Loading...
HomeMy WebLinkAboutMIN FC 2017/08/15 2016-2018COMMITTEE ON FINANCE 171h Session West Hawaii Civic Center 74-5044 Ane Keohokalole Highway, Building A Kailua-Kona, Hawaii August 15, 2017 CALL TO The regular meeting of the Committee on Finance was called to order at ORDER: 1:07 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 (via videoconference from Hilo) Ms. Eileen O'Hara, Member (via videoconference from Hilo) Ms. Valerie T. Poindexter, Member Mr. Herbert M. "Tim" Richards, III, Member (came in later) Ms. Jennifer Ruggles, Member (via videoconference from Hilo) STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: (There were none.) COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. Change Order of As directed by the Chair and with objection from Committee Members, the Business: following item were taken out of order: Comm. 388: NOMINATION OF MICHAEL HUGHES TO THE REAL PROPERTY TAX BOARD OF REVIEW From Mayor Harry Kim, dated July 27, 2017, submitting for the Council's review and confirmation the above nomination. Requires Council Confirmation by: September 11, 2017 (Section 13-4(1), Hawaii County Charter) FC -17 Vote on Comm. 388 (Approved) August 15, 2017 Mr. Richards moved to recommend confirmation of the appointment of Mr. Michael Hughes to the Real Property Tax Board of Review. Seconded by Mr. Kanuha 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. Chair David informed Mr. Hughes that he does not need to appear at the Council meeting on September 7, 2017, for confirmation of the appointment. Return to Order of The Chair directed the Committee to return to the order of business. Business: Comm. 14.17: REPORT OF CHANGE ORDERS AUTHORIZED: JUNE 16 - 30, 2017 From Finance Director Collins Tomei, dated July 19, 2017, transmitting the above report pursuant to Hawaii County Code Section 2-12.3. Motion to Close File: Mr. Richards moved to close file on Comm. 14.17. Seconded by Ms. Eoff CHR. DAVID: Discussion, Council Members? MS. LEE LOY: Chair? CHR. DAVID: Ms. Lee Loy, go ahead. MS. LEE LOY: Thank you. This is related totowards the very bottom, it's "Furnishing and Implementing Operations for an Organics Diversion Program." Mr. Tomei? CHR. DAVID: You want to call—Deanna Sako is here. MS. LEE LOY: Oh, okay. Thank you. CHR. DAVID: Ms. Sako, could you please come up? Thank you. (Note: At this time, Deputy Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: Good afternoon. Deanna Sako, Deputy Director of Finance. Page 2 FC -17 August 15, 2017 MS. LEE LOY: Hi. Thank you. I'm not seeing a change, but actually what I'm noting is a revised contract pricing and terms per negotiations. Could you expand on that, and if that's actually changing the original contract amount? MS. SAKO: I think this is the one that was that came out of the discussions earlier, and I think they're just formalizing it in the contract changes themselves. Part of that was almost like a price term agreement, so I think a lot of that didn't actually impact the total dollar amount. But yeah, I don't have the change order in front me, sorry. MS. LEE LOY: Okay, thank you. I yield. CHR. DAVID: Thank you, Ms. Lee Loy. Mr. Richards. MR. RICHARDS: Thank you, Chair. Ms. Sako, just a couple of questions. One of these, as an example, the HOVE (Hawai`i Ocean View Estates) Police Substation Lease. We have a percent of original 2,100 percent, and it looks to be a re -extension of the same office space. Is this the normal methodology for doing this? MS. SAKO: Yes, lots of time we try to do long-term leases but sometimes the landlord doesn't want to, or they'll say we just keep extending it for 12 months, whatever they're comfortable with. But sometimes once the station is established, it's hard to keep moving it around. So most of the landlords we worked with, and lots of time it's at the same rent or same price, but we do try to get the longer term leases whenever we can to lock into the rent. MR. RICHARDS: Okay, so yeah I'm not objective maintaining the thing once it's established and all that, I get it. But just coming through this process rather than—it just seems unusual that it comes through a change order process. MS. SAKO: Yeah, I think this one is not a normal. Normally, we lock it in and then just recertify funds every year. But in this case, for whatever reason, we just keep extending it for 12 months. But I can ask Hamana the reason why. MR. RICHARDS: Okay, thank you. I yield. CHR. DAVID: Thank you, Mr. Richards. Anyone else? Oh, Ms. O'Hara, go ahead. MS. O'HARA: A similar question. Thank you, Chair. A similar question to what Mr. Richards asked, and this item that we've talked about before. It's the police warehouse space lease, which again continues to rise in cost over time. I really wish we would identify that point, where it makes more sense to build our own facility rather than continuing to experience lease hikes. Because, yeah, Page 3 FC -17 August 15, 2017 that's what I'm reading from this. But maybe you can interpret it differently, Deanna? I'm not sure. MS. SAKO: I think it was actually the original lease, given the amount, was for one year, and then we went in for two, I believe, five-year extensions. And so, it just looks like it's going up somewhat. I think over the five-year period it has not escalated significantly. But we do periodically try to review, to make sure at what point would it be cheaper just to build our own. The police warehouses are kind of hard too, because we try to get it to a point where maybe we can actually cut back on some of the things, so they've been working with Prosecutors Office and things like that to see if there is some stuff we maybe don't need to keep. MS. O'HARA: Okay, well and thank you for that. And I hope we can continue to find ways to make that whole operation more cost effective because that's a lot of money going out for just a lease for storage of evidence. The other question I had is further on down the sheet. It's for the General Plan Community Viz Scenario Planning, and I see, were over three times the estimated original contract amount, because we've added on some customized web applications. MS. SAKO: Mr. Yee is here, and would like to speak to that. MS. O'HARA: Pardon? MS. SAKO: Mr. Yee, Director Yee. MS. O'HARA: Michael Yee was supposed to be here to speak that? MS. SAKO: Yes, sure. MS. O'HARA: Okay, and he's not there? MS. SAKO: