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HomeMy WebLinkAboutMIN FC 2025/08/05 (2024-2026)Committee on Finance 16th Session Hawaii County Building 25 Aupuni Street Hilo, Hawaii 96720 August 5, 2025 CALL TO The regular meeting of the Committee on Finance was called to order at ORDER: 1:02 p.m., in the Council Chambers, Hilo, by Mr. Matt Kaneali`i-Kleinfelder, Chair. ROLL CALL: Present: Mr. Matt Kaneali`i-Kleinfelder, Chair Mr. James E. Hustace, Vice Chair Mr. Holeka Goro Inaba, Member Ms. Jenn Kagiwada, Member Ms. Ashley L. Kierkiewicz, Member (came in later) Ms. Heather Kimball, Member Mr. Dennis "Fresh" Onishi, Member Ms. Rebecca Villegas, Member Absent & Excused: Ms. Michelle M. Galimba, Member STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: The following individuals registered to speak and came forward when called by the Chair: Jon Olson: Bill 38, Draft 2 (Comm. 203.7), in support. Eileen O'Hara: Bill 38, Draft 2 (Comm. 203.7), in support. COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. Comm. 23.17: REPORT OF FUND TRANSFERS AUTHORIZED: JUNE 16 — 30, 2025 From Controller Jon Arbles, dated July 16, 2025. Motion to Close File: Mr. Inaba moved to close file on Comm. 23.17. Seconded by Mr. Hustace. CHR. KANEALI`I-KLEINFELDER: Is there any discussion? Council Member Hustace, go ahead. FC-16 August 5, 2025 MR. HUSTACE: Thank you, Chair. If I could have some time going through this that would be amazing? CHR. KANEALI`I-KLEINFELDER: Yeah. MR. HUSTACE: I'd like to speak with a couple of the departments just for some clarity on these. Is there a representative from Public Works today? Ms. Kalua- Lewis, thank you. CHR. KANEALI`I-KLEINFELDER: And to all of our staff joining us today, please introduce yourself for the record before you begin. (Note: At this time, Public Works Business Manager Kelsey Kalua-Lewis came forward to address the members of the Committee.) MS. KALUA-LEWIS: Good afternoon. Kelsey Kalua-Lewis, Business Manager, Public Works. MR. HUSTACE: Thank you, Ms. Kalua-Lewis. If you could just give us some insight into the transfer, about $650,000 specifically for signals and streetlights, maybe you can just give us some explanation on some of those and the need there. MS. KALUA-LEWIS: Yes. So at the end of fiscal year 2025 when we were looking through traffic, looking over their entire budget as a whole they had some unanticipated —well, some of the costs came in lower than anticipated in some of their other sections. So what we decided to do is to kind of be proactive and we bought off of the price term agreement some items that would help to continue upgrading of light fixtures, upgrading of the sign inventory, et cetera. I mean, we're always going to need the money. Traffic is always consistently working on those types of things so we opted to transfer the funds and purchase while we could. MR. HUSTACE: Thank you, Ms. Kalua-Lewis. And that's all I have for Public Works at the moment. Thank you so much. MS. KALUA-LEWIS: Thank you. MR. HUSTACE: And then someone from Research and Development. I know Deputy was here, yeah. Just a question on a transfer of funds. It's $9,000 for motor vehicle, but in the explanation it lists that it's an older vehicle. (Note: At this time, Research and Development Deputy Director Dennis Lin came forward to address the members of the Committee.) MR. LIN: Good afternoon. Dennis Lin, Deputy for Research and Development (R&D). So what we have here is in addition to whatever funds that we had to Page 2 FC-16 August 5, 2025 purchase a new car to replace this vehicle. So in our budget for fiscal year 2024- 2025 we had $40,000 allocated for EV (Electric Vehicle) leases but, you know, the administration decided to utilize those funds to replace a vehicle within R&D. So what we did was we utilized that $40,000, but the quote from the vendor came back at $49,000. So we did have some extra funds from our subscription and memberships because some of the memberships have moved on to OSCER (Office of Sustainability, Climate, Equity, and Resilience) so it wasn't relevant to our department. So those funds were used to cover that extra cost of $9,000 for the purchase. MR. HUSTACE: Got it. Thank you, Deputy. Appreciate that. MR. LIN: Thank you. MR. HUSTACE: And then next up I think we have Major (Jeremie) Evangelista from Police or if anyone can speak to the Police piece. Yes. Perfect. Thank you. (Note: At this time, Police Accountant Hau`oli Aiona came forward to address the members of the Committee.) MS. AIONA: Good afternoon. Hau`oli Aiona, Accountant for Hawaii County Police Department. MR. HUSTACE: Thank you, Ms. Aiona. If you could just share with us. I understand the importance and the work here and these monies going into overtime for employees. In total it's about a million dollars being transferred for overtime services. And so some of it's coming out from, you know, the excess in fuels and lubricants, electricity; some is coming from Hi -Pal even. So different areas and different pockets there, so if you could just share with us a little bit about that shift over for those funds. MS. AIONA: Sure. So if you look at it, the first one was from our regular salaries and wages. Anywhere we had additional funding that was used due to vacant positions we moved it into the overtime to cover, so we stayed within our salary and wages for both. And then the second one was for the $572,300; that is where we were short on the salary and wages because we had exhausted. So then we went into our OCE (Other Current Expenses), our incidentals, where electricity it was not as high as we had appropriated for. Fuel and lubricants as well because there was no increase in any type for the fuel and lubricants. And our public safety supplies, we actually had some grants that were able to purchase some of the things we had appropriated for to be purchased with these funds, so we had an excess. So that was then transferred over so that we could meet all of the salary and wages with the overtime. MR. HUSTACE: Thank you, Ms. Aiona. Appreciate your time. Page 3 FC-16 August 5, 2025 MS. AIONA: Of course. MR. HUSTACE: And I think the last one, Chair, just for Parks and Recreation, if that's alright? Thank you. Ms. Felipe is here. (Note: At this time, Parks and Recreation Business Manager Charmaine Felipe came forward to address the members of the Committee.) MS. FELIPE: Good afternoon. Charmaine Felipe, Parks and Recreation Business Manager. MR. HUSTACE: Thank you, Ms. Felipe. Just on some of these they're very specific in removing kind of out of our Aquatics Division for repairs to facilities. Could you just kind of provide some insight into why specifically that division when we have some other facilities that do need some repairs; like I could think about the Kohala swimming pool, things that could be afforded at that level to make some of those repairs. MS. FELIPE: Right. Good question. So specifically for Kohala, most of the projects for aquatics fell under the ADA (Americans with Disabilities Act) compliance projects. And so there were other funds that could be used for those projects. MR. HUSTACE: Okay. Thank you. So this is just kind of shifting over some where additional funds are needed then? MS. FELIPE: Yes. MR. HUSTACE: Anticipated cost of telephones, office supplies, and so forth. Okay. Thank you, Ms. Felipe. MS. FELIPE: You're welcome. MR. HUSTACE: Thank you, Chair. I'll yield for now. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Onishi. MR. ONISHI: Thank you, Chair. Can I get Finance to come up? (Note: At this time, Finance Deputy Director Malia Kekai came forward to address the members of the Committee.) MS. KEKAI: Hello. Deputy Director Malia Kekai. Page 4 FC-16 August 5, 2025 MR. ONISHI: Thank you. You know, within the past months we've been seeing a lot of transfers of funding from one account to another. Looking at budget when we were prior, right, in May and so forth, June, you know, we were looking at how we can reduce expenses. And now I'm looking at all of this and I'm going like, wow, there is places for next year's budget that we can be reducing and putting money where we need to put it in instead of having this last minute or this ending of the fiscal year to transfer all these funds, right? But then also to me and correct me if I'm wrong, if we didn't have to transfer this, this could've gone into the fund balance, correct? MS. KEKAI: If it wasn't spent, yes, it would lapse into the fund balance. MR. ONISHI: Right. And then that would increase our fund balance to help with our 2025-2026 budget? MS. KEKAI: Yes. But these costs needed to be covered so that's why we transferred them from one fund that isn't spent down to the fund that the funds were spent down in. And I think just to also tell you, when