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HomeMy WebLinkAboutMIN FC 2024/11/07 (2022-2024)Committee on Finance 47t' Session Hawaii County Building 25 Aupuni Street Hilo, Hawaii 96720 November 7, 2024 CALL TO The regular meeting of the Committee on Finance was called to order at ORDER: 9:01 a.m., in the Council Chambers, Hilo, by Mr. Kaneali`i-Kleinfelder, Chair. ROLL CALL: Present: Mr. Matt Kaneali`i-Kleinfelder, Chair Ms. Cindy Evans, Vice Chair (came in later) Mr. Holeka Goro Inaba, Member Ms. Jenn Kagiwada, Member Ms. Ashley L. Kierkiewicz, Member Ms. Heather L. Kimball, Member Absent & Excused: STATEMENTS FROM THE PUBLIC ON AGENDA ITEMS: COMMUNI- CATIONS: Comm. 12.40: Ms. Rebecca Villegas, Member (via videoconference from Kona) Ms. Michelle M. Galimba, Member The Chair directed the Committee to proceed to the next order of business, Statements from the Public on Agenda Items. The following individuals registered to speak and came forward when called by the Chair: Wesley Takai: Bill 218 (Comm. 1109), in opposition. The Chair directed the Committee to proceed to the next order of business, Communications. REPORT OF FUND TRANSFERS AUTHORIZED: SEPTEMBER 1-15, 2024 From Controller Kay Oshiro, dated October 1, 2024. FC-47 November 7, 2024 Vote on Comm. 12.40: Ms. Kierkiewicz moved to close file on Comm. 12.40. Filed Seconded by Ms. Kimball and carried by the following voice vote: Ayes: Committee Members Inaba, Kagiwada, Kierkiewicz, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder — 6. Noes: None. Absent: Committee Members Evans and Galimba — 2. Excused: None. CHR. KANEALI`I-KLEINFELDER: Next communication, please. Comm. 12.41: REPORT OF FUND TRANSFERS AUTHORIZED: JUNE 16 — 30, 2024 AND SEPTEMBER 16 — 30, 2024 From Controller Kay Oshiro, dated October 6, 2024. Vote on Comm. 12.41: Ms. Kimball moved to close file on Comm. 12.41. Filed Seconded by Mr. Inaba and carried by the following voice vote: Ayes: Committee Members Inaba, Kagiwada, Kierkiewicz, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder — 6. Noes: None. Absent: Committee Members Evans and Galimba — 2. Excused: None. Comm. 14.15: MONTHLY BUDGET STATUS REPORTS FOR THE MONTH ENDED FEBRUARY 29, 2024 THROUGH MAY 31, 2024, AND PRELIMINARY MONTHLY BUDGET STATUS REPORT FOR THE MONTH ENDED JUNE 30, 2024 From Finance Director Diane Nakagawa, dated October 1., 2024, transmitting the above report pursuant to Section 6-6.3(h) of the Hawaii County Charter. Motion to Close File: Ms. Kierkiewicz moved to close file on Comm. 14.15. Seconded by Mr. Inaba. CHR. KANEALI`I-KLEINFELDER: Any discussion? Council Member Kierkiewicz. MS. KIERKIEWICZ: Just a thank you to the Finance Department for getting us caught up and producing all of the summaries to close out the fiscal year. I appreciate. I yield. Page 2 FC-47 November 7, 2024 CHR. KANEALI`I-KLEINFELDER: Any further discussion? Hearing none. Mahalo, Diane and to your team. Okay. Motion is on the floor to close file on Communication 14.15. All in favor? Vote on Comm. 14.15: The motion to close file on Comm. 14.15 was carried by Filed the following voice vote: Ayes: Committee Members Inaba, Kagiwada, Kierkiewicz, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder — 6. Noes: None. Absent: Committee Members Evans and Galimba — 2. Excused: None. Comm. 95.7: FIRST QUARTER REALLOCATION REPORT: JULY 1— SEPTEMBER 30, 2024 From Human Resources Director Sommer J. Tokihiro, dated October 4, 2024. Vote on Comm. 95.7: Ms. Kierkiewicz moved to close file on Comm. 95.7. Filed Seconded by Mr. Inaba and carried by the following voice vote: Ayes: Committee Members Inaba, Kagiwada, Kierkiewicz, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder — 6. Noes: None. Absent: Committee Members Evans and Galimba — 2. Excused: None. Comm. 231.8: FIRST QUARTER REPORT OF PERSONS EMPLOYED UNDER A CONTRACT FOR LESS THAN 90 DAYS: JULY 1— SEPTEMBER 30, 2024 From Human Resources Director Sommer J. Tokihiro, dated October 1, 2024, transmitting the above report pursuant to Section 2-12.5 of the Hawaii County Code. Vote on Comm. 231.8: Ms. Kimball moved to close file on Comm. 231.8. Filed Seconded by Mr. Inaba and carried by the following voice vote: Ayes: Committee Members Inaba, Kagiwada, Kierkiewicz, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder — 6. Noes: None. Absent: Committee Members Evans and Galimba — 2. Excused: None. Page 3 FC-47 November 7, 2024 Comm. 1137: FIRST QUARTER REPORT OF UNCAPITALIZED DONATIONS: JULY 1— SEPTEMBER 30, 2024 From Finance Director Diane Nakagawa, dated October 21, 2024, transmitting the above report pursuant to Resolution 538-24. Motion to Close File: Mr. Inaba moved to close file on Comm. 1137. Seconded by Ms. Kagiwada. CHR. KANEALI`I-KLEINFELDER: Discussion? Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. I'll just note that more than $40,000 in donations have been received by the County this quarter, helping our personnel get access to new equipment and attend different conferences across the state and around the county. So, thank you to all the organizations and agencies that made that possible. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Okay. Seeing no further discussion, the motion is on the floor to close file on Communication 1137. All in favor? Vote on Comm. 1137: The motion to close file on Comm. 1137 was carried by Filed the following voice vote: Ayes: Committee Members Inaba, Kagiwada, Kierkiewicz, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder — 6. Noes: None. Absent: Committee Members Evans and Galimba — 2. Excused: None. ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Res. 692-24: AUTHORIZES THE PLANNING DEPARTMENT TO AWARD FUNDS TO THE LEILANI ESTATES NEIGHBORHOOD WATCH THROUGH THE GEOTHERMAL RELOCATION AND COMMUNITY BENEFITS PROGRAM FOR IMPROVEMENTS TO LEILANI ESTATES COMMUNITY PARK Provides $435,000 in grant funds to support the revitalization efforts to the Leilani Estates Community Park. Reference: Comm.1127 Intr. by: Ms. Kierkiewicz Motion to Approve: Ms. Kierkiewicz moved to recommend adoption of Res. 692-24. Seconded by Mr. Inaba. Page 4 FC-47 November 7, 2024 CHR. KANEALI`I-KLEINFELDER: Go ahead, Ms. Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. As you know, our community is host to Puna Geothermal Ventures (PGV), and the County along with the Office of Hawaii Affairs (OHA), and State Department of Land and Natural Resources, DLNR, received royalties for energy generated in the community. And in our County Code there are ways in which our County can spend these funds to benefit community. There's a relocation fund and a community benefits fund. And so, this resolution is to support a request that was made on behalf of the Leilani Estates community, which is the community that is closest to PGV and most impacted by their operations. The funding being requested here today would be used to revitalize the association's park and restore it to pre -eruption standards. More than 40 percent of Leilani Community Estates Association's members lost their homes in the 2018 eruption. So, significant losses to membership dues ensued, but there is still a need to support the remaining community and this park. And so, this request would help to facilitate safety upgrades, facility repair replacement, and update the grounds as well as the beloved playground. And I just want to note that Leilani Estates serves more than just its community. There are neighboring Puna communities that access these facilities and as the President of the Board shared, Leilani Estates' aloha knows no boarders. They are happy to be a hub, a gathering place for different Puna communities. They are host to a number of different community events, neighborhood watch meetings, public forums, food distribution sites, sports team practices, you know, personnel training for local schools, and in disaster times, I can personally attest that this community has showed up to be a partner in distributing resources and support. They are very proud to be an alcohol and drug free park, something that they are very passionate about, making sure that there is a safe space for our keiki, `ohana, and kupuna. I did a lot of consultation with Corporation Counsel on this particular request because if you've known in the past, we've granted these funds to different County agencies, and these funds would be granted to a nonprofit. Given that there are no County facilities to support this particular community and this park functions as a de facto public space, there is a clear public presence here to support its restoration with these funds. You know, I just want to remind folks that the eruption, even though it happened more than six years ago, as you can tell, our community is still rebuilding and finding a way forward from that very traumatic event. And so, this investment would provide a much needed boost to the Leilani Estates community. Shout out to Rod Kindle who is not here today but was so diligent in connecting with our office. He originally brought this request to the Mayor, but our office made sure that we got it over the finish line. On behalf of Leilani Community Page 5 FC-47 November 7, 2024 Estates, we have the Board President and Treasurer, Al Marrow, here in the gallery, and fiscal sponsor for the project, 501(c)(3), is Leilani Estates Neighborhood Watchrepresented by Greg Armstrong. If any of my colleagues have questions about how the $435,000 is going to be spent, these gentlemen are here to answer any of your questions. Looking for everyone's favorable support on this resolution. Thank you. