HomeMy WebLinkAboutMIN FC 2019/05/20 2018-2020Committee on Finance
11th Session
Hawaii County Building
25 Aupuni Street
Hilo, Hawaii
May 20, 2019
CALL TO The regular meeting of the Committee on Finance was called to order at
ORDER: 1:45 p.m., in the Council Chambers, Hilo, by Ms. Maile Medeiros David, Chair.
ROLL CALL:
Present: Ms.
Maile Medeiros David, Chair
Mr.
Herbert M. "Tim" Richards, III, Vice Chair
Mr.
Aaron S. Y. Chung, Member (came in later)
Ms.
Karen Eoff, Member
Mr.
Matt Kaneali`i-Kleinfelder, Member
Ms.
Ashley L. Kierkiewicz, Member
Ms.
Susan L. K. Lee Loy, Member
Ms.
Valerie T. Poindexter, Member
Ms.
Rebecca Villegas, Member
STATEMENTS The Chair directed the Committee to proceed to the next order of business,
FROM THE Statements from the Public on Agenda Items.
PUBLIC ON
AGENDA ITEMS: The Chair called Charles L. Spain, representing Hawaii Fire Fighter Association,
who registered to speak in support of Resolution 169-19 (Comm. 277), and came
forward when called.
CHR. DAVID: At this point, I am closing public testimony and moving on to
Communications.
COMMUNI- The Chair directed the Committee to proceed to the next order of business,
CATIONS: Communications.
Comm. 9.9: MONTHLY BUDGET STATUS REPORT FOR THE MONTH ENDED
MARCH 31, 2019, FROM THE DEPARTMENT OF FINANCE
From Finance Director Deanna Sako, dated May 1, 2019, transmitting the
above report pursuant to Hawaii County Charter Section 6-6.3(h).
FC -11
Vote on Comm. 9.9:
Filed
Ms. Villegas moved to close file on Comm. 9.9.
Seconded by Mr. Richards and carried by the following
voice vote:
Ayes: Committee Members Chung, Eoff,
Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy,
Poindexter, Richards, Villegas, and
Chair David — 9.
Noes: None.
Absent: None.
Excused: None.
May 20, 2019
Comm. 278: POST AUDIT REPORTS FOR FISCAL YEAR ENDING JUNE 20, 2018
From Legislative Auditor Bonnie S. Nims, dated April 25, 2018, transmitting
the Comprehensive Annual Financial Report prepared by the Department of
Finance and the Single Audit of Federal Financial Assistance Program Report
prepared by external auditor N&K CPAs, Inc., pursuant to Hawaii County
Charter, Section 10-13.
(Note: Comm. 278. 1, from Legislative Auditor Bonnie S. Nims dated
May 13, 2019, transmitting a Concluding Communication and PowerPoint
presentation from N&K CPAs Inc. was circulated.)
Motion to Close File: Mr. Richards moved to close file on comm. 278.
Seconded by Ms. Lee Loy.
CHR. DAVID: Council Members, we have Bonnie Nims in here, and we also
have the representatives. Would you like to come up and give us a briefing? I
remember last time you folks had a PowerPoint, but you don't have a PowerPoint
this time, right? No? Oh, we do. So you want to do the PowerPoint before or
right now?
MS. NIMS: I just wanted to introduce
CHR. DAVID: Yes. Okay, perfect. Thank you, Bonnie.
MS. NIMS: Good afternoon, Council Members. I'm Bonnie Nims, Legislative
Auditor. As part of the Hawaii County Charter, it is our office's responsibility to
coordinate the Annual Financial Audit as well as the Single Audit of Federal
grants. To comply with this requirement, we went out for bid and contracted for a
five-year contract with N&K CPAs from Honolulu, who will be joining us.
N&K is now concluding their audit of the fiscal year 2018-2019, so we're always
lucky you're behind, and the Comprehensive Annual Financial Report, or CAFR.
At this time, I'd like to introduce to you Chad Funasaki, Ryan Iwane, and
Andrew Ho, who will summarize the results for you.
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CHR. DAVID: Thank you very much, Ms. Nims. Welcome, gentlemen.
Whenever you're ready, just introduce yourselves for the record and you can
proceed with your PowerPoint.
MR. FUNASAKL Chad Funasaki, N&K CPAs.
MR. HO: Andrew Ho, N&K CPAs.
CHR. DAVID: Thank you very much, gentlemen. Go ahead.
MR. FUNASAKL Good afternoon, Chair David and Council Members. As
mentioned, we're here to present the results of our audit for the fiscal year ended
June 20, 2018.
(Note: At this time, Audit Principal Chad Funasaki and Assurance
Services Division Senior Manager Andrew Ho came forward and provided
a PowerPoint presentation regarding the results of the County of Hawaii
2018 Audit. For viewing of the subject presentation, please see the DVD
copy of the meeting proceedings on file in the Clerk's Office. Hard copies
of the presentation are made a part of the record, see Comms. 278 and
278.1.)
MR. FUNASAKL You were considered—the County was considered a low-risk
auditee. So again, as indicated earlier, the section to Financial Statement
Findings, no matters were reported, as well your Federal Award Findings and
Question Costs. Again, no matters were reported, so basically a clean audit for
2018. Any questions at this point?
CHR. DAVID: Thank you, Mr. Funasaki. Ms. Lee Loy, go ahead.
MS. LEE LOY: Thank you, Chair. Thank you, Chad, Andrew, for being here.
I want to walls back toBonnie mentioned you guys are in the middle of a
five-year contract. What year are you folks at in that?
MR. FUNASAKL This is our first year.
MS. LEE LOY: For the Single Audit?
MR. FUNASAKL For both the CAFR and the Single Audit. This is year one of
five years, so we have up until fiscal 2022.
MS. LEE LOY: Okay. You know, in your summary you mentioned—it's on
page 25 of our audit, the Federal Awards, and then you mentioned which type of
Federal dollars you were examining, looks like Housing Eight (Section 8)
vouchers and this WIOA (Workforce Innovation and Opportunity Act) cluster.
MR. FUNASAKL Correct.
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MS. LEE LOY: This body had heard some concerns about our Mass Transit and
the Federal monies that we were getting that was coming from the Federal
government down to our State Department of Transportation, Highways. I'm a
little concerned because in your snapshot you mentioned that there were no
material weaknesses identified, and then significant deficiencies identified where
it's none reported.
And then, I look at your summary in which you identify a dollar threshold to
distinguish between the different types. My understanding is that the monies we
were getting from MTA (Mass Transit Administration) through the Federal award
was, you know, somewhere at almost $7 million, $6.9 million. So, help me
understand how this audit measures up to examining that Federal monies that
we're getting, because this body is really trying to help them and if we don't
know if we're doing a good job at managing those Federal monies, they may be at
risk. We want to put in the safeguards that are necessary, and this helps us do
that. So please help us, explain or help me understand that so we can put in the
safety net that MTA (Mass Transit Agency) may need, and using your folk's audit
as a tool to raise the flags for us so that we can do a better job as a Council.
Thanks.
(Note: At this time, Senior Manager Ryan Iwane came forward to address
the members of the Committee.)
MR. IWANE: Ryan Iwane, N&K CPAs. So I worked on the compliance side,
which is why I came up to answer the question. Regarding, I guess, the scope of
our Annual Single Audit, I guess the first thing I wanted to convey is that the
Single Audit in accordance with the Uniform Guidance is not 100 percent audit
of all Federal programs of a given entity. It's actually significantly lower than
100 percent.
For a low risk auditee, such as the County of Hawaii, the minimum coverage
with respect to expenditures in relation to total expenditures, that the audit needs
to cover is 20 percent for low risk auditee, so it's significantly less than a
100 percent audit.
As far as giving a little bit of background as to how Federal programs are
determined to be audited in a given year, you know, there's very specific Federal
guidelines as to what the process is. First and foremost, that determination of
which programs need to be audited is a quantitative assessment based on the total
expenditures of Federal awards of a given entity.
The Federal regulations also establish a dollar amount to identify Federal
programs that are more significant, I guess, in dollars, than others. Those
programs are referred to as Type A programs. The guidelines for the County of
Hawaii is that Type A programs are programs with expenditures that exceed
three percent of an entity's expenditures of Federal awards.
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So within the past three or four years, I would say, County of Hawaii had
roughly $40 to $50 million in total expenditures over the past three to four years,
which comes out to a Type A program threshold of roughly $1.4 million. It was a
little less in 2018, but the threshold is $1.4 million. Therefore, programs that
equal or exceed that Type A threshold will almost certainly be audited at some
point and time. Any other program actually may not be audited, yeah, as far as
within the scope of the Uniform Guidance.
So as far as the specific Mass Transit federally funded program that I think you
are referring to, it has not actually hit that threshold in any of the past three to four
years, and therefore, the likelihood of it being audited as a major program went
way, way down as a result of that.
MR. FUNASAKL Sorry, really quick. Earlier you mentioned the total was
$6 (million), $7 million, is that a cumulative number or is itit was spent in one
particular?
MS. LEE LOY: The revenue, yeah.
MR. FUNASAKL Okay, because as Ryan mentioned earlier, it's expenditure
driven. So what we do is prior to conducting the audit, we get a schedule, and this
schedule is prepared by various departments. Now, based off of that, those are
expended dollars. We based our threshold or assessment of which programs we
need to consider for testing, based off of that. So if the expenditures are not
reported there, then arguably it could be—there could be an instance where it
won't be in scope. I mean, but—there's procedures we do over that schedule, but
it's not there are things that could potentially happen. So keeping in mind that
it's reported expenditures, which we base off of our decisions on.
MS. LEE LOY: Ryan, Chad, thank you so much for that explanation. So just
to summarize, that particular department didn't meet the threshold of the
three percent, right, so that would be considered low risk. But what I also heard
you say is that the scope of services, when you folks were contracted, identified
some hard corners as far as, you know, thresholds, or amount being spent,
expenditures, those types of things. Back to your contract, is that scope of
services for every single year for the balance of your contract?
MR. FUNASAKL Correct. The scope of services would be—it would be the
same.
Now, you know, if a program is determined to be high-risk by the Federal entity,
they could say this cannot be a low risk program, then obviously it puts us into a
position where may need to consider looking at. We have no choice. If it does
meet a certain threshold, like let's say a Type B program, which if it wasn't low
risk, we wouldn't look at it; but if the Federal entity says—informs us, or the
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County, that this is a high risk program, it cannot be low risk then we have no
choice but to look at it.
MS. LEE LOY: And that would be a directive from the Federal funder to have
you folks audit a high-risk program?
MR. IWANE: Yeah, directive either from the Federal government or it could
be passthrough entity, which is kind of clarify that. That would be—if the Federal
government, or a passthrough entity were to request that we were to audit a
specific program, that would be on top of what we would be required to audit in
accordance with the Uniform Guidance. Yeah, so it would be a tack -on thing.
I wanted to add on one more thing, just to kind of clarify. As far as the scope of
the audit and these dollar thresholds that I mentioned regarding three percent of
total, that's actually a Federal requirement. It's not dictated by the contract with
the County of Hawaii. It's actually a Federal requirement that we need to adhere
to.