we budget obviously we can't budget exactly because we're trying to predict, right, project? MR. ONISHI: I understand. But this is year after year after year. MS. KEKAI: Right. MR. ONISHI: So it should be kind of set, right? You know more or less because, I mean, you look at some of them transferring of $210,000. That's kind of a lot. I can see $10,000, like $14,000, $5,000, like that $13,000. So it's kind of like their account, their balance was almost right there, but they had this little bit extra. But when it exceeds over six figures, that's kind of a lot. So it's kind of like overestimated of what they needed. MS. KEKAI: It's really all relative and it really is a case by case basis because sometimes fuel prices go up like crazy, right, and if we don't have enough we're going to have to transfer them too. And sometimes they don't rise and then we have extra. I mean, insurance is the same way; electricity is the same way. It's really hard to get to exact, right. We have to leave, you know, a little bit in there and then that's what gives us the flexibility at the end of the year. Could we be tighter? I think, you know, going forward we always strive to be closer and closer and follow the trends so we will continue to do that. MR. ONISHI: Okay. Okay. I mean, it's like looking at this, I could see where money could be spent in other areas. And for me, services within for our communities. I mean, even looking at creating early childhood care, right. I mean, helping our workers, the young families that have younger children with their childcare, right? So there is so much that I guess needs to be reevaluated. And as I've always mentioned to you, and Director (Diane) Nakagawa is that to Page 5 FC-16 August 5, 2025 me I believe Finance is the department that needs to do the audit or to really look at all the different departments and how their budgets are and then kind of correct it or at least help them. MS. KEKAI: We definitely do strive to review every single budget and help guide. And budget is just around the corner, so we'll be kicking that off shortly. MR. ONISHI: And then, you know, like public safety is one of the main ones, right? And then to me, also is recreational for our youths and seniors that we need to really focus on. MS. KEKAI: Yeah. We agree. We are in alignment with that, and we will definitely be looking at the budget closely. MR. ONISHI: Okay. Thank you. MS. KEKAI: Yeah. MR. ONISHI: I yield. CHR. KANEALI`I-KLEWFELDER: Thank you. Council Member Kimball. MS. KIMBALL: Yeah. Since we're delving into sort of philosophical questions about budget, hold on, Deputy. The budget, you know, having seen these transfers come through now for a while, are we at a point where we perhaps have too much specificity in our accounting structure so that there isn't a flexibility for things, unanticipated circumstances like you said, changes in fuel cost, changes in energy costs, things like that? I'm looking at some of these things and it's like it feels like the department should just be able to do that. It's part of what they need to be able to do to operate. So not to spend too much time on it because this isn't really the appropriate forum, but just one of the thoughts I've had about seeing these transfers come through. MS. KEKAI: Sure. I mean this is definitely a big conversation we've had since we've been implementing our new ERP (Enterprise Resource Planning) system is basically how far do you go down. I know Director Nakagawa has experience in Pheonix and they actually budget to the fund. They don't even go down to the base or the line item. So I think it just depends how much control we want and how much we will allow, you know, so I think that it's an ongoing conversation of convenience versus budget controls, right? We go back and forth all the time, so I think we'll continue to review that especially as we implement this new system and we have a new controller who also has a lot of background in accounting and budget control. So it's an ongoing conversation. MS. KIMBALL: Yeah. I realize that the tradeoff is that accountability, that transparency. But at the same time, you know, this body has over the years talked Page 6 FC-16 August 5, 2025 about budgeting for outcomes, right? And to me if we were to do better at saying these are the metrics that we would measure a department's success in terms of spending their funds and however they got there is kind of up to them. To me that might be a more meaningful approach towards budgeting. Just a thought. Thanks. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Anyone else? No. Okay. The questions are good. My follow up is for the department. How do we reference this in the budget hearings; do we see this information presented? I would assume from this past experience that we will see the budget for this year, next year, whatever it may be, but it doesn't ever take into account the last-minute transfers that occur the last two months of the year. How is that recognized by the budgetary process? MS. KEKAI: Yeah. I think currently what it is, is we show you the last three years of budgeted amounts and not the actuals, right? I think eventually once we get this new system in place and we're able to be current, right, not kind of behind, we'll be able to get you those numbers as actuals and budgeted so to be able to see both of those numbers at the same time when the budget comes. Not this year, but hopefully next year we'll have that, be able to run a report for you all that shows both, not just the budgeted but also what the actuals are. CHR. KANEALI`I-KLEINFELDER: Yeah, that would be helpful. I mean, thinking about Fresh's comment and we have a budget presented to us that is, you know, status quo or plus two percent or whatever it is per department, but the values in each line item are approved by the department and meet the goals that we're searching for as a County going to see three, four, five million dollars going to transfers, which isn't huge in a billion dollar budget, but is substantial; it makes you wonder whether the number was accurate in the beginning and why it was good then and not now. And understanding there are price differences and different things that happen along the way, which is interesting to see the most every year. MS. KEKAI: Yeah. And we'll strive to get closer and closer as we see the trends and as this new system, as I said, was in place. So yeah, we will definitely be trying to get those numbers closer and closer so that we don't have to be doing all these transfers during the year and, you know, at the very end. CHR. KANEALI`I-KLEINFELDER: Okay. Thank you. Okay. Seeing no further discussion, motion is on the floor. All members in favor? Page 7 FC-16 August 5, 2025 Vote on Comm. 23.17: The motion to close file on Comm. 23.17 was carried by Filed the following voice vote: Ayes: Committee Members Hustace, Inaba, Kagiwada, Kimball, Onishi, Villegas, and Chair Kaneali`i-Kleinfelder — 7. Noes: None. Absent: Committee Members Galimba and Kierkiewicz — 2. Excused: None. Comm. 24.14: REPORT OF CHANGE ORDERS AUTHORIZED: MAY 16 — 31, 2025 From Finance Director Diane Nakagawa, dated July 8, 2025, transmitting the above report pursuant to Section 2-12.3 of the Hawaii County Code. Vote on Comm. 24.14: Mr. Inaba moved to close file on Comm. 24.14. Seconded Filed by Mr. Hustace and carried by the following voice vote: Ayes: Committee Members Hustace, Inaba, Kagiwada, Kimball, Onishi, Villegas, and Chair Kaneali`i-Kleinfelder — 7. Noes: None. Absent: Committee Members Galimba and Kierkiewicz — 2. Excused: None. Comm. 24.15: REPORT OF CHANGE ORDERS AUTHORIZED: JUNE 1-15, 2025 From Finance Director Diane Nakagawa, dated July 10, 2025, transmitting the above report pursuant to Section 2-12.3 of the Hawaii County Code. Motion to Close File: Mr. Inaba moved to close file on Comm. 24.15. Seconded by Mr. Hustace. CHR. KANEALI`I-KLEINFELDER: Discussion? Council Member Hustace. MR. HUSTACE: Thank you, Chair. I think the first one is going to be for a question to DPW (Department of Public Works). Thank you, Ms. Kalua-Lewis. Appreciate you here being with us. There's one project, let's see, Contract Number 11511, it's a civil engineering service for safe route to Waiakea Schools. Original contract over a million, $1.04 million; and a change order of $300,000. And the explanation says that it was for additional design fees for waterline improvement. Was that not in the original contract for waterline improvement or how did that? (Note: At this time, Public Works Business Manager Kelsey Kalua-Lewis came forward to address the members of the Committee.) Page 8 FC-16 August 5, 2025 MS. KALUA-LEWIS: Sorry, could you repeat that contract number? MR. HUSTACE: Sure. It's 011511. MS. KALUA-LEWIS: Okay. And