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HomeMy WebLinkAboutMIN FC 2024/09/03 (2022-2024)Committee on Finance 43rl Session Hawai'i County Building 25 Aupuni Street Hilo, Hawaii 96720 September 3, 2024 CALL TO The regular meeting of the Committee on Finance was called to order at ORDER: 2:31 p.m., in the Council Chambers, Hilo, by Mr. Kdneali'i-Kleinfelder, Chair. I-melawwo Present: Mr. Matt Kdneali'i-Kleinfelder, Chair Ms. Cindy Evans, Vice Chair Mr. Holeka Goro Inaba, Member (came in later) Ms. Jenn Kagiwada, Member Ms. Ashley L. Kierkiewicz, Member Ms. Heather L. Kimball, Member Ms. Rebecca Villegas, Member Absent & Excused: Ms. Michelle M. Galimba, Member Ms. Susan L. K. Lee Loy, 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.) COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. Comm. 12.38: REPORT OF FUND TRANSFERS AUTHORIZED: JUNE 16 — 30,2024 AND JULY 16 — 31, 2024 From Controller Kay Oshiro, dated August 9, 2024. Vote on Comm. 12.38 (Filed) Ms. Kimball moved to close file on Comm. 12.38. Seconded by Mr. Inaba and was carried by the following voice vote: Ayes: Committee Members Evans, Inaba, Kagiwada, Kierkiewicz, Kimball, Villegas, and Chair Kdneali'i-Kleinfelder — 7. Noes: None. Absent: Committee Members Galimba and Lee Loy — 2. Excused: None. FC-42 September 3, 2024 Comm. 139.4: THIRD QUARTER CLAIMS REPORT: JANUARY I — MARCH 31, 2024 From Claims Investigator/Adjustor Clifford D. Victorine III, dated August 13, 2024, transmitting the above report pursuant to Section 2-9 of the Hawaii County Code. Vote on Comm. 139.4: Ms. Kimball moved to close file on Comm. 139.4. (Filed) Seconded by Mr. Inaba and was carried by the following voice vote: Ayes: Committee Members Evans, Inaba, Kagiwada, Kierkiewicz, Kimball, Villegas, and Chair Kdneali'i-Kleinfelder — 7. Noes: None. Absent: Committee Members Galimba and Lee Loy — 2. Excused: None. Comm. 139.5: FOURTH QUARTER CLAIMS REPORT: APRIL I — JUNE 30,2024 From Claims Investigator/Adjustor Clifford D. Victorine 111, dated August 13, 2024, transmitting the above report pursuant to Section 2-9 of the Hawaii County Code. Motion to Close File: Ms. Kimball moved to close file on Comm. 139.5. Seconded by Mr. Inaba. CHR. KANEALI'l-KLEINFELDER: Discussion on the motion? Council Member Inaba. MR. INABA: Yeah. Just a quick question for the Hawaiian Telcom item. This is going back over two years so just wanting to understand a little bit on the timeline for this one. CHR. KANEALI'l-KLEINFELDER: Please introduce yourself. MR. INABA: Good afternoon, Mr. Victorine. (Note: At this time, Claims Investigator/Adjustor Clifford D. Victorine 111, came forward to address the members of the Committee.) MR. VICTORINE: Good afternoon. Cliff Victorine, Claims Investigator. Corporation Counsel. To get to that question, it really was on their part. They had a collection group that was collected on behalf of them and the information that we needed seems to not be getting back and forth, the correct information I've asked them for; information for Hawaiian Telcom. They want to have a check written to Hawaiian Telcom but sent to them. They just sent us information for them. So, basically, I started jumping in and calling Hawaiian Telcom direct instead of dealing with the collection agency. And even though it took a little Page 2 FC-42 September 3, 2024 while to get done, I finally got in touch with the parent company for Hawaiian Telcom up in Chicago and the head of the, I guess, the security department there was able to work with me. So, it took a while to get through to get to them, but it was their side given us the wrong information continuously even though we'd ask for corrections. MR. INABA: Thank you. And this was in the amount for, what was that, like a replacement or what was the resolution in the end if we're allowed to ask that? MR. VICTORINE: Yeah. That is the basically the replacement value of the pole. MR. INABA: Okay. Thank you so much, Chair. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you, Council Member Inaba. Seeing no further discussion. Thank you for being here today, Mr. Victorine. Motion is on the floor to close file on Comm. 139.5, all in favor? Vote on Comm. 139.5: The motion to close file on Comm. 139.5 was carried by Filed the following voice vote: Ayes: Committee Members Evans, Inaba, Kagiwada, Kierkiewicz, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder — 7. Noes: None. Absent: Committee Members Galimba and Lee Loy — 2. Excused: None. CHR. KANEALI`I-KLEINFELDER: Resolutions, please. ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Res. 593-24: AUTHORIZES THE MAYOR TO ENTER INTO AN AGREEMENT WITH THE STATE OF HAWAI`I DEPARTMENT OF HEALTH Allows for the receipt of $925,000 of federally -derived funds to support opioid remediation activities. Reference: Comm.993 Intr. by: Mr. Kaneali`i-Kleinfelder (B/R) Motion to Approve: Ms. Villegas moved to recommend adoption of Res. 593-24. Seconded by Ms. Kagiwada. CHR. KANEALI`I-KLEINFELDER: Council Member Villegas, you want to say anything? Page 3 FC-42 September 3, 2024 MS. VILLEGAS: Yes. Wow. It's really great to see this coming to fruition. This opportunity was brought to Council during my first term in office and at the time it was, people weren't so sure about it and questioned the viability of there being responsibility with the opioid manufacturers for this epidemic. And in the last six years, we have only seen, unfortunately, that grow now with introduction of fentanyl and the black market use of that drug. But I just want to thank the administration and all those in the legal team that worked closely with the state and federal government to ensure that this money comes to our County. We are in dire need of the resources to help with addiction recovery and a lot of the other extenuating circumstances, just one of them being houselessness that often comes out of addiction. And for the community, I just want to read this because I feel that it is really powerful, and it gives our community an idea of the resources that will be coming our way. "In 2021 and 2022, a serious of settlements were finalized to resolve lawsuits against pharmaceutical companies related to the opioid epidemic. Major distributors and manufacturers agreed to pay billions of dollars as part of a national opioid settlement. Participating states and local governments are expected to receive a total of $26 billion over 18 years. The State of Hawaii anticipates receiving approximately $78 million with the County of Hawai`i's direct share estimated at $2.1 million over the same period of 18 years. The $925,000, is the current balance available to the County of Hawai`i." I am deeply grateful for your continued work. Director Adams, I'm sure this took some continued relationship building and advocating for our County to get this sum, and I look forward to learning how it gets distributed to do the most good for the most people and to mitigate so many of the devasting challenges that our people have gone through. So, this is a mahalo. This is an encouragement to our community, this is gratitude to this Council for voting to participate in this settlement, and thus we are in line to receive these funds and future funds. With that, I yield. CHR. KANEALI`I-KLEINFELDER: Thank you, Council Member Villegas. Council Member Kagiwada, and then I'll go Evans. MS. KAGIWADA: Thanks, Chair. I'm wondering if we can get R&D (Research and Development) up here for a sec. And while they're coming up, I'll also just add my thanks to working on this settlement, funding money, and distributing it. along with Council Member Villegas, you know, I represent one of the areas with one of the biggest homeless populations and also concur that opioid addiction has a huge part in helping us trying to figure out this puzzle. So, thank you for being here. So just for clarification, this is the second payout to our County of these funds. Is it the final payout of the funds or is there more to come? (Note: At this time, Research and Development Director Douglass Adams came forward to address the members of the Committee.) Page 4 FC-42 September 3, 2024 MR. ADAMS: Thank you, Council Member Kagiwada. Doug Adams, Research and Development. There were two different setups in terms of the funds that are coming. The initial was funding that the County had as a part of a settlement. So, money coming to the County for the County's use. This is the state's money that is now being allocated to the County. Confusing to me too, first time I heard it. This is not the only amount that is going to be coming but this is by far the largest amount that will be coming. Over the next 18 years, we anticipate the amounts being more in the $70,000 to $80,000 a year kind of range. MS. KAGIWADA: Okay. Thank you. And are you able or maybe your staff here able to talk a little bit about what the plan is for this funding at this time. MR. ADAMS: Yeah. So, I should first of all say thanks to Council Member Villegas for highlighting my role in this, which was absolutely nothing. So, Yoshi Otake, who is our Community Well-being Specialist in the department and Tim Hansen, who is obviously Executive Assistant to the Mayor, really worked this issue at the state level to make sure that we were identified. You know, they worked with Department of Health, the AG's (Attorney General) office making sure that this MOA (Memorandum of Agreement) is squared away so that we can do what we need to do with that. And with that, I will turn it over to Yoshi. MS. KAGIWADA: Thank you. Just push the button there. There you go. Got it. (Note: At this time, Research and Development Economic Development Specialist Yoshi Otake came forward to address the members of the Committee.) MR. OTAKE: Yoshi Otake, Economic Development Specialist from Research and Development. So, Tim and I are working together to actually gather stakeholders and discuss, you know, the use of the funds. So, we have not determined the best use of the funds, but that conversation is actually ongoing. And this is a big chunk of the funds that's available currently, but we're expecting, you know, less than $100,000 or so annual for the next, at this point, 15 years or so. MS. KAGIWADA: Okay. And does this have to be allocated and spent in a certain amount of time? MR. OTAKE: No. Not necessary. But we are definitely looking into spending it, you know, as soon as we are ready to. MS. KAGIWADA: Okay. Thank you. And is there a process for people that might be interested? Is there an application or is it going to be more the administration kind of working with the community groups to figure out where the administration thinks it'll be best used? Page 5 FC-42 September 3, 2024 MR. OTAKE: I think we're gathering the information right now and then most likely as a result of this conversation, we'll probably be releasing either an RFP (Request for Proposal) or whatever that complies with the County and state. MS. KAGIWADA: Okay. Great. MR.ADAMS: I would just add, it doesn't necessarily need to bean RFP because these are not federal funds. These are settlement funds as is our understanding. RFP's an appropriate way to procure. It's not that it wouldn't necessarily be that, but there isn't the federal funding requirement that we see when we use federal funds. MS. KAGIWADA: Okay. So, there may be some simplified process that you can use. Okay. Thank you so much for answering my questions. I look forward to seeing how we can assist our community with these funds that are direly needed. Thank you both so much. I yield. CHR. KANEALI'l-KLEINFELDER: Thank you. Council Member Evans. MS. EVANS: What stuck out to me is how little $2.1 (million) of $78 million. So, my question is, how did they make a decision about that dollar amount? Was it based on government consensus based on poverty? What were the numbers that the Department of Health (DOH) used? Because I can tell you, we have a lot of poverty. We have a huge amount of domestic violence associated with opioids; we have homeless. There's all kinds of stuff going on the fentanyl taskforce. Just want to know why so little because to me, I want to get as much as we can get of $78 million. MR. ADAMS: Yeah. So, Council Member, the $2.1 million, the decision was made at a national level. In other words, our state I'm sure was involved in negotiations with the national settlement folks. The determination of how the state ended up with $2.1 out of $28 billion is not something we were privy to. MS. EVANS: No. $78 million went to the state. Our County got $2.1 million. MR. OTAKE: So, that $2.1 million is an allocation that the County was able to receive specifically. But for instance, the example from the tax force and that was $478,000 or so. That was the state allocation. So, the state decided that they would like to use their funds for the County. So, $2.1 million is funds that we have more discretion over. But there might be additional funds that the state might be able to also allocate to each county as well. MS. EVANS: So, the decision of how to disburse $78 million is a formula. Potentially, there's a formula that would've divvied up amongst the County and then Department of Health left a bot of money for them and then they will set priorities and then basically we could apply potentially for some of that funding? Page 6 FC-42 September 3, 2024 MR. OTAKE: There was a methodology that they used that I just can tell you exactly what that methodology was. But I believe that in the long term the state might be able to allocate additional funds from their own allocation. MS. EVANS: And the only reason I'm saying this, and don't take it as a negative. It's a positive in the sense that we as a Council can write our state legislature, the senate and the representative, and say, go to the Department of Health, get more money for our County for these different areas. If in fact the Department of Health has discretionarily held back let's say $50 million, say for the priorities of x, y, and z, under these categories of x, y, and z, so then we can tell our state legislature to get "x" amount of that $60 million or $50 million, or whatever, that we want it to come to this County for these specific reasons. So, there might be an opportunity for us to get a whole lot more than the $2.1 million, and that's what I was looking at because $78 million is a lot of money. And I'm just trying to figure out how do we get more of the pot of that money, right? So, that's my thought behind my questioning. MR. ADAMS: We can go back to DOH and find out about whether there is was any particular type of rhyme or rhythm for their decisions. MS. EVANS: Let us fight for more. I think we just fight for our fair share. I'm willing to fight for more. Thank you. CHR. KANEALI`I-KLEINFELDER: You yield, Council Member Evans? MS. EVANS: I'm done. Thanks. CHR. KANEALI`I-KLEINFELDER: Okay. Thank you. Council Member Inaba. MR. INABA: Thank you. Just wanting to make sure I understand the B-52. So, it says the first MOA was associated with the state's directed share of the funds. And then this MOA is associated with the County's directed share of the funds. They're both around opioids. So, just wondering procedurally why are we needing more agreements and are we, for every new type of funding source, or do we not just want to have a continued agreement that kind of covers all matters related to opioids with the Department of Health because it's the same two entities. MR. OTAKE: So, I think there were only going to be two MOA's for the entire settlement funds for the state. It's just that for the County's share, so there has to be two MOA's