HomeMy WebLinkAboutMIN FC 2018/02/20 2016-2018Committee on Finance
28th Session
West Hawaii Civic Center
74-5044 Ane Keohokalole Highway, Building A
Kailua-Kona, Hawaii
February 20, 2018
CALL TO The regular meeting of the Committee on Finance was called to order at
ORDER: 9:07 a.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
Mr. Aaron S. Y. Chung, Member (via videoconference from Hilo)
Mr. Dru Mamo Kanuha, Member (came in later)
Ms. Susan L. K. Lee Loy, Member
Ms. Eileen O'Hara, Member
Ms. Valerie T. Poindexter, Member
Mr. Herbert "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: The following individuals registered to speak and came forward when called by
the Chair:
Hugh Ono:
Abolghassem Abraham Sadegh
Jon Olson:
Toby Hazel:
Comm. 746, in support.
Bill 98 (Comm. 712), in support.
Res. 490-18 (Comm. 730), in support.
Comm. 72.2, comment.
CHR. DAVID: At this point, I will close public testimony. Thank you,
everybody. Right now, I believe we are going to—Mr. Clerk, can we go to item
number one, Communication 746?
COMMUNI- The Chair directed the Committee to proceed to the next order of business,
CATIONS: Communications.
FC -28 February 20, 2018
Change Order At the request of the Chair and with no objection from the Council Members the
of Business: following item was taken out of order:
Comm. 746: REAPPOINTMENT OF GEORGE CAMPBELL AND NELSON H. HARANO
TO THE SALARY COMMISSION
From Mayor Harry Kim, dated February 1, 2018, submitting for the Council's
review and confirmation the above nominations.
Requires Council
Confirmation by: March 17, 2018 (Section 13-4(1),
Hawaii County Charter)
Vote on Ms. Eoff moved to recommend confirmation of the
George Campbell: appointment of Mr. George Campbell to the Salary
(Approved) Commission. Seconded by Mr. Richards and carried by
the following voice vote:
Ayes: Committee Members Chung, Eoff, Lee Loy,
O'Hara, Poindexter, Richards, and
Chair David — 7.
Noes: None.
Absent: Committee Members Kanuha and Richards — 2.
Excused: None.
Committee Members spoke in favor of the appointment.
CHR. DAVID: Thank you, Mr. Campbell. You don't have to come back for
the Council meeting when we actually hear this again. So, have a safe trip and
thank you for coming in so early this morning. Mahalo.
Vote on Nelson Harano: Mr. Richards moved to recommend confirmation of the
(Approved) appointment of Mr. Nelson Harano to the Salary
Commission. Seconded by Ms. Eoff and carried by the.
following voice vote:
Ayes: Committee Members Chung, Eoff, Kanuha,
Lee Loy, O'Hara, Poindexter, Richards,
and Chair David — 8.
Noes: None.
Absent: Committee Member Kanuha — 1.
Excused: None.
Committee Members spoke in favor of the appointment.
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CHR. DAVID: Alright, thank you, Mr. Harano. Thank you Barbara. Aloha.
Now Mr. Clerk, can we proceed with Communication 742, please?
Comm. 742: REQUESTS A PRESENTATION BY THE SALARY COMMISSION
REGARDING THE PROCESS OF DETERMINING SALARY INCREASES
From Council Member Maile David, dated February 1, 2018.
(Note: Comm. 742. 1, from Council Chair Valerie T. Poindexter dated
February 14, 2018, transmitting information submitted by Mr. Ono, was
circulated.)
CHR. DAVID: Thank you very much. At this time, I'd like to relinquish the
chair to Vice Chair Eoff Ms. Eoff, if you can do the motion.
Relinquish Chair: At this time, Chair David relinquished the chair to Vice Chair Eoff
ACTING CHR. EOFF: Okay, thank you. May I have a motion to file
Communication 742?
Motion to Approve: Ms. Poindexter moved to close file on Comm. 742.
Seconded by Mr. Richards.
ACTING CHR. EOFF: Mr. Ono, please come forward.
(Note: At this time, Salary Commission Chair Hugh Ono came forward to
address the members of the Committee.)
ACTING CHR. EOFF: Are you ready for the presentation? Is everything set?
MR. ONO: I am.
MS. DAVID: Ms. Eoff?
ACTING CHR. EOFF: Ms. David.
MS. DAVID: Thank you very much. Mahalo, and thank you again, Mr. Ono, for
being here and for joining us today. I would like to mention that given public
sentiment surrounding the events of the salary increases and being mindful of
what we've been reminded of in the past, you know, we need to make the
decisions, so we need good information. Thank you, Ms. Lee Loy.
I wanted to allow this Commission time to provide information to explain to the
public the mandated role of the Salary Commission and the process by which it
determines raises. So Mr. Ono, proceed as soon as you're ready. Thank you.
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February 20, 2018
MR. ONO: Thank you very much for this opportunity. I'm hopeful that—what
I'm going to do is present the background and the process that this Salary
Commission went through since it reconvened with a quorum beginning in
October. In doing so, at the end of this with the information that I'm going to
furnish, I'm hoping, or the objective is that this County Council, as well as others
who hear the presentation, will understand the comprehensive process that we
have gone through.
So with that, the best way to do this is to go through the chronological order of
what actually happened and some of the things that we considered. In doing so,
first of all, the events that led up to the beginning of this, it starts with a quorum
finally being in place in October of this year. The appointment isI'm one of the
senior members on the Salary Commission. I was actually appointed in
December of 2017. So, we went for a long time and we could not have a meeting
because we never had a quorum.
But on Wednesday of October 11, we had our first Salary Commission meeting
which we had a quorum. It was at that meeting that Florence Ikeda and myself
were elected as Vice Chair and Chair respectively of this Commission. Then at
the following meeting—and we decided to accelerate the meetings rather than
having once per month—it followed two weeks later, on Friday, October the 27th.
It was during that meeting that we received testimony from many with regard to
what the Salary Commission was doing as well as a briefing by the Department of
Human Resources and the Corporation Counsel.
Then on Monday, November 27th, a month later, we discussed the proposed salary
amendments, and actually developed two priorities, that A and B, which is what
we call Priority A and Priority B Salary Adjustments. Then on the following
month in December, Thursday, December 21st, we had another Salary
Commission meeting. Also, the following month in January, there was another
Salary Commission. These are meetings where decisions were actually made
with regard to salary adjustments.
And our last meeting to date was on Wednesday, February 14th. I might mention
that at this meeting, we discussed what we call Tier 2 Salaries, which I will get to
later in explanation. I think this is one of the most important things that this
Salary Commission will be doing in addressing some of the problems and issues
that have occurred in the past.
So, with regard to the background of law, the Commission was actually briefed on
what the State law says as well as what the County Charter says. It's interesting
to note that the Salary Commission, difference with other commissions is it has
really, full authority. We don't need anybody's approval to initiate a Salary
Commission. Whatever we decide does become final. But one of the things that
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February 20, 2018
was pointed out to us is that the—you know, that what we do shall have a
reasonable relationship to compensation both the public and private sectors.
We were also briefed very, very fully on the Sunshine Law, and we have been
guided along the way by our Corporation Counsel Amy Self, so that we have
never violated any laws or provisions of the Sunshine Law.
So, here are some of the facts. There are 36 positions that report to the
Commissionoh, let me take a break at this time and introduce Jim Higgins. Jim
is back there, he's a member of the Salary Commission. There are others that
wanted to attend the meeting, but we were advised that because of the Sunshine
Law, he iswe can only allow one other person, so Jim is that person.
Anyway, there are 36 positions under this Commission, which include elected,
appointed, department heads and deputies. We were made available—the current
salaries were made available to the Commission, so we had that information
available to us. They were identified to include inversions, because there were
several positions that were making less than the subordinates that report to them.
The information that was given to us did not include overtime pay. Overtime pay
is not a consideration of the Salary Commission.
Next, the positions that were subject to salary inversion were again determined by
specific positions, those that were subject to the salary inversion as well as the
percent of the inversion and the difference of pay of that inversion. Let me use
this as an example, the Police Chief, whose position was making substantially less
than the Assistant Chiefs that report to them, by a very significant percentage and
dollar amount.
The positions, we were shared information of comparable positions in the private
sector. This was provided to the Salary Commission by the Department of
Human Resources. We also had information on the salaries of other counterparts
within the State of Hawaii, to include the County of Kauai, the County of Maui,
and the City and County of Honolulu. This was provided to the Salary
Commission by the Department of Human Resources.
There was also salary information on collective bargaining and what we called the
Excluded Management (EM) positions. Some of the information with regard to
some of the increases that have occurred due to collective bargaining agreements,
and when those increases had occurred. This, again, was provided by the
department of Human Resources. We've received testimony by others at these
meetings in the form of statements from the public, with concern to the budget,
the impact on the budget, but also from others, which stated that they had to work
very, very long hours, and at a substantially low rate of pay. The concern of the
lag between what they were getting paid and what other people were getting paid
in other counties or in the private sector. In fact, it was stated for some that it was
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February 20, 2018
a great training ground, but you know, because of the lack of pay equity, many of
those people—not many, I shouldn't, I don't want to mischaracterize—but some
of those people actually left the positions to take on jobs in other sectors.
We had the Finance Director appear before us on two occasions to address the
issue of the County budget and whether the County budget would be able to
absorb any of the proposed salary increases that we were considering. So, the
response on both occasions that there is a Provision for Compensation Agreement
that is within the County budget, and that the Commission should not overly
concern itself with the salary increases.
Here's a summary of the actions taken. The priorities that were, first Priority A,
which are all those positions that were subject to salary inversions. Again, that
means that the subordinates were getting paid more than their bosses. Then B,
Priority B or long time are those that had not had a salary increase in an
extraordinary long period of time. And the C was those others that needed to be
addressed next. So, we actually had three tiers, A, B, and C.
So, the Commission decided to set these priorities up in two tiers, tier one and tier
two. Tier one are those that would need immediate attention to correct the
inversion and other deficiencies that were occurring with these salaries. The tier
two were those that could wait and be addressed in time but before the next
budget session, which begins on July 1, 2018.
The Finance Director then testified that once the Salary Commission decides, then
that decision is considered final. Also, what happened next was that the Planning
and Human Resources positions were reevaluated thereafter, and there was a
second adjustment made to both the Planning and Human Resources
compensation a second time. Again, primarily to make it—give it equity with
respect to what the other counties' positions were being paid. In other words,
when we set those the first time, many of the members thought that it was in fact
too low.
Finally, position Priority C, which were those positions that needed attention but
not immediately as those with the inversions, were finally discussed and approved
on January 18th. This discussion and approval occurred after discussion as to
appropriate levels to set these salaries at, and secondly, there were differing
opinions on the amounts of compensations for these positions. In the end, the
amounts to consider the demographics between the comparable positions of the
City and County of Honolulu, Kauai, and Maui. Adequate salary levels are
necessary to attract quality people for these positions. That's one of the
considerations that in filling these positions, some of which are still unfilled,
salary is an issue in attracting people to fill these appointed -type positions.
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February 20, 2018
It was also noted that the Department of Public Works, the Environmental
Management Department, and the Planning positions require professional
certification as part of their minimum qualifications while others do not. These
are requirements within the County Charter. Some commissioners also cited
basic qualification differences between those elected versus non -elected positions.
They felt that there was a significant difference between those who are elected
versus non -elected appointed people, so this difference in category there.
So, here's how our approvals worked. Salary increases were approved, first for
the Priority A and B positions and when that occurred, the vote was six to two in
favor of that. On that same date, the effective date was approved to be January 1,
2018. That was an 8-0 vote. There are eight commissioners. We have one
vacancy for one of the districts. Then, on December 21st, the adjustment to the
Planning and the Human Resources position was reapproved and that occurred
with a 5-3 vote on December 21st. Again, the effective date would remain the
same as January 1, 2018. The balance of positions, or Priority C positions, were
approved on January 18th of this year by a 5-3 vote, and the effective date made
for March 1, 2018. This date was chosen primarily as a compromise date. One
of—the Mayor had testified that his request was to delay the implementation of
some of these raises to July 1st, the beginning of the new fiscal year where it could
be incorporated into the budget. However, the balance was made because the
Finance Director had represented there is an adjustment fund over there to
accommodate some of that. So, a compromise position was reached to make the
effective date March 1, 2018.
Let me conclude here by just stating some additional facts that there is a report
that's called the County's Annual Financial Report, and within that report, it does
specify that there's a3.5 percent to seven percent is an acceptable raise for these
positions. If we take the worst case of 40 percent, the 40 percent, when divided
by the number of years is 10 years, so, the average per year would be four
percent. If you compound that, it's actually going to be less than 4 percent per
year. So, that falls within the parameters of this report, that's an official report of
the County of Hawaii.
No action was actually taken for too long. Again, I site that 10 -year period, 4
percent per year. As an example, the raises that were at 30-40 percent increase
so basically, what that says is that is how much less these positions were getting
paid for that period of time. I don't look at it as an increase of what they got, but
that's what they weren't getting paid. There was a deficiency in the amount of
compensation they received.
The Salary Commission has resolved a long-standing problem, and had we not
done that, we would still have the same problem. So, the Salary Commission
feels that it did resolve a problem, and the problem was with the inversions and so
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February 20, 2018
we no longer have these inversions and we've taken care of what we call
unsatisfactory salary deficiencies.
The Commission has been transparent. We have followed to the letter of the law.
We have no violations with regard to the Sunshine Law, the publication of
notices, and acceptance of testimony. All business was conducted in open
session, there were never any executive sessions. All business complied with the
procedures and Sunshine Laws. There were never any violations, okay? I
mentioned that. We took care of a long-standing problem and solved a long-
standing problem. We'll continue to resolve future salary issues and we are
looking at what—at not allowing this to happen in the future, to put in place
something that we will not have these long lapses.
We have a draft proposal that's on the table that's being developed right now, but I
am really confident that when we finish this, this Commission will be very
pleased with what its finally put out there. The County of Hawaii will be very
pleased with what will be in place at the time so that this will avoid having these
long lapses of times and trying to adjust the salaries that are so in arrears.
There are meetings that are going to be occurring this week with the Department
of Human Resources. The Vice Chair and I will be meeting to hammer out the
details on that so that we can bring it forth to the Salary Commission for
discussion. But unilaterally, across the entire Commission, it makes member
really want to address this issue so that it doesn't happen again. It's really a
travesty that we were left with this thing and this problem to resolve.
So, the Salary Commission was in a very difficult position, and due to the lack of
action that should have taken place, unfortunately, we were faced with a notably
large dollar amount and percentage increases which seemed to be the focus of all
the information that was out there rather than the work that the Commission had
done. So, with that, that's the end of my discussion with you today, and I
welcome any questions that you have. Thank you.
MS. DAVID: Mahalo, Mr. Ono for that presentation. Council Members,
Communication 742.1 is, I believe in your folder, which is the timeline that
Mr. Ono was referring to in his presentation. So, we have that. I really feel that
your explanation of your duties, and I appreciate Mr. Higgins being here also
Mr. Ono, really quickly before I yield, could you just give us a brief background?
I don't know you personally. I've talked to you, but could you give us a brief
background of your professional history?
MR. ONO: Who me?
MS. DAVID: Yes.
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February 20, 2018
MR. ONO: Okay, I have been a resident of this County for a little short of
50 years, and I came over here to work. I was with a construction company called
Hawaiian Dredging and Construction. When the job was pau, I was headed back
to Oahu and onto other projects, but I told myself, "Why are you leaving here?"
So, that's why I've been here so long.
But since that timeI am a civil engineer by background. I worked in both the
state and county governments. I worked for the State Highway Divisions, I
worked for the Department of Accounting and General Services. I worked for the
County of Hawaii as its Public Works Director, and retired close to 20 years ago
and had been in private practice.
I have been both a collective bargaining union employee. I've been an EM
position, or excluded management and I've been appointed, so, I understand it
very well. The story I tell our Salary Commission is that when I was appointed, I
was the Director of Public Works, and I had division heads reporting to me, like
the Building Division, the Wastewater Division, Engineering Division, and they
were EM levels. So, every time that there would be a negotiated pay raise, they
would get a pay raise that they jumped up above me and if nothing happened to
our pay, they'd jump up again above me. So, I used to tell them, "Gosh, I wish I
would become an EM someday, just like you." But, I got my wish. Someplace
along the line, I was offered the job at the State Highway back in the Hawaii
District, and so I got that position and when I got that, I told them, "Hey, guys,
guess what? I'm an EM now, just like you." But anyway, that's my background,
engineering and management, and that's it.
MS. DAVID: That's very outstanding and thank you for sharing that with us. I
think that gives us a better feel of the caliber of people that we have sitting on the
Salary Commission. So, thank you very much and now I will yield to my fellow
Council Members at this time.
ACTING CHR. EOFF: Okay, thank you, Ms. David. Thank you, Mr. Ono.
Council Members? Ms. Lee Loy.
MS. LEE LOY: Thank you, Mr. Ono. I've had incredible amounts of faith of the
caliber of the members of the Commission, and the background, and the skill sets
that all of you possess on that Salary Commission. And in no way, am I trying to
undermine any of those hardworking skill sets that you folks bring to the table,
and I continue to have a lot of confidence in that entire body going forward.
You're absolutely correct, you folks worked very hard to address a lot of
inequities. You guys picked up something that was dead on arrival with no real
movement for many years. So, I can appreciate all of the hard work and the
challenges that you guys went through. I like it when people get put in tough
situations, it really brings out the best in an individual. So, thank you, folks, so
much and thank you for providing all of that background information.
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I do have just one question. You mentioned in your report that you guys were
briefed on the law and the sections, and maybeI know Amy Self is here, maybe
she could help you with this. I understand the section of the Charter, I believe it's
13-28, that gives the Salary Commission that authority, but you also mentioned a
State law, and I was just wondering where that—help me with that, Amy.