this is for the safe routes to school? MR. HUSTACE: Yeah. So safe routes to school. I would think safe routes to school wouldn't have been a waterline impact unless there had been substantial infrastructure improvements. So I'm assuming waterline improvement wasn't part of the rezone project but now is? MS. KALUA-LEWIS: Yes. Correct. So when they went in and actually started the project, they realized that the waterline repair would be necessary. MR. HUSTACE: Okay. And what other work is being done there or things we might expect or is this kind of the big substantial change to it? MS. KALUA-LEWIS: I think that would be the big substantial change. Safe routes to school, usually that project doesn't have much unforeseen. So I think this one, while surprising, needed to be done. MR. HUSTACE: How did the two —with the safe routes to school, I'm thinking of pedestrian crosswalks, flashing signals, sidewalks, curbs, gutters. MS. KALUA-LEWIS: Yes. MR. HUSTACE: So at what point do we say, okay there's actually some waterline improvement; like what was that trigger? MS. KALUA-LEWIS: That part I wouldn't know. That's more a question for the engineering team. MR. HUSTACE: Thank you. I can work with them and ask them my question. Thank you, Ms. Kalua-Lewis. MS. KALUA-LEWIS: Okay. Thanks. MR. HUSTACE: Thank you. And I think my next question is for —no. I'm okay, Chair. Thank you so much. CHR. KANEALI`I-KLEINFELDER: Thank you. Okay. Seeing no further discussion, motion is on the floor to close file on Communication 24.15. All in favor? Page 9 FC-16 August 5, 2025 Vote on Comm. 24.15: The motion to close file on Comm. 24.15 was carried by Filed the following voice vote: Ayes: Committee Members Hustace, Inaba, Kagiwada, Kimball, Onishi, Villegas, and Chair Kaneali`i-Kleinfelder — 7. Noes: None. Absent: Committee Members Galimba and Kierkiewicz — 2. Excused: None. Comm. 24.16: REPORT OF CHANGE ORDERS AUTHORIZED: JUNE 16 — 30, 2025 From Finance Director Diane Nakagawa, dated July 10, 2025, transmitting the above report pursuant to Section 2-12.3 of the Hawaii County Code. Motion to Close File: Mr. Inaba moved to close file on Comm. 24.16. Seconded by Mr. Hustace. CHR. KANEALI`I-KLEINFELDER: Discussion, Council Members? Council Member Kimball. MS. KIMBALL: Yes. If I could have DEM (Department of Environmental Management) with regard to the services for Okahara and Associates, please? (Note: At this time, Environmental Management Business Manager Robin Bauman came forward to address the members of the Committee.) MS. BAUMAN: Good afternoon, I'm Robin Bauman, Business Manager for Environmental Management. MS. KIMBALL: So could you just describe what these special services are, and this is an extension of the contract; is this a regular contract that we hold with them? MS. BAUMAN: It's a consulting contract. We're extending it for six months to do additional services. These are specialty engineering services that help us with engineering work on some of our smaller projects, you know, doing the design, getting bid packets ready to go. MS. KIMBALL: Okay. So this isn't for Hilo Wastewater or large projects? MS. BAUMAN: No. MS. KIMBALL: Okay. Great. Thank you. I yield, Chair. Page 10 FC-16 August 5, 2025 CHR. KANEALI`I-KLEWFELDER: Thank you. Okay. Seeing no further discussion, motion is on the floor. All in favor? Vote on Comm. 24.16: The motion to close file on Comm. 24.16 was carried by Filed the following voice vote: Ayes: Committee Members Hustace, Inaba, Kagiwada, Kimball, Onishi, Villegas, and Chair Kaneali`i-Kleinfelder — 7. Noes: None. Absent: Committee Members Galimba and Kierkiewicz — 2. Excused: None. Comm. 118.2: FOURTH QUARTER REALLOCATION REPORT: APRIL 1— JUNE 30, 2025 From Human Resources Director Sommer J. Tokihiro, dated July 9, 2025. Vote on Comm. 118.2: Mr. Inaba moved to close file on Comm. 118.2. Seconded Filed by Ms. Kimball and carried by the following voice vote: Ayes: Committee Members Hustace, Inaba, Kagiwada, Kimball, Onishi, Villegas, and Chair Kaneali`i-Kleinfelder — 7. Noes: None. Absent: Committee Members Galimba and Kierkiewicz — 2. Excused: None. Comm. 127.2: FOURTH QUARTER REPORT OF UNCAPITALIZED DONATIONS: APRIL 1— JUNE 30, 2025 From Finance Director Diane Nakagawa, dated July 9, 2025, transmitting the above report pursuant to Resolution 538-24. Vote on Comm. 127.2: Mr. Inaba moved to close file on Comm. 127.2. Seconded Filed by Mr. Hustace and carried by the following voice vote: Ayes: Committee Members Hustace, Inaba, Kagiwada, Kimball, Onishi, Villegas, and Chair Kaneali`i-Kleinfelder — 7. Noes: None. Absent: Committee Members Galimba and Kierkiewicz — 2. Excused: None. ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Page 11 FC-16 August 5, 2025 Res. 251-25: AUTHORIZES THE PAYMENT OF FUNDS OF LATER FISCAL YEARS TO ENTER INTO A MULTI -YEAR LEASE AGREEMENT FOR REAL PROPERTY TO BE USED BY THE HAWAI`I POLICE DEPARTMENT Authorizes the Mayor to enter into a five-year lease agreement with four options to extend the lease for an additional five years with GEC Development Group, LLC., for space located at 28-2903 Hawaii Belt Road. Reference: Comm.409 Intr. by: Council Member Kaneali`i-Kleinfelder (B/R) Motion to Approve: Mr. Inaba moved to recommend adoption of Res. 251-25. Seconded by Mr. Hustace. CHR. KANEALI`I-KLEINFELDER: Discussion on the resolution? Council Member Kimball. MS. KIM BALL: Yeah. First of all, I just really want to mahalo the owners of this property for initiating this effort to provide HPD (Hawai`i Police Department) with a satellite office. One of the owners is a former police officer from City and County of Honolulu. And so I know this was a priority for them. Just wanted to ask, typically we do have a lease value indicated for these multiyear lease agreements. I know they were at one time willing to give it to us for free. I don't know if that's still the deal, but do we have a value that they're going to charge us, and can we have that amendment included in the resolution at the next hearing? (Note: At this time, Finance Deputy Director Malia Kekai came forward to address the members of the Committee.) MS. KEKAI: Yeah, it wasn't provided at the time because we were still verifying what was included. But now it is $600 per month, which includes utilities. MS. KIMBALL: Perfect. Great. Okay. Yeah, I'd just like the offer that we should include that in the language of the resolution at the next hearing, so happy to work with —I'm not sure, Captain Evangelista, if there's anything you want to say about this but very excited to have this support from our community members to provide you with the space up there. (Note: At this time, Police Major Jeremie Evangelista came forward to address the members of the Committee.) MR. EVANGELISTA: Jeremie Evangelista, Hawaii County Police Department. I echo those sentiments. We're appreciated of this company offering this space to us. We first opened a mini station is the Pepe`ekeo area back in the late 2000. I was in the volunteer fire station that was over there. At some point along the way Page 12 FC-16 August 5, 2025 we relinquished this space, but we would be happy to be able to have a footprint in the Pepe`ekeo community, someplace for our officers to work out of. MS. KIMBALL: Major. I'm sorry. Major Evangelista. My apologies. I don't know the stars; I don't know how to read that properly. My apologies. I should be know because we're always on the Waimea Association calls together. With that, I just ask for my colleagues support for this. It is something that the community has been asking for, for quite some time and just really grateful that it is moving forward. Mahalo. CHR. KANEALI`I-KLEINFELDER: Council Member Onishi. MR. ONISHI: Thank you, Mr. Chair. Question. This satellite, will it have internet service? MR. EVANGELISTA: I believe that's offered but we're not dependent on that. All of our mobile data terminals are cellular connected. MR. ONISHI: Yeah. So not like before where like down at the Mo`oheau terminal, the substation there but then there was the internet problem. That's why the officers wouldn't go down there because they couldn't do their work. So now it's a different process that you folks have? MR. EVANGELISTA: Yes. The devices themselves are able to connect through the cellular network. MR. ONISHI: And that's all officers? MR. EVANGELISTA: Yes. All of our patrol officers are issues mobile data terminals. MR. ONISHI: So Community Police Officers too? MR. EVANGELISTA: Yes. MR. ONISHI: Okay, great. Thank you. CHR. KANEALI`I-KLEINFELDER: Thank you. Major, this is a 10xl2 office? MR. EVANGELISTA: Yes, 120 square feet. CHR. KANEALI`I-KLEINFELDER: Bathroom, no bathroom? MR. EVANGELISTA: There's a common bathroom. CHR. KANEALI`I-KLEINFELDER: Common area? Page 13 FC-16 