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HomeMy WebLinkAboutMIN FC 2026/05/19 (2024-2026)Committee on Finance 36th Session Hawaii County Building 25 Aupuni Street Hilo, Hawaii 96720 May 19, 2026 CALL TO The regular meeting of the Committee on Finance was called to order at ORDER: 1:01 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 Ms. Michelle M. Galimba, Member Mr. Holeka Goro Inaba, Member (came in later) Ms. Jenn Kagiwada, Member Ms. Ashley L. Kierkiewicz, Member Ms. Heather Kimball, Member Mr. Dennis "Fresh" Onishi, Member Ms. Rebecca Villegas, Member STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: (There were none.) COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. Comm. 23.34: REPORT OF FUND TRANSFERS AUTHORIZED: MARCH 16 — 31, 2026 From Controller Jon Arbles, dated April 21, 2026. Motion to Approve: Mr. Hustace moved to close file on Comm. 23.34. Seconded by Ms. Kagiwada. CHR. KANEALI`I-KLEINFELDER: Any discussion? MR. HUSTACE: Yes, Chair. CHR KANEALI`I-KLEINFELDER: Council Member Hustace, please. MR. HUSTACE: Thank you. Just a couple questions here on the request for transfer of funds, first to Public Works on the street sweeper. FC-36 May 19, 2026 (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, Public Works. MR. HUSTACE: Thank you, Ms. Kalua-Lewis. You noted that the street sweeper estimated and budgeted amount was $300,000, and now you're requesting another $118,000, so why is it so much higher? MS. KALUA-LEWIS: I think with the inflation, when we currently budgeted for it, we thought $300,000 would be enough. When we put it out for bid, it came in a lot higher than anticipated. Fortunately, because of some of the equipment that we have in our lease account not being able to ship or be received this fiscal year (FY), we had additional funds to cover for the street sweeper. MR. HUSTACE: So the $300,000 was in last fiscal year's budget or current fiscal year's budget? MS. KALUA-LEWIS: Current fiscal year budget. MR. HUSTACE: So the research that was done at that time estimated about $300,000 then. MS. KALUA-LEWIS: In the prior year when we were developing the budget for fiscal year 2026. MR. HUSTACE: And how much time had lapsed until you went out to bid for that? MS. KALUA-LEWIS: I would want to say maybe like about a year because this was the original kind of estimates we did probably in the initial I want to say December, the early stages of the FY 2026 planning phase. MR. HUSTACE: So about a year from the time of research to then putting out to bid. MS. KALUA-LEWIS: Yeah. I would say about a year. MR. HUSTACE: And that research was pretty substantial in showing that it was about $300,000 then. MS. KALUA-LEWIS: Yeah, about $300,000. MR. HUSTACE: Because that's quite a significant change there in the value of it that I would say. Page 2 FC-36 May 19, 2026 MS. KALUA-LEWIS: Yeah. It was quite a higher than anticipated cost. I think what we're doing this year is as we progress through the budget process, if we have to update anything because, you know, the budget starts in September and then it kind of closes. Our last comments could be in March. I think we're trying our best. We did it this year to kind of move the funds around more accordingly than the initial estimates. MR. HUSTACE: Would it make better sense to, as you come here to the first reading of the budget and we get the second draft to have a more updated figure at that time, after some research? Because the research would've been back in the fall. MS. KALUA-LEWIS: Yeah. So I want to say, with March, it's a pretty safe estimate, all depending on the timeline of when we submit the request to Purchasing. I'm not sure of the influx that Purchasing gets, but usually Highway Maintenance submits all their kind of equipment requests in the beginning of the fiscal year. MR. HUSTACE: Yeah, I'm just trying to see if there's any way that we can tighten that timeline about getting more up to date figures as we go through the budget, if that's something that the department —Director of Finance, as well. I mean, how the departments look at that proposal and estimates done in the fall, send it the first draft but then, you know, there's no change in that figure when it comes to that second draft maybe. MS. KALUA-LEWIS: Yeah. And I think March through May, it's such a tight gap. I mean, unless there's like a drastic change. MR. HUSTACE: But I would say this one's kind of drastic. MS. KALUA-LEWIS: Yeah. This one was very drastic. And this, I can say, that it probably wasn't relooked at for the first draft. It was probably just the initial when we submitted the budget. MR. HUSTACE: Yeah, it's just some food for thought, Director, on substantial purchases like this that maybe need to be reassessing that figure so we're not having to shift so much large amounts of money around. If that makes sense? Thanks, Director. (Note: At this time, Finance Director Diane Nakagawa came forward to address the members of the Committee.) MS. NAKAGAWA: Sure. Diane Nakagawa, Finance. Yes. Thank you for your comments. I do want to add that as we go through the budget process each year a lot of the equipment that the departments purchase, they get a list from our Purchasing Department on the prices that were reflected in the previous year. So Page 3 FC-36 May 19, 2026 we do try our best to get prices as accurate as possible. Now we don't have a complete list because that would be too much and a lot. You know, if it's a specialty vehicle or equipment then that might not be included. But we do at least go through that process of evaluating the prices up until the last fiscal year. We send that out to the departments to evaluate. But yes, in some cases it is significantly over what we estimate. MR. HUSTACE: Yeah. And I'm just calling this one out particularly because Parks and Recreation also has one that was $35,000 over for their estimate, too. So just kind of seeing these fluctuations a little bit and just trying to see the timeline of when we do the research, you know, in regard to the budget, and then we go out to bid, and how that's all reflected and those sorts of things. MS. NAKAGAWA: Yeah. There could also be some anomalies in things that were added on and things that were reflected in the budget. Sometimes as we get closer to specs there are things that, you know, those who actually utilize it might need, that were added on, which would increase the cost. But sometimes not all of those things are known at time of budget. MR. HUSTACE: Thank you. I appreciate it. Thank you, Director. Ms. Kalua- Lewis, thank you. Chair, just one more question, sorry, for Fire actually. (Note: At this time, Fire Business Manager Nikol Lonokapu came forward to address the members of the Committee.) MS. LONOKAPU: Hi. Nikol Lonokapu, for Fire. MR. HUSTACE: Thank you so much. Just out of curiosity, new office furniture, what sort of range in furniture are you looking at to replenish or refurbish? MS. LONOKAPU: We purchased five desks for administrative staff. The desks were termite eaten. So these are just replacements. MR. HUSTACE: Okay. Thank you. I appreciate the clarity. Thank you. Thanks, Chair. CHR. KANEALI`I-KLEINFELDER: Okay. Seeing no further discussion. Just noting the $39 million transfer for the provisional compensation for the hazard pay, thank you to the administration for taking care of that. If I remember, that took a serious amount of bookkeeping to go back through and check the hours. Is that correct? I'm noting the very, very hard to read four pages of additional line items underneath of that transfer. Can you refresh me on those please? MS. NAKAGAWA: Yes, Council Member. So what you're seeing in front of you is actually the transfer back to the department. So the S&W (salaries and wages) that allowed us to pay for temporary hazard pay (THP) initially came out Page 4 FC-36 May 19, 2026 of departments S&W. This is the transfer back. What you have in all those additional pages is by department, I believe, and then through which either HFFA (Hawai`i Fire Fighters Association) or UPW (United Public Workers), or HGEA (Hawai`i Government Employees Association), in those different components. So that is the complete picture of our transfer back to the departments to make sure that they're made whole for those costs that came out of THP. CHR. KANEALI`I-KLEINFELDER: Beautiful. Thank you. MS. NAKAGAWA: You're welcome. CHR KANEALI`I-KLEINFELDER: Okay. Seeing no further discussion, motion is on the floor to close file on Communication 23.34. All in favor? Vote on Comm. 23.34: The motion to close file on Comm. 23.34 was carried by Filed the following