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HomeMy WebLinkAboutMIN COUNCIL 2018-06-06 2016-2018 Special Hawaii County Council Special Session 41" Session Hawaii County Building 25 Aupuni Street Hilo, Hawaii June 6, 2018 INVOCATION: Pastor Bob Tominaga of Thy Word Ministries gave the morning's invocation. CALL TO The special meeting of the Hawaii County Council was called to order at ORDER: 9:12 a.m., in the Council Chambers, Hilo, by Ms. Valerie T. Poindexter, Chair. ROLL CALL: Present: Ms. Valerie T. Poindexter, Chair Ms. Karen Eoff, Vice Chair Mr. Aaron S. Y. Chung, Member Ms. Maile Medeiros David, Member Mr. Dru Mamo Kanuha, Member Ms. Susan L. K. Lee Loy, Member Ms. Eileen O'Hara, Member (came in later) Mr. Herbert M. "Tim" Richards, III, Member Ms. Jennifer Ruggles, Member PLEDGE OF The Chair directed the Council to the next order of business, Pledge of Allegiance. ALLEGIANCE: (At this time, Mr. Richards led the Council in the Pledge of Allegiance.) STATEMENTS The Chair directed the Council to proceed to the next order of business, Statements FROM THE from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: The following individuals registered to speak and came forward when called by the Chair: Myles Miyasato: Bill 159 (Comm. 958), in opposition. (representing Operating Engineers) Sandra Demoruelle: Bill 111, Draft 3 (Comm. 756.18), comment. (See Comm. 756.33) Hawaii County Council-41 June 6,2018 Jerry Warren: Bill 111, Draft 3 (Comm. 756.18), comment. 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: Bill 111 RELATES TO PUBLIC IMPROVEMENTS AND FINANCING THEREOF (Draft 3): FOR THE FISCAL YEAR JULY 1, 2018, TO JUNE 30, 2019 Proposed Capital Budget for fiscal year ending June 30, 2019, includes 61 projects requiring a total appropriation of$260.895 million. Reference: Comm. 756.18 Intr. by: Ms. David (B/R) First Reading: May 22, 2018 and Comm. 756.19 From Council Member Jennifer Ruggles, dated May 30, 2018, transmitting (Memo No. 1): proposed amendments to add the Public Works Department's Kaimu-Chain of Craters Road Repaving project in the amount of$150,000. ; and Comm. 756.20 From Council Member Jennifer Ruggles, dated May 30, 2018, transmitting (Memo No. 2): proposed amendments to add the Public Works Department's Kalapana Water Spigot Station Improvements project in the amount of$80,000. ; and Comm. 756.21 From Council Member Jennifer Ruggles, dated May 30, 2018, transmitting (Memo No. 3): proposed amendments to add the Public Works Department's South Kulani Road Bridge Repair and Improvements project in the amount of$80,000. ; and Comm. 756.22 From Council Member Jennifer Ruggles, dated May 30, 2018, transmitting (Memo No. 4): proposed amendments to add the Public Works Department's South Lauko Road Bridge and Roadway Construction to Puhala Street project in the amount of $530,000. ; and Comm. 756.23 From Council Member Jennifer Ruggles, dated May 30, 2018, transmitting (Memo No. 5): proposed amendments to add the Public Works Department's Kalapana-Kapoho Road Widening project in the amount of$800,000. ; and Comm. 756.24 From Council Member Jennifer Ruggles, dated May 30, 2018, transmitting (Memo No. 6): proposed amendments to add the Public Works Department's Stainback Highway Widening and Repaving (County Portion)project in the amount of$150,000. Page 2 Hawaii County Council-41 June 6,2018 (Note: Comm. 756.3 1, from Council Member Herbert M. "Tim" Richards, III, dated June 4, 2018, transmitting proposed amendments to Bill 111, Draft 3, was circulated.) Motion to Approve: Ms. David moved to pass Bill 111, Draft 3, on second and final reading. Seconded by Mr. Kanuha. CHR. POINDEXTER: Council Member David. MS. DAVID: Yes, I believe we can just move forward with Ms. Ruggles' amendment. Motion to Amend: Ms. Ruggles moved to amend Bill 111, Draft 3, with the contents of Comm. 756.19. Seconded by Ms. David. CHR. POINDEXTER: Council Member Ruggles. MS. RUGGLES: I just ask for my colleagues' support. Thank you. CHR. POINDEXTER: Okay. Is there any other discussion? Council Member O'Hara. MS. O'HARA: Yes, I do have a question. This is calling for the Chain of Craters road repaving—this resolution, correct? MS. RUGGLES: This is for Kalapana Gardens. CHR. POINDEXTER: The 756.19 is the Public Works Department's Kaimu Chain of Craters Road Repaving Project in the amount of 150,000. That's your first one. If you look at your agenda, page 3. MS. RUGGLES: Thank you. Yes, it looks like that's what it says. MS. O'HARA: Could I have someone from Public Works come up, please? CHR. POINDEXTER: Sure. Do we have anyone from Public Works? Can you come to the table and then identify yourself for the record? (Note: At this time, Business Manager Aaron Brown of the Department of Water Supply came forward to address the members of the Council.) MR. BROWN: Aloha, Aaron Brown, Business Manager, Public Works. MS. O'HARA: Mr. Brown, given the status of events, is this an appropriate request at this point in time? Page 3 Hawaii County Council-41 June 6,2018 MR. BROWN: Right now, with the lava event going on, I think our biggest priority is having alternative evacuation routes for the communities in Puna. And we've been working collaboratively with the State and the national park and actually a lot of other entities in getting Chain of Craters road to a state that is usable, which it is right now. It is an open, maybe "open" is not the best word. It is a route that can be used should it be needed. There has been work that the State actually spearheaded working directly with the national park. So, if needed, we could open that road for an evacuation route. I'm not sure that this request at this time isI'm not even sure exactly in the district where the line would be on this request and how that would impact the work that we already completed as of last week. MS. RUGGLES: May I comment, please? CHR. POINDEXTER: Sure, Council Member Ruggles. MS. RUGGLES: Thank you. Because if this is—this is only a small portion of Chain of Craters. It's meant to connect Aloha Lokelani Street in Kalapana Gardens. And so, in order to pave that street, we must pave the small portion of Chain of Craters. CHR. POINDEXTER: And this is onI just want to remind the Council Members, this goes on the wish list. So, it's not something that we pass and it'll be done. It's just a wish list. And if they don't choose it, so be it. But, are you okay? MS. RUGGLES: Yes, I'm done. CHR. POINDEXTER: Okay, Council Member O'Hara still had the floor then I'll go to Council Member Chung. MS. O'HARA: Oh, okay. Yeah, I just wanted to be clear on what exactly we were anticipating being accomplished with that $150,000. It doesn't sound like a lot of money. So, I wasn't really clear. Thank you for the clarification. CHR. POINDEXTER: Okay. Council Member Chung. MR. CHUNG: Yeah. I certainly understand how all of this works with regard to it being a wish list. I have never been real fond of that whole concept because I think, if you look at other jurisdictions within the State, they try to at least tie it up with real money. But again, that's how we've been doing it historically and, out of deference to my colleague, I'll support it but it's really halfheartedly. We don't know what the situation is down there, okay. And far be it for me to even guess what's going to happen in the future. I just think now is really not the Page 4 Hawaii County Council-41 June 6,2018 best time to be even advancing a wish list for any roads down in that area unless it's for a really emergency type situation. That's just my thought. I'll vote in favor of it, but again I'm not fond of this whole wish list idea because it sends a bad message out to the public; there's this reasonable expectation that something will happen. If we don't have money, I just think it's heightening people's expectations unreasonably. I can see one or two or something, but I see a whole slew of these things with no money backing. I just wanted to make that comment. Thank you. CHR. POINDEXTER: Thank you. Council Member Richards. MR. RICHARDS: Thank you, Chair. I'm going to echo Mr. Chung's statement there. I'm bothered by the, quote, wish list as well because we do set that forth which gives us a list of priorities to work off of, which is good. But the way it's presented sets an expectation for our constituency, and that does bother me. And in looking at, and meaning no argument against Councilwoman Ruggles for her proposals, I'd consider withdrawing mines, `cause I have one on here as well, because of our budgetary concerns. And when we get to mine, I'll share a little bit about it. But I'm just withdrawing it because we don't know what we're going to do with our budget right now. We're struggling with that one. So, I get where Councilwoman Ruggles is going, trying to send a list of priorities, but maybe there's a better way to do this. So, I can support it in the same light that Councilman Chung is supporting it, but it is halfhearted because we're not putting real dollars with it and that bothers me. I'll yield. CHR. POINDEXTER: Okay, thank you. Council Member Ruggles. MS. RUGGLES: Thank you. I appreciate everyone's feedback. I just wanted to add that this is a subdivision that the County approved and is collecting property taxes from. This specific road has potholes that are three feet deep in it. This is a County road that we're expecting people to access their homes through. So, that is why I have this CIP (Capital Improvement Project) on here. It's a way for me to communicate to the departments and to the Administration what the priorities as I see it as a representative of this district should be. With that, I'll yield. Thank you. CHR. POINDEXTER: Thank you. Council Member Lee Loy. MS. LEE LOY: Thank you, Chair, and maybe if I could ask for a little bit of latitude because I hear what Ms. Ruggles is saying in sending a signal to the Administration to prioritize this. But could you help me with the connection? You said it's a street that would connect to the emergency evacuation route or help me, like, contextually understand what this does. `Cause the map on the communication itself is just help me. Page 5 Hawaii County Council-41 June 6,2018 MS. RUGGLES: So, this is the end of the existing road to the subdivision. It's called Aloha Lokelani Street. And this is just a small portion Chain of Craters that connects to that. That would need to be repaved in order for the whole street to be paved. MS. LEE LOY: And how do they access the subdivision now? `Cause, I guess in my head, we're trying to provide some connectivity to an emergency evacuation route that they're establishing now because of this event. But how are they accessing it now? MS. RUGGLES: Currently, they're accessing it through a really substandard road. The road is gravel right now. MS. LEE LOY: And how many residents do we have in that area? MS. RUGGLES: I don't have a number. MS. LEE LOY: Thank you, I yield. CHR. POINDEXTER: Okay. Any other—Council Member Chung. MR. CHUNG: Yeah, Ms. Lee Loy raised some interesting points. First of all, is this Ala Lokelani or Aloha Lokelani? You just said "Aloha Lokelani,"but on our printout it says "Ala Lokelani." Is it "Ala" or "Aloha"? MS. RUGGLES: It's Lokelani Street. I don't know where the "Aloha" came from, I'm sorry. MR. CHUNG: `Cause you just said "Aloha," but this printout, our Project Data Financial Impact Statement says "Ala Lokelani." Not that it makes a big difference, but I was getting kind of confused when you had different references. MS. RUGGLES: Sorry, I was texting and I think autocorrect changed it. MR. CHUNG: Oh, okay. So, it's just "Lokelani." MS. RUGGLES: Ala. MR. CHUNG: Ala Lokelani. All right. So, the three-foot potholes are on Ala Lokelani or on the Chain of Craters Road? MS. RUGGLES: They're on Ala Lokelani. MR. CHUNG: Okay, but this one is for road infrastructure on the Kaimu Chain of Craters Road and not on Ala Lokelani. If you're asking for improvements on Page 6 Hawaii County Council-41 June 6,2018 Ala Lokelani because of the state of disrepair, that might be something too. But you're—see, this is what I'm concerned about. You said you wanted to send a message to the Administration about maybe their lack of attention to that County road, but I think the better way to do it would have been instead of going with an appropriation on a road that is not really not going to fix the situation on Ala Lokelani, would be to just go and talk stories with the department head, Mr. Simeon, and ask him to use some fuel tax monies for the repair of that road instead of coming out with an appropriation. I mean, it's not going to address the problem that you had just spoken of, but again I'll vote in favor of it. I just wanted to point that out. Thank you. CHR. POINDEXTER: Thank you. Council Member Ruggles, did you have anymore—no? Okay. So, no more discussion on that, all those in favor of Communication 756.19 say "aye." Vote on Motion to The motion to amend Bill 111, Draft 3, with the contents of Amend: Comm. 756.19 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter–9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: Bill 111 is amended with the contents of Communication 756.19—Bill 111, Draft 3. Motion to Amend: Ms. Ruggles moved to amend Bill 111, Draft 3, with the contents of Comm. 756.20. Seconded by Ms. David. CHR. POINDEXTER: Council Member Ruggles. MS. RUGGLES: Thank you. This is pretty self-explanatory. CHR. POINDEXTER: Is there any other discussion? Council Member Lee Loy. MS. LEE LOY: Thank you. And if I could, a little bit of latitude `cause it's for water spigots. So, I'm wondering why it's coming out of our budget and not the Water Department's budget, if Ms. Ruggles could help me understand that? MS. RUGGLES: This is an appropriation that we worked with the Department of Public Works on. They gave us this number for the improvements that our constituents said that they needed. Page 7 Hawaii County Council-41 June 6,2018 MS. LEE LOY: So, Public Works is providing the water spigots for the community? MS. RUGGLES: Yes. So, the way that it works with these water spigots is that Public Works constructs the water spigots and then the Department of Water Supply supplies the water. MS. LEE LOY: I yield. CHR. POINDEXTER: Thank you. Any other discussion? Seeing or hearing none, all those in favor say "aye." Vote on Motion to The motion to amend Bill 111, Draft 3, with the contents of Amend: Comm. 756.20 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—9. Noes: None. Absent: None. Excused: None. Motion to Amend: Ms. Ruggles moved to amend Bill 111, Draft 3, with the contents of Comm. 756.21. Seconded by Ms. David. CHR. POINDEXTER: Council Member Ruggles. MS. RUGGLES: Thank you. This is an appropriation that would help with a bridge on South Kulani that connects thousands of people to the rest of the world. Thank you. CHR. POINDEXTER: Thank you. Any other discussion? Seeing or hearing oh, Council Member O'Hara. MS. O'HARA: I know that Ms. Ruggles and I have been part of an internal working group identifying some connectivity points and whatnot in the upper Puna area. This is all in the upper Puna area. I'm just going to ask Ms. Ruggles to identify how many of the asks here are things that we've discussed in that group. MS. RUGGLES: How many of the asks in this communication? MS. O'HARA: Not just this communication; you also have Lako Bridge- Lauko Bridge, and I believe both of those were things that were identified. Page 8 Hawaii County Council-41 June 6,2018 MS. RUGGLES: One of the—well, the South Lauko connectivity point, it's currently not being looked at in the committee that we're in, the Mayor's committee. But regardless, this bridge is on top of a waterfall and there are families that get trapped in there for days. So that's why I put this in here. And the other bridge, as it relates to connectivity, that was a request from the Hawaiian Acres and Fern Acres Associations, which are both in support of the connectivity locations. And if this bridge goes down, `cause it's very old and it's very narrow, then a lot of the connectivity points between Hawaiian Acres and Fern Acres will be moot because we won't be able to access the subdivisions. CHR. POINDEXTER: Council Member Chung. MR. CHUNG: I just wanted some clarification. That last example that Ms. Ruggles gave, was that in reference to the South Kulani Road Bridge matter? MS. RUGGLES: Which? I spoke about two different ones. MR. CHUNG: Yeah, and then the last one that you talked about. MS. RUGGLES: South Kulani, yeah, Hawaiian Acres. MR. CHUNG: Okay. So, you talked about the possibility of it going down. Now, this might fly in the face of what I had said earlier. But again,just for the spirit of trying to cooperate here, I'm just wondering if$80,000 is enough because bridges are really expensive structures. And I'm just looking at what we have here on our printout here. It might be a different number somewhere else, but let me just make sure. Yeah, it does say 80,000. So, is that enough? MS. RUGGLES: This is a number that the department gave us. MR. CHUNG: I'm telling you $80,000, unless you're just going to make some cosmetic changes to a bridge, that's certainly MS. RUGGLES: We also submitted these in phases. We're using the numbers that the department gave us. MR. CHUNG: All right. I just wanted to make that point. Thank you. CHR. POINDEXTER: Thank you. Any other discussion? Seeing or hearing one, all those in favor say "aye." Page 9 Hawaii County Council-41 June 6,2018 Vote on Motion to The motion to amend Bill 111, Draft 3, with the contents of Amend: Comm. 756.21 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—9. Noes: None. Absent: None. Excused: None. Motion to Amend: Ms. Ruggles moved to amend Bill 111, Draft 3, with the contents of Comm. 756.22. Seconded by Ms. David. CHR. POINDEXTER: Council Member Ruggles. MS. RUGGLES: Thank you. This is just the bridge that I was talking about; the families get stuck in for days. We've had many stories of a couple of old families that are ranchers up there that, when it rains a lot, twice this has happened, they've gotten stuck. And once, one of them had pneumonia and an ambulance couldn't get in and they couldn't get out for three days. And so, that's why I'm submitting this now. Thank you. CHR. POINDEXTER: Thank you. Any other discussion? Seeing or hearing none, all those in favor say "aye." Vote on Motion to The motion to amend Bill 111, Draft 3, with the contents of Amend: Comm. 756.22 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—9. Noes: None. Absent: None. Excused: None. Motion to Amend: Ms. Ruggles moved to amend Bill 111, Draft 3, with the contents of Comm. 756.23. Seconded by Ms. David. CHR. POINDEXTER: Council Member Ruggles. MS. RUGGLES: Thank you. So, this is one that may become moot because this is for Red Road widening, which at the time is very narrow. But we'll have to see where the Administration and the department goes with how we move forward on improving this road and if we're even going to do that. It all depends on Pele. Page 10 Hawaii County Council-41 June 6,2018 CHR. POINDEXTER: Council Member Chung. MR. CHUNG: Yeah, okay, I'm going to use this as the vehicle of giving my thoughts in this slew of CIP amendments that were made. And in advance of Mr. Richards' Communication 756.24, which he said he's going to withdraw, but I urge him not to do it because we're all supporting these things. But this is what I'm worried about, okay. I don't want to sound like I'm lecturing Ms. Ruggles because this really is in the spirit of trying to get things done. These are definite need areas—well, some of them are need areas for her district and we'd all like to support it. But what I'm concerned about is this, normally when you advance these types of measures, it has to be with some idea that there's going to be a funding mechanism. I said that earlier. It doesn't have to be real money but at least some idea where that money might come from, either with the State or somewhere within the County or trying to be able to find the money. `Cause what happens is, a lot of times—and I've seen it in the past—where some, I'm going to use it, irresponsible CouncilI'm not saying that's you but irresponsible councilors would advance these types of ideas as a wish list, but knowing full well that it's a wish list but advancing it so that they can show their constituents, "Look, I did this. This is what I did, now it's up to the Administration to find the money." That's real irresponsible. It has to be a joint effort between the Council person and the Administration in working towards a common goal. And that's all I wanted to say. I don't want it to be something that's going to fall, now, on the lap of the Administration. We all have to work together and have some idea where that money's going to come from. Right now, I don't know where that money's going to come from. So, that's all I wanted to say. And I'm asking Mr. Richards not to withdraw his amendment. CHR. POINDEXTER: Okay, thank you. Council Member O'Hara. MS. O'HARA: I just want to express my concern because of the situation we're involved in right now and our source of funding for some of the road improvements. When we're accessing FEMA (Federal Emergency Management Agency) funds, it's important to demonstrate that we don't have adequate funding to deal with the situation. So, I don't know if this is sending the wrong message or the right message or whatnot; if Deanna or Mr. Brown wanted to come forward and express their thoughts on the matter. I just want to make sure we're not sending the wrong message in terms of our emergency response at this point in time `cause this road is involved in our emergency response. Page 11 Hawaii County Council-41 June 6,2018 (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Council.) MS. SAKO: Deanna Sako, Director of Finance. I was just going to say, I mean that's correct. We do have a burden of proof that we can't afford the disaster. I mean, that is one of the criteria that FEMA looks at. But we know that the whole area of Puna is changing. And when the lava is done flowing, we're probably going to have to take a more comprehensive look at the whole area. And so, if this waited until then, that's fine with me but I'm not from Public Works. (Note: At this time, Business Manager Aaron Brown of the Department of Public Works came forward to address the members of the Council.) MR. BROWN: Aaron Brown, Business Manager of Public Works. I just want to give maybe a little more context, too. I know Council Member Ruggles probably put this in before our lava event or at least thought about this project before then. Now, if you look at Kapoho-Kalapana Road or Beach Road—Red Road, some people call it—there are quite a few lava flows going over that road right now. So, it is not a road that could give egress out of Kapoho right now. The section that she is describing, based on her map in here, may not be covered by lava but there is lava very close to there. So, this road would not act as an ingress-egress kind of road anymore. That's just context that I wanted to give for the project itself right now. And I think, as was being mentioned, the price tag on the work that would be needed to get the work done isI don't think there is much chance we could find that right now with the needs being—our resources are going to try to take care of that community as best we can. And I'm not sure that this would be high in our priority at this point based on the usage of that road right now. CHR. POINDEXTER: Council Member Lee Loy. MS. LEE LOY: Thank you. Mr. Brown, if you could stay for a second. Because when I look through what Ms. Ruggles is proposing, it's 800,000 now but 25 million at the end. And I heard her say some of her other proposals were being phased. My general concern with this one is not only the inundation of the lava but this is a beach road. And when I look at future forecasting, we're looking at sea level rises. And I'm having concern that this might not be the alignment. We might have to take that road more mauka. And so my question to you is, Mr. Brown, as we move these forward and these County assets kind of diminish and we have to reestablish them, will the funds be directed to that general area or are they just in kind of a placeholder? Page 12 Hawaii County Council-41 June 6,2018 MR. BROWN: I think it'ssorry, Aaron Brown, Business Manager, Public Works. I think that's a collaborative conversation that needs to happen. And on the administrative side, we would definitely take our direction from the Mayor. But I think it's too early at this point, in my opinion, to look at one project by itself We'd have to look at the entire situation. There's no end in sight that we can see right now. So, in my opinion, it's way too early for us to try to assess the total picture in what we're looking at right now, but it would definitely be a collaborative effort that we're looking at that the Mayor would give us the lead on. MS. LEE LOY: Thank you. I yield. CHR. POINDEXTER: Any other discussion? Okay, all those in favor of amending Bill 111, Draft 3, with Communication 756.23 say "aye." Vote on Motion to The motion to amend Bill 111, Draft 3, with the contents of Amend: Comm. 756.23 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—9. Noes: None. Absent: None. Excused: None. Motion to Amend: Ms. Ruggles moved to amend Bill 111, Draft 3, with the contents of Comm. 756.24. Seconded by Ms. David. CHR. POINDEXTER: Council Member Ruggles. MS. RUGGLES: This is self-explanatory but I'm happy to answer any questions you guys might have. CHR. POINDEXTER: Okay, any discussion? Seeing or hearing none, all those in favor say "aye." Vote on Motion to The motion to amend Bill 111, Draft 3, with the contents of Amend: Comm. 756.24 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—9. Noes: None. Absent: None. Excused: None. Page 13 Hawaii County Council-41 June 6,2018 Motion to Amend: Mr. Richards moved to amend Bill 111, Draft 3, with the contents of Comm. 756.31. Seconded by Mr. Kanuha. CHR. POINDEXTER: Council Member Richards. MR. RICHARDS: Thank you. I appreciate comments from Councilman Chung as far as what we're dealing with here, and I appreciate what Mr. Brown has said concerning the whole Pahoa region and what we're going to do with our roads. I'm not going to rehash what I said previously. Where this came from is an interesting idea that came up concerning the flow through Waimea town, Mamalahoa Highway, into the intersection. We have a traffic flow problem every day. There's a concept of a potential traffic circle. And so, conceivably, this could work. And my thoughts were to try and get something so there's a planning process that if we have the plans in place, I won't say it's shovel-ready, but getting it towards shovel-ready. So, if Federal funds or other funds became available, it might be ready to go. I'm leery to put this forth because I'm concerned about Pahoa and I don't want to pull resources away. But given the conversation, I'm willing to keep this going forward because I think the conversation is there and we have to take care of all of our communities. But I'm very sensitive to what's going on in Pahoa at this point. So, I'd like to hear from my colleagues. CHR. POINDEXTER: Any other discussion? Council Member Chung. MR. CHUNG: In fairness to Ms. Ruggles, I may as well ask Mr. Richards. What's your game plan on this one, I mean, working with the Administration, working with the State, in terms of the funding mechanism? MR. RICHARDS: Yeah, this came up very quickly, and that's why it's very last minute. I wanted to get it in so we could have a conversation. My intention is to work with Administration, with County to find funding to get the planning done. Because, if we can do that and we have something readyI know working with Department of Transportation, specifically Donald Smith, he said that if we have projects ready to roll, we may be able to have funding when funding comes for reappropriation. So, if we have something ready, that's my intention. So, that was the target to get this thing done. MR. CHUNG: Okay. So, basically it's not just leaving it in the Administration's lap and saying, "Okay, here it is. It's your responsibility." It's all going to be a collaborative MR. RICHARDS: Collaborative. It's got to be because we've got to go look for the funds together. Page 14 Hawaii County Council-41 June 6,2018 MR. CHUNG: Right. That's all I wanted to hear. Thank you. MR. RICHARDS: Thank you. CHR. POINDEXTER: Okay. Any other discussion? Seeing or hearing none, all those in favor say "aye." Vote on Motion to The motion to amend Bill 111, Draft 3, with the contents of Amend: Comm. 756.31 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, and Chair Poindexter—8. Noes: Council Member Ruggles — 1. Absent: None. Excused: None. CHR. POINDEXTER: Bill 111, Draft 3, is amended with the contents of Communication 756.31. So, now we are back to that main motion and bill. Any discussion on Bill 111, Draft 3, as amended? Hearing and seeing none, all those in favor say "aye." Vote on Bill 111: The motion to pass Bill 111, Draft 3, as amended to Draft 4 Draft 4, on second and final reading was carried by the (Adopted) following voice vote: Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—9. Noes: None. Absent: None. Excused: None. Recess: At 9:59 a.m., the Chair called for a recess. Reconvene: The meeting reconvened at 10:08 a.m. CHR. POINDEXTER: So at this time, instead of going to Bill 159, we're going to go out of order again and go to Bill 110. Should we need to go to Bill 159, then we can table 110 and go to Bill 159, depending on how the conversation goes. So, Mr. Clerk, please read in Bill 110, Draft 2. Hang on one second. Council Member Chung? Page 15 Hawaii County Council-41 June 6,2018 Point of Personal MR. CHUNG: Point of personal privilege. I'm just wondering Privilege: what's in the Chairperson's mind in terms of if there's a need to go to 159. I think we have to dispose of 159 first, one way or the other. CHR. POINDEXTER: Right. One way or the other, we will get to 159, whether it comes up in the discussion in 110, then we can move to 159 and table that to bring that excise tax in. Because if we read in Bill 159 first, we're only going to be discussing creating the surcharge, period—whether we're going to approve it or not approve it. But if we go to Bill 110, we can talk about the overall budget and look at all the options. And if the Council decides, "Okay, let's bring in the general excise tax to talk about it then," then we can table 110 and go to the general excise tax and talk about it. MR. CHUNG: So, there's a chance that 159, which is, what, an Administration- initiated bill? CHR. POINDEXTER: Yeah. MR. CHUNG: So, there's a good chance that it may not come up. CHR. POINDEXTER: Depends on what the Council decides, yeah. Because, we're going to have to read it MR. CHUNG: So, we're going to have to decide to bring it up? CHR. POINDEXTER: Yes. So, when MR. CHUNG: It has to come up at some point `cause it's on the agenda, right? CHR. POINDEXTER: Right. So, it's best toand it's up to you guys. If you guys want to override the decision for us to just do 159, we have to discuss only that and decide then to vote for it or not for it. I thought the best way is to get 110 on the table, allow the presentation so we can hear about the real property taxes, general excise taxes, and all of that information before we move to Bill 159 to decide if we want to vote yay or nay on that. MR. CHUNG: Okay, so an update from what happened at the last meeting. CHR. POINDEXTER: Yeah, and after the last meeting MR. CHUNG: Right. CHR. POINDEXTER: Council Member David and I met with Finance and Corp. Counsel. Page 16 Hawaii County Council-41 June 6,2018 MR. CHUNG: So, wouldn't it be better—okay, so you're actually—maybe I can agree to this, then. You're taking up Bill 110 for the purpose of letting the Administration just give a brief update and then we're going to table it and then go to 159? CHR. POINDEXTER: Yeah. MR. CHUNG: Okay. CHR. POINDEXTER: We can choose to discuss some of the 110 with what they present and then decide when to go to 159. That would be the MR. CHUNG: Okay, so 159 is going to come up. CHR. POINDEXTER: Yeah,just out of order. MR. CHUNG: Okay, all right. CHR. POINDEXTER: Okay, thank you for that `cause then the public could understand that, too, as well. Okay. So, Mr. Clerk, Bill 110, Draft 2. Bill 110 ESTABLISHES AN OPERATING BUDGET FOR THE COUNTY OF (Draft 2): HAWAII FOR THE FISCAL YEAR JULY 1, 2018, TO JUNE 30, 2019 Proposed Operating Budget for fiscal year ending June 30, 2019, includes estimated revenues and appropriations of$518,004,985. Reference: Comm. 755.10 Intr. by: Ms. David (B/R) First Reading: May 22, 2018 and Comm. 755.16: From Finance Director Deanna Sako, dated May 31, 2018, providing options to address the loss of real property tax revenue and account for additional expenses in the operating budget, both due to the volcanic eruption in Lower Puna. The options presented are to reduce expenditures, a specific proposal to increase real property tax rates, and to establish a one-quarter (.25)percent general excise and use tax surcharge to fund operating or capital costs of public transportation systems within Hawaii County. (Note: The following were circulated: Comm. 755.23, from Council Member Herbert M. "Tim" Richards, III, dated June 4, 2018, transmitting proposed amendments to Bill 110, Draft 2; Page 17 Hawaii County Council-41 June 6,2018 Comm. 755.24, from Council Member Maile David dated June 5, 2018, transmitting proposed amendments to Bill 110, Draft 2; Comm. 755.25, from Finance Director Deanna Sako dated June 6, 2018, transmitting a PowerPoint presentation; Comm. 755.26, from Finance Director Deanna Sako dated June 6, 2018, transmitting departmental budget amounts; Comm. 755.27, from Finance Director Deanna Sako dated June 6, 2018, transmitting a budget summary of the General Fund and Subsidized Special Funds; Comm. 755.28, from Finance Director Deanna Sako dated June 6, 2018, transmitting departmental program budget amounts; Comm. 755.29, from Finance Director Deanna Sako dated June 6, 2018, transmitting proposed budget cuts totaling $5 million; Comm. 755.30, from Council Member Maile David dated June 6, 2018, transmitting proposed amendments to Bill 110, Draft 2; Comm. 755.3 1, from Council Member Maile David dated June 6, 2018, transmitting proposed amendments to Bill 110, Draft 2; and Comm. 755.32, from Corporation Counsel Joseph K. Kamelamela dated June 6, 2018, transmitting a legal opinion relating to Comm. 755.23.) CHR. POINDEXTER: Before I ask for a motion, I see Council Member Richards. Do you have a point of clarification? Point of Order: MR. RICHARDS: Yeah, point of order. I just heard 518 million, and the paperwork I have before me is 515 million. So, I'm confused. Will someone explain this to me, please? (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Council.) MS. SAKO: I think we're on Draft 2 now, and the May 51h budget—I don't know what's attached on your paperwork. I'm just saying that Draft 2 was 518,004,000 and some change that he read in. MR. RICHARDS: Shouldn't we have the updated version in front of us? MS. SAKO: Yes. Page 18 Hawaii County Council-41 June 6,2018 MR. RICHARDS: Am I missing something? MS. SAKO: So, the information is also, if you have the green version of the operating budget, in the front pages—the landscaped or the charts, right before the General Fund divider—also has the $518,004,985. And the landscaped page is right before it. MR. RICHARDS: You guys have it? Recess: At 10:14 a.m., the Chair called for a recess. Reconvene: The meeting reconvened at 10:14 a.m. Motion to Approve: Ms. David moved to pass Bill 110, Draft 2, on second and final reading. Seconded by Ms. Eoff CHR. POINDEXTER: Council Member David. MS. DAVID: Yes, thank you, Chair. And before we proceed, with Director Sako and Mayor Kim, I just wanted to CHR. POINDEXTER: Communication amendment? Motion to Amend: Ms. David moved to amend Bill 110, Draft 2, with the contents of Comm. 755.24. Seconded by Ms. Eoff. CHR. POINDEXTER: Council Member David. MS. DAVID: Thank you, Chair. And I would like Director Sako to please explain this communication. MS. SAKO: We became aware that Hawaii Tourism Authority has extra money this fiscal year that they would like us to sign, and there will be a resolution coming forth at your next Council meeting to actually enter into that agreement that we need to sign by June 30th, but we don't need to spend the money till next fiscal year. So, since it was too late to amend this year's budget, we're asking that this grant be created in next fiscal year's budget so that the Department of Research and Development can go ahead and do the interpretive signage that this grant is for. And we're appreciative of all grants that we receive. CHR. POINDEXTER: Okay, thank you. Council Member Richards. MR. RICHARDS: Thank you, Chair. Thanks for the clarification, Deanna. One of the things that I think we need to do for our County is to get out the advertising about tourism as we are good to go as far as that goes, and that's one of the things Page 19 Hawaii County Council-41 June 6,2018 that has not been done. And so, I'm glad to hear this is a grant. I'm glad to hear we're going to get out very quickly because I know, west side, we're looking at cancellation rates upwards of 50 percent for coming into this summer, which from an economic standpoint is going to kick our County hard. So, I appreciate that. And now with the explanation, I will fully support this because we need this for our County going forward. I yield. CHR. POINDEXTER: Thank you very much. Council Member Chung. MR. CHUNG: Well, let me see if I've got this straight, though. This is an anticipatory account. I mean, we don't have 145,000 yet, right? We're anticipating. MS. SAKO: They've offered it to us; we are agreeing. The resolution to enter into the agreement will be on the, is it June 19'h, Council meeting to enter the agreement, which we expect to have signed by June 30'h. But we won't have time to incumber and expend it till next fiscal year. MR. CHUNG: Right. You guys are the experts and I have no problem, but we have to deal with a balanced budget. Right? And now, we're adding 145,000 somewhere that doesn't exist, right? Or does it exist somewhere? MS. SAKO: We believe it does exist. Actually, we're creating a new revenue account, a grant receivable from the Hawaii Tourism Authority, and putting in the offsetting expenditure. If for some reason we do not get the 145 from Hawaii Tourism Authority, we would not spend the 145. And some went to our other grant accounts. MR. CHUNG: Okay. I mean, this is really a technical thing. I leave it up to you guys, but I just wanted to point out that we're anticipating. MS. SAKO: Right. It's just waiting until the budget is adopted and then going in to amend. R&D (Research and Development) would do some of the time. So, we want it to be very effective (inaudible). MR. CHUNG: Wouldn't it be better just to create the account? And when the monies do come in, then you put it into the account? No? MS. SAKO: This is how all of our grants are. So, they only spend it if we actually get the money. MR. CHUNG: Okay. But again, I just wanted to raise that concern. Thank you. CHR. POINDEXTER: Okay, thank you. Any other discussion? Seeing or hearing none, all those in favor say "aye." Page 20 Hawaii County Council-41 June 6,2018 Vote on Motion to The motion to amend Bill 110, Draft 2, with the contents of Amend: Comm. 755.24 was carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: So, Bill 110, Draft 2, is amended with the contents of Communication 755.24. So, we're back to the main Bill 110, Draft 2. Council Member David. MS. DAVID: Thank you, Council Chair. Before we move forward with Director Sako and Mayor Kim, I just wanted to let my fellow Council Members know that because of the ongoing discussions that we were tasked to do with Finance, we, Chair Poindexter and I, met with Deanna Sako, Director, and her staff We also had our Deputy County Clerk with us and our LRB (Legislative Research Branch) staff, Leslie Chow and Donna Eckersley. The purpose of that was to actually determine, as a group, because there were a lot of questions that we had no answers for at our prior meeting. So we were, as a group, able to focus our direction on how do we move forward given the emergency situation. How do we move forward with this budget, what needs to happen and by what date, and what would constitute a balanced budget at this time given the fact there are so many issues that are unknown and basically changing every day? So, Ms. Sako is going to do a presentation, and to present to this body the four possible options that we concluded would be our task to focus on and make a decision on today given our timeframe. So, Director Sako, I really