August 5, 2025 MR. EVANGELISTA: Yeah, common area bathroom. CHR. KANEALI`I-KLEINFELDER: Does the $600 per month cover the CAM (Common Area Maintenance)? MR. EVANGELISTA: Which? CHR. KANEALI`I-KLEINFELDER: The area maintenance fees. MR. EVANGELISTA: I believe so. I believe all we need to do is use the space. CHR. KANEALI`I-KLEINFELDER: Okay. Okay. And has there been a request for this in the past? I mean, I like the idea, but I often see these spaces just with nobody in them. MR. EVANGELISTA: Anecdotally, people from the community had said they miss the substation. CHR. KANEALI`I-KLEINFELDER: Okay. I mean, overall supportive. Just I've always wondered about the satellites. There's one at Richardson's Beach Park and there's some around the island, but I mean, I rarely see anyone in the facility because they're so mobile now. MR. EVANGELISTA: Yeah. So the purpose is not to staff that office space on a regular basis. It's more of a place where an officer can get out of their car, set their laptop down at a desk and do some work at a desk if we're in before or in between calls. CHR. KANEALI`I-KLEINFELDER: Okay. I think the visibility in the community is definitely something that is mentioned in the resolution but is important. So thank you. MR. EVANGELISTA: Agreed. Thanks. CHR. KANEALI`I-KLEINFELDER: Okay. Council Members, seeing no further discussion, Resolution 251-25 is on the floor to forward to Council with a favorable recommendation. All in favor? Page 14 FC-16 Vote on Res. 251-25: (Approved) Relinquish Chair: STATEMENTS FROM THE PUBLIC ON BILL 38: (DRAFT 2) BILLS FOR ORDINANCES: August.5, 2025 The motion to recommend adoption of Res. 251-25 was carried by the following voice vote: Ayes: Committee Members Hustace, Inaba, Kagiwada, Kimball, Onishi, Villegas, and Chair Kaneah'i-Kleinfelder — 7. Noes: None. Absent: Committee Members Galimba and Kierkiewicz — 2. Excused: None. CHR. KANEALI`I-KLEINFELDER: Before we jump to Bill 38, I'm going to pass the chairmanship over to my Vice Chair Council Member Hustace. Please let the record reflect that happened at 1:36 p.m. At this time, the Chair relinquished the chair to Vice Chair Hustace. ACTING CHR. HUSTACE: Thank you, Chair. I will now be presiding officer for the duration of this discussion. So, Mr. Clerk, if we could move onto Bill 38? The Chair directed the Committee to proceed to the next order of business, Statements from the Public on Agenda Items. The following individual registered to speak and came forward when called by the Chair: Patti Pinto: In support. The Chair directed the Committee to proceed to the next order of business, Bills for Ordinances. Bill 38: AMENDS CHAPTER 19, ARTICLE 13, OF THE HAWAI`I COUNTY CODE (Draft 2) 1983 (2016 EDITION, AS AMENDED), RELATING TO REAL PROPERTY TAX CREDITS Establishes a Private Road Tax Credit of up to $500 to be applied towards a homeowner's real property tax bill when the homeowner expends at least $100 annually to maintain, repair, or improve a private roadway that is not restricted by a gate and is managed by a road maintenance organization. Reference: Comm.203.7 Intr. by: Council Member Kaneali`i-Kleinfelder Postponed: April 15, June 3, June 17, and July 8, 2025 (Note: There is a motion by Council Member Kaneali`i-Kleinfelder, seconded by Council Member Galimba, to recommend passage of Bill 38 on first reading.) Page 15 FC-16 August 5, 2025 ACTING CHR. HUSTACE: Thank you, Mr. Clerk. Do we have any further discussion on Bill 38? Mr. Kaneali`i-Kleinfelder, please. MR. KANEALI`I-KLEINFELDER: Thank you. I couldn't have said it better than Ms. Pinto. Sometimes I think you should be up here, and I should be back there. No, extremely well said in the testimony today. This really does begin to allow us to take better care of our communities in a way that doesn't break the bank and I think is long overdue given that the roads that we're hoping to reimburse folks or provide a tax credit for are maintaining their own roadways, which really does fall under our County kuleana but the, you know, said statehood this separation of private versus public has just been a growing issue especially with the inflow and density we see in Puna and other areas of our island. So again, just summarizing. Bill 38 provides a tax credit at this point, has a maximum of $250 and a minimum of $75. For folks living in a private subdivision with roads that are open to the public that are ungated, and this is for the homeowners class only. So this really does bring us down to local residents who are living in their primary home. So not for transient vacation rentals, not for secondary investment properties. This is for local people and local families. So with that, I did provide a communication today and if you do want to look it over, I actually found it very eye opening; Communication 203.8 is in front of you and it just provides some lists. This is mostly give mahalo to our Real Property Tax Division (RPT) for supplying this list. The importance here I think the first column is the original bill where we had a minimum of $50 and a maximum of $400 of a credit per year. The second large column is the $75 minimum with a $250 max; and then the last column is the subdivision and the associated fees. I would like to point out if you look over the fee schedule, there are a few on here that are marked out and darkened. Those subdivisions right now will actually not be applicable because they fall under the minimum. I wanted to point that out because one of the supporters who's come in for the last two hearings actually lives in Black Sands subdivision and is a supporter, although he recognizes that he's not applicable for the funds at this time and his subdivision isn't either. That's Mr. Rowen. I'm sorry he's not here today. But if you look over the list you begin to see this isn't a Puna specific bill and that it does apply island wide. I've found subdivisions here that I didn't even know existed because they're outside of my district. But I mean, up into Hamakua, in HOVE (Hawaiian Ocean View Estates), Hilo, just a little bit everywhere. So it's not a Puna specific bill as was, you know, brought up in the past. I mean, it does have a bearing, but I'd say not even so hard as District 5, but more so even District 4 has more applicable lots that meet the requirements than District 5 does. So pointing that out just as a methodology of island wide view versus district specific. Page 16 FC-16 August 5, 2025 The middle column in the 2025 combined $75, $250 column; the real applicable number here is if every single lot was to take their $250 max credit that the total would be $1.7 million in a revenue reduction. While I do understand that is not a small number, I mean, looking at our change orders just this meeting alone hitting about $3.5 million, there's cushion in our budget. You know, at a billion dollar budget and allowing these funds to stay in our taxpayers' pockets to maintain the roadways so that we can provide services to them, you know, I find this acceptable in a nice common ground in how we begin to step over decades of you maintain, we don't; County kuleana, private kuleana, and providing a better quality of life for our residents across the island. So I'm open to any questions. I mean, we've been through this many times. So like Mr. Clerk running through how many times we've postponed this. And open to questions from the body and then hoping to make some movement forward on this today. Thank you. ACTING CHR. HUSTACE: Thank you, Council Member. Council Member Kimball. MS. K VIBALL: Yes, thank you. Just so I'm crystal clear, in the second box there 2025 combined, $75 to $250; the tax credit is calculated based on what the road improvement fees are in those subdivisions right now within that range? And maybe that's a Keita, master of the numbers, question or I'm not sure if you know? MR. KANEALI`I-KLEINFELDER: From my understanding this is the maximum value if every lot was to participate, HOA (Homeowners Association) was to submit the information, and it was the maximum per. It may or may not be that each one of the members pays that much every year, but this would be the maximum allowance for subdivision. That's my understanding. Mr. Jo, I think it would be good to hear from you. MS. KIMBALL: Yeah, thank you. (Note: At this time, Real Property Tax Assistant Administrator Keita Jo came forward to address the members of the Committee.) MR. JO: Keita Jo, Assistant Administrator for the Real Property Tax Division. Yes, you are correct. So if a subdivision property was receiving a homeowners exemption and let's say they paid $150 on an annual basis, for their fees they would receive a $150 credit. So that covers anything listed upon that second column or second chart reflects that anything