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BUDGET & FINANCE COMMITTEE
FY 2010-2011 Departmental Call-Backs and Additional Budget Reviews
MINUTES
April 20, 2010
The FY 2010-2011 Departmental Call-Backs and Budget Reviews of the Budget & Finance
Committee of the Council of the County of Kaua`i, was called to order by Daryl W. Kaneshiro, Chair;
at the Council Chambers, 3371-A Wilcox Road, Lihu`e, Kaua`i, on Tuesday, April 20, 2010
at 1:18 p.m., after which the following members answered the call of the roll:
Honorable Tim Bynum
Honorable Dickie Chang
Honorable Daryl W. Kaneshiro
Honorable Lani T. Kawahara
Honorable Derek S.K. Kawakami
Honorable Bill "Kaipo" Asing, Council Chair
Excused: Honorable Jay Furfaro
The meeting proceeded as follows:
Mr. Kaneshiro: Councilmember Furfaro is excused for this session. The
notice of agenda was posted. Today's notice of agenda would be in regards to the departmental
callbacks and additional departmental budget reviews concerning the mayor's 2010-2011 annual
operating budget, and we'll also be discussing the employee furlough issues with the administration.
So at this time, members, before I open it up to the administration to do the presentation, any
questions on the procedures? Okay, with that, good afternoon Gary.
GAR,Y HEU, Administrative Assistant: Good afternoon budget chair and committee
members. For the record, Gary Heu. With me this afternoon I have to my left Malcolm Fernandez,
director for personnel services, to my right Wally Rezentes our county finance director, and at the far
right we have Marc Guyot, deputy county attorney. First of all I want to apologize for the late start
of this hearing, and I do want to thank the council for accommodating our request to deal with the
furlough issues on a specific hearing date. versus across the course of departmental reviews o£ our .
various budgets. And I guess what I'd like to do is first off acknowledge that CounciTmember Bynum
had made a request of the mayor that all department heads be available for today's discussion, and I
just wanted to let you know that all department heads are on-call as of one o'clock this afternoon, so
. they are available for discussion when we get to that point in the discussion if it's so appropriate.
I guess I wanted to preface today's discussion by saying that first of all, and it's not to
necessarily lower your expectations for the discussions today, but just to put the discussion in
context...in the proper context. Number one, we are currently in the planning process for developing
our ultimate furlough plan. It is a work in progress. Certainly we don't come here today with all the
I's dotted and the t's crossed. We are in daily communication with our counterparts on the other
islands in the *other counties, and we are all in that same canoe paddling up the same stream and
trying to collectively formulate our plans. You know, we're hoping that there's a certain level of
consistency across the plans that are currently being developed, and I just want to emphasize that it
is a work in progress. In addition, there is a need for us, before we can speak publicly about our
specific furlough plan that those plans be reviewed with the union. Additionally, we think it's
critical, it's the right thing to do, to notify our employees of our proposed furlough plan prior to
taking that plan out to the public. So again, I just wanted to kind of frame our discussion that we
~ • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 2)
will be having today in terms of the types of information that...type of information that we can share
with the council at this point in the game, and those things that we are unable to do. Let's see, I
guess what I would propose is that this first portion of the meeting we will provide council with a
little background, an overview, and try to address the questions that were posed in a number of
communications that have been sent to the administration, including there is a series of questions
that were embedded in the posting for this meeting today, there was an April 16 communication
which came over from the budget chair which had a number of questions relating to furloughs in
that communication, and then there were also some furlough questions that were embedded in the
budget follow-up communication for the mayor's office. So again, we'll do the overview, we'll attempt
to make our way through those questions that were posed, and then at that point in time, you know,
we would leave it to the discretion o£ the committee in terms of where to proceed at that point in
time based on the responses that we've provided, the overview we've provided, and if committee
members or the committee' chair felt that it was appropriate at that point in time to bring in certain
department heads for additional discussion, then I would propose that we take a short break and call
those department heads and have them available for discussion with the committee. So again, that's
how I would envision that we proceed through this discussion. If there's no questions at this point in
time, we'll just continue with our overview.
Mr. Kaneshiro: Any questions from the members at this point? If not, Gary,
go ahead and continue with your presentation.
Mr. Heu: Okay, thank you. Okay, just for some background, I mean
some of this information is information that committee members may already know, but for the
public, it would be good to know that there have been agreements that have been entered into with
two of our public employee unions, being Hawai`i government employees association and the united
public workers, regarding furloughs. The HGEA agreement was signed on October 14, 2009, and the
UPW agreement was signed on February 23, 2010. On November 24, 2009, a communi'cation went
out to all department and agency heads from our director of personnel services regarding the
furlough plan, with the exception of one department, and that was the prosecutor's office; that was
an oversight, and we apologize for that oversight. And the purpose of that communication was to
alert department heads to the need to begin planning for the potential implementation of furloughs
within the county, and so what accompanied the communication was what I'll refer to as a survey,
and I think...let's see, we got copies right? Yeah, maybe we can have those copies distributed so you
guys can see the communication that went out and the survey that accompanied the communication.
Basically what it did was it stated that we would be looking at following the State's lead in
terms of attempting to identify two specif'ic days per month for which we would implement furloughs.
We asked departments and agencies to review their own operations and their unique operational
needs, and if they were unable to accommodate...their operations were unable to accommodate a set
schedule like that, then to let us know why and then to propose a schedule that would allow them to
still implement the two-day furlough, but perhaps on a different type of schedule. Once that
information was collected and consolidated, there were a couple rounds of interviews that were
conducted by our management team, and that team was consisted of Malcolm Fernandez, Marc
Guyot, and Tom Takatsuki of personnel services. And so they met with every department and
agency and let's see, the first meeting or the first round of interviews began around March 15, 2010,
and then there was a second consequent interview for selected departments on April 1, 2010. Based
on that, what we've come up with is a master schedule...a proposed master schedule, and then also a
number of schedules that accommodate unique or specif"ic operational needs. So what I can share
with you today is that approximately 70 to 75 percent of our operations/employees would be covered
under the set two-day furlough plan, and so it would look similar to the type of schedule that the
State has developed and implemented for their furloughs. When I say similar, it may not be exactly
like the State's, but the concept behind it is very similar. So again, that would cover approximately
70 to 75 percent of the operations and employees in those operations. There is a portion of the
' • • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 3)
operations and the employees within those operations that would...two-day furloughs would be
accommodated by using staggered scheduling. And so we have tentative schedules for that
component of the operation. And then there's a very small portion, a very, very small portion of the
operations and the employees within those operations in which case we might have to go to the union
and seek waivers or exemptions for those employees, and that may mean proposals or negotiations
dealing with reduction in pay for that set of employees. Again, at this point in time, because you
know our plans have not been reviewed with the unions at this point in time, because some of this is
still in fliix, you know, we're unable to get into specif'ics as to departments, agencies, and specif'ic
employees covered under, you know, any one of these three components. So I mean that's where we
stand currently. Like I said, you know, it's a work in progress, there are still a number of areas that
are being reviewed in terms of furloughs in regards to our bargaining unit employees, as well as
other non-bargaining unit employees. I wish we had all the answers at this point in time; we just
don't, but we continue to seek out those answers working closely with our attorney's office. I mean
I'm sure Mr. Guyot's workload has increased by a hundred percent merely by the fact that we're
considering implementation of this furlough plan, because there's so many details to try to...to
attempt to vet. And so we've been working closely with the attorney's office, with our personnel
services department, and in conjunction with the other counties. And like I said, this is pretty much
kind of like a daily activity where people are checking in with each other as we encounter obstacles,
calls are being made, and discussions are taking place as to how to overcome certain obstacles.
Because in the final analysis, you know, this is something that no one necessarily wants to do; we
would not have proposed it in our budget if we didn't think it was a necessary thing to do and the
prudent thing to do. But we take this very, very seriously, and we want to assure that when we do
roll the plan out and it's reviewed by the unions and we've communicated appropriately with our
employees that we've done the right thing in terms of how we go about implementing. So with that,
that's pretty much in a nutshell our overview, and we'd be more than happy to start working our way
through the various communications to address specif'ic questions, unless there is some discussion
that the committee wanted to have at this point in time.
Mr. Kaneshiro: Okay with that, any questions? So what I got from this is
that you basically have a working documents, you're working with the unions, right now you're
still...it's an ongoing process, and what I hear is that once this is done, once you've done that, work
with the union, you will formulate a way where you will be able to inform employees, and at the
same time, the process employed...or hope to inform whoever else needs to be informed. Is that what
I'm hearing right now?
Mr. Heu: Right. There has been one communication that's already
been sent out to employees, and again, we felt it was the right thing to do, we thought it was the
appropriate thing to do that prior to transmitting the budget for...over to council for consideration,
we did send out a communication from the mayor to all our employees indicating that the proposed
budget contained provisions for a 2-day furlough. Again, you know, we've had the State out in front
of us in terms of implementation of furlough plans, and you know, there are certain things that
they've done better than others. Certainly, I think communication to the public was one area that I
think, you know, as everybody's racing to deal with this and get this done, I think there were certain
areas relative to communicating specific furlough days to the public that probably everyone would
acknowledge could have been done better, so having the State out in front of us, trying to learn from
things that they've gone through, you know, we are starting to put together our communication
plans in terms of when we are finally able to roll this out to the public, how we'll go about doing that.
Mr. Kaneshiro: Okay. I just want to caution my committee members that
there might be some personnel issues what I hear Gary saying that are ongoing negotiations, so
perhaps, you know, we have to at least be aware of that and take that into consideration. And I
would ask that if we start going into that route, either Gary or personnel or someone, you know,
advise us in those areas. So I just wanted to put that out, because this...as you know, it's an ongoing
• • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 4)
process right now working with unions, working personnel involved, and all of these at times
deserves some sort of conf"ide...how do you say that? I'm not too good with those highfalutin
words...conf'idential, you know, negotiations, let's put it that way. So but if we find that we're going
in that direction, I'm sure you're all here to caution us. So any questions as we proceed?
Mr. Bynum.
Mr. Bynum: Hello Gary, gentlemen. So we've already concluded contracts
with the unions that allow for furloughs.
Mr. Heu: Agreements, yes.
Mr. Bynum: And that allows...it doesn't require furlough, right?
Mr. Heu: No.
Mr. Bynum: So we didn't negotiate any amount of furlough. We
negotiated the ability to furlough up to two days, is that correct?
Mr. Heu: That's correct.
Mr. Bynum: And during those negotiations, were there any discussion
about alternatives to furloughs, like across the board reduction in pay, or reduction in pay for
essential workers that we maybe cannot have furloughed?
Mr. Heu: I'm going to let our deputy county attorney answer that, only
because he was involved in some of the specif'ic negotiation. I mean I have my sense of, you know,
what took place, but I think better to get it from our deputy county attorney.
MARC GITYOT, Deputy County Attorney: Thank you. I'm Marc Guyot with the county
attorney's office. The first negotiations we had last year with HGEA, that was the basis of federal
arbitration and the three-arbitrator panel. Out of that as the final settlements came together, there
was the choice of pay cuts or furlough days. The union wanted the furlough days. In working with
UPW, those were also options, and ultimately it was decided that the furlough was the way that they
wanted to go. So those were considered and those were looked at. During the HGEA arbitration
which went on for approximately 6 days, I believe, to various times, they had looked at all different
ways of cutting expenses for the State and county budgets, and this was one area that they were able
to make the inroads at that they felt comfortable with. At the same time, we were having a decline
in tourism, which had a great effect on both the TAT as well as the sales tax within the State. The
real estate market had started to drop, at which point the counties, their reliance upon the real
property taxes was planning dropping. Although there's that one-year lag from appraisal year to tax
collection year, it was easily foreseeable. I believe that played part of the role as to why the State
went immediately to their exercising of the furloughs the first year, where the counties held off until
the second year. I think that answers some of your questions.