appreciate. You can go ahead whenever you MS. SAKO: I'm going to go ahead and let the Mayor open up. He is going to be referring to pages, I believe they're 3 and 4 of the presentation, which is in Communication 755.25 which are the maps of the lava inundation. But I'll let the Mayor open it up and say a few words. (Note: At this time, Mayor Harry Kim came forward to address the members of the Council.) MR. KIM: I don't want to sound like I'm far behind on what Ms. Sako is presenting but I am far behind. I'm far behind because I don't care what she has on paper, it's behind. I went on a chopper ride yesterday to try to get an idea of Page 21 Hawaii County Council-41 June 6,2018 what was happening in lower Puna because I see all the maps and, more than a few times a day, meeting with all the university people and people out in the field, trying to get an idea of who has been affected and how much they're affected. I think because Ms. O'Hara and Ms. Ruggles were there yesterday at last night's meeting, you saw a lot of people there, obviously, but you saw a different crowd. The news yesterday that I gave to some of the residents who approached me personally, in the news I got this morning is already different. So, I don't care what you have, Deanna. It's old unless you made it ten minutes ago. This morning I found out, because last night I was guilty of giving, I think, wrong information. It was right at the time that I thought it was right on how much of Vacationland and Kapoho Beach lots were inundated. When you are in a situation like thatI'm sure some of you must know what I'm talking about—you make a huge mistake when you're dealing with a natural disaster, asking the question, "What is happening now?" And let's say your property is not affected and all of your hopes fall on that "not affected" and you're kind of blind to the reality of what could be; you don't even want to ask of that. But this morning, I have to tell the people of Vacationland, 100 percent, not 99 percent but 100 percent of your subdivision and, therefore, 100 percent of the farms, therefore, 100 percent of the homes are gone. That's over 160 homes. If you had asked me yesterday, that would not have been a figure. And I know of all the meetings, you've been there, Ms. O'Hara. You know what I'm talking about. Talking to you is the easiest thing to do in comparison to talking to the residents that have been affected. I'll share with you. Yesterday, a friend that I met in the early `70s, a young couple of high hopes that wanted to make an orchid farm and they developed a beautiful orchid farm, many employees. We forget about the workers that now have been affected. Beautiful house and those things. And they started to say about that and try to act brave and then just burst into tears. You wind up holding each other. You don't know who's holding each other up. The beach lots, between the day before yesterday and today, I'll bet you we lost over 300 homes. If you asked me a week ago, not within a figment of my imagination we would lose one. So, how can Deanna make a budget on revenues when she doesn't know what the hell our revenues are going to be. How are you going to make a budget on expenditures when you don't know what my requests are because I don't know? And whatever numbers she puts forward, it's a guessing game. You and I and everybody here, we are experiencing something of mother nature that all of us, including the best scientists in the world are in wonderment and awe of what is happening. How many of you can remember so many earthquakes; Page 22 Hawaii County Council-41 June 6,2018 6.9 occurred a couple of weeks ago, and I was in awe that nobody even talked about it. Usually you have an earthquake that size, people would say, "What were you doing? What did you feel? Did you see—7 Nothing. Because, it was just an inconsequential event among all the other events. We're dealing with three gases. Nine out of ten of all the times of my past experience, I'm dealing with only one. Now, I have to go deal and set up a monitoring and warning system of hydrochloric acid, laze, sulphur dioxide (inaudible) three times the normal volume. I don't know what to even tell you anymore. I talked to the Governor, and he's coming in tomorrow. I asked him to come in yesterday, but he couldn't do it. I'm grateful he's coming. I talked to the head of FEMA last week and earlier this week and this morning, the local guy. And this is what I was trying to explain. Last night, I committed to the people that were there and people who were not there that we would do everything we can within the powers of the law and the resources given to us to make things better. Just that,just to make things better. I'm begging the Governor for as much money as he can give. This morning's meeting with the people of my staff and the State,we are going to try to develop the best program to present to the Federal government this week on what we call IA Assistance, Individual Assistance, program. The presidential declaration given to us means very little or nothing in the kinds of programs we can give to the individuals of the residences. The presidential declaration basically covers some of the government expenses but very few, if anything, of those who are in dire need. The IA, Individual Assistance, is the key to us developing proposals, a program for housing, etc. If I fail in that, we will be in such a situation of finances, it will be "We can't do much,"because the kind of money that those programs will cost us will run into the millions of dollars, which we don't have. The Governor is coming tomorrow, and he's going to give us what he can. We met with the State Legislature this past Friday, and they gave us a commitment, "We will do whatever we can to help you, even if it takes a special session." I'll end this with this: I took a real fast look at the budget and what is being proposed. What is my wish list? The half percent on the GE (General Excise). And even that, I think the expenses that we must meet is going to be tight. I'm trying to say this in a way that none of you would interpret it as a lecture because it's not meant to be. It's basically pleading. The dependency on their County government, our County government to lead the way with the State and the Federal, I don't think I can ever imagine that this day would be, the immensity of it. We are talking over 600 families displaced. Page 23 Hawaii County Council-41 June 6,2018 Just a couple of weeks ago, do you know what their biggest complaint or concern was to us? How about the water? When are you going to get the power back? What about the roads? Today, all of that is moot because there is nothing to go back to. You won't even recognize it once you see it. We have to develop programs similar to what was developed for the people of Hawaii by the politicians of Hawaii in 1960 when Hilo was destroyed. And where we set in the beautiful Hilo Bay is because of that Kaiko`o Mall, Kaiko`o plan. We have to come up with something similar, I think. Or that over 500, 600, and Lord knows what tomorrow's figures will be. I ask of you this, Council, know that the needs are greater than I've ever seen. Know that I think, of government, this is one of the most critical times of where we go as a community. I care not to live in a community where we are just trying to maintain—and maybe I'm wrong; I don't believe I'm wrong. I really believe on what people tell me, that the vast majority of people in this land who pay the bills, our bills, realize that we need to step forward on this to make this a better community. I ask of you to know that the needs are great. I ask you to know that the dependency on you is so tremendous. We will do what we can do with the money you give us. You know that. We have to, by law, go by a balanced budget. We will reach out to the Feds that we already have. You know what they have said? "Harry, don't spend too much time like you did before because time has changed. Don't flood us with statistics. You have to put that down. But flood us with why it is so important to the people of Hawaii that the Federal government now step in. I think you know that we have examples throughout different places of where the Federal government and whoever blame, I don't care, did not step forward and they suffered. I will tell you what I said, and I'll end it. I told the Governor, I told the FEMA rep., "Give me the tools to show the United States of America how a government should respond." Thank you very much. CHR. POINDEXTER: Thank you. Deanna, can you continue? MS. SAKO: I'm going to go back to the first slide. So, we are on Bill 110, Draft 2. So,just a recap of events. When we submitted the budget on March 1st and this is just General Fund total, it was at 417.6 million. On May 3rd, the current lava event in Puna began. And on May 4th, we submitted the amended Draft 2 of the 2019 budget; for just General Fund 419.4 million. Today, we keep asking Lisa to look and what the total impact on values will be, and we believe that the true revenue number should be 414.4 million as of today. And as the Mayor said, things keep changing on an ever-flowing basis. So, we do believe that the revenue shortfall is $5 million. This is the map and the zones we looked at two weeks ago when we first met at first reading. The orange is what was inundated at that time. We believe this was Page 24 Hawaii County Council-41 June 6,2018 yesterday's map, and you can see how great the orange has grown as well as just the distance that the lava has been traveling. Because, Fissure 8, I believe, is right below the "A" in Zone A. And that's the one that's producing all the lava that is actually flowing up through PGV(Puna Geothermal Venture) up, around, and down to Kapoho where the front, the other day at least, was half-a-mile wide. I'm not sure what it is today. So, that's continuing to flow, that entire roughly eight- mile distance. Backing up, how we've kind of gotten here even without lava was that since 2010, that was the first budget that departments were limited to uncontrollable increases. We started cutting and tightening our belts at that point already after the recession. In 2018, departments submitted a 5 percent budget cut. And when we began the process for this current budget coming up, the Fiscal Year 2019, we began that in September of 2017. At that point, definitely we didn't know what we'd be dealing with today. Even at that time, departments were asked to submit two budgets: a status quo and a 3 percent reduction scenario. We applied the 3 percent reductions and we asked them to make additional cuts on top of that. That was just to submit a balanced March 1st budget. Through fiscal 2018, we've been able to maintain services. But with the Fiscal Year 2019 services, with the cuts we've had to take, we're not able to maintain services. And this is the one where the transfer stations will be closing on seven additional holidays each year. So, for a total of ten holidays they'll be closing now. Looking in the past, the top line is salaries and wages. And yes, it's climbed and then it flattened out when we had furloughs, and then it climbed again. I have another slide to partly explain that. The operating cost did go up but then it went down. And they've only slowly been going up for inflationary cost increases. The health benefits is the line where it continues to steeply increase. Debt service has remained relatively flat. It has gone up in the last couple years, and equipment is down almost to zero. Our uncontrollable costs, and I know you've heard me say this before, but we have to do our collective bargaining statewide with all the other counties and the State. Our Mayor has only one vote, and he's the only one to consistently say "no increases." The ERS (Employees' Retirement System) rates are set by the State Legislature. We have no County representation on the ERS board, and I don't just mean County of Hawaii. No counties at all have representation on the ERS Board. Same thing for health premiums. They're set by the State, the EUTF (Employer-Union Health Benefits Trust Fund) Board. And again, no County has representation on the EUTF Board. Page 25 Hawaii County Council-41 June 6,2018 We are mandated by HRS (Hawai`i Revised Statutes) to pay our other post- employment benefits. Some of you know this as OPEB (Other Postemployment Benefits) or GASB-45 (Governmental Accounting Standards Board Statement No. 45). That's an accounting standard that said you have to account for it and record the liability. But the State Legislature enacted law that we're forced to fund it, which is good in the long run but in times of difficulty, it's hard. HRS mandates that we participate in ERS, EUTF, and OPEB. It's not like we can shop around for another retirement system. We've shown this slide before, but Act 17 from the 2017 session, I believe, shows the increases come up. For our Fiscal Year 2017, we paid 17 percent for general employees and 25 percent for police and firefighters. However, by Fiscal Year 21 on July 1st, 2010, we will be paying 24 percent for general employees and 41 percent for police and firefighters. So, we have many increases to come yet based on that Act. There definitely are a lot of fiscal impacts from the eruption. Our estimated costs are 2.6 million for the month of May. That includes overtime, as well as some emergency roadwork. Ongoing,just to man roadblocks and evacuation shelters and whatnot, we expect our cost to be roughly 2 million per month to the County. We have no idea how long this lava event will last, and we also don't know the total cost impact. Until the lava stops, we really don't know. The costs incurred by many non-County entities, the State is heavily involved. National Guard's been here. In addition, incident management teams from as far away as North Carolina and other states have been here to help. We're hopeful the State's picking up those costs but it's not clear yet. We do know that our impact on real property tax revenue is four and a half to five million, and the long-term real property tax impact is unknown. As has been mentioned before, the economic conditions of our island are going to be changed for a while. So, I'll ask Lisa to come up and kind of talk about the estimated decrease in real property tax, which we do expect to be roughly 5 million. We changed it a little bit from a couple of weeks ago. While we're not sure how much we're going to get from the Governor yet, they have said it will be something. And it will be something we can use for our emergency related costs and, hopefully, to help us cover our 25 percent match that we're required. FEMA only picks up 75 percent. And in addition, FEMA does have the ability to reject costs as well. (Note: At this time, Real Property Tax Administrator Lisa Miura came forward to address the members of the Council.) MS. MIURA: Good morning, Lisa Miura, Real Property Tax Administrator. I know I've spoken to several of you over the past few weeks through texts or Page 26 Hawaii County Council-41 June 6,2018 emails or phone calls about the concern of how can it possibly be up as high as 5 million. And I have to tell you, I don't always agree eye to eye with Administration, but I definitely agree that 5 million is probably going to be a low number before this is all over. And the Mayor's right. That amount is what it is right now. And that's only for Deanna to do a balanced budget and for the Administration to turn in a balanced budget. So, I wish I could tell you I had more positive news, but a couple of weeks ago, like Deanna said on the maps, you wanted an estimate and I kept leaning towards the $6 million. And I think people thought 1.2 million was high, and that is long gone. So, I am really happy to answer any of your questions, but I think the reality is it's going to be a lot more costly and it wouldn't be in my due diligence to tell you that we are going to recover that revenue from any source. There is no money out there. I've talked to County of Kauai. I've talked to other jurisdictions. Revenue tax loss is not something that anybody gets reimbursed for. So, you need to take that off the table. It's a loss in revenue, and we need to take that into consideration. Nothing being discussed is about 2017. But, obviously, that number has drastically increased already with Kapoho being taken out because there was a lot of expensive properties down there and we have to prorate those taxes. So, the number is at 5 million right now. And if you have any questions, I'd be happy to help answer them. MS. SAKO: I can continue on. Lisa will be here for the discussion as well. But I just kind of wanted to do—remember the four zones that we had. And they have analyzed this quite a bit. So, we're looking at a $5 million anticipated revenue shortfall, and we are hopeful that the State will take care of our costs along with FEMA. We did look at external sources of financial assistance. We did submit a $50 million request to the Governor. We don't think we're going to get the full 50. We should find out by the end of the week what the actual amount is. The funds will be able to be used to offset disaster related expenses. Definitely health, safety type of costs. And as Lisa said, it will not address the decline in real property tax revenues. FEMA processes are lengthy. We have applied. We've submitted our application. We have our kickoff meeting with FEMA and HI-EMA (Hawai`i Emergency Management Agency) tomorrow along with a day and a half of computer training so that we can submit all of those expenses. It's a long process. We're still waiting for 5 million in receivables from our 2014 disasters as well, which they assure me they are working on as we speak. So, we did send forth Communication 755.16, which, after we had our meeting with the Chair and Finance Chair, we did lay out the four options. One option is to adopt Draft 2 of the Mayor's budget and deal with the shortfall somehow next Page 27 Hawaii County Council-41 June 6,2018 year. Number 2 is to cut expenses by 5 million. Three is to increase revenues, which would be to raise the real property tax rates, basically, to make it a revenue neutral option. And four is to increase revenues by adopting the GET (General Excise Tax) .25 percent surcharge. The first option does have a pro. The budget picture may become clearer in the future. It also may be clear that the future is much worse than we're anticipating right now. We don't know where the next lava will take. The cons are that we're not really addressing the true budget's shortfall right now. The revenue increase options will not be available. As you'll see later on, there's timelines to implement those by. It's kind of representing a known wrong number, which I don't feel good about. And an increase in fees that was discussed before, it would take time to implement. And our total fees would basically have to double or triple to make up that $5 million amount. Option 2 was to cut expenses by 5 million to accommodate the revenue shortfall. The pro is the option does not involve raising any taxes. It does reduce costs to reflect the decrease in revenue. The cons are that cutting 5 million would not leave sufficient funds to continue current services. Programs and services would need to be cut—significant widespread impact; all districts, all departments. Cuts would have to be determined today. Realistic cuts of only $1 million were identified, and we did submit a budget amendment for that million that's available if needed. It's kind of shortsighted and it really doesn't address the future economic impacts. Option 3 is to increase the real property tax rates. It would offset the declining real property tax values, and it would be a revenue neutral rate increase. The resolution must be approved by June 201h, 2018. It does require a public hearing, which we believe could be scheduled June 18'h, and then the Council could take action at your next meeting on June 19'h. Option 4 is to increase revenue by implementing a GET surcharge of a quarter percent. We couldn't have two identical bills on the table, so we had to make changes. And that's the bill, I believe 159, that was on the agenda. The pros are that in the current year, Fiscal Year 19, it would provide roughly $10 million in revenues for transportation. While we were expecting 25 million for a full year so a half-year would be twelve and a half because we are seeing some declines in tourism already. We reduced that number to be conservative. It could free up 4.9 million of General Fund costs related to transportation, which would be the General Fund Mass Transit portion plus the related fringe benefits, and it would help us diversify revenue. The ordinance must be approved by June 30, 2018, for there to be any impact on Fiscal Year 19. It does require a Page 28 Hawaii County Council-41 June 6,2018 public hearing before final approval, and use of funds would be restricted to transportation-related costs. We do have a sample of what those funds would be utilized for. The impact of the surcharge is obviously going to be different depending on everybody's spending. But if you typically spend $50 on groceries or eating out, your bill will increase by approximately 13 cents. Instead of$52.08, you would pay $52.21. And for a purchase of$100, your bill would increase by 26 cents, from $104.17 to $104.43. So, thank you for listening to the options, and we're happy to answer any questions. MR. KIM: May I comment? CHR. POINDEXTER: Yes, go ahead, Mayor Kim. MR. KIM: Because of my time away, we haven't had a real sit-down time on those things. I know what I'm saying is not very professional in the sense of disagreeing with you, Finance Director, but I do disagree with her on the quarter percent. I did tell her that they would have to go for the .5. And maybe I'm wrong again. I do believe that people understand why we have to do this. And I really do believe that. In your decision making, please understand the importance of this part. The roads still are deteriorating. Every single park is deteriorating because we can't maintain it, and so does everything that County government owns islandwide. I truly wish you would consider instead of quarter, go to half. I don't think there's anything that can stop you from withdrawing it later if you think that's too much. I do not like her options in regards to property tax because I think that really hurts the people that is very difficult at this time. I relish the fact that the tourists will pay 25 percent of the whole regardless of how much we take, and maybe more than 25 percent if you look at every line of how taxes are paid. But outside of that, I believe the public understands that, at this time, this is needed. At this time, it's justified. And I hope they trust their government, of you and us, that we will spend it wisely where it needs to be spent. I met with the Representatives and Members of Senate. I don't know what the future holds as to what they will offer us again. I'll close with this, and I thank you very much for the lengthy time I took of you. But take a look at the figures we just gave of revenues. I got a beautiful letter yesterday from HELCO (Hawai`i Electric Light Company) saying they're going to suspend my bill until things settle down. Even that small thing really made me feel good. I guess I am begging you that the public needs us to step forward. We will work with your balanced budget, but I think we need the other responsibilities of also Page 29 Hawaii County Council-41 June 6,2018 the whole island, of the parks, the roads, the police force—that they're begging us for more people. Every community wants more police officers. I can't do it with a balanced budget with no increase in revenues. I know and you know I say that publicly, I asked this body to take difficult stands in your first year by increasing the fuel tax because we didn't increase it for 30 years and we allowed it to deteriorate to what it is today. And you took that big step, and I thank you for it. And before that, I had to see you to increase the property tax on an average of 6 percent except for affordable housing and homeowners. And you took that step. But we're in such a worse condition now, it's unbelievable. I'm asking you to please consider the .5 so we can make this a better community. CHR. POINDEXTER: Thank you. Deanna, did you want to finish up or ? MS. SAKO: I think we kind of went through the presentation. As the Mayor mentioned, we did meet with several people from the House. Their leadership did come down on Friday. They had a tour and we talked with them, and the Mayor also reiterated our request to make the GE tax allowable to be like more 60/40; 60 percent for transportation and 40 percent for other costs, whether it's public safety, disaster, or as needed. So, we have that before us. They do feel like they've given us some of the tools to help ourselves, such as the GE tax. But obviously, they're still looking at a special session, and they would be willing to help us in other ways as well. CHR. POINDEXTER: Thank you. Okay. So, we'll open it up for discussion. Council Member Chung. MR. CHUNG: I'm sorry. CHR. POINDEXTER: Oh, okay. Council Member O'Hara. MS. O'HARA: Thank you, Chair. I just wanted to clarify a couple points in the presentation before we get into further discussion, if I can find my points. Okay, here it is. The request that you have submitted to the Governor, Mayor, for 50 million, that's just through the Governor's discretionary funds. This isn't what might come of a special legislative session. Correct? MR. KIM: Why I asked for that is because the Legislature appropriated a hundred and something million dollars for Oahu and Kauai. My fast mental calculation figured they don't need that much, and I think I'm right. I felt that $50 million was leftover that's not going to be encumbered or expended out of that source and that would not need legislative action. So, I was trying to look at the whole picture of what I could ask for and where I could ask for it and make it possible. So at the time, not knowing the whole story—and I admit that—I felt Page 30 Hawaii County Council-41 June 6,2018 that if I asked them for $50 million because that money was available—in my mind okay because I don't know in actuality—and that he wouldn't have to go back to the Legislature for an additional appropriation for that. MS. O'HARA: Good thinking. Thank you. I hope you were right, close, in terms of the money. MR. KIM: (Inaudible). MS. O'HARA: Yeah, but I'm certain the Governor has been very responsive to the situation and incredibly so. And I want to publicly thank him for that. And also, yeah, if there's any money there that can be released, I agree the 110 million sounded a little bit like overkill. So, that would be excellent if there was money that could be directed to us. The Legislative session is still not set, but I have a resolution coming forward at the next meeting also requesting that. And we've had lots of discussion with or I've had lots of discussion with House members, Senators, at the State level and also at the congressional level. We're going to need help from all of the above. So, thank you. MR. KIM: I thank you for saying that about the Governor, really, because he's really stepped forward for the people of Hawaii. MS. O'HARA: Yes, I agree. And also, I have a question. I guess it's for Lisa. Or maybe, Deanna, you can answer. I just want to be clear, this 5 million reduction of property tax revenues, that does or does not take into consideration all the homes just lost in the last day? It does take into consideration all the homes lost in Kapoho? Okay, I wouldn't have imagined that it increased further over our first number in May `cause that was only over 26 homes in Leilani. So, that was 3 million, so I'm kind of surprised it's only 5 million. MS. SAKO: The 3 million did take into account a reduction in most of these zones. MS. O'HARA: Oh, that's right. MS. SAKO: And so, when we got from the 1.2 to 3, we had estimated some reduction. MS. O'HARA: Right. MS. SAKO: We didn't know, like, it would be 100 percent in the Kapoho- Vacationland area. So obviously, we're still continuing to work on that number. Page 31 Hawaii County Council-41 June 6,2018 MS. O'HARA: Right. And I just want to caution everyone here, the map that you have up, north is north on this map. And the northernmost lobe, although everything's bright red, most of it isn't really active at this point. But that northernmost lobe is active. And if that should widen, we're looking at impacts into other very densely populated subdivisions of Nanawale-Hawaiian Beaches Shores and Waa. So, I just want you all to be aware that we're really not out of the woods yet, and this could escalate into an even much more costly more costly situation. So, I just want to put that out there. Thank you. CHR. POINDEXTER: Okay. Discussion? MR. KIM: Excuse me, may I say something I've neglected all of this time? CHR. POINDEXTER: Okay, go ahead, Mayor. MR. KIM: Other places of Puna that are not on that map are being affected. Other places of Ka`u that are not even remotely mentioned are on that map in regards to agricultural lands, agricultural crops, and expenses relating to fallouts. I wish I had better information to give you, but we really are learning day-to-day. The people of Ka`u are now even asking for shelters because of gas and fallouts. And if this continues, we may have to do that. But I'll tell you one thing, you want to see something frightening? Go to parts of Puna and Ka`u, and you're going to see foliage just keel over because of the gas—miles away from the so- called lava flow. The revenue that's going to affect the County is unknown at this time. That's why my tone is, "How can I project a budget when I don't know what my expenditures or revenues are? And I don't want to leave here with people in Ka`u thinking we're ignoring them. Because, they're asking for community meetings and we are giving it to them in regards to the hazards of gas. But bear in mind, Ka`u is also being greatly affected. MS. SAKO: Not just Ka`u, too, but wrapping around to the Kona coast. We've even taken situations at West Hawaii Civic Center to let our customers wait indoors because outdoors the air quality has deteriorated so much. So, a big part of the island is definitely feeling the impacts. CHR. POINDEXTER: Council Member Richards. MR. RICHARDS: Thank you, Chair. Thank you for your thoughts, Mayor. Thanks, Deanna. A couple of questions and maybe, Lisa, you're the one that needs to answer this. The real property tax collections for fiscal 2017-18. As I understood in our previous conversations, it's probably going to be a request for reconsideration or something along those lines. What is the projected loss of revenue for this year's budget? Who do I ask? Page 32 Hawaii County Council-41 June 6,2018 MS. SAKO: While Lisa's coming up, they have definitely been looking at each parcel. But the current year impact for Fiscal Year 18 is also prorated. So, from May 3rd or the damage date forward. MS. MIURA: Lisa Miura, Real Property Tax Administrator. Currently, the loss was at 30,000 when we met with you guys two weeks ago. So, we're anticipating over 65,000 right now. Each day that we get closer to June 30'h is a good thing for us because that's less that we need to prorate. But every day that more destruction happens, we do have to take into consideration. So, while it doesn't seem like a very large amount, that's only for the ones we know of right now. We are getting disaster claim forms being filed for farms that have lost, and that's something that, while we can only estimate, the Mayor is right again that it has affected a large area that wasn't previously taken into consideration. So, that is, again, a low number that continues to grow. And that, we're going to have to take from our current budget, which will mean a lower fund balance going forward. MR. RICHARDS: Currently, what is the fund balance? I'm sure it's in here. I just MS. SAKO: I think we have estimated 15 million in the budget. MR. RICHARDS: Okay. MS. SAKO: And we're hopeful we'll still be able to meet that projection. But as Lisa said, daily it's changing. I'm not sure they have time to do—there's a process that we're following for all the damage, destroyed homes. And so, they have to kind of be verified. So, I'm not sure if the 65,000 includes all of the homes like in Vacationland and Kapoho and all that. That was very new and just happened. So, that number will continue to grow. But we're fortunate we're fairly close to the end of the fiscal year. So, there definitely will be an impact but not as great as next fiscal year. MR. RICHARDS: Okay. So, what I'm hearing is that can probably be covered with fund balance. Is that correct? MS. SAKO: We're hopeful that there will be increases in other areas. MR. RICHARDS: Okay. So, let's park that one for now. And going forward, what I heard was a collection of 5 million reduction going forward for fiscal 18-19. Is that correct? MS. MIURA: The 5 million assumes that you are using the current tax rates, but there is a reduction in revenue of 5 million at this very moment. Page 33 Hawaii County Council-41 June 6,2018 MR. RICHARDS: Okay. And then what I also heard was, Deanna, you said we're spending about, on average, $2 million a month extra. Is that what I'm hearing? MS. SAKO: Right. The month of May was 2.6 million, but that also included additional roadwork and one-time costs. So, we're expecting roughly 2 million a month the more we're into it, having adequate employees to be able to man the roadblocks. The number of roadblocks have increased greatly from earlier in May till now as more roads get cut off So, that is our best estimate right now. But we'll need at least a pay period in June to kind of be able to clarify that. MR. RICHARDS: Okay, so we're at 518 million, again round numbers. We have a reduction projected going to 5, so that takes us down to 513. At 2 million a month, that's 511 or 509. What I haven't seen is any plan for cuts in the budget. MS. SAKO: So, we do have some available. The one-million-dollar one was submitted (See Comm. 755.29). I'm not sure if it was actually passed out. But if we had to cut $5 million in my whole pile of papers here, this is the first million that was in our proposal to zero out Council contingency funds of 270,000, to reduce Banyan Drive Redevelopment from 50-25,000. So, that would save 25,000. To reduce business development projects of 15,000; to reduce Waipi`o ranger supplies froml0-7,000; a reduction of 3,000; reduce potable water for Parks and Rec. by 5,000; reduce albizia or unsafe flora by 20,000; reduce interpreter services by a thousand; reduce miscellaneous claims and judgements by 75,000; reduce grants to non-profits by 500,000, back to the million; and then reduce various provisions to get us to that $1 million. Once we get above that 1 millionso, that million we feel like the departments can live with, we can live with; if we have to, we have to. Beyond that are definitely cuts that would impact services. The swimming pools, for example, would probably only be open for three days a week. P&R (Department of Parks and Recreation) would no longer be able to waive fees for non-profit groups and organizations. They would have to defer repair and maintenance projects of 200,000. They would close gyms and facilities two days a week, which would save 336,000. They would suspend a multitude of festivals like Cherry Blossom, Kupuna Festival, Queen Lili`uokalani Festival, Magic of the Seasons. They would suspend track-and-field programs; Easter egg hunts; fishing derbies; summer fun, if needed; Waipi`o Ranger program; Fourth of July celebration. We would forego the new County website for Information Technologies. We would reduce Planning, CDP (Community Development Plan) consultants, their conferences, and Banyan Drive Redevelopment. Page 34 Hawaii County Council-41 June 6,2018 CHR. POINDEXTER: Just one second. Is it okay if—remember during our meeting, we had what the $7 million looked like (See Comms. 755.26 and 755.28), a combination of any of these County-funded programs. Is it okay if I run a copy of this and give it to our accountant? MS. SAKO: It's fine. We actually have another version where we actually came up with 5 million (See Comm. 755.29). MR. RICHARDS: Chair, I'd ask for a recess, and let's get the paperwork in front of us. CHR. POINDEXTER: Sure. Okay, thank you. A short recess. Recess: At 11:07 a.m., the Chair called for a recess. Reconvene: The meeting reconvened at 11:41 a.m. CHR. POINDEXTER: Okay, where we left off, Deanna, you were going through the list of budget cuts. MS. SAKO: Yes, and it wasn't like an easy task. We kind of went back to the Charter and different things, trying to look at what programs were mandated and which ones weren't. But you can kind of see it's no fund gets eliminated, and some of these are very important programs. And I think we were kind of down by Human Resources and suspending the Employee Assistance Program, R&D (Department of Research and Development) suspending Energy Immigration, Business Development would be 332,000. Public Works would be no albizia or unsafe flora funding. So, that would be just another 170. Suspend HI-PAL (Hawai`i Police Activities League) Program; no replacement bus for Transit—that might be the match; Solid Waste—the recycling program would be pretty much reduced or eliminated; no car allowance for departments, including Council, R&D, Planning. These are the main ones who have car allowances. Only mandatory out-of-state or interisland traveling, but that would save only 75,000; no non-emergency equipment; suspend all non-mandated boards and commissions—that doesn't save us a lot but at least we would be consistently applying it. And we did look at un-funding positions that had been vacant for over a year. And that gets us pretty much to $5 million. CHR. POINDEXTER: Okay, Council Member Richards, you still have the floor. MR. RICHARDS: Okay, thank you, Chair. Thank you, Deanna, for looking at this. So, getting back to our big number here, 518. Projected revenue is a drop of Page 35 Hawaii County Council-41 June 6,2018 5 million. I had a question for Lisa. Can you come back to the table, please? Worst case scenario, if we lost all downslope of the open vents right now, what would our revenue loss be? MS. MIURA: 6.2 million. MR. RICHARDS: Okay. So, if we plan for a $6 million revenue loss, that takes us from 518 down to 513. At $2 million extra a month and we project, let's go four months, so that's an $8 million cost. So, 6 plus 8 is 14; where at 518, that takes us down to 504 million. MS. SAKO: It does, but I just want to clarify that the reason—last time, we were taking cost into account, at least our 25 percent share, but we do believe the Governor will be able to find that cost portion for us so that we would have enough to get reimbursed by FEMA and then the State would cover, hopefully, the 25 percent share. MR. RICHARDS: Is that guaranteed? MS. SAKO: It was looking good the last time we talked to them. MR. RICHARDS: Is that guaranteed? MS. SAKO: It's not guaranteed right this second, no. MR. RICHARDS: Okay, so my point on that is that I think we have to look at cutting the budget substantially. And I haven't heard anybody talk about reduction of hours. Could someone please expound on that? MS. SAKO: Nancy can bring up her worksheet. We did look at it, and what happened in the past when we had furloughs is one thing that happened was the whole State, we were in that recession, so it was negotiated statewide. And so, the unions did agree to it. But all public safety personnel, which are actually our highest paid employees, would not be subject to it. So, it does save. So, if we furloughed only the non-essential and the legislative branch, it would be 2.8 million for the year, which I believe is just one day per month, or half-a-year at 1.4, depends how long it would be going on for. MR. RICHARDS: Okay, I think the conversationI'm glad we're having this conversation—everything needs to be on the table as far as discussion. MS. SAKO: Yes. Page 36 Hawaii County Council-41 June 6,2018 MR. RICHARDS: Nobody likes this conversation, and nobody is approaching this cavalierly. This is not a good conversation to have, but we have to have it. And at this point, I'd like to yield the floor `cause I want to hear my colleagues and their opinions on this. CHR. POINDEXTER: Okay. Other Council Members, discussion? Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. A number of$6.2 million of revenue loss, does that total include both permitted and unpermitted structures? MS. SAKO: When we find it, we tax it. But Lisa can tell you that. MS. MIURA: It sure does. It's all unpermitted and permitted structures from, basically, Pahoa, that intersection below Pahoa High School and down. So, down to Kapoho Road and everything south. MS. LEE LOY: So, of the unpermitted structures, did we realize the revenues from those unpermitted structures? MS. MIURA: Are you asking if we tax them? We do. We've always taxed them, yes. MS. LEE LOY: So, these are all, whether permitted or unpermitted, but we knew about and we have realized the revenue from those structures. MS. MIURA: Yes. MS. SAKO: Now, there definitely could be some unpermitted structures we haven't found yet, but yes, for all the ones we know about, they're on the list. MS. LEE LOY: And then the 2.8 per day for furlough—and I'm just assuming if we chose two days, we'd just double it and it would be, like, 5.6 for the non-essential, I guess, executive branch. MS. SAKO: And legislative branch, yes. MS. LEE LOY: Okay. There was another sheet of Communication 756.32. That was a $7 million MS. SAKO: Yes. So, when we met with the Chair and Finance Chair last week, we were still talking about the week before when we had the 3 million loss in revenue and 4 million, our share of the expenses. So because of that, we were still on the 7 million. But, through more discussions with the Governor, we feel Page 37 Hawaii County Council-41 June 6,2018 like, okay, we're pretty confident they'll cover the cost. But, of course then, also, our revenue amount estimate of loss got higher. So, now we've been focusing more on the $5 million number. But the same concept applies. It was kind of eye opening in terms of how small some of our departments' budgets are. Like Aging is only 753,000 of County funds. Obviously, if it was like State or Federal funding, that's not on this list. So, there's different amounts and whatnot MS. LEE LOY: I know part of the conversation also included a hopeful ask of 50 million from the State. Has there been any conversation about deferring our payment of ERS during this event or some other tools that the State could offer in lieu of money? MS. SAKO: I totally hear what you're saying and, no, none of those have been offered. And because of how the plan is together and how they charge the interest and whatnot in the actuarial study, I'm not sure. Maybe ERS is just a bad example that they would go for that, but no, there have not been those types of discussions. MS. LEE LOY: You understand where I'm going? Like, there might just be some way to offset it where we're not paying for this entire fiscalI thought of it similar to that of the open space fund, right. It's kind of like a loan, but we would have to pay it back. MS. SAKO: Right. And that's the thing. At some point, we're going to have to pay it back. And so, looking at the impact this event is having on our island and how some people are getting their hours reduced already, there's a lot of that going on that somehow we have to spark that economic impact as well to be able to recover. MS. LEE LOY: That's all I have. I yield. CHR. POINDEXTER: I'll go to Council Member Ruggles and then to Council Member O'Hara. Thank you. MS. RUGGLES: Thank you, Chair. You said that the Governor gave you a positive indication that he wanted to help. Did he say for what amount? MS. SAKO: No, that's the part we're still waiting on. It's near the end of the fiscal year, and they're still analyzing their account. We thought it would be by the end of last week, but we're hopeful by the end of this week we'll find out exactly. We're also pretty sure it's not going to be the full 50 million. Page 38 Hawaii County Council-41 June 6,2018 MS. RUGGLES: Okay, thank you. So, Kauai was awarded 125 million, is that correct? MS. SAKO: I think they had 100 million and Oahu had $25 million during the flooding event, and that was a legislative appropriation `cause they were still in session. MS. RUGGLES: Okay, thank you. Do you have any knowledge if they're going to do a special session? MS. SAKO: They're talking about it. I think that's why they've been meeting with the Mayor and us. And I think they met with several Council Members as well. They're trying to figure out what our needs are, and I think they're open to it but they have to know what action they need to take up. MS. RUGGLES: Could you tell me how much is in our Budget Stabilization Fund? MS. SAKO: There is roughly $6 million. MS. RUGGLES: Okay, great, thank you. And there's 6 million in the Disaster Fund? MS. SAKO: Yes. As of today, that may not still be true, but yes. MS. RUGGLES: Okay. I guess I'll just move this conversation to where we left off last time with this information. It was my position that we hold off on increasing taxes and borrow from the PONC (Public Access, Open Space, and Natural Resources Preservation Commission) Fund, possibly from the Geothermal Fund if that's legal. We also have this Budget Stabilization Fund. I remember that, I think in Mayor Kim's first term, that—and we appreciate that he set these funds up. Thank goodness that we have these funds. So, I think it's important that we show the State that we're serious and that we need assistance. And now would be the time to use them. So, that's my personal position on where I would like to see this going. Thank you. I'll yield at this point. CHR. POINDEXTER: Thank you. Okay, Council Member O'Hara. MS. O'HARA: Yeah, and it's just a further clarification at this point. I'm going to ask Lisa if she can come back up. My memory isn't serving me well. Two weeks ago feels like a year ago right now. So, I remember we talked about giving 50 percent, or some percentage, reduction back, before it hit Kapoho, to the Kapoho region. And that was also applied to Nanawale, maybe? No? Page 39 Hawaii County Council-41 June 6,2018 MS. MIURA: There was a percentage to Nanawale should a proclamation come through for that area. But it's not 50 percent for Nanawale. It was 15 percent. MS. O'HARA: What about Hawaiian Beaches Shores? MS. MIURA: Nothing was considered in Hawaiian Beaches Shores for this proposal. MS. O'HARA: I would like to recognize that recent events have impacted property values as far away as Hawaiian Beaches Shores and Waa Waa. So, there is a whole other segment of real estate that needs to be assessed for whatever percentage reduction we feel is appropriate. But yeah, it's losing value as the lava spreads. MS. MIURA: Definitely, we agree. That's why I keep saying it's minimum $5 million today. It didn't take anything beyond Pahoa, that corner below Pahoa High School. So, it definitely could increase. MS. O'HARA: Right. And I just want everyone to be aware of that, and I also want to thank my colleagues Ms. Poindexter, Ms. David, and Ms. Eoff for coming to the Civil Defense meeting last night. It is important for everyone sitting here on Council to get really familiar with what's happening in Puna, and Pahoa town is not being threatened. But people need to be made aware because we are the decision makers and this is, after all, one island. I realize that this event, including the summit eruptions, is causing really a foul air up in the volcano area and has greatly diminished economic activity there, South Kona as well. The whole island is being affected by this. So, we really need to think as an island as we resolve some of the problems. There's discussions moving forward. And as I've said, I have a resolution requesting a special session. I'm pretty sure this is going to happen probably mid- July, is what I'm being told, for the legislative special session. But it remains to be seen how much we will know at that point and how much we can help. But the concept of a land swap is alive and well. And how that will be afforded, there's many different vehicles for doing things like that. I'm aware of at least several different models. So, that may be where this goes in the long run. But that's a much bigger picture than just settling our, quote, balanced budget, which is absolutely impossible to balance because we don't know the increase in cost and we don't know the increase in loss in revenues. I really appreciate all the work you guys are doing, especially `cause I know you're doing a whole lot of other work trying to put together proposals for FEMA Page 40 Hawaii County Council-41 June 6,2018 and whatnot. So, thank you. And I want to thank everyone at the County. Everyone is working overtime and to the maximum that they can give, and I really appreciate everybody's contribution to this. Thank you. MS. SAKO: Yeah, thanks for mentioning that. In any type of disaster, each department kind of has its roles and responsibilities. So, a lot of people are pitching in. And then before I forget, I just wanted to remind everyone that the Budget Stabilization Fund has very specific rules associated with it. And there has to be declared a reduction in revenue during a fiscal year for it to be enacted. So, it can't necessarily be used to balance the budget today, per say. So,just to clarify that. CHR. POINDEXTER: Okay. Council Member David. MS. DAVID: Thank you, Chair. You just answered one of my questions about the Disaster Fund. So, you said it had to be declared a reduction in this fiscal year in order tocan you explain that? MS. SAKO: For the Budget Stabilization Fund, there has to be a reduction in revenues and then the Finance Director can declare that we would need to dip into the Budget Stabilization Fund to help balance, so to speak, to rebalance the budget. MS. DAVID: So, the reduction in revenues from the real property taxes that we're experiencing because of this crisis, would that not qualify for a declaration? MS. SAKO: It could be, yes. MS. DAVID: For this year? I mean, for this fiscal because it's happening in this fiscal year. Right? MS. SAKO: For this fiscal, yes. We don't believe that this fiscal year is a significant amount that we would need to tap into it right now. For the Fiscal Year 19 that we're talking about, yes, that's the $5 million. But as Lisa mentioned, it was roughly 62,000, the actual amount today. MS. DAVID: Today, it was only 62, and that's not enough to tap into that fund? MS. SAKO: Well, we feel that there's enough other changes in the budget to even things out, that the fund balance would be able to absorb it. MS. DAVID: Okay. And what about—what's the requirements on the stabilization fund if we have to tap into that? MS. SAKO: That's the Budget Stabilization Fund. Page 41 Hawaii County Council-41 June 6,2018 MS. DAVID: Can we tap into that? MS. SAKO: Yeah, if the Finance Director declares a reduction in revenues. So, the one I've been talking about is the Budget Stabilization Fund. MS. DAVID: I see. MS. SAKO: So, yes, if we wanted to wait till next year. But as Lisa said, the problem keeps growing, and we don't know what the full amount's going to be. So, I'm not sure that's the best tactic. I mean, it would be something we could use. Let's say it goes much greater than 5 million; maybe the loss is actually 10 million next year, then we can take the additional 5 out of there. That would be a possibility. MS. DAVID: And so, if weI'm just looking for ideas. MS. SAKO: No, I know. And then,just to remind the Council also that the goal is to have enough between the Budget Stabilization Fund and Fund Balance to be between 5 and 15 percent of our expenditures. And we're already at the low end of 5 percent. MS. DAVID: Okay. MS. SAKO: I think Nancy wants to say something. MS. DAVID: Go ahead, Nancy. Thank you. (Note: At this time, Deputy Finance Director Nancy Crawford came forward to address the members of the Council.) MS. CRAWFORD: Nancy Crawford, Deputy Finance Director. I just want to add, and really, I mean, Deanna has said this but I just wanted to add that the idea with budget stabilization, when it was developed, wasn't that it be planned. Like right now, we're sitting here and we know we have a loss of revenue in the next year. The idea wasn't to plan to dip into it now as we practice the budget. Where I see it being more important is we work out whatever we work out today on the budget, and then, if in September or October we are hit with a hurricane and we lose a lot of additional properties and the revenue sources they represent, we have this reserve there as opposed to planning right now to just take it for something we already know we're going to need. That's all. MS. DAVID: Then that raises another question. Would the funds from the Governor, then, would that be able to be reimbursable, too, if we had to use this fund? What I'm saying is we're trying to make decisions on things that we don't know. And I know you know that. I don't have to tell you that. But that, to me, Page 42 Hawaii County Council-41 June 6,2018 is—can we get to a point where, since we don't know how much we're going to get from the Governor, can we get to a point where we balance the budget, whether it's with the potential furloughs, and get us to the point where we can address the big shortfalls after this fiscal? MS. SAKO: So,just to answer a couple of the questions, which may not be your main question, but I am aware that the money we get from the Governor will have to be used for disaster-related expenses relating to health, safety, and protective services and all of that. So, not necessarily replenishing, like, a Budget Stabilization Fund or something like that. I'm sorry, I know you had another question. I forgot what it was. MS. DAVID: Okay, never mind. Let's stick with that one then. So, the money that the potential funds that we might get from the Governor, whether it's 50 million or a portion of that, you said we could not use that. Could we use it to reimburse ourselves for the overtime that's being spent? MS. SAKO: Yes, that would be a valid cost for us. MS. DAVID: So, they could reimburse that. And at this point in time, that's running to be about what a month? MS. SAKO: Overtime alone would probably be about 1.5 million a month, but I probably need to see the June payroll to confirm that number. MS. DAVID: Okay, so we can use that. I'm just wondering, can you kind of explain, then, where we are right now? I mean, we're trying to figure out how to juggle something that we—Option 1. MS. SAKO: Based on what I know, I believe that we'll be able to cover the cost with help from the State and FEMA. But I am concerned about the 5 million reduction in revenue. So, I feel we are $5 million short. And I do remember my other point I wanted to make, and it had to do with furloughs. That's not something we can unilaterally do. It does have to be bargained with the union. MS. DAVID: So, that would be my next question. The union statewide or they would have to make that ? MS. SAKO: They would have to be willing to enter into a Memorandum of Agreement with our County to do that. Page 43 Hawaii County Council-41 June 6,2018 MS. DAVID: With our County. Based on an emergency situation, what is your feel or read whether they would be amenable to something like that, given our situation? MS. SAKO: A lot of their members are working very long hours. The unions that would be subject to furlough would not be SHOPO (State of Hawaii Organization of Police Officers) or Hawaii firefighters. It would be HGEA (Hawai`i Government Employees Association) and UPW (United Public Workers) who are already some of our lowest paid employees and have other jobs as well. So, I cannot speak for the union, but I'm sure they do understand that we are in this situation. I just cannot speak for them. MS. DAVID: No, I understand. I understand this is just looking at different options that we might have and given that the furlough discussion did include the legislative branch and appointed staff MS. SAKO: So, I do believe Mr. Brilhante is here now if you guys have questions regarding that. MS. DAVID: Okay, well, for now I think you've answered my furlough questions. But I think if my fellow Council Members have other questions, I'll yield at this time. Thank you. CHR. POINDEXTER: Okay, thank you. Any other discussion? Council Member Eoff MS. EOFF: Yes, I have a question. So, on your four options. And No. 1, your suggestion is that we could adopt, say, Draft 2 today even though you were uncomfortable with that because the income isn't really MS. SAKO: Right. Those are the four options that came out of our discussion with the Chair and Finance Chair of the Council. It is an option, but I don't think it's a good option. MS. EOFF: Yeah, I was kind of wondering why it was even an option. But then, I understand that MS. SAKO: I was trying to be agreeable and collaborative with everyone. So, I presented all of them. MS. EOFF: But there must be some merit to it, so I just wanted to explore that. MS. SAKO: There are provisions. And you have to realize, too, we met last week. And a lot has happened since last week. Page 44 Hawaii County Council-41 June 6,2018 MS. EOFF: It was more like 3 million. MS. SAKO: Right, when we thought it was a 3 million reduction in revenue. And we knew we'd ask the Governor, but we weren't sure yet. I at least have had conversations with his finance director, but I believe we will be getting something. MS. EOFF: Right. I would believe that. MS. SAKO: But in terms of where we were at last week, Kapoho and Vacationland were still there. I mean, there's a lot of things that have changed since then, including the air quality even in Kona and around the island. MS. EOFF: Of course. MS. SAKO: So, a lot has kind of changed since then. So, there are provisions in the Charter should emergencies happen during the year. We have revenue shortfalls, but I think we're getting to a point where our revenue shortfalls may be too large to deal with next year. Because once we pass June, well, 20'h, we cannot amend the real property tax rates anymore. And once we get past June 30'h, GE tax will not be an option at least for Fiscal Year 19. So, those would be off the table. So, we would be left with some other revenue source, unknown at this time, or we'd have to cut them. So, while it may be an option legally, I'm just saying it's probably not prudent. And I can tell you that we get calls from bond rating agencies and others on a regular basis in the last month or so since this event started. So, I'm trying to keep in mind our total credit well-being as a whole as well. MS. EOFF: And when you refer to those Charter provisions, is that the Section 10-8 and 10-9 that allows for appropriations, supplemental and emergency? MS. SAKO: Just a second. There areI think there's one that says when the Mayor—yeah, sorry, 10-9. Yes. If we have insufficient revenues, we'll report and make changes. MS. EOFF: So, those two sections allow for the anticipated but not known income as well, like from, say, FEMA or State. And then it also anticipates the shortfalls. So, it allows us to do the supplemental transfers later during the fiscal year. Is that what it's there for? Page 45 Hawaii County Council-41 June 6,2018 MS. SAKO: It does. But also, this was intended for when an emergency arises during the year, the budget is already set and in place, and we don't really have any other options. We're in a unique situation in that we still have time to take other things into consideration. When we're talking about 5 million, I'm already assuming that the 1.5 million in overtime we're going to incur every single month, that FEMA is going to come through and cover that. That is not appropriated anywhere in that $518 million budget. I'm already assuming FEMA's going to cover that 75 percent. MS. EOFF: `Cause that would be an allowable use of those kinds of funds. MS. SAKO: Yes, and that we're already assuming that the Governor will come through and help us match the 25 percent or, worst case scenario, we'd have to draw down significantly in our Disaster Fund. MS. EOFF: I understand we're only really looking at the shortfall that we understand to be true because of a loss of real property tax income. MS. SAKO: Yes, right. MS. EOFF: And trying to adjust some of that. MS. SAKO: Right. But it's not even just Fiscal Year 19. It's going to be the fiscal years down the road. We already know we have ERS and other expenditure increases, and you know the economic values around the island from this event. You know the media has blown some of it out of proportion. You know when you look up at the map of the Big Island, definitely the air and other things are impacted, but where the actual lava is flowing, you know it's not coming out this side of our island. It's really down in that lower corner. And you know a lot of people, like conventions and whatnot, they're all pulling out. People are canceling reservations. I mean, we need to fix our economy going forward, and we need our residents to believe that we are all pulling together to make this a better place and that we care about them. MS. EOFF: I also had a question regarding the surcharge, that option. MS. SAKO: I'm sorry, the surcharge on the property tax? MS. EOFF: No, the GE— MS. SAKO: Oh, GE tax surcharge. I'm sorry. Okay. MS. EOFF: So, when we were looking at that previously, we ended up postponing Page 46 Hawaii County Council-41 June 6,2018 MS. SAKO: Till January. MS. EOFF: And so, that bill is only due back to us in that form in January. You presented another bill that we may get to talk about later for a quarter percent, which that is something we're going to need to talk about. But my question is, did the State give us that opportunity to only add the quarter percent? Because, I think I had asked that question during a previous discussion when we were talking about the .5. MS. SAKO: I thought the language was up to .5 percent. I don't know MS. EOFF: Could you show me? I was trying to look for that because I asked that question during the question on the .5 because I was thinking maybe something we could consider would be Point of Information: MR. CHUNG: Point of information,just so that we won't have to go through this whole thing again. CHR. POINDEXTER: Council Member Chung. MR. CHUNG: This thing came up once before when Mr. Onishi brought it up. And again, Mr. Kamelamela came up, answered the question, and said that it can be anywhere within that range. MS. EOFF: Okay. So, the State would be okay. MR. CHUNG: (Inaudible) a while back. MS. EOFF: I just remember getting a different answer when I asked that question a couple meetings ago. MS. SAKO: I believe if it had been amended from half to a quarter, it would have required a new public hearing or something like that. But I'm not sure if that's where the confusion is. That's all I'm offering up. MS. EOFF: Oh, okay. Right. So, this would require a new public MS. SAKO: Yes, it would require a new public hearing. MS. EOFF: Thank you, Deanna. CHR. POINDEXTER: Okay. Any other discussion? Are we going to keep it going? Okay, Council Member Richards. Page 47 Hawaii County Council-41 June 6,2018 MR. RICHARDS: Thank you, Chair. I appreciate everything Deanna's working on, actually the whole Finance Department, Real Property and all that. What we need going forward is a balanced budget, and it's my belief we have to cut the budget knowing that we will probably get reimbursed. And with the reimbursements then we can adjust the budget going forward. And so, in the next fiscal year, we can come back and readjust the budget going up. I think it's problematic to take things down. Trying to get anything changed in the budget seems to be very difficult. I think we need to make some pretty strong cuts going forward to prep ourselves. This reminds me of 2008, 2009 and I was dealing with a business and we had to make some very hard cuts. I think that's where we need to go. Nobody likes this, but then again we didn't pick this event either. So, that's my belief, and it's where I think we should go forward. I'd like to hear from the Council Chair and Finance Chair, your thoughts. Where do you think we need to go? CHR. POINDEXTER: You guys want me to go first? My thoughts were that, for me, I would have stayed with the status quo on our Option 1 and utilize the opportunities through the Charter if we need to come in for supplementals. Because, like the Mayor had stated earlier, we really don't know where we're at. And it's just a guessing game. For me, I hate to frontload and put it on the back of the taxpayers. I think, like Council Member Richards had stated, maybe even if we have to cut in some areas would be better than raising taxes on our people and making that sacrifice. And then, in coming in later at a point, I know we have for next year to think we have another opportunity with the GET, which will be a full .5, at that point coming back to revisit that if we need to. We're looking at the—there's so many other opportunities coming up that may happen: the special session, what the Governor's giving us; whether or not they'd even consider the additional TAT (Transient Accommodations Tax) that the House supported. And I've gotten some calls saying, "Hey," from some Representatives, saying to go and ask the State Senators to consider that additional TAT. So, there'sI don't like frontloading. I would rather bare bones go into it and then do supplementals if we need to. So, that's where I stand on this. Council Member David. MS. DAVID: Yes, I think we talked about this at our meeting considering all these options. I'm just looking at the budget cuts for $5 million. It's going to be a very harsh impact on the services that, because of this crisis, is already down to bear minimum. I have a hard time trying to cut even more services, especially social services and services to our elderly, our kids. Page 48 Hawaii County Council-41 June 6,2018 I really would wish that we could move forward with a budget even—and then at a time down the road, which is only another month or two, we'll be in a position to find out whether the Legislature will even entertain giving us back our TAT. Some of these possibilities do not even allow us to use the funds to pay back or to make up the deficit. So, if we're cutting social services for this $5 million budget cut, if we do get funding, would we be able to actually replenish these cuts or reinstate these cuts? MS. SAKO: It depends what the funding is for. So, if it is disaster related, then no. Those monies would go purely for any overtime and disaster-related costs. As we said before, the Leg. and Governor and others, there's really no money to replenish your revenue sources. And then, I guess, others have said, "Do we know that for sure as of today?" And things like replenishing TAT and whatnot, you're asking, at least me, to put my faith in something. I heard a lot of promises from the Legislature. I have never seen any of them come true. MS. DAVID: Right. MS. SAKO: I've seen our TAT be reduced and capped and locked into place. And I appreciate their support, I really do. I mean, I appreciate them coming down. I appreciate all of their support. But if you want me to put my faith in that they're going to come through for us on something like TAT and not disaster related, I'm going to have a hard time supporting that today. MS. DAVID: To me, I think because of the situation, I would hope that our legislators because this crisis does not only affect this island. It's going to have a huge impact on the State's economy as a whole. And so, what I'm thinking is that as much as we don't trust our State in giving us back the TAT that we are rightfully, or we rightfully deserve or are entitled tonot deserve, we're entitled to that amount. If they refuse that, I really think that I'd like to have faith in that the situation is different now. The situation is something that is going to have not only Big Island impacts. So, I really would like to MS. SAKO: Right. And I agree with you that it's going to be statewide. Tourism is already being impacted statewide, which means the TAT total is going to come down which means there's less to share. MS. DAVID: Or less to increase for that matter because they've already decreased our—yeah. MS. SAKO: Right. So, I mean, it's hard to picture that. And when the Mayor and I met with them last week, they feel like they gave us the tools to help ourselves, which was the GE tax. And so, they're frustrated as well. I mean, I'm just sharing information. Yes, so I'll leave it at that. Page 49 Hawaii County Council-41 June 6,2018 MS. DAVID: And I think it's almost even considering the GE increase. I know it'll help us a lot, but it's hitting our people when they're down and when they're in a really sad situation. And I have difficulty doing that. But at this point in time, I don't know, Mr. Richards. If we've got to cut, I'm just looking at cutting us first before we cut our people. But that's something that maybe Mr. Brilhante can explain to us as far as what would it take to actually get the idea of a furlough going. Please. I mean, what process would it take at this point in time given the situation that we are in? And I know it's a delicate situation because we're dealing with the union. Thank you. (Note: At this time, Human Services Director William Brilhante came forward to address the members of the Council.) MR. BRILHANTE: Just checking, good afternoon. MS. DAVID: Oh, yeah, it is. Okay. MR. BRILHANTE: William Brilhante, HR (Human Services) Director. Ms. Sako has provided some real pertinent information as it relates to the furloughs. As you may or may not know, right now with each of the four unions that we deal with here through the County, we're all under current contracts with them. HGEA and HFFA (Hawai`i Fire Fighters Association), those contracts wouldn't expire until June 301h of 2019. With UPW and SHOPO, there's an additional two years on top of that. So because the contracts are in place, for us to engage and give strong consideration to the prospect of furloughs, we would have to get into contact and consultation with the unions that we're currently under contract with and, like Ms. Sako correctly stated, come under an MOA (Memorandum of Agreement) with each of the unions specifically identifying the parameters of a furlough program. Back in 2009, when we addressed and we actually implemented furloughs, the County was kind of riding on the heels of the State government. They were the first to approach the issue with the union. And the Governor at the time was the one who started the process, and we kind of followed along. I think what would make this situation unique is, I think, the County of Hawaii would be going it alone if we were to go forward at this point in time. And that would be my concern, is do we have enough backing, support. Is our carrot that we dangle in front of the unions big enough for them to kind of come on board and agree to a furlough situation. Always the position we take when we address furloughs is that furloughs is the least draconian step as it relates to reduction in salaries because the alternative that we put on the table is a RIF, a reduction in force. And that's always the Page 50 Hawaii County Council-41 June 6,2018 consideration. Do you kind of want to bite off—everybody take a little responsibility and have a little bit of a hardship, or do we put all the hardship on the last people we hired, which a RIF would then have to MS. DAVID: Okay. Then my other question, okay, because it seems like it's a complicated process having to deal with the unions. So, would you be able to estimate on appointed staff only, non-union employees, how many of those do we have in the County as far as potential for a furlough? Or I don't know what you would call it. MR. BRILHANTE: Right now, primarily our appointed staff are employees in the Mayor's Office, housing employees, and department heads and deputies. MS. DAVID: Counsel. MR. BRILHANTE: And that's kind of—we have to give some consideration to that as well. Because, as you know, the Salary Commission sets the salaries for department heads, deputies, and appointed legislators political positions. So, that's another consideration we'd have to take a look at, too, is that not only would we have to deal with the unions if we're going to do furloughs, but if we wanted furloughs for department heads and deputies, the Salary Commission sets the salaries for the department heads, deputies, and the legislators. So, that's another MS. DAVID: So, they would need to MR. BRILHANTE: Oh, I'm sorry. MS. DAVID: I'm sorry. So, you're saying that the Salary Commission would be the body to make that determination whether appointed staff and people in the legislative branch that are appointed also would take cuts? They would have to be the decision maker? MR. BRILHANTE: Yeah. And you've had firsthand kind of dealings with the structures. You have our union employees, collective bargaining employees. We have our employees that come under the auspice of the Salary Commission. And then now you know firsthand, in discussions recently last month, we also have our employees that come under the Salary Schedule, which you authorize. That would be the third entity where we would have to get buy-in for furloughs going forward. As far as the specific numbers, I can get you that information. I don't have it right off the top of my head right now. MS. DAVID: Okay, that's fine. If you can justI'm not sure how fast you could get that information, but I'm just curious what that amount would be. Page 51 Hawaii County Council-41 June 6,2018 MR. BRILHANTE: Well, approximately, we have 2,700 County employees and that's inclusive of water supply as well. So, it would be a number less than that. And I can get that figure to you within the next 5, 10 minutes, I'm sure. MS. DAVID: Oh, okay. Great. Thank you, Director Brilhante. Who to answer this: The uncontrollable cost this is for Deanna, sorry—the uncontrollable cost you have listed, one of them is the mandated other post-employment benefits, the GASB-45 payments. Could we, not tap into it, but could we defer those? MS. SAKO: By State law, no, we are not allowed to defer those. That actually keeps increasing and those funds are set aside. Right now, there's no provision for us not to make those payments. Part of that payment is also the current premiums for our retirees that we have to pay. So definitely, the whole thing cannot go away. But right now, we would not be allowed to reduce that without some sort of legislative action, I would assume. MS. DAVID: I see. And legislative action would be State legislative action? MS. SAKO: Yes. MS. DAVID: Okay, all right. Okay, gosh, I'm going to yield this time. Thank you very much. CHR. POINDEXTER: Right now, it's, okay, getting to be 12:30. Do we want to kind of allow Mr. Brilhante to get those figures, go to lunch, think about all of these things and come back, or do you guys want to work through it? Okay, who would want to do a lunch break? You guys don't really care? Okay, how many people want to work through it? Okay. We can order in if you guys want, but we MR. CHUNG: (Inaudible). CHR. POINDEXTER: Yeah, but they need to have lunch too. MS. SAKO: Perhaps we could take, like, a 15-minute break and Mr. Brilhante can work on numbers and different things. CHR. POINDEXTER: Okay. MS. SAKO: I just really feel the need to share with you that some of the groups that you mentioned, like housing for example, are working extraordinary hours during this disaster. And all the department heads, they are not here because they are working the disaster. So, keep that in mind as you make decisions. Page 52 Hawaii County Council-41 June 6,2018 CHR. POINDEXTER: Yeah. Okay, so we're going toinstead of 15, we're going to do a 20-minute break. That will give him time to get things back for us to just figure out what we're going to do for lunch, whether order in. Does everybody want to order in? I know Council Member Chung wants to work through it, and I saw his hand but I didn't see anybody else's hand on working through it. So, we'll come back in 20 minutes. Let's listen to a little bit about this and decide if we're going to take a lunch break or work through it and order in. Okay? Is that okay? Okay, we're going to take a 20-minute break. Recess: At 12:30 p.m., the Chair called for a recess. Reconvene: The meeting reconvened at 12:53 p.m. CHR. POINDEXTER: We took that break. Mr. Brilhante was going to get some numbers for us, and we're going to discuss it. So, we're going to check where that is right now. And while we were on break, I did ask the Council Members, and the majority wants to take a lunch break. So, we'll bring back discussion and then go to digest the numbers and everything that was presented to us and digest our lunch after that and be ready for a full afternoon. So, at this time, Mr. Brilhante is coming up, and I know that Council Member David had that question and went into recess. Oh, and there she is. Okay. Cause, Council Member David, when we took that recess so we could get the numbers, you still had the floor. MS. DAVID: Yes. Thank you, Chair. And, Mr. Brilhante, I know I asked you for some numbers on the potential of furloughing non-union personnel. Did you get those numbers? MR. BRILHANTE: Yes, Councilwoman David, I was able to get the numbers in our short little break. I have to thank my diligent staff MS. DAVID: Thank you. MR. BRILHANTE: Right now—currently under the County, we have 275 exempt non-union employees. But out of that number, there's a significant amount that belongs to the Office of Housing, and they are a specific—although they're exempt, they get no less than their union counterparts. So, they wouldn't come under the auspice of a furlough unless the unions agree to it. So, the number we have on the table right now is 176. Out of those 176 employees, 39 of them come under the Salary Commission. So, that's an issue we'd have to consider as well. I'll tell you this, though, and Ms. Sako brought this matter up and she alluded to it. And I'm speaking from personal experience. Every morning, we're up at the EOC (Emergency Operations Center) Page 53 Hawaii County Council-41 June 6,2018 at 6 a.m. We do a morning briefing with the Mayor and with the Civil Defense Administrator and, right now, I would say a hundred of our closest friends or so. And we're there till the late hours in the evening. And the majority of the people, County employees, who are manning the Civil Defense office are the department heads and deputies. And I can speak for myself. I work 12-hour days. I know the Director and Deputy of Parks and Recreation, they outdo me on those numbers. And none of those employees are getting a single cent as it relates to these overtime projections we're seeing. I think they should be commended going forward, and they should be recognized in my opinion. And we have such a dedicated Administration, and these guys show it every day. And I'll be the first to give them kudos. So, I hope that comes under your consideration. MS. DAVID: Of course. So, the hundred and—what would that amount to as far as—it won't amount to much savings, then. And I think that was the issue that I was asking about because—and I really have to say, Mr. Brilhante and Director Sako, that in no way when I asked the question did I mean to hurt any of our County employees. And I know that it really sends a serious message when people hear that this body might be considering. I'm just asking the questions to see where we are and until this body decides that might be a feasible thing. It was just that, a question to see that we have covered a lot of the possible options. MR. BRILHANTE: And I know it's incumbent on this body to ensure that no stone is left unturned and every possibility be considered. As it relates to the specific numbers, the reason I brought up the number, the 39 number for department heads and deputies, okay, so those 39 individuals would probably be on the higher end of the pay scale. But the remaining 140 employees, we're talking about council aids, temporary election clerks. The significant majority of these appointed employees are not the highest paid employees. I'll even argue that for the most part, they're some of the lowest paid employees here in the County. And talk about hurting the people that we can hurt the least. If that's given consideration with the GE, that's something that should be considered. And also in the interim, you know how the coconut wireless works here in Hawaii? While I was walking back to my office, I got a text from the HR director from another jurisdiction, and she mentioned that it's going to be a hard sell for the unions to agree to furloughs when we have the GE tax sitting on the table. It's kind of hard for the unions to say, "Yeah, our people are going to take that significant cut, but you guys aren't going to give any consideration to the GE tax." So, that's just kind of food for thought. MS. DAVID: Thank you very much because that's some information that I think we did not have, or at least I did not have, to put on the table to consider. And based on what you've said right now, it's off my table. I've gotten my answer, Page 54 Hawaii County Council-41 June 6,2018 and it will not even help the situation a minute bit. So, that was just it and I apologize for any panic that I've caused by asking the question. But you know what? I think we have to know all of these answers before we make a