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HomeMy WebLinkAboutMIN FC 2019/09/17 2018-2020Committee on Finance 19" Session West Hawai'i Civic Center 74-5044 Ane Keohokaloele Highway, Building A Kailua-Kona, Hawaii September 17, 2019 CALLED The regular meeting of the Committee on Finance was called to order at ORDER. 9:35 a.m., in the Council Chambers, Kona, by Ms. Maile Medeiros David, Chair. ROLL CALL. Present: Ms. Maile Medeiros David, Chair Mr. Herbert M. "Tim" Richards, III, Vice Chair (came in later) Mr. Aaron S. Y Chung, Member 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 (came in later) Absent & Excused: Ms. Rebecca Villegas, Member STATEMENTS The Chair directed the Committee to proceed to the nest order of business. FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: The following individuals registered to speak and came forward when called by the Chair: Jon Olson: Res. 304-19 (Comm. 472), comment. Abelghassem Abraham Sadegh: Res. 304-19 (Comm. 472); and Bill 95 (Comm. 467), comment. Cory Harden Res. 304-19 (Comm 472), comment. Dwight Vicente: Comm. 10.19: and Comm. 465, comment. CHR. DAVID: Mr. Clerk, if it's okay with Council Members, I'd like to take Communication 465. 1 understand Ms. Nakanishi is in Hilo. Could you please read in, if it's okay with everyone? Seeing no objections. FC -19 September 17, 2019 COMMUNI- The Chair directed the Committee to proceed to the nest order of business, CATIONS. Communications. Comm. 465 NOMINATION OF DENISE NAKANISHI TO THE BOARD OF ETHICS From Mayor Harry Kim, dated August 29, 2019, submitting for the Council's review and confirmation of the above nomination. Requires Council Confirmation by October 12, 2019 (Section 134(1), Hawai'i County Charter) Motion to Approve' Mr Kaneali'i-Kleinfelder moved to recommend confirmation of the appointment of Ms. Denise Nakanishi to the Board of Ethics. Seconded by Ms. Poindexter. (Note: At this time, Executive Assistant to the Mayor Rose Bautista and Nominee Denise Nakanishi came forward to address the members of the Committee ) Vote on Comm. 465: The motion to recommend confirmation of the appointment (Approved) of Ms. Denise Nakanishi to the Board of Ethics was carried by the following voice vote: Ayes: Committee Members Chung, Leff, Kaneali'i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair David — 9 Noes: None. Absent: None. Excused: None. Committee Members spoke in favor of the appointment Chair David informed Ms. Nakanishi that she does not need to appear at the Council meeting for final confirmation of her appointment. CHR. DAVID Alright, Mr. Clerk, just take us to the top of the agenda, please. Return to Order The Chair directed the Committee to return to the order of business. of Business: Comm. 10.19 REPORT OF CHANGE ORDERS AUTHORIZED: JUNE 16 — 30, 2019 From Finance Director Deanna Sake, dated August 20, 2019, transmitting the above report pursuant to Hawaii County Code Section 2-12.3. Page 2 FC -19 September 17, 2019 Motion to Close File: Mr. Richards moved to close file on Comm. 10.19 Seconded by Ms. Eoff. CHR. DAVID: Any discussion? Ms. Kierkiewicz and then Mr. Richards. MS. KIERKIEWICZ. Thank you, Chair. Is anyone from Finance in Hilo? CHR. DAVID: I believe Director is available. (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MS. KIFRKIEWICZ. Good morning, Deanna. MS. SAKO: Good morning. MS. KIERKIEWICZ. I was going through this Report of Change Orders Authorized, and I was curious about the Price Term Agreements for Mass Transit There were two items, and I noticed that the original contract amount states zero, the change order is also zero. I mean, the whole line is just zeroed out. So I'm just looking to better understand this. MS. SAKO: So pretty much every time you see a Price Term Agreement, it's always zeros. Those agreements are for us to purchase things usually in a per unit basis, so sometimes it may be for supplies, and we purchased cases of toilet paper and whatnot, but we agree on the price per item but not necessarily on how much we need. So then the vendors bill us as the product is used. MS. KIERKIEWICZ. Okay And this is the annual list of vendors that we procure as County, right? We work with certain vendors that go through the process? NIS. SAKO Right. These me any that might have had change orders, so we might have extended their agreement or did exercise option years. It's not necessarily the complete list, just the ones that had change orders. MS. KIERKIEWICZ. Okay So Price Term Agreement for rental of buses, what is that exactly right now with Polynesian Adventure Tours? NIS. SAKO' So this is one of our newer Price Term Agreements. I mean, from 2017, where if we don't have enough buses on a given day, we will reach out and ask them to rent buses so that we can utilize them on our bus routes. MS. KIERKIEWICZ: So between now and when this original contract was put in place, April 2017, do you have sense of how much we've spent? Page 3 FC -19 September 17, 2019 MS. SAKO- Specifically on rental, no. I know last fiscal year between rental and drivers, it was roughly $9 4 million. But that's on all vendors. MS. KIERKIEWICZ. Just last year? MS. SAKO, Last fiscal year, yes. MS. KIERKIEWICZ. And then we have another Price Term Agreement for furnishing and operating the fixed route and schedule for bus service. MS. SAKO Yeah, I'm pretty sure that's the drivers contract. MS. KIERKIEWICZ From 2015? MS. SAKO Yes, because there were several option years when we did that bid. So that $9 4 million I gave you earlier would include this one as well, as well as another agreement that's not on this list. But there are multiple contracts for rental buses, as well. MS. KIERKIEWICZ. How come there's so many change orders? I'm noticing for this one there's been twelve over the last four years. MS. SAKO: Right. Frequently at the end of the fiscal year and the beginning of the new fiscal year, that's when most of contracts come up for renewal. And so then if we're not doing anew bid or if we're exercising an option year—sorry, on my list it's cut off. but on that very far right column, it should say if it's an option year, we're extending the agreement. MS. KIERKIEWICZ. Okay Is it possible to start including account numbers for where these items are being funded? MS. SAKO- I will see if we can do that. MS KIERKIEWICZ. Okay, last question for this change order is regarding the temporary emergency shelters for folks displaced by lava eruption. So it says the contract is Hope Services. There is an amendment to the MOA (Memorandum of Agreement). Can you tell me as much as you can about this particular agreement the County has with Hope Services? MS. SAKO: Sony, I don't have that one with me. MS. KIERKIEWICZ, Okay Page 4 PC -19 September 17, 2019 MS. SAKO* As I mentioned, the last column is cut off. So I'm not sure if we're extending it. Sharon Hirota is the contact person for that. I think as noted in the cover letter, yeah, if there were questions, was to reach out to those contact people. MS. KIERKIEWIC7.. Okay I'll follow up with Sharon. Thank you, Deanna. I yield. CHR. DAVID: Thank you. Ms. Kierkiewicz. Mr. Richards, go ahead. MR. RICHARDS. Thank you, Chair. Thanks, Deanna. I'm going to follow up with what Ms. Kierkiewicz was working on when it comes to Mass Transit. We've had the conversations about the buses and the contract rate. Can we wee the contract rate? Can you just report on that? More specifically, I'm interest in what the contract rale has been and what the contract rate will be going forward. And this is part of the conversation we're going to have later. So can we get that9 I know w have a total of last fiscal year. But can you get us a report on that one, Deanna? MS. SAKO: That's something we can work on once the contract has actually been awarded: until then, any bides that haven't been awarded are not public record. MR. RICHARDS. But the one up to now is public record, correct? MS. SAKO Yes. Yes, we can get you rates for those. MR. RICHARDS. Can you get us a copy of that, please? MS. SAKO- Yes. MR. RICHARDS. Okay, great Then I had a question concerning the Kailua Master Plan I'm confused why the scope has been reduced. What's the story on that? MS. SAKO- So that probably is James (Komata) or somebody let me get back to that page. But generally, it could just be that there was a change or we discovered some things. Nomtally when scopes are reduced, it's just a quantity or something like that. So, it could be anything. MR. RICHARDS. So who would get—who is the best to ask that, from Parks and Recreation? MS. SAKO: Are you on the implementation plan? Page 5 FG 19 September 17, 2019 MR. RICHARDS. Kailua Park Master Implementation Plan MS. SAKO: Yeah, so Kevin Sakai is the best one. He's the one listed on the sheet, and he's at Parks. MR. RICHARDS. And then Kolekole Park, that has been shut down. I'm sure Council Woman—are you going to ask that? Okay, I'm going to leave that one for you, Val Last one is Ka'u. That has been ongoing for quite some time. Can you—now what? Changes in the landscape it looks like. Can you expand on that, please? MS. SAKO: James would probably be better. I was assuming we're getting down to the final change orders. I'm not positive if that is the final one, but James should be able to help. I can ask him to update you on that one and the Kolekole one. MR. RICHARDS. Yeah, we have these things trickling on in our parks, and we need to get going. Chair, I'm going to yield to Ms. Poindexter concerning that, if that's alright? CHR. DAVID- Sure. MR. RICHARDS. Thanks, Deanna, CHR. DAVID- Ms. Poindexter, go ahead. MS. POINDEXTER: Yeah, so with Kolekole and Hakalau, the State Department of Transportation has been holding that up for months. The constituents think it's the County, but it is at the State Department of Transportation. I can talk about that at some other time, but I don't think so on this discussion. But definitely, Department of Transportation has stalled us on this. Thank you. CHR. DAVID- Thank you, Ms. Poindexter. Anyone else? Ms. Lee Loy go ahead. MS. LEE LOY Thank you, Chair. Thank you, Deanna, for being here. I had a question regarding Richardsons. That contract was awarded back in 2008, but I also see that contract change order kind of up at 159 percent. But 1 also see in the notes the contractor the change order is related to mitigation plans regarding State Historic Preservation Division. Do you have any information on that? Because we're well into year eleven on this one, and I understand it to be improvements tor— Page 6 FC -19 September 17, 2019 MS. SAKO, Being that Kevin isn't here, I—because it's an older contract, I also know we recently funded that—did that bond authorization so that they could do all of their park accessibility improvements, the ADA (Americans with Disabilities Act) bond that we did. So I am guessing they had to bring the plans out and have them update it so that we could continue with our work there. Because if the original date is 2008, they were probably sitting somewhere. So Fm guess that's to kind of update, do whatever State Historic Preservation Division work we have to do in order to get it all ready to be able to make our changes to the park so it would be accessible for our community to enjoy MS. LEE LOY Yeah, thank you for that, Deanna. And I know this body experienced a lot of hiccups with State Historic Preservation Division, taking a while to review that. So if the Parks department doesn't mind reaching out to us because of these hiccups with other state agencies, I'd be more than happy to lend my support for that. Because as you stated, this is for our ADA compliance and for our disability community, and I know they've been asking for a long time to have facilities, especially at our ocean parks so that they can access the park, also. MS. SAKO: Okav, I'll let them know MS. LEE LOY Thank you, Chair. I yield. CHR. DAVID Thank you, Ms. Lee Loy Anyone else? Seeing none, all those in favor of filing Communication 10.19 please say "aye." Vote on Comm. 10. 