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HomeMy WebLinkAboutMIN FC 2017/09/19 2016-2018COMMITTEE ON FINANCE 19t' Session West Hawaii Civic Center 74-5044 Ane Keohokdlole Highway, Building A Kailua-Kona, Hawaii September 19, 2017 CALL TO The regular meeting of the Committee on Finance was called to order at ORDER: 2:25 p.m. in the Council Chambers, Kailua-Kona, by Ms. Maile Medeiros David, Chair. ROLL CALL: Present: Ms. Maile Medeiros David, Chair Ms. Karen Eoff, Vice Chair Mr. Aaron S. Y. Chung, Member Mr. Dru Mamo Kanuha, Member (came in later) Ms. Susan L. K. Lee Loy, Member Ms. Eileen O'Hara, Member Ms. Valerie T. Poindexter, Member Mr. Herbert M. "Tim" Richards, III, Member Ms. Jennifer Ruggles, Member (came in later) CHR. DAVID: Before we start with Statements from the Public, I would really like to thank Mr. Campbell for being here and being so patient. He's one of our nominee. So I'm going to take public testimony first, Mr. Campbell. I'm going to the outer sites. STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: The following individuals registered to speak in support of Res. 287-17 (Comm. 43 8), and came forward when called by the Chair: Curtis Tyler. Cherie Griffore. COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. FC -19 September 19, 2017 Change Order As directed by the Chair and with no objection from the Council Members, of Business: the following items were taken out of order: Comm. 437: NOMINATION OF GEORGE CAMPBELL TO THE SALARY COMMISSION From Mayor Harry Kim, dated August 29, 2017, submitting for the Council's review and confirmation the above nomination. Requires Council Confirmation by: October 15, 2017 (Section 13-4(1), Hawaii County Charter) Vote on Comm. 437: Mr. Richards moved to recommend confirmation of (Approved) the appointment of Mr. George Campbell to the Salary Commission. Seconded by Ms. Eoff and carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 9. Noes: None. Absent: None. Excused: None. Committee Members spoke in favor of the appointment. CHR. DAVID: I'm going to take a brief recess. So, Mr. Campbell, can you come up and we'll shake your hand, congratulate you. Mahalo. Recess. Recess: At 2:43 p.m., the Chair called for a recess. Reconvene: The meeting reconvened at 2:47 p.m. CHR. DAVID: Thank you, everyone. We are coming out of recess. What I'd like to do first, if everyone doesn't have an objection, I'd like to first take item—I understand the officer has been waiting here almost all day, and there's one item on the agenda, I'd like to take that one first and then we'll take the two Water Department reso and bill, if that's okay? Alright, Mr. Clerk, can you please—I'm sorry, I'm looking for the -289? MR. HENRICKS: Is that correct? CHR. DAVID: Okay, that's the one. Thank you. Page 2 FC -19 September 19, 2017 Res. 289-17: AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR LEASE FOR THE HAWAII COUNTY POLICE DEPARTMENT Authorizes the Mayor to enter into a five-year lease for new Taser conducted electrical weapons and associated equipment to be used by the Police Department at a total cost of $385,344.49. The equipment would replace obsolete models and become the property of the department upon completion of the terms of the lease. Reference: Comm. 440 Intr. by: Ms. David (B/R) Motion to Approve: Ms. O'Hara moved to recommend adoption of Res. 289-17. Seconded by Mr. Kanuha. (Note: At this time, Police Lieutenant Thomas Shopay came forward to address the members of the Committee.) CHR. DAVID: We have Lieutenant Shopay here, yes, for questions and just a brief explanation. Lieutenant, on the resolution. MR. SHOPAY: Aloha, I'm Lieutenant Shopay. I'm with the Hawaii Police Department. Thank you, Council and Chair, for having me here. I'll be happy to entertain any questions on the resolution. CHR. DAVID: Thank you. It's pretty much self-explanatory. Any questions, Council Members? Hearing or seeing none—Mr. Richards, would you have any questions for— MS. O'HARA: I do have a question. CHR. DAVID: Oh, okay. Ms. O'Hara, go ahead. MS. O'HARA: Are all of the tasers and weapons and equipment for the entire Police Department or is this just an add-on? MR. SHOPAY: This is an add-on. So what we've been doing the previous years, is taking small amounts of money, purchasing small parcels of the new devices as the old ones are getting phased out. So this purchase will now outfit the whole department, all of the new devices. MS. O'HARA: Thank you for that. MR. SHOPAY: You're welcome. Page 3 FC -19 September 19, 2017 CHR. DAVID: Thank you, Ms. O'Hara. Anyone else? Hearing or seeing none—Lieutenant Shopay, thank you very much for being here and for your patience. MR. SHOPAY: Thank you for your time. CHR. DAVID: All those in favor of approving Resolution 289-17 please say "aye." Vote on Res. 289-17: The motion to recommend adoption of Res. 289-17 was (Approved) carried by the following voice vote: Ayes: Committee Members Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, and Chair David - 7. Noes: None. Absent: Committee Members Chung and Ruggles - 2. Excused: None. CHR. DAVID: Mr. Clerk, can you please