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Kagiwada. MS. KAGIWADA: Thank you. Yeah. It's nice to see something innovative being done with these funds and something that's going to really benefit the community. I guess I just have a question on how this is going to work since it's a County Park facility, correct? No. It's not a County Park facility. So, maintenance for this, whatever gets done will be done by the same nonprofit or the same —yeah, if you want to come up. Maybe I can ask one of the, I don't know which is the right person. Hi. Good morning. Thank you for being here. You need to press the little green button. Thank you. (Note: At this time, Leilani Community Association President and Treasurer Allan Marrow came forward to address the members of the Committee.) MR. MARROW: Is that on? Okay. Good. MS. KAGIWADA: Can you just introduce yourself for the record? MR. MARROW: Pardon? MS. KAGIWADA: Introduce yourself for the record. MR. MARROW: I'm Allan Marrow. I'm the current President and Treasurer of Leilani Community Association. MS. KAGIWADA: Okay. Great. So, I'm just wondering, I know these funds are to, you know, renovate and upgrade the park to try to get it in the functioning place for the community makes a lot of sense. I'm just wondering, one of the issues we have at the County level is often times we're able to, you know, build things out, but then it's the maintenance and upkeep, the ongoing cost that end up either getting neglected; we've been trying to fix that or, you know, costing quite a bit that, you know, maybe wasn't budgeted in to begin with. And I'm just wondering since you guys are responsible, do you have a plan for that or how will that work? MR. MARROW: Well, yeah, some of this is, the playground equipment we've always had maintained everything else. The eruption is kind of a one-time event that degraded everything quite severely. So, these funds for a lot of this, for the Page 6 FC-47 November 7, 2024 playground portion of this, to replace some of the equipment that we've had to remove already actually for safety reasons. And we're actually going to increase the safety a little bit at the time by getting a better ground cover. You know, that's the stuff they put down underneath. MS. KAGIWADA: Yeah, it's very expensive. MR. MARROW: And another big portion is the pavilion repairs, which is corroded a bit, and while it's not a safety danger yet, it will be if we don't do something about it and that's quite expensive too. So, I don't think the ongoing maintenance should be much of an issue. This is really kind of a one-time impact because of the eruption. MS. KAGIWADA: But normally in the past you've done any maintenance with your dues, is that correct? MR. MARROW: Yes. MS. KAGIWADA: Okay. MR. MARROW: Well, we actually divide it up a little bit. We have our assessments to cover our primary, you know, the roads and stuff like that. But we also divide out, for example, all our transfer fees when property goes. That goes into a specific rent fund and that's usually used for anything like this, fixing and maintaining. So, we keep those funds separate. MS. KAGIWADA: Okay. Great. Well, really, really good to see the community come together for this and happy to support. Just wondering, you know, keeping ideas open for other potential communities out there doing something similar. So, thank you. I appreciate that and appreciate all the work you do for your community. I'll be supporting. Thanks. MR. MARROW: Okay. CHR. KANEALI`I-KLEINFELDER: Thank you. Okay. Hearing no other conversation, thank you very much for being here today. Appreciate it. We have the motion on the floor to forward Resolution 692-24 to Council with a favorable recommendation. All in favor? Page 7 FC-47 Vote on Res. 692-24: (Approved) Res. 694-24: Motion to Approve: November 7, 2024 The motion to recommend adoption of Res. 692-24 was carried by the following voice vote: Ayes: Committee Members Inaba, Kagiwada, Kierkiewicz, Kimball, Villegas, and Chair Kdneali`i-Kleinfelder — 6. Noes: None. Absent: Committee Members Evans and Galimba — 2. Excused: None. AUTHORIZES THE OFFICE OF HOUSING AND COMMUNITY DEVELOPMENT TO AWARD FUNDS TO VARIOUS ORGANIZATIONS FOR PROGRAMS ADDRESSING AFFORDABLE HOUSING Allows for grant awards to Hale Ola O Mohouli LLLP ($3,200,000) and Kuakini Family I LP ($5,000,000) for the development of affordable rental units and $5,075,000 to be retained by the Office of Housing and Community Development for the development of 25 single-family dwellings for workforce housing ($4,200,000) and to provide financial assistance to 17 low-income homeowners to conduct essential repair work ($875,000). Reference: Comm.1129 Intr. by: Mr. Kaneali`i-Kleinfelder (B/R) Mr. Inaba moved to recommend adoption of Res. 694-24. Seconded by Ms. Kagiwada. CHR. KANEALI`I-KLEINFELDER: We do have members from our Office and Housing and Community Development here. Council Member Inaba. MR. INABA: Thank you, Chair Kaneali`i-Kleinfelder. With that, if we could invite Housing Administrator Kunz forward. If you could just give us an overview of the process that happened to get to this final point, and maybe just give us an idea also of how much was applied for and other organizations as well. And then after that, I'd like to ask Corporation Counsel to come forward just to make sure that we're meeting the provisions of our Code as it relates to awards out to nonprofits. (Note: At this time, Housing Administrator Susan Kunz came forward to address the members of the Committee.) MS. KUNZ: Good morning. My name is Suan Kunz. I'm the Housing Administrator for the Office of Housing. Before I get started, I did want to mention that I have the affordable housing production staff, I believe they're in the Kona Office. There they are; Royce and Linda. So, I am going to ask them at some point to come in and talk through the timeline and those things. But what I will say is that this resolution is being put before this body today to meet the Page 8 FC-47 November 7, 2024 requirements of the administrative rules for the affordable housing production program, which is to report our efforts, our process, and our selection of awardees for the use of this fund. I think what I'll do is I'll ask Royce to walk us through the timeline and the list of awardees that they're presenting. Royce? (Note: At this time, Housing and Community Development Specialists Royce Shiroma and Linda Bui came forward to address the members of the Committee.) MR. SHIROMA: Royce Shiroma from the Office of Housing and Community Development (OHCD). The timeline that we worked on this 2024-2025 Affordable Housing Production fund, I'll reference it as AHP, started back in February, like early this year, in which we ran public comment, public hearings, and we requested public comments on the actual program itself to try to figure out what our priorities were. And then when that came in, we opened up the RFP in May with a deadline end of July, in which we received approximately 13 proposals. And of that, we rated it, ranked it based on the priority. This year the priority I want to mention is that it would be 80 to 140 in which we were attaining, trying to get more the workforce population to benefit from this program because there were a lot of programs and funding for the other, I would say the 0-30 and 30-80 populations. And based on that rating and ranking, all the proposals, we came up with the, or we selected before projects as you guys see in the list of proposals. Any questions? MR. INABA: Thank you, Mr. Shiroma. With that, good to hear that we're trying to target the 80-140 AMI (Average Median Income) sections. Maybe transitioning over to Corporation Counsel. Especially for big amounts like this, wanting to understand how the Council is able to verify that all sections of our grant code are being met; things like the membership of the board for these nonprofits. We know it's a public purpose, obviously. But there are those other sections in Section 2-137 that I'm hoping you can kind of shine light on for us. (Note: At this time, Corporation Counsel Elizabeth Strance came forward to address the members of the Committee.) MS. STRANGE: Thanks. Good morning. Elizabeth Strance, Corporation Counsel. And so, the Office of Housing also has administrative rules that have the composition of the selection committee and their selection process. And so, at least structurally, it appears to be set up to comply with the Hawaii County Code. If this body would have specific questions, I think those would be better directed to the department. MR. INABA: Okay. So, for Section 2-137, a governing board whose members serve without compensation, that there's a written conflict of interest policy, which complies with provisions of the IRS (Internal Revenue Service), they have bylaws or policies which describe the ways in which business is conducted. Right Page 9 FC-47 November 7, 2024 now, we're being asked to approve a resolution. So, I'm just wanting to make sure, or how do we verify that all of those things were in fact collected and are true for the nonprofits that are being awarded here? MS. KUNZ: If I may? So, part of the ranking and rating process for the selection committee is to go through required documents