19, The motion to close file on Comm. 10.19 was carried Filed) by the following voice vote: Ayes: Committee Members Eoff, Kaneah'i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair David– 8. Noes, None. Absent: Committee Member Chung – 1 Excused: None. Comm. 10.20. REPORT OF CHANGE ORDERS AUTHORIZED: JULY 16-31.2019 From Finance Director Deanna Sake, dated August 20, 2019, transmitting the above report pursuant to Hawai'i County Code Section 2-12.3. Motion to Close File: Ms. Villegas moved to close file on Comm. 10.20. Seconded by Mr. Kaneali'i-Kleinfelder. CHR. DAVID- Discussion, Council Members? MS KIERKIEWICZ. Chair? Page 7 FC -19 September 17, 2019 CI IR. DAVID: Go ahead, Ms. Kierkiewicz. MS. KIERKIEWICZ. Thank you, Chair. CHR. DAVID You're welcome MS. KIERKIEWICZ. Deanna, Ijust wanted to confirm that this line item here regarding land surveying services for topographic mapping for 132 (Highway) and portion in and around Leilani Estates inundated by lava, that that's coming out of the recovery money that we received from the Governor. MS. SAKO- Yes, one of the buckets of money MS. KIERKIEWICZ: Okay And then, do you have an insights that you could share with us around what is meant by expending the work? I see that the contract was executed in April, then there was a request to expedite at $5,000 done in July MS. SAKO' No, I could go find out from them. I don't remember what that was specifically about. But being that it's 132, this is the one we're trying to get done so that we can get the Federal Highway reimbursement. MS. KIERKIEWICZ. Yes. MS. SAKO: So if they were not quite on target, we may have asked them to speed it up. MS. KIERKIEWICZ: Okay And I'm assuming that they needed to do things in phases over a period of time? MS SAKO- Correct. MS. KIERKIEWICZ Okay Alright. Thank you. Appreciate it. Chair, I yield. CHR. DAVID: Thank you, Nts. Kierkiewicz. Mr. Kaneali`i-Kleinfelder. MR. KANEALI'I-KLEINFELDER. Good morning, Deanna. MS. SAKOGood morning. MR. KANEALI'f-KLEINFELDER. What is systems engineering group? MS. SAKO I can find out for you. I do not recall off the top of my head. I can check with our staff because it's listed under us. So when it says multiple Page 8 FC -19 September 17, 2019 contracts and probably multiple agencies, they have some kind of recurring agreement. I just can't tell you which one right now I'm guessing— MR. KANEALI'I-KLEINFELDER: Okay MS. SAKO: Yeah, I don't want to guess out loud, but I'm pretty sure I know which one. But I'll double-check for you. MR. KANEALI'I-KLEINFELDER: Yeah, Ijust didn't have any kind of—I don't know what it is. There's no breakdown of what they're doing or what project it is. Just wondering. If you shoot me an email, that would be nice. MS. SAKO Okay MR. KANEALPI-KLEINFELDER. Thank you. CHR. DAVID: Thank you, Mr. Kaneali'i-Kleinfelder. Anyone else? Council Members, no? Alright, all those in favor of filing Communication 10.20 please say "aye." Vote on Comm. 10.20: The motion to close file on Comm. 10.20 was carried Filed by the following voice vote: Ayes: Committee Members Eoff, Kaneali`i-Kleinfeldcr, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair David – 8. Noes: None. Absent: Committee Member Chung – 1. Excused: None. Comm. 119 2: FOURTH OUARTER REALLOCATION REPORT. APRIL – JANE 2019 From Human Resources Director William V Brilhante, Jr., dated August 13, 2019 Motion to Close File- Ms. Poindexter moved to close file on Comm. 119.2. Seconded by Ms. Villegas. CHR. DAVID- Council Members? Ms. Lee Loy, go ahead MS. LEE LOY- Thank you, Chair. Pm not sure if Mr. Brilhante is available in our Hilo Chambers. I just have a general question. I'm seeing a lot of classifications that are kind of walking back from various SR (Salary Rating) ratings, you know, like a 13 to a 10, and I just was wondering what the rationale was behind there. I'm specifically looking at the Vehicle Registration and Licensing Clerk, because here in Kona we have a long line. Page 9 FC -19 September 17, 2019 (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: Good morning. Can I help you? Good morning. I think I can help you. MS. LEE LOY Okay MS. SAKO So whenever we have a vacancy at that SR -13 level, the Vehicle Registration and Licensing Clerk, it's our hybrid clerk that we train to do both vehicle registration and drivers licensing. That's not a classification of work that we've been able to hire someone off the street to do. Once in a while somebody will transfer from one of the other islands that has that type of experience. But instead, we have to reallocate down to Clerk III so that we can just hire someone in with minimum qualifications, and then we train them. In future reports, you'll see those positions going back up to the SR -13 once they've bit their minimum required experience, and we'll reallocate them back up. So a lot of those reallocations down are actually being reallocated down to fill the position. MS. LEE LOY Deanna, thank you. Is that similar to all the other ones? Because there are others. Looks like a contract technician, from a 15 to a 12. Is that just trying to get its foot in the door? MS. SAKO- Yeah, so normally we'll try to fill at the given level. But then when we cannot fill, the we'll ask to reallocate down to a level that we can find someone. So something like a contract technician, they may need to start out at a contract clerk first and then get reallocated up. It just depends on the applicant poll at the time, if we can find people who meet those minimum qualifications. MS. LEE LOY Great. Thank you, Deanna. Chair, I yield. CHR. DAVID Thank you, Ms. Lee Loy Mr. Kaneah'i-Kleinfelder, go ahead. MR. KANEALI'I-KLEINFELDER: Deanna, I noticed just from being an electrician, I'm a trades person, that a lot of these—sorry, not a lot of these, but there are many electrical inspectors, building inspector positions that are being either rolled up or rolled down. But I did not notice many plan -check positions being created or rolled up or rolled down. I don't know if that a question for you or if that's a question for DPW (Department of Public Works). MS.SAKO* Yes, DPW could probably better answer. But that report is just what happened in that last quarter, so they may not have had any activity on plan - checkers. Similar to the Vehicle Registration and Licensing Clerk, many of those positions they need to reallocate down and train. Sometimes there's more steps Page 10 FC -19 September 17, 2019 than just two. Like our appraisers for example, they'll start out an Appraiser I and Page I I end up an Appraiser IV So they'll go up through series until they have sufficient experience. But they cannot go higher than the original classification. MR. KANEALPI-KLEINFELDER. Okay And those changes are made by the department and then okayed by Finance? NIS SAKO: They are okayed by Human Resources (HR). MR. KANEALI'I-KIEINFELDER. By HR? MS. SAKO- Yeah. So we put in the request. There's an entire reallocation packet that's given to Department of Human Resources, that they review. Depending on the type of request, they'll go out and audit the position before signing off, if that is okay I believe final approval is by the Managing Director. MR. KANEALI'I-KLEINFELDER: Okay Thank you, Deanna. CHR. DAVID- Thank you, Mr. Kaneali'i-Kleinfelder. Anyone else before we take a vote? No? Alright, all those in favor of tiling Communication 119.2 please say "ayc:' Vote on Comm. 119.2: The motion to close file on Comm. 119.2 was carried (Filedl 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. Comm. 431 REQUESTS A PRESENTATION BY DOUG BI ILEY, PRESIDENT AND CHIEF EXECUTIVE OFFICER OF IKAIKA'OHANA, TO PROVIDE AN OVERVIEW OF AFFORDABLE HOUSING AND POTENTIAL FUNDING TOOLS From Council Member Herbert M. "Tim" Richards, ill, dated August 9, 2019. Motion to Close File: Mr. Richards moved to close file on Comm. 431 Seconded by Ms EotT. CHR. DAVID: Go ahead, Mr. Richards MR. RICHARDS. Thank you, Chair. This is a presentation I requested on affordable housing, and as we know, our County is in desperate need of Page I I FC -19 September 17, 2019 affordable housing. Estimates are somewhere between 20,000 to 25,000 units by 2025. This group, Ikaika 'Ghana, that has been working in District 9, and I though this would be a great time to present some of the programs that they're working on, as far as how we get affordable housing going so the Council is brought up to speed on what's going on today So with that, I'm going to tum it over to our guests. (Note: At this time, Urban Communities Housing Senior Development Manager James Rock; and Ms. Delene Osorio, representing Ikaika 'Ghana, came forward to address the members of the Committee.) Cl IR. DAVID: Identify yourselves and go ahead. Thank you. MR. ROCK. I Ii, my name is James Rock. I'm a Senior Development Manager with Urban Housing. Douglas Bigley, the President of Ikaika'Ohana, regrets he could not be here today But together with Ikaika'Ohana and Urban Housing, we are affordable housing developers. That's what we do. We want to bring more housing to the State and to the County Today we want to talk about some of the tools that are out there to help make that a reality So what we have today, we have a presentation. I'll try to keep it to about 10 minutes and just kind of walk through the high-level points that we can talk about today, and after that we can open it up for questions and discussions CI IR. DAVID- Excuse me, Mr. Rock, could you please introduce her? MR. ROCK. I'm sorry CHR. DAVID- Or she can introduce herself. MS. OSORIO: I'm Delene