He's here. MS. O'HARA: I don't see any oh, here. MS. SAKO: He's coming. (Note: At this time, Planning Director Michael Yee came forward to address the members of the Committee.) MR. YEE: Michael Yee, Planning Director. Good afternoon, everyone. CHR. DAVID: Good afternoon. Page 4 FC -17 August 15, 2017 MR. YEE: First, I think, kind of going back in history a little bit, it's important to note that the original budget for doing the General Plan update was $975,000 and we're still within budget. And so I think that's the important thing to note, that we are still on budget. We don't, at this point and time, think we're going to go over budget. I don't anticipate we will. And so part of it is because we couldn't do a multi-year contract, that's why it appears that it keeps tripling or whatever, but that's not the case. This is what was planned for the cost of doing the General Plan. And just to add that $900,000 for a General Plan update of our size is fairly standard. MS. O'HARA: Okay, so thank you for that. So we have $900,000 allocated for this General Plan update, and of that nearly oh, nearly a little more than half, I guess, is going towards the purchase of this software. Is that the right understanding? MR. YEE: I'm not sure exactly. In terms of theI'm almost for sure it's not for the entire software package, is what most of the money is going. There was certainly an adjustment to do web based stuff for the public to access in the future, and that's part of the change order. But again, everything's within the original budget that was set forth for doing the General Plan update. MS. O'HARA: Okay, thank you. I yield. CHR. DAVID: Thank you, Ms. O'Hara. Anyone else? Mr. Chung. MR. CHUNG: So we were looking at the General Plan Community Scenario Planning, is that? MR. YEE: Yes. MS. SAKO: On the second page. MR. CHUNG: Right. I think what's concerning to me, it's not so much that we're still under budget. But when you have a contract $150,000 and it increases more than, like three -fold I think, it puts into question the contracting of the system we have in place. Because, I mean, how many people bid for this contract? Or is it like a sole source or what, what, what? MR. YEE: I believe there was bid process. MR. CHUNG: Yeah. MR. YEE: But I wasn't here for it. MR. CHUNG: I'm not saying that there was anything wrong in the way this was administered. But when you have something of a low -amount and it escalates Page 5 FC -17 August 15, 2017 later on, it could possibly—and if I were another bidder who didn't get the contract, I would say, "Hey, wait a minute now." Maybe this thing should have been actually a higher amount. I'm sorry, I'm just saying that maybe just for the future reference. Not just only for your department, Mike, but for everything else. This is kind of "eye-popping" really. Thank you. CHR. DAVID: Thank you, Mr. Chung. Anyone else? Hearing or seeing none, alright all those in favor of filing Communication 14.17, please say "aye." Vote on Comm. 14.17: The motion to close file on Comm. 14.17 was carried by the Filed following voice vote: Comm. 15.13 Vote on Comm. 15.13 Filed 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, Comm. 15.13: REPORT OF FUND TRANSFERS AUTHORIZED: JULY 1 - 15, 2017 From Controller Kay Oshiro, dated July 24, 2017. Ms. Poindexter moved to close file on Comm. 15.13. 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. CHR. DAVID: Mr. Clerk, Communication 379. Comm. 379: REPORT OF ISSUANCE AND SALE: GENERAL OBLIGATION BONDS 2017 SERIES A, B, C, D, AND E From Finance Director Collins Tomei, dated July 18, 2017, transmitting a report of sale and issuance of $139,895,000 County of Hawaii General Obligation Bonds. Motion to Close File: Mr. Richards moved to close file on Comm. 379. Seconded by Mr. Kanuha. CHR. DAVID: Discussion, Council Members? Mr. Richards. Page 6 FC -17 August 15, 2017 MR. RICHARDS: Yeah, Deanna? Oh, Ms. Sako. (Note: At this time, Deputy Finance Director Deanna Sako, returned to the table to address the members of the Committee.) MS. SAKO: Good afternoon. Deanna Sako, Deputy Director of Finance. MR. RICHARDS: Thanks, Ms. Sako, for coming forward. We're talking about a very large amount of money here. Could you go through this and explain A, B, C, D, E, and why this is before us, please? MS. SAKO: Sure. If you have the communication in front of you, there's several bond ordinances that are listed here. Those are the authorizations we work off to fund projects, basically. And then, we manage our cash flow by trying to do Bond Anticipation Notes (BAN) whenever possible. And those are low interest rate bearing, short-term borrowing. And then when we kind of accumulate enough of those, then we take it out with General Obligation Bonds, which are tax exempt. So, we just recently sold bonds. And we took out about $90 million in new money, $60 million went to back the BANs, $30 million new. But the total series is $139, almost $140 million. Because we also take those opportunities to look at prior issues to see if we need to refinance them, and if we can save money, we will do that. And that's what we did in this case. So Series A is actually the new money that went to pay off the BANs and for new construction projects. In total, that we have, we pay just about three percent for those bonds. And then the rest, B, C, D, and E are related to the series that we previously refunded. So B, C, D: let's see, B is the 2007 B Bonds that were refunded; Series C was the 2007 Series C bonds that we refunded; then D and E combined, make up the 2013 Series A bonds that were refunded. In total, I believe we're saving about $2.9 million over the coming years, or 6.1% to reduce cost in the future. MR. RICHARDS: Is that because our bond rating has, I'm not sure how to phrase that, has improved? MS. SAKO: Our bond rating has improved, so that definitely helped. But in addition, it can just be the market conditions of the time. So we evaluated, leading up to the point, and if the market conditions have changed, we might have chosen not to refund some of them. Page 7 FC -17 August 15, 2017 So, we try to refund whenever we can because we do want to save money. But it depends on the market conditions, even on that given day. MR. RICHARDS: Okay, and I think, probably some of these questions will spill over to the next communication. Thank you. I