Mr. Bynum: Some State workers in essential positions have negotiated
cuts in pay, is that correct?
Mr. Guyot: Some State workers in essential positions? I believe you're
talking about the bargaining unit 10 arbitration agreement? An arbitrator decided that certain
members of the Hawai`i State Hospitals, as well as State correction officers, some would be getting a
pay cut, others were allowed to go on furlough. That was an arbitrator's decision. It was ultimately
accepted by both parties, but it was not a mutually agreed upon settlement that bypassed. That was
the arbitrator's decision.
• • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 5)
Mr. Bynum: So there are State workers that are doing like a 5 or 6 percent
pay cut as opposed to furloughs.
Mr. Guyot: Yes, based upon the bargaining unit 10 decision from the
arbitrator.
Mr. Bynum: And is that an option for the county of Kaua`i?
Mr. Guyot: Not without a waiver from any one of the unions.
Mr. Bynum: So that wasn't part of the discussion with the unions?
Mr. Guyot: It was an option that was offered, but they chose to go with
the furlough.
Mr. Heu: I'm sorry. If I could, you know, provide additional follow-up to
that. When you say is that an option for Kaua`i, when I mentioned that last component of the
operations and employees, when I went to the three components of our operations and the employees
tied to those operations, I said the third component was a very, very small portion of the operations,
and the employees for which we may enter into discussions with the union to seek a waiver or an
exemption, and that's what we would be talking about the possible negotiation of a decrease in pay
for those employees.
Mr. Bynum: In terms of which employees are furloughed, that's the
county's option, right?
Mr. Heu: I believe so, yes.
Mr. Bynum: (Inaudible)
Mr. Guyot: I'm not sure exactly your question. Let me see if I can
attempt to answer (inaudible). SHOPO and the fire department are not part of the furlough
negotiations; their contracts were not impacted by this, and as such, their members are not part of it.
The county has the option of zero to 24 days of this fiscal year for UPW and HGEA employees; that is
the agreement that we have now with the unions.
Mr. Bynum: And so...if it's up to the county which of the employees they
choose to apply that to. We're free to say this group of employees no, this group of employees one
day, this group of employees two days; we have the flexibility about how to apply this, is that
correct?
Mr. Guyot: Yes, the agreement was zero to 24.
i
Mr. Bynum: Mr. Chair, I have lots of general questions. Is that...we go
now?
Mr. Kaneshiro: Would you like them to address some of the questions that we
sent over? First we have some questions that we sent over first, and maybe have them address
those, and it may tough on some of the general questions that you have.
Mr. Bynum: One other question.
• • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 6)
Mr. Kaneshiro: Okay.
Mr. Bynum: And then we can move on.
Mr. Kaneshiro: Yeah, and that because we have the... These questions were
all posted on the agenda, and also we have the communication that I sent out as of April 16, and of
the April 12 I did send a communication to the mayor's office with some furlough questions also. So
you know, if we want to take those up first...
Mr. Bynum: So I just have a couple questions that directly about what
you said, and then we can go to that.
Mr. Kaneshiro: Okay, yeah. If that's okay with committee members. Alright,
go ahead Mr. Bynum.
Mr. Bynum: You mentioned notifying employees, when did that occur?
Mr. Heu: That occurred prior to us transmitting the budget, so if we
had transmitted on the 151h, I would say it was the payday just prior to that.
Mr. Bynum: Right, because your budget anticipates and gives us some
specif'icity about who in terms of which positions are in the budget are reduced or show cost savings
based on furloughs. So you notified the employees three or four weeks ago, roughly.
Mr. Heu: Right around the time of the transmitting of the budget.
Mr. Bynum: And did every county submit a budget that included two days
of furloughs, to your knowledge?
Mr. Heu: I believe that Maui county, their budget's currently under
review, and up for decision-making. I believe the budget that was transmitted by Mayor Tavares
reflected a one-day furlough.
Mr. Bynum: But from the things that you passed out, department heads
have been planning furloughs since November of 2009? Mr. Heu: That's when we sent out that document, yeah, that
communication.
Mr. Bynum: So as we go on today, you should have some specif'icity to the
questions we've answered...asked.
Mr. Heu: We may have some... It depends on the question. I mean if
the question really speaks about the implementation of the plan or what the plan is, we're not going
to be able to get into specifics.
Mr. Bynum: Thank you.
Mr. Heu: Sure.
Mr. Kaneshiro: Mr. Kawakami has a question.
• • APRIL 20, 2010
. CALL-BACK (Mayor's Office) (Pg. 7)
Mr. Kawakami: Thank you. Not a question for the admin, but more a
question to you. You chairing this meeting, and I think the overall intent of this meeting was to
have some specif'ics on the plan, you know. If we're not ready, and that's understandable, what is
the net result of this meeting?
Mr. Kaneshiro: Yeah, I think what I want to try to do...
Mr. Kawakami: It seems to be premature, in my opinion, if the admin is
saying hey they need more time to come up with a plan. If that was the meat of this meeting and
`they're not ready, you know, what are we (inaudible).
Mr. Kaneshiro: Let me try to explain how I see this. From what I got from
the presentation from Gary today, there is an ongoing talks between unions and how and who and
how they going to implement it. So I believe and I know they don't have a plan ready until they have
that established. So that I'm certain about. So if I may, and I agree with you, I totally agree with
you that, you know, it might be premature to discuss some of this plans and so forth at this point,
but what I expect is that when we come to decision making, which is on I believe on May 10, we
should...we would like to have also these, you know, answers or plans and whatever we can get at
that time. Because through decision-making, that's the most important time. That's the time we're
going to be sitting down, we're going to be discussing the budget, we're going to know whether the
TAT funding was cut or not by the Leg, because I believe the Leg gets out on the 271h, and then at
that time we'll know where we stand. So yeah, but little premature. So what I wanted to do today is
try to address some of the questions during the budget. There was budget follow-up questions that
came about. Some went specifically to the mayor's office, and some were specific questions to the
furlough program. So what I as chair would like to do today and attempt to do is try to go through
the questions that we can answer, and I believe there are some questions in here that we may not be
able to get an answer from the administration at this current time because of ongoing negotiations
and personnel matters. So I believe there is, and if I am, I know Marc will correct me at that time,
and if there are. But at the same time, I would like to at least take the questions, you know, there's
financial savings questions on one-day furlough compared to two days, basic questions, fringe
benefits packages due to furloughs, and things like that. So if we could, at least we can continue to
address those questions, and when it comes to the point where we into decision-making, then we can
get into the employee side of the program, you know. By that time I'm hoping that they've already
reached an agreement and a plan for us to be able to do that. So if I may today, go ahead and
address some of the questions that came up, and these are more...if we look at some of the questions
or some of the more basic overall questions on savings and stuff like this. So is that okay with the
committee?
Mr. Kawakami: No, that's fine. It's just, you know, and you bring up the good
point. Until we know what real property tax certification, what...there's a conference committee
tonight at 7:30, we really have no idea financially.
Mr. Kaneshiro: I totally agree. Currently, all I can tell you is that the two
days furlough are in the current budget, which amounts to about 4.5 million. So it's in there right
now, just to let you know. We all saw the budget, that's in the budget. Currently, also, the 12
million or so is in the budget of TAT taxes. So you know, currently I know it's in there, but again, it's
premature for us to say what the end results will be until the Leg is over on the 27th, and then
we'll ...and as Gary stated, we need, you know, to see where we're at on the certif"ied real property tax
revenues and so forth.
Mr. Kawakami: In all fairness, though, to the rest of the committee, there is
value in finding out what the plan is, if there is a plan, and if there isn't a plan and that's what we're
• • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 8)
looking for, I say hey get them back to work, work on the plan, and when you guys are ready,
come back.
Mr. Kaneshiro: I agree.
Mr. Kawakami: And if there is no plan and we're spinning our wheels, let's
call a spade a spade, but let's go through the questions and, you know, let's see what we come
out with.
Mr. Kaneshiro: yeah, and then we'll be able to address some of the questions
today, so some of the same questions may not need to pop up during the decision making process,
because we're going to get a lot of work as we go through decision making process and so forth once
we see where we're at through real property tax revenues and also TAT taxes and so forth. So it's
just a lot of more work ahead of us. So at this time, Mr. Bynum.
Mr. Bynum: Can I get one thing clarified right now, because it just got
said again. Mr. Rezentes, is the savings from furloughs 2.4 million or 4.6?
(Inaudible).
Mr. Kaneshiro: So we'll go through it, and that's why I said, let's go through
the questions because they are here about one year, two year, and so forth. Go ahead
Councilmember Kawahara.
Ms. Kawahara: Thank you. No, I think it's important to have this discussion
now, considering that you have been in discussion with the unions and with the employees since
October 14 or before. So my understanding is that you got a signed agreement with HGEA on
October 14?
Mr. Heu: Yes.
Mr. Guyot: The signed agreement was for zero to 24 days. It did not
address the operational implementation of that plan.
Ms. Kawahara: Okay, and then UPW was signed on February 23, 2010?
Mr. Heu: Yes.
Ms. Kawahara: Same thing?
Mr. Guyot: Again yes, zero to 24 without the specif'ics of the operational
plan.
Ms. Kawahara: Okay. Are you aware...can you tell me off the top of your
head how many union members we have in the county under all of our unions? I have an old sheet
here from 2009, so instead of us talking about furloughs, I want to talk about how many bodies we're
talking about in our county that's going to affect these bodies, these people, these hardworking
people.
Mr. Kaneshiro: Do you have that, personnel department, roughly how much?
UPW and HGEA numbers; that's all she's asking.
~ • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 9)
Mr. Fernandez: Offhand I can't give you the exact number, but it's about 150
each, probably little bit more, so maybe about 3, 400.
Ms. Kawahara: Okay, so do we just have HGEA unit...HGEA and UPW as
union workers?
Mr. Fernandez: Reflected in the furlough plan would be those units, UPW and
HGEA.
Ms. Kawahara: Okay. I have something here and I'm going to send it over for
clarif'ication. It has a county of Kaua`i number of union workers, does not match up with what you're
saying, so I just want to make sure that I get the right numbers.
Mr. Fernandez: Well, that number is from our office. Those numbers are from
our office, so if that's the numbers, then those are the numbers.
Mr. Kaneshiro: What are they, if you have it. Can you let us know?
Ms. Kawahara: Yeah, I want to share this with everybody, of course, because
this is where I assume that we'd come and bring it to public discussion. It was something that was
sent out from Nora at Hawai`i.gov, which is HLRB, and it was to the county council, and the Chair
shared it with us, I believe, for all the councilmembers about the county of Kaua`i and how many
number of employees are in what unions, and it goes from unit 01 to 13. So I've got 356 in unit 1,
and 13 is...unit 13 is 120, and everything in between, 2 to 12, are those also units that are included
in our negotiations?
Mr. Fernandez: You know, I think I misspoke, because you know, I was
thinking about...it's a split of 300 really is SHOPO and HFFA. It's the other way around where you
have a bigger pool in UPW and HGEA than the other two units.
