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HomeMy WebLinkAboutMIN COUNCIL 2017-05-18 2016-2018 SpecialHawaii County Council Special Session 131h Session Hawaii County Council 25 Aupuni Street Hilo, Hawaii May 18, 2017 INVOCATION: Pastor Sheldon Lacsina of New Hope Hilo gave the morning's invocation. CALL TO The special meeting of the Hawaii County Council was called to order at ORDER: 9:04 a.m., in the Council Chambers, Hilo, by Ms. Valerie T. Poindexter, Chair. ROLL CALL: Present: Ms. Valerie T. Poindexter, Chair Ms. Karen Eoff, Vice Chair Mr. Aaron Chung, Member Ms. Maile Medeiros David, Member Mr. Dru Mamo Kanuha, Member (came in later) Ms. Susan L. K. Lee Loy, Member Ms. Eileen O'Hara, Member Mr. Herbert M. "Tim" Richards, III, Member Ms. Jennifer Ruggles, Member PLEDGE OF The Chair directed the Council to the next order of business, Pledge of ALLEGIANCE: Allegiance. (At this time, Ms. David led the Council in the Pledge of Allegiance.) STATEMENTS The Chair directed the Council 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: Fred Housel: Bill 11 (Comm. 91), comment. Judi Houle: Bill 11 (Comm. 91), in support. Gary Barr: Bill 12 (Comm. 92), in support. Hawaii County Council -13 Roxanna Lynch: (representing Wainaku Kaiwiki Community Association) Torrey Lynch: (representing Wainaku Kaiwiki Community Association) Jayme Carvalho: (Hawaiian Sunset Travel Team) Lucille V. Chung: Lisa M. King: May 18, 2017 Bill 12 (Comm. 92), in support. Bill 12 (Comm. 92), in support. Bill 12 (Comm. 92), in support. Bill 12 (Comm. 92), in support. Bill 11 (Comm. 91), comment. Margaret Wille: Bill 11 (Comm. 91); Bill 12 (Comm. 92); Bill 35 (Comm. 288); and Bill 36 (Comm. 289), comment. COMMUNI- The Chair directed the Council to proceed to the next order of business, CATIONS: Communications. (There were none.) ORDER OF The Chair directed the Council to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. BILLS FOR ORDINANCES (FIRST READING): (There were none.) The Chair directed the Council to proceed to the next order of business, Bills for Ordinances (First Reading). CHR. POINDEXTER: Mr. Clerk, could you please read in Bill 11, Communication 91.8 and Bill 11, Draft 2 please? Page 2 Hawaii County Council -13 May 18, 2017 Bill 11: ESTABLISHES AN OPERATING BUDGET FOR THE COUNTY OF HAWAII FOR THE FISCAL YEAR JULY 1, 2017, TO JUNE 30, 2018 From Mayor Harry Kim, dated March 1, 2017, transmitting for consideration the proposed Operating Budget for the County of Hawaii for the Fiscal Year (FY) ending June 30, 2018. This balanced budget includes estimated revenues and appropriations of $473,998,961, and is 2.38 percent higher than last year's budget. Reference: Comm. 91 Intr. by: Ms. David (B/R) Approve: FC -14 ; and Comm. 91.8: From Mayor Harry Kim, dated May 5, 2017, transmitting Bill 11, Draft 2. This draft revises revenues and expenditures for accounts proposed in Draft 1 as follows: General Fund (total adjustments +$16,721,906), Highway Fund (total adjustments +$414,437), Sewer Fund (total adjustments +$369,693), Solid Waste Fund (total adjustments +$959,484), Golf Course Fund (total adjustments +$46,000), and Housing Fund (total adjustments +$329,791). Draft 2 proposes 6 additional positions, for a total of 10 new positions. ; and Bill 11 ESTABLISHES AN OPERATING BUDGET FOR THE COUNTY OF Draft 2): HAWAII FOR THE FISCAL YEAR JULY 1, 2017, TO JUNE 30, 2018 Proposed Operating Budget for fiscal year ending June 30, 2018, includes estimated revenues and appropriations of $491,241,880. Intr. by: Ms. David (B/R) Motion to Approve: Ms. David moved to pass Bill 11 on first reading and adopt Finance Report No. 14. Seconded by Ms. Eoff CHR. POINDEXTER: Is there any discussion? Seeing or hearing none, pursuant to Article 10, Section 10-2a of the Hawaii County Charter, the Mayor has submitted an amended operating budget to the Council on May 5, 2017. So, is there any discussion before we move to the proposed Draft 2? Ms. David. Motion to Amend: Ms. David moved to amend Bill 11 with the contents of Comm. 91.8. Seconded by Mr. Richards. CHR. POINDEXTER: We're now on proposed Draft 2 so I can open up discussion. Council Members, on Draft 2. No discussion? Okay, so I guess we'll vote on—Council Member O'Hara, I know you had amendments, but are you going to move— Page 3 Hawaii County Council -13 May 18, 2017 MS. O'HARA: I would like to defer the two amendments until our next meeting. CHR. POINDEXTER: Okay. MS. O'HARA: Do I need to make a motion for that? MR. MAEDA: We're going to—we'll read them in and then at that point if they can be MS. O'HARA: Okay, thank you. CHR. POINDEXTER: Okay. Thank you. So, I guess we'll take a vote on Bill 11, Draft 2. Vote on Bill 11: The motion to pass Bill 11, as amended to Draft 2, on first Draft 2 reading was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter – 9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: Okay, so we are now on Bill 11, Draft 2 has—now we're going to move into the communication. So let's do—Mr. Clerk, if you can read in Communication 91.20. Comm. 91.20 From Council Member Eileen O'Hara, dated May 10, 2017, transmitting (Memo. No. 1): proposed amendments to the General Fund expenditure accounts by decreasing the Clerk -Council Services Salaries and Wages by $56,328 (removes funding for Legislative Specialist position and reduces funding for Administrative Assistant to the County Clerk position), decreasing the Corporation Counsel Salaries and Wages by $40,128 (removes funding for Legal Technician I position), and decreasing the Building Inspection Salaries and Wages by $128,544 (removes funding for one Building Inspector position and reduces funding for an Electrical Inspector position), and increases the Contingency Relief account by $225,000. CHR. POINDEXTER: Council Member O'Hara. MS. O'HARA: I would move to defer this measure. CHR. POINDEXTER: Okay. To the next Page 4 Hawaii County Council -13 May 18, 2017 MS. O'HARA: I'm sorry. To the next meeting. I have other amendments coming in that I would prefer to discuss before this. CHR. POINDEXTER: Okay. So is there a second? MS. O'HARA: Was that a motion? Motion to postpone: Ms. O'Hara moved to postpone Comm. 91.20 to the June 5, 2017 meeting. Seconded by Mr. Richards. CHR. POINDEXTER: If she's deferring, can we just defer or do we need the motion and the second? MR. MAEDA: She's postponing it, correct? CHR. POINDEXTER: Okay, postponing it. So it's just a postponement so MS. O'HARA: Don't need a motion? CHR. POINDEXTER: Actually, you need a motion to postpone. MR. MAEDA: Excuse me, we need a motion to amend the Bill 11, Draft 2 with the communication. CHR. POINDEXTER: Okay. MS. O'HARA: So I need to make that motion first? CHR. POINDEXTER: No, we're going to withdraw because we're going to go back, right? We're going to amend. MR. MAEDA: She's trying to amend Bill 11, Draft 2 with her communication, and then at that point, she can postpone it. CHR. POINDEXTER: Okay. Got it. MS. O'HARA: So my motion has to be to amend with Communication 91.20. CHR. POINDEXTER: I'm just going to take a because this is getting really important, what we're doing, I'm going to take a brief recess to talk to our Clerk and Deputy Clerk. Recess: At 9:58 a.m., the Chair called for a recess. Reconvene: The meeting reconvened at 10:01 a.m. Page 5 Hawaii County Council -13 May 18, 2017 CHR. POINDEXTER: Okay, I'm calling this meeting back to order. At this time, I'm going to give Council Member O'Hara the floor. MS. O'HARA: Thank you, Chair. And since we have a motion on Communication 91.20, I would like to withdraw at this time because we have another meeting and I will be reconsidering at that point. Withdraw Comm. 91.20 Ms. O'Hara announced the withdrawal of Comm. 91.20. CHR. POINDEXTER: So now we're back again to Bill 11, Draft 2, which is the May fifth, the Mayor's budget and I know that there was some discussion that wanted to take place. So before we move into further amendments, do we have any discussion? Council Member Richards. MR. RICHARDS: Thank you, Chair. As we go through this, obviously we're having a little bit of procedural questions bringing before us and I think that as we've received the Draft 2, there's changes here that I think some clarification needs to be brought before us. We need a lot more information and I don't want the public to think that we're just not paying attention and we're not listening and we're not reviewing this. I won't speak for the whole Council, but in this case, I will. Everybody's been spending hours poring through all this stuff and so I think, Chair, what I would like to do is start a discussion and in these changes in the—with the summaries that we've received, I think we should have some explanation coming from the different departments so I would like to ask, and I'm not sure the procedure on how to ask that to come forward. CHR. POINDEXTER: Sure. If you have the floor, you can call any department up to the table. For the Mayor or whomever you desire to MR. RICHARDS: I think probably the easiest way to start that, I would like to call Finance up and give us a brief summary and then we can go from there, go to the different departments. CHR. POINDEXTER: Okay. So Mr. Tomei and (Note: At this time, Finance Director Collins Tomei and Deputy Director of Finance Deanna Sako came forward to address the members of the Council.) MS. SAKO: Good morning, Deanna Sako, Deputy Director of Finance. MR. TOMEL Good morning, Director of Finance, Collins Tomei. CHR. POINDEXTER: Thank you. Page 6 Hawaii County Council -13 May 18, 2017 MR. RICHARDS: Thank you Finance Director and Deputy Director for being here. I'm not exactly sure how to ask the questions that I want my colleagues to weigh in on as we go through this whole procedure. I assume that you're instrumental in writing the summary as far as the Draft 2 budget comes forward, and a little bit of a moving target for us as we're trying to balance the budget and get our arms around it. So, if you could just touch on the big portions. And probably what's on everyone's mind right now is the real property tax, so we may need to get the tax people up here as well. Initially, our draft looked for a $297 million coming out of real property, and then in the summary I have, is a $303 million coming out of that first source revenue. I'm having trouble connecting these dots here so if you go through that process, and it does not appear on some of the documents that we received, that $303 million, taking into account the proposed tax hike is going to be covered by that. So I need some help explaining that please. MR. CHUNG: Point of personal privilege. CHR. POINDEXTER: Point of order. Council Member, Chung. Point of Order: MR. CHUNG: With all due respect to my colleague, Mr. Richards, I think the first thing we have to start with is the Mayor. This is his budget, and the first thing we got to talk about is the property tax increases and the justifications thereof. And then, we get to the Finance Department, Mr. Tomei. Is that okay? CHR. POINDEXTER: Yeah, Mr. Richards, are you okay with yielding for this moment? MR. RICHARDS: Absolutely. I yield to my colleagues because this is a collaborative effort to try and get the right answers. MR. CHUNG: And I really do appreciate that, but I think that's how it should flow. CHR. POINDEXTER: Okay. MR. RICHARDS: That'll work for me. CHR. POINDEXTER: That's good. Okay, so at this time, I'm going to ask our Mayor Kim to come to the table. We'll start with, I guess—do you want the floor back? (Note: At this time, Mayor Harry Kim came forward to address the members of the Council.) Page 7 Hawaii County Council -13 May 18, 2017 Point of Order: MR. KANUHA: I'm just trying to figure out exactly where we're at on this agenda. CHR. POINDEXTER: Okay. So where we're at right now is we're still at—well you see the top where it says Bill 11, Draft 2? MR. KANUHA: Yes. CHR. POINDEXTER: We have Bill 11, Draft 2 on the floor right now. MR. KANUHA: What did we vote for earlier? CHR. POINDEXTER: Communication 91.8, we did Bill 11, we put Communication 91.8 into Bill 11 so now we're at Bill 11, Draft 2. Got it? MR. KANUHA: Okay, so we amended already? CHR. POINDEXTER: Right, because we had to bring in the Mayor's budget. Bill 11 was the first budget. Communication 91.8 is bringing in Mayor Kim's May 5th budget, and making it draft 2, so we're right now on the floor, on the main motion, Bill 11, Draft 2. Yes. Thank you. Okay, Council Members, Mr. Richards, you had the floor before, I want to offer the floor to you again. MR. RICHARDS: Thank you, but I'll defer to Councilman Chung. CHR. POINDEXTER: Okay. Council Member Chung. MR. CHUNG: The difference between, well one of the differences between the first budget and this budget is the request for a tax increase. So if you could just talk about that and other aspects of the budget so that we can kind of understand where you're coming from. And then we can ask individual departments questions. Would that be okay? MR. KIM: Members of the Council, thank you very much for this opportunity, it's a beautiful day. In specific questions about the individual department budget, as you can see, all departments are back here to answer any of your questions. In general, in regards to the budget itself, I think you may have read somewhere that this is perhaps one of the hardest decisions of anyone in the administration or a Council Member, and that is to increase the taxes to the public that we represent. What is in front of you is I think, a statement of a six and a half percent increase of your property tax across the board, except for affordable housing rentals. The reason for that simply was that was a one -unit classification we felt that should not be touched because of the times we are in. Page 8 Hawaii County Council -13 May 18, 2017 In regards to the necessity for raising the taxes, obviously that involves a lot of discussion of what and how much. And a very simplified manner, it was stated that after all different options were reviewed, that the best in regards to fairness for all was an across the board six and a half percent, although there were a lot of pros and cons and discussion in regards to here or there, or not here or not there. In regards to the why of six and a half percent, I think from the very beginning, we all understood, meaning also the Council, that there were so many things of the budget that was beyond our control. A good part of the raise was because of things of legislative or because of union. I'm picking on the union element, using all round numbers of approximately $20 million short. After all the cuts were made, each department was asked twice to go back and make additional cuts. Despite all of that, you still come in, again, approximately $20 million short to balance the budget to be presented to you. And of that alone, I think pay raises would account for approximately $8 million, which is still basically unsettled. On the revenue side, I think it was well publicized and I know many of you, Mr. Kanuha, taking part in discussion of going to the State Legislature to try to encourage our better and fairer distribution of the TAT (Transient Accommodation Tax) to all counties, not just Hawaii County. And even at this point, we are planning for a lower end, that's what we all hoped for and it is a disappointing lower end. If that comes through, then we're talking about our debt on revenues approximately at $2 million short. On the optimistic level, we're hoping for quite a few million dollars increase instead of a cut. The tax increase of six and a half percent obviously is not going to be well received by most people. I just need everyone to know, and I know you have to make the ultimate decision on approval or disapproval or modification of whatever we proposed to you, but I do feel on the whole, that was the best thing we could do, the fairest thing we could do in regards to a presentation of a balanced budget to you. The expenses that I've stated in regards to State legislative action or union wages are all beyond our control. The only revenue that we do control unfortunately is very limited. As you may know, there are 17 tax bases for this State and only three of them are in the control of the County government. And the vast majority of that, as far as our revenues, is property tax. Approximately again, about 71, 72 percent is from property tax. So that's where they're going carry the burden of it again. In regards to department by department, the first instruction to all of them was cut. We didn't know at that early date what the shortage was going to be, but we knew it was going to be short. The second time around, it was again, cut. Then it came to the point of discussion, I would not support nor promote any furloughs for this County. Number two, I would not support or promote in regards to Page 9 Hawaii County Council -13 May 18, 2017 removal of positions that were there. On a very easy example, if money was not an issue, as I told the Police Chief, we could easily double the Police Department forces and still be short. I think some of you obviously represent, especially the rural areas that have made newspaper issues lately, like Ka`u, like Puna. The shortage of police officers there is not disputed, it's well-known. We do wish we had the money to give to the Police Department to increase the services there. I am confident, as I told Kona the day before yesterday, which I was there for a rotary, that we can defend comfortably, the entire budget as a good one in regards to choices that have to be made. I do not expect people to agree with our priorities, but I think I will go here today and days to come is to explain to you why these decisions were made. And in summary, the six and a half percent tax had to be made to present to you a balanced budget for the expenses we thought can be justified to you. Some of it increases, and I know the questions of why increase at this time. Let's take one that was a well-known one, the transit system. We increased their budget, in regards to things that needed to be done, by approximately $600,000. That was addition to their budget. And even that's going to be short. We are grateful for, on that one project that in personal plea to Mayor Caldwell and his staff to help us out as much as they can, and they have assured us that they will ship to us, I think, within hopefully, no later than end of June, five to seven buses for our use. These are buses that they rotate out of their fleet. And as even maybe a little embarrassing is me saying that their rejected buses are going to be some of our good buses because they have a tremendous maintenance program and those buses would not be put on the road unless it was good. The only thing we have to pay for is the transportation of those buses to this island. And this has been past practice, they have been very kind and gracious to us and giving us all that they can. I think all of the department heads are behind me. I think they are here ready to answer any of your specific questions within their budget. I'll use the Mayor's office as an example. I think most all of the departments, except for a few like transit, their budgets have been cut from this present year, including the Mayor's office. Our cuts are not huge, but everyone was asked to review and we reviewed it. Our cuts are small because basically our budget is very small. The one that I can recollect immediately was we cut $12,000, and in a budget of $400 million, this seems penny ante, but it is, where you can cut and the $12,000 was membership to the NACo (National Associations of Counties) element. And we felt we could receive the exact same benefits without the membership dues. Again, the Cabinet members are here to answer any of your questions. Thank you for this opportunity for this explanation. Page 10 Hawaii County Council -13 May 18, 2017 MR. CHUNG: I just have two more questions of the Mayor and this might be an oversimplification, but would it be correct to say that the major contributors to our expense increase would be the wages to the unions? Three unions we're looking at right now, right? Four? Okay, Fire Fighters and some HGEA (Hawai`i Government Employees Association). Retirement benefits, health and retirements benefits and the shortfall in TAT, that's kind of the major contributors, right? Okay. Yesterday, we had two speakers from Pahoa who actually said that the tax increase was long overdue, so I want your perspective on this. Is the tax increaseI'm not saying that you subscribe to what they were saying, but just so that we're very clear, the tax increase from the administration's perspective is to make up for this shortfall created by these three drivers, or is it because it's long overdue? I just want to make sure. MR. KIM: I'm not laughing at your question, Mr. Chung, but that's the first time I heard of that so it kind of caught me off guard. I'm reallyI apologize because I'm not laughing at your question. MR. CHUNG: Because they were actually supporting the tax increase but they said it was long overdue, which indicates something other than making up for a budget shortfall, right? MR. KIM: I saw that in the media and I'm trying to put it in the proper perspective here. It was kind of an enlightening thing to hear, someone to say a tax increase is overdue. That is not true. The budget's principle is a very simple one as you know. We're mandated to present to you a balanced budget. A balanced budget is you show what your anticipated revenues are and you show, in regards to how you're going to spend it, dollar for dollar. And if you don't need to raise revenues because you have more than enough to pay for your expenditures, I don't think there's any person that I know would raise the taxes because it's overdue. The unfortunate raises are made with the full knowledge, and I do mean a full knowledge, and you and I have discussed this in private and other times, even before you taking office again, on the hard times people are having on this island. And that is so very true. And for the government to realize that and still tax them for more, that is not an easy decision, as you have stated. And so I'll just discount that as absolutely not true, that no consideration is made because it was overdue. But on that, surprisingly, I went to Kona to speak to the rotary and I was very pleasantly surprised when some members did not use those words, but stated, and please, I'm not saying this as reflective of, but it was stated yesterday of the amount they pay versus other places and they're very satisfied and wished they had more police and other things, but very satisfied and services rendered. I think Page 11 Hawaii County Council -13 May 18, 2017 some of you who have been to the mainland as visitor or relatives, or just friends, know that this County here is very good in regards to free services. We're not fee for service type of mentality so you go to the transfer station free, you go to the zoo free, every swimming pool is free, and the parks are all free, and I love that, really. I'm really diverting from your question, but know that the raises, Mr. Chung, was made strictly to present to you, a balanced budget based upon the services we wanted to provide to this County. MR. CHUNG: And necessitated by those three drivers? MR. KIM: And other things, but mainly yes, sir. MR. CHUNG: Okay. Thank you very much. CHR. POINDEXTER: Any other Council Members? Council Member O'Hara. MS. O'HARA: Thank you, Mayor for coming before us. I do have some concerns about the approach on the property tax increases being equitable, and it comes from the testimony we've heard and we've received a lot in writing as well. There are other classes besides affordable rentals that I think need to be protected, particularly the homeowner class. And while we have many issues that have been brought up at the Council about ag exemptions not being properly applied, which is potentially true and something we need to look into, the ag rate is not something that we want to increase because we want to encourage agriculture if I'm understanding our objectives in common. So those are some things that I just had concerns with about across the board increase. And you say that the tax increase is not long overdue because you're just trying to balance the budget, but I think what's long overdue is perhaps an assessment of the needs of each district. I know I'm working closely within the Puna district within the context of our Community Development Plan, and we're going to be launching a Master Plan for Pahoa. You've asked for a Master Plan for roads, which is all great and when we get those plans in place, we're going to find that we are deficient in the funding that we need. You've heard from many people, and I have many written requests in front of me right now, along with a petition about the need for more police officers in Puna. And I understand how difficult that is to do, I mean it's a five to one ration, as we've learned, but that is something that we need to strive for. So it isn't that we're just trying to balance the budget, we also have to look at what needs are not being met in our communities because this is how we meet those deficits in providing the public service that everyone needs. Page 12 Hawaii County Council -13 May 18, 2017 And also for my district, which is—the socio-economic status of my district is such that we have a lot of low-income families, and mass transit is really critical. And while it's great that the City and County of Honolulu is anxious to get rid of their buses, we also have been ignoring a very important cost to that process. And one of the reasons they are willing to pay for the shipping to get them to the Big Island when these are 20, 25 -year old buses. I agree, they probably have a great maintenance program, ours may be not so great. So we're taking these used goods and not considering the disposal cost, and I had a long conversation with your managing director yesterday about this. It's not something to sneeze at. So we have created already, a graveyard of school buses and we're now creating a graveyard of Hele-On buses, and there is a cost to all of that. So just want you to recognize that it's not just a freebie that we're getting, that there are additional costs there. Plus, it doesn't necessarily lead to a reliable, public, transit system, which is really what we need to get to. So I just want to throw those two ideas out because it's about meeting the public needs here and what we're hearing from the public is more public safety, and better mass transit, and better roads. So that's what we're hearing. But thank you. CHR. POINDEXTER: Thank you very much. Any other Council Members with questions or discussion for the Mayor? Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. Thank you, Mayor, good morning. Thanks for being here. I have a little bit more fundamental questions, and forgive me because I'm very new to this and you have a department that does this all year long. We on the other hand, get it in March and then we get an amended budget in May, so we really have about two months to dig into all of this. With your amended budget, you proposed seven new positions. Can you help me—and I'm only going to focus on three areas, the aging, you have an aging and disability specialist, two new positions, the housing special program coordinator, and the information technology, a deputy. Can you detail why, out of the seven, just those three, why you need those positions, please? MR. KIM: I think Mr. Alameda is in the back and when his department comes over, he'll explain the specifics of these funds in regards to carrying over the program itself. And the three new quote/unquote positions that we initiated, number one, one of which you had mentioned is the deputy, we hoped to really capitalize on technology today. We really hope to use her skills, she comes in with a tremendousI feel that we're lucky to have her, as far as skills. One of her assignments will be to work with all departments and see how we can upgrade things that we do, including those of the Public Works, Planning, including that to begin with, I don't know if to begin with, but emphasis will be on the transit system. Page 13 Hawaii County Council -13 May 18, 2017 I think all of you must have received complaints from our residents in regards to our sometimes unpredictable arrival or departure of the buses, and no one denies that. We hope to use her skills in working with the transit department to improve that. I said this in Kona the other day, that give us a year, we have a guy named Curt that you're going to meet, he's on short term, another lucky find for us because of his background. I'll say it openly here that he just began this month, but he's been working for you, for us, for I think two months prior to that with only coffee as a pay, and he knows we don't pay retroactive. But hopefully people like him, the people in that department really wanting to do this and with this new position, will be able to develop a system that, as we said to the public, that hopefully the Council will be very proud of what has been done in the past year to come. In regards to other positions of the three, I think we all know the tremendous increase in the homeless. It's not just the homeless, they break it down, the State used to count it as a homeless, which is obvious, those without homes, not with shelters, strictly on the streets, and the roadways. And those at risk, at risk being at risk of becoming homeless if anything happens to their income or their expenses, in that there were classifications as far as hidden families living together to make ends meets. I think that it showed that Hawaii Island, in the December stats of the past years, showed that this island had an approximate average of 150 percent per year for three years running. And I think that was really a tremendous wakeup call for everybody, not just those responsible, but just the public. And for all the different reasons, no one taking credit for any one of it, but fortunately, it showed that this year, from January counting now, it dropped down 32 percent. We hope to have this person dedicate his time or her time, strictly on the programs of the homeless. I know that is very—right now I have the deputy, Lance Niimi in charge of it. He still will be involved, but we got to have someone dedicated full time on that and this is just a program that's going to be ongoing. Hopefully, there will be some day that a person can sit up here before you and say we no longer need this full time position. MS. LEE LOY: Thank you, Mayor. I have one other question because I'm really trying to understand the different nexuses between what departments—the areas we're trying to improve and then the increase in taxes. So with that understanding, or maybe can you—the philosophy, or your top three priorities, because we don't have much time left and I truly believe that we need to have a great circle of impact, but we also have to have the synergies that go with it. For example, like with mass transit, whatever we're putting into that department, I know other members on this Council want to make sure that it has the biggest circle of impact to improve everyone across the entire County. So with that said, and what I'm gathering is transportation is important to you, homelessness. Can you please just in a nutshell, what your top three priorities are so we can begin to Page 14 Hawaii County Council -13 May 18, 2017 look at ways to synergize this budget so that we can really improve the Big Island? MR. KIM: Thanks for that tough question, and I sincerely mean it, thanks for that question because that's the kind of thing we—if time was not a factor, and laws were not a factor, we'd just sit down and have that free kind of discussion. I think the Charter determines for us what our priorities have to be in regards to obviously everyone knows about responsibility to roads and responsibility to public safety. Public safety would include obviously, not just police, but civil defense as well. Our Charter requires, in regards to responsibilities of all the parks and planning, those will be always the top priority. The one thing that's in there, in now, that is becoming high-priority, two high -priorities, which is really not by Charter, saying this is high-priority, is housing. Fortunately, we have what we call a—the programs, a lot of it funded by the federal government as we all know of Section 8, which is rent subsidy. I got good news on that, this is not really—but I met with the State, housing people, all full energies and commitment to have Lanakila Housing back up and running, phase by phase. In the Charter I guess, you will not see the high priority in regards to what you just mentioned, transit system, and that is becoming a very important part of our County government responsibilities. And none of you are as old as I am, but I think if you go back a few years, the transit system was what we fondly called a sampan system and a lot of you are smiling so a lot of you know what I'm talking about. I don't know why you're laughing, Mr. Richards, you're not old enough. But really, that was a few years back. For me, it's like yesterday because I'm that old, but the transit system was a sampan system and if Mr. Richards remembers that then he remembers it only cost us 10 cents to jump on it when it passed by, there's no schedule really on that except it goes around in circles. But look—I heard laughter, I hope you didn't think circles meaning don't know where they're going. Circles meaning around Hilo. In regards to look how much we talked about—Ms. O'Hara said it all as far as the importance and I'm glad she brought it up. She said the tremendous need in regards to transportation as well as police. I mean Puna, which she represents, the fastest growing district in the State of Hawaii, the largest district on the island of Hawaii. How many of us would have said that just 15 years ago? Because Hilo now is, because of availability, because of affordability, it is now also the bedroom community of Hilo, where the employment is for a large part. Our transit is new, transit is something we're going to have to focus on, our transit is something we will focus on. With what we have, members of the Council, I said it openly and I will say it again, I hope we, obviously we, because you are with me, with government, we hope to fix this system and to make it a good one with what we have, in what Ms. O'Hara said. I just want to assure Ms. O'Hara that these buses will be carefully inspected by our mechanics. We will be relying Page 15 Hawaii County Council -13 May 18, 2017 on them for years because we have not been able to put enough money on it, we depend on the allocation by the federal government for the new buses. And even that, maybe we'll have to re-evaluate if we need to increase the County's share of it because as you know, one of those buses can run anywhere from half a million to a million plus. MS. LEE LOY: Chair, I just have one other question. And I know you said it earlier, you're not interested in increasing revenues with our free parks and that kind of stuff, but we're also sitting here and I don't want to be snarky, but we weren't going to raise taxes and that's what we're looking at. Do you have, or have you considered a plan to increase revenues by way of fees at our parks or other services that we provide? MR. KIM: I hope I don't have to. But we collectively may have to someday if we don't change the element of how funds are distributed. I think every government would like to have a tax system—some places are very lucky whether it be countries or states where the resources from, let's say oil as an easy example, it's so great that they don't have to tax their people. Or take like Las Vegas, their revenues from outside sources and that's the dream, to get your tax revenues from outside sources. That's what your tourist tax is. This is why I fight very heavily against excise tax. It taxes very heavily, those that cannot afford to pay it, that's why we call it the regressive tax, it taxes everything that changes hands. In regards to your question, Ms. Lee Loy, I'm going to take this opportunity to say that the transit accommodation tax, formulated by our State government in 1997, in regards to helping County governments. In black and white, the State Legislature said, the County governments need help to provide those services to the tourists and the tourist industry that we provide the services for. And I'm sure this is repetition for many of you, but at that time, they said in black and white, that the State will do the collection and 95 percent of all the funds collected will be distributed to the four counties. The five percent will be kept by the State government for administrative costs of collection, which is very reasonable, usually it's 10 percent and more. As time went on, it changed that those revenues, which was dedicated only to County governments, except for administrative, became something the State looked upon as revenues for them. And not to pick on them, but it was there they needed money to balance their budget and pay expenses just like we all do, and this was a place to take money from. Most of it, except for locals that paid hotels, also came from outside sources. The projected revenues for that fiscal year coming projected, anticipated, is approximately half a billion dollars. $500 million. Because of deviation from the original intent of that tax base, the TAT, the County governments will get approximately, maybe 20 percent of it, from 95 percent. What happened in between? It paid for the Convention Center, Page 16 Hawaii County Council -13 May 18, 2017 it pays for the tourism authorities in regards to their expenses, and it paid for even a place called Turtle Bay land for acquisition. The intent initially was to help us. So where does it leave us? I think you read enough times where Mayor Kenoi put that on high-priority like the rest of the Mayors, the three Mayors, they came together. It goes back to my time also. You go there with cup in hand attitude. From 95 percent we're less than 20 percent. Out of that 20 percent takes our approximately 18 percent, and there comes your approximately $19 to $20 million. Calculate it someday, what it would mean to Hawaii County if one of their studies made up of County, private, and State people, what is fair share to the counties. Their formula calculation was they felt that 45 percent of the whole would be fair. I just said we get 20 percent if we're lucky, and now they want to cut that. I wish we had other tax revenues besides property tax. I hope even now that the Legislature will review what they're doing, I hopeI know members of the Council have, excuse me for saying it, Mr. Kanuha, cup in hand, but that's how I feel sometimes. I know how much time you spent there. I know definitely how much effort the previous Mayors did, including obviously as did Mayor Kenoi. And I, they won't use that term, I feel like it's a cup in hand, you're begging for your share. I'm saying it openly now because I have the podium. It was designed to help the counties and now you ask the question where else we're going to get revenues from? I'll end that with this. This is my home from birth, I'm so proud, truthfully, of the principles of which our taxes are collected. I'm very proud that we are of value of respect of seniors. I'm very proud because this is why we give them more exemptions, that they would not be taxed out of their homes when they're old and on fixed incomes. I'm very proud of the fact that our parks and those things of recreation are free. All of us must have gone to the mainlandI remember the shock when I couldn't wait for Spring to go swimming in the pool, and as soon as I got there, they told me, "So many cents, please." I said, "What? You got to pay to go swimming?" I was in an even bigger shock when I had to pay to watch the Fourth of July fireworks. I'm not saying this is wrong or this is right, I'm just saying I'm proud of the values of the Hawaii County tax system. I'm proud that we're the only County that gives exemptions to people of the homeowner's class to become older, the realization of principle that they cannot afford to pay more. I'm sure some can, but you can't be selective. Where will we go, Ms. Lee Loy? You're the young one, you're going to have to review that, and I'm afraid because it needs to be done. I know the heavy criticisms of me, I just heard it this morning, and some of it I feel is not fair, but that's the role of the Mayor. It doesn't say people will be fair. But I do know this, our needs will continue to grow. I just said, and Ms. O'Hara said it in Page 17 Hawaii County Council -13 May 18, 2017 different words, I could double the police department in Puna, and you know it's still short. And I'll end that with this, thank you very much. MS. LEE LOY: Thank you, Mayor, thank you for your candor. I do want to share with my Council Members this one point. On the mainland, they pay for the parks, but because of weather, a lot of the parks are closed three or four months out of the year. So they actually have an opportunity to maintain parks or not even fund them with toilet paper because they're closed. But they still collect fees when these parks are open. We, on the other hand, have them open every single day and I just want to leave that on the table. Not that I'm interested in raising park fees or those types of things, but when we start comparing what people on the mainland do compared to what we do, I think we have to focus on what we have and how to maintain them. So I'm going to yield at this time. CHR. POINDEXTER: Thank you so much. Council Member Eoff. MS. EOFF: Thank you, Madam Chair. I just wanted to say thank you, Mayor for being here today and for that very thoughtful and in-depth discussion and explanation of your philosophy and the values you tried to put into the budget decision that you had to make. I see almost all of the departments represented here today, the department heads and their deputies. I wanted to thank all of them because I know that everybody was tasked with trying to either status quo their department's budgets or even cut, especially Finance Department who's been very helpful in explaining a lot of this to us because the numbers, it's sort of hard to understand what they represent sometimes, unless you ask a lot of questions. So my staff has been asked by me all the time to call, ask a question, find out what that means so that I can be more informed. I want to thank Finance for that, and Real Property Tax. I think we have a job ahead of us in the next few weeks, and yes, we can try and make some amendments both to the operating and of course to the capital budget, which is a lot easier to do and a lot more acceptable in the long run for our job here, because those are not automatically funded. They become projects that could be carried out by the County when money is found for them. But with the operating budget, I realize now that this shortfall that we have, as Mr. Chung and others have analyzed here already, was the biggest problem that we faced because those are numbers out of our control but things that we had to fund. Now I was trying to look at where there's a worthwhile chunk of money to be had and as you said, the TAT would be our answer, which would be our magic bullet. But it doesn't look like that's ever going to happen now. I don't know how that philosophy changed from a pot of money that was supposed to benefit the counties where the impacts were felt by the tourists and their needs, to where it's coming to us in such a small amount, now an even less than we had anticipated in Page 18 Hawaii County Council -13 May 18, 2017 our first draft of the budget, that it's negligible in helping us with things that we really need to do here. So without that, and then with the increased wages that are always going to go up, too, for Fire, Police, and the union's negotiations, we have a pretty growing budget. One of my constituents spoke about that this morning, he did some analysis, and he's been in to see me a couple of times with the numbers. And like I said, the numbers are hard to understand sometimes. There's a lot of cost of living that factors in everywhere, too, in our cost of doing business here. I started to want to look at those vacant, funded positions, thinking well there's somewhere—those salaries and benefits, those would add up to quite a bit of money, because I was like you. I thought, well we don't really want to raise property taxes, we said we wouldn't. You wanted to stand by that and I'm sure all of us wish we could, too, but where are you going to find enough money to make up the shortfall? So now that I was more informed, I realized that during the last eight years, and especially when Mayor Kenoi first came in, there was a big shortfall and a lot of vacant, funded positions were cut out. So what we have left to pick from is not that much. It's not that many unnecessary positions left in the County. I believe County workers are doing as much and we need to provide man power. We can't give people that they also demand if we don't have people sitting in those positions to provide the services. So, some of those positions also represent positions that are funded by grants so it boiled down to where there wasn't really that many vacant, funded positions. Now I don't know if it's too late in the game to really look again, and someone did tell us what that number might be. But other than that, I couldn't really find a magic bullet, besides your proposal that we would look across the board and raise the property tax, except for the affordable class rates, and then by adding the exemptions for the over 75 and 80. You have held true to your values to protect those most vulnerable there. We have a tough situation and I listened to the Na Leo interview that you and Deanna, and Collins gave the other day, and I think Deanna said that this was one of the more challenging budgets to try and balance. If I could take just maybe another few seconds here, I think we can ask some more detailed questions as we move on to Finance and maybe Real Property Tax. I still think that we have to findI don't really agree about charging fees for our parks either, I think that's one of the wonderful things about the Big Island, and I think those natural experiences should be free and yet, maybe at some point in time, there's certain things we could look at and maybe bringing in enough revenue to help keep all of those opportunities available. Page 19 Hawaii County Council -13 May 18, 2017 MR. KIM: Thank you, Ms. Eoff and Ms. O'Hara, Ms. Lee Loy, three of you touched on different things but basically said the same thing. I need toI don't think I need to, but I would like to assure all the members of the Council and the community, regardless of the amount of money we have or don't have, it is with an attitude to be as conservative as possible. I think my track record will show you that we did cut when we don't need it, and we should continue to do that. If the revenues exceed what we consider as our needs, there's no need to spend it. And I think records will show that monies were saved even though the budget is balanced, money was not spent. You should save for a rainy day. But I'm going to take this opportunity as inappropriate and I will rely on the Chair to cut me off at any time. First of all, I think Ms. Eoff, you were very involved in the Kohanaiki Project in Kona. Look how lucky we are. Look how beautiful that park is. You know, you have a couple of miles of coastline that is free from all development, and it's free for every family to go there anytime, and it's well -kept and well cleaned, and the development was made for the people. Camping area, showers, toilets, it's all free, anytime. And to me, that's great and it should always be and when I'm a citizen and if they proposed user fees for those things, I think I'd fight it. It's not what we want for our people here. But the thing I wanted to take advantage of is the two percent. When they first came out, I opposed it, not on the principle that we should not fight for and preserve special lands, it was on the principle that we set aside two percent of the top of our gross, was financially going to be a problem. I need to let you know that I still have the same position that two percent off the top for us is $5 to $6 million a year to buy land. It's not within the Charter that we spend so much of our money to buy lands. My position was simple, we got a lot of lands without that in fact, if the lands are that special and precious, we'll go to the Council and float a bond for that land and convince the public that this is special lands. Outside of that, my position on the two percent, number one, it's too much. It's the highest of any place I know, two percent. Whether it's one percent or allow us at least to use it for maintenance or something. It takes away revenues from lands that would just sit there unless you have the money to fix it. No one is against saving special lands, I'm just against the way we're doing it, not with a government that will always be in times, of times of shortage. I want to thank you for your time, but above all, I sense a real good relationship and attitude of where we have to go and this is not going to be easy for us to say yea or nay to people. Yea is easy, nay is the hard part. So thank you very much for your time and allowing me to babble on. CHR. POINDEXTER: Thank you. MS. EOFF: And I'll yield now because I have some other questions later. Page 20 Hawaii County Council -13 May 18, 2017 CHR. POINDEXTER: Council Member David. MS. DAVID: Aloha and welcome, Mayor, thank you for coming. Just listening to everything that the other Council Members have said, I really want to let you know that going through the proposed increases in property taxes, I have a sense that a lot of effort was put into the fact that we have to increase property taxes at this point in time. A lot of thought was put into doing it in a sensitive and not across the board manner. That's the sense I got, and I really appreciate that because I think all of the departments not only have to cut, but you folks had to come up with a realistic and a sensible increase that would not try not to impact the people that live here. So I thank you for that and I just have one question regarding priorities as we move forward to increases. This might not be the only time we have to visit that, but I've been getting a lot of calls from people in my district and they're really aside from the transit system, it is the public safety and the adequacy of the number of police power in the rural districts. So in prioritizing, if we're raising taxes, how do we get, at least not caught up because I know that's not possible, how do we allocate funds if we're increasing taxes, and include covering some of the public safety issues in our rural community? I get it. I get the numbers, but for me, it's still not acceptable because while we go based off of stats, we have real people in these areas that this lady this morning testified. When you fear leaving your house because you're not sure what's going to happen when you come back, or you have to make allowances for keeping somebody at your home, your home is a place where you're supposed to feel safe, and I've been hearing this a lot. I'm very concerned that if we're raising taxes, this is an area that I think if we're raising taxes, it should include additional, and I know that it's a very high cost item, but I just wanted to put that thought in your mind because, not that you're not thinking about it, but I think it is critically important to have adequate police. So thank you. And that's just my comment, not that I want an answer from you, but I do have a lot of people and I don't know how to help them. And if I have to agree to raise taxes just to make a dent in that, then I'm willing to go there. So in the prioritizing of what is necessary for this island, I just wanted you to hear what I had to say. MR. KIM: I would like to address that if I may. MS. DAVID: Sure. Thank you very much. MR. KIM: I don't think you know how much I appreciate what you just said. I know every Council Member here must have received calls or letters or personal conversations of shortage of things. I've been to a couple of those public meetings of exactly what you said. I come out of those meetings very disgusted, depressed, saddened, and disappointed, especially of what you just said. When Page 21 Hawaii County Council -13 May 18, 2017 people in this beautiful place live in fear and they've used that word, not wanting to leave their home, of being ripped off three, four, five times, etc. My goodness, we don't have to talk to each other on how hard it is to say no. We have a Police Chief, and I just went to a couple of ceremonies, and I believe they're very good people that work for us. One of the increases with this tax, because people are saying then why are you spending money here or there, when you say this and that? Well 600,000 of that increase, with this six and a half percent, first of the vast majority of it, I'll just use round numbers, $19 million of it is to pay for requirements. And on that, I think you know it's not easy for the Mayor to write a letter to all negotiators and say this administration will not support any pay increase. It's simply because it's not a matter of if they are there, Lord knows the police officers deserve it, it's a matter of whether we can afford it or not. One of the areas of increase was a $600,000 to the Police Department to slowly replenish some of that 10 -year old fleet, which is really worn down. Hopefully, we can make a program to replenish it because I really believe as far as the visibility of a marked police car is very good. Those are the kind of choices we had to make. Where would we make the best, most good? In turning down let's say Puna, Ka`u that says couple more people per shift, just a couple more. Your job is to listen but your job is a reality. One more police officer, just one more per shift equates to five officers. What does that equate to? Half a million and more, but whatever. I would be very supportive of a special off the top for certain positions because we consider it as the highest priority. And I know I'm not going to be very popular saying this, but I'd rather spend that money on police officers than buying land that sits idle and go for bond for special lands. And I know probably about 1,500 people want to throw a knife at me now. But thank you for what you're saying, Ms. Medeiros because what you're voicing is the factI hope that your people, community that watches this—it's not an easy decision to make and I appreciate what you said about the plight of people because we're having a lot of community meetings that you probably all attend, and the need for more services. MS. DAVID: And thank you, Mayor. I just am trying to figure out how we can do this as a County. MR. KIM: Thank you very much for that. MS. DAVID: And try to find some creative methods in addressing this really serious problem. I didn't mean to not mention our other first responders like our Fire Department and Civil Defense because these guys are very critical to our health and safety. So I guess we'll just try to put on our creative thinking caps and see how we can address this and not tax our people too much. Page 22 Hawaii County Council -13 May 18, 2017 MR. KIM: But on that, I think we should say, as Ms. Lee Loy said, all of you that have come from elsewhere know that the County governments is the one that gets the most hits from the public because we're the only reachable government. I mean look how much we pay for Federal tax and State tax, and then compare that with your County tax and see what it buys. I'll say it, yes, we got to improve, we always do, but I am proud of the budget that you're working on and that you finally will review and modify, and finally, hopefully, approve. MS. DAVID: Hopefully we can collectively do that and come up with something. I just wanted to end on a note that I come from a period of time where we never locked our houses, we never locked our doors, and our cars. MR. KIM: Are you that old? MS. DAVID: Yes, I am. I'm just right behind you. Well thank you very much, Mayor. Aloha. I yield. CHR. POINDEXTER: Council Member Richards. MR. RICHARDS: Thank you, Chair. Thank you, Mayor. I've listened very carefully what you have said and I think you're imparting some of your thought process, which is important for us to understand and embrace as we look at this budget. Again, I like the fact that you use rough numbers because that's how I like to talk story, too. We started out with a budget of $474 million and we went up to $491. I can account for about 11 million as it the obligations needed to meet with the payroll increases and our pension funding, I get all that. We have about $6 million plus or minus in there that I'm struggling with, and looking at the new positions, not just the vacant, funded positions, but new positions, can you give me some thought process in increasing those budgets? And like you said, we have heard it all in our districts, everywhere from people supporting a moderate increase to people saying don't touch our property taxes at all. But they also do understand that we're in a tight crunch and I'm on the same side of the table with you concerning TAT. I went back and looked at that and that conversation is not pau yet. But that's the here and now, we have to deal with. So can you help me understand the thought process for expanding some of the payrolls given our tight, financial timelines? MR. KIM: By payroll you mean wage increase or positions? MR. RICHARDS: New positions. MR. KIM: Like I stated, it's only three new positions that we're promoting at this time. I feel strongly that all three of them are very necessary. One of them, I think heavilyI was going to say your district, but almost all districts is in regards to the short-term rentals. When I was last Mayor many years ago, that Page 23 Hawaii County Council -13 May 18, 2017 was not a really big problem before this island or this State. Of all the islands, I think this is the smallest problem on this island so far. We don't have a real policy on dealing with short-term rental accommodations. We need to address this; this is becoming a big issue. It affects not only people not paying taxes or fair share, but also take away from housing that is needed for other rentals because they make more money on short-term rentals. Also disturbance of a lifestyle because these are rentals in neighborhoods of residential that are not residential but of short-term rentals and all the things that goes along with it. That decision is—this is something that is going to take a full-time person to work with, to make a definitive plan on how we're going to deal with this, to monitor it on a day by day basis in regards to making sure that we know who's there and what they're doing. I defend that because I feel that in the ultimate end, that it is part of the question Ms. Lee