go now to Order of Resolutions, 287-17? Res. 287-17: REQUESTS THE OFFICE OF THE LEGISLATIVE AUDITOR TO CONDUCT A PERFORMANCE AUDIT OF THE DEPARTMENT OF WATER SUPPLY TO ENSURE THE DEPARTMENT HAS ADEQUATE CONTINGENCY PLANS TO GUARANTEE SUFFICIENT WATER SUPPLY TO CUSTOMERS AT ALL TIMES, INCLUDING DURING A DISRUPTION OF DEEP WELL OPERATIONS Five of the Hawaii County Department of Water Supply's deep wells, Waiaha, Palani, Keopu, Hualalai, and Honokohau are out of service, restricting water access to residents, businesses, and private and public services in North and Central Kona. Reference: Comm. 438 Intr. by: Ms. Eoff and Mr. Kanuha Motion to Approve: Ms. Eoff moved to recommend adoption of Res. 287-17. Seconded by Mr. Kanuha. (Note: At this time, the Department of Water Supply's Manager -Chief Engineer Keith Okamoto and Legislative Auditor Bonnie S. Nims came forward to address the members of the Committee.) CHR. DAVID: Ms. Eoff or Mr. Kanuha, whichever. Ms. Eoff, go ahead. MS. EOFF: Okay, so given the current situation and the kind of extended, almost seven, eight month now water restrictions, Councilman Kanuha and I felt it was Page 4 FC -19 September 19, 2017 important that we do what we could to get a better idea of what the Water Department could do in the future, to either prevent disruptions or guarantee that we supply safe water and the expected water to our customers and what kind of backup plans we may have during disruptions. We spoke with the Legislative Auditor about this earlier, and we weren't really sure what exactly to ask for. We were told that if we were asking for too much technical investigating, that she would need to hire an outside auditor, and could be very expensive and take a couple of years. So we thought maybe we would ask her what we could do or what she could do to look at the department's current policy or practice and give us some recommendations. She did, and we chose this particular performance audit request. I'm wondering if Ms. Nims is there, if she'd be willing to come to the table? (Note: At this time, Legislative Auditor Bonnie Nims came forward to address the members of the Committee.) MS. NIMS: Good morning. Bonnie Nims, Legislative Auditor. MS. O'HARA: Hi, Bonnie. Good afternoon, though. MS. NIMS: Oh, sorry. It feels like morning still. MS. EOFF: Thank you for being here and thank you for agreeing to go ahead with this. Do you have—and we didn't put this in the body of the reso or even in the title, and Mr. Tyler raised a good point. Do we have any idea of how long this will take? Or can we put a timeframe to it? MS. NIMS: At this point, it would be pretty difficult. I'm not even sure what criteria that will be available to us. We need to do a little preliminary survey work before we would have a reasonable guess on how long it would take. If I just had a wag, I'd say five months at the very least. MS. EOFF: Okay. We will appreciate input as soon as possible, of course. Do you have anything else to add? Because I'm going to yield at this time. I know we wanted to hear a little bit more from a couple of testifiers and Mr. Kanuha may have some questions of you. But did you want to add any other comments to why we were going to take this approach? MS. NIMS: No, I thought you did a great job of the explanation. There's only so much that we can do in-house without searching for a subject matter or expert to get into the technical areas. I think, looking at contingency plans is a way that we can do something in-house and get something out relatively quickly without having to go through RFP (Request for Proposal) process to get us SME (Special Matter Expert). Page 5 FC -19 September 19, 2017 MS. EOFF: Okay, thank you. Okay, I'll yield at this time. CHR. DAVID: Thank you, Ms. Eoff. Mr. Kanuha. MR. KANUHA: Thank you, and I'm going to piggyback on that. This is the reason why we did it this way, so that we can do it in-house, and it wouldn't take an RFP to go outside the scope of what our current auditor could handle or the team could handle. And how much money it would cost, it would probably be substantial. But I know the Water department or the board—the board is actually doing the short-term proactive approach to dealing with a lot of the issues that Kona is facing right now. So they're going through the motions of doing that, which I appreciate them, and they can have that immediate approach to that. But this is more of a long-term look and how to create a little bit more contingency plans outside of the Water department. A different entity taking a look at it. We thought this would be a good resolution for—a proactive approach that we could do as a Council. So, being that, I'd like to clarify a few things Uncle Curtis was talking about earlier in his testimony. (Note: At this time, Curtis Tyler came forward to address the members of the Committee.) MR. KANUHA: Uncle Curtis, I know you—I got what you were saying in the first two minutes. I know you were rushed for the last minute. I just wanted to get you to continue on with that because I didn't really understand a lot of that. Maybe if you could clarify, of what you