MS. SELF: The State law that
ACTING CHR. EOFF: Excuse me, could you identify yourself?
MS. SELF: I'm sorry. Deputy Corporation Counsel, Amy Self. The State law
that Mr. Ono mentioned is 89C-3, but that does not apply to the Salary
Commission, but they're looking at that as an example of what they may end up
trying to do for Tier 2. 89C-3 is the State law that requires each County, through
recommendation of their Human Resources Director, to set up assistance for,
what is it? Exempt managers?
MR. ONO: Yes.
MS. SELF: Excluded managers will be paid the same or more. I'm not getting it
exactly right, but something like that. Then they're—like for instance, every
timeit says that they should be paid the same or more than the civil service
positions. So, in other words, whenever—there's a system in place by State law,
so that whenever the unions negotiate a salary increase for the civil servants, then
the excluded managers will also go up by a certain percentage. So, that's one of
the things they've been looking at regarding their job to do the same sort of thing
for the appointed positions and the elected positions.
MS. LEE LOY: A follow-up to that was something, and I hope I got it right, it
was the understanding of the Salary Commission that the decision, their decision
was final. Share with me the area of the Charter or State Statute that gave them
that authority in which their decision became a force and effect of law. I hope I'm
saying it correctly because what Mr. Ono mentioned was that their decision was
final.
MS. SELF: Well, that's because under the Charter, they're the ones that set the
salaries for the appointed and elected positions. If you look at section 13-28, little
d, it says that they "shall review and compensate all county elected officials and
appointed directors and deputy directors so that their total salaries and benefits
have a reasonable relationship to compensation in the public and private sectors."
So, nobody else sets these salaries except the Salary Commission.
MS. LEE LOY: And then I want to draw your attention to letter c, "The
commission shall establish its rules of procedure, which shall provide that it meet
at least annually, and adopt rules and regulations," all county elected officials
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February 20, 2018
oh wait, sorry, I didn't read that right. "Rules and regulations having the force
and effect of law. So, that's where we legislatively gave them the power to make
these salary determinations and have their decision be final.
MS. SELF: No, that just gives them the authority to make their own rules. They
have their own rules of procedure, just like any other board and commission, but
the authority comes in Section d. I've looked at the legislative history for the
Salary Commission. Originally, they were created to set the salaries just for the
Council Members, the Council Chair, and the Council Members. Then, they later
had other Charter amendments, which broadened that authority to include them
setting the salaries for all elected officials and appointed Directors and Deputies.
MS. LEE LOY: Is that Section 4-4 under our Charter? Is that on the legislative
history? Because there's a provision under Section 4-4 about advisory
commissions. The way I'm reading the Charter is we have advisory boards and
then we have a separate Salary Commission.
MS. SELF: Your Section 4-4 of the Charter, that's just for the Mayor to appoint
advisory commissions and then they only serve as long as the Mayor's term. So,
this is not that doesn't include any of the other commissions that—like all of
your other boards and commissions that are set up by the County Code and/or the
Charter. This is just so that if the Mayor wants to have an advisory commission
for him, it's—those have been set up in the past. They only serve as long as the
Mayor serves and then they're automatically—their terms automatically end.
MS. LEE LOY: And then under Section 13-3 of our Charter, there's an adoption
of a payment plan, and it says, "All persons employed by the county or any of its
boards or commissions, whether as officers or otherwise, except those who's pay
is otherwise provided for shall be paid in accordance with a pay plan enacted by
ordinance."
MS. SELF: I'm sorry, which section are you looking at?
MS. LEE LOY: Section 3-13 of our Charter. There is an adoption of a payment
plan. Oh no, Deanna's coming.
MS. SELF: I think Deanna may be able to—it doesn't apply to
MS. LEE LOY: Yeah, see, and that's what I'm trying to get to. Is that?
MS. SAKO: I was just going to say real briefly that—Deanna Sako, Finance
Director, that I believe this is the salary ordinance that you guys adopt annually,
that applies to yet another group of people not covered by other pieces.
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February 20, 2018
MS. LEE LOY: What I'm trying to get to is how the Salary Commission
understands their role. They have been given a lot of authority to affect pays for
elected officials, and all of that is covered under 13-28 (a),(b), (c), and (d), and the
legislative intent, at that time, was to give that body the authority to make those
adjustments.
MS. SELF: Correct.
MS. LEE LOY: So then, I have to pan out a little bit because I'm stuck with the
duties, powers, rules and responsibilities of the different branches of government,
and we have that executive branch, the legislative branch, and the judicial branch,
and it's my understanding—may I have more time, Chair?
ACTING CHR. EOFF: Go ahead, Ms. Lee Loy, finish.
MS. LEE LOY: It's my understanding that the County Council is vested with that
authority of setting the budget. So, I'm trying to find the balance or where we
kind of turned over that authority to the Salary Commission.
MS. SELF: The Salary Commission was created by ballot. The voters actually
set this up. This didn't just happen. I mean this went to—it was a ballot initiative,
so like I said, as far back as I could find when this first began, which was 1974,
ordinance number 56, it was to create the Salary Commission to determine the
salaries for the, I think it was just the Council, Council Chairman, and the Council
Members. From that point forward, I can't remember the exact changes, but the
last change was—there's these different propositions, so those went to the
election. So, it was actually the voters of the County that created this
Commission and gave them this authority. And as far as you're asking, did I
cover your question? Did I answer your question?
MS. LEE LOY: Yeah, it did because I did the legislative intent and went and
looked up proposition 10 and proposition 13, I think was another one from 1974
and again in 1979 and then again in 2000 and 2006. So, I did a really good check
of how we got here. We'll have our different conference about another piece of
legislation, but I just wanted to have that fundamental understanding on the
authorities.
MR. ONO: May I have a moment at some point in time?
ACTING CHR. EOFF: Yes, you can respond.
MR. ONO: I'm not responding to that specifically, but just let me mention that
what we went through was really tough stuff We were handed a prerequisite
position that was really so difficult to deal with. At this point in time, you know, I
would suggest that on this Charter amendment proposal, that if you can defer it
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until we're finished with our next tier two because I believe when we come up
with whatever we come up with, that you're going to be well satisfied, that this
situation won't be occurring like it has in the past, because we're going to build
into there something that which will not give these 10, 20, 30, 40 percent raises. I
don't see that happening again. The Commission voted unanimously at its last
meeting that they're really concerned about this Charter amendment and what it
would do to a process that can be long already, to make it even more cumbersome
and longer.
Point of Order: MS. LEE LOY: Chair, point of order, please.
ACTING CHR. EOFF: Thank you. Ms. Lee Loy.
MS. LEE LOY: I'm not trying to cut you off, Mr. Ono, but what we have before
us is your presentation. Actually, if you could stick around for that conversation
when we talk about a proposed ballot amendment that I initiated, I feel that what
you are sharing right now would be better served in that context.
MR. ONO: Okay. I apologize. I may not be able to stick around, but I
apologize.
ACTING CHR. EOFF: Okay, very good. Thank you, Mr. Ono. Thank you,
Ms. Lee Loy, I'm going to ask for further input now.
MS. LEE LOY: I got what I needed. Again, Mr. Ono, no disrespect, it's how we
have to operate, too, and you shared you guys have real strict Sunshine Laws, too.
So, thank you.
MR. ONO: Not a problem.
ACTING CHR. EOFF: I know there are several Council Members who wish to
speak, but I'm going to ask Ms. Ruggles if she still has a comment. Okay, go
ahead.
MS. RUGGLES: Thank you. Actually, I just have two questions, and forgive me
if you asked these while I was gone, Ms. Lee Loy. You mentioned that there's a
policy somewhere where you were advised to not consider the budget when
considering the salary increases. Could you please share with us where that
policy is stated?
MR. ONO: It was information that was furnished to us by testimony, a
representation. We actually heard many different sides of it that there were not
any funds within the current budget. Then we also heard that there were, but
primarily from my recollection, the adjustments that we came up with, the
Commission concluded that the County would be able to fund them.
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February 20, 2018
MS. RUGGLES: Okay, thank you. My question is, did you say that you were
advised to not consider the budget?
MR. ONO: I may have said that.
MS. RUGGLES: Okay, and is that something that you were advised by certain
testifiers, you're saying?
MR. ONO: I may have said that. I don't recall clearly. That may not be a true
representation. I wouldn't put too much weight on that.
MS. RUGGLES: Okay. My second question is you mentioned that there was a
report done by the County of Hawaii that raises can't go above three to four
percent per year, or something like that.
MR. ONO: It's in the County's Annual Financial Report. It was commissioner
Dr. Dow that shared that with us at the last meeting. It's something that he found
within this report.
MS. RUGGLES: Do you happen to know what year this report is?
MR. ONO: I believe it's for this current fiscal year.
MS. RUGGLES: Okay, that's all the questions I have. Thank you.
MR. ONO: Thank you.
ACTING CHR. EOFF: Thank you, Ms. Ruggles. Council members?
Mr. Chung? Mr. Richards.
MR. RICHARDS: Mr. Ono, thank you so much, I actually—thanks for the
presentation. I commend your courage for trying to make things right and fix
things, and I do appreciate the comments concerning private sector in attracting
good talent to help us run our County because we're all vested in the County. We
want this to be successful. So, that's a difficult balance to find, and like I said,
courage, you guys went after it.
The problem and the push back what you are hearing from the Council is kind of
a perfect storm as far as the tax side versus the increases. What we're trying to do
is understand the process. You have your job to do. The reason for these
conversations is we have our job to do as well, and we're trying to strike the
balance. So, please don't take this as an adversarial type of conversation.
MR. ONO: I do not.
Page 14
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February 20, 2018
MR. RICHARDS: Thank you. We can disagree and still be friends.
MR. ONO: Absolutely.
MR. RICHARDS: Okay, so that's where the push comes from and we're trying to
find that. I do anticipate and look forward to when you finish your next report.
But, please understand that's where the conversation is coming from. You guys
took a bold step and we appreciate the strength that takes to do that. We're trying
to find that balance going forward. So, just comments. I'll yield at this point.
MR. ONO: Thank you.
ACTING CHR. EOFF: Thank you. Any other comments, Council Members?
Seeing none, would it be okay if I asked a question too? Anybody object?
Eileen, did you have any comments or questions? Okay. Thank you, Mr. Ono, I
think it's important that our constituents and everybody understands that the
history of setting the Salary Commission was through a Charter amendment,
basically because it doesn't seem right that the Council Members would set their
own salaries. So, if that was the original intention—and then I don't know how it
grew from there to include those salaries of other appointed officers of the
County, and Directors and Deputies. But, I believe it's completely understandable
and now, it should be made public that the purpose for the Salary Commission in
the first place, and kind of take the politics out of Council Members involved in
setting their own salaries from the beginning.
I realize that you're going to make adjustments to your own rules and procedures
to deal with some of the issues that surfaced, due to the fact that this three to four
percent, which was a suggested annual increase to keep up with certain standards
and economic changes, hadn't been achieved. I don't know why, I don't know
why the previous Commissions in the years past didn't take that into consideration
or weren't advised that way, but it did make this current adjustment unusual, I
guess, and hence, the concerns and this presentation, et cetera. But, I thank you
for putting all of that on the record and helping us all to understand the situation
you were in, and that you do have intentions to correct that in yourI guess in
your next meeting, you're going to review your rules and procedures?
MR. ONO: Yes, our next meeting is on
ACTING CHR. EOFF: Well, I would look forward to that report and
MR. ONO: I don't know whether we're going to get to a conclusion at our next
meeting, but certainly, we've been eager to start this dialogue about addressing
what's going to happen in the future. You know, we've dealt with what's
happened in the past, so, we don't want to do that anymore, believe me.
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ACTING CHR. EOFF: Well, thank you very much. Whenever that report is
ready, I'm sure we'll be interested in hearing what your suggestions are.
MR. ONO: You will know about it, yes.
ACTING CHR. EOFF: Okay, Council Members, are we ready to close file on
Communication 742? Okay, all in favor, please say "aye".
Vote on Comm. 742: The motion to close file on Comm. 742 was carried by the
(Approved) following voice vote:
Ayes: Committee Members Chung, David, Lee Loy,
O'Hara, Poindexter, Richards, Ruggles, and
Acting Chair Eoff — 8.
Noes: None.
Absent: Committee Member Kanuha — 1.
Excused: None.
ACTING CHR. EOFF: Thank you very much. I'm going to relinquish the chair
back to the Finance Chair, Ms. David.
Relinquish Chair: At this time, Acting Chair Eoff relinquished the chair to Chair David.
CHR. DAVID: Mahalo, Vice Chair Eoff Let the record show that I've resumed
the chair of this Committee. Mr. Clerk, I believe, I think we can go to the top of
the agenda and then as we get to items that I have to take out of order, I'll do so.
MR. HENRICKS: Before we do, can I request a brief recess? Hilo can hear us
but can't see us. They'd like to see us. So, if we can just take a recess to repair
that?
CHR. DAVID: You sure can. We're in recess right now.
MR. HENRICKS : Thank you.
Recess: At 10:16 a.m., the Chair called for a recess.
Reconvene: The meeting reconvened at 10:22 a.m.
CHR. DAVID: Mr Clerk, can we please go to the top of the agenda,
Communication 14.29, please?
Return to Order The Chair directed the Committee to return to the order of business.
of Business:
Page 16
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February 20, 2018
Comm. 14.29: REPORT OF CHANGE ORDERS AUTHORIZED: DECEMBER 16 – 31, 2017
From Finance Director Deanna Sako, dated January 30, 2018, transmitting the
above report pursuant to Hawaii County Code Section 2-12.3.
Vote on Comm. 14.29: Ms. Poindexter moved to close file on Comm. 14.29.
Filed Seconded by Mr. Richards and carried by the following
roll call vote:
Ayes: Committee Members Eoff, Lee Loy, O'Hara,
Poindexter, Richards, Ruggles, and
Chair David – 7.
Noes: None.
Absent: Committee Members Chung and Kanuha – 2.
Excused: None.
CHR. DAVID: Thank you. Please, Communication 72.2.
Comm. 72.2: 2017 ANNUAL REPORT OF THE PUBLIC ACCESS, OPEN SPACE, AND
NATURAL RESOURCES PRESERVATION COMMISSION
From Mayor Harry Kim, dated January 18, 2018, transmitting the above report
pursuant to Hawaii County Code Section 2-217. The Mayor provides a detailed
summary of the purchasing history and status of the lands purchased with the fund,
an accounting report, a statement on management and stewardship of the lands,
and requests that the Council accept the updated prioritized list as provided by the
Commission.
Postponed: February 6, 2018
(Note: There is a motion by Ms. Poindexter, seconded by Ms. O'Hara, to close
file on Comm. 72.2.)
CHR. DAVID: Thank you very much. Okay, we already have a pending motion
and a second. Council Members, we have Mr. Hamana Ventura here for any
questions. If there are none, then—Ms. O'Hara.
MS. O'HARA: Thank you, Chair. Mr. Hamana and I just talked during recess,
and I just—one of the reasons that I wanted to hold this back until we had time to
talk about it, because our last meeting was getting very full, was a particular
purchase that's pending in my district. There was some discussion that it might
have been held up. It's a purchase that the community has been pursuing literally
for decades. It a large property adjacent to Kapoho Beach Lots that has coastal
access, doesn't have beaches, and people have been putting in work on
maintaining the environmental quality, mangrove removal, and that kind of thing.
So, it's an important property for us to receive through the Open Space Fund. I
just learned that it's moving forward. If Mr. Hamana would like to come forward
Page 17
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February 20, 2018
and just give us just a brief—are there any important things that you want to pull
out of this report that we might need to be aware of? That would be nice.
(Note: At this time, Property Manager Hamana Ventura came forward to
address the members of the Committee.)
MR. VENTURA: Good morning, Madam Chair, and members of the
commission, Hamana Ventura, Property Manager. This is our annual report, it's
been submitted since 2007. As we move forward, we're getting more efficient,
taking on more information and properties, but we're starting to get very
comfortable with the program and we ask that you support this communication.
MS. DAVID: Thank you, Ms. O'Hara. Anyone else, Council Members?
Ms. Eoff, go ahead.
MS. EOFF: Thank you, Mr. Ventura. I know earlier on last year, there was some
concern that we weren't moving forward on purchasing properties. I think we had
a discussion where you said that there was a request made of you to further
identify all the properties and where they were in the process, whether there was a
willing seller, whether there were any other hold ups. I'm just wondering, is that
process completed so that you're now moving forward on some of the pending
acquisitions?
MR. VENTURA: We're still trying to work with the current administration on
how do we equitably place our purchases? We'd like to see more assets in our
portfolio that address water sheds and various components of the programs, start
looking at conservation easements, and so forth. So, we actively looked at both
Waipi`o and Amy Greenwell in the past, because they had certain components
that fulfilled various aspects of the program. So, because of those different types
of purchases that are available, we'd like to be a little bit more diverse. In this
current administration, we actually have two active contracts going that are
purchases that are under contract. Today, we've only purchased 13 total parts
with the program. So, as we move through this, we'll get up to 15. It's not a
program that we're actively purchasing three parcels per year, it's one that we're
trying to be—with our funds and then make good purchases on behalf of the
County of Hawaii.
MS. EOFF: Thank you, Mr. Hamana, and I really appreciate all of your efforts. I
agree, purchasing or conserving land that would be in the watershed would be a
priority at this point. Thank you.
CHR. DAVID: Thank you, Ms. Eof£ Anyone else? Seeing none, all those in
favor of filing Communication 72.2, please say "aye".
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Vote on Comm. 72.2: The motion to close file on Comm. 72.2 was carried by the
Filed following roll call vote:
Ayes: Committee Members Eoff, Lee Loy, O'Hara,
Poindexter, Richards, Ruggles, and
Chair David – 7.
Noes: None.
Absent: Committee Members Chung and Kanuha – 2.