yield. CHR. DAVID: Thank you, Mr. Richards. Council Members? Ms. Lee Loy. MS. LEE LOY: Thank you, Chair. Follow-up question for Deanna. So what I'm hearing you say is when the bond has matured, it's being paid off, correct? MS. SAKO: Yeah. So throughout any given year, we're actually paying off bonds. So like in this particular series, we normally issue 20 years, and there's a principal portion that matures each and every year. We pay that down consistently. In addition, when we refund bonds, we basically pay off the old bonds and borrow new bonds at a lower interest rate, but the principal amount should be relatively the same when we do that. But we're trying to save on the future interest cost. MS. LEE LOY: Okay, which leads me into that next part of the question; which is, when we're executing these bonds. What type of legal fees or escrow fees are being applied? I know sometimes when you bundle them together, it's at a cheaper reduced rate. But if we're doing them individually, could you share a little bit about that process? MS. SAKO: We do pay underwriter fees and legal costs. But that's correct; if we do it all together, it definitely comes out cheaper to do that. We have never, I don't believe to my awareness, done just a refunding issue. We've always tacked it on to new money so that we can minimize cost to do that. MS. LEE LOY: And just a brief thumbnail, from what I can see, with 2018 and 2019, that's about $5.5 million that will be paid off, correct? MS. SAKO: Yeah, it's something in that rangeI think I'm on the wrong sheet. But at any point in time, so like even in the current year budget, which I think I left back there, we usually have between $20 and $30 million that will pay off, in bonds maturing, because they all serially come due. So there's some that come due each and every year, even though we might only issue bonds every three or four years, or two, depending on how quick we need the money. MS. LEE LOY: Okay, great. Thank you. I yield. CHR. DAVID: Thank you, Ms. Lee Loy. Anyone else? Kona? Mr. Richards? No? Okay. Alright, hearing or seeing none, all those in favor of filing Communication 379 please say "aye." Page 8 FC -17 August 15, 2017 Vote on Comm. 379: The motion to close file on Comm. 379 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: Mr. Clerk, Communication 380. Comm. 380: TABULAR SUMMARY OF BONDED INDEBTEDNESS AS OF JUNE 30, 2017 From Finance Director Collins Tomei, dated July 21, 2017, transmitting the above report pursuant to Hawaii Revised Statutes Chapter 47C. Motion to Close File: Mr. Richards moved to close file on Comm. 380. Seconded by Ms. Poindexter. CHR. DAVID: Discussion, Council Members? Mr. Richards. MR. RICHARDS: Okay, I'll dive back into this again. Ms. Sako, thanks for being here. And I appreciate your explanation, previous. Are, and this is off the top of my head, I think we had a liability for the County through all the bonds, somewhere around $462 or $63 million? MS. SAKO: Yes, as of June 30th. MR. RICHARDS: About June 30th. And in this—are we still at the same level? Are we making head -way at that? Or, where are we? MS. SAKO: It's gone up a little bit. You have two reports, and the communication we're on right now is the report for June 30th, which is required annually, and the next one is because we sold bonds and closed on that a few days later. So the total debt is $461, at June 3oth. That also includes bonds we issued on behalf of Water Supply or other agencies that are repaying us, and it does also include the debt that we owe for State Revolving Fund loans. Those are the ones that either a quarter or half percent interest, so we do like those. We can't really get a better interest rate. So, it is about $461. It has gone up a little bit. Because then, in early July, we issued bonds. But this $461 already includes the roughly $60 million in BANs (Bond Anticipation Notes) we had issued. On the next communication, you'll see it went up roughly $30 million. Our primary payout dates are usually in September, right after we collect our Real Property Tax revenue. Then that's when you usually see the principal amount Page 9 FC -17 August 15, 2017 drop, after those payments in September. So then it will go down $20—yeah, $20 plus million, probably. MR. RICHARDS: Okay, so when you said it went up a little bit from $461, what are we MS. SAKO: Yeah, then the next communication I believe it is MR. RICHARDS: Is it on MS. SAKO: Four hundred ninety-three. Because $30 million of what we issued in bonds was new money for projects that we're currently working on. MR. RICHARDS: Okay. MS. SAKO: As well as there's some big State Revolving Fund loan projects that are going on. So that number will continue to fluctuate throughout the year as well. MR. RICHARDS: Okay, thank you. I yield. CHR. DAVID: Thank you, Mr. Richards. Anyone else? Ms. Lee Loy, in Hilo. MS. LEE LOY: Thank you. Thank you. Deanna, thank you. At the end of your Statement of Fund Debts, we have a Schedule E, Other Indebtedness. It's for housing. MS. SAKO: Yes, that's a long-term loan that they've had for a quite a while. I think this is the zero interest bearing note. But it's with Hawaii Housing Finance and Development Corporation. They have arrangements with them that built that Ouli Ekahi Housing project that we have on the island. MS. LEE LOY: So it's on us to carry this number? MS. SAKO: Yeah, Housing falls under the County of Hawaii, in general. MS. LEE LOY: Okay. MS. SAKO: So since they're under our umbrella. That is a special fund. So those funds or that note is repaid with the proceeds from the rent and other revenues that's generated in that housing project. MS. LEE LOY: Thank you very much for that. I yield. Page 10 FC -17 August 15, 2017 CHR. DAVID: Thank you, Ms. Lee Loy. Anyone else in Hilo? No? Alright, Kona? Hearing or seeing none, all those in favor filing Communication 380 please say "aye." Vote on Comm. 380: The motion to close file on Comm. 380 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: Mr. Clerk, Communication 381, please. Comm. 381: SUPPLEMENTAL SUMMARY OF BONDED INDEBTEDNESS AS OF From Finance Director Collins Tomei, dated July 21, 2017, transmitting the above report as required per the issuance of $139,895,000 in general obligation bonds on July 6, 2017. Motion to Close File: Mr. Richards moved to close file on Comm. 381. Seconded by