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HomeMy WebLinkAbout01/25/2012 Regular Council MeetingCOUNCIL MEETING January 25, 2012 The Council Meeting of the Council of the County of Kaua`i was called to order by the Council Chair at the Council Chambers, Historic County Building, 4396 Rice Street, Suite 201, Lihu`e, Kaua`i, on Wednesday, January 25, 2012 at 9:16 a.m., and the following members answered the call of the roll: Honorable Honorable Honorable Honorable Honorable Honorable Honorable Tim Bynum Dickie Chang KipuKai Kuali`i Nadine K. Nakamura Mel Rapozo JoAnn A. Yukimura (excused at 12:31 p.m. to 3:53 p.m.) Jay Furfaro, Council Chair APPROVAL OF AGENDA. Mr. Chang moved for approval of the agenda as circulated, seconded by Ms. Yukimura, and unanimously carried. MINUTES of the following meetings of the Council: Special Council Meeting of December 7, 2011 Council Meeting of December 14, 2011 Special Council Meeting of December 15, 2011 Mr. Kuali`i moved for approval of the minutes as circulated, seconded by Ms. Yukimura, and unanimously carried. The Chair noted that there was no one in the audience wishing to provide public testimony at this time. CONSENT CALENDAR: C 2012 -18 Communication (12/30/2011) from Councilmember Kuali`i, transmitting for Council consideration, a resolution designating February 2012 as `Olelo Hawai`i Month in the County of Kaua`i: Mr. Kuali`i moved to receive C 2012 -18 for the record, seconded by Ms. Yukimura, and unanimously carried. C 2012 -19 Communication (01/05/2012) from Councilmember Bynum, transmitting for Council consideration, a proposal amending Chapter 5A, Kaua`i County Code 1987, as amended, relating to home exemptions. The proposal would raise the permanent home exemption in Section 5A- 11.4(a) from $48,000.00 to $225,000.00 for all homeowners, with an increase to $250,000.00 for those sixty years of age and above, and an increase to $275,000.00 for those seventy years of age and above: Mr. Kuali`i moved to receive C 2012 -19 for the record, seconded by Ms. Yukimura, and unanimously carried. C 2012 -20 Communication (01/10/2012) from Councilmember Rapozo, transmitting for Council consideration, a proposal amending Chapter 15A of the Kaua`i County Code 1987, as amended, relating to the Kaua`i County Fire Code as it pertains to "Open Burning Fires ": Mr. Kuali`i moved to receive C 2012 -20 for the record, seconded by Ms. Yukimura, and unanimously carried. COUNCIL MEETING 2 January 25, 2012 C 2012 -21 Communication (01/17/2012) from the Executive on Transportation, transmitting for Council consideration, a proposal amending Chapter 17A, relating to bus fares that would allow the current pilot program with Kaua`i Community College to be extended through to the end of the school year, provide the Executive on Transportation the authority to waive fares from six (6) to twelve (12) months for new fixed routes or other events, and allow the County to negotiate a group or bulk rate with Kaua`i Community College and other entities: Mr. Kuali`i moved to receive C 2012 -21 for the record, seconded by Ms. Yukimura, and unanimously carried. C 2012 -22 Communication (01/19/2012) from Councilmember Bynum, transmitting for Council consideration, a proposal amending Article 4, Section 19 -4.5 of the Kauai County Code 1987, as amended, relating to camping at Lydgate Pa k. This proposal deletes a provision that was inadvertently included in Bill No. 2149, Draft 5: Mr. Kuali`i moved to receive C 2012 -22 for the record, seconded by Ms. Yukimura, and unanimously carried. There being no objections, C 2012 -24 was taken out of order. COMMUNICATIONS: C 2012 -24 Communication (12/22/2011) from the Director of Finance, transmitting for Council information, the Schedule of Fund Balances for the Fiscal Year ending June 30, 2011, pursuant to Section 19.14 of the Kaua`i County Charter: Mr. Rapozo moved to receive C 2012 -24 for the record, seconded by Ms. Yukimura. Council Chair Furfaro: Is there anyone in the public that would like to speak on item 2012 -24? If not, members, any discussion on this report? Go right ahead. Ms. Nakamura: Chair, I have some questions about this report, sort of the timing of this report, which is Schedule of Fund Balances on June 30, 2011. So I understand that it's a Charter requirement? Council Chair Furfaro: For January, that's correct. Ms. Nakamura: Is the requirement that it be presented to us...I guess I'm not clear about what the requirement is. Council Chair Furfaro: That's to verify the fund balances after the June 30 audit. If you look at the top item on there, all funds that have been allocated to specific departments are reflected and that it shows a notice of the fund balances as reviewed by finance and that was the top line there that is now showing zero. But it is a Charter requirement. Ms. Nakamura: Okay and then everything that's in the assigned column would then be available to various departments for the new fiscal year. Council Chair Furfaro: As specified. Ms. Nakamura: That's their beginning of the year balance. Council Chair Furfaro: That's right, for that. COUNCIL MEETING 3 January 25, 2012 Ms. Nakamura: And there are other charter requirements requiring the council to receive quarterly reports? Council Chair Furfaro: Actually, I think I need to correct that and I should have corrected it yesterday. That is a Code requirement, not a Charter requirement. Mr. Bynum brought that up yesterday, but that is in the Code. I have met with the administration. I'll be glad to share with any member my communication to the Finance Director about getting us more timely and I understand they have submitted the first five months for the mayor's review. So we should be seeing that shortly. But that is a Code requirement. Ms. Nakamura: Isn't it also in the budget ordinance as a proviso? Council Chair Furfaro: It's in the budget ordinance as well as a proviso. The narrative is there, yes. So I think all I'm saying at that point is I have been communicating to the Finance Department, as well as copied in emails, and a discussion that I had with Finance yesterday, their need to get us more current. And they have indicated to me that the first five months are in fact being reviewed by the mayor right now. Ms. Nakamura: And what is the explanation for not receiving it in October of last year when we should have received it? Council Chair Furfaro: Well, actually the way it works and I think my email to them was pretty direct, I didn't take it to the next level of consequences (inaudible). But I want to make sure you're sure that what I reminded them is the July, August and September quarterly is due 40 days, by the narrative, is due 40 days after the quarter ends. So that would have said that it should have been due to us through September by November 10. Now December, November and October ended and that should be due to us February 10. So we have not crossed that deadline for that second quarter. But I think from my message to them, they are working diligently to make that date, that February 10 date with the second quarter. Ms. Nakamura: And at that February 10 date, we'll receive both the first and the second quarterly reports. Council Chair Furfaro: No, I'm hoping to receive the first quarter earlier than that. But I think I told them that that is not a date up for negotiation, and I basically shared with them that the Finance Director needs to work closely with the Finance Chairman when we're not in compliance. But if you take the pure spirit of the narrative, they are not delinquent yet for the second quarter. They are delinquent on the 10th of February. To the best of my ability I've communicated the wishes of the Council. Ms. Nakamura: Thank you very much, Chair. Council Chair Furfaro: Yes, Mr. Bynum. Mr. Bynum: I just want to say for the record I'm extremely unhappy that these deadlines are not being met. I've talked about this ever since I've been on Council, timely and open access to information is the lifeblood of an open government. And you know, I'm the Finance Chair. The Chair has always been very akamai about finance issues, as former Finance Chair, and this Council needs information to fulfill our duties and our responsibilities. We've gone more than half a year into the fiscal year and we don't have a profit and loss...we don't COUNCIL MEETING 4 January 25, 2012 know how the county is performing. We can't analyze any trends and we're approaching... and all of us are preparing for budget, and we lack this information. We put a proviso into the ordinance to say you have to get it to us at least by this date, which they are three - and -a -half months behind and I want to take it a step further. I believe when...you know, their finance software runs this data, comes up with a report, when that report is done, the Council, I believe, should have "read only" access on our computers. We shouldn't have to wait for this information to come down. This is all public information. We're entitled to it. You are entitled to it. And I think this is going to be a fascinating budget process this year because of things that we may talk about later today. The way we've budgeted, and a lot of people are talking about the CAFR, and then what we budget, I think it's going to change this year. I think there's a sentiment on the Council to be a little more assertive in how we budget, especially when we're in this era where we're comparing our fund balances with our budget proposals. And so it's just unacceptable that this information is being withheld from us. I believe... Council Chair Furfaro: Mr. Bynum, I need to point out... Mr. Bynum: I think I have the floor. Council Chair Furfaro: No, I want to point out a Point of Order. If you want to get (inaudible). Mr. Bynum: Point of Order? Council Chair Furfaro: Yes. Mr. Bynum: Take a Point of Order then. Council Chair Furfaro: Here it is. The item that we're following right now, for both of you I've extended the courtesies, this is to receive the fund balances report, the item on the agenda, in fairness to the Administration. And Mr. Bynum, as the Finance Chair, if you write to me and want to put it on the agenda, I will. In all fairness, this is the fund balance report. Now, I have shared with you my openness to put that on, but we are not discussing the budget or the financial reporting delinquencies in the current year. We're discussing the fund balances for the year ending June 30. Mr. Bynum: So Mr. Furfaro, later on the agenda we have a budget item to discuss follow -up of the CAFR. I can make those comments then? Council Chair Furfaro: You can do that then. That would be perfect. But also I'm reminding you as the Finance Chairman, and I'm somebody who balances every month when I get the report, I am equally disappointed. But I've shared with you what I have communicated to the Administration, and as Finance Chair, if you want to put a new item on the agenda, I've not prevented that. And if we get to the budget items, you want to discuss it, I'll be open to that then. Mr. Bynum: Chair, my frustration is that you had this dialogue with Councilmember Nakamura. I was almost done with what I wanted to say and in the middle of a sentence there's an interjection that I don't think follows our rules and you know, change it to a Point of Order, okay. But, you know, I'm frustrated at these interjections that happen when someone else has the floor. So with that, I'll let it go for now. Thank you. COUNCIL MEETING 5 January 25, 2012 Council Chair Furfaro: Okay, so we are on that and I don't want this to be reflected in any way that I'm preventing the discussion, but the agenda item on budget is coming up later and perhaps you would advise the Finance Department if they want to come over and talk when we get to that item it would be better. And please don't measure my aloha by allowing some leniency. But when we get into a second discussion, the reality is I want to bring us back to the agenda. So any further discussion on item C 2012 -24? Mr. Kuali`i. Mr. Kuali`i: Thank you, Mr. Chair. I don't know. I just was under the impression that maybe Finance would be here and that we would ask questions, but I guess you've met with them so you have the information, so I will ask you. Specifically on this report... and thank you, Councilmember Nakamura, because you asked a few of my questions as well. In the notes, do the notes represent funds that were transferred from the General Fund into the Capital Project funds? And the one specifically I see is Note 1, which is $11.1 million and when I look at the General CIP fund where it has Note 1 in the parentheses, it says... is that $2,000 then? So I'm not... if there was a little bit more explanation of what these notes were and what those amounts represent, is it going from the General Fund into these...is being assigned into these different CIP funds? And if that was the case, how come the balance is lower than the amount of the transfer? Maybe I'm just not understanding it. Council Chair Furfaro: No, and you know, I want to remind us when we went through the audit, the presentation that I put up on the board was my presentation, okay. So I have called for Mr. Rezentes to come over because I don't speak to anything other than my interpretations of us getting to a zero balance. So I think we'll have him here to answer those specifics. I understand he's on his way since I called for him. Mr. Kuali`i: Okay. Council Chair Furfaro: Mr. Rapozo, did you have another question? Mr. Rapozo: No, I just wanted to clarify that he was coming over now and that he wasn't going to... Council Chair Furfaro: No, no, I sent for him, but I want to make sure that we understand. This is the actual document required to show in January how the June 30 year ended at fund balances, and I can get some copies of my notes that I presented earlier at the audit time, which were again my notes, if you so desire. So can we hold this until Mr. Rezentes is over? And I'm going to point this out at the same time. I think within this discussion on fund balances, Vice Chair Yukimura had asked for a report about emergency needs and shelter operations from KEO, and I did not get an agenda item requested to be posted on this, but since it's dealing with fund balances, this might be a good time for us to pass out...this was received today from KEO at the request of Vice Chair Yukimura? I think Ginger had those copies earlier, but she stepped out. That's it. So just for the record, let's distribute those. We can't discuss this item, but this was a request for fund balance moneys. Ms. Yukimura: Mr. Chair. Council Chair Furfaro: Yes. COUNCIL MEETING 6 January 25, 2012 Ms. Yukimura: Actually it was Councilmember Nakamura's request and we did it through committee, I just want to acknowledge that. Thank you. Council Chair Furfaro: Okay, I just saw this piece of correspondence and it was addressed to you as the committee chairwoman, so I assumed it came from you. But if it came from Councilmember Nakamura, that's fine. So that's the only way this can tie into that report without further expanding the discussion on fund balances, okay. Any more discussion? I'm going to actually recess us for a few minutes here while we're waiting for Wally. We're going to go into recess for approximately 10 minutes. There being no objection, the meeting was recessed at 9:32 a.m. The meeting was reconvened at 9:42 a.m., and proceeded as follows: Council Chair Furfaro: We're back from recess and just to make sure we have some clarity here where we're going. On item 2012 -24, which is dealing with the fund balance report, at the time that we talked about this, this was my presentation on the board reconciling to the best of my ability the fund balances. The rules require that in January the Finance Department submits to us the Schedule of the Fund Balances, which supersedes my estimates and presentation. Now when we're talking about fund balances, Councilmember Nakamura queried me about some delinquencies in the budget reporting that the Council has not received, and I summarized that by Charter and we are prepared to get a February 10 report from the Finance Department on the second quarter. That's the date we're shooting for. Now, we have specific questions from Councilmember KipuKai regarding the actual fund balance report and I've sent for Mr. Rezentes to come up to answer Mr. KipuKai's questions. Any budget items, as I pointed out to Mr. Bynum, will be covered in 2012 -25 as it relates to the CAFR. Mr. Rezentes, thank you for coming over and I'm sorry I didn't communicate this to your earlier, but thank you for responding. There being no objection, the rules were suspended. Council Chair Furfaro: The question was posed on the fund balances. I pointed out the zero fund balance that is showing up on the report on the very first column. Then as they got into the specific questions about certain notes, I referred them to the quick summary that I had made, but we have very specific questions about some of the notes, and I'll leave the floor to KipuKai. KipuKai. Mr. Kuali`i: Thank you, Mr. Chair. Aloha and mahalo, Wally, for being here. My questions on this two -page report here, on the second page there are the notes and I just wanted to understand what those amounts represent. I see that on page one the notes are tied to each of these different funds. For example, the General CIP fund is Note 1, and it says "Assigned fund balance of $11,108,886 is designated for capital projects." What does that mean and is it transferring from the General Fund to that fund or from the General CIP fund to another specific CIP fund? And how do I see how it balances? WALLACE G. REZENTES, JR., Director of Finance: The relation between the two? Mr. Kuali`i: Yeah, the relationship. COUNCIL MEETING 7 January 25, 2012 Mr. Rezentes: First of all on the first page of the report is...I'm sorry, Wally Rezentes, Director of Finance. First of all on the first page of the report is a Schedule of Fund Balances and it is a list of the unassigned fund balances by these respective funds as of June 30, 2011, the unassigned fund balance. Mr. Rapozo: Terrific, I just want to clarify something real quick. May I? Council Chair Furfaro: Excuse me, Mr. KipuKai, Wally, if you'd hold on. Yes, go right ahead. Mr. Rapozo: Only because on the column, Wally, it's showing assigned and that's maybe... Mr. Rezentes: Yeah, I think we should have... Mr. Rapozo: Should that be unassigned? Mr. Rezentes: Yeah, we should have clarified that. It's the unassigned fund balance. So I apologize if that was the cause of some confusion. Council Chair Furfaro: No, no, it was a very important point. Mr. Rezentes: And what's listed in the notes is actually the assigned versus the assigned fund balance. Council Chair Furfaro: The lower ones are the assigned pieces. Mr. Rezentes: Yeah, on the back note. Council Chair Furfaro: That's right, thank you. Mr. Rezentes: So I apologize if that was cause for... Mr. Kuali`i: The entire front page is all unassigned. Mr. Rezentes: Yes. Mr. Kuali`i: And the notes are assigning fund balances. Mr. Rezentes: Those are the portions of that fund that is assigned. Mr. Kuali`i: So in Note 1, right, if $11.1 million is being assigned and being designated for capital projects, the balance of that is somewhere else. It's not even in this report? Mr. Rezentes: The balance is the unassigned. It's either assigned or unassigned. Mr. Kuali`i: So where is that $11.1 million? Mr. Rezentes: We can provide further details of that information. Mr. Kuali`i: I just think that if the notes are there, those seven notes, I would want to understand what... COUNCIL MEETING 8 January 25, 2012 Mr. Rezentes: Sure, the detail. Mr. Kuali`i: Yeah, I would want to understand. And if it's assignments for CIP, then there's that whole thing about the CIP, where if it's going to be happening next year, then you're accounting for that moneys, but if it's going to happen five years from now, then it's still sitting in the General CIP fund. Mr. Rezentes: Right, I think what you're referring to is what our spend down rate will be and... Mr. Kuali`i: So I would have the same question for the...well, for all the notes, but especially the four notes (the General CIP, the Bond Fund, Parks and Playgrounds Fund, and the Highway CIP Fund) because they're all well over a million dollars, yeah. Mr. Rezentes: Okay, okay. Mr. Kuali`i: Thank you. Mr. Rezentes: Yes. Council Chair Furfaro: Okay, Wally, one more time, for the purpose of the item, the unassigned balances reflect as zero? Mr. Rezentes: For the General Fund, correct. Council Chair Furfaro: Yes, for the General Fund. The line below reflects assignments of funds. Mr. Rezentes: Actually the entire list on the first page is unassigned, yes. Council Chair Furfaro: Right. Now on the flip side you have the notes for the explanations of which I'm hearing from Mr. Kuali`i that you're going to provide us more backup for those notes. Mr. Rezentes: Yeah, we'll come back with a separate report for those and I think he mentioned the ones that are the first four items. But we'll work on the Notes 1 through 7. Council Chair Furfaro: Okay. So Mr. Kuali`i, are you happy with that? Mr. Kuali`i: I'm fine. Council Chair Furfaro: Okay. Now, Councilmember Nakamura? Ms. Nakamura: So Wally, under major governmental funds on page one, under the General Fund, then you have Housing and Community Development Revolving Fund. That $2.1 million, is that assigned or unassigned? Mr. Rezentes: Unassigned. Council Chair Furfaro: In the Housing Revolving Fund. Mr. Rezentes: Yes, within that fund. COUNCIL MEETING 9 January 25, 2012 Ms. Nakamura: inaccurate? Mr. Rezentes: basically...it's unassigned. Ms. Nakamura: So when you add that up, then that's $23 million on page one and then $31 million total. Is that correct? here. guess. Ms. Nakamura: Mr. Rezentes: Mr. Rezentes: Mr. Rezentes: Yes. So it's unassigned. So the column heading there is Yeah, if you refer to the upper heading, that's So all of these on this list are unassigned funds. Yes. Correct. Mr. Rezentes: Maybe what I'll do is when I report back... Mr. Rezentes: I'll reference back to the CAFR. the Ms. Nakamura: Okay, so do you want to update this and resubmit it just so that it's accurate for the record? Mr. Rezentes: Sure, yes. Council Chair Furfaro: And nobody should get the $23 million reserve confused with the unassigned in the various accounts. It's just coincidental. Ms. Nakamura: Then the $31 million total, all governmental and enterprise funds of $31 million, is that consistent with the CAFR or should I ask that on the next item? Council Chair Furfaro: We'll ask that on the next item. Wally will still be Ms. Nakamura: Okay, thank you. Council Chair Furfaro: Any further questions about the unassigned? Mr. Rapozo. Mr. Rapozo: Thank you. Wally, to be clear, if you look at General CIP Fund with the Note 1, you're showing $2,104 unassigned. So in the General CIP Fund in our budget, you have $2,104 unassigned and you have $11,108,886 assigned. Am I reading that correctly? Mr. Rapozo: So if we look in the...that's how I'm reading it, I Mr. Rapozo: Just make it so that Councilmembers can understand it. Mr. Rapozo: Okay. Yeah, that'll be good, okay, perfect. Thank you, Mr. Chair. COUNCIL MEETING - 10 - January 25, 2012 Council Chair Furfaro: Actually, Wally, I have this worked out as such, but you do it, okay? And if you take those numbers, they reconcile, except my copy that I made is cut off here. But can you do that for us? Mr. Rezentes: Council Chair Furfaro: Mr. Rezentes: Council Chair Furfaro: Mr. Bynum. I mean what you're showing there reconciles... Correct (inaudible). But yeah, I can do that. It's one and the same. This is out of the audit book. Mr. Bynum: The total General Fund balance at the end of the fiscal year was $57,264,394. Is that correct? Mr. Rezentes: Yes. Mr. Bynum: So this report, the way it's formatted and sent to us, I don't think answers the question. Mr. Rezentes: The question is what is the amount that is unassigned and if you refer to your auditor's report on page 14, I can read it, and again this is relative to the General Fund. "The County's ending General Fund balance consisted of..." Ms. Yukimura: Page 14 of? Mr. Rezentes: Of the CAFR and this is from your auditors. "The county's ending General Fund balance consisted of $25 million in restricted fund balance, $5.4 million in committed fund balance, $51.4 million in assigned fund balance, and a zero balance in unassigned fund balance." And that was what I was reporting here. You know, it's consistent with the statements in the CAFR by the auditor. "The county reported an unassigned fund balance of zero due to the required amounts needed to cover revenue shortfalls (that's for the ensuing fiscal year) and contributions made to other funds in the upcoming 2013 year." Council Chair Furfaro: Mr. Bynum, you have another question? Mr. Bynum: Yes. The communication is for the Schedule of Fund Balances. It doesn't ask for just the unassigned fund balance. It asks for a schedule of the fund balances, which are in the CAFR. Why isn't the total General Fund balance reported in this report? Mr. Rezentes: I apologize. We have historically been requested of the Council to report the unassigned fund balance. We can provide and regurgitate what's in the CAFR for... Mr. Bynum: I can read a 10 -year history on page 124 of the CAFR and when I look at that history, I see that in the last two years there's been an extremely rapid acceleration of assigning fund balances. Would you agree with that? Mr. Rezentes: I'm sorry, you said a rapid... COUNCIL MEETING Mr. Bynum: Over the last two years, there's been a rapid escalation in the amount of the fund balance that was assigned. Mr. Rezentes: direction. Mr. Bynum: Mr. Rezentes: Well, understanding the fact that a good portion of the change was relative to the policy- making body's decision that I think was appropriate to create a reserve fund. Mr. Bynum: So in 2009 we assigned $11 million of the fund balance, in 2010 we assigned $19 million, and in 2011 we assigned $51 million. Mr. Rezentes: Mr. Bynum: Mr. Rezentes: Mr. Bynum: Mr. Rezentes: Mr. Bynum: Council Chair Furfaro: Mr. Rezentes: But on that note, though, you are correct in that besides the amount that the General Fund supports...the General Fund is having an increasing role in support of other deficit funds. And if you track history, you'll see in funds such as solid waste, for instance, where there's been over the years a lot more focus placed in the solid waste arena, so the General Fund has had to support more and more the funding of deficits within that fund. Council Chair Furfaro: You still have the floor. - 11 - January 25, 2012 Yes, the assigned fund balances have gone in that We're behaving differently in the last couple years. Yes. That's a pretty dramatic change in behavior. Of which twenty... I know I understand that. Yeah, $25 million was relative to the reserve policy. Thank you. Just on that note... Mr. Bynum: Just one final question and then we're going to address that in the Solid Waste Fund in the next agenda item or at least I want to talk about it. Last year the Administration sent to us a recommendation to establish a reserve policy based on the unassigned balance. If we had done that, then there wouldn't be any reserve. I never understood why the Administration asked us to do a reserve policy based on the unassigned fund balance. Luckily the Chair didn't do that and he used the more standard format of looking at the total fund balance as the basis. But why did the Administration ask us to do a reserve policy based on the unassigned fund balance? Mr. Rezentes: Because those are the funds that's available for reserve. You can't assign funds that are already assigned or already restricted. It has to be funds that are freed up. Mr. Bynum: We'll follow up on the next agenda item. COUNCIL MEETING - 12 - January 25, 2012 Council Chair Furfaro: Okay? And again, before I recognize Vice Chair Yukimura, the piece I presented during the audit piece will identify items such as how did we tap the General Fund and so forth, although this is an unaudited piece; this was my own arithmetic back in December, and the report we're getting from now is reviewed and verified. So Vice Chair Yukimura? Ms. Yukimura: Yeah, well you said that the General Fund has had an increasing role in making up for deficits in the special funds. Have you looked into the reason why there are deficits in the various funds or increasing deficits? Mr. Rezentes: Because we have elected not to develop policies that will fully...for instance, for Wastewater, Sewer or for Solid Waste, our policy has not been to recoup 100% of the cost within the Solid Waste Fund via tipping fees or fees charged to residents for residential pick -up. For wastewater, we have elected not to have the residents that are hooked up to sewer pay 100% of the cost to manage and maintain all of the expenses relative to that fund. So the General Fund has to provide the support so that the revenues meet expenditures. Ms. Yukimura: So have you looked into the possibility that the expenses might be due to poor management of the programs? Mr. Rezentes: Sure, that's always an analysis and we're in a continuous state of trying to improve operational procedures and I'm sure that it'll come out in your internal audits in the future in the ensuing years. So yes, we do look at ways to streamline operations. At the same time, we've also expanded what we do within solid waste, within the recycling, within curbside pick -up that requires a great deal of capital and operating expenses. And those decisions come to this body annually. Ms. Yukimura: Well, if we're talking about curbside recycling, I think many members of this Council... Council Chair Furfaro: Point of Order. Members, the agenda item is the CAFR. I asked Mr. Rezentes to be here to reconcile my original presentation to the CAFR, ask questions about the notes, and so forth. The subject matter is not curbside recycling (inaudible). He led us into the fact that the $12,318,000 that came from the General Fund to subsidize other accounts, which can be reconciled on the sheet I showed from the audit, is the financial part of what we're dealing with now. We're not here about management techniques and other particulars. So let's stay subject matter specific. Ms. Yukimura: Mr. Chair, the Finance Director has told us that part of the reason for the major change in how we're defining what's remaining in our budget is because the General Fund has been relied on increasingly to make up for deficits in various specific funds. And this is a budget question. I'm asking whether the Finance Department has looked into the causes of these increasing deficits. And solid waste is one where there has been increasing deficits. So I'm asking whether it's just... and the Finance Director himself has answered my question by saying that there's been increased activity, but I'm asking whether there has also been issues of proper management and proper use of money. So I think this is relevant. Council Chair Furfaro: Okay, we're going to call a Point of Order. If you want to challenge that, let's get a vote by the majority of the members. The item here on the agenda is reconciling and reporting of the fund balances. COUNCIL MEETING - 13 - January 25, 2012 Ms. Yukimura: Okay, then I'll change my question. Council Chair Furfaro: Okay, thank you very much. Ms. Yukimura: My question is we have actually instituted solid waste fees, so in many respects there should be almost a decrease in what we have to pay for from the General Fund. So why is it not the case? Mr. Rezentes: I can provide the details. I don't have it with me here, but it's basically arithmetic. We did incorporate the increases in revenue attributable to the new fees that you mentioned. However, the revenues, I believe, in other areas as well as the expenses have, for the most part, been on the rise as well. So we still fund... and I don't have my...I did not bring my budget with me, but we still fund a great deal of moneys from the General Fund to Solid Waste even after considering and placing in the revenue column the amount of the increase relative to the new fees. Ms. Yukimura: My question is why? Mr. Rezentes: Just look at the budget and look at the budget... Council Chair Furfaro: Excuse me, Wally, Point of Order here. Ladies and gentlemen, the agenda item right now is dealing with the fund balances. If you want to get into the items that deal with...to address follow -up concerns as it relates to the outcome of the comprehensive audit and so forth, that is the next agenda item. And I will be more flexible and more lenient then, okay? Ms. Yukimura: Thank you. Council Chair Furfaro: Now, in this meeting this morning alone I gave liberties to Councilwoman Nakamura to ask outside the fund balances. Then Mr. Bynum took it into operational issues. When I tried to say to him let's get back to the fund balance question, it was a matter of well, you're attempting to prevent me from discussing...we're talking fund balances. The next item is the questions that deal with the follow -up concerns related to the results from the comprehensive audit. Ms. Yukimura: Mr. Chair, I'm happy to wait until the next item. Council Chair Furfaro: Then, I'm happy. Ms. Yukimura: Thank you. Council Chair Furfaro: Any more questions for Mr. Rezentes as it relates to pursuing information on notes, fund balances, and the revised fund balance sheet, which he needs to produce? That's the item right now. Go ahead, Mr. Kuali`i. Mr. Kuali`i: Thank you, Mr. Chair. One quick other question with regards to these fund balances on the report that you have here. So you are going to provide further details on the notes, I appreciate that. But the other thing I thought of is maybe this would be easier to understand if instead of just showing us this one set of numbers that you show us what the numbers were for last quarter or the quarter before that, so that we can see what actually changed in each of those funds and maybe there'd be a little bit of explanation of what went in and what went out. It was just talking all the General Fund, but what about the other funds? COUNCIL MEETING Mr. Kuali`i: Mr. Rezentes: column alongside this. Mr. Kuali`i: Ms. Nakamura: Mr. Rezentes: Ms. Nakamura: - 14 - January 25, 2012 Mr. Rezentes: In actuality, to get an apples -to- apples comparison, what might be useful is this is based on our CAFR report, so it's as of the fiscal year end June 30, 2011. The relevant apples -to- apples comparison is the same information for fiscal year 2010. The prior year. Yeah, the prior fiscal year. So we can provide that I would appreciate that. Thank you, Mr. Chair. Council Chair Furfaro: Okay, we'll be sending over a communication that asks you to present the year -end June 30, 2011 with the financial for that period and then showing us the variance from that column in the year, for the year. That's acceptable, Wally? Mr. Rezentes: Yes and it was already provided to the Council at this time last year, but we can add it on. Council Chair Furfaro: Thank you. If you can add it on, it would be appreciated, and we're in agreement. Any more questions, again, about the fund balance report? Go right ahead. Ms. Nakamura: Thank you, Wally, for being here. According to the county code, we're supposed to receive this statement at the close of the fiscal year showing the unappropriated surplus or unencumbered balances by January 1. But I wanted to find out, since we are adopting GASB Statement No. 54 that now refers to this as unassigned or assigned balances, is this Code language still accurate or should we amend this to be consistent with what the reporting... Mr. Rezentes: The changes in GASB? It would probably be best to change it based on how GASB has now changed in how we are required to report information. Would that require a Charter amendment? I believe