Loy asked, of where do we get more money from? Well we get more money from people who should pay the rental, their so called taxes based on use. That's the whole basis of the tax system of the island of Hawaii, your assessment on the use of your land. It's unfair to others who pay their taxes to have your use identified as residential and you're using it for commercial purposes and as best as we can, this person will make sure we get that real solid policies. Other counties are trying and some of them are getting a handle on it but none of them are satisfied. The other position, that I've stated in regards to we have to get better in how we deliver our services that people are paying for and that is with the IT (Information Technology) office. Hopefully, one of the things that will be obvious, and I really have high hopes that you will be proud of the increased improvement in the transit system, and that person will focus on that. Third and the last position that we have pushed for this year, all of us, and I do mean all of us, was told from the very beginning we all have to focus on this homeless, at -risk problem. And people are given part-time jobs and full-time jobs to do this. The guy that takes the biggest brunt of it is Lance Niimi, he's deputy of Housing, which is full-time, but he knows how much of his time is doing that. He's our leader on that and I hope to have this position funded so we can identify someone who will work on this full-time with all agencies, and I think this will rapidly show it will pay for itself. Those are the three positions that I'm asking this Council to consider, those are the three positions that was heavily thought of, Mr. Richards, that I thought was very much needed for this island. MR. RICHARDS: Okay. Thank you, Mayor, I do appreciate that. Borrowing one of your lines, I do realize that, and I think we all realize that one of the problems of the Big Island is that it's big, and that challenges us for everything that we're talking about. The size of the districts for all of our first responders, getting from point A to point B takes just time and the infrastructure that goes with that. So I appreciate all the departments' struggle on trying to balance Page 24 Hawaii County Council -13 May 18, 2017 delivering whatever their specific task is within budget and we're struggling with that one, too. And so I appreciate your mana`o coming forward as how you're trying to encapsulate what you want to get done. MR. KIM: Mr. Richards, if I may comment on that just for a bit. The Police Chief and I were talking about how we wish, truthfully, you know, two guys talking about how we wished, and not to pick on the other counties, but I told him about remembering some kind of conference I was at. The Honolulu Police Department was saying their goal in response time on every call was within four minutes, and I was just laughing to myself. And as I'm telling the Police Chief this, you're lucky at times if you just jump in your car and go as fast as you can, if you get there in 45 minutes. He mentioned Miloli`i for example, or some places in Puna. And then he came up with this stat of how many police officers he had for the whole island and it's for every shift, I'll just round it off, 475 to 480. I asked him a question, "How much does Maui have?" He said just a little bit less. Well obviously that covers Molokai and Lanai, but that's real rural, don't lock your doors yet. Imagine as he said, the amount of police officers that cover this area of 4028 square miles and Maui, which is just a little below par of that, there's less than 700 square miles, and look how much more we have to cover? You can put all of Maui, and I know my Maui friends are going to really pick on me now, but that's okay. You know, Ms. Lee Loy, just think of it, all of Maui can fit in your district. Imagine if we had all the police officers covering only your district. That would be great, wouldn't it? That's how jealousy would become, as you said, Mr. Richards, on a big island, the problems of—but I'm still glad I live here. MR. RICHARDS: I don't disagree, but I'll yield at this time. Thanks. CHR. POINDEXTER: Thank you very much. Okay, Council Member Kanuha. MR. KANUHA: Thank you, Madam Chair. Good morning, Mayor Kim and everybody. Mayor, I'm having a really difficult time with this, and I understand the reasons why, and I really appreciate the answers given. It's hard because we see an increase, we see the taxes possibly going up and that's something that we're going to have to deal with, we see the economy in a good state, and the tourists coming here. It's just really difficult to see all these good things happening in our community and we have to raise taxes to support this budget and the increases that are made for this budget. I truly haven't really been convinced yet and I'm going to go back and really work hard to figure out all the different ways to adjust or not adjust, or see all the different methods of making sure that we can balance the budget that we have. It's just currently right now, I get a lot of things from my constituents, and I know they're your constituents as well, about property taxes, especially in Kona, the Page 25 Hawaii County Council -13 May 18, 2017 district I represent. And it's truly hard to tell somebody that we're going to raise taxes, and I know we're going to do some exemptions for 70, 75, and 80 year old, if that even passes, but for like—it almost seems like we're taxing out our people. It's difficult to live in Hawaii currently, like I'm having a hard time to live in my own district, so toand even try to purchase a home, it's tough. And to say—it was brought up, the impacts on residents, this will have an impact on the residents and so that's why I'm having a hard time supporting this right now. And I know we're going to figure out a way to do it, and I just don't know how we're going to do it right now. I know that you've given us a way to do it, but it's going to be tough. I'm not going to dwell too much about the TAT and what could have been and what we need to do further. It's a State bill, they're the ones that created it, they can take it away it if they want to, which it drives me insane. We fought hard to get the TAT to the counties, and for that to happen, and what they did with it is not cool. It just hurts a lot of the residents here in our counties which they represent as well. It just doesn't translate well with me. My vote in how we move forward is going to reflect how it's going to impact the residents I represent. I don't know exactly how I'm going to vote now, but it's going to beI'm really taking this as serious as I possibly can because of those impacts. So that's why I'm having a hard time. Just real quickly, Mayor, I have to go back to Kona tomorrow and tell the constituents—if we raise taxes, they want to know what they are going to get out of it. What services are going to improve if at all? They want to know that it's not going to be status quo because they're going to be paying more for it. What do I tell them? What do I say that is going to improve their lives more by them having to pay more taxes? It's a pretty simple question because that's what they're going to ask. I have to give them an answer to make sure that the parks are going to be properly maintained, the roads are going to be properly maintained, the public safety is going to be there when they need it. What do I tell them? And I know I'm going to have to tell them something, and you're going to have to tell them something, you're explaining it currently right now. MR. KIM: You know, Mr. Kanuha, first of all in all sincerity, it's great you feel the way you do. Where the hell would you be if you don't care, or any of us? Where would we be? But we have to give them, as you know, very straight answers. I know this is not going to sound right, and maybe not the answer to your question, but on the whole, eliminate the element of property tax increase at this time, I think our, your, their County government expenditure is as open as can be to look at where the money goes. Look at the discussion we had in regards to the increase that we're asking for. It' not just a slam bang thing and we don't care how it impacts. Look at the thought process that you guys just said and the hours you spent whether our proposal to you, and that's what it is, is justified or not. Page 26 Hawaii County Council -13 May 18, 2017 That's our check and our balance, you will see if it's justified or not and make your recommendations and changes and decisions. On our administrative side, the first decision in regards to here is our revenues, here are our expenditures with all of the cuts, it's such a minimal thing to tell you only three positions we're asking, and I can fully explain what those three were, one by one. Obviously, I hope it tells you the thought process of all the departments that we said no to. Take Parks, which you gave you an example, the parks will be better, those poor people in Parks, I mean, you know how many new parks we have, and we're going to try to maintain them the best that we can. Will it be to the satisfaction to everyone? You know it's not going to happen because they have no increase. Public Works, we're going to have to come back to you on fuel tax. Everybody in this room and the island knows, show me the improvement that we will do on that because this is tax specific. Fuel tax is for two purposes only, right? We don't spend it anywhere else. That's for your roadways and highways and that's for the transit system. They are being told when we come back, and we're going to have to tell you about this, to specifically tell you what those monies will be used for. But this is for our operating funds. Will this be obvious of the improvements, Mr. Kanuha? I'd be the biggest liar in the world if I told you the parks will be much better maintained, the police department would have more. I just told you we're not giving them anything, just the way the Fire Department is not going to get anything. It's a minimum budget increase of six and a half percent. The hardest decision is what is the fairest way to collect that to maintain what we have with the minimum improvements of the high priority areas which I just identified? In regards to an unpopular decision that you will have to mull over, again, I have to increase the minimum. Unfortunately, no one wants to raise the taxes, I was the last one to raise it, too. This is only the second minimum because I felt this is a fair share. It's more than a fair share because they pay based on what their properties are assessed. And $200 with a sliding scale for hardship is more than fair to ask to contribute to the services we just talked about. Let's not have user fees so they can enjoy the parks and the beaches and the zoos and the County band, all free. I'm afraid, Mr. Kanuha, I don't have easy answers for you because the improvements are not going to be that obvious, I just ask that you take a real good look at it. The services that the money provides now, and we hope to maintain it as best as we can with the slight improvements of the three positions, yes, they will have to be accountable because I know the seriousness of asking you in this hard time for three new positions. But the three new positions were hand-picked for high priority areas we've got to focus on. Page 27 Hawaii County Council -13 May 18, 2017 MR. KANUHA: Thank you. CHR. POINDEXTER: Council Member Ruggles. MS. RUGGLES: Thank you, Chair. Aloha. Good morning. I don't have a question, I just mostly have short comments. I just want to say that I appreciate how constructive the conversation has been in framing it moving forward. And also say thank you to the testifiers that came out and help set the context for this conversation, as far as the basic needs that we need to provide, especially in terms of public safety, mass transit, and affordable housing, homelessness. I agree that the money needs to come from somewhere, and I just want to say that I'm concerned about where it's coming from as it is, as far as how it affects the most disadvantaged populations on our island. And like you said, what is the fairest way to balance the budget? I would like for there to be a way to protect those disadvantaged populations, the most vulnerable on our island. And as it is now, the increases as they're presented, to me, don't protect the most vulnerable on our island. And so I just want to say that now, and moving forward, I'll have a lot more questions and I think we do have a little bit more work to do. Thank you. CHR. POINDEXTER: Thank you. Council Member Chung. MR. CHUNG: Thank you, Madam Chairman. After two and half hours of listening to Harry Kim, I really do regret asking him to come up first. I'm just joking, Harry. Actually, I have to echo the sentiments of Ms. Ruggles and others. Really, what you were able to provide was a really good framework for this budget and from a general standpoint, and it was really helpful for me. I know one of the main purposes of this meeting today is to obtain information, and we got again, the general framework from you, and we're going to get specifics from your department heads. But I just wanted to make a few comments if I could, because that's the secondary importance of this meeting. Because we don't get to talk to one another, because of Sunshine Law restrictions, I don't get to find out what my colleagues are thinking until they get to say stuff And really the media has asked each of us what we thought of the budget and what we're going to do, and all I could say was I really don't know because I got to listen to and hear what my colleagues have to say. So we're at a huge disadvantage, I hope everyone here understands that, and I'm going to lobby as hard as I can for a relaxation of the Sunshine Law. I mean, not to MR. KIM: Thank you. MR. CHUNG: Right. And it's not for the purpose of trying to do backroom deals or anything like that, but it really hampers our operation. So anyway, I'm going to make some comments though, Mayor, and not only do I not expect you to Page 28 Hawaii County Council -13 May 18, 2017 answer any of them, I don't want you to answer because you talk longer than I do. They're all going to be positive. First of all, I really do appreciate you kind of reminding me about the value -based structure that we have as it relates to our taxation. Again, we have a tendency to just think in certain terms, like automatons, but you brought it back. There are some underpinnings to this tax structure, and I really do thank you for that. The GET (General Excise Tax), as you know, Fresh and I last time got cracks for supporting the GET, and I understand where you're coming from, too. But if you could just pause for a minute, I'm not asking you for any comment here. Maybe go back, talk to your people, and think about it because I know a lot of people talk about the GET as being a regressive tax, but it's not really a regressive tax. It is a neutral tax because it applies to everyone, whether you're rich or poor, the same way. A regressive tax is where it hits the poor more. A progressive tax is where it hits the rich more. This is neutral and the reality of the situation is it's going to help the poor more. It really will, because it's going to provide more transportation and more funds which are going to be diverted to help the poor, it's going to lift everyone up, I believe. But just think about it. TAT, Mr. Kanuha talked about it, it's a creation of the State. We argue about it until we're blue in the face, but at the end of the day, they make the decisions and we got to deal with it now. And so that's what we're tasked with doing and we got to deal with it. Two percent, you and I have had many discussions on this in the past, and I told you, Harry, if you ever bring it up, I'm not going to leave you standing out there alone because I agree with you. No offense to anyone else here who supports the two percent, but I voted for the Charter amendment, the two percent Charter amendment when it first came up. It failed for the lack of super majority, which is required for Charter amendments, okay? And this two percent Charter amendment was actually passed after I left, but the more I thought about it, the more I had regretted what I had voted for earlier. Because what this does is, the two percent means acquiring land which is supposed to be done by bond floats, as you pointed out, is the most important thing in our budget. We're taking two percent off the top and reserving it for land acquisition. No other program in the County is afforded that kind of luxury, none whatsoever. So in that one statement, we're saying land acquisition is the most important thing in the County. I think that's wrong. And then finally, in regard to Mr. Kanuha's question, he asked what he can tell his constituents. I think the other way of looking at it is this, and I'm certainly not saying I'm in support of a real property tax increase or anything like that, but the other way of looking at it is conversely, what do you tell them if we don't raise the tax? What happens? So that's something he might want to think about, too. And that's all I had to say, only comments, maybe give you guys glimpses as to Page 29 Hawaii County Council -13 May 18, 2017 what I'm thinking in terms of this, or maybe not. But thank you very much for coming. CHR. POINDEXTER: Thank you. How nice to just say thank you. Okay. Council Member Ruggles. MS. RUGGLES: Thank you. I just had a quick comment about the Sunshine Law. This is really challenging for us. We are at a very disadvantaged position here as decision makers, where we can't talk to each other about the basic function of County government, which is to collect taxes and provide services, protect, and provide for the health and safety of our residents. We have one hearing on the fifth that we can bring up all of our ideas. I actually consulted with the Chair and the Clerk because I wanted to bring my ideas to this meeting to give everybody some time to discuss it and think about it and deliberate, because this is really important. So I just want to express that it's really difficult, and I hope that we can change that, and I'm having a hard time with it. Thank you. CHR. POINDEXTER: Thank you. Okay, we're going on the second round. Council Member O'Hara. MS. O'HARA: Thank you, Mayor, for the prolonged time that you're here. I just have a really short question. We were talking, or Ms. Lee Loy brought up the idea of additional user fees. With parks, I agree it's really wonderful that our parks are free, but we do need to keep them maintained and what not. Are you open to considering some strategic locations where applying user fees might make a lot of sense? We have a lava viewing area, which the County maintains and that site it primarily visited by visitors to the island. Local people do come too, but charging parking would bring in, not a huge revenue, but an additional revenue to the County. So there's places like that I really wish we could go around and reconsider if it wouldn't be a good idea to apply some user fees, parking fees, to strategic locations where it would cause minimal harm, so to speak, on our residents. And in fact, we could have a residential waiver or something like that so that we could increase our revenues without negatively impacting. So it's really just a yes or no, would you be willing to consider? MR. KIM: May I answer that? MS.O'HARA: Sure. MR. KIM: When the volcano erupted in that particular area in 1990, and when we first opened for—we had a choice, we had to control the whole area for safety of people and residents. We had a user fee that later on we dropped when the volcano stopped and changed direction. Now, we man it from in the afternoon to 10 at night, and we have special security. We already talked about how we're Page 30 Hawaii County Council -13 May 18, 2017 going to do this because we have to improve the situations there. That is being discussed, and then we will pursue it, and I'll talk to you about it. CHR. POINDEXTER: Thank you. I don't see any other lights on, so before we vote on this—Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. And this isn't directed at the Mayor because this really is the only opportunity for us as a Council to hear what we're thinking. I just want to discuss a little bit about what Mr. Chung said about the two percent fund. With this real property tax increase, that fund will now see, I believe, an additional $2 million and the struggle is, we're always kind of dealing with not a 100 percent of the revenue generation, it's always going to be 98 percent, and so I'm just sharing my thoughts on that. And like Mr. Chung said, we're making that the most important thing, is open space purchases. And I don't know if the time is right to reconsider that or maybe retool that where maybe some of it gets capped and an overflow—spill over into Parks so that we can maintain the parks. Or spill it over into Police, or into Mass Transit. Again, that's what this meeting is for because we're so handcuffed by the Sunshine Law that we almost have to kind of put these ideas out there as food for thought for our other colleagues in creative ways. Now, just saying that is one thing because there are a number of steps that have to occur, if we were to consider something like that. And for this budget right now, we have what we have but for maybe future budgets, with the idea of a Charter amendment there, maybe we can start turning the ship one or two degrees in a different direction than what we're doing now. Because like Mr. Kanuha said, we got to do better. We all got to go back and face our constituents and tell them we're going to raise your taxes, but you're still going to get the same level of service. And they simply don't like that answer, so we got to do better. We got to say we're raising your taxes and giving you better services. How we do that, it's going to take a collective effort, it's going to take a lot of hard work on our parts, but I just saw an opportunity there. Revenue generation, taking care of our parks, the open space fund, all of a sudden it just really kind of came together. Again, this was an opportunity for us to put our ideas out there. MR. KIM: What a great discussion we're having then, seriously. I never thought about it. You don't have the time to interact like this. CHR. POINDEXTER: Thank you, Ms. Lee Loy. And that's why I agree with Council Member Chung and Council Member Kanuha and everyone here who has kept saying that the Sunshine Law kind of ties our hands and maybe sometimes we would have these knee jerk reactions because we don't have time to sit with each other. And this is it. Page 31 Hawaii County Council -13 May 18, 2017 MR. KIM: You noticed that law was passed by the State, but it doesn't apply to them? CHR. POINDEXTER: Right. Exactly. We need more Home Rule. But I'm going to close before we vote on Draft 2, I just want to say we're talking about revenue generation, but there's also—revenue generation can mean in-kind services. So you talked about parks, and yes, we have increase in the amount of parks, thank God because what we do, we create places for our children, our families, our kupunas, our communities to gather. Those are our heartbeats of every community to keep them healthy and safe. It's a great place, we know that from plantation time growing up, Mr. Kim, is that we had these facilities and parks to go—that's why we grew up to be real good people. Anyway, I'm not saying that we need to look for more money and charge fees, that's not what I'm saying. We can start partnerships, which people are stepping up to the plate. I know there's a community who got together and say we don't want the parks spraying Roundup or whatever, so let's volunteer and let's be the ones who come out and help clean the park, whether it's Friends of the Park or whatever tool that is. It's the partnerships between each of your department heads, and I have to give kudos to Charmaine because she has started working on the Friends of the Parks and working really well with the communities to make sure that the communities take ownership in that and also participate. So when we talk about raising the cost, I don't think we need to do that. I think we need to create more partnerships with our community and our people. You can gain a lot from that. I want to say the Fire Department, I know a lot of people have talked about the police. In my community and in my area, we talk about the fire fighters because we have all substandard facilities and substandard homes from the plantation. Fire comes up, possibly can't save the home, but they try to save the homes around it because it'll go up in a second. I mean it's that bad. But to have them out there, they're talking to our seniors, providing some safety tips, coming in putting fire detectors, teaching them how to be safe, cutting your shrubs, whatever it is. The Fire Department is equally as important, especially when the first responders—all these accidents that have been happening on this island and even with the lava flowthings, hurricanesa lot of things. We need our fire fighters, they are our first responders, period. They are so important, police and fire equally, I would say. I know we're fighting for our fire fighters in our district, and we may have to wait on that, and I can appreciate that. So I just want to say thank you so much for sitting here for a couple of hours and spending some time with us as we deliberate on what our next steps are, to see if we can keep the budget balanced and move forward whether we have amendments or not. We look forward to working with you. MR. KIM: And truly, thank you for this talk, it was really good. Thank you. Page 32 Hawaii County Council -13 May 18, 2017 CHR. POINDEXTER: Thank you very much. So we're on Bill 11 as amended, Draft 2. Council Member Chung. MR. CHUNG: Point of information. I don't want to prolong this any longer, and I don't have any questions of the department heads now, after that, but if any of you have— CHR. POINDEXTER: What I wanted to do is I was going to see if you guys wanted to break for lunch and then we can come back. We were going to because there are no more amendments to the Draft 2, but if you guys still want to talk or do you want to take a break? Because I know I want to take a short break and come back. MR. CHUNG: I'm through. I just thought you were going to take a vote that's why. CHR. POINDEXTER: Okay. I'll open it up for discussion but I don't know where you guys are at right now. Do you guys still have questions because we still have the capital budget to go into and those amendments? And even with the—so if it's on capital, then you could wait if it's not on capital you could bring up someone, but I was just going to take a brief recess. MR. RICHARDS: Yes, let's take a recess real quick. CHR. POINDEXTER: Because we're still on the draft—five minute recess to just kind of freshen up. Recess: At 11:42 a.m., the Chair called for a recess. Reconvene: The meeting reconvened at 12:04 p.m. CHR. POINDEXTER: Okay, I'd like to call this meeting back to order. We're still on Bill 11, draft 2. So before we vote on Bill 11, draft 2 and possibly take a lunch break, I want to know whatI know we have all of the departments here, so I don't know if everybody's working. That was a joke, sorry. Bad joke. So I just wanted to know which departments we would want to keep here because I know like we have Prosecutor's Office, we have Environmental Management, Finance, we have all of the departments here, Parks and Recreation. Do we have any question for any of them and which departments and which ones can we release to go? Or do we keep them all here? We shouldn't be too long. Okay, Council Member Richards. MR. RICHARDS: Thank you, Chair. And now, Finance, please. Page 33 Hawaii County Council -13 May 18, 2017 (Note: At this time, Finance Director Collins Tomei and Deputy Director of Finance Deanna Sako came forward to address the members of the Council.) MR. RICHARDS: I think all of the Chairs appreciate the fact that we struggle again, in part because of the Sunshine Law and having conversations. And as we've gone through this exercise, working with numbers that I've got, and I don't know how to communicate this to my fellow Council Members without talking to everybody. So with that, we received a communication concerning certified values for the real property tax that I believe were used to calculate the projected, and again, I appreciate the fact that these were projected income, and we received a spreadsheet from Finance to kind of play with the numbers. When I looked at that spreadsheet and based upon what the proposed budget needs for the County coming forward, the original spreadsheet had a total tax revenue of about $297 million. Then looking at the May fifth draft, it was $303 million, so I went back and I looked at the proposed rates and the calculations, long story short, I came up with a $6 million shortfall. Is that because the certified values are not quite certified yet, or where's the shortfall because $6 million is a lot of money? MS. SAKO: Hi, Deanna Sako Deputy Director of Finance. CHR. POINDEXTER: Okay. Council Member Chung, point of order? Point of Order: MR. CHUNG: Point of order, point of personal privilege, or point of information. Not that I don't like looking at Deanna or listening to her, but we listen to her so much yesterday, Collins is the Finance Director, he certifies these things, I'd like to hear from him. If that's okay. CHR. POINDEXTER: Okay. MR. TOMEL Thank you, Councilman Chung. My name is Collins Tomei, I'm the Finance Director. To address the discrepancy, the certified values areI did sign that, and then I used that as the method of calculation, but I will defer to my Director who has that institutional knowledge for the difference. MR. RICHARDS: Okay. So just to verify, the number we got of $30.456 billion as the certified number, that's the one we're talking about? MS. SAKO: Yes. So those values were certified, but first of all, when we talk about $303 million, it's the first page on the revenue on general fund, that also includes penalties and interest or projected penalties and interest related to real property taxes. So the actual amount coming from the taxes that we apply the certified values on the tax rates to is $300.1 million roughly in the budget. We used a very specific number this year, I'm not sure exactly why, but $300.1 million. Page 34 Hawaii County Council -13 May 18, 2017 So the difference between the spreadsheet you got and that $300 million is roughly $3 million. There's also two other bills on the agenda, one is to increase the minimum tax so a little over $3 million is to go towards the minimum tax. The additional revenue would come from the minimum tax bill and then it's reduced slightly by the additional age exemptions by going to 75—adding the 75 and 80 year old age exemptions. And that gets us to the $300 million. So if the Council is going to explore other rate options, that base amount is what our rates were based on, and then we added for the minimum tax, and then deducted for the age exemptions to get to the $300 million. So let's say just for theoretical sake, if a Council Member thought they didn't want to increase the minimum tax, then that would have to be taken into account while setting rates. But the target number is the $300.1 million, that's what's in the budget and balances the revenue with the expenditures. MR. RICHARDS: Okay and that does make sense to me, but then further in on the other PDF's, we had $303 million, and so that's $3 million different. MS. SAKO: Right, that's the penalties and interest. MR. RICHARDS: Okay, added back to that. Okay. Alright. MR. TOMEL Councilman Richards, just to kind of address your question, that spreadsheet, by adjusting I guess tax rates, the target number is that $297 though. MR. RICHARDS: So that target stays the same, that $297? MR. TOMEL Yes. MR. RICHARDS: Okay. So I appreciate that. That makes me feel a lot better about looking at these documents because I was—and as Department of Finance knows, I ask questions every time it concerns a large number. Thank you. I yield at this time. CHR. POINDEXTER: Council Member O'Hara. MS. O'HARA: I just want to query Deanna on a comment she just made about how you arrived at the $300.1 or whatever amount for the full property tax. I understand that includes raising the minimum tax rate, which is one of the bills that we're going to be hearing today for first read. The other Bill 36 relates to the additional exemptions that the Mayor is asking for. My understanding though is that the additional exemptions, ages 75 and 80, are not going to come into play in the fiscal year 2017-2018 budget because they won't be, I mean it won't be happening until the following fiscal year. Is that correct? Page 35 Hawaii County Council -13 May 18, 2017 MS. SAKO: No, our intention was that they would be effective July first, unless we didn't write it that way. MS. O'HARA: Yeah, because currently, when you become I don't know, age 60 or something and you let the tax office know, it doesn't take effect until the following fiscal year. There's something in our Code already about that. So are we changing that up? MS. SAKO: Well no, these people have already applied for their exemptions and so right now it's automatic. When someone hits 60 or someone hits 70, the additional age exemption is automatically applied. When we set the values on January first of each year, you have to have hit that age by January first. And so we will actually let people know that the additional age exemption will be applied to them and they have a chance to appeal if they would like. MS. O'HARA: Okay, I'm still not sure how that is going to play into this next fiscal year budget. Example, when I turned 60, my birthday is in February, I did not get my age exemption until July one of the following year because you had to have turned that age by January one, and it has to apply. So mine applied to the following fiscal year, so I did not see that on my tax reductions for 18 months. MS. SAKO: Right because it was after January first. MS. O'HARA: Well, yeah, there are other birthdays in February, too. MS. SAKO: No, but it's anyone who is already age 75 on this last January first, or age 80 on this past January first is who we were planning on applying those exemptions to. MS. O'HARA: Okay. So it will impact this budget? MS. SAKO: Yes. MS. O'HARA: Okay, just wanted to be clear on that. CHR. POINDEXTER: Any other discussion? Council Member Eoff MS. EOFF: Thank you. Either one of youI guess Director Tomei, would youI know you may have given this to all the Council Members, but I don't think the general public, besides maybe some reporting in west Hawaii Today, has had a chance to really understand what these increases may mean in their either yearly property tax or their monthly property tax increase. So I know you broke it down by districts for us, and I see an average varying from district to district, from around $5 a month increase, which would mean about $60 a year increase to all the way up to $11 a month in my district, which is about $130 a Page 36 Hawaii County Council -13 May 18, 2017 year or so averaging. Could you just go over that a little bit with us because to me, for my general view of things and maybe others, it's easier to understand what a 6.5 percent increase would mean. MR. TOMEL Okay, thank you very much. In general terms, because this is very difficult to say the average homeowner, so it really depends on the net taxable that you'll be taxed on with the associated rate. So let's say in the Puna district, the net taxable was 143, now if it wasn't for let's say just the district, it could be any house that's valued at $143,000. So when you look at that, the annual difference between the current and the proposed based on the $6.55 new tax rate, is about $54 per year, come out to about $4.78 a month. MS. EOFF: And that's for a home that would be assessed at about $140,000? MR. TOMEL $143,500. So let's go up a little bit and look at something that's valued at about $291,000, tax assessed. So at the proposed rate, the difference between what they're paying now versus the proposed rate would get them to about $116 per year, that comes out to about $9.72 per month. MS. EOFF: Their total bill? MR. TOMEL Yes of their—it'll be additional to their bill. So when you're looking at 291—okay, let me just go through the calculations, yeah? So $291,600, the current rate at $6.15 per thousand, the annual tax amount would be $1,793, just shy of $1,800. When you look at the proposed rate at $6.55 per thousand, it'll go to $1,909, the difference is about $116 for the year. MS. EOFF: Thank you. That's all I wanted to understand. MR. TOMEL So again too, it really depends on what the net taxable would be. MS. EOFF: Right. But these additional percentages are not that extreme, I'll just have to say that. When I hear it in those terms, it's a little bit easier to understand and then if that money can get distributed throughout our budget to help us in all of these ways because even my staff offered, well what about furloughs? And I heard the Mayor say he doesn't want to support furloughs for County workers. And when you think about it, nothing is really perfectly fair, like I had said earlier, I don't think you can just do something and say it's fairer or less fair than something else. Sometimes it's fairer to somebody, maybe less fair to somebody else. When you think about the furloughs, our staff would be probably would cost them at least a couple hundred a month if they were to have to go on furlough, as opposed to the highest, or some of the higher increases here are only going to cost somebody a couple hundred a year. So when you look at what's fair and how we Page 37 Hawaii County Council -13 May 18, 2017 can, or what we should do here, I just wanted to put those things into perspective, it's interesting. MR. TOMEL Council woman Eoff, there was a lot of thought that went into this. It wasn't just let's hit a number. That might seem like the simple answer, but we went through so many versions of this plan that there was a lot of time to think of it. And I also want to really express my thanks to the hard work of the department because people crunch numbers all day and sometimes into the late hours of the night trying to get to this. And again, I also want to thank the willingness of the departments to work with us, to tear these numbers down and to give up positions or unfund positions. So this was a grueling process, and again, I do want to emphasize that this is probably something that we haven't seen for a long time. It's a combination of a perfect storm. There's many elements that come in that we've never had come together at one particular time. MS. EOFF: One of the classes that sort of bring up a lot of discrepancies is the ag tax. We've heard, over the last few years, I've heard, and I know the Real Property Tax Division was going to start to take an even closer look at this, but the discrepancies there and how we are trying to increase revenue where we deserve to have it and then still protect farming and farmers. So I know we've made some strides there, but there were some indications, I don't know if it was yesterday we heard it, or some point in testimony, that it could generate millions of dollars if we just checked that out better and found out where we were giving too many exemptions to people who weren't really farming. So maybe you can just comment on that because as we go forward, we're going to be looking for sources of revenue if it doesn't help us currently. It may in the future, but I don't know if we've been idealizing what that really is or if there really is more money there that we should be collecting. MS. SAKO: Yeah, I think I want to clarify where that $38 to $40 million number came from. I think it's not like people are cheating the system out of, it was a conscious decision when we went into the ag program, not only the dedicated program but the Ag Value Program, where you apply and say you're going to do ag and let us know what it is, then you get these lower rates per acre that you're taxed on. And so that is what the County as a whole is maybe giving up, or saying that's the value of agriculture to our island. We want us to be self- sustaining and sufficient and grow our own products and not have to import everything. And so agriculture is an important area on our island and they are given breaks through the Ag Value Program and the Ag Dedication Program. Our appraisers do go out and they do inspect the land, they look for making signs of agriculture, making sure the owners are doing what they said in accordance with their plan. We do also understand that at any given point in time we do leave land lay fallow so that it can regenerate and regrow or the pasture has to grow Page 38 Hawaii County Council -13 May 18, 2017 back, and you move your herd of cattle to different areas. And so we keep that all in mind. Obviously, when we get complaints we do go out and inspect it, even though it's not on our normal rotation, but it is something that we take very seriously and we do look at. So I don't believe we're losing $38 to $40 million a year, it's more what we've made that conscious decision to give in tax breaks to our ag owners and people who are actively farming their land. MS. EOFF: Okay. Thank you. MR. TOMEL There was—we added one position to the Real Property Tax and initially, that individual would basically be looking at a compliance person, so definitely short-term vacation rentals and let's say, after that project is pretty much settled, moving on to the ag issue. So we got some work to do. MS. EOFF: Thank you. So we may end up increasing our revenues by screening those things a little better with the new position you're adding? Well thank you very much. I'm going to yield. CHR. POINDEXTER: Anyone else for the first round? Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. I just wanted to understand, when we're going from our real property tax rates, the current rates to the proposed rates, it's by the nickels. Why by the nickels? MS. SAKO: It's easier to remember and explain to people. Generally what it is, and I think overall, it's just easier, $2.35 versus $2.38, just for the public and our staff It's easier to explain when it's in nickels. MS. LEE LOY: Okay. Thank you. I did have one follow-up question for Mr. Tomei. You mentioned this year there were all these components of a perfect storm. Tell me what the components were so I can understand the driver behind this. MR. TOMEL Okay. Council woman Lee Loy, bargaining unit came upon us this year, changes in the ERS rateswe have been paying towards this thing OPEC, other post -employment benefits, and that takes a step up. Then there was the issue of the TAT going down. So when you put all these components together, it adds up to a big number, something that, not that we're not paying for them or anticipate, but in the degree that it came to us, especially the TAT, that was an unfortunate situation, but that's pretty much it. Thank you. MS. LEE LOY: Thank you. I yield. Page 39 Hawaii County Council -13 May 18, 2017 CHR. POINDEXTER: Council Member David. MS. DAVID: Thank you, Chair. Aloha, Director Tomei. I just have one question because we're talking about trying to get the public to understand how much this will impact them. And I'm just going to talk about the homeowner's proposed tax rate, the 6.55. So I think Ms. Eoff said that for me, if my property tax right now, as a homeowner, with the homeowner's exemption, if I pay $1,000 a year, broken up in two payments, right? That would mean about $65 increase. So if someone pays $5,000 a year because of the assessed value of their house, then it would roughly be about 300 some odd dollars a year. And I just wanted to put that out there because that's the only way I could figure it out, how it would impact me as a homeowner. But this does not take into account all the other rates for the different classes. So I think a lot of us are—there are a lot of homeowners here that really—if you work and you own a home, it's an impact upon you, but I just wanted to make that, if that's correct. Okay. MR. TOMEL Same proportion, yes. MS. DAVID: I can figure that one out. Thank you. Aloha. CHR. POINDEXTER: Thank you. Any other for the first round? Okay, second round. Ms. O'Hara. MS. O'HARA: Thank you, Chair. Ms. Sako, you explained well what the impact of the added exemptions would be because it reduces it by a little bit, not a whole lot. And if you could provide me your multiplier for that because I am considering some amendments to the tax rates, and I want to be sure that whatever I suggest balances out in the end. So perhaps you can work with me on that and let me know. MS. SAKO: Yeah, we'll be happy to work with you. MS. O'HARA: Okay. And then the other thing is I just want the public to understand this, and one of the reasons we're seeing some significant increases this year is because this isn't going to be the only year that we're facing union increases. This is the first of three years step up, I believe. MS. SAKO: Well so far the contracts that have been completed are two-year contracts. MS. O'HARA: Two-year contracts, so we're going to see an additional increase in the next fiscal year as well as some step increases, correct? MS. SAKO: Correct. Page 40 Hawaii County Council -13 May 18, 2017 MS. O'HARA: So what I want to be sure is that if we go through the owner's task of raising taxes that we don't have to come back to this next year. So I want to be sure that we think this through properly, that we have made the adequate increases so that we're not back at the table doing this again next year. So that's what I'm hoping your analyses have showed us, that this is going to carry forward for at least a couple years. I realize there's unexpected events but for what we know. MR. TOMEL Let me just say a few words about that. In front of the other departments, I basically said this will get us through this year, okay? This will take care of this year, but then we have other costs that will be phased in, so we're not out of the woods yet. None of this is going to guarantee that we're going to make or achieve our numbers. There will still be a lot of very—we have to be very cautious about how we spend our money. None of this is going to be easy for any of the departments, I would say for the next three years. CHR. POINDEXTER: Okay. Council Member Kanuha. MR. KANUHA: Thank you. Good afternoon. Just real quickly, can you explain to me the fund balance and the carryover fund balance and why it was decreased? Inside here it just says "due to revised estimates." Could you just elaborate on why and how much? MS. SAKO: So each year, when we do the budget and we put in this line "fund balance from previous year," we're actually trying to predict what the fund balance is going to be at this coming June 30th And you know, we're still in May and so we don't have every single number yet, but we do our best to estimate that. And in talking to our staff, we have them update that every few weeks. When they redid the calculation right before we submitted the budget and even the most recent one, it's showing that it's probably not going to hit the targets where we were at, but we think we're a little over zealous in some of our revenue projections for the current year. So when the final number came down, we didn't want to over budget that and have issues from day one of the next fiscal year. We try to estimate as conservatively and as correctly as possible, but we do miss sometimes. MR. KANUHA: Yeah because even the last time we did this we were conservative in the estimate. Okay, I'm just trying to—thank you for that explanation. I have no other question for Finance, just another question for another department. Thank you, Madam Chair. CHR. POINDEXTER: Okay. Council Member Chung. MR. CHUNG: I guess this one maybe should go to Deanna. Deanna, maybe if you could give the public and some of us here a primer on this retirement benefits Page 41 Hawaii County Council -13 May 18, 2017 situation that we're looking at. Why we're in the pickle we're in right now and what it looks like over the next few years. What kind of impacts it's going to have on our budget going forward. Very briefly, it's very interesting and I think enlightening. MS. SAKO: So one of the things that people may or may not know is we're required by State law to participate in the Statewide Employee Retirement System Plan, and so all of our employees are participants in that except for a few. That plan is run by a State board and the State board has oversight of that, and they oversee the investments and all of that. But in addition, it used to be that we were assigned our fair share of the actuary evaluation of what we had to pay, and that was never enough. So they went to a percentage method and it's like 15 percent of payroll back in the days. And with the different investment options, and now especially with people living longer, they've had to make some changes to the actuarial assumptions. One of the very large ones is the actuarial or mortality tables, and the expectations of how long people are going to live. And when they looked at that, lucky we live in Hawaii, we have the longest life expectancy of all 50 states, which is great, but unfortunately, our pensioners live longer and so we have to pay them more out over the years. In addition, their investment expectation, it was up at eight percent at one point, it's been slowly coming down. They did finally reduce that to seven percent because they just were never hitting that target. And so all of these changes changed the plan itself and the actuarial liability, or the amount we all owe. It brought it down to a point where it was getting to not look so well for our bond rating agencies and others, so the State did have to take action and raise the rates. We just finished a five-year set of rate increases and the Legislature passed it and is expected to be signed into law by Governor Ige. That starting July 1, the rates will go up and they're increasing to 18 percent for general employees and 28 percent for police and fire employees. And in addition, they will increase another one and three percentage points the following year, and three and five percentage points the next year. And so we will end up at, I think it's twenty some and 41 percent for police and fire. So these are significant rate increases we're going to be paying and it's statewide. It's not just us, it's all four counties and the State that are going to have to pay that, but that's just to keep our plan compliant and to comply with State law that the period of which the plan will be amortized over is 30 years, or be fully funded in 30 years. MR. CHUNG: Okay, so they're going to be phasing in these rate increases, right? So next year it's going to be higher and the year after higher still, right? MS. SAKO: So there's three more years of successive increases after this next one. Page 42 Hawaii County Council -13 May 18, 2017 MR. CHUNG: Alright. Thank you. CHR. POINDEXTER: Anyone else on the second round? Okay. Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. And I don't know if I have a question but more of a comment after hearing that. For the rest of my colleagues, because this is the only time we can really talk, knowing that these three components of a perfect storm is actually driven by, two of them is the State, which is ERS and TAT MS. SAKO: Just to clarify, collective bargaining is kind of driven by the State, too. Just in full disclosure. The Governor gets four votes, and each Mayor one vote, and we're required again to negotiate all together, collectively, as an employer. So they really kind of have the most votes as well, but just saying. MS. LEE LOY: So it doesn't feel like we're in the driver's seat, and I feel like our methodology and our formula may be got to take a serious shift. I'm thinking about what Mr. Chung said about two percent being the most important thing going to the open fund, maybe we need to, not now, but for the future, think about funding our departments the same way, five percent to police, five percent to fire. I don't know, I'm just saying because what I hear Deanna saying is coming down the pipe is this growing percentage, is that accurate, Ms. Sako? MS. SAKO: Yeah, it is, and somewhere in this pile of paper isI know police ends up at 41 and I think the general employees end up at like 24 or 25 percent. MS. LEE LOY: Yeah, so trying to look around the corner a little bit, besides with dealing with this budget, I think we need to start planning ahead based on this information. And how we go forward, not only for this budget but future budgets, and take into account these elements of a perfect storm because if not, we're going to be facing element of a perfect storm every two years, right? And so the idea of saying we're not going to increase taxes actually in simply inaccurate, it's misleading. Again, because this is the only time we get to talk, just food for thought. So I yield. CHR. POINDEXTER: Thank you. Council Member Richards. MR. RICHARDS: Thank you, Chair. And again, not so much a question for Finance as comments to the Council. I think Council Member Lee Loy highlights the concern. I think we have two questions before us, but we have to work on them all now, is the stop gap for this year and the challenges we have in the next budget year, but actually start planning for 'I 8P 19 as we're working on 'I 7P 18, because if we don't, this is going to be problematic any way. That poses a question, as putting ourselves in the driver's seat, which comes back to the Page 43 Hawaii County Council -13 May 18, 2017 original conversation about the perfect storm and grabbing control of some of that. So I think we're going to have to have those conversations going forward, and I wish they didn't have to all be in this room. Thank you. CHR. POINDEXTER: Yeah, it's too cold. Okay, any other questions or discussions? Council Member David. MS. DAVID: Hi, I just have one—given what Ms. Lee Loy had said and the predicament that we're in planning, not only for this year's increases across the board, has any thought been given into the next round? MS. SAKO: Yeah, we do look at it and we were not only looking at this year, but the future years as well. Obviously, we can't predict the future entirely. There are some bargaining units that haven't completed their negotiations yet, so we don't have every single component as well as you're trying to estimate how much values are going to increase. But we did try to look at it and that's part of why we try to look at minimum tax as well and look at the age exemptions and try to look at all the components to be fair to everyone. But can we guarantee we're going to be good for next year? No, but we're trying to look at it more than just one year at a time. MS. DAVID: Okay great, because that was my question. In addition to what we're talking about here, in looking for ways and methods to be proactive so that we don't end up in being in the same position as we are now, I'm glad that some of these numbers have taken into consideration the threat that we're all looking at right now, the unknown. MR. TOMEL Council woman David, I just want to make a comment. If some of the bills that had gone to the Legislature had actually passed, it would have set us on a course that we would have to do major changes to our current plan. And so I really applaud Councilman Kanuha's attempt, you can only ask. Basically, like the Mayor said, we can only beg but then MS. DAVID: We shouldn't have to. MR. TOMEL Yes, but that's the reality of our situation, so when these issues come up, I'm strongly going to suggest that we all take a real good look and watch what kind of bills are passed and even the question about why they're being offered because in one particular case, and I'm just going to throw out numbers, okay? It was about 103 million to the counties, and then it would have gone to 93, which is what we're at now, then it would have gone to something like 61. There's about a $30 million difference just in that one year, and then it would have gone down to $31 million. So, the danger is there, and if that had Page 44 Hawaii County Council -13 May 18, 2017 MS. DAVID: And that's what we understand, Director. We do understand and I just wanted to make sure that the unknowns, or the potential of the increases that will definitely come next year, that we're being prepared for it somewhat in this budget and that we're not just looking at this year, or this fiscal year. MS. SAKO: But one of the things we didn't take into account was another drastic decrease in TAT. I mean something like taking us down to zero over three years, which were the proposals, something like that. It would be difficult to plan for that along with the current year, but definitely looking at different options, but not something that would totally eliminate TAT. MS. DAVID: And that may not be something of a budgetary in nature. It might be something that we would have to do as a body in asserting some sort of authority over our own destiny, so that's separate from budget. Thank you very much for making me feel a little better. CHR. POINDEXTER: Council Member Eoff MS. EOFF: Thank you. Well given what's just been talked about, I would like to suggest that maybe after the fiscal year begins, or even maybe not six months, but we would at least have a six-month progress report, not only on what the projections are in some of these different, out of our control areas that the State controls, but also how we're doing with our abilities to provide the services that we—our constituents want to see improved when they do see a tax increase. So maybe I can talk to you about that later, but I'd like to see a morea planning stage where we can begin to look earlier at what's going to come down the line, and maybe another kind of a special meeting or something that happens in six months that we can get a little bit better handle on, where we're going and how we're going to get there. MS. SAKO: Yeah, maybe if you could explain to us more what you're envisioning because I think we try to do that through some of the different components of the budget, but I think your concern is more the timing of when we receive it. MS. EOFF: Timing because we need more time and also, maybe now that we're understanding that there will be possibly shortfalls again when we see what the numbers are with the appraised values of our properties are and what the projected increases in some of the out of our control areas are. MS. SAKO: Some of the things that are hard is we only certify values once a year. We do our best to make estimates— MS. EOFF: But we see trends, right? Page 45 Hawaii County Council -13 May 18, 2017 MS. SAKO: Right. No, that's what I'm saying. We do best to estimate what it's going to end up at, but the market can shift at any point in time, too. MS. EOFF: I feel likeI'm looking forward to the next reading