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HomeMy WebLinkAboutMIN FC 2024/07/23 (2022-2024) Committee on Finance 40th Session West Hawaii Civic Center 74-5044 Ane Keohokalole Highway, Building A Kailua-Kona, Hawaii July 23, 2024 CALL TO The regular meeting of the Committee on Finance was called to order at 1:23 p.m., ORDER: in the Council Chambers, Kailua-Kona, by Mr. Matt Kaneali`i-Kleinfelder, Chair. ROLL CALL: Present: Mr. Matt Kaneali`i-Kleinfelder, Chair Ms. Cindy Evans, Vice Chair Ms. Michelle M. Galimba, Member Mr. Holeka Goro Inaba, Member Ms. Jenn Kagiwada, Member Ms. Ashley L. Kierkiewicz, Member Ms. Heather L. Kimball, Member Ms. Susan L. K. Lee Loy, Member Ms. Rebecca Villegas, Member (came in later) 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: Noreen Luiz: Bill 174 (Comm. 905), in support. Kyra Bronson: Bill 174 (Comm. 905), in support. (See Comm. 905.3) CHR KANEALI`I-KLEINFELDER: Thank you very much. Let's start at the top of the order, please, Communication 12.35. COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. Comm. 12.35: REPORT OF FUND TRANSFERS AUTHORIZED: MAY 16 —31, 2024 AND JUNE 1 — 15, 2024 From Controller Kay Oshiro, dated July 1, 2024. Motion to Close File: Ms. Lee Loy moved to close file on Comm. 12.35. Seconded by Ms. Kimball. FC-40 July 23,2024 CHR KANEALI`I-KLEINFELDER: Council Members, any discussion? Okay, hearing and seeing none, a motion is on the floor. All in favor? Any opposed? Vote on Comm. 12.35: The motion to close file on Comm. 12.35 was carried by Filed the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR KANEALI`I-KLEINFELDER: Next item,please. Comm. 13.37: REPORT OF CHANGE ORDERS AUTHORIZED: MAY 1 — 15, 2024 From Finance Director Diane Nakagawa, dated June 20, 2024, transmitting the above report pursuant to Section 2-12.3 of the Hawaii County Code. Motion to Close File: Ms. Lee Loy moved to close file on Comm. 13.37. Seconded by Ms. Galimba. CHR KANEALI`I-KLEINFELDER: Discussion on the measure. Hearing and seeing none, a motion is on the floor. All in favor? Any opposed? Vote on Comm. 13.37: The motion to close file on Comm. 13.37 was carried by Filed the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR KANEALI`I-KLEINFELDER: Next item,please. Comm. 13.38: REPORT OF CHANGE ORDERS AUTHORIZED: MAY 16 —31, 2024 From Finance Director Diane Nakagawa, dated June 21, 2024, transmitting the above report pursuant to Section 2-12.3 of the Hawaii County Code. Motion to Close File: Ms. Lee Loy moved to close file on Comm. 13.38. Seconded by Ms. Kimball. CHR KANEALI`I-KLEINFELDER: Any discussion on the measure? Council Member Lee Loy, go ahead. Page 2 FC-40 July 23,2024 MS. LEE LOY: I do, I have a question on this University of Hawaii I'm not sure if Diane is available. CHR KANEALI`I-KLEINFELDER: I believe we have a number of our departments in our Hilo Chambers. (Note: At this time, Finance Director Diane Nakagawa came forward to address the members of the Committee.) MS. NAKAGAWA: Good afternoon, Council Members. Diane Nakagawa, Finance Department, and I believe Planning is on as well for this item. MS. LEE LOY: Thanks, Director. You know, when I look at these change orders, I just kind of gleam down the percent of the original contract. And you know, those percentages, when I see it jump up, I just want to understand why. MS. NAKAGAWA: Okay, and I apologize. If Planning is not available at this time, I can get more information for you on this increase. MS. LEE LOY: Yeah, and just shoot me a quick email_ That'll be real helpful. I yield. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Evans. MS. LEE LOY: Sorry. If I could add one thing to that. Diane, if you don't mind sending me that email. But also, I just attended the National Association of Counties (NACo) meeting, and there's a number of individuals and people at NACo who offer grant opportunities. So, if this is a steady area that we want to kind of take a look at, let's also look at some of our partners that might be able to help provide resources and funding to accomplish this task. MS. NAKAGAWA: Of course, will do. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Evans. MS. EVANS: I have a question. Again, these jump out to me when there's a percentage. This says 300 percent above the change order. But it's Hawaii County Zoning and Subdivision Code amendments. So, this has been an ongoing contract since June of 2022. So, it's been in motion for over two years. Like, we're not finishing up. I don't know what this means, ongoing. Are we continuing to look at Code and coming up with amendments? I'm a little confused after two years, why this contract still exists? MS. NAKAGAWA: Sure, Council Member Evans, this one is also a Planning item that I definitely can get more information from the department for you and come back. Page 3 FC-40 July 23,2024 MS. EVANS: Yeah,please do, thank you. MS. NAKAGAWA: You're welcome, will do. CHR KANEALI`I-KLEINFELDER: Okay, seeing no further discussion. The motion is on the floor to close file on Communication 13.38. All those in favor? Any opposed? Vote on Comm. 13.38: The motion to close file on Comm. 13.38 was carried by Filed the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR KANEALI`I-KLEINFELDER: Next item,please. Comm. 13.39: REPORT OF CHANGE ORDERS AUTHORIZED: JUNE 1 — 15, 2024 From Finance Director Diane Nakagawa, dated June 25, 2024, transmitting the above report pursuant to Section 2-12.3 of the Hawaii County Code. Motion to Close File: Ms. Lee Loy moved to close file on Comm. 13.39. Seconded by Ms. Galimba. CHR KANEALI`I-KLEINFELDER: Discussion on the measure? Council Member Kimball, go ahead. MS. KIMBALL: I would just like to disclose that two of those change orders are with Fleming and Associates, which is my husband's architecture firm, which I am reflected as a joint owner of, but I have no purview of the day-to-day operations. Since we are just approving a report and not the expense itself, I do not feel conflicted, but I did want to disclose. CHR KANEALI`I-KLEINFELDER: Council Members, discussion? Okay, I have a couple questions, Ms. Nakagawa, if you're available. MS. NAKAGAWA: Yes, of course. CHR KANEALI`I-KLEINFELDER: Thank you, Ma'am. Good to see you, Director. The first one on the list, the $900,000 total for Hawaii County Zoning and Subdivision Code amendments. Do you know what that's for? Page 4 FC-40 July 23,2024 MS. NAKAGAWA: Council Member, I believe you're looking at the previous Change Order that we just went through. CHR KANEALI`I-KLEINFELDER: Sorry, I'm on the wrong one. No, completely. My apologies, Director, I will follow-up with you later regarding that. MS. NAKAGAWA: We can provide that as well. CHR KANEALI`I-KLEINFELDER: That's okay, we'll follow-up later then, on