Ms. Eoff. CHR. DAVID: Discussion, Council Members. Mr. Chung. MR. CHUNG: Thank you, Madam Chairman. This isn't really, completely relevant to the issue at hand. But I've got to ask you this, Deanna, we have talked about a shooting range, skate board park, dog park, and others. What kind of wiggle room do we have in issuing more bonds, in terms of our rating and our capability today? MS. SAKO: We still do have time. I forgot to bring my percentage sheet of where we're at right now. But we're still within like the 10 percent range, roughly, of our total expenditures, and we can go up to 15 percent per our guidelines from GFOA (Government Finance Officers Association). However, when we look at that, we're actually looking at the bond authorizations that have been approved by Council. So we still have money that's been authorized by Council that hasn't been encumbered or spent yet. Probably within the next couple months, maybe sooner, we'll be coming in to amend those bond authorizations. There's some projects that have been completed. And yet there's money still authorized for those projects. So we need just to do some clean-up and remove some of those projects and add on other ones, maybe like shooting range or other projects that do need funding. Page 11 FC -17 August 15, 2017 Even if with all of that included, we're only at 13 percent. So one of the things that helps, is when DEM (Department of Environmental Management) is able to get State Revolving Fund loans or that low interest rate loan. That does help keep our debt service down. So when we take all of that into account, we're still maybe like 13. But again, we're paying off $20 to $30 million a year MR. CHUNG: Right. MS. LEE LOY: —of principal, so then that makes future debt available as well. MR. CHUNG: How much leftover do you think you're going to have? MS. SAKO: From those other bonds? There's a couple big projects we haven't talked to certain Council Members about yet, if they want to leave those projects on. Because in some authorizations there's some projects that's just the bond authorization is not sufficient to be able to complete the project, so we're either going to have to increase it or take it off, or just leave it as a reminder for the future. MR. CHUNG: Are you at liberty to tell us whether the administration is contemplating a bond issuance during this term, Council? MS. SAKO: Like are they—we are probably going to try and amend the previous bond authorizations MR. CHUNG: Right. MS. SAKO: rather than come for a new authorization, yes. MR. CHUNG: So if a new authorization comes forward, then it probably has to be initiated by the Council, as far as you can tell? MS. SAKO: Not necessarily. I mean we're trying—there's actually quite a bit of projects that have been completed, and with leftover funding, so we want to utilize that first. MR. CHUNG: When are we going to get a better picture of what? MS. SAKO: I would say in the next month or two. We've talked to the departments. We're just kind of trying to finalize. I just haven't had time to sit down and work on that. MR. CHUNG: Thank you, Deanna. Page 12 FC -17 August 15, 2017 CHR. DAVID: Thank you, Mr. Chung. Anyone else? Oh, Ms. Lee Loy. I'm sorry, go ahead. MS. LEE LOY: Yes, thank you. And thank you, Mr. Chung, for that. Deanna, if there's a way for you to provide, just a rough estimate of what that wiggle -room is and what a forecast would look like, I would really love to see it. And if you could share that, that would be wonderful. So, thank you. MS. SAKO: Right, and we did try to borrow enough so that current projects in place, such as maybe the radio project and others, that there would be sufficient money that we actually borrowed. So it's doing the authorization just to kind of make sure it's the projects that everybody wants to see get done. CHR. DAVID: Ms. Lee Loy, are you done? MS. LEE LOY: Yes, thank you. I yield. CHR. DAVID: Thank you. Mr. Richards. MR. RICHARDS: Quick follow-up question, Ms. Sako. You said we're about 10 percent, and then if you do all the clean-up and all that, we're at 13 percent. Then we can go up to 15? MS. SAKO: The 13 percent is if we actually went out and borrowed absolutely everything that has been authorized. And there's some, especially SRF (State Revolving Fund) loans that have been approved, like 30 or more, or even closing of the landfill, that we won't actually have to borrow that money for a few years yet. MR. RICHARDS: Okay, so it's been approved but actually hasn't been borrowed? MS. SAKO: We have not borrowed it yet, right. MR. RICHARDS: Okay, so just for me, for my own education as far as numbers, 15 percent of what? What does that—what's that hard number mean? MS. SAKO: Of our total expenditures, is what GFOA looks at. That you don't want your bond or debt service payments to be more than 15 percent of your total expected expenditures. MR. RICHARDS: Okay. Alright, so it'salright, I got it. MS. SAKO: And we're roughly in the 10 percent range. I forgot that sheet of paper today. Page 13 FC -17 August 15, 2017 MR. RICHARDS: Yeah the MS. SAKO: Of where we're at. MR. RICHARDS: Okay, so roughly $46 million? Okay, got it. Okay, thank you. I yield. CHR. DAVID: Thank you, Mr. Richards. Anyone else? Seeing none, all those in favor or filing Communication 381 please say "aye." Vote on Comm. 381: The motion to close file on Comm. 381 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: Mr. Clerk, Communication 389. Comm. 389: FUEL TAX REVENUE REPORT FOR FISCAL YEAR 2017-2018 From Public Works Director Frank J. De Marco, dated July 27, 2017, transmitting the above report in compliance with Resolution 212-17, Draft 2. Increased fuel tax rates are projected to generate an additional $4.6 million, which will be used predominantly for road paving, mass transit projects, and signal upgrades. Motion to Close File: Ms. Poindexter moved to close file on Comm. 389. Seconded by Ms. Eoff. CHR. DAVID: Discussion, Council Members? Hearing or seeing none, all those in favor— MS. O'HARA: Wait, whoa, whoa, whoa. Whoa, whoa, whoa. CHR. DAVID: Alrighty, speak up. MS.O'HARA: Sorry. CHR. DAVID: We can't see you, Eileen. MS.O'HARA: Sorry. CHR. DAVID: I'm sorry, you were— Page 14 FC -17 August 15, 2017 MS. O'HARA: Sorry. MS. O'HARA: Oh, that's okay. CHR. DAVID: Half of your body is off the screen. MS. O'HARA: Sorry. CHR. DAVID: Thank