decision. This is a hard decision. And before I end, I really, as Ms. O'Hara said, we went out there last night. And we come from the other side of the island. And I saw all the department heads out there. And I know that you guys do a lot and continue to do a lot, so I appreciate everything that you folks do. And thanks for answering my question. I yield at this time. MR. BRILHANTE: I'm sure they appreciate hearing as well. Thank you. CHR. POINDEXTER: All right, thank you. Council Member O'Hara. MS. O'HARA: Well, thank you, Ms. David, for wrapping that up because that caused me great concern as well. Living this emergency as I have because my office is in the district and I don't leave the district very often. In fact, my refrigerator is empty `cause I haven't been able to make it to the store. And I can't tell you how many times I've talked to Bill over the phone, who is always there at the op center. And everyone here who experienced furloughs in the past when we had to do that in '08-9 under the great recession, the economy was in a different place then. And we had to cut back because of the great recession. But also, the economic activity going on was much slower, too. We have a different situation here. And if we were to consider doing furloughs as a way to balance the budget, I could never support that because we need every hand on deck right now. The services that we're providing are so critical to not only my district but everybody on this island. And again, I'm going to tell you this is not just affecting Puna. This is affecting the whole island. So, if we're going to keep our economy alive and not kill it completely, we can't do the No. 2 option that Deanna put before us, which was to cut expenses by 5 million. There's absolutely no way we can pull that off So, I would like, before we go to lunch, to maybe consider which of the options that were laid before us are even viable or different renditions of the options. I am really not interested in raising real property tax rates at this time. And I think the Council has kind of given the political will that is not something they want to keep on the table. That leaves us with Option 1 and Option 4. So, when we come back after lunch, we can vet those two options. Option 1 is to accept the draft budget as was presented, which reflected numbers that were prior to this event. And that means we'll be tweaking the budget all the way through the year because we don't have accurate numbers and it's not our fault. The other option is to increase revenues, and that's the GET option that we Page 55 Hawaii County Council-41 June 6,2018 have before us under Bill 159. So, I'm hoping that when we come back a little bit sated with lunch and clear headed, that we could just consider these two options moving forward. I think that will help us in the afternoon. Thank you. CHR. POINDEXTER: Council Member Richards. MR. RICHARDS: Thank you, Chair. Councilwoman, thank you very much for your comments, but with all due respect, it's not your decision what comes off the table. So, that's your opinion, thank you, but we'll consider all four going forward. Thank you. CHR. POINDEXTER: Okay, Council Member Chung. MR. CHUNG: And just to weigh in, as far as I'm concerned, the only two that I would consider would be Options 2 and 4; of course, No. 4 being my preferred route. And No. 3, absolutely not, from my perspective. No. 1, the problem with that is it's just a means of getting this thing through, but on the back end we're going to catch hell, okay. Because, we know full well what kind of shortfall we're going to be looking at. If the Administration hasn't made it clear, and even with our using our own intuition, we know we're going to be looking at a huge shortfall. And to pass this thing through is just, no offense to anyone, but I think is just illusory and irresponsible. So, it's either raise revenues or deal with what we've got, and got to cut. One concern I have is when I looked at what was being proposed on the chopping block, it's a lot of programs. And unfortunately, viable programs, but that's what we've got to deal with. But I didn't see anything with regards to Departments Miscellaneous Contractual Services. I know it's real small. We might be able to save maybe about 500,000, but I view that as being one area that I would seriously look into. Just my opinion. We can talk about that later. Thanks. MS. SAKO: We do have an analysis of the Miscellaneous Contractual Services. MR. CHUNG: Later on we can talk. Okay, thank you. CHR. POINDEXTER: And if you have an analysis of that miscellaneous services you need to hand out to the Council Members. So, if you could get that to us over lunch? After lunch or ? MS. SAKO: Yeah, I'm sure. CHR. POINDEXTER: Okay. Any other comments or discussion before we take a lunch break? No? Okay, can we just say back at 2? Is that okay? Okay, we are in recess, and we'll be back at 2:00. Page 56 Hawaii County Council-41 June 6,2018 Recess: At 1:06 p.m., the Chair called for a recess. Reconvene: The meeting reconvened at 2:10 p.m. CHR. POINDEXTER: When we took a lunch break, Deanna, you were in the middle of talking about what Council Member Aaron Chung had asked about and got some paperwork to pass out to us. MR. MAEDA: Ah, yes, it's being processed. CHR. POINDEXTER: It's being processed. Oh, okay. I thought it was already processed. Okay. So, while we're waiting for that, any other discussion? MS. SAKO: I can just tell you that the CHR. POINDEXTER: Okay, go ahead. MS. SAKO: Piece of paper is actually just a summary of what's in your budget binders. So, like, starting with page 2 under the 115 for Clerk-Council, it's like livestreaming, live captioning. So, all we did was, like, summarize that so we had it all in one place. So, that's what's being processed right now and then they'll be passing it out. And the one thing we did exclude is that if there's anything that had, like if it was grant funded or had a separate revenue source, then we excluded those because we wouldn't really be saving for it. We'd have to give up the grant or whatever. CHR. POINDEXTER: Okay. So, Council Member Chung, do you want to continue on that or ? No? Okay. Any other discussion? Or just let me know when you all want to move or possibly table that to address Bill 159 at any time. So, anymore discussion on Bill 110, Draft 2, as amended? Council Member Richards. MR. RICHARDS: Yeah, so I ask the question, "Are we balanced?" From what I'm hearing from real property, we are not. So, thereby, we have to be balanced. CHR. POINDEXTER: Okay. MR. RICHARDS: We have an ethical—we have a fiduciary responsibility to submit a balanced budget. So, I ask leadership what are we going to do? CHR. POINDEXTER: Well, the Council as a whole has to decide. It's not just leadership that decides. So, we all are one body. We all have our own opinions, and I think we need to come together and decide what we all want to do. Each of you can give your brief overview. If I can decide now, I would decide for all of Page 57 Hawaii County Council-41 June 6,2018 you but that wouldn't be right. So, how would you guys like to proceed? I'll take each of your opinions. That's what this is for. Or we can just vote on it now. It's up to you. It's this body that decides. It's not just the Finance Chair and the Chair that decides. So, anymore discussion on Bill 110, Draft 2, as amended? Council Member Eoff. MS. EOFF: I left off prior talking about the quarter percent option that I guess we're going to go to that pretty soon. Right? CHR. POINDEXTER: If you guys want to go to it now and talk about that, then we can—if you have a motion to table MS. EOFF: I guess it might be better for me to wait till we're talking about that to ask a of couple questions. CHR. POINDEXTER: Okay, we're still on Bill 110, Draft 2, as amended. Council Member O'Hara. MS. O'HARA: We were given a good presentation by the Finance Director, and we were given four options and the pros and cons thereof. Personally, my feeling about the balanced budget is the budget that was presented to us as Draft 2 was a balanced budget. We don't know and we still don't know and we won't know tomorrow either how to balance that budget because we're not clear on the cost overruns and the revenue declines. So, I don't—we could sit here at the table until that is resolved but we might be all 6 feet under by then `cause this could go on for years, folks. So, I don't think it'sI don't think that we're not performing our fiduciary responsibility by dealing with the budget as it was balanced the day before this all started. So, I mean, that is an option, and I consider it still on the table. But I personally would like to consider Bill 159 now so that we can decide if some of the other options that are on the table are viable. And so, I would ask that we move on to that. CHR. POINDEXTER: Do you want to make a motion to table Bill 110, Draft 2, as amended? Vote on Motion to Ms. O'Hara moved to table Bill 110, Draft 2, as amended. Table: Seconded by Mr. Richards and carried by the following (Approved) voice vote: Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—9. Noes: None. Absent: None. Excused: None. Page 58 Hawaii County Council-41 June 6,2018 Bill 159: AMENDS CHAPTER 2 OF THE HAWAII COUNTY CODE 1983 (2016 EDITION, AS AMENDED) BY ADDING A NEW ARTICLE RELATING TO TRANSPORTATION SURCHARGE AND CREATING THE GENERAL EXCISE TAX FUND Establishes a one-quarter(.25)percent general excise and use tax surcharge to fund operating or capital costs of public transportation systems within Hawaii County, to be levied beginning January 1, 2019. Reference: Comm. 958 Intr. by: Ms. David (B/R) Waived: FC (Note: Comm. 958.1, from Council Member Eileen O'Hara dated June 6, 2018, transmitting proposed amendments to Bill 159, was circulated. In addition, Comm. 958.2, from Council Member Susan L. K. Lee Loy dated June 6, 2018, was also circulated.) Motion to Approve: Ms. David moved to pass Bill 159 on first reading. Seconded by Ms. O'Hara. CHR. POINDEXTER: Council Member David. MS. DAVID: Thank you. I'd like to ask Ms. Sako, and possibly anyone else you want to call up, to explain Bill 159. (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Council.) MS. SAKO: After we met last week, we did come up with four options and we wanted to be able to present all four and have all the tools on the table to be able to discuss or enact any of the ones the Council felt moved to enact. So, because there's already a bill regarding general excise tax, we had to submit a different bill. And so, we did submit a different bill. We amended the purpose. And in addition, we're also creating the General Excise Tax Fund. We feel it would be prudent to account for these monies separately, like not to include it in Highways Fund or something like that, that is also used for transportation, but to have a separate fund for it. So, this would also create the General Excise Tax Fund so that we could easily tell everyone what the money was spent on. So, the revenues would go in there and the related expenditures. And then in addition, since it couldn't be the same, we also used the one-quarter percent general excise tax surcharge as the amount. So, if there's any questions, I'm happy to answer them. Other than that, we're still limited by HRS that it can only be used for transportation and I believe the bill reflects that. Page 59 Hawaii County Council-41 June 6,2018 CHR. POINDEXTER: Council Member David, do you have ? MS. DAVID: No, I yield at this time. Thank you. CHR. POINDEXTER: Council Member O'Hara. MS. O'HARA: Thank you. About that last point you just made, if the Legislature were to fashion a measure that allowed GE tax to be expended on a broader range of goods and services or whatever, would that apply retroactively or could it be—it couldn't be made to apply retroactively. In other words, if we enact this today, we'll only be able to use it for transportation and highways and that sort of thing in the future even if the Legislature changes the applications. MS. SAKO: I believe we worked with Corporation Counsel so that if it's amended in the future, the language is here that—of course, I'm not going to be able to find it right this second—but the thought was that it would be consistent with what's in the HRS. If the HRS is amended, then we could also—our ability to spend it on those uses would be there. MS. O'HARA: Mayor, are you stepping up to add to that? (Note: At this time, Mayor Harry Kim came forward to address the members of the Council.) MR. KIM: Yes, please. When the Legislature was here at the Civil Defense Office this past Friday, I did tell them that if they were to go into a special session—first of all, we're doing a lot of work on what happened there and there was all kinds of"I don't know." But it's just one of those things that was not of consequence. Either way, it means nothing to the State as far as revenues, more or less. So, I told them that if we do pass or we do have a special session, be advised we will come forth to ask you to go back to the 60/40. And I found no objection to that. But I'm not saying that they would vote for it. I'm just saying that they were told we would come. MS. SAKO: So at the bottom of page 2, we have "The money in this fund shall not be used for any purpose except those listed in this section or as allowed by any amendments to Sections 46 and 248 of Hawaii Revised Statutes." MS. O'HARA: Okay. So, in the hope that the Legislature might do that in special session, we could have some assurance that we could spend at least 40 percent, was it, on other types of activities? MS. SAKO: Right. MR. KIM: It was 60/40; 60 for transportation, 40 for other use. Page 60 Hawaii County Council-41 June 6,2018 MS. O'HARA: Okay. That being said, then, I have an amendment to Bill No. 159. Motion to Amend: Ms. O'Hara moved to amend Bill 159 with the contents of Comm. 958.1. Seconded by Mr. Chung. CHR. POINDEXTER: Any discussion? Council Member O'Hara. MS. O'HARA: Yes. I want to kind of reflect on where we've been in this budget session in that the amendment to the bill asks for the full amount that the Legislature has allowed us, which is one-half percent not one-quarter percent. I understand why the bill was written with one-quarter percent, but this amendment allows us the maximum. What I do understand from the actions taken by the State Legislature is whatever action we take from the GE tax, whether we vote it down or vote it up, that's a one-shot opportunity. We don't get to come back if we pass a quarter percent a year from now and increase it to a half percent. We don't get that option. So, it's a one-shot deal here. So that is what they have allowed us. I also, early on, introduced a resolution impacting our Highways Fund by reducing the future fuel tax increases. There's a 4-cent increase that's supposed to hit the pumps on January 1 and another one on January 1, 2019. MS. SAKO: I think it's July 1. MS. O'HARA: Oh, excuse me. July 1, I'm sorry. You're right. July 1, both times. And I bring that up because of its impact on the total of revenues that are brought in. My understanding is it's not quite a 1 cent to 1 million, but a little bit less80, 85 percent. So, if that resolution came back, we would be reducing revenues for next year by about 3.6 million. If we were to pass a half percent GE tax now, we would be bringing in approximately 20 million starting January 1. Is that correct? MS. SAKO: Yeah, that's about correct. MS. O'HARA: Okay. So, the net of that would be something like 16 million. We're currently, and, Deanna, help me out here. How much are we using from the General Fund right now for Mass Transit? MS. SAKO: General Fund is roughly 4.9 million once you take out grants and other things. MS. O'HARA: Just about 5 million? Page 61 Hawaii County Council-41 June 6,2018 MS. SAKO: Just under, yes. MS. O'HARA: Five million? Okay, so that gives us about 11 million that would go into our Highways Fund. And I do believe it's likely that we could expend all of that on our roads and Mass Transit without getting ahead in any way. We're so far behind because of the length of time it took us to increase the fuel tax. MS. SAKO: Yeah. It would allow us to actually implement some of the items in the Mass Transit Master Plan. MS. O'HARA: And we could implement the bus service plan that is just being finalized, or begin to implement over the next period of ten years. Those are the advantages I see of doing that, and I would be happy to bring forth the resolution to counter the fuel tax increase if that makes the Council more comfortable in voting for this. Just putting it all on the table. I'm going to yield. CHR. POINDEXTER: Council Member David. MS. DAVID: Thank you, Chair. I have a question on this proposed amendment, though. Maybe, Mr. Kamelamela, would you come up here, please? (Note: At this time, Corporation Counsel Joseph Kamelamela came forward to address the members of the Council.) MR. KAMELAMELA: Aloha. Joseph Kamelamela, Corp. Counsel. MS. DAVID: Thank you, Mr. Kamelamela. I'm revisiting some discussions we had during our meeting with respect to the bill that initially entertained the .50 percent, which is currently now what this body postponed till January. Now, I can see the Administration's effort to bring forth a similar bill but slightly different from what we've already postponed. And so, I'm having a difficult time trying to see the difference between this .50 that we're proposing to amend and the bill that we already postponed that we have not brought back for discussion. How is this not different from the postponement? MR. KAMELAMELA: Okay. I'll approach it, so let's put it this way. So, with the new bill that we have, there are substantial differences as we can see, not only the percentage but, also, substantially a reduction in the revenue amount because its estimate before was about 50 million, now it's 25. But there are other differences that we have here, too. We actually have a clearer purpose clause that wasn't in existence in the prior bill. So, that's one difference. The other difference that I see, too, is that they're creating a special fund that didn't exist in the other bill. So, I would just say that this is a different bill, but it's up to you to decide whether to take this on or not. But the bill is different. Page 62 Hawaii County Council-41 June 6,2018 And also too, we're looking at something substantially different. The circumstances, I think, that we're facing is something that's unprecedented. So, that's another major difference when we look at the circumstances. So, it's different. The .25 makes it substantially more different. MS. DAVID: And that's my question because can we actually—with this amendment, we'd be discussing a similar—the exact amount that we actually were considering on a different bill that's been postponed. MR. KAMELAMELA: Yeah. MS. DAVID: So, I'm having a hard time figuring out how I can support this one because it's not substantially different than the one that we postponed, as you've explained. MR. KAMELAMELA: But it is a different bill. MS. DAVID: Right, it is. It makes it different. MR. KAMELAMELA: And then,just to have an analogy, we see a lot of bills that get passed like in the Legislature. And then, get so many different versions that go through different committees and then get different things come up. But along the line, something gets, like, mooted out or not discussed along the line. MS. DAVID: Right. I'm just having a problem trying to figure out whether this is an appropriate amendment to what's before us in Bill 159 because the amount is now changed, which mirrors what we've already decided to postpone and not address until later. MR. KAMELAMELA: And I do understand. So,it's up to you as to whether you view this as being something substantially different, but it is a different bill, yeah. So, it's up to each one of you to make that independent decision. MS. DAVID: Yeah, thank you. Because, I think that's my difficulty with this proposed amendment. Okay, thanks. I yield. CHR. POINDEXTER: Council Member Eoff MS. EOFF: Mr. Kamelamela, I think we might, well at least I got a little bit confused in that back and forth because I think what Ms. David was saying was the new bill with the .25, that is substantially different than the previous bill that we postponed. But with Ms. O'Hara's proposed amendment to put it back to .5, is it still substantially different or does that make it the same as the one that ? Page 63 Hawaii County Council-41 June 6,2018 MR. KAMELAMELA: Well, I would say that this is the same bill. It's still a different bill because there's different things in there that makes it different, yeah. MS. EOFF: Even up to .5? MR. KAMELAMELA: Yes. And that's why I'm saying it's up to each one of you to make that choice. CHR. POINDEXTER: Okay. Are you yielding? MR. KAMELAMELA: Ms. O'Hara, do you have a question for me? MS. O'HARA: Yeah, I do. MR. KAMELAMELA: Okay. CHR. POINDEXTER: Council Member O'Hara. MS. O'HARA: Yeah, I just wanted to ask Mr. Kamelamela, Deanna pointed out, I think it's on page 2 at the bottom where it says "...or as allowed by any amendments...." I'm not sure that was in our first bill, was it? I don't have the other bill in front of me, I'm sorry. MR. KAMELAMELA: So, you're looking at page 2? MS. O'HARA: Mm-hmm, at the bottom. MR. KAMELAMELA: "Any balance remaining in the General Excise Tax..."? MS. O'HARA: No. Page 2 is—the last sentence is "...The moneys in this fund shall not be used for any purpose except those listed in this section, or as allowed by any amendments to Sections 46-16.8 and MR. KAMELAMELA: Oh, yeah, so that's different. MS. O'HARA: That's different. MR. KAMELAMELA: Right. MS. O'HARA: And that is substantially different than our previous bill because we were kind of stuck in a track on the previous bill, only able to do what had been expressed under the action by the Legislature that allows us to consider the opportunity of raising the GE tax. By including this language, any future action of Legislature can be applied to the fund that we create under this bill, which is also a substantial difference `cause we've Page 64 Hawaii County Council-41 June 6,2018 MR. KAMELAMELA: Yeah because it speaks about amendments. MS. O'HARA: Yeah, it speaks about amendments. So, both of those things remain substantially different than the previous bill. MR. KAMELAMELA: And that's true because if people thinking that maybe the next Legislature might broaden the purpose, not just transportation, but broaden it to, like, 60 percent, 2 percent for private and then maybe about 38 percent for other reasons. So, that's a big difference. CHR. POINDEXTER: Okay, any other discussion before we vote on this? Okay, no discussion? Okay, Council Member Eoff MS. EOFF: So, when I saw the new bill at a quarter percent, I thought, well, that's interesting to discuss because it may make some Council Members feel differently about the GE surcharge given that it's sort of a compromised amount. We have some concerns about adding burdens to people who are already struggling. And I was thinking that, at a quarter percent, maybe we would have a different discussion or an outcome given also that we're in a rock and a hard place right now. And I don't know what the best option is, but changing it now to .5 kind of brings us back to the same problem we were in, in the previous discussion, I think. But for me, anyways, it does. So, I was not leaning towards Ms. O'Hara's amendment, but I am still open to discussing the quarter percent, which I guess we can still do. But I just want to say how, and I don't know if maybe the Mayor wants to respond. MR. KIM: May I comment on that? I know this really sounds like just pushing forward, but I pushed forward from way back. The 60/40 allows up to 2 percent to be spent on private property. And I don't know how many of you are aware that Leilani Estates is private property. Kapoho, Vacationland are all private property, private roads. And now, this gives us another avenue which wasn't (inaudible) fast time changes. When this was originally introduced, that was in fact all I thought about were the big subdivisions in Puna and elsewhere, Ka`u, that could benefit. But I think something like this would be ideal for them. For a small subdivision like Leilani or the others that were affected, 100,000 or 200,000 is a huge amount for them. I'm just picking those figures out at random in regards to distribution. MS. EOFF: And how would that be used? MR. KIM: It would be the government's contribution to that. We would have to draft out all of the rules. This is new for government. And I thought about it at Page 65 Hawaii County Council-41 June 6,2018 the time, it would be only those subdivisions that are incorporated. You could draft out rules in regards to this would be a match element, etc. But the rules would have to be drafted up. MS. EOFF: And if we were to receive disaster relief from FEMA or also this MR. KIM: They would have to have the match too, and this could be used as the match. MS. EOFF: But I thought that the State was willing to provide funding as well to help us with the match. MR. KIM: The State, I think, will provide matching assistance to County government. I've never known them to really provide a match for private. This will enable the County government to provide that match to them for roadways or highways. MS. EOFF: I guess I'll listen to the other Council Members' thinking on this. But thank you. CHR. POINDEXTER: Any other Council Members? Council Member Chung. MR. CHUNG: First, with regard to the legislation that Mayor Kim was speaking of, that 60/40 percent range as well as the 2 percent for so-called private roads, the term "private roads"wasn't used in the legislation. They used something else, but that's what they meant. And the architect of that was Senator Lorraine Inouye in conjunction with Donovan Dela Cruz. We had that information before us during one of our discussions, and apparently, Mayor, you weren't here but it wasn't well accepted by this body, I mean, even knowing full well the benefits that we could enjoy by virtue of that amendment to the State legislation. So, what happened was they took it away `cause they were trying to accommodate us and it fell on deaf ears. So, they just took it away. Would they be willing to bring it back? Possibly. Okay. It's not out of the realm of possibilities, but it's not going to work this way. I can guarantee you this, it's not going to work this way: We say no to the tax increase and they say, "Well, how about this? We'll do this for you guys to entice you guys to maybe now approve the GET." It's not going to work that way. It's going to work this way: We have to approve it and then they'll consider tweaking it to our needs. I mean, I cannot guarantee that's exactly how it's going to work, but just my good sense is that's exactly how it's going to work. We cannot expect them to follow us. They did us an accommodation, we didn't accept it, they took it away. With respect to this whole half percent verse quarter percent, I'm in full support of Ms. O'Hara's amendment as I have been throughout this whole discussion. I Page 66 Hawaii County Council-41 June 6,2018 don't want to repeat myself, but I will say this: Hawaii County has approved the half percent. They needed it. Of course, this was before their big disaster, but they saw the need for it and they approved it. City and County, of course this is all derived from what happened with City and County, okay, `cause they have the rail. But Maui County, I think we pointed out these guys are flushed with money: $900 million budget. We talk about how big our budget is, this is an island that's far smaller than us in size. They have a smaller population, and they have a $900 million budget. Granted, a portion of that, maybe about 300 million of that, possiblyI really can't say off the top of my head—is devoted to CIPs. But that's real CIP monies. That's money that they're going to put into the dirt. So, here we are. We're looking at cutting a $500 million budget because we are presumably wasteful here in Hawaii County. And bear in mind when I think I asked Mayor Kenoi, when he was sitting right there where Mayor Kim is right now, whether he's in support of the half percent increase and he said yes, in no uncertain terms. He saw the need for it as well. So, we have a past administrator, head of the County, saying yes, he recommends it. We have Mayor Kim who is now begging us to do it. Kauai County has done it We go to Honolulu, we have to pay that half percent. If we go to Kauai, which we rarely do, but we have to pay their half percent for their infrastructure. But here, people come, they don't have to pay for ours. That's all I have to say. I'm in full support of this half percent increase. It think it's going to be the best thing that we can do for our island right now, particularly under the circumstances. I told you guys earlier I didn't want to do it just because of the emergency aspect of all of this, but I think more than ever we should consider this. MR. KIM: I want to thank Mr. Chung for bringing that up. Kaua`i's major point of doing this was that, at that time, approximately 85 percent of their revenues was from property tax. And at this time, we're about 75 percent. And I think we know that as a government unit to depend on a sole source is really problematic. Because anytime we need money, we've got to go right back to the same people we taxed last time. My biggest selling point on this was when I was shown that at least 25 percent will be paid by the tourist industry. CHR. POINDEXTER: Okay, Mr. Chung, are you done? MR. CHUNG: Yes. CHR. POINDEXTER: Okay. Any other discussion, for those who didn't speak yet? No? Council Member O'Hara. MS. O'HARA: The Mayor just brought up the fact that we are 75 percent dependent on property tax. And we know the events that we're experiencing Page 67 Hawaii County Council-41 June 6,2018 currently is going to reduce the valuations of property. And if we don't take any further action, and I certainly hope that we don't have to increase the rates for property tax, we're going to see reduced revenues into the future years. And I absolutely agree that we need a more diverse base for our revenues. There's other things that we can and should be doing in terms of increasing some user fees, but that doesn't close the gap. Those are small measures at best, and they don't close the large gaps that we're looking at here. This would serve the County to allow us to really look at the future and start planning for the changes that we need to be making not only in response to this event, but overall, we don't have a functional public transportation system. That's no news to anybody. There's a lot of road repairs that are well behind schedule, and I think that this money into our economy will help us to promote tourism, will help us to create a better economy for this island. And that is really what we're facing right now. We could, through our decisions today, send this County into an economic downward spiral, which I really would hate to see us do. So, I think this is a real critical point that we're at right now And I thank you for your support of this, Mr. Chung. I don't know if anybody else will support it. We may be two votes out to sea, but I appreciate the support that you've given it and I really want my fellow Council Members to think long and hard about this decision because you're impacting the future decades to come with the decision `cause this is a one-time shot, as I've mentioned before. We aren't going to be coming back to this opportunity again. And I fully agree with what Mr. Chung said about we're going to be listened to at the Legislature if we make this decision today. If we don't, they're not going to come bail us out. It doesn't work that way. So, thank you. CHR. POINDEXTER: Okay. Any other discussion? Council Member Chung. MR. CHUNG: Yeah, one more suggestion. For those of you who are on the fence and if you guys think there's any chance that the Legislature may amend this enabling legislation, why don't you just vote "yes" on it today, approve this thing and see how it goes with the Legislature. We have all the way till December to repeal it. That's a possibility. CHR. POINDEXTER: Any other discussion? Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. Like Mr. Chung and Ms. O'Hara, I have supported this bill. What I didn't like about the previous bill was there was no measurable. There was no way for us to account for how these monies were going to come in and where it was going to go. So, what I like about this proposal from the Administration is it parks it in a fund in which we would have a lot more Page 68 Hawaii County Council-41 June 6,2018 oversight, which is something I know a number of people asked for. We didn't want to give a blank check. I would want to see it in our Council fund, but that's not what we have in front of us. That being said, I still don't think we have the political will. I don't know if the quarter percent is more palatable. My concern is I don't want to give up this bill, because it establishes that fund, to hold out for the other one and hopefully add in language to the other one. So, that being said, I still want to hear from the rest of my colleagues about what they like or don't like about this bill. That's where I stand. CHR. POINDEXTER: Any other discussion? Council Member Eoff MS. EOFF: I have another question. So, if we were to approve, say, either the quarter percent or the half percent, how do we use that to balance the budget when we don't still know an accurate figure of what that amount would represent? MS. SAKO: What we do know is that there's roughly 4.9, 5 million in the General Fund that is attributable to Mass Transit that's not grant related. So, we would move that portion to this new fund, the General Excise Tax Fund, and then that would reduce expenses and we could also reduce the revenue by that same 5 million. MS. EOFF: So, that's saying that if we pass it at a quarter percent, you would just estimate that the revenue from the GE surcharge would be 5 million. MS. SAKO: Well, the revenue from the GE surcharge would be more than that, but we have to balance the General Fund, which is the one that's not balanced right now because of the reduction in real property tax. So, because there happens to be transportation-related expenses of 4.9 million in the General Fund, we would move those expenses to this new fund, which would have to happen after the fund was actually created. So,probably in July we would come in with that amendment. We have a draft if people want to see it. But we would actually come in July to do that amendment. But because we would reduce the expenses by 4.9 million, then the other side of it would be just to reduce real property tax revenue by 4.9 million and then the budget would be balanced again. MS. EOFF: And then that's a comfortable legal balanced budget because you can sort of predict that's going to work. MS. SAKO: Yes. MS. EOFF: So, the other part of the process is we do have to have a public hearing, which I think it's written down somewhere, the timeline for that. Page 69 Hawaii County Council-41 June 6,2018 MS. SAKO: Yes. MS. EOFF: And then we'd have to come back with MS. SAKO: A second reading. MS. EOFF: Of Bill 159. MS. SAKO: Yes. So, there would be a public hearing, second reading of Bill 159, and the Mayor has agreed to shorten that timeframe to enact it into law. MS. EOFF: Then we have to postpone voting on the final reading of the budget itself until that's all taken cared of? MS. SAKO: I don't think so, but—yeah, we didn't talk about that, yeah. MS. EOFF: So, that's okay to make the amendment ahead of the ? MS. SAKO: I don't know that weso, when I drafted a very rough draft of the amendment, or when we did, I have, on General Fund, reducing the revenue 4.9 million, reducing expenditures 4.9 million, and then a separate piece for the General Excise Tax Fund. And when we did the calculation, we were at the estimated and at the quarter percent. So, we put in 10 million as well as the 4.9 million to cover Mass Transit's expenditures and then added pieces from, like, the Mass Transit Master Plan and some of the things that would help them to accomplish some of the findings that were in the audit report as well. And then we had additional things. I think we included planning and design for some of the larger road projects that probably would have to wait for years until we got STIP (Statewide Transportation Improvement Program) money to do them. MR. KIM: Excuse me, but may I address Ms. Lee Loy's concern as far as Council input on where we spend the, excuse me again, money? I think when I approached you last time, we committed administratively they will work hand in hand with you in the distribution of these funds. CHR. POINDEXTER: Okay, Council Member Richards. MR. RICHARDS: Thank you, Chair. Listening to Councilwoman Lee Loy asking for input, I think we are asked of input and I think we need to give input. Right now, we're doing exactly what I feared we would be doing. We're discussing an income without actually discussing it in context with the budget. We're sort of hinting at it. I think this is a flawed way to approach this. I was supportive of a GE tax increase on the half percent if we can do it in context with concessions on real property and/or with the fuel tax. My constituency was Page 70 Hawaii County Council-41 June 6,2018 supportive of that. They were not supportive of any GE tax increase. After we talked about it, they understood what we were trying to get accomplished. It's no secret I have been arguing this for about the last 21/2 months. And before—it was in April, or no, the first part of May—it's all blurring together now we tabled the conversation on the GE tax `cause there wasn't a political will to get it done. Because of the structure and the way we have to do our budgeting, we can only touch real property between the final assessment of the previous year and the acceptance of the budget, which is about a two-month window. The fuel tax we can affect at any time. I tried to time my legislation with the real property tax in concert with the GE tax because, once again, we're not talking about the whole package. We're not talking about income stream and expenses at the same time. That's how you run a business. You've got to look at everything in context. And because of the way we are set up, we are not doing that and we are making mistakes. I get what people are saying, but I think the last thing we can do to support or help encourage the economy coming forward is to tax it again. And I don't think that's a way to do it. I understand we have expenses before us. I got it. But I think expecting people who are going to be struggling anyway in an economy that's going to be struggling anyway to go ahead and increase the taxes is the wrong direction. And I don't know exactly what the answer is. I guess we don't know what the budget is either. But the point on that is I can't see us signing even though I understand the conversation. The GE tax andMayor, I understand what you're saying but I also have to agree with you, there is a regressive portion of that tax. And it's not just the half percent. It's a half percent on a half percent. So, we have to be mindful of that. I am deeply concerned about our budget, but I said this months ago. And unfortunately, we have the perfect storm now. So, I cannot support this amendment. I'm not going to be supporting the GE tax because I don't think that's the direction. We have to start with cuts. I yield at this point. CHR. POINDEXTER: Thank you. Any other—Council Member Chung. MR. CHUNG: Yeah. I wanted to address Mr. Richards. Tim, try to keep an open mind on this thing, okay. I know you committed that you're not going to be voting for it in any way, shape, or form. But I was of like mind in terms of kind of drawing down the real property rates after the GE tax was increased. And you're right. Because of the timing, we're not able to do that. But maybe you could go back to your constituents who told you that's what they would like to see and tell them, "Look, at least for this year, give us a break. We're in dire financial straits because of a situation that is out of our control." Page 71 Hawaii County Council-41 June 6,2018 Just thinking out loud, and I'm hoping I'm right, the cost associated with this disaster will get less as time goes on because, I mean, that whole area is kind of wiped out unless it starts intruding on other populated areas, which we hope does not happen. And of course, we have to hope for the best but plan for the worst. But this is an extraordinary time. And maybe next year, if this is passed, we would have time next year to kind of adjust the real property tax rates. That's just my thought. And with regard to Ms. Eoff's question, I don't know exactly how it