HomeMy WebLinkAboutMIN FC 2017/10/03 2017-2018COMMITTEE ON FINANCE
201h Session
Hawaii County Building
25 Aupuni Street
Hilo, Hawaii
October 3, 2017
CALL TO
The regular meeting of the Committee on Finance was called to order at
ORDER:
1:00 p.m. in the Council Chambers, Hilo, by Ms. Maile Medeiros David,
Chair.
ROLL CALL:
Present:
Ms. Maile Medeiros David, Chair
Ms. Karen Eoff, Vice Chair (came in later)
Mr. Aaron S. Y. Chung, Member
Mr. Dru Mamo Kanuha, Member
Ms. Susan L. K. Lee Loy, Member (came in later)
Ms. Eileen O'Hara, Member
Ms. Valerie T. Poindexter, Member (came in later)
Mr. Herbert M. "Tim" Richards, III, Member
Ms. Jennifer Ruggles, Member (came in later)
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.)
CHR. DAVID: So I believe we can proceed, close Statements from the Public
and proceed to Communications. Mr. Clerk, please, Communication 449.
COMMUNI- The Chair directed the Committee to proceed to the next order of business,
CATIONS: Communications.
Comm. 449: APPOINTMENT OF DEANNA SAKO AS FINANCE DIRECTOR
From Mayor Harry Kim, dated September 12, 2017, submitting for the Council's
review and confirmation the above appointment.
Requires Council
Confirmation by: November 30, 2017 (Section 13-8,
Hawaii County Charter)
Motion to Approve: Mr. Kanuha moved to recommend the confirmation of
the appointment of Ms. Deanna Sako as Finance Director.
Seconded by Ms. Eof£
FC -20
October 3, 2017
(Note: At this time, Mayor Harry Kim came forward to address the
members of the Committee.)
CHR. DAVID: I'm sorry, Mayor. I'll let you catch your breath. We have our
Honorable Mayor Harry Kim for our agenda item, appointment of Ms. Sako.
Mr. Mayor, go ahead, please.
MAYOR KIM: Today was kind of a crazy day. First meeting was 6:30, second
meeting was 7:30, third meeting was 8:00, fourth meeting was at Pohakuloa, next
meeting was here, and this is the fifth meeting.
CHR. DAVID: Wow.
MAYOR. KIM: That's why I kept you waiting. This is a good situation in
regards to the nomination for you to consider, in a sense that I think I come forth
with a very qualified person of both experience and everything else related to this
particular job.
We lost the previous director, excuse me, in a rarity of pure truth. He asked for a
meeting; I had no idea this was coming forth. This is what he said, I hope I don't
offend him by releasing this kind of information, but he said, "You know, on this
job people don't realize how complex it is in the learning curve." I was going to
interrupt him and say, "I realize." But this is what he showed, the "learning
demands of the position, my ability to learn," he said, "no matter how much you
learn, you find out there's so much more to learn." He felt it was best for the
County, best for the department and the staff, and naturally for himself also, that
he resign, and that's the whole background of the resignation. Nothing hidden,
nothing else. I think we all know it's not often that a person will openly admit
personal weakness of their job.
Without hesitation he said, "I think you know the best person suited for the job is
Deanna Sako," and in truth I think I know that. We talked about it openly, who
his right arm was. He knew that the budgetary process was beginning again. He
knew that, and he said so, that the staff carried him on that. It was not fair to staff
and those other people for him to stay as director, therefore he asked me to accept
his resignation. On that part, publicly, I am very grateful for him. I told him in
truth, "I needed someone who had a reputation of integrity and trust," and he
fulfilled that very well for me.
Putting that aside of his resignation, I very proudly and gladly come to you to
please consider and accept the present nomination of Deanna Sako. Her work
record to you and the County of Hawaii I think is out there for everybody to see.
We pledge to you that we will do ❑ and I have to say this again because it was said
with Deanna in discussion, how proud we are of this Council. We know we come
in, especially the new ones here, you come in and what is the first thing hitting in
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October 3, 2017
you in the face, six percent raise of property tax across the board. The most
unpopular thing anyone, a politician can submit.
Second thing, as soon as that's resolved, bingo, first time in 30 years, fuel tax
raise. I mean, I could not have come up with the worst case scenario for you
people. But you took it by the bull, you rode it, and you passed it. So publicly
again, thank you, which I thanked you before.
But going back to the subject on hand, I feel very good about this nomination for
you to consider, and I kindly ask you for your positive consideration of this,
Deanna Sako. And, thank you for my short breath.
CHR. DAVID: Mahalo so much, Mayor Kim. Ms. Sako, would you like to come
up and say a few words, please?
(Note: At this time, Nominee Deanna Sako came forward to address the
members of the Committee.)
MS. SAKO: Good afternoon, I guess. I am just happy to continue to be able to
serve the citizens of our County. We appreciate all they do for us. Just like you,
we all want to make our island a better place to be, the best place to be, and we
just want to continue to do that. If you have any questions, I'm more than happy
to answer them.
CHR. DAVID: Thank you very much. Council Members? Ms. O'Hara.
MS. O'HARA: Okay, thank you. Of course I will be supporting this
confirmation. Deanna is so well-qualified for this position. As we all know,
she held this position previously for a couple of years and also served as the
Deputy Director for what appears to be six years. In the previous administration,
she's been the controller. She started out as an accountant here at Parks and
Recreation back in, whew, long time ago, 1999.
MS. SAKO: Yeah, long time.
MS. O'HARA: So you've been with the County for 18 years, which is
wonderful, because the position you hold requires that kind of internal knowledge
of the inner workings of the County. I fully understand why our previous director
resigned. It was a great challenge to come in from an external position from the
banking industry, and be able to get a handle on County finance. I'm not an
accountant. I'm not an economist. I still struggle trying to understand our County
procedures sometimes, but they are somewhat unique in public finance, and I
know that you understand this better than most anyone here. You have excellent
rapport with everyone on staff We're just very, very excited that you're willing
to step up and do this because it's very time consuming. I know you have family.
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October 3, 2017
It takes a lot out of one's life to show the dedication that you've always shown to
your work here at the County, and we very much appreciate it.
I see that your Certified Public Accountant license expires at the end of the year.
That's something that gets renewed, I'm assuming?
MS. SAKO: Yes, we have to renew it every two years.
MS. O'HARA: Okay, yeah. I'm sure you're on top of that, too. But again, I
fully support this confirmation. Thank you.
MS. SAKO: Thank you.
CHR. DAVID: Mahalo, Ms. O'Hara. Ms. Eof£
MS. EOFF: Thank you, Madam Chair, and thank you, Deanna. But I also wanted
to say a thank you to Collins Tomei for having come and be willing to serve the
administration when he was asked to and for what he did and also for his knowing
at what times to defer to your experience in a humble way. So I appreciate that
we've experienced that.
Now we're here, and I'm so happy that you will be the director. I completely
trust your information. You've always delivered it really concisely and clear and
helpfully when we've been at a loss or we needed to understand finances a little
bit better, so I've always appreciated your explanations; also being there when we
need to call and answering the calls and calling back. So anyways, I don't think
we could be in better hands. I really appreciate, Mayor, for your nomination of
Ms. Sako. I'll be supporting you whole-heartedly. And anything I can do during
the term, just let us know, we're here to help you, too. Thank you.
CHR. DAVID: Mahalo, Ms. Eof£ Mr. Richards.
MR. RICHARDS: Thank you, Chair. Yes, Deanna, I also, too, am very pleased.
I do want to echo what Councilwoman Eoff has said concerning Director Tomei,
and he did great and recognized when he needed to contact you.
So moving forward, I'm not going to ask you questions because I've got a lot of
questions later on the agenda and I'm sure you'll be hanging around for those, but
you know how I am.
MS. SAKO: I will be. Yes, I'll be here.
MR. RICHARDS: Thank you. I yield.
CHR. DAVID: Thank you, Mr. Richards.
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MS. POINDEXTER: Yeah, thank you, Deanna for stepping back up; and thank
you, Mayor, for recognizing that. Also, too, like previous Council Members
spoke of Collins Tomei, my hat is off to him. He was a gracious, very kind man.
When you appointed him, Mayor, he came to visit all of us to make sure that we
could build a relationship with him, and concerned about even us, about the heavy
lifting that we are doing here at Council. So it wasn't just him worried about the
Finance Department, but he was worried about us as individuals, as people, as
human beings. That meant a lot.
But with you stepping back up to the plate, I feel the same way about you. You
care about what we're going through. You've always had an open door policy.
Really appreciate that. Made it so easy for us to understand, because of some of
the lingo on the CPA (Certified Public Accountant) ❑
MS. SAKO: It's different, yes.
MS. POINDEXTER: It's different, and to break it down so that the regular
layperson can understand that, that's your skill set, and we appreciate that. So,
thank you. Thank you so much. And thank you, Mayor, for putting her on.
Thank you.
CHR. DAVID: Mahalo, Ms. Poindexter. Mr. Kanuha.
MR. KANUHA: Thank you, Madam Chair. I'm also ❑I'm going to keep it brief
Deanna, I fully support you❑
MS. SAKO: Thank you.
MR. KANUHA: ❑ and fully support the work that you've been doing in this
County. I think our entire County and the people that we represent really and
truly know that without you there ❑oh, they fully support what you've been doing
in the past 18 years or something. You're extremely valuable. You know the ins'
and outs' of what's going on in this County. And really, Mayor Kim, mahalo for
not only appointing her as the director now but retaining her as a Deputy Director
when you first came on board. I think she's extremely valuable and a great asset,
so I mahalo you and Deanna.
What I appreciate about you, is you really work with all of us on all the different
issues we have dealing with finances. It pretty much goes across the board with
everything. So, thank you for having that open-door policy and really keeping the
relationships going because that's valuable to me and it really helps out to how we
function within the legislative body in how we move forward policies. So, thank
you again and keep up the good work. I fully support your nomination.
MS. SAKO: Thank you.
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October 3, 2017
CHR. DAVID: Mahalo, Mr. Kanuha. Anyone else? Ms. Lee Loy.
MS. LEE LOY: Aloha. Thank you, Deanna. Thank you for stepping up. And I
said this when we went through the last cycle of all of our Cabinet Members, is
often leadership means also recognizing not only your strengths but your
weaknesses. So I'm going to ask, who you like for be your deputy?
MS. SAKO: I know who I want. But we have some changes in our department,
so there's a couple different people I'm considering and I may take a little while
yet before I decide. We do have some people out on long-term illness right now.
I also understand that each of our divisions are important, and I don't want to
leave them short-staffed or short-handed either. So I appreciate each of our
division heads, and I know they're stepping up and helping and will always be
supportive of me. But, we do have a few people we're looking at and I will take a
couple of months to decide probably.