Ms. Kawahara: So it's not... Is it just unit 1 and unit 13 that we're discussing
about?
Mr. Fernandez: No, unit 1 is UPW, unit 2, unit 3, unit 4 is HGEA, and also
unit 13.
Ms. Kawahara: Okay. So I guess I have staff copy this for me and maybe we
could get updated numbers. When you decided...when it became something that we were...that the
administration and the State of course was looking at, did you...when you provided us with the
budget and announced to the... actually announced and made notice to the employees, had you
looked...was it an across the board reduction of 7 percent for all departments, or was there some
kind of acknowledgement of different sizes and different departments? Because as we have people
coming up here to discuss the budget and the reductions, they are saying that they got a 7
percent...they were told to do a 7 percent total. ,
Mr. Heu: Right. II
Ms. Kawahara: Is that correct?
Mr. Heu: That's correct.
• 0 APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 10)
Ms. Kawahara: Okay, so I guess my question is, so there wasn't any
indication or thought about it was an across the board, one size fits all department, 7 reduction in
department spending.
Mr. Heu: That was the guidance.
Ms. Kawahara: Okay. And when we're talking about whether we need to do
this stuff, was there any idea or consideration put into the size of departments, the duties, the
revenue making abilities, and other efficiencies when that 7 percent was put out across the board?
Was there considerations on the different types of departments and what kind of...what duties they
do and what their employees do in relation to the size of the department and what they do and what
it would impact, not only the government programs, but also private and businesses?
Mr. Rezentes: In general terms, that was the guidance that we provided our
departments, knowing full well that some departments can accommodate a greater degree of budget
reductions than others, the 7 percent was put out as a general percentage that we wanted
departments to attain. If you look at everyone's departments, you know, there's not one that met it,
you know, exactly. It's a variation. As presented, the budget reductions vary by department,
so...and we know that full well based on past practice and history that, you know, you may send out
guidance, but in reality when you, you know, from the initial scrubs and adjustments that are made
in the budgeting process, some may, you know, be able to attain a little more than that, some will not
be able to attain anywhere near that, but... And I think the budgets as presented show that.
Ms. Kawahara: Okay. I would like to check on that, because I thought
everybody had come up and said that we had to do 7 percent and that's what they did. And that
there weren't people...well, one department said they were going to do less, and another department
said well these are the things that we would have to do to cut at 7 percent.
Mr. Rezentes: You'll find that it varies from department to department.
Ms. Kawahara: Okay. And also I think...are we going to go down this list,
budget chair? So that we can...as individually? That's what you're going to go do. Okay.
Mr. Kaneshiro: That's what I stated as the procedure.
Ms. Kawahara: Okay, so I just want to make sure that that was what was
going to happen, because I was wanting to see that. But the overall picture I wanted to know about
whether it was a one size fits all, and then also how many union members we're talking about.
Thank you.
Mr. Kaneshiro: Okay with that, Gary, you may proceed with some of the
questions that were sent over.
Mr. Heu: Yeah. What we'll do is we'll start with the April 16
communication from...let's see, from budget & finance chair, and I think the majority of these
questions are going to be addressed by Mr. Rezentes.
Mr. Rezentes: The first question is, as it relates to employees holding
federally funded position, is there a plan to furlough these Positions. If so, Provide an exPlanation of
why these positions would be furloughed. And what happens if the federal funds are not expended,
i.e., are they returned, appropriated elsewhere, etc.
• • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 11)
Our plan was to furlough positions that belonged to HGEA and UPW bargaining units,
irregardless if the positions were funded by the general fund, highway fund, wastewater fund, etc.
The implementation of furloughs could impact grant-funded positions; however, all efforts will be
made with the granting agencies to re-channel or reprogram funds to other grant eligible areas of the
department's budget and/or request for extensions where possible. The re-channeling of moneys, as
well as the requesting of extensions to spend down on grant funds, is not an unusual occurrence in
the county. It has happened on numerous times before. I don't know if you want me...
Ms. Kawahara: As related to spending down, do they make a distinction
between what is a salary versus what is a program spend down?
Mr. Rezentes: It may vary by the specific grant source.
Ms. Kawahara: Okay, so there's a possibility. So in general they do both?
You've done both before, you spent down a salary and a program and they've been okay with that?
Mr. Rezentes: Sure. The funds could be program (inaudible) for a program
and some portions of the grant may be specified for salary and wage related items. Oftentimes the
county department could, you know, go back to the granting source and request for a reprioritization
of how the grant funds are expended, and they may also ask for extensions beyond the specif'ic
deadline for the expenditure. And the...you know, it can run the gamut. It depends on the flexibility
of the funding source.
Ms. Kawahara: Okay. Thanks Wally.
Mr. Rezentes: The next question is, why is there a decrease in retirement
contribution. Explain how retirement costs are impacted...
Mr. Kaneshiro: Hold on. Wally, hold on. He has a question in relation to the
first comments and answers you gave.
Mr. Bynum: So the...regardless of whether the grant can be
reprogrammed, there's no savings to the county by furloughing those workers, is that correct?
Mr. Rezentes: There's no savings by...
Mr. Bynum: There's no savings to the county budget by furloughing
federally funded workers, or grant funded for that matter.
Mr. Rezentes: You know, if you can reprogram moneys to...that would
otherwise have gone to general funded positions, you know... For example, if you have moneys
that...if a position was earmarked to be general funded and you had an employee that was a grant
funded employee, but now you're not going to utilize all the grant moneys that was supposed to be
earmarked for this particular employee, potentially you could re-channel that moneys to pay a
portion, perhaps, of the general funded employee's salaries. It all depends on the grant source.
Mr. Bynum: Right, it all...but that's a bit of a stretch.
Mr. Rezentes: Yeah, I can tell you it has happened a number of times, so...
Mr. Bynum: Yeah, I've... Yeah. Most likely...but it will be a loss of
productivity to the county if those workers are furloughed.
• • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 12)
Mr. Rezentes: Perhaps.
Mr. Bynum: Are you aware of the study High Cost of Furloughs from the
University of California-Berkeley?
Mr. Rezentes: I reeeived a copy of it. I glanced through it a while back.
Mr. Bynum: So because you know, we do have guidance from other States
and other counties that are ahead of us in this game, and you know, this study indicates that federal
funded positions are very unlikely, if not impossible, to be any savings, and it reduces productivity
and increases cost. So you know, we've had time to look at the experience and to listen to economists
and listen to studies about the true cost of furloughs, and you know, I'm... I can tell you I'm coming
from the assumption that there's no savings to the county from the federal...from furloughing
federally or grant funded individuals are very unlikely that there could be savings. But those
, employees would have to do work to make requests to change the provisions of their grants. Correct?
And they'd have to do that when they were furloughed and had less time to do the additional work.
Is that correct?
Mr. Rezentes: Yes.
Mr. Kaneshiro: I think we can follow up with a question on that, Tim,
perhaps. Yeah, I got it now.
Mr. Bynum: You know, in many instances those funds will have to be
returned. Is that correct?
Mr. Rezentes: No. I can't say for certain. Again, it depends on the ability of
the department and the agencies, and the agency's willingness to allow for either extensions or
reprogramming or rechanneling of the funds to other grant eligible areas of the department's budget.
Mr. Bynum: Thank you.
Ms. Kawahara: At that point when you...are you able to give us an idea about
how much money you would be reprogramming at any point?
Mr. Rezentes: It would be after the fact, yeah.
Ms. Kawahara: It would be after the fact.
Mr. Rezentes: Sure. I mean, you know, just budgeting by nature, you know,
you always have...you're never fully staffed for the most part. Most departments are never fully
staffed. I mean we run vacancies that are funded...where the positions are funded by numerous
funding sources, including federal grant sources. So it's not unusual...I keep repeating myself, it's
not unusual that moneys are reprioritized after obtaining the proper federal granting agency's
approval to different areas of the budget, to different employees within different areas of the budget.
So I mean it's not unusual that we...a budget is made then adjustments are made to accommodate
the operation that's ongoing.
Ms. Kawahara: Okay. This will be an easier question because it's the
opposite. Are you able to tell us which positions or which grants would for sure absolutely be
jeopardized?
APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 13)
Mr. Rezentes: No. I would need to I guess get more information from the
appropriate source, you know. We would probably need to work with our different departments
specif'ically.
Ms. Kawahara: Okay. Would that be helpful to know?
Mr. Kaneshiro: We'll come with a communication.
Ms. Kawahara: Okay, yeah. I guess it will be helpful to know exactly what
positions and what funding specif'ically would be jeopardized that you could...that you know
specif'ically. Thank you.
Mr. Kaneshiro: Any other questions in regards to the first bullet or the first
point that the administration presented? Yes Mr. Bynum.
Mr. Bynum: Well that's why I wanted to talk to the department heads,
because if they've been on notice for some time, hopefully they've begun an analysis about which
grants can be reprogrammed and what's involved in that...
Mr. Heu: They have.
Mr. Bynum: And so we can ask those questions when they come up later.
Mr. Kaneshiro: Yeah, but I think, you know, at this time we should send a
letter out in that regards and get the communication back, rather than bringing each department
head here and asking each department. I mean what is the nature of that?
Mr. Bynum: Mr. Chair, we've had two weeks of budget hearings where we
haven't been allowed to ask furlough questions. These are the questions...
Mr. Kaneshiro: Mr. Bynum, I have given you the floor...we've been doing this
right now. I told you what we're going to do, but what you want to ask the department head to come
before this committee of 7 is to tell me what are the federally funded positions or what isn't. Why
can't we get a communication over it and have it sent back with an answer on a piece of paper.
Department heads cost us money. To bring them here to ask them that question, you know, it just
doesn't make sense for me-as a budget chair...
Mr. Bynum: v All I'd say, Mr. Chair, is that we weren't allowed to ask these
questions when the department heads were here, and that we set aside this time to do it, the
administration...
Mr. Kaneshiro: Mr. Bynum, I hear you, but I'm not going to...
Mr. Bynum: You're interrupting me. May I finish?
Mr. Kaneshiro: I'm not going to allow you, because you requested from the
administration or from me to bring the administration department heads back to ask them this
specific question about whether they have federally funded employees and how many federal funded
employees they have.
Mr. Bynum: And how are they going to...have they done an analysis of
what will happen to those federal funds? Have they started the process? Have they talked to their
I
~ 0 APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 14)
grantees? Have they talked to the federal people? They've had since November, at least, to know
that this was coming.
Mr. Kaneshiro: So you're saying that we can send a communication in that
regards to have them write that on a piece of paper back to us; we have to have them here physically
to answer us?
Mr. Bynum: And when will we have time to follow up with those answers?
Mr. Kaneshiro: You know, I'm trying to run this committee in a real proper
manner where each and every one of us; including 7 members, you know, have the opportunity to be
able to do and ask other questions they need be. So if you want to take a vote right now on the floor
and find out if that's what the whole committee wants to do, bring all the department heads back in
here to give us an explanation of all the grant fundings, the amount they spend for the grant
funding, what are their plans, rather than send a communication over, I'm ready to take the vote
and do that.
Mr. Bynum: Mr. Chair, I'm sure you'll prevail. You know you have a
majority of this committee, and you know, my role as a councilmember is to do the due diligence. We
have these budget hearings set up exactly for this kind of discussion. You know, I wasn't happy that
we weren't able to do this over the last two-week period when the department heads were here. We
rushed through our budget sessions and were out by noon by most days when we'd scheduled for the
full day. I wasn't happy when we started this today at one o'clock, but I heard a commitment from
the administration to be available to answer those questions to the best of their ability at this time,
and I'm being constrained from doing that by these rules. That's my...