were compounding on the end of your testimony because I really didn't fully understand. Turn on your mike, and if you could say your name again for the record. MR. TYLER: Aloha, my name is Curtis Tyler. Thank you, Committee Member Kanuha and Chair David, for allowing me the opportunity to respond to your questions and to give you further information on what I was saying. I was at the point, where I was saying, that I wanted to provide you with solution oriented, I mean, yeah solution oriented testimony because that's what the people of Kona need and that's why I gave that background. It seems to me that since every pump and every motor is different for every well, and we know that's true, that's because the pumps are underground. They're submersible, the motors and the pumps, so they're under the water. It means that the water is being pushed up thousand, whatever number, of feet, and it really should be pulled up. If it's pulled up, the pumps will be on the surface and the motors will be on the surface, as they were at the Kahalu`u Well. They work just wonderfully, well, for decades and decades, but then I guess somebody claimed that, according to what I saw in the newspaper, that they were noisy. Page 6 FC -19 September 19, 2017 I ask anyone here, would the noise of pumps bother you today, if you had water and you could use it, or would you just like to continue to do the same thing over and over again, and expect a different result? It isn't going to happen. It isn't. Everybody in this room knows that doing the same thing over and over again, coming up with the same problems, now it's even hit the private wells. Same problem, exactly the same. That's why they remobed or demobilized and remobed up there so they could (inaudible) the pump and the motor out. They have them to replace, but they have to pull them up. I think you have to look at the common sense and practical solution. I'm not an engineer. I don't claim to be an engineer. I have all the respect for engineers and professionals in this room. But sometimes there's either too much finger pointing. Whether it's on the social media, as the Water manager mentioned, or it's before you here, or it's among community members. Whether it be in the Action Committee or for the Kona Community Development, whatever it is. It's important, it seems to me, to do what is doable. My comment about commissioner—Board Member Domingo and others have stated in the paper, they thought it was a good idea to drill an adjunct, a second well so you'd have a backup system. You don't need a backup system. Well, first of all, drilling a second well, we all know how much it cost to drill a well per foot, and it's a lot more expensive than these pumps, these motors, okay? You don't need a second well if you have your pumps and motors on the surface because they will all be, possibly with some exception, all be the same. As I say, I'm not an engineer or an electrician, but I do know that much and it works just fine. It worked without a flaw. I mean, we heard the noise. It's on the old, what they call Walua Road. That was the old Kailua, Kealakekua Road. MR. KANUHA: Uncle Curtis, real quickly, I just want to make sure that we can— MR. TYLER: Yeah? MR. KANUHA: I know you're talking about Resolution 287. I know you have a lot of ideas on how the Water Department can— MR. TYLER: I'm going to finish on the 287. May I do that? MR. KANUHA: Yeah, and about the audit. MR. TYLER: Yes, about the audit. I think a performance audit makes sense because the performance, I think, probably isn't up to what the expectations of some of the stakeholders have. But I do believe that you need to make sure that there's a time certain. I heard five months from your auditor—from the auditor. Five months, six months that's fine. But there has to be something to be done in the meantime, we can't continue to go down the same road. Page 7 FC -19 September 19, 2017 The other point is if you're going to have an audit, you probably ought to have an audit on a regular basis, unless of course they take me up on my solution, in which case they won't have any more of these problems. But that's going to take time. But now is the time because there's four of them that are down. I really appreciate Committee Members Eoff and Kanuha that you have put this together. I know this is not easy, and I know it's not a—you're not pointing the fingers. You're looking for solutions, and that's what I'm talking about, okay? It is—and you are the policymakers. You need to grasp that and hold that kuleana. You cannot give a kuleana away. It's a responsibility. You can delegate authority, but you cannot delegate kuleana, okay? And that's what I'm asking you to do today. I'm here. You call me, whatever. Water manager can call me. I'm looking at this from a long-term perspective. I'm not seven generations old. I am seven plus seven plus decades old. But I know that it's important to consider this. Maybe the problem is not just with the pumps and motors, maybe the problem—I know it's with them because we read about, but maybe it's also over- consumption, and you talked about that in