Excused: None.
CHR. DAVID: Mr. Clerk, could you proceed with Communication 82.1?
Comm. 82.1: FAIR SHARE ANNUAL REPORT AS OF JUNE 30, 2017
From Planning Director Michael Yee, dated January 26, 2018, transmitting the
above report pursuant to Hawaii County Code Section 2-162.1(a).
Motion to Close File: Ms. Poindexter moved to close file on Comm. 82.1.
Seconded by Ms. Eoff.
CHR. DAVID: Discussion, Council Members? Seeing none—your lights, ladies.
Ms. O'Hara, you can go first and then Ms. Lee Loy.
MS. O'HARA: Is someone from Planning here?
CHR. DAVID: I understand that Director Yee was supposed to be here.
MS. O'HARA: Is somebody here from Planning?
MS. DAVID: Hilo? Is Director Yee in Hilo?
MS. MURAMOTO: No, he's not.
MS. DAVID: Okay. Alright, then you know, why don't we just move tocan I
table this until we
MS. O'HARA: Can we table it? Maybe send a message over to Planning?
MS. DAVID: I think my staff went to track him down right now.
MS. O'HARA: Okay, thanks.
Page 19
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Vote on Motion to Ms. O'Hara moved to table Comm. 82.1 to the end of the
Table: Finance Committee. Seconded by Mr. Richards and
(Approved) carried by the following voice vote:
Ayes: Committee Members Eoff, Lee Loy, O'Hara,
Poindexter, Richards, Ruggles, and
Chair David — 7.
Noes: None.
Absent: Committee Members Chung and Kanuha — 2.
Excused: None.
CHR. DAVID: Okay, Mr. Clerk, can we move then toI'd like to take,
Mr. Birch, since you have been patiently waiting, Communication 743.
Change Order As directed by the Chair and with no objection from the Council Members, the
of Business: following items were taken out of order.
Comm. 743: REQUESTS A PRESENTATION ENTITLED "HAWAII ISLAND TOURISM
ECONOMIC PROJECTION" BY ROSS BIRCH, EXECUTIVE DIRECTOR OF
ISLAND OF HAWAII VISITORS BUREAU
From Council Member Herbert M. "Tim" Richards, III, dated January 19, 2018.
Motion to Close File: Mr. Richards moved to close file on Comm. 743.
Seconded by Ms. Lee Loy.
CHR. DAVID: Mr. Richards, go ahead.
MR. RICHARDS: Okay, thank you, Chair. Thank you, Mr. Birch, for being
here. The reason for this request is, as we know, the tourism side of our County
and our economic drivers is very important. There has been a lot of changes and
actually, quite a lot of growth coming from that side. As we are facing
discussions on the budget coming forth, looking at and concerning the General
Excise (GE) Tax, everything, I thought it'd be a really good idea to get
information concerning the tourism industry and see where we are, see where
we've been, and some projections of where we're going, because that will
contribute to us making good decisions with good information. So, with that—
CHR. DAVID: Thank you, Mr. Richards.
MR. BIRCH: So, you're waiting for the presentation.
MR. RICHARDS: We're waiting for it to come on, so, thank you. Again, thank
you, Mr. Birch, for being here today.
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CHR. DAVID: Good morning, Mr. Birch, please identify yourself before you
proceed. Scott, do we need the take a short recess while you folks set up?
MR. RUEDY: We may need to, yes.
CHR. DAVID: Okay, we're in a two -minute recess. Thanks.
Recess: At 10:33 a.m., the Chair called for a recess.
Reconvene: The meeting reconvened at 10:34 a.m.
MS. DAVID: Thank you, I'm calling the meeting out of recess. Mr. Birch,
you're all set up and ready to go. Identify yourself for the record and then
proceed.
(Note: At this time, Executive Director of the Hawaii Island Visitors
Bureau came forward and gave a PowerPoint presentation to the members
of the Committee. For viewing of the subject presentation, see the DVD
copy of the meeting proceedings on file in the Clerk's Office. A copy of
the PowerPoint presentation is made a part of the record, see Comm. 743.)
CHR. DAVID: Thank you very much, Mr. Birch, for that presentation and the
information provided. Council Members? Scott, could we have the lights?
Thank you.
MR. BIRCH: Sorry, I ran through so fast, but I wanted to make sure we were on
time.
CHR. DAVID: No, that was perfect, thank you. Mr. Richards.
MR. RICHARDS: Thank you, Chair. First of all, Mr. Birch, thank you so much
for that presentation. Again, the idea is to communicate information so we can
gather the data that we need to make good policy going forward. I didn't hear the
warning going go off for the tsunami, information that was coming at us, but I do
really appreciate what you did. Thank you so much in advance for the other
documents that you'll be presenting to us.
More of an address to this Council, we'll discuss this a little bit further later, from
an economic projection standpoint, we have some decisions to make because if
we're going to take care of our County, obviously, we're going to have an impact
of more tourist coming forward. We need to be mindful of that as we do our
planning. and see where we can seek those revenues. So, with that, I'm going to
yield at this point.
CHR. DAVID: Thank you, Mr. Richards. Anyone else? Ms. Lee Loy, go ahead.
Page 21
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February 20, 2018
MS. LEE LOY: Thank you. I always love all of this information from you. I just
want to take you back to the slide on the forecasted air seats, Denver with a 130
percent jump and then Japan with the 75 percent jump. These are all directly into
Kona?
MR. BIRCH: These are all direct flights to Kona.
MS. LEE LOY: And the average stay is somewhere between like at five and
seven days?
MR. BIRCH: 7.2 days is the average length of stay now. The average length of
stay has dropped a couple percentage points, kind of year over year for two
reasons. One, the Japan influx. They stayed fewer days on the normal basis and
do more islands typically. The other one is all the direct access we have coming
from the West Coast, be it San Francisco, LA (Los Angeles), San Diego, across
the board, the price points that are now there have allowed the California
customers to come over for a long weekend and justify it. So, we're seeing a
three-day to three -and -a half-day stay, which is bringing the total down. We still
have 12 to 15 to 21 -day stays with a lot of our different customers, but the
majority of our business comes from the West Coast and they're staying less. So,
that's where it's really showing it.
MS. LEE LOY: I yield.
CHR. DAVID: Thank you, Ms. Lee Loy. Ms. O'Hara first and then I'll go back
to you, Mr. Richards. Ms. O'Hara.
MS. O'HARA: Thank you, Chair. I don't have numbers on the slides, but it was
one of the early on ones, occupancy, average rate, revenue PAR (Per Available
Room), per arrival, I guess. You had mentioned, you said this was hotels only,
and just those that report. So, we have hotels that don't report?
MR. BIRCH: Absolutely. It's voluntary.
MS. O'HARA: Okay, so it's all voluntary?
MR. BIRCH: Yeah.
MS. O'HARA: Do we have any idea of what percentage of our hotels are
reporting?
MR. BIRCH: Of our hotels, we're probably at about 75 percent of our hotels are
reporting, but that's it. No other category has their own reporting type system.
MS. O'HARA: Okay, so you have to guess at the other portion, the 25 percent?
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February 20, 2018
MR. BIRCH: Well, we'll start taking a look at how many rooms we actually have
available on the island versus how many arrivals we have, look at the length of
stay, and you can kind of figure out. We're still running between 50 and 60
percent as a total island.
MS. O'HARA: Okay.
MR. BIRCH: So when you put—kind of do your own internal calculations of
here's how many people, here's how long they're staying, here's how many
rooms we have, that's how we get their occupancy percentage anyway.
MS. O'HARA: Alright. You said that you've done a, kind of flushed out
vacation rental units by looking here, there, and everywhere to find if they're
advertised, but we don't have as many advertising as we have on island. Is that
my understanding? The percentage that are advertising is below of what we
actually have?
MR. BIRCH: We actually have more advertised vacation units than we actually
have hotels rooms on the island.
MS. O'HARA: Yeah, understood. No, I wasn't making that comparison, I was
just saying that there's quite a few that aren't being advertised.
MR. BIRCH: The difference between what's actually recorded on the visitor plan
inventory, which is about 2,000, the visitor plan inventory comes from the State,
which is in the data base of taxation. So, if you pay TAT (Transient
Accommodations Tax) taxes, and you pay GE taxes, the recorded rooms are the
11,000 rooms. The difference of 5,000 to 6,000 rooms are the ones that are not
recorded with the State.
MS. O'HARA: So, we have about 5,000 to 6,000 rooms that we can't track
through TAT payments? Is that what my understanding?
MR. BIRCH: We can only track them through them advertising on a platform.
MS. O'HARA: Okay, so it's pretty clear we have a little bit of a problem there
with TAT.
MR. BIRCH: I did spend a little time on that section, mainly.
MS. O'HARA: Okay. No, I'm just trying to highlight
MR. BIRCH: I'm throwing the statistics out so that the rest of you can take the
statistics and make the decisions.
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February 20, 2018
MS. O'HARA: Yeah, and I'm just going to ask, do you have any
recommendations on how to close that gap?
MR. BIRCH: I'll start by, where it's almost been a free for all, where there's no
reason for someone not to put a secondary home, or a piece of property, or even a
speculation purchase into a vacation rental because there's no penalties. I can pay
my mortgage with a vacation rental without paying a higher real-estate tax,
without having a huge management company that would take 50 percent of it. I
can just throw it on Airbnb or VRBO (Vacation Rentals by Owner), or any one of
the platforms, it's real simple as a transaction. If you're in a long-term rental,
there's laws and stipulations in the favor of the tenant in most cases, so if you've
got someone in a six-month to a year lease, it's really hard to get a not so good
tenant out. Where, if you're on a vacation rental, you know in 10 to 12 days,
they're gone. You don't have to deal with them anymore, and if they choose to
come back, you can say, "Sorry, my rental is not available for you." So, there's
no reason why you wouldn't want to put your second home or an opportunity into
a vacation rental. It's good money right now and the way our tourism is going,
the demand's there and you're going to get a really good return on your
investment very quick.
MS. O'HARA: Understood. And in that scenario, we still don't have a signed
agreement for the State of Hawaii to take, say if a property owner is participating
through, say Airbnb, it's still up to the property owner to pay the TAT and so on.
It's not automatically deducted at the point of
MR. BIRCH: The recent legislation was to have Airbnb be that agent for the
homeowner to collect those taxes and pay the taxes back to the State. But
essentially, any business you're in, you're renting your home on a long-term or
short-term, you are the owner of the business and you're required to pay all
business taxes, TAT, whatever comes along with it.
MS. O'HARA: Understood, but would passing that legislationI guess it's back
with the Legislature this year since the governor didn't sign the MOA
(Memorandum of Agreement). Do you think that would help us get better tax
records, as perhaps more money into the TAT, which we're not going to see right
now, the way things are, but do you think that might help?
MR. BIRCH: Now we're getting into my opinions here. The legislation that they
have that's been changed and changed a few times, and it looks much better this
time around, as it goes in, which is basically all platforms. The holdup that was
the challenge with the Airbnb, on their bill that they had in the beginning, was
Airbnb was actually going to protect those homeowners to another extent of not
sharing their contact information, or their data, or anything else of what that unit
was. They were just going to collect the taxes and then end up paying it through.
So essentially, those homeowners should be paying those taxes, but because of
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February 20, 2018
that one stipulation that the governor has held back and now has morphed into a
much more cleaner bill where we do get more of that information.
MS. O'HARA: Okay, excellent. Thank you, I yield.
CHR. DAVID: Thank you, Ms. O'Hara. Mr. Richards.
MR. RICHARDS: Yes, just a follow-up. Thanks, Mr. Birch. I think I heard at
some presentation somewhere that they had identified Oahu as being pretty much
saturated as far as a tourism site, Maui approaching it, Kauai approaching it or
there and Big Island is the potential area of growth. Did I miss that in the slide?
You're flipping papers.
MR. BIRCH: No, I'm just going to the occupancy percentage slide, which shows
usO`ahu is at the—that was the same one as theO`ahu is at 85 percent or
more.
MR. RICHARDS: Is that considered full for working purposes?
MR. BIRCH: Full because most times, you're going to have some rooms under
Renovation, you're going to have a lot of rooms that you're going to haveso,
85 percent is that pushing point.
MR. RICHARDS: Okay, so the question is, the reason for this double-digit
growth for a couple of years and international growth, what are we doing right as
far as that goes, or are we the last vestige of opportunity and that's why?
MR. BIRCH: I was going to take full credit for myself.
MR. RICHARDS: Got it.
MR. BIRCH: No, it's timing and it is the re -distribution of that. So, if we're
going to grow as a State, we need to spread it out to the neighbor islands. Kauai
is at saturation, although they have some new hotel products that's going to come
online. So, they're still going to have room to grow from a tourism standpoint.
As an infrastructure standpoint, they're going to be really tight. Maui is already
running a million visitors more than we are on an island. Luckily, they've had the
room inventory and the infrastructure to keep that moving, and their airport can
handle that. Kona is bursting at the seams, but we have the greatest room for
growth and we'll continue to have that. We have about a 10 percent gap in
occupancy right now that we can still fill. Typically, that will take three to four
years to get that occupancy to the point. I don't think we're going to take that
long.
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February 20, 2018
MR. RICHARDS: Okay, so just to follow up with that, the comments about the
hotel rooms being converted to time share and all that, your opinion, is that going
to be impacting our ability to take care of these visitors, or are we going to have
is it going to drift over to the vacation rental side?
MR. BIRCH: We've lagged far behind in the time share inventory percentage -
wise versus all other islands. What the time share is going to do for us is it's
going to provide a year-round, consistent, 90 percent occupancy. So, instead of
having the peaks and valleys, we're going to be able to spread that out now and it
should have less impact on the high points, comparatively to our lower points. So,
we're going to—it should steady us out so we can add more without seeing a
greater impact.
MR. RICHARDS: Okay, thank you, I yield.
CHR. DAVID: Thank you, Mr. Richards. Anyone else? Ms. Ruggles, go ahead.
MS. RUGGLES: Thank you for this report. This is amazingly informationally
packed. I'm fascinated by this. My question is, do the Airbnb's also voluntarily
report?
MR. BIRCH: There is no tracking of what an occupancy is for a vacation rental
at this time. They don't have a mechanism in it for this place. The hotels have
what they call a star report where it's even on a national level so that if you report
into it, you can say, "I want to see what my competition in California is." You
don't get names of hotels, but you get areas of hotels that will show occupancy
and stuff It's a private report that we're able to pull the numbers out of. I would
love to have a report for the vacation rentals.
MS. RUGGLES: Is that how you got your visitor plan inventory numbers?
MR. BIRCH: The inventory numbers come from actually DBEDT (Department
of Business, Economic Development, and Tourism), who will take all of the units
that have registered and they'll put them into the categories and then they have a
separate division they created that will go through and, each year, calculate how
many advertised units are from each island or from each area on the island.
MS. RUGGLES: What was the name of that organization?
MR. BIRCH: DBEDT. It's the State organization.
MS. RUGGLES: DBEDT?
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MR. BIRCH: DBEDT, yes. So, Hawaii Tourism authority basically houses
these reports. So, hawaiitourismauthority.org is the site you want to go, but
DBEDT's the organization that pulls the numbers.
MS. RUGGLES: And do they also calculate the accommodation preference
numbers?
MR. BIRCH: Yes.
MS. RUGGLES: Okay, that's all I have.
MS. DAVID: Thank you, Ms. Ruggles. Anyone else? Mr. Chung, just checking
on you in Hilo if you have any comments. All right, thank you. If there are no
more comments, Council Members, all those in favor of filing
Communication 743, please say, "aye".
Vote on Comm. 743: The motion to close file on Comm. 743 was carried by
Filed the following voice vote:
Ayes: Committee Members Chung, Eoff, Lee Loy,
O'Hara, Poindexter, Richards, Ruggles, and
Chair David – 8.
Noes: None.
Absent: Committee Member Kanuha – 1.
Excused: None.
CHR. DAVID: And now, I believe—if it's okay with Council Members, I want to
go back and take Communication 82.1. I understand Ms. Surprenant is in our
Hilo office for our fair share. So, could I please have a motion to take off the
table communication 82.1?
Vote on Motion to Ms. Poindexter moved to remove Comm. 82.1 from the
Remove from Table: table. Seconded by Ms. Lee Loy and carried by the
(Approved) following voice vote:
Ayes: Committee Members Chung, Eoff, Lee Loy,
O'Hara, Poindexter, Richards, Ruggles, and
Chair David –8.
Noes: None.
Absent: Committee Member Kanuha – 1.
Excused: None.
CHR. DAVID: Ms. Surprenant, thank you very much for being in our Hilo
office. I believe we had a question. Ms. O'Hara, go ahead.
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February 20, 2018
MS. O'HARA: Thank you, Chair, and thank you, April for coming over. My
questions relate to, first off, to Table two of the report where you have In Lieu
Contributions. It doesn't appear that we've had any in lieu contributions during
this current administration. Is this something that we're perhaps moving away
from or just opportunity hasn't arisen?
MS. SURPRENANT: No, we have had actually one on the very last item within
this annual report, just to clarify, the very last item on the last page was within
this reporting time. It was not within this administration, however. So, it's just a
coincidence we haven't had as many rezones in the last year, so, it's just a
coincidence.
MS. O'HARA: Okay, thank you. And I know that my district is pretty much out
of the play here on the fair share contributions, but I have asked, and you may be
aware of it, for a report from Director Yee on all the expenditures that we've done
to date from the Geothermal Community Benefit Fund, and I'm still—that's still
pending. We've been waiting quite a while. Is that something you guys are able
to work on?
MS. SURPRENANT: I can ask about that, but it's not something I cover. But I
will certainly ask Director Yee about that and we will get back to you.
MS. O'HARA: Thank you.
CHR. DAVID: Thank you, Ms. O'Hara. Anyone else on the fair share?
Ms. Lee Loy, go ahead?