like this. I think that you'll find in the ranking and rating sheets that these documents are required by the organizations to be submitted, and they are reviewed. MR. INABA: Okay. So, just as a legal matter, are we simply going forward and assuming, or going with the word of OHCD, that all of those documents have been received? Because I don't have them in my board; I don't know if they're in an associated communication, but how are we making sure that we are approving and we did get these documents; and if it's just based on the word of OHCD and that's okay with legal advice, then onward then. MS. STRANCE: You know, with the Waiwai Grant Program, those eligibility requirements are determined by the Department of Finance. Our office only gets involved if the department has specific questions about whether a document meets eligibility or doesn't. You know, if you have a concern about how the process is working then I think coming up with a way that you feel comfortable that things have been verified — MR. INABA: I would ask, are you comfortable as the chief legal advisor of the County with just the word of OHCD, that all of these documents have been received and verified? If that's the case, then we can move forward. But we have no evidence except for Administrator Kunz's word here that those documents have been received and verified. MS. STRANCE: Yeah. As general practice, our office won't go and assume that the process hasn't been followed. You know, we would look to see if they have a process that complies with the law. They have that. And so, we would assume that they have followed that procedure. If this body wants us to do something more or that there be some other type of verification when grants of a certain size comes to this body, I think that that's something that we could talk about. And, you know, I hear what your concern is, but we don't make it a practice to kind of micromanage departments at that level. But if there is a verification process that you'd like to have a look taken, we can do that. MR. INABA: Thank you. Administrator. MS. KUNZ: I would like to ask my staff to share with you a little bit about what their project files look like. So, Royce, if you don't mind? Okay. Thank you. MR. SHIROMA: I just want to say that, I mean, it'll be after the fact but one of our ways of check and balance is that when we route these contracts for the award Page 10 FC-47 November 7, 2024 to the nonprofits, we provide all the information as far as the IRS designation, that they are a 501(c)(3), all the articles in corporation and bylaws, and also the board resolution in which the person signing for the nonprofit has the authority. Those things would go in our routing sheet in which it'll be forwarded to Finance and then ultimately Corporation Counsel, and then to the Mayor for execution. That's our so-called check and balance I think in which we ensure that these are legit nonprofits. Although, to answer your question, Holeka, that it's kind of after the fact outside of this approval. MR. INABA: Okay. So, that process happens after the resolution is already passed? MR. SHIROMA: Yeah. MR. INABA: Okay. Wondering what kind of documents we might be able to get later. Happy to move this forward today. But I do think, we've been grilled and we're trying to do better as a Council with our grant awards, and our grants total $2.5 million each year and they're small, up to $50,000 per organization. This is millions to a few organizations, so we just want to make sure that everything is on the up and up. MS. KUNZ: I appreciate that. So, again, you know, no contracts would be executed without ensuring that all of that criteria is being met and it's a part of the contract packet. You know, if you would like for us to share that information, I think we can. Is that what you're asking prior to contracts? MR. INABA: That's where we're at, right? Is it just based on your word, and it seems like Corporation Counsel says they assume that you folks do what you're supposed to do. So, we're passing a resolution, essentially, assuming that you're going to do what you're supposed to. Is that accurate? MS. KUNZ: I mean, contracts won't execute without those pieces being in place. That's what I want to assure you. Because they have to go through Corporation Counsel. So, that's the check and balance that Royce is talking about. So, we feel really confident about that. We've been operating that way with all of our federal grant programs. MR. INABA: Alright. So, happy to move this forward and then maybe we can talk offline to see what kind of documentation might be helpful, or if we're just going to assume that everything is good moving forward. Thank you. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. Administrator Kunz, thanks to you and your team for, you know, continuing to implement this particular program. I know that it's very helpful to a lot of the organizations out there that are trying to Page 11 FC-47 November 7, 2024 get that gap funding to move towards the next step towards construction. I just want to note that a lot of the construction is anticipated to start; like the earliest is 2025, Q3 (Quarter 3), it's kind of a long way off. I'm wondering what sort of coordination is being done with other County agencies to help expedite, you know, the review of various permits knowing that it's really critical to get this housing online sooner rather than later. MS. KUNZ: Thank you for that question. So, we do have processes that in place where we have an expedited, for example, review process with Public Works. It's not in place the way I would fully like for it to be. I think for something like that to work, everybody has to agree and understand what the priority is. So, I run into issues with that sometimes, to be honest. But the process that is understood and in place is, for example, plans for housing projects would come into the Housing Office to be reviewed by my staff initially before it gets submitted to EPIC (Electric Processing and Inspection Center). One of the things that we have found and agree with Public Works is a lot of the delay sometimes is upfront. And so, applications that are submitted are not completed fully. And it could be really minor things, but it causes months and months of delays. So, we try to catch those things upfront and that is part of our process. Once it gets into the system and it comes through the Housing Office, we actually have access to these applications, so now we can monitor, right. If a developer goes straight into EPIC without us, we don't have access to those programs, I mean, applications. So, those are some of the things that we're trying to institute. It's helped, it's helped. MS. KIERKIEWICZ: Okay. Great to hear. Thank you. You know, I do appreciate the array of projects that are being funded here, new construction, acquisition, more infrastructure and, you know, very importantly the financial program that would help 17 homeowners through the process of acquiring a home. So, really fantastic. I just want to end on the point that Council Member Inaba was trying to make here. Thirteen million dollars is a lot of money. It's a very significant amount. And just to kind of illuminate what we do here at the Council. All the required documents that are noted in Chapter 2 of our Code, we look at all of that and ensure that everything is in place before we even give the application due consideration. And so, I say that because I think it's really important that Council and every one of our County departments have a consistent way in which we are having nonprofits apply for grant funding. So, I just say that for your folks to consider and maybe going forward, in the resolution explicitly stating that all of the documentation that's required in that section has been verified, just to give us the assurance that you actually do have it, right? Because the last thing we want is for them to not actually have the paperwork in order and then you have to come to us and say, "Oh, sorry. It was a good project, but they didn't have the paperwork. They're giving the money back, or we can't award these funds. Page 12 FC-47 November 7, 2024 MS. KUNZ: Right. MS. KIERKIEWICZ: So, being as proactive as possible and putting that in the resolution so that we know that you folks have it. MS. KUNZ: Thank you for that. I'll really take that into consideration. MS. KIERKIEWICZ: Great. Thank you. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. To Kona? Nope. Okay. Council Member Inaba. MR. INABA: Yes. And one last thing, I know our most recent Code update, we have a ten percent cap on administrative overhead costs. So, I'm not sure if it would be helpful to provide the budgetary breakdown on each of these awards to us because right now, we're just seeing $3.2 million going to a nonprofit for 90 units but we're not necessarily sure how that $3.2 million is being broken up and what each of the expenses looks like. So, maybe a simplified option. CHR. KANEALI`I-KLEINFELDER: If I could offer, Council Member Inaba, there's a communication in your folder, Communication 1129.1, which breaks down all the information from Resolution 694-24 that we're talking to today as well as the administrative expenses. MR. INABA: Yeah, I'm still not seeing the breakdown of expenses. I see a more in depth summary of each of the projects. Page 3; no, this is not a breakdown of what the expenses of the project are. MS. KUNZ: I'm sorry. Just to clarify, you're talking about the administrative expenses that the Office of Housing is using? MR. INABA: In general. So, if we're awarding $3.2 million out to a nonprofit, how is that $3.2 million broken out; what is the overhead costs that we are awarding as part of that $3.2 million to the nonprofit. I haven't seen it in this document. So, there's a timeline, but we're not necessarily seeing, is $800,000 for grading; is $2 million for vertical construction; is $200,000 for overhead of the nonprofit? MS. KUNZ: Yes. I do know that we have detailed budgets from the organizations. I just don't know if we have it here today. MR. INABA: Maybe next time. But I think it just helps us to answer that ten percent admin fee and just get a better idea of what exactly the $3.2 million is going to be spent on. We know what the outcome is, it's the 90 so many units, but how is the money being spent? Thank you. Page 13 FC-47 November 7, 2024 MS. KUNZ: Absolutely. Okay. MR. INABA: Chair, I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Kagiwada. MS. KAGIWADA: Thank you, Chair. I just want to thank you and your staff for all the hard work on this, on getting this money out the door and to especially thank your folks from the engagement division that got the residential repair program in here, which I think, you know, it's such a good bang for our buck, right? I mean, it's important that we build new affordable housing, but keeping the affordable housing we have is such a financial efficient way to make sure that we are providing housing for our residents. So, to me, this one is super important. I was really happy to see. I know you made your staff jump through all the hoops and apply just like everybody else to get in here and I just appreciate their work and getting that done, and to see this here. Thank you. CHR. KANEALI`I-KLEINFELDER: Thank you. Okay. A couple questions, Administrator. I won't call you, Director, today. Some of these projects that we have awarded or we're looking to award through the resolution —let's start with that. Are they awarded or this is a resolution allowing you to award the funds at a later date? MS. KUNZ: It's a resolution to meet the requirements of Admin Rules saying. that I need to report to this body what we've awarded. So, the answer is we've awarded these. So, we will be notifying these entities if we have not already, that they've received these awards. Now, as we're going through this continued vetting process, you know, like we just talked through, if we find that they are not meeting requirements, they cannot meet timelines as outlined in their proposals, a deal falls through that requires an acquisition of property, which happened in our last round. You know, those would be the things that would change this list. CHR. KANEALI`I-KLEINFELDER: Okay. MS. KUNZ: Yeah. CHR. KANEALI`I-KLEINFELDER: So, these are awarded already. MS. KUNZ: Yup. CHR. KANEALI`I-KLEINFELDER: So you already have MOA's (Memorandum of Agreement) or contracts in place with these organizations? MS. KUNZ: We're working on it. It's not executed yet. CHR. KANEALI`I-KLEINFELDER: Okay. So, you're still vetting? Page 14 FC-47 November 7, 2024 MS. KUNZ: Yup. CHR. KANEALI`I-KLEINFELDER: So they haven't received funds? MS. KUNZ: No. CHR. KANEALI`I-KLEINFELDER: Okay. MS. KUNZ: They haven't received funds. CHR. KANEALI`I-KLEINFELDER: Okay. The reason I'm asking is some of these project's tentative start dates are 2026-2027, and then I'm wondering about the tie in with resolutions being multiyear or single year and budgeting for future years that we haven't budgeted yet. And so, just walking through that process with the department. MS. KUNZ: Yeah. So, the admin rules do outline that we have to get contracts in place within a year. Royce, I'm going to ask you to kind of jump in if I'm misspeaking. I believe they have a requirement to produce actual housing units within five. CHR. KANEALI`I-KLEINFELDER: Okay. MS. KUNZ: Is that correct, Royce? MR. SHIROMA: Yes. That's correct. And some of them may involve part of the project, which one of them is the acquisition. So, you might award the funding to that nonprofit first in which the acquisition must take place prior to the vertical construction of the project itself. MS. KUNZ: So, phased projects. MR. SHIROMA: Yeah. CHR. KANEALI`I-KLEINFELDER: Okay. Touching on what Council Member Inaba touched on, maybe I misunderstood where he was going with his request, but I did appreciate looking to see that your administrative expenses pulled from this $14,000,500 was only 5.7 percent of what you could've taken, which was up to ten percent. So, I appreciate that you folks would put more money into the community than back into Office of Housing. MS. KUNZ: Absolutely. CHR. KANEALI`I-KLEINFELDER: And I'm interested to see a breakdown, like the financial assistance. We've talked about that in our other meetings that Page 15 FC-47 November 71 2024 we have. For the residential repair program, that's about $51,000 per awardee to do home repairs. MS. KUNZ: Right. CHR. KANEALI`I-KLEINFELDER: So, just interested to see how those play out. From what I'm understanding, you've selected people already for that funding or this a pool to be selected from in the future. MS. KUNZ: No. Correct. So, we have a wait list. You know, I should also recognize Courtney Vincent, who's in the room. So, she is the OHCD specialist who helps to oversee this program. So, if we're going to start digging into the program components, I might ask her to chime in. Royce, did you have your hand up? MR. SHIROMA: Yeah. I just think some of the questions, sorry, Matt. But some of the questions regarding the, what Inaba mentioned about administrative costs, for AHP we don't fund any administrative costs for the nonprofits nor the developers. According to our Administrative Rules everything needs to be project, directly project costs that use directly with the increase or the sustainability of the affordable housing units, for the record. Sorry. CHR. KANEALI`I-KLEINFELDER: I appreciate that. Thank you, Royce. Okay. I like that we've split or that you've attempted to split the funding between east and west. I'm seeing 91 potential units on the Hilo side and 73 units on the Kona side. I like that you've looked to differentiate the funding into two different areas rather than we have housing needs. Thank you. MS. KUNZ: You know, I would say that I was very pleased to see that too. But we don't always have control of that. It really depends on the applications we get and how they rank and rate. So, I was very happy to see that work out that way as well. CHR. KANEALI`I-KLEINFELDER: Cool. And then finally, and this is kind of where my questions from the beginning, watching these funds be created and how we place the money into the community. I would like to see, I don't know if you have it today, but I would like to see if any of these organizations have already been granted funds or granted lands by the County and how much we're subsidizing these projects to create housing in our community. Because I know, usually these projects are going after LIHTC (Low -Income Housing tax Credit) funding and different funding at the state level and federal funding. And we need affordable housing, but there's other areas of focus in our County that needs to be addressed as well. So, interested to see the breakdown of what these specific projects have already taken in County funding, so I can better understand what we're subsidizing and what's it's going to cost the taxpayers to put this housing up so we can provide them the benefit. Page 16 FC-47 November 7, 2024 MS. KUNZ: So you would want to see by project what they've applied for, what they've been awarded, federal, state, County? Okay. CHR. KANEALI`I-KLEINFELDER: If you can. Yes. I would like to see it because I can pull up some data online. I can see what they're doing at the state level, what existing agreements were already made, but on the County side, I'm always interested to see how much vendors are taking in from different County sources because there's a multitude of funds and multitude of good, and pull funding from the County and I want to see what we've already done on top of this. MS. KUNZ: Okay. CHR. KANEALI`I-KLEE* FELDER: Cool. Thank you very much. Council Member Kimball. MS. KIMBALL: Yeah, thank you. First of all, I want to echo Council Member Kagiwada's comments with regard to the residential repair program. I do think that is a really efficient way for us to keep people in housing that already exist and get us a little more bang for our buck that way. Kind of following off of what Council Member Kaneali`i-Kleinfelder was eluding to. I'm a little concerned about cost escalations and what we can anticipate in the changing political climate. And so, I would also be interested in seeing a little bit more detail about particularly the Kuakini project, which is design build about what sort of assurances we have. I don't know in your application process, if they were required to demonstrate how they might take it to the next step to actually the ground up construction because the last thing I'd like to do is invest in a planning and acquisition design and not have the revenue forecast available for the actual build out. So, if we can have some information. Was that part of the evaluation, if they had resources to take it to the next level? MS. KUNZ: Yes. Yes. Absolutely. MS. KIMBALL: Okay. Yeah. So, yeah, if we could have a little more. MS. KUNZ: Because I mean, the whole purpose is to have units that we can see completed, right? So, yes. MS. KIMBALL: Right. Yeah, yeah. So, if we can get a little more information about that in response to Council Members question, that'd be great. Alright. Thank you, Chair. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you. Administrator Kunz, you said a word that sort of worried me here. When the question was asked about is this resolution Page 17 FC-47 November 7, 2024 necessary before you can enter into an agreement, the title clearly states that this is a resolution authorizing OHCD to award funds. This resolution is not a notification to Council. So, technically, Corporation Counsel Judge Strance, if you could just confirm, this resolution needs to pass before OHCD can enter into any sort of agreement with any of the nonprofits listed here? MS. STRANCE: Elizabeth Strance, Corporation Counsel. I want to look at the enacting ordinance for the fund to see what the language is. But by implementing Article 2, there seems to be a process that requires Council approval to award. And so, we're going to have to look into that process a little bit. This is not a fund that I have spent a lot of time with, so I'd like to investigate that a little bit. MS. KIERKIEWICZ: Okay. I just want to point out, very clearly in the title, it says authorization. This resolution is not a notification. And I don't recall any departments being able to proceed without authorization from Council. MS. STRANGE: Understood. MS. KIERKIEWICZ: Okay. Thank you. CHR. KANEALI`I-KLEINFELDER: Thank you. One last question. Sorry, regrouping. For the department, for the goals and priorities FY 2024-2025, the homeownership initiatives, which I really do like, which is the building equity in community piece, which means local families buying housing and getting equity under their feet which builds them in the future. Under that goals and priorities, Number 2, homeownership initiatives, are we touching on that piece at all; are these going to be rentals; what progress have we made in addressing homeownership for local families through this $14 million? MS. KUNZ: So, here we're outlining what we're hoping to be, I mean, what are our goals and priorities for use of this fund. It really depends on the applications that we receive. So, when we go out to public hearings, when we start this process, we are promoting this, we are outlining this to the community. We are encouraging people to come in with programs like this. So, these aren't programs that I'm actually running myself, right, I'm relying on the community coming in with programs like this. So, we've seen from time to time programs coming in like that. I can't remember off the top of my head if we have programs like that in this list, but the ones that we've awarded were based on their ability to complete the applications and write what their goals are and how they're going to achieve affordable housing production. So, it absolutely is something that we are encouraging that we want to see. But again, I can only work with applications that are coming in. I don't know if I'm hitting your point or not, but you're wanting to know how I'm delivering this program? Page 18 FC-47 November 7, 2024 CHR. KANEALI`I-KLEINFELDER: I'm actually —I'll ask this simple question. Are any of these programs that we have looked to fund through this resolution, there's four subjects, are any of them going to be for sale? MS. KUNZ: I see. Okay. MR. SHIROMA: Can I? CHR. KANEALI`I-KLEINFELDER: Yes. Mr. Shiroma, go ahead. MR. SHIROMA: Yeah. To answer your question, Matt, we have two projects basically dealing with homeownership. One is the Kaiminani project and basically the RRP (Reverse Repurchase Program) program is to have benefit to the homeowner in re -having their units. So, those two tend to be —the other two are, like you said, are rental housing, the Moho`uli and the Ho`okini Family. CHR. KANEALI`I-KLEINFELDER: Okay. So, just following up. Mr. Shiroma, the Kaiminani Subdivision is going to be for sale? MR. SHIROMA: For sale, yes. Correct. MS. BUI: Sorry. Leasehold. MR. SHIROMA: Leasehold, for sale. Yeah. CHR. KANEALI`I-KLEINFELDER: Leasehold, for sale. Okay.. MS. KUNZ: Thank you, Royce. MR. SHIROMA: You're welcome. CHR. KANEALI`I-KLEINFELDER: Okay. Thank you. MS. KUNZ: Sorry about that. CHR. KANEALI`I-KLEINFELDER: Nope. Okay. Thank you very much. I appreciate your time, appreciate the information, and then we'll see you back at Council. Do we need to postpone this and hold this in Committees? Any comment? No. No, okay. I think we'll move it along. Okay. Council Members, we do have the resolution in front of us and the motion to forward Resolution 694-24 to Council with a favorable recommendation. All in favor? Page 19 FC-47 Vote on Res. 694-24: (Approved) BILLS FOR ORDINANCES: November 7, 2024 The motion to recommend adoption of Res. 694-24 was carried by the following voice vote: Ayes: Committee Members Inaba, Kagiwada, Kierkiewicz, Kimball, and Chair Kaneali`i-Kleinfelder — 5. Noes: None. Absent: Committee Members Evans, Galimba, and Villegas — 3. Excused: None. The Chair directed the Committee to proceed to the next order of business, Bills for Ordinances. Bill 218: AMENDS CHAPTER 19, ARTICLE 1, SECTION 19-2, OF THE HAWAI`I COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO REAL PROPERTY TAXES Amends the definition of "Affordable rental rate" to mean a monthly rent not to exceed the most recent affordable rental guideline for 100 percent of the area median income as established by the Hawaii housing finance and development corporation. Reference: Comm.1109 Intr. by: Mr. Inaba Postponed: October 15, 2024 (Note: There is a motion by Mr. Inaba, seconded by Ms. Villegas, to recommend passage of Bill 218 on first reading.) ; and Comm. 11,09.1: From Council Member Holeka Goro Inaba, dated October 29, 2024, transmitting Rent Comparison Tables. MR. INABA: Thank you, Chair. So, I did provide in Communication 1109.1, a comparison chart showing the current payment standard as it compares to 60 percent AMI (Area Median Income), 80 percent AMI, and then the 100 percent AMI, which is currently in the bill. There was a request though to get a Housing perspective on this bill and essentially, I've asked Ms. (Kehau) Costa from OHCD to come forward today just to give us a quick understanding of what the payment standard is because payment standard is the current tool by which we are establishing these rental caps. They provide that over to Real Property Tax, and Real Property Tax uses those numbers. So, I'm going to pass it over to Ms. Kehau Costa, who's going to give us that quick overview and then the intention today is just to kind of figure out where we're going to land in terms of moving this forward. I do intend, however, to keep it in Committees today. So, at least we can Page 20 FC-47 November 7, 2024 have a discussion and then be ready with the appropriate amendments next time. Ms. Costa, mahalo. (Note: At this time, Existing Housing Division Manager Kehau Costa came forward to address the members of the Committee.) MS. COSTA: Hi, good morning. Kehau Costa, Office of Housing. I am the Division Manager for the Existing Housing Division. CHR. KANEALI`I-KLEINFELDER: If you could, yeah, pull. It's more for the video and for those in Kona too. MS. COSTA: Okay. So, Division Manager for Existing Housing, which is Housing Choice Voucher or Section 8 program. So, I'm sorry if any of this is redundant. I think Lisa did a great job in the last Committee meeting, kind of talking a little bit about the payment standard. But I'm just going to start from the beginning. (Note: At this time, Existing Housing Division Manager Kehau Costa 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 part of the record, see Comm. 1109.1.) MR. INABA: Thank you so much, Kehau. So, with that, in referring to Communication 1109.1, we have a better idea now of how we're getting these rental limits from OHCD. The model that the bill proposes is going straight to the AMI charts as proposed by HHFDC (Hawai`i Housing Finance and Development Corporation). We heard some concern from a previous Real Property Tax staff member who, you know, shared that that would jump some of the rents, especially on the east side, by up to $800. So, what I'm proposing, I think, at this point is because what we're trying to do here is get more units into the program, but we're also not trying to do harm to individuals who are currently in the program and renting at an affordable rate. So, if we compare numbers here, for example, the 80 percent AMI page, we could see that the current rental limits are generally in line with 80 percent AMI. But things change from year to year. So, what I'm proposing and what I want to get feedback from the Council on is whether we can retool our bill here and we can set the rental rates by AMI via resolution, similar to how we do our Real Property Tax, and it just provides both the administration and the Council a little bit more flexibility, not just geographically but year to year because right now we're locked in at a certain 75 percent of the payment standard. But if we shift that model and we give ourselves, I believe, September 30t' is when I spoke with Administrator Miura