Osorio. I'm in Hilo, and I work with James and Ikaika 'Ohana. We're all over the place right now. We just need to get more projects built out there. CHR. DAVID- Okay, mahalo for that. Thank you. Go ahead. (Note: At this time, Mr. Rock provided a PowerPoint presentation regarding Affordable Housing in the County of Hawaii. For viewing of the subject presentation, please see the DVD copy of the meeting proceedings on file in the Clerk's Office. A hardcopy of the presentation is made a part of the record, see Comm. 431.1). MR. ROCK. With that, we say thank you very much. We provided our website if you want to have a bit more information about who we are. We enjoy working Page 12 PC -19 September 17, 2019 with the County; we're here. Feel free to reach out any time to talk about affordable housing. CHR. DAVID: Thank you very much. Mr. Richards, before we start, you folks mind if we take a real short break? MR. RICHARDS. That would be great. CHR. DAVID- Seven minutes. MR. RICHARDS. Seven minutes. Got it. CHR. DAVID Alright, we're in recess. We'll be right back. Recess: At 10:33 a.m., the Chair called for a recess. Reconvene: The meeting reconvened at 10'43 a.m. CHR. DAVID: We're out of recess. Mr. Richards, go ahead. MR. RICHARDS. Thank you, Chair. I did ask for this presentation from Ikaika `Ohana. Currently, right now I have at least five groups working on affordable housing in my district, and I thought it would be a good time toI dont want to sav educate the Council but bring it up to speed of the Council concerning attordable housing and the development thereof. If any of you are confused, join the club because this is not a simple thing to do. And James, I've got to tell you that you did a greatjob in presenting. Of course it's been about the twelfth time I've been through the educational process. I wanted to bring up—I do have some questions, Chair, just to run through a few things. A lot of affordable housing is tied into what's referred to as the Average Median Income (AMI) Can you explain AMI to the Council9 Relate it back to what our AMI is for our County relative to the State as well, please. MR. ROCK. So for the tax credit program, the income levels, the area need income is determined by HUD (Housing and Urban Development) on annual basis, and HUD goes through county by county and measures the income of the population and basically gives you the median value for each county The specific median don't have the number in front of me, but let's say that for the County of Hawaii, the median income is $75,000 for a household. With the Tax Credit Program, the program targets residents that are 60 percent of the median income and lower. Page 13 rC-19 September 17, Nit) The handout that you have, the one that we'll provide in softcopy later (see Comm. 431.2), the annual area median income for the County of Hawaii for the projects that we're looking at right now for our affordable developments, we're targeting the population with 30 percent to 60 percent of the Area Median Income. And in dollars, what that means for 2019, the 30 percent level for a family of four is $23,550. So a family that eams that much income would qualify for a 30 percent AMI units in our affordable developments. Going to the 60 percent range, it's $47,100 for a family of four. So again, family of four, the Area Median Income can be adjusted up and down based on household size. So we just pick a family of four as a marker to give you a sense of what's available out in the world. And how that translates into actual rent paid at a rental project, for a two-bedroom unit with the 30 percent AMI, kind of the lowest end of the range, the rent is $357, and this would be net of the utility allowance. So the amount that the tenant would pay is $357 toward rent, and they're on the hook for any utilities such as electricity, water, sewer, the total that they pay is the same, and the project receives at the amount after they pay utilities. So that could fluctuate a bit, depending on your development. But basically about $357 for that unit. Going to the higher side, a four-bedroom unit, so the larger household size, at 60 percent AMI. The monthly rent is $1,114. So looking at the rents across the island, they're offering significant advantages for families and providing a lot of relief. I know in some of the areas this represents a huge drop in what's available on the market, so providing this type of program can really help the residents of the County MR. RICHARDS. Can I continue, Chair? CHR. DAVID Yes you may MR. RICIIARDS: One of the things I wanted to touch on, I know our County, and I think, James, you touched on it, the Big Island, just by being the Big Island as a point, as far as qualifying, and that's because our AMI is the lowest in the State. Is that correct? MR. ROCK. I believe that's correct, yes. MR. RICHARDS. And I know we have, and this has come before us in previous, we have approaching or actually right around 20 percent of our households in our County are at the Federal poverty level or less. And so the need for the housing cant be reinforced enough. Page 14 FC -19 September 17, 2019 I think, James, we've gone through all of the 201H points and the AMI. Rental versus owning, can you just discuss that when it comes to these affordable housing things? MR. ROCK. Sure. The rent versus owning conversation is a bit complex. But basically when you're a renter, you pay the rent and you can call your landlord So if something starts—the faucet is leaky or something on the outside needs to be fixed, you call the landlord and the landlord can tum around and fix it. As a renter, you pay the rent, and that's the kind of where your obligation is. Once you switch over to homeowner, you do have the benefit of getting to pay for your property You know, if you can buy it outright, congratulations. But you have your finance that you take care of, but you're also responsible for the asset, so maintaining; painting, replacing roofs. It is a complicated undertaking. So there are differences that need to be highlighted between a rental program and for an ownership program, and there are benefits to both program. So the one that is that is targeted with the low-income housing tax credits, that is rental. The Tax Credit Program does have a feature, where if you operate a program for 15 years as a rental, you do have the option to sell those units at an affordable rate to potential homeowners. But there is a difference between, in general, just the rental track versus homeownership track. You can bridge the two, but it is kind of a detailed conversation and there are a lot of factors to consider. Did that address your question? MR. RICHARDS. Yes, it does. Couple other quick points. Housing, as 1 think the Council knows, this is a big point for Lieutenant Governor. He's very supportive of putting forward affordable housing projects. Again, could youjust touch on what the County can do as far as either loan or grants to trigger that, getting those extra couple of points? Just, could you reiterate that, please? MR ROCK. Sure. So through the application process, essentially for a development to receive points, to receive either the three or six points, at the time of application we basically just need a letter from the County that says the County can commit to x -dollars with simple terms. If it's a loan, the duration of the loan, anticipated interest, and an acceptance of soft payments. Basically, the County gets paid atter the hard -debt, construction debt, and other priority liens. But its' a simple letter when we start the process and start the application. And then if a project is awarded, you can move through the process of full negotiations of loan documents; the form of deed restrictions on title, how the County participates and reimbursed. So, it's a bit of process with a few steps. The first one is a critical one, is obtaining an award for a conditional commitment so that the County can have a condition on its commitment that you must receive the tax credit award, because Page 15 FC -19 September 17, 2019 without it, the project doesn't really move forward. So that's an example of how that can move forward. And then from the County's side, it's a matter of being able to identify resources that you can commit. That you can push towards affordable housing. I'm not familiar with all of the buckets and resources available to the County We look to your extensive guidance on that matter. But basically, any way that you can participate on the affordable applications through HHFDC (Hawai'i Housing Finance and Development Corporation), if you can get those conditional commitments in place prior to the application, then you're well on your way to receiving those extra points and having the funding come to the County MR. RICHARDS. Okay And thenjust one final thing, Chair. The 201H process, in order to be affordable we have to control cost going into this thing. And the 201 H you had mentioned allows us to have some construction standards waiver. Not health and safety, but some other things. Can youjust give a few examples? With that, Chair, I yield. MR. ROCK. Sure. 201H is very broad. Health and safety are items that remain in place. So you just can't build a building that's going to fall down; if everyone agrees, that would be a bad idea. But some of the things that can be modified or exempted through the 2018, the one that typically pops up is zoning. So if the County has something designated as Light Industrial but it's moving towards a Residential or Commercial District, the 201 H would be a tool that the County could use in conjunction with the developer to allow affordable housing development on the Light Industrial track. And the approvals would be documented through the 201 H process passed through County resolution. Other items that might be able to be waived or changed: densities, height restrictions, setbacks, various provisions within the County Planning Code or Building Code, things of that nature. There may also be the ability to waive certain fees, charges that the County wouldn't impose So those—a broad range of items that can be impacted through a 201 H process for the benefit of affordable housing developments. MR. RICHARDS. Okay, thank you. Chair. I'm going to yield and tum it over to my colleagues. CHR. DAVID Thank you, Mr. Richards. Ms. Goff, go ahead. MS. DOFF Thank you, Madam Chair. Aloha to you both and thank you for a really good presentation. MR. ROCK. Thank you. Page 16 FC -19 September 17, 2019 MS. EOFF` So I've had a chance to meet with Doug (Bigley) twice, and I met with you a couple of times, too. Have you been able to meet with all the Council Members? MR. ROCK. Not yet. I am trying my best, but I do intend to at least stop by and say hi to everybody before I leave so that we can