items from prior audits. And we also are conducting surprise cash counts. We conduct unannounced surprise cash counts at points of sale locations throughout the County. We last conducted a Page 3 CRCOC-31 July 23, 2024 cash count at the West Hawaii Civic Center; at the Hawaii Fire Administration's Firework permits and licensed fees desk on July 5, 2024. There is also those reviews transmitted to those charged with governance. We will also conduct investigations on our whistleblower hotline tips, as needed and as they are received. So, we have no open items at this time on those. Moving on, our Remediation Tracker. We continuously track the status of our recommendations. We've encouraged departments to notify us before the two-year follow-up if items are completed early. Recommendations are made available to the Administration, departments, the Hawaii County Council, and the public at our Department webpage at Hawaiicounty.gov. So, in closing, carryover and new audit engagements will commence as scheduling permits. Completed audits will be shared with those charged with governance, and responsible parties will have the opportunity to provide comments. Completed reports will be transmitted to the County Council and the Mayor and filed with the County Clerk as a public record. We want to take this opportunity to thank the staff who have been working through some personnel shortages and continue to strive to deliver high quality audits, the County Council, and the Administration for your support. We look forward to conducting our work this coming year. Mahalo, Council, and I'm happy to answer any questions you might have for me. CHR. VILLEGAS: Thank you, Mr. Benner. Conversations, questions? Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. No questions. I just wanted to offer up my support to the Auditor for this plan that he's articulated for the upcoming fiscal year. I also appreciate you adding to your work for a couple of the audits that have been requested by the Council. I know it's going to require a lot of time and resources, but it's very important that we continue to support this work and ensure that there's transparency within government, and that we are making recommendations for guidelines; policies; procedures that allow folks to do their job efficiently and effectively. I also want to commend you with the status of recommendations for report implementation. I think it's great to see from this standpoint what departments and agencies are making progress to resolve some of the recommendations that you have offered up. It gives us a sense of where we might need to follow-up with these departments and agencies to see what roadblocks are you encountering that prohibits you from, you know, implementing the recommendations that were offered up by the Auditor. Page 4 CRCOC-31 July 23, 2024 So again, just thank you very much. Continue to be impressed with your work. And if there's anything that this body can do to support your office, please let us know. Thank you. Chair, I yield. CHR. VILLEGAS: Thank you. Council Member Lee Loy. MS. LEE LOY: Thanks, Auditor Benner. I did want to understand the chart as of June 28, 2024, the status of recommendations for the report. You have items pending, resolved, fully implemented, and I'm looking specifically at the Mass Transit cash handling; the partially implemented and not implemented, and I noticed that the color of the bar goes all the way across unlike the one right above, which is the Human Resources, where they have the No. 3. And I was just wondering, does that mean only two out of the three? I just wanted to understand that a little better. MR. BENNER: The number scale is based on the column. So, like in the not implemented, there's only one in that entire column. So, it makes up the entire population. So, that's why the bar chart there is full. MS. LEE LOY: Got it. Thank you for that clarification. Like my colleague, always impressed with your work. Not only is it easily to digest, but it really does provide us a roadmap onto helping the department and be transparent, as you mentioned. Thank you for your work. I yield. MR. BENNER: Thank you. And Council Member Lee Loy, I just also mention to that, we believe we're going to have one of our personnel come back in a light - duty capacity. And we anticipate having them work specifically with Mass Transit to target a couple of those recommendations while they're in that light - duty capacity and see if we're able to turn some of those red and orange to green. MS. LEE LOY: Perfect. Thank you so much. CHR. VILLEGAS: Council Member Kimball. MS. KIMBALL: Thank you. I also will just echo Council Member Kierkiewicz and Member Lee Loy's comments about the quality of the information presented and the ease of digestion, if you will. I wanted to just zero in on the first audit you mentioned, cybersecurity. Are we getting some State or Federal support for that? If not, I'm happy to look into it; it's come up at a couple of National Association meetings —I've been on as a really high priority at the Federal level right now. And if we're not getting support for the analysis, I think I might have some options. But are we getting any funding for that already? Page 5 CRCOC-31 July 23, 2024 MR. BENNER: I'm not aware of any funding for that. What I can tell you is that we participated in some regional training. Specifically, I took some regional training in Oregon, and I was able to speak to a couple of my colleagues who conducted this audit previously, and they were willing and able to share on the material that they used in conducting their tests for this. It's my understanding that if the CIS (Center for Internet Security) controls one phase, as one, two, and three are fully implemented, that covers approximately 85 to 90 percent of the most frequent encountered items that, you know, threaten an organization. And it is conducted very stringent, and it does not allow you the latitude to just kind of improvise. It has to be done in a very standardized process. So, we have those materials and are ready to conduct them, but if there's any additional resources or conversations that we should be aware of, I'm of course, happy to go offline with you and have those conversations. MS. KIMBALL: Yeah, happy to do that. I'll kind of pay a little more attention to those phases. We can mostly tell you about GIS (Geographic Information Systems), but cybersecurity under recent events has become a high priority. So, I'll see what I can uncover, and I'll share that with you. Thank you, I yield, Chair. CHR. VILLEGAS: Thank you. Council Member Galimba. MS. GALIMBA: Thank you. I just want to go back to that chart and the Mass Transit cash handling. I was just wondering about the black part and Not Applicable. Can you talk about that a little more? MR. BENNER: At the time of the initial audit was done, you know, they were a cash -heavy operation. So, there was a number of recommendations that were made on that report. As you can see on there, it has better than 30 recommendations that were initially made on it. Since that, with former Director, I believe, John Ando, they had implemented a cash or fare -free system. So, a number of the recommendations in that report became not applicable because they were no longer handling cash or cash as an activity was kind of a de minimis activity. The one thing that we're cognizant of is that there's a sunset to that. So, as those sunset dates approach, we need to make sure that the departments are prepared to begin cash handling again, and the controlled environment is going to be sufficient to safeguard that cash. So, at the time it's not applicable because they're in a cash -free environment. S. GALIMBA: Got you. Thanks very much. Page 6 CRCOC-31 July 23, 2024 CHR. VILLEGAS: Anyone else. Alright with that, I just wanted to echo my colleagues in thanking you, Mr. Benner and your team. Especially, working with somebody out currently. Thank you for the depth and breadth of detail that you provide, and also in a format that is very palatable and digestible, as was indicated. I feel comfortable and confident in your skillset, and the reports you bring to