about that gives them enough time to prepare the applications with the new AMI cap, and it just allows us to ensure that we're making that change to have Page 21 FC-47 November 7, 2024 more units come down while also not harming those who are in the program. So, we want to get your feedback on that. And if that's the route we're going to take, we would change this language up where it might even require a different bill because it wouldn't be simply just adjusting the definition anymore. And then subsequently, we can have a discussion with the resolution on how we're going to set or at what level we would set those rates at. So, I want to invite Administrator Miura up, if there's anything that she would like to add and Administrator Kunz. It's a Real Property Tax matter in the Code, but definitely interplays with Housing. So, Administrator Miura. (Note: At this time, Real Property Tax Administrator Lisa Miura and Housing Administrator Susan Kunz came forward to address the members of the Committee.) MS. MIURA: Good morning, everyone. Real Property Tax (RPT) Administrator Miura and I have Keita Jo here, as well as the Assistant Administrator, and our Finance Director and Deputy Director, so you got a full house today from us. So, the affordable rental housing program, we learned a lot through this bill and being educated by Wes Takai, he was the former Administrator, two before me. So, there was Stan Sitko and then Wes Takai, and this was set up from their standpoint for the tenants. And in lots of discussions with him, we can understand and so does Council Member Inaba, that the concern is how will this affect those in the program because we don't want the rents to go up for them. And so, we just did a quick review of the West Hawaii only because honestly, in our current system, we had no way to plug in the numbers and majority do not push up when the rates are increased. So, that's a good sign, whether it was continued or first timers. Going forward and starting with this tax year, Keita did create a location in our system so that we can track it, so that we can provide better numbers for you because we know every time it comes up, what are people paying and this question and that. And when our —system was created, it wasn't around rentals. It was just for values. And so, we are implementing that into this upcoming tax year. We're just here to answer any questions. I know Mr. Takai had done a lot of his own calculations and the only thing I would say pertaining to what came up so far is the September 30, when Housing provides us the numbers right now, we are ready the very next day by updating our records. So, as long as it's approved by September 30, by Council, and I'm assuming a resolution doesn't have all the same requirements. You don't need to go to the Mayor for signature. There are some requirements. Okay. So, that's the only thing. We just need it to be final on September 30, and I didn't think about that prior to this meeting until Keita mentioned it. As long as it's final, we can do it. And the understanding is, if it doesn't change, it reverts back to whatever it was previously like our tax rates do. But we are here to answer any other concerns or questions you have, if you have anything for us. And just so you know, Mr. Takai did provide the information at 75 and 100 percent, but it sounds like that's a little bit off the table right now. Page 22 FC-47 November 7, 2024 MR. INABA: Thank you, Administrator Miura. Administrator Kunz, just want to invite you if you have any thoughts or concerns too. None at this time? Okay. Thank you so much. Okay. So, just want to open it up and hear from my colleagues. Again, my intention here would be to postpone this and then bring back either if it's possible, an amendment, or if not, a new bill that allows us to set it by resolution on a year to year basis; or if we don't change it, it remains based on whatever the last resolution passed was. Thank you, Chair. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Kimball. MS. KIMBALL: Yeah. Thank you. Thank you for putting all of this together for us. I'd just like some feedback from the maker or either Administrator Miura or Ms. Costa. To me, one of the questions here is using the payment standard versus AMI; and in your mind are there pros and cons to one over the other? You know, to the second question about the process, I have some comments on that. But that's really kind of my fundamental question here is, is that shift necessary, and if so why, or why not? MR. INABA: May I chime in first, Chair? Okay. For me, the intention is to make it really clear. Right now, no one else, for the most part, is using the payment standard. It's a program coming down from HUD. Kehau's an expert at it because she's working with our Section 8 vouchers. But that's not a number or a system that we normally work with. We see our AMI charts that are published on an annual basis in July, I believe, usually. But I could be wrong there. We always talk in AMI and when we're able to provide that resource very clearly in a chart that always outlined, I think that's to the benefit not only of the Council, but more importantly those who are trying to maybe consider getting into the program. Right now, no one's sure what the payment standard is or how it's come up with. It think maybe, I just learned about it last week, and I think it might be the same for Real Property Tax. So, for it to be just a clearly printed out guideline provided by HHFDC that we all utilize on a normal basis, I think, would be to our benefit. MS. MIURA: If I could speak a little bit. And it is a housing program and I can understand why many years ago they went to the payment standard because with technology things have really advanced. How we get data has changed. But now that we understand how Housing calculates the payment standard, and when Mr. Inaba did bring this up the first time we were all kind of pointing fingers. I was pointing at Housing; they were pointing at me, and we're like, okay, something's not right. It does appear, and Kehau can kind of correct me if I'm wrong, that their use of the payment standard has gone into an area where it should really be disconnected from Real Property Tax. When they figure out their payment standard and the difference that they're going to pay for their Section 8 housing, they shouldn't have to think about how this is going to affect Real Property Tax or the County's budget. They should be able to do their calculations for their purposes. And so, I can understand from that regard, it might be beneficial to break away from that. Is that correct? Page 23 FC-47 November 7, 2024 MS. COSTA: I would agree, primarily because our payment standard —what we take into consideration to develop our payment standard is our overall budget, our federal budget that comes to us. So, we have 2,130 vouchers. The per unit cost of that voucher just on average and, you know, it's one, two, and three bedroom and up, but the per unit cost of each voucher right now is a little over a thousand dollars. So, that's about a $26 million to $28 million budget. If our federal budget is cut, the only tool that we have to decide on is, do we issue less vouchers, or do we reduce the payment standard so that money spreads further. So, our consideration of how we develop the payment standard is based on the market, and it's based on our budget, and it's based on our community. So, if our budget is cut, then we'll pull back on the payment standard to try to —we could, I'm not saying we will, but we could pull back on our payment standard to make it cover more households. That will directly affect the Real Property Tax rate because we'll set it at 90 percent instead of 110 percent. If the federal government gives us a lot more money, then we can start going into like small area rents and we could really maximize, and we can go up. We can even do a study to go up to 140 percent. But that's only if we have the budget to do it and that will affect this program as well. So, when I'm looking at the payment standard, I'm trying to take into consideration how this is going to impact Real Property Tax's Affordable Rental Program, and I probably shouldn't, right? I probably shouldn't be doing that. Although, I'm not saying that that's not an appropriate Housing policy. It's just, you know, coming out of Housing, it just maybe shouldn't be connected to the Section 8 rent payments. MS. KE\4BALL: Thank you for that. That actually helps quite a bit, both of your responses. To the maker, as long as we can meet RPT's timelines, if we were to set these values and not cause any additional headache in terms of re -upping the program every year. What I would suggest is, you know, not perhaps limiting the Council's consideration to AMI, but maybe also the payment standard and also one of the things that is important here is that utility cost and, you know, if we were to see some major shifts in that area. So, I like the idea of giving the Council some flexibility of setting those values with the suggestion that we put a cap of kind so that we could go lower but potentially not higher. And whether that's at like at 80 percent AMI or 100 percent or whatever, but I think that would be kind of the direction I would recommend we go. Thank you. CHR. KANEALI`I-KLEINFELDER: Thank you. Checking in with Kona? Council Member Villegas? No. Okay. Council Member