MS. LEE LOY: Thank you, Chair. Good morning, April.
MS. SURPRENANT: Hi, good morning.
MS. LEE LOY: Hi. I noticed that on Table 1, the contribution and appropriation
for Hilo—and these numbers are so itty bitty every time—
MS. SURPRENANT: Are you looking at North Hilo or South Hilo?
MS. LEE LOY: This one is, I apologize, South Hilo, page 11 on your report.
There's that Traffic Calming Improvements dated 7/1/16 for a $303,000. Where
was that? I've always understood these monies to build capacity, and so, I'm
trying to figure out where we made these improvements and how it increased
capacity.
MS. SURPRENANT: We would have to ask Director of Public Works to join us
on that or reference the CIP (Capital Improvements Program), the most recent
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Vote on Comm. 82.1
Filed
February 20, 2018
CIP spreadsheet and report on that. I don't have that information with me right
now.
MS. LEE LOY: Okay, I will yield and discuss that with them. I see Mr. Brown is
here. Thanks April.
MS. SURPRENANT: You're welcome.
(Note: At this time, Business Manager of Public Works Aaron Brown
came forward to address the members of the Committee.)
MR. BROWN: Aloha, Aaron Brown, Business Manager of Public Works. We
will check with our Traffic Chief and get back to you guys on exactly where that
money was spent and what plans we have for them.
MS. LEE LOY: Thank you. I yield.
CHR. DAVID: Thank you, Ms. Lee Loy, and thank you, Mr. Brown. Any one
else? Comments? If not, mahalo, Ms. Surprenant for being there. I think we may
have one more thing for you later on in the agenda.
MS. SURPRENANT: Okay, thank you.
CHR. DAVID: Alright, Council Members, all those in favor of filing
Communication 82.1 please say "aye".
The motion to close file on Comm. 82.1 was carried by
the following voice vote:
Ayes: Committee Members Eoff, Lee Loy, O'Hara,
Poindexter, Richards, Ruggles, and
Chair David —7.
Noes: None.
Absent: Committee Members Chung and Kanuha — 2.
Excused: None.
CHR. DAVID: Thank you. Mr. Clerk, I think we're just going right down the
agenda with the next communication, Communication 705.
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February 20, 2018
Comm. 705: REQUESTS DISCUSSION REGARDING THE FORMATION OF A BUDGET
REVIEW AD HOC COMMITTEE TO REVIEW, RESEARCH, AND ADDRESS
CONCERNS RELEVANT TO THE COUNTY OF HAWAII BUDGET FOR
FISCAL YEAR 2018-2019
From Council Member Herbert M. "Tim" Richards, III, dated January 10, 2018.
Postponed: February 6, 2018
(Note: There is a motion by Mr. Richards, seconded by Ms. Lee Loy, to close file
on Comm. 705.)
CHR. DAVID: Thank you, Mr. Clerk. Discussion, Mr. Richards?
MR. RICHARDS: We don't need a motion now, it's just back on the table?
CHR. DAVID: There's a pending motion already.
MR. RICHARDS: Okay. Alright. Thank you, Chair. We—how do I approach
this? First of all, I do have a PowerPoint that I put together to use as a discussion
point, and I'd like to ask for personal privileges. Is that a possibility, Chair?
CHR. DAVID: How long would that take?
MR. RICHARDS: About five minutes.
CHR. DAVID: Okay, Mr. Clerk, if that is not on the agenda, how do we
proceed?
MR. RICHARDS: I can just discuss from my slides or I can show it.
CHR. DAVID: Or can we make copies of it? And then it would be assigned a
number? What do you suggest? We could probably move on if it'll take some
time to do that.
MR. HENRICKS: Yes, sorry to interrupt you, but eventually, it would need to be
made part of the record. It could be utilized now but it doesn't seem like we are
quite ready to do that. So, your call at this point.
CHR. DAVID: Alright then Mr. Richards, given the fact that this—we would
have to have it as a public record, would you be able to just discuss your
verbally?
MR. RICHARDS: Sure, and what I'll do is I can actually—sure, I'll discuss from
my numbers and then go forward.
Page 30
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February 20, 2018
CHR. DAVID: Thank you.
MR. RICHARDS: I think, first of all, I would like to, again, echo my thanks to
Mr. Birch for coming forth with the numbers. My intent of having this discussion
is to put on the table to talk about our impending budget concerns and put it in
context with all the rest of the tax implications and ramifications of the decisions
we have made and will be making coming forward.
One of my concerns, and you've heard me discuss this in the past, is that we get
into a maelstrom of silo legislation. What I mean by that is we look at one issue
and don't put it in context with the rest. If we look at our budget for last year,
we're looking at $491 million. Projections for next year are going to be well over
$500 million. If we look at where those funds come from, 60 percent comes from
our real property tax, and echoing some of the concerns that our Finance Director
has said numerous times previously, our funding sources are very limited as to our
diversity of it. So much income stream is tied to real property tax. If we look at
the other sources of revenue, they're stretched across a bunch of different things.
We do have fuel tax, licensing, grants, et cetera. But again, the primary concern
or primary funding source is that real property tax to the tune of almost $300
million.
Okay. One of the justifications that we have had used on us is that since we have
such relatively low real property tax, that's a good reason to raise it. But when I
look at that, I don't see that as a great justification because if we look at our total
tax burden, we are running some of the highest in the nation, if you take into
account real property as well as income tax and excise tax, et cetera. So, we
actually have one of the highest tax burdens in the nation. So, using that as a
justification, I don't see that as a good way to handle it.
We still have to pay attention to the cost of doing our County business. We've
talked about the other taxes, again, I mentioned the real property tax. I've heard it
loud and clear from my constituency, "Enough taxes." If we look at our fuel tax,
we took a substantial jump on that last year from 8.8 cents up to 15 cents.
Though it was long in the making at that point, and this goes back to our
conversations last year with the budget, we approved our budget. We had a
balance budget, yet we went ahead and increased the fuel tax, and that concerned
me because for each penny increase in the fuel tax, we glean about a million
dollars. So, we went from 8.8 cents up to 15 cents. We have that increase in
revenue, and I'm not saying it couldn't be used, what I'm talking about is again,
the total tax burden.
Now we are looking at the General Excise Tax and that is a part of our heavy tax
burden and this half percent increase coming forward. We'll talk about this a little
bit more, but my point is, if we don't look at all the tax revenues that we are going
to glean and stack it up against what we're going to spend, we're going to make
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February 20, 2018
some mistakes. I think we can avoid making some of these mistakes if we have
the ability to sit down and talk story, and brainstorm, have that ability to get that
kicking it around. I know one of the questions that the Chair raised in the past is
this allowable? Well, Maui has been doing this for quite some time now and I
think if there was an issue that would have been coming forth, that would have
already been raised.
The intent is to save our County some money and become more efficient. We've
had a great presentation about our visitor industry expanding substantially. When
looking at the General Excise Tax and this surcharge that we may or may not
decide to assign, that half percent, relative to our GDP (Gross Domestic Product),
which is numbers coming from Finance, set at about $5 billion, that's where the
number of $25 million comes from. If we believe Mr. Birch's numbers, which I
do, that half of that
$5 billion comes actually from the tourism industry. May I have a few more
minutes?
CHR. DAVID: Yes, you may.
MR. RICHARDS: Thank you. That would mean that only half of our GDP is
actually from industry ongoing on the island. I find that a little hard to believe,
but I will accept that for the time being. My point again, comes back to the fact
that in order to have these conversations about the best way to go with our budget,
we need to be able to talk about all of this stuff in context, and the impact that
each of the taxes that we may or may not assess and adjust coming forward. I do
not believe the correct way to figure out how to run the County is figure out how
much we want to spend and then adjust our income stream. I believe we have a
fair income stream and we adjust our expenses back to that income stream. But,
we won't have a good idea on that income stream unless we have the ability to
have the conversation about this.
So, again, my reasoning for the ad hoc committee is to take a selection of four,
and I propose this, so I'm very willing to serve on the committee, I'm very willing
to chair this committee, but if the will of the group is to have a random selection,
I'm very fine with that too. Whatever the group wants to do, but the point is to
have the conversations, and the concept I have is that four of us sit down and we
each take a couple of departments and dig into those departments, have a very
clear financial understanding of those departments so when we get the budget
from the Mayor, we have a very clear understanding of that. So, when we sit
down, reporting back to Finance Committee, we have our quote unquote expert of
each of those departments and we can report back to our group so we can make a
collective decision based upon good information, and with that good information,
we will get good decisions. So, with that, I want to hear a discussion on this. I
want to have a conversation and not just a decision, vote up or vote down,
because we're charged with the fiduciary responsibility of taking care of this
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February 20, 2018
County, and we have to pay attention to the finances, the good and the bad side,
and I think that's what we're trying to do. So, at this point I'll yield.
CHR. DAVID: Thank you, Mr. Richards. Ms. Poindexter.
MS. POINDEXTER: Thank you, Tim, for bringing this forward for discussion,
but for me, I still believe that we can individually speak with the departments and
bring that forward. The bottom line for me is that we need to have public
participation and open government. That's why we have the Sunshine Law. We
don't want to take anymore away from the public and have the perception that
we're trying to do things behind closed doors. I've said that publicly about the
State Legislature when we had difficulties as not having public input. So, I see
the danger with that. We can brainstorm in public, even if it takes us hours and
we run to midnight every night or whatever it is. But you know, we just took a
pay increase, too, so we should be willing to work those long hours. The public is
paying us to do that. So, at this time, unfortunately, I'm not able to support this,
so, I'll yield this time. Thank you.
CHR. DAVID: Thank you, Ms. Poindexter. Yes, you may, Mr. Richards.
MR. RICHARDS: Okay, thank you, Chair. Council Chair, I hear your concern
about transparency. My push back on that is sure, we can do that, and of course
have the private meetings, but we can't have the private meetings and brainstorm
as we go forward. I think collective wisdom is very important there. Case in
point, we tabled this motion because we had such a long day and we deferred it
and that's my concern going forward. If we can do that just to have a
conversation on this, my concern is going forward, I think we can do a far better
job managing that, and we've used ad hoc in the past.
The ad hoc committee we used for the styrofoam reduction bill worked
phenomenally well because we were able to sit down and talk story about that. If
we can do that, we will avoid—and I hear what you're saying because we're not
going to be making any decisions. The point is that we get that information, get
that research done, and figure out that information that we need to make the good
decisions. So, though I hear your concern, I respectfully disagree with it because
I think we can actually do a better job for the County and communicate all that. I
yield.
MS. POINDEXTER: Can I just respond to that since we're going the response
because he got a chance to respond to what I said.
CHR. DAVID: Okay, I'll allow it just this one time, Ms. Poindexter. I'm going
to the rest of the Council Members.
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February 20, 2018
MS. POINDEXTER: I just want to stop the back and forth on each one. Again, I
thank you for saying where we can respectfully disagree because at this point
again, the public has the right to be involved with something that, you know,
we're going to empty their pockets on. Thank you.
CHR. DAVID: Thank you, Ms. Poindexter. Ms. Ruggles
MS. RUGGLES: Thank you. I just have a question. At first glance, I thought
this was a really great idea and I really appreciate your intent with doing this. My
question is what would be the difference with this ad hoc and the process that we
go through during the budget season?
CHR. DAVID: Yes, you may, Mr. Richards.
MR. RICHARDS: Thank you, Chair. I think the difference is the process that we
go through is, in order for us to have a meeting, a committee meeting for finance
or for any of the committees for that matter, we must agendize, we must have a
public publicizing the meeting and going forward. One of the concerns that I've
heard is we can have the private meetings, yes, we can have the private meetings
but what we can't do is have a communal meeting to hear and discuss because as
we all know, each person hears things a little bit differently. If we're willing to sit
through numerous budget meetings and have one scheduled two or three times a
week, I'm willing to do that as far as that goes for the Finance Committee as a
whole. What I don't want to do is get us backed into a corner like the last budget
cycle. I think we can avoid that.
I understand the concern for transparency, believe me. That's not the intent of this
at all. The intent is to, and let's just pick a department, since Public Works is
here, one of us decides to become the person for Public Works. We sit with the
group, we talk story so we have a clear understanding of the needs of that group,
and then we can deliver it better to our Council as a whole because we'll have that
intimate understanding of their needs. Police is another one. Fire is another one.
If we embrace a portion of the budget rather than trying to ram rod it all the way
through—and my idea there is with that understanding we'll have a better grasp
of what we truly need, and thereby what our budget would be, and thereby, we
can make good decisions concerning our revenue side, which is going to come
from the taxes. I think we have a whole bunch of other conversation to have
concerning taxes, as been pointed out by Mr. Birch in our visitor side and what
we might be able to do there. But I think that could be part of the conversations
as well.
So, the idea is not to hide anything, by no means, it's to be able to brainstorm and
when we bring that back to the Finance Committee, we have that discussion in
front of everybody. B,ut it will be far more efficient because we have the Cost of
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February 20, 2018
Government Commission reviewing things. I think it'll be far more efficient and
save us time. We spend, depending on who's calculations you say, somewhere
around $10,000 an hour for us to be sitting in Council. If we can reduce that
number, because we're being more efficient with our time and the conversations, I
think that would be doing what we're supposed to do, which is taking care of the
County for the constituents. Does that answer the question, Councilwoman?
MS. RUGGLES: Yes, it does.
MR. RICHARDS: Okay, thanks.
MS. RUGGLES: If I'm understanding you correctly, the difference is during last
budget season, because we had the budget deadlines, the sentiment is that we
were pushed in a corner and so we had to make these decisions during these really
long meetings, where we were all pretty exhausted from meeting for eight hours
straight. So, it's also for efficiency and to save the County time in the public
arena, which is the tune of $10,000 an hour. Am I missing anything?
MR. RICHARDS: No, it's striving for efficiency and getting better decisions
made in a better context.
MS. RUGGLES: Okay, thank you.
CHR. DAVID: Thank you, Ms. Ruggles. Council Members? Ms. O'Hara.
MS. O'HARA: Thank you, Chair. I am not comfortable with this for the
following reasons. While it was described that we had some marathon meetings
during the budget process, there's always marathon during every budget process.
For those who've been on the Council longer, they're well aware of that. I wasn't
a novice to the County budgeting process. I did work as a civil servant and when
I did, I had to do a budget for my section. I participated in the department budget
development. I served on the Cost of Government Commission in 2010 and 2011
where we analyzed the County's budget, and now I'm in a position to approve the
County's budget.
Last year, you basically had a committee at your disposal. It's your legislative
assistant and yourself to put together what can be a very difficult process, but you
get to put together your amendments, and that's based on the public hearings that
we have with our department heads. My concern here is us trying to maneuver
through operations without direct knowledge of the operations. This is something
that's kind of a separation of powers and the reason that we do the budget process
the way we do. It starts at the lowest level of every department, moves up
through that department, vetted by the Directors of those department in concert
with the Finance Department, then to the Mayor, more vetting, more vetting. And
these are the people that run day-to-day operations. We are the policy makings
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February 20, 2018
branch, not the operations branch. I'm a little bit uncomfortable with taking this
behind closed doors and appointing a committee of four for the very reason that it
needs to be public.
I have a differing viewpoint perhaps than Mr. Richards and probably from
everyone on the Council. We all have different viewpoints of how the budget
should be developed, where the money is best spent, and where the cuts where are
best made. I don't want this railroaded by a committee that I might not be in
agreement with. I would want to sit on it, but we would all want to sit on it, and
we are sitting on it, it's called the County Council and we do this in concert in
public.
And yes, I hate the fact that it costs money, but we can cut that by doing our
homework. I recall last year, we were facing property tax changes, real property
tax changes. I asked for information from Finance that I don't know, maybe no
other Council would ask for before. I asked for the tables and how it was
calculated because I wasn't real comfortable with the initial proposal from the
Mayor to do across the board six -and -a -half -percent change to all property tax
classes. So, we had a spreadsheet to play around with and when we got that, we
asked that everybody submit that to Laserfiche at the soonest possible date so that
we could review each other's work. I did that. I was the only one. 10 days later,
we came to Council and there were all of these last-minute amendments laid
before us, floor amendments which were really difficult to absorb in the context
of a long meeting, without having looked at them previously.
So, I think we should go back to the commitment that I thought we made last
year, which is to do our homework well in advance so we have any amendments
before each other through our internal process and let us be able to work it
through that way. I agree Ms. Poindexter, if you need additional meetings with
departments to fully understand why they are requesting money here and not
there, they're available to us. They will meet with us. They will take the time to
meet with us. So, I am not at this point going to be supporting this. Thank you
very much.
CHR. DAVID: Thank you, Ms. O'Hara. Anyone else? Ms. Lee Loy and then
Ms. Eoff.
MS. LEE LOY: Thank you, Chair. I like the idea of being able to drill down
with each department, and almost like Ms. O'Hara said, leaving the operation stuff
to them, but looking at other ways between each department, that maybe we could
create synergies between so we could be more efficient, more effective, trim the
budget a little bit. I actually didn't view this ad hoc committee as something that
would happen behind closed doors. I was drawn to our Charter Section 3-16,
which is a Mandatory Program Review. I actually saw this as kind of a hybrid of
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February 20, 2018
what's afforded to us in the Charter, that "At least every four years, the council
shall critically review every program supported wholly or partially by county
funds, ..." That's actuallyI guess my optics on what this ad hoc committee
would gravitate to and what the goals and objectives of it would be, would
actually be this critical program review. Because it also, under the Charter,
basically says if that program is not sustainable, we can offer modification levels
or we can actually suggest that the program gets terminated. But what's
happening now is we get a proposed budget from the Administration and they're
choosing which programs get terminated and then we as a body have to sit down
and listen to our constituents and then push back.