was answered by Deanna. But, see, if we were to approve this today, this is money that's not realized yet. It's going to come in next year. So, under that scenario, we could probably adopt, I mean, go with Option 1. `Cause whereas on the one hand with Option 1, which is to adopt Draft 2 of the Mayor's budget and deal with the shortfall next year, we wouldn't be dealing with a shortfall. We would just adjust it upwards now, after we get the money. So, we could just go ahead with the budget today. We could go with Option 2, cut expenses by 5 million. But that's going to be like pulling teeth already, today. So, this is the path of least resistance right now. I think it's the best way to go. It's the way that we can really help our community and communities throughout the island. Thanks. MR. KIM: If I may address you, Mr. Richards. Publicly, I promised you a lot of things in regards to the taxes. Obviously, who wants to raise taxes? But what I promise you is that if you look at our track record on the first eight years as Mayor, when we left we reduced taxes. And I promised to you and all of the citizens of Hawaii that is a goal. When able to, we will reduce it. We're not here just to raise money to spend. The expenditure is needed to make us a better place, and we will reduce it when the situation allows it, as we did the first eight years and we left the County in a lower tax rate than when we entered. CHR. POINDEXTER: Okay, any other discussion? Council Member Eoff MS. EOFF: I just wanted to ask Mr. Chung, possibly, if he wants to answer. Do you think that it would be, maybe it is the path of least resistance, but prudent at this point to go with that Option 1 and adopt the budget at whatever, 519 million? We know that we won't have that much in income because of the decline in the property taxes we'll collect. But then allow continued discussion on either, I guess, Bill 159 or bring back the postponed one later. But in the meantime, we find out what kinds of income we receive from State and Federal and then, of course, Finance will come to us with these changes as income is available. And then we figure out how we deal with it MR. CHUNG: Yeah, well, as I stated it, if I may Page 72 Hawaii County Council-41 June 6,2018 MS. EOFF: To stay in balance. MR. CHUNG: Yeah. As I stated before the recess, I couldn't support—without a GET increase, I cannot support Option 1. For me, it's either Option 2 or Option 4. And I think I used the word "illusory." We know intuitively that we're looking at a shortfall, and a major shortfall at that. And to adopt something based on that premise would be irresponsible in my opinion. It's only one man's opinion. MS. EOFF: Oh, okay. I misunderstood, I think, what you said before. So, you don't feel that we should go with Option 1. MR. CHUNG: We could go with Option 1 if we approve the GET because we're looking at an infusion of money, not a shortfall. MS. EOFF: Oh, I see. But we can adopt it and then later correct the actual notice. MR. CHUNG: Correct. MS. EOFF: That's what you're saying? Okay. MR. CHUNG: And the Administration can now divert funds within the context of the current budget—well, the Mayor's budget—use them for whatever they have to do and, of course, they're keeping a running tally of what's being used and where. And then, when the money comes in, they fill in the blanks. MS. EOFF: Okay, I understand. CHR. POINDEXTER: Council Member O'Hara. MS. O'HARA: I had a few clarifying questions, I guess. Well, one thing I think it's clear toDeanna, you just said that the balanced budget concept applies only to the General Fund, not to our special funds? MS. SAKO: No, it's the whole budget. But the revenue that—like real property tax impacts the General Fund. Sorry if II didn't mean to mislead anyone. But the balanced budget is the entire budget, but the real property tax is impacting our General Fund. So, that's the one where we have the 5 million short. So, we somehow need to reduce or fix something worth 5 million in the General Fund. MS. O'HARA: And that 5 million is our best estimate at this point in time. Page 73 Hawaii County Council-41 June 6,2018 MS. SAKO: Right. And we keep saying, like, we don't know. I think the thing we do know is that 5 million is probably the minimum number and I think Lisa and I feel fairly confident of that. And the part we don't know is if it's going to go higher. MS. O'HARA: Right. No, we don't know. And the special fund that we would be setting up is just another special fund for the receipt of GE tax receipts. MS. SAKO: Right. So, much like Highways Fund, Solid Waste Fund, Sewer Fund. So, the revenues would go directly there and specifically there. And then the expenditures would be appropriated there as well. So, going on once the fund's created, I would envision it being part of the budgeting process each year. MS. O'HARA: The second question I wanted clarification on is if we were to move on the quarter percent, which is different than the public hearing we had before, we would have to have another public hearing, as pointed out. MS. SAKO: Yes. MS. O'HARA: And do we have to—that was my question: Do we have to even if it's at a half percent, `cause we had a hearing on half percent,just because it's a different bill number? MS. SAKO: That one I'll yield to the County Clerk or Corporation Counsel. MS. O'HARA: Clerk? Corporation Counsel? MR. MAEDA: I think we would have to have a public hearing. MS. O'HARA: Okay. Mr. Kamelamela is shaking his head yes as well. So, that answers that question. Thank you. I just wanted the answer to that. Thank you. CHR. POINDEXTER: Any other discussion? Okay, Council Member Chung. MR. CHUNG: Thanks for letting me speak a fourth time on this amendment. But I wanted to make one more comment. I know Ms. Lee Loy has spent a lot of time at the Legislature, as has Mr. Kanuha. And I've been trying to do my part. I think, based on what, I cannot speak for them, but based on my understanding, another thing that might possibly be on the table for the Legislature if we adopt something like this, I cannot guarantee it, but they could also entertain the possibility of exempting prescription medication. Now, that is a big thing. Page 74 Hawaii County Council-41 June 6,2018 Now, some people are saying, "Well, what about food? That's an essential thing that people need." Food would take out too much of a chunk of this total. But prescription medication is a possibility, and it's easy to track because we only have so many places, right, that can dispense these things. But again, look, I would say approve it. We'll see what the Legislature does. I know this, though. I'm almost confident if we vote it down, they will do nothing. We vote it up, let's see if something happens. And whoever is against it right now can always propose a repeal if nothing is done. It would get us back to where we are anyway. So, it doesn't really matter to me. That's my last pitch. Thank you. CHR. POINDEXTER: Any other discussion? Okay. So, I'm going to give my input because I'm agreeing with Council Member Richards. And is this the time to raise taxes on people who are already struggling? And it's so difficult. And I know, Mayor, it's difficult for you, too, to do that and want to say you have to do that. So, I know it's a difficult thing for me. And even if we exempt the prescription medication, that would be great, too, but that doesn't take away the healthcare cost. Because even if you look at FQHCs (Federally Qualified Health Center), Medicare, Medicaid, uninsured population, the poor of the poor are going to all of these federally qualified health centers, and yes, they're non-profits. They don't pay into the GET, but their overhead, their equipment costs, their services, everything will increase. The cost has got to be passed on someplace, whether it be passed on to the patient or whether the insurance companies have to eat it. If the insurance companies are eating it, then we're looking at what kind of insurance rates are we going to be looking at the next time we go in for our benefits? Because, I guarantee you it's going to be raised. There's no doubt in my mind that they will have to raise the insurance costs because somebody has to pay for all of the increase: the hospital cost, everything. And I know food. Food will be so difficult, but the increase of the cost of food. The increase of housing. I mean, I've been getting calls from people, landlords, people who have bob's, even, and saying, "Please don't because we've got to pass it on somewhere." Just right now, it's such a bad time, for me, my opinion, to be taxing our people. I like the idea of just working hard withI know we have cashflow we're looking at the Governor sending some relief. We look at the 5 million that they're trying to expedite from our 2014 disaster to come back in. We're looking at the Legislature with a special session on some type of other relief. I don't know what's ahead. I don't want to gamble. Deanna, you said yourself. I mean, we said we would pass this and maybe ask the Leg. to do something. You Page 75 Hawaii County Council-41 June 6,2018 said yourself we cannot depend on them, or cannot depend on that. So, at this point, I'm sorry but I'm not supporting this communication. Okay, so we'll take the vote, I think, on the Communication 958.1, which is to put it from the .25 to the .5. Mr. Clerk, can we do a roll call on this? Vote on Motion to The motion to amend Bill 159 with the contents of Amend: Comm. 958.1 failed by the following roll call vote: Failed Ayes: Council Members Chung, Lee Loy, and O'Hara—3. Noes: Council Members David, Eoff, Kanuha, Richards, Ruggles, and Chair Poindexter—6. Absent: None. Excused: None. CHR. POINDEXTER: Okay, Communication 958.1 fails. We're back at Bill 159. Any discussion on Bill 159? Are we ready to vote on Bill 159? Council Member Ruggles? MS. RUGGLES: Thank you. This is going to be way taking it in a different direction. But just out of respect for the testifiers, I was curious. I don't know if Ms. David can answer this or if there's somebody here from the Department of Environmental Management, but I wanted to ask about the issue with the Na`alehu Wastewater Treatment Facility and what does it do with that as far as the location and was there an Environmental Impact Statement? CHR. POINDEXTER: Yeah, that is not part of Bill 159 right now. So, yeah, we had voted on that already. That was in Bill 111. MS. RUGGLES: Okay. CHR. POINDEXTER: So, I would encourage you to maybe speak with Director Kucharski. MS. RUGGLES: Okay, great. And I apologize for my confusion. CHR. POINDEXTER: No problem. Okay, I guess we're ready to take a vote onoh, Council Member Eoff MS. EOFF: So, now we're looking at Bill 159 to increase or add a GE surcharge at .25. We understand, and I think I'mI really feel in a rock and a hard place `cause I don't feel good about passing a budget that's not balanced knowing that we've lost $5 million in real property tax income. I don't believe we can cut 5 million out of this budget as far as services. I think that's not fair to anybody, really. So, even though I completely don't support raising taxes at this time and I Page 76 Hawaii County Council-41 June 6,2018 didn't support the GE previously, I voted "no,"but I feel like it's sort of a compromise at this point to look at adopting this surcharge of an additional income stream at a quarter percent. It's kind of negligible on most people's shopping bills. I don't quite understand the compounding amounts that happen when, I know down the line, there's an increase every time there's a point of sale. So by the time food gets in the grocery store, even though we're looking at a quarter percent more, maybe that's really more than that. I have a hard time understanding all of that. But I don't think that it's going to be as noticeable as, for instance, raising property taxes on people. I don't think it's going to be noticeable as closing down all of our programs. I mean, people won't have anythingI think it will just be a downhill spiral for us. So, if this actually will help us to get through this—and I don't know how my colleagues also want to look at it. I know,philosophically, I don't want to vote for it. But between a rock and a hard place right now, ideally I feel like I have to do something. The only other option for me that I felt that I could check on and that I really haven't gotten a really good answer but I like Option 1 because it's easy right now to adopt the budget as it is. It's easier than dealing with this right now. But then I don't know how you would approach coming back to us in the next few months to make it right and that we would, I think, eventually have to look at this surcharge anyway `cause I don't see MS. SAKO: So, two comments. In our example, we did try to take into account the compounding effect. So, those examples have that included. But if we adopt it as is with no revenue increases on the table, when we come back it would be the cuts like what we've been talking about `cause there wouldn't be any other option. MS. EOFF: I guess I was, maybe, hoping that you'd be able to increase revenue from the special disaster relief funds that we would be eligible for. But now that I've learned more, it seems like they have limited use. MS. SAKO: Right. We would be able to increase, like, FEMA grant, but the appropriation portion would have to be all disaster related. MS. EOFF: That's why I feel like a rock and a hard place. I don't see any other way to make up for real property tax income that we're losing, except that for right now I have to somehow justify that at a quarter percent and, given the disaster and the state that we're in, that I would have to support this, the Bill 159, that quarter percent. I guess I'm not 100 percent in, but I just wanted to express how I'm thinking right now. CHR. POINDEXTER: Okay, Council Member Ruggles. Page 77 Hawaii County Council-41 June 6,2018 MS. RUGGLES: Thank you. Regarding the .25 percent increase. So, as far as the compounding effect, I don't believe that the examples of$50 for groceries, the bill will increase 13 cents, actually demonstrates the compound effect of this increase. In fact, I believe that example minimizes the real impact. And so, I researched the consumer report "Hawai`i County." The most recent one is 2014. And the average household in Hawaii County spends about $51,000 every year; 51,700 is the average household income-14.4 percent of that is spent on food. So, that 13 cents for every $50 of groceries only represents 14 percent. If we take away 7.8 percent, which people spend on retirement and savings, everything else is subject to the General Excise Tax. So, that leaves $40,200 in GE tax expenditures. With a .25 percent increase, that will be about $100 a year for everyone. It's $200 a year if we were to do the half percent. But with the quarter percent, it's $100 a year. For people on fixed incomes, I think this is too much. And regarding making up for the property taxes, that actually is really surprising that the council member representing the district of the displaced people would say that now that we're losing that property tax income, let's tax them at the register. I don't find that acceptable. We just increased the minimum tax. We just increased the fuel tax. We just increased the property tax. All of these taxes are regressive taxes. They're impacting the poorest of the poor the most. The GE tax is the most regressive of these taxes. They should be the last tax that we look at. There's a tax scenario that I proposed, and I'll keep bringing it up. We can increase rates on assets, not basic needs that people need to survive, and provide exemptions to protect those of the low values or we can increase hotel and resort. People are saying that we want to make tourists pay more, then let's increase hotel and resort rates. If we don't want to do that, there's also this Residential Class A that Oahu did. They brought in $39 million the first year that they did this. I understand that is still in the appellate courts right now. But awaiting the result of that, that can be very revealing and present a really good opportunity for us to protect those who can least afford it. So with that, I think we should just go ahead with the current budget. The State looks promising. We don't know if we're going to get the 50 million, but chances are we will. We'll know by the end of the week. Hopefully, we'll know by two weeks if we'll have the special legislative session. And like Ms. Eoff and Ms. Poindexter pointed out, we have the ability if we are at a shortfall to call a special budget session if need be. If the State doesn't come through for us, we can address it then. I don't think now is the time to be increasing the General Excise tax, especially when we don't know what our other options are and we only have to wait a little while longer to see. With that, I'll yield. Thank you. Page 78 Hawaii County Council-41 June 6,2018 CHR. POINDEXTER: Okay, Council Member David. MS. DAVID: Thank you, Chair. That's an understatement when Ms. Eoff said that this is such a difficult decision. And for me, had it not been for this unprecedented disaster that we're looking at and facing that's affecting everything that this body does and the Administration does and it's creating so much revenue shortfalls that I can't even imagine if we're going to even recover, no matter what we do with this budget. And so, had it not been for this disaster, I think I would be going with Option 1, realistically, because I think whatever we'd have to do could come later. But I'm listening to Mr. Chung. I'm listening to all my other fellow Council Members, and it seems like there's an opportunity here that might guarantee that we get the assistance. I don't like this raising taxes, but I preferI like the 25 percent better than I do the 50 percent at this point in time. And I think this whole island has communities that are totally underserved in one way or another, whether it be Pahoa, Ka`u, Kona, South Kona. I mean, my constituents are telling me they're underserved, too, but in different degrees that we have to kind of address as we go along and make adjustments. I'm not saying that what's happening in PahoaI mean, that is so devastating. I'm trying to balance it in my mind that, because of this disaster, there is going to be funds. I'd like to wait, but I also see Mr. Chung's point, that we might be able to show some good faith in that we are trying to help our island recover in this unexpected disaster. I'm not liking where I'm leaning, but I really think that I have no option at this point given all the considerations that we—furloughs. Cutting services? Unless you look at this list that Deanna passed out to us, it's a rude awakening that the things that we might have to cut if we don't do something right now, to me it's going to have a bigger impact on the communities that we all serve if we cut services. I'm just going with what I feel, and my feeling now because of the situation, the current situation, I have to actually agree that the quarter percent I hope will help this County recover from something that I don't think is going to end soon anyway. It just depends on the will of Tutu Pele and her desire at this point in time. So, that's stuff we can't even attempt to determine. I don't know. I'd like to hear from everybody else because I'm really feeling really torn at this point. And I can see both sides very clearly, and both sides don't make me feel any better. So, I'm going to yield right now, and I'd like to hear from the rest of the Council Members. CHR. POINDEXTER: Council Member Richards. Page 79 Hawaii County Council-41 June 6,2018 MR. RICHARDS: Thank you, Chair. We talked about, several months ago, wanting to work hard and doing the hard decisions and here we are. I listened very carefully to what Councilman Chung has said, and he talked about if we don't like it in a year, we can repeal it. Well, let's flip it around the other way. How about we put a sunshine date of one year? And if we want to extend it, we can extend it. I don't know if that will work. A possibility. I don't want to support a tax increase without some sort of fiscal responsibility and cut. And so, I would entertain looking at the quarter percent if I see some sort of concession on the budget of$5 million or $3 million, but not no concession. We're at 518 right now, let's take it down to 514, 515, somewhere in there. And when we're in the middle of next year, if we have a revenue stream, we can re-appropriate and go back up. I would entertain that conversation. I'm not saying I'm going to support it. I'm trying to keep an open mind. I yield at this point. CHR. POINDEXTER: Council Member O'Hara. MS. O'HARA: Thank you, Chair. I'm going to reflect back on a comment made by one of my colleagues that I support this tax at a time when my district is the hardest hit by the current event. It is the hardest hit, and it pains me greatly to see what's happening in my district. It pains me to raise taxes, but they will not receive support from us if we don't have any money. That's a simple fact. You can talk about this is the most regressive tax ever, blah, blah, blah. Yes, that's textbook correct. But that doesn't reflect the reality of what is on the ground. I have been living this. I know you don't live in the lower Puna district. I realize you represent upper Puna, but I do. And every household that's impacted, I know almost every one of them. So, this is my community. And my community has talked to me, and they said they wanted the half percent increase before all of this started because they wanted a bus system. They wanted to provide for the neediest of the needy in our community. We cannot do that when our coffers are empty. And I wanted to ask Roxcie Waltjen to come up—she's our Director of Parks and Recreation just to give a snapshot of what is happening to our facilities. Our last administrator Billy Kenoi, our last mayor, really pushed to get the new district park on the ground in Pahoa. I know when he did so, he never envisioned it being used as a refugee camp or an evacuation center, but that is what it is now. And it's taking a lot of hits in terms of facility maintenance. Facility maintenance on the pool, facility maintenance on the community centers, facility maintenance everywhere that Parks and Rec. is trying to accommodate the evacuees. Page 80 Hawaii County Council-41 June 6,2018 So, I just wanted to ask Ms. Waltjen if she could give us a little snapshot of what that looks like and what are some of those costs `cause we haven't really put that into this picture and I think it would be important to add that. (Note: At this time, Parks and Recreation Director Roxcie Waltjen came forward to address the members of the Council.) MS. WALTJEN: Roxcie Waltjen, Director of Parks and Recreation. Right now, we have about 410 people living at the Pahoa Regional Park area. We are utilizing all facilities on that park, including the ballfields, the open fields, the parking lots, the open play court. The community center and the MPR (Multi-Purpose Room) area is where we have the information center going on every day. The senior center, we have the seniors that need a little bit more care. Now, with that being said, we have staff that is working 24-hour shifts. They are working 12-hour shifts. We are running around-the-clock. Although the Red Cross does assist us in providing help with running the shelter, it is the Parks and Recreation staff that is running it. In addition to that, we are also keeping our pool open 24 hours so that people can take a shower, okay. When we were running a center at the Kea`au Community Center, they didn't have showers. So, every single blessed day, we had our staff from Elderly Activities driving and transporting those people at the center down to the civic to take a shower. Now, this is impacting not only Kea`au, not only Puna, not only Mountain View or in the East Hawaii section. It is starting to impact people in the Kona area and in the Hamakua area. This past week, I've had to take people out of the gyms out in the Hamakua area and bring them in to help with the shelter down in Pahoa. I have had to bring in Victor from Kona—closed down the facilities down there to bring them in. So, this is a problem that we are all facing. I've taken Lindsey out of the Waimea area and the Kohala area to bring her in and help with assistance in this area. Maintenance staff is there 24 hours right now. Several times a day we've got to throw trash. Several times a day the toilets need to be cleaned, the showers need to be done. Our fields are in disrepair right now. Once this is all over, people, we going have to redo all those fields, and that is the biggest facility that we have. Not to mention we have a whole bunch of other fields that need to be redone. Not to mention we have the Kuawa field that we can't get open. And the Waikoloa fields are in disrepair also. So, as far as we not knowing what a budget is, hey, I pretty much can see it's not going to go down. It's going to get higher because it's overuse right now. It's going to start impacting whereby we're going to start closingI'm going to have Page 81 Hawaii County Council-41 June 6,2018 to start to close some of the pools because I need staff on that side of the island. Kohala pool, today I got a call from the people out there. It's starting to make a funny noise again. We put a band-aid on it. It's ready to explode. I don't know. And the summer months are coming. We need our pools. On top of that, I have community members that are complaining out in the Pahoa area because they can't use the skatepark, and they want me to move people who have been displaced by the lava away from the skatepark so they can skate. Okay? This is a really bad situation because, apparently, we also have other individuals that want me to open up the pool, which I tried to open up the pool for free swimming but Pele's hair got in it. So, three times we tried. Three times Pele's hair got in there, and we couldn't open it. Now, what's happening is the people who normally use the pool in Pahoa, I've been sending them to the Kawamoto pool. And now, some of them are going down to the Laupahoehoe pool. Also, the Honoka`a pool needs to be fixed. Without the money, I can't finish the construction there. I mean, the bottom line is we've got to take care of people first before I take care of facilities. MS. O'HARA: Thank you. Thank you, Roxcie, for that. I just wanted them to kind of get an idea of the pressure it's put on the Parks and Ree's facilities and their staff And most people who are in response on this emergency are working 12-hour shifts. Officers are coming all the way from Kona, and they get to spend two hours driving one way and two hours driving back. So, their shift is a 16-hour shift in essence, since they're doing 12 hours on the ground. This is what it looks like. And it's affecting many hundreds of our 2,700 employees. So, I don't know how we can possibly persevere and keep providing services to our public without this additional revenue. So, I'm sorry. I don't like increasing taxes. But I can also tell you that the concept of taxing only the wealthy homes and only the resorts backfires in many ways. We're told right now that 50 percent of the reservations have been canceled, even in West Hawaii. And if you think that raising the taxes on those resorts is going to improve that situation, I doubt it. It's going to make them increase their prices. And if we continue on property taxes, we also increase the cost to our renters. And we have a lot more renters in the market right now. Trust me. A lot more renters and we don't have enough residences for them to find reasonable accommodations. So, along with losing considerable property tax revenues, our costs are going to escalate. And if we're going to have anything left at the end of this of decent facilities, a brand new facility like the district park in Pahoa, in a state that we can continue to use it for what it was intended, we're going to need this money. Right now, we have no recreational activities going in the district of Puna at all. The Page 82 Hawaii County Council-41 June 6,2018 pool was closed. Pohoiki is closed. The hot pond is inaccessible, and we don't even have the skateboard park open right now. So, we've got thousands of kids in our district who have a summer with nothing to do. CHR. POINDEXTER: Okay. Council Member Ruggles. MS. RUGGLES: Thank you. Question: Can this GET tax be used for disaster relief? MS. SAKO: The tax itself right now has to be used for transportation. And the only savings to the General Fund is the fact that we can move whatever transportation costs out of that fund over to the new General Excise Tax Fund. So, the tax itself cannot be used for disaster relief. That is one of the things if the Legislature was to amend it to a 60/40 then it could be. But the way it's written right now, no MS. RUGGLES: Okay, thank you. That's why I was a little bit confused with Ms. O'Hara's response `cause I'm not sure how relevant the GE tax is to the disaster relief if it cannot actually be used. But I certainly appreciate the amount of effort that Parks and Rec. has been putting in. It's incredible, the work that you've been doing. I visited each shelter every night for the first two weeks of this hit, and everyone is really worn out and spread thin. But this GE tax, it explicitly says it can only be used for roads and mass transit, not disaster relief. So, what got me was that now people cannot pay taxes on their assets on their property anymore, that now we're asking them to pay more at the register. To me, it's not right for people who are already struggling, when 50 percent of our island is living paycheck to paycheck. We need to look at other options. We need to tax those who can actually afford it. Thank you. CHR. POINDEXTER: Council Member Chung. MR. CHUNG: I wanted to speak about the emergency aspect of this. Hopefully, it's not at the risk of losing any of the new votes that have come on board. But I think I stated beforeI'm going to vote in favor of this, of course—my reservations relate to the emergency aspect of all of this. I think I stated that. When I supported it throughout all of these discussions, it was because it was a means for us to diversify our revenue stream and it was a way to improve the quality of life for all of our residents. Most particularly the poorest of the poor, I would think, because they derive more of a benefit when we improve Mass Transit and transportation, and it allows them to get to services, to medical appointments `cause they don't have cars, the poorest of the poor. And, most importantly, to jobs. Page 83 Hawaii County Council-41 June 6,2018 But I will support it even if I don't like the idea that some people feel we have no choice but to do it right now because of the emergency aspect. But I don't really want to get into the fray of what Ms. Ruggles said towards our colleague Ms. O'Hara. But I will say this, I've seen Ms. O'Hara and I'm going to tell you right now, I haven't told you this, I've seen a big change in her over the last few weeks. Been kind of edgy, no offense. And she's changed, her personality. And I know she's being deeply affected by what's going on. She's just an example, probably, of everything that all of those people down there are having to put up with. And I've got to say, PTSD (Post-Traumatic Stress Disorder) is the first thing that comes to my mind. So, she's being affected. She's doing everything she can for her community, I know that. And I would just—last go around, Ms. Ruggles criticized me for not being respectful or hopefully we could have a more respectful discussion regarding perspectives, and that was after I called her a champion for the poor. I don't know how it devolved into me not showing respect. But I really believe that the same respect should be paid to Ms. O'Hara. She's going through a lot. She's only doing what she believes is in the best interest of both her community and the island as a whole. Thanks. CHR. POINDEXTER: Any other discussion? Council Member Eoff MS. EOFF: I just wanted to say we don't have a budget amendment in front of us, but I just wanted to be clear that although what Ms. Ruggles was concerned about was that the GE surcharge money could not be used for anything but public transportation-type issues right now, it still frees up what you told me was almost $5 million that right now is going to Public Works. MS. SAKO: Well, it's actually going to Mass Transit. MS. EOFF: Going to Mass Transit. And so, without us having to put it there, we're free to put it into the General Fund to balance the shortfall. MS. SAKO: Right. We could reduce the real property tax revenue, which is the one we'd be short on, and then reduce the Mass Transit expenses and then the General Fund would remain in balance. MS. EOFF: So, that's how that works. I think you were touching on that. But I just want to make it real clear that it's just a juggling, but it works for us to pass a balanced budget. Thank you. And it doesn't take us ahead like we had hoped or some people had hoped with the GE surcharge previously, right? But it keeps us from sinking right now. Page 84 Hawaii County Council-41 June 6,2018 MS. SAKO: It keeps us from sinking. And I think it really does give us a better position with the Legislature in asking for amendments to how we could spend that. MS. EOFF: And possibly even with increasing our share of the TAT. I mean, I've heard that tossed around, too, that we need to show—I've been in communication with some of our State legislators, and I guess there's a prevailing sense that we need to do something to help ourselves before we ask the State to continue to help us in those ways to get us going, especially with the TAT. Because, unfortunately, that would have helped us right now quite a bit had we received that. MS. SAKO: Yes, it would have. MS. EOFF: But it's not anymore what we can hope for. It's just what we're in reality now up against. And I guess when we go back to the bill, I would likeI don't really know when this would be appropriate, but I wanted to hear more about Mr. Richards' suggestions about puttingI guess what he was saying is he didn't want to support the GE surcharge without looking at somewhere to cut in the budget. Right now, I'm not really looking for services to cut. I think we have enough issues that we're going to be dealing with as it is. But I want to get all of us supportive of something as, I guess, what my goal is this evening is for us to be able to feel good about doing something that satisfies at least some of our current needs. MS. SAKO: We did submit the million dollar budget reduction that I think LRB is holding should it need to be introduced. And I believe we put Ms. David's name on it just as Finance Committee Chair, by request, obviously you guys. But just, that is available should you so choose to look at that as well. MS. EOFF: Okay, great. Thank you. CHR. POINDEXTER: Okay. Council Member Lee Loy, you had your light on? MS. LEE LOY: Thank you, Chair. I'm sitting here reflecting on something my boss always used to say: "If you can't convince them, confuse them." So, I'm actually going to try and convince a few more colleagues to come along. And it starts with something that resonated with Mr. Chung at our very first budget meeting where he said, "If we're going to raise taxes, everybody going benefit." So, everybody should vote for it because it won't go to a specific district, it'll impact the entire island, islandwide. So, from that seared memory, I want to urge my other colleagues to come along `cause it does help. But I am listening very carefully, and I actually think a sunset language does one of two things. It provides a safety net for a constituency that Page 85 Hawaii County Council-41 June 6,2018 may not necessarily support the GE, but it sends a message to our legislators that we can work together and pass this where we are actually helping ourselves. I am willing to listen to more discussion. And I actually just texted staff about refining this bill, its sunset language, so we could have a better safety net so that more people can come along. But I'm going to end with something Deanna started two weeks ago. We have to do this together, and that means "shared sacrifice." I'm going to yield. CHR. POINDEXTER: Council Member Richards. MR. RICHARDS: Thank you, Chair. Thanks, Councilwoman Lee Loy. Yes, this is going to have to be a consortium and a collaborative effort to try and get there. I'm very interested in the sunset clause, and I want to know if we can do that. I want to know if we can also, in the clause, be it reauthorized if we decide collectively as a body that it's a good thing to do. It's the first thing. I would like Finance and the Budget to meet me half way on this. We were told we have a $6 million budget shortfall. I'd like to see a $3 million cut. I would also ask the Chair that we have some latitude, so perhaps we'd table the conversation on the GE and go back and talk about the budget and then we—since we can't talk about this collectively, I think we have to pinky promise each other how we're going to vote on the next piece of legislation. I don't know how else we're going to get this done. But my point on that is that's why—and I have pushed this from the beginning—we have to do this in context with each other. And if we can get a sunset clause—and I'll entertain the concept of it being reauthorized if we choose to reauthorize. If we can get a $3 million cut and put those all together, I am very inclined to support that as a package but it's a package and not one at a time. So with that point, I'll yield. MS. SAKO: Mr. Kamelamela is prepared to answer the sunset date question. CHR. POINDEXTER: Okay. So, yeah, we'll have Mr. Kamelamela answer that then I'll go to Ms. Ruggles and then we're going to take a break. Go ahead, Mr. Kamelamela. MR. KAMELAMELA: Good afternoon. Joseph Kamelamela. Actually, I heard at least two questions. So, with regard to the sunset clause, if you do a sunset, that's it. You won't be able to bring it back. That's one point. The second point is, when I've looked at the statute many times, you go with what the authority is. There is no other authority there to sunset. They just say, "You do this." They give you a time period, and if you don't meet the time period, that's it. So, that's how these tax statutes generally work. Page 86 Hawaii County Council-41 June 6,2018 I heard this other question. This is actually time sensitive. If you try to table this now, you won't be able to bring forth and hear this bill for this round because we have to go to a public hearing. So, if you talk about it today, that's good. But if you try to table a decision on it, it's going to be too late. CHR. POINDEXTER: I think what Council Member Richards wanted to do was table this to go back and speak about the budget and then go back to that at the end of the day. MR. KAMELAMELA: Okay. CHR. POINDEXTER: I'm sure that I'm interpreting that correctly. MR. KAMELAMELA: Thanks for the clarification. CHR. POINDEXTER: Okay, Council Member Ruggles. MS. RUGGLES: Thank you. And I just wanted to respond first. I appreciate what Ms. Lee Loy said about the sunset clause. I would support that, but I would not support the GE tax in general. I also must follow up on what Mr. Chung said. I did not mean any disrespect to Ms. O'Hara. I understand we're all under a lot of pressure, and you're doing an excellent job. Personally, I'm from Puna. I was born and raised in Puna. I was raised going to that coastline that is now covered by lava. And I personally know a lot of people who do not want to be taxed more that live in that district who lost property. They do not want to be taxed more for their basic necessities that they need to survive now that they cannot pay property taxes because they don't have a house to pay property taxes on. I helped one of those people evacuate two weeks ago. Last week, I had to help them evacuate from the place that we evacuated them to. So, I'm very in touch with it. I just find it to be a disservice that we're going to now increase their costs at the register. I agree that maybe we should table this until we know what the status of the relief funds from the State will be. With that, I'll yield. Thank you. CHR. POINDEXTER: Thank you. We're going to vote on that today, but if it does pass, we'll have an opportunity or Mr. Richards says we'll have an opportunity, as well, to amend. Council Member David. MS. DAVID: Thank you, Chair. I'll be really quick. I just have a question. I know Corp. Counsel—Mr. Kamelamela, I'm sorry, could you come up? I just have one more question for clarification regarding the sunset. Thank you. Okay. By statute, this type of increase or tax increase, we cannot sunset. MR. KAMELAMELA: Right. Page 87 Hawaii County Council-41 June 