voice vote: Comm. 23.35 Vote on Comm. 23.35 Filed Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, Villegas, and Chair Kaneali`i-Kleinfelder — 9. Noes: None. Absent: None. Excused: None. REPORT OF FUND TRANSFERS AUTHORIZED: APRIL 1 — 15, 2026 From Controller Jon Arbles, dated April 29, 2026. Mr. Hustace moved to close file on Comm. 23.35. Seconded by Mr. Inaba and carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, Villegas, and Chair Kaneali`i-Kleinfelder — 9. Noes: None. Absent: None. Excused: None. Comm. 24.34: REPORT OF CHANGE ORDERS AUTHORIZED: MARCH 16 — 31, 2026 From Finance Director Diane Nakagawa, dated April 16, 2026, transmitting the above report pursuant to Section 2-12.3 of the Hawaii County Code. Motion to Approve: Mr. Hustace moved to close file on Comm. 24.34. Seconded by Mr. Inaba. Page 5 FC-36 May 19, 2026 CHR. KANEALI`I-KLEINFELDER: Any discussion? Council Member Kagiwada. MS. KAGIWADA: Thank you. Director Nakagawa, if you don't mind just coming and just refreshing my memory on this. I see there's a large number of reallocations with no additional costs. Can you just explain? There're the reallocations for recruitment and the reallocations with no additional costs that have large numbers. Can you just explain briefly what these are? (Note: At this time, Finance Director Diane Nakagawa came forward to address the members of the Committee.) MS. NAKAGAWA: Sure. So if it's a no -cost amendment, a lot of times it's a price term agreement, so the price is unknown, so we don't put an additional cost for the year. Of course, there are costs if the County purchases or uses services off that list. But when we do an additional year, an option year, it's still a no -cost amendment. So a little different, you would see on line item ten, that's actually a Finance item for our queuematics op for vehicle registration and licensing that does our appointment scheduling and our queueing. It's not really an additional cost. This is just the next year's cost of the service. So sometimes the high percentage is a little misleading, it's not like a change order. This is the actually contracted amount for the second year of service. MS. KAGIWADA: I see. But these aren't all contracted positions. Are they for the positions? MS. NAKAGAWA: I'm sorry. Am I on the wrong item? MS. KAGIWADA: Yeah, I'm looking at the positions. I'm so sorry. I'm looking at the wrong thing. You're looking at the right thing. I jumped ahead. apologize. I yield. MS. NAKAGAWA: Okay. CHR KANEALI`I-KLEINFELDER: Thank you. Thank you for the answer, Ms. Nakagawa. Any further discussion on Communication 24.34? Hearing and seeing none, motion is on the floor. All in favor? Page 6 FC-36 Vote on Comm. 24.34 Filed The motion to close file on Comm. 24.34 was carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, Villegas, and Chair Kaneali`i-Kleinfelder — 9. Noes: None. Absent: None. Excused: None. May 19, 2026 Comm. 118.5: THIRD QUARTER REALLOCATION REPORT: JANUARY 1 — MARCH 31, 2026 From Human Resources Director Sommer J. Tokihiro, dated April 23, 2026. Motion to Approve: Mr. Hustace moved to close file on Comm. 118.5. Seconded by Mr. Inaba. CHR. KANEALI`I-KLEINFELDER: Council Member Kagiwada, discussion? MS. KAGIWADA: Thank you. I don't know if we have Director Tokihiro available or do you think you could answer this question, Director. So just looking at these numbers of positions and I'm on the last page there with the totals, you've got 43 reallocations for recruitment and 90 reallocations with no additional cost. Can you refresh my memory on what the difference between those two are and why we would see such high numbers especially in that second category? (Note: At this time, Finance Director Diane Nakagawa came forward to address the members of the Committee.) MS. NAKAGAWA: I apologize. Are you on the last page? MS. KAGIWADA: Yes. The last page that has the departments. MS. NAKAGAWA: The departments. Sorry. Maybe I'm not seeing what you're seeing but maybe I can explain it. So this report will go through every position by department that is reallocated and the effective date and the monthly change and yearly change. These costs, if they're reallocated within the year, are normally absorbed by the department. We do have a separate budget line for relocations, if at the end of the year these reallocations cause a need for the department in S&W. But most times when the department is reallocating, there is funding within their S&W. MS. KAGIWADA: Okay. So is it always just kind of planned that in S&W money will be moved around for these reallocation amounts. Is that kind of how? Page 7 FC-36 May 19, 2026 MS. NAKAGAWA: I think it's taken into consideration that throughout the year the department has to reevaluate the needs of certain positions and sometimes if they're doing recruiting, they need to recruit down a step because they're not getting as many applicants. So things are changed throughout the year in order to fill some of these positions with extended vacancies or things like that. But it is anticipated that some changes will happen in the year. MS. KAGIWADA: Okay. I'm just looking especially at the Police line, 82 reallocations with no additional costs, that's because they made an adjustment either up or down. Is that why that would be there? Is that for the recruit class? MS. NAKAGAWA: I don't think these are the recruit class ones. But maybe I would need to check on that one with HR (Human Resources). You know, most of the departments have one or two. You have really higher numbers for Police. So just hoping that I could understand that a bit more. Okay. That would be great. Thank you. I yield. Vote on Motion Ms. Kagiwada moved to table Comm. 118.5 to later in the to Table: agenda. Seconded by Mr. Inaba and carried by the (Approved) following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, Villegas, and Chair Kaneali`i-Kleinfelder — 9. Noes: None. Absent: None. Excused: None. Comm. 887: REAL PROPERTY ASSESSMENT CERTIFICATION REPORT FOR THE 2026-2027 TAX YEAR From Finance Director Diane Nakagawa, dated April 29, 2026, transmitting the above report pursuant to Section 19-90(d) of the Hawaii County Code, indicating a total net taxable real property value of $56,854,635,650. Motion to Approve: Mr. Hustace moved to close file on Comm. 887. Seconded by Mr. Inaba. CHR. KANEALI`I-KLEINFELDER: Any discussion? Council Member Hustace. MR. HUSTACE: Thank you, Chair. I just want to mahalo Real Property Tax Division on compiling this and I appreciate their work on the appeals process as well. Just one question, Director Nakagawa mentions that a certification and assessment list was transmitted to Council on a USB (Universal Serial Bus) flash drive. I don't remember seeing one come across to our offices. Page 8 FC-36 May 19, 2026 (Note: At this time, Finance Director Diane Nakagawa came forward to address the members of the Committee.) MS. NAKAGAWA: Council Member Hustace, I can double check on that. It should have been. I think it went to the Clerk's Office as well. MR. HUSTACE: Okay. I don't know if it probably went to the Clerk's Office on that. MS. NAKAGAWA: Happy to check on that. MR. HUSTACE: Okay. Thank you. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Kimball. MS. KIMBALL: Director Nakagawa, that wouldn't be anything different than the roughly 150-page document that we had in Laserfiche. Okay. Yeah. MS. NAKAGAWA: Sorry. It shouldn't be. MS. KIMBALL: Okay. Thank you. MS. NAKAGAWA: We have Administrator Miura in the Kona Office if she has anything to add. (Note: At this time, Real Property Tax Division Administrator Lisa Miura came forward to address the members of the Committee.) MS. MIURA: Hi. Lisa Miura, Real Property Tax Administrator. The USB drive should have every assessment record. So it's a lot larger than the PDF (Portable Document Format) version that's online. CHR KANEALI`I-KLEINFELDER: Are there any questions from the body? Council Member Hustace. MR. HUSTACE: Thank you, Chair. Administrator, so those are different files then, so those assessments are considered confidential. MS. MIURA: They're not considered confidential, but they would be extremely burdensome to have all 141,000 assessments printed on paper. MR. HUSTACE: I understand. Thank you, Administrator. I just wasn't sure if there were that difference between the certification and those assessments. So thank you for broadening that clarity and our Clerk's Office will check on that file too. So thank you. Page 9 FC-36 May 19, 2026 CHR. KANEALI`I-KLEINFELDER: Thank you. Anything further? Okay. Administrator Miura, can you just give us like a