CHR. DAVID: Mahalo, Ms. Lee Loy. Mr. Chung.
MR. CHUNG: Oh, thank you. I wasn't really going to say anything, but since
everybody spoke I didn't want to make it seem that I wasn't supportive of this
appointment because, really, I can't think of anyone other than you for this
position, yeah?
MS. SAKO: Thank you.
MR. CHUNG: I hold you in the highest regard. You've saved the County
millions of dollars over the past several years, and we really do appreciate that.
I'm also glad that people mentioned Collins, too, and then the Mayor brought up
Collins's name, too. I told you guys earlier he's my banker, so I've known him
for a long time. He's a real high -character individual.
MS. SAKO: Yes.
MR. CHUNG: Just an unfortunate set of circumstances, I guess, but we all wish
him well. But, thank you again. Look forward to continue working with you,
Deanna.
One thing I wanted to ask you, and I think we have discussed this in the past
though, County's borrowing capacity over the next several years. I know this
administration kind of been left in a tough situation; but at the same time, we've
heard skateboard park, shooting ranges, and there are other needs. Roads in Puna
that need to be addressed; and if possible, we should be exploring some avenues
of financing for those things. I think if anybody can do it, you're the person to do
it, right?
MS. SAKO: Yes, that's very high on the priority list.
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October 3, 2017
MR. CHUNG: Yeah.
MS. SAKO: Because there's definitely a lot of projects that need funding,
including those you mentioned and others. So, that's one of the next priorities
that we'll be bringing forth before Council.
MR. CHUNG: Okay, thank you. Maybe not of the magnitude of $100 million or
anything.
MS. SAKO: No, yes.
MR. CHUNG: But maybe smaller stuff that we can serve the public and enhance
the quality of life for our citizens. Thank you. Congratulations.
CHR. DAVID: Mahalo, Mr. Chung. Anyone else? No? Okay, it's my turn.
First of all, Mayor Kim, thank you very much for this nomination. Because not
only can I echo what my colleagues Obut my personal relationship with Ms. Sako
has always been very positive. I've learned a lot from you, Deanna, especially
from one that hates math, and I really appreciate you taking the time to explain
this very complicated process to me whenever I ask.
MS. SAKO: Anytime.
CHR. DAVID: And I also wanted to mention Mr. Tomei. Because I think when I
first met him, he didn't strike me as a Finance Director. He gave the
impression Ohe was such a humble person, and I thought he would be in an
instruction type of field, where he would give good advice. He was always open
and he was very warm, and that really stood out to me, and making the effort to
sit down and welcome us as much as we were welcoming him, so I thank him for
his service and always being there, too, when we called.
Other than that, I support you 100 percent. And I really thank you and your staff
for taking a handle on this very, very huge department, which is pretty much the
lifeline of this County.
MS. SAKO: Thank you.
CHR. DAVID: So I respect you a lot and appreciate everything you do.
So, we're ready? All those in favor of confirming the appointment of
Ms. Deanna Sako please say "aye."
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October 3, 2017
Vote on Comm. 449: The motion to recommend confirmation of the appointment
(Approved) of Ms. Deanna Sako as Finance Director 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: Deanna, you don't have to come back for Council. But I'm going
to take a recess so we can congratulate you really quick.
MS. SAKO: Thank you. That would be great. Thank you.
CHR. DAVID: Mahalo.
Recess: At 1:22 p.m., the Chair called for a recess.
Reconvene: The meeting reconvened at 1:27 p.m.
CHR. DAVID: Thank you, Council Members. We are now out of recess.
Mr. Clerk, can you please read Communication 450?
Comm. 450: AUDIT REPORT NO. 2017-03: HIRING PRACTICES AT THE COUNTY OF
HAWAI`I'S DEPARTMENT OF HUMAN RESOURCES
From Legislative Auditor Bonnie S. Nims, dated September 7, 2017, transmitting
the above report pursuant to Hawaii County Charter Section 3-18(4)(2).
Motion to Close File: Ms. Poindexter moved to close file on Comm. 450. Seconded
by Mr. Richards.
CHR. DAVID: I would like to call up Mr. Shibata and Ms. Pacheco.
(Note: At this time, Audit Analysts Lane Shibata and Maxinne Pacheco
came forward to address the members of the Committee.)
CHR. DAVID: Thank you. Mr. Shibata, please identify yourself for the record,
and you as well, Ms. Pacheco, and then go ahead.
MR. SHIBATA: Good afternoon, Members of the Finance Committee.
Lane Shibata, Audit Analyst with the Office of the Legislative Auditor.
MS. PACHECO: Good afternoon, my name is Maxinne Pacheco. I'm an
Audit Analyst with the Office of the Legislative Auditor.
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CHR. DAVID: Mahalo for being here. Mr. Shibata, go ahead.
MR. SHIBATA: Our Legislative Auditor, Bonnie Nims, wanted us to convey her
sincerest apology for not being here today. She was scheduled to be off -island.
But Maxinne and I did majority of the audit work so we know pretty much the
detail of how the audit was conducted like that.
Just as a brief summary. The purpose of the audit was to determine whether the
County's hiring practices in place were effective at ensuring equitable, uniform,
and transparent selection of candidates and ensuring compliance with applicable
laws, regulation, County policies and procedures, and according with the
applicable best practices. We reviewed and evaluated internal controls over the
hiring practices during calendar year 2016.
Our audit process, we conducted interviews and walk-throughs with DHR's
(Department of Human Resources) staff and the department, HR (Human
Resources) representatives to fully develop an understanding of the entire hiring
process.
We performed a risk -base analysis to determine which departments and which
positions pose as a greatest risk in the hiring process.
We just mentally narrowed our audit scope, by risk, and tested four departments
and four different classes of work.
We looked at what ❑ during 2016, there were 404 filled Civil Service positions,
and we reviewed 46 recruitments or twelve percent of that total.
We also performed analysis of the entire process, from the initial Request to Fill
vacant positions to the final selection of the applicant, including review of
supporting documentation at DHR and at the department levels. In summary, we
found numerous questionable hiring practices and we made our recommendations
accordingly.
What standards do we follow? We conduct all of our audits in accordance with
generally accepted government auditing standards. These standards require us to
plan and perform our audits to obtain sufficient and appropriate evidence to
provide a reasonable basis of our findings and conclusions based on our audit
objectives, and we believe that the evidence obtained provides a reasonable basis
of our findings and conclusions based on our audit objective.
Our audit reports are also reviewed by a national representation peer group every
three years to ensure that we, our office, performs our audits according to
government auditing standards, or commonly referred to as the yellow book. So,
if anybody has any questions?
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CHR. DAVID: Ms. Pacheco, you'd like to say anything? Just open for questions,
okay. Council Members, do you have any questions for Mr. Shibata at this point?
No? Mr. Richards.
MR. RICHARDS: Thank you, Chair. Reading through this, you selected four
departments. What was the criteria, those four departments as opposed to any
other departments?
MR. SHIBATA: That's a good question. Like I stated earlier, we performed
our risk base assessment to determine our sample size. We looked at these
four positions. Two were unskilled registration positions, the Laborer II and
Park Caretaker; and two skilled positions, Clerk III and Scale Attendants.
The departments DI guess the risk that were involved when these
departments ❑were that the positions were continuous and open recruitment for
three years, in these four departments. Qualifications for these positions were low
or minimum.
The other departments that we considered, as far as Police, Fire, they were not
considered because their rehiring practice didn't include the Staffing Review
Committee. Without the involvement of the Staffing Review Committee, it
minimizes the risk of having outside influences or outside involvement during the
hiring practice, unlike the departments that we chose. I hope that answers your
question.
MR. RICHARDS: Sort of. So your decision to audit the four departments, was
that determined after you reviewed all the departments and then made a
determination or was it a "we are randomly selecting four departments then we're
going to select those"?
MR. SHIBATA: No. Originally what we did, was we looked at all the
departments, looked at all of the new hiring positions that they conducted during
2016.
MR. RICHARDS: Okay.
MR. SHIBATA: And then we looked at determining which positions were risky,
the highest risk, and then those four departments.
MR. RICHARDS: Okay, so it's kind of floated to the top after you did your first
review?
MR. SHIBATA: That's correct.
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MR. RICHARDS: And then on the timeline, why 2016 as opposed to 2010, or no
comparables? Was there a reason for that or we're just trying to have a very
narrow focus at this point?
MR. SHIBATA: Yeah, once we have a narrow focus, than kind of more recently
in the hiring practices versus long time prior.
MR. RICHARDS: So the decision was, early on, just be very narrow focused?
MR. SHIBATA: That is correct.
MR. RICHARDS: Okay, thank you. I yield at this point.
CHR. DAVID: Thank you, Mr. Richards. Anyone else? Ms. O'Hara.
MS. O'HARA: You've come up with recommendations from this report, and the
administrative recommendations note that the Office of the Mayor and
Department of Human Resources consider an independent whistle blower
program and system to allow anonymous complaints to be reported. I sat on the
Cost of Government Commission in 2010 and made that same recommendation.
The committee made that same recommendation in our final report, and here we
are in 2017 and I'm to be made aware that has never been implemented. That's
kind of sad.
Also, you suggest in that administrative recommendation that there are not only
policies and procedures that need to be updated but the County Charter and/or
County Code, but it doesn't provide any real specifics on those updates. Can you
expound on that a little bit? I'm talking about page 18 of your report.
MR. SHIBATA: Well, we wanted the, I guess, Office of the Mayor and DHR, we
wanted them to kind of take a look at the County Code or the County Charter and
see they could kind of tighten up ways to kind of prohibit the kind of practices
that was done in the past. We wanted them to kind of consider taking a look at
that but not 0I think we kind of met with them and kind of informed them as far
as what kind of practices that shouldn't be done, and I think they got the idea. So
it's just a matter of, I guess, getting together and seeing if they could put more
restrictive laws, or rules, or regulations to kind of discourage, deter prohibitive
hiring practices.
MS. O'HARA: So you basically see that entirely as the purview of the Office of
the Mayor and the Department of Human Resources, because ultimately it is the
County Council that would modify Code and approve any changes to County
Charter in a way that it advances to a vote. But that is the role of this body, so
I'm not sure if we were to wait for some action from the Office of the Mayor and
Human Resources or if these are things that we can be directly involved in.
That's why I'm asking the question.
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MR. SHIBATA: Part of the, I guess, the responsibility, according to the State
law, rests under DHR. They would be fully aware of what kind of prohibitive
practices that they should be looking at or they should be considering. The
Council also can, I guess, under the purview, institute changes to the Charter or
County Code also to kind of put in laws and regulations that would prevent
prohibitive hiring practices. You could consult DHR and see what kind of things
you should be introducing or you could be introducing.