us. So, thank you for that. I really appreciate it. MR. BENNER: Thank you very much for that feedback. CHR. VILLEGAS: You're welcome. Alright with that, all those in favor on closin�z file on Communication 93 1, please say "aye." Any opposed? Vote on Comm. 93 1: The motion to close file on Comm. 931 was carried by (Filed) the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, and Chair Villegas — 8. Noes: None. Absent: Committee Member Kdneali'i-Kleinfelder — 1. Excused: None. CHR. VILLEGAS: Mr. Clerk let's go on to Communication 938. Chan_ge Order As directed by the Chair and with no objection from the Council Members, the of Business: the following item was taken out of order: Comm. 938: PERFORMANCE AUDIT 2024-02: DEPARTMENT OF ENVIRONMENTAL MANAGEMENT DERELICT AND ABANDONED VEHICLE PROGRAM From County Auditor Tyler J. Benner, dated July 3, 2024, transmitting the above audit report pursuant to Section 3-18(d)(2) of the Hawai'i County Charter. Motion to Close File: Mr. Inaba moved to close file on Comm. 938. Seconded by Ms. Kagiwada. CHR. VILLEGAS: Back to you, Mr. Benner. (Note: At this time, County Auditor Tyler Benner came forward to address the members.of the Committee.) MR. BENNER: Thank you. So, we're here today to debrief the Council on an audit of the Department of Environmental Management (DEM) Derelict and Abandoned Vehicle (DAV) Program. The Report No. is 2024-02, published July 3,2024. Page 7 CRCOC-31 July 23, 2024 I would like to thank the Audit Team for working through some resource challenges and reassignment in personnel. Next, I want to state that we came to view this program positively, and we would like to thank the Administration, the DEM Director, the Deputy, Solid Waste Division Chief, the DAV Specialist, Business Manager, HPD (Hawai`i Police Department) Traffic Safety Coordinator, and others whose knowledge and expertise informed our understanding of the program. We were granted unrestricted access to sites, personnel, and facilities. And the cooperation was exceptional. So again, thank you. In its management response, DEM generally agreed with our audit recommendations. So, I'm going to —if you wanted to work with me on this, Council, you're welcome to thumb through the report. Otherwise, I'll just go through the elements as they come up, and they are in order of the report. So, Objective, which would be Page 3 of the report sought to answer the question of whether the Department of Environmental Management Solid Waste Division administers it's Derelict and Abandoned Vehicle Program in accordance with Hawaii Revised Statutes, Section 290 and other relevant governance to identify, remove, and dispose of abandoned vehicles thereby enhancing public safety, protecting the environment, and maintaining community aesthetics. The Scope included inventory and financial reviews from August 2023 through June 2024 but did not evaluate cash handling. Regarding methodology to achieve our objective, we included reviews of HRS 290 and relevant subsections, the department's rules and procedures; the GAO (Government Accountability Office) Green Book, OSHA (Occupational Safety and health Administration) standards and best practices. We gained an understanding of the department's internal controls, processes, practices, and document flows. We participated in two ride-alongs island -wide and conducted visits to all three impound lots with DAV staff to observe their work processes and interviewed appropriate staff and assessed the sustainability of the Vehicle Fund Program. Our evaluation covered controls over the abandoned and derelict vehicles processes, including vehicle identification extraction, impound storage, disposition, and inventory tracking. So, the conclusion of our audit was based on the evaluation of the Department of Environmental Management Solid Waste Division does manage their Derelict and Abandon Vehicles effectively and in -line with Hawaii Revised Statutes (HRS) 290 and other related regulations. The program successfully identifies, removes, and disposes of abandoned vehicles, which enhances public safety, protects environment, and improves community aesthetics. Page 8 CRCOC-31 July 23, 2024 While our overall assessment is positive, it's important to recognize compliance might not be perfect in every case due to differences in individual performance and judgement. To further improve the program, we identified specific areas for improvement and made five recommendations. So, Recommendation 1, was to prioritize personal protective measures, this is Page 17 of the report. We noted that the staff frequently enters environments that are dangerous to their health and safety. To mitigate the risk, we recommend that DEM implement additional health and safety devices and equipment to address environmental location and public interaction risks that they face and to formalize policies and procedures related to these items. DEM concurs with this recommendation. Recommendation 2, Increase Reporting Options for Abandoned Vehicles, this is Page 20 of the report. The current program relies on the public and the police to identify abandoned vehicles. While the police effectively identify vehicles in population centers and high traffic areas, the part of the program that depends on the public to report vehicles is not optimized to service multiple reporting options. This gap results in vehicles in remote or undesirable areas remaining unreported and not being removed for extended periods. We recommend that DEM implement a proactive campaign to educate residents on reporting abandoned vehicles to mitigate this gap. This should include collaborating to facilitate easy reporting, increase community involvement, and expedite identifying and removing abandoned vehicles from remote or undesirable areas. Specifically, we suggest working with the information officer to increase public service announcements using social media, implementing a 311-helpline app or similar service, and utilizing an online form. DEM concurs with this recommendation with the further reservation that initial reporting is a cross -functional activity conducted in concert with HPD and would require their mutual buy -in. So, Recommendation 3 is to Enhance Written Policies and Procedures, that's Page 22 of the report. DEM has high-level rules of practice and procedures that are regularly updated. The last revision was in April 2023. However, as written, they lack detailed instructions in key areas such as employee safety, field protocol, software security, and some compliance with HRS 290. So, we recommend that DAV management enhance policies to ensure that consistent and safe administration of the program addressing areas such as employee safety, field protocols, software security, and compliance with legal requirements. DEM concurs with this recommendation. Page 9 CRCOC-31 July 23, 2024 Recommendation 4 was to Modernize the Vehicle Auction Processes, this is Page 24 of the report. DEM holds its auctions inconsistently. Degradation of the vehicles can lead to decreasing revenues when auctions are conducted. We made the recommendation to increase the frequency and modernize the process. In their management response, DEM did not state whether or not it concurs with the recommendation. Although they did provide some thoughtful options to improve the activity. Recommendation 5, to Provide Cross -Training for Program Continuity, Page 26. We identified gaps in training needed for program continuity and recommended cross -training to resolve the gaps. DEM concurs with this recommendation. So again, we just want to thank the department and the Council for the opportunity to present today. That concludes our debrief, and we'll turn it over to the department. I am joined in chambers by the Deputy Director for any questions the Council might have. Mahalo. CHR. VILLEGAS: Thank you, Mr. Benner. Any questions or comments from the Council? Brenda, did you want to share anything? (Note: At this time, Environmental Management Deputy Director Brenda lokepa-Moses, came forward to address the members of the Committee.) MS. IOKEPA-MOSES: Good afternoon, Brenda lokepa-Moses, Deputy Director for the Department