for the County's share and state share. They're both part of the $78 million. MR. ADAMS: The other piece of this is that for the County piece, whatever the first amount of funds that we received that we did the MOA on, the use of those Page 7 FC-42 September 3, 2024 funds is different in terms of the restrictions than this use. And so, the MOA's had to be different because of the way the settlement was written and what we could use the different pots for. And so, that I think is probably as clear an explanation about why two different MOA's. MR. OTAKE: Yeah. And I would also add that the first MOA was intended specifically for taskforce, which is different from this use. We are looking at a little more general use of funds for opioid remediation activities. MR. INABA: In both cases though, the funds have come down through the state, right? MR. ADAMS: That's correct. (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. If the Council wants an explanation for how this settlement fund is set up, I can provide more information. So, when these lawsuits were filed, the County filed its own lawsuit and sued a number of opioid manufacturers. At some point, the state filed its own lawsuit. And then when a nationwide —there's two different nationwide settlements that were reached and built into those were incentives to have the state manage the funds so that there won't so many direct recipients of funds. The formula's for the funds, as Doug said, was set up at the national level. And when I say incentives, there were financial incentives if the states were able to get the counties to sign on to having the state manage the fund. And so, we agreed to participate in that because of the incentives. Having said that, we also wanted to make sure that the County would be able to self -direct some of the funds. So, if we had gone to the lawsuit and settled outside of the formula, then we wouldn't have gotten the same percentage of money, but it would've come straight to us. So, we agreed to have the state manage the fund. It's not necessarily the Department of Health. Part of this settlement agreement set up a taskforce and I think if you wanted a presentation on that, Tim Hansen might be a good person for it. But that taskforce has done needs assessment across the state. And so, it identifies needs statewide, some of which would be on this island. So, residential treatment, for example, isn't identified, but specific need that isn't just we see as our own need, but the state sees as its need. So, when you see the term county directed funds, that's that portion that, Council Member Evans, you think this is kind of small, but the entire state and our County also benefits from the state directed funds. So, there's kind of two different expenditure processes. Tim, I believe, is our County Representative on this statewide board that is made up of a number of professionals across the state that we negotiated and identified to help identify the needs of the entire state. So, when you see this, the County directed, that portion that was negotiated that the Page 8 FC-42 September 3, 2024 County can say, this is how we want to spend it. And then there's the state, and the County still has a say in how that is spent because we're on the board, but money will still come directly to the County through that source. MR. INABA: Got it. Okay. Thank you for that background information. And then just on the Finance side, we're taking money in via the resolution and the accompanying bill. Do these line items currently already exist in the budget? No. Okay. Yeah, so if we can just get some information. We're creating new line items and then are those types of line items lines where the funds stay in that line item in previous or in future fiscal years where the funds might not be completely expended this fiscal year? (Note: At this time, Managing Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: Correct. Sorry. Tim couldn't be here today, so I'm his replacement which is not always a good thing. But there are similar opioid line items in the budget, but that is for the money we received from the state. So, this is now the County portion, and it will be carried forward until it's spent. But as we get new appropriations, it will be added to the budget and that line item. But as Yoshi said, it's going to be more in the 70, 80, 100 thousand dollar range each year. This is by far going to be our biggest allocation. MR. INABA: Okay. And that, to be clear, the carry forward remains in that specific line item. MS. SAKO: In that specific line item so that everybody can see how it's being spent, and we'll be tracking it over the 18 years that we'll have the funding. MR. INABA: Perfect. Thank you. Chair, I yield. CHR. KANEALI`I-KLEINFELDER: Thank you, Council Member Inaba. Council Member Villegas. MS. VILLEGAS: Sure. Just a quick little bit in here that might shed a little more light. This last paragraph says, "the spending must comply with the Hawaii MOA strategy, which reflects the national opioid settlement restrictions under three categories of treatment, prevention, and other initiatives." And while other initiatives are a pretty broad term, treatment and prevention, I think, are