you. Yeah, Eileen. Alright, thank you. MS. O'HARA: I do have a couple of questions; I don't know who's here to answer them. Ms. Sako might be able to answer, but I think this is a DPW (Department of Public Works) question, and I don't see any DPW here. I don't know what you have in Kona. MS. SAKO: Ms. O'Hara, Aaron Brown, the Business Manager for Public Works, is also here. MS. O'HARA: Okay, great. Great, great. (Note: At this time Public Works Business Manager Aaron Brown came forward to address the members of the Committee.) MS. O'HARA: Okay great, great, great. Well, thank you. Thank you, Aaron for being here. The question I had, was when we increased the fuel tax a couple months ago, we were told that it might not go into effect until as late as January 1 or as early as October 1, and yet here it says the County "expects to collect 10 months of additional revenue. So that's telling me it's going into effect on September August 1? Did this already (inaudible)? MS. SAKO: It actually go into MS. O'HARA: Did this already (inaudible)? MS. SAKO: It did. It went into effect on August 1st. So when we submitted the resolution to the State Department of Taxation, they actually said—the HRS (Hawai`i Revised Statutes) says it shall go into effect by the State, and they did it. When we had called previously, they said, "Oh, there's no way we can get it done," so apparently we talked to the wrong person. So they moved on it, and we then remembered the provision in the resolution and so we got the report in as quickly as we could. But, yeah, this was totally unexpected. MS. O'HARA: Well, good, good. And it came at a good time in terms of the price of the pump, so that's good. Page 15 FC -17 August 15, 2017 MS. SAKO: Yes, that's true. MS. O'HARA: Anyway, so we're estimating that the increase $4.6 million for this fiscal year? MS. SAKO: Yes, that is correct. MS. O'HARA: Is that correct? MS. SAKO: Yes, that is correct. Yes. MS. O'HARA: Okay. And we had been given some months ago, I think it was in May. May 26, I received a communication from DPW as to the projects that would be on the list if we got the additional fuel tax funding. MS. SAKO: Um -Hum. MS. O'HARA: And all but one had a dollar amount associated with it, an estimate. MS. SAKO: Um -Hum. MS. O'HARA: And the one that didn't, was the, let's see, I did find it here. Oh, the Old Mamalahoa Highway Projected Start, South Kona, doesn't seem to have a dollar amount. Do we have an up date on that? Aaron, do you know? MR. BROWN: I'm not totally positive, but I know that Neil has been working with both Mayor and Frank on figuring the exact scope of what we're looking at. Kind of a lot of, there's a lot of variables I think they're considering. Staffing, equipment, material, and also working inI think it's important to know that this list of projects, again, are more it's a living document. So their goals that we're hoping to do and accomplish this year, we kind of—the State rushed to implement the fuel tax as of the first of this month, but we're not sure exactly when we'll be able to receive the payment back from the State. So, we will receive 10 months. But there is a lag of when we receive the money. So again, this is a living document on what exactly—what projects we can fit into the year, what kind of funding will be available. But I know that they—to answer—to come back to your question, they are still, I think, working out the scope of the project. MS. SAKO: And Old Mamalahoa is a—both are large, long road. There's other pieces in play with Federal and State funding, as well, so they're trying to make sure we're not paying for something that we don't need to. So, we're kind of trying to work out all the details on that project. Page 16 FC -17 August 15, 2017 MS. O'HARA: Okay. Without that one estimate in there, I'm just going to round off what we have in the way of estimates, at about $2 million, and yet we're getting $4.6 million in. And when I look back at the chart on the Fuel Tax Revenue report it says about $1.7 million for Road Paving, $1 million for Mass Transit; and then various amounts for School Safety, Emergency/Disaster, Signal Upgrades, Salaries and Wages, and Equipment. Assuming that those estimates that were given weren't just for the paving, they were for the Salary and Wages, and equipment cost as well. Is that correct? MS. SAKO: Yeah, when we met before, I think we had broken it out kind of what we need to get things done. Because the revenue and the fund had been dropping, so some of these expenses had been cut below a point that we could do work with. So now that the Bargaining Unit increases have gone into place, and different things, we were able to do more, I guess, better determine where the need is for those funds. MS. O'HARA: Okay, so again, we have about $2 million in projects identified. want to point out that some districts don't seem to be qualifying at the same rate that other districts; for instance, Puna is about half of what is being spent in Hilo, in South Hilo. So I just want to see if there's any additional monies over and above these projects. And the $1 million for Mass Transit that can be directed at some new project this year because I'd certainly have some asks. MS. SAKO: Yeah. MS. O'HARA: Yeah, and I know every other Council Member does. MR. BROWN: So the list you have in front of you is on top of the already scheduled maintenance schedule, so it could be that there are—the projects already planned for all the districts, including Puna. And these are just sort of additional—again, it's sort of a goals list. Because this is our first year, we're able to get fuel tax in 29 years. We're not exactly sure how it's going to work. And then, the Mayor has also talked about doing some community meetings within the district. So, again, this is kind of a live document, where things can change over those meetings happen, or as some of these variables come out to play. But again, this is in addition to the kind of already scheduled maintenance program they had in place. MS. O'HARA: Right, I understand that because it's new money. It's additional money. But just pointing out that there's still a little slack in this budget, it appears. So I'm glad to hear we're going out to assess the needs in the public. And hopefully meetings will be arranged in the Puna district. Thank you. Page 17 FC -17 August 15, 