so. Okay, thank you. Council Chair Furfaro: Please make note along with our legal counsel in the audience, that item Amy, I hope you can overhear this conversation, thank you very much. Mr. Rezentes: And it may be good to somehow...because GASB can come up with changes annually, it may be good to put in some language, and I'm speaking to the County Attorney, to allow us flexibility to change it as the GASB changes. (Inaudible) can discuss that further. Council Chair Furfaro: So if you continue to... if you work that with the County Attorney and then have some proposal that goes to the Charter Commission and so forth, much appreciated. Mr. Bynum. COUNCIL MEETING Mr. Bynum: I just want to say I'm anxious to get to the next question because I've prepared a slide that outlines last year the solid waste budget versus actual for the Solid Waste Fund. And I also have a handout prepared about the changes in fund balance reporting by GASB 54. So I'm anxious to get to the next item. Council Chair Furfaro: Well, that's the next item. We're on this item right now, so let's go. JoAnn. Ms. Yukimura: Just a follow -up to Councilmember Nakamura's question. Are we saying that unappropriated surplus is the language of our Charter, but in fact the GASB language is unassigned balance? Mr. Rezentes: Yes, there have been a number of changes since the...I'm not sure when that Charter section was implemented. But there have been a number of changes that GASB has instituted that we are required to follow. Ms. Yukimura: Okay, and until we have a Charter change, couldn't we just put in parenthesis the proper word, so we just know that it's one and the same? I mean we could use unappropriated surplus (unassigned balance)? Mr. Rezentes: It may mean different things under GASB and that's why they categorize it differently. There is, I believe...I can...I don't have it right in front of...but there's... Ms. Yukimura: So it's not one and the same. Mr. Rezentes: in the CAFR. Ms. Yukimura: what you're saying. Mr. Rezentes: - 15 - January 25, 2012 Yeah. I don't have the section, but it's talked about In fact it's a different accounting framework is Yes, yes. Council Chair Furfaro: But in the meantime we have to live with the Charter we have. There needs to be an understanding by members of terminologies and the basic negative and positive integers that lead to the net outcome. Ms. Yukimura: Chair, I want to say what you've just said is absolutely true. We need some real clarification on terminology and definitions. Council Chair Furfaro: Mr. Rapozo, you have the floor. Mr. Rapozo: Thank you. Just, Wally, you don't have to answer this right now because... and I'm not a finance guy. But when I look at the Charter, unappropriated surplus or unencumbered balances that could include unassigned and assigned. I just don't think the language... Mr. Rezentes: It could include assigned and unassigned. Mr. Rapozo: So I think the language is perfectly fine. I don't think we need to change the Charter. The unappropriated surplus is simply money that we didn't spend, or unencumbered money is money we didn't spend. Unappropriated is money that is pretty much unrestricted. I mean I think the language is fine. I think we understand the difference between assigned and COUNCIL MEETING - 16 - January 25, 2012 unassigned, but I guess before we start jumping to a Charter amendment, the analysis by the County Attorney's Office, I guess, should be "Is the Charter language of 19.14 legally appropriate for what GASB requires us to provide ?" And if not, I think it's a lot easier to submit a report in compliance with the Charter in addition to your GASB report than changing the Charter. That's my personal opinion. To get it out to the ballot and explain this to the public, I think it's a lot easier to generate a report with an unappropriated surplus and unencumbered balance. I just think that would be a lot easier way to go. But that's just my humble, unprofessional opinion, Mr. Rezentes. Mr. Rezentes: With the new GASB definitions, the audit explains it on pages 54 and 55, the CAFR explains it on pages 54 and 55, unassigned fund balance, non - spendable, restricted, committed fund balances, and assigned fund balances. Council Chair Furfaro: You need to understand that terminology on 54 and 55 before you get to page 71, which is accounting for some of those funds. Mr. Rezentes, I'm going to see if we have any more questions on this item and then I'm going to have to ask for public testimony, then ask you to come back. Wait a minute, we have another question. Mr. Bynum. Mr. Bynum: Just one last thing. Because you referenced 54 and I have it highlighted on that page, from my review of the CAFR, the assigned fund balances are the amounts that are constrained by the county's intent, intent being the key word. It's not what...we don't actually always do what we initially put as our intent. Correct? Mr. Rezentes: Yes, and just to go further, my Finance /Accounting staff did verify with the Council's auditors that on the appropriate treatment of the assigned balance for this CAFR. So we did reconcile how we intended to treat and in this case treat the reserve policy with the auditors and they concurred with the recommendation of the Finance Department on the treatment of the reserve fund. Mr. Bynum: Right and I understand that, but when we get the CAFR, we get to look at what we stated as our intent and then we get to see what we actually did, which are two different things. And so in the next agenda item I want to talk about the Solid Waste Fund, about what we stated our intent was and what we actually did. Mr. Rezentes: And for a point of clarification, this CAFR was completed as of June 30, 2011. The reserve fund, the reserve policy that was set by ordinance was effective July 1. So the known intent of the County Council ultimately by the time the CAFR was completed was known. That was known because the budget ordinance was approved already by June 30. So therefore, our auditors took into consideration the policy approval of this Council to set up the reserve and therefore that funds was removed from our unassigned fund balance to the assigned fund balance. Mr. Bynum: And I see that it was done and we'll discuss that in future meetings. Council Chair Furfaro: Okay and the most important part is everyone needs to understand again, the sequence of dates and also the fact that if we have funds that are earmarked by contract; we have funds that are earmarked by intent; we have funds that are earmarked because the design element is being made, but we reflect the construction cost; you know all of those things have to be considered COUNCIL MEETING when we say the fund balance is there. There may be intents in there under different variables. Any additional questions on the fund balances for Mr. Rezentes? Mr. Rezentes, I'm going to ask you to step down and see if we have anyone that wants to give public testimony. Mr. Mickens? GLENN MICKENS: Thank you, Jay, for the record Glenn Mickens. This gets pretty confusing. The public, including me, continually hears that our unappropriated General Fund balance is roughly $57 million. Jay, as stated before, corrected this amount to a negative $2.6 million, which is a big difference. But the public's impression is that we have this $57 million unapproriated, unencumbered fund out there to be able to do with as they please, you keep on knocking it. But if the actual figure is a $2.6 million, which this sheet finally shows down there, shortfall post reserve policy, then why aren't we calling it what it is? As JoAnn said, call it...if it's an unassigned balance or if it is encumbered, why isn't that specified? It shouldn't be that hard, should it, to make the public aware of what the fund balance either is or it isn't? It just seems like it wouldn't be that tough to do to put those figures out there and you know, I thought, Jay, you were the first one as I remember to bring this up that it isn't a $57 million unencumbered fund balance. That's not it. It's more like $2 million because the funds are encumbered. They are going to be used for something. That's not right? Council Chair Furfaro: Let me try and summarize it for you a little bit. We're looking at two pieces here. On June 30 of last year, right, we had a reconciliation of our checkbook, okay. And on July 1 we decided to go along and say hey, we had a balance in the checkbook, we're putting in a reserve. That's the two parts you have to understand, and it was only a footnote in the upcoming budget. In December we entered a resolution as we tried to refine what the reserve is. Mr. Bynum can eventually, as Finance Chair, work through the committee an ordinance on that. That's what we're talking about right now, what did we look like on June 30, okay. Mr. Mickens: So, I'm sorry, Jay, but I'm still confused. The fund balance is actually a negative $2 million or... Council Chair Furfaro: No. Mr. Mickens: It's not. It's... - 17 - January 25, 2012 Council Chair Furfaro: We have a reserve, Glenn, of $23,387,000, okay. But if it's a reserve, we moved it from our checking account over to our savings account. Mr. Mickens: The General Fund account? That's the savings account? Council Chair Furfaro: The reserve, the terminology "reserve." Mr. Mickens: Okay, reserve. Council Chair Furfaro: So we had that $23 million and we took it out of the operating account and we earmarked it as a reserve, like we moved it to a savings passbook. That's how we have to look at that, okay. Mr. Mickens: Okay. The reserve balance then is what? What is the figure? COUNCIL MEETING - 18 - January 25, 2012 Council Chair Furfaro: $23,387,077 unaudited. Mr. Mickens: Unaudited, which means what? If they audit the thing the figure could change? Council Chair Furfaro: It means that was a guesstimate that I presented. That's what it means. Mr. Mickens: Oh, right, right. Council Chair Furfaro: That's this guesstimate. Mr. Mickens: Yeah, I've got that guess you got there. Yeah, I see, okay. So at this stage of the game, there's a $23 million unappropriated balance? Council Chair Furfaro: No. There's a $23 million reserve. Mr. Mickens: Right. Council Chair Furfaro: Okay, which left the checking account with no balance in it that was unappropriated. Now below that line there was money, like in Housing, and that is the attempt to spend, it's under contract to build something, okay. There is money in those accounts. But the General Fund, the checking account that we have, our household checking account, when we allocated all the funds, there was a zero fund balance. Mr. Mickens: Okay, so to get it straight then, at this stage of the game there is no money in the unappropriated general balance. The $23 million you're talking about here is encumbered. You're going to be... Council Chair Furfaro: It's not encumbered. It's by a resolution that says if we have an emergency, 15 percent of that can be used for early response before FEMA details on a hurricane. Mr. Mickens: Right, right. Council Chair Furfaro: So much of that can be used for special unconsidered funds that exceeded the cost of things we budgeted for. It's specified in that resolution. Mr. Mickens: Because I've heard you say that before. X amount has to be put in there, which is understandable for a hurricane or a disaster of any kind, and so that $23,000,000 is there. What percent is that $23,000,000 of the... Council Chair Furfaro: It's roughly 15 %, which is what Mr. Bynum is suggesting that instead of using the original balance, we look at a GASB kind of recommendation and in particular we took the city of Denver that arrived at, if your General Fund amount is this much, about 15% of that should be held in reserve under some policy. It's not by ordinance, it's just by resolution at this time. Mr. Mickens: But the 15% then, is that $23 million or would that be more? Council Chair Furfaro: You know, for right now I'm just going to say it's not in an ordinance, that's what it stands at, and it's like that money is in a separate account. COUNCIL MEETING - 19 - January 25, 2012 Mr. Mickens: Okay. Council Chair Furfaro: Okay? Mr. Mickens: Yes. Council Chair Furfaro: You have a specific question for Mr. Mickens, Mr. Bynum? Mr. Bynum: No, I'll wait for the next agenda item. Council Chair Furfaro: Okay, thank you. Mr. Mickens: Okay thanks, Jay. Council Chair Furfaro: I'll be glad to meet with you separately and you got the little draft that I put together so. Mr. Mickens: Right because I think it's important. I think the viewing public, I think, is watching this and I'm no math genius in any size, shape or form. But if it's confusing to me because they keep kicking around that $57 million figure, including me, saying why we have such a huge surplus and you know the people keep on wondering that. So you know your explanation here does help. Thank you, Jay. Council Chair Furfaro: Okay. Just remember, Glenn, the resolution is a policy statement and in the budget ordinance that's where the reserve fund is intended to be, the budget ordinance, okay. Ken, did you have a question? No. Is there anyone else in the audience that has a question? No. There being no objection, the meeting was called back to order, and proceeded as follows: Council Chair Furfaro: Okay, we're going to ask to go ahead after this discussion and receive this item so we can move to the next item. All those in favor, signify by saying aye. The motion to receive C 2012 -24 for the record was then put, and unanimously carried. C 2012 -25 Communication (01/03/2012) from the Council Chair Furfaro, requesting the Administration's presence to address follow -up concerns relating to the 2011 Comprehensive Annual Financial Report (CAFR): Mr. Kuali`i moved to receive C 2012 -25 for the record, seconded by Ms. Nakamura. Council Chair Furfaro: Okay, is there anyone in the audience now that wants to testify on this item before I get Mr. Rezentes back? Please come up, Glenn. There being no objection, the rules were suspended. GLENN MICKENS: Thanks, Jay, for the record Glenn Mickens. Is this item referring to this finance sheet, this particular thing, the enterprise funds? It's not... COUNCIL MEETING - 20 - January 25, 2012 Council Chair Furfaro: That sheet is the fund balances. This question /item deals with items that came up in the financial report as audited, the CAFR. Mr. Mickens: Oh, okay, so it doesn't have anything to do with like enterprise funds? Council Chair Furfaro: If there are questions you have about the enterprise fund, you can ask them now, but not to be confused with... Mr. Mickens: Well, okay. I just want to...you got, you know, under enterprise funds, public housing, sewer, golf fund. My understanding of an enterprise fund, I'm not positive, is that the income has to equal the outgo. It's a balanced fund. Is that not true? Council Chair Furfaro: We've had this discussion many times. An enterprise fund is intended to cover their operating expenses. Mr. Mickens: Right. Council Chair Furfaro: The reality is the three that we have, golf, housing, I think it's... Mr. Mickens: Sewer. Council Chair Furfaro: ...sewer do not. Mr. Mickens: Right, then why don't we change the title of them and don't keep calling it enterprise fund if it's not an enterprise fund. Council Chair Furfaro: Have you sent that request over before? Mr. Mickens: Okay, thank you, Jay. Council Chair Furfaro: Wally, may I ask you to come up and I think Mr. Bynum has a presentation. If you'd like to watch it from the seat first, that's up to Mr. Bynum. Are you going to show your presentation first? Mr. Bynum: I didn't know what order, but... Council Chair Furfaro: No, I'm asking you. That's why I didn't happen to say...you want to show it first? Mr. Bynum: Yeah sure, why not? Council Chair Furfaro: presentation first. Mr. Bynum, Mr. Bynum: okay. I think the people at this Council Chair Furfaro: Mr. Bynum: Council Chair Furfaro: Okay, Wally, we're going to have Mr. Bynum's I'm going to give you the floor, go ahead. Okay. I just want to... Glenn, everyone's confused, table are confused. I'm not. You're confused. I'm not, for the record. COUNCIL MEETING - 21 - January 25, 2012 Mr. Bynum: Okay. So I want to start by, I'm going to pass...I've passed this out previously to Councilmembers in a CD I've supplied them with recently and I have copies here today. We keep talking about GASB. GASB is the Governmental Accounting Standards Board, okay, and they recommended some changes in the way counties and municipal governments report their fund balances. And so this document that I have here is called Looking for Ways to Make the Fund Balance More Useful and I want to read a few things out of here. Mr. Bynum: Yes, I made 10 copies. "Research conducted by GASB has found that despite widespread appeal of fund balances, it is often misunderstood by both preparers and users of financial statements." So they know that. Hey, people are not doing. "GASB initiated research on fund balances in response to concerns that some users of governmental financial information did not understand the difference between reserved and unreserved fund balances. There was further concern that users would be confused about how reserved fund balance relates to unrestricted net assets" and it goes on. And then it talks about and lists some problems, which I'll go into in a few minutes, and so having these terms correct is very important to understand them. Some of us mistakenly interchange terms and then it makes it even more confusing. But I've said for a couple of years I think a big source of this confusion is when we look at the CAFR, which is the audited report, what we actually did, right, and compare it with the budget, which is an intent of what we say we're going to do. But at the end of the year, the CAFR reconciles what did you say you were going to do and what did you actually do. And so I have a slide that has the Solid Waste, both the budget and the CAFR, you know what did we say we were going to do and what did we actually do, and I'd like to show that. And this is just one example and I've been working on this for a while. I had hoped to have it all ready for all the fund balances today, but I'm not there yet because I've been distracted by other things I had to respond to. But I was up at 4 a.m. this morning making... not this chart, but if we could maybe come back to this, this is a different picture. This one right here, okay. As I said I was doing this at 4 a.m. I'm relatively certain these numbers are correct. They're from the CAFR and the budget. And so if you look, this is just the Solid Waste Fund. This isn't what we're going to do, this is what we did last year, okay. So if you look, the budget said our revenues were going to be $3,046,000. But when it was all said and done, our revenues were actually $3.4 million. So a variance, you know, and that's a good way to budget, to have more revenue. In a budget you say this is what I think we're going to get in revenues and if you budget well you're going to have somewhat of a positive variance. That's not a very large positive variance. It's kind of large actually by percentage, but it tells you $378,623. Now in expenditures, our budget said we're going to spend close to $15 million or $14,793,000. We're saying hey, this is what we budgeted; I think we're going to spend this much money in solid waste. But at the end of the year, we actually spent $11.3 million. Quite a huge difference between what we budgeted and what we actually did, and that variance is $3.4 million. And I think one of the things that the Council's going to be looking at this year in our budget are these variances historically and try to get them a little tighter. So we said we thought the income or the loss would be in the budget that basically we would need to subsidize this fund from the General Fund by $11,747,000. That was the budget projection. At the end of the day, what we actually had to subsidize, it was $7.9 million. Again with a pretty large variance between what we budgeted and what we actually did, right. So in order to do that, we did General Fund transfers. At the beginning of the year, the budget said we're going to transfer $9 million into the Solid Waste Fund so we can operate for the year. In the long run we actually transferred a little more than that. So if you look at what we said in budget, the net change in the fund balance of this particular fund at the end of the year would have been a reduction of $2.5 million, right. We started the year with the...I'm on the budget column here. We started the year COUNCIL MEETING - 22 - January 25, 2012 with saying hey, we have $9.7 million in the Solid Waste Fund, but by the end of the year it's going to be reduced. That's the budget column. Then you go next to say the actual column. Well, same beginning, we started the fund with $9.7 million, but by the end of the year, we had a little more revenue, we didn't spend as much as we budgeted, and so the actual ending was the fund balance increased. It didn't decrease, it increased, so from $9.7 million to $11 million. So we started this fiscal year with $11 million in the Solid Waste Fund. Is this making sense to everybody? So that variance, to me, is very large. Our budget said hey, we're going to end the year with $6.1 million in this fund, but we actually ended the year with $11 million or a $4.5 million difference from budget, from our budget prediction. I think where some of this confusion comes is when we look at the CAFR and then say well, in our budget we've said this is what we intend to do. But you can see in this fund, what we've said we intended to do and what we actually did were two different things. I personally believe we should make our financial decisions based on what we actually do, not on a budget plan that has very large variances like this. If you look at this GASB thing that I passed out, it says, "Actions taken to reserve or designate fund balance vary from government to government, leaving the financial statement user uncertain as to the force behind proposed limitations. Some governments transfer resources from the general fund to other governmental funds without an intention to use the resources in the receiving fund —the resources reside in the other fund and are subsequently transferred back." And so the General Fund should hold our excesses pretty much. We shouldn't hold excesses in Solid Waste or CIP or other funds. So I just want to say for the Solid Waste Fund, we need to look at budget versus actual. And that was our frustration earlier is we want quarterly financial statements from Finance that tell us how we're performing during the course of the year, right? Budget versus actual. We're more than half of a year into this fiscal year and we haven't gotten it. So now if I could put up that page 124 from the CAFR, please. So the CAFR, again certified financial audits, it's what is actually done. It's done independently to make sure that the numbers are accurate and it has many, many charts and numbers, and so it does take some time to get educated to this. And perhaps what we maybe need to do is have a workshop for the Council and the public about these changes with GASB. But GASB was saying hey, sometimes you're not getting a clear picture because you're parking funds in these funds instead of parking them in the General Fund. So this is something that's in everything and it has the... unfortunately you can't see the titles on this, but if you look at the General Fund at the top, going across the right is a 10 -year period. But these are some of the new terms that GASB has come up with. The General Fund, the total General Fund is at the bottom. In 2002 it was $12 million. Above that is the unassigned, assigned, committed, restricted, right? These are the terms we need to get familiar with and understand. And this is how...for the look over a 10 -year period because you see trends. So I want to kind of bring it... if I would have had time, I would have made this in a chart that was easier to read and that's stuff I'm working on, but I have to move this over so we can see the last couple years. Thank you. Okay, so bottom figure 2011, total General Fund for this year is $57,364,000. That's money in the bank so to speak, sitting in the General Fund. Now of that, that 460 figure is restricted, okay. Of that total General Fund balance, we have that restricted. The next one is, the title is committed, right. So we're contractually obligated to spend that portion of $5 million. Where the confusion happens, I think, is in this assigned category. And COUNCIL MEETING - 23 - January 25, 2012 I've shown charts previously that for the last 10 years only one year did we use the assigned amount. We assign it for budget purposes, but at the end of the year, we don't actually use it. So when I said earlier, rapid escalation in assignment, you can see it was like 9, 10, 11, 13, 14, 11, all of a sudden last year 19 and this year $51 million, we've assigned it. Does that mean at the end of the... does that mean the money's all gone? No, because going back to our thing that our Finance Director turned us to, summary on page 54, the assigned fund balance are amounts that are constrained by the county's intent to be used for specific purposes. But they are neither restricted nor committed. And, you know, I don't have that chart here today, but if you looked at the last 10 years, we assigned various amounts. But when the next year's CAFR came, I think for the last eight years, we didn't use any of the assigned amount. We used it for budgetary purposes, but did we actually write a check and have it leave our asset? No. And so I have concerns that the Solid Waste Fund increased, you know that previous slide, a $4 5 million variance from what we said we intended to what we actually did. We need to make our financial decisions, again in my opinion, on what we actually do, not say hey, we've assigned all of this money and so oh, and that's your concern, I think, Mr. Mickens. Oh, do we have $57 million or do we have a deficit of $2 million. Well, if you look at all of the intents we put out there, yeah, we've assigned it all as intended. But the facts are right here at this bottom line. At the end of the year we get a snapshot. It's gone 30, 42, 45, 54, last year 68, this year 57. One of the things I'm trying to look at now is of that 57, how much of that is sitting in other funds and got moved...like I just showed the Solid Waste Fund increased by $2.5 million this year. If we would have budgeted differently and we didn't transfer those funds, that much, I don't think we needed it. I know we didn't need to transfer as much as we did. And so I know I believe I'm reading the sentiment of the Council correctly, this year they really want to get more engaged in budget and look at the variances. You know, why do we have a Solid Waste Fund where we predicted we're going to spend X, but in actuality we spent much less than that. Is this making sense to anybody out there? And it is confusing, but it's very important because I've been concerned the last couple years. I can see what we actually did and that's why I said when the CAFR people were here, we're in a very strong financial position because if we took 20% of that $57 million as a reserve, there's still a whole bunch more money above the reserve. So I don't want to confuse it further, but just viewing the Solid Waste Fund, budget versus actual, we've got an analysis to do. I'm concerned that this $57 million actually...there's actually more, but we moved some of that into other funds. But I haven't completed that analysis yet and that's why eventually when we finish discussing this agenda item I'm going to ask for a deferral so we can look at the other funds other than the Solid Waste Fund. We have Golf Fund, Sewer Fund, but you have to look at those in total. And that's why we get the CAFR every year. Eh, you guys do whatever you want planning the budget, right, but what did you actually do? Make your future financial decisions on what you actually did. If you want to report the fiscal health of the county, base it on audited financials, not budget plans that you don't follow. I'm done for now. Ms. Yukimura: I have a question. Mr. Bynum: Yes. Ms. Yukimura: So we'll come back to our chairs and now it's time for questions. COUNCIL MEETING - 24 - January 25, 2012 Mr. Bynum: Maybe I'll show two more slides. I'm sorry. Well, I think Mr. Rezentes is still here I hope. Ms. Yukimura: No, he's outside, maybe with the Chair. Mr. Bynum: Well great, he's going to have a hard time answering questions related to what I just presented. Ms. Yukimura: I want to just ask a question. May I? Mr. Bynum: Yes. Ms. Yukimura: If we go to your Solid Waste Fund chart, basically what you're showing there is we transferred almost $2 million more than we needed to transfer. Mr. Bynum: We actually had a $4 million variance between what we said we were going to do and what we actually did. Ms. Yukimura: Yeah, but we had an income loss, an actual income loss in the fund of $7.9 million and we transferred $9 million, right? Mr. Bynum: Correct. Ms. Yukimura: $9.162 million. Mr. Bynum: $9.871 million is the actual. Ms. Yukimura: So yeah. The bottom line is that we actually needed a subsidy of...which is huge, $7.9 million and we gave them a transfer of $9.1 million. Mr. Bynum: Yes. Ms. Yukimura: And it's sitting in a Solid Waste Fund rather than in the General Fund. Mr. Bynum: Correct. This thing I passed out, GASB says hey, that's not the way you're supposed to do it. It says the General Fund...you don't transfer money in there unless there's a specific use for it and that's why I've been trying to learn about GASB. A few years ago here on Council, the Finance Department came and said hey, GASB 54 has new ways to report fund balances and we can go online and look at GASB and I've called and talked with their staff people on the phone and that's why I've shared with other Councilmembers some of these bulletins they put out. This one is a discussion about fund balance. So... Council Chair Furfaro: Are you pau with your presentation? Mr. Bynum: I think so. Council Chair Furfaro: Okay. Mr. Bynum: Oh no, actually I have a couple more slides. I'm sorry. A little different, but to get... COUNCIL MEETING - 25 - January 25, 2012 Council Chair Furfaro: Can I just share one thing with everybody? The numbers Mr. Bynum put up on the board, you'll find in your book on page 38, the $9 million transfer during the year and you need to tie that to ordinances for transferring money. So let me go sit in the crowd. Mr. Bynum: So these are a couple of slides, two that have been put out by the Finance Department reporting our financial cushion. I'm trying to get this to go back further in years and that's something else I'm working on. But we were carrying a 17% to 23% balance and then it has gone up a lot, but up to 2007, I have a concern. I still don't understand, and I've had this concern for a couple of years now that these numbers, 2001 -2007, are kind of one set of figures and these two are different. This is what the administration has put out as our balance with percentages. This is what the auditor put out this year and if you look, these numbers through 2007 are the same. So to me, this is the correct way to do it. This is comparing apples with apples. This is comparing apples here up to 2007 with oranges because these numbers are the unassigned fund balance, but these numbers are different. I don't understand to this day why the administration put one type of figure here and a different type here. But when Mr. Pasion put this out, this was my reading of it when I did the math, and just...I know this gets a little confusing, but what he's reporting is the total General Fund balance, minus the restricted and committed, and that's in these notes right here. But to me, this is the accurate kind of funds that were available to the county last year and the percentage of the expenditures plus transfers out, we were carrying a surplus at 53 %. Now we have said, this year, our intention is to carry something between $20 million and $25 million, kind of like we did in the past. And now this would be different. I'd like to update this slide and I will because this year it will have come down, but it still will be a high percentage, much higher than the 25% that we have designated as what we should hold as reserve. And then my earlier discussion was and is this number being impacted by taking funds that should remain in the General Fund and this is a question. I haven't fully answered it in my mind, but I showed you in solid waste. Are we parking some of those general funds in solid waste, in sewer and in other places that changes what this number would be? So that's my presentation, thank you. And to me this is an ongoing thing and as we go into budget, I hope certainly the seven people at this table have to be on the same page. I'm reading what I've heard from members over the last six months. I believe in our next budget we're going to look at those variances more closely. We're going to say do we really need to budget this much in this department when over the last 10 -year period there's been very large variances? So thank you. Mr. Rapozo: Mr. Chair? Mr. Chair, I have a process comment real quick. Council Chair Furfaro: Go right ahead, Mr. Rapozo. Mr. Rapozo: And only because I'm looking at the clock and we're 10 minutes until 11 o'clock. We have a scheduled agenda item at 11 o'clock and we still have to take a caption break. So just food for thought, we might want to do the caption break now and then reconvene with the military and then come back to this discussion after, just because I know it's going to be a long item. Council Chair Furfaro: I think that might be an appropriate piece and I think during this time I just want to point out if...I don't know how to do it totally polite, but I'm going to do it. I'll distribute my numbers of this solid waste piece because you have to have good information and these numbers in your presentation don't necessarily work out in the variance that you presented. So if you don't mind I'll distribute this for people to take a look at. COUNCIL MEETING - 26 - January 25, 2012 Mr. Bynum: As I said I did this at four in the morning and I think the numbers were...I'll be happy to... Council Chair Furfaro: Well, as you pointed out, some of us have a different understanding of numbers and I wanted to get this out. And I also want to point out that the handout you have from 2006 has been corrected in 2008, was corrected again in 2009, was corrected again in 2011, more current information. And this reconciliation you can find on page 38 of your audit report. But I'm going to just reserve my right to interpret numbers the way I've interpreted numbers and we can come back to expand your presentation as you'd like, but I think it's important, like we all say, good information in gives you good information out. So we'll get these numbers redistributed and I think I'm going to let Council Vice Chair Yukimura run the 11 o'clock presentation, if you don't mind, okay, if that's acceptable to you? And so on that note, you know numbers are important, but the reality is our process right now is about intent and you need to understand we put money with the intent as Mr. Bynum said. If you do only actuals, then you have a cash accounting system. And that could be easily corrected if we want to give the Finance Department that authority in the future. But currently they have to estimate the budget in the beginning with a FIFO system. So we're going to go on recess for 10 minutes and we'll come back and we have a presentation at 11 o'clock. We're in recess. There being no objection, the meeting was recessed at 10:53 a.m. The meeting was reconvened at 11:09 a.m., and proceeded as follows: Ms. Yukimura: The Council is now back in session and I'll give it to Chair Furfaro to start this next