MS. O'HARA: Well, thank you. Yeah, a little more specificity would be
appreciated on that, I guess, in terms of those recommendations. Most of the
other monitoring, oversight, and training is pretty clearly expressed, but I wish we
had a little more definition on what you are recommending, in the way of changes
to County Code than to saying that would be something to consider.
MR. SHIBATA: Our office would be open if you wanted to kind of talk with us
too for, I guess, kind of advice and ideas on what we're kind of looking towards.
MS. O'HARA: Okay, thank you very much. I yield.
MR. SHIBATA: Thank you.
CHR. DAVID: Thank you, Ms. O'Hara. Mr. Chung.
MR. CHUNG: And good afternoon, Lane, Maxinne. Thank you for being here
have the same line of questions that were brought up by Mr. Richards and they
have to do with the methodology. I mean, first of all, I really do thank you for
your hard work on this.
Let's kind of cut to the chase here, what was the impetus for this audit? Was
there any rumors of wrongdoing or anything that made you guys select 2016 as
the date or the year that you would do your review? The reason for that is, it
seems that it's this Staffing Review Committee that determined whether or not
you're going to examine a particular department. I mean, that's what you said,
right, instead of just examining everything across the board? Because the County
Council does the hiring.
In fact, Al Konishi, who was here testifying at the Merit Appeals Board, was
wondering why we weren't included in the audit. The Water Department does
their own hiring as well as the Police and Fire. I'm glad you guys brought those
two up. We did have a police cheating lawsuit many years ago, which cost the
County millions, right? But it seems that you guys are focusing automatically on
this Staffing Review Committee. Why was that? Because that almost eliminated
an assessment of all other departments. I'm just kind of curious, why would you
set that as a threshold and not just do an examination of all, so we could get a
comparative analysis throughout the County?
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MR. SHIBATA: We kind of looked at the timeline, too. For us to kind of look at
all of the departments, would have taken us quite a bit of time. Like I said, we
started from looking at the entire list of new hires for 2016, and we decided that
looking at the previous year would be most effective than looking at prior years
behind. That was one of the criteria that we used or risk analysis that we used.
We also looked at these positions or these continuous open recruitments, which
departments had positions that were continuously open, recruitments for three
years. Continuous recruitments should be for positions that are difficult to fill,
meaning that they need higher qualifications, highly skilled experience, and they
needed certification and licenses. So, those positions of the other departments
require those. The departments that we looked at, two of the positions did not.
The lists were greater Othe recruitment lists were greater, which would be0were
difficult to, I guess, narrow down the number of applicants to be viewed versus
having a skilled position with four or five applicants, so that was one of the other
risks that we looked at.
We also looked at the number of positions that were available, not only these four,
but there were other positions available that they hired candidates, too. Those
were, I guess, filled according to the policies and procedures that were set. So
that's why our main focus was on these four departments because of all the high
risk that was involved.
MR. CHUNG: Yeah, well, I had a difficult time following that, Lane. I mean, no
offense, but it just seems to me that there was a great deal of subjectivity on the
part of the auditor's office in choosing different departments and classifications
and things like that. I think the best way to do it, even if it's more time
consuming, is to do everything, right? For example, you took a sampling of 46,
and I think the report said that it showed some, I don't know what the word is,
inconsistencies, with about 42 of them. That's a high percentage. But now, if
you had chosen a larger sampling, would that percentage have been smaller, like,
for example, now 43 out of 200 hirings? I'm just making things up. Or, would it
have been worse, we don't know. We don't know how things would have been
had you checked in 2005, 2004, all the way back to see how long this type of
culture has been in existence or what might have been done in the past. I'm not
trying to criticize you guys, but at the same time we want to make sure that we get
accurate information out there, right, so that we can make decisions and then the
public can have a real clear idea of what's going on.
So, I think a better way of doing this would have been, even if more time
consuming, even if it took a year or two to get a real broad sampling, not broad
sampling, every single, you have to analyze every single hiring, yeah? You have
to do it with all of the different hiring agencies within the County. You cannot
just pick some.
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Because I will say this, I just had a conversation with a person in downtown. I
guess he was kind of concerned that it showed, and no offense to Environmental
Management over here, okay, but that Environmental Management was sort of
dismissed as being okay. He works for Environmental Management, and he said
that. We can kind ofOthey have sought legal representation on several 0for
several matters. So he was put off by that; that it indicated that Environmental
Management was A -Okay. Now whether it is or not, I don't know. It's only his
opinion. But he said we can expect something to come down the pipe, that's what
worries me. From both sides, it's just a matter of fairness. Is it a bad situation we
have? I don't know. If so, how bad? And if it's not that bad, then let us know,
too. I just can't really tell based on the methodology that's been implemented. I
know my time is up, but I have a lot more questions.
CHR. DAVID: Okay, let me go to the other Council Members and I'll come back
to you. Ms. Lee Loy.
MS. LEE LOY: Thank you, Chair. Thank you, Maxinne and Lane, for being
here. I'm almost glad that my Council Members haven't gone tone-deaf, because
I've often advocated for good information helps us make good decisions. So I do
have to circle back on what Mr. Richards' point is, is this tiny little snapshot of
time, and the sampling seem to have targeted specific divisions. So it's really
hard to understand in the magnitude of some of these recommendations and a lot
of the concerns that are being raised, but also balancing that with other personnel
issues that exist.
Like, for example, often times positions are filled Obecause that particular
classification, there's a work injury, and so they have to provide reasonable
accommodations, which means that they may need to move into a similar
classification but in a different department. That's one thing that I didn't see in
this audit, was those extenuating circumstances. So when Mr. Chung talks about
the numbers, of those numbers were there other extenuating circumstances that
these positions were filled with individuals and it wasn't because of some
inappropriate hiring practices? Do we have that information?
MR. SHIBATA: Part of auditing standards, I guess, was we need to ensure that
we have sufficient evidence to support our findings and conclusions. By looking
at the four departments and the four positions during our risk analysis, we believe
that the findings that came about by just looking at these four positions showed
that the hiring practices were a little bit flawed and needed to be improved. I
think part of our mission and our goal of the office is to make sure that we find
problems or processes, and our recommendations goes along to help improve that
process. So I think the number of instances that we found supports our findings
and then also supports our recommendation. Ultimately, our recommendation
goes to ❑what we want to do, is trying to improve the County government to
make it better, the processes.
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October 3, 2017
MS. LEE LOY: Just a follow-up. Thank you. I know this so challenging to talk
about. I feel it in the room. Everybody's feeling extremely awkward right now.
Then back to the recommendation that Ms. O'Hara brought up, it was Charter
amendments and Code amendments, and I can appreciate that because as a
policymaking body that's our role here. But there's this other umbrella, under
HRS (Hawai`i Revised Statutes) 76, and then the Chapter 91 and Chapter 92
appeals process. We have this umbrella, Human Resources' statutes and then we
have our own. So how do we ensure that, one, and I think this is the real goal, is
that people who are being hired are being hired based on merit and a skill set and
are the right people for the position but also kind of marginalize or minimize the
concerns that it's about who you know and not what you know. How do we
findOhow do we refine legislation that fits into these other statutory
requirements?
MR. SHIBATA: I think our recommendation to the department and to the Mayor
is kind of a piece to solving the bad hiring practices that the County went through.
With all the recommendations, including monitoring and oversight, which DHR
has, that's another piece that will help or aid in improving the hiring practices.
We also recommended, maybe the HRS needs to be kind of looked at.
Previously, they had a provision that entailed prohibited personnel practices,
which was repealed, and we never went back to kind of find out why it was
repealed. But by reinstating that, that might be another piece in helping improve
the hiring practices and not have it questionable.
In addition, we also recommended that the NeoGov System be used more so that
it will track the statuses of candidates, when they do apply for positions, which
would help the County ensure that the practices are equitable and uniformed, clear
across the board.
MS. LEE LOY: I'm going to yield at this time. I think Obecause my other
question might be more for Deanna, and that's based on her response, that's
contained in the audit, on pages 26 and 27. So I'm going to yield at this time,
Chair. Thank you.
CHR. DAVID: Thank you, Ms. Lee Loy. Second round. Anyone else for
the first round? Then I'm going to go second round. Mr. Richards and then
Mr. Chung.
MR. RICHARDS: Yeah, I'm sitting here and listening to the conversation. I
really appreciate the auditor's report. And, I'm sorry Ms. Nims couldn't be with
us today to further answer. Please understand the Council is not criticizing your
report. We are critiquing it, and trying to develop that understanding. I do
appreciate the thoughtfulness of the questions coming forward. We all want the
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October 3, 2017
same thing. We want fairness. We want transparency, and you guys about heard
all that.
That being said, the question of selection process, as Mr. Chung pointed out, if
you count two out of five, that's 40 percent; if you count two out of 100, that's at
two percent. Statically, unless you read the detail, it changes the story
substantially. So that's what we're trying to get to the root of all this stuff
From my perspective, I'm just trying to get an understanding, I appreciate the fact
that there may be some questionable practices in the past and we're trying to go
forward with that. But how long have we done these practices, is why I pose the
question, and what was the reason that we didn't change earlier, if that was such
the case? That's why I said, such a narrow review, I get it. But that, just to me,
highlights the fact that maybe we need to look a little deeper if we're going to be
making some public policy changes. And again, trying to get that information.
So I'll yield at this point, thank you.
CHR. DAVID: Thank you, Mr. Richards. Mr. Chung.
MR. CHUNG: Really, when I look at these recommendations, too, and
following-up again on Mr. Richards and Ms. Lee Loy, this all derives from State
law, right, the hiring practices? You recommend some things relating to the
administrative, the Mayor, and also the Human Resources Department, nothing
really at the Council level. There's really nothing we can do. But it's just so
disappointing and hurtful, if there was wrongdoing. It's difficult for me to tell,
and that's why I had to ask those questions about the methodology.
I can understand the whole concept of0you said that there were questionable
hiring practices, and I think you're dealing basically with the structure of the
hiring practice that was implemented in 2016. But at the same time, Lane, you
said that you found that the hiring practices were a little bit flawed. So was it0is
it something that we should be concerned about? When you say, "Little bit
flawed," the public is out there thinking something really bad happened, right?
You talked about D I don't think we're feeling really awkward.
Let's throw all the cards on the table over here. We had a Human Resources
Director, who had the Merit Appeals Board, after an Executive Session, a lengthy
Executive Session, resign, right, and we don't know what happened in that
Executive Session. Basically, I don't know what to make of this. I appreciate the
hard work. But just tell us, is there cause for concern? Was there wrongdoing? I
mean, just tell us. Or, was it not as bad as itOpeople are thinking. I just don't
know what to think right now.