MS. LEE LOY: Okay, I'm going to yield. Thank you, Ryan, Chad. Really, this
has been very enlightening, so thank you. I yield.
CHR. DAVID: Thank you, Ms. Lee Loy. Anyone else? Ms. Kierkiewicz, go
ahead.
MS. KIERKIEWICZ: Thank you, Chair. Thank you for the presentation. I have
a few follow-up questions. Pretty sure that you monitor the Tribune -Herald, so
you're well aware of the debacle with what we uncovered for Mass Transit. Does
that affect the County's risk status at all? You mentioned that the County is a low
risk auditee, so do you think with what we uncovered with Mass Transit, the
scope of your audit would need to expand in the coming years?
MR. FUNASAKL I don't believe it will impact the status as a low, because
that's dictated based off of the results of our audit. You know, as Ryan
mentioned, it's a Federal requirement. You know, had this occurred, let's say it
was in scope and we looked at it, then it could be potentially a risk that it could
have been elevated to high-risk auditee
Now, the difference between the two is basically the amount of Federal funds
we need to look at. I mean, a low-risk auditee, as Ryan indicated, we look at
20 percent to meet that threshold; if it's a high-risk auditee, it's 40 percent.
MS. KIERKIEWICZ: Can we go beyond that threshold in the audits?
MR. FUNASAKL I mean, there are times whenI mean, they won't come out to
exactly 40. I mean, it might be 50, based off of the programs we look at. It's just
to ensure that we meet or exceed that 40 percent.
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MS. KIERKIEWICZ: You mentioned a schedule of the audit that you'd be
completing, so can you clarify or expand a little bit upon that?
MR. FUNASAKL The Federal work? The expenditures?
MS. KIERKIEWICZ: Well, you talked about a schedule. Does that mean there
are different programs that you have set out to audit in your five-year contract?
MR. FUNASAKL Yeah, well, if we didn't look at a program for two years and
it'swe could consider that a low risk. In that third year, it could no longer be a
low risk, so we need to look at it. So yes, every three years, we'd have to look at
it.
MS. KIERKIEWICZ: Auditing a specific program?
MR. FUNASAKL Like Section—for example, Section 8. It's a relatively large
program. Does it mean we have to look at every year? If there's no problems in
various years, there's an option that we can take to not look at it because it's low
risk. It's significant, but it's a low risk. However, if we didn't look at it for two
years, we'd have to look at that program. We have no choice, to look at it.
MS. KIERKIEWICZ: Okay, I got that. Thank you. And maybe this is a question
for Finance Director Sako or maybe even our Legislative Auditor. But is it too
late to expand or amend the scope of the contract to include audits of other
agencies?
MS. NIMS: Bonnie Nims, Legislative Auditor. The contract is to audit the
financial statements, and so however they decide to do that to meet the generally
accepted auditing standards.
As far the Single Audit, which I think is more what you're referring to, they every
year have to follow the Federal guidelines on how to select their major programs.
They do a risk assessment every year and assess which programs fall into a high
or low category.
To answer your question on amending, I think that would be a more specific
individual contract. Instead of saying, "I want Mass Transit's Federal money
audited," that would be, I think, an independent contract. That's something I
probably have to work with Corp. Counsel on.
But like I said, depending on the amount of Federal expenditures in a given year,
their risk assessment will change based on which programs they would audit. If a
new program comes on the books, say Housing gets a new grant and spends
$1 million plus and it's never been audited, that's going to be a high-risk grant.
So something else may fall off to meet that 20 percent threshold.
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MS. KIERKIEWICZ: Okay, that's helpful. Very helpful. Thank you. Chair, I
yield.
CHR. DAVID: Thank you, Ms. Kierkiewicz. Ms. Lee Loy, go ahead. Before
Mr. Richards—Mr. Richards didn't speak yet. But if you yield, I'll let
MR. RICHARDS: I will yield.
CHR. DAVID: Alright. Ms. Lee Loy, go ahead.
MS. LEE LOY: Thank you, Mr. Richards. Thank you, Chair. Because I want to
keep this in context for what something Ms. Kierkiewicz mentioned and now
Ms. Nims, which is our new programs. We're about to get a bunch of money
from the Federal government, right, for relief as it relates to our recovery efforts
in Puna. So I'm back to the similar question of, we've got $67 million coming in
from the Federal Government and then another, the CDBG (Community
Development Block Grant). Would that be a considered a new program? And
then if we're meeting these thresholds of three percent, or twenty percent, would
that be a program that would kind of slide into a Single Audit?
MR. FUNASAKL Sixty-seven million in revenue, it would be driven off of
what's expended in any given year. So you could be awarded $67 million, you
know, in fiscal 2019; if you spend let's say $3 million of it, then definitely it
would be something we probably need to look at.
MS. LEE LOY: Thank you. I yield. Thanks.
CHR. DAVID: Thank you, Ms. Lee Loy. Mr. Richards, go ahead.
MR. RICHARDS: Yeah, thank you, Chair. And thanks for being here. You can
see that we're intrigued or perplexed to all of it by what we're talking about here.
For raising the concern—and I hear what you're saying about auditing. It's not
really a spot-check, but it sort of is at 20 percent of what I'm hearing. If we as a
County said there's an area from what we think is flagged, is that something we
can actually request to have audited? Or are you bound by the Federal regulation
step; dictate how you're going to proceed?
MR. IWANE: I think that—if you're talking about natural audit of the Federal
program, we're bound by the Federal requirements as far as the manner and the
process that we take to determine Federal programs. Again, I guess, similar to the
comment I made about if a Federal agency or a pass-through entity specifically
requested Federal program be audited, and in those instances that program would
be audited in addition to what we would have to do under the Federal
requirements. I don't believe there's any specific guidance when the request is
coming from the governing board. I don't believe there's anything that says
anything about that. We would probably have to, I guess, as we talk about it—but
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it would—almost certainly if it is allowable, it would be on top of the minimum
that we are required under the Federal guidance.
MR. RICHARDS: Okay, I anticipated that answer, but thanks. Then
following-up, and it was "uh-huh" moment for me. You made the comment that
this is expense driven not revenue driven, which highlights the puka and the
process. You stated again that if we have $67 million coming from the Feds
but only expend a couple of million, that it probably wouldn't trigger an audit
because again, it's expense driven, Which is where we have the problem with
Mass Transit because it wasn't expended because it was never appropriated,
because we never got the paperwork, and so we never got the reimbursement and
that's where I see the problem. So like I said, "uh-huh" moment for me. I've got
other questions, but they're not for you. I yield.
CHR. DAVID: Thank you, Mr. Richards. Anyone else, Council Members? No?
Alright, gentlemen, thank you very much for coming.
MR. FUNASAKL Yeah, sorry. We have a few more.
CHR. DAVID: Oh, you're not done yet?
MR. FUNASAKL Yeah, just a few more to go.
CHR. DAVID: Oh, okay. No questions.
MR. FUNASAKL I wanted to go through the financial.
CHR. DAVID: We usually wait till you present and then we ask questions.
MR. FUNASAKL Okay, I'm sorry.
CHR. DAVID: No, no, that's fine.
MR. FUNASAKL Maybe I should have waited until the very end. It won't take
long.
CHR. DAVID: Thanks for letting me know. Go ahead.
MR. HO: Andrew Ho, N&K CPAs. Okay, so today I'll be going over some the
required communications to governance yourselves, and these are in accordance
with generally accepting auditing standards. So if you turn to, I guess, that first
slide. We'll start with Significant Accounting Policies.
(Note: At this time, Assurance Services Division Senior Manager
Andrew Ho came forward and continued with N&K CPAs' PowerPoint
presentation regarding the results of the County of Hawaii 2018 Audit.)
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MR. HO: Any questions?
CHR. DAVID: That concludes your live presentation now?
MR. FUNASAKL Yes, apologize.
CHR. DAVID: I have to disclose something. The reason why I couldn't follow
it, Chair Chung and I were looking at this and I thought your were done because
our PowerPoint is put together backwards. But thank you very much. That's
why. Any questions before we?
I just have one question. So what you do as an audit firm is basically, like you
said, based on the Federal mandates, or statutes, or whatever?
MR. FUNASAKL Correct.
CHR. DAVID: So any other audit, we'd have to follow our own process
performance audit and not be something that you folks would be doing on a
normal basis?
MR. FUNASAKL Well, definitely the scope would be different. It would be
specific to a certain department or certain issue. So definitely the scope would be
a lot more narrow, more precise. But I would think those types of audits, I don't
know they would be recurring. It could be a one-time look and an assessment
made at a department.
CHR. DAVID: Right.
MR. FUNASAKL So yeah, I wouldn't
CHR. DAVID: It's not something you would normally—right, because you're—
MR. FUNASAKL Right, correct. But it's something that we actually do—we
can do.
CHR. DAVID: Okay, that was my question. I think that's what we're—in my
mind, at least I know you folks are bound to do certain ones. So thank you very
much, gentlemen, and thank you for being here. Any other questions? No more?
Alright, then we'll move on. Thank you, Ms. Nims.
MR. FUNASAKL Okay, thank you.
MR. HO: Thank you.
CHR. DAVID: Alright, Mr. Clerk, please, can you move on to—oh, no, sorry.
All those in favor of filing Communication 278 please say "aye."
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Vote on Comm. 278
Filed
May 20, 2019
The motion to close file on Comm. 278 was carried by the
following voice vote:
Ayes: Committee Members Chung, Eoff,
Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy,
Poindexter, Richards, Villegas, and
Chair David – 9.
Noes: None.
Absent: None.
Excused: None.
CHR. DAVID: Now, Mr. Clerk, can you move on to Communication 279?
Comm. 279: CERTIFICATION OF NET TAXABLE REAL PROPERTY VALUE FOR
TAX YEAR 2019-2020 FROM THE DIRECTOR OF FINANCE
From Finance Director Deanna Sako, dated May 1, 2019, transmitting the above
report pursuant to Chapter 19, Section 19-90(d) of the Hawaii County Code.
The certified total of net taxable real property is $33,443,473,564.
Motion to Close File: Ms. Lee Loy moved to close file on Comm. 279.
Seconded by Mr. Richards.
CHR. DAVID: Any questions first? If no questions, I'm going to take the vote.
Ms. Eoff, go ahead.
MS. EOFF: Did RPT (Real Property Tax) want to come up and give us just a
brief window?
CHR. DAVID: Ms. Miura or Mr. Jo. Thank you.
(Note: At this time, Real Property Tax Administrator Lisa Miura and
Assistant Administrator Keita Jo came forward to address the members of
the Committee.)
CHR. DAVID: Those are huge numbers. Yes, I think we need to have some kind
of explanation. Please identify yourself for the record, and welcome.
MS. MIURA: Lisa Miura, Real Property Tax Administrator.
MR. HO: Keita Jo, Assistant Real Property Tax Administrator.
MS. MIURA: So the Certification Report is required for us to provide it by
April 19th to administration, and they turn it in to Council to help with the budget.
So the cover letter that went to Chairman Chung will have pretty much the
summary of everything that you've got. The County Council was provided a cd
(computer disc)—our reports on it, and it has every single parcel on the island
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with their assessment. It's a huge amount of data that gets provided each year.
But we are here to answer any questions. We're always here even when it's not
in front of the cameras to answer any questions you may have.