the correct one. The Emergency Call Center, I see a few deductions, and I think I want to give some credit to Ms. Julann (Sonomura) for getting those done and getting those change orders submitted to a lesser extent and saving the County a little bit of funds. Is that correct? MS. NAKAGAWA: Council Member, we do have Public Works here as well. So, I'll turn it over to Kelsey (Kalua-Lewis). CHR KANEALI`I-KLEINFELDER: Okay. We have the Director here also. I'm open to anyone, but I'll take the Director, in preference. (Note: At this time, Public Works Director Stephen Pause, came forward to address the members of the Committee.) MR. PAUSE: Steve Pause, Director of Public Works. I'll defer to Ms. Kelsey Kalua-Lewis, our Business Manager. She can start and I'll be the closer. Thanks, Kelsey. (Note: At this time, Public Works Business Manager Kelsey Kalua- Lewis, came forward to address the members of the Committee.) MS. KALUA-LEWIS: Thank you. Hi, Kelsey Kalua-Lewis, Business Manager of Public Works. I do want to give credit to Julann, you know. We're starting to kind of wrap up this Emergency Call Center. We had a bunch of change orders that kind of—we wanted to get done before the fiscal year. And a lot of the deductions you see, there was one that basically, we deducted the allowance for the Motorola system, which was originally in the Hensel Phelps contract, but Civil Defense handles that part. So, moving the money to the correct area so that Motorola can continue with the communications on the call center. I think maybe Steve would have more on that$21,000. I think that was more project work that we had deducted. CHR KANEALI`I-KLEINFELDER: Thank you, Kelsey. MR. PAUSE: Yes, there was a series of change orders, if you will, that were backing out costs that were previously planned for in the budget. So, that's what Page 5 FC-40 July 23,2024 this is. And as Keley also suggested, Julann's team are doing a wonderful job, as we're getting closer to finishing this up. I think that last time I was in front of you when I got asked the question, we're on track to sort of mid to late August of wrapping up the building portion. Completion will continue for like another six to eight weeks. There's cameras, there's IT (Information Technology) equipment, there's communication equipment. But we're actually seeing the light at the end of the tunnel. And as Kelsy said, a lot of this stuff is just kind of trying to clean up things. There were a number of allowances provided in the contract. And as we had the contractor go forward with those tasks, there's money available. I hesitate to say left over, but the complete use of what was originally allowed is not necessary. So, so we're trying to clean this up. But yes, Julann and team, one last thing is that we're meeting with Hensel Phelps weekly, and we're on track again to get this thing wrapped up. CHR KANEALI`I-KLEINFELDER: Thank you very much. Thank you, Department of Public Works and Finance. Seeing no further discussion, we do have the motion is on the floor to close file on Communication 13.39. All in favor? Any opposed? Vote on Comm. 13.39: The motion to close file on Comm. 13.39 was carried by Filed the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR KANEALI`I-KLEINFELDER: Communication 231.7, please. Comm. 231.7: FOURTH QUARTER REPORT OF PERSONS EMPLOYED UNDER A CONTRACT FOR LESS THAN 90 DAYS: APRIL 1 —JUNE 30, 2024 From Human Resources Director Sommer J. Tokihiro, dated July 5, 2024, transmitting the above report pursuant to Section 2-12.5 of the Hawaii County Code. Motion to Close File: Ms. Lee Loy moved to close file on Comm. 231.7. Seconded by Ms. Galimba. CHR KANEALI`I-KLEINFELDER: Discussion on the communication? Hearing and seeing none, the motion is on the floor to close file on Communication 231.7. All in favor? Any opposed? Page 6 FC-40 July 23,2024 Vote on Comm. 231.7: The motion to close file on Comm. 231.7 was carried by Filed the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR KANEALI`I-KLEINFELDER: Resolution 559-24, please. ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Res. 559-24: AUTHORIZES THE HAWAII FIRE DEPARTMENT TO AWARD FUNDS TO HAWAII WILDFIRE MANAGEMENT ORGANIZATION Pursuant to Chapter 2, Article 25, Section 2-139(a)(3)(A), Hawaii County Code, the Hawaii Fire Department is providing a grant of$33,200 to the Hawaii Wildfire Management Organization to be used towards Phase 1 of the "Community Fuels Reduction and Defensible Space"project. Reference: Comm. 936 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Motion to Approve: Ms. Galimba moved to recommend adoption of Res. 559-24. Seconded by Ms. Lee Loy. CHR KANEALI`I-KLEINFELDER: Discussion, Council Members? We have our Fire Department in the Hilo Chambers. I'll ask if the Fire Department wanted to give us a brief overview, and then we'll go to questions from the Council. Before you begin, please introduce yourself for the record. Thank you for being here today. (Note: At this time, Fire Chief Kazuo Todd, came forward to address the members of the Committee.) MR. TODD: Hawaii Fire Department Fire Chief Kazuo Todd. So, this particular set of funds is Phase 1 of a two-phase project, it's a little over a half-a-millions dollars that's going to go into field reduction work being done in the area around Mana Road and actually stems from our post-fire grants that occurred because we essentially processed a FMAG (Fire Management Assistant Grant). So, when the disaster occurred several years ago for our Mana Road fire, we applied for it and received FMAG grant which helped us cover some of the costs Page 7 FC-40 July 23,2024 of response. And after that's done, there's usually HMGP (Hazard Mitigation Grant Program) fuel mitigation money available based on the cost of the fire and everything else, which we applied for and received. Then that money is going to be basically sent out to HWMO (Hawai`i Wildfire Management Organization) to hire crews that will go on to fuel reductions, such as using chainsaws to limb trees or reduce brush or other things in that region basically. CHR KANEALI`I-KLEINFELDER: Thank you very much, Chief, appreciate your time. Council Members? Council Member Inaba. MR. INABA: Yeah, Chief Todd, this is the first grant, I believe that we are taking up since discussing our grant procedures. So, I want to ask Corporation Counsel if you could give us some advice on how we should be proceeding with these types of grant requests to keep giving money out? How much information do we need to ensure that the grant is, in fact, in line with the Code and our grant procedures? (Note: At this time, Corporation Counsel Elizabeth Strance, came forward to address the members of the Committee.) MS. STRANCE: Thank you, Elizabeth Strance, Corporation