I kind of appreciate everybody using good information helps us make good
decisions, but now we all know better, so we should be doing better. I'd like to
support this in that vein that we're actually accomplishing something provided to
us under the Charter, which is a mandatory program review. Again, it was never
my intention that this would be done behind closed doors. It would be a more
transparent process and even an opportunity for the business community or other
people to weigh in on how effective these departments are or these various
programs that we have on the book and if they're actually serving its purpose.
Those are my thoughts. I don't know if Mr. Richards maybe wants to reframe the
goals and objectives and point to that section of our Charter as a tool. I'm not
sure. Those are my thoughts. I think we have the authority, it's given to us under
the Charter. The section is 3-16, Mandatory Program Reviews. I don't know if
any other body or Council Member has ever done those. So, I actually saw this
subcommittee as that hybrid to move into that arena. I got real familiar with this
County Charter because of the Salary Commission, and there are a few other
things in here that we should be doing. But that's what we were elected to do.
Again, I don't know how many more times I have to say it, I never viewed this as
an opportunity to be behind closed doors. I saw it as a hybrid of program review.
I yield at this time.
CHR. DAVID: Thank you, Ms. Lee Loy. Ms. Eoff, go ahead.
MS. EOFF: Thank you, Madam Chair, and thank you, Mr. Richards, for thinking
creatively and trying to help with solutions so that we can participate better in the
budget process. I'm also uncomfortable with this particular request to form an ad
hoc committee. One of the things that I was told was that to form an ad hoc
committee, first of all, should be the Chair of the standing committee that would
request it. Also, there needs to be a specific piece of legislation that we would
then need to form an ad hoc committee to further delve into some questions or
research and come back with a specific recommendation. I think that this request
is a little bit too broad to meet some of the requirements of formation of an ad hoc
committee.
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February 20, 2018
On the other hand, I think that the week that we spend in the program reviews,
during the presentation by each department, is where our further questioning and
maybe as we become more in touch with the departments prior to that, we would
be able to ask better questions at that time. That is our current process, and I don't
know about this mandatory program review. Ms. Sako, do you have a little bit
background on that?
CHR. DAVID: We also have Corporation Counsel available too.
MS. EOFF: Okay, thank you.
(Note: At this time, Finance Director Deanna Sako came forward to
address the members of the Committee.)
MS. SAKO: Deanna Sako, Director of Finance. I don't know if you remember
but we also present with the budget, two rather large manuals. One is the
program budget and the second one is the status report, both end of year and six-
month progress report of the goals and objectives of every single department
within the County. I spend a lot of time doing that and I would hope that you
guys spent the time reading it. But in addition, that is what the departmental
reviews are for. This year, they're scheduled in April, and we request all
comments. I think everybody has been very open and that has been considered
the departmental program budget reviews. At least that's how it's been done in the
past. We spend a lot of this time on those program budgets so I'm hoping
everybody is reviewing it. If there's areas that you feel they shouldn't be doing,
that's the time to speak up as well.
MS. EOFF: Thank you, Ms. Sako. In years watching previous Councils and
current Councils, the budget review process is very long and can be intricate and
confusing at first and forever. I mean it's a difficult process and everybody does
come at it with their own personal take on where the County should be tightening
their belts or increasing their revenues, et cetera. But, I'd like to see us improve
the process. I don't know where this is exactly going to work for Mr. Richards'
current request, but I think that given some of the discussion we've been having, I
have some really good ideas personally, how to start sooner, as Ms. O'Hara had
stated with getting better information and learning as much as we can ahead of
our review, our week-long review, and then our meetings, which I think is also
quite a number of times where we involved the public and we involved the
departments. We can have a good back and forth dialogue, and I think if we set
our minds to that, we will get where we want to be. Thank you, I yield.
CHR. DAVID: Thank you, Ms. Eoff Ms. O'Hara, go ahead.
MS. O'HARA: Thank you, Chair. I was looking to see if Mr. Chung was
engaging, but he didn't seem to be. Anyhow, thank you for that, Ms. Sako,
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February 20, 2018
because I was just going to bring up that we do get the program reviews. It's in a
narrative form. It is a lot of information to absorb, but I've been called back to
that many times through the year, as I move on legislation or move on a
contingency fund request, or whatever to go back to those programmatic goals
that are stated by each of the departments.
What we don't do is discuss that document here at Council, and maybe we should
make some time to do that because I have found some, well it's called
deficiencies, in the programmatic goals. For instance, when we were doing the rat
lung worm disease, I came to find out that R & D (Research and Development)
has no programmatic goal matching with human health issues. So, these are
things that perhaps we should be discussing more. I'm perfectly happy to do that,
but it is getting done. The programmatic reviews are being done by the
departments, they are being delivered to us, it's up to us to vet them and call them
out more.
I know I have more homework on my plate this year than I did last year. I
thought it was a bad year last year, but it's going to be an even more intense body
of work this year because of the many situations that we're facing. We have more
budget short falls, et cetera. So anyway, I am still not thinking to support this. I
want this to be done with full transparency before the public. If we have to call an
extra meeting, so be it. I'm committed to doing that. Thank you.
CHR. DAVID: Thank you, Ms. O'Hara. Ms. Lee Loy, go ahead.
MS. LEE LOY: Thank you, Chair. I think I missed Deanna's explanation, but I
got the down low over here. I think this is where the leadership I relied on very
heavy last time, and we were given a very fixed process. A budget was given to
us, we went through departmental reviews, and then another budget dropped. I
recognize, right now in this moment, that we actually had an option to say, "No,
we're going to stick with the first budget proposed and we're not going to raise
taxes," but we were encouraged by leadership, "No, we got to move in the next
one," and then we started tinkering with the numbers. So, I felt like all of the
efforts that we had at that time was lost, when we could actually just have said no
and held the line with the first proposed budget without any tax increases.
And, you know, maybe if we did have an opportunity through the different chairs
to have their different departments that they're covered in, you know, have them
set aside a time on the meeting in which we can dig in their budget and ask them
those questions, not within that timeframe, to get a deeper understanding. I think
that's healthy. I think that's good information helping us make good decisions.
But, the new mantra for me is we know more now, so we should do better. I don't
mind doing the hard work. I don't think anyone of my other colleagues doesn't
mind doing the hard work, but I also feel strongly it has to be done in some kind
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of context so that when we receive the information, we can come up with
different options and solutions and have a more meaningful impact on the budget
itself.
That being said, I don't know, Mr. Richards, I don't know if there's an opportunity
here for you to retool your ad hoc request to have some guidelines. I think I
enjoyed the conversation and I clearly see that some people want to stick to the
same train tracks that have been given to them in the past, but I'm ready to step
outside the box and work harder. I think our constituents deserve that. We're
going to facing some real tough decisions going forward. That being said, I yield.
CHR. DAVID: Thank you, Ms. Lee Loy. Ms. Eoff and then Ms. Ruggles.
MS. EOFF: Thank you. I was just going to—maybe Ms. Sako can further
clarify, but my understanding was the first draft of the budget does not have the
actual income from property taxes set. So, we have to have a draft two, which
provides us with a new number based on real numbers and that is why that's the
budget that we have to work off of. So, I don't think what Ms. Lee Loy was
exactly correct on that. I don't know if it matters or not to this discussion, but I
just wanted to make sure that was clear. Is there anything you wanted to add?
(Note: At this time, Finance Director Deanna Sako came forward to
address the members of the Committee.)
MS. SAKO: The only thing I wanted to add is yes, we don't have final numbers,
we have to wait for the real property tax appeal process to be completed. But in
addition, the other reason we have a March and a May submittal is because the
legislative session is still in progress. And last year, we also had collective
bargaining for all of our bargaining units. I believe when we submitted the March
budget, we had either just received Fire, or we got it right afterwards. In addition,
the Legislature changed the ERS (Employees' Retirement System) rates. There
were a lot of changes between the March and May budget that actually happened
in the legislative session last year. So, just as a reminder, there is a reason there's
two versions.
MS. EOFF: Thank you.
CHR. DAVID: Thank you, Ms. Eoff, and thank you, Ms. Sako. Ms. Ruggles.
MS. RUGGLES: Thank you. So, while everyone was talking, I wrote down,
Mr. Richards, three reasons and I wondered if there was another way that we
could address these. The first reason is the marathon meetings. I think it's very
valid and really important to be addressed. I wondered—there's two ways that we
can address this. One is set the hearings in a more staggered manner where we
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can focus on one department at a time and start the budget hearing process sooner.
So, I wonder, Mr. Clerk, or Chair Poindexter, is that possible?
MS. POINDEXTER: That always depends on what the Mayor's meeting with his
department heads and what's being offered forward. I don't know if thatI know
by County Code and—can you just explain that?
MS. SAKO: The process or?
MS. POINDEXTER: Why that date and why we cannot go sooner.
MS. SAKO: The April one?
MS. POINDEXTER: Yeah.
MS. SAKO: Okay, so there's a lot of history to it. One is, it used to be like the
second or third week of March, and one problem was it coincided with spring
break, and many of the department heads have children and they weren't around.
But actually, what they've learned over the years was that we submit the budget
on March first, that gives the Council Members two weeks to look at it and be
ready to ask questions. That was kind of rough, really, so it was, I believe it was
Council's request to move it to the end of March, early April. It ended up being, I
believe now, the middle of April, mostly to give the Council time to really review
the program budget, the operating budget, and be able to ask and have better
discussions with the departments at that time. Then that still gave us a couple of
weeks, two or three weeks, before we have to submit the May fifth budget to
incorporate some of the comments and suggestions that were made at that time as
well. But it was really to kind of give more opportunities to look at it before those
department reviews.
MS. RUGGLES: Okay, so, I guess I just want to say that I agree with
Mr. Richards that it's not efficient and I personally believe it's less productive to
be doing these marathon meetings, and it's less effective. I value it being a public
process, and I value the public can come and testify in each one of those hearings,
and receive that notice and listen to the discussion, and know when it is, and
watch it later if they'd like. So, is it possible to schedule it sooner, or to receive
the budget sooner to give us more time?
MS. SAKO: So, the dates on March first are set by Charter. So, March first and
May fifth are in the Charter. And again, I believe the May fifth is set to be—the
second deadline is actually set to coincide with the legislative session. It says no
later than May fifth or within five days after the end of the legislative session or
something like that. But, the Legislature adjourns later, I believe now, than that.
But those dates are in the Charter and I believe would require a Charter
amendment.
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MS. RUGGLES: Okay, and those are the deadlines for when we need to have
completed the budget review?
MS. SAKO: Oh, complete the budget review? No, it just says there needs to be a
budget review. But when you asked could you get the budget sooner, we can't
necessarily submit the budget sooner. You can meet with the departments, you
know, the departmental budget reviews can be moved. I mean you can work
together to do that, but it would have to be between March first and
May fifth.
MS. RUGGLES: Okay, and when is the deadline for when the final budget must
be approved?
MS. SAKO: Approved? No later than June 30th. The Charter also says that if the
Council has not adopted a final budget or if the Mayor vetoes and there's no
override, or there's no action taken, that the Mayor's May fifth budget will stand
adopted so that we don't fall into the same kind of issues the federal government
has. We will always have, no offense, I just had to throw that out there, but we'll
always have an approved budget on July first of each fiscal year.
MS. RUGGLES: Thank you. So, from May fifth to June 30th, we have about two
months to do the budget review. I remember from last year, we packed it all, I
believe into three days in a row or something like that.
MS. SAKO: So, just to clarify, the department budget reviews are usually
between March first and May fifth, and it was three days in a row. But then, after
the May fifth budget comes in, there's usually two Council meetings where you
guys review it and they try to have the second reading by early June so that if
significant amendments are made and the Mayor vetoes, there's still appropriate
time for the Council to have a veto override meeting. I'm sure the County Clerk
would have pointed that out.
MS. RUGGLES: Well, that is still two months.
MS. SAKO: No, it is two months. If you look at the calendar and count
backward on days, it's a little tough. The law also says that the real property tax
rates have to be set by June 20th, so that we can get the bills out in July.
MS. RUGGLES: Well, I'm also considering the first budget review and the
second budget review. I don't believe there was a lot of substantial changes
between the two.
MS. SAKO: Last year there was. Yeah, there were a lot of—many years there's
not, correct. Many years there's not a lot of change between March and May.
Last year, because a lot of the things that the Legislature and the bargaining units
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continuing to negotiate, there were actually quite a few changes between March
and May. That's not probably a—well, I don't know if it's typical or not, but it
didn't always happen that way.
MS. RUGGLES: Okay, so would it be possible, during at least the first budget
review process, instead of having it be three days in a row, where each meeting
we're reviewing three departments, that we can review one department on one
committee day and schedule it in a way that's staggered so that we don't have
these marathon meetings?
CHR. DAVID: Is that a question directed to our Clerk?
MS. RUGGLES: To either who has the knowledge.
CHR. DAVID: Would you care to respond, Mr. Clerk?
MR. HENRICKS: Sure. Jon Henricks, Deputy County Clerk. Almost anything
is possible. I don't want to say that we're where we're at because this is the best
way to do things and we've discovered that over the years, but to some degree,
that's the truth. So, if we were—and by the way, it's more than three departments
every day, it's more like six or nine every day because there's, I think, 16 agencies
or more the County would have to go through.
MS. RUGGLES: Right.
MR. HENRICKS: So, the thing is, if you want to separate those out each to one
day, that's not going to happen. So, do we do less per day? I guess that would be
possible, but the schedule we create is based upon experiences that we've had and
trying to best create an efficient process that allows for sufficient time. We try to
vary the departments based upon review the Council Members might have interest
in.
Could we spread it out more? Sure, but not forever. There's a point where our
window closes. Like we're talking about when the Council needs to be done with
the budget. It has to be adopted before June 30th, but the Council is essentially
done with the budget on June sixth. So, that window is not as wide as it appears
for the reasons Ms. Sako mentioned, real property taxes, allowing the Mayor time
to veto, allowing the Council the opportunity to potentially override that veto. So,
the window is not as wide as it appears. So, would we stretch out or space out the
departmental review process? Maybe. I don't want to say anything now for sure
because—without looking at all of the logistics, that'd be irresponsible. But,
we're at where we're at for a reason. That's something that we could worked on
with the Chair of Finance and the Council, and feel free to put your request in.
But, we've already submitted our notice too, to the agencies about when they're
to appear. I'm not saying that can't be revised, but it's kind of how we do
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business and what seems reasonable for the amount of time that we have to do
things.
MS. RUGGLES: Okay, thank you. I understand that's how we've done it in the
past. I think especially in light, or in context of the recent tax increases and what
Ms. O'Hara refers to as crisis management in our budget, that maybe we should
be looking at a new way to look at our budget this time. I would support, well, I
support the intent of the ad hoc committee. My only concern is it not being part
of the public process that is required by the Sunshine Law. If there's a way that
we can include the public and provide more time for us to really focus in and do
the program review, the critical program review, that it would be a lot more
effective and efficient for us in doing our job. Thank you.
CHR. DAVID: Thank you, Ms. Ruggles. Ms. Poindexter, then I'll go to you,
Mr. Chung.
MS. POINDEXTER: At the end of the year, I know that the departments have
pretty much figured out what their budget is going to be presented to the Mayor.
So, I've been already scheduling departmental reviews to see where they're
falling short and what's happening. So, we can each individually do that as well.
I know that they would be open to that so when you do come and we have to
schedule those departmental reviews, maybe six in one day, we're all
knowledgeable about already what they're presenting as each department. I think
that would be the way to go, but that's just my suggestion. I'll yield at this time.
CHR. DAVID: Thank you. Mr. Chung, did you want to speak?
MR. CHUNG: Thank you.
CHR. DAVID: You're welcome.
MR. CHUNG: I think it's ironic that we have on the same day that we're talking
about this measure, the non-profit grant review process, and the formation of the
ad hoc committee for that process. Now, if all of you recall, about two and a half
years ago, I launched the same concerns that many of you are lodging against
Mr. Richards' idea of forming a budget ad hoc committee. But really, when I
look back now, having had time to see how things work, it wasn't all that bad. I
still have some concerns, but I certainly haven't abdicated my responsibilities
with regard to the non -profits, nor would I abdicate my responsibilities as they
related to the budget. But, it makes forpossibly, it makes forpotentially, it
allows for a more efficient system, I think. Ms. Ruggles herself said, we've got to
change something, this might be the way to do it. So, I'm going to be supporting
it, and nothing would preclude us from providing input to that subcommittee, or
having them interface with us during the course of all of their investigations.
Having said that, with regard to the departmental reviews, I think it can work fine
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if the Council or the Committees is given more direction in what we're supposed
to be looking at.
Let's take a look at this thing historically now. Over the years, I recall we get
subsumed with these really unimportant topics, in my opinion. I'm not saying that
animal control is an unimportant topic to some, but when we're talking about the
Police Department and we spend a lot of time talking about animal control, it's not
what we're supposed to be doing when we're talking about a budget process. We
could certainly talk about animal control during another presentation or another
time.
We should be looking at specific matters on the budget whenever these
departments come up. But what do we do? We just come and tell them we pat
them on the back saying, "You guys are doing a good job." And that's, when you
think about it, that's what it amounts to. We don't really go over their budget with
a fine-tooth comb. Why? First of all, we let them give a long-winded description
of their program, which is intended to cast a good light on their program, and we
let the public talk so long before these presentations that we don't have time to ask
any questions. So, what I would suggest is put all the public testimony at the end
of each of these, or at the end of the day or something like that, and let us do our
work. We spend too much time with the public testimony and with no offense to
anyone, but with nonsense subjects. I think the system can work. Thank you.
CHR. DAVID: Thank you, Mr. Chung. Anyone else? Mr. Richards.
MR. RICHARDS: Thank you, Chair. Actually, thank you for the conversation.
This is actually a really good conversation we're having. One of the concerns and
a statement was made, taking this behind closed doors, that's about as far from it
as it can possibly be. What the ad hoc committee allows us to do what we ought
to do is have quick meetings, maybe some time sensitive meetings that we could
quickly discuss something.