high level on that report please? MS. MIURA: Sure. As Clerk (Aaron) Brown had stated, this is over $56 billion in taxable value. If you look at the PDF that's online and available there is a breakdown by council district and it also reflects all of the appeals under value and there's a section that breaks it out by historical zone. And so we're the only county in Hawaii, I believe, that still provides it by council district so you can see what the break downs are for every single tax class, which comes in handy during tax rate setting, which will come up on Thursday. CHR KANEALI`I-KLEINFELDER: I was just about to say that you amazing person, you. What was the for discussion today so we can think about this because we have Thursday coming, what was the highest level or highest bracket of real property tax collected; which category? MS. MIURA: Well this one just shows the value. So there's nothing in this report that will talk about taxes yet. But if you're talking about last year's tax collection, we can get a break down. We're collecting for the current year because we have until June 30, and we have a tax sale coming up in a couple weeks. CHR KANEALI`I-KLEINFELDER: Okay. This is assessments only? MS. MIURA: Correct. The certification is only on the value. So what you're going to get is the net taxable values. It does break down how much in exemptions there are. So the very last page will show that there are approximately ten billion dollars in exemptions given and that's through all of the different programs that the County Council has approved in the past. CHR KANEALI`I-KLEINFELDER: Were the assessments higher than last year? MS. MIURA: Oh, yes. So we went up 2.74 percent. CHR KANEALI`I-KLEINFELDER: And did you see any pattern going forward that is clear or is it just a guesstimate on what we're looking at next year? MS. MIURA: You're looking at a pretty flat, unless something changes in 2026 for 2027, which I believe Director Nakagawa has spoken about it at budget. But it may come up again and show up in your future numbers as far as our revenues not supporting the expenditure at the current tax rates. CHR KANEALI`I-KLEINFELDER: That is where I was going. Ms. Nakagawa. Thank you, Administrator Miura. Page 10 FC-36 May 19, 2026 MS. NAKAGAWA: That is correct. So we are estimating at this time a zero percent increase for 2027-2028. CHR. KANEALI`I-KLEINFELDER: Okay. That's good to know that we're looking at rates in full understanding of where we sit in debt servicing with the projects being walked in the door island -wide, but majority being wastewater. MS. NAKAGAWA: That's correct. CHR KANEALI`I-KLEINFELDER: Okay. Thank you. Any further discussion? Nope. Okay. Motion is on the floor to close file on Communication 887. All in favor? Vote on Comm. 887: The motion to close file on Comm. 887 was carried by the Filed following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, Villegas, and Chair Kaneali `i-Kleinfelder — 9. Noes: None. Absent: None. Excused: None. ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Res. 569-26: AUTHORIZES THE PAYMENT OF FUNDS FROM LATER FISCAL YEARS TO ENTER INTO A MULTI -YEAR LEASE AGREEMENT FOR WAREHOUSE SPACE TO BE USED BY THE DEPARTMENT OF PUBLIC WORKS Authorizes the Mayor to enter into a three-year lease agreement with Geo Investment Company, Inc., for warehouse space located at 73-4081 Hulikoa Drive, with an initial security deposit of $4,896, and an estimated monthly cost of approximately $3,240 for the first year and increasing thereafter. Reference: Comm.892 Intr. by: Council Member Kaneali`i-Kleinfelder (B/R) Motion to Approve: Mr. Hustace moved to recommend adoption of Res. 569-26. Seconded by Ms. Galimba. CHR KANEALI`I-KLEINFELDER: Council Members, discussion on the resolution, if any? I have one question for the department. My only question is this. I believe Mass Transit is seeking a base yard in Kona. Is that right; do you know? Page 11 FC-36 May 19, 2026 (Note: At this time, Public Works Business Manager Kelsey Kalua-Lewis came forward to address the members of the Committee.) MS. KALUA-LEWIS: Kelsey Kalua-Lewis, Public Works. I do not know the answer to that right now. CHR. KANEALI`I-KLEINFELDER: I might be wrong, but I think they were or they were a few years ago. It's in my memory somewhere. I could be completely wrong. But it might be worth reaching out to them. There's a different source of funding. MS. KALUA-LEWIS: So this would be Highway fund. I believe Mass Transit is primarily GET (General Excise Tax) fund. CHR KANEALI`I-KLEINFELDER: It is. So if they need a warehouse and you folks need a warehouse then to be efficient in government, we could do a joint warehouse. But it might be a little late for that. I'm just putting that out there for the discussion. MS. KALUA-LEWIS: No. We'll take note of that. CHR KANEALI`I-KLEINFELDER: Thank you. MS. KALUA-LEWIS: Thank you. CHR KANEALI`I-KLEINFELDER: Okay. Seeing and hearing no further discussion. All in favor? Vote on Res. 569-26: The motion to recommend adoption of Res. 569-26 was (Approved) carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, Villegas, and Chair Kaneali`i-Kleinfelder — 9. Noes: None. Absent: None. Excused: None. BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. Page 12 FC-36 May 19, 2026 Bill 159: INITIATES AN AMENDMENT TO ARTICLES III, V, VI, VII, VIII, AND X OF THE CHARTER OF THE COUNTY OF HAWAI`I (2024 EDITION), RELATING TO THE ESTABLISHMENT OF A BIENNIAL OPERATING BUDGET AND CAPITAL BUDGET Establishes biennial budgeting for the County, with an initial primary budget to be adopted every odd -numbered year and a supplemental operating budget to be adopted every even -numbered year. Reference: Comm.891 Intr. by: Council Member Kimball Motion to Approve: Ms. Kimball moved to recommend passage of Bill 159 on first reading. Seconded by Ms. Galimba. CHR. KANEALI`I-KLEINFELDER: Council Member Kimball, you want to start us off? MS. KIMBALL: Thank you. So here's another charter amendment again looking at structural processes that might contribute to greater quality of governance. I will say for this one I do have the administration's support and I'll let Director Nakagawa speak to her level of support. What I will say is that this is something that I have talked about over the years with some of our former Council Members. The idea being that by providing a two-year cycle we would align with the state's two-year budget cycle. It would by default force more sort of long-term planning in terms of expenditure and revenue. I also think that there's an argument for actually greater transparency with a biennium cycle because our budget process is like a can't see the forest through the trees type of situation when there's so much information provided to the public through the budget process. If it were more aligned so that we had a supplemental where we're just talking about the significant changes it might be a little bit more clear to the public about how things are progressing and how things are changing year to year. The other key area of this is looking at our fiscal resources over the next couple of years, especially with our debt liability. There are administrative efficiencies in terms of reducing the amount of time that the administration has to spend in person hours towards developing the budget cycle. I will say that the Council still retains the ability within this format to amend the capital improvement budget at any time or to put forth a bill that would amend the operating budget just as we do now. It does not change the six -year cycle of the CIP (Capital Improvement Projects) budget and that's intentional, just to align with the state processes where they're contributing to our CIP funds. I didn't want to present a difference that would potentially cause a delay in that process of them sending funds to the County. I'm happy to take any questions about this. I think it is much more straightforward than the previous charter amendment that we discussed. Thank you. Page 13 FC-36 May 19, 2026 CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Onishi. MR. ONISHL Thank you, Chair. Ms. Nakagawa, can you please come up? You can introduce yourself. (Note: At this time, Finance Director Diane Nakagawa came forward to address the members of the Committee.) MS. NAKAGAWA: Diane Nakagawa, Finance Department. MR. ONISHL You know, we did have a discussion last week about this, right, and we wondered why. I mean, can you give your opinion or how you feel about it? MS. NAKAGAWA: Sure. I'm happy to. Our team has been talking a lot about this, you know, kind of looking into it. One of the