Counsel. I haven't evaluated the resolution with that lens. And it's not clear to me whether the funds for this project are County General Funds. I'll need to talk to the Chief a little bit about that. MR. INABA: Chief Todd, are these coming out of General Funds? MR. TODD: No, they're Federal funds. MS. STRANCE: So, these provisions as the County Code address the use of County General Funds. So, I'd like to take a little bit of a look at it because we might need to amend the resolution if they're not using General Funds. MR. INABA: Okay. And I think we maybe need to evaluate it based on the current language, because I don't think that the current language and the Code is specific to County General Funds. That's the language we're going to be including. So, Chief Todd, I'm in support of the resolution obviously, but we're working towards reviewing a grant request and the awarding of grant funding more closely across all departments and giving with their own contingency relief funds. So, if you can get that information, Corporation Counsel prior to the next reading just to make sure we're doing our job according to the Code. MS. STRANCE: Okay, I'll follow-up with the department and take another look at it. MR. INABA: Thank you. Chair, I yield. Page 8 FC-40 July 23,2024 CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Evans. MS. EVANS: Yes, I mean, Betsy, if you want to stay in that seat, thank you. Yeah, I'm just curious because it is a grant in excess of$25,000, is that put out for a Request for Proposal in a way? I noticed the Hawaii Wildfire Management Organization is amazing, and you know, they're so capable. But I was wondering if when you put out for a grant, do you have to open it up for other people to apply for the grant? Because I've got other community members that are real concerned about fuel mitigation. MR. TODD: So, in this particular grant, HWMO and the Department of Forest Wildlife and us usually sit down when we're looking at a lot of these Federal grants. In this particular case, we've written a grant with them basically as the management of the grant. So, they're going to hire a variety of subcontractors, and the money essentially is sort of a pass-through for getting work done. The Hawaii Fire Department doesn't have the capacity to assign some of our staff to go and manage the hiring of contractors; putting together the different plans and everything else. At least for the last 20 years or so, HWMO has been the primary group on the island as a nonprofit that kind of has put our Community Wildfire Protection Plans and generated all the potential work that could be done. Then when we're post-disaster, we work with them to kind of take a look at the Community Wildfire Protection Plans and figure out what kind of projects would fit within the grants' parameters and then apply for that. Then when the money comes through in this particular case, even for them, while there is management fees because they've got to process a lot of the paperwork and whatnot. The money is passed on from them into the local community to different groups to go and do work and get land cleared or remediate issues or harden structures or whatever the grant might be for. So, two years ago when we sat down with HWMO and we were trying to figure this out, that's how that was designed, is that they would do the management portion of it. As for the procurement and everything else, maybe we've got to sit down the Corp. Counsel and have a deeper discussion on how that works and everything. But all I can say is this is how we've been doing it for a long time. MS. EVANS: So, to follow-up, this was Mana Road. You were able to get the money because of Mana Road fire. How about the August 8h fire, are you going through the same process? So, we should see something coming in front of us, so that there can be fuel reduction, defensible space from the August 8h fire? MR. TODD: So, the August 8t'fire, essentially an FMAG was generated for that. There is a $1.8 million under HMGP FR (Federal Regulations) and we Page 9 FC-40 July 23,2024 submitted two NOI's (Notice of Intent) a month or two ago. One was for signage for warning people, and the other one I can't remember off the top of my head. Today, I was talking to Chief Okinaka, and the HMGP Disaster Recovery portion of that which is another pool of money, which we're not the only department that applies for. The previous plan for our station's generator and automatic transfer switch and power redundancy project which had been on our previous HMGP actually from the Mana Road fire or maybe the lava fire. Whenever there's a major disaster and it's declared, oftentimes there's Federal money that can be used afterwards if you apply for it. So, we applied for money to do some remediation of our stations because for continuity of services if the power drops out after a fire, things like that, will need to run off of a generator; and our generators are a bit old. So, I think we're going to be rolling for that project on top of this one at the moment. Then, we've applied for some other projects just this year under the Community Wildfire Defense grants. We'd put in for over $5 million worth of grants for staffing, fuel reduction, Community Wildfire Protection Plans. In the HMGP DR-4724 (Disaster Relief) which the NOI is due on August 1st, so that's about a week away. I don't think we currently have any fuel reduction plans at the moment, if that answers your question. MS. EVANS: It does, and it just taught me that whenever we have those disasters, afterwards there's opportunities to apply for grants. And then they come in and assume the questions that came from Council Member Inaba and Corporation Counsel that they'll look at how you award these grants. So, thank you very much. MR. TODD: To go just a step farther, I apologize even within the Fire Department, there's a lot of grants out there and sometimes it's hard to track. I'll talk to Chief Okinaka about potentially working with HWMO. There's only a week left before the NOI is due on the HMGP DR-4724. And maybe we can do that because that will be two to three years from now that pops up. It's not a bad time to do some more fuel reduction. But you know, this is usually me and him and a couple other chief officers in our spare time trying to put together, you know, these pretty long grant applications, because we don't really have anyone else to do it. So, it gets a little complicated at time. So, my apologies. MS. EVANS: Thank you. CHR KANEALI`I-KLEINFELDER: Thank you. Okay, seeing no further discussion, I think we're okay in moving this to Council pending some information from the department and Corporation Counsel. With that we have Page 10 FC-40 July 23,2024 the motion is on the floor. All