presentation. C 2012 -23 Communication (01/19/2012) from Council Chair Furfaro, requesting the presence of Dr. Dileep G. Bal at 11 a.m. to fully discuss "Tropic Care Kaua`i 2012," a project of the Department of Defense Innovative Readiness Training (IRT) operation, which will provide free medical, dental, veterinary, and optometric care to all Kaua`i residents for two weeks beginning February 28, 2012 through March 9, 2012. Council Chair Furfaro: Well, first of all thank you all for being over to share with us some community benefits that we can have from this very, very great source of public activity that you're about to present to us. You have a wonderful narrative that went out in the This Week magazine and Dr. Bal, as you came to first talk to Council Vice Chair and myself, I'm going to let her run the meeting because it's a council day and I have to save the presentation for the whole day and lean to a few questions at the end. But Vice Chair Yukimura, if you can have them introduce themselves and take us to the next step. And again, welcome, we're delighted you're here. Ms. Yukimura: Thank you, Mr. Chair. Welcome, Dr. Bal, Colonel Arends and Commander Gittleman. I want to give the floor to Dr. Bal, who is our District Health Officer on Kauai, who, I believe, had quite a responsibility in bringing this to Kauai. And so please, if you would state your name for the record and then proceed. There being no objection, the rules were suspended. COUNCIL MEETING - 27 - January 25, 2012 DILEEP BAL, Kaua`i District Health Officer: Dileep Bal, District Health Officer here on Kaua`i. Madame Vice Chair, what we're going to do is very briefly it's a logistical sort of thing. Let me introduce the people flanking me to whom we are all indebted on Kaua`i. To my right is head of the mission, Col. Jerry Arends from the Air Force. And he's been the guiding light behind setting this up and he will be our lead speaker and I will follow him after that. He is going to basically frame for us what is happening with the Innovative Readiness Training Program. And after that I will follow up and say specifically what we're doing on Kaua`i. The reason for the musical chairs is Cdr. Gittleman, to my left, is going to be the clinical head of the entire operation, and she's heading back to San Diego tonight. So she's going to be going all over the island to make sure that we have everything set up for when they come next month. So I would like Cdr. Gittleman to say a few words before she leaves and then I would personally like to have the Governor's Representative, Mr. Dennis Esaki, say a few words. Jerry and I could never have gotten this off the ground without Dennis. I mean this is a joint enterprise, as you'll see in the slides, between the Pentagon, the District Health Office, and the Governor's Office. So the batting order will be Lisa, then Dennis, then Col. Arends. And after Jerry, I will bring up the rear. Ms. Yukimura: Thank you, Dr. Bal. Cdr. Gittleman? LISA GITTLEMAN, Commander: Good morning, aloha. I'm Commander Lisa Gittleman and I'm from the US Navy Reserves. I am heading back to San Diego tonight because I am a reservist, I have a civilian job as well, which is with the County of San Diego. So I understand public health quite well. It's kind of funny to be in on a county supervisors' meeting on this. I am actually thrilled to be here and thrilled to be able to participate in the Tropic Care IRT this year. Kaua`i is my second most favorite place on earth aside from San Diego. I come here a lot with my husband and it just gives me great personal pleasure that you are all so welcoming. The support from the island, all the different organizations, the Health Office, it's just been overwhelming and I'm sure by the end of the mission you're going to have about 300 military members that are probably going to be in tears when they leave the island because you folks have just welcomed us already so warmly. So we are planning clinical operations in three different communities here on the island. There will be one clinical site in Kapa'a at the All Saints Episcopal Church. There will be a second site here in Lihu`e which will be at the Kaua`i Community College and we'll be using some of the parts of the Nursing School and the Wellness Center over there. And then we'll be over in Hanapepe at the Soto Zen Temple doing clinical services. We're going to be housing our military members in two of the armories, one in Hanapepe and one in Kapa`a. And the kinds of services that we're bringing are... we're bringing an optometry team which is active duty Navy which will actually be fabricating glasses for people. We're going to have dental. We're going to have medical which will consist of doctors, nurse practitioners, physician assistants. We're bringing a plethora of medics and Navy corpsmen to assist in all those different services, as well as we're going to have a couple of Navy dieticians and Navy psychiatrists and Navy chaplain. So we're really hoping to help not only like with the traditional kinds of medical, dental and optometry services, but also be able to offer some mental health, spiritual intervention, and nutrition counseling. In addition to doing that with individual patients, we have some plans in place to maybe give some nutrition classes at senior centers and really interact some with the community, and engaging the nursing school at KCC. We're going to be utilizing some of the nursing students in each clinic site. They're very excited to come and work with us and learn from us. We're very excited to be able to use them because they're here from the island and they'll probably help us a lot in interacting with the patients. We also plan to do some presentations for them with the military nurses going and doing maybe some COUNCIL MEETING questions and answer panels and talking to them about nursing careers and different aspects of nursing, as well as military nursing. So we have a lot of things planned, not just at the clinics, but engaging with the community. Ms. Yukimura: Thank you, Cdr. Gittleman. Are there any questions of Cdr. Gittleman because she has to leave. Council Chair Furfaro: I have one. Ms. Yukimura: Chair. - 28 - January 25, 2012 Council Chair Furfaro: Your opportunity to speak on health improvements that individuals can make, some coaching and so forth, specifically are you going to be covering diabetics? Are you... again, what the framework would be... and I ask that as a diabetic. So what opportunities will be there for training? Cdr. Gittleman: I understand. I definitely see opportunities for us to engage not only in diabetes specifically but in all chronic illness: diabetes, high cholesterol, hypertension. I know these are things that plague all of the U.S., not just Hawai`i. So I know that we will have medical officers and the nutritionists specifically that would probably love to engage in a lot of preventive education about that. I know, as a provider myself, when I'm doing these missions, I probably spend this much of my time doing a physical examination and this much of my time talking and educating people because that's where the impact and the differences are really going to be made. Council Chair Furfaro: And these teams are...they have some years of service. I mean they're not trainees. They're... Cdr. Gittleman: No, no, it's a legitimate question. Council Chair Furfaro: I mean I get good services with my insulin and everything from Wilcox, but just for the public, these are true tested professionals that can do some coaching. Cdr. Gittleman: Yes, these are... from the Navy side and I'm sure...I'm actually doing the credentialing for the Air Force side as well. I can attest that a lot of times the medical professionals that are coming, they're higher ranking officers, so they have quite a bit of maturity in their fields and length of service, not only in the military but in their specific medical specialties. So you're not going to be getting somebody that's like still in school or fresh out of school. We will have some junior officers because we see this as a great training opportunity for people who are newer to the military. For us it's a great retention tool to bring these people on missions. People love to interact with communities and do something different outside of just going to their two -week annual tour in a military hospital. This is something that they can really get hands -on with people and they love it. So we see this as a retention tool. So you will see some younger officers for sure, but all of them are well educated in their fields and will have a lot of expertise to share. Council Chair Furfaro: Thank you. Thank you, Vice Chair. Ms. Yukimura: Thank you. You know, I'm thinking if the others can answer the questions, we could reserve our questions for maybe Col. Arends. Dr. Bal: We'll do questions at the end if we could. COUNCIL MEETING Ms. Yukimura: Okay. Dr. Bal: That's why Toni's coming. Some of the questions, I think Toni is best (inaudible). Ms. Yukimura: Yes, we haven't even introduced Toni Torres yet, but we will. I think I have one question that nobody else can answer. What do you do in San Diego? You work for San Diego County in your regular job? Cdr. Gittleman: I do work for the County of San Diego, Director of Public Health, and I do Tuberculosis Control and Refugee Health. Ms. Yukimura: Interesting, all right. Cdr. Gittleman: I'm bilingual, but Spanish. Ms. Yukimura: We have some Spanish speakers here. Well thank you very much. We appreciate your presence and your work and the availability of wonderful opportunities for our people to get some health care. Cdr. Gittleman: Ms. Yukimura: - 29 - January 25, 2012 Thank you, our pleasure. Thank you. Dr. Bal: Thank you, Commander. Dennis will just tell you of the Governor's Office's involvement. It's been huge in terms of supporting our enterprise. DENNIS ESAKI, Governor's Representative: Good morning, Mr. Chairman, Honorable Councilmembers. The Governor is very pleased to participate in this... Ms. Yukimura: Dennis, can you just state your name for the record? Mr. Esaki: Oh sorry, Dennis Esaki, Governor's Representative. Ms. Yukimura: Thank you. Mr. Esaki: The Governor is very pleased to participate in this great mission thanks to the cooperation of the military, state and county agencies led by Dr. Bal of the Department of Health, and numerous nonprofit agencies. This ties in with the Governor's original plan to continue services to the community with limited funds. So we got cooperation from the military. Imagine the free medical, dental and vision services for everybody on the island for two weeks. It's a tremendous benefit financially and also social -wise. Once again, Dr. Bal put me up here, but they're doing all the work and they are the ones qualified to answer any questions. Once again thank you Col. Arends and the military Innovative Readiness Training Program. I'll let Dr. Bal explain all the details to you, but we're pleased to participate and thanks for the county's cooperation. Thank you. Dr. Bal: Toni, come up. For those of you who don't... and I'm sure all of you do know her, our Director of Nursing Toni Torres. More about her in a minute because she's actually going to be our operations chief for the entire COUNCIL MEETING - 30 - January 25, 2012 operation. But our opening speaker, Madame Vice Chair, is going to be Col. Arends. So we will do our musical chairs and switch them again and Col. Arends will be in the middle in front of the mike. Ms. Yukimura: Thank you, Dr. Bal. Welcome Col. Arends. JERRY ARENDS, Colonel: Thank you. Mr. Chairman and Members of the Council, I'm Jerry Arends, Colonel in the US Air Force Reserve on active duty. In August 2010 I arrived in Hawai`i at the invitation of Dr. David Fray, who's with the Department of Health over in Honolulu, to talk about the Pentagon's Innovative Readiness Training Program. He introduced me to several people and then thought that some of the neighboring islands would be interested in this initiative and invited Dr. Bal over. And he and I had lunch in a cafeteria over salads, and I was dealing with a guy who was really skeptical of some guy that's coming with a free lunch and I actually had one. I was a colonel over here looking for training opportunities in terms of deployment training to a tropical area that potentially would require, if not the islands itself, at least it would represent an environment where it was a high probability that US military personnel, particularly guard and reserve, would deploy sometime in after a natural disaster to assist the population there. He took the bait and he called me back and we came out to Kaua`i and discussed the potential for a training opportunity here where we could bivouac —I always refer to it as military people all sleeping with a hundred of their best friends in tents or an open bay barracks situation —and then set up mobile military clinics with mobile equipment in an expeditionary fashion wherever you could find the place to do it or ultimately a tent, but any kind of a building that would provide at least a place to provide care of some kind, and then we would bring the equipment and the supplies. So then his question was well, who pays for all of these supplies? We do. So it was becoming the free lunch that he couldn't imagine. On the other hand, I was given a budget to find that kind of a training environment for licensed medical professionals in the Guard and Reserve so that they could have that kind of an experience of getting a call -up because there's a disaster somewhere and a need in a tropical environment; close up your own clinical practices for those of you who have your own, for instance the physicians; kiss your family good -bye; pack your bags; get on a plane; and you and a whole bunch of strangers and a bunch of medical equipment you're not used to using, particularly it is mobile, and providing the standard of care that U.S. citizens are accustomed to by statute or required to give. So with that we started the Tropic Care series, which we intend to have as an enduring series in the State of Hawai`i similar to what we have in Alaska in the winter, what we call Arctic Care, a mission that's been occurring for about the last 18 years and rotating around the boroughs of Alaska to meet the health gap needs of the Alaskan Native villages that are very difficult to reach. They have a health system, but don't always get the things that they need simply because of where they live. This program was started during President Clinton's administration. He had a lot of interesting initiatives to bring value to communities in America, particularly medically underserved communities and Hawaii just happens to be one of those states, unfortunately, that shows up on the U.S. Department of Health's annual list of medically underserved areas and medically underserved populations. Sometimes that's due to the lack of funding, sometimes it's due to just attracting health professionals to the island. So medically underserved has a lot of different connotations, but it all turns out to be just simply limited access to the entire range of health care services and gaps in that for people or difficulty in getting timely service. I was on a plane yesterday and I like to chat with people next to me, especially if I'm in uniform. I can't really put on my iPod and ignore them. And the lady seated next to me was on her way to Honolulu for a medical appointment with a rheumatologist and had just mentioned that...I told COUNCIL MEETING - 31 - January 25, 2012 her about our mission. And she noted that if she had made the appointment here on Kaua`i in November, she would get her appointment in May, which didn't really help her condition. So she was flying to Honolulu at considerable expense to get something a little bit more timely to meet her physical needs. It just so happened she works with an NGO with an underserved population as well. So I was sure to tell her this is coming to town, make sure you watch for the flyers and listen to the public announcements for it. We will be bringing a team of Navy reserve, active duty Navy, active duty Army, Air National Guard, and Air Force reserve medical professionals, and it was a good question that was asked. And I do want to stress that when we talk about training, when we talk about the medical missions, we're really speaking about the idea of preparing for deployment, and training on the kind of equipment that they would use (the mobile chairs), and then dealing with the conditions of setting up a medical clinic and medical practice in whatever facility is available and yet making that standard of care. It's not hands -on training, so you potentially...with the areas that are represented, a large group from Fargo, North Dakota, a large group from Battle Creek, Michigan, a large group from Washington D.C., and another from Richmond, Virginia, and then people scattered throughout the United States on an individual basis. You're potentially getting the Mayo Clinic people who just happen to be guard and reserve serving in uniform one weekend a month and two weeks a year and any deployment, but coming from extremely sophisticated practices. And typically we do have a lot more senior officers in the dental, optometry and physician ranks than you might see across the non - medical areas of the military services. The junior people will be predominantly the nurses and the admin officers because we do like to focus on them as far as leadership opportunities to lead this kind of a mission. I don't import colonels to run the thing. I'd rather have the younger people, the junior people get this experience in a non - threatening environment because I'm not a threatening person. So these people will be here. The training aspects for other things that will occur on the island and applications have been submitted to the Pentagon, our civil engineering Innovative Readiness Training Projects, such as we'll be assisting with the pathways project with civil engineers. The Habitat for Humanity is looking for assistance in building their community out in `Ele`ele and those are the kinds of missions that we do really seek for our civil engineers because they are training. They aren't civil engineers every day in their job. They might be a waiter or a student, a teacher. So these are the opportunities on the civil engineering side for them to get the stick time on large pieces of equipment and machinery or just hammering nails and designing buildings or putting things up. So the island presents just so many wonderful training opportunities for our guard and reserve. The medical is just what I happen to do and I think it's the most special because it reaches the most people. So we are focusing on filling the gaps. This isn't intended to compete with any of the local health care professionals or try to take away from their livelihood. This is working with the Department of Health in identifying those areas where the health system on Kaua`i just can't meet the entire need, and that's where we fit in best. So that we actually come to augment and enhance, but this is entirely at the invitation of Kaua`i. And so I do applaud the initiative the island has taken and your local government and your health services and your community activism that you have brought such an impressive mission to the island. Ms. Yukimura: Thank you, Col. Arends. I just want to say that we've been recipients of guard and reserve support and response after two hurricanes now, `Iwa and Iniki, and we remain deeply grateful to the services for their help in those times. Dr. Bal, you wanted to do your presentation and then we'll take questions later? COUNCIL MEETING - 32 - January 25, 2012 Dr. Bal: Certainly, Madame Vice Chair. Is somebody going to run the slides or how do they...forward and back, my God, even that shouldn't tax my abilities. Again, before we start let me just say, I can't thank Col. Arends and his staff enough for this. Basically as you see, they will be here on February 28 to March 9 and it's a partnership, and we've sort of badged it in two ways. They've badged it Tropic Care 2012 so that for the next five years we're having it to be Tropic Care 2013, 2014. But Dennis and I decided that since the Governor has a new day in Hawai`i, we'd go maverick on him and say this is a new day in Kaua`i, sort of thumb the nose to say Kaua`i is ahead of them. And it is ironically yesterday when Col. Arends and I were up in Honolulu, everybody absolutely adored what he had to say. The only fly in the ointment was my boss and others who kept saying Dileep, why didn't you do this stuff for O`ahu? I said because I work on Kauai. And they've really been hustling Col. Arends to say why doesn't he start something, and frankly, good luck to them, but they don't have the resources. They don't have Toni Torres. They don't have all the people this morning that from 8 a.m. to 10 a.m., the reason we were late, Mr. Chair, is we were at the Civil Defense place from 8 a.m. to now and an identical presentation of mine was given by Toni. We sort of do this alternately. So she said I'll do the morning, you do the Council, and I said all right. And it's just about the same presentation. And basically the infrastructure...this is not just the Department of Defense Affairs, the Pentagon, and Kauai District Health Office. This is everybody, as you will see from the slides, on Kaua`i. The sense of `ohana on this island cannot be duplicated regrettably in O`ahu. And we hope that they get their own program, but they have to do the kind of collaboration with Col. Arends that we've been doing. As you see the partners are Col. Jerry Arends, Toni, Thomas Noyes, whom you all know, and myself. We're the core group. The most important of the three of us arguably is Toni because she's going to do all the legwork on this, and again, I can't thank Dennis enough because I'm sure the Council is aware of the bureaucratic nature of the State, and we've had all —I hate to call them roadblocks —but we've had some barriers, and Dennis is rather good at breaking down barriers. So that's why we're moving as fast as we can. I was trying to characterize Jerry Arends and I thought of Peter Ustinov; I'll tell you why. Many of you, how many of you have heard of David Niven? Believe it or not, actor Peter Ustinov was David Niven's batman. He was actually the guy who was his soldier who takes care of his personal needs, and I've seen Jerry operate. It's a huge operation he heads, but he's one of the nicest guys. He doesn't always tell everybody he has...you know he's a full colonel. He has all these guys whom we had this morning at our meeting and it is absolutely great to see the way he operates. He's sort of democratized the military to a degree to which I didn't know could be done and the reason is that he takes his responsibilities very seriously. He's delivered on every promise he's made to us, but he doesn't take himself seriously. So God bless you, Jerry, because that characterizes Jerry. I'll characterize the program in a minute. Again, this should not be surprising to you, Mr. Chairman and to the Councilmembers, those are the people participating. This is not the Governor's Office, the Pentagon, the District Health Office. This is all these people. Everybody, all of them were represented this morning in the meeting and we're going to tell you some of the roles of a few specific ones. As was explained by Lisa, we're doing the entire spectrum of medicine. We're doing physical exams, blood work panels, vision screening, spectacles, dental, and I hate to say this as the District Health Officer, but we have appalling teeth on this island. We don't have fluoridation, and I was told by my staff don't use the COUNCIL MEETING - 33 - January 25, 2012 fluoridation word to the Council, so it sort of slipped out then. As a result of one little lack of one major public health intervention, we have a total lack of good... dental caries is right. We don't have enough dentists. Thanks to Jerry Arends and his... she said 300. He keeps telling me, Dileep, it's going to be between 300 and 400. I still don't know how many are coming. He said why don't you just say 350 and we'll figure it out because everybody wants to come. He's the boss and everyone keeps telling him from all over that no, they're bidding on it. They all want to come because they love this mission. We're going to do medication review, dental cleaning minor, behavioral assessments, educational sessions. Toni has set up with Lisa a series of educational sessions with Bill Arakaki's people in the schools. There's going to be exercise programs. Thomas' program, which is a $3.5 million Community Putting Prevention to Work, is our partner on the prevention effort. They're helping publicize it and CPPW is a strong partner in this enterprise. To be politic, we said it's going to be 300 +, but it's actually going to be a little bit more than that. Madame Vice Chair and Councilmembers, let me just say Toni and I kind of divided it and this is where it addresses something of Chairman Furfaro's question. They have their objectives and we have ours. Their objectives, and surprisingly they mesh like you wouldn't believe, they want to train for rapid deployment, real world practice, give care to the needy wherever they are. They do a lot of this in Latin America — seamless internal and external collaboration— that's their objective. And our objective, Toni's, Thomas', Dennis Esaki's, Dileep Bal's is to give preventive care, health care, eye care, dental care, mental health care to those who need it and cannot afford it on Kaua`i. And like I said, those two sets of needs mesh because, again, to Council Chair Furfaro's question, these are not —and I hate to knock anyone, we have some of the best physicians on Kaua`i —but these guys, as Col. Arends has said, some of them are from the top academic medical centers in the country, arguably the world. They happen to be in the reserve, they happen to need to do a fortnight of fulltime service somewhere, and Col. Arends, who was a marketer in his other life, marketed Kauai and he's got many more very prestigious docs bidding to come here. So he's having to pick who he can bring. So these are not practices. These are all licensed, they're all expert in their field and just to give you, Mr. Chairman, a feel for this, the way we do this is I'm like Jerry. Jerry and Dileep are the ideas men. They come up with ideas and we go trotting full tilt into what we want to do. And then Toni and Lisa slow us down. Like when they first came during the planning, Jerry said Dileep, you want to do colonoscopy? I said sure. HMSA doesn't pay for colonoscopies except with certain rather rigorous requirements, you know, and I understand that. But they'll do colonoscopies for somebody who needs it and wants it. The problem was...I mean every time I come up with an idea that Toni says I make her hair more gray and luckily she had a big ally in Paul Esaki. Dr. Esaki was at the meeting and Dr. Esaki said Dileep, why don't you do that next year. Let's see how we can figure this out, the issues of anesthesia. One of Jerry's docs said well we can do it without anesthesia; we can do it with this. And you know, so we had a discussion there and in the end I got overruled, we said we're not going to do colonoscopies. But if that is a need, I mean, Toni, Thomas and I have a full year after this year's exercise, we'll see where the needs are and we'll be better positioned with Col. Arends' clout to bring the kinds of people we need. Again, thinking of the mission, I told you what I thought of Colonel Arends. I love Martin Luther King. This quote I absolutely adore. The problem with the world is "our scientific power has outrun our spiritual power. We have guided missiles and misguided men." And Colonel Arends belongs to an organization that happens to have guided missiles. So it's not just a rhetorical statement on his part, but they have men and women who are by no means misguided. They're inspired COUNCIL MEETING - 34 - January 25, 2012 and they're inspired to help us. That's where, I think, their spiritual power really helps them because they see this as their kuleana and they've just been tremendous to work with. Cultural briefing, this again is Toni Torres and my colleagues in the District Health Office. Colonel Arends did point out that North Dakota, where he's originally from, is not very diverse. So we asked him what is not diverse. He says well, they're 99% white, but some of them are of Norwegian extraction and some of Swedish. So, you know, I translated that for (inaudible) you got, you know, 99% haole guys. So Toni, first thing she said, on the first day we've got this huge cultural briefing in terms of how they can do their reach -out on the practice. The sites, Lisa Gittleman mentioned them. We've had some bumps on the road. Dennis has helped us ease some of them. Toni has been inordinately helpful. Colonel Daligdig has been very helpful. We're now settled on the Kapa'a Armory and the Hanapepe Armory. But again as always in bureaucracies, whether it's the State, the county or the military, there are little bumps. I hope I tell no tales out of school if I tell just the Councilmembers and all the viewers of the program, but for some reason they pulled all the toilets out of the Kapa'a Armory last week. They were trying to fix it. And we were tearing our hair out. It's just an anecdotal how in bureaucracy the left hand never knows what the right hand is doing. Col. Arends and Toni and I were there. We sorted it out. We met yesterday with General Wong in Honolulu. Marvelous man. He met with Col. Arends and his group earlier, met with me, came and saw us at our Department of Health Office yesterday, and everything is worked out. He is giving, as we speak, Col. Arends' colleague Col. Hall is going to PMRF to get all the resources in terms of mobile showers, mobile kitchens, mobile sinks, all compliments of General Wong. So you know, the `ohana just doesn't extend to the people I mentioned on Kaua`i island. The military here from Honolulu has been exceedingly supportive of us. This is again to show the Councilmembers the Kapa'a and Hanapepe Armories would be perhaps unnecessary. But I stole Toni's slides from this morning, so there we are. Oh this one, this is a special one. We didn't have a good kitchen anywhere and so in Kapa'a we're using the Hongwanji kitchen right opposite All Saints Church. Coincidentally our former head of environmental health —this is what they don't have on O`ahu —here everybody knows everybody else, Mr. Chairman. I mean it's just hilarious. We said why? I told Toni well, I don't know whether you have a contact in the Hongwanji. She said don't worry, our former head of environmental health, Clyde Takekuma, happens to be the Chairman of their Board. So she's got that lined up. I mean, you know, everything has just lined up like you wouldn't believe. And it has just worked out very well. The clinic sites, those are just some of the photographs of the sites. The clinic sites, again, Madame Vice Chair, are going to be...we're going to have three major sites. We looked at a whole bunch of them with their advance party which Col. Arends brought earlier. And we've selected the Kaua`i Soto Zen Temple Zenshuji, which happens coincidentally to be right by the Hanapepe Armory. And the President of it is Gerald Hirata. He was there at our meeting this morning at Civil Defense and he is just, again, a marvelous man. He is making all of his resources available to us, and Col. Arends' staff love it. So they're there figuring out some of the logistical issues. COUNCIL MEETING - 35 - January 25, 2012 These are some of the things we're going to do at all of these clinics. The Hanapepe Armory site (inaudible) this morning I was informed that we're setting up our optometry unit there. The way, Madame Vice Chair, it'll work basically is for instance with the spectacles, the actual guys who are going to do the stuff, Col. Arends brought them this time to see what they're going to do in another month. So those gentlemen were here, they happen to be naval gentlemen. This is a naval unit. They actually have like a LensCrafters thing that's mobile. They're going to set that up at the Hanapepe Armory. They told me they're going to use us. They usually fax the prescriptions and this morning at the meeting, they said Dr. Bal, we're going to use you guys as a test run to use emails for the first time from the Kapa`a Clinic —the Kapa'a Clinic is going to be at All Saints, I'll come to that —and at Kaua`i Community College. Instead of faxing, which they normally do, they're going to email the stuff. It'll come in, then they'd have picked the...if you go to any of the clinic sites, you pick the frame you want. You have your vision tested and they will then ship it to you the next day. I mean it's just incredible. The volume, I asked them how much can you do? Can you do 50, 100 a day? The guy just casually said well, we can do over that at each site. So I said what do you mean? He said well, our lens, our equipment, he said Col. Arends wanted the heavier equipment, not the lighter one, which you had in Alabama, was it? So he said nah, these guys might need more. So he can churn out 400 pairs of spectacles a day. I mean it's nuts. Col. Arends: Can I add something to that? Dr. Bal: Yeah. Col. Arends: For anyone who's accustomed to military eyewear, there's actually going to be a range of stylish frames rather than what we always call the BCGs, the birth control glasses, where you won't get another date if you wear them. Dr. Bal: You know, that's the kind of anecdotals. Funny you should say that, Jerry, because the guy, he was rather...I didn't even ask the question. It's funny you said that because I was talking to the guy this morning, the guy who's actually going to be doing this, the guy who's heading it, and he said well, I just want you to know we've got 10 different kinds of frames. I said great. Rather defensively he says and they are very attractive. I said all right. He said there are four for men and four for women and they can have their pick. I said great and I said what about the other two. He said oh, we have two children's frames. I said all right. So I mean they'll do. I imagine they'll be stylish but functional. But anybody who has and we've been through a recession as the Council knows very well. The site at KCC we have compliments of Char Ono and Chancellor Helen Cox. Helen Cox and Char have been very, very supportive. And we had a little problem with the Kapa'a site and then believe it or not it's going to be at All Saints Church. I'm glad Councilman Nakamura's back. The senior warden there happens to be Galen. I would have described Galen as Nadine's better half, but I'm scared of her. But I happen to go to that church and Galen, our Pastor Ben, the Junior Warden David, who was at the meeting this morning, have just been spectacularly helpful. I mean Col. Arends and I went there and as usual they have their bureaucracies in the church. We committed to all of this. We got it and then we found the big gymnasium, which is what Col. Arends and his people wanted, we could not use. Oh, you have the slide, okay. See, Toni knows where I've got the slide. Ah, there we are, All Saints Episcopal Church. There we go. Free movies even. So that's the gymnasium. So we picked the gymnasium and then our COUNCIL MEETING - 36 - January 25, 2012 Pastor Ben called back and said Dileep, you can't have the gymnasium. I said why not? He said well, it's leased for the duration for those two weeks. Again, you talk about...you know it says in the book of Proverbs "grace turneth away wrath." Then God bless our pastor, he and the church leadership have actually, compliments of Col. Arends, they worked it out. Between the three of us, we worked it out. They're moving all of the pews out of the church. He's