2017 CHR. DAVID: Thank you, Ms. Lee Loy. Mr. Richards. I mean Ms. O'Hara, I'm sorry. Mr. Richards. MR. RICHARDS: Okay. Thank you, Chair. Just as a follow-up to Councilwoman O'Hara's comments. Could we get a summary? A one-page summary of what was previous, plus combining with this, with some rough numbers on it, just distribute to the whole Council, so we know what you're thinking? MR. BROWN: In terms of the already scheduled Maintenance Fund? MR. RICHARDS: Yeah. MR. BROWN: Yeah, we can. Frank, and Neil, and myself, we'll coordinate and put something together. MR. RICHARDS: Okay, just because I think that will help everybody. Kind of know where we are with that. As you schedule the meetings go forward, each representation from the different districts will have a better idea. Thank you, I yield. CHR. DAVID: Thank you, Mr. Richards. Anyone else? MS. RUGGLES: Chair? Jen. CHR. DAVID: Oh go ahead, Jen. I'm sorry. Go ahead. MS. RUGGLES: Thank you. I just want to ask a quick question. I want to make sure I'm understanding this correctly, Mr. Brown. Under the road resurfacing projects, under Puna, we have Kipimana Street, and then Waa Waa to Kapoho. First of all, I'd like to know how are you how's the department determining what projects go on this list? MR. BROWN: I think that question could be better answered by Neil and Frank. It's a collaboration within the administration. Also, Mayor is involved on reaching out to the community, having boots on the ground with our Highway staff, and taking in a lot of different feedback into figuring out what the priorities are. Public Safety usually is number one, though, I know on prioritizing the list. So I think that might be a question that Frank and Neil can better answer, than myself. MS. SAKO: We can follow-up with them. MS. RUGGLES: Okay, great. Well, just in regards of public safety, I put in a few CIP (Capital Improvement Project) requests that had to do exactly with public Page 18 FC -17 August 15, 2017 safety. I guess I just don't understand why Kipimana Street is more of a public safety issue than having shoulders on these basic feeder roads that feed into these very large subdivisions. Where, we have disabled veterans walking along the side, and they have no shoulders. We also have no emergency access route that has two lanes into Orchid Land. I would think that those are bigger public safety projects. And I also can't help but notice that there's not one project on this list in District 5, my district, and that concerns me. Thank you. CHR. DAVID: Thank you, Ms. Ruggles. Anyone else? Alright. Oh, Eileen? Ms. O'Hara, go ahead. MS. O'HARA: I'm sorry. It was just a short comment. Jen brought up the list for Puna. Kipimana Street is not actually in the Puna district. It's towards Hilo; it's in Ms. Lee Loy's district. So it's in District 3 not 4 or 5, just pointing that out. Thank you. CHR. DAVID: Thank you, Ms. O'Hara. MS. LEE LOY: Madam Chair? CHR. DAVID: I'm sorry. Ms. Lee Loy. MS. LEE LOY: Thank you. I just have a quick question for Mr. Brown. When we had the discussion regarding the increase in the fuel tax, we saw a graphic of the amount of reserve we were dipping into in this fund. And, if I recall correctly, the conversation was to replenish that Obasically, that savings in Department of Public Works. I'm just wondering where that is on this chart. Is that associated with the Salary and Wages fringe benefit or fringe increase? Or, are we still looking to have to replenish that reserve? MS. SAKO: We're going to wait till the end of the fiscal year and see how much this actually helps to rebuild the fund balance. Because as much as we would like to repave every road that needs it this year, we only have limited manpower. So we're hoping that this is a good expectation, what they're going to spend. But there are certain areas, like we really hope, that we will not be having a disaster this coming year, so that money would be unspent to help replenish the reserves and other situations like that. MS. LEE LOY: Okay, great. Thank you. I know that was one of the main reasons I really subscribed to the overall increase. There was a number of things that I saw needed help: Mass Transit, paving our roads, safe zones to our schools. But that reserve balance being so low was very alarming to me, so I really would like to see that get back to a more comfortable level. Thank you. I yield. Page 19 FC -17 August 15, 2017 CHR. DAVID: Thank you, Ms. Lee Loy. Council Members, any more discussion? If not, all those in favor of filing Communication 389 please say Ic aye. Vote on Comm. 389: The motion to close file on Comm. 389 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: Mr. Clerk, please, Resolution 252-17. ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Res. 252-17: AUTHORIZES THE DIRECTOR OF FINANCE TO NEGOTIATE THE LEASE OF REAL PROPERTY, SITUATED AT WAIAKEA, SOUTH HILO, COUNTY AND STATE OF HAWAII, IDENTIFIED AS TAX MAP KEY: 2-4-057:030, TO HKI KAWILI, LLC, A NONPROFIT CORPORATION Authorizes the Finance Director to negotiate a 65 -year lease of the subject property for the purpose of constructing, developing, and operating affordable senior housing with preference to veterans and their spouses. Reference: Comm. 384 Intr. by: Ms. Lee Loy (Note: Comm. 384. 1, from Council Member Susan L. K. Lee Loy dated August 15, 2017, transmitting hardcopies of maps depicting the location of the subject parcel identified in Res. 252-17, was circulated.) Motion to Approve: Ms. Lee Loy moved to recommend adoption of Res. 252-17. Seconded by Ms. Eoff CHR. DAVID: Ms. Lee Loy, go ahead. And just a note, that Mr. Yoshimoto is in our Hilo Chambers for any questions regarding this resolution. Go ahead, Ms. Lee Loy. MS. LEE LOY: Yeah, thank you, Chair. I'm going to be urging my colleagues to support this resolution. What I'd like to do, just for a brief minute, is direct everyone to Communication 384.1. It was distributed before lunch. Page 20 FC -17 August 15, 2017 CHR. DAVID: Excuse me. Ms. Lee Loy, while you're doing that, we have Mr. Bob Williams here and Ms. Gushiken in our chambers here in Kona. MS. LEE LOY: Great. CHR. DAVID: Thank you. MS. LEE LOY: So what I really wanted to do, is just take a few minutes to orient the rest of my colleagues as to where this parcel is located. Like in times past, the first graphic is a TMK (Tax Map Key) map. It's