things that I shared with the Council Member that one of the first things that's critical is our new CoHnect financial system was built for an annual budgeting process. So as we just built this system, it would take a significant amount of effort to shift the system to a biannual budget. So early projections, speaking with the developers, it's about 12 to 18 months to be able to make that shift from a system standpoint. That was first of mind because we are still right in the middle of this big shift and change. Cost wise to do that, I don't know yet what that would be. You know, of course in Finance we are always looking at improvement and efficiencies. In this case, I think there's still more questions that we have on some of the details. Some of the concerns, of course, is in this two-year cycle there is in forecasting a little bit more difficult, you know, as we just talked about looking at a zero percent increase. Even that, that's with the information we have today to go two years out would be difficult or less accurate. So those are some of the concerns that we have. I think for us at this point and time what's also a little bit concerning is, maybe not concerning, we will have to stay on top of this budget no matter what, right. So with the obligations that we have making sure that spending is where it should be, we will continue and even more so maintain some of the touches to the budget. So while we're all for efficiency, we are going to be moving a little bit differently towards more continuous touches to evaluate departmental budget needs. So that's some of the concerns and I think more questions yet than some answers, you know, in terms of how lapses work and how that's programmed and budgeted. So, that is our early thoughts on it. MR. ONISHL Okay. And do you think that the system that we have now is broken? MS. NAKAGAWA: No. I don't think the system we have is broken. MR. ONISHL Okay. Okay. Thank you. Page 14 FC-36 May 19, 2026 MS. NAKAGAWA: You're welcome. MR. ONISHL I yield, Chair. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Kagiwada. MS. KAGIWADA: Thank you, Chair. To the maker, can you just talk a little bit about the beginning of the two-year cycle specifically about how the first budget year I think is being proposed. Based on what I read it would be in the odd years. I guess my question has to do with potential for new administration coming in that very first year and starting a two-year budget process basically in December and having to have a first -year budget in May. I can't remember exactly what the date was. But can you talk a little bit about why you chose to frame it in this way as opposed to giving a new administration maybe a year already and being able to have some ramp up time? MS. KIMBALL: Yeah. Actually this was something that I wanted to get some feedback from the body on. I settled on presenting odd number first, but I think there's arguments for both odd and even as the starting point and when we did the supplemental. So I don't have really a strong argument for one or the other. Part of it is aligning with the state or not. I mean, you could argue that it could be best to align with the state or that it would be best to be one off from the state because then you would know what they were planning to do on their biannual budget. There is the argument that a new Council coming in should have the budget to look at first thing or have it in the second year of their term. You know, there's pros and cons to each. So I don't have a preference really strongly one way or the other and actually would like some feedback from the body. So thanks for the question. MS. KAGIWADA: So, I guess my feedback would be I would be concerned about specifically a new mayor and their full new administration coming in with all the new leadership and them having to create a new two-year budget in a very short amount of time if we were to keep it the odd years. They come in early December, end of November, and then they'll have to create that while they're appointing directors and getting them approved and all those things at the same time. It seems like it would be pretty challenging, whereas if they had the second year of a budget to work off of it that first year and then really have that year to come up with their budget. To some extent it makes for sense to me. But that's just my two cents on that issue. I yield. MS. KIMBALL: I would just remark that, that happens now. CHR KANEALI`I-KLEINFELDER: Okay. Thank you. Okay, further discussion? Okay. So from what I got, mixed results from the administration, especially regarding CoHnect system and the interplay between this new style of Page 15 FC-36 May 19, 2026 budgeting. And so our amendments, same timeline, the question we had on the previous charter amendment. This is one of those charter amendment kind of times. Okay. Mr. Inaba, go ahead. MR. INABA: I guess I'm wondering out loud how significantly different this is if we're having to do a supplemental budget every year. That essentially is going through the same process. I mean I can see where we have the benefit of a two- year projection but when we're coming back anyway in that interim year with a required supplemental. Are we not maybe better off right now, especially with the feedback provided by Finance staying with an operating budget and a capital improvement budget that we produce every year with the updated assessed values and the tax rates there. So I mean I don't feel strongly either way, but I just am not seeing where this is really going to get us in any place better than where we are right now, especially with the new finance system. It's going to potentially put us back. So in terms of wording, Section 2 of the bill, I think throughout the bill we talk about, and the supplemental operating budget for the second year of the biennium in Section 2, it just says and a supplemental budget. So I don't know if that was intentionally different than the rest of the sections but if this does move forward, I think that should reflect the same language throughout the rest of the bill. But right now, I'm sorry, I'm just not convinced that this is going to help us be more efficient or plan better financially for the obligations that we do have coming down the pipeline. MS. KIMBALL: Yeah. I just respond initially to that Section 2. No, I think that was just an oversight on part of our drafting. You know, the data supports this less as a way to improve efficiency in government structure than it does the County manager proposal. So there is some evidence that it does support longer term fiscal planning, that longer term thinking, which I think we all agree is important. There's also some evidence that insulates the County a little bit from disruptions in the economy outside of our control. And so those were kind of the leading reasons for introducing this. The component about efficiency, for me, I look at the time that both we as a Council and the administration spends developing these budgets and reviewing these budgets with what in my mind isn't particularly a constructive process in terms of are we really aligning our budget with the outcomes that we want to see. There's probably more that needs to be done to achieve that particular aspect of budgeting, but this is I think a step towards that. I mean you, Council Member Kierkiewicz, mentioned many times over the years about the importance of budgeting for outcomes and I think we still don't quite do that very well. Some of my thought about doing a biennium cycle would be that we would have more time to define and establish those outcomes in the biennial cycle and then start to use the supplemental to adjust to make sure that we are actually achieving those goals. Page 16 FC-36 May 19, 2026 So I'll just leave it there. But to your point, Council Member Inaba, there is less strong evidence that this is a meaningful shift. CHR. KANEALI`I-KLEINFELDER: Okay. Thank you. Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you. I think during my first budget hearing on the Council I brought up the idea of budgeting for outcomes, right, setting the goal and then having the funding within the County kind of match where you want to go. So if you want safe communities, you obviously are investing in community development and public safety and so on. I am not 100 percent convinced that shifting to a two-year budget cycle is the solution. I think you mentioned earlier, Council Member Kimball, and I wholeheartedly agree that what's wrong is just the overall system. We have a lot of broken systems, and I think finally we're in a position as a County where we have invested in critical finance grant management systems that is going to get our County on track. We have the CIP Manager, right, we have the data that's all coming in, and I feel like we need to give that a bit of time to play out. Like we need to give the County some time to really own these systems, work out the kinks, and see what comes of that. This might be too much too soon for our County to manage. And Director Nakagawa, if you could just come forward. I'm curious that with the system that has been invested in for our County, the financial management, and this idea for budgeting for outcomes, right, because we want to make sure that every single tax dollar is spent according to the kind of community we want to see, right, safe and thriving full of opportunity. Is there a chance for us to move towards a budgeting for outcomes model so that we can measure the impact of every dollar and every department's effort? MS. NAKAGAWA: Yes, I think there is. So in the implementation of our new system we are still in the middle of the critical areas making sure payments are made even with our payroll, right. So we're still in the thick of things in terms of making sure our system works. The next step is kind of what I call the fun step, which is looking at all the additions, all the things that we've talked about from analytics, kind of making sure that we can provide more information for the public that's digestible. All the things that we've been talking about would be sort of the next phase of the system that I think will provide some of that. And I do really want to make sure, you now, we do hear the comments of aligning our budget with our outcomes, making sure that what we present kind of all aligns. And I think we've kind of heard the comments and there might be other ways in which we can discuss and present information that might provide a better outcome at this time than kind of a shift to a biennial budget, but more a change in formatting or the kinds of information and how we present it or the Q&A (Questions & Answers) part. But yes, I think there's room for improvement, but we could do it in other ways. Page 17 FC-36 May 19, 2026 MS. KIERKIEWICZ: You know, I think the biggest issue that we've all seen is if we're supposed to be making our decisions based on data, the information is not timely and it's not always accurate. So I think that's the struggle that Council Member Kimball is trying to address through this bill. I don't know if this is the right vehicle, but I think you sense and understand our frustration. I think you're frustrated too because there's a lot going on and you want to be able to articulate all of the great things that are happening. MS. NAKAGAWA: Extremely frustrated, yeah. MS. KIERKIEWICZ: I also don't think that you want to go through these budget motions like we do every single year. I think we all want the process to be less stressful and more meaningful and to have the process be more accessible to more members of the community. I would love for Council Chambers to be full of folks every year to weigh in on what they see to be important; what are the priorities in their community, and for the Council to then kind of make budget amendments according to community priorities. I'd love to see things in the General Plan and CDP (Community Development Plan) funded, right, but we've got to get our systems in place to make sure that money is going out equitably across communities, right? MS. NAKAGAWA: Yes, thank you. Thank you for those comments and acknowledging that really the first step for us was to make those big leaps and not just in one financial system, but in many systems across Finance and how we are putting together the budget, managing grants, managing our financial system. We've made a huge investment. Now we need a little bit of time to make sure they are all working properly and then to take these investments to the next level. So I really do appreciate that acknowledgment and also the statement of if we get a little time we are going to get better. We've already gotten better. But with all of these investments it'll continue to provide us with more timely and more accurate information, which is always a top priority for us. MS. KIERKIEWICZ: Perhaps an ad hoc at some point; not this term but maybe next term after the financial management and grants management systems are up and running well-oiled machines, it would be an opportunity to engage Council on how we make the whole budgeting process for everyone, not just Finance and departments and the Council but ensuring the community engagement throughout. MS. NAKAGAWA: We would welcome that and we share the same want in enthusiasm for the budget process as you do. MS. KIERKIEWICZ: That sounds like so much fun. Too bad I'm not going to be here to have on all the fun. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Kimball. Page 18 FC-36 May 19, 2026 MS. KIMBALL: Yeah, thank you. Council Member Kierkiewicz and the Director bring up a number of valid points. And, you know, starting to look at this, the way that we budget as a County is pretty archaic in terms of how County level municipalities across the country actually budget. And there are a number of mechanisms that improve that process in a more meaningful way in terms of one, the Council really driving the budget towards the priorities of the Council at that time, which I don't think we really do to the extent that we could. And then the second is that idea of budgeting towards outcomes, you know, saying, "Okay. DPW (Department of Public Works), we want you to pave 50 miles of roads this year; we're going to give you this amount to do it, and then we're going to measure those metrics on how well you're accomplishing that goal." One of the things that I think is important with this conversation is that a shift to that type of budgeting model would potentially result in us reducing some of the granular detail that we have in the budgets that are presented to us now that are maybe not as important or meaningful with regard to actually achieving the outcomes we want to achieve with the budget. What I will say is the risk with that is the public who may have beenI don't know how many of them actually look at our budget books aside from us, but for the ones that do, there might the perception that we are trying to hide things where we're not being as transparent if we were to move to a more modern and goal oriented budgeting process. So I only put that out there for the purpose of conversation on the matter. But I do think there's, process wise, a number of options before us. And I do consider what the director had to say about giving our new platform time to be implemented and some of the reports to be produced from that to see if that provides us with the kind of more meaningful oversight that I think we could have of the budgetary process. It is in my mind the most important thing that we do and so we should always be questioning the process and the quality of the debates and deliberations we have around the budget. So thank you. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Kagiwada. MS. KAGIWADA: Yeah. I just want to add one more thing kind of speaking to the point made by Council Member Kierkiewicz. I too have been just, I don't know, flummoxed is maybe the word about the lack of input from the community on our budget process and our budget hearings, and I'm trying to figure out why. But I like the model they have over in Maui where the Council is actually going out to the different districts to talk to people about the budget before it gets finalized and to gather information from community, and I'm hoping that we can consider something like that going forward too. I'm just kind of researching how they do it over in Maui and what that might take for us, but obviously our island being much bigger. But I think something like that, I just feel like we're budgeting without a lot of community input, and it is a little bit frustrating. So I too would like to see our Council Chambers full when we're talking about these issues. Alright, I yield. Thanks. Page 19 FC-36 May 19, 2026 CHR. KANEALI`I-KLEINFELDER: Thank you. Director, can I talk to you for a minute? I'm just thinking about this concept. What's getting me right now is forcing through a charter amendment that requires a tier budget, there's a missing piece of are you telling me we don't think two years in advance right now, if not five years in advance when we start budgeting for things in our County. I don't think that's true, but I mean that's what this presupposes. And if you're going to point