Kagiwada. MS. KAGIWADA: Thank you, Chair. Alright, this is very interesting. I'm still, I guess grappling with the question which is putting aside that if we go with payment standard versus AMI, changing potentially the rate and how that would Page 24 FC-47 November 7, 2024 affect some of our folks on the lowest economic levels that are needing this help. I know there was the discussion about, you know, Lisa mentioned if rates push up, not all or maybe even the majority of people are not necessarily pushing up to that level. But my question to, I guess, either or both of you, I guess I'm looking at Kehau first is could that be that people have what they consider good tenants and they don't want to lose them and they're going to keep at a certain rate. But if that tenant leaves, they could be pushing up to the maximum level and therefore, you know, being a place that people at the lower end cannot afford any longer. Is that a possibility or a probability, or do you have any thoughts on that? MS. COSTA: It's a possibility. MS. KAGIWADA: Is based on your knowledge and dealing with, you know, so many of the folks in these programs, do you feel like there's a good possibility that people would not push their rents up even if not changing tenants? MS. COSTA: So, only about 20 percent of the Section 8 landlords participate in the affordable rental program because our payment standard is higher than the cap. So, my comparison wouldn't I don't have a lot of families that I would be able to do that comparison. We have a lot of really good landlords with long-term tenants that, you know, keep the rents affordable for their families and work with their families. But market conditions, when those tenants leave, and market conditions are good, they'll raise the rent. MS. KAGIWADA: So, you're talking primarily about the Section 8 program. MS. COSTA: Section 8, yeah. MS. KAGIWADA: Okay. So, Administrator Miura, what are your thoughts as far as the affordable housing program and if you feel like people are keeping those rates affordable even when they have a chance to boost it up because of the good tenants they have or is it more philosophical, we're going to keep it this way even if we turn over tenants, we're going to keep it as low as we possibly can. MS. MIURA: You know, I wouldn't be able to answer that question. I have to really reach out to property managers or others because I think it differs and it really depends where the properties are located, and I couldn't even begin to answer that off the data that we have in our office. Sorry. MS. KAGIWADA: Okay. And then as far as the people, the 20 percent that actually do work in both, is that something that it would be good to try to grow the number of people who are in both programs or is having separate, you know, more people doing this and then separately having more people do that, a better program? I don't really understand what is the preferable as far as, you know, helping people afford and getting enough landlords to participate. So, any thoughts on that? Page 25 FC-47 November 7, 2024 MS. COSTA: So, for our program, I think it's important to remember that the payment standard is based on a fair market rent. And so, landlords that participate in the Housing Choice Voucher Program are benefiting from a payment standard that's 110 percent of fair market including utilities. But we do rent reasonableness studies on each unit, right. So, a landlord comes in and says, "I would like to charge the highest rent on your payment standard." Well, we go out, we do an inspection, we make sure that the home is safe and the quality of the home —and it's comparable to the area, other rents in the area. So, you know, maybe a home that's older has some deferred maintenance, is not a newer unit, maybe it's smaller; they're not going to be able to get the highest payment standard. Maybe they're more, you know, rural than right in Hilo so they're not getting the highest payment standard. We won't approve the rent that high and so those are the types of homes that fall into the affordable rental for our program. MS. KAGIWADA: I see. MS. COSTA: Just some of the older homes that are —not the newer units. MS. KAGIWADA: Okay. So, there's already some differentiation there as far as what people can charge and also somewhat maybe geographically. MS. COSTA: Right. Yes. MS. KAGIWADA: Alright. Okay. MS. COSTA: I don't know if that answers your question. MS. KAGIWADA: It gives me more information for sure. Thank you for sharing that. Yeah. So, I'm still just struggling to see how we do this to get more people in the program. You know, we've talked about this so much. Obviously, with passing Bill 104 and doing the long-term rental bill, that was part of it was try to get more people to do long-term rentals who would not necessarily qualify for either of these two programs. I am a little concerned that as we look at the payment levels that we do not raise it to a point where people who can barely afford what they're in right now, or people similar to them who would that lowest kind of rate would no longer be competitive to be in those places. So, looking to, you know, your expertise to make sure as we go forward, like keeping that front of mind that we don't do that, you know, happy to consider. Yeah. MS. MIURA: Lisa Miura, Real Property Tax Administrator. I'm only saying that for the person who has to take notes of this meeting because I think our voices are a little similar sometimes. I think from Real Property standpoint and understanding everything that was said, you had a good question about which program would encourage more individuals in it. And if I'm not mistaken, I think Section 8 is maxed out on your vouchers. So, they can't encourage their program Page 26 FC-47 November 7, 2024 because they're done putting out the new ones for now, and that could change. So, it depends what County Council's trying to do. From our side, when I look at the numbers that East Hawaii has, 1,808 applicants in this program, or properties, excuse me; and West Hawaii has 113 applicants. We have a fair and equitability issue that really needs to be addressed at some point. And I know it's come up from time to time and I think relying on Housing's payment standard worked for a while, but we need to look at other ways to get that information. The payment standard comes to us usually in late September. And so, that might be another reason, if Council's going to go to resolution, that you're not always looking at the payment standard because that's going to come out very close to the time you're setting your resolution, whereas, the AMI comes out in July. And so, that provides you time to look at it and to study it. I think to answer some of the other questions, if we start seeing that people are raising their rates when you do the monthly rates, as a result of it, when you're doing the upcoming year, then that would be something you could consider in pulling back on the resolution and what's allowed. Right now, we're not putting all that information in there. I pulled the West Hawaii numbers for this today mainly because there was only a hundred and something, so I could do that, you know, fairly quickly. But to pull the other 1,800 wasn't going to happen for today. But knowing some of the questions that are coming up, that'll help us put in whether it's a first-time tenant, whether it's a continued tenant, and maybe we can get better data from it. It's just right now it's not anything that we've been looking at as a reason to track. MS. KAGIWADA: Okay. So, yeah. To the maker, really happy that you brought this forward and that we're exploring it. Supportive of going to the AMI. I think it sounds like everybody is kind of got on board there. Still, just yeah, really cautious, I guess, as we look forward to looking at setting the rate. So, thank you. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you. Thank you, Council Member Inaba, for putting this forward so we could have the discussion. And thank you, Mr. Takai, for reaching out and really sharing your expertise on the intention behind this particular program and being such a fierce advocate for making sure that people can afford to live here. I really appreciate your mana`o and your presence. Housing, Real Property Tax, there's an idea of giving the Council the ability to set these rates based on a blending of information available. Is that realistic? I mean, given the timeframe in which you just shared, Lisa, when you can expect to receive some of that data; AMI in July, payment standards in September, is it really realistic for us to take a look at that as a body and make a decision? MS. MIURA: Well, right now they give us the document in usually late September or as close to October lst as possible, and we can put it in our system Page 27 FC-47 November 7, 2024 and update the very next day because we are just waiting for those numbers. I think it really depends on Council. So, I have faith in Council now and the next two years. I think it depends on the makeup, honestly. And if they remember that there's a resolution that they need to pass. But if they don't, then it just stays where it was. Then I believe constituents will reach out and let their Council Member know, "Hey, rates have gone up or down and you do something about it." .I don't know what the resolution take on the Council side from us. If we get it September 30, we