in favor of forwarding Resolution 559-24 to Council with a favorable recommendation? Any opposed? Vote on Res. 559-24: The motion to recommend adoption of Res. 559-24 was (Approved) carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR KANEALI`I-KLEINFELDER: Motion carries. Resolution 562-24, please. Res. 562-24: AUTHORIZES THE MAYOR TO ENTER INTO A MULTI-YEAR AGREEMENT WITH SP COUNTY OF HAWAII, LLC, TO REPLACE HAWAII COUNTY SHARED-USE ELECTRIC VEHICLES Authorizes the Mayor to enter into a ten-year lease agreement with an approximate monthly cost of$8,357, to replace the County's disposed shared-use electric vehicle fleet with eight new electric vehicles. Reference: Comm. 943 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Motion to Approve: Ms. Lee Loy moved to recommend adoption of Res. 562-24. Seconded by Ms. Galimba. CHR KANEALI`I-KLEINFELDER: There was a request by the department and Corporation Counsel to postpone this item to our next meeting, given some needed name changes within the document. With that, I'll be seeking a motion to postpone. Vote on Motion to: Ms. Kimball moved to postpone Res. 562-24 to Postpone: August 6, 2024. Seconded by Ms. Lee Loy and carried (Approved) by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. Page 11 FC-40 July 23,2024 BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. Bill 174: AMENDS CHAPTER 19, ARTICLE 7, SECTION 19-53, AND ARTICLE 10, SECTION 19-71, OF THE HAWAII COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO REAL PROPERTY TAXES Allows residential properties rented for six months or more to be eligible for the Homeowner tax classification and replaces the term "husband and wife"with ,'married persons". Reference: Comm. 905 Intr. by: Ms. Kagiwada and Ms. Galimba Postponed: June 18, 2024 (Note: There is a motion by Ms. Kagiwada, seconded by Ms. Galimba, to recommend passage of Bill 174 on first reading.) MS. KAGIWADA: Thank you, Chair. So, bringing this back for more discussion. This is a homeowners' benefits bill. Basically. Let's homeowners keep their three homeowners' benefits; it lets them keep their lowest tax rate, the three percent cap on annual real property tax rate and their homeowners' exemption when renting long-term on their primary property. So, as we heard from a couple testifiers today. One, if you're renting a room n your house currently long-term, there's been some confusion, so this is just really to clear that up. And then, two, we wanted to extend it to if you have an Ohana or ADU (Accessory Dwelling Unit) on your primary property, you could rent that long-term as well and not lose all your homeowners' benefits, and that's kind of the newer part. So, one is kind of cleaning up,just clarifying what we already are doing and have, and the other is adding that Ohana-ADU possibility without losing your benefits. So, love to hear from folks, your thoughts on this. And I'll turn it to my co-introducer to see if she has anything to add. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Galimba. MS. GALIMBA: I don't have anything to add, thanks. CHR KANEALI`I-KLEINFELDER: Thank you. Okay. Council Member Kimball. MS. KIMBALL: I think this is an easy one to support, you know, especially in light of what we're talking about with Housing and encouraging more housing; providing long-term housing over transient accommodations. Our tax policy is one of the most significant levers that we have. And so, I'm supportive of these Page 12 FC-40 July 23,2024 amendments, and mahalo to Council Members Kagiwada and Galimba for putting it forward. Thank you. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Inaba. MR. INABA: Yes. The first change in this bill says, and currently it reads, "The homeowner class is exclusively reserved for properties which are used as the owner's principal residence." And this bill removes the word "exclusively." I'm wondering if the change is needed, and maybe if we can hear from Real Property Tax. Because what other propertiesI think the intention of this bill is only to be affecting properties where the property owner lives. So, I'm not sure what this specific change accomplishes. (Note: At this time, Real Property Tax Administrator Lisa Miura, came forward to address the members of the Committee.) MS. MIURA: Thank you. Lisa Miura, Real Property Tax Administrator. Keita Jo, Assistant Real Property Tax Administrator is here as well, in case there's any questions in regard to other areas of the bill as it comes up. So the homeowner class, I believe the removal of the word "exclusively" because there are some areas following it that says, "Shall not qualify." And the question may come up, what is commercial or income-producing purposes. And if it's exclusive use of the Homeowner Class, it is a little bit in conflict if you're going to allow for long-term rental. So, if the bill passes, then the word, "exclusive" should not be there. MR. INABA: Maybe I'm reading it differently, because I know we had made a change similar in a previous bill affecting this Section. But this as it currently reads in the Code saying, "The homeowner class is exclusively reserved." It's not for properties which are exclusively used as the owner's principal residence, there's a difference I think than what we took out before, which is maybe what the intention of this is. But I want to make sure that there's not other properties we might be looping in that could potentially take part in this homeowner class without the owner having their principal residence there. MS. MIURA: I see what you're saying. As staff change and Property Tax Administrators change, including Corp. Counsel attorneys, I think the issue we're running across is the interpretation may not be what the original intent is. And I'm not a grammar expert, so, I'm not sure if by removing that word, "exclusive,"would open it up to anyone else. We're taking it that the homeowner tax class, you have to apply still for the homeowner exemption to qualify, and the homeowner must be on property. I understood removing the word, "exclusive,"was just to allow for other rentals like the long-term rental and the Ag tax class to be included on there. But I don't know if Corp. Counsel wants to weigh in on that. Page 13 FC-40 July 23,2024 MR. INABA: I'm no grammar expert either. So, maybe we'll have Corporation Counsel come forward. I just want to make sure we're not opening a loophole here when we kind of took up this topic in a previous bill. So, the way we're removing the word, "exclusively," on the first page, Corporation Counsel. (Note: At this time, Corporation Counsel Elizabeth Strance, came forward to address the members of the Committee.) MS. STRANCE: Good afternoon, Elizabeth Strance, Corporation Counsel. I'll have to kind of think this