located near Waiakea High School, in my district, that's what you'll see on the Google earth image. It's outlined in red. Those two graphics is just to basically orient my colleagues where this is at. And if now I could call up Ms. Gushiken and Mr. Williams, to give the Council Members just a brief overview of what the project entails. I know it's identified in the resolution, but it really does serve a purpose for senior housing and addressing veterans. I just wanted them to take a minute or two to share their mission and the overall project. CHR. DAVID: Thank you, Ms. Lee Loy. Mr. Williams, please identify yourself and Ms. Gushiken, and go ahead. MR. WILLIAMS: Thank you, Councilperson Lee Loy. Good morning. Aloha kakou, Members of the Hawaii County Council. CHR. DAVID: Aloha. (Note: At this time, Bob Williams and Marian Gushiken came forward to address the members of the Committee.) MR. WILLIAMS: Chair Maile David and Vice Chair, all the members, happy to be here. Not my first time in front of most of you. By way of introduction, I want to first of all introduce Marian Gushiken, who happens to be a Hilo girl, coincidentally. She's the Director of Development for EAH (Ecumenical Association for Housing) Housing Corporation of Honolulu and San Rafael, California. They've been established in Hawaii for quite a while, and Ms. Gushiken can talk to that and answer your specific questions. The broad overview I want to provide to all of you, is of course, that this is a project that's been a pipeline for 10 years (inaudible). We've hung in there, and we're finally at the point of development. It's been a rough road; but with the support of County government, we're there, and other benefactors, estate, and so forth. Page 21 FC -17 August 15, 2017 Our project, basically that we're talking about today is a 75 -units of senior living, through Kapi`olani, upper five -and -a -half acres of our three parcels. This would be parcel 30, bounded by Kawili Street, on the Puna side and Kapi`olani Street on the mauka side. A three -parcel located between two churches and below the university and across from the high school, and RM -1 zoning, residential housing behind us. So, it's a good fit. Neighbors love it. We've searched high and low over a five or six year period. We've talked to Sanford Carr, Sheldon Zane, and Fred Yamashiro when he was till in business. Two other developers, whose name escape me, and also some people we met through HFDC (Housing Finance and Development Corporation). And we settled upon EAH as the perfect fit to do this project. They're community based. They've got a great track record here in the State. They've got formed a nonprofit here specifically to do that, that's what that HKI Kawili, LLC, is all about. Ms. Gushiken can talk about that more. But we are here to urge your—the bigger indulgence, and ask you to approve this lease of this project. That will give them a start-up lease; to find the money, to give them a follow-on long-term lease. We're going in this hand and glove as our partner, the partnership with them, and we look to have a long and fruitful relationship. Seventy-five units senior living is the intent. Downsized, by the way, from the original 110 units when we did our final Environmental Assessment. I'll pass the ball to Marian Gushiken. CHR. DAVID: Thank you very much, Mr. Williams. Aloha. Please identify yourself. MS. GUSHIKEN: Good afternoon, my name is Marian Gushiken with EAH Housing. And, Bob, thank you for that. I just want to give a brief background for those who may not be familiar with our organization. EAH is a nonprofit housing and development and management company. We were founded in San Rafael, California, back in 1968, so next year we'll actually be celebrating our 50th year in service. We serve primarily northern California. We've just opened an office in southern California. We came to Hawaii in 1996 at the invitation of HUD (Housing and Urban Development) as a preservation effort to preserve roughly 500 units of housing in Oahu that was at risk of conversion to market rate use. We're able to do that with the assistance of HUD, and have since grown our portfolio to about 1,500 units that we've developed here, and managing about 2,000 units both for ourselves and for other counties as well as other third - property owners. Page 22 FC -17 August 15, 2017 This would be the first project that we'd be doing on Hawaii Island and of course very excited about it. We have been with HIVM (Hawai`i Island Veterans Memorial), I think, we're now going on two MR. WILLIAMS: Five years, huh? MS. GUSHIKEN: Well, couple years for us, since our involvement. So we would be taking on the senior housing cases Bob mentioned, while they continue to work on their efforts to develop the Veterans Service Center. It's been quite an effort just to get the change in use approved by the DLNR (Department of Land and Natural Resources), and that just occurred, so we're very happy to be here in the hopes that you would approve the resolution. That would authorize us to take the next step in negotiating the ground lease, and we can get started on financing and planning for this project. CHR. DAVID: Thank you very much, Ms. Gushiken. Council Members, any more questions? Hearing or seeing noneoh, I'm sorry. Mr. Williams. MR. WILLIAMS: I just want to say I'm remiss in not introducing my fellow colleague and board member, Dr. Sonia Juvik here, who is with me as well. But there's only (inaudible) she gave me the "hi" sign. CHR. DAVID: Aloha. Does she want to say something? Do you want to? DR. JUVIK: No, I'm okay with that. CHR. DAVID: Okay, thank you very much. Sue? Ms. Lee Loy, do you okay, go ahead. MS. LEE LOY: Just a summary. Thank you for all the information, Ms. Gushiken and Mr. Williams. This, for the rest of my colleagues, really fits into that Silver Tsunami Wave that we keep hearing about. The idea that this is where it is at this time is just a real natural fit for the growing population of our seniors, and how this is going to provide not only senior housing but veterans and their spouses, somewhat of a boutique or niche type of housing that really isn't provided in other areas. So again, I'm just urging the rest of my colleagues to support this. And, thank you. MR. WILLIAMS: Thank you. CHR. DAVID: Alright, Council Members, if have no one else has any comments, all