Mr. Kaneshiro: Hey, I'm not constraining you. All I'm tell you, that's
ridiculous to have department heads here before us, every single department head who's what, paid
over probably hundred thousand dollars, to be sitting before us to make a presentation to you, when
you can send a communication to them and we can get the written communication back by next
week. That's all I'm saying.
Mr. Bynum: I'll stand by my statement. This process has constrained
me...
Mr. Kaneshiro: If you feel... If you feel...
Mr. Bynum: May I speak?
Mr. Kaneshiro: If you feel that, you know, the Chair is not making a right
decision by trying to save money from bringing these guys back here rather than having them out
there, do the job that they're doing rather than sitting here for another two hours waiting for you to
ask them the same question over and over, fine and well. But I'm telling you right now, as Chair,
I'm not, you know, I'm not going to allow that to happen with the administration.
Mr. Bynum: I'm not going to allow you to speak, councilmember, is what
you're saying.
Mr. Kaneshiro: You know what, we're in recess.
There being no objections, the Chair recessed the meeting at 2:12 p.m. The meeting reconvened
at 2:26 p.m., and proceeded as follows:
• ~ APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 15)
Mr. Kaneshiro: Budget session now called back to order. -
Mr. Rezentes: Retirement contribution is a percentage of total salaries and
wages: therefore, a reduction in total salaries and wages will result in a reduction in retirement
contribution. For every dollar reduction in salary and wages due to furloughs, there will be a
corresponding reduction of 15 cents or 15 percent in our contribution to the employee retirement
system.
Question number 3...
Mr. Kaneshiro: Hold on one second. Let me see if they have committee
members have questions on that.
Ms. Kawahara: Yes.
Mr. Kaneshiro: Go ahead Councilmember Kawahara.
Ms. Kawahara: Thank you. Regarding the retirement contributions, can you
tell me, is it going to affect the employee's high fives, is it going to delay their retirements because
of...
Mr. Rezentes: Salaries... You know there's a question along those lines...
Ms. Kawahara: Later?
Mr. Rezentes: Yeah.
Ms. Kawahara: Okay, I want to be sure to make sure that's covered. It's
,down here somewhere. Okay good, thanks.
Mr. Kaneshiro: Continue.
Mr. Rezentes: Number 3, do you anticipate furloughs will decrease vacation
time taken by employees, and is there a cost associated in the short and long term? I don't anticipate
or think that furloughs will decrease vacation time for employees; I may be wrong, but I am not sure.
This is an area where, you know, we're kind of uncharted waters right now. I don't.think we've done
furloughs in my history, so I can't speak, you know, using history.
What is the county's policy regarding vacation usage during the furlough period? Yeah, I
think that's more of a Marc...
Mr. Guyot: That is an area that's pending review with the unions. There
was some questions that they had that they...how they wanted to apply it. So at this point it's an
issue that we're aware of, and it is one of the pending issues that we're going to be reviewing
with them.
Mr. Kaneshiro: Okay, you could probably catch...so go right into the next
bullet point, because that's the question that probably Councilmember Kawahara was referring to.
So would you cover that bullet point on number 4, how will furlough affect employees.
Mr. Rezentes: How will furloughs affect employees that are near retirement,
and will it motivate these individuals to retire early? Employees near retirement may be affected by
furloughs, as their average high three years of pay, from which monthly pensions are factored, may
~ • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 16)
be reduced. The decision to retire is an individual one based on a number of considerations. So
basically, you know, if an employee's...if the employee who's retirement eligible is in a position
where he or she is likely to make their higher three salary years during that period, you know, they
will be affected. .It is a decision, again, that would be individual in nature whether they opt to retire
or wait to future years to make that decision.
Mr. Kaneshiro: Go ahead.
Ms. Kawahara: Yeah, if I could continue off of that. So people that are
usually close to retirement, they're the ones that actually probably would have the most experience
in that workplace and maybe have the institutional memory of that department? Is- that usually
pretty much how it works, right?
Mr. Rezentes: Yes.
Ms. Kawahara: And you are aware of the State furloughs and how that has
caused a great outfluY of people that want to retire when they heard about the furloughs, and that
they're losing a great...high level of expertise and experience when the furloughs were discussed and
taken into consideration, and that they...the unions had noticed that they had a lot of people
converging to do a retirement before those took place?
Mr. Rezentes: You would have a better knowledge base than me, as a State
employee. I assume everything you said is correct.
Ms. Kawahara: Okay, but...so you would expect that to remain also true for
the county? You are aware of that if this is part of your furlough plan?
Mr. Rezentes: I wouldn't doubt it.
Ms. Kawahara: Okay, thank you. And if we go back to the vacation. So when
they...when you're discussing it, just on a broad base, if they take vacation versus a furlough, is that
a savings or not?
Mr. Guyot: No, the county would not see any savings if someone is
scheduled for a day off and they take a vacation day...
Ms. Kawahara: Instead.
Mr. Guyot: ...although to a certain degree, that's factored into the yearly
anticipation of employee's actions. So it's not a direct...
Ms. Kawahara: But if they took a furlough...
Mr. Guyot: That's part of the things we're negotiating.
Ms. Kawahara: ...they could take a vacation instead and get paid, yeah?
Mr. Guyot: That's part of what's being negotiated with the unions.
Ms. Kawahara: Okay, so but they could switch it...then that's what you're
discussing, they could switch it.
~ •
APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 17)
Mr. Guyot: Perhaps, and it even gets more complicated than that, and I
don't mean to hide the ball...
Ms. Kawahara: No, no, I understand.
Mr. Guyot: It's just that union rules on vacations and days off can get
very complicated. So when you affect one part, you now affect the other. And that's what we're
trying to work through, and that's why it is somewhat delicate at this point, and why on the other
hand the counties and the State, as well as the other employees, judiciary and so forth, are trying to
have somewhat of a uniform program so that it makes sense to all the employees, it makes sense to
the union, and makes the most sense to the employers. This is one of those little speed bump ones
that can get very complicated, and it shouldn't be from what it looks like.
Ms. Kawahara: Okay. No, I appreciate the answer. So for those two
questions, I think I'm okay now with those for now. Thanks.
Mr. Kaneshiro: Tim.
Mr. Bynum: So there's a reduction in payments to the employee
retirement system because they are a percentage of pay, and if there's a reduction in pay, there's
a...but the cost in the long run are still the same, yeah? Aren't we kicking those costs out into the
future, because there's fewer deductions, but our obligations remain the same?
Mr. Rezentes: You know, there's an actuarial analysis done by the
retirement system based on, you know, total salaries by different classes of employees. So it's
averaged over time, you know, in the retirement system's, you know, determination of how much the
counties...each county and the State pays into the system. So I think over time it'll average out, but
yes, it does impact, you know, to a certain extent in the long term.
Mr. Bynum: Right, so there's a reduction of contributions, but there's not a
one for one reduction in the obligation.
Mr. Rezentes: Possibly. I don't know the...
Mr. Bynum: It's likely it's unlikely to reduce our long-term obligation to
our employees. Is that correct?
Mr. Rezentes: Yeah, I don't think its...
Mr. Bynum: Okay.
Mr. Rezentes: I don't think it would be significant, but yeah, there would
be...
Mr. Bynum: Okay, thank you.
Mr. Rezentes: Okay, the next question. If employees are furloughed,
productivity will decrease by one or two days, yet the fringe benefit cost will remain the same.
Explain how furloughs would impact the fringe benefit cost for the county.
Mr. Rezentes: If the county...if the employees are furloughed, fringe benefit
costs will not remain the same, except for health fund benefits, yeah. Similar to the retirement
system contribution, you know, the county would save in the 7.65 percent paid for social security, 15
~ 0 APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 18)
percent again for the retirement system, and 24 percent for OPEB costs, other post employment
benefit costs, that is contributed.
Next question is, provide a breakdown of one, the first one, the financial savings with the
one-day furlough versus a two-day furlough. And I think Councilmember Bynum, the numbers that
I gave you was based on HGEA alone, and I was advised by my budget administrator who updated
my numbers for me, inclusive HGEA and UPW total, the approximate two day savings of...in
salaries is 3,183,000 and in fringe benefits 1,158,000. One a one day furlough, it's 1,590,000 in
salaries and 579,000 in fringe benefits.
Mr. Bynum: Five hundred and?
Mr. Rezentes: Seventy-nine thousand.
Mr. Bynum: So roughly one furlough day is two million dollars, roughly, or
a little over.
Mr. Rezentes: Two point one, yeah.
Mr. Bynum: Two point one.
Mr. Rezentes: Two point one, two point two. I'm not sure really what the
answer that was...you guys wanted for this question, but the question was, the fringe benefit
package due to furloughs. Assuming the exclusion of SHOPO and HFFA, salaries and wages would
be 352 million, and retirement contribution about 5.1 million.
Mr. Bynum: I'm sorry, you said retirement?
Mr. Rezentes: Retirement contribution 5.1 million.
Mr. Bynum: One point five... I'm sorry.
Mr. Furfaro: Five point one.
Mr. Rezentes: Five point one. Salaries and wages 35.2 million. These are
excluding SHOPO and HFFA 35.2 million, and retirement contribution 5.1 million.
Mr. Kaneshiro: So what you're stating is a total amount of earned wages?
Try that again.
Mr. Rezentes: Salaries and retirement contribution.
Ms. Kawahara: Thirty-five point two million would be the savings?
Mr. Bynum: No, no, the cost.
Mr. Rezentes: The actual cost. Right, correct.
Mr. Bynum: With furloughs... Or without?
Mr. Rezentes: No, no. It's inclusive of furloughs.
Mr. Kaneshiro: Oh I see, okay.
. . ~ •
APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 19)
Ms. Kawahara: Is there a difference between (inaudible), so would just be
double? (inaudible)
Mr. Rezentes: You can...you would increase the 352 by roughly 1.6 on the
salary side, and the retirement system would be roughly 15 percent of that total, because it's based
on 15 percent.
Mr. Kaneshiro: Committee members, you got that on the breakdown? You
have a question, Councilmember Kawahara?
Ms. Kawahara: Salary and wages 15 percent. So what was the fringe benefit
package breakdown...or is the second bullet.
Mr. Kaneshiro: The second bullet, the fringe benefit package due to
furloughs.
Mr. Rezentes: You understand that question?
Mr. Kaneshiro: Not really. I'm trying to get...
Mr. Rezentes: (inaudible) talked about the benefit packages in the
appropriate questions above, they didn't really understand that (inaudible) to be honest.
Ms. Kawahara: Okay. I was hoping you did.
Mr. Kaneshiro: Perhaps...did one of our committee members write that
question, perhaps we can have some explanation on that?
Ms. Kawahara: Sounds like a Jay question.
Mr. Kaneshiro: But we got the financial savings with the (inaudible).
Ms. Kawahara: No, no, no. I mean he knows what it means.
Mr._Kaneshiro: Yeah, I`m trying to understand this.
Mr. Rezentes: Sorry. You know, I just got the questions yesterday, but you
know, trying best to answer, you know, on relative short notice.
Ms. Kawahara: How furloughs will impact fringe benefits costs.
Mr. Kaneshiro: Staff informed me that that was one of the questions that was
brought up with one of the members not here today. So what we'll do is I'll have our staff come with
another communication in regards to that...