one through. I hate to think and talk at the same time. MR. INABA: Okay, I'll going to let you have a moment to talk, then I have other questions. So, on the second pageI keep looking back and forth between the first and second pages. So, we're saying via this bill that the homeowner class is reserved for properties where the homeowner has their principal residence and uses that don't qualify as homeowner are properties that are used for residential rental purposes for a term not longer than six months. So, if they rent for seven months, we're not allowing them to be a part of the homeowner class. Is that right? Maybe, Council Member Kagiwada. I may be reading it wrong. MS. KAGIWADA: No, the wording is a little funny, but this I what was suggested to us from LRB (Legislative Research Branch). This says, "Real property that is used for residential rental purposes for a term not longer than six months." So, those are not allowed. So, that means a term not longer than six months. Does that make sense? MR. INABA: Okay, I think I'm understanding the concept, and maybe we just have to wordsmith it. MS. KAGIWADA: Six months or longer is allowed. MR. INABA: So, this wouldn't, because it's Section prohibiting, then maybe it would be for a term less than six months. I think that might be in the same concept. MS. KAGIWADA: Less than, instead of not longer than. MR. INABA: Okay. And then with that, I guess I'm going to ask Real Property Tax right now, we have the affordable rental class. I'm just wondering what this does, because if we pass this, then why would anybody rent at affordable rates because they can rent at market rate for six months and still get all the benefits of the homeowner class. MS. MIURA: Correct. So, there's 62 parcels right now that are in the Homeowner Exemption and Affordable Rental Program. And when we were reviewing and spot-checking, not every single one, although the monthly Page 14 FC-40 July 23,2024 allowable rate for affordable rental went up quite a bit in the last several years, they did not increase the monthly rates to their tenants. So, I couldn't say without calling each one of them, if they would raise the rate. You know, I'm definitely not a housing expert, but I think there's situations where you do have individuals renting already at an affordable rate, but they don't qualify for the program because one, we can't prove that they're permitted and that would include homes built in the 1930's. We were not keeping records in Real Property Tax or the Finance Department at the time, even when it was under the territory of permits back that far. So, part of the issue was when the come forward to file the affordable rental, we can't prove that they're legally permitted, which is a requirement of the Affordable Rental Program. MR. INABA: Okay. Thank you for that. I think I see what we're trying to maybe get at. I just have to kind of think how that plays out with the program that we currently have. But thank you, RPT and Corporation Counsel. Circling back to you on our first page if not we can take it up when you're ready. MS. STRANCE: Thank you. So, you asked the hypothetical question about whether or not we're creating some sort of loophole, and it's hard to guess what somebody might do down the road. There is some protection to the County around the use of the property because the owner has to use the property as a principal residence. As you know, that's a fairly restrictive test to meet. But it would leave open, I guess, if there were options for a person in a homeowner class who uses their home as a principal residence and then otherwise qualifies for something else, then that potentiality is there because you haven't said they can't use it for anything else. This bill is actually opening up or describing opportunities where you might maintain your homeowner class principal residence and still not become ineligible for something else. But we would have to sit down and consider what some of those might be. But the intention is that to have this class, the owner has to use the property as a principal residence. That is a fairly restrictive definition. MR. INABA: Okay. Thank you. And I guess I'll just kind of end with the idea as if we were maybe misinterpreting what this wording meant, then we can stop misinterpreting and leave it alone. But if it's actually going to prevent us from carrying out what the intention of the bill is, then let's change it. We'll just try not to change what's not broken if it really isn't broken. Then I guess my last question, sorry, RPT, for this bill do we have an understanding of how many people might be jumping over, what the financial impact to the County might be, for those who are currently let's say, residential Page 15 FC-40 July 23,2024 rate; tax payers who do rent currently for a year at a time, they'd be jumping over to this homeowner rate potentially if they live there? MS. MIURA: We have no idea. MR. INABA: Okay, thank you. Chair, I yield. CHR KANEALI`I-KLEINFELDER: Thank you. Okay, seeing no discussion, MS. KAGIWADA: I'll just, may I Chair? I'll just go back because this was asked before, I think of Keita Jo, but I will ask it of you, Administrator. Will this make life harder or easier for you guys over there? MS. MIURA: Well, if I could clarify a couple other things in the bill, it might make it easier. I will state that I know there's been a lot of discussion on Rules, and this is one area where we are trying to draft rules. So, we do need the clarification of what the intent and will of the County Council is. As we heard from the testifiers, there has been confusion and different interpretations through the years. And we do need to have that cleared up. And when this part of the Code was codified over 40 years ago, I'm not sure the housing issue was taken under consideration when they specifically excluded any rental activity. Now, with all of the short-term rentals and long-term housing issues, I just think it's a good time to revisit what the Council's intent is for the constituents because that's not something Real Property Tax can just interpret. Based on how this Code goes, that will help us to determine how to write up our rules. So, in that respect, one of the harder areas of enforcement is to know when there is somebody doing a long-term rental because either they have to come clean like the testifiers did and be honest when they do their applications or usually whenever there's complaints. So, it's not exactly fair to everybody else who is trying to do it, maybe not so honestly or not even understanding or realizing it. I think we're taking it right now that Council's position is on short-term. So, there's no short-term allowed, and appears from this bill that it would continue to be no