those in favor of approving Resolution 252-17 please say "aye." Page 23 FC -17 Vote on Res. 252-17 (Approved) August 15, 2017 The motion to recommend adoption of Res. 252-17 was 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 very much. MR. WILLIAMS: Thank you very much. MS. GUSHIKEN: Thank you. CHR. DAVID: Aloha. MR. WILLIAMS: Aloha. CHR. DAVID: Mr. Clerk, please, Resolution 254-17. Res. 254-17: AUTHORIZES THE OFFICE OF THE MAYOR TO ENTER INTO AN AGREEMENT WITH THE UNIVERSITY OF HAWAII The agreement would provide $25,000 from the Department of Research and Development to the University of Hawaii to fund its Building Private Sector Capacity to Control Little Fire Ants in Hawaii County project. Reference: Comm. 391 Intr. by: Ms. David (B/R) Motion to Approve: Mr. Kanuha moved to recommend adoption of Res. 254-17. Seconded by Ms. Poindexter. (Note: At this time, Research and Development Director Diane Ley came forward to address the members of the Committee.) CHR. DAVID: Any discussion? We have Diane Ley in our Hilo office, Council Members, if you have questions. Thank you very much. Okay, Ms. Lee Loy. Oh, Ms. Ruggles first, and then Ms. Lee Loy, and then Ms. O'Hara. Go ahead. MS. RUGGLES: Okay, thank you. Thank you, Diane, for being here, Diane. I was just curious, what is the end result of this agreement? Page 24 FC -17 August 15, 2017 MS. LEY: The intent of the agreement, it sprung out of the annual Request for Proposal for economic development grants from Research and Development. Oh, I should sayI'm sorry. Excuse me, let me identify myself. CHR. DAVID: Thank you. MS. LEY: Diane Ley, Director of Research and Development. So this request came forward out of the department's annual Request for Proposals to fund economic development projects. The Big Island Invasive Species Committee moved forward with this proposal based on feedback they had been receiving through their offices as well as through the Little Fire Ant hui. Basically, they identified the need for training of professional landscapers and yard service maintenance folks to have a solid understanding of what the little fire ant is, making sure they're identifying species, also what the appropriate pesticides use and applications are; and how to continue to maintain properties appropriately to identify whether or not the controls are working or they need to modify that. So, the intent is to train professionals and commercial businesses. MS. RUGGLES: Okay, thank you. So if this grant—so a successful end result of this grant would be that landscaping people with the landscaping business know how to identify and treat fire ants? MS. LEY: Yes. So this is, in a sense, an economic development project as well as an education program. I think we are finding, the County and State through various entities, including the Big Island Invasive Species Council, has been doing a lot of outreach and education and training programs for homeowners. But realistically, a lot of people can't manage that themselves. They either don't have the time or the willingness or the capacity. And frankly, it's an opportunity to purchase that service. And, if we can make sure that our professionals are well- trained, we're e applying pesticides appropriately and when they need to be done. MS. RUGGLES: Okay, so the Big Island Invasive Species Council is going to be training the professionals? MS. LEY: Yes, they'll develop a curriculum and provide training. They'll do the outreach, convene meetings, the training sessions, half-day training sessions, and they anticipate and hope that they'll be able to train professionals in each of the districts. And then they'll do an educational outreach program, eventually even doing a video post on their website. MS. RUGGLES: Okay, great. Thank you. MS. LEY: Thank you. Page 25 FC -17 August 15, 2017 CHR. DAVID: Thank you, Ms. Ruggles. Are you done? Alright, Ms. Lee Loy, go ahead. MS. LEE LOY: I was just getting your attention for Ms. O'Hara. CHR. DAVID: Oh, okay. Ms. O'Hara. MS. O'HARA: Sorry, I know you can't see the lights over there, Chair. Thank you, Ms. Ley for coming up. I do support this measure. I think it's a great idea because this is an issue that a lot of homeowners are choosing to ignore for whatever reason, but it just proliferates when we don't take care of it at a community -wide level. I do interact with quite a few professional yard service folks and landscapers, and they're being eaten alive trying to do their job. This will help—their knowledge will compel owners to bite the bullet and start treating for the little red fire ant. The more that we treat throughout communities, the more control we're going to have overall. I very much appreciate it. I like the avenue that this has taken in terms of developing curriculum, on hosting the trainings. I just hope that we can get this out there to enough professionals, that we not only spur on economic development but I'm looking at the environmental aspect of it too, so that we start getting some control on this little red fire ant problem because it's extensive. It has economic ramifications. It has health issues. Especially, as it's related to small animals and pets and what not, causing blindness and other diseases. So we really need to focus on getting some control, and I think this is going to be a good program. Thank you. MS. LEY: Thank you. CHR. DAVID: Thank you, Ms. O'Hara. Anyone else? Mr. Richards, go ahead, please. MR. RICHARDS: Just a quick question, on behalf of ag. As we look to our exports of the Big Island, these are invasive species we need to control. So, well done and I support it. CHR. DAVID: Thank you very much. Anyone else? Seeing none, all those in favor of approving Resolution 254-17 please say "aye." Page 26 FC-17 August 15, 2017 Vote on Res. 254-17: The motion to recommend adoption of Res. 254-17 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: We have nine "ayes." BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. (There were none.) CHR. DAVID: And I believe that covers our agenda for this afternoon. ADJOURN- There being no further business, at 2:07 p.m., Ms. Poindexter moved to adjourn MENT: the meeting. 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. CHR. DAVID: We have nine "ayes," and we are adjourned. Approved: , /' '- _ 121 410 Ms. Maile edeiros i avi•, Chair (Date) Finance Committee MD/na Page 27