Mr. Chung points out some interesting points that we do get side tracked as we sit
through our presentations, and don't focus in on what I think we should be
working on. Something was brought up concerning the ad hoc report. In the past,
it's my understanding that the ad hoc reports back with a final report, but that's not
the intent. The intent is to have ongoing conversations, and maybe Finance Chair
David, we have—every two weeks we have an update from the ad hoc committee
of what's been worked on and going forward.
The intent is to do something different. I don't think anybody can say that last
year's budget process was a good process. We ended up getting railroaded into
some decisions that I think we could have avoided had we given it a little bit
different thought process. Statement was once made, doing the same thing over
and over again and expecting a different outcome is the definition of insanity. I
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don't want to do the same thing again. I want to—as you guys know, I don't stay
in the box that's drawn around me very well. I'd like to seek a better solution and
this is an effort to seek that better solution.
The concerns about transparency, absolutely, this isn't an intent to make any
decisions outside the public arena. The intent is to get the information well
digested prior to bringing it to that arena so we can efficiently have those
conversations and move the whole process forward. This isn't to beat up
anybody, this is to review things and give a different eye to the programs that
we're looking at it. It's all about transparency when we go to make those
decisions, that's what it has to be and that's how we function. I completely agree
with all of that, but the idea is to be efficient when we're making those decisions.
If we can do that and save a bunch of effort, which translates as a bunch of
finances or money to the County, I think that's what we were elected to do. I'm
seeking a solution there. If we want to have a full Finance Committees outside of
the regular committee day, every week or every other week, I'm fine with that,
too, if that's what the group wants to do, but I think that's an inefficient use of
time.
Another statement was made that we can all meet individually with the Directors.
I completely agree with that and that means that they have nine meetings that are
the same, as opposed to maybe have one meeting with the group as a whole. It's
not just for efficiency for us, but it's also for the directors as well. That's why I
think this is a way. Is this the best way? I don't know, but it's a different way and
I'm seeking to make things efficient and better for our County, not to do back
door deals because that's the furthest from my mind. I think it's an interesting
point that Councilwoman Lee Loy brings up concerning the critical review. Yes,
I understand the review process coming from Finance. Got it, but we're looking
at it with a different eye, we're also looking with a constituent's eye because we
all represent different demographics and that looks at things a little bit differently.
Maybe we can find something there, again, as Councilwoman Lee Loy said,
seeking that synergy and the balance that maybe there's some redundancy going
on that we've done the same thing for so long that we're accepting it how it needs
to be. But maybe we can look at it a little bit differently. The intent is to look at
things a little bit differently and more efficiently. Thank you, I yield.
CHR. DAVID: Thank you, Mr. Richards. Ms. O'Hara and then Ms. Ruggles.
MS. O'HARA: Thank you, Chair. I do appreciate what you're trying to do here,
Mr. Richards, I really do, but time is of the essence and we have taken a lot of
time on this conversation already, and we're going to fall behind on our agenda
once again. I'm just going to say, Deanna, I'm sorry to interrupt, but one thing
that everyone on Council needs to understand is the timeline of the whole process,
which for the departments begins in October, so, as Ms. Poindexter pointed out,
by the end of the year, they pretty much have their department budget more or
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less put together under instructions from the Mayor to cut back five percent, or
whatever he gives them in the way of instructions.
I don't mean to say that it's inefficient that we all meet individually with
departments, because each of us has an area of interest in terms of how the
departments function. I'm not going to be going necessarily to IT (Information
Technology) for instance, or whatever, but I do have an interest—for instance,
Mr. Chung brought up the humane society contract. I have been working on
making changes to that outside of this process. I've been meeting with the
Mayor's Office, Finance, the Purchasing Agent, to see what we can do to make
that a more of an efficient process. We all have the opportunity to do this and I
hope you are doing it on the side anyway, and that's where we gain the efficiency.
I don't really see this as—you know what I feel like it's almost too late. If we
were to do an ad hoc, it would be best to do so from December to March, then
we'd have that program review, you go into the departments, they already got
their next year's budget, initial budget together. But at this point in time, no, I
don't see this as the way forward to changing the process as we did it last year.
Ms. Ruggles, you want more time for meetings? It would be great, but it becomes
a very tight schedule, as the County Deputy Clerk pointed out. It becomes very
tight because we have an obligation to complete this within the fiscal year and we
have to leave time for vetoes and all of these other things. I think it's been a great
conversation, I thinks it's been educational for some of us, and I'm just not going
to be supporting this. I'm sorry to say I'm not going to be supporting this today. I
like the idea and maybe it needs to be flushed out for next year a little bit more.
Thank you.
CHR. DAVID: Thank you, Ms. O'Hara. Ms. Ruggles, after you're done, I think
we can end this discussion.
MS. RUGGLES: Thank you. It was mentioned that we're taking a lot of time on
this discussion, when we talk about efficiency, but I think this is a worthy
discussion because this has to do with the process of fulfilling our obligation to
the public in approving a thoroughly examined budget that is responsible, fiscally
and well -reviewed, that balances public benefit with our expenses and our
revenues. So, I think that this is very pertinent to our position. Of the two options
I'm hearing is we either do one on ones with the departments, on our own with
the departments that interests us, or we can do this ad hoc committee. Both of
those are not ideal for me because they're in private. If there was a way that we
can amend this so that we could include compliance with the Sunshine Law and
have our discussions with each department be on the record within the ad hoc
committee, I would definitely be in support of that. I just wanted to say that.
Thank you
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CHR. DAVID: Thank you, Ms. Ruggles. Alright, Mr. Richards, go ahead.
MR. RICHARDS: Thank you, Chair, thanks for the latitude. An ad hoc
committee is appointed by the Chair, correct? This maybe a question for the
Clerk as well.
MR. HENRICKS: Correct.
MR. RICHARDS: Okay, can it be terminated by the Chair at any time?
MR. HENRICKS: Not that I'm aware of
MR. RICHARDS: So what terminates the ad hoc?
MR. HENRICKS: It either completes its job or it doesn't.
MR. RICHARDS: Okay, I was going to offer that if there is a concern, the Chair
could terminate it or we can vote our self out of this existence, but again, trying to
seek a different path to get a better answer. I yield.
CHR. DAVID: Thank you, Mr. Richards. I believe now I can actually—you do?
Okay, you know what? We're going to have to convene or we're going to have to
put this Finance Committee aside until the end of the day. We have a one o'clock
presentation from a gentleman that we postponed last meeting, and he's going to
come back at one. So, before that, I'll let you have your last comment and I need
to say something before we take a break. Go ahead, Ms. Lee Loy.
MS. LEE LOY: Thank you, Chair. I'm liking this discussion and I think this
actually exercises a muscle that we haven't been able to exercise during our
budget review process. I'm a little concerned because it almost feels like the
situation is not quite ripe yet, and when I say that, I heard something Ms. O'Hara
just said which is, maybe we need to restructure our program review and push
them up in beginning January, even before we get the budget. You know, those
are all options that we could explore, but that's what I want to do. I want to try
something differently. With that—but we're back to the same issue. We're
getting shoved up against a time restraint and we start retreating back into our
offices to do it the same old way. So, I actually would support deferring this, or
tabling it until after our next committee meeting. I think this is a huge
opportunity for us to maybe set the pace. It might be too late for this budget
cycle, but set the pace for next one, and I'm okay with that. I yield at this time.
CHR. DAVID: Okay, Ms. Eoff, two seconds.
MS. EOFF: Rather than take up too much time now, but if that option is
something we want to consider, I don't know, but I'm still having concerns about
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the actual process of the way this ad hoc committee is being requested to be
formed. Not that I'm against the idea of trying to be more efficient during our
budget reviews and all of that time that we spend on the budget, but I'm just
uncomfortable with the way this request is being made and I haven't had enough
or any time. I didn't have a personal conversation with Corporation Counsel or
the Clerk specifically about this communication. I know we're running short
now, maybe Madam Chair can provide more—looks like she has some
information to share, so, I'll yield.
CHR. DAVID: Well, not information, but I would like to make my comment if
everyone is done.
MR. RICHARDS: By all means.
CHR. DAVID: I opened the door. Mr. Richards, if you have one more thing to
say, I really want to get this matterI appreciate what—Ms. Lee Loy has a great
suggestion.
MR. RICHARDS: I agree.
CHR. DAVID: I don't feel that this is the venue for that at this time. But, you
can say what you need to say and then I'll just close on this communication.
MR. RICHARDS: Well, what I was going to say was I liked the idea of maybe
tabling it since we're getting pressed against the clock. But, I want to hear what
you have to say, so I don't want to say that until you've said what you've said.
CHR. DAVID: Maybe you won't want to hear it, what I'm going to say. Okay,
thank you for that. I really appreciate the discussion as well. I mean I think—too
bad we can't have this in our conference room and just hash it out, but we are
bound by procedures and processes, this body is, and that is pretty much what my
comment is going to be. I really have a problem on the establishing of this ad hoc
committee for the purpose of discussing a budget, which has not been brought
before this body as an official business. We don't have the budget before us, and I
would beg to say that the difference between the non-profit ad hoc committee that
we're going to be entertaining this afternoon, we have a communication that has
been properly agendized and for that, we have official board business before the
Council to form the ad hoc committee.
The other issue I'd like to point out is that the request is very general and vague.
There is no issue of a specific task, like our Clerk is saying, that you folks are
going to be addressing. I have a real difficulty with that because ad hoc
committees are supposed to investigate an issue before the Council and come
back with your recommendations. Then, my other thing is that discussing
allowing four people to discuss a budget that we don't even have a copy of at this
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time, kind of, in my mind, allows for people, whoever those four people are, to
talk about and formulate opinions and decisions about something we don't even
have before this body.
So, with all due respect, those are great ideas. I think we should have something
developed for this body to address things about our last minute, trying to figure
things out on such a short timeframe. That, I totally agree. And I thinkI agree
also that we can't do it today. So, my position is, and although I get what you're
saying, Mr. Richards, and I really agree with you, but procedure wise and the
rules that we have to follow, I would not be able to support this formation of this
ad hoc committee at this time. So, that's my position. So, in other words, I
probably will not want to entertain a motion to defer.
MR. RICHARDS: Okay, so you probably won't or you won't entertain because I
was going to say let's defer this thing then, put it on the table.
CHR. DAVID: Well, I already said I would not support the formation of this ad
hoc, but I do support the ideas that we need to do something better and be very
open for our constituents, especially during budget season.
MR. RICHARDS: I'm just seeking a solution.
CHR. DAVID: I know you are.
MR. RICHARDS: So, I ask, do you want to table this to the call of the Chair?
I'm very willing to do that. If you want to table this until we actually have the
budget before us, I'm willing to do that. What I don't want to do is do the same
thing like we did last year. So, if someone else has a better idea, let's do it.
CHR. DAVID: Okay, if you table it until I think we have—until the situation is
other than what I see here, as far as having an official business before this
Council, then we can entertain that discussion at that time.
MR. RICHARDS: Okay, that'll work, so, move to—what am I doing, Clerk?
CHR. DAVID: Do you want to postpone to the call of the Chair?
MR. RICHARDS: Yes.
CHR. DAVID: I'm sorry, Mr. Clerk, is that something that we could do to with
this communication?
MR. HENRICKS: It's your motion.
CHR. DAVID: Do I hear a second? Is this to the call of the Chair?
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February 20, 2018
Vote on Motion to Mr. Richards moved to postpone Comm. 705 to the call of
Postpone: the Chair. Seconded by Ms. Poindexter and carried by the
following voice vote:
Ayes: Committee Members Chung, Eoff, Lee Loy,
O'Hara, Poindexter, Richards, Ruggles, and
Chair David — 8.
Noes: None.
Absent: Committee Member Kanuha — 1.
Excused: None.
CHR. DAVID: Thank you. Okay, this matter has been postponed. Council
Members, I think we need to take a half-hour lunch and then be back here at
one o'clock. Can we recess this to the end of committees this afternoon?
MR. HENRICKS: That would beso, our last committee of the day is the Public
Works and Parks and Recreation Committee. Are you suggesting that we would
recess Finance until the adjournment of Public Works and Parks and Recreation?
CHR. DAVID: Yes.
MR. HENRICKS: Sounds good to me.
CHR. DAVID: Thank you. Alright, so that's what we'll do. Council Members,
half -an -hour lunch, we'll be back here at one o'clock.
MR. CHUNG: Madam Chairman?
CHR. DAVID: Okay, I'll say it later. Mr. Chung, go ahead.
MR. CHUNG: I'm letting you know that I'm not going to be around after 2:30,
I've got a doctor's appointment.
CHR. DAVID: Okay, do you have a letter? Nah, just joking. Alright, we're in
recess. Thank you, Council Members.
Recess: At 12:28 p.m., the Chair called for a recess.
Reconvene: The meeting reconvened at 3:45 p.m.
CHR. DAVID: I'm taking the Finance Committee out of recess and proceeding
with the agenda. If it's okay with my colleagues, there has been a request to take
Bill number 106 out of order. We have Mr. Brown in Hilo. I believe he's still in
Hilo. Okay, thank you. So, Mr. Clerk, can you please read in Bill 106?
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Change Order As directed by the Chair and with no objection from the Committee Members,
of Business: the following item was taken out of order:
Bill 106: AMENDS ORDINANCE NO. 17-39, AS AMENDED, THE OPERATING
BUDGET FOR THE COUNTY OF HAWAII FOR THE FISCAL YEAR
ENDINGJUNE 30. 2018
Increases revenues in the Fuel Tax account ($4 million) due to the increased Fuel
Tax rate in the current fiscal year; and appropriates the same to the following
accounts: Highways Maintenance Service – Roadside Maintenance Service
($1.4 million), Highway Mass Transit – Other Current Expenses ($1 million),
Highway Maintenance Administration – Other Current Expenses ($490,000),
Traffic Division – Traffic Safety ($260,000), Traffic Division – Signals & Street
Lights ($550,000), and Public Safety Disaster/Emergency – Highway Fund
($300,000).
Reference: Comm. 737
Intr. by: Ms. David (B/R)
Motion to Approve: Ms. Poindexter moved to recommend passage of Bill 106
on first reading. Seconded by Ms. Eoff
CHR. DAVID: Council Members, I have Mr. Brown in Hilo. He got there okay.
He will give us a brief presentation on the contents of Bill 106. Mr. Brown, go
ahead.
(Note: At this time, Business Manager of Public Works Aaron Brown
came forward to address the members of the Committee.)
MR. BROWN: Hi, Aaron Brown, Business Manager for Public Works. Thank
you for letting me go before some of the other things. I have a couple kids I got
to pick up, so, that's why you saw me in Kona, and now back in Hilo. I wanted to
give a quick break down on, you know, kind of the fuel tax revenue that we
generated and where we're putting it, and thank you to all of you guys again for
supporting the fuel tax increase. I know it was a hard thing to do, but it definitely
was very necessary to maintain operations and put some funding back in needed
areas. We are looking to put a million dollars into our Mass Transit System, into
their operating fund. I think as we learn more about their Master Plan and how
the new administrator sees the future on that, she'll be collaborating more with, I
know our administration on how to best use that money.
We are looking to upgrade our traffic signals, and so, you'll see money going to
our Traffic Division. We're trying to get a lot more synchronization which will
help both flow and—actually will help in gas consumption. A big one is our
Public Safety and Disaster and Emergency Funds because we were very low on
revenues for a long time. Unfortunately, that was an area that was slowly getting
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February 20, 2018
cut year after year. So, it's I think real nice that we're able to budget some money
to go back into that fund.
We also have some money, where I think everybody can agree, that our roads are
a major investment that we want to look into. So again, we, you know, not
having—not being able to raise fuel tax revenues for 29 years definitely puts us
behind the eight ball, but we're looking forward to moving forward and start
investing in these roads again.
I was able to get a full three months of fuel tax revenue. I think that an important
thing that I wanted to note was I think it's kind of a behind the envelope estimate
that for every cent of increase, we can generate about a million dollars of revenue,
and that's not quite correct. It's probably more like about $850,000, so, not quite
the full million that I think a few of us have been saying. So, we are estimating
that over this first year, the fuel tax increase would generate about $4 million. So,
the bill kind of shows you the breakdown on where those monies will be—where
the funding will be going to, which is kind of what I briefly touched on. I think
more of your questions may help to further defineI can try to answer questions
that'll further describe some of these initiatives if you guys would like.
CHR. DAVID: Thank you so much, Mr. Brown. Council Members?
Ms. O'Hara.
MS. O'HARA: Thank you, Mr. Brown. I love the way you articulate these
things, thank you. On top of the fact that the one cent increase ended up
providing a little less than $1,850,000 or so, we also didn't get the full 12 months
this year. Am I correct?
MR. BROWN: That's correct.
MS. O'HARA: So, that accounts for the fact that it's not 85 percent of 6.2. That
was the increase that we did. I just want the Council to understand the math.
MR. BROWN: Yeah, thank you for bringing that up. Originally, in the Fuel Tax
Revenue Report that we submitted last year, we estimated that we could get about
$4.6 million, even knowing that we were only going to get about eight months tax
revenue. However, consumption has been slightly lower and we're being
conservative, it looks like we are going to get probably about $4 million in
revenue. So, slightly less than what we were hoping for, but still, definitely, well
needed to go back into a lot of our OCE (Other Current Expenses) and things of
that nature.
MS. O'HARA: Okay, excellent. Thank you so much.
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CHR. DAVID: Thank you, Ms. O'Hara, anyone else? Seeing none, all those in
favor of approving Bill 106, please say "aye".
Vote on Bill 106: The motion to recommend passage of Bill 106 on first
(Approved) reading was carried by the following voice vote:
Ayes: Committee Members, Kanuha, Lee Loy,
O'Hara, Poindexter, Richards, Ruggles, and
Chair David — 8.
Noes: None.