of the budget where we may be able to consider some other creative rates, or Council Members may have ideas with regards to the operating budget. But at this point in time, I feel like I want to support what's before us. I don't feel completely comfortable with everything, but I feel you folks have put in a great deal of time and effort and so I'll probably be voting yes today, with the hopes of us continuing to look at it closer and maybe any more new information that can come forward in the next couple of weeks would be helpful. CHR. POINDEXTER: Council Member Kanuha. MR. KANUHA: Thank you. I'll try to be quick. I know we say we look at the State and how much money is going to be given to us for terms like TAT and stuff, but we really can't dwell on the fact that the State's not going give us our fair share, we can argue about that forever. The fact is we fought years ago to have the cap at 103 extended until, which is what this year was. The sunset date was this year, so, if the bill didn't pass or not, it would have been dropped to 93. So we knew that, that's how we should prepare for it. But it'sa lot of times we need to write our own history, we can't always be depending upon the State to give us these things because they're probably not going to it. So it's within us that we have to do—we can't look towards the State. I did have a brief question for, since the departments are here, just IT (Information Technology—are we going to do that or? CHR. POINDEXTER: Yeah, you can come forward. (Note: At this time, Information Technology Director Jules Ung came forward to address the members of the Council.) MR. KANUHA: And it's not going to be a tough question. CHR. POINDEXTER: He's lying. No, I'm just joking. MR. KANUHA: Hello. Within the additions to this amended budget, one of them was a position for a Deputy. Can you just sell it to me on the need for a Deputy for your department? CHR. POINDEXTER: And can you identify yourself for the record first? MS. UNG: Yes. My name is Jules Ung, I'm the IT Director, Hawaii County. From the get go, I felt there was tremendous value in retaining institutional Page 46 Hawaii County Council -13 May 18, 2017 knowledge and experience. That is vital to preparing and managing a strategic vision for the department. I have been relying heavily on my staff to provide that, however, working with a Deputy with institutional knowledge would have tremendous advantages. In formulating this strategic vision, in addressing cyber security issues, especially in wake of the "wanna cry" virus that hit last Friday, we have spent a lot of time and resources in addressing vulnerabilities in the County network. How we handle and prepare for incident management and prevent breaches of our network, a Deputy Director could help me address all of these issues. In working more closely with each department, we could tailor a plan to streamline and create more efficient processes for every department Countywide and address the way that we manage our engagements with the public. Currently, we're the least public facing department and currently, we have no capacity to address our public facing interactions as far as information technology. Our website, number one, is a glaring issue. Included in this budget iteration is a $125,000 supplemental request for a Countywide website over haul. If you approve, and this goes through with this budget, this could take a tremendous time of resources and energy, put forward to each department in addressing each department's needs. So that's how I feel, that a Deputy could be very beneficial. MR. KANUHA: Thank you and I'm just looking at trying to look at the department. I know you have managers, two managers I'm seeing, that could help out with institutional knowledge. MS. UNG: And they do. They do quite a bit. MR. KANUHA: Because I know you started in the beginning to say that a deputy could help out with institutional knowledge, but to be honest, it's an appointed position, you can appoint whoever it is so they could have institutional knowledge, or they could be Joe Blow off the street. MS. UNG: That's true. MR. KANUHA: I understand the need for you to have additional people to help out the situation that we have currently in Hawaii County with regards to making it better, better systems, and whatever it is, all the things that you just said. Just trying to figure out if it wouldn't be more appropriate to maybe have several more, I don't know about managers, but other people to help out with maybe, the analyst to help out that situation. I'm just trying to figure out if that's the best use of that amount of money. And I know you're going to be fighting for that position because it's one of the few positions that are added to this budget. So I'm just trying to see for myself, the need of creating this position, adding on top of this Page 47 Hawaii County Council -13 May 18, 2017 budget, another $100,000 or whatever it is, in addition, and making sure that's the best use of what we're trying to do here. MS. UNG: Sure. One of the biggest intentions with the Deputy as well is free up the time and resources to focus on how we can centralize our IT services Countywide. So in creating this position, the intention is to dedicate resources into consolidation and cost savings. MR. KANUHA: Thank you. CHR. POINDEXTER: Okay. Council Member Ruggles. MS. RUGGLES: This is a question for Finance. MR. CHUNG: I have a question. CHR. POINDEXTER: If any others for IT first, can we finish up with IT? Did you have one for IT? Okay, Council Member Chung. MR. CHUNG: I don't know if this is a fair question, but do you have anyone in mind if this position is approved? MS. UNG: I have several people in mind and I've had several recommendations. MR. CHUNG: And who are those people? We'd like to know, well I'd like to know. MS. UNG: At this time, I haven't spoken to my staff about it yet. I would also like to take their thoughts into consideration before making a public statement. MR. CHUNG: Okay. Thanks. CHR. POINDEXTER: For IT, Council Member David. MS. DAVID: Hi, Director Ung. I have one question then. This department never had a Deputy before, is that correct? MS. UNG: That's correct. MS. DAVID: And so from what I gather from Mr. Chung's question, would this Deputy—is it your intention that this Deputy Director would be an in-house person? MS. UNG: An in-house person? Page 48 Hawaii County Council -13 May 18, 2017 MS. DAVID: Internal. MS. UNG: Yes. MS. DAVID: Alright. Thank you. CHR. POINDEXTER: Council Member O'Hara. MS. O'HARA: Because of this type of question, I just wanted to put this in somewhat perspective. How many people are in the IT department total? MS. UNG: 21. MS. O'HARA: 21. It is a relatively small department. MS. UNG: Yes. MS. O'HARA: And I'm not contesting that the need of a Deputy isn't there because I'm sure it is. I also wanted to call our attention, Council, to the audit that we reviewed recently and the one finding of significant deficiency had to do with IT at Civil Defense, and they need to continue working on that project as well. A lot of the work this department does is so unseen to us, it's really hard for us and the public to evaluate. But I do know how important it is and how many people you serve and how many deficiencies you're dealing with. And I just really appreciate the work that you're doing and I tend to support your argument for a Deputy. So I'm just making those comments public because I think this is a department that could eventually resort in a lot of cost savings across the entire County, not just in that department. Thank you. CHR. POINDEXTER: Okay. Any other for IT? Council Member Ruggles. MS. RUGGLES: Thank you. I just want to say that I appreciate you putting forward your need for more resources because I think that the IT department is crucially important, especially as we move forward in this day and age, as technology gets more and more important, especially how government interfaces with the public. And the website overhaul you're speaking of is I believe very needed and currently, I was just made aware that we may not be complying with several government transparency executive orders. MS. UNG: It's true. MS. RUGGLES: And other laws, which is why this is so important. So I just wanted to say that. Thank you. MS. UNG: Thank you. Page 49 Hawaii County Council -13 May 18, 2017 CHR. POINDEXTER: Thank you. Council Member Chung. MR. CHUNG: How about this then? I certainly understand the need for more IT expertise on board, but I don't necessarily subscribe to the idea that, only because you have a new position, we're going to get better service. What if you guys go out and contract for a year and you come back and give us measurables as to how that person improved operations and if you can show that, then maybe there might be a need for a Deputy. Because with the creation of a new position, comes other incidentals, too. And right now, we're not—unless there's something that you can demonstrate to me beyond a reasonable doubt that this thing is absolutely needed after having not had it for all of these years, I would prefer not to really go into position creation mode, given the kind of financial picture we're looking at. Is that a possibility? MS. UNG: Understood. At the same time, we do realize that the scope of the IT department has drastically expanded. So currently, we're looking at supporting other departments in ways that we have never supported them before. One example is traffic. They have reached out to us recently to assist them with cyber security measures and network support. In the past, they have been very independent and have not sought out IT's help with those areas, so we are expanding our scope in assisting other departments and really working as one entity versus very distinct individual departments. MR. CHUNG: I'm not questioning the expansion of the scope, my question was, would you entertain the possibility of contracting for an additional person there after which, maybe a year or two, we could see the efficacy of that person's work? And it could be akin to a Deputy, but instead of actually creating a new position and funding it, just having a contractor in there. You could pay him $100, $120,000, we don't have to pay for retirement and stuff like that, but you pay for a contractor who would generally do what you're asking for of a Deputy and we'll see how it works out. MS. UNG: We'd definitely consider that. We went to HR (Human Resources) initially and identified the needs and the responsibilities of this position and this is based on advice of HR, so MR. CHUNG: Would you consider that? MS. UNG: We would consider that. MR. CHUNG: Thank you. CHR. POINDEXTER: Okay. We're upon the 1:00 hour, and we haven't had lunch yet, so can I—are there any other questions for IT? If not, can I just say that if it's somebody—because of institutional knowledge that somebody from Page 50 Hawaii County Council -13 May 18, 2017 in-house will be going into that position and you're expecting more of that person, I can understand that. Like you said, you're expanding. Somebody like a Don Jacobs. You look at Finance, they would have been foolish to get rid of Deanna, right? We all know that now when we're coming into the budget, because you have somebody in a position that is new coming from the outside, same with IT. So I can see somebody like Don Jacobs, who has brought a lot of resources during his short time in IT. I think he's still works there as well. I'm hoping that he will be the person because he, talk about institutional knowledge and the partnerships and resources that he is able to bring to this County, he was very invaluable for me in our rural areas when we were looking at internet connectivity. However, of course I cannot tell you who to hire, but I'm saying, if it is someone who is in-house, with that institutional knowledge that you're going to expand their position and expect more of them, I could support that. So I'm just sharing that with you. So thank you so much for coming in and answering the questions. Are we ready to vote on this, or do we have more questions on departments? Council Member Ruggles, you had a quick question? Okay, so can we get Finance back up here? Quick question from Council Member Ruggles. (Note: At this time, Finance Director Collins Tomei and Deputy Director of Finance Deanna Sako came forward to address the members of the Council.) MS. RUGGLES: Okay, thank you. So last year, our real property tax revenues were at $263 billion, is that correct? MS. SAKO: Are you looking at the revenue? Then it will be millions. MS. RUGGLES: Millions? Thank you. And this year, it's projected that we need $297 million? In the paper, it said we were looking at a $21 million shortfall. However, this is a $35 to $36 million difference, so I was wondering if you could clarify that. How much exactly do we need? MS. SAKO: Well I think there's different components of it and so some additional real property tax revenue was generated just from the certified values and the valuation adjustments. So the $20 million increase that we're asking for between the rate increases or rate adjustments and the minimum tax and age exemptions is the $20 million that is generated from a number of things, including our TAT reduction, fund balance reduction, the pay raises, and all of that. So I'm not sure if I answered your question. Page 51 Hawaii County Council -13 May 18, 2017 MS. RUGGLES: My question is, what exactly do we need in real property taxes to make up for the shortfall? Because in the paper it said $21 million after the cuts were made to our TAT. MS. SAKO: Right. So the $300 million number that's in the budget is what we need to bring in taxes this year, but there's a component of that that's impacted by like minimum tax and different things. So the budget we presented includes $20 million related to rate increases and minimum tax increases. MS. RUGGLES: Okay. Thank you. That's all. CHR. POINDEXTER: Okay. Thank you. MR. TOMEL But you know in that spreadsheet, that little calculator? The target is 297. MS. RUGGLES: Our target is 297? So we're looking in bringing in 35 to 36 million more with these increases from last year? MS. SAKO: The total real property tax revenues will increase by that much, yes. But not all from the rate increases. MS. RUGGLES: I see. Okay, thank you. CHR. POINDEXTER: Okay. Any other—Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. And this is more of a protocol question because I guess we're kind of moving into voting on the operating budget as amended. I feel like there's still a lot more conversation to have and my concern is, from a protocol standpoint, if we move this forward, will we still have an opportunity to ask questions of the other departments? Because I'm getting a sense some people want to cut, some people want to leave it as it is. You know, we're going to be going back and forth, and my concern is, as we have these discussions, the departments will provide more valuable insight as to how that impacts the department, so I'm cautious about voting right now. CHR. POINDEXTER: So what you could do is, what we've done in the past—so you vote on the Draft 2, but you still are working on, if you want to do amendments, you still can meet with departments, even with Finance, or whoever you want to meet with when you bring your amendments forward for us to, again discuss at the later meeting. MS. LEE LOY: Okay. So maybe I'll make it more simple like this. I can propose all types of amendments, who's the clearing house for these amendments Page 52 Hawaii County Council -13 May 18, 2017 to make sure that they're going to work? Is that Deanna folks or the department head through the Mayor? CHR. POINDEXTER: We as a body is going to decide what—because you're going to make amendments, you're going to have to take things from someplace, right? So we'll get to hear that when you bring the amendments forward, so we'll get to discuss that as a Council. But in the meantime, if you're doing an amendment that may affect somebody else, you may want to go meet with that other department and go, "How is this going to affect you if I do this?" And then when you bring your amendments to the Council, then we all talk about what you do, and I know it's a tough process because it's such a short window that we have. I've heard in the past, they stayed until 1:00 in the morning on their last meeting to pass the budget, on discussion, because of the Sunshine Law. Unfortunately. MS. SAKO: Not to interrupt, but if you do have questions and you want to know the impact, we're more than happy to help either answer those or be like a clearing house and get input from the departments or what not. In some cases, we know where things are, like legal mandates, right? I think that's the kind of question you're asking, right? You don't want to cut something that maybe we really do have to have and so—but I think all of the department heads are available and more than happy to answer questions as well. But if you need just one department to funnel it through, we do have the budget office in our department and we're happy to help. MS. LEE LOY: Thank you for that because as I adjust nickels, I got to make sure it balances. CHR. POINDEXTER: Thank you. Council Member Richards. MR. RICHARDS: Thank you, Chair. So, and I think I'm hearing what Council woman Lee Loy is saying, that if we vote on this right now, is there a conversation on the operating budget? CHR. POINDEXTER: Or for today? For the operating, yes. MR. RICHARDS: So what might make sense is that we recess for lunch and then come back to the vote because if something comes in mind, not that everybody has to come back, but if we have a question on specific department, we could invite them to come back. Is that a possibility? CHR. POINDEXTER: Whatever the Council decides. Council Member Ruggles. MS. RUGGLES: I actually have one more question and it might be for Parks and Recreation. I don't know if we want to Page 53 Hawaii County Council -13 May 18, 2017 CHR. POINDEXTER: Because it's after one right now, why don't we break for lunch and thenI don't know what departments would have to come back. I don't think we have any questions for Prosecutors, do we? And if we do have, we will call you. Who else? I know definitely probably after lunch is the capital budget and that DPW (Department of Public Works) probably we need you, Parks and Recreation, we would need you. IT, I think we're done with IT. Finance, of course we would need you. Planning, I don't think we would need you; we will call you if we do. And who else? What other department? Fire, we'll call you. That would be good. Okay. And the Police Department, too, I think we can call you if we do need you. DEM (Department of Environmental Management), we will need them? Yes, DEM, you will need to be here. R&D (Research and Development) would need to be here as well. Okay? Because after we come back, we're still on the Draft 2 of the operating, and then we're going to move into the capital budget. Recess: At 1:08 p.m., the Chair called for a recess. Reconvene: The meeting reconvened at 2:07 p.m. CHR. POINDEXTER: Aloha, welcome back, I'm calling this meeting back to order. We're still in discussion with Bill 11, draft 2. Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. If Neil from housing, I just have a question similar to that of what Mr. Kanuha asked of Information Technology. We have another position for Housing, a Special Program Coordinator. Real simply, what are we getting? What's the deliverable, what's the measurable, what are we hoping to achieve? (Note: At this time, Housing Administrator Neil Gyotoku came forward to address the members of the Council.) MR. GYOTOKU: That position is for a Homeless Coordinator like. We right now, are developing a plan with Mayor Kim, as far as how to address the homeless situation. That person would be largely responsible for working with our agencies and coordinating efforts with our departments to address our managing agents. We have a project in Kona, Ulu Wini, where what we have is transitional units. So we're trying to also establish a platform like what we call encampment where we can take the people off the street and move them to this encampment, and eventually, I want them to be transitioned over to this transitional housing where we can provide services to help them become more independent citizens and move on to a more permanent housing situation. This coordinator would be mainly working with the nonprofit agencies and our Managing Agent. I have Lance now doing that and he's running around like a chicken without a head, but that's the nature, it's a really complex situation and Page 54 Hawaii County Council -13 May 18, 2017 issue and it takes a lot of time. Hopefully, that person can help ease some of the burden so that I can have him do some more housing issues like that project. MS. LEE LOY: And for this new position, do you envision that individual or that Program Coordinator to be centralized in Kona or Hilo? MR. GYOTOKU: Well Mayor Kim's vision is that we're going to develop a template that will apply to both sides of the island, Hilo and Pahoa, also maybe someplace in Ka`u. But we're trying to develop the plan right now and Kona would be probably the first place we're looking at. We're talking with some people about getting some property to do the encampment, which is just to get the people off the street, offer them a place to go to, instead of living on the street. And then hopefully we can move them into an emergency shelter, which we have in Kona. I'd like to try and establish emergency shelters in Hilo and other parts of the island and more transitional housing, if we can get it. MS. LEE LOY: Thank you. And then you mentioned coordinating with other nonprofit agencies. Me and a couple other Council Members had an opportunity to sit on those nonprofits and there is a number of nonprofits out there trying to figure out a solution for that. Is that what this individual would become? Like a tsar? MR. GYOTOKU: Definitely, a coordinator between working with those agencies and the County, as far as trying to address the homeless issues with the nonprofits and our managing agents that we have for the properties we do have. MS. LEE LOY: Do you know just off the top of your head and even if you don't, how many other nonprofit agencies this individual would need to coordinate with to be successful at this job? MR. GYOTOKU: I think there was a list that Lance had given me. There were about 26 different nonprofit agencies that, in one form or another, are working with the homeless. They also have State agencies like Department of Health for the mental issues, for the veterans, we're trying to work with, too. But there are some other than nonprofit agencies involved. MS. LEE LOY: Thank you, Chair, I yield. CHR. POINDEXTER: Any other questions for Housing? Okay. Thank you very much. So I think we can allow you to leave. Council Members, any other questions? Council Member Ruggles. MS. RUGGLES: Thank you. I had a question for I think Parks and Recreation. Page 55 Hawaii County Council -13 May 18, 2017 (Note: At this time, Parks and Recreation Director Charmaine Kamaka and Deputy Director Ryan Chong came forward to address the members of the Council.) MS. KAMAKA: Good afternoon. MS. RUGGLES: Good afternoon, thanks for coming up, and thanks for staying. I had a question, this is just seeking clarification. So I noticed that we have $543,000 for our golf course fund, is that coming out of the general fund? MS. KAMAKA: Yes, we do. That is general fund as far as I know. MS. RUGGLES: Okay. Which golf courses is this for? Is this for a few golf courses or just one? MS. KAMAKA: Hilo Muni (Municipal). MS. RUGGLES: Okay. Do we charge the public to use this golf course? MS. KAMAKA: Yes, we do. I don't have the fees in front of me, but yes, we do. We have a schedule of fees. MS. RUGGLES: Okay. MS. KAMAKA: There are residence fees and there are non -residence fees, student fees, and monthly cards, so there's a whole schedule. MS. RUGGLES: Okay. What are we paying for? MS. KAMAKA: What are we paying for? Operation of the course and maintenance. MS. RUGGLES: Okay. Do we pay—because I noticed there was a restaurant and MS. KAMAKA: There's a concession there, there's a pro shop and a restaurant there so they pay us monthly fees. That goes out to bid and they bid on it. MS. RUGGLES: Okay. That's all the questions I have. Thank you. I just wanted to comment that I find it interesting that we're paying over $500,000 to subsidize a golf course that people already have to pay for, yet we're questioning a position in IT (Information Technology), that we could hire five deputies for that much. I just wanted to point that out. Thank you. CHR. POINDEXTER: Council Member Eoff Page 56 Hawaii County Council -13 May 18, 2017 MS. EOFF: Thank you. People have suggested that we should raise the fees at the golf course in certain of those categories, just because it would help pay for it. I don't know if you have thoughts on that at this point, or if there's anything we can look at later. I don't necessarily agree with fees at our parks, or even for parking in many places, but with golf, I'm just wondering, since it's so low in some of the categories. MS. KAMAKA: When you think about it, all of our recreational activities are funded. Golf courses traditionally are not money making endeavors, they lose money. MS. EOFF: I know it's expensive to maintain the quality of the green. MS. KAMAKA: Yes, and so it's probably one of our more expensive recreational activities when you look at the total cost of the golf course. But it in no way pays for itself. I'm not ready to raise fees. It's invaluable in terms of the activity it provides for senior citizens. It's one thing that senior citizens—it gets them out and about. The main goal is to get some level of exercise and so it's a good deal for them, but it's a good deal for the County because it keeps our seniors active and healthy. And it's not only seniors, it's—there's junior golf, it's a wonderful activity, it's not inexpensive. MS. EOFF: Do tourists play golf? MS. KAMAKA: Tourists play golf. They pay a little higher fee, non-resident fee. It's inexpensive for what it is, but it is expensive to the tax payers, but I think the benefit to our community far outweighs the cost of it, and I'm not a golfer. MS. EOFF: Mr. Kanuha and I have both sat in on several meetings with constituents of ours who are begging for a municipal golf course on the west side, and even suggesting certain sites that the County to look at. But that wouldn't be something to talk about right now, but I hope that maybe we can MS. KAMAKA: Not right now. And actually Ryan reminds me, Maui County wants to shut theirs down because it is an expensive endeavor, and they're holes to throw money in, for a lack of better terminology. But I think they bring great value to the golfing community. MS. EOFF: And I agree, I've heard this discussion come up many times in the last years and years past and I do believe it's a healthy—it's a great thing that our seniors can get out and walk and socialize and I guess in the future, we would like to look at a west side municipal golf course as well. When we could afford it MS. KAMAKA: If we could afford it, I would totally support that. Page 57 Hawaii County Council -13 May 18, 2017 CHR. POINDEXTER: Thank you. Council Member Ruggles. MS. RUGGLES: Thank you. I just have one follow-up question. I know a lot of my constituents golf often in Volcano. Does the County subsidize that in any way? MS. KAMAKA: No. That's a private golf course. MS. RUGGLES: Okay. Thank you. CHR. POINDEXTER: Any other questions for Parks and Recreation? Okay. Council Member Richards. MR. RICHARDS: Just a quick one, Director and Deputy. The Honoka`a golf course, is that private or is that? MS. KAMAKA: That's private as well. We just have the Hilo Municipal golf course. CHR. POINDEXTER: Okay. Council Member Kanuha. MR. KANUHA: Just a follow-up, yeah, that's the only municipal golf course on this island, but before they used to subsidize several golf courses on the west side with a big chunk of money, and because of financial times and certain other issues, money got chopped, which is understandable. CHR. POINDEXTER: Thank you. Council Member O'Hara. MS. O'HARA: I'm just going to throw this out here because I am not a golfer, not that I have anything about golf, it's a great game. But there are sports that the seniors can also engage in that they aren't able to, at least here in east Hawaii, and that is bowling. And our bowling alley has a huge debt to the County in terms of their property taxes. Am I correct, Finance? Yeah, I've looked at it, it's pretty high up there. How about a municipal bowling alley? Just throwing it out there, guys. I know we can't really consider it, but MS. KAMAKA: I support that. If somebody wants to give us a bowling alley, we'd consider a MS. O'HARA: Yeah because it's an activity that is not available to anyone, students, etc. and I actually like to bowl. But anyway. CHR. POINDEXTER: Okay. Thank you. Council Member Kanuha. Page 58 Hawaii County Council -13 May 18, 2017 MR. KANUHA: Thank you. Just real quickly, I know the Mayor asked the department to cut a few times, tell me the process of going through that and what exactly did your department cut? MS. KAMAKA: Each division goes line by line and tells us what they can live without and the ramifications of eliminating those things that they can live without. Our budget is a one percent increase over last year, so we're, in my mind, that's