continue our conversations. MS. EOFF- So you are involved in a couple of projects in Kona as well as Waikoloa. Are you running into obstacles here that we can help with? MR. ROCK. We've discussed kind of before that every development is difficult, and so no project is free of obstacles. The departments that we have been working within the County have been very helpful: Planning and Public Works, the Mayor's Office. They've all met with us, and they're very supportive of affordable housing. They have been responsive. They have their workload to manage, just like everybody else, but they have carved off time and given us guidance where they can to help move things forward. So from the County's perspective, it is clear that affordable housing is a priority We're seeing that in the responses that we're getting from departments and from the Council's office. So thank you very much for that, as well. MS. EOFF So just last week several of us were at the Congress Planning Conference. MR. ROCK. Yeah, Congress of Planning Officials. MS. EOFF I attended the affordable housing workshop. So on Maui they had a few projects that ran into obstacles. And although the 201H process could be expedited, and they're looking at ways now to make that happen, they were long drawn out. Like you said, they ran into problems. But what they've done, and if my colleagues can chime in too on this, is make sure that the Office of Housing work closely with the Planning Department prior to really using the application. MR. ROCK. Sure. MS EOFF And that worked out a lot of issues. MR. ROCK. I would echo that. as well, in that to our presentation where the coordination as a key component. MS. EOFF In coordination. MR. ROCK. Having the person, or the agency, or office in place so that developers can present proposed projects, and then work within that office to discuss County priorities, so the different challenges, or even the direction that the Page 17 FC -19 September 17, 2019 County would like to take to see what could be incorporated within a specific development. I laving those conversations early and often is absolutely critical. MS. EOFF- There's also the community component, too. MR. ROCK. Absolutely Community outreach. MS. EOFF- So that at the time that it does reach the Council or the decision-making, there's not many surprises, really, that would maybe throw it back. MR. ROCK. Right. MS. OSORIO, In Mayor Kim's first time around as Mayor, somewhere in 2008-2009 CIIR. DAVID- Ms. Osorio, I'm sorry, can you identify yourself for the record so our stenographers can? MS OSORIO* Oh, I'm sorry I'm Delene Osorio. CHR. DAVID Thank you. Go ahead. MS. OSORIO, In 2008 or 2009, somewhere around thereI have to dig out the letter—Mayor Kim issued a memo to all departments that if any affordable housing project was sent to the Planning and Building Department, that it was to receive priority Many of the departments didn't know about that. I believe what—James is meeting now with the department heads. The pace that which the Building Department and any department involved has been stepped up so that it is being given priority But I will send you that letter. I'll go look for it. NIS. EOFF: Thank you. I guess—also, you build bothyourprojects include both single-family homes as well as multi -family apartments, correct? MR. ROCK. Correct. MS. EOFF What is your inclination now? What kinds of projects do you think we have a better chance of getting off the ground and making them really at affordable rates? MR. ROCK. As far as making them the most units with the most affordability, probably your multi -family is the better way to go. NIS. EOFF. Rentals Page 18 FC -19 September 17, 2019 MR. ROCK. Single-family construction, it can be beneficial if a specific goal is in mind, but it does come with lower densities and fewer units with higher construction cost. So for example, if I'm building a duplex and I have two units next to each other versus a single-family home, my duplex has certain economics of scale where I have fewer exterior walls, because now I have some shared space; I have fewer roof lines; and I can condense a bit of the model so that I don't need quite as much land to develop more units. So your multi -family can hep reduce cost and provide more units. And with the long-term rentals, with a qualified developer in place, you can see the longevity of those units for a 50 -plus years into the future. On the single-family side—part of our program, we are offering some single-family rental components, so we will manage them for 15 years. It docs become the question of the tenant being able to take ownership after the fact to—and having that education program in place so that the potential owners of a project, or potential owners of the unit understand the transition from a renter to a homeowner, and so there are a couple of challenges there. But just going back to the original question, probably multi -family is the most efficient way to go on a per dollar with a unit production. MS. EOFF Okay, right now I just have one more question or thought. MR. ROCK. Sure. MS. EOFF So the loan or grant from the County seems to be sort of acritical element. Does our County have resources to be able to do that, or do we need to create some kind of special fund or increase our pot of potential monies for that? MR. ROCK. So the tool exist, it's called the Revolving Fund. I looked up the chapter, and now I'm blanking on it. But there is an existing tool within the County code and it allows for contributions and loans to affordable housing development. So, the tool itself exists. As far as the funding capacity, it would be a conversation that we ca definitely have, if needed, with anybody in the County regarding possible ways to fund or what we would see as the need on our side, and then the County can look to the resources that you do have either for allocations of existing monies or creating future buckets. MS. EOFF- Okay, thank you very much. CHR. DAVID: Thank you, Ms. Foil.. Go ahead, Ms. Kierkiewicz. Page 19 FC -19 September 17, 2019 MS. KIERKIEWICZ: Thank you, Chair. IIi, Delene. Hi, James, nice to see you again. Thank you for reaching out and for doing a quick introduction to yourselves, interest in your involvement in housing with me. I appreciated talking story with you. MR. ROCK. Thank you. MS. KIERKIEWICZ. Housing has been on my mind a lot. 1 represent an area that inundated by lava. So many folks were displaced and are still looking permanent housing solutions. I recently attended a housing summit that was hosted by Senator Schatz. There was leadership, State Legislature and other counties, and I got to hear about what they were doing. At the conference that Karen mentioned, Hawai'i Conference of Planning Officials, just last week on Maui, there was a panel discussion about the 201 H process. I was very excited to bar about what was happening on Kauai. They have county -driven project. Maui has many projects, as has Oahu. And I guess I was just a little bit concerned or confused and a little bit said that Ilawai'i County wasn't there. So if OHCD (Office of Housing and Community Development) is naturally supposed to be our champion for affordable housing, because 1 think everyone on this dais agrees it's a huge priority, I'm looking at these tools; they're available. How can OHCD be a better champion? I'm under the impression that we're already pursuing what you've laid out. MR. ROCK. From our standpoint with OHCD's communication, having open conversations with developers. Continuing to reach out basically, letting open conversations with OHCD is working on, what tools the County has available, and providing almost a guide, if you will, of how to get through the processes within the County to help make everything move through quicker. So for example, if through a 201H process, the County has certain planning concerns and it's just concepts that the County knows is an issue, OHCD in its conversation with potential developers can relay those concerns when we're in the early stages of development so that we can then plan for those, and either contribute to a solution or find ways to avoid the issue all together, if possible. And so having that communication role, open-door, providing a bit of a guide to developers on what's available; what are the hot spots, what are the spots that—you know, these are really the big issues that we can either avoid or find ways to address it. I would say those are probably the key things we could use from Housing. MS. KIERKIEWICZ. You mentioned responsiveness from departments. Page 20 rC-19 September 17, 2019 MR. ROCK. Yes. MS. KIERKIEWICZ. And so what I'm hearing is you're having to go to the top, to like the Mayor's Office, Roy Takemoto, to ensure that your issues are being addressed by the office? MR. ROCK. In some cases, yes. MS. KIERKIEWICZ. Okay MR. ROCK. We are the champions of our own deals in some circumstances. And so when we do face challenges or we find that certain paths that we hoped were available and no longer available, we have had to find our own way through development. And so part of the role that OHCD could help fill, is to help us find that way. So if we do come across those challenges and hit a roadblock or an obstacle, how do we get around it? Because the challenge of building the affordable housing still exists. So just stopping our tracks really isn't an option. We need to do it. MS. KIERKIEWICZ. So what I'm hearing essentially is that we need OHCD to really be notjust the champion but a navigator for developers to get through whatever process, whether it's the 20111 track orjusl working to get an affordable housing development off the ground. MR. ROCK. That would be helpful. MS. KIERKIEWICZ. Okay I think I've heard enough, and I think everybody knows how I feel about how we need to do better to make affordable housing a prionty I'm very interested in taking a look at the existing tools. And maybe, Karen, this is something we can do together. I know you're the Chair for the Housing Committee and I am Chair for Planning and Governmental Relations and Economic Development, so 1 see a lot of nexus going around here. But I think it's high -time for us to really make this a priority And now conversations are happening about our budget, if this body really care, then it's something that we need to start budgeting for because those 19,000 affordable units aren't going to be built by themselves. MR. ROCK. Mr. Bigley did actually talk to me about the 19,000 units. He said about 18,000 we've got it, but that last 1,000 will be hard. MS. KIERKIEWICZ. I love his outlook. Alright. I mean, I love all of these tools. I appreciate the presentation. We're going to need all of this, I think, if we're going to give affordable housing a real chance here. Thank