short-term, but long-term is being opened up. But on the enforcement side, that would be easier. It is up to Council whether you allow it for everything on the property. So, right now, interpretation is, if it's within the same dwelling, then the long-term is okay. But what happens when it's a structure, and this is where the problems come in; or an employee interprets that to be a separate unit within the dwelling, or it's attached to, you know, you have the house, a carport, and then another unit. And it's attached by that, or you have a pool or whatever else was done, or a separate dwelling. So, I believe that would help us to clear up what is going on here. Page 16 FC-40 July 23,2024 MS. KAGIWADA: If I may, Chair. I still have the floor, okay. I would just say for me, and my colleague can chime in here, but definitely the intent is to, you know, to encourage and allow long-term rentals on private property of a principal home and to not penalize people for doing that or confuse people for doing that either. I yield. CHR KANEALI`I-KLEINFELDER: Council Member Galimba. MS. GALIMBA: Thank you. Yes, that is our intent in this bill, is to mostly clarify from what I understand what is sort of ambiguous in our current Code. But the intent is to clarify on the side of encouraging folks; not encouraging, but not discouraging people to provide long-term rentals because the need is so dire. Thanks. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Evans. MS. EVANS: So, is it implied that the homeowner lives on the property, and then part of it would be rented long-term, and is that really clear? That everybody understands that is an owner-occupied property—have to be owner- occupied, then they can rent out part of their property. Then, with the whole entire property that they own fall under the homeowner's class. MS. MIURA: Is your question, if we understand that this bill would allow for any property where the homeowner's getting an exemption? It doesn't matter what type of long-term rental they're doing, that the whole property would get the homeowner tax class. That's what our thought is on that right now. MS. EVANS: Okay, but the homeowner has to be—they have to be on property. It's like Short-Term Vacation Rental. It's hosted or basically they live there. MS. MIURA: Right. So, for our office, we don't look at hosted. If it's hosted, they would not get the homeowner tax class, because that means they're renting a room or anything on that property for less than 180 days, which this bill currently still excludes, although the wording is odd. MS. EVANS: Okay. And so, you know, we have these AgI'm just thinking of the different classes versus residential. So, this would apply even on Ag? MS. MIURA: This would not apply towards the Ag as I understand it because if the bill that County Council passed last year, if it's the homeowner and they're doing active Agricultural use, they qualify for the homeowner tax class. This would apply to the testifier earlier that stated she's still doing active Ag, living on the property and doing two long-term rentals. So, right now, she does not qualify for the homeowner tax class because of the rental activity. So, in the case you're presenting to us, that's when somebody would qualify. Page 17 FC-40 July 23,2024 MS. EVANS: Even if it's Ag property? MS. MIURA: Correct. The Council changed that last year with the slew of other bills. MS. EVANS: Okay, yes. Thank you. CHR KANEALI`I-KLEINFELDER: Thank you. Okay, Director Miura, Administrator. This bill that we're looking at was passed in not this bill but this section of the Code was from 40 years ago? The year is right when you said that. MS. MIURA: The tax classification 40 years ago was created when we took it over from the Territory of the State. But you guys, Council has been updating parts of it through the years. CHR KANEALI`I-KLEINFELDER: For Section 2, the $50,000 for the value of the property exemption, is that still an appropriate amount or is that 40-years- old? MS. MIURA: That same Section 1971, a different part of the Code. You guys updated that several years ago but then increased the exemption amount for 80 and plus last year. CHR KANEALI`I-KLEINFELDER: Okay, good. That was my question. Okay, thank you. Motion is on the floor to forward Bill 174 to Council with a favorable recommendation, all in favor? Any opposed? Vote on Bill 174: The motion to recommend passage of Bill 174 on first (Approved) reading was carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR KANEALI`I-KLEINFELDER: Thank you very much. Bill 180,please. Actually, Mr. Clerk, sorry, I'm going to yield the Chair. This is my bill coming up that I need to speak on. So, let the record reflect, so it is 2:20 p.m. Council Member Evans, you are the Chair. Thank you. Relinquish Chair: At this time, the Chair relinquished the chair to Vice Chair Evans. ACTING CHR. EVANS: Thank you. Mr. Clerk. Page 18 FC-40 July 23,2024 Bill 180: AMENDS ORDINANCE NO. 24-33, AS AMENDED, RELATING TO PUBLIC IMPROVEMENTS AND FINANCING THEREOF FOR THE FISCAL YEAR JULY 1, 2024, TO JUNE 30, 2025 Adds the Police Department Hawaii County Morgue project($1.5 million)to the Capital Budget. Funds for this project shall be provided from General Obligation Bonds, Capital Projects Fund—Fund Balance and/or other Sources. Reference: Comm. 930 Intr. by: Mr. Kaneali`i-Kleinfelder Motion to Approve: Mr. Kaneali`i-Kleinfelder moved to recommend the passage of Bill 180 on first reading. Seconded by Ms. Galimba. ACTING CHR. EVANS: Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you, Council Member Evans. For the body, I attended the Police Commission meeting a few weeks ago, and in the meeting, I overheard our Police Chief explain some recent Rule changes that had happened and the stress it was about to cause the department. This is the response from my office and in coordination with both the department and the Administration. We do have someone from our Police Department joining us today, and it looks like Corporation Counsel. If you could provide us a little background on the project and why this is important, and then I'll fill in any gaps that may exist when you're done. (Note: At this time, Hawaii Police Department Major Sherry Bird, came forward to address the members of the Committee.) MS. BIRD: Good afternoon, Major Bird with Hawaii Police Department (HPD). I'll give you a little background on this. Earlier this year in April, staff with the Hilo Benioff Medical Center met with the Police Department staff and informed us that as early as September of this year, they are moving towards no longer accepting decedents who pass away outside of their facility. The reasons that they explained is that their capacity of their chillers is diminishing. Obviously, the