need 24 hours, and we'll have it posted. MS. KIERKIEWICZ: In terms of mechanics for rolling out the program, and maybe this is a question for the maker, whose kuleana is it to compile all that information and provide a recommendation on what we should be adopting? Is it something that would rest with the Council; are we directing Housing or Real Property Tax to do it? I'm really curious how that piece plays out. MR. INABA: For us, I think we'd be looking at what HHFDC provides us in July and then also looking at how successful the program is. So, if we're not seeing anyone in West Hawaii, for example, joining the program that might tell us that we need to increase the rental limit because right now we have so little, whereas, we probably don't want to really move things around in East Hawaii too much right now because we have 1,800 folks in there. But it gives us that flexibility. We probably won't be waiting for the payment standard of that year since it comes anyway in September, which is our timeline to get the resolution passed. But we would have at least the payment standard from the previous year, the AMI from HHFDC from the current year, and a review and ability to see what the inventory of affordable housing rentals looks like in the current program. MS. KIERKIEWICZ: I understand all of that. Totally on board with it. Who is doing that work? We are not here forever. There will be future Councils; there will be other members in OHCD and Real Property Tax. I think it's very important that yes, Council is doing the resolution but who will be doing the backend work to make sure all those calculations are done, and the data is considered? MR. INABA: The numbers would be changing year to year anyway with the AMI change from HHFDC. So, once we set it, for example, at 80 percent AMI for East Hawaii and 100 percent for West Hawaii, it remains because each year they will be updating; HHFDC updates their numbers. So, it's not stagnant. So, even if the Council chooses not to change the percentage, the actual rent would be changing from year to year, and that would be available to Real Property Tax in July. MS. KIERKIEWICZ: Ladies, you want to weigh in? MS. MIURA: Lisa Miura, Real Property Tax Administrator. I'm going to vote for the Chairman of whatever Housing Committee there is on County Council; Page 28 FC-47 November 7, 2024 that maybe it's one of their duties for that. Because I do see what you're saying. Somebody, when you guys are gone, and same thing when we're gone, and I think this happened to the program. Administrations changed, the focus on who did it changed. So, like resolutions, when it comes to the tax rates, if I'm not mistaken, it's County Council who does the resolution for the tax rate, and I don't know if that's the responsibility of the Chair. But miraculously, each year that resolution happens, and I think it's the County Clerk's Office. So, I can see Jon's face is not thrilled. But because of how the Council is set up currently, I don't know if there's specific tasks to someone. So, yeah. MS. KIERKIEWICZ: For the record, our Clerk has a very stoic face. Okay. Kehau, did you want to weigh in at all? MS. COSTA: So, I do think it depends on the methodology that you determine that you're going to base this on. If it's as simple as a percentage, an AMI percentage of the HHFDC chart, I don't want to speak for Lisa, but that's not a complicated calculation at all. You're just pulling a number off of a chart. If you're asking, if I believe what you're asking is a blending of information and setting a policy or a direction, then Lisa and I had an ah-ha moment the other day when we both realized that there's a gap between who's determining the intention and the policy of this program. So, if you're looking at policy decision and a blending of information, of data, then it would be Housing. But it depends on how you write that resolution. MS. KIERKIEWICZ: Well, it depends on what we're going to do with the Code, right? Like right how we're potentially changing payment standard to AMI. MS. COSTA: Correct. MS. KIERKIEWICZ: And I heard colleagues say, "Let's look at all of it." What would be most advantageous to folks that are trying to live here. And I'm all for looking out for all of that information, but I also have to remember, we are not always going to be here, and I want to make sure that someone is continuing to do the work, or we're writing in the code provision the fallback plan in case someone forgot, right? Okay. Great. Thank you. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Kimball. Council Member Inaba. MS. KIlVIBALL: I was just, given what Administrator Miura just said in the conversation with Council Member Kierkiewicz, you know, in addition to making it so the Council sets by resolution; sets by resolution by a such and such a date, which is going to be before December 30'h as an obligation. Setting the upper threshold of what the Council can choose to do, based on AMI or something else, and perhaps, I'm not necessarily sure I want the default to be that same level of AMI. We might consider looking at like the cost -of -living increase or the cap to Page 29 FC-47 November 7, 2024 kind of address what Council Member Kagiwada was talking about, so the jump is really more tied to that increase as opposed to the area AMI because I think that there's the potential that that shift could be greater than cost of living increase for those folks that are already in homes. So, that might be a suggestion to limit as a default, if the Council fails to act then rather than the current rate staying in place or immediately going to the 80 percent AMI calculation. That's actually something more moderate like a three percent increase of the previous years or something along those lines as just a possibility to consider. I think one of the main things we want to avoid for both taxpayers and the renters is massive shifts in year-to-year payment rates. And so, using that as the potential default as opposed to just sticking, you know, exactly with AMI might be a way to ameliorate that. Thanks. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Inaba. MR. INABA: Thank you. I think that's something we can definitely take up, almost like a cap protection for renters should this Council fail to act. But yes, I thank everyone for their input. Thank you to Housing and RPT for being here, and I'm just going to ask after Chair gets to speak, a postponement, and then we'll know for certain whether this bill is viable or we're just going to bring a fresh bill based on what we talked about. So, thank you all. Do you have anything? CHR. KANEALPI-KLEINFELDER: I do have one. To whomever, listening to our discussion on the rate and what it's tied to and seeing how volatile the market is and completely out of our control, is there a way for us to predictively set rates? We saw during COVID (Coronavirus Disease), we saw markets spike that was way beyond what anyone thought was going to happen. So, looking at events like that in our community, which is, I think, our volatile Hawaii real estate market, which is driving fair market rental rates across the island, how do we predictively do that. And I'm thinking about our process; I don't want to get in too much because our other Committee started at 10:30 a.m., which was five minutes ago. But I'm just wondering, to the different departments and the brilliant minds here, if there's a way for us to set our process so we are predictively looking at what our rates are going to be and what we want to help cover on our side to make rentals more available to local families. That's it, just real easy. Again, I don't want to get into it right now. I'm just saying that it's going to be postponed. We can talk about this but that's where my brain is going, and I think that's what I'm hearing from my fellow Council Members as well. MS. COSTA: Thank you for the question. It's a complex answer. CHR. KANEALI`I-KLEINFELDER: I'm getting that. Page 30 FC-47 November 7, 2024 MS. COSTA: Right. So, we could have an explanation about market conditions. Simply, the payment standard is that. It's a rent study; inflation, CPIs (Consumer Price Index) calculated. There's a whole methodology that HUD does. So, it's a safe prediction of market rents. CHR. KANEALI`I-KLEINFELDER: Is it predictive or is it like a six-month process that was based on information from when they started, and then they land, and then they give it to us and then we implement? And I know government takes a long time. So if I'm guessing, our predictive actually puts us at about a year or six months behind the schedule. That would be my guess in my non -logical man brain. MS. COSTA: There are tools that we could implement to have a more up-to-date market study. CHR. KANEALI`I-KLEINFELDER: Okay. Okay. Cool. That's all. Thank you. To the maker. MR. INABA: Thank you, everyone, again. Vote on Motion Mr. Inaba moved to postpone Bill 218 to to Postpone: November 19, 2024. Seconded by Ms. Kierkiewicz (Approved) and 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 Member Galimba —1. Excused: None. CHR. KANEALI`I-KLEINFELDER: That brings us to the end of our agenda. ADJOURN- There being no further business on our agenda today, Chair Kaneali`i-Kleinfelder MENT: adjourned the meeting at 10:39 a.m. Thank you very much. Approved: LV 5-6, Mr. Matt K.tneali'i-KleinfeldeChair (Date) Finance Cottee VUTK,f 9 Page 31