you, Chair. I yield. Page 21 PC -19 September 17, 2019 CHR. DAVID: Thank you, Ms. Kierkiewicz. Ms. Lee Loy, go ahead. MS. LEE, LOY Thank you, Chair. Thank you both for being here. Like the rest of my colleagues, I was on Maui, too. I actually had an opportunity to take a look at a 201H project on Maui. The opportunities for housing on Maui is so costlyl but hearing how they were able to take agricultural land and develop that into a 201H project was exciting for me I do want to talk a little bit about how the County can help. I know under the 201 H program there are ways to provide exceptions or exemptions for certain housing: planning, zoning, but construction standards. I wanted to expand a little bit of that. And as my colleagues just shared right now, between Ms. Eoff and Ms. Kierkiewicz, on the housing issue, you know, as Chair for the Public Works Committee, where we could actually begin to look at new tools about roadwav standards, right, which is always extremely costly for developers, right? Putting in the infrastructure: the road, the road width, the curb gutter, sidewalks. And maybe blue-skying it for a minute through our building permit process or building construction permit process looking at affordable housing pathway That if they comply with the 201 H program, we provide some exceptions or relaxing some of the construction standards that would create a fast path through the building permit process. You know, go ahead and share what some of these 201 H programs look like as far s the exceptions for construction standards. MR. ROCK. Sure. So for construction standards, the standards are updated on a regular basis. You have new electrical codes, you have new building codes, fire safe law, so those are developed over time. Hopefully, every step that they take is a step toward more safety, more stability Implementing those in construction, it's generally a good idea. I mean, we're all improving together. Some of those do come with increased costs. It is the nature of the beast. But it's not that the Building Codes themselves are the only program or the only factor that might push costs up. From the State level as well and from the Fed., they also like to see basically high standards in affordable housing development. And so for our projects, we typically target at least a lead silver certification. We go through with the green practices and make sure that we're trying to do as much renewable reduced waste and those programs to make sure that we are really addressing society's needs as we develop. And how that touches on the Public Works and with building permits, there is nexus there. Because as we use the different materials and different plans, obviously we want to comply For the most part, we definitely try to. We try to stay basically within the box, because it's a good box. It has a lot of thought put into it. Safety standards are there for a reason, and so we do try to achieve that. Page 22 FC -19 September 17, 2019 On the processing side, other communities that we worked within in, they do have affordable housing menus, if you will. Where if you hit such a threshold, like the County could define if you are x -percent affordable units or more, you qualify for this alternate path. And that pathway might be the expedited reviews. It might be relaxation of certain planning codes such as densities, to allow for more units on parcels. Or if you are affordable, to allow affordable construction on a wider range of zoning so that ag lands, by right, if you're affordable, you can now develop on it for Light Industrial or Mixed Commercial. It basically opens the door. So at the County level, you guys can set the standards on what you would like to see and where, and then those tools can be immediately deployed by the development community Obviously, having the coordination among those would be very helpful to know what tools are in the system. That would be fantastic. MS. OSORIO I wanted to clear up a point if we weren't absolutely clear about our meeting with the Mayor and the department heads. It was not—the intent of that meeting is that all of the department heads are there, and we present them with our overall plan for a project so that everybody is onboard before we get there, so that was the intent of the meeting. We held such a meeting with the Mayor on Maui, too. We're dong projects on Maui. Let me back up one on the 201 H. Because it's affordable, doesn't mean every developer has to apply for a 201H. We have a project in Waikoloa; there's no 201H. La`iOpua, there's no 201H. But Kapi'olani, there is a 201 H application, right, that we have to go through. MR. ROCK. Potentially MS. OSORIO• Yeah, okay, potentially But when we—I bring up this point because in Maui we did the same thing. We met with the Mayor and all the department heads. The issue there was water. They want to develop in Maui. The going thing now is show me the water. Well, Water Department—for this project in Lahaina that we're working on, we are building 200 units, however the Water Department says, "You can have water if we have it available when you're building " And we're sitting there saying, "Oh, try wait, this may take two or three years" And by the time we get there, maybe there's 80 people ahead of us, so they get the water credits and we're short now to build that project. So what the Water Department did, on recommendation of the Corp. Counsel, was they said if you are affordable—that's another thing, too—if you're taking a look at how can you do pathways to hep developers get there faster, if they're 100 percent affordable, try to cut everything that's in the way Back to Maui, so where we had 200 units sitting, 80 people above us. But the Water Department said, "Okay, once ve know you're building"—and they set Page 23 FC -19 September 17, 2019 some criteria. They moved us up. They gave us the 200 water whether or not we were built. I don't know if we've seen that agreement yet. But those are the kind of things that make our life easier, too. That's one way MR. ROCK. And if I may add to that? The development timeline that we typically work with are on years. From the time we first took at a project and how the concept of what we would like to do, to coordinating with the counties and the communities to see what the project might look like, and all that takes place before we think about submitting an application for financing. And then from that point, you go through the application process, the awards and basically when you can achieve your financial close, where all the resources come together, it's probably about two years before you can really start turning dirt. So construction process, that's another year to two years. If we're looking at three to four years before we have final Certificate of Occupancy or before some of the County commitments can really be locked in, for example, the water, being able to know beforehand that those commitments are in place. It provides certitude for developers, and that just makes everything much easier and the community that we're serving can now rely upon that; that these resources are available and being a priority of the County in being able to leverage that to move forward with the development, that's a very big tool. MS. LEE LOY You know, you mentioned a lot of the programs are lead certified silver, do we get extra points if they're lead certified? MR. ROCK. Yes, I think you do. So in the Qualified Allocation Plan, there are various buckets in green building. It's kind of one of the concepts that they provide in scoring. And so when we look at our developments as a standard, we go for the lead silver, and then we do just kind of a cost benefit analysis to achieve gold or to achieve platinum. It comes down to a dollar -decision in some cases, where it doesn't make sense to remove a unit from the pool to then provide the other units a different standard. You know, it's conversation that we have with all of our partners to see what's appropriate for each development. MS. LRB LOY Yeah, thank you for that. 1 think that educational piece on the AMI, that's what I keep hearing tends to be the hook, is meeting those standards, right? Often times they have to have, you know, multi -family with a single-family, like a suite of options, as far as being able to really stand up the project. So for me, trying to look at using the tools that we already have and then using the exceptions through the 201 H to help minimize some of that upfront costs. And I'll ask this, because we could actually relax some of the DOH (Department of Health) standards, as far as providing wastewater treatment facilities, so we Page 24 FC -19 September 17, 2019 could actually stand up 200 units without developing a wastewater system. That's correct? MR. ROCK. Sure. So for the standards that the County decides to amend or change, in general, if it supports affordable housing, you have our vote. I don't know about the specifics for the wastewater treatment. But you definitely have a good team of folks here and also at the State with DOH. They have the right idea of what they would like to do, by maintaining public safety, understanding kind of the range of results that are acceptable. If everyone is focused on providing housing for residents, you'll find a way to get there. MS. LEE LOY Yeah. MR. ROCK: We can definitely provide our input, wherever we can and what we see, and what would be most beneficial. From our side, we definitely want long- term viability, so we want to make sure that anything that is in place, that it's going to be standing there by the time I am well gone. You know, whole new population in there. MS. LEE LOY Thank you. Yeah, some of your rentals are for 50 years. So go ahead, Delene. MS. OSORIO: One more thing, too. On the available resources, allow for the conditional commitment of County loan grants before financing application are submitted to HHFDC (Hawai'i Housing Finance Development Corporation). On a timing schedule, HHFDC normally puts out their application deadline for February, March. So one of the ways that the County can help too—from this point on, ifs a mad -dash rush for all of us. For example, right now we are working an RFP (Request for Proposal) for the Maui Affordable Housing Fund. If you want money out of their fund, you have to submit your project and try to get money out of them. Then after that, Maui will get the 2020 Allocation of Home and National Trust Fund again next year. Doug said this morning that the RFP is coming out, so that's October November, hopefully the Big Island, somewhere around this time of the year, might come out with a project -based RFP again So these three things, if they were pushed back a little so that we get a response as we're preparing the RFP for HHFDC, where the big money really comes