another (inaudible). I don't know this, okay? Whether it's exceeding the maximum, both sustainable yield. Whether the pumps can—but they're pushing. MR. KANUHA: I think that's why we're trying to get as much information as possible. MR. TYLER: Yeah, thank you for the opportunity to share some more with you. I appreciate it very much. Good luck to you and remember your kuleana. MR. KANUHA: Mahalo, Uncle Curtis. MR. TYLER: (Hawaiian word). Aloha. A hui hou. MR. KANUHA: Again, real quickly, and this resolution is just a request to the Office of the Legislative Auditor. It's up to—Bonnie, am I correct in saying that we send a resolution to you requesting an audit, it's up to you to decide on whether the audit is necessary and when the timeline of it is going to be, and how you figure that all out is up to you. Am I correct in saying that? MS. NIMS: Yes, you are correct. Just to maintain our independence, we do a risk assessment and try to fit it in if we can; and if we deem it lower risk than some of the other issues that we have, then we may push it off. MR. KANUHA: Thank you. And I'm going to be emphasizing the higher risk of this one as an important one to do. For myself, and I am sure Karen can speak for herself, as well, but I think it would be important and incumbent on us, as the County, to move forward with this. I'm just speaking on my thing. I know Page 8 FC -19 September 19, 2017 you've got to figure out your risk assessment, but that's just mine. So, thank you. I'll yield. CHR. DAVID: Thank you, Mr. Kanuha. Anyone else, Council Members? No? Alright. Then all those in favor of approving Resolution 287-17 please say "aye." Vote on Res. 287-17: The motion to recommend adoption of Res. 287-17 was (Approved) carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 9. Noes: None. Absent: None. Excused: None. CHR. DAVID: Thank you, Mr. Clerk. We're going to go down to, or up to Communication 448. Comm. 448: AUDIT REPORT NO. 2017-02: CASH HANDLING AT COUNTY OF HAWAI`I'S DEPARTMENT OF WATER SUPPLY From Legislative Auditor Bonnie S. Nims, dated August 25, 2017, transmitting the above report pursuant to Hawaii County Charter Section 3-18(d)(2). Motion to Close File: Mr. Richards moved to close file on Comm. 448. Seconded by Ms. Poindexter. (Note: At this time, Legislative Auditor Bonnie S. Nims and Audit Analyst Sharilynn Olivar came forward to address the members of the Committee.) CHR. DAVID: I believe Ms. Olivar is available in Hilo, and so is Ms. Nims for questions. Council Members, any questions on the audit report? Mr. Richards, go ahead. MR. RICHARDS: Thank you, Chair. Ms. Nims? MS. NIMS: Good morning. Good afternoon, sorry. MR. RICHARDS: I realize we're in a different time zone, so it's no problem. Could you just give a brief synopsis, thumbnail sketch, of the report? I've read it. But just from your perspective, a quick thumbnail, please? MS. NIMS: Sure. Basically, the objective of our audit was to go into the Department of Water Supply and look at their cash handling process of how they handled the water receipt revenue. So customers pay for their water, they come Page 9 FC -19 September 19, 2017 in, pay the bill, and we're looking at how that money is handled from the time it crosses the counter or the mailbox to the time it gets deposited and posted to the general ledger. Basically, the synopsis of what we found, is we found significant internal control deficiencies, including a lack of key segregation of duties as well as the lack of independent monitoring. We felt that this was mainly due to incomplete and inaccurate policies and procedures. As a result of these weaknesses, we couldn't really determine if all the cash that came in over that counter or through that mail was actually deposited and recorded into the County's books. Based on those weaknesses and the cause of those weaknesses, we made several recommendations to address those issues. Last I was talking to the Department of Water Supply, most of the recommendations have been implemented. We have not had a chance yet to confirm those. I know our external auditors that do the financial statements are looking at some of those. So when we do a follow-up, we'll be able to tell 100 percent, if they have been implemented. MR. RICHARDS: And what's the timing of the follow-up? Is that six months from now? Or, what's your estimate? MS. NIMS: We try for about a year, give them a chance to implement the changes. Sometimes a little bit more, sometimes a little bit less. It depends on our schedule, too, and theirs. MR. RICHARDS: If I recall right, you said you didn't find any evidence of any inappropriate use of funds but this was just something loose and it needed to be tightened up. Is that a fair statement? MS. NIMS: Correct. We did do—we tested cash receipts. We tested 20 days because it billed on an every other month schedule. The cash receipts that we were able to test, that were in the system, were complete and accurate, and we didn't find any problems, just minor clerical errors that weren't indicative of a problem. Our main concern, though, is what we couldn't see. One of the significant