Mr. Rezentes: I mean you understand, I thought I...I figured I answered. If
that's the question, you know, I kind of answered that earlier where, you know, I said, you know, the
salaries, retirement system for example is based on salaries and wages is based on 15 percent, OPEB
is based on 24 percent of salary and wages, social security, fica is based on 7.65 percent of wages, so
those benefit packages are a function of or are a percentage of the salary and wages, right. So I'm
assuming that's similar to the question that's now being posed.
• 0 APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 20)
Mr. Kaneshiro: Okay, we'll go ahead and have that noted, and if he
had...need further clarif"ication on that, we'll come back with a written question. We'll go ahead and
have that noted, the answers you gave us, and if the committee member need more clarification on
that, we'll come with another communication in that regards.
Mr. Rezentes: Okay.
Mr. Kaneshiro: Do you have anything else you wanted to ask on this?
Ms. Kawahara: Just so... Chair, he's reading from something. Are we going to
be able to get that so...
Mr. Rezentes: I'm reading from chicken scratch.
Ms. Kawahara: Oh. So will we be able to get his written responses to these
questions along with the ones he's saying now, because especially with the percentages he's
discussing about fica and all that.
Mr. Kaneshiro: That's not a problem. We'll get a written get back to us on
that.
Ms. Kawahara: For all of these, yeah.
Mr. Kaneshiro: Okay.
Ms. Kawahara: Okay, because taking the notes in regards to his answers...
Mr. Kaneshiro: Right.
Ms. Kawahara: Probably won't cut it.
Mr. Kaneshiro: Okay, and who's going to address the next question we have?
Mr. Heu: The last question on the April 16 memo is, how do you intend
to maintain the current level of bus service if bus drivers and dispatchers are furloughed, and again,
that is still under review. e
Mr. Kaneshiro: Okay. Okay, understandable.
Ms. Kawahara: And that's under review because they're figuring out if they
can stagger them, or... That's the general question, I think, yeah.
Mr. Heu: We're looking at a number of different options, and you know,
bottom line is that we would hope to be able to maintain the current level of service, but there's no
guarantee that we will be if in fact we implement the two day furlough.
Ms. Kawahara: Then Mr. Ayat(sic), the options cannot be discussed...that
they're looking at?
Mr. Guyot: Yeah, they're (inaudible). We need to go through with that.
And the bus is a unique department, so again, because of the almost...I want to say 24/7, but the 7
day a week with the hours, it does create some unique things that need to be worked out.
. . ~ ~
APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 21)
Mr. Rezentes: Six days.
Mr. Guyot: Six days.
Ms. Kawahara: Six days, not 24/7 either, okay, good. Thank you.
Mr. Kaneshiro: Okay Gary, thank you.
Mr. Heu: So I guess we'll move on to the questions posed in the notice
and agenda. •
Mr. Kaneshiro: Alright.
Mr. Heu: In general, on the first three questions, you know, I would
defer to my opening comments and overview relative to the sharing of the plans, except for on
number one where there is the review of legality, I'll let our deputy county attorney address that.
Mr. Guyot: As we previously said before, the HGEA and UPW have both
agreed to zero to 24 furlough days. So that deals with the majority of their agreement, as well as we
now have concurrence of the union, which would tend to make it legal.
Ms. Kawahara: (Inaudible) address legality.
Mr. Heu: Okay, jumping down to question number 4...
Ms. Kawahara: No, no. No.
Mr. Kaneshiro: Hold on, she has a question on that. Go ahead Lani.
Ms. Kawahara: The most important one here is, how are you going to
determine which employees are exempt? I mean how is that going to happen?
Mr. Kaneshiro: Which one you're talking about?
Ms. Kawahara: Number 2...
Mr. Kaneshiro: Okay, we're still one one yet.
Ms. Kawahara: Oh, he was going to go to 4, so I went to 2.
Mr. Kaneshiro: We're still on number 2 yet on the comprehensive review, and
he was addressing the legality portions of it. But we can more on to 2 at this point.
Mr. Heu: I guess I was making a run at trying to generalize the
questions 1, 2, and 3, outside of the legality question. Really kind of fall under the umbrella of the
overview that we did upfront in terms of how we were able to...or how we identif'ied three different
components of operations and employees, and I guess specif'ically when Councilmember Kawahara
was asking about exempt employees, I guess good question. I mean if you could be more specif'ic
about exempt, maybe we could better answer that.
Ms. Kawahara: Who would be on your list as exempt...or public safety that
are in the old terms essential.
APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 22)
Mr. Kaneshiro: I guess she's referring to question number 2. If you look at
question number 2, right there, it says the issue of employees who are exempt from the county of
Kaua`i's employee furlough plan and so forth; that's in relationship to that.
Mr. Heu: You know, I can't really speak to what classes of employees
were previously categorized as essential because I think that predates me, but basically in our
analysis, there may have been some employees who in fact were previously classif'ied as essential
workers, but you know, we worked very hard with specific departments and agencies to make sure
that those essential services were still covered and that we would still be able to service them
adequately. And so based on that, you know, those employees schedules may be covered under the
set two days schedule, or they may be set under the staggered schedules.
Ms. Kawahara: So the specific one that I'd like to go to, in your budget
there's $159,800 two day furlough a month reduction in water safety officers, and I'd like to know if
they are not part of your furlough process, or you are considering them as people that will be okay
to furlough.
Mr. Heu: Yeah. Again, we're currently in the planning process, and so
we are reviewing all classif'ications, categories of employees. So currently... I guess the short
answer is yes we're still reviewing furlough plans for water safety officers.
Ms. Kawahara: Okay, because I know that you didn't furlough fire or police,
because that shows no furloughs, but...
Mr. Heu: We don't have an agreement that allows us to do that.
Ms. Kawahara: Right, so they're not, right?
Mr. Heu: Right.
Ms. Kawahara: So but in this case there's a specific notification that these
people are on the line of a furlough.
Mr. Heu: Yes, currently that's how it's reflected in the budget that
we're proposing.
Ms. Kawahara: I would like to know, if possible, how will you determine
whether or not they are not to be furloughed.
Mr. Heu: Well, currently, again, we would like... First of all, I'd like to
say that we'd like not to get into specific discussions about specific categories of employees, because
again, we have not had that review with the union. So if I tell you that yes, water safety officers will
be furloughed and that we have a plan to do that, then we would be getting out in front of ourselves
in terms of our need to discuss that with the union. We're just using that as an example.
Ms. Kawahara: Okay. So I guess it's just the thing then, if you weren't ready
to discuss it but you put it in the budget, it's just to help you to help us know that that's a
possibility?
Mr. Heu: Yeah, we were...I mean part of it is to illustrate how we
intend to balance the budget.
APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 23)
Ms. Kawahara: Okay, and that's why we're here to wonder if you...so that is
one of your intentions right now as you go through discussions with the unions.
Mr. Heu: Yeah, so...
Ms. Kawahara: Because that's your intention is what's in the budget.
Mr. Heu: Yeah, so for every...for all the classes of employees that we
showed a reduction attributable to furloughs, that is the planning process that we're currently
going through.
Ms. Kawahara: Okay.
Mr. Kaneshiro: What union do they fall under?
Mr. Heu: HGEA.
Mr. Kaneshiro: HGEA.
Mr. Heu: Yeah.
Mr. Kaneshiro: Okay. They are HGEA members.
Mr. Heu: Yes. ,
Mr. Kaneshiro: Alright.
Ms. Kawahara: So when... This is for budget chair.
Mr. Kaneshiro: Go ahead.
Ms. Kawahara: In the big picture...so when we're... When will we be able to
find out...I mean at what... We will be able to get all these answers before we make budget
decisions?
Mr. Kaneshiro: Yes, and that's the comment I made when I first started the
meeting.
Ms. Kawahara: Yeah I know. I mean I want to make sure because there's a
lot of stuff that's on the we'll wait and see.
Mr. Kaneshiro: I stated for the record that we'll be starting decision process
on or about May 8...May 10... On or about May 7 we will have the supplemental budget back to us,
and I believe on or around that time that possibly with union negotiations on certain items
(inaudible), we will have answers by that time.
Ms. Kawahara: Okay, so by May 8 or May 10 we'll have all this union stuff
answered.
Mr. Kaneshiro: You still get union involved.
Ms. Kawahara: No, that's what I'm asking about if whether the unions will be
able to answer all of these for us.
~ 0 APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 24)
Mr. Heu: Yeah, you know, I would...it be wonderful if we had that
much control over the unions. Unfortunately we don't, and we... I mean we have our schedule,
there's no doubt. I mean by charter, we have our budget schedule that we need to adhere to. The
unions don't necessarily...
Ms. Kawahara: Well, they have a vested interest in making sure they give
you enough information too. •
Mr. Heu: Well, I mean if we take the State as an example on the UPW,
I mean look how late in the game the UPW issues was resolved. So again, we know what our
timeline is, but we cannot speak for the union relative to committing them to those timelines.
Mr. Kaneshiro: Okay, Tim? ,
Mr. Bynum: This budget, when approved, goes into effect July 1, right?
Mr. Heu: Yes.
Mr. Bynum: So any furloughs if we have furloughs, they will start on
July 1?
Mr. Heu: Yes.
Mr. Bynum: Okay, so let's just look at this timeframe. Last
November...October, November, you informed department heads that they need to be prepared for
two-day furlough, potentially, right?
Mr. Heu: Yes.
Mr. Bynum: Okay. Then we come...you submit the budget and the budget
tells us you intend to furlough certain groups of people.
Mr. Heu: Yes.
Mr. Bynum: Does that include all...every single HGEA worker?
Mr. Heu: I believe it does.
Mr. Bynum: And it includes every UPW worker.
Mr. Heu: I believe it does.
Mr. Bynum: Okay, so I don't need to go down the list and talk about people
that perform services that may be very difficult to furlough, like police dispatchers or public safety
workers at the police jail, or water safety workers, or wastewater employees that run a 24/7, or solid
waste, or you know, parks facilities...
Mr. Heu: It's all inclusive.
Mr. Bynum: So I can't ask questions there. We going to still clean parks
restrooms every day?
~ • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 25)
Mr. Heu: If that is impacted by the potential schedule, then we really
couldn't speak to that.
Mr. Bynum: So we have this thing that department heads are to be
preparing since last November for this potential of furloughs, the budget gets submitted a couple of
weeks ago. During the budget session you asked for a deferral to discuss the implementation...you
know, how are services going to be impacted for our citizens, how are these issues going to be
addressed for our workers, and you're not prepared to discuss that today, right. You just said, these
first three questions you don't want to discuss today. The budget is due...the supplemental budget is
due to us on the 7th of May. On the lOth we're to do deliberation and decision making; that's after.
So we get the budget on a Friday. On Monday morning we're to do deliberation. Even if you answer
these questions in writing, where is the public dialogue about the impact of services for the citizens?
Where is the dialogue? If it doesn't happen now during budget, which is where we normally discuss
these kind of things, and it doesn't happen today at this special session that we did, when is the
public dialogue? I keep hearing premature, it's premature to have this discussion. I don't think it's
premature at all. We had this...our department heads... I've had some of these discussions offline
with departments-how you going to handle water safety officers, how you going to handle? They
have... They're thinking about it, but we can't talk about it. I've got...
Mr. Heu: Primarily because... and you understand why we can't talk
about it, right?
Mr. Bynum: No.