at the budget and show me it goes out three years in advance, but those numbers never change too much, maybe a couple of them. MS. NAKAGAWA: Yes, I am going to point it out. It is taken into account. Now what we know this year we may not know next year. So yes, maybe we could do a lot more discussions on future years. But the budget does look, you know, I bring this up because to a point made earlier, the information that sometimes is shared with Council is different than the published information. It's a much higher level, so when we talk about or Council Members talk about some of the details on there. This year for example, if you look into your budget, you'll see 2026-2027, 2027-2028, and 2028-2029. If there are known changes then we'll go ahead and make those changes. If they're not known at this time, yeah, more than likely it is a status quo or if it's something that we're not going to do. But that kind of demonstrates on a lot of these things. There's information that we don't have at that particular time. But yes, we are looking at the budget several years out. CHR KANEALI`I-KLEINFELDER: Okay. That's where my brain was. This is looking for a two-year budget, but we're provided a budget every year that has three years out as far as estimated budget line items. As more of understanding the whole system, I don't think that we just look at things one year out and call it good, and then go, I think we should be good next year. There's a thought pattern there I hope, department wide, administration to Council levels, all branches of government that we're cohesively building a solid picture into the future for our residents using tax money. There has to be. MS. NAKAGAWA: When there are items that we know that will continue in our budget, if things are going to change and those that we know, then those are changed. So yes, I mean, we are looking as far as we can out and making those adjustments. And more than likely in the next year more adjustments will be made in the next budget. CHR KANEALI`I-KLEINFELDER: What do you call that right now? MS. NAKAGAWA: What? CHR KANEALI`I-KLEINFELDER: Do we have a name for that or is that just the way we do things; what's the deal? MS. NAKAGAWA: Our budget process? Page 20 FC-36 May 19, 2026 CHR. KANEALI`I-KLEINFELDER: Yeah. If I put a name on it and call it biennial or triennial. MS. NAKAGAWA: Well we're still on an annual budget because the Council is adopting one year, but we do provide information for future years because yes, we always want to be planning not just one year out as I continue to talk about it especially now, we cannot plan one year out. We need to plan five, ten, twenty years out considering all the different obligations that we have. So although we are adopting a one-year budget, we are actively planning for future years to the best we know right now. CHR KANEALI`I-KLEINFELDER: Thank you. MS. NAKAGAWA: You're welcome. CHR KANEALI`I-KLEINFELDER: That's what I understood. That's where my head goes to when I read the bill is understanding that this could charter require a biennial budget and force that way of thinking. I just want to make sure we're already doing it. MS. NAKAGAWA: We are. We are planning ahead. I agree wholeheartedly that we want to see more input from the community, but I also want to just mention that a lot of the times when the departments are working on their budget there are adjustments made from the feedback that they get throughout the year as well. So there's different ways in which the community shares what they would like to see and some of that is put in into the different ways that they change their budget as well. I just wanted to add that in as well. CHR KANEALI`I-KLEINFELDER: I do like our yearly budget because it gives us a chance to break things down every five or six months. Actually, if you think about it, when you start; when you end; when we have the budget in front of us; the public interaction. But it gives all of us a chance to weigh in. If you really use this time period that we're in right now, actually, to go after things that you want to get done and you coordinate well, you can get a lot done in a budget cycle, which forces it every year versus a two-year period, which would actually lag it out a little bit longer. Yeah. Okay. Sorry. I'm talking to you thinking out loud. Okay, Council Members. Thank you, Director. Council Member Galimba. MS. GALIMBA: So I do think that there's a lot of frustration in sort of digesting the budget and sort of making it relevant for ourselves as well as to the community. And I think part of that is a lot of times what I've come to realize is that the budget seems to be almost like, well it's talked about as status quo plus or status quo minus. And so that sort of mindset of, I mean, it's a reality, we do have a company basically. The County is like a company, and you have to have the basic functions of that organization funded on an ongoing basis for like your basics functions that need to be funded. And that's not very interesting I think for Page 21 FC-36 May 19, 2026 most people. And what we're looking for, I think when we're talking about budgeting for outcomes is something more that folks can get excited about and feels relevant. And how you present that or draw it out of the budget is not so easy a thing to do and might require almost a separate format. And I think potentially what Council Member Kierkiewicz is pointing that that supplemental year budget might pull those out a little bit more versus being all lumped into the big budget. That being said, I think there are some things in this idea that could be really useful and could be drawn out. That being said, Finance Director's point about having just set up our systems for an annual budget is very convincing to me. So even though this wouldn't start till 2030, if it were to pass that would be having to pretty much already start changing things. So I think the timing, maybe we need to push it down the road just a little bit and consider how things work out with our current system, which hopefully will be amazing and answer some of these needs that we have. Okay. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Villegas. MS. VILLEGAS: Yeah. Thank you, Council Member Galimba. And thank you, Director of Finance. I take what essentially, I am interpreting is you're asking for a bit of time to let, you know, change can be good, but too much change is disconcerting, and you never really get a track on what's happening. While I do like the concept of two years and aligning with the state, maybe the state should align with us. And I also just in the last few weeks, Director Nakagawa, I want to express my huge gratitude because we can budget things every year or we can do things every two years, but if the departments don't encumber the money and don't get the contracts out and don't spend the money then we're planning for outcomes that aren't being executed, and that is disappointing. And that leaves us with constituents in the electorate who are very disenfranchised and disenchanted and that has nothing to do with the budgeting because we've got the money there, we put it in the line items. So I also have concerns about extending this to every two years because it's only through the budget cycle that then it came to me, okay wait, I've got to put something in the CIP based on a certain contract; wait, it was never done. So there's a tickler in that. You know, okay, every year we are looking back at the things that we fought for the year prior to ensure we're in that budget cycle. So I want to personally and professionally thank you for your help remedying that circumstance and situation and keeping an eye on it for us. So I don't know that this is the right time. I mean I appreciate the opportunity to have this conversation and to look at where to be helpful. Alright, I yield. CHR KANEALI`I-KLEINFELDER: Okay, thank you. Council Member Kimball, how do you want to proceed? Okay. Council Members, on the motion to forward Bill 159; Mr. Clerk, can we get a roll call please? Page 22 FC-36 Vote on Bill 159 Failed The motion to recommend passage of Bill 159 on first reading failed by the following roll call vote: Ayes: Committee Member Kimball —1. Noes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Onishi, Villegas, and Chair Kaneali`i-Kleinfelder — 8. Absent: None. Excused: None. Vote on Motion to Ms. Kagiwada moved to remove Comm. 118.5 from the Remove from Table: table. Seconded by Mr. Inaba and carried by the following (Approved) voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, Villegas, and Chair Kaneali `i-Kleinfelder — 9. Noes: None. Absent: None. Excused: None. May 19, 2026 CHR. KANEALI`I-KLEINFELDER: We have our Director from Human Resources here as well as our, I believe we may have Police Department online as well. Yes, we do. Beautiful. Ms. Kagiwada, go ahead. MS. KAGIWADA: Thank you so much, Chair. And I'm sorry this might be just totally 101, but I need a refresher on these numbers on the last one. I was just primarily looking at those totals on the last page of this communication. Can you please just give me a refresher on what the reallocations for recruitment indicate and what the reallocations with no additional costs indicate as far as what does that actually mean. Thank you, Director. (Note: At this time, Human Resources Director Sommer Tokihiro came forward to address the members of the Committee.) MS. TOKIHIRO: Sure. Sommer Tokihiro, Director of Human Resources. So the temporary reallocations for recruitment purposes are generally recruitments from a higher class of work to a lower class of work. So we may have a difficult time identifying applicants that meet all of the minimum qualifications at the permanent class. And so we work with departments to see if they would like to recruit at either a lower level or multiple levels. And so the intent of the is to broaden our applicant pool. And then the reallocations with no cost to the department, specifically on this report there were several position reallocations from Police Office (PO)11 to Police Office III. Page 23 FC-36 May 19, 2026 These are standard reallocations that the department utilizes on an annual basis. So it's a temporary allocation to the level of Police Officer III to provide promotional opportunities for specialized assignments within the department. So the department makes those personnel assignments and tracks how long personnel are in those positions. And they come to the Department of Human Resources to renew those temporary allocations on an annual basis. And so I believe and I'm glad Deputy Chief (Sherry) Bird is also here as well. But from a budgeting perspective because this is a promotional opportunity within the department that occurs on an annual basis, I believe they set their budget knowing that they're going to have a certain number of positions reallocated from Police Office II to Police Officer III on an annual basis. MS. KAGIWADA: Okay. So you're saying that then reflective in the budget we're working on now for this upcoming year, those 82 positions would be reflected, for instance, at the position III level as a permanent position as opposed as a temporary reallocation. MS. TOKIHIRO: So I believe that the funding is there covered in salaries and wages, but those PO III positions are not permanent. They are temporary promotions. So we don't have any permanent PO III positions; we have permanent PO II positions that get reallocated to PO III for these specialized assignments. MS. KAGIWADA: Okay. Deputy Chief Bird, if you can just say a little more. Budgeting wise, I'm just not really understanding why if we do this on a regular basis and we're needing these (PO) III positions why we wouldn't make those permanent or something. Are these employees going into that and then what happens after a year, and they've been in a position III; what happens to them then if it was temporary? (Note: At this time, Deputy Police Chief Sherry Bird came forward to address the members of the Committee.) MS. BIRD: Hi. Good afternoon. Deputy Chief Bird, Hawaii Police Department. Yes. To answer that, these are temporary promotion positions. So it allows our officers to advance on a temporary basis. They're in those positions for five years if selected, but they have to go through a process, you know, meet minimum requirements for the position, get interviewed, go through a process. Once they're selected into a position, these positions are like our vice positions, our traffic enforcement unit, so it requires a lot of specialized education. But they're in there for five years and it can be extended up to eight years. So as far as the budget goes, the budget is already there for those positions but because they're temporary, we have to rotate them out. So again, it's to provide promotional opportunities for our personnel. Page 24 FC-36 May 19, 2026 MS. KAGIWADA: Okay. So then after those five or maybe eight years, they go back down to a position II? MS. BIRD: Yes. MS. KAGIWADA: Okay. MS. BIRD: They go back down; we recruit again and allow for other interested and qualified personnel to seek advancement. MS. KAGIWADA: Alright. That's a very different system than it seems like most other departments use. Thank you for that explanation. I did not know that is what is occurring with kind of these larger numbers. Yeah. MS. BIRD: The other departments also have similar types of systems like this. MS. TOKIHIRO: I think I just want to clarify that when you have a position that is permanent, then it would be permanently filled. And so having these positions identified as temporary allows the department to set the term between five and eight years to provide these opportunities to officers that meet those qualifications. So keeping them temporary allows for the greatest possible flexibility on that part of the department to provide that additional training and experience to officers that will benefit them in future promotional opportunities for other classes. MS. KAGIWADA: Okay. Yeah. I mean I see that. I'm just wondering how it feels then to go back down to a II after you've been a III. That's where I was headed with that is, you know, if that indeed is the cycle as opposed to a lateral move or going up, or after taking those temporary positions that qualifies them for moving up in the department, I'm just curious about that. To me that's a little bit unusual to kind of be promoted and then it be temporary and then go back down and then all that. So just very interested in it. I can take it offline and talk a little bit more with folks. But I just wanted to make sure I understood what these numbers represented. So thank you, Chair. And thank you for indulging me. I yield. CHR. KANEALI`I-KLEINFELDER: Not a problem. Council Member Hustace. MR. HUSTACE: Thanks, Chair. Director, just to follow up a little bit. I'm curious on Council Member Kagiwada was talking more about the positions within departments, but on the far right columns you have the monthly cost and the annual cost. Some of these are positive costs and some are negative costs though. They kind of range. So even if you just look at the PO II to PO III, some are positive cost and some are negative cost, and it's the same for other departments too. So I'm not really understanding why some are in parentheticals Page 25 FC-36 May 19, 2026 and others are not if the cost is going to be increasing the burden on the County to pay someone more for more duties and more work. MS. TOKIHIRO: So that's dependent on the position. But as far as the differences between those, I would have to do more research with my team. I'm not sure if the Finance Director could clarify that. But I'm really not sure how those costs are impacted. MR. HUSTACE: Because it makes sense when they're going from like a Civil Engineer IV to a Civil Engineer II, there'd be a reduction in cost there. But then there are ones that are going from Investigator IV to Investigator V, but it's a positive cost. Sorry, I'm maybe not reading this accurately. It's just they way it's laid out I would see these as, in parentheticals, these are a negative so in theory that would be adding to the cost of the department and the County, right, so what is the positive cost versus the ones in parentheticals? If I'm off base here, please correct me. MS. TOKIHIRO: So for example on the first page when we're looking at Real Property Appraiser III to Real Property Appraiser IV, that's part of the career ladder. So the income in that position now meets the qualifications to qualify for the IV level, so that would be an increase in cost for the department with the reallocation up. With the reallocations down you are likely to see savings, but it also depends on the individual that's in the position. I'm just kind of thinking out loud. If someone had been like a Police Officer II for several years and they had achieved a different step on the salary schedule, their promotion to a Police Officer III, they maintain their step. So the cost of a promotion to that next level may be higher and will vary based on who's being promoted. MR. HUSTACE: I know. I understand that. So you said Real Property Appraiser III to IV, the monthly increase was $121. But then