CHR. DAVID: I know you are, and you're very good about that. So, Council
Members? Ms. Eoff and then Mr. Richards.
MS. EOFF: I guess, just a very simplistic question. But I would understand that
because some of the tax rates were raised previously, that we have increased
income as well as property values may have gone up. But did—do you attribute
some of the increase also to your review of parcels that weren't being taxed
properly? Because I know you were doing a very extensive review.
MS. MIURA: Correct. We did a very extensive review. So tax rates weren't
raised this year or last year. It was in the prior year, so I just wanted to
confirm that. I think you're speaking about all the parcels that are under one acre
that were being classified as agriculture and they weren't doing agricultural on
them. We had come before the Council two months ago to say those were going
to be taxed as residential. Only a portion of the increase came from that. The rest
of that came from the increase in the market value of the properties as well as
reviewing a lot of the agricultural parcels, where people they were—where they
were getting a preferential agricultural value that were not actually doing
agriculture, so those were removed from the program.
MS. EOFF: And those were some of the recommendations that had come forward
from the review board?
MS. MIURA: Correct. That came from the Real Property Tax Review Working
Group and the Agricultural Committee. We've been going through, around the
island, to work on the agricultural program already. But the big change on the
properties under one acre that were being taxed as agriculture without agricultural
came from the review group.
MS. EOFF: Thank you.
CHR. DAVID: Thank you, Ms. Eoff. Mr. Richards, go ahead.
MR. RICHARDS: Thank you, Chair; and thanks, Lisa, for being here. If I read
this correct, somewhere around the four percent increase in values is what you
have over last year, am I reading that correctly? And of those values, you had
mentioned the one-acre—or under one acre not being characterized as agriculture
anymore, what was the net benefit as far as tax? Do you have that number? And
if you don't have it off the top of your head, I'd sure like to see it if you can work
it out.
MS. MIURA: It was over one million. The only reason I'm questioning the exact
number is because there are some appeals on that. So when the values come to
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you, it's already taken the appeal under consideration. So until it goes through the
appeal, we won't know what the exact loss is of that section.
MR. RICHARDS: So somewhere around $1 million?
MS. MIURA: Correct, there was over $1 million.
MR. RICHARDS: Okay. Last year, it wasn't a very good year for the County, it
had a few things going on. But even in spite of that, we saw a growth in our
overall value. Was this across all the different property types: residential,
commercial, agriculture? How did that work out? What was the distribution?
And it's probably here, it's just a very complete report.
MS. MIURA: It is. So we're the only County within Hawaii that also provides a
certification by Council district. So you have the data provided to you several
different ways.
Let me look at the aggregate. So agricultural went down as well as the hotel and
resorts. The hotel and resorts is due to an appeal, though. So remember when we
provide the final numbers to you, we have to take into account half of the value in
appeals which are in dispute because we don't know what the outcome is going to
be, so we don't want to overestimate what our income is going to be either. So
those were the two areas that went down. The agriculture, because we were
double-checking and triple -checking what properties were actually doing
agricultural, as well as the conversations for properties that weren't doing ag,
under one acre were re -taxed, classified as residential.
Part of the increase, and we have to keep in mind is the homeowners have the cap
of three percent. But a lot of times the market was at a higher level; and even
though maybe their area didn't go up quite as much, we're still not hitting that, so
the three percent cap still continues to go up until it hits where the market is.
MR. RICHARDS: Alright. Okay, I'll yield at this point. Thanks.
CHR. DAVID: Thank you, Mr. Richards. Anyone else? Ms. Kierkiewicz, go
ahead.
MS. KIERKIEWICZ: Thank you, Chair. Hi, Lisa. Keita, great to see you. So
we had roughly 140 more appeals this year than last year, 343 versus 203. Can
you estimate how many of those came from Council District 4 or areas that were
inundated by lava?
MS. MIURA: I couldn't. I would be taking a really wild guess right now.
MS. KIERKIEWICZ: Okay.
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MS. MIURA: I only know off my head which area had the most appeals, but not
which areas had the total appeal count.
MS. KIERKIEWICZ: Okay, so which area of the island had the most appeals?
MS. MIURA: It was Hamakua.
MS. KIERKIEWICZ: It was Hamakua. Okay, interesting. Can you just walls me
through the appeals process? Because I'm looking at the various valuations on
appeals for Council District 4 and they seem pretty low, like the dollar figure.
MS. MIURA: Yeah, part of that has to do with the actual assessed value. That's
what they're allowed to appeal. So if
MS. KIERKIEWICZ: How does that work?
MS. MIURA: Let me go through the whole appeal process. So in March, we
mail out our assessment notices and everybody has until April 9th to appeal, and
that is in our Hawaii County Code. The only time the April 9th deadline doesn't
hold is if we do an amended notice after the assessment mailing happens. Then
you come in and you have 30 days from when we send that notice out. So there
were a little bit more appeals we got in after this that was a result of amended
notices that happened.
When they file, on the appeal form there's a particular they have to fill out. It is
located online, and it's still online now if anybody wants to take a look. They
select what basis they want appeal based on. The deadline is one of those. It is
hard deadline; but it is up to the Board of Review if you miss that deadline, if
they're still going to hear your case. In our County Code, it says, you know, that
it has to be more than 20 percent in dispute. The board has been known to hear
cases that are less than 20 percent, depending—they've actually just been hearing
them, but they're not required to hear it.
So, people can appeal based on the value. So whether it's just they're appealing
on land or appealing on building, they can appeal on the fact that we didn't grant
them an exemption. They can appeal if they feel like we're in the wrong tax
class. They can appeal if they feel like our values not even at market value but
if a neighbor is valued much less than them and there's no systematic reasoning
for that, it's not fair and equitable, they can appeal. So there's several factors that
they can appeal on.
Not everybody is necessarily appealing on values. It could be on the fact that they
thought they were a homeowner and they didn't file their paperwork or that we
found out they were doing a vacation rental in their home, and so we pulled them
out of the program. So there's different reasons for appeal.
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After that, the Board of Review is made up, or should be made up, of five
members of the public, and it is all volunteer and they have usually nothing to do
with our office. Right now, we only have four board members and we've been
actively trying to put the word out for a fifth member. They have an
organizational meeting required in March, and they can start hearing appeals as
early as July. So right now appeals would be scheduled through usually October,
November for an amount this size. The board would actually determine in front
of the appellants and the County what their decision is. So they actually have an
open hearing where members of the public can come and watch. They're given
their information on what time to come. They can reschedule if it doesn't work
for them, and we do have a lot of people reschedule.
Prior to actually going to the appeal, they may talk to the appraiser or our office
and determine—you know, see more information about why we denied an
exemption or how we came up with the value so that they can come to the board
and present their own values. Typically, we have a bunch that will withdraw their
appeals after they have a chance to talk to us. Some will agree to settle; the
appraiser and the appellants will come to an agreement. Even if they do a
settlement, it has to go before the Board of Review for approval, and the Board of
Review does ask us questions about settlement. So it's not that our staff can go
ahead and do these settlements just to avoid going to hearing, they want to see
why they came up with this value. It has to be justified.
For the ones that actually make it to the hearing, they are provided time, and the
Board of Review asks them questions; and before that times ends, they will
actually deliberate and give their final decision right there.
MS. KIERKIEWICZ: That's very helpful. Just in case I have questions from
constituents, I'd just like to be able to share with them what the process and the
timeline is. So you mentioned there are four individuals on the Board of
Appeals?
MS. MIURA: Correct, right now there are four.
MS. KIERKIEWICZ: And you need one more?
MS. MIURA: We do.
MS. KIERKIEWICZ: Okay, in order to have these meetings?
MS. MIURA: No, the quorum is only three.
MS. KIERKIEWICZ: Okay.
MS. MIURA: So, I'm sorry. You only need three to have quorum, but it's really
hard to have only three of a five -member panel because all three need to agree.
And if one of—let's say one person is out for whatever reason and there's an
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emergency, we have to reschedule all those meetings if there's no quorum. And
we have a requirement to notify. We have to advertise it. We have to post for it.
We have to send letters to everybody about their hearing times. So to end up
canceling on that day is a real inconvenience because we do have people traveling
from out of island that were from the mainland to come to our hearings.
MS. KIERKIEWICZ: Okay, thank you so much.
MS. MIURA: You're welcome.
MS. KIERKIEWICZ: I yield.
CHR. DAVID: Thank you, Ms. Kierkiewicz. Anyone else before I move on?
No? Well, thank you, Ms. Miura. Thank you, Mr. Jo, for coming and for
explaining all of that. Alright, all those in favor of filing Communication 279
please say "aye."
Vote on Comm. 279: The motion to close file on Comm. 279 was carried by the
Filed following voice vote:
Ayes: Committee Members Chung, Eoff,
Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy,
Poindexter, Richards, Villegas, and
Chair David – 9.
Noes: None.
Absent: None.
Excused: None.
CHR. DAVID: Mr. Clerk, I think somebody has—one of us has to leave, so can
we take Resolution 169-19? Thank you.
Change Order of As directed by the Chair and with no objection from the Council Members,
Business: the following item was taken out of order.
Res. 169-19: COMMITS TO FUNDING THE COST ITEMS AWARDED BY
ARBITRATION TO HAWAII FIRE FIGHTERS ASSOCIATION (HFFA)
UNIT 11 AND EMPLOYEES EXCLUDED FROM BARGAINING UNIT 11
FOR THE CONTRACT PERIOD JULY 1. 2019 THROUGH JUNE 30. 2021
Authorizes the appropriation in future fiscal years which would include across-
the-board increases, step movements, within range progressions, and one-time
lump sum bonuses. The estimated cost over the two years of the contract would
be $6,970,788.
Reference: Comm. 277
Intr. by: Ms. David (B/R)
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Motion to Approve: Ms. Villegas moved to recommend adoption of Res. 169-19.
Seconded by Ms. Lee Loy.
CHR. DAVID: And I believe we have Director Sako and Mr. Hunt here for
questions.
(Note: At this time, Finance Director Deanna Sako and Deputy Director
Steve Hunt came forward to address the members of the Committee.)
CHR. DAVID: Ms. Poindexter, go ahead.
MS. POINDEXTER: Yeah, I had a question on the one-time lump sum bonuses.
Because for the Bargaining Unit 11, it specifically says the bonuses are for the
SR -17 to SR -27; Fiscal Year 2020 is $576,625, Fiscal Year 2021 is $579,850; and
then when we go to the Bargaining Unit 34, they don't have who the bonuses will
be for. It doesn't specify anything. But their bonuses, Fiscal Year 2020 is
$21,500, Fiscal Year 2021 is $22,025. So the total bonuses is $1,200,000. What
are the bonuses for? You know, we have theI agree with the two percent
increase each year because to me that's like a cost of living increase, so that's
valid. I think that justifies. You know, we should have that in there.
And then I see we have some of the catch-up stuff We're playing catch-up on
step movements. I don't know when the catch -ups are going to be caught up
because we keep adding stuff there to catch up. You know, do we ever catch up?
First question, is that catch-up every time we do a contract with them? Is that in
there?