Mr. Heu: And it's because we have not...the unions have not reviewed
our furlough plans.
Mr. Bynum: The unions already know you're going to furlough, right?
Mr. Heu: They don't...there's a need for us to review our specific
schedules, the furlough plan, with the unions prior to discussing them with the public.
Mr. Bynum: So this plan will be implemented before there's any dialogue
that the public can participate in.
Mr. Heu: I couldn't answer that.
Mr. Bynum: We have to make... I have to make decisions about budget
without ever having the answers to these questions.
Mr. Heu: Well, like I said, you know, in my overview, I believe what I
represented was we do have a schedule that shows how 75 percent of the operations will be
impacted. We do have schedules that show the staggering of furlough for a certain component of our
operations. We have not reviewed those schedules and our plan with the unions as of this time, so
it's not as if we are totally unprepared for this. I mean there's been a lot of work that has gone in to
this, and it's not an easy...it's not an easy task, because there's a lot of discussion and consideration
that needs to go into building a plan like this. What I'm saying is although the plan may be
available, it has not yet been reviewed with the impacted unions, and so therefore we're not able to
discuss it on the floor today.
Mr. Bynum: Or any time prior to decision making on the budget.
• • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 26)
Mr. Heu: Or any time prior to discussing it with the unions, having it
reviewed by the unions.
Mr. Kaneshiro: I also heard from you that there's a smaller portion where
union exemptions for some of what we call essential. I know we don't use that word anymore, but
- essential workers to possibly include some reduced pay. That is still ongoing, what I'm saying, right.
Mr. Heu: That discussion still needs to take place with the union.
Mr. Kaneshiro: If what I heard, so... So it's an ongoing process.
Mr. Heu: It is that.
Mr. Kaneshiro: We're not to be here to say that possibly there'll be no water
safety officers. What I hear is that there is a smaller portion of where you folks are still working
towards getting, you know, either this or that. So I don't want the general public to have the
impression either that there'll be no or none, you know. Because I heard you say that, and I heard
you say negotiations going on yet, or there probably be shortly from our attorneys, you know, there'll
probably be shortly to address things like this. This is all an ongoing thing. I mean you know...
Mr. Heu: I don't think currently, and I could be wrong, perhaps I
shouldn't speak out of school, but I don't think that any county at this point in time has had...has
done the review that I was talking about regarding their furlough plans with the union.
Mr. Kaneshiro: And I heard you're also working with other counties to
address some of these concerns.
Mr. Heu: Yes we are.
Mr. Kaneshiro: Because it's not only Kaua`i county that's going be impacted
by this. We're talking about city & county of Honolulu, Maui, Hawai`i, big island, but you want to do
it where everybody's on the same page, everybody's agreeable, because you all have all this other
unions and employees involved. It's not only one segment or one part; it's not only Kaua`i itself,
right? If I heard right.
Mr. Heu: That's correct.
Ms. Kawahara: Related to this stuff.
Mr. Kaneshiro: Go ahead, Councilmember Kawahara.
Ms. Kawahara: So related to this stuff, I understand that you need to submit
the plan, the furlough plan, to the union. So am I hearing that it's one succinct plan that you hand
in at one point, or you're handing it in individually as items come up and as questions are asked
regarding positions. Mr. Heu: I'm sorry, maybe I didn't catch the...
Ms. Kawahara: You say all the counties have not done a review of furlough
plans with the union.
Mr. Heu: Right.
• • APRIL 20> 2010
CALL-BACK (Mayor's Office) (Pg. 27)
Ms. Kawahara: Now when I'm talking about Kaua`i county, is a furlough plan
to you an item specific with all the issues that you're going to submit to the union at some point?
Mr. Heu: I think what we'll probably end up doing is, as an example,
the easiest thing to provide to the union would be the set two days a month schedule, which would
impact 70 to 75 percent of the operations. So that might be the first thing that we send to the union
for review, followed by once we are able to finalize the staggered schedules, that would be
additionally something that we would submit. And probably the most problematic area would be
those areas that...for which we would seek a waiver or an exemption.
Ms. Kawahara: And that's the 25 percent.
Mr. Heu: Oh no, it's a very, very small percent. I don't have a
percentage for you, I'm sorry.
Ms. Kawahara: Okay, so the 70 to 75 percent part of the package, the
employee furlough plan that is not...does not exist yet?
Mr. Heu: The schedule?
Ms. Kawahara: Are we going to get that?
Mr. Heu: It does exist.
Ms. Kawahara: Okay. Are we going to get that as a county council?
Mr. Heu: Once we've had the opportunity to review that with the union
and...
Ms. Kawahara: When will you be doing that?
Mr. Heu: In the very, very near future. I think we're very close to being
able to do that.
Ms. Kawahara: Are you going to be able to do that before we need to make
decisions on that part...before.we make budget decisions in May on that 70 to 75 percent?
Mr. Heu: The question is will we be able to send that up for a union
review prior to decision making?
Ms. Kawahara: No, to get a response from the union.
Mr. Heu: We would love to think that we could get a response from the
union prior to decision making, but we can't commit for the union.
Ms. Kawahara: Will you be able to send it to them in enough time where it's
reasonable to expect them to have it sent back?
Mr. Heu: I believe we will.
Ms. Kawahara: Then at that point the council can know what it is.
• • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 28)
Mr. Heu: At the point that the union has review it and that we've
notif`ied the employees, yes.
Ms. Kawahara: Okay, and then what happens with the other 25 percent of
employees that you said are not as easy to schedule or put into...
Mr. Heu: That would also go up to the union for review once we finalize
that.
Ms. Kawahara: And then from that 25 percent you said there's even a smaller
percent of people that we need to get waivers for?
Mr. Heu: Yeah, the third component would be for a very, very small set
of employees that we've deemed probably necessary to seek a waiver.
Ms. Kawahara: Okay, thank you.
Mr. Kaneshiro: Tim.
Mr. Bynum: So not all employees will be furloughed on the same day,
necessarily.
Mr. Heu: Not necessarily.
Mr. Bynum: So if we have a furlough Friday that has State workers
furloughed and county workers furloughed, we might still have the pool open with county workers
manning that recreational facility, for instance.
Mr. Heu: That's a possibility.
Mr. Bynum: And the jail will still be open, right?
Mr. Heu: Yes.
Ms. Kawahara: Are you able to say you have a plan at all right now...a
furlough plan, if it's not something that's approved by...that you've run through the union or
anything, but you've run through your heads, are you able to say that you have a plan at all
when...in regards to 998 employees of the county...or only a partial, 75 percent of a plan and 25...
Mr. Heu: I think that we can say that, again, as I've stated a number of
times that we are in the planning process, I think we are very close to certain parts of the plan... I
mean it depends what you want to define as a plan. If you want to define a plan as something that
covers all of our employees, if the answer...if the question is do we have a final...finalized plan,
furlough plan for the entire employee base, the answer would be no. But we've got components that
are either completed or very close to being completed.
Ms. Kawahara: Okay. Yeah, I would just hope...I mean furloughing, as we all agree yeah, is such a enormous endeavor, and it has such a large effect on all of everybody's lives. So
to have a plan, a full plan, with implementation and alternative would be optimal. Thank you.
Thank you Chair.
Mr. Kaneshiro: Okay. See, I guess this is a crossover on many of the other...I
mean if you look at it, some of the questions that we have here.
• • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 29)
Mr. Heu: So are we dropping down to number 4 at this point in time?
Mr. Kaneshiro: We already discussed some of that, right?
Mr. Rezentes: Yeah, we answered that in number 5, basically, you know,
how social security, retirement system, OPEB will adjust based on the percentage of salaries, and
the health fund would remain the same. I think I've answered that in the prior set of questions.
Mr. Kaneshiro: Okay.
Mr. Heu: Then our deputy county attorney has been chomping at the
bit, so we're going to let him take on question number 5.
Mr. Kaneshiro: Yeah, I think that we all understand... I mean we know that
they're in communication on this one, but go ahead, Marc. You wanted to add a little on that on
the...and the question is, the impact of county employee furlough plan on appointed and elected
employees.
Mr. Guyot: Okay. This is a question that's currently under review for
salary commission. They've tasked us with providing a legal opinion on that. Without letting the cat
out of the bag too early, salaried non-hourly employees, appointed and elected official all have very
different limitations on how their salaries are decided. There was a question of how the effect would
be perhaps on you folks, the councilmembers, and there was a decision given on that. Salaried
workers provide a unique situation for the county in a multitude of ways. It seems very simple, but
there are a conflict of laws, so to speak...conflict of rules that affect temporary furlough or a long
period furlough. And this one year fiscal year is considered a long...it's considered not a temporary
furlough. Some of the laws that are created to address that deal more with State and federal
budgets where they get to the end of their fiscal year and they realize we're going to be tight for the
next 90 days, and we've seen it a few years back and recall Washington shutting down for a few
days. Cali_fornia's done that a few times. So that's under a temporary furlough. When it's this long,
it creates a different effect. We call it by the same name, but legally it's not. And that's what's
taking a bit of time to explain it to salary commission that there is a way to do it, and what they can
do with that, and it will be for the different types of employees. You can't just lump them as
non-hourly. I wish it was that simple, but the way the charter allows for certain salaries to be set
and the appointing authorities for those people, what powers they have, it creates a very
interconnected system that needs to be dissected and explained in compartments, if you will.
Mr. Kaneshiro: Tim.
Mr. Bynum: Well, you know, the budget has appointed positions
furloughed, right. And I know that department heads and councilmembers are subject to the salary
commission, and I believe our Chair has asked those questions of the salary commission, and you
know, so I hope there's an answer that if we furlough that we're all in the same boat, regardless of
whether you're salaried or appointed or elected that furloughs should apply to those departments
and get furloughed. That's what we're seeking an answer to?
Mr. Guyot: Yes, we're seeking to accomplish that, and it's been important
that we all share the same boat. That is the gist of it. It's trying to work all those components in
order to achieve fairness with everybody going into the same boat.
Mr. Bynum: Thank you. I just wanted to hear that kind of more straight
forward like you just gave it, as opposed to... Because you know, if I'm listening to that at home, I'm
• • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 30)
thinking what did he just say? Did he say that supervisors aren't going to get furloughed? But
that's why we're trying to make sure that that...
Mr. Guyot: Trying to accommodate it, do it properly, and do it legally.
Mr. Bynum: Right, okay.
Mr. Kaneshiro: Can we...
Ms. Kawahara: And elected officials.
Mr. Kaneshiro: Can we move on to...
Mr. Guyot: Some elected officials.
Mr. Kaneshiro: Number 6. I guess, Gary, you want to speak on this?
Mr. Heu: If I'm not mistaken, number 6 is what may have created a
firestorm previously, and so I'm not sure if... You know, the only thing I would add to the discussion
is that our department heads were impacted by these federally grant federally funded grant
positions have been in communication with federal agencies providing that funding. And so those
discussions are ongoing, and so I wanted to say that on the floor so that you didn't think...that
councilmembers didn't think that that hadn't been addressed or was not being addressed. I mean
certainly those discussions have been ongoing, and whether or not we've got a definitive on each one
of those funding sources, I couldn't tell you at this point in the game, but I can tell you that those
discussions are ongoing and have not been ignored.