key here and what I'm interested to hear your team comes up with and best ways to allocate and spend these resources. And I officially rescind my thank you for Mr. Adams and give it to you. Thank you for all your work on this. I know this is a dance, but I am just grateful to see this coming through. And if I remember, correct me if I'm wrong, Judge Strance, but not all municipalities throughout the country participated. Like we had to vote as a Council to participate, which gave us access to being a beneficiary of these funds at some point. And so, that's just Page 9 FC-42 September 3, 2024 another part I want to point out because that was passed at the time and I'm deeply grateful for that or we would've missed out on this. So, I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Okay, seeing no further discussion. Thinking back to our meeting, how I asked Rebecca to read this one in because she fought for this, and she was a voice for our community as well as for our government to go after these funds. And I remember her arguing with different levels of our administration at the time because she saw the importance of this. And it wasn't a unanimous pass. Actually, it was a six, two Council vote. Council Members Lee Loy and Council Member Tim Richards voting against the measure to enter into legislation. So, to see it come to this point and to be accepting $2.1 million over the next decade or more for our County just because we passed a resolution really does highlight the importance of something unique that comes along and seeing the importance. And you did, Council Member Villegas. So, thank you for doing that for us. Thank you. So, good discussion. Thank you, Mr. Adams. Thank you, Mr. Otake. Thank you very much. We do have the motion on the floor to forward Resolution 593-24 to Council with a favorable recommendation. All in favor? Vote on Res. 593-24: The motion to recommend adoption of Res. 593-24 (Approved) was carried by the following voice vote: Ayes: Committee Members Evans, Inaba, Kagiwada, Kierkiewicz, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder — 7. Noes: None. Absent: Committee Members Galimba and Lee Loy — 2. Excused: None. BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. Bill 196: AMENDS ORDINANCE NO. 24-32, AS AMENDED, THE OPERATING BUDGET FOR THE COUNTY OF HAWAI`I FOR THE FISCAL YEAR ENDING JUNE 30 2025 Appropriates revenues in Federal Grants — Opioid Settlement Funds account ($925,000); and appropriates the same to the Opioid Settlement Funds account to support opioid remediation activities. Reference: Comm.993 Intr. by: Mr. Kaneali`i-Kleinfelder (B/R) Page 10 FC-42 September 3, 2024 Vote on Bill 196: Ms. Villegas moved to recommend passage of Bill 196 on (Approved) first reading. Seconded by Mr. Inaba and carried by the following voice vote: Ayes: Committee Members Evans, Inaba, Kagiwada, Kierkiewicz, Kimball, Villegas, and Chair Kdneali'i-Kleinfelder — 7. Noes: None. Absent: Committee Members Galimba and Lee Loy — 2. Excused: None. Bill 197: AMENDS ORDINANCE NO. 24-32, AS AMENDED, THE OPERATING BUDGET FOR THE COUNTY OF HAWAIJ FOR THE FISCAL YEAR ENDING JUNE 30,2025 Increases revenues in the State Grants — Career Criminal Program account ($55,034); and appropriates the same to the Career Criminal Prosecution Program account, for a total appropriation of $546,168. Funds would be used to support nine positions in the Office of the Prosecuting Attorney. Reference: Comm. 994 Intr. by: Mr. Kdneali'i-Kleinfelder (B/R) Motion to Approve: Mr. Inaba moved to recommend passage of Bill 197 on first reading. Seconded by Ms. Kimball. CHR. KANEALI'l-KLEINFELDER: Any discussion? Council Member Kimball. MS. KIMBALL: Yeah. I just have a procedural question to Deputy Director. Does this not have an accompanying resolution; is that not necessary or did we? MR. KANEALI'l-KLEINFELDER: That is a good question, Council Member Kimball. There is a good answer as well. (Note: At this time, Finance Deputy Director Aaron Brown came forward to address the members of the Committee.) MR. BROWN: It is a good question. 1, unfortunately, do not have that answer at this second but I can follow up on that for you. I'm not sure if that had come previously or that is something about timing that maybe the Prosecuting Attorney's Office was considering. So, I'll look into that for you guys. MS. KIMBALL: Okay. Great. Yeah, I don't recall that we saw a resolution on this but look forward to seeing that come forward. Thank you. Page I I FC-42 September 3, 2024 CHR. KANEALI'l-KLEINFELDER: Thank you. Thank you, Deputy Director. Okay, with that we have a motion on the floor. All in favor? Vote on Bill 197: The motion to recommend passage of Bill 197 on first (Approved) reading was carried by the following voice vote: Ayes: Committee Members Evans, Inaba, Kagiwada, Kierkiewicz, Kimball, Villegas, and Chair Kdneali'l-Klelnfelder — 7. Noes: None. Absent: Committee Members Galimba and Lee Loy — 2. Excused: None. ADJOURN- There being no further business on our agenda today, Chair Kdneali'i-Kleinfelder MENT: adjourned the meeting at 3:03 p.m. Thank you very much. CHR. KANEALI'l-KLEINFELDER: Thank you. Approved: MK/tk f 0 121Z q (Date) ' Page 12