MS. SAKO: Lately, it has beensorry, Deanna Sako, Director of Finance. So
lately there has been a catch-up, and I think it dates back to when there were a few
times maybe that not every bargaining unit received steps. But it's sure to make
sure that everybody is on their appropriate step, given the current salary schedule
with the current amounts of steps.
MS. POINDEXTER: Okay. So next, bonuses. I know that—I've spoken to other
Council Members from other counties who are bothered by that, too. You know,
here we are giving $1,200,000 in bonuses. What does that constitute? I mean,
what is it for, who is it for? At least I know that Bargaining Unit 11 is saying it's
for the SR -17 to SR -27, but what is it based on? I don't know.
MS. SAKO: It's actually just based on the SR level they're at. There was a
specific dollar amount assigned for each level, and they average, I would say,
about $2,000 a person for each year. It is based just that you work here, and
you get a bonus.
MS. POINDEXTER: Okay. You know, I wish we could all get bonuses, but this
is our public's money, so I'm kind of concerned about that. It's great to give. I
know they work hard, but that, for me, is very hard to pass when we know we're
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struggling; raising taxes, doing a lot of stuff that is on the taxpayer's back. So,
I'm struggling with that piece of this contract.
The other thing that came up recently on the Island of Kauai was the spiking. So
that kind of like—you know, is this given to them a couple of years before they
retire so that it puts them in that different bracket, where they call them spiking?
mean, I don't know who's monitoring that. Because again, this is all our
taxpayer's money. I don't know, how do you want to address that?
MS. SAKO: Did you want me to comment on spiking?
MS. POINDEXTER: Yes, please.
MS. SAKO: Okay. It is actually—spiking is one of the things I testified
before the arbitration panel about. A couple of years ago, rank -for -rank went into
the contract, and so it's where the senior employees get called back to fill that
like -level position. But I do believe thatcoincidentally, the spiking bill passed
in—our first payment was in 2013, and then rank -for -rank started in 2015. But
from our 2015 payment, spiking bill on—it's been—significant amounts had been
attributed to the Fire Department.
Of this most recent year, in 2018, our spiking bill was $3.8 million, and roughly
$3 million is attributed to the Fire Department, a little over three-quarters of that.
Overall, for all the years of our spiking bill, the last six that we've gotten, only
36 percent of the employees were Fire Department employees, but 68 percent of
the spiking payments were attributed to the Fire Department, or $7.5 million out
of a total $11 million we've paid over six years.
So, it's definitely a concern to us. It is something that we do track. It's related to
overtime and other non -based pay amounts that they get paid. You know, yes,
and I did hear Kauai definitely has concerns as do we.
MS. POINDEXTER: Yeah. And I have nothing against the Fire Department
love them. My nephew is a firefighter.
MS. SAKO: We all do.
MS. POINDEXTER: But I just want to make sure that we're doing what is right,
and just, and fair. Like I said, it's all of us. We're paying for all of this, so we
need to make sure that we're doing what is right by the public. So, thank you. I
yield at this time.
CHR. DAVID: Thank you, Ms. Poindexter. Anyone else?
MR. KANEALI`I-KLEINFELDER: Hi, Deanna.
MS. SAKO: Hello.
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MR. KANEALI`I-KLEINFELDER: Who bargains on behalf of the County for
these types of bargaining?
(Note: At this time, Human Resources Director William V. Brilhante, Jr.,
came forward to address the members of the Committee.)
MR. BRILHANTE: This case—this matter was going through negotiations.
We're trying a negotiated settlement.
CHR. DAVID: Mr. Brilhante?
MR. BRILHANTE: Oh, I'm sorry. Yes, William Brilhante, Director of Human
Resources.
In this case, we started negotiations. You know, we're going through and we're
trying to reach type of settlement agreement through the process. But at a point in
time, the Fire Department made a determination that there's an impasse, so they
filed a Notice of Impasse and then this matter went to binding arbitration.
MS. SAKO: Can I just clarify one thing? When we say "we," because I know
some people are new, it's the entire State is negotiating together.
MR. BRILHANTE: Correct.
MS. SAKO: So just to clarify that.
MR. BRILHANTE: Yeah, thanks for the clarification. So the arbitration notice
was provided and then we went to binding arbitration. A neutral arbitrator was
assigned to hear the case. It was almost like a quasi -evidentiary hearing. We met
in Oahu. All the jurisdictions were there: State, City and County, Kauai, Maui,
and ourselves. Unfortunately, I was the employer's representative on the panel,
so there's a three-member panel: the neutral arbitrator, a representative from the
union, and then a representative from the employer's group. I guess I pulled the
short straw.
So, we had a two-week arbitration. At the end of the day, the neutral arbitrator
issued a decision or an order. So that's pretty much how it went. But
negotiations started at least a year prior to the impasse being declared.
MR. KANEALI`I-KLEINFELDER: The SR -17 through 27, 26 and 27 are for
unfunded positions that we have for pilots. It's a very specialized group of
people.
MR. BRILHANTE: Correct.
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May 20, 2019
MR. KANEALI`I-KLEINFELDER: We only have four positions, and they're all
unfunded. How is that taken into account?
MS. SAKO: HR (Human Resources) and their staff actually did a very detailed
analysis. So we put in what was in the arbitration agreement, whether—and in
our case, yes, we don't have those. So they went person -by -person in the Fire
Department to come up with the cost. They looked at the SR ratings and when
they were due for their next step movement, and they went through a very
thorough analysis to come up with the costing.
MR. BRILHANTE: The other thing isto take into consideration is that the pay
scale, like Ms. Sako alluded to earlier, is based on all of the jurisdictions within
the State. So, there are some positions that maybe County of Hawaii doesn't
have but the other jurisdictions do.
MR. KANEALI`I-KLEINFELDER: I mean, these positions may range from 50,
60, to 110, and on top of that we're going to give them another $21,000 bonus per
year. I mean, that's niceI'd have to say it's a pretty nice salary, plus a bonus.
Is that just like a one-time Christmas bonus or is that a you walk in, you get a
$2,100 bonus. How does that work?
MR. BRILHANTE: When we were going through the negotiations, one of the
things that were brought to the employer's group was the fact that what Fire was
asking for was nothing more and nothing less than what the SHOPO (State of
Hawaii Organization of Police Officers) received two years ago in their four-year
contract. And if you look at the SHOPO contract, you look at year three and four,
the bonus is verbatim, you know, across the board for what was awarded to Fire.
So that's my understanding, the basis where the arbitrator got those numbers
from.
MR. KANEALI`I-KLEINFELDER: Okay, thank you. Appreciate it. You know,
actually, just for meI mean, when we come up on things, and here's where
we're increasing GE (General Excise) income and other source of income, is it
well known within the bargaining units that there's more money to grab and
there's more of an ask there, on those years?
MR. BRILHANTE: Yeah, that's always the position. You know, in the
arbitration, both the employer's group and the union representatives, you know,
present their case. You know, the employer's group, for the most part, you know,
based on the CAFRs and annual budgets, you know, we specifically identify what
type of discretionary funds we have available to, you know, be able to afford the
proposed raises. And of course, the employer's group, they come back, and they
say, "Well, look, you have this, this, and this," so you actually do have the money.
As that information is provided to the arbitrator, you know, the arbitrator's
determination as to who, he or she finds more credible. And in this case, the
arbitrator made a determination that there was money available by the employers
to cover the proposed pay raises.
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May 20, 2019
MS. SAKO: But in our presentation, our financial information, we did stress that
it's the General Fund that pays for all of the firefighters. You know, they're not
special fund funded. And general excise tax, what goes into a special fund is
specifically for transportation. So, that was pointed out during the arbitration.
MR. KANEALI`I-KLEINFELDER: Thank you.
CHR. DAVID: Thank you, Mr. Kaneali`i-Kleinfelder. Ms. Eoff, go ahead.
MS. EOFF: Thank you. So this resolution was transmitted to us from the Mayor,
with the statement at the end that says he does not support the decision that came
out of arbitration. What do we do with that? Because in previous years, I may be
under the wrong understanding, but I thought that we almost were obliged to
adopt this as just one County that's part of this whole process. So I'm just
wondering, what are our choices?
MR. BRILHANTE: Again, the basis for all this Collective Bargain Units
pursuant to the HRS (Hawai`i Revised Statutes), and there's a provision in the
HRS Section 89-10 which says that although it's a binding arbitration, an
arbitrator makes a final determination. Any item which relates to cost or like a
funding mandate has to be approved by each of the independent jurisdictions. So
in this case, we have 20 days to submit that cost item, you know, request to our
jurisdiction, which is you, and then you guys can make an independent
determination as to whether or not you support the cost item increase. So, right
now the ball is in our court. Pursuant to 89-10(b), you know, if the item isn't
approved by any of the jurisdictions, then we start the process over again.
MS. EOFF: And what are the ramifications of that tax?
MR. BRILHANTE: The current contract carries over, just like an extension.
MS. EOFF: Oh, I see. Then you still get paid.
MR. BRILHANTE: Correct.
MS. EOFF: Okay, I'll yield at this time. But that's a lot to think about. Thank
you.
CHR. DAVID: Thank you, Ms. Eof£ Mr. Richards, go ahead.
MR. RICHARDS: Thanks, Chair. We keep talking about big numbers. And,
Deanna, I appreciate the information. You, too, stated that it keeps -c- oming
towards our way. Can you discuss with me our pension payment for the
Countv as a whole, all departments, and then narrow it down to our first
responders, Police, and Fire? And then, I know we're going up, from—what is it,
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35 or 36 percent to 41 percent next year? Can you give me those rough numbers?
And again,, you know me, rough numbers ares
MS. SAKO: So currently, we have to participate in the Employee State
Retirement System, and so we do that. The State has determined that we will all
pay a percentage of salaries. So right now, I think we're at, like roughly,
19 percent for general employees and 31 percent for Police and Fire, which are
broken out into a separate grouping under the Employee Retirement System
(ERS).
Those rates were still—this was year two of a four-year rate increase, so next year
in fiscal year 2020. And then the following year, in fiscal year 2021, there are
two additional rate increases. So in the end we end up at, I think, it's 24 percent
for general employees and 41 percent for Police and Fire employees. And that's
why this particular contract, the costing is very high because those ERS
(Employee Retirement System) rates are included in the costing. And this
contract's total cost is approximately double of what it was two years ago when
we came before you with a cost for Bargaining Unit 11. So that's partly—you
know, everything contributed is why everybody is having a hard time with this
particular one. But part of that is the ERS rates are included in the total costing.
MR. RICHARDS: Okay. And then to put actual numbers to this, what is our
current contribution, total and then broken down as you outlined? Again, roughly
is good.
MS. SAKO: I would need somebody to go grab that. Wait, just a second. I think
I have my Monthly Budget Status. I don't have it broken out by the two groups,
but I can tell you that for General Fund alone we budgeted $43 million in the
current fiscal year.
MR. RICHARDS: For both, is that correct?
MS. SAKO: For both. For all employees.
MR. RICHARDS: Just so our public that's listening, why the difference between
retirement for general versus first responders?
MS. SAKO: I don't have all the history, but I know part of it has to do with their
participation in social security programs across the nation. And so they do pay
the Medicare tax, but they don't pay the FICA (Federal Insurance Contributions
Act) portion, or the 6.2. So each employee also pays a higher percentage
contribution into ERS, as well. Higher than a typical employee.