MR. SHIBATA: Well, when you look at the report, it does say that our hiring
practices were questionable and there were some improprieties in the way the
candidates were interviewed and selected. If you look at the public perception
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October 3, 2017
that's out there, you know for yourself that they do question the County's hiring.
We feel that afterOby implementing these recommendations, it should improve
the practice, the hiring practices. I guess that's what our office's major goal is
trying to do, is trying to improve the process to make sure that there isn't that bad
perception out there, in the public.
MR. CHUNG: Yeah, because I just want to relay the story that was told to me by
my wife, after she had read all of this stuff She works for the community
college, and she was telling me how their hiring practices go. She's not in the
loop over the hiring, but sometimes she's on panels, and she said their HR person
is top notched. I mean, in terms of making sure and getting on all the people who
are involved. Because whenever you have a human element in hiring practice,
you're going to have some subjectivity of course, right, maybe even crookedness,
I don't know. But that person, I think her name was Mari, but I could be wrong,
every step of the way is reminding all of these different panels and reviewers that
they have to just stick with the script, basically, all the way through, and I think
which comports with good hiring practices. But again, I mean, is there something
we should be worried about here? Is everything A -Okay now? Yes or no?
MR. SHIBATA: Yes, DHR started to implement a lot of the trainings, mandatory
trainings to train departments, HR staff, including directors and people that serve
on the interview panels like that. I think with that, they're trying to ensure that
these practices are in compliance with the laws and rules of HRS.
MR. CHUNG: Okay, so everything's okay now? Right now, they're in
compliance with ❑
MR. SHIBATA: We believe so.
MR. CHUNG: Oh, okay. Alright, thanks.
CHR. DAVID: Thank you, Mr. Chung. Ms. Ruggles.
MS. RUGGLES: Thank you. Thank you for being here. My first reaction was
also wondering why we only did it for 2015 and 2016 because the Staffing
Review Committee existed from 2013, so I felt that it was a really limited scope
of review, but still valuable.
On page six, do you refer to an internal complaint process? Does that mean that
complaints within Human Resources would go to the Human Resources Director?
MR. SHIBATA: I think what we're referring to here is the County's internal
complaint process. DHR has entered the complaint process for people that are
existing employees of the County. The Merit Appeals Board handles complaints
for people seeking to be employed with the County, so those are considered like
new applicants.
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October 3, 2017
MS. RUGGLES: Okay, so for people who are seeking to be employed by the
County, they would send complaints to the Merit Appeals Board; and for people
within the Human Resources Department, would their complaints go to their
director? Who do they have to complain to?
MR. SHIBATA: The current employees can complain internally to their director;
or if it involves their director, they can go one step higher.
MS. RUGGLES: Which would be? Is there a representative from HR here?
CHR. DAVID: Yes, I believe it is Acting Director Brilhante, from HR. Would
you like to come forward, please?
(Note: At this time, Human Resources Acting Director William Brilhante
came forward to address the members of the Committee.)
CHR. DAVID: Mahalo, Acting Director Brilhante. Go ahead, Ms. Ruggles.
MS. RUGGLES: So who would somebody, who has a complaint within their
department, complain to?
MR. BRILHANTE: Good afternoon, Chair and Committee Members, and
specifically Council Member Ruggles. Just to clarify this statement here, found in
the report as it relates to the internal 0oh I'm sorry, William Brilhante, Acting
Director, Department of Human Resources.
Just to clarify that statement found within the audit, on page six, the internal
complaint procedure is a formulized procedure that's afforded to applicants, who
submitted an application or submitted a request for a promotion, and they applied
for a promotion and they weren't selected, and for whatever reason they feel that
there were some procedural misgivings or just general mistakes made with the
hiring process, whether it be proper consideration given for their application.
That's also a procedure that's afforded to excluded management members of the
County, who aren't covered by the Civil Service protections. So that's the
formulized procedure, it's through the Internal Complaint Procedure.
I think what you're alluding to, Ms. Ruggles, is if0and let me rephrase the
question just so that I can respond accordingly, properly, is that you're, I think OI
believe your question is, what resource do the employees within HR have or are
available to them if they see something that they're not comfortable with moving
forward, who can they complain to?
MS. RUGGLES: Right.
MR. BRILHANTE: The best answer I can provide for that, is there's a
formulized system in place, structure in place for that, and we don't have that in
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October 3, 2017
pretty much almost any department. But what we do afford our employees, is the
opportunity, through the chain of command. We have a supervisor for each
division within the department, and that supervisor is available; then above the
supervisor is the Deputy Director, the position I was serving previously; and then
above that is the Director, which would have been the HR Director.
MS. RUGGLES: Okay, thank you for that. I have follow-up questions for the
auditor's office. So on page seven, it says that you "narrowed down the audit
scope to test recruitments for the four different classes of work" within the
departments, which are the Clerk III, Laborer II, Park Caretaker, and Scale
Attendant. I'm just curious, what higher paying positions did you exclude from
the review, and why did you choose these four classes?
MR. SHIBATA: Can you repeat the question again? What was?
MS. RUGGLES: Yeah, basically why did you choose these lower pay scale
recruitments and if you did deliberately exclude higher paying recruitments?
MR. SHIBATA: I think what we did, was when we looked at the risk
CHR. DAVID: Excuse me, Mr. Shibata. I'm sorry.
MR. SHIBATA: Sure.
CHR. DAVID: Could you just identify yourself?
MR. SHIBATA: Oh yeah, sorry. Lane Shibata, Audit Analyst with the Office of
the Legislative Auditor.
CHR. DAVID: Thank you.
MR. SHIBATA: Sorry. I think when we looked at the risk and we looked at the
different areas of risk, the higher paid positions required more skill, so the number
of applicants to review was less than these lower positions. When you have a
greater number of applicants, the risk is higher because of0you know anything
can happen, right?
MS. RUGGLES: Okay.
MR. SHIBATA: So in looking at the type of recruitment, skill level that's
involved, minimum qualifications, just like a high school diploma to get in to
qualify. The applicant pool becomes greater, so you need more scrutiny on how
those applicants were determined, on which applicants to review.
MS. RUGGLES: Okay, thank you. That looks like 42 out of 46 that you looked
at, there were numerous questionable hiring practices. This is a quote from the
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October 3, 2017
report, it says, "An existing employee manipulating the recruitment or selection
process to ensure the hiring of a close friend or family member," and I'm just
wondering how many of those violations you found.
MR. SHIBATA: I think we found just one instance of that.
MS. RUGGLES: One instance?
MR. SHIBATA: Yes.
MS. RUGGLES: So out of the 42, only one of them included an employee
manipulating the recruitment process to ensure hiring of a close friend or family
member?
MR. SHIBATA: That's correct.
MS. RUGGLES: Okay. And in one of the line items in here it says, "Bypassing
or failing to abide by legislation pertaining to the recruitment and selection
process," so that's basically failing to abide by legislation that's passed, which
I'm assuming the law, which I think, is really serious implications.
I did a little bit of math here, and if we look at just this sample of review that the
auditor's office conducted, in 2016 the County hired 404 positions. From when
the Staffing Review Committee started, it's existed for four years. So if we go
400 times 4, that's 1600 hires; and if 12 percent of those 404 hires, which is what
the 46 reviews that you did, it was 12 percent of that. If 91 percent of that
12 percent had questionable practices, that means that 175 of our hires in the past
four years had questionable hiring practices. So I'm wondering if there's
anything going on right now; if HR is going to be looking at these hires and doing
anything to correct it, to ensure that we have the most qualified candidates
currently in these positions? Was that part of your recommendations?
MR. SHIBATA: I think that question might be posed to HR, if they're going to
implement our recommendations to improve their process.
MS. RUGGLES: Yeah, would you Edo you have anything to comment on that?
MS. PACHECO: Maxinne Pacheco, Audit Analyst. So I reviewed OLane and I,
we interviewed. We collaborated information from different reliable and credible
sources. Then from there, the whole purpose of the audit is to figure out a gap in
internal controls, in policies and procedures. We wanted to find out if people are
being selected based on merit, and that means are they in compliance with
HRS 76? Part of that process is the skill set evaluation. We wanted to understand
if departments are using their process. Because we found out that even though
departments are turning in a skill set to DHR, they weren't actually doing it, one;
and second, they weren't doing it correctly.
Page 20
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October 3, 2017
The County of Hawaii is an equal opportunity employer and provider. Every
minute we have to demonstrate this clearly. So when we looked at the
departments and these high-risk positions that are continuous for three years,
there's risk there. We wanted to make sure that when we look at these
departments and these positions, we wanted to make recommendations to improve
their process and their hiring processes and their written procedures so they can
comply with the merit principle.
MS. RUGGLES: Okay, thank you.
MS. PACHECO: I'm not sure if I answered your question. Sorry.
MS. RUGGLES: That's alright, thank you for that. My question is, considering,
based on this audit, based under this small sample, we could have 175 current
employees, from 2013, that may not be the most qualified for the position based
on questionable hiring practices, so I was wondering if there's any steps within
Human Resources that they're looking at to correct this? Okay, Acting Director
Brilhante, do you have any comments on that?
MR. BRILHANTE: Again, William Brilhante, Acting HR Director.
Councilwoman Ruggles, that's a serious question that you're asking, and I can
assure you that most consideration has been given towards that matter. I'm not
going to answer that question currently in open session. If you and I would like to
discuss that privately, I would be happy to address that. But my concern is, and
always the concern, is the potential for exposing the County to any type of
liability. With my legal background, again, that's something that would be of
concern and that's something that would have to give serious consideration to.
The audit is a snapshot of a period in time. It's a picture of what was happening
at that time. As you can see from the current statements made in the conclusion
section of the audit, significant steps have already been taken and already
currently in place, new practices that would help to ensure that the type of items
that were identified in the audit are corrected and won't be allowed to happen
again. That's the primary focus from our standpoint, from the Department of HR,
moving forward.
MS. RUGGLES: Thank you for that, Mr. Brilhante. Moving forward, I do think
that this audit was very valuable. I'm grateful for the recommendations and also
that the department is looking at it as a really constructive resource. Moving
forward, I think hopefully we've learned a lot. Also, I think it's a step in a good
direction that the Mayor remove the Staffing Review Committee, which from
what I've read, was one of the main causes for the questionable practices. Now
that it doesn't exist, I'm optimistic that we can become more compliant and fair.
Okay, with that I'll yield. Thank you.