going to have his staff move it out. They're going to store it at the Kapa'a Armory. I said where are we going to have the service? He said oh, we'll have the service in the gymnasium. I said it's leased. He said it's just leased during the week, not Sunday. So I said won't anyone mind? He said nah, I don't think either the Bishop or God will mind. So there we are. That's the stuff we (inaudible). And again, we have the Kauai Soto Zen Temple Zenshuji, which again is right next door. We're done. Believe it or not, Mr. Chairman, I'm giving you the abbreviated version, if you ask me. You know, Toni's always nervous that I'll bore people. Ms. Yukimura: We would like to ask questions soon. Dr. Bal: So what's happening? I'm going to finish this quickly. Just let me tell you what happened with this. Each one has a story. This one happens to be right next to the armory. The church is % of a mile, over half a mile from them. So the question of logistics, how to get them there. And so I asked Col. Arends, do we need buses for that? Col. Arends: He said half a mile? He said that's nothing. Those guys will walk. And you have to remember, he... sweet as he is to Kaua`i and everything, he's a hard man. I said when do you run your clinics? Col. Arends: He said well, we'll run them 7 a.m. to 7 p.m. Dr. Bal: I said you're going to run them in the evening? Col. Arends: He said yeah, people, when they finish work, that's when they can use it. Dr. Bal: So I said okay and then he said, oh by the way, seven days a week. So I said when do these guys rest? He said they're not coming here to be on your beaches. They're coming here to work for me and for you. So I mean this is a very serious enterprise for them. Let me move through this. At Kaua`i Community College, you all know. Mid - planning Conference, that's where we had all the people. You see Dr. Esaki in the corner there. Again, Madame Vice Chair, this has been really glorious for me because this is... Mahatma Gandhi said "If you want to change the world, be that change." All of you in the room epitomize Mahatma Gandhi's saying. Kaua`i is changing the way Kaua`i is. I cannot disclose to you what the Mayor, who has been a big partner of ours, is going to do for this because I was told by Beth who told me this morning, you can't say anything to them tomorrow, there's a courtesy thing involved that we're going to individually tell each Councilmember. I said all right. If I say anything, Toni will kick me. Can I say I'm not supposed to tell them? Ms. Torres: You're not supposed to. Dr. Bal: Yeah, I'm not supposed to tell them. So they're going to tell each of you individually what they would like to do. And again, the county's contribution for that I thank the Mayor and Council. The Mayor and COUNCIL MEETING - 37 - January 25, 2012 Council epitomize wanting to change the world. When they told me in Honolulu yesterday the level of support you guys are giving our enterprise, Col. Arends said this morning, you know, he has never seen it in many places. That's the group, as you can see, when we got together and we're organizing, organizing multiple visits. To recap the dates, Madame Vice Chair, on the 30th was the initial planning conference, mid - planning on November 1 and 2, final planning January. The deployment will actually be February 25 to March 10. We have a Distinguished Visitors' Day on March 6, 2012 and obviously the Councilmembers are all invited. We would be delighted to have you as our honored guests. Toni says share with them who else is coming. The Governor will be coming, the Mayor obviously will be coming, we have some very senior brass that Col. Arends is bringing. We're bringing several generals and admirals from the mainland. Believe it or not, the Assistant Secretary of Defense is coming. They're all coming. It's going to be at Smith's Family Lii`au. It's going to be at 5 o'clock. You're going to get a personal invitation, each of you, from the Col. Arends and myself inviting you to it. There's a little requirement that you RSVP by the 22nd because we're juggling the numbers, so we need to know who all are coming so that we can... Col. Arends: Can I throw in something in there? Dr. Bal: Yes, sir. Col. Arends: The DV Day is intended...it's an entire day's event, so the daytime activities prior to the luau will be touring the sites, particularly for the elected officials and the Pentagon brass who we depend on for the funding of this program. So it's a good way for them to see how training is occurring and why this is a really good program to fund each year in the Defense budget. Dr. Bal: My purpose, Mr. Chairman, is to inform the Council. Far be it for me to ever attempt to lobby the Council on anything. It would be inappropriate as a state employee. But if the Council in its wisdom wishes to...may I just point out as a matter of information that Congresswoman Colleen Hanabusa is in the Armed Services Committee in the lower house and Senator Akaka is in the upper house, both in the Armed Services Committee. If the Council wishes to express its appreciation to the Pentagon folks for coming out and helping our `ohana, that is your...whatever is your pleasure. Let me also point out exactly what he said. Dennis has arranged that the Governor will come. He'll come at about 12:30 p.m. or 1 p.m. We're going to have the Assistant Secretary come, so we're going to have military and civilian escorts. We're going to have somebody from the District Health Office, we're going to have Col. Arends' military escorts, we're going to get them, take them to clinics. Some of them will be taken to Hanapepe, some of them will... Ms. Yukimura: Dr. Bal, you know, I think this is wonderful, but I think we really want to hear... Dr. Bal: Questions and answers. Ms. Yukimura: Yeah, and how those who cannot access health care can really take advantage of this, so questions and answers. Dr. Bal: Okay, we'll move to questions and answers. Ms. Yukimura: Great. Are you pretty much finished then? COUNCIL MEETING - 38 - January 25, 2012 Dr. Bal: I can, I will just run through the last one. That is my last one. And I think you'll like that, Madame Vice Chair, it's something you love, little quotes. That's from 1200 BC. It's a Sanskrit quotation from Kalidasa. And I was thinking how can I thank Jerry and his people for doing all of this for us and I said when they leave this is best said on March 10 when they leave. And I would like to thank them in advance with what I was going to say on March 10. When they leave, this is what I will say, what Kalidasa did, "Thank you for making so many of my yesterdays dreams of happiness and for giving to so many, many of us tomorrows filled with Hope." I will shut -up, Madame Vice Chair, and I'm happy to take questions. Ms. Yukimura: Dr. Bal, you're always so enthusiastic and also steeped in philosophy, which I love. But I wanted to... as you described how you've been planning and how you've been working, it's just always inspiring to hear about how the people of Kaua`i have responded and it's also not surprising because there's just that amazing desire to help each other and make things happen. So all the different groups that you've pulled together is really a wonderful thing. So thank you for that. I'd like to go to questions and I think there's a lot of them or comment. Councilmember Bynum and then Councilmember Rapozo. Mr. Bynum: Dr. Bal, Toni, Colonel, thank you. Colonel, thanks for accepting the invitation. We're thrilled to have you here. I've learned about this program and the other aspects that are going to come later to the island that are just awesome and so I think we should all be supportive of these deployments that are training being meaningful for different communities. And so it's a very exciting thing. I have one question. Have we done outreach like to KEO and community groups so we can help bring in our homeless population and make these services available? Ms. Torres: Yes. Part of the partnership was to...when I first heard this from Dr. Bal, I said oh my god, we're going to do what, where and when. So I had to go out to all the different agencies and kind of sell it to them and how they would benefit from it, and help with their numbers, help in their participation. So yes, we have. We had a representative at the final planning meeting today and all 65,000 of us are eligible to attend. But we know there is that targeted population. So we have groups going out to these specific areas. But we just want to let everybody know there is no eligibility, all 65,000, but we do know the areas we need to look at. Mr. Bynum: I anticipated that answer. I just can't thank you all enough for collaborating and working on this. Toni, I'm sure one of the hardest part of your job is reining in Dileep. Dr. Bal.: You got that right. Mr. Bynum: Thank you. Ms. Yukimura: Councilmember Rapozo. Mr. Rapozo: Thank you, Col. Arends, and of course Dr. Bal, Toni, Dennis, Thomas, all of you that are instrumental in this. I'm really excited. I am very, very happy that you chose Kaua`i. Dr. Bal, you said earlier you were very skeptical. I've been very involved with identity theft and all of that and my general warning is if it sounds too good to be true, it is. And I have to say that this is just phenomenal for this island. I don't think... maybe you do, but I don't think you realize the impact that you will have on this island. I mean it's 65,000 of course, COUNCIL MEETING - 39 - January 25, 2012 but the people that don't get medical treatment, the people like the lady you sat next to. My daughter herself had to wait five months for an appointment on Oahu for her condition. And this is phenomenal and I do want to make a statement about the quality of service. I myself served with the Hawai`i National Guard for 21 years; I retired. I got on your rapid deployment several times. Not yours, but with the military, and was the recipient of medical care. I was a wire guy, a cable jock, so I got hurt often and was often seen by the medical professionals in the military. And I have to tell you, it's second to none. It is. And whether they're from Mayo or what, the Guard and Reserve always get a lesser recognition than the regular. That has since changed, I think, with the activity in the Middle East, but nonetheless, they are always looked upon lower. But I have to tell you just from my personal experience, the Kaua`i people, I'm just so excited. I don't know if you can tell, but I'm just blown away. I had not known about this until today. The colonoscopies without anesthesia, no, that cannot happen, that simply cannot happen. I do want to say a special mahalo to General Wong, a phenomenal man, and true leader. I think all the little things that were done to bring this thing together, I'm excited. With your permission, I want to put it on Facebook. Good because I already did and if you don't believe me, check my page, it's there. And the glasses, I just have to ask two questions, Madame Chair. (1) What are the new styles because when I was in the guard, those glasses you couldn't give them away. Are they like a little more acceptable today? Do you know? Col. Arends: Yeah, I saw them and I wouldn't be embarrassed to wear them. Mr. Rapozo: But would I? And then a serious question. We have a lot of youth on this island that participate in sports throughout the year and there are physical requirements that they need to make. It's a shame that the way the medical coverage here in Hawai`i is with HMSA and so forth, they may be allowed one physical in a 12 -month period, so they miss the cutoff date so they cannot participate; parents cannot afford the physicals. Would this program...I know you said everybody's eligible, would this program be available for athletic physicals? Dr. Bal: Councilman Rapozo, she will give you a very specific answer. Ms. Torres: Thank you for the question because we're working really closely with Mr. Arakaki and that was presented to him. He is speaking to his athletic directors, the concept of having maybe the football boys go on one day; tennis, cross country on another. So they will be able to take advantage of the situation. It runs till 7 p.m., so they can come after school. And interestingly all our clinics sites are where there is a high school. Mr. Rapozo: Right. Ms. Torres: So they would be going to Hanapepe, KCC and All Saints. Mr. Rapozo: Okay and for anyone as well as the youth, sports, (inaudible) soccer, baseball, football and so forth, they'll all be...wonderful. Col. Arends: May I add something to that too? That's an aspect of our missions that we always tend to throw out there first, you probably need school physicals. That's primary care medicine and it's usually a great need because of the way you described it. We also like being able to go into the schools COUNCIL MEETING - 40 - January 25, 2012 and being with the kids. Some of the places we go, the conditions are really hopeless in many ways and you run into a lot of cynical youth. Is this all that I'm going to be able to look forward to? And to have this group of people come in who are not only civilian health professionals, but they come in there uniformed and do this on a voluntary basis and care enough to come to a community like that, it has an enormous impact on kids. We do career days. We have people come in and talk about what it's like to be a physician and what it's like to be a military person. And that's usually received really well and the teams love to do that. We have a lot of peripheral impact beyond just the health care. Mr. Rapozo: Like I said, being a former member of the Guard, I learned more there than I've ever learned everywhere else in my deployments to Korea and so forth working with Korean kids as well. But I think this is...I guess history being made for this island. I hope we can continue. If there's anything this Council can do for us to continue to have you come every year, twice a year, even three times a year. I think that, again, Councilmember Yukimura talked about the homeless population or Councilmember Bynum talked about the homeless population, I tell you, you just go down to the beaches and these people need the medical care and this will give everyone on this island, and I really hope, Leo, this should be the top story in the newspaper tomorrow. This should be the headline really, above all the budget nonsense we're going to talk about later. This should be really, Free Medical Care for Kaua`i Residents February 28 to March 9, that should be the headline. I hope it is. Not on page three or so and I just think this is that important, more important than what we will be discussing today, I believe in my heart. So thank you very much and God bless all of you. Thank you. Dr. Bal: Councilmember Rapozo, just one thing on the more than two weeks. We initially bid it for multiple weeks. Again, as Councilmember Bynum said, Toni is very competent at her job at slowing me down. She said let's not do six weeks the first year. Let's do two weeks the first year because the way he does it, the way he sets it up is very clever. So I said why don't we do one on the west side, one in the north side, and one sort of Kapa`a- Lihu`e in that spillover. So Toni very wisely, just like on the colonoscopy, I got slowed down; she slowed me down on the scope. She said let's see what it entails from resources, and again thanks to Col. Arends, we have reapplied. You have to apply. We sent in the application in December. Both times we wrote the application between Christmas and New Year's. So we wrote the application, sent it, and Col. Arends approved it. So the next one is from...I'm sorry, Thomas helped us. I'm sorry, Thomas, my apologies old boy. Thomas, Toni and I wrote it. We do it from 12, well I guess I can say it. We got the dates a little mixed up. We said from 13 to 18 or 12 to 17, so we're in the process of fixing that. The application was pristine. But I'm an old man, so I got the dates a little mixed up, the five -year period. But Councilman Rapozo, we will get that. Madame Chair, let me say for the end if I can give you two minutes. I'd like to have at the end of the whole thing. Ms. Yukimura: Okay. Dr. Bal: I'd like Thomas, seeing Thomas reminded me on the non - medical thing that we're doing with the county that you might be interested in. Ms. Yukimura: Yes. We take a lunch break at 12:30 p.m. by requirement. So I know there are some other questions and let's go ahead with Councilmember Chang. COUNCIL MEETING - 41 - January 25, 2012 Mr. Chang: Thank you, Vice Chair. You know to Col. Arends and Dr. Bal and Ms. Torres, thank you very much, and Tommy Noyes and to Mr. Esaki and Wanda Shibata back there. You know it is good news. It's like too good to be true news, especially when you're doing a clinic from 8 a.m. to 7 p.m. seven days a week for that period of time. I haven't had this much good news since I got a call from a guy from Jamaica that told me I won $7.15 million and a new car. But I just wanted to ask a couple questions because I know that there are a lot of Councilmembers with a lot of questions because this is very exciting. Having 300 personnel coming into Kaua`i, where are we housing them and what are we doing to put a roof over their heads during the duration of the time that they're here? Col. Arends: They'll be sleeping at the two armories. That's what those sites are for. In open bay, again, that's the requirement. It needs to look like a field deployment, so it's going to be a field deployment. Everybody's going to be sleeping with a hundred of their best friends for two weeks. Mr. Chang: And when we have a free health care for all, you know like the resources that we have on Kaua`i, there are times that during Christmas a dentist may open up for treatment. I mean it's just one day and everybody just flocks in. How do we, in an orderly fashion, when it comes, do we have... Chairman Furfaro will say like in the hotel business there's a catering and convention manager that you kind of check in. I would suppose you cannot make a reservation in advance, but how do we do it in an orderly fashion that people realize they don't have to push or shove, help will be on its way? Ms. Torres: We've been having a lot of phone calls for dental, for vision and I just talked to Cdr. Lisa and how it would be best to organize it. So we're thinking of block scheduling as well as if you wanted to come to the clinic, there are two things you wanted to do, dental and vision. We would say let's focus on your dental today and then come back for vision because of the amount of people that will be waiting. After you finish your dental, then you have to jump into another line. So one of the suggestions was that, but we were looking at block scheduling and if there's a group of people because part of our Japanese community, it was told to us, that they don't want to come one -by -one and usually they feel that it should be the other person that goes, they need it more than me. But they are the same, they need it just as much as anybody. So one of the thoughts was to get those groups together and have a block schedule time so they come, it's a social thing, and they come as a group, not individually. Mr. Chang: And that's good that we talk about it to strategize in advance because we still have time, which is I'm sure why we're here. Ms. Torres: Correct, we're still strategizing. Mr. Chang: And Toni Torres, one of the questions I had for you with the conversation that we have so many great men and women coming highly skilled and very, very professional, are we allowing the community college nursing students or other...I mean are there opportunities for apprenticeship? To stay out of the way, but to observe and to learn and to be taught? Mr. Torres: You know as you see the sites, one of the challenging things was to get sites that were not going to be used for two weeks. We had all these county buildings we wanted, but they have this going on, this going on, so we could not interfere. That's why you see the three sites. They're not county. There's the church. There's the Soto Zen and there's KCC. We're going to COUNCIL MEETING Ms. Yukimura: Great. - 42 - January 25, 2012 be housed in the KCC Nursing Department. Char Ono and Helen Cox are fully behind it and they're going to integrate their students as part of the clinic as well as having the reservists do presentations and work with them on different projects that they can do as a teaching project for the people that will be coming. Mr. Chang: In eyes, glasses, dental, medical, I'm glad that you have dieticians there, a chaplain, you know, medical health people, nutritionists because sometimes maybe local style you don't want to talk to somebody that might know your parents or whatever, but it seems that it's a greater opportunity to be much more open to a stranger. In other words, when you're sitting on a plane with somebody, you have no choice but to be the best friend that you're sitting with. The person next to you is like the hairdresser. You can talk and say anything that you want on the plane. So I think it's like a real nice open way, but you know during the duration if there's data that's being taken like maybe somebody might come in like there's a consistency of maybe like an ear problem or skin disorder or a foot... you folks keep track of that? Ms. Torres: We're working on that because it's important to know the kind of people, how many people, what age group, what areas they come from so we know we're going to do a lot of demographics also. Mr. Chang: Okay, beautiful, thank you and thanks again for being here. Ms. Yukimura: Thank you. Col Arends: May I slide one more thing into it that I think would be really helpful for the Council and various entities. Besides that reporting on the health demographics, we know what's helpful for you as well. So we'll be keeping track of how much that would equate to in billable charges. So through your efforts of bringing this military expedition to give us the opportunity to have the environment we need to train in, the residents of Kaua`i will have received X- million dollars worth of billable charges with no charge. We did that last year in Alabama, a small town, 250 people, about 3,000 people came. We estimated the billable charges over an eight -day period was $1.2 million. So that's huge kudos for you to be able to report and we'll do that. Ms. Yukimura: Thank you. Dr. Bal: Madame Chair, we should be able to quintuple that here. So in terms of once we get that we will obviously share it with the Council. Dr. Bal: And in response to Councilmember Rapozo's question that we didn't say this earlier, the problem we had was we can't meet with the Council unless it's a written up meeting. Ms. Yukimura: No, no, it's... okay, yeah. Dr. Bal: Right, so we did brief only the Council Chair and I apologize, we should have done this. Only recently we briefed Senator Kouchi, we briefed all the Representatives, and my apologies. I wanted to make sure it was a fully done deal before we tell everybody. COUNCIL MEETING Ms. Yukimura: We would like it. Ms. Yukimura: And I think by doing this you're also sharing it with all the people of Kaua`i so that's really the main thing. Councilmember Kuali`i. Mr. Kuali`i: Aloha and mahalo. Thank you to all of you and to everyone who's done the planning in advance and to everyone who's coming to provide all those services. And I'm glad to see that it'll be a continuing project throughout the State of Hawai`i. Councilmember Chang actually asked most of my questions about the logistics. I just wanted you to just confirm again then, so from February 28 through March 9, all the days, there's no day down like Saturday or Sunday, and only Tuesday, March 6, you're closing at 3:30 p.m. but the rest of the days are from 8 a.m. to 7 p.m.? Ms. Torres: Because of the Distinguished Visitors' Day that will be happening and that is for all the military reservists to participate in, especially the mahalo that we'll be having at Smith's Tropical Paradise. Mr. Kuali`i: So at that time even if people are finding out about it then and they just walk in, they can get in line. You won't have to call in advance, make any kind of appointment? Ms. Torres: No, but if you happen to call because there is a number on our flyer that we have, I'll specify a time, especially for our block. Mr. Kuali`i: Ms. Torres: Mr. Kuali`i: - 43 - January 25, 2012 That's your "for more information number." Yes, yes and we've been having lots of calls. Thank you so much. We're looking forward to it. Ms. Torres: Can I just say one more thing because when I saw you, Councilman, I thought of the Hawaiian population. Alu Like, QLCC, OHA has had a big push on this. The Hawaiian Homes person, Erna, thanks to Wanda who was able to give this information, she's having a mail out of 600 of our flyers going to their participants. So they know their targeted population. So we really appreciate them doing their part. Dr. Bal: On that, Madame Chair, we'll send you an email version of that flyer if you like or you can have it. Dr. Bal: It would be great if each of you put it out, send it out, put it on your website, wherever you want it because we want to... one of the things my colleagues are nervous about was this... might be, you know, we give a party and nobody comes. So I don't think it's going to be a problem, but I'm ever an optimist, so. Ms. Yukimura: Thank you. Councilmember Nakamura. Ms. Nakamura: Thank you so much for your presentation, giving us this update, and I think that email would be good so we can help to get the word out. And I just wanted to thank Dr. Bal for your leadership, not only for bringing in this project but all the millions of dollars you've brought in, other outside funding, and here resources again to this community. I think it's a great service to the people of Kaua`i. Thank you. COUNCIL MEETING - 44 - January 25, 2012 Ms. Yukimura: Thank you. Council Chair? Council Chair Furfaro: Dr. Bal and everyone, first of all, on behalf of myself and Vice Chair, thank you very much for coming in and seeing us and giving us an overview of this piece. Certainly your comments about Mahatma Gandhi's approach to this value of starting with each of us, you know, we know it as the value of kokua. And for the Garden Island I would like to say that they can capitalize on this value of kokua by maybe getting a copy of this email for the hopes that they are going to express this value that you're bringing to our community. It is exactly that, kokua as we know it as a Hawaiian value and reaching out and helping one another and starting on an individual basis. But we're just very pleased and I do appreciate the briefing we got early on, Council Vice Chair and myself, and this presentation today I'm certain will help with that outreach. But if there is anything that comes up that you might want to share with us that we can kokua, please let us know. Dr. Bal: Thank you, Mr. Chairman. First of all I'd like to thank the Council for its indulgence in giving us so much of your time to tell what we're doing. But the two things I want to do is thank the people to my right and left because frankly it was very sweet of Nadine to give me credit. I'm humbled by the fact that these guys with everything they did and I'm humbled by the fact that Toni, Thomas...I mean Toni, Thomas, without all of them, there's no way this could happen. The function of leadership is just to sort of set the thing up and then get out of the way to make sure you're not an obstructionist in letting people who know how to do this happen. But the second comment, Mr. Chairman, is something I'd mentioned to you and Vice Chair, so let me just very briefly say it. I'm an old physician, so I limited myself to this. But the first time or the second time or the third time I met Jerry, I realized that Col. Arends has a much broader range of things. So just conceive, Mr. Chairman, they have reservists on the medical side. Then they have reservists, like Councilman Rapozo, on the non - medical side. They have engineers, they have logistical people. So he just happened...we happened to be having, I think Dennis, Jerry and I were having drinks and dinner somewhere and he just mentioned, he said well, you know, I have all these engineers. I said say what, bro? Engineers? And so the next day Dennis and I took him to meet Beth and everybody in the county. We met with Larry Dill, with Doug Haigh, and I said listen, we'll handle...Thomas, Toni and I, we'll do the medical thing. But the potential, Mr. Chairman, just think about this for a minute. And the example he gave me just blew me out of the water. He said Dileep, we've given Boy Scouts of America... how much have you given them? Col. Arends: It's a lot, millions of dollars. Dr. Bal: Millions and millions of dollars. What they do, Mr. Chairman, is on the construction end, they will pay for everything except the supplies. So if you want to build a bridge or build a road or build a building, they will come in, they will help you. Col. Arends has planners; they'll come help you do the plan, help you do the architectural drawings. Two things they won't do is the County will have to muddle through the labyrinthine approval process itself and God knows that stuff. And two, they will not provide you with the supplies. They'll provide every piece of equipment, heavy equipment. To give you one example, Mr. Chairman, I mentioned this to you and Vice Chair, the State, it's not a matter of the County, just outside our building next to the State building there are those toilets next to the judicial building. And besides being an eyesore, it's not functional. So DAGS has been thinking for quite a while how do we move them. Nobody has the money to move. Compliments of Col. Arends, he said you want them moved, Dileep? I said yeah, but who's going to move it? Well, Jerry says, I COUNCIL MEETING - 45 - January 25, 2012 have all these guys. On day one they'll come and they'll set up all the clinics. The last two days they'll take it down. In between I don't want them to be just sitting around. I'll have them do stuff. And he's got them doing stuff all over the island. So he's actually moving those toilets at considerable expense because they have to rent these huge machines or whatever, moving it to the jail. So if the County wants a project and I understand Doug Haigh and Larry Dill are putting in. In the last 30 seconds I will say we made the connection, Dennis, Thomas and myself with Jerry, between Col. Arends and Habitat for Humanity because they have a lot of...they've got the permits, they've got all the supplies and thanks again to Col. Arends, he has made two other connections through our facilitating, (1) with the County with Building (inaudible) and others, and (2) with Habitat. And Toni tells me to cease and desist, so thank you very much for inviting us. Ms. Yukimura: Thank you, Dr. Bal. I have a couple more questions I'd like to ask even though we're at the end of our time. Are wellness exams included, so like breast exams and pelvic exams and so forth, because that's a really big part of women's health that often gets neglected? Dr. Bal: Yes, absolutely, Madame Vice Chair, absolutely. Ms. Yukimura: Okay and then also... Dr. Bal: And unlike on the civil engineering side, here they will give medications. On the medical side, they will give the supplies. They will... have to sew somebody up, they'll do it, so. Ms. Yukimura: You mean even the prescriptions? Dr. Bal: Yes, ma'am, only for 30 days. Ms. Yukimura: Okay. Dr. Bal: So the continuity is an issue. Col. Arends: We do the prostate screenings as well. Ms. Yukimura: And prostate screenings as well. I mean that's really a common need here, so that's really appreciated. And then my other question, in working with the early education group and as you know that's a big push of the Governor's and we know that it's the foundation of a really good public education system, there are many health related issues with vision and hearing and so forth, and I just wanted to focus on that for a second so people out in the public with preschool children could also know that those are services that are available. I mean it's such a wonderful array of services and there could be the opposite problem of just many more than...although you do seem to have a huge capacity. But I think more than anything we want the word to get out to those populations who don't often access this and yet have a huge need. So I hope that everyone who knows those populations, as you mentioned Toni the Hawaiian population, will make an outreach so that we can really get those who don't have any other options. Ms. Torres: We're also doing outreach to Ni`ihau. Ms. Yukimura: You're doing outreach to Ni`ihau as well? Ms. Torres: Yes. COUNCIL MEETING - 46 - January 25, 2012 Ms. Yukimura: That is fabulous. Okay, so we are at the end of the time. It's been a wonderful presentation and more than that, what you're planning to actually make happen on the ground is fabulous. So thank you very much. Chair, did you have last few words? Council Chair Furfaro: I just want to let you know that this Council will follow up with the Senator as well as with Representative Hanabusa, letting them know through some communication of this value. Dr. Bal: Thank you, Mr. Chair. There being no objection, the meeting was called back to order, and proceeded as follows: Mr. Rapozo moved to receive C 2012 -23 for the record, seconded by Mr. Chang, and unanimously carried. Ms. Yukimura: Motion is carried and now we're in recess. Council Chair Furfaro: Thank you very much. There being no objection, the meeting was recessed at 12:31 p.m. The meeting was reconvened at 1:38 p.m., and proceeded as follows: Council Chair Furfaro: I was of the impression that we might have had some testimony. There are five specific areas of that last bill that are being addressed to change and I would like to take a moment to structure our meeting so that Public Works, I asked them to be over here by 1:45 p.m., and we have about seven minutes to go and then we'll finish this on the Wailua Bypass presentation. On a note of personal privilege, members, may I have a personal privilege. I'll review the changes in the Open Space Committee, but on a note of personal privilege. The first change is allowing funds to be used for the purchase of land for conserving specifically open space and adding scenic values. The next item that I reviewed in the bill was to change the community input process from annual to biannual throughout the bill. The third change was changing the time to a point and I'm not sure I understand if it is the one at -large commissioner from 45 days to 75 days or is it in fact all commissioners. I need some clarity for that and I'll be bringing that to the County Attorney. There is a general section 6 -14.2, item 5, which expands the role of the commission similar to other commissions that we have. And then item five specifies that the property may be held /or managed, either one of those, by the County of Kaua`i or other government entities. So this may also include nonprofits. So we need a little further clarity on that from the County Attorney's Office. So thank you for that personal privilege to highlight those five areas, and we are going to be in recess until the county engineer comes. There being no objection, the meeting was recessed at 1:40 p.m. The meeting was reconvened at 1:51 p.m., and proceeded as follows: Council Chair Furfaro: So we're all current where we're at. We have item 2012 -25, which is the financial reporting. We have that in recess. We are going to go to the Wailua Bypass item, which is the emergency bypass item, C 2012 -27, and then we've requested to ask the Police Department over for the next item. COUNCIL MEETING floor. - 47 - January 25, 2012 C 2012 -27 Communication (01/18/2012) from Council Chair Furfaro, requesting the Administration's presence, to provide the Council with an update on