MR. RICHARDS: Okay. Alright. And what's your projection? Again, off the
top of your head, when we hit the top of our increase in contribution. We're at
$43 million this year. What's your expectation two or three years from now?
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MS. SAKO: I think it's a $10 million increase. Ten next year, and then probably
another $10 million, so we're going to be in the mid -60s in a couple of years.
MR. RICHARDS: Okay. Alright, thank you. I yield.
CHR. DAVID: Thank you, Mr. Richards. Ms. Kierkiewicz, go ahead.
MS. KIERKIEWICZ: Thank you, Chair. I have two things I need to say. The
first is a question. Is it true that Hawaii County is the only County where the Fire
Department has firefighters that function as firefighters and also as EMTs
(Emergency Medical Technicians) and paramedics?
MR. BRILHANTE: That's correct. We're unique in that regard, where we run
our EMS (Emergency Medical Services) service through the Fire Department.
MS. KIERKIEWICZ: So our guys and ladies are actually wearing multiple hats.
MR. BRILHANTE: Correct.
MS. KIERKIEWICZ: Okay, great. I just wanted to make sure that was known.
Chair, and then I also have to disclose I submitted a communication to Council
Services. As you all know, my partner is a firefighter, so I'm going to be recusing
myself from this vote pursuant to our Council rules. Thank you.
CHR. DAVID: Thank you for that disclosure, Ms. Kierkiewicz. Anyone else has
any questions? Okay, then. Mr. Chung had to leave. He thought we'd be talking
until he got back at 3:30, but I don't think it's going to happen. So given that, I
have just a few questions which has not, you know, been already covered by
everyone else.
Our option right now, being that Mayor has sent his negative recommend—you
know, approval, would be what—Mr. Brilhante, you're saying if we do not move
forward on this, you folks go back to arbitration.
MR. BRILHANTE: Yes. At this stage, I think since we're still in Committee
and, Mr. Brown, correct me if I'm wrong, but either a positive or negative
recommendation, it'll move forward.
CHR. DAVID: Right, it can move forward regardless.
MR. BRILHANTE: Either way. And then it'll be discussed at full Council on
first reading.
CHR. DAVID: Right.
MR. BROWN: That is correct.
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MR. BRILHANTE: I still remember a little of my Corp. Counsel—previous.
CHR. DAVID: Well, I'm impressed.
MR. BRILHANTE: But, yeah. So then what would happen is that at first
reading, a determination would be made as to whether or not you're going to
approve the resolution or deny it. Like I said, the language in the HRS (Hawai`i
Revised Statutes) like everything else can be argued both ways. Although the
employer's position is that the matter gets remanded back and negotiations start
an anew, communication to me by the union's attorney is contrary to that.
CHR. DAVID: Right.
MR. BRILHANTE: So it is what it is.
CHR. DAVID: And that's what we're hearing.
MR. BRILHANTE: Nobody can actually predict exactly what's going to happen.
You know, just a quick reading of the specific language, where it says, "All cost
items shall be subject to appropriations by the appropriate legislative bodies."
CHR. DAVID: I see. Basically, if we have the funding to cover whatever has
been negotiated, then it's up to the Council or the Mayor's Office and with
approval of the Council. Okay. So in that caseI noticed in the breakdown, it
says fringe benefits. I see they have listed as "Fringe benefits included are
overtime, premium pay, hazard pay, standby, temporary assignment,
compensatory time, retirement system, Medicare," a whole slew of things that are
covered by fringe benefits. Maybe not now, but I'm curious to see what amounts
are attributable to those fringes, because what I'm hearing from my other Council
Members, on the spiking. Who could actually explain spiking? I just heard a
general description of that, but I think it applies to people or certain ranks that are
almost retiring. Is that what?
MS. SAKO: Well, the true definition of spiking is that in your highest three paid
years, which your retirement compensation is based on. If those are significantly
higher than your other years of compensation, then they do look at it and it gets
kicked out of spiking. And in those cases, they look at each person actuarily and
give us a bill to make up that difference. So that increase, if it was not, you know,
your overtime was not earned consistently throughout your career, or other
non -based compensation, then we end up having to foot the bill for that. The
higher the person is paid, or the longer life -expectancy, you know, depending on
when you retire, then some of those payments do add up and are rather
significant.
When you're referring to the more senior people, I think one of the things that
we've argued in arbitration is that the rank -for -rank is impacting that. Not only
are you at a higher rank, but we're not calling in the lower employees to put them
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on TA (Temporary Assignment) or to bring them back to pay overtime. But we
have this rank -for -rank provision, where we have to call in a "like rank" employee
to cover, and each person has to be offered 12 shifts a year. So, we spend roughly
$2 million a year, just for rank -for -rank overtime. I also think that is impacting
the overtime for these employees that are retiring, and that's why our spiking bill
is so high. So our argument at arbitration was actually to reduce rank -for -rank,
either the number of times we have to call them back or to eliminate it all
together.
CHR. DAVID: Okay, that was the negotiation on the rank -for -rank. So they
can't TA? A captain or someone with a lower rank at a station cannot TA into
like when someone goes on vacation here and they're at a certain level?
MS. SAKO: That's my understanding. If a captain is out, they'll have to call
another captain in.
CHR. DAVID: And that person or that captain is being called from somewhere.
MS. SAKO: Anywhere on the island.
CHR. DAVID: Anywhere on the island.
MS. SAKO: I don't know how they actually do it.
CHR. DAVID: What the process is.
MS. SAKO: But they would have to offer it to several before offering TA, is my
understand.
CHR. DAVID: I see. And that would mean whoever is coming to replace would
be paid regular, or what would their pay be?
MS. SAKO: It would be overtime.
CHR. DAVID: Overtime. Okay. I just have one more question. Because
Mr. Chung wants us to table this to the end of our Committee. He'll be back by
3:30. My question is, it seems like we're costing things out in advance, in several
years. We agree here in this fiscal, and then it covers for the next couple, right?
Unfunded liabilities, this is included in our unfunded liabilities, saying that when
the time comes, we'll find the money, if we agree to this, right? Because right
now we don't have the funding.
MS. SAKO: Right. Basically, right. If you say yes, this is okay, that it means we
will have sufficient funds in the budget to cover these increases.
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CHR. DAVID: Okay, you'll have to make allowances to cover those then. Okay.
And the rank -for -rank, the three years, is it consecutive or is it throughout the
tenure?
MS. SAKO: So when ERS determines, it can be any—it's the three—
CHR. DAVID: Highest pay?
MS. SAKO: 12 month consecutive periods that happen to be the highest. So
for many employees, you know, assuming that you follow the traditional path and
continually get promoted, it is usually your last three years, but that's not to say it
has to be the last three years.
CHR. DAVID: I see. So if you had a better paying job in your 20 -year career,
they would choose the highest through your entire career.
MS. SAKO: Right, or if you had a year that had significant overtime.
CHR. DAVID: Right.
MS. SAKO: You know, that might end up being one-year highest paid.
CHR. DAVID: Because they—so they include not your base pay, but they
include overtime in calculating your rate?
MS. SAKO: For employees hired before July 1, 2012, that's correct.
CHR. DAVID: Oh, okay. Alright, I think I haveI think for now I don't have
any questions. If you guys can hang out for a little while? Oh, I'm sorry. Thank
you, Ms. Lee Loy, go ahead.
MS. LEE LOY: Yeah, thank you. I just want to understand kind of the nuclear
option, right, if we signal. So what I head you say, Ms. Sako, is we have money
right now to pay for these increases, but what I heard Mr. Brilhante say is if for
whatever reason this doesn't pass, we kind of go back and hit the reset button, as
far as negotiations. So my question is if we say no and we go back and there's
more conversation about what that contract looks like; if a firefighter goes up in
step and grade, is that benefit package and the overtime, does that compound
amount of monies owed? Because now we have a longer contract period to look
over, and then that particular firefighter has gone up in step and grade in which
them we're paying them more.
MR. BRILHANTE: What happens in the process, the current contract is good
until the end of June 2019. So once July 1st comes, if there isn't a new contract in
place, then the old contract continues. At some point and time when a new
contract—because the new contract will be adopted, will be authorized and
approved. At that point in time when the new contract is approved and becomes
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effective, we go back, and we calculate what is called "retro." We do retro -pay.
We go and recalculate all of the employee's pay, and we calculate it under the
new basis. So it could be a situation where the amount we actually spend could
be a little higher than what we would have spent if just ratified the agreement.
MS. SAKO: I'm not sure if this is part of your question, but when we do the retro
pay, we look at the grade and step they were supposed to be on every day. So just
because, let's say, six months passes and they should have gotten a step
movement on December 31st, when we go back to July 1st, we look at what they
should have been on that day. So it doesn't mean we would necessarily pay them
more than they were entitled to.
MR. BRILHANTE: No. Correct.
MS. LEE LOY: Thank you. I'll be more than happy to make motion to table
Resolution 169-19 to the end of our meeting.
Vote on Motion to Table: Ms. Lee Loy moved to table Res. 169-19 to the end of the
agenda. Seconded by Mr. Richards and carried by the
following voice vote:
Ayes: Committee Members Eoff, Kaneali`i-Kleinfelder
Lee Loy, Poindexter, Richards, Villegas, and
Chair David — 7.
Noes: None.
Absent: Committee Member Chung — 1.
Excused: Committee Member Kierkiewicz —1.
CHR. DAVID: This matter is tabled. Mr. Clerk, could you take us back to
Communication 280, right above?
Return to Order of The Chair directed the Committee to return to the order of business.
Business -
Comm. 280: REQUESTS AN UPDATE BY THE DIRECTOR OF THE DEPARTMENT
OF INFORMATION TECHNOLOGY ON THE STATUS OF
IMPLEMENTATION OF THE ENVIRONMENTAL SYSTEMS RESEARCH
INSTITUTE SOFTWARE
From Council Member Maile David, dated May 1, 2019
(Note: Comm. 280. 1, from Information Technology Director Jules Ung dated
May 20, 2019, transmitting a handout relating to Comm. 280 was circulated.)
(Note: At this time, Information of Technology Director Jules Ung and
Geographic Information System Analyst Erik Lash came forward to
address the members of the Committee.)
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May 20, 2019
CHR. DAVID: Welcome.
MS. UNG: Hi. Aloha.
CHR. DAVID: Ms. Ung, go ahead. I think you're here for an update, right?
MS. UNG: Yeah, so this is a follow-up to our prior resolution, providing us the
authority to enter into a multi-year agreement for the ESRI-EA, or Enterprise
Agreement.
Currently, we're going through procurement. So we're establishing sole source,
and once that's established, we can route the contract through the County for
signage, and at that point we can start to issue licenses county -wide.
However, we did want to give you some information as far as where we are with
GIS (Geographic Information System) county -wide. Do you all have this, some
slides? We don't have a PowerPoint for you, but we did provide a PDF with a
couple of slides (see Comm. 280.1). We'd like to cover basically compatibility
and workflows and the benefits to the County of having this EA in place.