from, if we had responses before that. our team that works on the finances, it makes their lives easier, too. It's not a question of making their lives easier, but when we're looking for money from different sources of fund, having these dates moved up a little bit is helpful because we'll be hounding OHCD or whoever we need to contact; to say, "Okay, did you award the project -based vouchers yet? Okay, did you award the home funds yet?" Page 25 FC -19 September 17, 2019 So knowing that the end game, from September through February is we're in a push to get money And then after that, if we don't have enough, so we come back and ask for more. MS. LEE LOY• Thank you, both of you. I think in the tip of spear on this one is OHCD and having better communications with them and making it a priority Thank you again for all of the information. Chair, I yield at this time. CHR. DAVID- Thank you, Ms. Lee Loy And can Ijust have a gentle reminder that we know Mr. Rock and Ms. Osorio is going to be available to meet with you folks individually I'm going to go to Mr. Kaneali i-Klcinfelder right now But I'd like to move on with the other issue on our agenda. So, Mr. Kaneali'i-Kleinfelder, go ahead. MR. KAN EALI'l-KLEINFEI.DER: Good morning. MR. ROCK. Good morning. MR. KANEALI'l-KLEINFELDER- I had the pleasure of speaking to Mr. Rock. Thank you for reaching out to us. Nice to meet you. So after my conversation, a few things stand out. This is just interesting information as we got into our conversation. But could you explain, James, if we use LII ITC (Low Income Housing Tax Credits), how that affects the homeownership for the potential homeowners or renters? I mean, this doesn't actually apply to renters but more towards the homeowner side. MR. ROCK. Sure. The LIHTC program at the Federal level requires that if you are going to use the tax credits on the development, you have to have a 15 -year rental period associated with that development. So a concept of using tax credits for immediate such as a tum -key development wouldn't quire work. It'sjust not a part of that program. However, using the tax credits for the first 15 years and then rotating to a for sale option, that is a provision of the code. We are currently doing—a development in Kona uses that provision, as well. So when looking at that, you do kind of very long-term planning to make sure that the resident population can enter at the AMI's allowed by LIHTC. So basically 60 percent of AND and below, and then over the 15 period, you're hoping to improve the situation of your tenants through various social services, educational financial services, nutrition, health, after that school program. Anything that you can do to help improve the family Over the course of that 15 years, once that unit does become available, they're ready to make that transition from a renter to a homeowner and then have the conversation about, now that you own the asset, you have the equity opportunity, possibly equity sharing with the different partners, such as the County or the State, to Page 26 FC -19 September 17, 2019 understand how much more affordability you have before I can either turn the market or whatever restriction. Initially, the LIHTC program, it can't be used for immediate tum -key You have to have that 15 -year window. But then beyond that, there's flexibility in the program. MR. KANEALI'I-KLEINFELDER. Thank you. Yeah, I though that was interesting and just something to be aware of as we move forward on this, or if we do move forward on this. You mentioned lead silver building. What is your take on how the IECC (International Energy Conservation Code) is going to affect affordable housing, just for you? MR. ROCK. So for us, we contract our electrical engineers. We contract a lot of the consultants through our architectural firms. And we do watch the various building codes that come up. And one of the things that we were discussing with some of the County departments is understanding that if we have a line in the sand, as far as when we submit an application, if we have a full set of drawings, if we can lock those codes into place, then at least we had common benchmark that these were the appropriate standards in place at the time of submission, and then you can roll forward from there. And then as new codes are brought on, developers such as us, we just respond to the codes. We incorporate the new design standards. Any pricing changes, we have to take a look at that, and we try to keep up with the rest of the development world. So if there is any reason why a project cannot comply, one option is to go through 201II, request the relaxation of that code. And that would be sort of a project - specific, case-by-case request. MR. KANEALI'I-KLEINFELDER Okay Any projects in with us currently9 MR. ROCK: Yes. Currently we have three projects on the Big Island. We have a project in Waikoloa Village, we have a project in Kona, and a project in Hilo. All three of those projects, we are trying to work with the State with the County to try to start construction in the next six to nine months. The total unit count there is about 184 units across projects. MR. KANEALI'I-KLEINFELDER: That's good. Permitting already in, or are you guys just starting to talk? MR. ROCK. For the project in Kona, the site work has already been completed by DHHL (Department of Hawaii Home Lands), and so we are preparing the package with our architect on the single-family homes that will be built on the Page 27 PC -19 September 17 2019 lots. That one should be done probably the end of the month. And then we'll kick of the building permit process. So that once the buildings are ready, we'll have a preapproved sing -family home model that we can then apply to the lots and move forward. For Waikoloa, we currently have our application for plan approval in Planning. They are processing that now. Public Works has given us a couple of looks at our plans to give us feedback We plan on having our Waikoloa project architectural set to kick off the permitting process also in the next few weeks. So, architect is very busy And then in Hilo, we do have a few more items to o through Planning. Recently we had—that particular project has annual reporting requirement to go through Planning. The ordinance that provided the conditional zoning change, that's still in place on the project. It's one of our possible reasons to through 201 H. But basically, we we still working with Planning on our intent for the site. We're generating all of the project drawings and understanding some of the current issues with County drainage. We have a drainage easement going across the property, but we're working with Planning and with our Civil Engineers on that, as well. So all of these various pieces are moving along and at different stages. MR. KANEALI'I-KLEINFELDER. Okay, that's good to hear. Just for me, I'd just like to know that as we move forward with the affordable housing, we're balancing, you know, taking care of the communities that are underserved, and that we're providing good solid housing. I mean, some parts of the code that arc coming in are just designed to help the homeowners to be more efficient, silver status for some of your buildings, you know, that's great to hear because that's going to help people moving into homes, who are already having hardship keep their cost down and have a better quality of life So, I appreciate hearing that. And if you can, please try and incorporate more of that livable style of community as you push forward There's creation of housing but there's also developing that community and that sense of well-being that 1 think is crucial to bettering the quality of life for everybody MR. ROCK. Sure, and I can address that. MS. OSORIO- If I could speak to that, too? We already have three projects in Hilo that were totally renovated. Unfortunately, those projects did not have community rooms. However, in each one of the projects that is now going to be built, there is a community center which will have room for the tenants to occupy, have meetings. We also will be providing social services, such as having a health and well-being nurse or person come in to do immunizations or blood pressure testing, to have somebody on site that will be able to coordinate computer programs for kids at the school. Page 28 FC -19 September 17, 2019 This morning, while waiting for this meeting to start, we're able to work with Hawaiian Community Assets to hire on Maui, an AmeriCorps VISTA (Volunteers in Service to America) person who will be directing all of this research and bringing in more social services to the project in the community rooms that we build. So it's not only a house we're building, we're building that home and that community, as well. MR. KANEALI'I-KLEINFELDER: That is exactly what I want to hear, because if we can do that, we're going to better the quality of life. These homes are going to provide, you know, low-cost alternatives for an extremely high-cost market. It's just another piece of making sure we're taking care of everybody at that level that we want to see everyone get to So, I appreciate that. MS. OSORIO: Oh, you should have seen Riverside then. MR. KANEALI'l-KLEINFELDER. Yeah, I know people who live in Riverside. They said that the change is amazing. Butjust knowing those were renovation projects, and we're talking about new communities, there's some differences there, and very large differences. MR. ROCK. Sure. MR. KANEALI'I-KLEINFELDER: Butjust to take into account what we talked about today And where we need to go as an island—knowing you're moving towards that more community level versus just housing, I think that's really good to hear. So, I appreciate both of you and I appreciate your time. MR. ROCK. And touching on that for just a moment, with Ikaika'Ohana, one of the big drives and missions for that organization is just the overall experience for the tenant. So beyondjust producing a unit, it is—how does the tenant live there and how do the have a future? And so we do try to provide as much as we can. The open space that Delene mentioned, community gardens, a spot where people can actually plant their own food and take part actively on their own and their own well-being. And so it is a big part of the overall concept for the development It's not just "we're here, we built something" and walkaway It's kind of "we're here, now you're stuck with us, too." We're going to be here, and we're going to help the tenants as much as we can. MR. KANEALI'I-KLF,INFEI,DER. That's what I want to keep hearing, and I really appreciate that. Thank you. MR. ROCK. Sure. Page 29 FC -19 September 17, 2019 CHR. DAVID Thank you, Mr. Kaneali'i-Kleinfelder. Council Members, are we ready to take a vote on this? Alright. all those in favor of filing Communication 431 please say "aye." Vote on Comm. 431 The motion to close file on Comm. 431 was carried by File 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 Thank you very much for being here. MR. ROCK. Thank you everybody CHR. DAVID: This one will be really quick. Can we do Resolution 302-19? Thank you. ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS. Order of Resolutions. Res. 302-19 AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR AGREEMENT WITH SPECTRUM (CHARTER COMMUNICATIONS) Authorizes the Mayor to enter into a five-year lease agreement with an approximate monthly cost of $1,710, to increase internet connection speeds to computer server centers at the Hilo Civil Defense Agency and the West Hawaii Civic Center. Reference: Comm. 466 Intr by Ms. David (A/R) Motion to Approve: Mr. Poindexter moved to recommend adoption of Res. 302-19 Seconded by Ms. Eoff. (Note: At this time, Information Technology Analyst Corey Stone came forward to address the members of the Committee.) CHR. DAVID- Council Members, I need to note that Director Ung is out of state, but Mr. Stone is here. If we have any question, he can attempt to answer it; if not, he can get the information to us before our next meeting in Council. Council Members, go ahead. Any questions on this? No? Alright, Mr. Stone, Page 30 FC -19 September 17, 2019 thanks for coming back and for your patience and waiting. Alright, all those in favor of approving Resolution 302-19 please say "aye." Vote on Res. 302-19, The motion to recommend adoption of Res. 302-19 was (Approved) carried by the following voice vole: Ayes: Committee Members Chung, Eoff, Kaneali'i-Kleinfelder, Kierkiewice, Lee Loy, Poindexter, Villegas, and Chair David — S. Noes: None. Absent: Committee Member Richards — 1 Excused: None. Change Order As directed by the Chair and with no objection from the Council Members, the of Business: following item was taken out of order: Bill 95AMENDS ORDINANCE NO. 19-74, AS AMENDED, RELATING TO PUBLIC IMPROVEMENTS AND FINANCING THEREOF FOR THE FISCAL YEAR JULY 1 2019 TO JUNE, 30, 2020 Adds the Public Works Waima au'au Stream Bridge Repair project for $1.3 million to the Capital Budget. Funds for this project shall be provided from General Obligation Bonds, Capital Projects Fund — Fund Balance and/or Other Sources. Reference: Comm. 467 Intr. by- Ms. David (B/R) Motion to Approve: Ms. Poindexter moved to recommend passage of Bill 95 on first reading. Seconded by Ms. Eoff. CHR. DAVID, Director Yamamoto is in Hilo, I understand. Director, could you come forward. Council Members, any questions while he's coming forward? (Note: At this time, Public Works Director David Yamamoto came forward to address the members of the Committee.) CHR. DAVID: Well then, I don't see any questions here, Director. Ijust want to say thank you for your patience and for being here. If you want to say something, you know, about this; if not, we'll just take a vote. No? We got you. Mahalo. Alright, all those in favor of approving Bill 95 and forward it to Council with a positive recommendation please say "aye." Page 31 FC -19 September 17, 2019 Vote on Bill 95 The motion to recommend passage of Bill 95 on (Approved) 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- Thank you. Mr. Clerk, our last resolution. Resolution 304-19, please. Return to Order The Chair directed the Committee to return to the order of business. of Business: Res. 304-19, AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR AGREEMENT FOR BUSES AND DRIVERS FOR THE MASS TRANSIT AGENCY Authorizes the Mayor to enter into a three-year agreement to operate the Hetc-On Bus Fixed Route Transit Services. The selected contractor will provide drivers to operate County -owned buses for specified routes and provide their own buses and drivers to service the remaining routes. Reference: Comm. 472 Intr. by- Ms. David (B/R) Motion to Approve: Mr. Kaneali`i-Kleinfelder moved to recommend adoption of Res. 304-19 Seconded by Ms. Poindexter. CHR. DAVID: I see Director Carreira. Welcome Director and thank you for your patience in waiting to get to this item. Council Members, questions? Okay Director, Council Members would you like her to give an overview on thissummary of this request for us, please. MS. CARREIRA. Okay, this is an RFP that actually was started by the previous administrator Sole (Maria) Aranguiz. When I started on November 1`t—after I started, we realized that actually this contract should have been started last year July because it actually expired June 30, 2018. It's now 14 and a half months later, and we still haven't awarded a new contract. So in December of last year, we put out an RFP as opposed to an IFP (Invitation for Bid). It's not a lowest bid. It's an RFP with an evaluation committee, high scoring. So we started that process, questions and answers. And then we were Page 32 FC -19 September 17, 2019 getting ready to award, I guess, within the last week -and -a -half, and I was informed that—did we do a resolution for a multi-year contract, and we had not. This is not a normal process, I guess, for Mass Transit historically It's always been like a year contract. It may be it's for five years, but a year optional. So a resolution was never brought forward. Because we're starting with a three-year contract and two one-year optionals, this becomes a multi-year contract. We need to have that approved before we can enter into any kind of contract, and basically that's why I'm here. But this is just not something that we haven't done. The only multi-year contract lease we've done in Mass Transit since I've been here, it's for our newest Xerox machine. So I apologize, I didn't realize we needed to do the resolution. But in order to even enter into the contract, we need to go through the resolution first. CHR. DAVID: Thank you, Director. Questions, Council Members? Mr. Richards. MR. RICHARDS. Aloha, Brenda. Appreciate you being here. You and I have had long conversations concerning the contracting and moving forward with Mass Transit and the financial oversight. And it's, again, no secret, I've been probably most critical of Mass Transit. I am bothered by approving a resolution that has no numbers attached to it. I know we had to go from here to having our Mass Transit system fully functional. I know we have to employ buses that are going to be hired, and as you and I have discussed, forward contracting should substantially reduce the daily charge of those buses. But approving a resolution for a multi-year contract with no monies attached to it, no financial side, I don't see how that's financial oversight. I can't support this because there's no financials attached to it. So can you give me something to work off or MS. CARREIRA. Okay Well, one isI know it came out on paper as a blank check. I'm not asking for a blank check. What we're looking for with this award, that it's definitely within the budget that we presented to you earlier, several months ago, that was approved I'm sorry, because it's a sealed bid, it's confidential so I'm not able to say who put in the bid, what the amounts were, and I understand the uncomfortableness that you may have. Basically, you knowI guess what it is—you have my word, is that it's definitely within budget. Because if it wasn't, we would have had to cancel the contract. Yeah, it is an uncomfortable position as it is for me asking you this also. You know, this is something that—yeah, you know— MR. RICHARDS. Brenda, I get it. You said it was within the budget, and I understand that. But the Mass Transit budget has rocketed in the last year. I think we went from $14 million to $21 or $22 million, and off the top of my head. So Page 33 FC -19 September 17, 2019 we've increased it by $7 million, essentially 50 percent over the previous year. And then to say it's going to be within budget, I believe it will be. But since our budget has skyrocketedI know what you're saying. I know that it's a sealed bid; I get that part. But again, I can't support something—because we as a body are charged with financial oversight of the County, and without having any numbers attached to it, I can't support this. I'm going to yield and listen to my other Council Members. CHR. DAVID- £hank you, Mr. Richards. Ms. Kierkiewicz, go ahead MS. KIERKIE WICZ. Hi. I'm feeling like Mr. Richards right now I'm feeling like we don't have enough information. And one of the things that I've been championing while I've been here is the transparency and the accountability on the County side, especially for recovery process. And with recovery positions that this body created—the last Council meeting we asked the right questions, and we were able to gel the amount that these positions cost so we could make an informed decision. And that's what this all comes down to for me, is making an informed decision. You know, earlier today we saw change orders for, I think, a contract with Polynesian Adventures through the end of the year, so I'm assuming that once that closes out, you're hoping that this contract we can get a new vendor on board to provide bus services MS. CARREIRA. Actually, the reason why it says December is because we didn't award this contract. I would like to actually see us have the new contract on board way before that because we've gone on too long. I mean, me as an administrator, 14 and a half months is too long. We're over that. So we had to keep extending it because this contract hadn't—we hadn't finished review—or the committee hadn't finished reviewing it. It took this long to get through the process. So 1 would actually like to get this out earlier rather than later. Because some other details about this particular contract is one, 1 don't have a baseyard in Kona, so a lot of this is the contractor would be doing the Kona, North Kohala, and Ka'u routes with own buses, of course with their own drivers. Even though we would oversee as the Hele-On transit—you know, I have no mechanics, we wouldn't have to have people waiting there. And as we were able to get more buses, then definitely we wouldn't replace the contractor buses so that we could become zero percent reliant on bus rentals. MS. KIERKIEWICZ. But that's going to take some time, I'm assuming. MS. CARREIRA. Oh, yes. And that again, that takes time. I can give you a little update. We believe that the four newest buses we believe, don't hold me at this, at the moment is going to be completed in December; and if that comes Page 34 FC -19 September 17, 2019 alright, then we've got to go training, bring the buses here. Maybe January, I don't have the date on that. But they will be completed this year The hydrogens, those three buses, they're still on hold. Mitch Yuen is working on an issue that came up with it. Because I was hoping to have one of them here, but again we're looking at