weakness that roll into that segregation of duties and independent monitoring, was that adjustments were never reviewed or reconciled from the paperwork to what's in the system, to the general ledger and the bank reconciliation, to make sure that any money that—the risk is, is that any money that came in over the counter, the customer account could be altered, the money taken. Without reviewing those adjustments, you'd never know because the account would balance out, the customer would never complain that they have an overdue late payment, the deposit matches because it was adjusted from the system, et cetera. Page 10 FC -19 September 19, 2017 So that is why we're saying that we can't determine if money is complete, because there was no reconciliation. We don't know if there were adjustments out there, adjusted accounts. And that's one of our significant concerns. MR. RICHARDS: Okay, thank you. I yield. CHR. DAVID: Ms. O'Hara. MS. O'HARA: Thank you, Chair. I don't know, this might be a question for Mr. Okamoto, in terms of the response to the auditor's report. I'm reading off of page 19. Do you have a copy of the report? (Note: At this time, the Department of Water Supply's Manager -Chief Engineer Keith Okamoto came forward to address the members of the Committee.) MR. OKAMOTO: I don't have a copy of the final. MS. O'HARA: Well, this is a short one. I can just read it. It was about surprise cash counts are not performed at all offices. And it says, "Beginning June 2017, surprise cash counts were scheduled for all offices for the current fiscal year which will be performed unannounced at each district office. A schedule will be prepared annually going forward." Who is conducting that activity? MR. OKAMOTO: I'll let—Keith Okamoto, Manager -Chief Engineer. But I'll defer to our Assistant Waterworks Controller. (Note: At this time, Assistant Waterworks Controller Candace Gray came forward to address the members of the Committee.) MS. GRAY: Hi. I'm Candace Gray, Assistant Controller, Department of Water Supply. Can you repeat your question? MS. O'HARA: It's on page 19, number 6, if you've got the report in front of you? It's about the surprise cash count, just randomly sampling and making sure that the amounts match, what it was anticipated. MS. GRAY: The surprise cash counts are conducted by our Water Service Program supervisor, who's not part of the cash receiving process. MS. O'HARA: Okay, that's the kind of question I wanted. That's the kind of answer I was hoping to get. Thank you, okay. CHR. DAVID: Thank you, Ms. O'Hara. Anyone else? Ms. Lee Loy. Page 11 FC -19 September 19, 2017 MS. LEE LOY: Thank you, Chair. Candace, thank you for being here or staying here with us. I recall one of the last things I did on the Water Board was an audit that was performed. And maybe, if it's not for you, it might be for Ms. Nims, was the audit that was independently prepared for the Department of Water Supply shared with Ms. Nims, which actually addressed some of these concerns that Ms. Nims had? MS. GRAY: The audit done by N&K CPAs, I guess I'll defer that to Ms. Nims. MS. LEE LOY: Bonnie? MS. NIMS: Sorry. I think we can answer that. We did look at all the prior audits that had been done at Department of Water Supply, and this issue had not been addressed. Shari was actually the one that went through and looked at the details, so I can have her elaborate. MS. OLIVAR: Hi. Shari Olivar, Audit Analyst. So this was identified through the walk-through, where we had found that the cash receiving system was not being reconciled to the actual deposit. It wasn't posted in prior audits, so during Accuity, N&K, nobody had identified this issue. For N&K, just the segregation of duties. MS. LEE LOY: Oh, okay. So they addressed this segregation of duties but not the receiving portion, is that accurate? MS. OLIVAR: No. Oh, yes. MS. LEE LOY: Yes, okay. MS. OLIVAR: Yes, they did identify the cash receiving, just the segregation of duties. MS. LEE LOY: Okay. So your audit and N&K's audit actually address, or found those segregation duties on both sides or in both audits? Did I ask that correctly? MS. NIMS: Yes. Bonnie Nims, Legislative Auditor. You are correct. N&K, for the last three years has recorded this as a finding, the segregation of duties issue. They had not reported on the monitoring portion of it. MS. LEE LOY: Great. I yield. Thanks. CHR. DAVID: Thank you, Ms. Lee Loy. Anyone else? Seeing none, I think then we can go ahead with the vote. All those in favor of Communication 448 please say "aye." Page 12 FC -19 September 19, 2017 Vote on Comm. 448: The motion to close file on Comm. 448 was carried by the. Filed following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 9. Noes: None. Absent: None. Excused: None. CHR. DAVID: Clerk, thank you. Okay, great. Thank you very much. Thank you, Mr. Okamoto and everyone, for being here all day and for your patience. That's it. That's it. MR. KANUHA: We can bring something up. CHR. DAVID: Unless we have questions, but I don't think so. Mahalo. And, Mr. Clerk, can we just go up to the top of the agenda? Communication 14.18. Return to