between the $75 and $250 max. MS. KIMBALL: So these are in essence actual numbers based on the language that currently is in the bill? Page 17 FC-16 August 5, 2025 MR. JO: Correct. And these were numbers that were pulled and subdivisions that were pulled based on a poll to our appraisal staff that have a lot more detailed knowledge about their specific areas. So that's the best information we have to date. MS. KIMBALL: Okay. Thank you as always for always for putting the data together. I still have the question, and I'm sorry, Deputy Corporation Counsel Wong. You had asked me what my questions were to prepare you for today and I started that email and then didn't finish it but one of the questions and I don't know if you were able to look into this at, all would be the liability of the association to ensure that their members; if we're using them as the vehicle to report the payments, who's made the payments and what not, are they going to have any legal liability there? I'm not sure if you had an opportunity to look at it and that's on me if you didn't. So don't blame her. (Note: At this time, Deputy Corporation Counsel Keyra Wong came forward to address the members of the Committee.) MS. WONG: Thank you for the question. Deputy Corporation Counsel (DCC) Keyra Wong. So not so much a liability but I am working with RPT to create an avenue via the Finance Director's Administrative Rules to allow a taxpayer to avail him or herself of the credit should in the circumstance should the RMO (Road Maintenance Organization) or RMA (Road Maintenance Association) not turn in that paperwork because I do see that there could be an issue, right, especially in the beginning if the organizations don't have their documentation put together. But we will be having some amendments to the Finance Director's Administrative Rules to allow for that process so that the taxpayer can still avail him or herself to the tax credit. MS. KIMBALL: Okay. That's great. That doesn't sound like anything that we need to have clearly legislated within this bill, right? MS. WONG: No. I think there's sufficient language in the section that elude to any other documentation or requirements by the Finance Director. MS. KIMBALL: Okay. Great. Alright. Thank you for looking at that. I appreciate it. ACTING CHR. HUSTACE: Thank you, Council Member. Over to Council Member Kagiwada. MS. KAGIWADA: Thank you, Chair. So like the testifier said, I also thought at the beginning this would be a really hard sell, but it seems to have, with the creativity and the persistence of the maker, come a long way and I think we've had some really good discussions around this. My two concerns continue to be cost at this time to our County given just what we see ahead, what we all know Page 18 FC-16 August 5, 2025 our liabilities are going to be going forward in the next several years and also the time, the staff time, for RPT. So when we're done with this discussion I'd like to introduce an amendment that I think at least goes some way to introducing both of those issues. ACTING CHR. HUSTACE: Thank you, Council Member. Any other questions before I go back to the maker? Mr. Kaneali`i-Kleinfelder, if you have any other considerations? MR. KANEALI`I-KLEINFELDER: I just wanted to mahalo RPT. I mean, this is your information so thank you for bringing this forward. I'm wasn't sure how hard —I don't want to bug you guys, but I also like that you were able to present this the way that you were and it shows me that you're already tracking this, and it is possible. So as we begin to work with HOAs to provide the documents to coincide with what RPT has on record there's a really interesting collaboration that'll occur out of that that I think will help us better work towards our future and how we're going to plan life in Puna and across the island in these subdivisions, which are fairly massive in the future. And then also just taking a minute that total apps column, which would be applications, was 8,578. And really that creativity in addressing how this affects staff time really does fall back to the department in some very brief but intimate conversations right outside those two doors right there on how this could actually be put into effect without killing the department and the staff, and the answer was simple but, I mean, it really does help craft the overall solution which is if the HOAs can help provide the information in a form directed by the administrator then we can cut down having to review 8,578 application each year and streamline a process. So mahalo to the department for helping kind of bring that idea into existence. And other than that, thank you for your guys help to date, all of you. Thank you. ACTING CHR. HUSTACE: Thank you, Council Member. Over to Council Member Onishi, please. MR. ONISHI: Thank you, Chair. Just a question to the author, the maker. It's always mentioned it's open, I guess this is to help with the open to public traffic, right? So I understand like during those mornings like people are using certain roadways, you know, like maybe the top, well not the highway but the roads like below them, like five of them, to go across and enter to the others like Kaloli or whatever, right, all these other roads. So for me, I would really support compensating them maybe on that part, but the ones way down on Beach Road, I mean, that's basically just the residents back there, right, that uses that road, right? And so that would be kind of hard for me because there was a choice of, you know, what they wanted, right? But then also I remember back then when I was on the Council we talked about that emergency route from Volcano Road coming down to that Highway 11, and I don't think it ever happened, right, Page 19 FC-16 August 5, 2025 because the County was supposed to I guess help fund that project to connect the roads in case there's emergencies. Was that ever done, that emergency road? MR. KANEALI`I-KLEINFELDER: Not Stainback? MR. ONISHI: No. MR. KANEALI`I-KLEINFELDER: A road that was higher up? MR. ONISHI: Well it's like the Volcano Road, right, and then you connect down through the, I guess that's like Fern Forest, all up that side; upper Puna and then you come down to lower Puna to Highway 11. What's that like a road from the top coming down? MR. KANEALI`I-KLEINFELDER: There's an emergency access route that really is a County maintained roadway through Hawaiian Acres but connects to Ainaloa Boulevard. And that's one of our emergency access routes that's existing, but nothing that needed to be built. MR. ONISHI: Okay. MR. KANEALI`I-KLEINFELDER: I'm not sure if I know exactly what you're talking about. MR. ONISHI: Well back then, like I said, they were supposed to like I guess pave or they were supposed to have a road that connects, right. So I could see if the County, we could do something like that where we can add another emergency road, you know, from the top like more closer to Kea`au or wherever. You know what I mean? That has to be mapped out, but yeah. MR. KANEALI`I-KLEINFELDER: I completely agree with that. And I think there are things in the works, connectivity and different emergency access routes but I don't know if it would fall under this bill. I love these questions. MR. ONISHI: I know. But then like I said, but if you propose something like that I would support that. MR. KANEALI`I-KLEINFELDER: Okay. Got it. MR. ONISHI: But this one I'm, you know, possibility. MR. KANEALI`I-KLEINFELDER: Okay. MR. ONISHI: But thank you. I yield. Page 20 FC-16 August 5, 2025 ACTING CHR. HUSTACE: Thank you, Mr. Onishi. Any other discussion? I do have a couple questions. I know there was some —would you like to bring your amendment? MR. KANEALI`I-KLEINFELDER: Just kind of touching on Mr. Onishi's comment. I did find out after discussion, I talked to Hawaiian Acres just to kind of feel out where they stand with this and it was brought to my attention that DOE (Department of Education) actually cancelled their bus route for anyone off of Road 1, because Road 1 is so unkept. And it's not the communities fault. They just don't have the funding to do it. But because their road is in such bad condition DOE cancelled the bus route and now, we have parents trying to figure out how to get their kids to and from school in Mt. View Elementary School, which has actually the biggest truancy rates in the County, if I remember correctly. Just a side note. ACTING CHR. HUSTACE: Thank you, Council Member. I do have a couple questions — MS. KAGIWADA: I just have one question. ACTING CHR. HUSTACE: Sure. Please. MS. KAGIWADA: Just one question. Do you know how many of these subdivisions have mandatory road fees versus voluntary road fees? MR. KANEALI`I-KLEINFELDER: I do not off the top of my head. I can probably tell you there's at least a