Mr. Kaneshiro: Gary, what I wanted to add to that is that on March 15, 2010
as we were going through the budget review, I sent over three questions to you, and this was actually
from the Chair and from me as the budget chair, and one of the points or bullet points was on the
question number 3, a list of contractual positions funded by State or federal grants and the contract
period. And I believe that through the budget process, each department gave a list to us. They
showed us what are...or especially housing and the big, you know, organizations that have this type
of funding. But what I wanted to do to that is to add on, that if you could, besides that list, what I
would like to see is the total salary and fringe benefits of those positions, because Mr. Bynum
brought up a good point about, you know, they're federally funded, so how does it really affect us if
it's federally funded. I mean how does it affect the general fund when it's federally funded. So to
add to it, I think it would give us a good indication by looking at the total salary and fringe benefits
on the total positions that, you know, besides (inaudible). I believe most your departments already
submitted the amount and who and what grant programs they come from. But what would really
help is overall a total salary and fringe. benefit amount. Don't have to go specif"ic to that certain
position, but just overall through State and federal funding.
Mr. Heu: Okay.
Mr. Kaneshiro: Any other members has any questions on this item? If not, I
would like to move on to item number 7.
Mr. Heu: Okay, item number 7, you know, I think we discussed it a
little bit previously, an example of how we would communicate to employees. We, as I said earlier,
sent out a written communication to all employees notifying them that the two day furlough would
be reflected in the budget that we're sending over. Currently our director for communications, or
executive assistant Beth Tokioka, is in the process of putting together a communication plan for both
. . ' ~ •
APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 31)
item 7 and 8, internal communication, in terms of how we would go about dealing with
communication to employees, as well as to the public. Just very generally, because that
communication plan has not been finalized, but we would envision a series of ineetings with
employees. I believe that prior to the submittal of the budget, the mayor had actually contemplated,
you know, some large employee meetings down at the convention hall, but unfortunately we couldn't
pull that together in time, you know, as we were putting the budget together. And so we felt that the
next best thing would be to get a written communication out to employees. So it'll probably be a
combination of venues that we use, including larger employee meetings, workplace meetings, and
then written communications. As far as public communications, we will obviously use our news
releases. We will probably...you know, one thing that I saw relative to public notif'ication for the
State furlough days were, I think there as a lot of...not a lot, but there was some upset with the
public not knowing that...you know, I went down to the State building and found out it was closed,
you know, last week Friday. And so...and part of it is, from what I recall, I mean sometimes people
have to hear it five different times, they have to be touched five different times before, you know,
some of that messaging gets through. Now whether the State did that or not I'm uncertain, but
certainly we would be sending out a communications, news releases, with our furlough dates and
plans, and then what we would probably do is do follow-up reminders to the media, you know, a few
days before a given furlough day just so that as an example, you know, on the radio station they
could announce that don't forget tomorrow furlough day, you know, for the county, impacting these
departments. But that, we'd make use of our website, you know. You'd be surprised at how many
people actually today accessed the county website for information, so we'd definitely have it posted
there, as well as probably put notif'ications at our...over the counter locations where we service
customers face to face. But again, that communication plan, both internal and external, is in the
process of being developed at this point in time.
Mr. Kaneshiro: Okay. Any questions on that, members.
Mr. Bynum: Was that 7 and 8 both?
Mr. Heu: Yes.
Mr. Kaneshiro: Okay, any other general questions that committee members
have? Mr. Bynum.
Mr. Bynum: I think you said earlier that you think furloughs are
necessary. Is that correct?
Mr. Heu: Well, if I didn't... Yes, we believe that furloughs are
necessary to help us to balance the budget that we proposed. There are obviously other ways of
balancing the budget, but we feel that...and this is not necessarily a decision that came to pass
lightly, you know. And we do understand the implications of imposing a two day furlough. I think
that Councilmember Kawahara, you know, brought up a good point that in terms of something that's
impacting the State and may well impact the county, and that would be, you know, that there will be
some employees who may otherwise not have chosen to retire who may consider that based on
implementation of furloughs. So you know, we did take those things into consideration, but you
know, I think that's part of, you know, conducting business in terms of you know... This is not
something this is not something unlike what, you know, in the private sector company would
consider doing as it looks to deal with some of its fiscal challenges. I mean I came from a company
that at least seemingly during my career resorted to offering early retirement packages to employees
in an effort to reduce cost, and those seem the same situation that we're facing relative to the
potential of loss of, you know, corporate knowledge and that sort of thing. Those things impact the
folks in the private sector all the time, and there's no doubt that there are challenges that it creates
for the organization, but ultimately the organization gets through that and the organization is
• 0 APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 32)
renewed and revitalized and we would anticipate that the same thing will happen with the State and
county government. And so..:but again, I guess the point I'm trying to make is that, you know, we
did not arrive at this decision lightly. It wasn't something that, okay we have authorization to do
this, we have agreement from the union so let's impose it. I mean there as a lot of thought that went
into and continues to go into it.
Mr. Bynum: And what are those other alternatives? You said there are
alternatives other than furloughs.
Mr. Heu: Oh, I think you probably know those alternatives as well as I
do. I mean...and I think that as we have come through, you know, this budget review and this
budget discussion, I don't think that you've really...you've heard of certain revenue enhancement
initiatives that we're proposing, but I think the, you know, the 800 pound gorilla sitting in the room
is, you know, property taxes. Obviously that's our primary source of revenues, and we have not had
a discussion on that. We didn't think that it was a prudent decision to propose any increase at this
juncture without looking at ways that we could do everything that we felt was reasonable to reduce
expense, including looking at the furloughs.
Mr. Bynum: And we have done other things to reduce our cost, is that
right?
Mr. Heu: Oh absolutely.
Mr. Bynum: Like many things. We have how many vacant positions in the
county right now?
Mr. Heu: A number.
Mr. Bynum: And I've asked for that number in writing a few times, but I
don't think I've seen it yet. So you don't know that number, how many...
Mr. Heu: Yeah, I do recall that communication come in. I think it came
over as a budget follow-up question, and I think that between our personnel services department and
finance that we are working to get, you know, you all that information that was requested.
Mr. Bynum: But we have reduced our workforce considerably over the last
two years, is that correct?
Mr. Heu: I couldn't say off the top of my head. I mean I know that we
have held back positions; we have dollar funded positions that otherwise in the past would have been
fully funded. Yes.
Mr. Bynum: Well there were other positions that were fully funded that
were not filled last year, right.
Mr. Heu: Yes.
Mr. Bynum: And that resulted in a fairly large unappropriated surplus
even in a budget year where you cut the budget. Correct?
Mr. Heu: I would say that that is probably true.
• • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 33)
Mr. Bynum: And so you know, my...I applaud the administration for being
pretty quick out of the box, recognizing that we were going to have budget difficulties, and in last
year's budget and even prior to that, I think, really looking at costs in anticipation of having some
difficult budget seasons. So I think right now a lot of our departments are without, you know, people
working, and that's already caused an increased workload and stress on our employees. Would you
agree with that?
Mr. Heu: I'm not...I guess I'm not prepared to sit here today and say
that our employees are overtaxed and stressed. I mean that is not necessarily feedback that has
come back to me. I'm not sure what you're hearing. I think that everybody...
Mr. Bynum: The employees have had an increased workload?
Mr. Heu: Councilmember, I think that everybody understands the dire
straits we're in, and I think that most employees...I mean it's a small community. They look around,
their friends, their neighbors, their relatives have lost jobs, and I think most of our employees are
thankful to still be...to still have a job, and yes, you know, we're asking people to do, you know, a
little more with less. But in general, I think most employees understand the gravity of the situation
that we're dealing with.
Mr. Bynum: Well that's not really a question I asked, but I appreciate
those comments. The...I just wanted to see... I mean I think you agree that the administration has
taken a pretty proactive measure in terms of reducing cost and delaying equipment purchases,
reducing the workforce, you know, being very thoughtful about any hiring that occurs, dollar funding
positions, those are all things that you've done.
Mr. Heu: Yes.
Mr. Bynum: And I applaud those things, and I think they're good things.
You know, is the administration open to limiting furloughs if there is a viable way, and does the
decisions that the legislature makes about TAT impact that decision?
Mr. Heu: Oh absolutely, yeah. You know, I think the mayor, the
administration, we all remain open to all the possibilities, but I think what you see in our budget
proposal is a, you know, a reasonable approach to the unknown. We all wish we had a crystal ball. I
mean .you know, I mean we just don't know what the leg...where the legislature will end up, you
know. And so that's the huge unknown, but we remain open, there's no doubt about that.
Mr. Bynum: Well we may know tonight. It be nice to at least have some
certainty.
Mr. Heu: Well, but if they need to take a little more time to preserve
our TAT, we welcome that.
Mr. Bynum: Just for the record, Gary, your...the budget you submitted
anticipates two days of furloughs...
Mr. Heu: Yes.
Mr. Bynum: ...for all HGEA and UPW employees is what I heard here
today. Right?
Mr. Heu: Yes, and beyond.
• • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 34)
Mr. Bynum: I'm sorry?
Mr. Heu: And beyond... appointees and those other classes that we
talked about.
Mr. Bynum: Right, right, that we discussed. Your budget also anticipated
no increase in property tax in any category, is that correct.
Mr. Heu: That's correct.
Mr. Bynum: And is that the case in the other counties? Are other counties
making adjustments to their property tax that you're aware of?
Mr. Heu: You know I'm not certain about every county. I know
certainly that Maui county, because I've had a discussion with, you know, Mayor Tavares, and I
believe the big island also, but I couldn't get into any kind of specifics on that.
Mr. Bynum: So but the...if...because the budget also assumes at the
moment that the TAT revenues equal to last year's.
Mr. Heu: Yes.
Mr. Bynum: Which we hope the house prevails and that is the truth. But
so...I mean you have to start with...and I'm not being critical of any of those assumptions, because
you have to start with that, right. But you know, it's also possible that there's other opportunities
for a different mix by the time the next budget submittal comes on May 7.
Mr. Heu: Depending on what happens, yeah. As things become clearer
to us.
Mr. Bynum: Okay, thank you.
Mr. Kaneshiro: I want to inform councilmembers that some of the questions
that were asked about provide the list of vacancies and so forth from the administration, we did get
it today, so it's in your box. Okay, so thanks Gary, we do have that and it has all the vacant
positions, some of the vacant positions including, you know, and the total number of county
workforce and so forth. So this would help us too, but I...it's in our inbox now; it came in today while
we were in session. Thanks Gary. Any other questions for the administration while we have them
here?
Ms. Kawahara: It's an overall question about the furloughs.
Mr. Kaneshiro: Absolutely. Go ahead.
Ms. Kawahara: Can you ask...can you tell me what kind of information you
gathered when deciding to do the furloughs what the economic impact would be of 998 employees by
record that I have here on the local economy if you did furloughs and there was a reduced
expenditures on their part in the community? Was there a look at that kind of economic impact on
furloughs on the economy, the local economy.
Mr. Heu: I don't believe that was part of...you know, we didn't
necessarily...
~ • APRIL 20> 2010
CALL-BACK (Mayor's Office) (Pg. 35)
Ms. Kawahara: That was part of... You thought about it, though, yeah, about
what kind of...
Mr. Heu: I mean...I think that's been out...you know, that's been out
there. I mean ever since the, you know... I mean it's been on the blogs ever since the State
contemplated...
Ms. Kawahara: Yeah, since the State one.
Mr. Heu: So it was nothing that we factored into our decision making.
Ms. Kawahara: No?
Mr. Heu: No.
Ms. Kawahara: Okay.