Real Property Appraiser I to II, it was a negative $82. MS. TOKIHIRO: Yeah. And that's a good question. I'm going to have to do some research with my department. MS. NAKAGAWA: Diane Nakagawa, Finance. So I think we need to look at this exactly with every single position. So the case for every position may be different. You could have an incumbent budgeted at a very high step and then you change it or reallocate it, and it may be an entry level step. So you have to always take into consideration every year as we go through the budgeting process, the departments review positions and make adjustments to their salaries. So each position is budgeted. So if there's a change, the change is dependent upon where that incumbent or the previously held position was budgeted at. So sometimes it's not always from a I to a II it's going to be higher. It's based on the budgeted cost in the position in that year. Hopefully that helps. Page 26 FC-36 May 19, 2026 MR. HUSTACE: So how should this be read though? You know, there's a negative number there, right? This is a loss to that department because they've made that change? MS. NAKAGAWA: It's not a loss to the department. MR. HUSTACE: The savings. MS. NAKAGAWA: Yeah. It's the savings to S&W. So a little less in some of these positions that are in the parenthesis that are going down. It's just an adjustment to their S&W, not necessarily a loss. MR. HUSTACE: So I'm reading that the right way then. Okay. So this would be an increase cost to the department in verse there too. MS. NAKAGAWA: Correct. MR. HUSTACE: Okay. So it's really just dependent on each individual employee in those positions and then the transition across throughout the year, and change in steps, change in positions. So we have to really look at the critical end for each of those roles. MS. NAKAGAWA: Yeah. You can't really group them. You need to look at the incumbent position number, and then where it was budgeted to, what it's being reallocated to. MR. HUSTACE: Got it. Thank you. It's just reflective in the sense with the Police Officer II to III because so many were within that change between the two classes, but the numbers and the effective date is the same, but there are wide range in numbers there that are changing. So that's where I'm kind of losing a little bit, but it makes sense. Yeah. Thank you. Thanks, Chair. Both of my questions were the last half of the Council. Sorry about that. CHR. KANEALI`I-KLEINFELDER: I like it. No ones ever asked that many questions on a reallocation report. I think we all learned something. That was good. Anything further on this one? You're good? Okay. Thank you. Thank you, Deputy Chief Bird for jumping on. I was texting the Chief. MS. BIRD: No problem. CHR KANEALI`I-KLEINFELDER: And thank you, Sommer. Appreciate it. MS. TOKIHIRO: You're welcome. Thank you. CHR KANEALI`I-KLEINFELDER: Okay. Motion is on the floor to close file on Communication 118.5, all in favor? Page 27 FC-36 Vote on Comm. 118.5: Filed STATEMENTS FROM THE PUBLIC ON BILL 160 (Comm. 893): i •1 Motion to Approve May 19, 2026 The motion to close file on Comm. 118.5 was carried by the following voice vote: Ayes: Committee Members Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, and Chair Kaneali`i-Kleinfelder — 7. Noes: None. Absent: Committee Members Galimba and Villegas — 2. Excused: None. The Chair directed the Committee to proceed to the next order of business, Statements from the Public. The following individual registered to speak and came forward when called by the Chair: Debbie Hecht Comment. AMENDS ORDINANCE NO. 25-45, AS AMENDED, THE OPERATING BUDGET OF THE COUNTY OF HAWAI`I FOR THE FISCAL YEAR ENDING JUNE 30, 2026 Appropriates revenues in the Real Property Tax Penalties account ($1,125,000); and appropriates the same to the following Transfer to Public Access/Open Space Preservation accounts: Fund ($1,000,000) and Maintenance Fund ($125,000). Reference: Comm.893 Intr. by: Council Member Kaneali`i-Kleinfelder (B/R) Mr. Hustace moved to recommend passage of Bill 160 on first reading. Seconded by Ms. Kagiwada. CHR. KANEALI`I-KLEINFELDER: Council Member Galimba. I believe we may have Administrator Miura in Kona still. MS. GALIMBA: Okay. Yes. So that would be a question for either Administrator Miura or Director to please explain the RPT (Real Property Tax) penalties and the relationship to the PONC (Public Access, Open Space, and Natural Resources Preservation) fund. (Note: At this time, Finance Director Diane Nakagawa and Controller Jon Arbles came forward to address the members of the Committee.) MS. NAKAGAWA: Happy to do that. Diane Nakagawa, Finance. Also here with me is our Controller Jon Arbles, who will go through just an explanation of this one and the following. Page 28 FC-36 May 19, 2026 MR. ARBLES: Hi. Jon Arbles, Controller, Department of Finance. So what the RPT penalties are is just it's an anticipation of what we think, an estimated amount of what we think will be so that we can make the appropriate allocations to PONC and to these funds. In the past it's just been listed under penalties, but it is in fact not just penalties, it is actually past due payments in addition to penalties. It's a little challenging based on the old system and the new system to try and split out which portions are actually penalties, and which portions are past due payments, and so on and so forth. So based on what we've done in the past I just listed them all under penalties. But it is in fact an estimation of what we think we'll collect through the end of the fiscal year and to make sure there's an appropriate appropriation for that to go to the allocating ones. MS. GALIMBA: I don't remember this coming before us previously so can you explain that? MS. NAKAGAWA: Yeah. So if they were in a little different order between Bills 160 and 161 it might be a little easier. But we do an estimate of the amount that would be transferred based on the two percent or the quarter percent each year. So for example, on the next bill what you're seeing is that year end when we get the exact amounts. If those don't match up, we need to make sure that the proper amounts, the two percent and the .25 percent, are transferred into those areas. In Bill 160, what we're doing right now is kind of anticipating that the revenue collection now is going to be higher than we anticipated to make sure that we can do that transfer. So you're seeing both of them at the same time. Normally, you would see closer to Bill 160 each year as we get to this time and we know a little bit more about how much exactly needs to be transferred. But at this point because we didn't do that last year, you are seeing both of those. So this is really to ensure that the proper amount of funding gets transferred into PONC maintenance and the other funds as well, like disaster. So that's what you see in front of you. MS. GALIMBA: Thank you. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Okay, seeing no further discussion, motion is on the floor to forward Bill 160 to Council with a favorable recommendation. All in favor? Vote on Bill 160: The motion to recommend passage of Bill 160 on first (Approved) reading was carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, Villegas, and Chair Kaneali`i-Kleinfelder — 9. Noes: None. Absent: None. Excused: None. Page 29 FC-36 STATEMENTS FROM THE PUBLIC ON BILL 161 (Comm. 894): Bill 161 May 19, 2026 The Chair directed the Committee to proceed to the next order of business, Statements from the Public. The following individual registered to speak and came forward when called by the Chair: Debbie Hecht Comment AMENDS ORDINANCE NO. 25-45, AS AMENDED, THE OPERATING BUDGET OF THE COUNTY OF HAWAI`I FOR THE FISCAL YEAR ENDING JUNE 30, 2026 Appropriates revenues in the Fund Balance From Previous Year - Reserved account ($443,775.57); and appropriates the same to the following Transfer to Public Access/Open Space Preservation accounts: Fund ($274,878.65), Maintenance Fund ($40,457.41), and Transfer to Disaster/Emergency Fund account ($128,439.51). Reference: Comm.894 Intr. by: Council Member Kaneali`i-Kleinfelder (B/R) Vote on Bill 161: Mr. Hustace moved to recommend passage of Bill 161 on (Approved) first reading. Seconded by Ms. Galimba and carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, Villegas, and Chair Kaneali`i-Kleinfelder — 9. Noes: None. Absent: None. Excused: None. ADJOURN- There being no further business on our agenda today, Chair Kaneali`i-Kleinfelder MENT: adjourned the meeting at 2:28 p.m. Thank you very much. Approved: Mr. Matt Kane li`i-Kleinfe er, Chair (Date) Finance Commit e InU MIl7 Page 30