handful I know are voluntary. But it would be hard for us to give you an exact number right now. MS. KAGIWADA: Okay. In your discussions —sorry. If I may, Chair. Have people talked about maybe going to mandatory with a passage of a bill like this? MR. KANEALI`I-KLEINFELDER: So two part answer. One, yes they have and it's a bylaw work through. So it's community meetings and bylaw changes. Part two is where you have voluntary road dues and you're getting low participation. Knowing that you'll get a tax credit at the end of the year, I think it will help bolster that people donate more to the roads because they know they're going to get back against their property taxes. So this should be proactive on both sides of the fence. MS. KAGIWADA: Okay. Thank you, Chair. I'll wait until your comments. MR. KANEALI`I-KLEINFELDER: Yeah, good question. ACTING CHR. HUSTACE: Just a couple questions before the amendment. To the maker, Mr. Kaneali`i-Kleinfelder, what's going to guarantee improvement; Page 21 FC-16 August 5, 2025 will this guarantee improvement for the roads in those communities? I mean, people are paying in to the RMA, the HOA, for the purpose of the road maintenance; they're giving them that tax credit, but maybe that HOA hasn't taken that step to then really utilize those funds appropriately that they're generating. So just a question on that. And, you know, there are a number of HOAs here, maybe some will take advantage of this and work with their homeowners, maybe some won't. And so it's kind of hard to tell. I mean, we have this number here to $1.7 million of what could be assumed if everyone takes actions, all those HOAs and all the members are taking advantage of this opportunity. But it's kind of unclear where that could be. It could be at that end, or it could be a lot smaller. So I'm not sure really if those HOAs are really engaged in this process. I mean, I'm sure you've talked to many of the members, but the HOA boards themselves, are they prepared to kind of take on this process of working with their members? So a couple of questions if you wanted to address those? MR. KANEALI`I-KLEINFELDER: Okay. As far as a guarantee, it's not any more guaranteed than it is now. But what I do know is with a credit involved you should see more participation from the community and knowingness that my road dues are being paid, it's being tracked, there's better reporting, because the HOAs are actually reporting it back to the County, and hopefully a more willingness to pay on time and put into their community knowing there's a return on their investment as far as the roads being improved. Does it fix it more so? No. Because they barely have enough funding to do what they need to do now. To your second question as far as the usage of the program. I'm sorry, one more time, usage of the program? ACTING CHR. HUSTACE: Yeah. We just have that maximum figure of what could be credited to these homeowners in total, but it could vary from one HOA doing it, one homeowner doing it, to all 8,578 doing it. So it could be this huge swing in what is credited or what is recouped by the County, those sort of things. MR. KANEALI`I-KLEINFELDER: Okay. So a few pieces to that. One, right now, we don't know at all. And so this, we never know walking into a new bill, a new program, who's going to take advantage and who isn't. Two, there's been a longstanding history of a lot of back and forth in the subdivisions with HOAs, how funds are being used. So when we start to really provide a document back to the County on what's happening, what's being applied, who paid dues, who didn't; the subdivisions themselves have to track who paid because they can lien someone's property if they're not paying their dues on time. So I think, not I think, I know this is going to start leading to better recordkeeping on part of the HOAs. If I had 3,000 people telling me that I didn't file a document and that they lost $250 because I didn't file that, I would be on top of my game as Page 22 FC-16 August 5, 2025 far as if I was an HOA getting that document to the County. So I feel like we're actually incentivizing a lot of positive changes with this bill even though we're not specifying if it'll happen. It simply is saying we need a report back by the HOAs on who paid their dues and who didn't. And this, like I said, proactively walking into the future this kind of information helps us build how we work with community in the future. This will be useful later on down the line as we start to address infill, density, infrastructure, across the island. ACTING CHR. HUSTACE: Thank you. You know, and I understand the intent of what you're trying to go for and improve these roads. I'm just hoping that these HOAs will then, you know, get the wheels moving and kind of make the improvements that need to be done. MR. KANEALI`I-KLEINFELDER: I do too. I'm sorry. I really do hope that is what happens. I think it will happen but more so if it does and when it does, it's going to be beautiful. That's what I'm saying. ACTING CHR. HUSTACE: Thank you. Just a question to Real Property Tax, Mr. Jo, because some of the point came up about —I think DCC Wong also mentioned this about if the HOAs are not submitting the paperwork especially in those initial phases, and you get 8,000 individuals reaching out. I mean, as an extreme, this is extreme. But you're not working with the single bodies, you're working with these individual homeowners and you're having to validate that then too. What would that process look like to validate those single homeowners? They have a receipt they've given to their HOA; all the receipts look different. These are extreme I'm talking about but I'm just kind of curious of your thoughts here. MR. JO: Yeah, the way we foresee it is in the unfortunate even that an HOA does not file by the deadline that there is that mechanism that allows individuals to file. We would have to validate in some fashion that they did in fact pay those dues whether it's a receipt, image of a returned check, you know, that would be something that we would have to develop through the process. But there is a potential that in the initial years that we would be validating individual applications for quite a period of time after that due date. ACTING CHR. HUSTACE: Thank you, Mr. Jo. So to the maker, how do we, with that sort of feedback on the initial phasing on it and individual homeowners ready to jump on it, ready to take action on this but the HOAs are kind of slow to make those improvements or the proper submissions or paperwork. How do we improve that for Real Property Tax so that they're not having to work with thousands of individuals but rather a handful of HOAs? MR. KANEALI`I-KLEINFELDER: I'm going to step back my comment. Actually, Patti, could you come up to the front? I'm going to answer your question here in a second, but I think what I'd like to do is hear from a community member. So Patti, what is your role in Fern Acres? Page 23 FC-16 August 5, 2025 (Note: At this time, Testifier Patti Pinto came forward to address the members of the Committee.) MS. PINTO: I'm the Vice President of our board of our community association and I work closely with the audit committee looking at books. But I have the pleasure of serving in a highly functional community association. We would leap to take part in a program like this, and we spend every penny that receive for road fees on road maintenance every year. We have 26 miles of road to maintain, and we can afford to pave one mile a year and this is a really, really competent association. So it's like, this is going to make a huge difference. If we collect more road fees, we can pave more roads and keep our subdivision safe and accessible for everybody. I think more subdivisions have qualified accounting systems, they're audited every year; they're nonprofit corporations, they have to file 990s. These are for the most part really responsible and we hear a lot about the political discord about how things are done. But the financial management I think is pretty sound in the good subdivisions. MR. KANEALI`I-KLEINFELDER: So what we've expressed to date, this is for Mr. Hustace's question, is how we would collect the information from the HOAs? And at this point we've centered in on a spreadsheet basically with a list of who paid, who didn't pay, what was paid, TMK (Tax Map Key), and name. Pretty straightforward information, is that something that you as Fern Acres Vice President know that you could turn around — MS. PINTO: We could definitely do that. And I think it might be interesting to do, you know, if your road maintenance fee isn't paid by March 31st, you've lost it for this year. MR. KANEALI`I-KLEINFELDER: Okay. MS. PINTO: Something like that so that the association would file one