Let's turn to the first slide, which is a map, and that's taken from the GIS services
currently running to support EnerGov. We've set up a standalone server. And if
you flipped to the second slide, we can touch on compatibility county -wide. So
this service provides us with the ability for authentication with the EnerGov
interface and a single sign -on experience, which is more seamless for users
county -wide.
We are facilitating the user testing of the EnerGov software so that Tyler can
authenticate against GIS services, so users do not have to sign on twice or manage
two different passwords on the County network.
Turning to the third slide, titled Internal Workflow, the foundational parcel layer
is managed in the Planning Department. In order to make the parcel compatible
with Tyler technology's requirement, the Planning Department tax mapping
workflows were adjusted from Shapefiles to a Geo -database format.
Now, we'd like to do a demonstration to show the difference between a Shapefile
and populated data fields in and Geo -database. So could you all please close your
eyes, and keep them closed until we ask you to open them. No peeping, no
peeping. I'm going to hold up a symbol of shapefile, but don't look. Now, what
you may be experiencing is total blackness and perhaps an overwhelming desire
to open your eyes and to see what's in front of you. Maybe like you're blind. I'm
going to just turn around show the room.
Okay, now please keep your eyes closed as we demonstrate the properties of a
Geo -database populated with data fields. Imagine you're on a beautiful beach,
possibly on the west side of the island. It's twilight, the sun is setting. The sky is
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May 20, 2019
yellow, and orange, and blue. The ocean is glassy, and maybe there's like a one
to two -foot swell, and you're on a breaking wave, maybe about 30 feet from the
shoreline, which is speckled with lava rock, and coral, and white sand, and in the
background there are silhouettes of palm trees. Now, you can open your eyes.
Was that accurate? Did you envision something similar? So this is like the
properties of populated data fields within a Geo -database. This gives you
metadata, where you can recreate the image.
So now that the foundational layer of GIS is up to the online building permit
system standard, we can start to integrate other integral data layers county -wide.
So some of those layers will include zoning, special design districts, special
management areas, and wastewater lines to name a few, and this part of the new
standard for data management county -wide.
So turning to the last slide. These are some of the benefits to the County. We
will have the ability to deploy user licenses and support projects such as EnerGov,
the recovery effort, Vision Zero, and agencies such as Highways, Mass Transit,
and Civil Defense. We can support an unlimited amount of users on premise,
when previously advanced user licenses would cost us up to $10,000 each plus
annual maintenance.
So in the past couple of months we've had multiple requests for licenses,
from Research and Development, Planning, Civil Defense, the Mayor's
Office, and external partner agencies related to recovery. We will be able to
scan up redundancy for the enterprise GIS without incurring additional costs
for GIS server licensing, which can run as much as $30,000 for a server
license installation. Agencies will have the capacity to leverage the ESRI
platform for data collection for a variety of purposes including hazard
mitigation, pre -during -and post -event.
As a public service, the mapping resource is currently available via disc to the
public and will be accessible on an online format. Over time, the EA will support
the mechanisms for a smart County and save money, while increasing efficiency.
Please let us know if you have any questions, concerns.
CHR. DAVID: Council Members, any questions for Director? Ms. Kierkiewicz,
go ahead.
MS. KIERKIEWICZ: Thank you. Alright, let me see if I have this correct. So
this system we have now is like riding the Hele-On bus and getting this new ESRI
system we're going to be rolling around in like a Lamborghini. We have all these
new features and licenses that are available.
MS. UNG: Well, we primarily want to focus on the EA for this discussion. But
maybe what you're referring to is EnerGov, which is the new building permit
system.
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May 20, 2019
MS. KIERKIEWICZ: No, not EnerGov, just this system.
MS. UNG: The system is in place.
MS. KIERKIEWICZ: Right, but now we're getting additional licenses and
features.
MS. UNG: Yes.
MS. KIERKIEWICZ: So we're no longer public transportation, the vehicle that
we're currently in, with having these additional licenses and features from ESRI
in this new agreement. It's like we're driving a Lamborghini. It's just my
perception. We're getting so much more with this new agreement.
MS. UNG: You could look at it that way, yes.
MS. KIERKIEWICZ: Okay. When you had us do the exercise, which I
appreciate, but I still don't understand the point that was trying to be made. We
saw the sunset, and that represented the Geo -database, but I don't know what
Shapefiles were like. Is that?
MS. UNG: The Shapefiles is like
MS. KIERKIEWICZ: Operating in the dark?
MS. UNG: Looking—like operating in the dark.
MS. KIERKIEWICZ: Okay. So we're no longer operating in the dark?
MS. UNG: Now we have the metadata populated to recreate the image.
MS. KIERKIEWICZ: Okay, perfect. Makes perfect sense. And then can you
talk a little bit about this stand-alone GIS server and what kind of investment we
needed to make to stand that up, if any?
MS. UNG: Sure. I will defer to Erik on this one.
MS. KIERKIEWICZ: Okay.
MR. LASH: Good afternoon, Council. Erik Lash, IT (Information Technology)
GIS.
So in order to make the EnerGov permit system function, we had to stand up
essentially, a single GIS server machine by itself, on an API, that could talk to the
EnerGov Tyler program.
MS. KIERKIEWICZ: Sorry, what's an API?
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MR. LASH: Application Program Interface. It's essentially the language in
which the two electronic devices communicate. And so the API for the EnerGov
system is going to be specifically for that. It's what had to happen in order to
allow the two organizations to communicate back and forth
So it has its own server license. It stands on its own server, physical server,
physical machine. The EnerGov project databases and REST (Represetnational
State Transfer) services, the services that everybody sees on the internet, those are
essentially isolated in their own room from the rest of the County GIS
infrastructure, because of this. So that's dedicated hardware and software for this
project.
MS. KIERKIEWICZ: And how much is that costing us, or is that part of this
agreement?
MR. LASH: That will be covered under this agreement, yes.
MS. KIERKIEWICZ: Okay. I don't have any other questions for now, Chair. I
yield. Thank you guys.
CHR. DAVID: Anyone else, questions for IT? Seeing none, I just have one
comment. So I'm looking at the exercise that you gave us. So the zoning, the
special design districts, SMA (Special Management Area) areas, and wastewater
line, that's what we will be seeing all together. Like that sunset and all the other
things that you're describing will be like that photograph combined, what we're
going to—the overlay.
MS. UNG: Probably it's like it, if you dissected the photograph, and the ocean
was the layer, and the palm trees was a separated layer.
CHR. DAVID: Right. The ocean, the zoning, special design districts, and the
coconut trees, et cetera.
MS. UNG: Exactly.
CHR. DAVID: Okay, got it. I like pictures. I understand things a lot better that
way. So thanks a lot Director and Mr. Lash. Alright, mahalo for being here.
MS. UNG: Mahalo.
CHR. DAVID: Alright, Council Members, I think we have one more. Oh, hang
on a second. All those in favor of filing Communication 280 please say "aye."
Vote on Comm. 280: The motion to close file on Comm. 280 was carried by the
Filed following voice vote:
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May 20, 2019
Ayes: Committee Members Eoff, Kaneali`i-Kleinfelder,
Kierkiewicz, Lee Loy, Poindexter, Richards,
Villegas, and Chair David — 8.
Noes: None.
Absent: Committee Member Chung — 1.
Excused: None.
CHR. DAVID: Thank you. Mr. Clerk, now please proceed with Bill 70.
Thank you.
ORDER OF The Chair directed the Committee to proceed to the next order of business,
RESOLUTIONS: Order of Resolutions.
(Note: Res. 169-19 was taken up previously, out of order.)
BILLS FOR The Chair directed the Committee to proceed to the next order of business,
ORDINANCES: Bills for Ordinances.
Bill 70: AMENDS ORDINANCE NO. 17-19, WHICH AMENDED ORDINANCE NO. 12-
129, WHICH AMENDED ORDINANCE NO. 11-81, WHICH AUTHORIZED
THE MAYOR TO ENTER INTO AN INTERGOVERNMENTAL AGREEMENT
FOR A STATE WATER POLLUTION CONTROL REVOLVING FUND LOAN
FOR WASTEWATER PUBLIC IMPROVEMENT PROJECTS AND
AUTHORIZED THE ISSUANCE OF GENERAL OBLIGATION BONDS FOR
THE PURPOSE OF FINANCING QUALIFIED WASTEWATER PUBLIC
IMPROVEMENTS OF THE COUNTY OF HAWAII
Increases the original amount authorized from $2.7 to 7.5 million, and amends
Exhibit A to add Hilo to the second project title, to read, "Kula`imano, Papa`ikou
& Hilo Dewatering & Barminutor Replacement." The increase is due to updated
cost estimates and anticipated contingencies. Hilo is added to reflect that certain
equipment will be designated to the Hilo Wastewater Treatment Plant if
necessary.
Reference: Comm. 287
Intr. by: Ms. David (B/R)
Motion to Approve: Mr. Kaneali`i-Kleinfelder moved to recommend passage
of Bill 70 on first reading. Seconded by Ms. Villegas.
CHR. DAVID: I believe we have Director in the house, Director Kucharski.
Council Members, do we have questions? I saw a head nod, Mr. Kucharski.
(Note: At this time, Environmental Management Director
William Kucharski came forward to address the members of the
Committee.)
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May 20, 2019
CHR. DAVID: Welcome, and thanks for your patience. Ms. Kierkiewicz, would
you like to ask your questions to Director?
MS. KIERKIEWICZ: Oh, sure. Hello, Director Kucharski, nice to see you. You
know, I see this background and justification report, but it's really stunk out clear
to me why there's a need to increase the amount of funds for this project. I mean,
what was—was there a delay? What's really behind all of this?
MR. KUCHARSKI: Bill Kucharski, Director of DEM (Department of
Environmental Management). There wasn't a delay per se. What there was, was
an initial estimate that was put in just simply to get something on the board so that
we could move forward with design. As we're moving forward, we found that we
would need significantly more money. When we're in there, there's—you can get
like a 30 percent or 50 percent contingency, and in order not to come back and sit
here again for another change, we had an estimate that was higher than we expect
but still within the bounds of possibility. That's the best answer I can give you.
MS. KIERKIEWICZ: Who crafted that cost estimate?
MR. KUCHARSKI: That was done by our contractor that's in the design. They
do a preliminary design. I think they are 30 to 60 percent design, and at that point
they have a much better idea of equipment, material, and everything that will be
necessary to complete the project.
MS. KIERKIEWICZ: So if making these sort of estimates in their wheel -house
because they're the experts, why was their estimate so off?
MR. KUCHARSKI: Because we did the first estimate and gave it to them.
MS. KIERKIEWICZ: Okay, got it. I yield for now, Chair.
CHR. DAVID: Thank you, Ms. Kierkiewicz. Ms. Lee Loy, go ahead.
MS. LEE LOY: Thank you. Thank you, Director Kucharski, for being here. And
following up on Ms. Kierkiewicz's, on the background justification sheet it says,
"the Hilo Wastewater Treatment will not be receiving any physical upgrades as
part of this project. However, the new mobile dewatering facilities included as
part of this project will be considered back-up system."
MR. KUCHARSKI: Yes, Ma'am.
MS. LEE LOY: So we're buying a big Band-Aid, it sounds like.