infrastructure there. Electric vehicles, we have the one at our baseyard. You can talk to Justin Scalzi who will be giving a presentation this afternoon. There's some other possibilities of other buses. Bug again, there's infrastructure which we do not have. It's an issue; it's a concern for me. Because technically, if these contractors are not saying they would, the current would say no to the extension of any contract, basically I would have to cancel 20 routes. DIS. KIERKIFWICZ Twenty routes? MS. CARREIRA. Yep. DIS. KIERKIEWICZ. In West Hawaii? DIS. CARREIRA. Its on this island. Because have right now ten. Hopefully, twelve buses up right now. So I'm calling around to ask for buses. Youjust can't get buses herein the next three months. It's just not going to happen. Suit's going to be next year. We continue to try and get parts, and it takes a long time. There's the procurement process which everybody goes through. You know, because we didn't have buses since 2015; but, you know, since that time we didn't have GET (General Excise Tax). Now we have the GET, and we thank again the people of this County that we can get more. But during those times—vou know, I'm going to say fortunately—I know you guys didn't like us getting those secondhand buses from Honolulu, but actually they've been really great. Major mileage, but they've been on the road a lot. We've had some issues now, but they have helped us. We have 33 routes. I'm responsible. We are responsible for 33 routes. And if we have only 10 on the road, for us that's 13 buses we're renting, I mean yeah, 23 buses that we are renting at any given time, and that concerns me. Not saying that this particular contract is going to make—we believe that it will make it better. Because I'm not worried about sending my mechanics out to West Hawaii, and then we can slowly get more buses and replace along the way. But the total is actually 55 that we really need, with spares, you know, by a certain date. But I can tell you we are exploring all of our different options and a lot of manufacturers and dealers. Sales people have contacted us, been really great. Page 35 FC -19 September 17, 2019 The entire County has helped. The Finance Department, Deanna has been a big, big help. And our current vendors, Polynesian Adventures and Roberts both, we've all worked as a team as much as we can. We just have a system that's— CIIR. KIERKIEWICZ. Brenda, I don't disagree with you. You know, we were at the Planning Conference, and our County Mass Transit Plan received an award. And I have no doubt in my mind that you are going to be great at working with all the stakeholders to implement. My big issue with this is I feel like it's coming to us at the l It' hour, and we're having to have this dialogue on the floor. You know, in the past we've been critical of IT (Information'rechnology) of not reading out. And Jules (Ung), to her credit, had made it a point to reach out to Council Members ahead of things coming to the agenda and asking—sharing information, asking questions, making sure all of our concerns were addressed. And Mass Transit is important, I'm assuming, to the administration, so I just wonder why there wasn't that effort extended by the administration to reach out to all of the Council Members to let us know that this was coming down the pipeline. MS. CARREIRA. You know, as far as forme, my basic thing was I found out we needed to do a resolution, and my main thing to doing is trying to gel it on to the Council. And part of the reasonI'm sorry, the urgency is that I need to go—I'm planning to go on two mainland trips for work and leave on Saturday and not going to be back until October 2n1, so I didn't want to push it back more and more until I return. But that's one of the things. MS. KIERKIEWICZ. Brenda, I know You don't have to MS. CARREIRA. Yeah, I don't know. Yeah, I'm not sure— MS. KIERKIEWICZ. But guess what I feel like right now? I feel like I'm being held hostage, like I've got to do this or you're going to lose 20 routes; and it's like, well, I feel like I'm a rubberstamp at this point, and I don't like feeling that way It's not your fault; it's the process. I'm seeing now as we talk to you that it's not working out in anyone's favor. That's just how I feel. I can't support this in its current state I support you, like 150 percent. I know that you're going to do amazing things for Mass Transit. But I just—the way this all came together; it just doesn't sit well with me. Chair, I'm going to yield at this time. CHR. DAVID: Thank you, Ms. Kierkiewicz. I'm going to go to Chair Chung right now. Page 36 FC -19 September 17, 2019 MR. CHUNG: First of all, I don't think this is really Brenda's fault. I mean, if any responsibility has to be held, it's got to be at the Corporations Counsel's office because they are the ones who are and no offense to the deputy over here. You know, they are the ones who were supposed to make sure that all of the is were crossed and is dotted with regard to this. Because Brenda just came on board and, you know, she actually came from outside County government, so she can't really be expected to know all of the requirements for these types of measures. You know, what we're looking at here is really a clash of philosophies, I think, government principles. I'm going to read for you what the requirement is here, and it's contained in Section 10-11. It's also mentioned in the resolution. But at the very end of that section it says, "any contract, lease or other obligation requiring the payment of funds from the appropriations of a later fiscal year or of more than one fiscal year shall be approved by resolution," and that's why we're looking at this today The question becomes whether this resolution is done prior to the contract being awarded or after. I've seen it done a number of ways, and I've had discussions with the Corporation Counsel's office about this matter. My personal preference is that they award it. They award it and then come to the Council for approval ratification, so at (cast we know what the terms are But I think from their perspective, they're kind of concerned that in case there's a vendor who contests the award, then it puts everything in jeopardy And I think so Corp. Counsel has to—going to have to come and explain all of this. But I actually would prefer getting more information, okay? I can't see us entering into a contract of this magnitude without having more specifics. \ You know, Ms. David mentioned the possibility of going into an executive session. I'd be okay with something like that. But we need a better idea of what's going on. I am of the belief that the award can be made and we come in the backend to approve, yeah. You know, certainly we don't want to put ourselves at risk either. So I think a really good fallback position would be which is what Ms. David suggested She whispered it actually to me; you know, maybe going into executive session I don't know how you feel about that Rene(Schoen) CHR. DAVID Yes. Thank you, Mr. Chung, for that. Go ahead, Ms. Lee Loy MS. LEE LOY: Yeah, I'll be more than happy to get us there because I did— aside from that was the procurement process, right? You know, I think we might have a very robust discussion in executive session. Page 37 FC -19 September 17, 2019 Motion to Enter into Ms. Lee Loy moved to enter into Executive Session Executive Session: in order to hold attorney-client privilege discussion regarding Res. 304-19, as authorized by Section 92-5(a)(4) Hawaii Revised Statutes. Seconded by Ms. Eoff. CHR. DAVID: Discussion, Council Members? Mr. Richards, go ahead. MR. RICHARDS. Yeah, thank you, Chair. And just realty quick, brilliant idea, Chair, as far as going into executive session. I completely agree with Council Chair Chung as far as coming on the backend of this conversation, being able to prove. Because its only we're going to ever know our fiscal oversight if we know what the numbers are. With that, I yield. Cl IR. DAVID- Thank you very much. MR. HENRICKS. Madam Chair, before you take the vote, you've read the criteria, that means HRS. And I think Mr. Chung was fairly clear as to why, and that Ms. Lee Loy made the motion. But before you take the vote and we close the curtains, I just want to be clear as to what the parameters of discussion are going to be. So that when we're in executive session, we stay within there, and then everything else should be CHR. DAVID Perfect. Yes. MR, HENRICKS. And it's clear for the record, too, why the Council is—it's important to state for the record why we're closing the meeting off. CHR. DAVID: Okay, and this is to discuss the contents of the resolution and our with respect to cost. MS. SCHOEN: Madam Chair, I would suggest—well, just for the record, the discussion would center around the Charter, Section 10-11 Also, the procurement process and then the existing procurement process that is now before the Mass Transit Department. CHR. DAVID, Awesome. Thank you very much for that. Any other questions, Council Members, before we take the vote? All those in favor of going into executive session please say "aye." Page 38 PC -19 September 17, 2019 Vote to Enter Into The motion to enter into Executive Session was carried Executive Session: by the following voice vote: (Approved) Poindexter, Richards, Villegas, Ayes. Committee Members Chung, Eoff, Kaneah'i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair David — 9 Noes: None. Absent: None. Excused: None CHR. DAVID: I am calling a recess while we set up for executive session. Recess: At 11:56 a.m., the Chair called for a recess. Reconvene: The meeting reconvened at 1.10 p.m. CHR. DAVID: Alright, welcome back to the Committee on Finance. Thankyou for your patience. Council Members, based on our discussion in executive session on this matter, I believe we are ready to entertain a roll call vote or further discussion. So if no one needs to discuss anything, Mr. Clerk, roll call vote, please. Vote on Res. 304-19- The motion to enter into Executive Session was carried (Approved): by the following voice vote: Ayes: Committee Members Chung, Eoff. Kaneali'i-Kleinfelder, Poindexter, Villegas, and Chair David — 6. Noes: None. Absent: Committee Members Kierkiewicz, Lee Loy, and Richards — 3. Excused: None CHR. DAVID- Thank you, Mr. Clerk. BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES. Bills for Ordinances. (Bill 95 was taken up previously, out of order.) CHR. DAVID: And I believe that concludes the Finance Committee meeting. Page 39 FC -19 September 17, 2019 ADJOURN- There being no further business, at 1.11 p.m., Ms. Lee Loy moved to adjourn MENT the meeting. 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 CHR. DAVID: Thank you. We are adjourned. Approved: Ms. Made Medeiros David, Chair Finance Committee MD/na (Date) Page 40