of Environmental Management. I just wanted to check because we have our faithful employee, Julie, and she's joining us, I think from remote. She's on vacation, but she wanted to make sure she was available. Julie are you with us on Zoom? Hi Julie, so thank you for joining us on your day off. I just wanted to give you a moment if you wanted to interject. I think overall, we all discussed it. Thank you, Tyler for very considerate recommendations for our staff, and we're in the motion of getting some of these things already done. So, Julie, if you want to take a few minutes to add to anything that Tyler had discussed. (Note: At this time, Environmental Management Derelict/Abandoned Vehicle Specialist Juliana Holzman-Escareno, came forward to address the members of the Committee.) MS. HOLZMAN-ESCARENO: Like I said, I mean we're in overall agreement with the audit. I mean no program is perfect. I'm glad that they pointed out how we can make our program better. We're taking these recommendations seriously, and we've already started on a few of them. I met with the Safety Officer already regarding safety policies; looking into cameras that are impounded already, and also hand-held radios for our staff in the field. So, we're already getting a head - Page 10 CRCOC-31 July 23, 2024 start on trying to remediate these recommendations, and hopefully we'll do it sooner than two years. MS. IOKEPA-MOSES: Thank you, Julie. I don't have anything to add. I appreciate the conversations that we've had with Tyler. He did allow us to kind of give a broad stroke on some of the security things he wanted us to clean up on. I didn't want to jeopardize any of our employees. They did a tremendous job, and they understand if they are in a situation where it doesn't look safe, that they are to abort mission and come back to the base yard. Nothing is as important as their safety. So, Julie's leading the ship, and we're very confident in her efforts. And so, with that if the Council has any questions, if not, that's all I have to say today. Thank you. CHR. VILLEGAS: Thank you so much, Brenda. Council Member Galimba. MS. GALIMBA: Thank you. So, yes, I just wanted to sort of congratulate Juliana and the department on the growth of this program. It's really making a difference, especially in my district. You can see that in the expenses, which I think, directly relate to the number of cars that you are disposing of. I did want to ask about the interdepartment expense, which has been growing in the last few years. Looks proportionate, but I just wondered what that interdepartment expense was or is? MS. IOKEPA-MOSES: We did add another employee to the West side to make it easier on our employees and not traveling as far. And with that, we have some office expenses and upgrades in our equipment at the offices. But mainly doing the salaries for expansion of our program. And of course, Julie's position got to a supervisor position as well. We'll been working on it for a while. MS. GALIMBA: So, it's not necessarily like working with another —but it's interdepartment. So, it's building up your department's capacity, is what those numbers are. Is that right? MS. IOKEPA-MOSES: Yes. They're under the Solid Waste wing but they are semi -anatomist on their own. So, yeah, it's building up within our department. We don't have third party that we consult with in this program. MS. GALIMBA: Okay, thanks. And towards the end of this audit, it does sort of bring up the idea of an increasing scope to get vehicles off of private lands as a way to increase its performance. Do you have any thoughts around that as a potential way of expanding the program? MS. IOKEPA-MOSES: Julie, do you want to take that? We currently have a program already in place. Page 11 CRCOC-31 July 23, 2024 MS. HOLZMAN-ESCARENO: Yes, so we currently have the vehicle disposal assistance program that does allow property owners or vehicle owners to dispose up to two vehicles per year. So, we do go on private property. MS. IOKEPA-MOSES: At no cost. So, there's no cost for that towing from your personal property. And that's a new program that we've put in place, and it will help our disadvantaged communities, like Ka'ii that are so far away from the disposal sites. MS. GALIMBA: Thank you. Last question. Basically, this last year, 2021-2022, expenses went up to 3.8, which is, you know, higher than income. So, just wondering about any thoughts on the sort of input-output of the program. And it's a very important program that we don't want to go away. I know it kind of had a cash balance for a long time, but it looks like it might be trending in the opposite direction. Do we need to get more income? MS. IOKEPA-MOSES: Yeah, I'll speak to that, and then Julie for sure will jump in. When I first came on board and I looked at this program, we had huge surplus in this program. And the department thought that was success. But to me, getting those monies spent out in the community is a success. So, the more that we spend that means the more vehicles we're towing out of communities, the more people that we're helping within the communities. And to me, that shows a success within our department. Julie has probably doubled the amount of vehicles that we've towed out in these last couple of years since the beginning of our Administration. So, kudos to our department for spending that money on getting the island cleaned up. Julie, I don't know if you have anything else to add to that. MS. HOLZMAN-ESCARENO: No, I don't have anything else. MS. GALIMBA: The really difficult question is, do we need to increase our income in one way or another to make sure that we can continue to get those vehicles off because there still are quite a few and people still are dumping them on the side of the road. MS. IOKEPA-MOSES: Yeah, I mean, of course we're looking at the vehicle disposal fee. It hasn't been changed for 30 years maybe. It's a long time. Increasing that registration fee to like $12 for a year for a vehicle. It'll take some time for us to do that, but we are looking ahead. We definitely don't want to dwindle down all of the monies within that pot. But we do have some things in front of us. What page is that seven? I think on how the program funded. Some suggestions that we want to ease into. Page 12 CRCOC-31 July 23, 2024 MS. GALIMBA: Well, thanks very much. And again, it looks like it's a very successful program, as you said, because it's spending the money for the purpose that it's supposed to. So, thanks, and I yield. CHR. VILLEGAS: Thank you, Council Member Galimba. Council Member Kagiwada. MS. KAGIWADA: Thank you, Chair. Just wanted to say thank you to Auditor Benner as well, and to DEM, and especially, Julie, who has helped us out and helped my office several times with calls to get abandoned vehicles off the streets. And I'm looking forward to working to help get the word out. I think that was like, number two. Its helping people understand the program and be able to call in when there are issues. So, looking forward to seeing how our office can help with that as well. Just want to thank you, and yeah, looks like what we can do to make sure we have the funding for this. Whether it's increasing the vehicle disposal fee, making sure you guys are having a chance to auction off anything that's of value or we need to put something in the budget, just you know, we would like to keep this going because I do think it's really successful. So, thank you all, appreciate it. I yield. CHR. VILLEGAS: Council Member Evans. MS. EVANS: Thank you. What would it do to move it from two to three vehicles a year? Is that something the State Legislature does, or do we have any control over that? MS. IOKEPA-MOSES: I think we want to get our bearings on how this year rolls out. We just changed that rule this year. We don't know how fast it's going to tap out our monies in our pot. So, I definitely think we can look at that. Right now, I say, we'd like to look at how the two vehicles roll out for this year. MS. EVANS: You did this by rule -making? MS. IOKEPA-MOSES: Yes, we amended some rules, so we can now tow off of private property. MS. EVANS: Okay, has there ever been a discussion about