6,2018 MS. DAVID: What about repeal? Does it also prevent us from repealing something or are we able to repeal this down the road? MR. KAMELAMELA: That's a good question. MS. DAVID: I mean, if it can't sunset, do we have the authority as a body to repeal? I don't know. MR. KAMELAMELA: Yeah, let me think about that one. MS. DAVID: Okay cause we're going to take a break anyway. But that was my only question. CHR. POINDEXTER: So, if you can—Council Member Chung, do you mind waiting till after the break to let you think on it and get back? When we come back, Ms. David will still have the floor. Okay, taking a brief recess. Recess: At 3:50 p.m., the Chair called for a recess. Reconvene: The meeting reconvened at 4:11 p.m. CHR. POINDEXTER: At this time, I'd like to call on Mr. Kamelamela `cause I think we may have to go into executive session. Let's hear from him so we can decide whether or not we have a motion to get into executive session. Mr. Kamelamela? MR. KAMELAMELA: Joseph Kamelamela, Corporation Counsel. I would request that we go into executive session because of certain things that we need to discuss dealing with the immunities and duties of the group. CHR. POINDEXTER: Okay. Regarding the MR. KAMELAMELA: Regarding the question dealing with repeal and sunset date. CHR. POINDEXTER: Okay. Can I entertain a motion to get into executive session? Motion to Enter into Ms. Eoff moved to enter into Executive Session in order to Executive Session: hold attorney-client privilege discussion regarding Bill 159, as authorized by Section 92-5(a)(4) of the Hawaii Revised Statutes. Seconded by Mr. Richards. CHR. POINDEXTER: Council Member Chung. Page 88 Hawaii County Council-41 June 6,2018 MR. CHUNG: Joe, explain to me why we've got to go into executive session. It's just a legal opinion, right? MR. KAMELAMELA: Yeah. It's a legal opinion. MR. CHUNG: And it exposes us to some kind of liability? MR. KAMELAMELA: Possible. MR. CHUNG: Really? MR. KAMELAMELA: Yeah. And that's why I MR. CHUNG: Or you just tell us what we can and cannot do when—that's it, right? MR. KAMELAMELA: It's not as simple as that. MR. CHUNG: Really? MR. KAMELAMELA: Yeah. MR. CHUNG: Okay. CHR. POINDEXTER: Okay. Any other discussion? Okay, all those in favor of getting into executive session say "aye." Vote on Motion to The motion to enter into Executive Session was carried by Enter into Executive the following voice vote: Session: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—9. Noes: None. Absent: None. Excused: None. Recess: At 4:13 p.m., the Chair called for a recess to go into Executive Session. Reconvene: The meeting reconvened at 4:36 p.m. CHR. POINDEXTER: Okay, we're out of executive session and reconvening our meeting. I believe it was Council Member David who had theoh, Council Member Chung had the floor then before we went into the break? Who had the floor? Okay, so we are now still on Bill 159, in discussion. Is there any Page 89 Hawaii County Council-41 June 6,2018 discussion? Are we going to be ready to vote on 159, or did you guys want to motion to table it to go and discuss more on Bill 110, Draft 2? Up to you guys. Any more discussion or motions to be made? No? We're ready to vote? Okay, Mr. Clerk—are you guys ready to vote on Bill 159? Council Member Richards. MR. RICHARDS: Okay, so I'd like to hear what Finance has to say about 110. So, I'd like to table this thing so we can come back to it. CHR. POINDEXTER: Okay. So, are you making a motion to table Bill 159? MR. RICHARDS: Yeah. Vote on Motion to Mr. Richards moved to table Bill 159. Seconded by Table: Ms. David and carried by the following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—9. Noes: None. Absent: None. Excused: None. Vote on Motion to Ms. David moved to remove Bill 110, Draft 2, as amended, Remove from Table: from the table. Seconded by Mr. Richards and carried by (Approved) the following voice vote: Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: So, before us right now is Bill 110, Draft 2, as amended. Any discussion? Council Member Richards. Motion to Amend: Mr. Richards moved to amend Bill 110, Draft 2, with the contents of Comm. 755.23. Seconded by Ms. Lee Loy. CHR. POINDEXTER: Is there any discussion on this, or do you believe that we have to go into executive ? MR. RICHARDS: I believe we have to go into executive session because I received a communication from Corporation Counsel that says "confidential." So Page 90 Hawaii County Council-41 June 6,2018 CHR. POINDEXTER: Okay, so our Clerk will help you get the motion—wait, he made the motion, so let Council Member MR. CHUNG: No. Wait. This can be said in public, right? Why? What is so confidential about this thing? CHR. POINDEXTER: Okay, can—Council Member Richards, can I put your motion on hold for a little bit? MR. RICHARDS: Absolutely. CHR. POINDEXTER: Okay. Council Member Chung. MR. CHUNG: Yeah, I don't even know why we went into executive session for the other thing, quite frankly. And I don't think we need to goI mean, I know as a matter of course, your department always puts these things, "attorney-client communication,"but this is an opinion and I don't see anything in here that really isI mean, it's just an opinion. Why do we have to go into executive session, Joe, really? No need, right? MR. KAMELAMELA: I think there's a need. And then, if you want to talk about that outside then we can decide what to do. MR. CHUNG: Okay, why don't we talk about it outside, and if there's a need to go inside then we'll do that. MR. KAMELAMELA: No, and then it's going to—that's a legal opinion. MR. CHUNG: But it has to do with the operations of the County. I'm not going to vote to go into an executive session on something like this. Too often we've been going into executive sessions for reasons that are beyond the scope of our privilege in that regard. So, I'll just vote against it. CHR. POINDEXTER: Okay. Council Member Ruggles. MS. RUGGLES: Thank you. I also don't think we need to go into executive session for this. This pertains to our powers and duties as it relates to the Charter and case law, which I believe the public should understand what our duties actually are. Because, I actually came across a very similar predicament, and I wasn't even allowed to file the amendment that I wanted to make because of this, and that's because I wasn't even aware of this Charter description describing what our duties and our abilities as Council people are. And I think the public should also know so that they have an accurate expectation of what our job is and what they would like from us. So, I would really like having this conversation in public. Page 91 Hawaii County Council-41 June 6,2018 MR. KAMELAMELA: And that's why I wrote that letter `cause that has to do with your guys' powers and duties. And that's part of the reason why I'm asking to get into it. Now, if you don't want to go into executive session, I don't have to talk about the letter. CHR. POINDEXTER: Can we just hold on for one second? I think we should read the motion in and then discuss the executive execution, whether we go in or out. Correct? MR. KAMELAMELA: Yeah. CHR. POINDEXTER: Deputy Clerkah, Mr. Clerk? Right? Okay, that would be better because then we're having the discussion on whether or not we go into executive session. I was just wanting Council Member Chung to, like—if there was a point of clarification. Go ahead and read that in and make your motion, Council Member Richards, so that we can continue discussion on whether or not we go into it. MR. RICHARDS: Okay, so where are we? CHR. POINDEXTER: Making a motion to go into executive session. MR. RICHARDS: Oh, wait, you want me to go into executive session? I thought we were talking about not going in. CHR. POINDEXTER: No. If you make the motion to go into executive session then we can discuss whether or not we should go into it because that's what we're discussing. Motion to Enter into Mr. Richards moved to enter into Executive Session in Executive Session: order to hold attorney-client privilege discussion regarding Bill 110, Draft 2, as amended, as authorized by Section 92-5(a)(4) of the Hawaii Revised Statutes. Seconded by Ms. Lee Loy. CHR. POINDEXTER: Discussion? Council Member Ruggles, you may continue. MS. RUGGLES: Thank you. There's case law and Charter law in here that I think is very valuable to discuss in public, and these are public laws. The public should know. I read this whole thing. I don't see anything in hereI mean, unless is there a specific aspect of this that would cause us to be liable simply through discussing the law that everybody should know? Page 92 Hawaii County Council-41 June 6,2018 MR. KAMELAMELA: Good afternoon. Joseph Kamelamela, Corp. Counsel. Part of the motion that was made still has to do with the powers and duties of this Council. That's why I'm asking you to go into executive session because it does. And then, in the executive session, the Council can make a decision later whether to bring this content out publicly. I'm just being careful. MS. RUGGLES: Okay. I don't think that I can support going into executive session. Thank you. CHR. POINDEXTER: Council Member Chung, then I'll go to Council Member Richards. MR. CHUNG: Yeah, but you're being careful for what end? I mean, to protect us? I think we should err on the side of transparency. I mean, if there was a reason. For example, if this was a lawsuit or something like that, yeah, by all means we'll go into an executive session. But we've talked about separation of powers before on the floor in open meetings. That's all this is about, really, a separation-of-powers issue. There might be a little bit more but nothing that would extend it into the realm of an executive session. Yeah, it deals with powers and duties, but it doesn't mean that every time we talk about the powers and duties of the Council we have to go into an executive session. That would be nonsensical in my opinion. MR. KAMELAMELA: No. And that's why it's good to have this. MR. CHUNG: Yeah. So, I'm going to be voting against it. And we have the we're the client, I guess. So, we could waive that attorney-client privilege. CHR. POINDEXTER: Council Member Richards. MR. RICHARDS: You don't need to convince me about not going into executive session. I'm with you. I do it because this piece of paper says "confidential." I don't see anything in there that we need to go against. So, I'm perfectly fine with it out on the floor. CHR. POINDEXTER: Council Member Kanuha. MR. KANUHA: Thank you, and I agree. I think we should just talk about the amendment, whether we're going to vote for it or against it. CHR. POINDEXTER: Okay, Council Member David. MS. DAVID: Yeah, I think given the explanation in this confidential communication and—but my thing is the fact that Mr. Richards' proposed amendment is public record, I think we can discuss the merits of his proposal Page 93 Hawaii County Council-41 June 6,2018 without going into executive session. I think—thank you for being cautious, but I don't see anything here that would expose us to any kind of liability if we start talking about our duties and functions. So, I think I'll just not support the executive session. CHR. POINDEXTER: Council Member MR. CHUNG: I've got one more thing to say, though. I mean, there is a possibility thatI mean, the only thing that I can think of is that Joe will tell us that the Administration will veto the bill if this measure is approved. But even under those circumstances, I still think it should be done in the open. That's the only thing that I can think of. I just wanted to bring that up. CHR. POINDEXTER: Thank you. Council Member Ruggles. MS. RUGGLES: Thank you. I just wanted to add that this is a very valuable letter(See Comm. 755.32). And I think it would be very valuable for the public to understand the contents as well because it relates to our job and what they expect of us. That's all. I'll yield. CHR. POINDEXTER: Thank you. Seeing no lights, instead of voting it down, would you like to withdraw your motion, Council Member Richards? `Cause, you probably would vote against your own motion. MR. RICHARDS: Why don't you call for a vote, and we'll vote it down. I mean, I don't care CHR. POINDEXTER: Okay. You want to withdraw it, or you want to vote for it? MR. RICHARDS: Vote on it. CHR. POINDEXTER: Okay. All those in favor of going into executive session, please say "aye." Vote on Motion to The motion to enter into Executive Session failed by the Enter into Executive following voice vote: Session: Failed Ayes: None. Noes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—9. Absent: None. Excused: None. Page 94 Hawaii County Council-41 June 6,2018 CHR. POINDEXTER: So, we are not going into executive session. We are now back to Bill 110 oh, talking about the amendment, I'm sorry. We're now on Communication 755.24. Right? MR. RICHARDS: 23. CHR. POINDEXTER: 755.23, okay. Okay, back to Council Member Richards. MR. RICHARDS: So, where are we, Clerk? Is this motion, or do I need to make this ? CHR. POINDEXTER: You're live on the floor on the communication. MR. RICHARDS: Okay, all right. Okay, explanation on this. It took a while to get there, didn't it? Talking about Mass Transit, and a year ago we were pretty much in the same position looking at Mass Transit and being very troubled by where Mass Transit was. We're a year later, and we haven't really fixed anything as of yet. My concern is that we as a County need Mass Transit, but I think Mass Transit definitely needs oversight going forward. And I retooled my amendment. There's some concerns with that. So, what I did in this situation, rather than redirect the funds, I put it in a special account that actually already existed and we just had to find it. And it was very helpful from Finance. They helped us find the account. Transfer the funds from there into that account to make sure that, as we move forward and as we see the appropriate performance of Mass Transit, we can reassign or reallocate the funds towards Mass Transit. I think all of us have heard from their constituencies, everybody's constituency, that we need Mass Transit. Mass Transit definitely needs strong oversight. All I have to do is reference the audit report. Enough said on that. And that was six months after we raised the concern in the budget hearings last year. And to have that process still in place or lack of process in place is very disturbing to me. I think there is some potential good direction for Mass Transit, but I think just hoping for a good direction is not a good fiscal management. We're in very tight fiscal times right now. I think very strong oversight is important. And it's not to take the funds away. It's just to hold them back until we see the performance there because I am not comfortable authorizing $15 million and then waiting to see if something happens. So with that, I'd like to hear from my colleagues. I yield at this point. CHR. POINDEXTER: Council Member Chung. MR. CHUNG: Yeah, thanks. I'm going to be supporting this. And it's really no reflection upon the current leadership of that department. Okay? But before I get Page 95 Hawaii County Council-41 June 6,2018 into that, let me just talk about this opinion. And I'm going to tell you why I disagree with the opinion. I'm not saying that I'm correct. We are entitled to disagree, right? But I think the fatal flaw in all of this is that it starts out by saying, "It is presumed that the Council will administer this Department Reserves account." We're not going to administer it. It's what we've talked about before. We're going to sequester it here, and it's going to be incumbent upon the Administration upon reachingI'm guessing. I haven't spoken to Mr. Richards just as you didn't. It's going to be held in an account here at the Council and upon some showing by the department that they've reached certain goals. And you can make the request for an appropriation moving those monies out from that department reserves account back into their account. That's what I'm guessing. So, it's not where we are administering or doling out the money. It would be the same as any appropriation bill,just moving it from here to there so they can administer it. And now I'm getting back to why I support it. I support it half-heartedly because I think we have a new director, new hope for that department. A lot of the problems in that department were basically because of lack of funding. They didn't have the manpower to handle cash and things just move so quickly. Hopefully, we're going to get an infusion of money soon, and we can move that department ahead. We have a new direction. But why I support this is I think it can be a model for other departments where we hold money in this, what do you call it, Department Reserves account. It would act as a means to hold departments accountable and almost have a periodic review of their operations so that they would come up, ask for money, and they would explain why they need the money and what they've done so far. It might be a little bit cumbersome, but I think it's really good from an accountability standpoint. That's why I would support it. But no offense to the Mass Transit department. They've been singled out, but I actually fully support that department. So, I don't think anything bad is going to come of this thing. I think, actually, something good can come of it. CHR. POINDEXTER: All right. Now, who was first? Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. I, too, am going to be supporting this amendment because I truly believe in program measurables. And that's what this mechanism does. It provides us with an opportunity to work with that department, look at deliverables and how to measure them. And again, if they're off-track, we can get them back on track. I'd like to see that happen with a few other departments that we tend to wait a long time for permits, like the Building Department. But that's for another day. Page 96 Hawaii County Council-41 June 6,2018 So, I am going to be supporting this `cause I think it gives this body the opportunity to provide those program measurables and then, in return, get the deliverable that our constituents are asking for. And this is one department that impacts every district. Those are my thoughts and my reasons. So, thank you. CHR. POINDEXTER: Okay, Council Member O'Hara. MS. O'HARA: Thank you, Chair. I just will have some questions of our Finance Director regarding implementation of this department reserves and how would that impact operations of the Mass Transit department. Because, I understand there's a lot of time lag in putting things before Council. We have to have things agendized almost three weeks in advance of the meeting, blah, blah. And then, I don't know what the rules of engagement will be for this department reserves. Is this going to have to come through us through ordinance change or resolution? How are we going to release funds from here? I'm unclear as to how that's going to affect operational timing, which is often very critical, with a department that's rolling buses down the road. So, I agree that we need oversight. I totally agree. The audit was not good. As we all saw, it was quite terrible. But we do have a different direction now with a plan and a new coordinator that wasn't reflected in that audit. So, I want to know how do you perceive this working, and how will it affect the operations directly. Thank you. MS. SAKO: So, one of the concerns is that whenever we have, like, a contract or a purchase order, we have to be able to certify funds. So, apparently up to the first half of the funds, we're okay. But if there's a contract that requires the whole amount, let's say like for insurance, then there wouldn't be adequate funding in that object hold. So, we would have a difficult time certifying the funds or actually purchasing the insurance for the buses. So operationally, it's going toI do have that concern of how we're going to actually be able to accomplish that. In addition, I'm hearing you guys talk about, like, measurables and goals and performance measures. And I thinkI know we spoke about the audit report and accomplishing those things, but other than that, I'm not sure what you guys had in mind. So, I guess I'm not sure what they would have to achieve in order to come in with the amendment. And I think Administration is supposed to initiate budget amendments. So, I guess we'd come in and say, "We think we did A, B, C. We want the money." But it's mostly the contracts that might get initiated in the early part of the fiscal year, not having adequate funds to certify. MS. O'HARA: Go ahead, Mr. Kamelamela. Page 97 Hawaii County Council-41 June 6,2018 MR. KAMELAMELA: Thank you very much. Before I speak, thank you to the Council Members so that I can speak openly, the letter that I provided to you, saying that each one of you basically said that I can talk in the open. So, I want to thank you. Now, this is aI do understand the frustrations that the Council Members feel but we, too, have been frustrated seeing the bus system deteriorate before our eyes even before we started. And what was good is that we had the Mass Transit study that was done by SSFM (SSFM International, Inc.) and then we had the audit, which I think we're kind of moving in the right direction. Now, the letter. I'm going to publish it later on the Corp. Counsel's office website so people can see it, so that they can read it and understand why there's most likely going to be a violation of separation clause. What we need to look at, aside from the Charter, is also the Code. In the Code, the Mass Transit system was created. And it's very clear in the Code itself as to who gets to supervise and administer. It's very clear that it's the Managing Director that has a certain kind of administrative authority. And so, with regards to day-to-day operations, it's the Managing Director and the Mayor who has that authority. Council, although it tries to say that it's going to park money in the Council just flies in the face of our Charter. Our Charter is very clear. It makes a clear and distinct explanation as to what is the authority of the legislative branch and the Mayor. The legislative branch should be doing the policymaking. They're not there to have the Mayor go to the Council and say, "Give me more money," because that's not the way it's supposed to be. You don't see the Mayor trying to park money in his place and say, "Council, come to me if you want to do this." No. The way that it operates is that when either the Council or the Administration have monies to run it separate, hey, that's fine. So, if this account was used for something that is totally within the control and authority of the Council, I'd say fine. And so, what are some of the things that the Council has? Well, they have monies for staff they handle themselves. When there's contingency relief funds, that's their money. The Mayor can't touch it once it's set. But what is being done here flies in the face of our basic Charter. That's our constitution. And so, to me, if the Council wants to do something, create policies. You can create policies based on the Mass Transit study. I mean, that's the way to do it because you are the policymakers. You set what are the deliverables based on the study. What else can the Council do? The Council can take all of this money and put it in any account that he has now that he has control of that only relates to the legislative branch. They can do that, too. What else can the Council do? They can ask for a report from Mass Transit. That's it. The cases that I cite, they're all Hawaii cases. Those cases that I cite reflect how government runs. No matter Page 98 Hawaii County Council-41 June 6,2018 how you try to characterize parking the money, it is administrating Mass Transit. It's dealing with the operations. Is there somebody in the Council that can really operate Mass Transit? Is there a body there that actually can do the administration? I don't know of any. That money's parked. It's parked. And the title of the reserve is "Department Reserves." Now, if that was "County Council Reserves," I have no problem. But this is "Department." And I note it in the letter that there is a certain system that's been setup on the budgeting already. The Mayor gives the budget, does an amendment, and that's it. Council, they have their role in the budget. I haven't seen a situation like this. It's like creating whatever you call it. It's a special account, but that if you're going to create a special account that's going to help to operate the Mass Transit, that's wrong. And yes, Aaron, that is going to be my recommendation to the Mayor, to veto it. Thank you. CHR. POINDEXTER: Thank you. Now—okay, you still have the floor. Go ahead. MS. O'HARA: Yeah, and I just wanted to do some follow up. I wasn't really expecting Mr. Kamelamela to give that opinion with my question, but thank you for that. I don't entirely agree with all of your arguments, but I see your point. And thank you for clarifying your position. And I'm not really sure this is the best approach. I have problems with the term "Department Reserves"because it basically says we're keeping this money in reserve for any and all asks and uses, not just Mass Transit. And that does begin to push our hand into the direct operational aspect of the County. So, I can understand what you're saying here. I'm not sure that I'm going to be supporting this. I like the idea in terms of accountability. It's something we need to build into our budgets much more. Just having periodic reviews, even annual reviews, programmatic reviews don't seem to be sufficient to keep the efficiency level where I would like to see it and where I think all of us in the room would like to see it. So, I'm not sure that this is the mechanism for gaining that, and I don't know that I'll be supporting it but it is an interesting discussion. And I also want to say that, in terms of moving Mass Transit where it needs to go, I don't think this is going to help. I really don't. So, it doesn't help to incentivize it in anyway. It just makes it more cumbersome to operate. So, I'm sorry, I'm not really sure that I'll be supporting this. CHR. POINDEXTER: Thank you. Council Member Ruggles, you had your light on. Do you still want to ? MS. RUGGLES: Thank you. I just want to request that everyone please excuse me for the next few sentences and for the time I spend on this. I just wanted to Page 99 Hawaii County Council-41 June 6,2018 say that I believe I owe Mr. Richards an apology for earlier. I actually thought we were voting on this amendment, which I had stated the last time it came up that I couldn't support it though I appreciated it. So, I misread the agenda, and I take responsibility for that and I apologize. I do actually support your CIP. So yeah, sorry, and thank you for giving me that time. I'm looking at the Charter here and also an email that I had from Deanna from an inquiry that I made because I wanted to explore options for moving positions around. I actually explored every vacancy, every funded vacant position that I could find in the budget to see if we can reallocate resources for more police for Puna. And later, when I was discussing with Deanna, she shared with me that it might not be within my power or duty to be able to do that. She said that she had Corp. Counsel look at the issue, and they said that it would violate the Charter if I were to take funds from one position within the Police Department and move it to another district. She said I wasn't able to do that. I looked at the Charter, Section 5.13, powers, duties, and functions. But for the executive branch, it says to make transfers between agencies or between subdivisions of agencies to applicable civil service regulations. And in Section 3.1, the primary function of the Council says it should be setting policy and legislation. But I still have questions becauseI mean, clearly the executive branch says make transfers between the agencies, between subdivisions of agencies, but it doesn't say that the Council cannot do this explicitly. So, I was wondering if you could elaborate on that, Mr. Kamelamela. MR. KAMELAMELA: I always get a similar question because sometimes people say, "Oh, it's not prohibited." And so, I explain to people when we look at the Charter, it outlines what our authority is. So, I've always advised the Mayor and the department employees that if the authority is not set out under the Charter or the County Code, you're not allowed to do it. And so, if you want to do something else, then you move to change the Charter. But the way that this Charter was created back in 1968, it recognizes that the executive branch and the legislative branch, they serve different duties and obligations because one makes the policy, which is critical. And so, whatever policy is set out, we're going to follow it as best as we can. And so, we have also the legislative branch having the authority to pass the budget. So, that's the authority that the legislative branch has, and that's why it's critical. Like, I'll just sit here and say, "Well, they're doing the job. They have the authority to do that." Just because something here is not mentioned doesn't mean that you can do it. Page 100 Hawaii County Council-41 June 6,2018 MS. RUGGLES: Yes. Okay, so I hear what you're saying, that if it's not set in the Charter, that we cannot do it. MR. KAMELAMELA: Yeah. MS. RUGGLES: Is that written in the Charter? MR. KAMELAMELA: Well, there's case law. And so, there's the three cases that I've cited in my letter that set out the principles for a separation of powers. So, that's what I'm relying on when I'm talking with respect to this. That's what I'm relying on. That's the body of the law. So, this Charter is our County constitution. And the case law will help us not only understand it better, but it kind of gives you an outline as to some of the areas that are purely within the legislative body, like the power to confirm. That's with you. The power to settle. That's with you. The Mayor gets to veto. That's his power. The Mayor gets to appoint. Okay? And the Mayor gets to do the day-by-day operations. MS. RUGGLES: Yeah, I understand. Thank you. In regards to the amendment, I just wanted to say that we spent a lot of resources on this Mass Transit Master Plan, and I, personally, don't think we should take away from the resources. They have a new administration. I support and appreciate the intent to restore contingency funds, and I cannot support it at the expense of Mass Transit's capacity to improve. So, I'll yield with that. Thank you. CHR. POINDEXTER: Thank you. Council Member David. MS. DAVID: Thank you, Chair. And I have a question for Director Sako. During our normal process when the Administration comes before us to ask for authority for funding from one account, those transfers come all from the departments' accounts, right? MS. SAKO: Yeah. The Charter says that the Mayor has the authority to transfer funds within a department. If it goes between departments then we bring forward a budget amendment to the Council. MS. DAVID: To the Council. And that's our standard process, right, where we would have some sort of oversight on certain transfers? MS. SAKO: Yes. MS. DAVID: Okay. So, the fact that, I think if I'm reading this correctly—could I ask Mr. Richards a question? Page 101 Hawaii County Council-41 June 6,2018 CHR. POINDEXTER: Sure, Ms. David. Councilman Richards? MS. DAVID: Okay. So, creates a new account for the Office of the County Clerk. So, that would mean we would hold all this money in our budget. MR. RICHARDS: Yeah. I discussed this with Finance, and Director Deanna is the one that identified the number and the name of the account for us. And we would hold this. I have no problem. I'm not married to this name. If we need to call it Mass Transit Reserve or something, whatever. We just used the name that was suggested by Director Deanna. And the intent is, well, I'll get into that later `cause you asked the question. MS. DAVID: Okay, all right. Thank you. And so, Deanna, how would we request, I mean, I'm having a hard time understanding the process that if we establish an account under our legislative branch, what would be the process of transferring and approving, basically, transfers? MS. SAKO: Right. We wouldn't be able to just do a transfer form because it's sitting in the Clerk's Office or Council to Transit. So, we'd have to bring forward a budget amendment. What I'm still a little confused about is what the thought process was on the milestones. I mean, I know we did talk about the audit, and I'm not saying there aren't things that they can definitely achieve and improve on, I'm just not sure. I haven't heard the discussion on what those milestones would be. But I still just have the concerns about being able to certify funds for, like, yearlong contracts. MS. DAVID: That answers my question. At this point, I'm pretty uncomfortable with this sort of new situation because, in my mind, I like the idea but I just can't see how the process would actually function. So for now, I'm going to yield and listen to the rest of my colleagues. CHR. POINDEXTER: Council Member Richards. MR. RICHARDS: Thank you, Chair. Let me explain a little bit. When I first brought this forth, I had tried to transfer funds out and questions were raised about salary and wages. And I was very sensitive to that. So, if you notice in here, there's not a touching of salary and wages. There's nothing there for all the reasons that were articulated, and I got that part. What I did was I went through this. This is only on the General Fund side. This doesn't touch the Highway Fund. And the reason I did that is to save on paperwork and headaches to try and get that done. The intent is for oversight. If anybody can tell me that their constituency is happy with the management of Mass Transit, please raise your hand. I'm not seeing any. The point is I've heard loud and clear from my constituency, actually from some of yours as well, that Page 102 Hawaii County Council-41 June 6,2018 they want oversight of Mass Transit—no reflection on current management. But we've had a year, and we saw no changes. We have a very un-positive audit report from Mass Transit. We're talking about a lot of money. And going forward, the idea here is that 50 percent of the funds would be held in a reserve account, again not touching salaries and wages, which means six months' operation is fine going forward. It is there. And as far as metrics coming forward, Councilwoman Lee Loy may have mentioned this before, this gives an opportunity for the Mass Transit committee, Ms. Ruggles, to work out the details as far as coming up with the metrics going forward. I agree, we don't do day-to-day management. I have no intention to do micro- management, but we do set policy. And one of the policies we set is a $500 million budget that we are held accountable by our constituency. And if we don't take a step towards trying to be fiscally responsibleI want Mass Transit to work. In Districts 7, 8, 9-primarily 8, 9—we have a lot of people that catch mass transit to go to work. The problem is they are very frustrated with mass transit because sometimes it doesn't show, it's late, whatever the case is going to be. We haven't fixed those problems. We've all been in office this term now for 18 months, something like that, and the problem there is still the problem. It hasn't shifted. We need to take a bold firm step to go forward. Like I said, I'm not married into the account name. If we need to make a change, I'm fine with that. The intention is to have oversight and help them move forward so we can get the successful Mass Transit that we need. That is my intention on this. And I'm sorry if I'm a little bit outside the box, but you guys have been with me a year and a half, and you know I usually am standing outside the box. So, with that, I will yield and continue the conversation. Thank you. CHR. POINDEXTER: Council Member Chung, you had your light on before. Are you still wanting to add no? Any other discussion on this? Okay, Council Member Kanuha. MR. KANUHA: Thank you. And mahalo, Tim, for bringing this up. I do think it's a really good conversation to have. And I actually appreciate the intent that you're trying to show in this amendment, but I also appreciate the communication given to us by Corp. Counsel and the issues that it may pose. And really what, Deanna, you spoke about earlier, how are we going to manage this thing, I want to make sure that we can have that oversight. I mean, that's our duty as Council Members to have oversight over the functions of this County. So, I take that to heart. But I want to know how we get this money into this fund, how are we going to manage it? How is the process going to go? That's what I want to know. `Cause right now, it's kind of we're putting a ton of money into something that we Page 103 Hawaii County Council-41 June 6,2018 haven't really done before. So, I want to really make sure that we know what we're doing in that aspect. I know we do. We'll figure it out, but I need some sense and guidance of how this is all going to play out. So, I appreciate the intent. I actually like a lot of what you're trying to do, but how is it all going to play out? CHR. POINDEXTER: Okay, Council Member Chung. MR. CHUNG: Yeah, how simple. You just—when they need the money, they come with some kind of appropriation bill or whatever. I don't know what the proper term would be for a transfer of those funds out of one account and back into Mass Transit. And again, this is not necessarily only for Mass Transit because it's a department reserve. I kind of find it odd that Joe would say it would be more appropriate if it was the Council reserves. It flies in the face of the whole argument that's proffered by this opinion. And to even say that you're going to recommend to tell the Mayor to veto—something as manini as this. This is an accountability measure, really. And Iagain, I apologize to Sole. She's the one who's kind of being singled out. But I think all of you know how I feel about the Mass Transit department. I support it fully, and that's why—that was the single reason why I supported the GET. I think it should be expanded. But again, I reiterate I think this is a good model going forward for other departments. I object to our Corp. Counsel's opinion. I believe it is incorrect. It is not violative of a separation of powers `cause we're not managing it. We're just holding it. And that's the most important function that we have as a Council, as a policymaking body, is to handle the budget. But in reference to Mr. Kanuha's question, yeah, it's a very simple process. I don't see any problems whatsoever. So, I support it again. CHR. POINDEXTER: Council Member Ruggles. MS. RUGGLES: Thank you. I just wanted to ask, are there any conditions on this department reserve for releasing the money that you have in mind, Mr. Richards? CHR. POINDEXTER: Yeah, go ahead, Council Member Richards. MR. RICHARDS: My intention is to make Mass Transit successful. In order for it to be successful, we have to change the paradigm, make the whole shift different. I have great hopes for Sole that she's going to get this done. Do I have any ideas that it'll be extremely difficult to release the funds? No, if we're making progress. Page 104 Hawaii County Council-41 June 6,2018 We have 18 functional buses right now. Sole, is that number still accurate? Actually, excuse me a second. CHR. POINDEXTER: Okay. So, do you want to call her up. MR. RICHARDS: Yeah. CHR. POINDEXTER: Yeah, please come up to the table. And, Mr. Kamelamela, if you could take a backseat. Thank you. And then if you could identify your name for the record. (Note: At this time, Mass Transit Administrator Maria "Sole" Aranguiz came forward to address the members of the Council.) MS. ARANGUIZ: Good afternoon. Sole Aranguiz, Mass Transit Administrator. MR. RICHARDS: Okay, a question I had for you, Sole. We had, I think it was, 18 buses functional. What is today's count? What do we have? MS. ARANGUIZ: It's up to date because I get a daily report now. We have 13 vehicles in service. That means that the rest to operate are being contracted out in order to maintain our current demands. MR. RICHARDS: Okay. I know we have 50 buses, 48, whatever that is, total. And we can come up with the metrics. You chair the Mass Transit coming up with any kind of metrics. I'm very flexible to that. What I'm trying to do is get oversight. Because once again, and I've said this before and I think most people in the Council have said, we could double the taxes that we charge if people actually believed that they were getting good value for what we are doing. They don't believe that right now. So, we have to strive for confidence in our people, and it starts with oversight, transparency, and responsibility. And so, whatever kind of thing, I'm very open to hearing whatever type of deal. We have 13 functioning right