the Wailua Emergency Bypass Improvements. There being no objection, the rules were suspended. Council Chair Furfaro: Mr. Dill, the rules are suspended, you have the LARRY DILL, County Engineer: Good afternoon. Council Chair and Members of the Council, I'm Larry Dill, County Engineer. We do have a presentation for you today on PowerPoint. So if I can ask...you have a copy, I believe, of this book in front of all of you and we'll go through it on the screen. This presentation was put together, led by our Roads Chief Ed Renaud and his staff, also with input from our engineering division, and also key input from our Kaua`i Police Department, from Ale Quibilan, to make sure that we were addressing certain safety concerns which is one of the drivers for this project. So this drawing on page 2 of the presentation gives you basically the overall scope of the project beginning at the start of the project across from the Aloha Beach Resort near the Wailua Bridge on the right side of your screen, of your page, towards the end of the project over on the left side, which is the entrance across from the Kaua`i Beach Resort. You can see that there are two ownerships represented here. On your left side of the line is Grove Farm Land and on the right side is the State of Hawai`i, Department of Hawaiian Home Lands property. A majority of the project, as you can see from the graphic, is on State land, Department of Hawaiian Home Lands property. Just a little background on the project, next slide. The Wailua Emergency Bypass Road is a former cane haul road. As I mentioned, it goes from mauka of Aloha Beach Resort all the way down to actually Roberts Hawai`i Tours in Hanamd'ulu, but the scope of work we're talking about doesn't go all the way that far. It goes down to the Kaua`i Beach Resort entrance right now. And it's obviously an alternative route that we use between Wailua and Hanamd'ulu given the event of an emergency closing Kuhio Highway, which as we know is not all that uncommon, unfortunately, in an event on that stretch of Kuhio Highway. It's owned, as I mentioned, by the Lihu`e Land Company and managed by Grove Farm. The County does have right -of -entry agreements with the ownership, both in the State and Grove Farm, which allows us to open that road in the event of having to close down Kuhio Highway in the event of an accident. Mayor Bryan Baptiste in 2004 held a blessing to mark the official opening. There have been approximately 272 accidents and 8 reported fatalities at that stretch of highway that required KPD to close down Kuhio Highway and open up the bypass road. That should give you an idea of how important this bypass road is to our community. It is the only alternative access available to allow free flow in emergency situations when that stretch of the highway is closed by KPD and is the alternative route for the public's access between the county seat and what is the largest population center on the island, the Kawaihau District. The existing road conditions, the roadway is in distress, it's weathering and raveling. There is vegetation growth in the pavement which is bad for the road. Water then can infiltrate into the base, which causes more problems for the road, COUNCIL MEETING - 48 - January 25, 2012 including potholes. There is insufficient, almost nonexistent guardrails, also needing reflectors, and insufficient signage and delineators. A lot of that speaks to some of the issues that KPD has expressed to us that in the event...they're not comfortable opening this bypass at night because of the lack of all of these safety features. The existing roadway varies from about 14 -feet wide to about 20 -feet wide. Typically where it crosses the culverts, of which there are 11 culverts along the route, it narrows down to 14 feet, and those important locations are lacking a lot of the guardrails we're talking about. Also these culverts are lacking some maintenance. They're blocked to some degree, if not completely blocked, with debris and mud. The existing headwalls there are damaged or insufficient, and insufficient retaining walls in some of those areas, and a lot of overgrowth of vegetation in the drainage ditches alongside the road. So what we're wanting to do, proposing to do is provide a safe alternative passage for motorists during an emergency. We're talking about a degree of reconstruction of the roadway, including certain appurtenances I've mentioned for approximately 2.9 miles of that total 3.5 that's used for that bypass from Aloha Beach to Kaua`i Beach Resort. The scope of work we're talking about includes road reconstruction. We're going to be doing some dressing of the road shoulders and swales to control the drainage. The drainage is what causes or lack of drainage is what causes a lot of the problems that's resulting in the roadway. We want to install guardrails with reflectors, and some signage, and delineators to help route the traffic safely down that road, especially at night. As I mentioned there are 11 culverts. We need to get in there and clean them all and clear away excess debris and mud and sludge that's built up there, prepare headwalls, construct some new headwalls where it's lacking headwalls altogether, and some small retaining walls in the area of the culverts, and also do some vegetation control in the ditches. Again, this is an overview of the project where we're talking about these improvements. And I'll just take you through some photos of the site starting at the north entrance to the project. This is the gate KPD has the key to open up in the event of an emergency. Going down the roadway you can see that the pavement is, generally speaking, very neglected. It is serviceable in a lot of areas. As you know in the most recent event, we opened up the road, it was during the daytime and it functioned, but it's obviously needing some maintenance work. Here's an example of the first culvert, where you can see that at nighttime this especially would be the concern of the possibility where a culvert very close or entrance very close to the roadway where a vehicle might go off the road, we would want to add a headwall and a guardrail. Road reconstruction shown down there, we've got vegetation growing through the pavement there that contributes to breaking up of the pavement. There's the second culvert, pretty much a similar situation, needs a guardrail. The third culvert, there's no protection at all. It's the drop -off at the edge of the road where we need to add some protection. The fourth culvert, we have varying degrees of protection here. There's a little bit of a headwall there, but it's really a dangerous situation. Fifth culvert, you can see that here's a location where we've actually put some temporary road barriers to protect vehicles from going off the edge. Here's a situation where we have a low headwall. It may or may not stop a vehicle that's going off the side of the road there (the sixth culvert). Another low headwall, it's a COUNCIL MEETING - 49 - January 25, 2012 dangerous situation at the seventh culvert. The eighth culvert with basically no protection for a vehicle there, lacking a headwall, guardrail. Similar situation at the ninth culvert and at the tenth culvert. All of these culverts, you can see, are safety problems. And here's down at the other end of the road. I'm sorry, this is the boundary between the State of Hawai`i land and the Lihu`e Land Management /Grove Farm property. Actually the Grove Farm property land, I believe, is in a little bit better shape than the State side right now, but it still requires a lot of reconstruction. Cleaning out of that...that vegetation will only serve to continue to break up the road faster if it's not addressed. Various problems there with cracking, alligator, breaking up of the pavement, alligator cracking. And finally, here's the exit back onto Kuhio Highway opposite the Kaua`i Beach Resort entrance. And this is actually the full end of the bypass at the Hanamd'ulu gate next to the Roberts bus facility in Hanamd'ulu. So our cost estimate, as you know, we had been looking to the State to participate in the funding for this. In round numbers, the County was looking to match the State's million dollars, so we had one million both from County and State. Because of our not being able to access the State funding, and I'm not familiar with the details of the status of that, others at the county are... Council Chair Furfaro: I'll cover that later, Larry. Mr. Dill: Okay, thank you. We took a look at what we can do if we just go ahead with the project now implementing the County's funding. So the approach we took was (1) addressing the safety issues, safety issues that were brought up to us by KPD which would include some protection at the culverts, improvement of headwalls, installation of guardrails, adding deflectors, and then some other reflectors and delineation and signage for the safety of the vehicles going through. After we costed those items out, we took a look at basically what we could do to address the worst parts of the roadway with the remainder of the County's million dollars of funds. And so we estimated that after we took care of the safety issues, we would do what road reconstruction we could. And so the worst part of the road, which we estimate at just under 7,000 feet or about 1.3 miles, we figured we could reconstruct those portions of the road at an approximate total cost of $382,000.00. I'm sorry, after safety, we looked at the culverts as well because if drainage isn't functioning on the road, that's a major contributor to damage to the road. So we did safety first and then the culverts and then road reconstruction is the order, until basically we used up that million dollars that's available to us. So those are the numbers you see before you there. If you add these up, including new retaining walls, drainage ditch vegetation control, some guardrails, traffic delineators, that bottom number there on the maintenance of the bypass road, we did an estimate, after we do this, of our annual maintenance cost, what it would take our roads division to go over there and do bimonthly maintenance, twice a month, and we would estimate that amount to take care of it afterwards. Our timeline to take care of all of these improvements, we estimate about 18 months because we are planning this project, doing it in -house with our existing roadway crew. We wouldn't do it all at once, but we would do it as the schedule would allow us to fit it in with other projects going on. So for that reason it would take a little longer, but we feel that way we could use our money that we have available to us most effectively. COUNCIL MEETING Mr. Dill: That's correct. - 50 - January 25, 2012 We looked at permits, but because it's an existing roadway and it's essentially a maintenance project, no environmental assessment would be required. We are doing a little bit of new stuff, like guardrails, but there are exemptions that Public Works is entitled to under the HRS that don't require it (environmental assessments). So all the improvements that we would have to do there, all the new improvements would fall under those exemptions. As I mentioned, we are looking at doing this work in- house. We could outsource it to a contractor. The advantage would be that we could probably get it done quicker because they could focus their attention on it, but we wouldn't be able to probably use the funds most efficiently. It would cost us a little more given our limited amount of funding. We talked a little bit about the funding availability from the State and the County. The numbers that I showed before, it comes out to a project estimated cost of a little over $900,000.00. It does not include any resurfacing. It talks about reconstruction and recompaction of the pavement. We have done some preliminary looks at if we were able to avail ourselves of the State funding, what we could then do with that money, and that would likely then allow us to do additional reconstruction beyond that 1.3 miles that I mentioned and also possibly some resurfacing, depending on the numbers. And that ends our presentation and I'll be happy to entertain any questions. Council Chair Furfaro: Thank you. So, Larry, as you can see, this is correspondence from myself. I took the opportunity to speak over at the Legislature with the Finance Committee of the House, with the Senate Ways Committee on this as part of my presentation. What I'm sharing with you, we have $1 million of which $50,000 was earmarked to evaluate scope, specifications, and so forth, and we have the $950,000.00 worth of work that needs to be prioritized, with or without the funds from the State. And in my presentation, I want to make sure we're really clear, I'm saying prioritize the items that you just presented to us, the $382,000, the $132,000, the $85,000, the $211,650.00 and the $15,000, knowing that it doesn't include any paving, right? So obviously, we need to have an opportunity to move forward and not sit on this for the third year and wait to see the outcome from the State. And I'm delighted with the way you've broken this presentation down for us. Obviously you can determine the priorities. I like the idea that we're attempting to do the culvert strengthening and many of the other pieces associated with cracks and pukas, so that at least we can begin that startup and then maybe look towards the resurfacing money if we're successful in getting State money. And if we're not successful in getting State money, we do have our own budget time coming up. I also want to thank you for doing the cost analysis on...I think it was $295,000 for the annual repair, and that should be reflected in your budget, okay, in your budget, not in the CIP money. But, you know, we need to convey the annual upkeep estimates and I assume that's also in -house repair and maintenance that's done? Council Chair Furfaro: That would be in -house work. So I think we're a lot closer to where we want to be in our ability to improve the safety and risk management of using this piece with our own money rather than just wait and see what we're going to do if we get funds from the State. I think everybody's been following the State is going through some very difficult times and I think it will be right at the end before we actually know where we're at on the State's share. The Employee Retirement System, if you watched the news last night, Joe Souki was COUNCIL MEETING - 51 - January 25, 2012 again talking about the shortfall the State has there and using that need as possibly one of the reasons to support a gambling bill. You know this is a very serious financial position that the State has right now, and I only use that example because it's now public information. I don't want to wait on our portion of the improvements if we have all of the easements in line and signed off on, if we can start our portion, and then have a wait - and -see approach to what we can do with resurfacing money that comes from the State. Let's do the R &M items, let's make sure we have the R &M items that are ongoing in the annual budget. So I'm going to recognize Mr. Rapozo now and I had no problem going over to the Legislature and making that part of my presentation. We need to know where we're going to be with that money there. Mr. Rapozo? Mr. Rapozo: Thank you. Larry, thank you for the report. I just wanted a little bit more explanation on road reconstruction. What does that entail? Mr. Dill: In the poorer places of the road, we're talking the bad parts first, we're going to remove the existing material, and then set it back down and recompact it with a roller. We've also been working with the State. They have an excess of cold plane material and so they are going to make that available to us so we can put that down as part of the effort, so we'll get a much more stable surface in there. Mr. Rapozo: How much...when we repave a road, what is the cost per mile on asphalt? Mr. Dill: I'm sorry I don't have that number with me. I'll have to get back to you. Mr. Rapozo: You guys don't know that? Does anybody know what that is? I can't remember offhand, but...is it like $290,000? ED RENAUD, Chief of Field Operations & Maintenance: Yeah, the low. Mr. Rapozo: So why wouldn't we... if it's the same price, why wouldn't we pave? We're going to pay $290,000 per mile to reconstruct when...if it's going to cost us let's say $300,000 per mile to repave, I don't understand why we wouldn't repave. Mr. Renaud: Okay, what's happening in here is...this is not resurfacing now. Resurfacing, we would have to go in there...if we do resurfacing on the areas that are let's say acceptable, we would have to go in with 3 inches. It's not the normal 1 -1/2 inches. The reason why is there are a lot of holes and whatnot where we have to use maybe about 1 -1/2 inches to an inch to level. Once we have that leveling course, then we put the 1 -1/2 inches on top of that. Now at the reconstruction, when we put down and correct the base, we come back with 2 inches. So it's different than what we do on the County roads. The County roads we do 1 -1/2 inches resurfacing. This is not new. Mr. Dill: It would probably not be advisable to just resurface 1 -1/2 inches over this road because it is in such bad shape. Mr. Renaud: Yeah. Mr. Dill: So as we're doing with the islandwide resurfacing with the bad roads, we're removing all the pavement and in some places we're removing part of the base as well. COUNCIL MEETING - 52 - January 25, 2012 Mr. Renaud: If contaminated. Mr. Rapozo: And then what do you put in its place? Mr. Dill: Then we rebuild the base and we put back a full layer of asphalt as opposed to just a resurfacing layer. Mr. Rapozo: And that's what this is here? That's what you're talking about here? Mr. Dill: No, this is we're going to remove up to 8 inches in some places to go down and correct the base for its bad shape and fill it back up again. So as opposed to...I don't have the cost in front of me, the $290,000, but we looked at a cost to resurface a 3 -inch, and we had a much greater number than $290,000. Mr. Rapozo: So what will we get? Will we get some kind of a blacktop on this road? Mr. Dill: No, well, we're going to use the cold plane material from the State, so it will be recycled asphalt material used in the parts of the road that we reconstruct, so it won't be a "blacktop." It'll be a compacted base course or similar. Mr. Rapozo: So what is the $290,000? What do we buy with that? I guess I'm trying to figure out the cost. It seems like a lot and we're not...is it just labor, is it labor cost? Are we buying any materials for this? It just seems very, very high if we're not paving. Mr. Dill: We are doing a lot of removal of the material. So we're going down, in the places we're going to repair, 8 inches. So the area has to be picked up, removed, and reset and recompacted. So there is labor cost in here. So this is our crew's time. there. there. Mr. Rapozo: Your crew's time? Mr. Dill: Yeah, right, there's labor cost, is it? Or it's just a... Mr. Renaud: The reconstruction is our cost. Mr. Dill: Okay. Mr. Renaud: The reconstruction is our cost. That's a lot of labor Mr. Rapozo: Yeah, well I guess, for me, if they're County employees, we're not paying them any more than we're already paying them. Mr. Dill: I'm sorry, so this is just materials cost we have in Mr. Rapozo: And I guess the question is what material are we purchasing? Is it that stuff you said we're buying from Honolulu? COUNCIL MEETING - 53 - January 25, 2012 Mr. Renaud: Okay, in this case if we do it the proper way, we would have to... Mr. Rapozo: We want to do it the proper way, I guess. We should be doing it the proper way, Ed. We shouldn't be doing it any other way. Mr. Renaud: If we do it the corrective way, we're going to use ATB. Why ATB? Because ATB labor is cheaper. (Inaudible) is expensive. Mr. Rapozo: What is ATB, I'm sorry? Mr. Renaud: ATB is asphalt treated base. Instead of coming up in layers with your normal base, which takes a lot of labor, we will use ATB. But because we are doing this road and the road is not used often, it's only for emergency, we are going to use recycled material. The worst condition is what you see, the prices. But if we do it, we're going to do it with recycled material that the State stated to us that they have a lot available. Mr. Rapozo: Okay. Mr. Renaud: So we want to go in with that. And then what's going to happen on the top because you're saying if we're going to resurface, after we create that surface, we would have to maintain that surface because if it rains, it can be porous and whatnot, so we would need to get back in there. And then some day if we have more money, we can put a resurface course down, the AC. Mr. Dill: Councilmember Rapozo, let me get back to you on the breakdown of that costing. I'll get something to you. Mr. Rapozo: It just seems quite high, but if that's what the cost for recycled material is, then it is what it is. And then the other question was again the maintain. I agree with the Chair that the $295,920 shouldn't be in that computation because that's just maintenance cost. It's not the project cost. So your project is actually a lot less than the $900,000. Mr. Dill: No, it's not in the $900,000 number. It's separate. Council Chair Furfaro: You don't have it in the proposal, but you are making us aware of... Mr. Renaud: Correct. Council Chair Furfaro: To go forward, you're going to have to show that in your R &M budget that's upcoming. Mr. Renaud: Correct. Mr. Dill: Right, correct. Council Chair Furfaro: Okay, before I go to the next, I want to make sure you gentlemen heard me when I said you have $50,000 available to you to design some specifications on what we're doing. I don't want to have a chop suey option 1, chop suey option B, use this with recycled material, use that with refill, and so forth. You come up with the plan and you tell us what you're going to use there knowing that it might have to be phased work. And obviously, I think we're saying we want to do the best we can with written standards and scope, okay. And Larry, I COUNCIL MEETING Mr. Dill: That's correct. want to ask, when you say we're digging down maybe 8 inches or so forth, that's because some of the integrity that's been violated now and it's too damp to only go a couple inches or it's not worth putting a patch over a base that's already infected with water. Council Chair Furfaro: That's what you're saying, right? Okay, thank you. Mr. Chang. Mr. Chang: Thank you, Ed and Larry. Thank you also for numbering the pages, and the pages that would be dark on the bottom, thank you for highlighting that in yellow so we can see the page. You know I wanted to ask you a question. You had talked a little bit about the possibility or maybe a thought of outsourcing, a contractor. But you also said it would be more expensive if we outsourced. I mean how does that bidding process, I mean can we inquire or... - 54 - January 25, 2012 Council Chair Furfaro: Maybe you want to ask this question, Mr. Chang. The work you presented to us, is the work being done in- house? Mr. Dill: Correct. Council Chair Furfaro: And does not reflect any contractors doing any part of this job at this time. Council Chair Furfaro: I don't want to go back and forth from what you presented us to say... Mr. Renaud: But the thing is for example, guardrails. If we outsouce that, which we can, this price would be lower. Their price would be lower than ours. that. out. Mr. Dill: Correct. Council Chair Furfaro: Well, then obviously we would like you to outsource Mr. Renaud: That's right, that's correct. Council Chair Furfaro: I mean it doesn't take a road engineer to figure that Mr. Renaud: That's what we're going to do. Council Chair Furfaro: Write the specs and tell us what they are so we know which way we're going. And this piece is very much appreciated, Ed, don't get me wrong. But I don't want to get caught up in the discussion, well, we're going to use option C and option B. Write the specifications that says what we're going to use that covers this price (inaudible). Excuse me, I'm sorry, Mr. Chang. Mr. Chang: No, that's fine, thank you. So there are different components that you will inquire about outsourcing. So also you said if the County did it on our own, it would be about 18 months to complete from start to finish? Mr. Dill: That's what we're estimating, yes. COUNCIL MEETING - 55 - January 25, 2012 Mr. Renaud: Yeah because what's going to happen is we have limited men at each baseyard. So we would use a small crew so we still can do other maintenance countywide and that's the crew which would be there. But we're looking at every source, like the Chair said, we're looking at outsourcing and we will get that all fine- tuned. Mr. Chang: Okay, so when we finally fine -tune it with outsourcing or maybe we're set with the game plan, ready, set, go, that shouldn't take 18 months. If we fast -track it... Mr. Renaud: Yes, it could. Mr. Chang: So it could...I'm sorry, so if we fast -track it, conceivably it could take a year? Mr. Dill: If we fast -track it and the prices make sense, yeah, we could do it quicker then, yes. Mr. Chang: Okay. Mr. Dill: Because like Ed said, if we go do 11 guardrails for 11 culverts, our crew would fit it in amongst the other work they've got going on, as opposed to a contractor who could go out and bang out all 11 at the same time. Mr. Chang: And I guess that's kind of like what I'm leading up to, because if there is that possibility and people are out there needing work. Mr. Renaud: Correct. Mr. Chang: Then I'd like to see them out there getting it done and so we can rectify this problem as quick as possible, but yet get other people opportunities for work. Kaua`i people for work on Kaua`i projects. Mr. Renaud: If we have the green light, excuse me, if we have the green light to move, then we would massage this, everything, so that the majority of the work, as long as they stay within our cost, we would outsource it because then we can use County sources in other places. But if the worst condition came whereby we had to just move it with our moneys and whatnot, then we would have to do it. But the thing is, the number one thing is to get work out there so people can work and then we will fill in the pieces if we have to. Maybe the most would be supervision. That's it. Mr. Chang: Beautiful, okay, thank you. Thank you, Chairman. Council Chair Furfaro: That's why again, before I recognize Mr. Kuali`i, get this all written down what those options are. Larry, you and I have worked together. You have a number that may not reflect in -house labor cost, right? So that means other projects get deferred. Mr. Dill: Right. Council Chair Furfaro: Maybe that's not the way we want to go. But, you know, let's get it done in that scope piece. And on the approval, Ed, once this Council had approved the money and put it in the CIP budget, you don't have to come back to us other than give us an idea of what the plan is, especially if this COUNCIL MEETING - 56 - January 25, 2012 project has gone dormant so long. And dormant doesn't mean a stop, it means it has just become very passive for a while until we get it activated again. And Mr. Kuali`i? Mr. Kuali`i: Thank you, Mr. Chair, aloha and mahalo to both of you. My first question has to do with the Department of Hawaiian Home Lands because the majority of the road is going through Hawaiian Home Lands, and of course you have a right -of- entry. I'm curious as to how long that right -of -entry is good for and how involved is the Department of Hawaiian Home Lands in what we're doing now. Mr. Dill: I don't believe there's a great deal of involvement from their standpoint. We're going to have to (1) formulate a plan. Of course we would communicate that to them to let them know that we plan to do this and make sure that they don't have any concerns or questions. As far as the term or expiration date of the right -of- entry, I'd have to get back to you on that one. Mr. Kuali`i: You see, I only know that I've seen over the years pretty extensive plans for the future homestead development in that area, and I also know that the people of Kaua`i have indicated to the Department that that is their primary interest, is living in a neighborhood that is as close to Lihu`e as possible. And so now with that property, that is the next big development for the Department of Hawaiian Home Lands. Now, it could still be five, ten years out, but I would think that knowing that they already have some designs of how that homestead would look in the future and what kind of roads would, go through there, it would be ideal if the work that you do to improve this existing road will in fact be of benefit to them in the future. Otherwise, it's just a road that's going to be broken up. Mr. Dill: Okay, thank you. We'll coordinate with them and touch base with them and see what their plans are and how they might be coordinated together. Mr. Kuali`i: Then that leads to the point of how more permanent or temporary the changes you're making are. Because when I looked at that other slide where you showed the guardrails, but then you also showed another slide where there were some temporary concrete barriers, and if this is a temporary road that's not used that often, why wouldn't you consider just using those concrete barriers rather than actually installing guardrails in potentially what may not be a road in the future? Mr. Dill: Okay. Mr. Kuali`i: And maybe it's cheaper, so I don't know. Mr. Dill: We have a limited amount of those concrete barriers and those are "mobile." And so those we can move around. So if we install guardrails there, of course that frees those up for use elsewhere. Mr. Kuali`i: You know your slide 4 where you talked about there had been approximately 272 major accidents and 8 fatalities, was that since the May 14, 2004 opening? Mr. Renaud: Correct. COUNCIL MEETING - 57 - January 25, 2012 Mr. Kuali`i: So it's the entire period of the use and availability of that road. Wow, that seems like a lot over seven years. And then so the improvements that you talked about in this other slide with the guardrails and the reflectors, so it is the County's intent to make this available through the night as well, for nighttime emergencies as well? Mr. Dill: Yes. Mr. Kuali`i: Okay, yeah, that's it for now. Council Chair Furfaro: Okay, Larry, I would suggest you take advantage of the County Attorney's Office on those leases. I brought them the last time we met. I think the next time they get reviewed is 2014 and they're reviewed in five -year increments for a total of 20 years. Councilwoman Nakamura. Ms. Nakamura: Thank you for a very clear report and picture of what's possible and what the problems are along the way. I think Councilmember Kuali`i's point is really well taken. You know finding out about DHHL's plans for development in that area and it's a pretty extensive development that's being proposed and it's been talked about for a long time. And we know that there is going to be a lot of resources needed to make that development a reality. And so it would be good to get a sense of what the current department leadership's timeframe is for buildout because that, to me, would impact our plans. I guess one of my questions is the bike path through this area, do we have an alignment and is it a makai alignment or mauka alignment? Mr. Dill: I believe it's a makai alignment. Ms. Nakamura: It's a makai alignment, okay. Because I guess one of my thoughts was that and I think this came up in one of the previous meetings on this topic was that if we're going to be putting a million dollars into this project, is it possible to make it a pedestrian or bike path temporarily even and would the landowners be willing to even consider that? I'd be curious to see if it's going to be leveled out and is there going to be a barrier between the roadway and a separate multi -use path. Is it something to consider or just to put it on our radar and even to do an analysis whether it makes sense to go there or not? Mr. Dill: Okay, we can look into that. Ms. Nakamura: Okay. So landowner consideration is really important there and I think you answered my question about the roadway surfacing; I think Councilmember Rapozo asked that. And I think the other consideration is the timing issue. So to consider if we do it in -house it will take about 18 months. If we outsource it, by the time you do procurement and go through the process, how long would that take? And I'd be curious to see what that difference is. Mr. Dill: Okay. Ms. Nakamura: And just to explore that possibility. Thank you. Council Chair Furfaro: One moment, Mr. Bynum. And Larry, I want to make sure we understand. We're not asking this project to be held up on a temporary repair on money we're willing to let further improvements be made on post- emergency, like bike path use or whatever because that'll come with the planning with Hawaiian Homes and Grove Farm. Don't let the radar screen go COUNCIL MEETING - 58 - January 25, 2012 dark. I mean if we have these options on multi -modal use afterwards and so forth, I think those are all good ideas, but I'm not waiting any more on this. Either we're going to get it or we're not going to get it. I think there's an ad that says, "Let's just do it." It's an emergency loss prevention opportunity for us that will eventually lead to other benefits that I'm sure Mr. Bynum will also touch on. But make sure because there's the pre -use here for emergencies and then there's the post benefit. Mr. Bynum, you have it and if I'm not back in, would you finish running the meeting? (The Chair was noted excused at 2:28 p.m.) Mr. Bynum: Thanks for the report. I'm not going to take a lot of time because you've been very clear. Just if you use that ATB, that's kind of like a base course, right, that you'd have to keep maintaining because you're using it for emergency, but then it could be the base course if it was ever... Mr. Renaud: The ATB is asphalt treated base. It's like asphalt pavement, but it's bigger rock and everything. And what happens when you use that is you cut back on your layers and compaction. With normal base, you have to compact until you get (inaudible). In this one it's different, yeah. But the material is just a little bit more expensive. Mr. Bynum: I just had an occasion to legally ride a bike on this when there was a bike to work day and the police chief was there, and people need to understand, this road doesn't just parallel the highway, it goes mauka quite a ways and then comes back down and eventually it may service Hawaiian Home Lands there. In terms of it being...to explore the possibility of it being as a commuter route for commuter bicycles, that's something that would be worth exploring, in my opinion. But the bike path does have a makai route in terms of that bike path. If that were not more than a commuter route, it requires crossing the highway twice and gets really complicated, and we already have invested considerable sums in planning and permitting of the makai route to connect to Hanamd'ulu Beach Park and other amenities along the coast. But I'm sure there are commuter bicyclists now who may use it even though they shouldn't because it does get to Lihu`e or to Hanamd'ulu and it gets there in a way that's much safer than riding in the median. But I just wanted to make those comments, if I could, and thank you for the good work. That's it. Anyone else have questions for Ed or Larry? If not, thank you very much and I think we'll move to the next agenda item. Mr. Rapozo: Oh, you probably need to vote before you move on. Mr. Bynum: Oh, I'm sorry. I apologize. Okay, any public testimony on this issue? Glenn. GLENN MICKENS: Thank you, Tim, for the record Glenn Mickens. First I thank Ed and Larry for their presentation, for their PowerPoint. I have a couple of comments here. If as the picture shows pavement was once put on this road as you've seen all the way through