report to Property Tax and it would be that. MR. KANEALI`I-KLEINFELDER: Okay. So to your question, Mr. Hustace, I kind of lighten it to as a server if you are in charge of getting someone their drinks at their table and you don't show up or you take a drink order and never come back to the table, you're going to have four to ten angry customers giving you the stink eye from across the room, and I've been there. For whatever reason you guys didn't get it, you're still in trouble. For an HOA with 500 or in the case of HPP (Hawaiian Paradise Park) with 4,000 people who had qualified, if they didn't get this information in you have 4,000 angry residents who didn't get their full tax credit, who deserved it, and there's not going to be a lot of room for the HOAs to wiggle out of not being compliant. And if they do fall through and drop the ball, then they have a recourse through what we can do through administrative rules in providing them an application so that we don't overburden the department but there is a recourse should there be a failure on the part of the HOA. So I like this Page 24 FC-16 August 5, 2025 check and balance system we've created without being overly specific via legislation. We've created a program if it passes that allows for the credit that doesn't overburden the department and starts to create a check and balance within community in a section of community that we don't normally have a check and balance over. ACTING CHR. HUSTACE: Thank you. Appreciate that. I'm going to yield for now. Back over to Council Member Kimball and then we'll go to Council Member Kagiwada. MS. KIMBALL: Yeah. Thank you, Acting Chair. Something occurred to me as we were just discussing this. So this is a program what is available for road maintenance organizations or any nonprofit entity registered blah, blah, blah, responsible for maintenance repair Improvement of private roadways. My question is and I think I did bring this up last time was in all of these cases listed, is the entire payment that is made to the organizations used for roadway maintenance or are there instances where folks do a payment of $250 and $100 of it goes to road maintenance and another $100 of it goes to park maintenance, and another bit of it goes to something else just because for consistency about what you're trying to promote and do here, I'd want to see it limited to that amount going towards the road maintenance. And just like we do with our nonprofit grant and aid, maybe there's an allowance for like administrative or something like that, which I think we should be clearly delineated with the maximum like we do with the nonprofits, ten percent administrative or something like that. So any thoughts on that or to your knowledge do each of these entities exclusively use the dues for road maintenance? MR. KANEALI`I-KLEINFELDER: Chair, can I? ACTING CHR. HUSTACE: Please. MR. KANEALI`I-KLEINFELDER: Thank you. I did reach out to a few of them. I mean, Ms. Pinto, I'm going to use you. She qualified that their fees that are paid of $215 a year are exclusively for roadway maintenance and there is a 10 percent administrative fee that is part of that $215. If they want to apply more funding they can and that would be for the community association or the communal property. So that's a separate fee altogether. For Hawaiian Acres, they're under a voluntary system. They have a community association, HACA, Hawaiian Acres Community Association, and they have Hawaiian Acres Roads Corporation. Each one tracks differently; same breakdown, 90 percent goes to roads and road maintenance, 10 percent administrative. So for what I was seeing just as a general average, I can't speak for every single one, is that the road maintenance fees are specific to road maintenance with the small percentage being for administrative costs should there be. If you want to deep dive into that and I would be very open to an amendment that really specified that to make sure that is what is happening because that's the intention. Page 25 FC-16 Motion to Amend: August 5, 2025 MS. KIMBALL: Yeah. Let's work on this between now and the next hearing to just add some clarifying language about that aspect of it. I'm okay with having them, you know, some of these folks, especially the big subdivisions may need an accountant or to hire an auditor to audit their books and stuff like that and I'm - okay with that being covered by this to an extent, right. And yeah, I'll take a look at it. ACTING CHR. HUSTACE: Thank you, Council Member. Council Member Kagiwada. MS. KAGIWADA: Thank you. I have an amendment here. Ms. Kagiwada moved to amend Bill 38, Draft 2, with the contents of Comm. 203.9. Seconded by Ms. Kimball. ACTING CHR. HUSTACE: Discussion? Ms. Kagiwada. MS. KAGIWADA: Thank you so much. If I could get Administrator Miura up here along with Keita Jo, that would be great. And while they're coming up I'll just say,, you know, as I've said before I've been impressed at the testimony and the way that the author has been persistent and creative in working this bill. I still have concerns about both the overall cost given our budget constraints going forward in our things we know we have to pay for as well as the time. So I just wanted to bring up to ask you, Administrator Miura, if we were to go with this, which is a proposal of the $75 flat credit as opposed to basing the credit on the amount paid up from $75 to $250, what would that look like for your staff? Would that reduce some of the staff time perhaps or is that basically the same if you have to do one or the other? (Note: At this time, Real Property Tax Administrator Lisa Miura came forward to address the members of the Committee.) MS. MIURA: Good afternoon. Real Property Tax Administrator Lisa Miura. So I don't see it as being a major shift or change for the staff as much as it just makes it simpler in the program to just go to $75 straight across the board because we're not going —this group is $215 and not even thinking about the 10 percent they were talking about earlier and removing that but just going to $75 no matter what everyone pays. I didn't think it was going to be anything different on the staff, did you? MR. JO: Assistant Administrator Keita Jo. No. And then when it comes to programming the $75 across the board is the most ideal option in the scale of complexity, right. You have a more complex process that basically asks for an application every year from every person to a credit that's between $75 and $250 to a static credit that's just $75 across the board. So that's the most preferable option in terms of programming and complexity. 'It's easier for our staff to also articulate to somebody what the credit's about, right? It's going to be $75 for Page 26 FC-16 August 5, 2025 everybody. You might have subdivisions where, you know, the annual assessment might be $435 but maybe someone did a partial payment and only paid $100, right, is it going to be different for just that one person? So this makes it a little bit more simple. MS. KAGIWADA: Okay. And as far as the actual burden on the County, I think when I had reached out you quoted a number of $2.3 million. This new range is in the $1.7 million range but as far as the $75 credit I believe you said it would be more like $630,000 a year. MR. JO: That is correct. Our analysis based on the data that we have currently indicated a revenue loss of $630,000 annually. MS. KAGIWADA: So quite a bit; less than half the amount. Almost a third of the amount than would be otherwise. I'm just wondering, so for me the other issue is just I feel like the people that are already paying the larger amounts, if they're given a $75 credit that's more than they're getting now and they're already paying the larger amounts. Those who are not paying anything right now who may be encouraged to pay I feel like are more likely the people that can't afford the larger amounts and so the $75 amount seems like a good place to start. I also feel like there's a lot of things that as you mentioned before, we just don't know. There's a lot to do with the HOAs; we don't know about their ability to cooperate and do this and everything. So I'm just wondering if we might want to try and that's why I put this amendment in to start with the $75 flat rate to see how it goes and then eventually if it works well and the HOAs are all, you know, turning in their paperwork and you're only dealing with the HOAs; you're not doing all the individuals, at some point you could look at doing a range or something and making it a little more complicated. So that would be my thought on why I'm suggesting this might be a good place to start to see if we can work out some of the kinks and to see what the actual involvement is. I also do have a concern based on the issue that