now? MS. ARANGUIZ: We have 13 functional, and the other ones are getting fixed within the next two weeks. I mean, I have various schedules for each one of those that are in the maintenance area right now. MR. RICHARDS: Okay, and this gives an opportunity, I believe this is Councilwoman Lee Loy's idea, that this gives an opportunity for the chair of that committee to have direct working relationships with the different departments that we may or may not be interacting with to help get things lined up. It's not about micro-managing. It's coming up with the metrics that we would establish. And again, I'm very flexible on that. But if we don't have a showable response to what we're trying to get accomplished, we're going to be spending a lot of Page 105 Hawaii County Council-41 June 6,2018 money. And we are in a very fiscally tight year coming up. And the better we can show management and oversight of that management, I think we're going to be far more successful. So, I have no preconceived idea. I'm not thinking "Unless she has 40 buses running, the money doesn't come out." That's not what I'm thinking. What I'm saying is we've got to make progress forward, and I don't think we're any different today than we were a year ago when we were talking about this. Does that answer the question? MS. RUGGLES: Yes, it does. Thank you. I'd just like to hear the rest of my colleagues' thoughts on this. I actually misread it at first. I thought it was putting it into our CRF (Contingency Relief Funds). But now I see it does something different, which I'm beginning to understand more of the purpose here and see its potential value. Thank you. CHR. POINDEXTER: Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. So, everybody knows my position on this. I want to get back to Joe's information, and I think he's actually downplaying what the legislative branch's duties and authorities are. Yes, it is policymaking, but it is the budget. That two together, the policymaking and the ability to control the budget, is our primary task. So, that's leading into what we know is an agency that needs a lot of help. I actually see this as our duty to ensure that the public's money is being spent appropriately. And that's why, when we had the audit along with the SSFM report, I tasked Ms. Ruggles with being that liaison between the department and this body. Because, if they were doing great, you could provide us that feedback and then we could deliver more resources to them. But if they weren't, you could deliver that message, too, to help and we would help you get them back on track. So again, I support this. And from what I can see, it's a total of 1.8 million. There's still a lot of money in that department. And forecasting there might be a GE, there might be an infusion of money in that department, and we can accelerate that department even quicker. So, those are my thoughts. I, again, will be supporting this. I think it goes a long way to tell our constituency we're being prudent with their money. Thank you. CHR. POINDEXTER: Okay, anybody else? MS. SAKO: Can I just ask a question,just in all fairness to Transit or any other department, when might we expect to receive the metrics? The measurables? CHR. POINDEXTER: Council Member Chung. Page 106 Hawaii County Council-41 June 6,2018 MR. CHUNG: Yeah. I mean, I'm not going to answer that question, of course, but I've got to say when you brought it up, though, Deanna, I thought to myself, "That's a legitimate concern." Right? I mean, what kind of standards is the Mass Transit department going to be held to, to be able to get those monies released? But really, I mean, you guys know us. We're not here to jam you guys up. It's because of the concerns that have been raised of your department prior to you being there, that gave rise to your department being singled out. But it could have been something like this. Just across the board, 10 percent or 15 percent or 20 percent, off the board from all the departments to sequester them in that Department Reserves account and have each of the departments come up periodically. And what it amounts to, really, is instead of having a departmental review once a year at the beginning of the budget cycle, it's going to be almost twice a year. And it's not real painful, right, the departmental reviews? So, you'll probably come up, Sole, and say, "Look, this is what we've been doing so far to improve our operations. I know there were some concerns about this and this, and this is what we've done to improve it but now we need the money." Okay? And it's probably something like that, right, Mr. Richards? No more than that. But I cannot answer what those metrics are going to be. But I think it's going to be real fluid and very relaxed. That's what I think. That's how I feel about it. CHR. POINDEXTER: Council Member Ruggles. MS. RUGGLES: Thank you. I just wanted to ask Mass Transit Administrator what your thoughts are on this and how you think this would impact the department. MS. ARANGUIZ: Well, to be honest, I was—my expectation was that prior to moving forward with this approach, we would have had the opportunity probably to have a more one-on-one or probably a separate discussion to go over what was expected, how we can come up to some sort of deliverables, performance targets based on what is in the master plan, what the fund is going to provide, how close it's aligned to that. Because, my concern was like how can we measure success? How are we going to set those standards? Is it going to be reasonable? `Cause if you give me 500 and you expect to deliver based on, like, 2 million, obviously it's going to be off track. So, I want something to be fair for both. Of course, you have your obligations and to make sure that you are providing enough oversight of the activities. But for my part, I would like to have the opportunity, really, to go over, probably not in the same as this venue, and kind of like identify what are the most critical aspects of the master plan, what is expected for this upcoming fiscal year. Page 107 Hawaii County Council-41 June 6,2018 Moving forward, how it aligns with the level of funding that we are receiving and how we can kind of like set, I would say, measurable performance that we would be accountable for but at the same time are realistic. So, that is my concern as an administrator. Moving forward, I have no issue. You know we already are preparing with SSFM a metrics. We offer that we will meet with you and then go over all of the elements of this for the cash handling aspects and how we are authorizing each one of those. So, I think that is a way of showing you that, yes, we are concerned. We want to perform. We have a commitment not only to you, not only to the County, but for the entire community as well, to make sure that they know that we are fully aware of our responsibility and the expectations. MS. RUGGLES: Do you feel that this amendment would be—that having this departmental reserve would help with that process? MS. ARANGUIZ: Well, to be honest, I felt that prior to coming with this sort of approach, we would have come with something like I offer to you. Like they do in every transit agency, you have a monthly report in which you talk about the finances, the issues, the ridership, the good and the bad and the ugly, and what the agency's doing every day to achieve the goals that we have set for the agency, for the quarter, for the entire fiscal year, and how it aligns with the master plan. So, that would have been a more, I would say, not coming just from one part of this conversation. But I guess that would have been probably something that we would have been able to accomplish regardless because that's the way it's done in other places. But moving forward, we are open to any sort of suggestions that would help you out. Obviously, make sure that we are doing what we are expected to, but at the same time, give us the opportunity really to show that we are on board, that we understand the magnitude of the issue, that we are moving forward, that we are hopefully leaving behind all of those issues that we have experienced in the past. And I understand the frustration because it has been a different—lack of funding or lack of direction. But it's a different story moving forward. So, I would like at least to have the opportunity to show that there is a very strong commitment from our part and from my team. MS. RUGGLES: It doesn't quite answer my question, but I'll yield. I've asked twice already. CHR. POINDEXTER: Council Member David. MS. DAVID: Thank you, Chair. Director, can youso, what I'm hearing you say is, are you asking for an opportunity, given the audit report and the things that Page 108 Hawaii County Council-41 June 6,2018 were identified in that report, and are you actually asking for an opportunity to see to cure those things and to address those things before something like this would be implemented? MS. ARANGUIZ: That's what I would have expected, to have probably a prior discussion to go over, let's say, "This is the issue. You're dealing with this situation. We have expectations about A, B, and C, based on the master plan as well as the daily responsibilities of your agency. How can we work together in achieving that while we maintain the oversight and you make us aware of the progress to date through reports, regular reports?" That would have been the way I used to report on the activities in previous areas of what I had been responsible for. Because, there are set targets and expectations and you are expected to report back on those. And if you are not achieving those, to have a good justification why. It could be that the funds didn't come. But at least to have the level of discussion in which both parties are involved and it doesn't come fully as an expectation. I was really concerned, to be honest, because I didn't know what is expected, how it's going to be measured, and if it's going to be based on some—what really do you want to see. And I understand right now we don't have a matrix in place, but I would like to—if there's a matrix that needs to come just like we prepared for the cash handling, something that at least probably we can have some that will concurrence us to what needs to be provided, how regularly. And there's a form through Councilwoman Ruggles. We can do it through her, or we can prepare something that, on a quarterly or monthly basis, we'd provide to you so you can see how we are getting to those levels and to those targets so you can measure. Are we getting a"C" or are we getting an "A"? So, something like that so you can probably make your decision based on that. MS. DAVID: Okay, thank you. I'm thinking that this might be a little premature at this time because I think, given the fact that Mass Transit, I know that was a really bad report on Mass Transit. And I understand where my colleague is coming from on the oversight for funding, and that's where I have some difficulties in not knowing whether I will support this or not because I do consider that we do have a separation of powers. I appreciate Corp. Counsel's letter. And another thing, I think I heard that, I think, Ms. Ruggles, as Chair of the Mass Transit, would be the person to be in charge of this process. So, is that what I ? Yeah. And I'd like to know if Ms. Ruggles would be willing, at this point in time, to determine whether she'd be ready to release the money to you if that was going to be her role. And then that still raises some questions of—not thinking outside the box but actually kind of respecting what I feel is the process. As Page 109 Hawaii County Council-41 June 6,2018 legislators, I guess unless we establish a process or change the Charter that will allow something like this, I probably would support it that way. But that's just my thoughts right now. Thank you. CHR. POINDEXTER: Council Member Richards. MR. RICHARDS: Thank you, Chair. Councilwoman David, I can answer a little bit of that for you. Director, as I understood, I thought I heard you say you're all in, your team's all in, you want to make a difference. And what I thought I heard you say was you'd be willing to give this a shot. And don't answer that one quite yet. If we look at the numbers 1.8 million on a $15 million budget, that's about 11 percent. So, you actually have almost 90 percent of your budget going forward. With that 90 percent budget, working with the—realizing that what we're talking about is we want to be sure that we are fiscally happy with the management. We were very concerned a year ago. We are still not there. In deference to you, you are fresh. The problems, you've inherited a lot of problems. I've got it. Now in deference to us, when you hit the ground, I think it was February, we didn't see you. We never met you. We didn't know anything about you. And we reached out to you to find out what was going on. And so, building that relationship of understanding so we can go forward and work together again, I don't think anybody on the Council is speaking against Mass Transit. We know we desperately need it. We have very long distances. What we're not happy with is the management of and the oversight of up to this point and putting in a metric. If you are willing to work with it, I am very confident that we are willing to work with it, which also shows the oversight that I strongly believe we need to get this thing going. Because if you show us and you talk about a monthly report, I'm a little concerned that that's a little too often. You'd spend a lot of time writing reports, and I don't think that's a good use of your time. Quarterly reports, different story. I think that would make more sense. If we had that going forward, commitment from you, you'll have a commitment from me to work with you to make sure we get that funding coming forward to address things. And you talk about a metric. I don't know. I don't think that it's all that difficult. I agree with Councilman Chung as far as the transfer. That's no issue. I don't believe there's any problem of the funds being in the departmental fund as outlined because, if this is a model that works, this is our responsibility. We are responsible for this $500 million budget. And so, I think there's a way to actually use this as a model going forward. And if we have a commitment from you to make it work, you have a commitment from me and I'm willing to bet you have a commitment from everybody else on the Council to make this thing work. With that, I'll yield. Page 110 Hawaii County Council-41 June 6,2018 CHR. POINDEXTER: I have Council Member Chung. MR. CHUNG: You wanted to say something first? MR. KAMELAMELA: If the Chair would allow me to do so, yes. CHR. POINDEXTER: Is everybody okay with that? Yes, go ahead. MR. KAMELAMELA: Yeah, I do appreciate the discussions made by everyone here. A part of what I feel is that there's an unfairness here to be doing this because she is new. There were things that had been discovered that needs to be corrected. And I do understand where Council Member Richards is coming from, too. But violating the Charter is not a small thing. It doesn't matter if all you're talking about is 10 percent of her budget. I mean, $1.8 million may be small to some people, but that's not the point here. It's how this fund is being created to operate. Because, I keep on hearing that word from many Council Members. This fund is to operate. And the way the Charter is written, administration, operation is with Executive Department. And that's one point. The second point that I wanted to make is that Director Sako had made it clear that this could impact contracts. Because if you look at something that I had written on page 4, the Charter, Section 10.11, requires funding to be in place prior to contracting. That means when a contract goes out, all of the money has to be there. Now, if this 10 percent is sitting on the side and there's not enough money to be contracted, that's a problem too. Nowhere is it in the Charter that I have read that this type of putting aside is allowed. Nowhere. And, yes, there is an argument it doesn't prohibit, but as I stated before, it's what authority does this Council have in trying to operate Mass Transit? And the answer to that isn't that I'm trying to downplay the legislative role, no. I am saying there is a balance that had been struck by the people who created this Charter back in 1968. We should abide by it. It is not a small thing. Thank you. CHR. POINDEXTER: Thank you. I'm going to ask that we take a short break. They have to change the tapes right now. Right now it's ending, the tape. So, thank you. A short recess. Recess: At 5:50 p.m., the Chair called for a recess. Reconvene: The meeting reconvened at 5:57 p.m. CHR. POINDEXTER: And right now, hopefully Council Member Chung will remember what he was going to say. Council Member Chung. Page 111 Hawaii County Council-41 June 6,2018 MR. CHUNG: First of all, I will say this, and I kind of whispered it to Deanna outside, I don't really care whether this thing passes or not. I really don't, because on the one hand, you know, we're kind of picking on Mass Transit—and unlike Mr. Richards, I don't really have that much of a hard on for this department. I mean, not under the present administration or anything like that. CHR. POINDEXTER: He said heart, h-e-a-r-t. MR. CHUNG: Yeah, yeah. Thank you, thank you. But I really don't. I don't have that level of frustration, because I believe they've been hamstrung by a lack of funding, I really do. So whether this thing passes, doesn't pass, I'm not vigorously fighting for it, but I like the model. This may go contrary to some other very intelligent people in the audience, but I like the model. It could be used in other context, I believe. So what I'm saying here is even if you vote against itI'm going to be voting for it though, of course but even if one of you votes against it, don't let it be on the opinion of the Corp. Counsel. No offense to Joe. No, because that means this would be an improper exercise of the Council's power. I believe that it is a proper exercise of the Council's power. Now when Joe was up here, he kept on using the word "poperate." All of you use the word "operate," I never heard anybody use the word "operate" out of anyone here. The only person who might have come close to saying it was Ms. David when she suggested that Ms. Ruggles could decide when to release it or something like that. Now I object to that, because I'm not going to defer to one person. I can listen to the Chairperson's opinion and I'll take that into consideration but no, one person will not decide when those moneys would be released. That would be violative of the County Charter, in my opinion. But this is not unlike, for example I kind of whispered to someone else, Budget Stabilization Fund, Rainy Day Fund. You have a pot of money, Administration comes to the Council to get approval for the release of those funds. I know Joe was saying it's somewhere in the Council's budget. That makes no difference. I thought it was very funny, you know, when he said nowhere is it allowed, and then of course he answered his own question with what I would have said, well nowhere is it disallowed. This is something that can be done, and it makes for responsible government, I believe. But whether you guys want to go and pick on Mass Transit, that's a secondary issue. But just don't let your "no"vote be a validation of the concept that we don't have the authority to do it. That's all I ask. Thank you. CHR. POINDEXTER: Thank you. Council Member O'Hara. Pretty soon we're going to have to stop taking a lot of the rounds, but I'll entertain one more round. Go ahead, Council Member O'Hara. Page 112 Hawaii County Council-41 June 6,2018 MS. O'HARA: I actually haven't spoken much on this, but I agree with what Mr. Chung just said. I like the model. I just am not sure that it's the right time and the right agency to use this model. I would like to see this model used for instance to a set aside without—let's just say theoretically that we were in a budget where we had a little bit of surplus. This would be the time to put it aside and then divvy out to departments as needed. I still see the way this is put together as a bit punitive, and there is reason to go in that direction given the information that we have acquired in the last year. Because of the audit and because we know changes are desperately needed. But I don't think this is going to achieve what we're hoping to achieve. That's just my gut feeling here. I may be wrong, and if this passes I hope it proves me wrong. But I'm not really inclined to support it 100 percent. So I'm just not 100 percent convinced. Thank you. CHR. POINDEXTER: Thank you. Council Member Ruggles. MS. RUGGLES: Thank you. I just wanted to say that, first of all, in our last discussion with Mass Transit I did reach out to Sole and she is very willing to provide the periodic updates. Now we're just discussing how often these updates should be, these reports to the Council. My idea was once every two months and I love your feedback on that as far as what you would think is acceptable, but I'm willing to facilitate whatever might provide a little more accountability and transparency with their progress for us and for the public. So the question is, should we create an account and then require Mass Transit to come to us and communicate and appeal to us their specific needs for the progress that they need to make? For their financial needs, then that measurable goal. Then from there, we discuss it—this is what I'm assuming would happen—and then decide if we want to release the moneys for that as it aligns with what we see fit. I see this as good, because it creates good communication and the relationship and the information that we can then pass on to our constituents who rely on the system, but then I'm also concerned because it creates another level of bureaucracy that Mass Transit now must come to us. It slows down the progress because the amount of time that it takes for us to do an appropriation and the deadlines to make the agendas, it slows things down by months. So I'm concerned that this will slow down their progress. And honestly, it just seems a bit demoralizing to the department. And there's questions of whether or not this is even legal. So I would prefer to just move forward with the two-month report if you guys are comfortable with that. If you think it's moreI think it's better to have it more frequently or less frequent. Just, yeah, let me know and I'm open. With that, I'll yield. Thank you. Page 113 Hawaii County Council-41 June 6,2018 CHR. POINDEXTER: Thank you. So I'll give my input now since we've been all that rounds. I like the idea that Council Member Richards came up with about wanting to have some type of safety net for the public because it's the public money. So I thank him for bringing that forward. My concern is like what Council Member Ruggles had said about the timely manner for bringing things before the Council. Because even if you waive it through Committee, you've still got to go two readings. You know, it's difficult, and if something needs to be rushed through, it's so difficult having it come, getting agendized, even if you waive it, and coming through you still need the two readings. So it's not based on what the letter I'm not basing that decision on the letter, on our duties or what that letter was, although I respect that. Definitely do respect that. I agree that we should have maybe a quarterly budget to actual report. I don't think too that we have enough time in this period of the budget and what we've got to focus on to get through this whole disaster, you know, with what's happening with the lava and what we need to focus on, to put together a good matrix. I would ask that maybe the chair of that committee, Chair Ruggles on that committee, would start looking at what would a matrix kind of look like. Maybe if we get those reports quarterly and it's still—and the Council feels well they're still not moving in a good direction, then we look at next year, we have a solid matrix, we know what we're doing, we're up for it, and we can I think at that point, we could deal with it better. Instead of rushing into something and trying to work out the—you know, it's like getting a new i-phone and they've still got to work out all the bugs, and you keep trying to go back in and fix stuff So I like the idea. I also see some of the pros and cons, some of the difficulties with doing it that way. But like I said, if we start now to look at—write a policy that will require them to submit a report, or even if Council Member Richards, you would like to limit the amount that gets expended or whatever. I don't know, we do that with settlements. If they've got to come to us if it's above a certain amount, that they're required to come to the Council to get approval. You know, something like that, and that's through policy. So anyway, at this time, I'm not supporting it. I think it's a good idea for us to start looking into how do we develop a good matrix if we decide to go in this direction. So are we ready to vote on the communication, or does somebody still want to say something? Are you guys ready to vote on the communication? Okay. So we are voting on Communication 755.23. Maybe we should do a roll call vote. Go ahead. Page 114 Hawaii County Council-41 June 6,2018 Vote on Motion The motion to amend Bill 110, Draft 2, with the contents of to Amend: Comm. 755.23 failed by the following roll call vote: Failed Ayes: Council Members Chung, Kanuha, Lee Loy, and Richards —4. Noes: Council Members David, Eoff, O'Hara, Ruggles and Chair Poindexter—5. Absent: None. Excused: None. (Ms. O'Hara voted"kanalua," then "no.") CHR. POINDEXTER: Communication 755.23 fails. Now we're back to the main bill, Bill 110, Draft 2. Discussion on the main bill? Are we going to be ready to vote on the budget, or—go ahead, Council Member Chung. MR. CHUNG: I cannot vote on the budget until I know what's going to happen with the GET. CHR. POINDEXTER: Well, that's the tricky part. So Mr. Clerk, can you just explain that todayI mean, I know it's like the cart before the horse, but can you go ahead and explain that to the Council? How this works and how we have to pass the budget and put this until tomorrow, or MR. HENRICKS: I think so, but I believe Mr. Chung just meant today's vote on the GE, not ultimately. CHR. POINDEXTER: No, he meant on the budget. MR. CHUNG: What? We have the GET that's on the table, right? MR. HENRICKS: I don't think he meant like he wouldn't vote on the budget until the GE is finally approved. I think he just meant for today's discussion and vote. MR. CHUNG: Right. CHR. POINDEXTER: Oh, okay. So do you guys want to go back to—put this on the table, go back and vote on the GET, then come back on the Bill 110, Draft 2? MR. CHUNG: Well, I would prefer that. CHR. POINDEXTER: Okay, so do you want to make a motion table Bill 110, Draft 2, as amended? Page 115 Hawaii County Council-41 June 6,2018 MR. RICHARDS: Can we have discussion about this? CHR. POINDEXTER: Yeah, can I have a second first, then we can go into discussion if you to table or not. MR. RICHARDS: Okay sure, I'll second it. Motion to Table: Mr. Chung moved to table Bill 110, Draft 2, as amended. Seconded by Mr. Richards. MR. HENRICKS: I'm sorry, I was incorrect earlier. Laying on the table is just a procedural matter. So you guys have got to figure out if you want to do that first, take the vote on that, then you do it, but it's not something to be discussed or debated, whether you want to lay it on the table. Withdraw Motion CHR. POINDEXTER: Oh yeah, okay. So we'll discuss it before—so Council to Table: Member Chung, can you just withdraw your motion and then we'll just talk about it. MR. CHUNG: Okay. CHR. POINDEXTER: Okay, Council Member Richards. MR. RICHARDS: Listening to Council Member Chung, he can't vote on the budget until he hears what's going on with the GE. I can't vote on the GE until I hear what's going on with the budget. Oh, we're in that cycle again. Amazing. CHR. POINDEXTER: Yeah. Okay and that's the tricky part. Because with the GET, we're going to have to go to a public hearing. If that passes we go public hearing. Go ahead. MR. HENRICKS: I think that's understood, that we cannot adopt a GE Tax today. CHR. POINDEXTER: Right. So that's the situation. So that's what we're trying to explain to the public, who's going to be watching, on why we cannot. So I hear you, too. So Council Member Chung. MR. CHUNG: Well, let's just vote on the budget then. CHR. POINDEXTER: Okay, so how do you want to proceed? Do you want to lay this on the table and go back and vote on the Bill 159 and come back to this, or do you want to just vote on this and then we go to Bill 159. Page 116 Hawaii County Council-41 June 6,2018 MR. CHUNG: I said I cannot vote on this budget until I know what's happening with 159. CHR. POINDEXTER: Okay, so let's go ahead and take your motion again. Motion to table Bill 110, Draft 2. Vote on Motion Mr. Chung moved to table Bill 110, Draft 2, as amended. to Table: Seconded by Mr. Richards and carried by the following (Approved) voice vote: Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: Okay, so we have tabled Bill 110, Draft 2. Can I have a motion to take Bill 159 off the table? Vote to Remove Ms. Eoff moved to remove Bill 159 from the table. Bill 159 Seconded by Mr. Kanuha and carried by the following from Table: voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: Okay, Bill 159 is now on the table. Any discussion? Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. In an effort to try and make that rock in a hard place a little more comfortable, when we discussed this, I heard some level of palatable action. So what I'd like to do is amend Bill 159 with Communication 958.2. Motion to Amend: Ms. Lee Loy moved to amend Bill 159 with the contents of Comm. 958.2. Seconded by Ms. David. CHR. POINDEXTER: Council Member Lee Loy. Page 117 Hawaii County Council-41 June 6,2018 MS. LEE LOY: Thank you, Chair. Basically what this amendment does is provide that sunset provision and safety net, and you'll find that in Section 4 of the termination of the surcharge. "Unless otherwise extended by ordinance, this article will be repealed on December 31, 2020,provided that this general excise and use tax surcharge shall not extend beyond December 31, 2030 . . . "pursuant to the act and the session law. So I kind of mashed all of that together. It's pretty self-explanatory and it's my hope that, you know, this is going to be a benefit, and benefit a lot of districts. So I yield. CHR. POINDEXTER: Okay, any discussion on the communication? Council Member David first. MS. DAVID: Thank you, Chair. Ms. Lee Loy, I really want to thank you for taking the lead on this, and adding that language. Because I think that was a concern that given the circumstances that we were trying to digest all day, I think this is a comfortable—yes. So I really appreciate your effort to find a solution in this very difficult situation. That's all. I yield. CHR. POINDEXTER: Council Member Chung. MR. CHUNG: You know, I speak against this amendment. But I see the beauty of it. It looks like it has solidified one vote on the part of Ms. David. And in as much as it was brought up by Mr. Richards, you know, he's probably going to support it as well. So I know what Ms. Lee Loy was trying to do, was get a broader base of support. But I'm speaking against this thing and I will say this: it goes against my principles of what the GET increase was intended to be. Because what is happening now, it's looking like this was a stopgap measure to address the emergency situation. I've said on many occasions that I didn't want it to be that way. So in gaining two votes, it might have lost one vote on this side. But you know, at least it's better than nothing, I guess. Thank you. CHR. POINDEXTER: Okay, Council Member Eoff. MS. EOFF: Thank you. So the way it reads now, that means we would not be in the program after 2020? Because I thought Mr. Kamelamela told us that if we set this date, then we would not be able to bring it back, even though the State had allowed us 2030 as an end date. I think we would not be able to reinstate it, I think is what he said. Is that right? MS. LEE LOY: Okay, so I might share my thoughts a little differently. My understanding with the act is it provided counties the authority to adopt this GE Page 118 Hawaii County Council-41 June 6,2018 surcharge, which would be provided to us till 2030. This allows us to take it at a quarter percent and yes, would end at 2020 or whatever date we want to explore. But we could still utilize it if we brought back another ordinance. MS. EOFF: That's a procedural question that I am wanting to be clear on. I mean, I would like it if that were true. CHR. POINDEXTER: Mr. Kamelamela, are you thinking? MS. EOFF: He's thinking. CHR. POINDEXTER: Oh, okay. MS. EOFF: Well, Mr. Chung's concern would be CHR. POINDEXTER: I thought you were looking down rolling—thinking, okay. Go ahead. MR. KAMELAMELA: I'm just going to repeat what I think this thing does. But once this happens, I don't think we can bring it back. So like if wesorry, I didn't get to see the entire thing, but the way that this reads is that—this says it's going to be repealed, and that's it. We won't be able to extend it. Yeah, I mean I didn't see the final language, sorry. I can see the other part, you know, "shall not be extended beyond December 31, 2030." I mean, I understand that part. This puts an end date, and once that's done, that's it. I don't think you can bring another ordinance. MS. EOFF: I don't think that was—or was that your understanding? That if you used the language that's in here in your amendment, after 2020 we wouldn't be able to reinstate it. CHR. POINDEXTER: Okay, so that was just Council Member Eoff speaking. I'm just going for the minutes that's why. Because Council Member Lee Loy has the floor. MS. LEE LOY: If I might answer? CHR. POINDEXTER: Yes. MS. LEE LOY: Yes, you're absolutely correct. It would stop at 2020. But my understanding is the way I wrote this language is if we brought another ordinance forward before the 2020 date, we could extend it, we could go up to the half percent. Again, my understanding of the act is that it gave the counties taxing authority up to the .5. But you know Page 119 Hawaii County Council-41 June 6,2018 MS. EOFF: So is ? CHR. POINDEXTER: Hang on one second, because it's a conversation goingI think the conversation should be between Council Member Lee Loy getting that information. You know, I apologize. I don't have the act. Does anybody have the act, because I think it gave us two dates on there that we can—they gave us two extensions to do an ordinance. MR. KAMELAMELA: I don't know if everybody has the act. CHR. POINDEXTER: Yeah, do you guys have a copy of the act? So can we get that? I have it upstairs too, but yeah, can we get copies made for everybody so we can look at the act that we're talking about? While we're looking at that, Council Member Lee Loy, is it okay if I take a couple of people and come back to you? MS. LEE LOY: Yeah, but it's open for discussion. I honestly don't want to spend too much time on this one. The real elephant in the room is that budget, and we have to go get that. So I really don't want to spend too much time on this. So I yield. CHR. POINDEXTER: Okay. Council Member Eoff, did you ? MS. EOFF: No, I just wanted to be clear on that point, but I'll yield. CHR. POINDEXTER: Okay, Council Member Chung. MR. CHUNG: I again disagree with Mr. Kamelamela. Even if this is contrary to my position. I think it's a valid proviso in there, the repealing of it in 2020, because what can happen is prior to that sunset date, the Council can amend that ordinance by taking out that provision. They can take out that whole sunset provision. That would be the only way, though, because once it's repealed unless the legislature gives some kind of authorization, it's gone. It is gone. I also think that we cannot adjust the amounts, the percentages. I'm in agreement with Joe on that, but I just think it's not a fatal flaw as worded by Ms. Lee Loy. I just think it flies in the face of how I view the benefits of this measure. I never wanted it to be an emergency type of thing. So I have to be consistent with what I've stated on many other occasions. Thank you. CHR. POINDEXTER: Okay, any other discussion? That's my concern too, because I thought we couldn't bring another ordinance unless we removed that. I think it can be removed at any time if any of you are in office and remember that, or that depends too, because things change. Page 120 Hawaii County Council-41 June 6,2018 Okay, with that being said, are you guys ready for the vote, and no need to get the act? But you still want the act? Okay. So all those in favor of amending Bill 159 with the contents of Communication 958.2 say "aye." Okay, before I say the vote, I think we need to do a roll call. I'm going to wait till Council Member Eileen comes back because she did go to make copies of the act. So out of fairness to her, before I do the roll call vote, can I take just a brief recess and run in there and tell her. Okay, let me take a brief recess. Recess: At 6:26 p.m. the Chair called for a recess. Reconvene: The meeting reconvened at 6:27 p.m. CHR. POINDEXTER: Okay, calling this meeting back to order. So we're going to take a roll call vote on Communication 958.2. Mr. Clerk. Vote on Amendment: The motion to amend Bill 159 with the contents of (Approved) Comm. 958.2 was carried by the following roll call vote: Ayes: Council Members David, Eoff, Kanuha, Lee Loy, Richards, and Chair Poindexter—6. Noes: Council Members Chung, O'Hara, and Ruggles —3. Absent: None. Excused: None. CHR. POINDEXTER: Okay, so Bill 159 is amended with the contents of Communication 958.2. So now we're back to the main bill as amended. Any discussion or are we all pau and ready to vote? Okay, so I have a discussion point. Because I didn't talk all the whole time, and I was being patient and following the rules. I'm going to be voting "no" on it at this time. I will wait, if it does pass, for the public hearing and to go back to my community. Because I have been in contact with communication associations and talking about this. Then come back to seeI see the pros and cons of it, and I see how it could help. I'm hoping to feel a lot better about it after the public hearing. At this time though, I will definitely vote "no." So thank you. Mr. Clerk, roll call please. Oh, hang on one second. We have a latecomer. Council Member David. MS. DAVID: I just have a procedural question for our Clerk. Can you explain then when we vote on this right now, this roll call vote, and then the bill itself will go before a public hearing? This has to go before a public hearing? Page 121 Hawaii County Council-41 June 6,2018 MR. HENRICKS: Only if there is five votes. Then you will have a public hearing, we'll plan it for the evening of the 18'h, presuming this will be on second and final reading on the 19'h. MS. DAVID: On the 19'h. Okay, I just wanted to make that clear, because then at least everybody knows this goes to public hearing. Thank you very much. CHR. POINDEXTER: Okay, thank you. Thank you for making that clear. Thank you for catching it. So Mr. Clerk, roll call please. MR. CHUNG: I have one comment. CHR. POINDEXTER: Oh. Oh, okay. Council Member Chung. MR. CHUNG: I'm going to be voting in favor of this, okay? Even if I said I wasn't going to. No, and it's just for the purpose of this, because I've got to vote first. I don't know how the votes are going to fall. I want this thing to at least, at the very least, advance this towards a public hearing. But I'm letting everybody know in all probability when it goes for a final vote, I'm going to be voting "no." I just wanted to explain so that you guys don't think, "Hey what the hell, he said he's going to vote no, and " CHR. POINDEXTER: Okay anybody before I take the vote? Okay, Mr. Clerk, roll call. Vote on Bill 159 The motion to pass Bill 159, as amended, on first reading Draft 2): failed by the following roll call vote: Failed Ayes: Council Members Chung, David, Eoff, and Lee Loy—4. Noes: Council Members Kanuha, O'Hara, Richards, Ruggles, and Chair Poindexter—5. Absent: None. Excused: None. CHR. POINDEXTER: Okay, so Bill 159 fails. Okay, so now, can I have a motion to take Bill 110, Draft 2, off the table, please? Page 122 Hawaii County Council-41 June 6,2018 Vote to Remove Ms. David moved to remove Bill 110, Draft 2, as amended, Bill 110, Draft 2, off the table. Seconded by Mr. Richards and carried by the from Table: following voice vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: Bill 110, Draft 2, as amended is before us. Is there any more discussion on Bill 110, Draft 2? Council Member Richards. MR. RICHARDS: Director? (Note: At this time Finance Director Deanna Sako came forward to address the members