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October 3, 2017
CHR. DAVID: Thank you, Ms. Ruggles. And I believe, Ms. Lee Loy, you were
next.
MS. LEE LOY: Okay, thank you. Maxinne and Lane, you mentioned to
Mr. Chung earlier that with the recommendations we're kind of closing the gap.
Because us, as the legislative body, is looking for policies or opportunities to
improve our Code.
But, I want to take a step back a little bit. Because we have this tiny little
snapshot in time and we're really focusing on the hiring practices, but
what's absent from this is another hiring practice that the County uses, which
is the 89 -day contract. I'm afraid that if we're trying to close the gap on one,
we've just blasted a big wide hole into using another practice. So how do we
bring balance, which is what we're striving for, the fair and equitable process of
people being hired through a merit system, when we're using Mr. Richards' term
"band -aiding" legislation in, or regulatory controls within the department when
we're not making a comprehensive overhaul or comprehensive approach to ensure
that we're just going to figure out a different way around, or under, or over? How
do we do that?
MR. SHIBATA: Our office didn't look at the 89 -day contract hire. I'm not sure
if this question should be posed to DHR as far as what they can do to ensure that
the 89 -day contract hire, like you said, "Doesn't get blown out of proportion."
MS. LEE LOY: Thank you, thank you, thank you. I think this is aDI appreciate
what Mr. Brilhante said, there's some recommendations, and we're seeing the
departments making strides to do it. I think there's still a lot more work ahead.
I want the County OCounty jobs are very coveted, so there's a lot of pride and ego
that goes into ❑if you're denied a position or you don't get hired, it's very
personal. It's so easy to go down the road of "Oh, it's because the person knew a
family member." What we want to do is get back to the merit principle, so that
really is the balancing act.
Yeah, thank you. Thank you for going through a difficult process. But I do
believe that we need to expand the sampling sides and really take a bigger
comprehensive look at all of the hiring practices along with any future
recommendations because County jobs are coveted. I was 20 years old, and I
would allege that. When I was applying for a job way back then, there is this
stigma of "it's who you know not what you know." So yeah, if we could
somehow get a more comprehensive look, that would be wonderful. I'm going to
just yield at this time. Thank you.
CHR. DAVID: Thank you, Ms. Lee Loy.
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October 3, 2017
MS. PACHECO: Maxinne Pacheco. The Charter requires us to follow-up on the
recommendations after a year, so we will consider looking at all the positions.
That after all the policies and procedures have been updated, we can go back
again and look at if all departments are complying with the skill set evaluation
criteria and how they can clearly demonstrate that they're upholding the merit
principle. So, yes, we will consider that when we follow up after a year.
CHR. DAVID: Thank you, Ms. Pacheco. Ms. Poindexter.
MS. POINDEXTER: So Ms. Lee Loy brought up a good point about contracts.
And if we're using ❑ my concern would be, if we're using contracts to give that
person the required amount of hours needed for a certain position, right? So if we
hold off hiring on a position and we contract the person we really want for that
position but doesn't have the qualified hours Obecause certain jobs come with you
have to have these certain qualified hours. So my concern is if we would use that
contract, I would say that contract Othat the Mayor or whoever has the ability to
just contract somebody, to allow them to continue to do that to build the hours
needed, and then now, all of a sudden that person is qualified because have the
required hours, so now let's process through HR. I'm glad that was brought up.
That's a concern, and I hope you look into that. So, thank you.
CHR. DAVID: Thank you, Ms. Poindexter. Mr. Kanuha.
MR. KANUHA: Thank you. I don't know if this is a question for your guys, but
is there any current complaints that have come out during this time with these
positions? I don't know how to form that question. Is there currently any
complaints that have happened? I know there are always complaints, especially
with these ones that you guys have looked over, and during this time period.
Maybe I've got to ask HR or somebody? Because I don't think that's something
you guys looked at, yeah?
MR. SHIBATA: Yeah.
MR. KANUHA: You guys don't? No more? Coming out of this audit, and what
we see here, that the County may not have been following certain State laws and
regulations. There's always going to be that potential, I'm assuming, and that risk
associated with that. Okay, I'm just answering my own question.
CHR. DAVID: Thank you, Mr. Kanuha. Anyone else? Mr. Chung.
MR. CHUNG: Just real quickly.
CHR. DAVID: Sure.
MR. CHUNG: My concerns about the methodology, not withstanding, I really
wanted to thank you guys. It's been instructive. I still don't know if it should rise
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October 3, 2017
to the level of being concerning because I really can't tell. But at the same time,
Madam Chairman, I think at some point we should have an Executive Session
with our Corporation Counsel, right? Because I know the audit has been put
together in newspaper articles with this other thing that wasn't mentioned in the
audit, it's that POI (Person of Interest) thing, right? I just don't know what to
make of all of this because we're not in the hiring line. But, Madam Chairman, I
would make that request. I really leave it up to your discretion, but I think we
really have to get a
CHR. DAVID: Is that a motion?
MR. CHUNG: No, just a suggestion. Yeah, at some point we need to really get
a0have a talk with our Corporation Counsel and HR. Because that's where we
get involved if there are lawsuits and things of that nature, I think we have to be
fully apprised of all of the issues.
I want to echo what Ms. Poindexter said, and Ms. Lee Loy, about those 90 -day
contracts, or 89 -day contracts, yeah, and particularly as they may be used or
misused in allowing people to get qualified for certain jobs, yeah. But that's
really not your kuleana. But thank you, both of you, for that.
CHR. DAVID: And I think that's a great point, as far as the Executive Session
suggestion. I think I'll go to Mr. Richards first and then we can revisit that
question, whether we want to, Council Members, we want to entertain that
today, while we're on the subject, or we want to do it at a later date, okay?
Mr. Richards, go ahead.
MR. RICHARDS: Thank you, Chair, and I'm very curious when Councilman
Chung says Executive Session because we are very resistant to go into Executive
Session, and for all the right reasons, so I understand that. I know Council Chair
said she would have echoed and seconded a motion. I think this is some pretty
important stuff to talk about. Quite frankly, that things weren't up. Right now we
have everybody in front of us at this point. I would certainly entertain going into
Executive Session to discuss this rather than try and put something off So, I
would make that motion ifOmay we have the latitude to have a little conversation
here, Chair?
CHR. DAVID: Go right ahead. Thank you.
MR. RICHARDS: Okay. So please respond, Council Member.
MR. CHUNG: I think it might go outside of the scope of what's being agendized
and that's why I'm making the suggestion to the Chair, at her discretion, to
perhaps at next meeting or one shortly thereafter to put it as an agendized item. I
mean certainly it doesn't have to be something that says an Executive Session.
This was only meant to be discussing their audit, and now it's going to turn into
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an Executive Session on potential liability. I think that might be going a bit far
afield, in my opinion.
MR. RICHARDS: Okay, soDalright, I definitely understand that point and we
stick to the agenda, so that makes all the sense in the world. But I think the
questions posed are very important, so we should probably talk about putting this
on the agenda in very short order. I'll yield.
CHR. DAVID: Thank you, Mr. Richards. I suppose that could come before us in
a form of a communication. So whoever would want to entertain that in the near
future, that would be great. Council Members, any more questions for our
auditors? No? Okay. I saw that sigh of relief, Mr. Shibata.
I'd like to say thank you very much. I've been listening to my colleagues, and
they've expressed a lot ofOthe sentiments I feel, also. I just wanted to say thank
you because I know this was a very difficult and hard task, when you have to
audit your County family, in a sense, so I know it's difficult. But I appreciate
your hard work and the fact that you've done very well in your presentation, so
mahalo. I think we can take the vote and let these good people go. All those in
favor of filing Communication 450 please say "aye."
Vote on Comm. 450: The motion to close file on Comm. 450 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: Mahalo. If it's okay, could we just take a five-minute recess?
Thank you, we're in recess.
Recess: At 2:35 p.m., the Chair called for a recess.
Reconvene: The meeting reconvened at 2:43 p.m.
CHR. DAVID: Thank you, Council Members. We are out of recess.
Mr. Clerk, please, could you read in Resolution 310-17?
ORDER OF The Chair directed the Committee to proceed to the next order of business,
RESOLUTIONS: Order of Resolutions.
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October 3, 2017
Res. 310-17: AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR
AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR LEASE
FOR FIVE REFUSE TRAILERS
Authorizes the Mayor to enter into a five-year lease agreement for five refuse
trailers for the Department of Environmental Management, Solid Waste Division,
at an approximate cost of $12,000 per month, needed to accommodate the
additional hauling capacity required to transport waste to the West Hawaii
Sanitary Landfill upon the closure of the South Hilo Sanitary Landfill. The
County will own the equipment at the end of the lease.
Reference: Comm. 468
Intr. by: Ms. David (B/R)
Motion to Approve: Ms. Eoff moved to recommend adoption of Res. 310-17.
Seconded by Ms. Poindexter.
CHR. DAVID: Council Members, we have Director Kucharski and Solid Waste
Chief, Mr. Goodale, here for questions. Do we have any questions for these
gentlemen?
MR. KANUHA: Yes.
CHR. DAVID: Could you please come forward?
(Note: At this time, Environmental Management Director
William Kucharski and Solid Waste Division Chief Greg Goodale came
forward to address the members of the Committee.)
CHR. DAVID: Mr. Kanuha.
MR. KANUHA: Thank you, Madam Chair. Good afternoon. So this is for five
refuse trailers that are going to be used when the Hilo Landfill closes, is that
correct?
MR. KUCHARSKI: Yes, sir.
MR. KANUHA: Just as a point of information, when the Hilo Landfill closes,
all the trash that's generated on this side is going to be hauled over to the west
side, which is why you're going to need the five additional trailers?
MR. KUCHARSKI: Yes, sir.
CHR. DAVID: Mr. Kucharski, could you please identify yourself and put your
mike on?
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October 3, 2017
MR. KUCHARSKI: Sorry. Bill Kucharski, DEM (Department of Environmental
Management).
CHR. DAVID: Thank you.
MR. KUCHARSKI: My apologies to the recorder.
MR. KANUHA: You're so used to it already; you should know by now. The
closure, I know we've gone over this before. But the closure of the landfill is
anticipated, when?
MR. KUCHARSKI: Approximately a year to 18 months.
MR. KANUHA: Okay, I'll yield at this time.
CHR. DAVID: Thank you very much, Mr. Kanuha. Mr. Richards.
MR. RICHARDS: Thank you, Chair. This will be the first question for
Director Sako. Don't run off, Bill.
(Note: At this time, Finance Director Deanna Sako came forward to
address the members of the Committee.)
MS. SAKO: Good afternoon. Deanna Sako, Director of Finance.