MR. KUCHARSKI: What we're doing is having a dewatering system that can be
used at these facilities that could also be used at Hilo. If we had a problem with
the centrifuge that we currently use to dewater there, this is a system that could be
brought there in an emergency as a back-up to cover on that.
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MS. LEE LOY: So this back-up system would work at Kula`imano, Papa`ikou,
Hilo. No? Am I
MR. KUCHARSKI: Yes.
MS. LEE LOY: So tell me the amount of facilities that this back-up system could
serve around the island.
MR. KUCHARSKI: I'm notI can't tell you that it couldn't be used on most of
the facilities; if it can be used on Hilo, which is our largest facility, then it could
be probably used on any. This will be a centrifuge, so that can be moved. You
know, a centrifuge will throw heavy particles out and water will drop out, so
you'll get a dryer material. My guess is that it's a centrifuge because I can't think
of anything else that would be a portable filter.
MS. LEE LOY: And then right at the top of the justification, it's "enter into an
intergovernmental agreement for a State Water Pollution Control Revolving Fund
Loan." What's the interest rate on those loans? Because I understand them to be
rather low.
MR. KUCHARSKI: I think it's between three-quarter percent, one percent, but
they vary. It's down in that area. It's not in the four to five percent. Most of the
large expenditures from Wastewater goes to the SRF (State Revolving Fund)
fund.
MS. LEE LOY: So if I'm understanding this correctly, it's SRF funds, a bond
float, yeah, General Obligation Bonds, are those the two sources of funding?
MR. KUCHARSKI: In order to secure the SRF loan, the County needs to secure
that. So the authorization is for the County to issue bonds if necessary, but
they're not issued unless the SRF loan does not come through; but if it does, that's
sort of the guarantee to the State that the County has the facilities to repay the
loan. It's my understanding. I shouldn't be speaking for Finance.
MS. LEE LOY: Thank you, Mr. Kucharski. Chair, I yield.
CHR. DAVID: Thank you, Ms. Lee Loy. Mr. Richards, go ahead.
MR. RICHARDS: Thank you. Thanks, Bill, for being here. I wanted to circle
back on what Council Woman Lee Loy asked, actually a little bit further back.
The estimate we made—we made the first estimate, and it was three -fold less than
the consultant. Is that what I was hearing?
MR. KUCHARSKI: When we put in the contingency, yes, sir. There's about a
50 percent contingency in the estimate. We expect it's probably going to be
closer to five than seven.
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May 20, 2019
MR. RICHARDS: In case—
MR. KUCHARSKI: No, and we don't want to keep coming back. If we spend
less, we'll feel a lot better than coming back and saying we need to spend more.
That doesn't' mean that the cost is going to increase, it just means that we have
the ability to cover it if it doesn't.
MR. RICHARDS: And why do we need that contingency in there?
MR. KUCHARSKI: Because particularly on facilities, when we're dealing with
really old facilities, we're dealing with bar screening that is the initial change. I
mean, the bar screens are what if you do primary treatment, what you do is you
have these screens in to take big hunks of things that don't dissolve, and you pull
that out. These are going to be changed. If we get in there and find something
that we can't see, it's going to require a change order; that's a contingency on the
contract amount, as a rough example.
MR. RICHARDS: So it's things that you're not—you're guessing that's what it's
going to be until you open it up.
MR. KUCHARSKI: I would say we're guessing that there's going to be
something that we didn't anticipate in the original design, yes, sir.
MR. RICHARDS: Got it. Okay. Alright, I yield.
CHR. DAVID: Thank you, Mr. Richards. Mr. Kaneali`i-Kleinfelder.
MR. KANEALI`I-KLEINFELDER: Hi, Bill.
MR. KUCHARSKI: Sir.
MR. KANEALI`I-KLEINFELDER: So that Kalinanaole interceptor
rehabilitation fees does not include fixing the interceptor? We're just paying for
what? I don't get it.
MR. KUCHARSKI: This is for the treatment plants for the collection system.
That is a separate project, but I think it's under the same SRF loan fund. So that
portion is going to remain as—that's not going to be modified. It's only for the
upgrades and the repairs to the treatment systems. Frankly, I don't know—I can't
give you a good reason why they're both mentioned in here. I really didn't go
back and check on that.
MR. KANEALI`I-KLEINFELDER: As far as I know, and we've talked about it
before, that facility is old. I think your words, the cement is—how thin did you
say that cement was? Is it the same facility we're talking about?
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MR. KUCHARSKI: I need clarification exactly which facility I'm talking about
because most of the cement that we have in our systems is degraded in some level
or other. Hilo has probably the largest degradation concrete breakdown; but on
these, we have the barminutors, and then the concrete structure themselves are
going to have to be repaired and rebuilt. But I can't tell you how much they're
broken down; if I told you, it would be a guess and probably a bad guess.
MR. KANEALI`I-KLEINFELDER: So although this is a revolving fund for
projects like what we're talking about, we're not using it, we're going to buy a
piece of equipment that helps us solve problems in the future, maybe?
MR. KUCHARSKI: We're going to be replacing the equipment that has worn out
in the original design with an upgraded design but the same principle. The SRF
fund is for dealing with improvements in water quality, and this will improve the
discharge and our ability with that facility to function as it's designed. It's just
worn out. Like say I'm going to put a new clutch in the car—for those that know
what a clutch is. There aren't many around. It's a peddle on the left. Excuse me.
MR. KANEALI`I-KLEINFELDER: The total that we're talking about is $8.6
and $7.5, respectively.
MR. KUCHARSKI: Yes, this is asking for a $4.8 million increase in the original
amount.
MR. KANEALI`I-KLEINFELDER: Why don't we just fix it with that much
money?
MR. KUCHARSKI: We are. That's what this is for, is to fix and repair the two
treatment systems.
MR. KANEALI`I-KLEINFELDER: Okay, thank you. I yield.
CHR. DAVID: Thank you, Mr. Kaneali`i-Kleinfelder. Anyone else?
Ms. Villegas, go ahead.
MS. VILLEGAS: Hi. How you doing, Bill?
MR. KUCHARSKI: Good afternoon.
MS. VILLEGAS: So just to make sure that I understand, Hilo has its own
wastewater treatment facility, correct?
MR. KUCHARSKI: Yes.
MS. VILLEGAS: And these are separate facilities that are being described here,
correct?
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May 20, 2019
MR. KUCHARSKI: Yes.
MS. VILLEGAS: Just in laymen's terms, can you explain what it meansoh,
where did I just find—the terminology? It had "dewatering and barminutor."
MR. KUCHARSKI: Yes, Ma'am.
MS. VILLEGAS: Sorry, barminutor replacement. So those are certain capacities
of these separate wastewater treatment facilities, and they're the clutches that
need to get fixed?
MR. KUCHARSKI: Yes. When the wastewater comes in from a normal
sewer -line collection system, there are going to be a lot of things in there that
don't dissolve. I mean, there's wood, there's gravel, there's things like
MS. VILLEGAS: Feminine hygiene products?
MR. KUCHARSKI: Yes, wipes that you can use that you really shouldn't.
MS. VILLEGAS: Right.
MR. KUCHARSKI: But all of those wind upI mean, there's Barbie dolls.
There are all sorts of things that wind up there. But these screens, when it comes
in, these screens lift and take all of that debris out of the flow; so that when we're
in a treatment, all of these external nondegradable products are not in that
treatment train. That's what the barminutors do.
MS. VILLEGAS: That's a barminutor.
MR. KUCHARSKI: And then on the dewatering, once you come down and
you've treated the water, you usually have a sludge. That sludge has a high
volume of water. So you put that into a system that removes the water and takes
sit from—something looks brown water into cleaner water and then sludge. If
you shake up a bottle of water and you sit, pretty soon you'll get it clear on the
top and the mud will be on the bottom, well, it does that, only it does it much
quicker than just settling. Although there are some systems that settle, like
Kealakehe. That's how you get the sludge, it just settles.
MS. VILLEGAS: Okay.
MR. KUCHARSKI: But this is a physical means of getting that separation of the
water and the sludge more quickly so that can be taken out and disposed of.
MS. VILLEGAS: Okay, so would you define this as not only a fix for what's
going on at this facility but an upgrade to a more efficient technologies?
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MR. KUCHARSKI: It will be more efficient because it's new. But it's going to
be essentially the same design. It's not going to be an upgrade to the design. It's
going to be an upgrade to the equipment that's already there, that's been
functioning well for the last 20 years.
MS. VILLEGAS: And at either of these facilities are we experiencing any
challenges or issues with unanticipated discharge?
MR. KUCHARSKI: There's always some. What this does, we just have to send
people out and do significant amount of maintenance to ensure that we don't have
discharges that violate our discharge standards or our permits. And so this is
going to require less maintenance because we don't have to keep fixing the bar.
We don't have to keep saying, "Alright, we've got to run this dewatering again."
This is an operation maintenance type of thing and replacement of things that
have just worn out.
MS. VILLEGAS: You know, if something hits the fan, you all know that saying,
at the Hilo Wastewater Treatment facility, there is capacity with these new and
updated pieces of this project, I guess, to be transferred over and then help in that
capacity.
MR. KUCHARSKI: Yes, it could.
MS. VILLEGAS: Hopefully, that won't ever happen, but yeah.
MR. KUCHARSKI: My thought is the equipment that we use, the water
equipment would be mobile, so it could be moved there in case of a, you know, if
there was some sort of power shutdown or over -capacity and we needed more
dewatering capacity, this is just an equipment that could be mobilized there to
help with that.
MS. VILLEGAS: Which isn't the case for a lot equipment associated with
wastewater treatment facilities.
MR. KUCHARSKI: No, usually it's just generators that we move from one place
to another.
MS. VILLEGAS: Yeah. Okay, thank you. I yield.
CHR. DAVID: Thank you, Ms. Villegas. Anyone else? No? Alright. Thank
you, Director, for being here and for your explanation. Council Members, all
those in favor of forwarding Bill 70 to Council with a positive recommendation
please say "aye." Welcome back, Chair Chung.
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Vote on Bill 70
(Approved)
Recess:
R ernnvene
Vote on Motion to
Remove from Table:
(Approved)
May 20, 2019
The motion to recommend passage of Bill 70 on first reading
was carried by the following voice vote:
Ayes: Committee Members Chung, Eoff,
Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy,
Poindexter, Richards, Villegas, and Chair David — 9.
Noes: None.
Absent: None.
Excused: None.
CHR. DAVID: Can I have a motion to take you want to send us in a recess.
Oh, perfect.
MS. LEE LOY: Yes, thank you.
CHR. DAVID: We're in recess for seven minutes. Thank you.
At 3:35 p.m., the Chair called for a recess.
The meeting reconvened at 3:46 p.m.
CHR. DAVID: Okay, welcome back. I'm taking the Finance Committee out of
recess. Could I please have a motion to take Resolution 169-19 off the table?
Mr. Kaneali`i-Kleinfelder moved to remove Res. 169-19
from the table. Seconded by Ms. Poindexter and carried
by the following voice vote:
Ayes: Committee Members Chung, Eoff,
Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy,
Poindexter, Richards, Villegas, and
Chair David — 9.
Noes: None.
Absent: None.
Excused: None.
CHR. DAVID: Ms. Poindexter, you wanted to?