Order The Chair directed the Committee to return to the order of business. of Business: Comm. 14.18: REPORT OF CHANGE ORDERS AUTHORIZED: JULY 1 - 15, 2017 From Finance Director Collins Tomei, dated August 7, 2017, transmitting the above report pursuant to Hawaii County Code Section 2-12.3. Postponed: September 6, 2017 (Note: There is a motion by Ms. O'Hara, seconded by Mr. Richards, to close file on Comm. 14.18.) CHR. DAVID: Thank you, Mr. Clerk. And I believe Mr. Tomei is available in Hilo for any questions. Council Members, I think this one was postponed because they had the wrong attachment to the Council Board. If anyone else has any questions about that, we can ask Mr. Tomei; if not, we'll move forward. Any questions, Council Members? Hearing or seeing none, all those in favor of filing Communication 14.18 please say "aye." Page 13 FC -19 September 19, 2017 Vote on Comm. 14.18: The motion to close file on Comm. 14.18 was carried by the Filed the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 9. Noes: None. Absent: None. Excused: None. CHR. DAVID: Okay, Communication 14.20, please. Comm. 14.20: REPORT OF CHANGE ORDERS AUTHORIZED: AUGUST 1 - 15, 2017 From Finance Director Collins Tomei, dated August 30, 2017, transmitting the above report pursuant to Hawaii County Code Section 2-12.3. Motion to Close File: Ms. Eoff moved to close file on Comm. 14.20. Seconded by Ms. Poindexter. (Note: At this time, Finance Director Collins Tomei came forward to address the members of the Committee.) CHR. DAVID: Any discussion, Council Members. Ms. O'Hara, go ahead. MS. O'HARA: I had a question on this. I have to get back to it. CHR. DAVID: I believe Mr. Tomei is in Hilo. MS. O'HARA: Yes. CHR. DAVID: Aloha, Director Tomei. MS. O'HARA: I was just curious about the change order for the HI -5 Certified Redemption Center at County Recycling and Transfer Stations. I'm not sure which stations and where we're adding that on to. Just kind of curious. Do you know, Mr. Tomei? MR. TOMEI: Collins Tomei, Finance Director. I cannot tell you exactly where, but I know they were reshuffling the locations of the center. MS. O'HARA: Okay, it's kind of relevant because there's a little huhu going on in Pahoa Village about the removal of the HI -5 Redemption Center from the Pahoa Transfer Station, and so I was kind of curious if this was reinstating it? Page 14 FC -19 September 19, 2017 MR. TOMEI: I think what I remember from this, it might have been—well, I know for a fact it transferred from the Kea` au Transfer Station to the Kea` au Town someplace. I might have to get back to you on that. MS. O'HARA: Then, no, I think it was from Pdhoa Transfer Station to Pdhoa Town, and that's why they took it out of the transfer station. A lot of people in Pdhoa would prefer that it be back in the transfer station. That's why I was asking, which—what this change order applied to. Very little information here. MR. TOMEI: Let me get back to you on that one. MS. O'HARA: Okay, appreciate it. Thank you. CHR. DAVID: Thank you. Mr. Richards, go ahead. MR. RICHARDS: Yeah, thank you, Chair. I had two questions on the change orders, one for the La`aloa Beach Park, two -and -a -half times the original contract. Comment on that? How did we miss the mark so badly? MR. TOMEI: Again, this is something that came up with Parks and Rec. But that work that was going on with the La`aloa parking area, right now there's a—it has to do with a burial treatment plan, so there were unexpected expenses on that. MR. RICHARDS: So is it my understanding that a burial was discovered during the process? MR. TOMEI: I believe the burial was already, let's say identified, and then as they did more work, more, I guess, questions came up about that. MR. RICHARDS: Okay. And then the other question I had, concerning the architectural and engineering services for the Prosecuting Attorney's office, it seems like we had a bunch of change and just curious of why we're doing that. If we bid this stuff out, then we have these changes coming forth it just bothers me, so what's the explanation there? MR. TOMEI: Okay, what happened was that I think the Prosecuting Attorney's office was initially scheduled to be attached to the, I guess, the new courthouse, but then they changed the location so that prompted that particular change order. MR. RICHARDS: Okay. That change, was that on our side or did someone change that for us? MR. TOMEI: That was on our side. MR. RICHARDS: Okay, I yield. Page 15 FC -19 September 19, 2017 CHR. DAVID: Thank you, Mr. Richards. Anyone else? Ms. Eoff, go ahead. MS. EOFF: Mr. Tomei, would you know on the Prosecutor's office, is that still going to be located here by the West Hawaii Civic Center or on the site? MR. TOMEI: Yes, that is the plan. MS. EOFF: Okay, thank you. CHR. DAVID: Thank you, Ms. Eoff. Anyone else? Seeing none, all those in favor of filing Communication 14.20 please say "aye." Vote on Comm. 14.20: The motion to close file on Comm. 14.20 was carried by the Filed the following voice vote: Ayes: Committee Members Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 8. Noes: None. Absent: Committee Member