population has increased and so has the volume of individuals who's come into the morgue. And it's common that up to 30 individuals are stored in the morgue in a space that's designed for 15. And again, these are individuals who passed while they were patients in the hospital, and those who passed outside of the hospital those bodies essentially are HPD bodies. I did want to acknowledge that staff did indicate that their willingness to work pass the September goal date, I guess, if we could demonstrate that there is a plan moving forward towards a long-term solution. Page 19 FC-40 July 23,2024 So, this information was presented to Administration and keeping September 24 as our goal timeframe, it was decided to move forward with establishing a temporary morgue space with a long-term goal of establishing a permanent morgue space. So, for the temporary space, we looked at you know, available locations in Hilo that would be best for our purpose. And I just want to acknowledge that this is a sensitive subject and, you know, everybody that we deal with is treated with dignity and respect. We decided to work towards using a portion of the property that the new Emergency Operation Center is being constructed on. There is a portion of the property off on the side that's away from the primary operational side. It wasn't really designated for any usable purpose, so, that's the area that we're focusing on, and currently that's with a consulting company. So, simultaneous to that, Kona Community Hospital changed out their laboratory vendors. So in those conversations, as we're trying to work through that process, you know, they also mentioned that the volume of bodies in their morgue is 100 percent plus over capacity, and their morgue space is designed for six to eight bodies. So, this was something that we needed to look at as well. One difference at Kona Hospital is that they had an additional container that was acquired during the pandemic time in preparation,you know, for more bodies coming into the hospital. So, they have that additional storage space available at that hospital. For that, a container was initially with Civil Defense. HPD has since acquired that. So, it's in our inventory basically. We're also working with finalizing the ground lease and morgue space agreements with Kona Hospital where we will rent out the ground space for that container, and that container will be used for HPD bodies. Then we'll rent the autopsy suite so that the laboratory vendor can do the autopsies. Just for information, by statute, the Chief of Police for Hawaii, Kauai, and Maui counties is the coroner. And he can designate the deputy coroner, which is a designated that our sworn officers have. Honolulu is a little different—well not different in that they have their own coroner within the Medical Examiner's Office and not with the Police Department. Just talking about stats for the last three calendar years, HPD bodies average about 654. I mean, in my opinion, there's a great need for a permanent morgue on our island, and I'm here for any questions. MR. KANEALI`I-KLEINFELDER: Thank you very much. That was very informative. That really sums up what I heard from Chief Moszkowicz during the discussion during the Police Commission. I think for my counterparts here, the importance of this has been highlighted. The reality is we have I think a growing population and we have more there's no nice way to say it but, we Page 20 FC-40 July 23,2024 need more space for more bodies as we have them coming in. And we need to be able to hold them safely and make sure people are being dealt with in a good way. With that, understanding we are looking for temporary spaces right now, which I think is a stopgap measure. We need to be looking at long-term fiscal responsibility and having a space where we can have a County morgue to house these bodies as they come in, and therefore, the budget amendment. Is there anything else that Corporation Counsel would like to add before I switch over to Council discussion? (Note: At this time, Deputy Corporation Counsel Dakota"Cody" Frenz, came forward to address the members of the Committee.) MS. FRENZ: Good afternoon, Deputy Corporation Counsel Cody Frenz, newly assigned attorney for the Police Department. I don't have any additional information. I think Major Bird did a good job of covering all of the many moving parts for this current dilemma. But I am available for any questions any Council Member may have. Thank you. MR. KANEALI`I-KLEINFELDER: Thank you, Cody Frenz. Chair, I yield. ACTING CHR. EVANS: Thank you. Member Kagiwada. MS. KAGIWADA: Thank you. So,just to clarify, this funding is for starting the search for the permanent morgue or this is funding for the temporary, if I may ask of the maker? MR. KANEALI`I-KLEINFELDER: Council Member Kagiwada, this is for the beginning process of finding permanent space for a County morgue for our County. MS. KAGIWADA: Excellent. Thank you, yeah, and such a need. I had the privilege of sitting next to Major Bird at a training we were in, and we did even talk about this then. So, I know it's a huge need and very supportive. Thank you for bringing this forward. ACTING CHR. EVANS: Thank you. Any other questions? Seeing none, we have a motion on the floor, all in favor? Oh, excuse me, yes, Member Kaneali`i- Kleinfelder. MR. KANEALI`I-KLEINFELDER: I need to say this, too. Major Bird, thank you for being here today. I have a friend in your department, and he's been bugging me for this for about five years. And I've brought it up and brought it up, and I think to see it actually getting to the point of, hey, we've got to do this. I really need to give him some credit because he saw this coming for a long time, Page 21 FC-40 July 23,2024 and he's been asking and asking. So, I'm really happy so see this move forward because this is a need like Council Member Kagiwada said. So, thank you for your support. I look forward to seeing this move forward. Mahalo. ACTING CHR. EVANS: Okay. We have a motion on the floor, all in favor? Vote on Bill 180: The motion to recommend passage of Bill 180 on first (Approved) reading was carried by the following voice vote: Ayes: Committee Members Galimba, Inaba, Kagiwada, Kaneali`i-Kleinfelder, Kierkiewicz, Kimball, Lee Loy, Villegas, and Acting Chair Evans —9. Noes: None. Absent: None. Excused: None. ACTING CHR. EVANS: I yield the Chair at 2:30 p.m. Relinquish Chair: At this time, Acting Chair Evans relinquished the chair to Chair Kaneali`i-Kleinfelder. CHR KANEALI`I-KLEINFELDER: Thank you, Council Member Evans. Please let the record reflect I have assumed the Chair at 2:30 p.m. Mr. Clerk, we're on Bill 182,please proceed. Bill 182: AMENDS CHAPTER 24, ARTICLE 4, SECTION 24-17 AND SECTION 24-19, OF THE HAWAII COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO AN EXEMPTION FROM CERTAIN MOTOR VEHICLE TAXES AND FEES FOR VEHICLES USED BY POLICE OFFICERS IN THEIR OFFICIAL DUTIES Seeks to exempt motor vehicles owned or leased for twelve months or longer by the County and County-subsidized motor vehicles from motor vehicle taxes and certain vehicle registration fees. Reference: Comm. 940 Intr. by: Ms. Kimball Motion to Approve: Ms. Kimball moved to recommend the passage of Bill 182 on first reading. Seconded by Mr. Inaba. CHR KANEALI`I-KLEINFELDER: Council Member Kimball, go ahead. MS. KIMBALL: Yes, thank you. This is a bill that's being brought forward at the request of the Police Chief and the department with the recommendation of Corporation Counsel with respect to kind of a housekeeping alignment between Hawaii Revised Statutes and our fees associated with vehicle ownership. It would exempt vehicles from these taxes and fees with respect to those that are Page 22 FC-40 July 23,2024 used by police officers in their official duties. If they owned it for any length of time or leased it for 12 months. I did have a brief conversation with Deputy Cody Frenz in the back there. But I think we need a couple comments in there to clarify what the intent, and I want to make sure that's on the record now is that, owned for any period of time or leased for 12 months. So, those should be viewed as two separate clauses, not owned for 12 months. With that, I hope to have everybody's support. Cody is here too to answer any questions. I don't know if there's anybody from the department available. I know Chief is in training, so, he's not here. But I guess Major Bird is going to be available for this one as well. Anyway, I want to thank our friends at HPD, and ask my colleagues to support this amendment. Thank you. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Kagiwada, go ahead. MS. KAGIWADA: Thank you, Chair. Happy to support. Just to question, and I don't know who this is for. If it's for Deputy Corporation Counsel Frenz or Corporation Counsel Judge Strance. But just to clarify going forward, are there things that make the usage of the cars by HPD different than say, other County departments that may use personal vehicles for business reasons? I'm just wondering if this is going to open up everybody that uses their cars for County business wanting this, or is there something special here? Maybe Deputy Corporation Counsel Frenz, if you could take a stab at that? MR. FRENZ: Sure, Deputy Corporation Counsel Cody Frenz on behalf of the Police Department. I've only been newly assigned to the Police Department for about a week now, so I wasn't a part of the prior work, and there's been a lot of work. And we also,just for the record, we have two amazing friends from VRL (Vehicle Registration and Licensing) here in the event there are additional questions. But my understanding, when you look at the HRS (Hawai`i Revised Statutes) right, as it's currently in place. It's specific for the Police Department and their functions. So, I do believe that I think it would be a little dangerous to open it up and have it be sort of a free-for-all. This has a very specific exemption purpose already in place, and we're just trying to ensure that where there may be a disconnect or a different interpretation on the County side, that we fine tune and provide a little clarity within our Code to ensure that we're all on the same page and we're tracking in line with the HRS. So, this would be specific to Police. Page 23 FC-40 July 23,2024 MS. KAGIWADA: Thank you so much. I see Judge Strance may have something to add. (Note: At this time, Corporation Counsel Elizabeth Strance, came forward to address the members of the Committee.) MS. STRANCE: Thank you, Elizabeth Strance, Corporation Counsel. Just to kind of tag on to what Ms. Frenz was talking about. So, there isn't a loophole for anybody who might use their car for work. It's very specific and bargained for provisions regarding subsidized use of cars. So, that's a fairly narrow set of County employees, and I don't want to say, exclusively police officers, because I know we have an investigator in our office who has a subsidized vehicle. And I believe the Prosecutor's Office may have subsidized vehicles. So, we'll have to check into that, whether it would be extended broader than just to the police officers. It's tied into a specific State statute, and so, my understanding the intention of this bill is to make clear that the County is following the State statute and has that cross-reference. MS. KAGIWADA: Okay, thank you so much. That makes it a little clearer. Like I said, I'm happy to support. I think it's probably the way to go. Thank you, Chair. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Villegas. MS. VILLEGAS: I had one quick question. Yes, for a number of different things we have asked for, and I'm not asking for an economic impact statement or survey on this, but I just wondered is there someone in Hilo who could tell us about how this would affect Department of Finance or any monies coming in if it would be significant or if this is kind of a remedial adjustment. At this point, I still think the benefit outweighs any loss of funding, but just wondering. MS. NAKAGAWA: Good afternoon, again, Diane Nakagawa, Finance Department. Also, Naomi O'Dell, our Vehicle Registration and Licensing Administrator. As described earlier, this item is really a housekeeping item that we're taking a look at. We appreciate the Chief in the Police Department for working with the Finance Department, as well as our Council offices to really get this. We are following HRS. This is just to get this clarification into Code, so that what we're doing in practice is actually what it said. So, there will actually be no impact as this is what our Vehicle Registration and Licensing have been doing in practice. MS. VILLEGAS: Great. Thank you so much for clarifying that. With that, I yield. Page 24 FC-40 July 23,2024 CHR. KANEALI`I-KLEINFELDER: Okay. Seeing no further discussion, Council Member Kimball thank you very much for bringing this forward. With that, we have the motion is on the floor to forward Bill 182 to Council with a favorable recommendation, all in favor? Any opposed? Vote on Bill 182: The motion to recommend passage of Bill 182 on first (Approved) reading was carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball,Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR. KANEALI`I-KLEINF'LLDER: That brings us to the end of our agenda. ADJOURN- There being no further business, Chair Kaneali`i-Kleinfelder adjourned MENT: the meeting at 2:39 p.m. We're adjourned. Thank you. Approved: B/ 21 ) zL Mr. Matt aneali`i-Kleinfelder, air (Date) Finance Co 3 .ttee MK/dt Page 25