Absent: Committee Member Chung — 1.
Excused: None.
CHR. DAVID: Mr. Clerk, could we please then now, go back to, not the top of
the agenda but where we left off, I believe it is with Resolution 490-18?
Return to Order The Chair directed the committee to return to the order of business.
of Businiess:
Res. 490-18: AUTHORIZES A DECREASE IN THE COUNTY OF HAWAII FUEL TAX
FOR FISCAL YEARS 2018-2019 AND 2019-2020
Decreases the fuel tax by 4 cents per gallon for Fiscal Year 2018-2019, bringing it
to 15 cents per gallon, and by 8 cents per gallon for Fiscal Year 2019-2020,
bringing it to 15 cents per gallon. Fuel taxes may be used to support the safe and
efficient operation of County roads, mass transit, and highway infrastructure.
Reference: Comm. 730
Intr. by: Ms. O'Hara
Motion to Approve: Ms. O'Hara moved to recommend adoption of Res. 490-18.
Seconded by Mr. Richards.
CHR. DAVID: Ms. O'Hara.
MS. O'HARA: Okay, the situation with this resolution is, if you'll read the fifth
whereas, it explains the purpose of this, which wasn't really explained in the brief
description, and that is, "Whereas, the County of Hawaii is considering other
revenue source for the improvement and maintenance of County roads, highway
infrastructure, mass transit, therefore, the County Council finds that additional
increases to the fuel tax for the future fiscal years is no longer necessary and that
the fuel tax should remain at 15 cents per gallon." This is predicated on adopting
the half -percent increase in GE tax.
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February 20, 2018
So, what I would suggest doing with this at this point is to vote it up and then, it's
going to be parked until we find out what happens with the GE tax increase, and if
that never comes to pass, then this bill or this resolution, I will withdraw. The
reason I would like to have a brief discussion is my support, so far of this GE tax,
half -percent increase, has been conditional upon being able to do some offsets,
and that's why I have put this forward. Now, if the Council is not inclined to do
offsets, I mean, we got to put on the hat and say, "Okay, let's pretend we're
approved the GE tax surcharge and not have that discussion." But, if we were,
would you consider doing this as an offset? That's what this is about.
Now, Aaron Brown just explained to us that one cent—what the implication of
one cent increase or decrease would be. So, if we were to move forward and
remove the two increases that are coming at us next year and the year after, that's
going to translate into a reduction of six plus million dollars. I can't give you
exact numbers because it's based on fuel consumption, but somewhere between
six and six -and -a -half million dollars. I think that's about accurate. But of
course, the GE tax, if we were to approve it, would bring through the door
$25 million at a minimum.
So, that's the offset. What it would mean for a household is if the household were
to be consuming 100 gallons of gas a month and we take away this eight -cent
increase, that saves them $8. That same household might be paying 15 more in
GE tax. So, it's not a total offset, it's a partial offset, just to give you an idea of
how that would work. It's not a perfect offset. There's going to be people that
don't have cars and don't buy fuel so they're not going to realize that offset. But,
that's the intention of this resolution and we can debate it or not, but, my goal
would be just move it forward and park it until we see where the other one goes.
Thank you.
CHR. DAVID: Thank you, Ms. O'Hara. Ms. Lee Loy.
MS. LEE LOY: Thank you, Chair. This might be more of a procedural question,
either for our Clerk or Ms. Schoen. When we do fuel tax increases, we have to
have a public hearing. So, under Ms. O'Hara's scenario, how does it move up, get
parked, and then the public hearing process? I want to understand that a little
better.
MR. HENRICKS: Madam Chair? May I?
CHR. DAVID: Thank you, Mr. Clerk.
MS. LEE LOY: Thank you, Mr. Clerk.
MR. HENRICKS: I understand your question, that's what I was actually thinking
about when Ms. O'Hara was describing her desired route. We really can't move
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February 20, 2018
something up and park it there, we'd have to put it on the next agenda for
adoption. Our instinct then would be to call for a public hearing before that time,
just to make sure that the Council didn't adopt it without that. So, it doesn't seem
that's what the introducer wants, is to have a public hearing so soon, which we
would probably call for the 13th of March, just to make sure because it would be
on the 14th for adoption. So yeah, we can't move something up and kind of say,
"Well, we're not going to put it on the Council agenda for a future time." Once
you move it out of committee, it moves to the next available agenda, and we
would want to call for a public hearing before it's brought forward for potential
adoption.
CHR. DAVID: Thank you, Mr. Clerk. Ms. Lee Loy.
MS. LEE LOY: I'm going to think. It's getting hard. I'm going to yield at this
time. Just one other question though, because this one dials it back, we still use
the same process?
(Note: At this time, Assistant Corporation Counsel Renee Schoen came
forward to address the members of the Committee.)
MS. SCHOEN: Good afternoon, Renee Schoen, Assistant Corporation Counsel.
Yes, the process is the same even though it's a reduction. And to HRS 243-5 that
set out that process, and so, you do have to have a public hearing before adoption.
CHR. DAVID: Ms. Lee Loy, are you yielding? Thank you. Mr. Richards
wanted to speak after, but you'll yield to Ms. O'Hara? Thank you. Ms. O'Hara.
MS. O'HARA: Okay, I'm glad we hashed that out because I wasn't sure myself.
That means it can be parked right here in committee, but, I would like to have the
discussion just to get a feel for what you all would consider.
CHR. DAVID: Thank you. Mr. Richards.
MR. RICHARDS: Thank you, Chair. And just to throw more conversations in
this mix, I have an amendment for this, which is actually a reduction, not just a
reduction going forward, but a tad of a reduction. I do commend Councilwoman
O'Hara's thought process because mine is the same. If we're going to do a GE tax
increase, we have to have offsetting and whereas, if we do a GE increase, we need
to give something back. And the first place we can start with is the fuel tax, so, I
have an amendment to go forward.
Now, procedurally, we are doing a lot here, Jon. I want to have the conversation,
I think that's exactly what Eileen is working on here. I can put forth my
amendment, we can have the amendment discussion, or do we just want to have a
discussion going forward as far as the concept of this? She's going like this, yeah.
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February 20, 2018
Well, once again, we're getting stuck in this time thing, which brings back that ad
hoc committee that we talked about earlier today. But, I digress.
CHR. DAVID: Thank you, Mr. Richards.
MR. RICHARDS: So, with that, is the intention for you to hold this in
committee, Councilwoman O'Hara? Then, I will trust you on that and I won't
introduce my amendment yet. So, let's have the conversation.
CHR. DAVID: Thank you. You're yielding?
MR. RICHARDS: I yield, yes. I'm sorry.
CHR. DAVID: Anyone else? Mr. Kanuha.
MR. KANUHA: I'm on the same plane as both of my colleagues in that, if there
is otherI mean we are considering other revenue sources and if that other
revenue source does happen to go through, then I think this will be absolutely
necessary. So, I'm in complete agreement with that. For the purposes of keeping
it in committee, I'm okay with that, too, but I understand where you're going and I
appreciate that aspect. So, I'll yield.
CHR. DAVID: Thank you, Mr. Kanuha. Anyone else wanting to weigh in? So,
Ms. O'Hara, are you entertaining a motion to postpone this to keep it in
committee?
MS. O'HARA: I am. I'm sorry that I'm not hearing from the rest of the Council
on how they might entertain this because it has an impact on my vote. But, I can
do that if that's where we are going.
CHR. DAVID: Okay, well, Mr. Richards wants to weigh in again. Mr. Richards.
MR. RICHARDS: Thank you, Chair. And in alliance with Councilwoman
O'Hara concerning this, the reasoning of the thought process was if we have an
increase in our GE, the surcharge specifically for the County, approximately
40 percent, depending on whose numbers you want to look at, that increase in
revenue will actually be paid for by our visitor industry. That actually alleviates
some of the tax burden from our constituents and puts it on the visitor industry. If
we do that, that savings, well actually, is hard dollars coming back to that
constituency.
The thing is, we have to be sensitive of the fact that, I can appreciate why we
needed the fuel tax increase, though I didn't support it at the time, I understand
why it needed to come forth. However, that being said, we've had tax after tax
and if we don't have a balancing in there, it's tough for our constituency to
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February 20, 2018
embrace what we're trying to get accomplished here. So, I'm in alliance with
Councilwoman O'Hara's thought process, not totally the numbers, but the thought
process to get that moving forward because if we're going to entertain the GE,
that's a good way to actually help our constituency, if we give something back on
the other side. I, too, am waiting to hear back from the Council Members to see
what they're thoughts are. I yield.
CHR. DAVID: Thank you, Mr. Richards. Ms. Poindexter.
MS. POINDEXTER: I'm not ready to weigh in on which way I'm going to
decide because we have to have the conversation on the GET, and hear all of what
everybody is saying, and even hearing from the Mayor on what his community
outreach was like and all of that. That will help determine whether or not,
depending on what comes out of the conversationso, at this time, I'm not able to
weigh in whether I would support it or not. So, I'll yield at this time. Thank you.
CHR. DAVID: Thank you, Ms. Poindexter. Ms. Ruggles.
MS. RUGGLES: Thank you. I am in support of this, of both of these. I'm on the
same page with both Ms. O'Hara and Mr. Richards, like Mr. Kanuha, and maybe
for a little bit different reason. I was opposed to the fuel tax, so, I think any
decrease would be beneficial to my constituents. I'm also a little bit confused
about this idea of moving—of how moving the fuel tax taxation to the General
Excise Tax makes visitors pay more because we don't know what percentage of
visitors are actually paying into the fuel tax compared to the GE tax. Do we?
Yeah, if you can clarify for me, Mr. Richards, I'd appreciate that. Thank you.
CHR. DAVID: Mr. Richards, go ahead.
MR. RICHARDS: I'll invite Councilwoman O'Hara to weigh in on this. Long
story short, if you look at the spending habits of the residents of the County versus
the visitor, we saw a presentation this morning from Mr. Birch, and he showed
where they actually spend $185 a day, the visitor's industry. If you put the
surcharge on that and do the math, I use 30,000 people a day on average, but he
had 31,000. Long story short, that GE surcharge could roughly generate about,
I'm forgetting my numbers here, about $12 million, about $10 to 12 million. The
balance would be generated by our residents.
Now, you're asking specifically, how much our visitors pay for the fuel tax versus
the residence tax? That is actually an interesting metrics that I haven't worked
out, Councilwoman O'Hara. But, the point on that one is that the GE would
actually be replaced, and if we can give some metrics back on the fuel tax, a big
portion of that will be picked up by the visitor industry, and the GE has to be
specifically used for transportation, a big part of that. So, that's where the offset
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February 20, 2018
comes. But that's an interesting metrics and I'm going to look into that. Thank
you.
MS. RUGGLES: Thank you. Yeah, I'm confused because I'm not I'm just
wondering where we were getting that assumption that the visitor industry will
pay more through GE tax versus fuel tax, because as far as I know, visitors tend to
drive more than residents on the day to day, and they also spend more. So, I think
it's comparable. Anyway, I do support this. Thank you.
CHR. DAVID: Thank you, Ms. Ruggles. Anyone else? Ms. O'Hara.
MS. O'HARA: I was just going to weigh in on that comment. I have to agree
with Ms. Ruggles, it's probably comparable, 30 or 40 percent of the fuel tax may
be covered by visitors. But also, recognize we as a population drive a lot because
this is a Big Island. So, it really—it'd be something you'd have to look into and I
can't really say off the top of my head.
CHR. DAVID: Thank you, Ms. O'Hara. Mr. Chung?
MR. CHUNG: You know, I'd like to support this measure. Thanks for allowing
me to speak, I just got back from the doctor's office. But, I'd like to support this,
but I can't do it until I know what's going to happen with the GET. So, I will
either vote to postpone or I'll just wait. I'll have to vote no right now. Thank
you.
CHR. DAVID: Thank you, Mr. Chung. Ms. Eoff.
MS. EOFF: I too think that it's a wise idea to hold this in committee while we see
what happens with the GE and then revisit it as appropriate.
CHR. DAVID: Thank you, Ms. Eoff. Ms. Lee Loy.
MS. LEE LOY: Thank you. I'm going to use the baseball analogy. You have a
batter in the box, and then you have one on deck and one in the hole. And so, I
think holding this at committee provides some of that assurances to our
constituency that we have someone on deck and something on the hole, because I
want to hear what the plan is from the administration and what their scoping was
during their tour of the different communities, and listening to what my other
colleagues experienced at those community meetings and the sentiments that were
coming back. That's not what's before us right now, so, holding this on deck, and
in the hole, is where I'd like to stay. Thank you.
CHR. DAVID: Thank you, Ms. Lee Loy. Anyone else? Everybody's done?
Okay, great. I would have to take the same position that I would prefer to see
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what happens with the GE before I weigh in on this, and so, Ms. O'Hara, are you
ready?
Vote on Motion to Ms. O'Hara moved to postpone Res. 490-18 to the call of
Postpone: the Chair. Seconded by Mr. Richards and carried by the
(Approved) 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, Resolution 495-18.
Res. 495-18: AUTHORIZES THE OFFICE OF THE MAYOR TO ENTER INTO AN
AGREEMENT WITH THE STATE OF HAWAII DEPARTMENT OF
HEALTH, CHRONIC DISEASE PREVENTION AND HEALTH PROMOTION
DIVISION, PURSUANT TO HAWAII REVISED STATUTES SECTION 46-7,
FOR A GRANT TO THE PLANNING DEPARTMENT
Funds in the amount of $9,700 would be used by the Planning Department to
allow key staff to attend Complete Streets trainings to plan for, design, and
operate streets with safe access for all users.
Reference: Comm. 736
Intr. by: Ms. David (B/R)
Motion to Approve: Ms. O'Hara moved to recommend adoption of Res. 495-18.
Seconded by Ms. Poindexter.
MS. DAVID: Discussion, Council Members? I believe if we have questions, I
thinkI have a note that Ms. Surprenant would be in our Hilo Chambers for this.
Hilo, is Ms. Surprenant?
MS. MURAMOTO: Chair, she's not in the Hilo Chambers.
CHR. DAVID: Okay, well, does anyone have questions? If not
MS. O'HARA: I just want to comment if I could?
CHR. DAVID: Sure.
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February 20, 2018
MS. O'HARA: This sounds really good. We've been talking about complete
streets and it's wonderful we're getting grant to train the folks in the Planning
Department in this. So, I'm all for it.
CHR. DAVID: Cool. Alright, thank you very much. Mr. Richards?
MR. RICHARDS: Yes, I have a quick comment.
CHR. DAVID: Sure.
MR. RICHARDS: This last week I attended a Sustainable Transportation Forum
hosted by Senator Inouye in Hilo. It was interesting because they were talking
about the whole complete street thought process and that for sustainable
transportation, they're actually talking about, well, what I was led to believe was
the complete streets initiative may not exactly be the way to go and that we
should be rethinking some of that. So, I'm going to support this, but it's an
interesting conversation to have because they said to have sustainable
transportation, we actually have to look at our zoning and how we're assigning
that, and that the roads we build, even though they may have to be federal
standards, may not actually be the roads we want to build. Anyway, I just offer
that as an observation, interesting concept going forward. So, with that, I yield.
CHR. DAVID: Thank you, Mr. Richards. Mr. Kanuha.
MR. KANUHA: Thank you. I want to learn more about that because we've been
talking about complete streets and I know the Council, years ago, passed a
resolution saying that we're for complete streets and how to move forward with
that. It's a great concept. We went up, Val and I went up to one of these training
events in Seattle and Portland and really saw how the cities around the complete
streets concepts were moving forward and getting people in all modes of
transportation to where they need to go, safely and efficiently. It was really quite
interesting. I know it takes a while to change a lot of mind sets and a lot of, you
know, it's very easy to make status quo or do status quo in how we're doing our
streets, but a lot of unique concept came out from those trainings and kind of
changed the mentality of thinking about these modes of transportation.
So, I'd love to see that sustainable transportation one, but I also want to move
forward with our Complete Streets Programs. I really would love to have an
update of how that program is happening. I know the Hilo downtown was trying
to do some stuff, but I haven't really seen anything about the Complete Streets
Plan yet. But, this is good for staff to go to these trainings and kind of get out
of—or even, whoever. There are a lot of individuals—yeah, we went up with
April, maybe April can say something, not only staff from Public Works, but
elected officials and administration officials because you really need everybody to
kind of understand the concept of the complete streets. So, I'm all in favor of this
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Vote on Res. 495-18
(Approved)
February 20, 2018
and definitely, I'm a supporter of complete streets and I just want to move
forward with some of the plans that are being talked about. I yield.
CHR. DAVID: Thank you, Mr. Kanuha. Aloha, Ms. Surprenant, thank you for
coming down. If you'd like to say a few words about Resolution 495, you can go
ahead.
(Note: At this time, Planning Program Manager April Surprenant came
forward to address the members of the Committee.)
MS. SURPRENANT: Sure, this is another grant from DOH (Department of
Health). We've received these grants previously. So, this is another one to
further our training and education in complete streets. In this one, Director Yee
has actually been instrumental in working with Kauai to do a peer-to-peer
workshop for the engineers and planners between Kauai and the Big Island. So,
we're hoping to do that in the coming months, we're collaborating with them as
well as DOT (Department of Transportation), and Smart Growth America. So,
hopefully that will be coming, like I said, probably in late spring, early summer.
I think Council Member Kanuha also asked about complete streets. We are in the
process of hiring a Transportation Planner right now so we'll be doing interviews
soon. So, I'm hoping to have that person on staff and then we will be looking to
kick off the complete streets contract that we have with SSFM. So, I would hope
for that to happen probably in March or April, it would be my hope.
CHR. DAVID: Thank you very much for that. Council Members, any other
questions for Ms. Surprenant? No? Well, thank you for running down. Alright,
Council Members, all those in favor of approving Resolution 495, please say
"aye."