status quo. The things that we did away with were equipment requests, some positions, and you just work with what you have. We're looking to the community to support us with Friends of the Park Programs in situations. Even our Friends of the Park Programs we had to cut because we have funding to buy materials and supplies for friends' groups. So we, line by line MR. KANUHA: Okay. Thank you. CHR. POINDEXTER: Thank you. Any other questions for Parks and Recreation? Okay, Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. I'm going to try and take this in a little bit of a different direction. Under our open space fund, I believe some of the monies, $300,000 I believe, goes to the stewardship programs that I understand the department vets as far as the various groups and individuals that come and requests money. Is that money exhausted every single year? MS. KAMAKA: No, not at all. There's a substantial balance in that account. MS. LEE LOY: Yeah, the stewardship account. Any guess as to why? MS. KAMAKA: Why there's a balance? MS. LEE LOY: Why they're not exhausting it all the way. MS. KAMAKA: Because we don't have enough applicants for grants number one, and the grant applicants that we do have, some of them didn't qualify for, or didn't get the recommendation to move forward to Council. But really, there are not enough applicants for the grants. MR. CHONG: And the first year of grant awarding CHR. POINDEXTER: I know that when she's speaking, they just make the assumption that's Charmaine, but can you just introduce yourself for the record? When they do minutes. MR. CHONG: Ryan Chong, Deputy Director of Parks and Recreation. So the first awarding cycle was actually last year, and so there's only been one award so Page 59 Hawaii County Council -13 May 18, 2017 far for the stewardship grant, and that was to Pohaha I Ka Lani. This is the second year. But they're the only one that actually got last year, they re -upped again this year. So there's not a large pool of people requesting this money so far. MS. KAMAKA: And it's a new program, relatively new. MS. LEE LOY: Is it possible for those stewardship awards go to other areas of Parks through our Friends of our Park agreement? MS. KAMAKA: That's a legal question. MS. LEE LOY: Okay. Thank you, just thinking out loud. I yield. CHR. POINDEXTER: Council Member Eoff MS. EOFF: Well just my understanding is that maintenance fund, it does cap out at $3 million, and it can be tapped into by the department for maintenance of open space parcels. They can tap into it, flora and fauna studies, whatever they determine needs to be done to maintain the open space purchase. And the grants, as one other aspect of where the funds can be directed, but that fund does have a ceiling, so if it isn't being used and it grows to $3 million, we stop depositing into it, until it goes down again. CHR. POINDEXTER: Council Member Lee Loy. MS. LEE LOY: And just to clarify, but it's only the properties that were purchased with the open space fund, so we're not seeing any supplemental dollars coming from that fund going into the department? MS. KAMAKA: No, not at all. MS. LEE LOY: Thank you, I yield. CHR. POINDEXTER: Okay. Any other questions? Okay, thank you. MS. KAMAKA: Thank you. CHR. POINDEXTER: Still on Bill 11, draft 2. Does anybody else have any questions or wants to have some discussions? Council Member Richards. MR. RICHARDS: Over lunch, I thought of another question for Finance. (Note: At this time, Finance Director Collins Tomei and Deputy Director of Finance Deanna Sako came forward to address the members of the Council.) Page 60 Hawaii County Council -13 May 18, 2017 MR. RICHARDS: Hopefully a relatively simple question. Again, going through the document of the draft in here, where is the TAT? MS. SAKO: In part A, general fund, on page two of the revenues, it's called State Grants -in -Aid TAT, 3304.01, it's in the bottom quarter of the page. MR. RICHARDS: Hang on a second. MS. SAKO: Sorry, it's right after the first orange divider. MR. RICHARDS: Okay. MS. SAKO: And then the second page of that, towards the bottom. MR. RICHARDS: Okay. 33 MS. SAKO: 04.01. And it's called State Grants -in -Aid (TAT). So we have the 17 million 298 in the current year. MR. RICHARDS: Okay. Thank you. I yield. CHR. POINDEXTER: Thank you. Any other discussion? Do we have questions for DPW or Environmental Management or our transportation? I'm looking at Council Member O'Hara. No? Nothing? Okay. Any other questions for any other departments? MR. RICHARDS: No, but I have a procedural question. CHR. POINDEXTER: Okay. Go ahead, Mr. Richards. MR. RICHARDS: We're being asked to vote on Draft 2 and this is a vote to accept the draft as the next version of the budget, or are we acknowledging that it is? CHR. POINDEXTER: No, it's to accept this next version and to move it to the next meeting so that we can make adjustments to what we're now accepting as the new version. MR. RICHARDS: Okay. CHR. POINDEXTER: Because the old version is the first one that he presented, so we need to accept the second one that he's presenting and we're going to have an opportunity to make changes to that at the next budget meeting. Page 61 Hawaii County Council -13 May 18, 2017 MR. RICHARDS: And hypothetically, if we were to reject it, then we go back to the draft one, is that correct? CHR. POINDEXTER: If we reject this one, the Draft 2? Yeah, we would go back to draft one. We would not accept the May fifth one, correct, Clerk? Because this is accepting that we did the communication, we accepted the communication to amend that bill into Draft 2. So we still didn't vote Draft 2 in yet as amended, okay? MR. RICHARDS: Alright. Okay, thank you. CHR. POINDEXTER: Yeah, when the draft one came up, we did not have the final numbers, but especially with arbitration. Council Member Kanuha said he would be right back and he wanted to be here for the vote. So can I take a brief two -minute recess? Recess: At 2:29 p.m., the Chair called a recess. Reconvene: The meeting reconvened at 2:36 p.m. CHR. POINDEXTER: Just for clarification purposes, before the recess, Council Member Richards asked what if we vote this down, would it revert back to the draft one. In the Charter, it does say on the operating budget, "The council shall adopt the operating budget on or before June 30. If it fails to do so, the operating budget as submitted and as amended by the mayor shall be deemed adopted by the council as the operating budget for the ensuring fiscal year." So what would happen is the budget that the mayor had submitted and amended would be the budget, so it would be in our best interest, of course, to vote for it. It's kind of like we have to vote for it, or you don't really have to vote for it, unless if you want what the mayor is submitting. Okay, I think—if everybody is clear on that. Okay, so we're still on Bill 11, Draft 2 and I thought Council Member O'Hara, you had a question? MS. O'HARA: Yes, and this came up earlier in our early budget meetings with the departments and the questions about whether or not they were applying for grants, and I think Ms. Ruggles asked that question of almost every department that came before us. In reviewing the budget and its copious amounts of pieces of paper to review, so I may have this wrong, but I see a lot of empty line items for certain departments with regard to federal and state grants. In particular, Highway, Bikeway, Sewer, and Solid Waste funds, and I'm sure there's probably some accounting explanation for that, I'm hopeful. Or is that we just aren't aggressive enough in pursuing the grants that we could be applying to these projects? So I guess that question kind of carries over between DPW and DEM, and you guys are sitting together already, so Page 62 Hawaii County Council -13 May 18, 2017 (Note: At this time, DPW Director Frank DeMarco and DEM Director Bill Kucharski came forward to address the members of the Council.) MR. KUCHARSKI: Good afternoon, this is Bill Kucharski, Director of DEM. We are looking at grants, we have actually contacted a State grant service to come in and pursue grants for us on the waste water side and other areas. Frankly, the time it takes, particularly with the budget and all of the other things going on, we have not been able to pursue it with as much vigor as we will on July 1. And that's not a good answer, but it's the only answer that we have. We are looking at SRF (State Revolving Fund). Obviously, it's not a grant, but we do a lot of that, we stretch the—we never stretch the boundaries. We're always within compliance of federal rules for getting these funds assigned to us and we'll continue to work on that. We're also in discussion with EPA (Environmental Protection Agency) on different grants to support local community groups and to help us move forward our agendas in different ways. I can't come up and say we have these grant applications because that's a special skill, essentially in writing and getting grants and that's a skill that we need to get trained on before we'll be able to aggressively pursue. But that's what we're working on. MS. O'HARA: Thank you, and can you describe the State grant services that you are interacting with? What is that? (Note: At this time, Deputy Director of DEM Diane Noda came forward to address the members of the Council.) MS. NODA: Hi, good afternoon, Diane Noda, Deputy Director of Environmental Management. The State Department of Health Clean Water branch had done outreach to our Waste Water Division and said, "Hey we have some grant monies that we would like to give out and we'd like to know who's interested." And so over the last month actually or so, we were trying toactually it's tomorrow that we have a phone conference that has been postponed about four times just because of scheduling, so that we can learn what's available and whether we actually, with our bare bones Waste Water Division staffing right now, if they're going to be able to, if we seek the money, if we're going to be able to implement whatever reporting requirements are needed. We've also just done an initial work with our Research and Development department, and so we have just recently been registered for a grant network, that eCivis, that we can go into to look for specific grants for our specific divisions. But that's really at the preliminary stage right now. MS. O'HARA: And this just points to what I've been saying at the County for the longest time, that we really need a grant specialist. R&D's in the back, and I Page 63 Hawaii County Council -13 May 18, 2017 know Diane's listening, but the County can't make positions, we can only encourage the administration to consider having a grant specialist who can assist in the manner that clean water branch is assisting you. Because I've worked with them on grants in the past, and they don't have a lot of resources either. So I can understand why the phone call has been put off four times because between the two departments, it's hard to get people to talk to each other. So I will continue, and if it'sI will continue to pursue to get a grant specialist position at the County. I feel it should be under R&D and it could reach across all of the agencies, not only to identify the grant opportunities, but to help you with the putting together your technical scope, which is really on the departments. But there's also other little aspects to putting together a good application that a well- trained specialist would be able to assist and ensure success on, and also to help in the reporting requirements, and just keeping everybody on track. So, I'm sorry, I'm going to continue to advocate for that because I can see where your department in particular would really benefit from that. Thank you. CHR. POINDEXTER: Okay. Thank you. MS. O'HARA: DPW, what's your story? MR. DEMARCO: Thanks for that. This is Frank DeMarco, Department of Public Works Director. The budget actually reflects grants and as we move forward in time, we'll pursue grants. Now in my former capacity with the County, I used to write grants, FEMA (Federal Emergency Management Agency) grants and several of them actually—HUD (Housing and Urban Development) grants as well for some of our levy certification projects. Oftentimes, these grant writers become staff themselves, but I appreciate where you're going with that. Having prepared these grants, it takes a lot time to prepare them and track them. It's not just writing them, you have commitments afterwards, you have to make regular reportings, usually quarterly. That would be very helpful. But for DPW, as we need it, we prepare grants, much like I did for FEMA grants. Did you want to add anything to that? MS. SAKO: Deanna Sako, Deputy Director of Finance. All I was going to add is that the budget reflects the operating grants we know about at the time we do the budget. And as you know from being on Council, you know we come in to amend a budget whenever we do get additional grants or increases in grants. And then I was also reminded that for Public Works, a lot of their grants are actually capital grants and those were in the capital budget, so they come in to amend that as well. MS. O'HARA: Okay. Thank you. I wasn't really trying to pick on either of the departments, I just really want to push this one because as our budgets get to the point where we're not at a half a billion dollars annually, we need those additional sources of revenue. And I think it's up to the County in terms of operating Page 64 Hawaii County Council -13 May 18, 2017 efficiently and effectively to consider what resources we need to assist you guys in getting the grants that you need. So I just wanted to bring up that point. MR. DEMARCO: Thank you. CHR. POINDEXTER: Okay, thank you. Any other questions? No? Okay, are we ready for the vote then? Vote on Bill 11: The motion to pass Bill 11, Draft 2, on first reading and Draft 2 adopt Finance Committee Report No. 14 was carried by (Approved) the following voice vote: Ayes: Council Members David, Eoff, Lee Loy, O'Hara, Richards, Ruggles and Chair Poindexter — 7. Noes: Council Member Kanuha —1. Absent: Council Member Chung — 1. Excused: None. CHR. POINDEXTER: Okay, so now, Mr. Clerk, we're moving into the capital budget. Can you read in Bill 12, Communication 92.1 and Bill 12, Draft 2, please? Bill 12: RELATES TO PUBLIC IMPROVEMENTS AND FINANCING THEREOF FOR THE FISCAL YEAR JULY 1, 2017, TO JUNE 30, 2018 From Mayor Harry Kim, dated March 1, 2017, transmitting the proposed Capital Budget for FY 2017-2018, and the Capital Program for the next six years from FY 2017-18 to 2022-23, which includes 37 projects requiring a total appropriation of $130.2 million. Approximately $81.2 million are intended to be funded in whole or part by bonds, $39.3 million to be funded by the State Revolving Loan Fund or State Capital Improvement Projects, $9.66 million to be funded by federal funds, and $45,000 to be funded by Fair Share Contributions. Reference: Comm. 92 Intr. by: Ms. David (B/R) Approve: FC -15 ; and Comm. 92.1: From Mayor Harry Kim, dated May 5, 2017, transmitting Bill 12, Draft 2. Draft 2 proposes 48 projects requiring a total appropriation of $173.9 million. ; and Page 65 Hawaii County Council -13 May 18, 2017 Bill 12 RELATES TO PUBLIC IMPROVEMENTS AND FINANCING THEREOF Draft 2): FOR THE FISCAL YEAR JULY 1, 2017, TO JUNE 30, 2018 Proposed Capital Budget for fiscal year ending June 30, 2018, requires a total appropriation of $173.9 million, of which approximately $97 million are intended to be funded in whole or part by bonds, $67 million are to be funded by the State Revolving Loan Fund or State Capital Improvement Projects, $9.8 million are to be funded by federal funds, and $45,000 are to be funded by Fair Share Contributions. Intr. by: Ms. David (B/R) Motion to Approve: Ms. David moved to pass Bill 12, Draft 2 on first reading. Seconded by Eoff CHR. POINDEXTER: Is there any discussion? Council Member Richards. MR. RICHARDS: Yeah, again procedural, is this similar to the budget to move forward? CHR. POINDEXTER: Yes, this is amending, now taking the Communication 92. 1, it's the Mayor's May five capital budget and then amending it to be our Bill 12, draft 2. Okay? So now we make a motion to amend. So pursuant to Article 10, Section 10-2 of the Hawaii County Charter, the Mayor has submitted an amended capital budget to the Council on May 5, 2017. So is there any discussion just on that? No? Motion to Amend: Ms. David moved to amend Bill 12 with the contents of Comm. 92.1. Seconded by Ms. Eoff CHR. POINDEXTER: So now we're going into discussion on the capital budget, Draft 2. I'll wait for a little bit, it's the last time, I was going to move fast but because we can do the discussion and then we need to go into the communications, the amendments, and the other communications. So we can do that first and then come back and discuss it as amended, and it'll still be the amendment—Bill 12 as amended, Draft 2. Okay, so—if we don't have any questions right now, we have to amend it, we have to vote to have it as a Draft 2. Okay. Does anybody have any questions before we get into just making that Draft 2? It's just accepting the Mayor's May fifth and moving it as Draft 2. It'll be Draft 2. And all the communications is going to go into amend Draft 2, right? MR. MAEDA: So we're going to vote on Bill 12, Draft 2? CHR. POINDEXTER: Right. That's what it says we need to do right now, correct? If they don't have discussion. Okay, and I don't see any discussion. Page 66 Hawaii County Council -13 Vote on Bill 12: Draft 2 (Approved) May 18, 2017 The motion to pass Bill 12, Draft 2 on first reading was carried by the following voice vote: Ayes: Council Member David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter – 8. Noes: None. Absent: Council Member Chung – 1. Excused: None. CHR. POINDEXTER: Okay, so now we're on to that main motion of Bill 12, Draft 2. Now we're going into our MR. MAEDA: For clarification, that was eight ayes and one absent? CHR. POINDEXTER: I'm sorry, yes, eight ayes, and one absent. Okay so now we'll move into communications, so Mr. Clerk, Communication 92.3. Comm. 92.3 From Council Member Lee Loy, dated May 9, 2017, transmitting proposed (Memo. No. 1): amendments to re -appropriate the Parks and Recreation Department's Lili`uokalani Gardens Renovations project in the amount of $1 million. Motion to Amend: Ms. Lee Loy moved to amend Bill 12, Draft 2 with the contents of Comm. 92.3. Seconded by Mr. Richards. CHR. POINDEXTER: Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. This particular line item was in the previous budget and wasn't picked up by the department. However, I've made the decision, or made the choice actually to try and get this back onto the wish list, which was clearly explained to me from our Finance Department, that these are just wish list items. And just a little bit of background on whya couple of things. During this legislative session, we were looking at a number of bills that would begin to revitalize the Banyan Drive area, and it was pretty much based on those interactions at the Legislature that, had these bills gone through, and one of them did, it would actually help supplement the idea of what that revitalization would look like. So this was my way of complimenting what the State was planning to do and showing or giving an indication that the County was on board with an entire revitalization of the area. I placed it in the Lili`uokalani Garden's renovation or identified it for renovations for the park for a number of reasons. One, the park is celebrating its 100 -year anniversary this year. We've also attended a number of ceremonial events at the park and over time, a number of visitors, a number of—we just recently had a tree planting ceremony with the Page 67 Hawaii County Council -13 May 18, 2017 Governor of Japan there, so it's really becoming a very well -visited, well -attended kind of icon of Hilo and the bay. And earlier this morning, we had testifiers talking about parks and gyms in their area and the wonderful memories that they had about that. I can speak of how many wonderful memories I have for Liliuokalani Park as a kid growing up, and I'm sure there are a number of other people who would speak of the same thing. So those are my reasons for kind of putting this back on the wish list. I think when we're looking to accelerate our dollars or send signals to other departments or other agencies or the State for the matter, as to what is important to us, this one for me was that indicator. So if I could please get your folk's support on this and thank you for allowing me to explain the passion behind this one. I yield. CHR. POINDEXTER: Thank you, Council Member Lee Loy. Any questions or discussion on Communication 92.3? Vote on Motion to The motion to amend Bill 12, Draft 2 with the contents of Amend: Comm. 92.3 was carried by the following voice vote: (Approved) Ayes: Council Members David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter — 8. Noes: None. Absent: Council Member Chung — 1. Excused: None. CHR. POINDEXTER: Bill 12, draft 2 is amended with the contents of Communication 92.3. Now we move on the Communication 92.4. Mr. Clerk. Comm. 92.4 From Council Member Valerie T. Poindexter, dated May 9, 2017, transmitting (Memo. No. 2): proposed amendments to re -appropriate the Public Works Department's Laupahoehoe Point Access Road Improvements project in the amount of $2.3 million. Motion to Amend: Relinquish Chair Ms. David moved to amend Bill 12, Draft 2 with the contents of Comm. 92.4. Seconded by Ms. Lee Loy. CHR. POINDEXTER: Should I just hand this over to you, Karen, so I can just basically? At this time, Chair Poindexter relinquished the chair to Acting Chair Eoff ACTING CHR. EOFF: Okay, Ms. Poindexter, go ahead. Page 68 Hawaii County Council -13 May 18, 2017 MS. POINDEXTER: So this morning we had people come and testify about the Laupahoehoe Point Access Road and the improvements on it and I think we talked a little bit about it during the first budget and talking about the road. It is the only road in and out and we do have people who live still down at Laupahoehoe Point. The road is in very bad condition. Some areas are one lane, you know going, you have to yield and it's dangerous because one of the very dangerous turns, the guard rail had fallen through, so the cliff side is very unstable. So when we talk about priority and needs, I'm hoping that DPW will look at this as a priority on their list to work on as a road, before we get into a big, you know, liability, losing someone's life or something because this was brought to our attention already. Because I didn't see it in that first budget that you guys were going to take into consideration so I was shocked and alarmed that you would not, especially if we're having tourist—that's a tourist destination. You heard one testifier say that one time, we had 300 cars go down in one day. So I would ask DPW to take this communication very seriously, this improvement, and I ask my colleagues for their support. Thank you. ACTING CHR. EOFF: Okay, any other comments, Council Members? Vote on Motion to The motion to amend Bill 12, Draft 2 with the contents of Amend: Comm. 92.4 was carried by the following voice vote: (Approved) Ayes: Council Members David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter – 8. Noes: None. Absent: Council Member Chung – 1. Excused: None. ACTING CHR. EOFF: Mr. Clerk, can you read Communication 92.12? Comm. 92.12 From Council Member Valerie T. Poindexter, dated May 10, 2017, transmitting (Memo. No. 10): proposed amendments to add the Kaiwiki Park Improvements project in the amount of $1.7 million. Motion to Amend: Ms. Poindexter moved to amend Bill 12, Draft 2 with the contents of Comm. 92.12. Seconded by Ms. O'Hara. ACTING CHR. EOFF: Go ahead, Ms. Poindexter. MS. POINDEXTER: Okay. So Kaiwiki Park Improvements, we did hear from some testifiers and I think we got some other written testimony. Unfortunately, that's a big amount, the $1.7 million, but that's a real number with the cost of rebuilding that facility because it has to be torn down. There is no way to make Page 69 Hawaii County Council -13 May 18, 2017 major improvements without bringing in the ADA (Americans with Disabilities Act) compliance. So it triggers ADA because of the type of improvements that needs to be made. So I just ask my colleagues for their support in getting this on the wish list because that's all it is, it's a wish list and now it's up to the community to kind of just call the Mayor and express how desperately they need this. Thank you. ACTING CHR. EOFF: Any further discussion? Vote on Motion to The motion to amend Bill 12, Draft 2 with the contents of Amend: Comm. 92.12 was carried by the following voice vote: (Approved) Ayes: Council Members David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter – 8. Noes: None. Absent: Council Member Chung – 1. Excused: None. ACTING CHR. EOFF: Go ahead, Mr. Clerk, 92.13. Comm. 92.13 From Council Member Valerie T. Poindexter, dated May 10, 2017, transmitting (Memo. No. 10: proposed amendments to add the Honoka`a Gym Floor Improvements project in the amount of $300,000. Motion to Amend: Ms. Poindexter moved to amend Bill 12, Draft 2 with the contents of Comm. 92.13. Seconded by Ms. O'Hara. ACTING CHR. EOFF: Go ahead. MS. POINDEXTER: Okay. We heard from Mr. Jayme Carvalho, who is, I think one of the supervisors at that gym. But I put this in because I had a lot of calls from the constituents in that area who couldn't be here to testify because they're working, but talked about the gym floor and the dangerous conditions. I know that there have been a lot of people who had—several people who had torn their Achilles tendon, blaming the floor for that. I don't know how true that is. I know that they had some safety issues with that floor. So I called to look at other gyms and how much it would cost and we came up with the amount of $300,000. So I just ask for the support from my colleagues to put this on the wish list as well. Thank you. ACTING CHR. EOFF: Okay, thank you. Any other discussion? Mr. Richards. MR. RICHARDS: As we've discussed, almost anything we can do to support recreation in our community is good. From what I was gathering from the Page 70 Hawaii County Council -13 May 18, 2017 testimony, it sounds like we might actually have a roof problem if we're having leaking. So would this include attending to that? MS. POINDEXTER: May I answer that, Chair? ACTING CHR. EOFF: Go ahead. MS. POINDEXTER: Yeah, I think what the slippery was, it was a type of floor it is. When it rains, it's not where the roof is leaking it's the mist that comes that makes that type of floor very slippery. So I don't know of any leaks in the roof because I thought we had fixed those, but I know that when it does rain, the mist that comes in makes the floor slippery. MR. RICHARDS: Okay. And maybe that would be attended to in the Planning portion, I justI support it because taking care, but be sure we don't fix the floor when there still has leaks. Thank you. I yield. MS. POINDEXTER: Thanks. ACTING CHR. EOFF: Thank you. Any other comments? Vote on Motion to The motion to amend Bill 12, Draft 2 with the contents of Amend: Comm. 92.13 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter — 9. Noes: None. Absent: None. Excused: None. ACTING CHR. EOFF: Motion carries. Mr. Clerk, Communication 92.14. Comm. 92.14 From Council Member Valerie T. Poindexter, dated May 10, 2017, transmitting (Memo. No. 12): proposed amendments to re -appropriate the Parks and Recreation Department's Laupahoehoe Boat Ramp Improvements project in the amount of $2 million. Motion to Amend: Ms. Poindexter moved to amend Bill 12, Draft 2 with the contents of Comm. 92.14. Seconded by Mr. Richards. ACTING CHR. EOFF: Ms. Poindexter. MS. POINDEXTER: Yes. Okay, so we did receive written testimony and we also heard from Lucille Chung on this and the Laupahoehoe Boat Ramp situation is a difficult situation because they also have the core of engineers that have to Page 71 Hawaii County Council -13 May 18, 2017 work on the break water issue. And so Parks and Rec doesn't want to necessarily fix the boat ramp area until the core engineers come in and fix the break water. Well last year, they came in and I don't know how many of millions of dollars was spent for them to come in. They were in for I think about a week and figured out that what they thought they were going to use to fix it was shooting cement under water and doing all this fancy stuff It didn't work, so they took off I didn't want this to lapse, I want to make sure we put this in and keep this in because once they fix the break water, we need to fix the boat ramp area because it's very dangerous there as well, with all the rebars kind of sticking up, and Parks will try to cut it down. We've put up a "No Swimming" sign up there, but no swimming is like saying come swim. But I think for our protection we had to put the "No Swimming" sign. So I just want to make sure—leave that in on the wish list just in case the core of engineers come in and finds a solution, then we can move to fix that ramp area and that we have the money there on our wish list for the Mayor to select from. So thank you, I ask for your support. Vote on Motion to The motion to amend Bill 12, Draft 2 with the contents of Amend: Comm. 92.14 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter – 9. Noes: None. Absent: None. Excused: None. Relinquish Chair: At this time, Acting Chair Eoff relinquished the chair to Chair Poindexter. CHR. POINDEXTER: Mr. Clerk, let's go back to the top