it, why can't it be fully repaved again? We can't maintain over 300 miles of County roads now, our own roads, so how will we properly maintain these 2 miles or more, whatever it is, of this bypass road when the brochure says no resurfacing? It says $296,000 for maintenance. But with no AC, the deterioration of this road should require much more than this, which it probably will. As with upper Waipouli Road, the County has put down this crushed material that Ed's talking about. I think they scrape it off the asphalt and they crush it and put it back down, but it does make a good base course. But in rains if you go up and take a look at that road, if you look at it during rains, it still washes COUNCIL MEETING - 59 - January 25, 2012 off. It's not like putting AC down on the thing. And if, as Mel said, this job should be done right from the start, and Ed agreed, the only right way would be to use HAPI or AASHTO standards to do it, because just as our bids have finally stipulated, we use these standards. If we just use compacted used AC, we will never be able to stay on top of the maintenance part of it. It's going to be one perpetual thing after the other. I would like to see that road not just be an emergency bypass, but I would like to see that road as being an alternate road to be able to travel on for alleviating traffic. I understand that money is the key here, but doing it right initially will save a lot of money in the long run as our 300 miles of road is being done right now prove the contracts that were bid on this thing are being done with cold planing and various things all according to AASHTO standards and I really appreciate it, but you know, that's the right way to do it. If you're going to do it, do it right. If you don't do it, it's not going to happen. Whatever is done, it shouldn't need to be three more years to do, as Jay pointed out. And I believe our resurfaced roads are about $300,000 a mile. So I do believe that the $290,000 figure that they're estimating, something, sounds too high there. But I think Larry said he'd get back with the proper figures on this, I think it is. So anyway, as you pointed out, we've been waiting a long time to get that thing done, that road, something happen. And if the State is still up in the air, are they, about whether they're going to give their $2 million match in this thing? (The Chair was noted present at 2 :31 p.m.) Council Chair Furfaro: They're not going to give us a $2 million match. Mr. Mickens: Million, whatever. Council Chair Furfaro: It is a one million dollar match. It still has to be discussed as it comes out of Finance, and Ways and Means. Mr. Mickens: But we have appropriated our $1,000,000 or $950,000, whatever that is, is that right? Mr. Bynum: That's my understanding. Mr. Mickens: So that money is there, so we're still waiting then for the... Council Chair Furfaro: Our money has been there for three years, okay. Mr. Mickens: Three years. Council Chair Furfaro: And what I'm saying is it has $50,000 in it for the purpose of configuring the standards for the repair items, but we haven't done that part yet. And then we have the actual...our share of the money for the work, which we can prioritize and get started until we know if we have the State's share. And then for budget purposes and until such time that we know where the new development is going with Hawaiian Homes, we're going to have a $295,000 annual maintenance fee to keep that road at minimum risk and safety. Mr. Mickens: And is the total...have figures ever been showing — I don't know if Larry has these or not —how much that road would cost to be done by AASHTO or HAPI standards as opposed to the way they are proposing to do it now? COUNCIL MEETING Council Chair Furfaro: Again, Glenn, we haven't asked that question because we don't know what eventually and with what urgency the Office of Hawaiian Affairs and the Homestead Council and Department of Hawaiian Homes will come to a conclusion about their development. That's not an item right now that is on the agenda. We just want to bring it up to a minimum standard for safety. Mr. Mickens: But as three years. You put the money up for whatever. That money has been there. check with the Hawaiian Home Lands properly do it or not? Council Chair Furfaro: Mr. Rapozo: Council Chair Furfaro: - 60 - January 25, 2012 you're pointing out, we've waited three years, our million dollar match or Hasn't this other research been done to or anybody else to see whether we can Council Chair Furfaro: Glenn, you have access to State records that show the new road for that area to actually go more mauka. The long -term benefit, I think, as both Ms. Nakamura and Mr. Bynum have suggested, is we may have some mutual benefits for expansion of the abandoned temporary road to be an extension of the bike path and other multi -modal transportation systems. Mr. Mickens: Okay, thank you, Jay. Council Chair Furfaro: You're welcome. Thank you, Mr. Bynum. Is anybody else wanting to speak on this item? If not, we have a motion to receive and a second, am I correct? There being no objection, the meeting was called back to order, and proceeded as follows: Okay, any further discussion, members? I have some comments. Go right ahead. Mr. Rapozo: I want to thank the Administration for the report. I think, I'm not going to ask for it to be deferred, but I do want staff to take note that I would like to see an update in a three -month period because three years...it's obvious that this was never a priority. And I think that's the frustration that many people face out there because unless you have lived it, unless you have been on that side of the bridge when an accident has occurred, it is very difficult to express the frustration when it's three, four, five hours, appointments, doctor appointments, school, whatever it may be. Years ago when Mayor Baptiste was the mayor, we did a very good job of putting a blacktop on that road and utilizing it, and again, it's just frustrating because it's not the money because the Council put the money in three years ago, a million dollars. And you cannot tell me that we cannot get that up to some kind of safe standard with a million bucks, especially if we're not paving it. So I hope this will move the Administration into getting this done. Eighteen months is a long time considering we don't need permits, we don't need any permits. We can go out there and contract this out. It is an emergency road. I don't know if it qualifies for any emergency procurement, but it just seems like nothing was done and that's the frustration. I had hoped to see a report where we'd see a much quicker turnaround, but it is what it is. Eighteen months is better than another three years, so. But I would ask, Mr. Chair, if we could have an update in three months just so we can make sure that we are moving on this project, especially before the budget. Thank you. COUNCIL MEETING There being no objection, the rules were suspended. Mr. Chang: Thank you, Mr. Chair. - 61 - January 25, 2012 Council Chair Furfaro: Okay, Mr. Bynum. Mr. Bynum: Yeah, I believe what we've been waiting for is the State funds, but Glenn asked some really good questions that I'm sure are on the minds of lots of people. A lot of us remember when the State determined that we needed a Kapa'a bypass. That had had happened very quickly, and by government standards, it was lightning speed. I don't remember the timeframe exactly. And so I kind of agree with Glenn that hey, State, are you ever going to build a mauka highway? And if not, why not a Lihu`e bypass that goes both ways? But if we move forward with these repairs, we're putting the culverts at 14 feet. That's not, I believe, sufficient width for a two -way regular road like the Kapa'a Bypass and so those questions are out there, but that's really a State responsibility in terms of if they went that route. In the meantime, to move forward and make it safe as a viable emergency route seems like a good way to go, and I think the Administration and the Council is frustrated that we haven't been able to accomplish that. I think the police are very wise to say hey, we'll use this now in its current state daytime. But nighttime? Too scary. And these repairs that Public Works is talking about would give the opportunity for it to be open at night as well. So none of these are perfect solutions, but I think Glenn asked some really good questions that are on the minds of lots of people. And that's the best status of those answers that I know right now. Thank you. Council Chair Furfaro: Any further comments? Okay, if not, I want to please make note that we are going to request a quarterly update. To the engineers at the back of the room, if I could have your attention, I will wait until then. Gentlemen, I expect that you will have a sharper presentation for us in 90 days, maybe even using some professional services to identify which route we're going. I want to caution you to use all in -house labor at this particular time does not please me because in fact it will defer other projects and we don't have a mechanism to manage what could be incurrred overtime to do the work. Now with those words of caution, I want to thank you for the presentation, especially in the week, and also know that between the Mayor and myself, we have put the red flag in front of the Legislature, but we want to start with at least our phase of moneys and do the most critical safety issues we can. Mr. Bynum moved to receive C 2012 -27 for the record, seconded by Mr. Chang, and unanimously carried. There being no objection, the meeting was recessed at 2:42 p.m. The meeting was reconvened at 2:49 p.m., and proceeded as follows: C 2012 -28 Communication (01/19/2012) from Councilmember Chang, requesting the Kaua`i Police Chief's presence, to provide the Council with an update on fireworks usage during New Year celebrations in 2012: Mr. Kuali`i moved to receive C 2012 -28 for the record, seconded by Mr. Rapozo. Council Chair Furfaro: Thank you very much. Gentlemen, the rules are suspended. And Mr. Chang, I'm going to give you the liberty here to pose the appropriate questions on any surveys that you might have from the Police Department. COUNCIL MEETING - 62 - January 25, 2012 Council Chair Furfaro: On that note, if I may, Mr. Bynum, may I ask you to run the meeting? I must step out again. (The Chair was noted excused at 2:50 p.m.) Mr. Bynum: Mr. Chang. Mr. Chang: Thank you so much. First of all, Officer Quibilan and Chief Perry, thank you for coming here. I actually had a...the reason that I'm summoning the both of you, I stayed home on New Year's Eve and slept and observed and watched. Usually the years of the past I've stayed home, but you could hear when it was 12 o'clock because it went br -r -r -r boom, but this one went br -r -r -r boom, boom, boom, boom, boom, and it was a lot longer and a lot louder than it was in previous years, and the irony of it is we ran into each other early that morning and I had asked you, Chief, about the stats and what have you. I'm going to ask if I can just have a moment to read this letter because this, I believe, is the only written testimony that we have. But I've been approached by several residents within the Lihu`e area, in which both you and I live, Chief, so we were able, and I think Mr. Quibilan also lives in Lihu`e, so we could all hear this. But this is addressed to all the Councilmembers. "For the past several years in our Lihu`e neighborhood, we have been victims of aerial fireworks on New Year's Eve. The display can be compared to the Hospice 4th of July Show. A couple of years ago a call was made to the police department. An officer came to our neighborhood and confronted the people involved. Surely the officer could see the aerials before he talked to the subject. A few minutes after he left, the aerials continued. We are concerned for the health and safety of our neighborhood. Some of these aerials go haywire. It bounces off the rooftops of neighbors and goes into backyards of adjacent neighbors. Others even hit the side of the homes. Even if the aerials go straight up, a lot of the hotspots land on roofs. Furthermore, next to the tile wall where these aerials are launched, a neighbor has a propane tank and the neighbors do not spend New Year's Eve at home. In conclusion, one can easily see firework displays from the police station. Can the police department be proactive and control these neighborhoods before the home burns ?" And it is signed "Concerned Lihu`e Neighbors." Speaking to these neighbors, they just didn't want to be identified because of retaliation and they're scared and they don't want to be a subject of payback or what have you. So I have been monitoring them and they didn't want to come to speak, but I just asked them if they could have a written response. So, Chief, when you and I had the opportunity to chat, I think we were talking about injuries, noise and you might want to address the fact, you know on New Year's Day you had said that they were monitoring so much with the ban in Honolulu that a lot of the illegals might have made its way to the neighbor islands, including Kaua`i. So thank you. DARRYL PERRY, Chief of Police, Kaua`i Police Department: There's actually a limited ban in Honolulu. You still can purchase firecrackers. I think it's 5,000 for about $25, you can get a permit. But the majority of the other types of fireworks, including sparklers and the rest, are prohibited. And so the neighbor islands still, you can still set up fireworks on the neighbor islands. And so my understanding is and we don't have the intel to indicate that fireworks were transported here illegally, but that's an assumption that we're making, and that's an investigation that we're looking at that's still ongoing. But it appears like you said anecdotally that, and I heard the same thing after New Year's, the fireworks COUNCIL MEETING - 63 - January 25, 2012 kept on going, it was louder than normal. It was really loud, kind of like cannons going off and so I was concerned about that. But when I checked the stats, the statistics about reports, and you have that before you, it appears that there was only a slight rise from year -to -year. For this past New Year's we had 49 complaints, but 2 citations were issued. I don't have the particulars on those citations. The year before we had 41 complaints, the year before 39, and the year before that's 28. And we're covering a two -day period, the 31st and the 1st. On the right -hand side I have a comparison with July 4 and the numbers are small and the reason being is because it's only one day. It's really consistent year after year. Last year we had a little bit more and that may be because fireworks were brought in from the neighbor island, from O`ahu. We take these complaints very seriously, but in terms of overall responses to cases, there are other cases that we have to respond to during this timeframe that are also very serious, which include on the bottom here, I have the arrests that were made during that timeframe. For this New Year's we had 25 arrests, the year before 14, the year before 20, and the year before, in 2009, 26. And some of the cases that we encountered were harassment, burglaries, drugs, DUIs, assault, disorderly conduct, contempt of court, family abuse, theft, reckless endangering, and reckless endangering may mean a variety of things. Normally during New Year's Eve, some people have a tendency of shooting off their guns and rifles and everything else and that's the kind of things that we are very concerned about. During that timeframe and you're talking about enforcement, we actually change the way we operate, KPD operates, and we have more officers on the road during that... in fact we almost double our force to make sure that the public is safe. We're out there on the roads and we're out there investigating cases. And I'll have AC Quibilan step in and he can explain to you more about our enforcement efforts during this timeframe. ALEJANDRO QUIBILAN, Assistant Chief, Patrol Services Bureau: Thank you, Chief. Good afternoon, Councilmembers. For the record, Ale Quibilan, Assistant Chief, Patrol Services Bureau. In response to the written letter, Councilmember Chang, we recognize that the period of December 31 through the early morning of New Year's Day every year for the last number of years since I was a district commander that this is possibly the busiest time of the entire 12 -month period. We have numerous calls for services because of the activities — it's just ongoing all over the island. Unlike Super Bowl Sunday which is a big thing, but everybody's at home watching TV. The people are out there. And we know that they're out there celebrating. So how they celebrate is on them, but whether it be fireworks, family get - togethers, consumption of alcohol, being at the bars, being out at the beach parks with their families for legitimate reasons or for illegal activity, we know that it's very busy, and as Chief Perry mentioned, we do double up our manpower up there because of the number of calls, and because some of these calls we've encountered in the past we've had to send multiple officers which thins out the beat of available manpower. At the same time, we know that there's a lot of people on the roadway moving, family traveling from one household to another, and especially after midnight when they're trying to get back home. And we're trying to have a high presence on the roadway so that people will slow down or think twice about drinking or driving after they have consumed alcohol. At the same time we're also trying to monitor activities in the neighborhood knowing that there are illegal fireworks out there. So to be everywhere at the same time from (inaudible) from Ha`ena to Polihale it's just about impossible for us, but we do what we can. So doubling up the manpower is as much as we can do. Now this is just for the Patrol Bureau. Over the past few years, the detectives have also put their manpower and support knowing that they can follow -up on major cases that come across so that we COUNCIL MEETING - 64 - January 25, 2012 can deal with the more minor stuff. So any major assaults that occur, they can take it off our hands right away. So we have more than doubled the manpower out there to address the problem. And no doubt that as in that letter that you mentioned that these types of illegal fireworks can be hazardous and are hazardous, but as far as the issue about the officer pulling up to the neighborhood, where it states, obviously they would have seen the aerial, in order to issue a citation, we have to be able to identify and prove. So someone would have to either tell the officer that's the person who launched it, there's the launcher, and we can go with that and hopefully the person will testify in court. Other than that, we're going to have to make that observation firsthand in order to testify in court. Other than that we can only suspect or we can encounter the individual, but without proving or having a probable cause to cite the individual, we can only document what we have, and if the neighborhood don't want to come forward, then we're very limited as far as our action. Mr. Bynum: Other questions from Councilmembers? If not, I really thank you for coming here today and just on a personal note, your statistics say there were 479 service calls and I don't think any of us can imagine what it's like for KPD to deal with 479 calls in one day. So I'm very appreciative of all the things your officers do to protect us every day. I did a ride along a couple of times and it was pretty eye opening, but that doesn't even give a sense of what you guys are dealing with every day, so thank you very much. Assistant Chief Quibilan: Thank you. Mr. Bynum: Mr. Chang: Mr. Bynum: that would like to testify back to order. There being no objection, follows: Anything else? If not, that's it. Do you want to take testimony from the public? I wasn't ready for this. Anyone in the audience on this agenda item? I guess not. I'll call the meeting the meeting was called back to order, and proceeded as Mr. Bynum: Any discussion among Councilmembers? Mr. Chang: Thank you, Mr. Bynum, and again thank you very much to Officer Quibilan and Chief Perry. I guess I just wanted to say that for the officers, you know that it's extremely hard to enforce, but we have a community out there that there's an elderly population, there's the children and there were a lot of...I mean I watched...I think everybody knows where I live, but I watched the show from my window and I never saw anything like that. But I could also hear, like the Chief was saying, cannons. I thought it was a lot closer to where I was at, but when I found out where the Chief lived, and I said hey, did you hear that last night, and he confirmed it sounded like bombs that were just echoing. And if we remember during the New Year's Eve and that time of the year, it was still winds. It was Kona, but it was still. And you could just see the smoke all throughout the neighborhoods and all throughout the streets not even moving. So I know that there are people that are concerned with not only their health but also with their safety because things were going...you know, you don't normally, I guess, people don't shoot it straight up at their house. Maybe they point things in other directions. So I just wanted to just get the community aware that we do need to be considerate because there are people that are out there that are...you know nobody COUNCIL MEETING - 65 - January 25, 2012 wants to make trouble or squeal on their neighbors, but they're scared and these are non - drinkers that stay home and they just want to be safe and when everything goes loose, I guess maybe it's a way to just try to have people share a little bit more aloha and be very respectful to the people and the neighbors where they live because you know this might be a once a year thing, but we still live with each other for the next 364 days, 365 days a year. So I just...I wanted to bring this on the floor because I was requested to and I was asked because there are people and I'm sure that there are other neighborhoods that had to deal with the same. So we just want to keep everybody safe, we want the officers to be safe, and in the interim, there are so many other pressing things and issues out there that we need our rank and file to be where they are, when they are, when they can respond to sometimes much more serious issues, if you will. So I just wanted to thank the Chief and Officer Quibilan once again for being here to share the statistics, and hopefully that gives a little bit better understanding for our community. Thank you. Mr. Bynum: Thank you. Anyone else? Councilmember Rapozo? Mr. Rapozo: Thank you. I just want to say thanks. Interestingly, if you were to send a cop over and he gives a ticket for a fireworks violation, the cop is going to be criticized, don't you have better things to do, why don't you go catch the drunk drivers, why don't you go catch the bad guys, and I really feel sorry for the police officers because they're tasked... especially on New Year's Eve, the worst night of the year for the most part. I was in Puhi most of the evening that night and I heard the noise, but then I went back home to Wailua and it was relatively quiet in Wailua. I mean it was strangely quiet. It was almost like, what's going on? But I think, Captain Quibilan, you covered it well as far as what the officer has to see because the neighbors don't want to squeal, and Dickie used the word squeal. They don't want to squeal on their neighbors, but they want the police to do something. They want somebody to do something. They want the Council and everybody else to pass stricter laws, but unless the officer sees it, he really can't do anything. So they're in a tough spot and again I wasn't going to ask you guys the statistics of the other cases, the DUIs or whatever. I understand you folks made quite a few DUI arrests on New Year's Eve, on that weekend or that period. And frankly I'd much rather you be on the roads looking for DUIs, although I do believe that fireworks violations are important as well. But I think with your limited resources you put them in the areas that protect the vast majority of the community and I wanted to say thank you for your efforts on that front because I don't believe we lost anybody on New Year's Eve. I believe we made it through that weekend, and congratulations, and unfortunately some people got arrested for DUI, but those lives may have been ones that you saved. So tough dilemma, I mean this year I didn't get...I think that was the only letter I received from the community about the fireworks. I know the aerials are always a problem. The Fire Code now addressing some of that as far as enforcement, but just wanted to make sure it really comes down to that consideration — Mr. Chang talked about neighbors having consideration for their neighbors, because we really cannot expect the police officers to be able to go enforce the fireworks violations on New Year's Eve. I mean it's just, again, there are so many other things going on. So Chief, thank you. Captain, thank you very much. And we'll see what happens next year, I guess. Dickie will go ride along New Year's Eve, and that person that wrote the letter, get them in your car on New Year's Eve and see how much fun you folks have watching the cop (inaudible) show. Mr. Bynum: Anyone else? If not, we have a motion and a second. All those in favor? COUNCIL MEETING - 66 - January 25, 2012 The motion to receive C 2012 -28 for the record was then put, and unanimously carried. C 2012 -29 Communication (12/29/2011) from the Director of Parks & Recreation, requesting Council approval to accept the donation of grass sod and labor to prepare the sod, valued at $10,000.00, from the owners of the Kiahuna Golf Club (Jim Miller, Tom Batey, and Bob Guilde): Mr. Kuali'i moved to approve C 2012 -29 with a thank -you letter to follow, seconded by Mr. Rapozo. Mr. Bynum: matter? Any discussion Mr. Rapozo: is this sod going? Mr. Bynum: Mr. Rapozo: Anyone in the audience would like to testify on this among Councilmembers? I'm just curious, Mr. Chair, you may know, where I do know. It's not in the letter. Mr. Bynum: In fact I even mailed some pictures to one of our staff, but I forgot to ask them to have them ready, so thanks for asking. I'm almost certain this is about Peter Rayno Park. The senior baseball guys are out there at Peter Rayno Park redoing the infield. I've met with them a couple of times, took some pictures because they're also doing some grassing around King Kaumuali`i School in areas that are all dirt now. And they're out there volunteering with sprinklers and so they've laid out the infield. It's a very common thing in our community that people kokua and volunteer in the parks and the seniors are redoing their own infield. They brought the sod out there. The County is supplying some materials, but I saw Coach Rayno out there and the crew. I had to stop and talk to them, and in fact I've been meaning to go by because the sod is in now. When I was there they were doing it, so very much kokua and I'm almost certain this is the same thing. So they got materials from Kiahuna and from the County and they're doing the work and they're also doing kind of the ongoing maintenance. You know, there at Peter Rayno we have a new restroom that the County put in and we have senior tournaments there. So thanks for asking the question. Mr. Rapozo: Well, I guess, it would just make it a lot easier for us if some information could be attached because this is very incomplete and I appreciate the explanation. I'm ready to vote. Mr. Bynum: Councilmember Chang? Mr. Chang: I do want to take this opportunity to personally thank the owners of Kiahuna Golf Course. As you mentioned, the sod is going to the Hanamd'ulu Park, so it might be a nice plug because they start their 44th season, and their season opener and blessing will be on February 25. So the community is taking these 30 days or the one month prior to just spruce the whole area up and I want to say aloha to Bobby Medeiros, the General Manager, and you know he was also very responsible with golf maintenance because I think most of the golfing community will know that the sod or the grass at Kiahuna is a very, very good, high quality grass, really pretty, quick growing kind of grass. So I hope it catches on very fast because it's going to be a real nice quality from the south shore down to the east side. So I'm sure that they are preparing the field, so again, special thanks not only to the senior softball preparing for their 44th but of course to the owners and the maintenance people there at Kiahuna. Thank you. COUNCIL MEETING - 67 - January 25, 2012 Mr. Bynum: Just as an aside, you know, I'm just a few years away from being eligible for the senior league. I actually would be eligible now because they allow, I think, one or two players between 55, but those are the ringers, right? Those are the guys, the relatively young guys, and I have this fantasy of playing softball again someday, but certainly not as the ringer. Thank you. If there's nothing else, do we have a motion and a second? All those in favor? The motion to approve C 2012 -29 with a thank -you letter to follow was then put, and unanimously carried. C 2012 -26 Communication (01/05/2012) from the Mayor, transmitting for Council consideration and confirmation, the following Mayoral appointees to various Boards and Commissions for the County of Kaua`i: (1) Board of Ethics Paul Weil — term ending 12/31/2014 (2) Board of Review Craig De Costa — term ending 12/31/2014 (3) Charter Review Commission James Nishida — term ending 12/31/2014 (4) Police Commission Alfredo Nebre — term ending 12/31/2014 Mr. Kuali`i moved to receive C 2012 -26 for the record with interviews and resolutions to follow, seconded by Mr. Chang. Mr. Bynum: Anyone in the public who would like to testify on this? Mr. Mickens. There being no objection, the rules were suspended. GLENN MICKENS: Thank you, Tim. I just want to personally thank Paul Weil for volunteering again for another two years. I was at many Ethics Board meetings and I was extremely impressed with Paul. I believe he's a retired attorney and I thought he did just a tremendous job and I just want to thank him for his time and service. Thanks, Tim. Mr. Bynum: Yup, and he's a character too. Anyone else would like to testify? If not, we'll call the meeting back to order. There being no objection, the meeting was called back to order, and proceeded as follows: Mr. Bynum: Any discussion among Councilmembers? If not, all those in favor? The motion to receive C 2012 -26 for the record with interviews and resolutions to follow was then put, and unanimously carried. CLAIM: C 2012 -30 Communication (01/12/2012) from the Interim County Clerk, transmitting a claim filed against the County of Kaua`i by Gerald Taragos for COUNCIL MEETING - 68 - January 25, 2012 damage to his personal property, pursuant to Section 23.06, Charter of the County of Kaua`i: Mr. Kuali`i moved to refer C 2012 -30 to the County Attorney's Office for disposition and /or report back to the Council, seconded by Mr. Rapozo, and unanimously carried. COMMITTEE REPORT: A report (No. CR -COW 2012 -01) submitted by the Committee of the Whole, recommending that the following be received for the record: "COW 2012 -01 Communication (12/23/2011) from Wallace G. Rezentes, Jr., director of Finance, requesting agenda time for a presentation and status update on the Hawai`i Employee Retirement System (ERS) and Hawai`i Employer -Union Health Benefits Trust Fund (EUTF)," Mr. Rapozo moved for approval of the report, seconded by Mr. Kuali`i, and unanimously carried. RESOLUTIONS: Resolution No. 2012 -12, RESOLUTION CONFIRMING MAYORAL REAPPOINTMENT TO THE SALARY COMMISSION (Charles King): Mr. Kuali`i moved for adoption of Resolution No. 2012 -12, seconded by Ms. Nakamura, and carried by the following vote: FOR ADOPTION: Bynum, Chang, Kuali`i, Nakamura, Rapozo, TOTAL — 6, Furfaro AGAINST ADOPTION: None TOTAL — 0, EXCUSED & NOT VOTING: Yukimura TOTAL — 1. Resolution No. 2012 -13, RESOLUTION CONFIRMING MAYORAL REAPPOINTMENT TO THE CHARTER REVIEW COMMISSION (Carol Suzawa): Mr. Kuali`i moved for adoption of Resolution No. 2012 -13, seconded by Mr. Chang, and carried by the following vote: FOR ADOPTION: Bynum, Chang, Kuali`i, Nakamura, Rapozo, TOTAL — 6, Furfaro AGAINST ADOPTION: None TOTAL — 0, EXCUSED & NOT VOTING: Yukimura TOTAL — 1. Resolution No. 2012 -15, RESOLUTION DESIGNATING FEBRUARY 2012 AS `OLELO HAWAII MONTH IN THE COUNTY OF KAUAI: Mr. Kuali`i moved for adoption of Resolution No. 2012 -15, seconded by Mr. Rapozo. Mr. Kuali`i: I submitted this resolution and the purpose of this resolution is to celebrate, encourage, revitalize, and perpetuate the Hawaiian language. This came to me in the form of...well with the Office of Hawaiian Affairs legislative package, I saw that they were introducing a bill to the Legislature for consideration of February as `Olelo Hawai`i month or Hawaiian language month. So that's why I brought this resolution before you, just we're coming up on February. And I wanted to read just a couple of the whereases and let me say, "Whereas once spoken throughout Hawai`i by Native Hawaiians and foreigners alike, `Olelo Hawai`i was considered to be nearly extinct by the 1980s, when fewer than fifty (50) fluent speakers under the age of eighteen (18) were left; and whereas to save the Hawaiian language, a number of historic initiatives were launched, including the `Aha Punana Leo Hawaiian language immersion preschool programs, the COUNCIL MEETING - 69 - January 25, 2012 Department of Education's Hawai`i language immersion program, and the Hawaiian language programs of the University of Hawai`i System; and whereas in 1978, the Hawaii Constitution was amended to recognize the Hawaiian language as one of the two official languages of the State of Hawai`i; and...Be it further resolved, that the Kaua`i County Council hereby designates February 2012 as `Olelo Hawai`i month to celebrate and encourage the use of the Hawaiian language." Thank you, Mr. Chair. Mr. Bynum: Anyone in the public would like to speak on this matter? Any discussion among Councilmembers? Councilmember Rapozo? Mr. Rapozo: Thank you. I just want to thank Councilmember Kuali`i. You know I had really forgotten about... until I read this resolution I remember learning this in school many years ago that there was a time in Hawai`i that you couldn't speak Hawaiian. And again, I had forgotten about that until I read your resolution and it refreshed my recollection, but just the thought that you're in Hawai`i and you couldn't speak the language. So thanks for doing this. I wish we could send this to more places than just the mayor, the council, and OHA. I think a lot of people need to hear this. You know we hear a lot of people talking about respecting the host culture, but I don't think many do. I think we have a lot of people that do not respect the host culture and it's resolutions like this and efforts like this that will really raise the level of awareness for everyone on this island that in fact the Hawaiian language is so vital to preserve this culture. So hopefully, we can redo this every year and remind people that it is so important to respect the Hawaiian culture and to preserve what's left of it. So thank you, Mr. Kuali`i. Mr. Bynum: Any other discussion? Yes. Mr. Kuali`i: I just wanted to say further, it wasn't that long ago where... not too long ago that I did the certificate for our kumu, Aunty Shirley Leialoha Kauahi, and then the students came from the charter school here behind KCC, and I know some of them wanted to come today, but I told them it wasn't necessary. But in February I'll probably do another certificate and we'll have some of that again. The only other thing I wanted to say is that the numbers