MR. RICHARDS: Thanks, Deanna, for coming up. Again, question on the
finances. This is a similar lease we've seen in the past, and I won't bring up twice
to ask about the semi -tractors.
MS. SAKO: Right, it is a financing lease. It's more like a loan to buy the
equipment so that we will own it at the end. Obviously, the equipment has an
expected useful life of much longer than the five years we're going to be leasing it
over.
MR. RICHARDS: And interest rate is?
MS. SAKO: It remains very low; low to high ones, low two percent. I haven't
checked what the most recent ones were, but it continues to be a good financing
option for us.
MR. RICHARDS: Okay, great. And then, Director Kucharski, this is strictly
for Owill this be able to deal with any of the, what we call it, biological type of
waste? Not just the solid waste; but if we're talking about dealing with the
greenwaste or anything like that, is this also capable of dealing with that, as well?
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October 3, 2017
MR. KUCHARSKI: Yes, sir. Bill Kucharski, DEM. The process is that it will
leave east side with refuse for Pu`uanahulu, and it will return with greenwaste or
mulch, depending on where it's processed, and brought back to the compost
facility, which we anticipate being on the east side.
MR. RICHARDS: Okay.
MR. KUCHARSKI: Yes, there should be no dead -head walls.
MR. RICHARDS: Okay, thank you. I yield.
CHR. DAVID: Thank you, Mr. Richards. Ms. O'Hara.
MS. O'HARA: Thank you. So how close does this get us to where we need to be
to do the hauling that we're going to have to do when we close the landfill? Will
this Ewe still need more trucks and more trailers?
MR. KUCHARSKI: I'll let Greg answer that.
MS. O'HARA: Okay.
MR. GOODALL Yeah, good afternoon. Greg Goodale, Solid Waste Division
Chief. Basically, what we've made a determination is, certain amount of tonnage
that needs to be in each trailer, so we're estimating that each trailer will hold
about 20 tons. We've looked at with our diversion and everything, that eight
trailer loads a day would be kind of the max level. That might be on the high end
of what it would take to get the refuse from East Hawaii to West Hawaii landfill.
MS. O'HARA: That's amazing that it hasn't changed since we did the study in
2004 and got the same result, eight to twelve trucks a day. But at that time I think
more transfer stations were hauling into Hilo than they are today, so that may
account for that, the reason that number stayed static over time because that's
unusual. But thank you for that. So the question was, does this purchase or lease
get us where we need to be, in terms of the number of trucks and trailers that we
have on fleet?
MR. GOODALL To do the hauling operation, this should take care of it for now.
MS. O'HARA: What is "for now" mean? I mean, I'm talking about when we
close the landfill.
MR. GOODALL At the rates the refuse that we have D I think one of the things
that when you look at what the study from before, there was actually a higher rate
of refuse coming into Hilo, and then it kind of declined during Onow we're
starting to see the rates of refuse to approach that level again, which is why it
looks like it's kind of static.
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October 3, 2017
But over time, if there are additional tonnages coming in0obviously for us, we're
going to be focusing on trying to divert that, so we're not having to haul refuse to
West Hawaii and do things like composting it and trying to recycle or reuse.
MS. O'HARA: And speaking of that, and you made reference to it,
Mr. Kucharski, about back hauling the greenwaste, and that the site would most
likely be on the east side.
We had talked some time ago about the hiring of geohydrologist to investigate the
water quality and the well at Pu`uanahulu, to allow it to be a potential site for a
compost facility. I haven't heard anything back from you on that, and would love
to know what the status is.
MR. KUCHARSKI: Bill Kucharski, DEM. We have 0 taking out E l had a
geohydrologist take a look at the formation, and found that he could not find
satisfactory fresh water within that lands in which we were.
We are now in discussions with Waste Management to put in a reverse osmosis
system, to give us enough water for the operational needs that we have at the
landfill. We don't have the numbers. We haven't done really an overwhelming
estimate of the volumes. But, that is what we're looking at. A system like that
could be expanded where we do more composting on that side, on the west side.
Personally, I'd like to see more smaller facilities around the island, that we could
not have to haul greenwaste as far as we do, and be able to have smaller facilities
that people could bring their greenwaste to and pick up compost or treated mulch,
but that's not what you've asked. For the west side, we hope to have water there
if we ever get to the point where we want to have another large composting
facility.
MS. O'HARA: Okay. I will ask in future meetings for some updates on the sites
being considered, but for now we can leave it at that. Thank you.
MR. KUCHARSKI: Yeah, we're in the process of finalizing the contract for the
EA (Environmental Assessment) for that, and then the sites will be up.
MS. O'HARA: Thank you.
CHR. DAVID: Thank you, Ms. O'Hara. Let's see, Ms. Eof£
MS. EOFF: I just wanted to ask again about the number of trips per day. So if
we have these additional five trucks and trailers, and you said there may be eight
trips per day?
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October 3, 2017
MR. GOODALE: That's correct. We purchased three truck tractors and three,
actually that was in a previous fiscal year, so the additional five that we're asking
basically rounds out the eight.
MS. EOFF: So each truck is just going to make one trip per day?
MR. GOODALE: Well, when you look atObasically you're going to have some
amount of times that you're going to expect the truck to be potentially down for
maintenance or those kinds of things. But in actuality we are expecting to be able
to make more than one trip, it just really depends upon your road conditions, the
ability for the truck to make that turnaround, you know, depending upon the
activity level within the sort station or at the landfill in West Hawaii. So there
are a lot of factors that come into how quickly they can make the haul. But yeah,
for the most part that it could be only a single trip in a day. In most cases, we
would try and have it so that there would be more than one trip in a day.
MS. EOFF: And then is that going over Saddle Road?
MR. GOODALE: The intention, at this point, would be that they would follow
the Saddle Road, yeah. We're in the process of doing an update to our traffic
analysis, as part of the Environmental Assessment that's being done with the
closure of South Hilo Landfill, which uses Saddle Road as the traffic pattern.
MS. EOFF: And then, I remember there was a change to the Code, maybe eight
years ago or something like that, that designates which transfer stations take trash
to which landfills around the island. That wouldn't need to be changed, would it?
MR. GOODALE: Well, I believe that was further modified to give the director
the ability to make the decision.
MS. EOFF: Okay, so we're okay there to make the change?
MR. GOODALE: Well, once Hilo Landfill is no longer able to, the choice is
pretty narrowed down.
MS. EOFF: I'm just wondering if any changes need to be made to Kona?
MR. GOODALE: I mean, that might be something that would be looked at if it
seems as though the existing could be streamlined in some fashion or whether,
you know 0yeah, I mean that's something that could be looked at.
MS. EOFF: There might not be a conflict there. You'd have to check.
MR. GOODALE: I believe how it's written now, does allow for the director to
make the decision as to where the refuse is directed.
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October 3, 2017
MS. EOFF: Okay, thank you.
CHR. DAVID: Thank you, Ms. Eoff Ms. Poindexter.
MS. POINDEXTER: Yeah, and Ms. Eoff kind of touched on it too on where
you're traveling. Because if you were to come Hamakua way0because you have
about maybe five transfer stations, as you get out of Hilo and all the way down,
up into Waimea, that's about maybe five transfer stations in between? Like she
said, like Council Member Eoff had asked, do they take all that in to Hilo, put
them into those trucks, then you take them over? Or, are you going to take those
big trucks to come out this way, which would be a concern because of the
bridges? We're already ❑ you know with all the heavy ❑ the Matson containers
just D I mean, a lot of trucks going that way. It's amazing. I don't know what's
going on. But a lot of trucks are going that way. On top of it, we're going to
have the Forest Industry now coming with their trucks up on to Hu Honua, so
you're looking at a lot of traffic on those bridges that are in desperate need of
repair, and then you add the tonnage of what you guys are looking at. So, I'm
hoping you guys stick to the plan of going up on Saddle. But I don't know how,
you know, what are you guys going to do in between with all these transfer
stations?
Some of the concerns, too, already, is people are DI mean, you close down the
Pa`auilo transfer station not accepting any more, like stove, washers, those kind of
things, so we're finding them, a lot of them are in the gulches now or in some
abandon fields or whatever.
But yeah, so there's a concern about all the in-between from Saddle Road, yeah?
What's going to happen there? Do you guys have any plans or thoughts on that?
MR. GOODALE: So currently, everything from Laupahoehoe, so Laupahoehoe,
Pa`auilo, Honoka`a all go to West Hawaii already. The only two that are
currently coming back towards Hilo are Honomu and Papa`ikou, and that's in
discussion as to whether or not we look at sending those. Also, whether it would
make more sense to go the Hamakua direction or whether it makes more sense for
those loads to come in to the sort station and try and make the loads more
efficient. So, we're still evaluating that. But as far as anything on Hamakua,
those are the only two stations, and they're both three -day -a -week stations, so
typically those stations would only see maybe one load per week coming in.
MS. POINDEXTER: I'm hoping you guys would open it like every day because
we're seeing a lot more rubbish in the gulches, on vacant lands, I mean, it's gotten
worse. Since we've closed transfer stations, it's a mess out there. Even with the
oil. Now, thank God, we have the oil thing going again. But you guys got to
really think about that whole piece, not just 0I mean, I know we're talking about
traffic and where we're traveling now too. But the overall, what's happening with
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October 3, 2017
trash, I'm just getting real nervous. That it's a year, it's just a blink away and
we're not even ready.
So, I'm hoping you're working with State Highways, of course, on what's
happening with our bridges; the things that are coming up with the Forest
Industry, all of that. The impacts on that, right? I mean, I'm sure you guys are
already in talks with that, to plan.
MR. GOODALL Well, as I said, we're only really looking at maybe one load
per week. So when you compare that to the amount of traffic, as you said,
something like Matson containers and those, when we looked at from the traffic
analysis standpoint, it's not a big contributing factor. But we do take that into
consideration as far as our hauling routes and the routes that they need to be able
to travel to get there. So those gulches are always a concern, in the condition of
the various bridges.
MS. POINDEXTER: Yeah, and some of the narrow bridges coming through.
MR. GOODALL Yeah.
MS. POINDEXTER: Even out towards Laupahoehoe going back. But then 0and
I'll come make a meeting with you and talk about what's happening out on the
small transfer stations that are now contributing to the environment and not good
stuff happening out in my area. So, thank you. Thank you so much. I'll yield at
this time.
MR. KUCHARSKI: Bill Kucharski. We are in the initial stages of setting our
next year's budget, so it's timely discussion.
CHR. DAVID: Thank you, Ms. Poindexter. Ms. O'Hara.