MS. POINDEXTER: Deanna, can you come up again?
(Note: At this time, Finance Director Deanna Sako came forward to
address the members of the Committee.)
MS. POINDEXTER: In our discussion, we were talking about the bonus pay that
was on the contract. You made reference at one point that, I guess, the arbitrator
felt that because the Police had it, SHOPO (State of Hawaii had it, it was okay to
put it in the Fire contract. Correct me if I'm wrong, but I think the reason why we
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approved SHOPO'S, at that time they had retention issues, and plus they didn't
have rank -for rank. Is that correct?
MS. SAKO: Yes, that's my understanding. So when we through the arbitration
with SHOPO, several jurisdictions were having trouble just being able to recruit
and then hanging on to longer -time officers.
MS. POINDEXTER: Okay. So, to me that was a justification of why we needed
to do that. Here, I cannot find the justification. So, at this time I'm not going to
be able to support this. I'll yield at this time. Thank you.
CHR. DAVID: Thank you, Ms. Poindexter. Anyone else? Ms. Lee Loy, go
ahead.
MS. LEE LOY: Thank you, Chair. Ms. Sako, we're just one of the other
counties. Do we know where Kauai is, Maui County is, City and County of
Honolulu is?
MS. SAKO: I'm not sure anyone had actually heard it or voted on it yet. I know
Kaua`i's meeting is next week; I think Maui is the same. So I'm not sure how it's
been going, but I have been hearing that, you know, some people—that it may not
be supported. But obviously, we won't know that until they take their vote. So
when we hear, we can come back and update you guys.
MS. LEE LOY: And if, for example, it doesn't get support here at Hawaii
County and then Kauai, are those two counties kind of stuck back at the
arbitration, and then the other counties move forward? And those firefighters get
theirs and do we—how does that work?
MS. SAKO: No, we are one. We negotiate all together as one body. So if
one—my understanding is if one county says no, then we would go back to
arbitration. As Mr. Brilhante said, we may argue about it first, but yeah.
MS. LEE LOY: Yeah, I'd like to see wat the counties do, but I don't mind
moving it forward just to kind of get it to the next step and hold it there. But I'm
willing to listen to the rest of my colleagues and see what we want to do. I yield.
Thank you.
CHR. DAVID: Thank you, Ms. Lee Loy. Ms. Villegas, go ahead.
MS. VILLEGAS: I just want to start off by saying thank you, Deanna, for all of
your extensive information and knowledge, especially about spiking and some of
the challenges that we're experiencing in the County and statewide and the
different departments that represent that. I think that's a great opportunity for the
leadership in these departments to take a look at it and see how they can work in
the future to reduce those instances.
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May 20, 2019
I appreciate hearing that your team are identifying situations, circumstances, and
different people that this might be happening with. I also recognize that it's
human nature that we do what we can to make sure that we're getting what we
need.
I also have tremendous respect and gratitude for our Fire Department. I don't
know that there really is a number that could actually value the service, the
discipline of the different really, really, really powerful and appreciated services
that they provide our community. They're constantly fundraising for equipment,
and it constantly seems that they're underfunded in a general standpoint. I'm
conflicted in that capacity because in my heart I immediately want to say
whatever the firefighters need, and this obviously went to professional, and it's
been through arbitration, to people that know way more specifics, stats, and
strategies than I do where this is related.
But I would say that the concept of bonus, you know, coming from the private
sector, you got a bonus if you had your benchmarks and these are the things you
had to do in order to accomplish, you know, whatever was set out for you by your
manager. So I guess there's someI get that it's based on a precedent set by
SHOPO. I also thinkI mean, ironically, do you bonus a fireman or an EMT
forI mean, they're going to put out the fire. These men and women are diligent
and determined, and they risk their lives on daily and expose themselves to other
forms of trauma.
So that bonus, I don't know; I wish there was a different word for it, just because
it becomes kind of aI don't know, jacks the position in that capacity. And just
from a fiscal—trying to be fiscally responsible, setting precedents, it becomes
challenging because we just continued toironically, then the County is taking
care of the people that live and serve this County, but if things continue to inflate
without any stopping. I firmly believe the two percent, that's like a cost of living
adjustment. That's even in the private sector.
MS. SAKO: Right.
MS. VILLEGAS: So, my only concern really comes with the bonus side of
things. I really want the Fire Department to know and understand that it doesn't
come from a place of not supporting. If our pockets were endlessly deep, I just
get concerned that we're going to end up backing ourselves into a corner. But I
also think that if we have money, as the arbitrator identified, that this is one of
those services that can't be cut, that can't be reduced, and should be supported
from a civil servant standpoint.
But my question just comes on the bonuses and then how that becomes—how did
you equate that and what are your benchmarks? Yeah, what are the parameters
for that? So thank you for all of your time and expertise in this, and for the
arbitrator, and the firemen, and the fire women, and the captains, and the chiefs.
Yeah, we'll continue to do this dance. Thank you.
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May 20, 2019
CHR. DAVID: Thank you, Ms. Villegas. Anyone else before we move on with
however we're going to proceed on this? Okay, I just have a couple of questions
left then. Maybe this is for Mr. Brilhante. On the negotiations, is it all or
nothing? I'm hearing Council Members specifically identifying certain things
within this contract that they are having some questions about. Would that—so if
the Council decides that they cannot support one, or maybe two of the issues or
the components of this bargaining contract, what then? Is there an option to
negotiate that? Or, no because that's been in arbitration?
MR. BRILHANTE: I wish I could give you the answer I know you're wanting to
hear. You know, unfortunately the Council has to consider all of the cost items in
their totality. You know, like what was mentioned earlier, that's the duty we owe
to the taxpayers, you know, when it comes to using public funds. Like I said, I
wish I could give you a better answer, but it's all or nothing. And again, this was
binding. This was a decision based from binding arbitration. So, you know,
whatever the arbitrator ruled in his decision, that's pretty much what goes
forward.
CHR. DAVID: Yeah, okay. There's no—okay. So if you folks
MR. BRILHANTE: I will say this, thoughI'm sorry to interrupt—you know,
Ms. Sako was our lead witness as it related to the financial matters. She clearly
stated on the record, and she raised our issues as it related to rank -for -rank and the
cost associated with overtime and those financial commitments, and the arbitrator
took it upon himself to actually "verbatim" put Ms. Sako's language in the award.
So it's not like we're there just sitting around eating donuts and drinking coffee.
You know, we were doing our homework there, and we were trying to put the
best foot forward that we could for the County.
You know, it's—and I'm preaching the choir, County of Hawaii is in a unique
situation. There are some other counties that, you know, maybe weren't
aggressive as it related to cost items because maybe they're more financially
flushed than we are, but unfortunately that's not how we are here. You know,
we're aggressive as it related to the financial concerns.
CHR. DAVID: And I appreciate that. Because I think what we've been hearing,
at least what I've been hearing on the west side is—you know, the concern that
our constituents and the people of this island are concerned with is the extremely
high cost of wages that is not only the Fire Department but this entire County.
They are talking about cutting, and then we have something here that, you know,
when you look at the numbers, it's astronomical as far as a layman's vision. That
has nothing to do with how important everyone in this room believes our
firefighters and our police, for that matter. So my next question is, who else has
rank -for -rank in our departments?
MS. SAKO: Fire is the only one that has such a provision.
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May 20, 2019
CHR. DAVID: Police doesn't have any?
MS. SAKO: No.
MR. BRILHANTE: No.
CHR. DAVID: Okay. Now, for real, my last question. Overtime, what is the
County's total overtime that we spend yearly? The most?
MS. SAKO: This year and last year a little bit higher than normal because of the
emergencies that we had. But last year we had $16 million; in fiscal year 2017, it
was $14 million, and of that, just because we were talking about how retirement
payments are set by overtime, the Fire Department has half of all overtime in the
County.
CHR. DAVID: Out of our total overtime, Fire Department is 50 percent of that
overtime?
MS. SAKO: Correct.
CHR. DAVID: Not the Police.
MS. SAKO: Not Police, no.
CHR. DAVID: Okay. Well, I'm just full of more questions, so I don't know
what to do. Council Membersoh, I'm sorry. Go ahead.
MS. EOFF: So I understood what Ms. David asked and your answer, but I just
wanted to repeat that to make sure I'm clear. If the counties, us, any of us, Maui,
Kauai or us, rejected this contract, even though we only are really rejecting one
aspect of it, when it goes back to arbitration, the decision out of there would be
either accept this contract the way it is or we go back to the contract that's
currently in existence. There's no changing to the contract that can be
MR. BRILHANTE: The process would be, according to our interpretation and
that of the State Attorney General which I mentioned earlier, it might be argued
differently by the union's attorney, is that the proposed contract is thereby
rejected if a jurisdiction were to reject the proposed cost increases. The contract
in its entirety, the new contract would be rejected, and then the matter would go
back and start anew, as if, new negotiations.
MS. EOFF: For whole new contract.
MR. BRILHANTE: Correct.
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MS. EOFF: So if the counties unanimously suggest that there's one component
that doesn't sit well, one or whatever but not the whole contract, that could be a
topic for further negotiation?
MR. BRILHANTE: You know, what happened previously, dating myself,
hopefully not, this is just based on hearsay, it was back in days of Governor
Ariyoshi, back in the late 70s I believe, there was a Fire contract that was rejected.
I think it was by the State Legislature. You know, don't quote me on the specific
facts, but a contract was rejected by one of the jurisdictions, so it got sent back.
You know, the process was going to start anew. But in that interim period of
time, the union and the employer's group got together, and they were able to
remedy whatever issue that was contentious at that time, and they reached an
agreement before the process started anew. Since it was a negotiated agreement,
the contract went forward.
MS. EOFF: That would be an ideal type of a situation. Okay, thank you.
CHR. DAVID: Thank you, Ms. Eoff Before—anyone else? No? Okay,
Mr. Clerk can we do a roll call vote, please, to move this forward to Council?
MR. BROWN: With a positive recommendation.
Vote on Res. 169-19: The motion to recommend adoption of Res. 169-19 was
(Approved) carried by the following roll call vote:
Ayes: Committee Members Chung, Eoff,
Lee Loy, Richards, and Villegas – 5.
Noes: Committee Members Kaneali`i-Kleinfelder,
Poindexter, and Chair David – 3.
Absent: None.
Excused: Committee Member Kierkiewicz –1.
(Note: Ms. Eoff, Ms. Lee Loy, Mr. Richards, and Ms. Villegas voted
"kanalua" then "aye.")
CHR. DAVID: Alright, that concludes our agenda for today. We took
everything.
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FC -1 i nta, 20, 2019
ADJOURN- There being no further bucmese, at 4 04 p m., ble Lee Loc moved to adjourn
HENT the meeting. Seconded b ?vis Poindc\ter and carried by the following
voice vote'
Ayes Committee Members Chung, Eoff,
Kaneah'i-Klemfelder, KlerkleNvicz, Lee Lo_v,
Poindexter, Richards. Vdlegas, and
Chair David — 9
Noes None
Absent: None.
Excused: None.
CHR DAVID We are adjourned. Thank you everybody
Approved
Nis. Maile Medeiros David, Chair
Finance Committee
MD/na
(Date)
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