to the bills in the Legislature are HB 1984 and SB 2175. HB 1984 has already passed out of the Hawaiian Affairs Committee and is going to the Finance Committee next. So people can air their support. Our Representative Morikawa already voted for it in the Hawaiian Affairs Committee. Thank you. Mr. Bynum: Thank you, Councilmember, and I wanted to thank you also for putting this on the agenda and I also want to take this opportunity to recognize some of my mentors since I've been in Hawai`i, Puna Dawson, LaFrance Kapaka, Aunty Linda Sproat from the north shore, who taught me about the importance of using correct place names, Hawaiian place names. And I've seen that change over the years that I don't hear people refer to Donkey Beach so much, I hear them refer to Kuna Bay. I don't hear so much about Secret Beach, I hear about Kauapea. And I just wanted to thank those mentors and also Peter Apo, who talked so eloquently about the resurgence of Hawaiian pride during his lifetime and how it had impacted and enriched his life. So thank you for letting me make those comments. And I believe it's time to vote. Roll call, please. COUNCIL MEETING - 70 - January 25, 2012 The motion for adoption of Resolution No. 2012 -15 was then by the following vote: FOR ADOPTION: Bynum, Chang, Kuali`i, Nakamura, Rapozo, Furfaro AGAINST ADOPTION: None EXCUSED & NOT VOTING: Yukimura BILLS FOR FIRST READING: put, and carried TOTAL — 6, TOTAL — 0, TOTAL — 1. Proposed Draft Bill (No. 2425) — A BILL FOR AN ORDINANCE TO AMEND CHAPTER 5A OF THE KAUAI COUNTY CODE 1987, AS AMENDED, RELATING TO HOME EXEMPTIONS: Mr. Kuali`i moved for passage of Proposed Draft Bill (No. 2425) on first reading, that it be ordered to print, that a public hearing thereon be scheduled for February 15, 2012, and that it thereafter be referred to the Finance /Parks & Recreation /Public Works Programs Committee, seconded by Mr. Chang. Mr. Bynum: Would anyone like to testify on this matter? There being no objection, the rules were suspended. GLENN MICKENS: For the record Glenn Mickens. Thanks, Tim. I just have a short testimony. You have a copy of it. Let me read it for the viewing public. At first look, this Bill 2425 looks very good for those who own their homes, although it would probably raise taxes for owners of medium and higher value homes. I did read this bill but did not see any section that specified where the added money would come from to pay for the increase. The bill doesn't say so, but will the taxes for our property need to be increased to pay for the larger exemption? In other words, where's the rate? Will it have to be raised or not? Mr. Bynum: The point of this bill, Mr. Mickens, is to reduce taxes for local homeowners. Increasing the exemption will result in lower taxes for people who own own and occupy their home on Kaua`i. It will reduce the revenue from that particular tax class. So that's something that we have to address at every budget how we balance our budgets, but... so I hope that answers your question. Mr. Mickens: Okay, let me finish the rest and I'll address that. But if the money will come from businesses or those not eligible for the increase, then won't the items that we all buy have to be raised to pay for it? And since those who don't qualify for this bonus still have to pay for it, isn't that treatment unfair to them? I do appreciate Tim's efforts towards homeowners and seniors, but I would like to know more about how it will be paid for. That's the thing I'm more curious than anything, Tim, what's going to pay for this thing? Mr. Bynum: This is a first reading, we usually don't have a lot of dialogue and this is my bill, so I can answer that question simply by saying in the last three years the non - resident tax classes, business, people who own real estate here but live elsewhere, hotels and resorts have had their taxes reduced by $24 million in a just three -year period. So they're paying $24 million less over those three years than if their bill were to remain the same as in 2008. The Homestead class hasn't had any reduction in taxes. In fact, that class has paid $3.1 million more. So we have to do a balanced budget and we do. We saw again today that we have a reserve and not only are Homestead class people paying more while everybody else is paying less, there's a lot of inequity. This bill is an attempt to lower taxes and also reduce the inequity that's in the Homestead class by, in COUNCIL MEETING Mr. Mickens: Mr. Bynum: reading. Mr. Mickens: Thank you, Tim. - 71 - January 25, 2012 essence, resetting the cap. That's what was complicated and took a while. It was to get the language that basically your cap would be based on taxes after we make these changes if they're successful and will be more equitable going forward. The pay for is...this isn't something we have to pay for. It's something that will, if passed, reduce revenue from that class. But as I just said, $24 million less from the non - residents while residents are paying $3 million more doesn't seem appropriate, and residents should share in that reduction as well. So that's what my motives are and I hope that answered your question. Mr. Mickens: Well, again, I will benefit from this thing, I think I will, which would benefit me personally. But I just...when you take money from someplace, drop that down, then the revenue for whatever that was paying for is going to have to come from someplace else and that was my concern because I didn't want to see somebody else suffer. Mr. Bynum: And I don't want to debate, but I'm sure as we move through the process, we will have that dialogue, okay. Okay, thank you. Any other questions? We're on bills for first Mr. Bynum: Okay. We have a motion and a second. I'll call the meeting back to order. There being no objection, the meeting was called back to order, and proceeded as follows: (Chair Furfaro was noted present at 3:25 p.m.) Mr. Bynum: Any discussion among Councilmembers? If not, roll call vote, please. The motion for passage of Proposed Draft Bill (No. 2425) on first reading, that it be ordered to print, that a public hearing thereon be scheduled for February 15, 2012, and that it thereafter be referred to the Finance /Parks & Recreation /Public Works Programs Committee was then put, and carried by the following vote: FOR PASSAGE: Bynum, Chang, Kuali`i, Nakamura, Rapozo, TOTAL — 6, Furfaro AGAINST PASSAGE: None TOTAL — 0, EXCUSED & NOT VOTING: Yukimura TOTAL —1. Council Chair Furfaro: Let me ask exactly where we're at this... Mr. Bynum: We just did the first bill for First Reading. Council Chair Furfaro: Okay, I'm going back to the resolution. Did we deal with the resolution on `Olelo? Pau? Okay. I wanted to have something to say, but that's all right. Okay, we'll go on to the first bill? Mr. Bynum: Next item, please, and I'll hand the gavel back. COUNCIL MEETING - 72 - January 25, 2012 Mr. Chang: Hold on, hold on. Chairman, if you want to say something about the Councilmember's resolution about... excuse me, if I can... Council Chair Furfaro: I just want to make sure that we have an understanding that we might be revisiting something on the resolution for establishing `Olelo Hawai`i in February, is that correct? Mr. Kuali`i: I was probably going to do a certificate. Council Chair Furfaro: Okay and that's how we'll do it. Then my question is answered. Okay, thank you, mahalo, maruru. So let's read the next item. Proposed Draft Bill (No. 2426) — A BILL FOR AN ORDINANCE AMENDING CHAPTER 15A OF THE KAUAI COUNTY CODE 1987, AS AMENDED, RELATING TO THE KAUAI COUNTY FIRE CODE: Mr. Kuali`i moved for passage of Proposed Draft Bill (No. 2426) on first reading, that it be ordered to print, that a public hearing thereon be scheduled for February 15, 2012, and that it thereafter be referred to the Public Safety & Environmental Services Committee, seconded by Mr. Rapozo, and carried by the following vote: FOR PASSAGE: Bynum, Chang, Kuali`i, Nakamura, Rapozo, TOTAL — 6, Furfaro AGAINST PASSAGE: None TOTAL — 0, EXCUSED & NOT VOTING: Yukimura TOTAL — 1. Proposed Draft Bill (No. 2427) — A BILL FOR AN ORDINANCE AMENDING CHAPTER 17A, KAUAI COUNTY CODE 1987, AS AMENDED, RELATING TO BUS FARES: Mr. Kuali`i moved for passage of Proposed Draft Bill (No. 2427) on first reading, that it be ordered to print, that a public hearing thereon be scheduled for February 15, 2012, and that it thereafter be referred to the Housing /Transportation /Energy Conservation & Efficiency Committee, seconded by Mr. Rapozo, and carried by the following vote: FOR PASSAGE: Bynum, Chang, Kuali`i, Nakamura, Rapozo, TOTAL — 6, Furfaro AGAINST PASSAGE: None TOTAL — 0, EXCUSED & NOT VOTING: Yukimura TOTAL — 1. Proposed Draft Bill (No. 2428) — A BILL FOR AN ORDINANCE AMENDING ARTICLE 4, SECTION 19 -4.5 OF THE KAUAI COUNTY CODE 1987, AS AMENDED, RELATING TO CAMPING AT LYDGATE PARK: Mr. Kuali`i moved for passage of Proposed Draft Bill (No. 2428) on first reading, that it be ordered to print, that a public hearing thereon be scheduled for February 15, 2012, and that it thereafter be referred to the Finance /Parks & Recreation /Public Works Programs Committee, seconded by Mr. Rapozo. Council Chair Furfaro: Any discussion? Let me see if there's public testimony. Mr. Mickens. There being no objection, the rules were suspended. GLENN MICKENS: Glad you're back, Jay, thank you. You have a copy of my testimony. It's not long. Let me read it for the viewing public, please. I know we're still pushing this camping grounds over there. I'm not sure why. I don't think there's a huge stampede to open those camping grounds, but who will be COUNCIL MEETING - 73 - January 25, 2012 responsible —we've gone over this before —who will be responsible for enforcing all these rules which are in the agenda? It was stated at one of our last hearings about this issue that we just don't have enough police to attend the fights, drug problems, or other serious crimes at these campgrounds. So why are we insisting on opening them before we address the problems that can and will happen? Just look at past history in the same location if anyone doubts this. Under No. 8 of this bill, why has the toilet mandate for one - hundred or more campers been removed? A lot of testimony from councilmembers and others said that this requirement was an absolute necessity. I think we discussed that at length. (Inaudible.) Kaipo was here at the time and I remember it was brought up. And we have never heard a conclusion about union rules to hire more workers since expanding their workload may require this to be done. You know, that was a big issue also. And finally, what is the rush to open these campgrounds when it's not a priority and the above problems have not been fully addressed? So these are my concerns, but I don't know if anybody wants to address the problems or not. Council Chair Furfaro: I'll address a couple of your questions, Glenn. Mr. Mickens: Okay, thank you. Council Chair Furfaro: First of all, this isn't anything more than a housekeeping issue that deals with the bill that we passed a while back about getting them open. Secondly, if you recall, I too would like to have seen a little more emphasis put on either building additional bath facilities and /or some kind of a claim for the organization that used it to require porta - potties. Mr. Mickens: I remember. Council Chair Furfaro: But this is an item for further discussion during our budget session upcoming, which also includes reflecting staffing levels for the parks. That was part of yesterday's discussion. I'm sorry you weren't there for that part of it, but a communique went over. But the piece we're dealing with right now is a housekeeping item pretty much. Mr. Mickens: Okay. Council Chair Furfaro: Mr. Bynum, did you want to add to anything there? Mr. Bynum: I was going to wait until we call the meeting back to order. Council Chair Furfaro: Okay, we'll wait. I hope that answers your question for now. Mr. Mickens: Yes, it does. Council Chair Furfaro: But it will be a process on the staffing levels during budget. Mr. Mickens: Budget time. Council Chair Furfaro: Yes. Mr. Mickens: Okay, thank you very much. COUNCIL MEETING - 74 - January 25, 2012 Council Chair Furfaro: Is there anyone else that wishes to speak on this item? If not, I'm going to call us back to order. There being no objection, the meeting was called back to order, and proceeded as follows: Council Chair Furfaro: Mr. Bynum, you have the floor. Mr. Bynum: Just briefly, this bill was introduced, I think, over six years ago and it did pass this Council recently. And the communication says this proposal deletes a provision that was inadvertently included in the bill. I've never seen this happen before. It was a mistake. We've been through all of this debate and this is just to correct that mistake and I hope that the bill moves forward with that intent. Thank you. Council Chair Furfaro: Okay, any further discussion? If not, voice call vote. All those in favor? The motion for passage of Proposed Draft Bill (No. 2428) on first reading, that it be ordered to print, that a public hearing thereon be scheduled for February 15, 2012, and that it thereafter be referred to the Finance /Parks & Recreation /Public Works Programs Committee was then put, and carried by the following vote: FOR PASSAGE: Bynum, Chang, Kuali`i, Nakamura, Rapozo, TOTAL — 6, Furfaro AGAINST PASSAGE: None TOTAL — 0, EXCUSED & NOT VOTING: Yukimura TOTAL —1. Council Chair Furfaro: Any further business? Or can we go back to the agenda item that I had in recess. C 2012 -25 Communication (01/03/2012) from the Council Chair Furfaro, requesting the Administration's presence to address follow -up concerns relating to the 2011 Comprehensive Annual Financial Report (CAFR). (continued) Mr. Rapozo: Mr. Chair. Council Chair Furfaro: Yes. Mr. Rapozo: We have been going on for two hours, so you may want to take a caption break. Council Chair Furfaro: Take a caption break at this time. Okay, we're in a 10- minute caption break. There being no objection, the meeting was recessed at 3:34 p.m. The meeting was reconvened at 3:45 p.m., and proceeded as follows: Council Chair Furfaro: Okay, at this point we're returning to the finance item on the CAFR that we had recessed earlier and I believe Mr. Rezentes prepared some responses. But it might be beneficial if we do, after some dialogue, defer this item and bring the external auditors back if you would like. I just want to make a quick summary before I bring up Mr. Rezentes. COUNCIL MEETING - 75 - January 25, 2012 First of all, in reference to the General Fund CAFR of 2011 that I made the notes on, some of you have that copy, and I want to make sure we understand that the upper part of the report makes reference to how the CAFR was reported to us and it indicated $57,264,000 fund balance and it had page numbers that we referenced to those particular pieces. I also want to make certain that if you look at our start of the year of what we indicated is unappropriated surplus of $50,269,000, my sheet references $47,619,000 and that is because there were items that needed to be forecasted at the time that were not on the start of the year, which included the Public Access Fund, the debt service of $4 million, the General Fund transfers to others, whether it was by ordinance and /or journal entries, showing the $2.6 million negative number. And so I want to make sure that if you take away the $2.6 million that I reconciled there against the $50 million, that's how we got the $47,619,000. We had operating shortfalls that were directed by revenue. If you look at our sheet, we had forecasted $110 million worth of revenues. We only got $101 million in revenues. So we had a shortfall of $9,993,000, leaving the $37,000 to start the year. Then we have a resolution that shows the $23 million in a reserve policy with specifics how it was allocated. Now in reviewing Mr. Bynum's sheet, I do want to show that you have to turn to another page of the audit to see this particular piece where we show the Solid Waste balance of $11,741,528 on his sheet and I'm going to give you this sheet, Tim. The reality is unless you go to the audit page that I would like to reference, and we still do not have the schedule from the Finance Department, on the government fund balances you will see $7,211,661 that actually is set aside for the closure of the landfill. And I think we had requested a while back, Wally, to get a kind of summary for the past years on how we're setting up that reserve for the landfill closure because we would like to know what the impacts are going forward. So that item on page 27 needs to be deducted from the number that Mr. Bynum is sharing with us, which then leaves us about $1.9 million. And I just wanted to reconcile that for you folks. So we actually started the year with roughly $23 million reserved, we accounted for public access fund contributions, debt service and general funds to other funds that were brought down for the $9,900,000. And my preliminary number, I was showing $2.6 million negative and that is because those items were not accounted for. So we probably should hear from Mr. Rezentes. Did he leave? Oh, okay, so on that note, let's get Mr. Rezentes here and pursue this. Mr. Rezentes, I understand that you've prepared some narrative for us and I'm going to give you the floor. And I would suggest that if we wanted to call our external auditors back that we can do that if there are further questions. I don't want to take any more time to reconcile these numbers because quite frankly I did them as I know how to interpret them. But I think one of the things I want to point out is we need to make sure that we also identify the government fund balance sheet on page 27 that shows money going to the closure account, which was not being reflected in the earlier presentation. So I give you the floor. The rules are suspended. There being no objection, the rules were suspended. WALLACE REZENTES, JR., Director of Finance: Chair, I'm sorry. I think you have my CAFR, yeah? I was searching for the orange tabs. Council Chair Furfaro: Oh my gosh, I wrote all over your book. Here's my book. I'm sorry. Well now you have my notes. (Vice Chair Yukimura was noted present at 3:53 p.m.) Mr. Rezentes: I was just searching through my things (inaudible). COUNCIL MEETING - 76 - January 25, 2012 Council Chair Furfaro: Okay, sorry about that. Mr. Rezentes: Now I have your cheat sheet? Council Chair Furfaro: Yeah, yeah, you have my cheat sheet. Mr. Rezentes: Let me know if you want it back. Council Chair Furfaro: Okay, Wally, you have the floor. Mr. Rezentes: Okay. Yes, we prepared responses to the questions posed by the County Council. I believe there were 13 questions, so we had the various departments respond. Basically we compiled the responses here. I'm not sure how you want me to go through it. If you want me to read it verbatim or... Council Chair Furfaro: Well, why don't you go through the highlights and then I'll turn it over to Mr. Bynum if he has any questions on your presentation. How's that? Mr. Bynum: Yeah, I don't think I'll need that. Council Chair Furfaro: Oh, okay, well since he prepared the comments, why don't you go through the highlights for all of them. Mr. Rezentes: Okay. The first question that was posed was relating to vacation and sick leave compliance concerns and computerization efforts. The question actually was related to the Management Advisory Report responses that, I believe, the Personnel Director had put together and what I did was basically reiterate what he had stated in the management letter to the County Council. I also added the second paragraph that basically states that the Administration is researching the possibility of acquiring a payroll /personnel system, and we intend to make a recommendation in the upcoming budget cycle. At this time we have $395,000 in Bond Fund CIP for this purpose; however, the cost of such a system could range in the $1.1 million range category. We are also looking at the feasibility of including a Time and Attendance module as part of the software package, as well as look at whatever funding options are available to us. As you know, the personnel reorganization is also taking place at this time. Another factor in the decision process is an ongoing internal review on the possibility of outsourcing facets of our payroll function to a third party, and we've had some of our staff in IT and Finance /Accounting do some research along those lines. At one time the County had outsourced that operation and transferred the risk that way. I know there were some other...Maui County, I believe, still operates in that manner. Mr. Rapozo: I have a question, Mr. Chair. Council Chair Furfaro: Why don't we go to questions as we go through each piece. Go ahead, Mel. Mr. Rapozo: Thank you. Wally, you know my concern with that item was...you know obviously it was human error. I mean we know that because it's manual, it's not electronic. We weren't putting the ending balance, or the ending balances for vacation and sick leave were not matching the beginning balances for the next year. I don't know how we can mess that up, I guess. I don't know how else to put that. My bigger question is was there a review done by your office or somebody to find out what was the impact, what was the effect, was it in COUNCIL MEETING - 77 - January 25, 2012 fact intentional, were people getting more hours because they transposed a higher number of hours? Did anybody check? Did anybody go in and make sure that this wasn't a... and there were several instances that's why I bring it up. If it was just one time, I can see... Mr. Rezentes: Various departments. Mr. Rapozo: Various departments, but 20 +...90% of them was in Personnel. Mr. Rezentes: Right. Mr. Rapozo: So I'm only worried about Personnel. The one, the two or whatever was in the Police Department, but my concern is Personnel. That's a trend. When I see that many, it's a trend. It's more than an anomaly. It is like there's a definite problem. So I guess for me the question is did somebody go look and make sure? If I had 28 hours at close of 2010, beginning of 2011, I had 82 hours — can someone explain to me how that occurred and is there the necessary paperwork for vacation slips, sick slips? Did someone make that check because (1) that's too many occurrences for it to be just a mistake. My big concern is I want to make sure that there's no evidence of fraud, that nobody's getting extra overtime or extra vacation or sick leave hours, and that all of these things are documented, and I want to know if that was done. And if you don't know, that's fine, Wally. Mr. Rezentes: And with respect to fraud, that has not come to our attention. It was definitely a cause for concern because of the frequency of occurrences and namely in the Personnel Department. I can just tell you that the department head, Malcolm Fernandez, is aware of the issue and he is taking corrective action. I don't have any of the specifics. Mr. Rapozo: Okay and let me make myself clear, Wally. I understand he's aware. I understand he's taking corrective actions. My concern is in those incidents that the numbers didn't match, did somebody go back and reconcile them to make sure that those numbers that start 2010 or 2011 are correct? Mr. Rezentes: Yes, yes. Mr. Rapozo: They have? Mr. Rezentes: Yes. Mr. Rapozo: And you're saying today that... Mr. Rezentes: Based on the findings of the report, everyone who had a finding circled back and took the corrective action and made the appropriate changes. Mr. Rapozo: Okay. Council Chair Furfaro: Any more questions on this audit item? Go right ahead, Councilwoman. COUNCIL MEETING - 78 - January 25, 2012 Ms. Nakamura: Just following up on Councilmember Rapozo's question. One of the recommendations that the Auditor made was that the County should also increase the number of random quality control reviews to ensure vacation and sick leave records are accurately reported. So are there new policies in place in order to do that? Mr. Rezentes: I can't say if every individual department has done that. I know that we are looking at methods other than the current method of dealing with this type of occurrence, and part of it is to look at financial tools to be more accurate in our reporting and calculations. Ms. Nakamura: I'm glad that you're looking at those alternatives and whether to do it in -house or outsource and different types of software. I think that's the way to go. Mr. Rezentes: It's pretty longstanding. It's going to be a major undertaking and quite an expensive one. But long -term, I think it may likely pay dividends and I'm sure there are a number of folks on the administrative side that are definitely in support of moving in this direction. Ms. Nakamura: Okay and again, I think from our side, well for me I feel like this is an investment we should be making and that it's going to be an investment in either software, training, and possibly personnel in order to have an efficient system in place. So I think that's something that I would anticipate. Mr. Rezentes: Okay. Council Chair Furfaro: Vice Chair Yukimura. Ms. Yukimura: How have the other counties handled this? Mr. Rezentes: I am not sure. I haven't...beyond the queries on the outsourcing of payroll, I don't know how they do it or if they have purchased software specific solutions that address this, such as Time and Attendance Systems and payroll /personnel type of software. I am not aware. Ms. Yukimura: Who is in charge of researching this? Mr. Rezentes: Right now Finance /Accounting and IT have done some research. Our payroll folks, accounting, as well as IT have done some research. I know that Personnel has done some research as well. And we haven't come to any final conclusions to make recommendations, but we hope to do so in the near future, and also I'm sure in the end I'm going to get the question of okay, how do we try to best finance or fund a long -term solution. Ms. Yukimura: You know, for me this issue has been longstanding. I mean there were concerns, there was money put in several years ago. I don't know if this is from three years ago? Mr. Rezentes: I'm not sure if you were here. Basically, our research tell us that the best of breed type of solutions may be upwards of a million dollars and what we have now set aside for a payroll /personnel system in the Bond Fund is $395,000. So it's a far cry from what we would ultimately need. But some of the decisions that surround that is whether or not we will long -term move to outsource payroll or keep payroll as part of that whole system functionality. COUNCIL MEETING Mr. Rezentes: Leased. Ms. Yukimura: ...could be reasonable. Mr. Rezentes: Yes. - 79 - January 25, 2012 Ms. Yukimura: Well, in the process of doing the research, do you think that it would be helpful to find out how the other counties are approaching their problems in this area? Mr. Rezentes: Yes, I have a feeling they're not cutting edge, though. And sometimes other resources, such as the GFOA, has better resources and better opportunities through them to research the types of companies that provide these specific solutions. Then we need to work on finding out what is the appropriate course of action and we're not 100% there yet. Ms. Yukimura: Okay, well, it may be that the counties aren't cutting edge, but at least you'll find out if they are or aren't. I mean because if they are or if even they're in process it might be useful to talk to them. The other thing is... Council Chair Furfaro: Please stay within item No. 1. ,Ms. Yukimura: Yes, yes. The expenditure of moneys, even if the system costs a million dollars or more, may be done in increments. So yearly amounts may be... Mr. Rezentes: Sure, right. We amortize it over the life definitely and that's an alternative that we can look at and work towards. Ms. Yukimura: Right, okay, well I am glad that attention is being paid to this. I think the $395,000 is more than enough to do the research that it takes. Mr. Rezentes: Oh, we're not going to spend that money...hopefully we can do the research in -house by finding out what's out there, what's best of breed, what our counterparts...what type of offerings there are by these types of firms that specialize in this area. Ms. Yukimura: Right, okay, well, I mean I share Councilmember Nakamura's support for fixing this issue because it has been a longstanding issue as far as I remember and it was out of the same kind of concerns that these discrepancies and these problems would be coming up if we didn't have a good system. So now we're seeing it actually happen. So I look forward to hearing the recommendations and understanding your decision making at budget time. That is your timeline, right? Ms. Yukimura: Okay, thank you. Council Chair Furfaro: Okay, members, just a reminder, too, these are the Q &A that came from the CAFR that we sent over, but obviously if there's an item that you would like to further investigate and so forth, be thinking in terms of our own internal auditors, that if we wanted to take a look at something we could put it in that resolution as well. Well, Wally, you did say that you are maybe looking at contracting that service out? COUNCIL MEETING Mr. Rezentes: Yes. - 80 - January 25, 2012 Mr. Rezentes: Yeah, well, we are looking and we have made some inquiries with Maui County. They currently outsource their payroll processing. They have internal payroll specialists, but they outsource the work and all the calculations, all the federal /State reporting requirements, the check cutting /mailing, and all that is outsourced by a third party and, as you know, there are a number of companies in the State and nationally that do that for a living. And oftentimes, the concern is that because of the complexity of the structure of our union agreements, it is somewhat of a learning curve even for these companies to deal with our collective bargaining agreements. It's good to know that in the past, the County has outsourced and then now Maui has done it. So we know it can be accomplished, it just may take a little longer in transition to get the information done accurately and everything flowing correctly. Council Chair Furfaro: Okay, would the committee that's being formed for HR that they're looking at some of these functions are personnel functions, will there be any discussion? Mr. Rezentes: Definitely, we need to, definitely. Council Chair Furfaro: Okay, so there's the contract services, there's finding programs that we can lease or finding programs that we can do in -house with a capital investment. Council Chair Furfaro: Okay, thank you. Any more questions on item 1? No? Wally, we'll go to point No. 2. Mr. Rezentes: Okay. The question was relating to the policy for transitioning of key employees. The policy direction that we have, there's no "administrative" or legislative policy per se other than what we have in Section 3 of the budget provision. And that relates to the hiring temporarily of employees when there's an employee out on long -term disability, etc. There are some limitations to that in that you can only recruit on a temporary basis for the replacement and I'm tasking personnel to look at the language in there to see what kind of recommendations they may have to change the verbiage in Section 3 to allow a little bit more flexibility. The intent is, obviously, to have an adequate time period for newly hired employees to shadow and train with the retiring employee. But I think a lot more work is needed in this area, a lot more guidance from HR as well. Council Chair Furfaro: Okay, any questions on item 2? Let's move to item 3 then. Ms. Nakamura: I have a question. Council Chair Furfaro: On No. 2 or No. 3? Ms. Nakamura: On No. 2. So the budget ordinance Section 3 that you're referring to, Wally, that's the policy that pretty much limits what you can... spend departmental resources? Mr. Rezentes: Yeah, how you can go about it, correct. Ms. Nakamura: So having more flexibility in that language would help the departments with their succession planning and training? COUNCIL MEETING - 81 - January 25, 2012 Mr. Rezentes: I'll share an example. If an employee is on long- term disability and that employee cannot or does not intend to come back to work, the way our retirement system is structured, the retirement system would recommend that that person burn all of their available time. And if you're a 25 -year, 30 -year employee, that could be months or maybe even a year. And if a department doesn't have the ability by having an extra body over that period or funding for that period, you're somewhat limited unless you come back and ask for more funds and redirect funds. By rewarding maybe and giving more flexibility in the language may allow for an easier and better transition. But, again, that was...what I'm explaining to you is a definite possibility as I've discussed this matter with the Employee Retirement System. Ms. Nakamura: I think it would be good to see what kind of suggestions you have to change the language and... Mr. Rezentes: Yeah, I want HR to look at it and look at those recommendations. It should be kind of, I think, sent to them and have them review and provide maybe draft language for us in the upcoming budget cycle. Ms. Nakamura: That sounds good, thank you. Mr. Rezentes: Okay. Next one, item 3, under Department of Finance, explanation as to why current year expenditures or total cumulative expenditure for a federal award would be reported as a negative number. In this case, you know again, this was in the Management Advisory Report. Basically it's a credit, the negative is a credit, so it's actually a good thing in this case. And that's what we explained here. I think the concern was that it was bracketed because it was actually income that was generated in the program that can be used in the ensuing year for expenditures for that program. If you're okay, the next item? Council Chair Furfaro: We're fine. Mr. Rezentes: Okay, please provide the source of funds found within the Department of Public Works fiscal treasury Trust Fund. The source of these funds are fees per the sediment and erosion control ordinance No. 808. This ordinance addresses the grading, grubbing, and stockpiling activities as required by the Engineering Division of Public Works. Later on you'll see, actually on the second to the last page, Table I, is a table of all the Trust Fund accounts that you requested and included there is the one for Public Works for sediment and erosion control. Council Chair Furfaro: Okay. Mr. Rezentes: No. 5, what are the advantages or benefits of the employer paying 100% of the annual required contribution for OPEB costs to other EUTF upfront? Paying the annual OPEB requirement as well as the annual required contribution or ARC in accordance with GASB -45 basically ensures that we are setting aside adequate funds to pay off our unfunded liability of $207,000,000 within a 30 -year period. If we did not pay both the annual OPEB and ARC contribution requirements, what we're in effect saying is that we will be paying off the unfunded portion and for us again that's $207,000,000 in excess of 30 years. GASB -45 basically allowed the counties, if you follow it, to pay off the debt within that 30 years. And from a fiscal perspective, it is the right thing to do. We're being fiscally conservative here, and I know that Chair Furfaro can attest that when we did our bond rating presentation, the question was asked and we are COUNCIL MEETING - 82 - January 25, 2012 definitely in the better half or better quarter of the country in that we elected to do this and it does have a positive reflection on our bond rating. So that is one of the reasons definitely why we want to continue our commitment to pay for the ARC and not pass that cost on to the next generation. Council Chair Furfaro: Wally, you do know we're going to have a presentation soon from the EUTF people. Mr. Rezentes: Yes, I'm trying to schedule that. Council