Council Member Hustace brought up and I think about, you know, will this money, will this tax credit actually result in better roads? We don't know that. So before getting into a more complicated and a more expensive program, I think trying something that's a little simpler and a little less expensive to see if it will actually result in better roads might be a way to go. So that's why I'm proposing this. I'd love to hear people's comments or questions. Thank you. ACTING CHR. HUSTACE: Thank you, Council Member. Any other takers? Alright, Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: I don't love the amendment. I'll just say that. I think nowadays, you know, when I grew up $20 was a lot of money and it just isn't anymore. So $75, it's something and it does create a little bit more of a Page 27 FC-16 August 5, 2025 streamline program for the department. $75 to the community member; some of them are putting in $500 a year; some are being capped at the minimum level already at $75 because there's just no value to the property or because there's no permits on file or just because that's their home. It just becomes the question of is it worth it for them to do the work? And so if I lived in a community that had this credit, I'd want the bigger value of course. So I'd prefer the bill as it was. We did step it down from $400 to $250 and adjusted the minimum to match what most of the community associations are getting as a minimum already. And then just touching bases on the guarantee. The bill doesn't guarantee anything but nothing's guaranteed now. So I don't really want to dive too far into the guarantee issue because whether or not the bill passes the community continues to pay the same thing. We're just creating a credit back to the community members for having to maintain their own roadways that are open to the public in a way that doesn't break the bank and doesn't kill the department. So in summary, I like the idea; I like the streamline approach. I would hope for a little bit higher value for our community members to be able to receive as a tax credit both to make it worth their while but also to make it worth RPTs while in having to process. Open to it, I mean, a way forward, yes please. But just thinking about what it cost to maintain the roads and what their costs are as a community, I would like to keep that in mind as we proceed. Thank you. Thank you for bringing it forward. I like the thought. It's interesting. ACTING CHR. HUSTACE: Thank you, Council Member. Any other discussion? Council Member Kimball. And for the record, Mr. Clerk, Ms. Kierkiewicz has joined us. MS. KIMBALL: Yeah. Thank you. Just I'm looking at this proposal from the lens of correcting a mistake made decades ago in the creation of these subdivisions and providing the necessary infrastructure and we've been battling with that in many different way whether it's roads or wastewater; many other types of infrastructure. And so to that end, you know, understanding there's this fairness component, when people pay their property taxes a fraction of it goes to highways, a fraction of it goes to wastewater, a fraction of it goes here, there, and everywhere, and a lot of these subdivisions they're not receiving some of those benefits. And so if at the $250 level, if folks are paying that and that road maintenance organization is investing that equivalent amount in doing work that, you know, I'm not going to say we should've done it. But it should've been set up to be done meaningfully by us many, many decades ago. So I'm going to not support the amendment. I think it's right to be in this range with the maximum of $250 because I think just looking at this from the lens of fairness, which is what I'm looking at it from. I do understand the concerns about the cost but what I like about this is it's a benefit exclusively offered to our residents that have the homeowners tax class Page 28 FC-16 August 5, 2025 and that way if they fall into any of the other tax classes, whether if it's an investment property of any kind, they're not going to get this benefit. And so I think, you know, we're always trying to strike that balance that protects the residents from inflationary pressures in property tax and this is one way to do that where we could look at shifts in other places at a later point if we did need to compensate for this funding. If the $75 were to make a big difference to RPT then that would be a different story in terms of labor. But since it doesn't sound like it's going to be that significant I think I'd rather stick with the original language. Thanks. ACTING CHR. HUSTACE: Thank you, Council Member. Any other discussion on the amendment? Council Member Kagiwada. MS. KAGIWADA: Yeah. That's fine if nobody wants to support it. Like I said, I just feel like it's really important that there are people already paying $400 or $250. They're not going to stop paying it because they get $75 not $400. I don't think you're going to get —what I heard a lot from the maker is that some of these subdivisions that are the lower cost subdivisions that need help kind of getting to that place where they can get their fees if they're, one, not mandatory already or two, people just can't afford it. And to me, that's the lower end. That's the person that is paying the potential $75 that could get that credit back that isn't paying anything now. It's not the person who's paying $400 and will stop paying the $400 is they only get $75 credit. So that's my thought on that. Yeah, alright. Thanks. I yield. ACTING CHR. HUSTACE: Any other thoughts? Council Member, quickly please. MR. KANEALI`I-KLEINFELDER: Just shortly. I completely agree with Ms. Kagiwada, and I really was striving to find a balance. I originally was going to do $25, which would've given it to every subdivision. Like Black Sands again, came in testified on behalf of even knowing he wouldn't qualify but knowing it's important to the community as a whole. And I really appreciate that mindset. On the backside of that, if they don't qualify on that minimum threshold then they could work with their community to increase their road dues because they can't get where they need to go without having a road due schedule that actually can pave the roads that they have. So this really is, I mean, after walking this line for six years this is trying to find that balance between how do we create more accountability, how do we make sure we're taking care of our residents, how do address environmental justice,. how do we take care of our areas that are underserved; this decades old problem of private subdivisions with roads not maintained by anyone with no clear title, blah, blah, blah, blah, blah. I'm just trying to get to the heart of it in a way that affects local homeowners and not short-term vacation rentals and other things that Page 29 FC-16 August 5, 2025 don't really suit what I was shooting for and who we're tying to help. But I appreciate the thought process, and you walked on it with us, and I appreciate that. So I don't hate your amendment, just I'm wanting to hit that nice dollar amount for the people paying to maintain their own roadways. And what wasn't mentioned by Council Member Kimball was fuel taxes, because fuel tax revenue is provided back by state and County. But in the case of someone who drives private roadways, they're never going to see that revenue back to any roads that they drive for the most part. ACTING CHR. HUSTACE: Thank you, Council Member. MR. KANEALI`I-KLEINFELDER: Thank you. ACTING CHR. HUSTACE: Mr. Clerk, roll vote please on the amendment. Vote on Motion The motion to amend Bill 38, Draft 2, with the contents of to Amend: Comm. 203.9 failed by the following roll call vote: Failed Ayes: Committee Members Kagiwada and Acting Chair Hustace — 2. Noes: Committee Members Inaba, Kaneali`i-Kleinfelder, Kierkiewicz, Kimball, Onishi, and Villegas — 6. Absent: Committee Member Galimba — 1. Excused: None. ACTING CHR. HUSTACE: Thank you, Mr. Clerk. Back to the main motion on Bill 38, Draft 2. Any further discussion? Okay. Mr. Clerk, roll call vote please. Vote on Bill 38: The motion to recommend passage of Bill 38, Draft 2, was Draft 2 carried by the following roll call vote: (Approved) Ayes: Committee Members Inaba, Kaneali`i-Kleinfelder, Kierkiewicz, Kimball, Onishi, and Villegas — 6. Noes: Committee Members Kagiwada and Acting Chair Hustace — 2. Absent: Committee Member Galimba —1. Excused: None. ACTING CHR. HUSTACE: Thank you, Mr. Clerk. That being the end of our agenda today. Page 30 FC-16 August 5, 2025 ADJOURN- There being no further business on our agenda today, Acting Chair Hustace MENT: adjourned the meeting at 2:26 p.m. Thank you very much. Approved: Mr. Matt Finance ( MK/tk `i-Kleinfelde'T, Chair I-c-*-2r (Date) Page 31