illegal junkyards where people might dump on private property —abandoned vehicles. MS. IOKEPA-MOSES: I mean, I think Julie can chime in on this as well, but we don't handle junkyards. We work with the Planning Department because there's some ordinances in place, if you have a certain amount of vehicles in your residential house lot —it's a violation of Planning Department Codes. It's a problem for sure for these junkyards. And Julie, do you have any input on some Page 13 CRCOC-31 July 23, 2024 of the ones you've seen? I think we found a couple in Ocean View when we did that cleanup. MS. HOLZMAN-ESCARENO: Yeah, we normally try to work a lot with Mark over at Planning, the inspector there. There are a lot on the island, but if we were to try to towaway all the vehicles at every junkyard on the island, we would definitely have no funding to tow vehicles on the road. So, if that's something that we want to see, we definitely need to look into more funding. MS. EVANS: Okay, yeah, I'd love to work on the junkyard thing, because I'm seeing lots that have five, ten; one in particular has 150. But you know, they're out there, and it would be interesting to see how we could work maybe with the Legislature and kind of figure this out, because it is such an environmental hazard. But thank you. MS. IOKEPA-MOSES: Council Member Evans, we'd love to talk to you about forethought on that because we don't want to per say, give people an idea that they can create this junkyard, and then, we'll clean it up on taxpayers' money. So, we'd like to talk to you about a good plan for that, because I know some people buy property, and they find out when they mow the grass, that there's ten vehicles on their property. I think that's a different story than people salvaging parts and then leaving their junk cars. So, I'd definitely would like to talk to you. And maybe we can sit down with the Planning Department as well. MS. EVANS: Yeah, I would love to do that. Because I have real problems in my district. Thank you, I yield. CHR. VILLEGAS: Thank you, Council Member Evans. Council Member Inaba. MR. INABA: Thank you, Chair. I think we've had good discussion on this, and we still have more to get through for Housing. So, I think if we can focus our conversations specifically to any of the recommendations, or if not, have the conversations offline with the department later. Thank you. CHR. VILLEGAS: Thank you, Council Member Inaba. Council Member Kdneali'i-Kleinfelder. MR. KANEALI'l-KLEINFELDER: Thank you, Chair. Thank you for being here, Auditor and Deputy Director lokepa-Moses. I just wanted to commend you on a job well done on the audit, but also on the Vehicle Disposal Assistance Program. Those are two tremendous programs that we have and utilize County funding for that beautifies our community. From the audit, I saw a few things that looks like the department is willing to take on, but I didn't see anything that was a huge talking point, or something that Page 14 CRCOC-31 July 23, 2024 needed to be really leaned in on the department. Looks like there's some training necessary. Possibly some Apps that could better help our community report things, as needed. But I appreciate everyone's time, and I look forward to seeing what we do in the future. MR. BENNER: Thank you, Council Member. I will make the comment that we are seeking, you know, some technological improvements and replacements to some of our existing infrastructure; like Granicus, as an example. Whether we update or replace that with something else, I know that the scoping and specking for whatever comes next should include 311 capability baked in. And so, the technology will be there. It's just a matter of whether there's appetite to adopt it. MR. KANEALI'l-KLEINFELDER: I completely agree, Mr. Benner. Something like that would be tremendous from potholes to abandoned vehicles to anything that helps us be more efficient in our processes as we get bigger as a County, would be extremely helpful. That's a great idea, thank you. And to the department, Brenda, please give my appreciation —I think Julie's on the line right now. Julie is amazing, mahalo. CHR. VILLEGAS: Thank you, Council Member Kdneali'i-Kleinfelder. Council Member Kierkiewicz, quickly. MS. KIERKIEWICZ: Thank you, Chair. This program has come a very merry long way. I can recall my first term on the Council. These pink stickers to identify what vehicles had been abandoned, were not even something that was part of our County's workflow. And I think the collaboration between Torey (Kellner) over at the Police Department; Juliana, Environment Management, and all of their supporting staff are a testament to when we worked together, we can really get things done. This program has been built from scratch, and I just want to confirm Deputy Director, that your department has the necessary resources; financial resources to implement the recommendations that are put forward in the audit. MS. IOKEPA-MOSES: Yes, we do. And we're waiting for them, thank you. MS. KIERKIEWICZ: Okay, don't be shy about asking for more because we want to make sure that this program is successful. It has done tremendous work to decrease the blight in a lot of our communities. And so, we wanted to do everything that we can to support you to continue this positive program. Thank you. Chair, I yield. MS. IOKEPA-MOSES: Thank you. Page 15 CRCOC-31 CHR. VILLEGAS: Thank you so much close this out, and say thank you, guys. Comm. 938, please say "aye." July 23, 2024 . And with that being it, I'm just going to And all those in favor of closing file on Vote on Comm. 938: The motion to close file on Comm. 938 was carried by (Filed) the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kdneali'i-Kleinfelder, Kierkiewicz, Lee Loy, Kimball, and Chair Villegas — 9. Noes: None. Absent: None. Excused: None. Relinquish Chair: At this time, the Chair relinquished the chair to Vice Chair Kagiwada. Return to Order The Chair directed the Committee to return to the order of business. of Business: Comm. 935: REQUESTS A PRESENTATION BY KEYSER MARSTON ASSOCIATES FOLLOWED BY A DISCUSSION WITH THE OFFICE OF HOUSING AND COMMUNITY DEVELOPMENT REGARDING UPDATES TO CHAPTER 11 OF THE HAWAPI COUNTY CODE From Council Member Ashley L. Kierkiewicz, dated July 5, 2024. ; and Comm. 935. 1: From Council Member Ashley L. Kierkiewicz, transmitting a report by Keyser Marston Associates. Motion to Close File: Ms. Kierkiewicz moved to close file on Comm. 935. Seconded by Ms. Lee Loy. ACTING CHR. KAGIWADA: We have Keyser Marston here, I believe. Do you want to introduce them? Go ahead. MS. KIERKIEWICZ: Thank you very much, Chair. In 2020, the Council adopted a resolution requesting that the Office of Housing and Community Development address our housing crisis with urgency. There were a number of recommendations that were put forward in that resolution. One of them was adopted. That was the establishment of the Affordable Housing Production Fund. Another was to evaluate Chapter 11 to determine what changes do we need to make to our County Code that deals with Page 16 [a 401614M July 23, 2024 affordable housing to ensure that there is a range of housing opportunities that are attainable to fit the diverse lifestyles of our residents. So, in addition to that, the Council also received an audit from our County Auditor related to Chapter 11 and how we deal with housing credits. And so, Office of Housing and Community Development engaged with Keyser Marston Associates to do an analysis of Chapter 11. So, wanted to introduce our Housing Administrator, Susan Kunz, to speak to the work that their office has led in partnership with the consultant. This is going to be informing some future Code updates by this body. Administrator. (Note: At this time, Office of Housing and Community Development Administrator Susan Kunz, came forward to address the members of the Committee.) MS. KUNZ: Good afternoon everyone, Susan Kunz, Office of Housing and Community Development. Thank you so much for introducing this communication and allowing us to do this presentation today with our consultant. I think what I want to do is introduce David (Doezema) and give you a little