of the Council.) MR. RICHARDS: So now that we don't have a GE before us, where are we with the budget? MS. SAKO: We're still short $5 million. We gave you four options. MR. RICHARDS: Okay, that's all I needed to know. Thank you. CHR. POINDEXTER: Okay, any other discussion? Seeing or hearing none, Mr. Clerk, we're going to do a roll call. Oh, we're voting on Bill 110, Draft 2. Are we ready to vote on that? As amended. That Bill 110, Draft 2. So we're voting on the budget right now. Let me just say, whether it—and correct me if I'm wrong, Mr. Clerk. If the vote is all noes, the budget is that Bill 110, Draft 2. Am I correct? MR. HENRICKS: There's one difference. It's now as amended. So if you approve this then it goes in with the HTA (Hawai`i Tourism Authority) account that was created today to receive grants. If you don't, then it is what it started before that. What it was before that. CHR. POINDEXTER: Okay, so it's important to know that if we vote"no,"then the HTA stuff is going to be out. MR. HENRICKS: And Ms. Sako can correct me. That's the only difference between the votes. Page 123 Hawaii County Council-41 June 6,2018 MS. SAKO: Yeah, that's the only difference. If the vote is no, we would come in to amend in July. CHR. POINDEXTER: So they would come in to amend in July, the budget, with the HTA amount at that time. So Mr. Clerk. MR. HENRICKS: So just to be clear, that's because of the Charter provision that says that if the Council fails to adopt the budget before June 30'h, then the Mayor's budget as amended takes effect on July 1. That's what we're talking about, correct? CHR. POINDEXTER: Yes. So we'll go back to just the Bill 110, Draft 2, without any of the amendments. Then like Deanna stated, they'll come back to put that HTA money back in. So if you vote"yes," it will go through as amended. They don't have to come back with the HTA stuff If they're voting "no" they will come back with the HTA stuff regardless that Bill 110, Draft 2, either amended or un-amended. Is everybody okay and understands that, or need more clarification? We're okay? Okay, Mr. Clerk, roll call please. Council Member Kanuha. MR. KANUHA: Sorry. Somebody took my folder that has everything, but yeah, and it had all the other sheets. All the different proposals, to keep it as is or the different options. I mean, one of the options to keep it as is said that it was irresponsible to do so. I'm looking for that option to reduce to what the actual budget is. "Cons of Option 1: Representing a known wrong revenue amount in a budget is irresponsible. Council would not be addressing growing budget shortfall in Fiscal Year 2018-2019." Deanna, do we have the communication that had the reduction? Did you guys propose that, or ? MS. SAKO: So we did do a communication that reduced it by $1 million, and I believe LRB (Legislative Research Branch) has it. We did pass out the list of what $7 million looks like. We passed out the Miscellaneous Contract Services explanation. You know, we provided for options. We provided the GET bill, we have you a change in real property tax revenues. We've kind of done what we can. CHR KANUHA: No, I appreciate. Because somebody took my folder that had all that so I can'tI would have brought that up earlier, but we were on GET. CHR. POINDEXTER: Do we need to take a short recess to look at our papers? I'm going to take a short recess. Recess: At 6:38 p.m. the Chair called for a recess. Page 124 Hawaii County Council-41 June 6,2018 Reconvene: The meeting reconvened at 6:59 p.m. CHR. POINDEXTER: Okay, calling this meeting back to order. We are still on Bill 110, Draft 2, and Council Member Kanuha, you have the floor. Or are you yielding at this time? MR. KANUHA: Thank you. Well just currently, we're atI know I'm repeating a lot of what has already been said, but I just want to make sure I know exactly what's going to happen after this vote, or what we're going to do. So I want to make sure the process isI understand the process, and I can make that informed decision. What is going to happen, what are the consequences, reality, of what we're voting on now? CHR. POINDEXTER: So we have the options before us. The only way—you know, right now it looks like we would have to do cuts maybe. But if other options would come back to the table, that means we would have to do some type of motion to reconsider on a passed vote that we did today. That would bring another option back to the table. Like if they're talking about GET or whatever. Do you want to hear from other Council Members? MR. KANUHA: I'll yield. CHR. POINDEXTER: Okay. Council Member Richards. MR. RICHARDS: Thank you, Chair. First of all, Deanna, coming back around again to reiterate a little bit about what Councilman Kanuha was talking about. We're, as it stands right now, $5 million projected deficit over our expenditures, correct? MS. SAKO: Correct. MR. RICHARDS: Okay. So with that, and this—forgive me Council but this is the situation we get into when we're not considering packages rather than looking at revenue and then expenses. So because of that, I do want to ask for a reconsideration of the GE. However, I need to have concessions in this budget as we're talking about. Right not we're at $518, and I want to hear around a $3 million cut. What can we do to do that? I realize you guys have had sharp pencils until they go dull, but can we get to $515 or thereabouts? MS. SAKO: Well, I don't think we can get to $515, but let me explain why before everybody, you know, starts attacking me here. But in the budget, the increase in real property taxes from March to May was $1.7 million. I'm just trying to flip to that page so I'm saying everything correctly. Then some of the other increases in the General Fund were grant-type revenues;program income and grants. Then some of the increase also came from some of our other Page 125 Hawaii County Council-41 June 6,2018 subsidized funds, including Housing which had additional money for like the Housing Choice Voucher Program, things like that. So some of the increases were like grant related I guess I'm trying to say. So why we are willing to get us back down closer to the $515, I think $3 million might be difficult especially given with the challenges that we're experiences with the lava. You know, we've not had a disaster of this magnitude before, or this type of disaster. Even though we've had lava come, it was slow moving, and we could kind of track. And this is just a very different type. It's just much more massive. So in terms of trying to stay consistent with the March, I believe we can cut out $1.7 from the budget. One million is already—somebody has it, is available already, and we could work on maybe getting another million out of the budget to try to meet you half way. MR. RICHARDS: So that would make us from $518 to $516, rough numbers? MS. SAKO: Yes, rough numbers. MR. RICHARDS: So you're looking at about a $2 million cut that you can do? So if I ask forClerk, if I ask for a reconsideration of the vote on 159, what is the process? CHR. POINDEXTER: Make a motion to reconsider. MR. RICHARDS: Do I make a motion to—do I have to—do we have to table 110 while we're doing that? MR. HENRICKS: No, that's not necessary. CHR. POINDEXTER: No need. MR. RICHARDS: Okay, so now we're not seeing anything. We still have to vote on this budget. So we have to have hard numbers. But we're going to get at least $2? MS. SAKO: Yes, we'll get you to $2. MR. RICHARDS: Can we go to $2.5? MS. SAKO: No. MR. RICHARDS: Two and a quarter? Page 126 Hawaii County Council-41 June 6,2018 MS. SAKO: We'll do our best. MR. RICHARDS: I'm an auctioneer. MS. SAKO: I know. So was my father. MR. RICHARDS: Okay, kidding aside here. So at least $2, and I'd like to look towards $2.5. If I have your word, then I'd like to ask for reconsideration of Bill 159. So I make the motion. Motion to Reconsider: Mr. Richards moved to reconsider the vote taken on Bill 159, Draft 2, as amended. Seconded by Mr. Kanuha. CHR. POINDEXTER: Is there discussion? MR. RICHARDS: I'll make a quick comment. CHR. POINDEXTER: Council Member Richards. MR. RICHARDS: Thank you. Just, this is in an effort to get—and I think I'm borrowing Councilman Chung's thought process. This is to allow this to get it to public hearing. Whether or not we have a third vote to come back on this, and I'm not committing to a positive vote on the third vote. What I'm doing is trying to work on our budget given our extraordinary circumstances. So I'm willing to support this to get it to public hearing with no commitment for the final vote. I yield. CHR. POINDEXTER: Okay, Council Member O'Hara. MS. O'HARA: I see that as a futile exercise because we've already gone to public hearing once, and things have changed a lot. This is true. I don't know that the public is really going to change their opinions of what they expressed previously. And the opinions change as a result of the circumstances. I just did not support Bill 159 with the amendment that was added through Communication 958.2. I would personally like to see a reconsideration of that vote, because I don'tI must agree with Mr. Chung. If we're going to go down this road of adopting the GE tax, it should not be for the purpose of emergency only. Making it one year only more or less does that. There's also questions about the legality of this phrase as added and whether it could be turned over in subsequent measures later. Next year, whenever. I'm uncomfortable with that. So the reason I didn't support this was because of the amendment, and I would like to ask the maker of the amendment if she would consider reconsideration since I wasn't in the prevailing side. Page 127 Hawaii County Council-41 June 6,2018 CHR. POINDEXTER: So Mr. Clerk, can I ask you a procedural question? Now that we are at 159 as amended MR. HENRICKS: We're actually not there yet. CHR. POINDEXTER: Okay. MR. HENRICKS: We're on the motion to reconsider that vote. CHR. POINDEXTER: Okay, so do we want to move into voting on that reconsideration first and then moving forward on discussion? Because then we'll be back to 159 as amended. You can still vote it down, it can still be voted down or up. But we have that opportunity still. Before we start talking about that other amendment that Council Member Sue Lee Loy made to 159, is everybody ready to vote on the reconsideration to put Bill 159 as amended back on the table? Any discussion? So can we take a vote? All those in favor ofoh, okay. Let's do a roll call vote, thank you. For the motion to reconsider to bring Bill 159, as amended, back to the table. Go ahead. Council Member David. MS. DAVID: Thank you. Before we vote on that, I'd really like to hear the introducer's opinion on the recon. Whether we MR. RICHARDS: Mine was the reconsideration. MS. DAVID: Oh, you're doing the motion to recon? I'm sorry. MR. RICHARDS: Yeah, do you want me to explain a little further? MS. DAVID: No, I just wanted to hear Ms. Lee Loy, but she's not making the motion. Okay, got it. Sorry. CHR. POINDEXTER: Okay, Council Member Eoff. MS. EOFF: My question would be is this the process to also re-look at the amendment? CHR. POINDEXTER: Yes. Once we get 159 as amended back on the table, then we could possibly look at a reconsideration for that amendment. So is that clear, kind of? Okay, so Mr. Clerk, roll call on the motion to reconsider to get Bill 159, as amended, back on the table. Page 128 Hawaii County Council-41 June 6,2018 Vote on Motion The motion to reconsider the vote taken on Bill 159, as to Reconsider: amended, was carried by the following roll call vote: (Approved) Ayes: Council Members Chung, David, Eoff, Kanuha, Lee Loy, O'Hara, Richards, and Chair Poindexter—8. Noes: Council Member Ruggles — 1. Absent: None. Excused: None. CHR. POINDEXTER: Okay, so Bill 159, as amended, is on the floor at this time. Council Member Richards. MR. RICHARDS: Yeah, since I asked for the reconsideration, I think it's pretty self-evident why we're back here. Our budget's in a very tough way. For the reconsideration, we have a working $2 million, targeting $2.5. Given that perspective, like I said, I'm very willing to support this to get it to public hearing because we are in a tough situation and I recognize that. I'm not going to reiterate my thought process that I've been bringing forth, because it's all out the window right now. But I will support this going forward, to get it to public hearing. I will support it, as amended. I don't think I will support it if we change the amendment. I'll yield at this point. CHR. POINDEXTER: Okay. So hearing that, any other discussion? Council Member Chung. MR. CHUNG: I have a question of Mr. Richards. What did you just say again? You're not going to vote for it ultimately, if ? MR. RICHARDS: I'm not committing to voting for the GE increase MR. CHUNG: In any way, shape or form. MR. RICHARDS: No, I didn't say that. I said I'm not committing to a positive or a negative vote. I'm not committing at this point. I want to get it to public hearing, but I do not believe I will support it if we unamend. MR. CHUNG: Take out the sunset. MR. RICHARDS: Yeah, if we take out that. MR. CHUNG: Vote for it today, or ultimately. MR. RICHARDS: I will vote for it today, as amended, to get it to public hearing. Page 129 Hawaii County Council-41 June 6,2018 MR. CHUNG: What if it's unamended today. MR. RICHARDS: I will not vote for it. MR. CHUNG: But will you vote to allow itso you're not going to even allow to move it towards a public hearing? MR. RICHARDS: No, because I think this gives us a good metric to manage it. MR. CHUNG: Okay. CHR. POINDEXTER: So if I clarify that, and correct me if I'm wrong. So if it the amendment, if it's 159 as amended, you're saying you will support it; and if the amendment is taken off and it's just 159, then you won't. So can you just make that clear? MR. RICHARDS: Yep, you bet. What we're looking for is five votes to get it to public hearing. I will, since I voted against it, I will vote to support it to get it to public hearing because we're in a budget crunch right now. In the best interest of the County, I'm willing to go there to see where we are with all this stuff Now, Council Woman O'Hara might be very right. There may be very bad sentiments towards this. But at least we'll get it out there, because we have, what did you say, an 80-foot, several mile long lava river? MS. SAKO: I believe the river is eight miles long and a half a mile wide. MR. RICHARDS: Okay, which is different than what we had when we started this budget conversation. CHR. POINDEXTER: Thank you. Council Member David. MS. DAVID: Thank you, Chair. Being that I was voting on the positive side on this, I think I will remain—my position will be the same given Ms. Lee Loy's amendment, and I really would like this to move to a public hearing because I think it's important that we hear from the community on this, given the situation that we are in right now. So I yield. CHR. POINDEXTER: Any other discussion? Council Member Kanuha. MR. KANUHA: I've stated my objections previously to the GET and continue to do so, but just hearing everybody out, I'm thinking with this amendment and some Council Members stated that they won't vote for it with the amendment, it's kind of almost shooting you guys in the foot if you want it to get passed, because Page 130 Hawaii County Council-41 June 6,2018 Mr. Chung stated earlier that if it goes to the next round, he's not going to vote for it. He's going to vote against it with the amendment. Ms. O'Hara's not going to vote for it with the amendment. I'm just trying to put this all together. CHR. POINDEXTER: You're trying to count. MR. KANUHA: I mean, I'm just stating what's happening right now. So it doesn't look like it's even going to pass that second round if you guys vote for this with the amendment. MS. SAKO: Can I just ask for a minute? CHR. POINDEXTER: Yes, Deanna. MS. SAKO: So since I'm the one that ultimately has to deal with whatever ends up, I still have concerns. I was not in executive session so I didn't have the privilege of hearing that information, but I do have concerns because of the way the act is worded that if we sunset on December 31, 2020, and the action is taken after to take that sunset out of 2020, if it's done after March 31, 2019, I am concerned about the legality of that and being challenged by the State. So I mean I can't tell you what to do, but I'm just saying I definitely have those concerns. Two years is great and obviously better than nothing, but I don't want it to end up that the whole bill is flawed and we get nothing in the end. So I appreciate everything you guys are doing, and I'll leave it at that. CHR. POINDEXTER: Council Member Chung. MR. CHUNG: Thank you. Let me describe the lay of the land as Mr. Kanuha was trying to do. As amended, you lose me and Ms. O'Hara, two of the three staunchest supporters of this whole concept. Without the amendment, you lose Mr. Richards, possibly Ms. Eoff and Ms. David. Everybody else, I write you guys off already. I mean, that's true, right? I have to disagree with Mr. Kanuha in one regard. I did day I'm going to vote"no"with the amendment, but I've been known to change my mind for the greater good. I'm not saying I will change my mind. I told you guys why I object to that amendment and it kind of blew my mind when Ms. Lee Loy tried to appease Mr. Richards by putting that sunset provision in there, and he voted "no." I can say that because he's my good friend. So I really don't know what the heck is going on, but I say this: I'm going to keep an open mind as I try to do on all other issues, and that's all I'm going to say right now. I prefer that amendment to be out of there. We'll see how things go. CHR. POINDEXTER: Council Member O'Hara. Page 131 Hawaii County Council-41 June 6,2018 MS. O'HARA: As I was not on the prevailing side with the amendment, I can't ask for reconsideration, but anyone who did vote for the amendment can. I believe you did, Mr. Chung, vote for the amendment. No? Okay. Then it's going to be, I don't know, whoever wants to consider that. CHR. POINDEXTER: Okay, do I hear anyone wanting to reconsider, do a motion to reconsider for the amendment? I don't see any at this point. Okay, so we're going to end up voting on Bill 159 as amended. I still have to say that I want it to go public hearing, but I have to vote "no"because I just told the community on Sunday when I had this huge meeting and said that I would not support it as is because it was down to $2.5 and for transportation, and a lot of stuff that had some discussion. Anyway, but again, once it goes to public hearing, I'm going to ask them to come. I'm hoping that now that things have changed since the first public hearing that we had, we were not in the situation with the lava. I think people are now, maybe that's their way of maybe giving back to this. Just hoping. So Mr. Clerk, can I have a roll call on Bill 159, as amended. Vote on Bill 159: The motion to pass Bill 159, as amended, on first reading Draft 2 failed by the following roll call vote: Failed Ayes: Council Members Chung, David, Eoff, and Lee Loy, O'Hara, and Richards —6. Noes: Council Members Kanuha, Ruggles, and Chair Poindexter—3. Absent: None. Excused: None. (Note: Ms. O'Hara voted "kanalua," then "aye.") CHR. POINDEXTER: Okay, Bill 159, as amended, is approved and will move to second reading and a public hearing. So the public hearing, we're going to schedule that public hearing on the 18th, we're hoping, right, on the 18th? MR. HENRICKS: We will schedule it on the 18th, and the public hearing notice will include the rate and I believe it will also include what was amended today, just to be clear with the public that it would sunset on the 31st of December 2020 unless further extended, but shall not exceed beyond December 31st, 2030; all in the public hearing notice. CHR. POINDEXTER: So that 18th is after the Committee meetings in Kona. MR. HENRICKS: Correct, and we usually go for about 5:00 o'clock to allow people to come after work. Page 132 Hawaii County Council-41 June 6,2018 CHR. POINDEXTER: Okay, perfect. Okay, so now we are back to Bill 110, Draft 2, as amended. Is there any more discussion on the budget? Deanna, do you want to say a few words? MS. SAKO: Part of the amendment Ms. David has, I believe they were working on the other parts of the amendment as we sit here. CHR. POINDEXTER: Say it again? Sorry. MS. SAKO: I believe I believe, you know, in trying to work out an agreement in how the additional cutsI believe they're typing it up right now. CHR. POINDEXTER: Okay, do we want to take a short recess? Okay, we're in recess. Recess: At 7:21 p.m., the Chair called for a recess. Reconvene: The meeting was reconvened at 8:17 p.m. CHR. POINDEXTER: Calling this meeting back to order. Right now, Council Member Richards still has the floor. MR. RICHARDS: Thank you, Chair. Deanna, thank you very much for processing this through, and I'm just looking through numbers real quick. MS. SAKO: There's two amendments. One is for $500,000 and this was part of the one we had prepared before and we didn't ask them to, I guess, do it yet again, because it does touch the nonprofits. So it's like a four-page amendment, but it's basically reducing nonprofit grants by $500,000. MR. RICHARDS: And that was—we had two versions, the $1 million and the $1.5 million? MS. SAKO: Right, so it takes it back to the $1 million version. But that is kind of why it's so long. And then the $1,750,000 is the rest of the cuts. So the real property tax and General Fund is reduced by $2.25 (million) and it reduces Contingency Funds, some smaller things, including albizia, Police, fuel I think a little bit, supplies, ParksI mean each department has a little bit, and then the larger one is the Transfer to Solid Waste. Then when you look below, because each fund has to be balanced separately. At the bottom of that page is reducing the Solid Waste Fund under the recycling programs by $1.1 million. MR. RICHARDS: I had a question concerning the Waimea Airport. That went from $18,000 to $8,000. Page 133 Hawaii County Council-41 June 6,2018 MS. SAKO: Yeah, and that's the Administration, the Mayor's promised money of$8,000, because you're doing your CRF (Contingency Relief Funds) in the current fiscal year. MR. RICHARDS: Correct. MS. SAKO: So we're doing part and part. But I had budgeted the whole $18,000 in case something happened and the contingency funds lapsed. But because Corporation Counsel is able to rework the agreement, we're able to certify part out of this year and part out of next year. So we're good. MR. RICHARDS: Okay, alright. MS. SAKO: Yeah, and that's the only reason I did it. MR. RICHARDS: Alright, thank you. Alright, I yield. CHR. POINDEXTER: Any other discussion on what is before us? Council Member Eoff MS. EOFF: So Mr. Richards, you pretty much requested that we look at any ways to tighten up our belts, right, and find some reductions in the budget to take it down. Do you feel that these amendments would not be detrimental to any of the departments and any of the programs? Are you comfortable with this? MR. RICHARDS: Okay, that's two questions. The first question am I comfortable with it? Yes, but I think it's detrimental, it's going to impact everybody, yes. But do I think it's something that we can start by marshalling through and going forward? Yes. I realize this is going to be budget tightening for everybody, getting us through to the other side and getting a balanced budget going forward. I think it was Councilman Chung that pointed out that not delivering a balanced budget is not reasonable. So I think this gets us forward and moving forward. It's going to be a tight year. We don't even know where we're going to end up. But in my mind, this is a place that we can comfortably say we did the tightening on the budget and we tried to get things rectified. In six months we may go this was a good thing we did; in six months we may go we didn't cut enough and we don't know that now. But in my mind, for myself, yes, I think this is a place we can be. MS. EOFF: Then I guess what I wanted to ask Deanna then was if at some point during the fiscal year we find we have some income from various sources, would there be opportunities to put some of this back if that should happen? Page 134 Hawaii County Council-41 June 6,2018 MS. SAKO: Yes, if we find alternative sources of funding somehow, then we could come back in and amend the budget. MS. EOFF: Okay. Except for the nonprofits. Once we decide on that one, that's it. MS. SAKO: Yeah, I think that might be difficult to come in and redo at a later date. MS. EOFF: So I kind of, I feelI looked over as much as I can understand of the line items that are being reduced. As you said, it doesn't seem too detrimental to operations. I'm not positive, but with that and given that there may be a chance to refund some of them. But the nonprofits, I'm kind of having a little bit of a self-examination over since I sat on that Committee and I know that we wanted to support the nonprofits as best we could. We already pretty much decreased most of their requests quite a bit. So I'm a little bit sad about that. I understand us not having contingency for now. I think that's part of our giving. But I'm just thinking a little bit about the nonprofit one. MS. SAKO: Yeah, so just to clarify, it's not that anybody I think feels the nonprofit aren't important. MS. EOFF: I know. MS. SAKO: It's just that when we talked about going back to roughly the March level that just happened to be what got funded between March and May. So yeah, I just wanted to clarify it wasn't any particular thing. MS. EOFF: Yeah, I see that. Okay, well thank you for being ready to do this. CHR. POINDEXTER: Council Member Ruggles. MS. RUGGLES: Thank you. Just looking at this nonprofit, how did you guys determine what amounts to cut from what programs? MS. SAKO: The committee actually, the Council committee actually submitted a $1 million plan and a $1.5 million plan. So we just basically took it back down to the $1 million plan that that Council committee did. MS. RUGGLES: Okay, I see. On this first $7 million cut, it says "charge raised fees," and it says golf course on there. What would be the amount? I know this isn't what we're looking—but I guess what I'd like to know is MS. SAKO: I'm just trying to find where that was written, I'm sorry. Page 135 Hawaii County Council-41 June 6,2018 MS. RUGGLES: Is what you gave us here incorporated into this at all? MS. SAKO: Oh sorry. You're on theno, so this piece of paper that looks more like this, the first part is the million that we had talked about earlier, and we've selected various other items on here. MS. RUGGLES: Okay. What does R&M projects? MS. SAKO: Repairs and Maintenance. MS. RUGGLES: Okay, thank you. I guess I just want that I noticed that all the cuts that we made to these nonprofits, they total $500,000 obviously, and that is the exact amount that we subsidized the Hilo Golf Course for. I just have to say personally I think that all of these nonprofits are providing a greater service to the most amount of people, and I believe that they would be of more service to the public than the Hilo Golf Course is. So I would prefer that we cut that instead of our nonprofit grants. That's just my two cents and my first thoughts. Thank you. CHR. POINDEXTER: Okay, I don't see any other lights. Council Member Kanuha. MR. KANUHA: Thank you, and thank you everybody who was working on this. Deanna, you guys were going to submit $500,000, the nonprofit grans previously, correct? MS. SAKO: It was on our original list of cuts when, you know, we started to realize that we are going to have a revenue issue. So we did come up with the million, and that's been on our list for a while. The Council committee was good enough to come up with a $1 million list and a $1.5 million list. So we were able to utilize that to do it. MR. KANUHA: Okay. I just appreciate this amendment in having a greater effort in trying to be balanced, have a more balanced budget. Is that a correct statement? MS. SAKO: To be more fiscally responsible. MR. KANUHA: Fiscally balanced. MS. SAKO: Yeah. MR. KANUHA: Thank you. CHR. POINDEXTER: Okay, I guess I'll say something then. No lights are on. Okay, Council Member O'Hara. Page 136 Hawaii County Council-41 June 6,2018 MS. O'HARA: Deanna, does this balance the budget? MS. SAKO: This reduces it, if the two are passed together, by $2.25 million. We're closer to the $5 million. But it does take into account that GE Tax did pass first reading and that we will be hopeful that it would also pass second reading. MS. O'HARA: Okay, and yes, we can be hopeful. In the other cuts other than the nonprofit cuts, can you explain the last page (see Comm. 755.30), the cuts to Solid Waste? MS. SAKO: On the last page, the Solid Waste portion, for General Fund, we would just be reducing the Transfer to Solid Waste, and then it would come out of the recycling program. The item that would be reduced is the recycling center collection and hauling, which I believe is the two-bin system. MS. O'HARA: So we would be gutting our recycling program? MS. SAKO: We would be greatly reducing it, yes. MS. O'HARA: How could it function without that contract amount? MS. SAKO: I'm not sure. MS. O'HARA: That is the biggest, of course, number in this spreadsheet. It's $1.1 million. The repercussions of that, we don't have anyone from DEM (Department of Environmental Management), but we do know that's going to increase tonnage to the landfill, which is not going to save us any time on the landfill. So that's going to accelerate a much bigger cost which is closing of the landfill. So while it does appear to be a cost savings on paper, I don't think it is in reality. I'm sorry, I don't see that we need to go there. Thank you. CHR. POINDEXTER: Council Member Ruggles. MS. RUGGLES: Thank you. How much does this reduce the budget by? MS. SAKO: Altogether $2.25 million. MS. RUGGLES: That Budget Stabilization Fund, could that be used to help stabilize the budget without these cuts? MS. SAKO: So as we tried to explain earlier, we can't use the Budget Stabilization Fund to balance the budget. The provisions in the Code are to use it in any particular fiscal year where there is an unexpected decline in revenues. Page 137 Hawaii County Council-41 June 6,2018 MS. RUGGLES: Would this substantiateI mean, what's happening with the lava, would that substantiate an unexpected decline in revenues? MS. SAKO: I'd have to pull the Code provisions out to confirm that. MS. RUGGLES: I think that might be something worth looking into. Also like I said before, possibly borrowing from the PONC (Public Access, Open Space and Natural Resources Commission) Fund and then seeing what the State can do to help us. These cuts could be unnecessary. I yield. CHR. POINDEXTER: Okay, so I agree that maybe some of these cuts are unnecessary at the time, because it's not going to balance the budget, these cuts right now. Correct? Because we're still kind of like in limbo with the GET. MS. SAKO: Right, it would be in conjunction with the GE. CHR. POINDEXTER: Right. So you would be later able to use what's in the Charter as far as the supplemental, coming back at a later time. Say we don't pass this. One scenario is we get the GET and it'll all be okay. MS. SAKO: Yes. CHR. POINDEXTER: Okay. The other scenario is we don't get the GET and the budget had been passed. Then you can come in to do the appropriation reductions after that? MS. SAKO: Yes, right. They would be similar to this, plus more. CHR. POINDEXTER: Right. Okay, so we have that opportunity after we see what happens with Bill 159 to come and do the cuts if necessary. I'm concerned because where Police, Fire, Parks and Rec. I look at even the Waipi`o Ranger supplies. I know it's little, cutting $3,000, but their budget is very little. I'm so concerned about beefing them up more than cutting them down. We just had a head-on collision on Waipi`o Road yesterday. We're lucky people didn't die. I don't know how the injuries. I know a truck was totaled. That is a disaster, that area. We depend on the ranger program and they're there only from like maybe 8:00 to 3:00 or something like that. We need to beef that program up. We need to work with Corp. Counsel to see what we can do for that area, because that alone, that road and what's happening on that road will cost the County a lot of money. So cutting that $3,000 may seem very, very minimal, but it's huge, because we're already at a real tight budget there and with a big liability. I'm leaning towards—and I like what, yes, Council Member Richards is trying to do, some concessions and getting it reduced. But if we have the Charter that says Page 138 Hawaii County Council-41 June 6,2018 later we can come and do the reduction and waiting to see what happens with Bill 159, I would rather go that way versus cutting it now if we don't have to. So that's where I stand. So I don't know, we don't have any amendments made yet. Or these considered communications, but just for information, or is somebody going to read in something to amend? MR. HENRICKS: They are available to be used as amendments. CHR. POINDEXTER: Right. So these are—nothing has changed. So what's before us right now is still the Draft 2, as amended. If we need to do additional amendments, then we need to start making motions. So I some people gave input on how they feel about these, so now we wait on—Council Member Richards. MR. RICHARDS: I move to adopt these amendments as presented by—and I guess we have to do both. MR. HENRICKS: Can I ask before you. So you get it right one time. Ms. Sako, is this a situation where we would move to amend with both communications at one time, is that what we're looking at here? Because they are co-dependent if you will? MS. SAKO: Yes, I think you do, because the revenue reduction and Memorandum Number 3 includes the nonprofit grants that are also in Memorandum 4. MR. HENRICKS: So then the appropriate motion would be to move to amend with Communications 755.30 and 755.31? Did I get that wrong? Motion to Amend: Mr. Richards moved to amend Bill 110, Draft 2, as amended, with the contents of Comms. 75 5.3 0 and 755.31. Seconded by Ms. Lee Loy. CHR. POINDEXTER: Discussion? Council Member Richards. MR. RICHARDS: Thank you. I don't think that—it's not lost on me. I was on the grant-in-aid ad hoc committee and we discussed this at great length. I think we have to look at the first bigger picture. We need to be fiscally responsible. If we do nothing, we are $5 to $6 million in the whole. Help me out with this on my numbers, Deanna. By doing this we have a $2.25 million reduction proposed, which takes us from $518 down to $515, $515 and a half(million) say, somewhere in there. The other side, we get the GE tax proposal coming forward, it's been mentioned by our Mayor somewhere around 25 percent of that will be paid from visitor industry. Again, these are averages and these are expectations, Page 139 Hawaii County Council-41 June 6,2018 but a quarter percent on the GDP (Gross Domestic Product) on our County is going to bring us in somewhere between $10 and $20 million. Is that a fair estimate, Deanna? MS. SAKO: The quarter percent yes, about $10 million in the half year, and $20-$25 in a full year. MR. RICHARDS: Okay, so we're making concession on $2.25 million, netting back $10 million. In next budget cycle, in next budget year, we can go back and re-appropriate and take funds as they come forward and put them coming forward. We can do that. It's my belief we need to be fiscally conservative up front and if the funds come then we can replenish. I don't think we go the other way around because I can't support that. So we have a plan before us that I can support, and I'm not making any promises on the GE, I want to hear from our constituency. But I think this is a direction that is good for our County because it is a net win of at least $10 million and higher, depending on what the cycle. So with that I'll yield, I want to hear from my colleagues. CHR. POINDEXTER: Council Member Ruggles. MS. RUGGLES: Thank you. I think just from the brief conversation we had, there's a lot of concerns coming up with these two communications. We've heard about the recycling program, Waipi`o equipment, the nonprofit grants. There's even—it's taking away one of our bus replacements. I personally do notI think there are better ways if we need to cut the budget. Like I said, if we're going to be cutting our nonprofits, why are we taking buses away? We should be looking at the Golf Course one. Furthermore, we have this $6 million in our Budget Stabilization Fund meant for unexpected losses, and if all we need to do is look at the Code, this all could be unnecessary, especially when we have a potential $50 million coming in from the State. So in the short term I think we have other options. In the long term, as I keep saying, I think we should look at taxing million dollar second homes. I won't be supporting this amendment. Thank you. CHR. POINDEXTER: Any other discussion on the amendment? Okay, I'm going to take a roll call. Mr. Clerk. Page 140 Hawaii County Council-41 June 6,2018 Vote on Motion The motion to amend Bill 110, Draft 2, as amended, with to Amend: the contents of Comms. 755.30 and 755.31 failed by the Failed following roll call vote: Ayes: Council Members Kanuha, Lee Loy, and Richards —3. Noes: Council Members Chung, David, Eoff, O'Hara, Ruggles, and Chair Poindexter—6. Absent: None. Excused: None. CHR. POINDEXTER: So we're back to Bill 110, Draft 2 as amended. Any discussion? Seeing or hearing noneoh, Council Member Richards. MR. RICHARDS: Okay, what I was trying to do was strike a balance here. Apparently we are not interested in striking a balance. This could have been a net positive for the County. If it's the will of this group not to, I'm comfortable with that, but then I would like to ask for reconsideration of 159. MR. HENRICKS: I think I need a little time to see if we can reconsider something we reconsidered after we reconsidered it. CHR. POINDEXTER: Okay, I'm going to take a brief recess. Recess: At 8:43 p.m., the Chair called for a recess. Reconvene: The meeting reconvened at 8:48 p.m. CHR. POINDEXTER: Calling this meeting back to order. Okay, the Clerk researched it, and our rules don't MR. HENRICKS: Well, I would thank Mr. Kamelamela for pointing out CHR. POINDEXTER: Okay, go ahead. MR. HENRICKS: It's very simple in our rules and it says, "A motion can be reconsidered only once," and you know, that seems logical and fair. CHR. POINDEXTER: Okay. So we're back to Bill 110, Draft—we're still at Bill 110, Draft 2 as amended. Is there any more discussion on that or are we ready to take the vote? Council Member Richards. MR. RICHARDS: It's very unfortunate we've just gone this way, but it does help me make my vote for the GE coming up. Thank you. Page 141 Hawaii County Council-41 June 6,2018 CHR. POINDEXTER: Okay. Council Member Kanuha. MR. KANUHA: Thank you. Deanna, scenario. MS. SAKO: Yes. MR. KANUHA: This vote goes up, we stay at $518 (million). MS. SAKO: Yes. MR. KANUHA: Then somewhere down the road, we're going to have to figure out how to make up the shortfall. MS. SAKO: Well, right now GE tax passed first reading, and we'll go to public hearing, and then we will see what happens at second reading, and then make decisions, yes. MR. KANUHA: If this budget gets voted down, what happens? MS. SAKO: If the budget's voted down, the Council will have failed to approve a budget by June 301h, and so the May 4 1 draft we submitted stands. MR. KANUHA: That was at how much? MS. SAKO: The $518 (million). Just without the HTA amendment. MR. KANUHA: Thanks. CHR. POINDEXTER: Any other discussion? Okay, seeing or hearing none, Mr. Clerk, roll call, please. Vote on Bill 110 The motion to pass Bill 110, Draft 2, as amended, with the Draft 3): contents of Comm. 755.24, failed by the following roll call Failed vote: Ayes: Council Members David and Eoff—2. Noes: Council Members Chung, Kanuha, Lee Loy, O'Hara, Richards, Ruggles, and Chair Poindexter—7. Absent: None. Excused: None. CHR. POINDEXTER: Okay, so even if it's two "aye"votes, it goes back to Bill 110, Draft 2, without the amendment. Page 142 Hawai`i County Council-41 June 6,2018 MS. SAKO: Without the amendment of HTA. CHR. POINDEXTER: Without the Hawai`i Tourism Authority, which Deanna had stated earlier that she can come back in for that in July. So the budget is what the Mayor had presented, and I think we're done. So can I ask for a motion to adjourn? ADJOURN- There being no further business, at 8:51 p.m., Ms. David moved to adjourn the MENT: meeting. Seconded by Ms. Eoff and carried by the following voice vote: Ayes: Council Members Chung, David, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Acting Chair Eoff—9. Noes: None. Absent: None. Excused: None. CHR. POINDEXTER: Meeting is adjourned. JUL 2 5 2018 Council Approval: CO OjtL2 TY CLERK SM/dg/j a Page 143