Chung - 1. Excused: None. CHR. DAVID: Mr. Clerk, Communication 15.15. Comm. 15.15: REPORT OF FUND TRANSFERS AUTHORIZED: AUGUST 1 - 15, 2017 From Controller Kay Oshiro, dated August 22, 2017. Vote on Comm. 15.15: Ms. Poindexter moved to close file on Comm. 15.15. Filed Seconded by Ms. Eoff and carried by the following voice vote: Ayes: Committee Members Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 8. Noes: None. Absent: Committee Member Chung - 1. Excused: None. CHR. DAVID: Mr. Clerk, Communication 437. Oh, I'm sorry. MR. HENRICKS: I think we're done, to 288. CHR. DAVID: Sorry, my bad. MR. HENRICKS: It's been a long morning. Page 16 FC -19 ORDER OF RESOLUTIONS: September 19, 2017 CHR. DAVID: It has been. Thank you. 448. MR. HENRICKS: Two, eight, eight. I think that's the last item. The Chair directed the Committee to proceed to the next order of business, Order of Resolutions. Res. 288-17: AUTHORIZES THE OFFICE OF THE MAYOR TO ENTER INTO AN AGREEMENT WITH THE DEPARTMENT OF EDUCATION, STATE OF HAWAII The agreement would provide $5,500 from the Department of Research and Development to support Kea` au High School's robotics program. Students in the program would construct a robot to survey the internal conditions of the air conditioning duct system at Kea`au High School, and perform routine cleaning of the ducts to eliminate dust, dirt, and mold. Reference: Comm. 439 Intr. by: Ms. David (B/R) Motion to Approve: Ms. Eoff moved to recommend adoption of Res. 288-17. Seconded by Ms. O'Hara. CHR. DAVID: Any discussion, Council Members? Mr. Richards, go ahead. MR. RICHARDS: Sorry, anytime we spend money I'm curious. So we are doing something at the Kea` au High School, which is a State facility, and we're using our County funds. Wasn't the justification of taking our TAT (Transient Accommodation Tax) funds was to run the State? CHR. DAVID: Well, we have Mr. Ron Whitmore in our Hilo office to answer that very question. MR. RICHARDS: I would like that question answered, please. (Note: At this time, Research and Development Deputy Director Ron Whitmore came forward to address the members of the Committee.) MR. WHITMORE: Good afternoon. Ron Whitmore, Deputy Director, Department of Research and Development. Excellent question. However, this is a good example of a small investment that makes a tremendous impact. Look for a little context to this, as a grant award made through the department's Annual Economic Development grant program, through its RFP (Request for Proposal) program. This falls under the business development section of that granting program. It's a very small grant being matched by other dollars put up by the DOE (Department of Education) and other supporters of the Kea`au High School robotics program. Page 17 FC -19 September 19, 2017 This is simply funding materials and related supplies to support the high school robotics program's design and development of a robot that will then clean the ducts within the high school. So it's solving an ongoing challenge the high school faces that require significant time and financial expense on their part, while giving the students who are on a track in STEM (Science, Technology, Engineering, and Mathematics) careers and related industries an opportunity to develop and deploy a very practical solution, meeting their own school's immediate technological challenges. As you may be aware, the reason why it's coming before Council is because HRS (Hawai`i Revised Statutes) 46-7 requires that anytime the County enters into a cooperative agreement with any other governmental entity, it requires Council approval. MR. RICHARDS: Okay, that answers the question. And, yeah, it will have great application for us. I'm sensitive if we are maintaining a State facility that happens to be a school, and I do appreciate that. MR. WHITMORE: It's not the case. MR. RICHARDS: That's not the case. Thank you. I yield. CHR. DAVID: Thank you, Mr. Richards. Ms. Poindexter. MS. POINDEXTER: Yeah, we're not maintaining that State facility, but we are helping out the State, correct? MR. WHITMORE: Indirectly. The impetusism for the program is to support the robotics program. MS. POINDEXTER: Right. MR. WHITMORE: It's the secondary side effect that the application of the robot the students are developing will be used to— MS. POINDEXTER: Right, and main thing it goes back to the kids, the students. However, I just want to put this on record, for our State Legislators to know that we do work in ways to help the State on a lot of issues as well as—because they always try to throw it in. I know they tried to throw that in my face, that they've always been just helping out the counties. But we, too, find ways to work together. So I appreciate that and I just wanted to get that on record. Thank you. CHR. DAVID: Thank you, Ms. Poindexter. Point well -noted. Okay, anyone else? All those in favor of approving Resolution 288-17 please say "aye." Page 18 FC -19 September 19, 2017 Vote on Res. 288-17: The motion to recommend adoption of Res. 288-17 was (Approved) carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 9. Noes: None. Absent: None. Excused: None. CHR. DAVID: Mr. Clerk, can you go to the last item, I believe, Resolution 290-17? Res. 290-17: AUTHORIZES THE MAYOR TO ENTER INTO A MULTI-YEAR HOUSING ASSISTANCE PAYMENT CONTRACT WITH UHC 00525 HILO LIMITED PARTNERSHIP OWNERS OF E KOMO MAI, SELECTED FOR THE SECTION 8 PROJECT -BASED VOUCHER PROGRAM AS OFFERED THROUGH A PUBLIC NOTICE DATED FEBRUARY 12, 19 AND 26, 2012 Authorizes the Mayor to enter into a new five-year agreement to continue providing rental assistance for up to 11 eligible participants. Reference: Comm. 441 Intr. by: Ms. David (B/R) (Note: Comm. 441.1, from Council Member Maile David dated September 11, 2017, transmitting proposed amendments to Res. 290-17, was circulated.) Motion to Approve: Ms. Eoff moved to recommend adoption of Res. 290-17. Seconded by Mr. Richards. CHR. DAVID: And I believe Mr. Gyotoku is in Hilo to answer questions. But I think—Mr. Clerk, should we just go ahead with the proposed amendment first, then, before discussion? Okay, may I have a motion to amend Resolution 290 with the contents of Communication 44 1. 1 ? Motion to Amend: Mr. Kanuha moved to amend Res. 290-17 with the contents of Comm. 441.1. Seconded by Ms. Poindexter. CHR. DAVID: And, discussion. For Council Members, this is just to change, correcting the date of publication. Changing the date from the 26th to the 29th, in the title as well as in the whereas and enacting clauses. So this is a pretty simple amendment. If anyone has no other questions, I'll take a vote on the amendment. All those in favor of amending Resolution 290-17 with the contents of Communication 441.1 please say "aye." Page 19 FC -19 September 19, 2017 Vote on Motion to The motion to amend Res. 290-17 with the contents of Amend: Comm. 441.1 was carried by the following voice vote: (Approved) Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 9. Noes: None. Absent: None. Excused: None. CHR. DAVID: And now we're back to Resolution 290, as amended. Any discussion Council Members? No? Oh, Ms. O'Hara, thank you. MS. O'HARA: Since we have members of the Office of Housing here, perhaps they could just explain this in real simple terms. I just want to make sure I understand this action. (Note: At this time, Housing Administrator Neil Gyotoku and Assistant Housing Administrator Duane Hosaka came forward to address the members of the Committee.) MR. GYOTOKU: Good afternoon. Neil Gyotoku, Housing Administrator. First of all, I'd like to introduce to my left our new Assistant Housing Administrator, Mr. Duane Hosaka, who we recently took away from Civil Defense. MR. HOSAKA: Aloha, Council. Duane Hosaka. CHR. DAVID: Aloha, welcome. MR. HOSAKA: Yeah, thank you. MR. GYOTOKU: The resolution, what happens is, it continues to provide assistance to 11 Section 8 participants at the E Komo Mai housing project. MS. O'HARA: That was very simple. So this is just a continuation of an existing program, and we're just acting to continue it then, you were saying? MR. GYOTOKU: Yes, correct. We had provided in previous years. I think there was a previous five-year contract to provide Section 8 project -based vouchers to 11 participants, and this is just a continuation of that project to help them. MS. O'HARA: Okay. We don't do this normally for the Section 8 voucher program, so this is a little out of the ordinary, isn't it? MR. GYOTOKU: No, we sign contracts for different projects. For Section 8 project -based contracts, there are limited terms, usually five, ten years at the end Page 20 FC -19 September 19, 2017 of their expiration date. This is one of the previous or earlier project -based vouchers that we had issued, so this is just a continuation of that project for Section 8 project based vouchers. MS. O'HARA: And the length of time this continues is another five—? MR. GYOTOKU: For five years. MS. O'HARA: Five years, okay. MR. GYOTOKU: And there is another option for another five years, I believe. MS. O'HARA: Okay. So every time you exercise option, you come back to us? MR. GYOTOKU: Correct. CHR. DAVID: Okay, thank you very much. Thank you, Ms. O'Hara. Anyone else have questions? Seeing or hearing none, all those in favor of approving Resolution 290-17, as amended, please say "aye." Vote on Res. 290-17: The motion to recommend adoption of Res. 290-17, as Draft 2 amended to Draft 2, was carried by the following voice vote: (Approved) Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 9. Noes: None. Absent: None. Excused: None. BILLS FOR The Chair directed the Committee to proceed to the next order of business, Bills ORDINANCES: for Ordinances. (There were none.) CHR. DAVID: I believe that takes care of our agenda. Mr. Clerk, is that it? Alright, may I have a motion to adjourn, please? Page 21 FC -19 September 19, 2017 ADJOURN- There being no further business, at 3:31 p.m., Mr. Richards moved to adjourn MENT: the meeting. Seconded by Ms. Poindexter and carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 9. Noes: None. Absent: None. Excused: None. CHR. DAVID: We are adjourned. We have nine "ayes." Mahalo, everybody. Approved: Ms. Maile Medeiros David, Chair Finance Committee MD/na (Date) Page 22