Chair Furfaro: And we really appreciate you pursuing setting that up for us because quite frankly some of us are not comfortable on the terminology when we have contributed 100% of our exposure. And we want to make sure we have a way to do that, okay. Mr. Rezentes: Yes. The next one, after the actuarial report is released from the Employee Retirement System in three to four weeks... Council Chair Furfaro: Excuse me, Wally. Mr. Rezentes: I'm sorry. Council Chair Furfaro: I recognized Mr. Bynum. He had a question. Mr. Rezentes: Oh, I'm sorry. Mr. Bynum: I'm sorry. You know this is one I love to talk about because I'm proud of us for doing this, but I think you may have just said it. What percentage of municipalities nationally do this? Mr. Rezentes: I'm not sure, but I know that even locally within the State...I know the State is not doing it, the Big Island is not doing it or haven't done it fully; Maui County and us, we're the only ones, as I understand it, that we're paying the full OPEB and ARC contribution. Mr. Bynum: I think I read in the press that less than a quarter of municipalities nationally are... Mr. Rezentes: I forget the percentage, that's why I was hedging. No, I don't know that number. Mr. Bynum: Well if anybody reads that anywhere, let me know. But this is a good move, thank you. Council Chair Furfaro: Are there any more questions? And I just want to remind you that Wally is preparing to get the EUTF gentleman here within the next four to six weeks, that the item of us making sure we have some legal verbiage other than just narrative in our budget (inaudible) and so forth that really indicates that the money we put in can be isolated for our employees. Vice Chair Yukimura. Ms. Yukimura: I'll wait until he comes. Council Chair Furfaro: Okay, so we're on No. 6. COUNCIL MEETING - 83 - January 25, 2012 Mr. Rezentes: After the actuarial report is released from the ERS in three to four weeks, please provide an update on the investment rate of return and projected percentage of salary increases. I believe that was covered last week when we met with the ERS Administrator and I think he provided the PowerPoint to... Council Chair Furfaro: But he'll be coming back again after... Mr. Rezentes: Yes, yes and unfortunately the timing, I think, was such that the actuarial report that you posed in the question was not completed yet. But I'm sure by the time he comes back, it will be completed and you'll have fresh information. Council Chair Furfaro: Mr. Rezentes: Council Chair Furfaro: That's what we're hoping for. Yeah. No. 7. Mr. Rezentes: Write a detailed breakdown of the $51,362,791.00 that is categorized as Assigned within the General Fund and basically that's what I did here and it's referenced on page 92 of the 2011 CAFR. Council Chair Furfaro: Mr. Bynum: So we committed all of the...we have no unassigned balance, right? Mr. Rezentes: Yes. You have a question, Mr. Bynum? Go ahead. Mr. Bynum: Is there a further breakdown? I mean the $47 million, that includes the reserve and money assigned to balance the budget? Mr. Rezentes: Yes, for this current year's budget, yes. Mr. Bynum: So that $47 million includes the reserve and money to balance this current budget, right? Mr. Rezentes: Mr. Bynum: assigned to the budget? That's the amount that was necessary, yes. And do you recall offhand what amount of that was Mr. Rezentes: do you mean, I'm sorry. Mr. Bynum: If I understand it correct...because this is new. We haven't done this before where we assigned every dollar. That $47 million plus the self - insurance is the amount. Of that $47 million some of it is reserve, right? Mr. Rezentes: Yeah. Mr. Bynum: $22 million? $25 million? Council Chair Furfaro: $23 million. The amount that was assigned to the budget...what COUNCIL MEETING - 84 - January 25, 2012 Mr. Bynum: $23 million. And so all of the additional is assigned to balance this year's budget? Mr. Rezentes: The CAFR report is as of June 30, 2011. So what is meant by this Amounts to Balance Future Budget Shortfalls is what was committed for this current fiscal year. Mr. Bynum: Right. Council Chair Furfaro: July 1. Mr. Rezentes: Yes, correct. Mr. Bynum: And some of that was for reserve and some of it was to present a balanced budget. Mr. Rezentes: Correct. Mr. Bynum: So that $47 million is broken down into two pieces, right? Mr. Rezentes: Yes and ultimately it's going beyond the General Fund too, right? It's going to fund all the other deficit funds as well. Mr. Bynum: Right. Mr. Rezentes: Correct. Mr. Bynum: We'll talk about that later, thanks. Mr. Rezentes: Next one, please provide a list of the 12 Treasury Accounts that was included in the Management Advisory Report page 4 and that was on your second to the last page, the list of the 12 Treasury Trust Fund accounts: the balance as of June 30, 2011, a description of what it is, the enabling legislation, and the duration. Any questions on No. 8? If not, we'll go on to No. 9. Mr. Rapozo: Yeah, I mean the Table I? Mr. Rezentes: Yes. Council Chair Furfaro: Go ahead, Mel. Mr. Rapozo: Thank you. I see the chart. I guess for me, the question we had during the review was whether or not we could use those funds. Mr. Rezentes: Oh yes, Councilmember Rapozo, I think that's a future question. I think we're going to come to that. Did I not include that? Mr. Rapozo: No, I mean No. 8, right? We're on No. 8. It says please provide a list of 12 Treasury Trust Accounts and what the funds in each account can be used for. Mr. Rezentes: Yes. COUNCIL MEETING Mr. Rapozo: So I think when we had the review, we weren't sure. Nobody could answer the question as to how long do we have to keep it in that trust, can those funds be released, can it be used for management, and I think that was what... Mr. Rezentes: Section 6 -1.3 covers that. Mr. Rapozo: Oh, okay. Council Chair Furfaro: So hold that question until we get to No. 9, which is next. Are there any questions for No. 8? If not, let's go to No. 9, and Mr. Rapozo has the question out on the table. Mr. Rapozo: Okay. Council Chair Furfaro: You can respond to it now. Mr. Rapozo: Okay, go ahead, I'm sorry, Wally (inaudible). Mr. Rezentes: Okay, well, basically Section 6 -1.3 of the Kaua`i County Code states that all moneys deposited in the Trust Fund not used for the purposes for which the moneys were received and remaining unclaimed for a period of at least five years basically can be realized back into the General Fund. Some of these trust funds, in our review, meet that criteria where we can realize it into the General Fund and we will be including that in the upcoming fiscal year 2013 budget. We know that there are a few accounts... some of these deposits or some of these trust funds that were in here have served its purpose and there is moneys that we can sweep out of there because the intended purpose is now past. Unfortunately some of these items sometimes have to stay in the trust fund for long periods of time due to violations or not meeting certain requirements, like in the Planning Trust Fund mainly for Class IV zoning permits, or even the sediment and erosion control ordinance when there is noncompliance and the moneys have to stay there until the appropriate measures are addressed and the Department of Public Works can sign off on the permits or the requirements. Council Chair Furfaro: Wally, when those accounts get swept, they get swept to the General Fund? Mr. Rezentes: Yes. - 85 - January 25, 2012 Item 9, the next one. The County Code Council Chair Furfaro: Okay. Mr. Rapozo: At your first review, how much of this is sweepable? There's $1.2 million in there right now. There are some big accounts: Foreclosures /Tax Liens. I don't know, what are those moneys for? It's almost a half a million dollars. Mr. Rezentes: That is moneys that we have. Those moneys are in and out. When we have foreclosures or tax liens, we receive the funds, it's in safekeeping until the foreclosure process is complete. Sometimes we have to hold it in excess of a year before we can clear out, when the new purchaser can ultimately take possession of the property. In that one, it's in and out, but sometimes it might take a long time. I don't think there's much... on that one I don't think... COUNCIL MEETING - 86 - January 25, 2012 Mr. Rapozo: What's the source of those funds? How does money get deposited? Where does that money come from? Because a tax lien is somebody that didn't pay their tax, right, so we put a lien on their property. Mr. Rezentes: We sell the house. Mr. Rapozo: Okay. Mr. Rezentes: Let's say we sell the house, we keep the money until...but unfortunately the new purchaser cannot take possession right away. We have to keep the money in this trust account until after all the State and Federal law requirements, and I'm sorry I don't have the specifics. I would have to ask my Real Property people. Mr. Rapozo: Okay, a good example of this would be a sale of a foreclosed property... Mr. Rezentes: Right. Mr. Rapozo: ...that this Council refused to buy back or whatever, so now it goes out to the market, it sells, the money gets sent to the Director of Finance, it goes into this account, and then when we...whenever that deal gets done, then it goes into the General Fund. Mr. Rezentes: No, no, then we... Mr. Rapozo: Oh, you pay the... Mr. Rezentes: Yes. Mr. Rapozo: But there is some, there's still, there's going, typically we... Mr. Rezentes: There are other fees. Mr. Rapozo: And that all just remains in that Trust. Mr. Rezentes: Yes. Again, I apologize, I don't have the specifics, but I can provide you more details (inaudible). Mr. Rapozo: No, I was just more interested in knowing what the source would be, but that clarifies it, so thank you. Council Chair Furfaro: Wally, why don't we be more specific when we come up on the budget cycle, that that question comes up again? Councilmember Nakamura. Ms. Nakamura: Hey, Wally, thank you for providing Table I. I think it's...for the first time I've seen something like this that clarifies these funds, the Trust Funds, and the description and what authorizes them. I don't understand... is that the duration column? Is that how long you have to keep the funds in there? COUNCIL MEETING Council Chair Furfaro: Vice Chair Yukimura. - 87 - January 25, 2012 Mr. Rezentes: No, no, it's kind of an average estimate that the departments gave. You know, again, it's not always consistent how much time, say, a deposit goes in there before it goes back out or dispersed back. Some, I know, departments didn't want to provide a number and we put "varies" because there is really no consistency. Ms. Nakamura: Okay, so there is no set policies in some of these. Mr. Rezentes: No, no, I mean it is for a specific...the Treasury Trust Fund is set in these instances for a specific purpose. It is just that the disposition of the funds are not often consistent. It's a case by case. Ms. Nakamura: I think what would be useful is another column that says what these funds can be used for within that department. It would be a useful tool to know, and then the last column that I think Councilmember Rapozo was asking for, the next column is what's the unused balance after five years. I'm sure that will come up in the budget process, so thank you. Ms. Yukimura: Is it such that it varies with each Fund as to how long things stay there or get dispersed because of the lack of statutory clarity? Mr. Rezentes: I apologize, I would think you would need to speak to the subject matter experts and get that information from them, from the various departments that manage these accounts. Ms. Yukimura: But presumably these funds are guided by statute, right, the statute that formed them in the first place. And I can imagine that some of them are really clear that after such and such a time they have to be returned and in other times it might be left unspoken or unarticulated? So maybe what we need, and maybe that's something the County Attorney does, would be to give us the statutory language for each fund. I don't think she heard. Mr. Rezentes: I'll write it down for her. Council Chair Furfaro: Amy, the request... can you come up for a moment? We want some clarity on these various descriptions. The question is can the County Attorney's Office, for the purpose of these items, give us terms and conditions related to when they hit certain action dates. AMY ESAKI, First Deputy County Attorney: We can go look at each one of the funds and see what the ordinance specifies for each fund. Council Chair Furfaro: Okay, and what is a reasonable time you can get that back to us? Ms. Esaki: Within two weeks, is that okay? Council Chair Furfaro: Two weeks? Fine. Three weeks is good too just so long we're ahead of the first blush of the budget. Ms. Esaki: All right, sure. Council Chair Furfaro: Vice Chair Yukimura, you still have the floor. Amy, she still may have questions for you. COUNCIL MEETING Ms. Yukimura: No, no, no, I think the assignment is pretty clear and you're pretty clear. Ms. Esaki: Yes. Ms. Yukimura: So as Councilmember Bynum pointed out, it would be...you've listed, and thank you for doing that, the enabling legislation in the list that you've given us, Wally, and so we'd be just clarifying what that says as to the disposition of the funds, how they can be used, when they have to be returned. Mr. Rezentes: Ms. Yukimura: Ms. Esaki: Ms. Esaki: Council Chair Furfaro: Ms. Esaki: Ms. Yukimura: Ms. Esaki: Council Chair Furfaro: Mr. Rezentes: sweep as much as I can to the looking at this thoroughly. Council Chair Furfaro: just sweep...a lot of money. Mr Mr. Kuali`i: fiscal means Public Works? Mr. Rezentes: Mr. Kuali`i: Mr. Rezentes: - 88 - January 25, 2012 And it might not say when it has to be returned. And it may not say. Right. Ms. Yukimura: And it would be valuable to know that because maybe we need some statutory amendments to make clarifications like that so that there's not this over - loaning of funding which has been recognized via the auditors and might just provide for a better functioning of those funds. Ms. Esaki: Sure. I know recently we received a request from a law firm for a grading permit which they said had lapsed and it was several years ago that the grading permit had been issued. So we're researching that as well currently. Council Chair Furfaro: Okay, but please let us know if it is also silent. Sure. Okay? Okay. Thank you very much. Thank you. Any more questions for Amy? If not, Wally. And I have to be quite honest, I'd be happy to General Fund. So in fact I'm glad we're doing this, Well, we may be talking about a vacuum, okay, not . Kuali`i has a question for you, Wally. Just a couple of quick questions. So I assume PW Yes. So what is KWMCH? Kauai War Memorial Convention Hall. COUNCIL MEETING - 89 - January 25, 2012 Mr. Kuali`i: Convention Hall? Mr. Rezentes: Yeah. Mr. Kuali`i: And what is T/F Special Plate? Second to the last before Water. Mr. Rezentes: I think that is the Drivers Licensing Special Plates. I don't know the acronym, but you know when people have customized plates. Mr. Kuali`i: Customized plates. Thank you. Council Chair Furfaro: Next item, please. Mr. Rezentes: No. 10, please request and provide the Council with written assurance of the funds deposited into the EUTF as the County of Kaua`i's required contribution is being reserved for the County of Kaua`i employees when they retire. Please be sure that the requested assurance documentation is approved by the County Attorney and is legally binding. I did have that conversation with the EUTF Administrator, and when she arrives, she knows that is a request that you folks made and have it in writing, and we will make sure that we circle that back with the County Attorney's Office for review. Council Chair Furfaro: Thank you. Shall we go to the next item? Mr. Rezentes: And for items 11, 12, and 13, yes, he's still here. Council Chair Furfaro: Mr. Dill? Mr. Rezentes: I have the County Engineer here to assist me with through any specific questions that you may have. Item 11, please provide an update of the status of merging the sewer billing charges with the Department of Water resulting in one bill that reflects sewer charges and water charges. Please provide a breakdown of potential costs (manpower, software, etc.) that would be necessary to implement such a merge. Council Chair Furfaro: Okay, wait right there, Wally. We need to take a recess. There being no objection, the meeting was recessed at 4:38 p.m. The meeting was reconvened at 4:42 p.m., and proceeded as follows: Council Chair Furfaro: We are back. Mr. Dill, welcome again. The next three items... the last three items (inaudible) with the Public Works Department, Wally, so I'll leave you at the mike. There being no objection, the rules were suspended. Mr. Rezentes: I think I read it, right? Council Chair Furfaro: Yes. COUNCIL MEETING - 90 - January 25, 2012 Mr. Rezentes: Okay. So the Wastewater Division responded with this paragraph in the Management Report, and since Larry is here and since he's a board member at Water, maybe I can pass it off to him. LARRY DILL, County Engineer: Good afternoon, Larry Dill, County Engineer. I'll just read the paragraph here and then elaborate a little. "The Wastewater Management Division of the Department of Public Works acknowledges and agrees with the conclusion that the current process for billing commercial sewer accounts should be revised to allow timelier billing. The recommendation to consider having sewer billing performed by the Department of Water is one of several approaches that could be a feasible alternative billing system. Regardless of which billing system is used, the complexity of reducing the lag in the commercial billing process is the impact on customers that will occur over the duration the billing cycle is advanced to become more current. The Division will be reviewing the options and feasibility of alternatives for making the transition to timelier billing, with input from the Finance and Water Departments and others in County Administration." So what we're recognizing in this response is some of the comments that the Auditor made addressing the lag that exists for some of our commercial billing accounts. So we are moving in -house to try to correct that situation and that's happening really separate from the move to perhaps billing with the Water Department. We have had some preliminary discussions with the Department of Water about the possibility of combining our billing with theirs so they would submit a consolidated bill to their and our customers. As you probably are aware, the Department of Water does their billing via the Honolulu Board of Water Supply. The Honolulu Board of Water Supply already does that consolidated billing for the County of Maui and also for the City & County of Honolulu. So we do know that it's something possible and feasible. At the Water Department, they are currently moving from bimonthly bills, every two months, to a monthly bill. So they're working with the Board of Water Supply on that right now and their latest projected goal for achieving that is July 1. So they're going through that process right now. The Board of Water Supply has indicated they'd like to take care of that issue first before they address other items. So in the meantime we've had, as I mentioned, some preliminary discussions with the Department of Water, but aren't able to move forward yet with serious discussions with the Board of Water Supply about implementing a consolidated water bill. As we mentioned, we are also looking at other options, specifically, outsourcing, an alternate service provider for doing the billing to see if it's another way that we could effectively and efficiently produce our bills for wastewater. But there are other advantages to be gained with the Water Department if you go that route and that, right now, is our first choice. Council Chair Furfaro: Okay, let me ask you, in these preliminary discussions, and maybe Wally can jump in here, first item is what is the benefit of cash flow position, okay? (2) What is the benefit to any potential delinquencies and collections? And (3) would there be fees to the County for the accounting support that would be provided on the billing cycle? Will there be a fee? So those three questions. Mr. Rezentes: Okay, I'm sure there'll be a charge. Definitely the vendor in this case is the City & County of Honolulu Department of Water. So there will be fees associated with that. Based on discussions that I've had internally, on the collections side of the house, the City & County and Maui, as we COUNCIL MEETING understand it, manages it in two different ways relative to collections. One of the questions that comes up is when a partial payment is made, who gets credited first, water or wastewater. And in the case of Maui County, it's 50 -50. In Maui County's situation, the water board is not semi - autonomous, so therefore I can see why it's 50 -50. Council Chair Furfaro: It's all county. Mr. Rezentes: On O`ahu where it is a semi - autonomous situation, like it is here, the first amounts paid or any partial payment will first go to water, secondly to wastewater. So that would be something that we would have to address with the Water Department and I'm sure on the County's side we would have to make the appropriate contingencies to address this. Council Chair Furfaro: Okay, so there is discussion on that. It's not going to be left up to jan- ken -po, right? Mr. Rezentes: Yeah. - 91 - January 25, 2012 Council Chair Furfaro: Okay, but those are serious... Mr. Rezentes: We have to remind Water how well we have assisted them and partnered with them in other matters. Council Chair Furfaro: Okay. Any additional comments along the line? Okay, let's go to No. 12, then. Mr. Rezentes: If a merging of sewer /water billing should occur, would this be problematic in any way as it relates to the use of a specific revenue source? And I commented, see above. Would this type of merge need to be addressed with any federal or State agencies? And the response is to our knowledge, we could do this without any State or federal involvement or decisions. Council Chair Furfaro: Any particulars, members, on No. 12? Wally and Larry, let's go to No. 13. Mr. Rezentes: No. 13, please provide a schedule that shows the estimated cost of the closure of the landfill and a breakdown of how we anticipate our targeted and estimated closure and post - closure costs based upon estimated tipping fees collected and allocations from the General Fund on an annual basis. Council Chair Furfaro: And Wally, that was kind of a question that I posed earlier when we identified page 28 that transfers 7.9 and my discussion with your staff, with Renee Yadao, if we could get some kind of reconciliation maybe based against the long -range plans for the closure. Is that possible? Mr. Rezentes: Yes. Basically that's what we've done here in the Tables. And the first Table is a schedule of the closure costs and fund reserves for Phase II of the Kekaha Landfill. Mr. Dill: Chair, if I may, in looking at Table II, line 1 Closure, you can see the amount $8.974 million. Council Chair Furfaro: Yes. COUNCIL MEETING Mr. Dill: That amount is the closure construction cost estimated by our consultant when he completed the Phase of Cell 1 at the landfill. Council Chair Furfaro: Right. Mr. Dill: And so each time we do a new design, we get an updated estimate of the closure cost for the landfill. So that was the most recent target that was done and so if you look at the next line, it's the federal grant which we received from FEMA. As you can see over the next several years we show the interest earned on that account, which accumulates and adds to that $1.75 million number. The third line, which shows a balance of $7.2 million in the Solid Waste Disposal Fund, which shows the accumulated amount in that fund dedicated towards the closure cost of the landfill, and then every year you can see, beginning with 2012, amounts $300,000 and building to show the amount that we add to that fund every year to account for the closure cost. That amount was based on estimates provided, again, to us by our consultant from Waste Management actually, and we've continued to contribute to that fund on that basis ever since then. And then the fourth line of the General Fund, the $490,000 represents County match to the FEMA moneys that are addressed in line 2. Our plan, so $8.947 million was the latest estimated closure cost and that was estimating closure in 2014 of Cell 1 if the landfill closed at that time. Mr. Rezentes: So just to put it into perspective, that $8.9 million was the best information we had at the time of the CAFR, the end date of the CAFR. But as you know, and I think Larry can go into more detail, there is going to be a reanalysis by consultants that will change the numbers and the cost estimate. Council Chair Furfaro: Right, so Larry, I think you weren't in the room when I asked him that when we get closer to having some professional evaluation, we want to put that on an agenda item because we went back to recognize on page 28 the $7.2 million that was put in this year. But if I read this approximately, across the board for the period leading to the year 2021, we're going to have roughly about an additional 6% contribution for the next several years in the amount of $312,000 compounded to an amount of $433,000 in year 2021. How secure are we on this federal money each year? Mr. Dill: The federal grant is money that we received already, so that's money in hand. 1.8? - 92 - January 25, 2012 Council Chair Furfaro: So you're just spreading it out in future years, the Mr. Dill: No, the...well, the $10,000 plus you see every year represents interest that we earned on that account that goes back into that account. Council Chair Furfaro: Okay. Mr. Rezentes: That represented the FEMA portion of the debris. So that is moneys that we have already at hand. Council Chair Furfaro: Yeah, I see it in Note 2 now that it is the interest rate portion. Okay, that answers it. But when you get this refined, we would like to see it again. COUNCIL MEETING - 93 - January 25, 2012 Mr. Dill: Okay, certainly, you can see at the end of Note 1 that we anticipate a revised closure cost will become available by April of this year. Council Chair Furfaro: Okay. Mr. Dill: That's the design of Cell II, which is currently being designed. So we'll get that cost and then we will revisit to make sure we are setting aside the appropriate amount to anticipate the closure. Council Chair Furfaro: And I don't want to commit to a month or date. I want you to tell me when you're ready to present it. Mr. Dill: Okay. Council Chair Furfaro: Okay, I mean if it's May or June or whatever, just so we have a more current picture. Mr. Dill: Okay, certainly. And if I can also mention, the Table following, the one with the green, the other costs that's mentioned in the CAFR is we do have annual monitoring and maintenance costs. But these costs are funded annually in our operations budget. And so the $330,000 is not something that's a cumulative thing that goes into a fund. We just fund it as a line item in our operations budget every year that, of course, this body reviews and approves. That takes care of both Halehaka and Kekaha. Council Chair Furfaro: Okay and that's your R &M best guess each year. Mr. Dill: Yes, but we have pretty good history on that because we've been doing it for a while. Council Chair Furfaro: Sure. Mr. Dill: So we contract it every year, but that's right, yes. Council Chair Furfaro: Especially the one in Lihu`e, you have a lot of history with, okay. It's tough to read black on green, you know. Mr. Dill: Oh, my apologies. Council Chair Furfaro: Okay. Orange and black works good, but green and black, especially for the guys at the table that are color blind. Any more questions on what Larry has shared with us? Vice Chair Yukimura? Ms. Yukimura: The FEMA grant moneys, when did we get those, the $1.7 million? Mr. Rezentes: Years ago when they analyzed... they estimated how much...what percentage of debris was FEMA related. They did an engineering analysis. So at that time when that was done, those moneys were provided to us and set aside long -term for ultimate closure. Ms. Yukimura: It was set aside for closure purposes and it's been getting interest every year. Mr. Rezentes: Correct. COUNCIL MEETING - 94 - January 25, 2012 Ms. Yukimura: So that the interest goes back into... Mr. Rezentes: Stays within the Solid Waste Fund. Ms. Yukimura: Okay. And then the Solid Waste Disposal Fund No. 3, is that the tipping fees that we collect or a portion of the tipping fees? It's the $7.2 million, well as of June 30, 2011 and then there's $300,000 plus in subsequent years. Council Chair Furfaro: Just before you returned, we identified the $7.2 million on page 28 of the CAFR. But in subsequent years, if I understand the Vice Chair's question, that's going to be a new budgeted item each year coming over from you? Mr. Dill: I'm sorry, which line item is going to be the new budgeted item? Council Chair Furfaro: The three hundred and... Mr. Rezentes: It's ongoing. It's been ongoing for... Council Chair Furfaro: But it shows up in your operating budget. Mr. Dill: It'll show up, yes. Mr. Rezentes: In the Solid Waste Fund operating budget, yes. The Note 3 on Table II, the amount that's set aside annually is based on a dollar per ton basis and it's spelled out actually in the contract with the operator, how much is set aside on a per ton basis, and I believe there is also a CPI, again in the last paragraph, the last sentence, CPI factor that's also calculated into the amounts that are set aside. Ms. Yukimura: And these are out of the...who gets the tipping fees? Or how is the operator involved with this? Mr. Rezentes: When the contract was originally let to bid, the analysis at that time was done where the estimated amounts of closure was calculated and it was actually like a bid line item that was bid upon by all vendors. There's no commitment to the contractor for these funds. What will happen in the end when we are in the closure phases, we have this pot of money available and we will bid it out to the open market. But how we go about setting aside the funds was done via the contract. But what we hope to do with this analysis that Larry's consultants will be doing the first quarter of this year is take a look at all the hard and soft cost estimates in the future, including considering the lateral and vertical expansions that have been approved, and then estimate how much we need then and then we can reanalyze how much we need to set aside annually to reach that estimate. And in the end we may be setting aside too much money, right now. It will all be dependent upon the analysis. Council Chair Furfaro: That is why we're going to ask Larry to come back after the evaluation, and Larry, we're depending on you to raise the red flag on that after it gets reforecasted. Ms. Yukimura: Okay, so, may I? Council Chair Furfaro: Yes. COUNCIL MEETING - 95 - January 25, 2012 Ms. Yukimura: So when the contract was signed with the operator, you said the figure that he bid was set and that's been what we've been collecting annually? Mr. Rezentes: Yes, it's on a certain amount per... Ms. Yukimura: From the contractor? Mr. Rezentes: No, no, no, it's from our tipping fees. Ms. Yukimura: From our tipping fees. Mr. Rezentes: Yes. Ms. Yukimura: Okay. The figures have been taken from tipping fees. Mr. Rezentes: And the County, again, it was a pretty unique bid. I wasn't around at that time, but... Mr. Dill: Neither was I. Council Chair Furfaro: Okay, gentlemen, you've noticed the disclosure here that it was a unique bid and neither of you were here, okay. Mr. Rezentes: But the important thing is the County is in 100% control of that fund. Ms. Yukimura: That's important. Mr. Rezentes: And we have the ability to bid out with that fund. Ms. Yukimura: So we're not obligated to this contractor to give them the bid to close it? Mr. Rezentes: No, no. Council Chair Furfaro: I think he said that earlier. So it was unique, but it achieved the goals that we wanted. Ms. Yukimura: As long as the contractor doesn't hedge...I mean if he had a stake in closure, then what he does right now, every day and every year, he'd do it to set up the closure cost so that they would be as reasonable as possible. I mean that's the only thing you have to watch in terms of how he does the day -to- day operations to the extent that they affect closure in the long run. Mr. Dill: Yes, but the estimate of the actual closure cost, what it will be, is being done by a separate engineering consultant. So we know, how much, according to that third party estimate, will be the required amount. And then as Wally was mentioning, we'll be revisiting this number to make sure we're setting aside the appropriate amount to meet that cost at the appropriate time. Ms. Yukimura: Well, I think it's good that you have a third -party consultant. Thank you. COUNCIL MEETING - 96 - January 25, 2012 Council Chair Furfaro: Well, I think it's good that Larry's there because he has experience with closing the emergency landfills and has gone through this in another life. Are there any more questions here, because we are at the last item. Councilwoman Nakamura? Ms. Nakamura: I just wanted to thank you for preparing this because we spend a lot of money preparing the CAFR, and I think there were a lot of good constructive criticism, and I think this discussion takes us to the next level to address the concerns and see what we can do to improve efficiencies within the County. So thank you for getting us there. Council Chair Furfaro: Wally, I want to tell you that although each year we go through this process, it is delightful that we have a summary that we don't have to come back to the various department heads this time and say "and we agree on a completion by this date" and I'm saying that very graciously, Larry. So the last three items, we're depending on you to raise the flag rather than us send a worksheet that says, "You will give us feedback by April 15." Wally, it's important for you to also understand that when we come to the EUTF presentation, we're not writing to you and mandating it must happen by a certain date, we're leaving that in your hands, and we will schedule it appropriately. And I would like to echo Councilmember Nakamura's thank you for the great narrative and we are depending on you now for the final summaries. Is there any more discussion on this item? This is our last agenda item for today. If not, is there anyone in the audience that wishes to testify? Seeing no one. There being no objection, the meeting was called back to order, and proceeded as follows: Council Chair Furfaro: Okay, we need to vote on receiving this. Did I have a motion? Mr. Watanabe: Yes. Council Chair Furfaro: Okay. Yes, what do you have? Ms. Yukimura: Did we...I didn't get a copy of your figures? Council Chair Furfaro: Well, I'll give you one and the way I left it, I left my comments with Mr. Bynum in Finance and I said, if we go this next route, then clearly we'll bring back the external auditors, okay? Because for us to be going through, I summarized my presentation verbally, but Mr. Bynum has the worksheet. Ms. Yukimura: Okay. So just to clarify for me, we didn't defer the matter, we will put it on as a new matter? Council Chair Furfaro: If Mr. Bynum wants it as a new item, I suggest we put it as a new item and with the external auditors. I summarized the worksheet earlier, showed what page numbers we had, and pointed out the differences in Mr. Bynum's sheet and mine are on page 28, which sets up the landfill $7.2 million. Ms. Yukimura: Okay, thank you very much. The motion to receive C 2012 -25 for the record was then put, and unanimously carried. COUNCIL MEETING /wa - 97 - January 25, 2012 ADJOURNMENT. There being no further business, the meeting was adjourned at 5:05 p.m. Respectfully submitted, RICKY WATANABE County Clerk