MS. O'HARA: I understood, of course, that the trailers from the transfer stations,
Laupahoehoe, Pa`aulio, Honoka`a, are being directly hauled to Pu`uanahulu
already, and that's probably a once a week occurrence. Is that what I understood
from that, Greg?
MR. GOODALL That's correct. Yeah, approximately.
MS. O'HARA: And refresh my memory again, on the south side of the island, is
it all of the stations including what, Pahala, are already directly going to
Pu`uanahulu?
MR. GOODALL Yes, from Pahala back around. Yeah, so ❑
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Vote on Res. 310-17
(Approved)
October 3, 2017
MS. O'HARA: Okay, so that does limit the number of stations that are coming
into Hilo currently, from Volcano, Kurtistown, wherever we have them out there?
I'm forgetting now.
MR. GOODALE: Glenwood.
MS. O'HARA: Glenwood, yeah. Glenwood, Kea`au, Pahoa, and down in
Kalapana all come in to Hilo. So as I said before, I understand. Because back
when we did this analysis in '04, '03-'04, everything from Waiohinu to Honoka`a
was coming into Hilo, so there was a higher amount of trash commanding us to do
eight to twelve truckloads of 20 tons a day. But because we have already reduced
the amount that's coming into Hilo and sending it directly to Pu`uanahulu, we
have less to haul over the Saddle Road. I get that. I appreciate the fact that0as I
understand it, this is going to be the number of trucks that will suffice us once we
close the Hilo Landfill?
MR. GOODALE: We believe that should be an adequate number to be able
to ❑ depending upon whatever the various levels of refuse coming in. Then we'll
have to continue to assess that as time goes by, and it's all dependent upon the
incoming refuse of course.
MS. O'HARA: Okay, thank you. Council Members, anyone else? No? Alright,
all those in favor of approving Resolution 310-17 please say "aye."
The motion to recommend adoption of Res. 310-17 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. Mr. Clerk, can you please read Resolution 311-17?
Page 33
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October 3, 2017
Res. 311-17: AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR
AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR LEASE
FOR FIVE SEMI -TRACTORS
Authorizes the Mayor to enter into a five-year lease agreement for five semi -
tractors for the Department of Environmental Management, Solid Waste Division,
at an approximate cost of $16,000 per month, needed to accommodate the
additional hauling capacity required to transport waste to the West Hawaii
Sanitary Landfill upon the closure of the South Hilo Sanitary Landfill. The
County will own the equipment at the end of the lease.
Reference: Comm. 469
Intr. by: Ms. David (B/R)
Motion to Approve: Ms. O'Hara moved to recommend adoption of Res. 311-17.
Seconded by Ms. Poindexter.
CHR. DAVID: Questions for the director or the Chief? Ms. O'Hara. No?
MS. O'HARA: No.
CHR. DAVID: Oh, your light was on.
MS. O'HARA: Yeah, it was still on. Sorry.
CHR. DAVID: Oh, okay. No, if you don't have any questions, that's great too.
MS. O'HARA: We're discussing the other half of the transport, so I believe
we've already had pretty much the discussion.
CHR. DAVID: Right. Thank you. Anyone else? Seeing none, all those in favor
of approving Resolution 311-17 please say "aye."
Vote on Res. 311-17: The motion to recommend adoption of Res. 311-17 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 very much, gentlemen. Mr. Clerk, Resolution 312-17.
Page 34
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Res. 312-17: AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR
AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR LEASE
OF REAL PROPERTY
Authorizes the Mayor to enter into a ten-year and six-month lease with Prince
Kuhio Plaza, LLC, with an option for a ten-year extension, for space located at
the Prince Kuhio Plaza (former Safeway space). The property contains an area of
approximately 39,525 square feet, to be used by various County agencies for
general office use and related services. The annual rent would be $573,112.50
starting on July 1, 2018, and would rise incrementally to $747,781.82 ending on
December 31, 2028.
Reference: Comm. 470
Intr. by: Ms. David (B/R)
Motion to Approve: Mr. Richards moved to recommend adoption of Res. 312-17.
Seconded by Ms. Poindexter.
(Note: At this time, Real Property Manager Hamana Ventura came
forward to address the members of the Committee.)
CHR. DAVID: Council Members, we have Mr. Hamana here to answer
questions. Mr. Hamana, would you like to give us a brief run-down of this
transaction? Thank you.
MR. VENTURA: Thank you. Good afternoon, Council Members. Hamana
Ventura, Property Manager. What we've done, is we've tried to take a proactive
approach, looking at our maturing leases, looking at our rate structures. In doing
so, we've come to the conclusion that if we have the opportunity to consolidate
some of our leases, we'll save ourselves some money down the line. I think it's a
better, stronger, stable position for the County going forward. Thank you.
CHR. DAVID: Thank you. Any questions? Ms. Lee Loy.
MS. LEE LOY: Thank you, Chair. Oh, it's afternoon. Good afternoon. So what
offices are we hoping to consolidate into this location?
MR. VENTURA: We're looking at, primarily Office of Aging and Housing.
MS. LEE LOY: I like that one-stop shop for our kupunas. That's actually very
wise. Does it fit everybody, though, because I know this is a 40,000 square foot
office space? They're going to take it all up?
MR. VENTURA: Yes, we have adequate space for both services. In addition, we
should have additional space for various departments as needs arise, including
warehouse.
Page 35
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October 3, 2017
MS. LEE LOY: Thank you. I yield. Thank you.
CHR. DAVID: Thank you, Ms. Lee Loy. Ms. O'Hara.
MS. O'HARA: Is this a new space to acquire, meaning we don't already hold this
space?
MR. VENTURA: Correct. This is a former Safeway space located next to
Long's. Safeway decided that they wanted to go to another location, which is
right behind WalMart, put in the gas component, which probably helps our
bottom line. But they're the current tenant, and what we're looking at, is at being
a replacement tenant for Safeway.
MS. O'HARA: Okay, so that's kind of a stand-alone building by itself, right?
MR. VENTURA: Right. The only other tenant in that building is CVS, Long's.
MS. O'HARA: Right. Okay. Thank you.
CHR. DAVID: Thank you. Mr. Richards.
MR. RICHARDS: Yeah, thank you. So am I reading this correct, it's a ten-year
fixed rate, for the ten years?
MR. VENTURA: No. No, what we're looking at, as we're starting off at a base
rent of approximately, oh not approximately, $1.20 a square foot, with an annual
increase of approximately three percent.
MR. RICHARDS: Okay.
MR. VENTURA: Three percent ballpark.
MR. RICHARDS: And just as a, for my education, our total leased payments for
office space throughout the County, what are we looking at annually?
MR. VENTURA: In our division, what we're covering now is about $1.5 million.
MR. RICHARDS: Okay, thank you. I yield.
CHR. DAVID: Thank you, Mr. Richards. Anyone else? Mr. Chung.
MR. CHUNG: Hamana, how big is that whole Kaiko`o Mall space that we have
for the County?
MR. VENTURA: Are you talking about the old Sun Sun Lau building?
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October 3, 2017
MR. CHUNG: No, the one right across the street, Kaiko`o Mall.
MR. VENTURA: Oh, I'm not sure of that.
MR. CHUNG: About how much?
MR. VENTURA: Aupuni Center.
MR. CHUNG: Aupuni Center. If you had to take a guess, how big?
MR. VENTURA: I would say in access of 40,000 square.
MR. CHUNG: Okay, but not like 100,000 or anything like that, right?
MR. VENTURA: No.
MR. CHUNG: Kind of close to this?
MR. VENTURA: Correct. To give you some perspective, Sports Authority,
when they went out of business, same size as this space, 40,000 square feet.
MR. CHUNG: Okay. And how much we paying right now? I mean, Housing is
what? Free, right?
MR. VENTURA: No, Housing is located in two separate locations.
MR. CHUNG: Oh, no. Two yeah?
MR. VENTURA: Kino`ole and that armory.
MR. CHUNG: So how much we paying right now for Housing?
(Note: At this time, Finance Director Deanna Sako came forward to
address the members of the Committee.)
MS. SAKO: Deanna Sako, Director of Finance. Over the ten years, or the next
ten years, we would save roughly $2.4 million.
MR. CHUNG: So how much we paying right now for Housing?
MS. SAKO: Well, Housing at the armory is free, but we're paying roughly
$110,000 a year for the Section 8 area.
MR. CHUNG: Okay, and how big is that? What is their total area right now?
MS. SAKO: They have 7,000 square feet.
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October 3, 2017
MR. CHUNG: Total?
MS. SAKO: Well, no, no, no, just for what we're paying for. Sorry.
MR. CHUNG: Okay, what about at armory?
MR. VENTURA: $6,500 additional.
MR. CHUNG: Okay. Okay, so about thirteen. Okay. And then Office of Aging
at Sun Sun Lau, right?
MR. VENTURA: Correct.
MR. CHUNG: How much we're paying over there?
MR. VENTURA: $538,000.
MS. SAKO: But the lease is ending and the proposal is to escalate significantly.
MR. CHUNG: Okay. That's how many square feet?
MR. VENTURA: Fourteen thousand plus an additional 2,300 warehouse, storage
actually.
MS. SAKO: So just under 17,000 square feet.
MR. CHUNG: Correct, okay. Can't we consider building a place?
MS. SAKO: We're looking at a lot of different options as we're evaluating the
leases; this is one of them. We have other departments that would like to move or
have more space as well, so we're looking at buying some other current facilities
we lease. We're kind of evaluating everything right now. Building is a little hard
because we don't have land in the area. But like I said, we are evaluating all of
our options.
MR. CHUNG: Have you guys negotiated something with the landlord yet, or you
just want authorization for a certain amount?
MS. SAKO: What's before you, we have negotiated with them. We're still
looking to see if some of our other landlords would come down.
MR. CHUNG: Okay. Because this is my concern, and I certainly share the
excitement of Ms. Lee Loy and others, that you have this one-stop shop, but
really, Hilo is not a real what I'd call a growing or thriving area in terms of
economic drivers. The fact that Safeway has been closed for a long time, that
area has been unoccupied for a long time, it could mean a lot of things. It just
Page 38
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October 3, 2017
shows there's really not a market for that type of building, but it is a retail area. I
think we should keep it.
Now, I'm not talking about for our own management. I'm just talking about for
the vitality of Hilo Hawaii. I'd like to see some other commercial guys move
into that space; if not, we're not going to have room for others to move in. It begs
the question, too, retail is going down nowadays all over. I'm just wondering if
have to go there, can we get a better deal? I mean, really, those guys 0it's been
vacant all of this time. They'd be happy to have somebody come in.
And what about common area maintenance? Is that all factored into this price?
MR. VENTURA: This is a gross lease.