bit of his background. And then, just bring him up and we'll start the presentation. David is the Senior Principal of Keyser Marston Associates Northern California Office with over 20 years of experience in affordable housing, land use, economics and fiscal impact analysis. He's completed many projects, probably 30-plus, I think, related to best practices and feasibility studies for inclusion of rezoning programs like ours. He's done this in California, Washington State, Colorado and several counties in Hawaii. So, in addition to this extensive experience, David has a Master's degree in Urban Planning and a Bachelor of Science degree in civil and environmental engineering at the University of Michigan. Well, I thought it was important to give you a little bit of his background. So, with that I do want to thank you, David, profusely for his work with our staff and our office. He and his staff has been extremely responsive and very easy to work with. So, with that, I'm going to turn this over to David. (Note: At this time, Keyser Marston Senior Principal David Doezema, came forward to address the members of the Committee.) MR. DOEZEMA: Thank you so much, Susan. You make me blush, right off the bat. And thank you, members of the Council, for the invitation to be here to talk to you about this important topic, which is the Affordable Housing Policy established in Chapter 11 of your Code. As Susan indicated, we prepared a report Page 17 CRCOC-31 July 23, 2024 regarding the Code, and it covers a variety of topics, which we'll touch on each of those topics in the presentation. (Note: At this time, Mr. Doezema provided a PowerPoint presentation to the members of the Committee. For viewing of the subject presentation, see the DVD copy of the meeting proceedings on file in the Clerk's Office. A copy of the PowerPoint presentation is made a part of the record, see Comm. 935.2.) ACTING CHR. KAGIWADA: Excuse me, I'm sorry, we have a technical issue we have to deal with. We have postponed our other meeting until 4:00 o'clock to today, so we will need to —I'm very sorry, open that up and do something with that, and then we can come back to this. It's just going to take us a few minutes here. So, we're going to recess this committee for a few minutes, and we will be back. Recess: At 4:00 p.m., the Acting Chair called for a recess. Reconvene: The meeting reconvened at 4:10 p.m. ACTING CHR KAGIWADA: I think we're on the Requirements in Other Counties page. Okay, maybe you can just start this one over again real quick. (Note: At this time, Mr. Doezema continued the PowerPoint presentation. For viewing of the subject presentation, see the DVD copy of the meeting proceedings on file in the Clerk's Office. A copy of the PowerPoint presentation is made a part of the record, see Comm. 935.2.) MR. DOEZEMA: So, thank you very much for your attention. I know it's been long, but happy to answer questions. ACTING CHR. KAGIWADA: Thank you. Council Member Kierkiewicz, you still have the floor. MS. KIERKIEWICZ: Just, thank you very much for the presentation. We look forward to working with you in the Office of Housing and Community Development to find ways to implement your recommendations. Thank you. ACTING CHR. KAGIWADA: Thank you, Council Member. Alright. Housing Administrator, do you want to add anything before we kind of jump in here? Or are you ready for us to maybe ask some questions. Okay. Council Members, questions, thoughts, comments? Council Member Inaba. MR. INABA: Thank you, Chair. I'm just wondering if you folks will still be available for conversations after this meeting to kind of get into the report in-depth if we have questions? Page 18 CRCOC-31 July 23, 2024 MR. DOEZEMA: Absolutely. MR. 1NABA: Perfect. Alright, I will save everyone's time and ask questions and set up some time with you offline. Mahalo. ACTING CHR. KAGIWADA: Thank you, Council Member. Council Member Kdneali'i-Kleinfelder. MR. KANEALI'l-KLEINFELDER: Thank you, Chair. Wasn't sure what to expect, but I like what you put in front of us. So, thank you for your time. There's a couple things that really stood out to me within your report and then your recommendations that I found very interesting and very common sense. may follow-up with you, as Mr. Inaba stated. One thing I want to touch on, I did not see in here, any thought towards private development of affordable housing versus government development of affordable housing. Did I miss it, or did we not approach it? MR. DOEZEMA: You're correct, that we don't directly speak to it. MR. KANEALI'l-KLEINFELDER: Okay, is that because 201H doesn't apply to government affordable housing? MR. DOEZEMA: Our focus was on Chapter 11, which applies to private projects, and I believe you're correct, that it wouldn't apply to County, Federal, or State Housing. MR. KANEALI'l-KLEINFELDER: Completely fair. I'm having different discussions with different folks and just trying to find a way forward, as you've done with your solutions as far as how we look at Chapter 11 and private developers for affordable housing. I think there's a Code in here somewhere, and I'm looking for it, but I like that you stated clearly that we're in a very unique situation here. And I'm paraphrasing completely, and you correct me if I say it wrong. But because of the actual market price that's driven by a global economy here compared to what we can build that, and the prices that it costs to build things, that it's almost impossible to build that affordable housing. Then you provide solutions which is beautiful. But that finding of market price is kind of a realism of what our situation here in Hawaii is, or we're incredibly lucrative when it comes to development versus trying to put affordable housing projects up almost leads me to believe we're in a self-induced housing crisis. Page 19 CRCOC-31 July 23, 2024 MR. DOEZEMA: I mean the affluence of, you know, the global economy and just the demand for luxural products in your market. You know, it soaks up and drives up construction costs, and contractors will be focused on that luxury product, and as you said, it sort of squeezes out some other housing types. And you know, it can't compete with what those luxury projects can pay. MR. KANEALI'l-KLEINFELDER: I agree. And you know, sometimes, I wonder about my thought process when I see it put in other places in better words than mind. And I appreciate that, because it clarifies things for me but it's good to hear from another source. So, I appreciate you and your report, and I thank you for coming back to us with something substantive. Appreciate it. ACTING CHR. KAGIWADA: Thank you, Council Member. Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. Like my colleagues, I'm going to take you up on an opportunity to have an offline conversation. I think a lot of the information that you provided, I've seen in so many other spaces, as it relates to the construction of housing and some of the gaps. But I love that it's been kind of laid over our Chapter 11 because this is what we're trying to solve, and to some of those market rates as they relate to the construction of housing and the demand. But the shear costs for getting those materials here is not reflected when AMI's (Area Median Income) are set, or rental costs are set. Because they're set at a Federal level, but they don't account for the 60 percent of shipping to our island for all of this material. So, I'm actually loving where we are as far as fixing and tailoring our Chapter 11, but I'm also going to be looking forward to other areas that we can have better impact on different; not only local housing policy, but State housing policies, and some initiatives that we're seeing at the Federal level. So, thank you for such a comprehensive report. And I'm glad that Susan read your curriculum rete because as soon as heard urban planner with some skillsets around engineering and architecture, I was like, this is going to be good. So, thank you so much. I yield. ACTING CHR. KAGIWADA: Thank you. Council Member Galimba. MS. GALIMBA: Thank you. Just following up on comments of my colleagues. First of all, thank you for such a great report and presentation. And