The motion to recommend adoption of Res. 495-18 was
carried by the following voice vote:
Ayes: Committee Members Chung, Eoff, Kanuha,
Lee Loy, Poindexter, Richards, Ruggles,
and Chair David — 8.
Noes: None.
Absent: Committee Member O'Hara — 1.
Excused: None.
CHR. DAVID: Mr. Clerk, can you please move on to Bills for Ordinances, Bill
number 98, please?
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February 20, 2018
Bill 98: INITIATES AN AMENDMENT TO ARTICLE XIII, SECTION 13-28 OF THE
HAWAII COUNTY CHARTER (2016 EDITION), RELATING TO THE
SALARY COMMISSION
Requires that at least 30 days prior to the approval of any salary adjustment, the
salary commission submit copies of a detailed report of its findings and
conclusions to the Office of the County Clerk and Office of the Mayor, publish a
notice that said report is available for public inspection and include in the notice a
detailed account of proposed salary increases or decreases, and hold at least one
public hearing in both East and West Hawaii. Also requires that any increase or
decrease of more than 10 percent be approved by a two-thirds vote of the entire
membership of the commission.
Reference: Comm. 712
Intr. by: Ms. Lee Loy
Postponed: February 6, 2018
(Note: There is a motion by Ms. Lee Loy, seconded by Mr. Richards, to
recommend passage of Bill 98 on first reading.)
CHR. DAVID: Thank you, Mr. Clerk, there's already a motion on the floor.
Ms. Lee Loy.
MS. LEE LOY: Thank you, Chair. I appreciate the opportunity to have Mr. Ono
come before us and kind of layout the process that the Salary Commission went
through. There was a news article that the Salary Commission did not support
this ballot initiative, but I'm going to respectfully disagree. The salaries that came
forward, to use Mr. Chung's term, was eye-popping. A lot of the questions that I
posed this morning to Mr. Ono and then Ms. Self was the authority and how this
body, the Salary Commission body, can have an enormous impact on our
operating budget.
I hope I can get my colleagues to support this and basically, what it is it gives the
checks and balances back to the people to provide meaningful comments to the
Salary Commission and hopefully use—have them take those comments and
maybe readjust. As mentioned earlier, this framework kind of came out of how
we do our fuel tax increase, and if this—if the Salary Commission is a body with
those authorities to institute raises and impact our operating budget, they should
also be held to a higher standard, just like us. Who knows going forward, people
may not want to engage because of the adjustments that the Salary Commission
has worked so very hard on to address the inequities.
I also heard Mr. Ono talk about they have a future proposal coming forward, but
for right now, that's not what we have, and we need to give the electorate the
ability to engage, and this, and I stand firmly on this, this is the way. This ballot
initiative creates an opportunity for a more educated electorate because they're
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February 20, 2018
the ones that are going to pay the bills and they should have a seat at the table. I
yield at this time and look forward to my colleagues' input on this matter. Thank
you.
CHR. DAVID: Thank you, Ms. Lee Loy. Council Members? Mr. Richards.
MR. RICHARDS: Thank you, Chair. We had the long conversation this morning
with our Salary Commission. I don't think there's any question as far as the level
of work they put into reviewing salaries and the level of professionalism on the
Commission as far as what they're evaluating. As Mr. Ono said, there's a lot of
catch up to do and he didn't ever foresee something like that necessarily
happening again, which is nice to hear, but it did happen this time.
I think what Council Member Lee Loy is attempting to do—we keep hearing the
concern for transparency, and I think we all hear it loud and clear. We all
appreciate, and I think in my previous conversation on this, I said we don't want
to over, oversight on too much commission, and if we allow for some latitude, I
think that's what the intent here is if we have the broad swings and the double-
digit increases, that makes a lot of my constituency not too happy with it. The
understanding that this is not under our jurisdiction at all, is not there.
So, there's an education process there, but the checks and balance that I think is
needed to have this, and I appreciate what Mr. Ono said about not supporting this
going forward, but that being said, we are bound by a bunch of different laws that
govern how we do things, again for oversight, all for it. This is just in the same
vein as that, having the oversight that if there is a substantial increase for
whatever reason, that a level of accountability, just to kind of reiterate, "Okay,
this is what's going to be coming forward and there's an approval that's coming
forward." I think it's sound in thinking that process because if we are truly intent
on the transparency, then I think having the checks and balances there that our
constituency can then see, "Okay, there is that checks and balance that we need to
have and we're comfortable with that," and then we can accept the approval
that—we can approve the rates that have been determined by the Commission. I
think it's just the checks and balance, and in my mind, it's pretty simple and pretty
straight forward. I don't see a big issue with it because again, it offers that
transparency that we keep talking about time and time again. So, I support this. I
yield.
CHR. DAVID: Thank you, Mr. Richards. Ms. O'Hara.
MS. O'HARA: I do appreciate all the work that the Salary Commission is doing,
and it's a difficult job, but I also find there is definitely a lack of transparency.
While we may have read in the newspaper that the Salary Commission was going
to meet, and they were considering raises, I didn't know until I actually attended
the Commission meeting what those intended raises were, and I was shocked.
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February 20, 2018
But, the point being that there was no way to acquire the information in advance
so that I didn't have to go directly to the meeting. I didn't testify. I know that
Mr. Chung testified in writing and Ms. Lee Loy gave verbal testimony, but I
didn't feel prepared enough to give testimony at that point. I just think it's
important, this section here that requires that public notice be given and published
in papers, and that there is some accountability for the actions that they're going
to take.
They did their job. They did it right. There's no question about that. Absolutely,
but it would be nice for the public to be more aware of the process, not only the
public but those who were affected by the raises, to be more aware of the process
and have that knowledge in advance of the actual meetings. As we have found
trying to do things like set prices, set property values, not values, but property tax
rates, et cetera, and in a public meeting is very difficult. It's something you have
to give a lot of thought to, and I would prefer that we amend. If the electorate so
decides that we amend this County Charter to allow for this additional public
process. Thank you.
CHR. DAVID: Thank you, Ms. O'Hara. Ms. Poindexter.
MS. POINDEXTER: I don't see any harm in doing this. I see that the public gets
to chime in on it, which we all talked about having the ability for the public to be
part of the decision making. But, in this case, they wouldn't be part of the, really
the decision making, so I don't want to give them any false hope either. However,
that will be up to the voters to decide if they would want this or not.
I feel that the Salary Commission did give a lot of their time, and a lot of thought,
and a lot of hard work. They even asked if we do this, how will it impactI don't
know exactly word for word, but how would it impact the budget? They had the
Finance Committee come up and asked, "Do we have the money for this?" What
I heard this morning, they alluded to the fact there may be, or there is, or
something is set aside for that, or something to that effect, I got to go listen to it
again, but that's what I got out of it.
So, I think they were trying to do their due diligence, but I feel the public has the
right to vote on this. I also want to remember the process and make sure that they
don't get the false hope that because this is put in place, that if they come forward
and say what they want and the majority who shows up, that the Commission will
have to decide, based on what they hear or whoever shows up. So, I just want the
public to know to be cautious of that, too, because it's not that they will be
making that decision but they will be giving input. Thank you, Council Member
Lee Loy, for bringing this forward. At this point I will support it. Thank you.
CHR. DAVID: Thank you, Ms. Poindexter, anyone else? Sure, Ms. Ruggles.
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February 20, 2018
MS. RUGGLES: Thank you. I'm also really appreciative of Ms. Lee Loy doing
the work to bring this forward. I am wondering, in the past or the most recent
salary increases, did the Commission have any public hearings? Is that a part of
their process?
MS. LEE LOY: If I might answer that?
CHR. DAVID: Yes, you may.
MS. LEE LOY: They operate like any other board or commission. So, they have
an agenda that's posted, however, what happened this go around was they
agendized the discussion. They did agendize the discussion, but the proposal
itself was distributed at the meeting, and some other decisions were made on the
day the proposal was given. So, my constituency was taken aback, like how
could you put these raises in that day, vote on it, and then impact the budget
without more of a transparent process?
That's how I came up with this framework. I took a process, like we do with the
fuel tax, and mirrored that right into their responsibilities because what we heard
this morning is the salaries of all County -elected officials and appointed Directors
is given to them under the Charter, under Section 13-28. So, I'm back to, if
you're given that much authority, you should actually also be held to a higher
standard. We're all hopeful it won't happen again, but we also heard discussions
earlier today about maybe we do the fix now, but what's going to happen 10 years
from now, when we're not here and we have a very different Salary Commission?
This is the safe guard for our electorate. I hope that answers your question.
MS. RUGGLES: Yes, it does. Thank you. I think that there's definitely no harm
in putting this to the voters and letting them decide, and I agree with you
wholeheartedly on every point that you made. Thank you.
CHR. DAVID: Thank you, Ms. Ruggles, anyone else? Mr. Chung?
MR. CHUNG: Thank you.
CHR. DAVID: You're welcome.
MR. CHUNG: I'm going to be supporting this. We'll let the voters decide. I
have a few concerns though, and hopefully, they could be addressed. If not, I'll
just vote for it as is anyway. I wanted to make a comment though. The current
Charter provision relating to the salaries was born out of a desire to depoliticized
the system. Because I recall, back when I was on the Council from 1996 to 2004,
prior to the Charter amendment, what we have right now, the appointed
department heads would—their salaries, I think, would be recommended by the
Salary Commission but approved by the Council. And at that level, there
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occurred a lot of problems because for one reason or another, it was never the
right time to give the department heads raises. When the economy was good, for
some reason, they couldn't pull the trigger. When the economy was bad,
obviously, it was not a good time. That's what gave rise to the current system
where the Salary Commission takes it away from politics, and of course, they
have to do it in public, but they used their own good judgment.
I will say that I've worked with Hugh Ono for many years when he was the Chief -
Engineer here at the County, and then Jim Higgins was a former Water
Commission Chairman. These guys are good thinkers and I'm sure they did a
really good job, but I stated my objections and the reasons therefore. The other
one I failed to mention, too, was the timing of their raises raised some questions
because what it amounted to was a situation whereby a person who might have
been in office for about a year was going to get a huge raise, which was actually
deserving of those that preceded him or her.
So, I'm still in favor of incremental raises, which this sort of in a way supports, so,
I'm in favor of it. I'm just wondering if it's necessary to have one hearing in both
East and West Hawaii. I mean right now, we're having the GET, you know,
we're considering that, and even for that, as far as I can tell, we're only having
one public hearing out in West Hawaii tonight. Those are my thoughts. I'm not
saying I'm against it, I'm just saying that's something that I think we could
improve upon. I will support it. Thank you.
CHR. DAVID: Thank you, Mr. Chung. Ms. Eoff, did you want to speak?
MS. EOFF: So today, we did learn that the major problem in this last few years
was that the incremental raises weren't implemented or even suggested, I guess
for whatever reason. But, the other thing is, as Ms. Poindexter pointed out earlier,
I had that thought, too, if the Salary Commission is basing their decisions on
criteria that they are kind of mandated to use, whether it be fair compensation or
fixing those inversions where the union raises may have made subordinates
receiving higher pay than their Directors or their Chief or those kind of things.
I'm just wondering, I wouldn't want the public to have the perception that some
input from public would, in some way, be able to change what the Salary
Commission determined was within their criteria.
However, I believe the public hearing may be able to clear those things up so that
it would be a better feedback from the public, to require the transparency part to
be discussed more, even whether it brings more attention to how the Salary
Commission does its job, and maybe whether in the future, we have some way to
balance what their decision comes out to against what our budget constraints are.
Because to me, that was the biggest problem at this point in time, that somehow,
between all of the raises previously negotiated and bargained for and then these
on top of that, have made the previous comment that the Finance Director usually
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has that and yeah, we budget for these increases kind of a moot point because we
couldn't have known how extreme this particular year would end up.
So, I think I want to support this because I believe in the process to create a more
transparent and informed public. And I'm not sure, I thought I saw an amendment
somewhere about rather than two public hearings having one, but it would be and
video conferenced to both sides. So, I don't know if that—was that your
amendment, Ms. Lee Loy? So, I think that might be a good idea.
And just one other thing, I don't know if this is really important, but there's, I
think, a formatting issue on the bottom of the first page, the paragraph just jumped
out to the left. The underlined part. Okay. That's all, thank you.
CHR. DAVID: Thank you, Ms. Eof£ Ms. Lee Loy, would you want to?
Motion to Amend: Ms. Lee Loy moved to amend Bill 98 with the contents of
Communication 712.1. Seconded by Mr. Kanuha.
CHR. DAVID: Ms. Lee Loy, on the amendment.
MS. LEE LOY: Thank you, Chair. And again, if I could get my colleagues'
support. Between the Salary Commission meeting and me proposing this bill, I
had an opportunity to talk with Deputy Corporation Counsel, Amy Self, who
advises the Commission, and we learned of their objection to the bill. During that
conversation, the issue came up about the cost associated with these public
hearings and the work that body has to do, including the time for them to hire a
court reporter to transcribe their minutes, and we, as a body, understand that very
intimately. So, in an effort to address the public hearing process in a more
efficient and expedient way, this amendment allows the Salary Commission to
hold at least one public hearing in either East or West Hawaii, provided that any
public hearing shall be conducted using videoconferencing technology to allow
for public participation from both East and West Hawaii. So, this actually helps
reduce the cost.
Now, in my conversation with Deputy Corporation Counsel Amy Self, they had
put a number anywhere between $700 to $1,500 that this amendment creates for
that Salary Commission. I shared this with Ms. Self, even if this were to cost
$5,000, their decision impacted our budget by $1.3 million. So, for me
personally, having them do this at a cost in an efficient way really doesn't justify
not doing it. So, I would urge my colleagues to support this amendment, which
also, I think Mr. Chung raised just a little bit ago about how to make it more
efficient and mirror what we do with our fuel tax increases. Thank you, I yield.
CHR. DAVID: Thank you, Ms. Lee Loy, anyone else? No? Alright, then I'll
just state for the record, that thank you very much for doing this amendment.
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My concern, yes, when I initially saw this was the added cost, since we're
discussing budgets and raises, that it would cause to get to have two public
hearings, both on the east and the west side. So, I appreciate your amendment,
and given the discussion this morning, I also understand where Mr. Ono and the
Salary Commission came from. Their points were very well taken. I just want to
say that this body's decision today is not reflective on what they decided on. So,
given your amendment, I believe that I would be in support of allowing the voters
of this community to weigh in on this measure, and I will support the bill as
amended. Alright, all those in favor of the motion to amend Bill 98 with the
contents of Communication 712, please say "aye."
Vote on Motion to The motion to amend Bill 98 with the contents of
Amend: Comm. 712.1 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: Then now, Council Members, back to Bill 98 as amended, with
Communication 712.1. Any further discussion, Ms. Lee Loy?
MS. LEE LOY: Thank you, and thank you my colleagues for this. I do want to
speak to one point that Ms. Eoff and Ms. Poindexter is raising. Civil engagement
has a way, it has a way of helping people get into uncomfortable positions and
thinking about what kind of impacts they have. So, I heard the phrase coined
"false hope." I don't think it's false hope. I think it provides civic engagement,
and at the end of the day, this is a ballot initiative. The people will have to decide
if they want to grab onto this as an opportunity for themselves to have civic
engagement in a meaningful way. That's where I stand.
Thank you very much to the rest of my colleagues. Thank you for allowing me to
bring this forward. We still have a few more steps in front of us because we do
have to approve this, I understand three more times. Three more times, and I
want to move this forward with a 9-0 vote to show our constituency, we are
listening. And so much of the salary ordinance and the salaries that came up has
been spilling over into other conversations, and it's been incredibly challenging.
And this, this ballot initiative gives that back to our electorate, back to the voters
because they're the ones who are going to have to pay this bill, and they're going
to have a seat at the table. Thank you very much.
CHR. DAVID: Thank you, Ms. Lee Loy, anyone else? Seeing none, then,
Council Members, all those in favor of approving Bill 98, as amended, with the
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Communication 712.1 and forward to the Council with a positive
recommendation, please say "aye."
Vote on Bill 98: The motion to amend Bill 98, as amended to Draft 2 was
Draft 2 carried by the following voice vote:
(Approved)
Ayes: Committee Members Chung, Eoff, Kanuha,
Lee Loy, O'Hara, Poindexter, Richards,
Ruggles, and Chair David — 9.
Noes: None.
Absent: None.
Excused: None.
CHR. DAVID: Alright. Mr. Clerk, I believe we need to recess for our public
hearing.
MR. HENRICKS: We only have one item left on the agenda and it's something
we already covered. I think we can get through 105.
CHR. DAVID: Sorry, I didn't turn the page. Alright, please, Bill 105, Mr. Clerk.
Bill 105: AMENDS ORDINANCE NO. 17-39, AS AMENDED, THE OPERATING
BUDGET FOR THE COUNTY OF HAWAII FOR THE FISCAL YEAR
ENDING JUNE 30, 2018
Appropriates revenues in the Federal Grants — Department of Health (DOH)
Complete Streets account ($9,700); and appropriates the same to the DOH
Complete Streets — Federal account. Funds would be used by the Planning
Department to allow key staff to attend Complete Streets trainings to plan for,
design, and operate streets with safe access for all users.
Reference: Comm. 736
Intr. by: Ms. David (B/R)
Motion to Approve: Ms. Poindexter moved to recommend passage of Bill 105
on first reading. Seconded by Ms. O'Hara.
CHR. DAVID: Thank you. Any discussion? Council Members, this was the
companion to, I believe Resolution 495? So, any discussion? Hearing or seeing
none, all those in favor, please say "aye."
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Vote on Bill 105:
(Approved)
ADJOURN-
MENT:
Approved:
February 20, 2018
The motion to recommend passage of Bill 105 on first
reading 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.
There being no further business, at 4:45 p.m., Ms. Poindexter moved to adjourn 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. Finance Committee is adjourned.
Finance Committee
MD/jm
(Date)
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