MR. CHUNG: Yeah, okay. I mean, is there any possibility? I'm just worried
about the inventory of retail space here in Hilo. There's no development.
MR. VENTURA: Thank you for that concern.
MR. CHUNG: I'm just looking at it from a different 0yeah, not the
MR. VENTURA: However, if we look at the retail trends, three of the largest
anchors in that center are Sears, which is 70,000 square feet, and Macy's has two
buildings. The trend down the line, is that large retailers, like Macy's and Sears
could essentially cease to exist.
MR. CHUNG: Yeah, for sure.
MR. VENTURA: So the possibility of us taking up this square footage and then
taking retail out of the mix, it's a valid concern, however the trend seems to be
going in the opposite direction that there may be more retail space coming back
on line. If we're watching national trends, that we may be filling in space to help
provide income and services in an area that actually needs it.
MR. CHUNG: I don't know if I totally agree with that. Yeah, let me think about
this for a little while.
MR. VENTURA: Yeah, thank you.
CHR. DAVID: Ms. Poindexter.
MS. POINDEXTER: Yeah, you sparked something of concern, where Aaron is
talking about, Council Member Chung is talking about taking that retail space
away and what are we doing to Hilo? I agree because if we look up atOmaybe we
can have the State, I'm just tossing out some ideas. When you look at Rainbow
Falls and the old hospital, a time to tear it down, ask the State to give us an
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October 3, 2017
Executive Order for the land, and we build something up there. You have
HCEOC (Hawai`i County Economic Opportunity Council) up there. You have
the Aging. I don't know if the Arc is up there. You have a lot of things, but then
you leave Hilo with the place to be able to0maybe Costco's coming in but no
more place right now. Maybe those are things, we can leave that area for the
retail. I don't know. But when Council Member Chung said that, I was going,
"Yeah, there's so many old State buildings that are being abandoned." What are
we doing? Are we working to State, to say, "Hey, can you Executive Order? Can
you go bulldoze that place down and then Executive Order the land to us?"
We've done that for Parks. So, I don't know. I'm just tossing that out since that
was brought up.
MR. VENTURA: That's a very valid point.
MS. POINDEXTER: Thank you.
MR. VENTURA: And thank you for bringing it up.
CHR. DAVID: Thank you, Ms. Poindexter. Anyone else?
MR. CHUNG: I'm going to support this. But real half-heartedly I've got to say, I
really think we should beDif we're going to spend this kind of bread, let's spend a
little bit more and build your own, yeah? That's my thoughts. Okay, thanks.
CHR. DAVID: Thank you. Ms. Lee Loy and then Mr. Kanuha.
MS. LEE LOY: Yeah, thank you. I'm going to be supporting this because I am
looking at those trends, and for some reason retail is falling by the wayside.
Mr. Chung is very aware of this, that we have an industrial area that is under lease
with the Department of Land and Natural Resources that we're struggling with
right now.
I know the Police Department wants new space. I feel like there's this juggling
act that Deanna and Hamana is having to go through to get our facilities in
areas ❑ and the reason why I appreciate this area, because my district is that aging
population that's going to use that Office of Aging center, and that's just the
trend, because then after that it will be Kea`au and Puna. That's the growth
pattern of our island. So, I actually appreciate that's where we're going to be
moving into because the services are going to be right there. You've got a
pharmacy right next door. You've got other shopping around the block. I think
it's a good fit.
But I also think we do have to look around the corner a little bit more, as far as a
master plan our County facilities should look like in the next five and ten years.
Because we're not going to move out of this County building, and then how do
we relate the rest of our County facilities and services from this area? So, thank
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October 3, 2017
you. I think there's a lot on the table. I do support the idea, especially Police
wants a new building. Police Department wants a new building. We're renting
space for warehousing their evidence. If this gives us wiggle room for other
opportunities for other facilities, then I can support this. So, thank you.
CHR. DAVID: Thank you, Ms. Lee Loy. Mr. Kanuha.
MR. KANUHA: Thank you. I also support this. It does bring up good
discussion because there are a lot of opportunities. I'm in favor of, for sure,
consolidating a lot, building a new facility that can house a lot of different
departments.
But, I'll also bring up another aspect. We went to Deschutes County, and they
had a brand new facility, County facility, but they also built on extra spaces
within that facility. It was kind of a risk. But they now rent it to State
departments as a pretty big lease, as the income generator to offset the amount
that they spent on the building. So it's a pretty cool situation. I hope that we can
look at different ideas of how we not only make spaces available for the County,
but income generation in the future. It's a unique thing that they did to help with
their income, so something to think about.
CHR. DAVID: Thank you, Mr. Kanuha. Mr. Chung.
MR. CHUNG: Yeah, and I'm really glad Mr. Kanuha brought that up too
because that's ❑this is a big chunk of cash we're talking about per year. That's
something that our County rarely looks at, if ever, is revenue enhancements that
would help us out with the bottom later on. I'm hoping we can pursue those
things later on.
I have this one last question, however, though. Is there going to be any capital
expenditures in getting this shell ready for occupancy?
MS. SAKO: There will be some. The landlord is providing some of the money to
help to do the build -out and the renovations. In addition, we're working with
Public Works to try and bring the cost down. That's one of the factors we're
considering, because if the cost to build out is too high then it would not be
affordable for us.
MR. CHUNG: So what are we looking at, around?
MS. SAKO: They have it at a few million dollars right now, but we think we can
do it for cheaper.
MR. CHUNG: They, meaning who?
MS. SAKO: Public Works.
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October 3, 2017
MR. CHUNG: So that's $2 million total or $2 million in addition to the landlord
kicking in stuff?
MS. SAKO: They're still working on that, yeah. Some of our Property
Management staff are meeting with them today.
MR. CHUNG: But going be big money?
MS. SAKO: It will not be cheap, yes.
MR. CHUNG: Well, see what you guys can do. Thank you.
CHR. DAVID: Thank you, Mr. Chung. Ms. O'Hara.
MS. O'HARA: Thank you. I'm glad we're having this discussion. I will support
this. I agree with Mr. Chung, somewhat reluctantly, because I've been saying this
for every facility of lease that has come up, is why aren't we building our own
facilities and while we may not have the land we may also have the land.
I've been doing some investigation of County holdings in my district, which
doesn't have a lot of County facilities, and I find that we own properties all over
the place and I'm not really sure why we're holding said properties, honestly.
Why would we, if they don't serve us any purpose? I mean, I understand we're
not paying property tax on these properties like a private owner would. But to
just hold it for no particular reason, I think the idea of having a master plan for
County's real estate is a grand idea, and that's what Ms. Lee Loy just threw out.
Because I would like to know how many parcels we do own. I would like to
know how many State land ❑ State parcels are out there that might be of use to us
that could be EA'd over to us, oh EO (Executive Order). Sorry.
CHR. DAVID: EO'd.
MS. O'HARA: Yeah, because I just don't feel like paying out this kind of rent
money over and over and over again. It really serves us in the long term. So
really need to know what our needs are, what our current inventory is, and how to
best balance that. So, I totally support the idea of a master plan for the County
real estate holdings and project out at least 20 years in terms of what our needs
would be.
CHR. DAVID: Thank you, Ms. O'Hara. Anyone else, Council Members?
Seeing none, all those in favor of approving Resolution 312-17 please say "aye."
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Vote on Res. 312-17
(Approved)
October 3, 2017
The motion to recommend adoption of Res. 312-17 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. Ventura. Mr. Clerk, please, Bill 68.
BILLS FOR The Chair directed the Committee to proceed to the next order of business, Bills
ORDINANCES: for Ordinances.
Bill 68: AMENDS ORDINANCE NO. 17-39, AS AMENDED, THE OPERATING
BUDGET FOR THE COUNTY OF HAWAII FOR THE FISCAL YEAR
ENDING JUNE 30, 2018
Decreases revenues in the Transfer from General Fund account (-$50,772); and
increases the Office of Management Salaries and Wages account by the same
amount. This transfers funding for the Special Program Coordinator from the
Office of Housing and Community Development to the Office of Management.
Reference: Comm. 471
Intr. by: Ms. David (B/R)
Motion to Approve: Ms. Eoff moved to recommend passage of Bill 68 on
first reading. Seconded by Ms. Poindexter.
(Note: At this time, Finance Director Deanna Sako came forward to
address members of the Committee.)
CHR. DAVID: And I believe Ms. Sako is here for any questions.
MS. EOFF: I have a question.
CHR. DAVID: Ms. Eoff, go ahead.
MS. EOFF: I just wanted to confirm that this is the Dis this Mr. Niimi's position?
MS. SAKO: This is the 0sorry, Deanna Sako, Director of Finance. This is the
new position we created in the current fiscal year budget, and we put it under
Housing.
Mr. Niimi is actually in one of the Mayor's Executive Assistant positions. He is
not in this particular position, but the Mayor would like this position in his office,
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under him. He feels it has more weight, when you're dealing with the community
and the State, to say " I represent the Mayor in dealing with the homeless issue."
So, we had created it under Housing and we just want to move it to the Mayor's
office.
MS. EOFF: So then Mr. Niimi would have another person working?
MS. SAKO: Someone to help with that, yes.
MS. EOFF: Okay, great.
MS. SAKO: But definitely he was continue to workOpart of his duties is to
include this.
MS. EOFF: Sounds like a good move. Thank you.
CHR. DAVID: Thank you, Ms. Eoff. Ms. O'Hara and then Mr. Kanuha.
MS. O'HARA: Deanna, while you're up here, can you just confirm how many
executive assistants the Mayor currently has because I stopped by the office
recently and the gal rattled off so many names, I couldn't count. So how many
are we up to?
MS. SAKO: Lance, Roy, Rose, I think three in Hilo and two part-time in Kona.
There's other positions in his office, not all of them are executive assistants.
MS. O'HARA: Yeah, she might have confused some other positions because I
think she gave up seven or eight names.
MS. SAKO: Yeah, I don't think they're all executive assistants.
MS. O'HARA: Okay, thank you.
CHR. DAVID: Thank you, Ms. O'Hara. Mr. Kanuha.
MR. KANUHA: Thank you. I was just reading that the plan functions on the job
description of the position is not going to change. Got it.
CHR. DAVID: You're good? Anyone else? Seeing none, all those in favor of
approving Bill 68 please say "aye."
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Vote on Bill 68: The motion to recommend passage of Bill 68 on first reading
(Approved) 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: Mr. Clerk, we're done? Okay, may I have a motion to adjourn?
ADJOURN- There being no further business, at 3:28 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: Thank you, Council Members. We are adjourned.
Approved:
AIM
121fIti
Ms. Maile Medeiros David, Chair (Date)
Finance Committee
MD/na
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