it really points out, not just that we have Affordable Housing Production problem, but we also have even a working folks production problem, like middle, even lower luxury. I mean, basically, it's like luxury, you know, if you have millions to build a house, you can afford to, and you can find some people to do it. Page 20 CRCOC-31 July 23, 2024 But anything below that is infeasible by your presentation in Kona, Kohala; yeah, it is. But it's so expensive that a normal person can't afford it, the market rate. And where it is feasible from affordability standpoint, it's infeasible from a developer production standpoint. So, it's got, you know, two horns that we're stuck between here. So, yes, you could either do a luxury —if you're extremely rich, you can get a house, or you can build a house in Ocean View. Those are like our two options right now, which is a crazy place to be in. So, thank you for just drawing that picture with data. So, thanks. ACTING CHR. KAGIWADA: Thank you. Council Member Evans. MS. EVANS: Thank you. I'm looking at Chapter 11 and certain years, looks like 1998 was a popular year. Looks like our colleagues passed some ordinances in 1998. And I was kind of curious if these ordinances resulted in the next few years in any changes. For example, they put in density bonus; I mean meeting the density bonus, which was one of your recommendations, or you know, it came up today. It kind of looks like if they do density, that we gave them quite a bit of incentive here. I was kind of curious if we gave that kind of incentive, did we see any changes? It's a pretty nice density bonus, we actually did. So, just a comment. It was kind of curious, because it looks like some of the stuff we tried, and then we should see if in fact, there was any reaction to that. I guess a lot of the stuff that you're mentioning, if we took one this year and eliminated it, it'll be best to try it one at a time, or do you see us doing kind of a sweep with kind of a comprehensive Code change? MR. DOEZEMA: I think it makes sense to try more than one thing at once. But can I respond to your density bonus comment? My understanding is that density bonus provision has not been used, you know, just by it being there. But if you think about it, this ordinance applies to projects that request a rezoning. So, you can request a rezoning to the density that you need for your project. So, why would you need the density bonus, right? So, I think the idea of the density bonus that I sort of suggested, it goes along with the concept of applying the program to projects that aren't requesting a zoning change. So, it would be sort of adding that density bonus in the context where someone's not asking for a zoning change already. So, I think it would be doing something that your current Chapter 11—it's sort of a different context, I think. MS. EVANS: So, density bonus serves a purpose but not a rezoning. Page 21. CRCOC-31 July 23, 2024 MR. DOEZEMA: Yes, because you're rezoning, you can ask for the density you want. MS. EVANS: Interesting. The other thing that struck me is they have a lot of affordable housing builders in our State that have been doing it for years and years. And when I have talked to them, it's about stacking a financial package that makes it feasible. Plus, the Chapter 11 and working you know, to get some waivers on some of the costs. But you had some comment about if we had a fund that could help us leverage. Did you have some specific examples or something that came to mind when you wrote that? MR. DOEZEMA: I guess the somewhat concept to like waivers. It's if you have local money to contribute towards a project that can also assemble the other stack of funds that you mentioned, then one way to think about that is that through that local contribution, we're helping make a project that is bringing together these other sources as well and making it possible in our County. That's sort of what that comment was trying to get at. MS. EVANS: I'm having a hard time hearing you because of the motorcycle. Our noise ordinance. Sorry, but please repeat it. MR. DOEZEMA: So, the comment about leveraging in -lieu fees, leveraging State and Federal sources, what I intended by that comment was that, when the County has local funds to contribute to an affordable project that has, as you mentioned, you know, quite a variety of different sources that it's drawing upon, one way to think about that situation is that we're helping with the County helping make that project possible and reigning in those outside funding sources into our County for the purposes of constructing affordable housing. You know, leveraging those sources, I guess, is what I meant by that. MS. EVANS: Okay. The other thing that you didn't bring up, but I know they have it on the other island, is Transit Oriented Development (TOD). That is maybe an option of how we change the way we build affordable housing. So, like where we build it, what would be a benefit if you're going to take away parking. People have to be able to get to where need to go. So, I know that's why the TOD, which is, I think going to be successful in Honolulu. It's basically, if you draw an area and call it a TOD, then automatically, that area; instead of project by project. You take that area, and you remove all of those building requirements instantly. So, what you're doing is you're attracting people to come to that site that you've occupied, right? If we have a County property, a lot of land or whatever that's County -owned to State-owned, and say we're going to take the County land, we're going to take the State land, and we're going to remove all these standard requirements and cut back costs. So that we get the affordable housing developers to already know they don't have to negotiate a way Page 22 CRCOC-31 July 23, 2024 or come up with these negotiations. It's already there for them. So, that could be an incentive. Is that something that you've seen before because I didn't see it in here, or did I miss it? Sorry. MR. DOEZEMA: Yes, you've probably seen it before, and I'm glad you brought it up. And I guess my question is, I don't know one way or another, but you have transit service that, you know, you'd want to concentrate development around. I mean, I think it would be contingent on that, right. I mean, in Honolulu, the example is, I believe they're building this rail system there. I think it's recently opened, if I read the news right. And so, it's part of the planned transit improvement. They want to achieve what you're describing there and concentrate development around the transit stops. You know, certainly if you have places in the County where that's an appropriate thing to do, certainly that would contribute to the same goal. MS. EVANS: I think it's important because of the General Plan and the things we are organizing. But in Hilo and Kona, in our urban areas, if you have for example, County of State land, maybe you picket and remove all these restrictions and attract them to come and build on it. And then you work with your transit and get that all kind of worked out. But anyway, it's just a thought that might be a way. This is so fascinating to me. I'd love to hear how you stacked your priorities on what we would change first would be the most impactful. MR. DOEZEMA: I think you should get rid of the excess credit feature. I think that right now, it's inhibiting success of your ordinance. And I think the idea you raise is intriguing as well. But the 201H local version of that, I think that has a lower affordability threshold to be eligible for that. I think to me, I'm very intrigued by how that would work. I don't pretend to know exactly how that would materialize. But to me, that's something real that you can offer to projects. Those to me is sort of like jump out as, you know, making some movement on the situation. MS. EVANS: Okay, thank you. Thank you, Chair. ACTING CHR. KAGIWADA: Alright, great. Council Member Kimball. MS. KIMBALL Thank you, Chair. First of all, Go Blue; Miami Alum, as well. Three questions and a comment. First question is, when you talk about here, the percentage of calculated affordability gap as one potential in -lieu fee structure, can you describe to me specifically how you're calculating that because Vice Chair Inaba and I looked at that and there were a couple of different mechanisms for calculating that. I'm curious what mechanism you were using. Page 23 CRCOC-31 July 23, 2024 MR. DOEZEMA: So, it's on Page 4 of the report, if you want to look. And what we did, and it's you know, more than one way to do it. But what this is, is based on the representative market sale price by project type and by location. Compared to an affordable price at a specific income level. And for the example, we chose 80 percent of AMI. Then we looked at the difference between those two and calculate a gap figure. And that gap figure varies very widely depending on location and you know, the project's specifics. Then we translate that into a per - square foot amount based on the size of the example project type that we used to come up with the gap in the first place. Because I don't think it's a good idea to have an in -lieu fee per affordable unit, because that results in sort of a disincentive, small and more affordable units to do it that way. That's why we translate it. MS. KIMBALL: Right, okay. This is actually a really smart way to do it. Thanks for sharing that. The second question don't know if this is an Administrator Kunz question, something for your, or something for Corporation Counsel. Did we explore at all, the potential takings issue around like a prorated purchase of excess credits out there? Do we have any information or sense of that? Thank you. (Note: At this time, Deputy Corporation Counsel Sylvia Wan, came forward to address the members of the Committee.) MS. WAN: Good afternoon, Council Members, Deputy Corporation Counsel Sylvia Wan in my representation of the Office of Housing and Community Development. At this point, I don't think I can opine specifically as to the taking issue because the question presented is far too broad. I will note that in any phasing out of our current excess credits, that is an issue that we will have to consider in what is going to be legislated, as far as any change. Because there are about 1,300 credits out there in people's hands that have a market value. And so, yes, that is going to have to be something considered. It's not an impossibility to phase them out. Presently, they do not have an expiration date. It makes sense that they would otherwise have an expiration date, but it's kind of hard to opine at this point, just with everything still kind of being open. But that is something to be considered in legislation going forward. MS. KIMBALL: Okay, thank you. Yeah, I'd suggest —this is where at which point, I'll make my comment, I hate credits. I think that unfortunately, I know they were well intended, but they have dug us into a hole that, until we get rid of all of those excess, we are not going to be able to actually use the Inclusionary Zoning Policy of Chapter 11 at all in my mind. Page 24 CRCOC-31 July 23, 2024 In which case, we need to figure out if we can prorate them; if they're all going to be worth $50,000. The quick math puts out at about 60 million to buy them all out. But that would be what it comes to, which leads me to my last question, which is, in your analysis of this, from the standpoint of Chapter 11 being an Inclusionary Zoning Program. I know this is a really broad question, but from evaluating other programs, does Inclusionary Zoning even work? I mean, I'm looking at your charts about the different steps we're taking and the different counties, including ours over time. And it really appears from the way the data are presented, that's it's really other market forces. So, I wonder with your expertise and background, do we really know enough even at this stage to say, Inclusionary Zoning can work, or do we have to consider a very different model? MR. DOEZEMA: So, Inclusionary Zoning, I think, saying broadly one way or the other, inclusionary works; sort of out of the context of the specific place of which that it's applied is a little too broad I think. I think it can be problematic and not worthwhile in some situations. The incidences where it works the best are instances where there are very highland values that when you apply a requirement, the way that requirement is absorbed by the market is by, sort of subtracting value out of the land that's inherently very valuable, right? It's not only because of the infrastructure, it's there. It's because you're in an urban environment, for example, where there's just only so many sites where you can build your project. And there, I think, inclusionary is a policy that in some such context, you know, works well and can be a very valuable tool. I think another context, and I think this is a context that's quite relevant to Hawaii County is where you have a very luxury product that is being produced that absolutely can sustain an additional cost and still go forward. Because the purchaser of that luxury product isn't necessarily very price sensitive all the time, right? They want that product and are not going to change their mind because of a smallish, relatively additional cost, right? So those are two examples of where it is a very effective tool, an important tool for ensuring that affordable is brought along with the market rate where it can be challenging and not work very well. It's when you have sort of a market that is very modestly priced homes, and land values that are very low, and you add a cost on top of that and you're adding in essence tacking on a cost to market rate home, that would be purchased by sort of a moderate income home buyer, and you're sort of more directly influencing that cost because where else can it be recovered from? Not from the land value in that situation, right? So, I think to say blanket never works or it's always a good thing is a little too black and white. And I think you have in your situation, kind of both of those circumstances blended together. Page 25 CRCOC-31 July 23, 2024 MS. KIMBALL: Thank you. And I appreciate the fact that that was a very difficult question to answer. So, I appreciate that you attempted to do so. And I would agree, I think we have some distinctly different characteristics across the County, where there's not going to be a one -size -fits -all housing solution. And I know that our next step here is an Ad Hoc to further dive into this. But you know, looking at really just how we want the society we've got in this community by the look. It's more than just the money. I don't like using the zoning process to fund housing. We are on a trajectory where I think we will have pockets of housing for the very low income, and we'll have pockets for the very high income, and we have an enormous gap in the middle. And there's a lot of things that are leading to that trajectory; some of which you have highlighted here. So, I look forward to the Ad Hoc's results, but I think we need to do some major shifting, and I look forward to diving into it. Thank you, I yield. ACTING CHR. KAGIWADA: Alright. Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: On slide 4 that has the Waikoloa Family Affordable Housing picture, and I see a date of this listed on the top, is it all from 2019? Okay, compiled? MR. DOEZEMA: So, some of the data points are from this 2019 study, and I believe it was 2018 data that was used in the 2019 study. Well, the 53 percent of home sales to out -of -State buyers is 2022. And I think that 32 percent of households that are cost burdened, I think that may be a little bit more updated figure. I forgot the exact timing of that data as well as the vacancy. MR. KANEALI`I-KLEINFELDER: Okay. That's helpful, thank you. I yield, Chair. ACTING CHR. KAGIWADA: Go ahead, Ms. Evans. MS. EVANS: Thank you. This question is about Mixed -Used planning, and Member Kaneali`i-Kleinfelder had mentioned the other day, if you had, for example, in a Commercial Zone, and let's say it's a two or three-story building, and you're allowed an affordable housing unit on the third floor and Commercial on the bottom floor. What you're doing is you're mixing kind of an affordable housing with a Commercial Retail. I believe that some places do that to try to create affordable housing units, you know, like work where you live. But I think that's kind of a think -out -of -box thing where you have Commercial potential; Industrial, and yet in it, you actually may have Residential. So, what are your thoughts on Mixed -Use, because what I'm getting at is kind of way, we zone might affect having affordable housing? Page 26 CRCOC-31 July 23, 2024 MR. DOEZEMA: We didn't focus a lot on that question in the work we did for your circumstances, because sort of the place we started was looking at the projects you have and less about imagining the projects, like Mixed -Use that we didn't see in the data set and like thinking about how that might be different. MS. EVANS: So, I will yield. My colleagues are all tired. But having said that, so, you looked at what we have but you didn't look at what we could replace it with. MR. DOEZEMA: Yeah, that was not our focus, looking at what you could replace it with. MS. EVANS: That's good to know. Thank you. ACTING CHR. KAGIWADA: Okay, thank you. Alright, I'll just say a couple comments. I'll also be reaching out to talk privately, because this is very fascinating, and I want to know more and dig down. But just a couple things. On your recommendations, in E, "Increase Incentive to Provide Affordable Units within Project." This speaks to something that Council Member Kimball just said a little bit too. Removing overly prescriptive affordable unit mix requirements. I feel like, do we really have? Because I don't see our projects coming out with really great mix in the housing. So, I'm just wondering do we have this overly prescriptive affordable unit mix requirements right now? Because I haven't seen them develop, I don't think. MR. DOEZEMA: Well, you probably don't have it in front of you. But it's Section 11-5, Subsection (d) is what I was talking about in that comment. ACTING CHR. KAGIWADA: In the main report? MR. DOEZEMA: Of your Code. ACTING CHR. KAGIWADA: Oh, of our Code. Okay. MR. DOEZEMA: What is says, like is, a minimum of 20 percent of the required affordable credits are earned at one credit per unit level, which let's see what is that? A hundred at 120 percent AMI. ACTING CHR KAGIWADA: Oh, I see, okay. Page 27 CRCOC-31 July 23, 2024 MR. DOEZEMA: Then, a minimum of 30 percent must be earned at 1.5 or greater, and that would be 80 to 100 percent AMI. So, it's saying like, you got to have some of this, some of this, some of this. A small project may not be practical, right? So, you may throw up your hands, you know, you're telling me every little level I have to deal with. What you can do, though, is maybe what you're referring to is just go, it's 60 percent AMI or something. And then you've met this. But if you wanted to not do that, then you'd be subject to this kind of complicated tiering. ACTING CHR. KAGIWADA: Okay. I guess this is to the Housing Administrator, I'm trying to think of the projects we have built already. And do we have that, or this is a fairly newer —I mean when I think about housing developments, I do think more of the ones that have primarily one type of housing, or one type of client, or resident. And maybe there's two and they're very divided, you know, by areas in that development. So, I'm just wondering how this has worked in the past? Has it even worked or what does it mean? (Note: At this time, Office of Housing and Community Development Administrator Susan Kunz came forward to address the members of the Committee.) MS. KUNZ: Right. I think what you are referring to or what you recognize are, the majority of the existing housing units that we have in our existing housing inventory, are units that were subsidized by low-income housing. Tax credits, for example, that require 60 percent and below. So, when you're doing 100 percent affordable at 60 percent, you're not going to get exposed to doing that type of breakdown requirement. ACTING CHR. KAGIWADA: That old higher end ones that are primarily higher end and maybe they used credits, and they didn't build any affordable there. MS. KUNZ: Right. So, if you have projects that are coming in at 100 percent affordable, they're not going to get exposed to that requirement. If you have a commercial or market rate project coming in, that is pushing the higher end of the AMI, they're going to get exposed to having to break down to do some of the lower income categories that are required by Chapter 11. ACTING CHR. KAGIWADA: Okay, but that's a hinderance is what you're saying? MR. DOEZEMA: I'm saying, it's like, the Code is inflexible in this regard, and if you want more projects to provide units within the project, give them more flexibility and just how they do it, it's what's being suggested. And the other aspect here is, you have this system like 60 percent AMI, earn two credits, and you know, 120 to 140 is half a credit. So, you're already like building in Page 28 CRCOC-31 July 23, 2024 incentives for certain behavior, probably in the lower AMI levels. So, is that enough to sort of achieve your objectives? MS. KUNZ: I believe Chapter 11 prescribes that requirement. It's almost like, if a developer says, I can't make a project pencil, then they just walk away. ACTING CHR. KAGIWADA: You don't have any flexibility. MS. KUNZ: We don't have any flexibility to say, okay, what can you do? Can you do 80 percent and up, right? We don't have that flexibility right now. ACTING CHR. KAGIWADA: Okay. Alright. And then my other comment is just about the going to the in -lieu fees. I feel like it could address some of the concerns we have with our credit system, but it also perpetuates some of the problems that we have with the credit system going back to the ability for people to do very monogrammatic, if that's a word I can use for this? But developments that are for instance all, you know, higher end, single-family units in one area and all low-income in another area or something like that and allowing people to do that I think, is maybe something we want to get away from to do better planning. MR. DOEZEMA: The reason we propose the in -lieu fee is because the feasibility results say, forcing the units on site, would add to the challenges of market rate projects. I mean, there's advantages and disadvantages to in -lieu fees. The disadvantage is that you're less likely to get, you know, mixed -income projects. And you know, there's lots of reasons why people want to see a mixed -income project. You allow an in -lieu fee that's a lower cost, lots of times you're not going to get that. But I guess what we're saying is, having that option is important so that you have the project at all, I guess. ACTING CHR. KAGIWADA: Okay. And then finally, someone mentioned earlier, but if we did do the in -lieu fees then can that money be used? I guess, I'm thinking even more towards County public housing projects that are not only to just incentivize developers to build, but for County projects that we actually, you know, build and own and keep affordable. Is that something that in -lieu fees have been used for in the past? MS. KUNZ: I think all of those things should be considered, and I'm really looking forward to the conversation with the potential Ad Hoc committee, if that's the direction the Council is going, to have those kinds of discussions. But I think it's an option, definitely. ACTING CHR. KAGIWADA: Okay, great. Alright, I'll be reaching out. Thanks. Alright, we're getting to the end of our meeting here. Anybody else last minute? Okay, we're all looking good, we're all feeling good. Alright, it looks Page 29 CRCOC-31 we're done with our agenda today. All those in favor of closing file on Communication 935 please say "aye." Any opposed? Vote on Comm. 935: The motion to close file on Comm. 935 was carried by (Filed) the following voice vote: Ayes: Committee Members Evans, Galimba, Kdneali'i-Kleinfelder, Kierkiewicz, Kimball, Lee Loy, and Acting Chair Kagiwada — 7. Noes: None. Absent: Committee Members Inaba and Villegas — 2. Excused: None. ADJOURN- Alright. Now we are adjourned at 5:06 p.m. Thank you very much. MENT: Communications, Reports, and Council Oversight Committee RV/dt July 23, 2024 4 (Date) Page 30