of the communications, Communication 92.5. Comm. 92.5 From Council Member Jennifer Ruggles, dated May 9, 2017, transmitting (Memo. No. 3): proposed amendments to add the DPW Puna Roads Repair and Maintenance project in the amount of $12.12 million. Motion to Amend: Ms. Ruggles moved to amend Bill 12, Draft 2 with the contents of Comm. 92.5. Seconded by Ms. David. CHR. POINDEXTER: Council Member Ruggles. MS. RUGGLES: Thank you. This is a big lump of money for various roads in Puna. We've got this estimate from DPW on a few different projects that we Page 72 Hawaii County Council -13 May 18, 2017 inquired about. We had asked Finance if we should submit a separate CIP (Capital Improvements Plan) for each project, and they told me to ask the department. So we asked the department and they preferred it to be in one big lump. And so what this $12.12 million is for is first, it's for an improvement to South Kulani Road to widen the shoulders because we have a lot of students and residents that catch the bus and they catch it off at Highway 11. They walk along the side of the road there and there's no shoulder. It's a pretty high -traffic road, and the speed limit is 35 miles an hour, and of course people drive 50, so it can get dangerous. The second improvement is for South Kapua Road to add shoulders as well because it's the same situation. The third improvement is for Ola`a Road, which as we know, is an emergency access route used by first responders and by residents that live in the Orchidland subdivision. The Ola`a Road is a one -lane road that goes off of Highway 11 and goes over a bridge. It has a lot of blind spots and dips, it's very dangerous. So this project would widen the shoulders as well as make it so there are two lanes. And the fourth project within this is the Road 8. We have a County easement on this road, and this is also one of our emergency access routes, and it would add shoulders as well. This is a very high -traffic road and people drive fast on it. So access all of Hawaiian Acres as well as lower Puna, going on to Highway 130 through Ainaloa. So that's what this project is and I ask for your support. Thank you. CHR. POINDEXTER: Any other discussion or questions? Okay, no? Vote on Motion to The motion to amend Bill 12, Draft 2 with the contents of Amend: Comm. 92.5 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter — 9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: Mr. Clerk, Communication 92.6. Comm. 92.6 From Council Member Jennifer Ruggles, dated May 9, 2017, transmitting (Memo. No. 4): proposed amendments to add the DPW Modification and Relocation of Puna Water Spigot Stations project in the amount of $600,000. Motion to Amend: Ms. Ruggles moved to amend Bill 12, Draft 2 with the contents of Comm. 92.6. Seconded by Mr. Kanuha. Page 73 Hawaii County Council -13 CHR. POINDEXTER: Council Member Ruggles. May 18, 2017 MS. RUGGLES: Thank you. This is to expand and create ADA compliance for the water spigots up in Mountain View. Currently, I believe there are only five spigots that serves almost all of upper Puna, and it can get quite full. There's a lot of traffic and so we looked at extending the spigot area and also add a little extra in case we need to relocate it to a different area as well, and I ask for your support. Thank you. CHR. POINDEXTER: Thank you. Any other discussion? Vote on Motion to The motion to amend Bill 12, Draft 2 with the contents of Amend: Comm. 92.6 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter — 9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: Mr. Clerk, Communication 92.7. Comm. 92.7 From Council Member Eileen O'Hara, dated May 10, 2017, transmitting (Memo. No. 5): proposed amendments to add the Pahoa Village Road and Akeakamai Loop Intersection Improvement project in the amount of $200,000. Motion to Amend: Ms. O'Hara moved to amend Bill 12, Draft 2 with the contents of Comm. 92.7. Seconded by Ms. Ruggles. CHR. POINDEXTER: Council Member O'Hara. MS. O'HARA: This is a problematic intersection in the Pahoa Village. It is, for those who are familiar with Pahoa Village, across from the old Paul's Garage, and it's the alley way that leads down to the Tin Shack Bakery that Mr. Chung was describing the other day. Anyhow, it has, I said problems, the grate that supposed to collect the storm waters is mislocated and so water puddles up. There's this tremendous hole that they come and they patch it and put rocks in it and two weeks later, it's a tremendous hole again. There's something that needs some major engineering there and I'm just asking for that problem to be fixed, it's right in the middle of the village. So I ask for your support on this. CHR. POINDEXTER: Any other discussion? Page 74 Hawaii County Council -13 Vote on Motion to The motion to amend Bill 12, Draft 2 with the contents of Amend: Comm. 92.7 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter — 9. Noes: None. Absent: None. Excused: None. May 18, 2017 CHR. POINDEXTER: Communication 92.8 Comm. 92.8 From Council Member Eileen O'Hara, dated May 10, 2017, transmitting (Memo. No. 6): proposed amendments to add the Kahakai Boulevard Shoulder Paving and Curb Stops project in the amount of $500,000. Motion to Amend: Ms. O'Hara moved to amend Bill 12, Draft 2 with the contents of Comm. 92.8. Seconded by Ms. Eoff CHR. POINDEXTER: Council Member O'Hara. MS. O'HARA: The Kahakai Boulevard is one of the County -owned boulevards in our major subdivisions in lower Puna. And I think the entire length of it from Highway 130 is a little over six miles down to the ocean and of the six plus miles, about half of it has an asphalted shoulder on the north side of the road that people can safely walk on and bike on. But only half of it is at this point, is prepared as a sidewalk, it's not an actual sidewalk, but it's a paved shoulder. And we want to extend that all the way down to the ocean from the point where it stops and all the way up to Highway 130. It goes up to Keonepoko right now, which is the elementary school, but from there to the highway is another two and a half, three miles. And we often see people walking to the grocery store up at Malama Shopping Center. They even push baby carriages and try to ride their bikes and it's extremely dangerous. People were going, it's at least 50 miles an hour, I think it's a 45 mile an hour zone, but people go much faster, so it's a very dangerous part. So we would like to extend that all the way up to Highway 130 for public safety reasons. So I ask for your support. CHR. POINDEXTER: Any other discussion? Page 75 Hawaii County Council -13 Vote on Motion to The motion to amend Bill 12, Draft 2 with the contents of Amend: Comm. 92.8 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter — 9. Noes: None. Absent: None. Excused: None. May 18, 2017 CHR. POINDEXTER: Mr. Clerk, Communication 92.9 Comm. 92.9 From Council Member Eileen O'Hara, dated May 10, 2017, transmitting (Memo. No. 7): proposed amendments to re -appropriate the Post Office Road Extension project in the amount of $201,000. Motion to Amend: Ms. O'Hara moved to amend Bill 12, Draft 2 with the contents of Comm. 92.9. Seconded by Mr. Richards. CHR. POINDEXTER: Council Member O'Hara. MS. O'HARA: I'm just asking for this CIP item to be reappropriated, it would lapse otherwise and this is an extension of the existing road. The existing road needs work, but this would be specifically for a new road that would connect mauka of the Government Road going through the village and connect with the new regional park from the other side of it. It was planned and kind of in the works with Planning back in 2014, and that was when we experienced the lava flow threat, and much of that planning was more or less abandoned at that time. So it kind of sat and lapsed a bit but things are happening, things are kicking off in Pahoa. We've got the Puna Kai Shopping Center committed and moving forward, and this is in that same area. So I wanted to be sure that this was on the books, it's actually in District 5, but I wanted to be sure that we re -appropriated it so it didn't get forgotten. Anyway, I ask for your support. CHR. POINDEXTER: Okay. Any discussion? Vote on Motion to The motion to amend Bill 12, Draft 2 with the contents of Amend: Comm. 92.9 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter — 9. Noes: None. Absent: None. Excused: None. Page 76 Hawaii County Council -13 May 18, 2017 CHR. POINDEXTER: Mr. Clerk, Communication 92.10. Comm. 92.10 From Council Member Eileen O'Hara, dated May 10, 2017, transmitting (Memo. No. 8): proposed amendments to add the Nanawale Boulevard Rock Outcropping Removal project in the amount of $150,000. Motion to Amend: Ms. O'Hara moved to amend Bill 12, Draft 2 with the contents of Comm. 92.10. Seconded by Ms. David. CHR. POINDEXTER: Council Member O'Hara, MS. O'HARA: This is a problematic situation in another County -owned major subdivision boulevard, Nanawale subdivision. The residents have asked for years for a fix because at night especially, people tend to race on Nanawale Boulevard and this is a huge curve right where you turn off for the VFW Hall. There has been more than one accident in that area so the line of sight is very much compromised by this large boulder rock outcropping. So it's another ask and hopefully you guys will support it. CHR. POINDEXTER: Thank you. Any discussion? Vote on Motion to The motion to amend Bill 12, Draft 2 with the contents of Amend: Comm. 92.10 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter – 9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: Mr. Clerk, Communication 92.11. Comm. 92.11 From Council Member Eileen O'Hara, dated May 10, 2017, transmitting (Memo. No. 9): proposed amendments to add the Puna Streetlight Installation and Repairs project in the amount of $150,000. Motion to Amend: Ms. O'Hara moved to amend Bill 12, Draft 2 with the contents of Comm. 92.11. Seconded by Ms. Lee Loy, CHR. POINDEXTER: Council Member O'Hara. MS. O'HARA: Yes, we've had lots of requests for better security and better lighting in the village of Pahoa. We have some street lighting attached to the utility poles in the main section where the boardwalks are—area of Pahoa Village. Page 77 Hawaii County Council -13 May 18, 2017 They are mounted on poles that are about 200 feet apart and they don't carry light all the way from pole to pole, the radius is about 50 feet. I understand from our traffic division that we're now able to correct that with new bulbs that extend up to 100 feet, so there will be close to overlap. And when we replace it with the new type of bulb, which is also more energy efficient, and this also will extend lighting from the village area where it's pretty well covered, all the way out to Long's Drugs, along the Pahoa Road. Because as we've seen from photographs that were presented to us by Puna constituents, the roadway there is very narrow, there is no shoulder, and at night, it's real easy to miss the pedestrians. So we want to have better lighting in the village and we put in enough money, hopefully, to cover a few lights down at Kalapana. We've had requests from the venue known as Uncle Robert's, which is very dark at night and has a lot of visitors who aren't familiar with the territory. So again, you have people walking along a very dark road that has no shoulder. So we're hoping to be able to put three or four lights down there as well. And the good news on this one is I've got an approval to use funding or permission to use funding from the geothermal relocation and community benefit fund, which is to be used for community benefit in lower Puna. So I'm really excited that we'll be able to move on this project fairly quickly. Thank you. CHR. POINDEXTER: Any discussion? Vote on Motion to The motion to amend Bill 12, Draft 2 with the contents of Amend: Comm. 92.11 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter — 9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: Mr. Clerk, we go now to Communication 92.15. Comm. 92.15 From Council Member Dru Mamo Kanuha, dated May 11, 2017, transmitting (Memo. No. 13): proposed amendments to re -appropriate the Public Works Department's Kuakini Highway Improvements (Palani Road to Kaiwi Street) project in the amount of $130,000. Motion to Amend: Mr. Kanuha moved to amend Bill 12, Draft 2 with the contents of Comm. 92.15. Seconded by Ms. David. CHR. POINDEXTER: Council Member Kanuha. Page 78 Hawaii County Council -13 May 18, 2017 MR. KANUHA: Thank you. This is just a re -appropriation, just putting it back on the list because it was going to lapse, so I ask for your support. CHR. POINDEXTER: Any other discussion? Vote on Motion to The motion to amend Bill 12, Draft 2 with the contents of Amend: Comm. 92.15 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter – 9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: Now we're back to the main motion, which is Bill 12 was amended to Draft 2 and further amended. So Mr. MR. KANUHA: I have one more. CHR. POINDEXTER: Oh, we have one more? MR. KANUHA: It's not on the agenda, so I don't know how CHR. POINDEXTER: It's not on the agenda. MR. KANUHA: May I amend, Madam Chair? CHR. POINDEXTER: Yes. Council Member Kanuha. Motion to Amend: Mr. Kanuha moved to amend Bill 12, Draft 2 with the contents of Comm. 92.16. Seconded by Ms. David. CHR. POINDEXTER: Council Member Kanuha. MR. KANUHA: Thank you. Yes, this may not be on the agenda, but it is in the proposed amendments so—and this is again, another re -appropriation for funds for Kuakini Highway. It was going to lapse so just putting it back on the list. Thank you. CHR. POINDEXTER: Any other discussion? Page 79 Hawaii County Council -13 Vote on Motion to Amend: (Approved) May 18, 2017 The motion to amend Bill 12, Draft 2 with the contents of Comm. 92.16 was carried by the following voice vote: Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter — 9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: So we are now on the main bill which is 12, which was amended to Draft 2 and then we further amended it. So we need to take a vote on Bill 12, Draft 3. Is it Draft 3? Because we have all that amendments and we amended it to Draft 2, then we put all these amendments in, and it's now Draft 3. Okay, so is there any discussion? Council Member Chung. MR. CHUNG: If I could bring up either Allan or Frank, I just have one question. It might have been asked for and answered, but it has to do with this one item, Waianuenue Avenue reconstruction, Kamehameha Avenue to Rainbow Drive. That looks like $2 million, yeah? Can you explain that? Real briefly, I was just kind of curious as to the amount, $2 million. Waianuenue Avenue reconstruction, Kamehameha Avenue to Rainbow Drive. It's a long stretch of road there. (Note: At this time, Director of Public Works Frank DeMarco and Deputy Director of Public Works Allan Simeon came forward to address the members of the Council.) MR. DEMARCO: Let me verify this later, but my impression is that this is an in- house repaving project. MR. CHUNG: Okay. Alright, that's what I thought, I just wanted to make sure. MR. DEMARCO: Yeah, just by the price and we had discussed that. MR. CHUNG: Thank you. MR. SIMEON: If I may add to that, we are also looking at amending or proposing to our STIP (Statewide Transportation Improvement Program) program to add this for thein October, for later years. MR. CHUNG: Thank you very much. MR. DEMARCO: If I could, I'd follow up on this. Frank DeMarco, Department of Public Works Director. So what this does for us is by having our in-house paving, it gives us time because it's a STIP Project, it takes years for these things Page 80 Hawaii County Council -13 May 18, 2017 to complete. So much of this work that we'll be doing in-house will be redone but the expectations by that time, it will need to be redone. I just wanted to clarify that. CHR. POINDEXTER: Okay. Any other discussion before we vote on Bill 12, draft three? Council Member Eoff MS. EOFF: While Public Works is up here, I just wanted to thank you for adding the new project Kealaka`a, extension to Hina Lani into this draft because that is a priority request from the CDP (Community Development Plan) Action Committee, and it helps the whole connectivity and the Kealakehe region. And so I was glad to see that added here. I was going to do that but you did it already. Mahalo for that one. The other one is, it's not really you guys, but the continuous funding that we're putting into the Kealakehe Waste Water Treatment Plant. That's the most expensive project on this island at this time I believe, but completely important to everybody. So I'm glad to see that one continuing to be a priority here. The one more that's added that I wanted to thank, I think this comes from the Office of Housing, but it's the Ulu Wini, the facility improvements and it's I think it'll be important as we move forward with this homeless initiative to—that we have a solid foundation at our transitional housing. So mahalo and I look forward to all of these good projects around the island. I think that it's pretty balanced, it's pretty fair, it's the way that we do address shortfalls in every district, but looking at the island as a whole. I think we've done a pretty good job all the way around here, including the Council Members' additions. Thank you. CHR. POINDEXTER: Thank you. Council Member David. MS. DAVID: I'll be really short. I just wanted to say thank you also. You made my job easier because Mr. Simeon helped me figure out on the pending projects, you folks took care of all of it, so I didn't have to do any of the work. So thank you very much. MR. SIMEON: I want to give the credit to our staff. MS. DAVID: Exactly. Thank you, staff But yes, you made my job easy. Mahalo. CHR. POINDEXTER: Council Member Ruggles. MS. RUGGLES: Thank you. Hello. I was wondering for the connectivity, the $20 million, I know two months ago, or three months ago, the last time we had met, we spoke about the priority list for the five connections. I know you were on Page 81 Hawaii County Council -13 May 18, 2017 vacation for a while, and I've been trying to get that list. Have you decided yet? Or have you finalized that report? MR. DEMARCO: Frank DeMarco again. No, we haven't, but we're getting close. The intent, as we've discussed, was to bring that forward to the public and to you so that we can all, and the Mayor of course, come to an agreement as far as the routes that we've selected. And to give all of you and the community an opportunity to weigh in as far as our road connectivity and emergency escape routes, whether those work the best for the community. MS. RUGGLES: Okay, so the priority list is—now we're awaiting public input? MR. DEMARCO: No, not quite yet. We're still working on the base map and that's where we're at right now. MS. RUGGLES: Okay. I guess we'll talk more about it. Thank you. MR. DEMARCO: Yes, definitely. CHR. POINDEXTER: Council Member O'Hara. MS. O'HARA: Just following up on those comments. We have two existing CIP appropriations on the books and Ms. Ruggles is just adding this $12.12 million. I think one is for $20 million for Puna roads and the other is $11 million for the connectivity. You had said you were working on a Puna road Master Plan, and I think that's what you just referenced maybe when you were saying the Plan, or is that just for connectivity points? MR. DEMARCO: Well we're referring to it as the road connectivity, emergency escape route. MS. O'HARA: Yeah. Oh, that's all you're referring to there? MR. DEMARCO: Right. MS. O'HARA: Okay. How is the other major road Master Plan effort going that you referred to earlier on, couple of months ago, that the Mayor had tasked you with doing a circulation plan for Puna? MR. DEMARCO: It's the same plan. MS. O'HARA: It's all the same plan? Okay, so you're still working on that? And you both are invited to the Road Connectivity meeting on June four, Tuesday, so please put that down. I know you'll get a formal invite, I think it's two to four in Kea`au. Page 82 Hawaii County Council -13 Vote on Bill 12 Draft 3 (Approved) May 18, 2017 MR. DEMARCO: Well thank you for the invitation. I know you offered before. MS. O'HARA: Thank you. CHR. POINDEXTER: Thank you. Any other discussion? Council Member Kanuha. MR. KANUHA: Also I just wanted to thank you guys and your staff for working with us. I know a lot of the projects that I've been trying to push were road projects in Kona, so just mahalo for being available. Just really appreciate it. Thank you guys. CHR. POINDEXTER: Thank you. Any other discussion? Seeing or hearing none, we're going to be voting on Bill 12, Draft 3. The motion to pass Bill 11, as amended to Draft 3, on first reading and adopt Finance Report No. 14 was carried by the following voice vote: Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter — 9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: Bill 12, Draft 3 passes first reading and then the second and final reading will be on June 5, and we can make amendments to that. Okay, Mr. Clerk, Bill 35. Bill 35: AMENDS CHAPTER 19, ARTICLE 11, SECTION 19-90(e), HAWAII COUNTY CODE 1983 (2016 EDITION, AS AMENDED) RELATING TO THE MINIMUM TAX Raises the minimum real property tax from $100 to $200, and raises the minimum tax for those who receive a home exemption or a totally disabled veterans exemption from $75 to $150, $50 to $100, and $25 to $50; all per graduated scale based assessments. Also eliminates the minimum tax for properties assessed at a market value of $500 or less. Reference: Comm. 288 Intr. by: Ms. David (B/R) Waived: FC Motion to Approve: Ms. David moved to pass Bill 35 on first reading. Seconded by Ms. Eoff. Page 83 Hawaii County Council -13 May 18, 2017 CHR. POINDEXTER: Council Member David. MS. DAVID: Thank you. Could I have Director and Deputy Director from Finance come up, please? (Note: At this time, Finance Director Collins Tomei and Deputy Director of Finance Deanna Sako came forward to address the members of the Council.) MS. DAVID: Thank you very much. I really just have one clarification for myself. The fact that we've already approved Bill 11, Draft 2, these proposals in Bill 35, are these increases are included in the Bill 11, Draft 2? MS. SAKO: Yes, they were. I mean in terms of when the administration came up with our proposed revenue amount, we did take both bills into account. MS. DAVID: Okay, thank you. And so now I have a question for our Clerk. Mr. Clerk, so when we move this forward, when we vote on it and if it moves forward, then it would be included in any amendments that we propose later on, when we come back? No? I mean the amounts that the real property taxes raise? Who can answer that? Deanna? MS. SAKO: I guess what I wasI guess one thing might be nice is that if this moves forward to second reading with the budget, then they'd all be at the same point in time. If the Mayor's rates, the proposed rates were adopted, then we would need both ordinances to be approved to come out to our amount. But let's say that Council didn't like those proposed rates and wanted to do something else, or maybe you didn't like raising the minimum tax, the rates would have to be adjusted to get up to that $300.1 million before penalties and interest. I mean assuming no other changes in the budget. So given that I don't know what all other proposed rate scenarios might be coming up, I think if you guys could move this forward to second reading at least, then next time, on June 5, when you're talking about it, and you take care of all of that, you'll know whether you need to pass this or not. MS. DAVID: Thank you very much. That makes sense. I just needed to be clear on that. So thank you. MS. SAKO: Thank you for asking. MS. DAVID: Yeah, and I yield. CHR. POINDEXTER: Okay. Council Member Chung. Page 84 Hawaii County Council -13 May 18, 2017 MR. CHUNG: I don't want to make trouble, okay? But this is really the first time I looked at this minimum tax ordinance. I mean I kind of looked at it in passing. You know, this thing says, "Notwithstanding any provision to the contrary," which means this trumps anything, "there shall be levied upon each individual parcel of real property taxable under this chapter, a minimum real property tax of 200 per year." Isn't it supposed to say no individual property of real property taxable under this chapter shall be levied less than a minimum tax? This is saying we got to tax them at—shall be levied the minimum tax. It's supposed to say the opposite. It means all of the properties on this island supposed to be taxed at the minimum tax of $100. I mean I just—we know what it means. I think Joe, you got to look at this thing and maybe rewrite it a little bit, because we don't want to get into some problems. I think this thing is MS. SAKO: I was just going to say this is just the existing language in the Code, it's being updated MR. CHUNG: Yeah, I know that and I know that you guys aren't proposing it. This thing is kind of screwy. MS. SAKO: But I agree that we should probably—yeah. MR. CHUNG: So maybe Joe, when it comes up next time, take a look at this thing. Just change it, "No property shall be taxed less than a minimum of 100 or 200 with the exceptions as provided." That's all I've got to say. Thanks. CHR. POINDEXTER: Okay. Council Member Ruggles. MS. RUGGLES: Thank you. So this bill is proposing a 100 percent increase on the lowest of property values, and this concerns me. I just wanted to share that. I believe that there are less regressive ways to bring in money, and I want to protect those who are the most vulnerable and at risk, especially disabled veterans. I don't think we should be giving a 100 percent increase on those who can afford it the least. So I'm not going to be in support of this bill. Thank you. CHR. POINDEXTER: Okay. Council Member Richards. MR. RICHARDS: Thank you, Chair. Deputy Director, question on this. What is the financial impact of this? I'm sure you've ran the metrics on this as far as what does this actually bring in and add to the revenue. MS. SAKO: It's roughly $3 million and that is based on the rates the Mayor proposed. It's depending—each set of rates would generate a different minimum tax scenario. So based on the rates that came in with the proposed budget, it's roughly $3 million. Page 85 Hawaii County Council -13 May 18, 2017 MR. RICHARDS: And if we left the rates at the old level, did you run those metrics as well? MS. SAKO: No. MR. RICHARDS: Okay, I yield. CHR. POINDEXTER: Okay. Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. Deanna, if I understand you correctly, this is kind of a bundling, right? We have the proposed budget, we raise real property tax rates, this was another piece to that, so what I hear you saying is let's all get them to one place and deal with it there. What I do want to just share with my other Council Members is I'm really not happy with the proposed budget that we passed earlier today. I'm willing to move this forward because as we begin to amend the budget, and possibly cut that budget, we're going to need this other piece and have to adjust it. I'm really not happy. We can do better and the idea of let's just move this along and let's get to the next step, this is where we're supposed to do the hard work. I know we're all tired and I know we got it at the last minute and just there's so much, but we got to start looking at areas that we can cut and figure it out together. Maybe this is a question for the Chair or our Clerk, is there an opportunity for us to schedule another meeting, now that we have pretty much an idea of how this is all going and where everybody stands. Earlier today, Mr. Kanuha said no. I get it. We're not putting out somethinga good product, that's how I feel. CHR. POINDEXTER: So you want the answer to that? MS. LEE LOY: Yeah. The question is, do we have another opportunity before June 5, because it's going to look bad that we ran through a bunch of amendments, we don't know how it's all going to fall out, and then we're going to actually have something frankensteined together, and that's not right. For our island, that is not right. People should have an opportunity to comment, people should understand where we're coming from, and people should know that we're looking out for them, we're looking out for their checkbooks. CHR. POINDEXTER: Right. And it's unfortunate that the second draft or the Mayor's amended budget comes in and we have a short window to get our amendments in. So that is unfortunate, it's just how the timing is. But Mr. Clerk, I don't know if we can call an emergency meeting. I don't know, a special session, and if there is enough time to get the public notice and amendments in? Or is it a rush to get amendments in now and should we look at June 5, and like they have done in the past, call it a working day even to the extent of going to one in the morning, like one Council did in prior years? So, Mr. Clerk? Page 86 Hawaii County Council -13 May 18, 2017 MR. MAEDA: Well next week, the 24, 25, 26 is WIR and where you have some Council Members that are not going to be present. So the week of the fifth, when we do have our special meeting, we also have the sixth and seventh available. We could recess our meetings, our special Council meeting that starts on the fifth, if we don't finish up, to the 6th or the 7th or the 6th and the 7th, if necessary. So that's also an option. The week of the 30th is also a possibility because we would be able to post agendas, we would have enough time to post agendas for that as well. CHR. POINDEXTER: Okay, because we have the fuel tax hearing on the 31 st of May, correct? MR. MAEDA: Yes. CHR. POINDEXTER: Okay. So can I hear from Council Members on how tight that is or what do you guys want to do? Council Member Richards. Wait, excuse me, Council Member Lee Loy, you still have the floor. MS. LEE LOY: Yeah, thank you for that answer. I'm going to urge my colleagues, I would want to have one more meeting because we're so handcuffed by the Sunshine law. I have a number of thoughts, I don't know how my other Council Members are going to react to that and I just don't want to behave like the Legislature. Because what's going to happen if we don't get this extra meeting in, is we're going to propose a whole bunch of amendments and it's going to come June fifth and the public's going to hear about it. If we don't like it and we recess to the next day—come on, this is the due diligence of ourselves, but also for the public and I've seen a number of emails on my phone of people offering suggestions and options. And I want to take some meaningful time to take a look at it and figure out a way through. That's where I stand. I am in complete support of what Deanna is saying and I'm okay with moving this stuff to the next step, but I would want another opportunity before June fifth to look at more amendments, look at how everybody's thinking. If there are tax cuts, what departments are going to have to look at other options for funding. How does this all work? That's where I stand. So I yield. CHR. POINDEXTER: Okay. Council Member Richards. MR. RICHARDS: Okay. Thank you, Chair. I'm going to echo Council Member Lee Loy. Point is well taken when Councilman Kanuha said no. Again, understanding the process as far as in order to discuss it, we have to move it forward, but we don't have to be happy about it while we're moving it forward. And again, being shackled by the Sunshine law, we should be able to sit down, and talk story, and sort through this so we can do what we need to do, which is get a good budget that's balanced and is respectful of the needs. Page 87 Hawaii County Council -13 May 18, 2017 The problem is, again, we are hand strung by that so getting together to talk story again, rather than having a whole bunch of amendments, and I see a tsunami of those coming at us that are probably not going to be workable with each other. So we're going to have to amend the amendment, I guess. I don't even know the metrics to how to get that done, but if we could sit down and talk story at a special meeting so we can actually work out our differences and get the general consensus in the right direction, I think that's probably our best bet and probably the best use of time. So I think we got to get together— MR. MAEDA: Excuse me, Chair, it might be wise to just take a real quick recess to look at the calendar more closely and then to kind of figure out what exactly we want to try to do. CHR. POINDEXTER: Okay, so right now, I just want to respond. I know voting no, if we were all to vote no, if you wanted to vote no, that was your prerogative, but again, remember, the budget would be what the Mayor did. So passing it will give us the opportunity to have amendments. Now, what's on the floor is we need to discuss if we could have an extra meeting before the June fifth meeting to bring amendments. Recess: At 3:50 p.m., Chair called for a recess. Reconvene: The meeting reconvened at 4:04 p.m. CHR. POINDEXTER: After much discussion with the Clerk and trying to figure out if there could be a special meeting, and it was real difficult because we also have people already committed to the Western Interstate Region Conference. So what would be best is to convene at the Special Council meeting on the fifth and if everyone would come in with the amendments, then we could introduce all the amendments and talk about it all at one time, instead of having to do it one by one. Then we can have that all on the table. And then, if we're running into the late evening and our minds don't work quite well at late hours, mine doesn't any way, then we could recess to the following day and continue working on it. So can I get any feedback from Council Members? Council MemberDavid. MS. DAVID: Yeah, I think that's a great idea given the tight agenda deadlines that we have to work around as was explained to us. I like that idea. I think we can have a good working group. Thank you. CHR. POINDEXTER: Thank you. Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. We got to move it forward, we don't have to like it, but we got to move it forward. We have some constraints. I'm just going to encourage my other colleagues, if you folks are making amendments, just get them up quick so we can all take a look at it and amend or adjust. And I'm just Hawaii County Council -13 May 18, 2017 going to speak for me, adjust my amendments to reflect some of what your folks' thoughts are. Again, there's a lot of public comments out there and a lot of great options that people are writing about, and I just want us to all really take a good hard look at that and not just capitulate to real property tax raises. Figure out creative ways toI meant the bargaining units, it is what it is, but there's other things I think we can try and figure out. So I yield. Thank you. CHR. POINDEXTER: Thank you. Any other discussion? Council Member Richards. MR. RICHARDS: I think I know the answer to this, but we can't meet Monday the 29th because it's Memorial Day and we're not allowed to meet on holidays, is that correct? CHR. POINDEXTER: I don't know if that is the only reason why. I think of the time of posting, the time to post and get amendments in and all of that timing didn't work. The holiday thing didn't come into play when we were looking at timing, but I don't know. The question too is can we meet on holidays? I don't think that came into play, it was basically the timing of it all. MR. MAEDA: I think if you wanted tom we could meet on a holiday. But still, we wouldn't CHR. POINDEXTER: The timing doesn't MR. MAEDA: Yeah, the timeline is too tight to have everything prepared to post for the fifth. And if we don't complete everything on that day, then we're going to kind of CHR. POINDEXTER: Move towards the eighth or something later. We'd miss the fifth, we would have to go for the second time to come back and would miss the fifth. Okay. Council Member Ruggles. And I'm kind of giving leeway on that because right now, we're on Bill 35, yeah? Okay. Council Member Ruggles. MS. RUGGLES: I just want to say that I appreciate Council Member Lee Loy bringing up this issue, and I do think it would be good idea to meet prior to the fifth if possible, but understand the timeline constraints around that. But it's definitely a good discussion to have and to explore our options with that. CHR. POINDEXTER: Right. Okay. Council Member Chung. MR. CHUNG: This should actually be instructive for next time when we handle the budget. The Mayor is supposed to submit his amended budget when? May fifth? In anticipation of that, maybe we should schedule, within the timeframes permitted by law in terms of agendizing, something right after, maybe Page 89 Hawaii County Council -13 May 18, 2017 May 10th or 1 lth, or something like that. So it would give us at least a little bit more time, one week more. I can't say anything about right now, but at least we can kind of think about it for next time. CHR. POINDEXTER: Okay. Any other discussion on that? Council Member Eoff. MS. EOFF: Just for right now, the situation we're in, I hope that on the June fifth special meeting that we can offer as much leeway to Council Members as possible so that we can kind of compare amendments and even come up with something that isn't there exactly, but something that we can come up with together on some. And I'm sure staff will help us to prepare those amendments on the spot if need be, but I think that's what we're going to have to do, is consider it a real working meeting and look at everybody's thoughts. Just be able to discuss them all together at that time. CHR. POINDEXTER: Okay. Any other discussion on that before we get back to Bill 35? Okay and I just want to say again, everybody keeps talking about the Sunshine law so that's the thing that jams us up. If that wasn't there, this discussion would not have to happen because we could reconvene at any time. So we got to work at the State level to get that change, and that would benefit the people. That's another benefit for the public. Okay, back on Bill 35. Is there any more discussion on Bill 35? MS. RUGGLES: I have a question for Real Property Tax. CHR. POINDEXTER: Okay, can we bring up Stan from Real Property Tax? Council Member Ruggles. (Note: At this time, Real Property Tax Administrator Stan Sitko came forward to address the members of the Council.) MR. SITKO: Stan Sitko, Real Property Tax Administrator. MS. RUGGLES: Aloha, Stan, thank you for being here. I have a question. I know this was asked to Deanna, I realized that maybe you might be able to answer this, what is the difference between the revenues that we're receiving and the minimum tax and what we would be receiving if the minimum tax was doubled? MR. SITKO: Well, I have to work each one dependent on the rates. Each class would have a different net assessed amount that would trigger the minimum tax. MS. RUGGLES: Do you have any estimate in your mind? Page 90 Hawaii County Council -13 May 18, 2017 MR. SITKO: At this point, I did give that to Deanna, and that is that $3 million increase over what we're getting now. MS. RUGGLES: Okay. So it would be the $3 million increase without that? MR. SITKO: Without that, you would have to raise the rates to make up for that amount. MS. RUGGLES: Okay. I see. I know that when we spoke, we talked about lava land and how some of the assessment cost more to send out than it's worth in receiving. MR. SITKO: That is correct. And that is the idea behind these zero minimum tax for those properties under $500. MS. RUGGLES: I see. And that was my question. Is $500 that's the break- even point? MR. SITKO: That's what we assign to what we call trash parcels. Lava land or shall we say a remnantI can take a 76 square foot remnant that was left over a road taking. I don't know what particular use you want, the County doesn't even want it. So yes, but I still have to legally tax it. MS. RUGGLES: I see. Okay, that's all the questions I have. Thank you, Stan. I'd just like to say that when we—for anyone who's played with the property tax calculators, for that three million, I think that we can make up that three million fairly easily, without having to put the burden on those who can least afford it, which are those who are already qualifying for the lowest possible property tax. And with that, I'm just going to say that's why I'm opposing this bill. Thank you. CHR. POINDEXTER: Okay, any other discussion? Question, Council Member Eoff? MS. EOFF: How long has it been since the minimum has ever changed? MS. SAKO: Hi, it was raised in 2003 to $100 and then in 2004, we added this sliding scale, so that if you live in a low assessed value home, you would pay less. MS. EOFF: That's where it went for these exceptions? MS. SAKO: The exceptions, yes. MS. EOFF: I hear what Jen's saying, but on the other hand, there are many people who say that it hasn't been fair, that there are a lot of people who are paying only $100. Because they utilize services just as much as people who are Page 91 Hawaii County Council -13 May 18, 2017 paying a lot more than that, even though the value of their property may be lower, they still utilize all of the services the County has to provide from this revenue. So I see both sides of this argument. Really, it's a tough one but I understand why you've proposed it. I think I had one more question about it, but I forgot now what I was going to ask. So I guess, yeah mainly it was just one and how often this minimum has ever changed. MS. SAKO: It's not something that changes very often. MS. EOFF: Okay. I think—you told me that you guys analyzed it and you felt that it would not really hurt people to pay another $50 a year or $25 a year, who are these most—the ones Jen's referring to as maybe the most vulnerable who live on these very low assessed properties. I think you did, I'm not sure how you analyzed it, but I asked you that question, I remember. CHR. POINDEXTER: Any other questions before I go back to Council Member Ruggles? Okay, Council Member Ruggles. MS. RUGGLES: Deanna, I just have a question. How did you analyze that this wouldn't affect people on fixed incomes? MS. SAKO: I think it was more a general discussion, I don't know that maybe analyze is exactly the right word, but we tried to look at different people and look at how much it would impact them and obviously, every dollar impacts somebody, but I think as everything we did with the real property tax system this year, we tried to look at it from a standpoint of fairness. And that people are helping to pay their fair share. People may disagree with that, but that's where we approached it from. MS. RUGGLES: Okay. Thanks, it's just a 100 percent increase on the poorest of people. I'm just going to point that out. Thank you. CHR. POINDEXTER: Any other discussion on Bill 35? Okay, are we ready to vote? Vote on Bill 35: The motion to pass Bill 35 on first reading was carried by (Approved) the following voice vote: Ayes: Council Members Chung, David, Eoff, O'Hara, Richards, and Chair Poindexter – 6. Noes: Council Member Ruggles –1. Absent: Council Members Kanuha and Lee Loy – 2. Excused: None. CHR. POINDEXTER: Okay. Bill 36, Mr. Clerk. Page 92 Hawaii County Council -13 May 18, 2017 Bill 36: AMENDS CHAPTER 19, ARTICLE 10, SECTION 19-71(d), HAWAII COUNTY CODE 1983 (2016 EDITION, AS AMENDED) RELATING TO HOMES Adds two new exemption categories for real property owned and occupied as a principal home: (1) for homeowners between 75 and 80 years old; and (2) for homeowners 80 or more years old. Reference: Comm. 289 Intr. by: Ms. David (B/R) Waived: FC Motion to Approve: Ms. David moved to pass Bill 36 on first reading. Seconded by Ms. O'Hara. CHR. POINDEXTER: Council MemberDavid. MS. DAVID: Yes, I think Mr. Sitko, this could be you, too, categories for homeowners. If you could just kind of give us a brief overview of these categories. MS. SAKO: So right now, every homeowner gets a $40,000 exemption plus 20,000 of their value, up to another MS. DAVID: Stan, could you identify yourself, I'm sorry. MR. SITKO: Stan Sitko, Real Property Tax Administrator. Right now, everybody gets a base exemption based on their age, plus an additional 20 percent of their value, up to a maximum of 80,000. So if you had a $40,000 assessed property, and you were over 70, you would get $180,000 worth of exemptions. MS. SAKO: So right now, everybody has that base 40, but when you hit 60, it goes up to $80,000 and then when you hit 70, it goes up to $100,000. So we went in to add additional release for those over 75 and 80 because that is when your retirement income starts to dwindle for many. And so we kind of split the difference of the 20,000 so that instead of waiting until you're 80 to get the additional 20,000, we implemented half of that at age 75 so now they would go up to 110,000 and then at age 80, 120,000. MS. DAVID: Thank you. I'll yield at this time. Thanks. CHR. POINDEXTER: Council Member Chung. MR. CHUNG: Deanna or Stan, what was the historical underpinnings for this base $40,000 exemption? Page 93 Hawaii County Council -13 May 18, 2017 MS. SAKO: We think we inherited that when the program came over from the State in roughly 1980. MR. CHUNG: All of the counties have this? MS. SAKO: Have homeowner exemptions? MR. CHUNG: Yes, this $40,000. MR. SITKO: We just recently took a poll amongst the other islands and basically, some have—all of them started out with it, okay? And all of them pretty much maintained it up until the year 2000 or so. Since then it's varied. Maui has a flat exemption amount that it gives to everybody. It was up to 300,000 this year, they dropped it down to 200,000. Kauai and City and County also have an age schedule, but I would actually have to—they deviated from that 40, 80, 100 a while ago, so I would have to actually refresh my memory. MR. CHUNG: I'm just talking about this $40,000. MR. SITKO: The 40,000 base is based pretty much I think, everybody still has that, still gives it. MR. CHUNG: Okay. So we're not doing anything different from? MR. SITKO: Nothing unusual, no. MR. CHUNG: Okay. Alright. Why do you suppose that is though? Are we trying to promote homeownership or what's the public policy that's being advanced by this? MS. SAKO: I think for our island, yes, we care about our homeowners and the people who live here are residents, basically. So it's really more of the residents because you have to have a residency requirement so that's what we're trying to promote and take care of our residents. MR. CHUNG: Okay. Alright. Thank you. Since I have the floor, I'm going to make some comments regarding this. I'm going to vote for it again, just as I've done with all the others today, except for the first one when I had to leave. But when I think about what Mayor Kim said, our value -based taxing policy, let's think about what the historical underpinnings were for these, for the old guys. And if I had to take a guess, because I really don't know what it was, but it had to do with the plantation people, right? You got small pensions, small little homes and they're not real rich people, but they contributed to the tax base of our County for many years. So it was to address them, but it was also to help our kupuna, to Page 94 Hawaii County Council -13 May 18, 2017 respect them, and that's what we do, right? Where ever we lived, that's what we do. But I think this thing is flawed right now. We have guys coming in from the mainland who have never contributed to our tax base before and they have a lot of money. They're coming here buying semi -expensive homes, if not expensive homes, and just based on their age, are now availing themselves of these exemptions. I think that's wrong. I think what we should be doing is basing this thing on the years that you have lived in a particular residence. So if you're of a certain age, 70 years old and you've lived in a residence for 20 years for example, now, you're eligible for this exemption. If we can fix this, we're going to generate a lot of money. And I think the people who are moving, I'm not trying to pick on them, they can pay, right? So I think we can generate some more cash, and it's fair and it keeps with Mayor Kim's value -based taxing policy. What are we trying to achieve? Only because the guy reaches a certain age, now they get an exemption? That's not right. So I just wanted to throw that out there for peoples' consideration. Maybe some district constituents might take exception to it, but I believe we should be taking care of the people who have lived here for a long time and have seen an astronomical increase in their tax assessments because of the influx of other people here who are driving the values up. We got to protect these guys, we really do. And they've contributed so much to our way of life and our tax base over the many years. I think they're entitled to a break. So, that's all I have to say. Thank you. CHR. POINDEXTER: Thank you. I wanted to yell Hallelujah or something. Council Member O'Hara. MS. O'HARA: Well, since you had your light on first, you got to take my argument, but that's my argument, too. Whenever there is public policy, you got to consider the unintended consequences. I think you're absolutely right, Aaron, that the intention was originally for homeowners who had paid into the system and lived here all this time. Now we're seeing a huge influx in population, my district, I have told you has quadrupled in the last thirty some years and is expected to increase by 50 percent in the next 25 years. And it's not because we're having many babies on island, it really isn't, it's not because young people are coming here because there are great jobs, it's because we have this silver tsunami and our island looks good to mainland retirees. The property values are much less expensive and we already have tax rates that are much less expensive than on the mainland. The average mainland property is paying around $1,400 a year. Our average here in the State is under a thousand. So it's not like we're the highest tax rate and in terms of the valuation of property per the tax rate, we're the lowest in the country. In fact, if you look at it, looks like we aren't even really achieving a decent tax rate for property in Hawaii. So Page 95 Hawaii County Council -13 May 18, 2017 we're attracting this in migration of people and not only are they getting a good deal if we extend these exemptions for 75 and 80, but that has an impact on affordable housing. They're going to drive up the speculation of housing because to them, properties are affordable. They're not going to quibble over prices and they are going to take the affordable houses that are available and buy them up. And it makes our housing issue even more of a problem. So in terms of public policy, I think this has a really negative consequence that we need to consider. CHR. POINDEXTER: Thank you. Council Member Richards. MR. RICHARDS: This is something that we've actually kind of kicked around a little bit and it's been my concern that this is part of the whole constituency concern. Again, what I refer to the bookends, the young families, and then the retirees, the kupunas, pricing them out of their homes by taxing them out of their homes. We had one constituent right now who told me, "I've lived here at least 50 years in Waimea and I don't think my kids can afford to live here." And that's them giving them the house and it's just not right. So there are some things that I've thought of, but I have to support both Councilman Chung and Council woman O'Hara with the concern about this because I think though the short term I get it, I think it has long-term ramifications that we're already seeing the problem with as it is. Thanks. CHR. POINDEXTER: Thank you. Council Member Eoff MS. EOFF: Mr. Sitko, do you have an estimate of what the losses to the tax revenue by adding these, at this point in time? MS. SAKO: It's roughly $450,000. MS. EOFF: 450,000. It's not a really large number, but it's only to consider possibly this could wait and by the following year, we can come up with a different policy where we don't offer this to people who haven't lived here a certain length of time, if we do really want to help kama`aina and people who've invested here for long periods of time. We might be able to afford this to them and then maybe make it so that the newcomers would wait. MS. SAKO: Not to cut you off, sorry, but in the past, a lot of the complaints we got were actually from our long-time kama`aina residents that were in their later years that were having a harder time because they were on fixed income. And that was the issue we were trying to address. MS. EOFF: So I can see that's why you wanted to afford this break. However, I guess we maybe didn't take into consideration what the Council Members are saying now but maybe this is encouraging something that is actually, on the other Page 96 Hawaii County Council -13 May 18, 2017 hand, raising property values for people, or taxing them out of their homes. But it's only 450,000 you said? But I guess it's something for us to think about if this is the time to do this, maybe we can wait until we can do it more equitably. But I reallyI don't know if that amount is enough to not afford it to those who do need it right now, too. So I'll have to think about that one. Thank you. MS. DAVID: Mr. Richards. CHR. POINDEXTER: Council Member Richards, sorry. MR. RICHARDS: Just a follow up on that one. I don't think that we as a Council object to taking care of the kupuna, what we don't like is this methodology because we have some ideas that will respect the people who have been here for a long time and take care of their tax burden. And though I agree with Council woman Eoff that 450,000 in the budget right now is not a huge amount, to the people who are actually going to be hit by that 450,000, it's probably a lot to them. So we have to be very sensitive to that. I yield. CHR. POINDEXTER: Council Member Kanuha. MR. KANUHA: Thank you. Deanna, this is going in conjunction with budget increases and the tax increases, correct? MS. SAKO: Right. This was part of our entire calculation so I probably have the same request if we can just get it to the second reading and MR. KANUHA: That's kind of why I'mwith what happened previously and what's going through, I mean I'm going to support this because that's, as you explained with the tax increase, it's going to impact people, and kupuna groups are going to be impacted as well. And this kind of offsets a little bit of what the impact of that increase would be, correct? MS. SAKO: Correct. MR. KANUHA: Thank you. CHR. POINDEXTER: Okay, Council Member O'Hara. MS. O'HARA: Okay. This of course applies to the homeowner class and just so that we fully understand, Stan was explaining to us that the way we calculate the tax is you get the homeowner exemption, if you have an additional age exemption, you get that, and then you get 20 percent of the total value up to $80,000 exempted before you start considering taxes. But another thing that's in place in our homeowner's class is the three percent cap on value. Meaning from the year you purchase it, the assessed value cannot increase by more than three percent per year. Got that right? Yeah? And I was asking Stan outside how that Page 97 Hawaii County Council -13 May 18, 2017 got handled during the Great Recession when properties actually lost value and that cap follows it down. Just so you know, that was actually a benefit perhaps to us in the long run, if you're a long-term homeowner. I really cannot support this bill the way it's written. I really appreciate what Mr. Chung said about trying to recognize those who have resided for x number of years where this could be indeed applicable, but we also have to remember that seniors make a high demand on County services. And so we—why we want to take care of them, we want to make sure that we're taking care of those who have given back to the County and the community for a long period of time, and not make it an attraction that can reduce our affordable housing and drive up values all around. So we got to be careful on these public policies, so I think we want to step back on this one and consider another right on this one. Thank you. CHR. POINDEXTER: Thank you. Council Member Ruggles. MS. RUGGLES: Thank you. I just want to say that I agree with Council Member Chung, Council Member O'Hara, and Council Member Kanuha in that we do need to protect the kupuna that live here. There are a lot of people that are moving here buying medium to high -valued houses. It's increasing the property rates and they really haven't contributed much in this County, and why should they be exempt just as someone who's been there their whole life? And so if somebody was willing to bring that amendment forth, I just want to say that I would support that. Thank you. CHR. POINDEXTER: Thank you. Any other discussion on Bill 36? Because remember on June fifth, we can come with amendments to this as well. Are you guys ready to vote or should I wait? Point of Order: MS. O'HARA: Chair, point of order. Since this bill was not, I mean it is brought to us upon request, would it be appropriate to ask the writers of the bill to consider amendments, or is that going to be on us? CHR. POINDEXTER: Anybody can amend. MS. O'HARA: Anybody can, so I would like to ask Finance to convey that to the administration and see if they're interested. MS. SAKO: Yes, we can do that but in addition, you know Stan and I were sitting here because the same thing about unintended consequences, and so we need a little bit of time to think it through also because then even though you've been a long-time resident, and maybe you want to downsize and move to a smaller home in your later years, then how does all that work? We will take it back to the administration and we'll talk about it, but I think we just need some time to talk about the flip side of it, too. Page 98 Hawaii County Council -13 May 18, 2017 CHR. POINDEXTER: Okay. Knowing that amendments could be talked about or drafted MS. EOFF: Madam Chair? CHR. POINDEXTER: Council Member Eoff MS. EOFF: Then is this like the other bill, something we should move forward along with the budget and then continue to work on it next time? MS. SAKO: Yeah, I would appreciate that, just then we have everything at the same place and then whatever amendments are made probably could be taken cared of at the next reading. CHR. POINDEXTER: Any other discussion? Vote on Bill 36: The motion to pass Bill 36 on first reading was carried (Approved) by the following roll call vote: Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter — 9. Noes: None. Absent: None. Excused: None. (Note: Ms. O'Hara and Mr. Richards voted kanalua then "aye.") CHR. POINDEXTER: Okay. So I think we're at the end of the agenda, we've got everything, correct? MR. MAEDA: Yes. Page 99 Hawaii County Council-13 May 18, 2017 ADJOURN There being no further business, at 4:37 p.m., Ms. David moved to adjourn the MENT: meeting. Seconded by Ms. Lee Loy and carried by the following voice vote: Ayes: Council Members Chung, David, Eoff, Kanuha, O'Hara, Lee Loy, Richards, Ruggles, and Chair Poindexter—9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: Okay, this meeting is adjourned. AUG 0 2 2017 Council Approval: CO 'CLERK SM/jm Page 100