Mr. Kaneshiro: Okay. Any other questions, if not we'll surely come up with
some follow-up questions, I believe, that we have. Anything else, my members, at this time before I
adjourn this...
Council Chair Asing: Yes.
Mr. Kaneshiro: Mr. Chair, go ahead.
Council Chair Asing: If I may, let me comment. You know, the budget process is an
ongoing process, and it'll be further refined when we have more accurate projection of all anticipated
revenue sources. At the present time the administration is proposing a$146 million budget. The
two major unknown revenue sources is the TAT and real property tax amounts. And they're
substantial. The real property tax could be in the area of $8 million, give or take, ballpark figure.
The TAT could range from zero to $12 million; that's the range. So there could be a possible shortfall
of between 14 and $20 million. We just don't know. Now May 7 the supplemental comes in. All the
things that we've discussed today could be meaningless, because it's at that time that we put the
package together and make the final proposal, that's what you will do. If we do not agree with you,
we vote it down. So councilmembers have the opportunity to-say no I don't like your answers, I don't
agree with you, I think you're wrong, I think you're way off, then Councilmembers are afforded the
opportunity to make their own proposal and vote the administration down. That is the process.
That is our budget process. So if councilmembers are not satisfied, not enough information, wrong
information, faulty, you make that decision as a councilmember at that time. So the system and the
way it's set up is the administration proposes and this council makes the final decision. You don't
agree with something, say here you go, you don't have it. Make your recommendations, though, and
then we'll vote on the floor on what we think is the right thing to do. So that's the process. Today I
think I've spent two and a half hours of getting almost nothing. I didn't feel anything was resolved.
My take is wait till the supplemental comes in. That's the...the meat is all there. Everything today
is...we anticipate, we think, maybe it's...we anticipate two days, it may be one day, I'm not sure, I
don't know the exact numbers that'll come in.
I can tell you that I watched the island pulse program on Thursday night. I cari tell you
what the chair of the senate ways and means committee made as far as a statement. The statement
was made on the question of TAT numbers for the counties. Here's the statement. At the most, 50
percent, half. Why? Here's the reasons that was given by ways and means committee chair. We
gave the counties an opportunity to tax if they wanted to, they turned it down. That's number one.
I
• • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 36)
Number two, did they furlough last year? They did nothing. The counties did nothing, so what do
you think the message is? We didn't furlough, number one. Number two, as I mentioned earlier,
what do you think is going to happen? If we don't furlough, then maybe next year if we had...if we
get 50 percent, we may get nothing. And so you're faced with that ho, that's the reason that was
given, and with that kind of inessage, I know where you're coming from and what you're trying to do,
and it is difficult. I know something about the real...the TAT. I've tracked the TAT back all the way
and found TAT going back all the way, and then all of a sudden you see no TAT going back. Because
what you will find is it is at that time that the grants-in-aid program was in effect. How did we get '
money from the Leg? Grants-in-aid. That was the program. And then came oh, oh we're going to
now tax the tourists for the use of county parks, facilities, lifeguard service, you know, all of these
services that we provide. So out comes the TAT tax now. When that tax was generated, what
happened was that each county had a share of that. Kaua`i county, this is your share. Hawai`i
county, Maui, Honolulu, State, convention center, everybody had a share in this. And so when you
look at that, it's like wow, there was a reason for that, there was an allocation of funds, and it's
reasonable. So in my opinion, it's...I don't think it's fair to cut that out now, because everybody had
their share. Everybody is still getting their share. Why should the State take all now? Something is
wrong. So I know a little bit about the history. I don't agree with the taking of the TAT, and that's
the reason for it. But I think that we have a process in place and we just need to follow that process.
But I watched that program and when I heard that, you know, the message to me is, wow I'm stuck,
and I know. I didn't agree with taxing either, taking that taxing power on. Why would I want to get
that power and now have the power to start taxing people? I'm saying to myself, they pay enough
taxes to start with. Why do we want that additional income? Enough is enough. So anyway, that's
my take on, you know, some of the issues today and this meeting today. I think, you know, as
councilmembers, you ask all the questions, you receive the answers, you don't like the answers, vote
it down. Come up with your own ideas, throw it on the table, let's discuss it, vote on it, that's the
process, and I think we should follow the process. That has always been the process, and we should
just go ahead and follow that process. Thank you.
Mr. Kaneshiro: Mr. Bynum.
Mr. Bynum: I agree with the Chair that we didn't get a lot of additional
information today in this hearing. I...you know, this is my fourth budget process to go through, and
I found this one the most frustrating in terms of, you know, for reasons that we all think are
frustrating. We don't know what the legislature's going to do. We don't know what the things are,
but I also see this as an opportunity for our county to really shine, because I think we have a lot of
really fine outstanding people working in the county that do a really hard job to serve the community
every day, and you know, my experience at budget hearings is that I feel really good about those
workers by and large, and about the efforts that we make. However, this year we went through this
process very quickly. We didn't get into goals, objectives, challenges. We didn't have a rich dialogue
that we could have had. Some of that we're going to refer into committee, because when we started
up and down that route it was like oh, let's ask the dollar questions and we'll put this in committee,
you know. So some of our budget hearings...where my first year we had callbacks on almost every
department and used every minute of every day to have this very rich dialogue. This year we were
out by noon and didn't even come back for the afternoon sessions. And then we scheduled this day,
and I have a laundry list of questions about how in this extraordinary year, if we implement
furloughs that will impact services to the county of Kaua`i for our citizens, how it will impact the
morale of our workers who already in my view are stepping up and working hard to provide the level
of service that they want for the county of Kaua`i with fewer personnel. We've already done a lot of
things to reduce our costs by not filling positions, dollar funding positions. And you know the result
of that is the county...the amount of dollars that are being paid to county workers is down
significantly already. And you know, the further impact of that is the dollars that are circulating in
our community are down already, because on the county of Kaua`i, our size, the smallness of our
island which we all love, means that our county employees represents a large portion of the middle
. ~ • APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 37)
class that, you know, is spending money in our restaurants and in our small businesses and stores.
This furlough proposal will take an additional $32 million out of circulation in our economy, so it
won't just hurt our workers, it will hurt our small businesses, and I think I'm afraid we will see more
of our...some of our favorite restaurants closing because a big portion of...as an example, not to
mention retail establishments and other establishments, it'll be difficult.
You know, regarding the TAT, I've heard the ways and means committee chair for four years
talk about the budget. The house agreed that it's reasonable and appropriate that the county of
Kaua`i get a portion of the TAT. Again, we host a lot of visitors who use police, fire, and all of our
roads, and all of our workers, and it's logical that they would help pay for some of those services. In
fact, we host a higher percentage of visitors per capita than the other counties do, so we're in a
unique position on Kaua`i that the impacts of these things are greater for us. And so we've made the
argument quite successfully, and I think we've educated the public to know what TAT is and why are
are entitled, in my view, to a portion of that. What the legislature has said by giving us, saying, oh
you guys don't need the TAT because we'll give you a sales tax, or we'll give you another tax. What
they've said to us is visitors impact your services, but they're not going to contribute to that
anymore, go get it from your citizens, go get it from your residents. And I agree with the Chair,
that's not the way to go, and I appreciate that our counties have made that argument and we've
gotten support from economists in the State, we've gotten support from the Honolulu Aduertiser who
said, hey that's just passing the buck, and I think we've done a good job of making that argument,
and that's why we didn't lose the TAT last year. In fact, the house said no, we should keep that at
the current level. And the senate reluctantly by some of our senators said, well maybe we'll cut it in
half. So we don't know. Are they going to scoop half of what we're entitled to? Are they going to
scoop it all? Or are they going to leave it at the previous levels. But you know, these decisions are
important and they impact' Kaua`i, I believe, and I think this is accurate, greater than the other
counties because of the uniqueness of our community. You know, I'd really like to know how, you
know, we're going to maintain public safety if our police dispatchers and fire dispatchers are
furloughed. I'd like to know how we're going to maintain services at wastewater. You know, we
didn't...I should have asked this question, which I didn't, which is what's the impact of these
furloughs on overtime? You know, the...because I... you know, we have a history of furloughs in
other States that are ahead of us, both the State of Hawai`i and in other States, and the true cost of
furloughs, you don't save a dollar for a dollar; you save 37 cents or 40 cents, depending on the
circumstances. We don't know exactly, but there are unintended consequences.
There's a study from University of California-Berkeley, and I just want to read one
sentence-in the conclusion, furloughs are a particularly inefficient form of budget savings. The
general fund, and this is for California, so our numbers will be different, but the general fund saves
less than 37 cents for each dollar cut in wages. You know, the study also talks about one furlough
day workers. can kind of handle, and the cost and ...isn't that great. But when you get...the
difference between one and two is huge, and it impacts morale, it impacts productivity. So I think
we all know just logically, we don't have fewer driver's licenses to issue, we don't have fewer
restrooms to clean, we don't have, you know...we just have less time to do it in. So productivity is
going to wane, and so is...yeah productivity and the level of services has got to be strained at some
level, because there's only so much that workers can pick it up. There's only a certain amount of
time that workers can give that extra effort without having consequences on their health and
wellbeing and safety. I know there's a general sentiment in the community that county workers
need to pay their fair share, and I think our workers are more than willing to do that, and in many
ways are. But we have to look at potential unintended consequences.
You know, we haven't proposed property tax increases, and in most categories, I don't think
they're warranted. But a close examination of the current property tax structure, and we had tax
reform contemplated last session, which this council didn't pass, but there are room to increase
revenues, in my mind, and I will most likely put forward alternative proposals. They may not be
• ~ APRIL 20, 2010 '
CALL-BACK (Mayor's Office) (Pg. 38)
successful, but I think we need to have these arguments. Now the process, though, is very
constrained. We can't have a discussion prior to decision making. The supplemental budget comes
on Friday, May 7. Monday morning the lOth, a few days later, we start deliberative process about
that budget, and it has to be completed, looks like prior before we...to getting answers to how we're
going to implement these furloughs and how we're going to maintain the level of services. So it's a
very difficult year, and I hope, you know...and I don't know this, because we haven't had, as these
extraordinary circumstances in previous budgets, and we went through decision making and
deliberation pretty quickly. But you know, I don't know the answer to this, can it go beyond the two
days we have scheduled if we need the first day just to discuss the overall package? And I hope...I
don't know the answers to that. But I'm hopeful that the administration, and I'm sure they will, will
remain open to, you know, different proposals about how we address this extraordinary fiscal issue
that we're in. And I think to the extent that possible, the public should be aware and engaged in this
process. We have had, in my view, a very little meaningful dialogue about the impact of these fiscal
constraints and the choices that we'll make. We haven't had those opportunities, and unfortunately
in my view, we didn't have those opportunities today either.
Mr. Kaneshiro: Okay, with that... Councilmember Kawahara.
Ms. Kawahara: Are we having... Is this final discussion?
Mr. Kaneshiro: Well if you want to, I mean you know. I'm not certain what
more we can really discuss at this point until we see what we're going to go with the Leg. But if you
want to make some wrap-up comments, I'll allow you to do so.
Ms. Kawahara: Okay, thank you Budget Chair. I wanted to thank all of you
for being here. We all know how difficult it is, and I personally and as an elected official feel that it's
very important. It's meaningful... Is it meaningful? Yes. Is it useful? Yes. And was it time wasted
or not? I don't believe it was time wasted. I believe this was useful. I believe this is meaningful,
because what we're doing is we're discussing the economic faith of at least 988 employees of the
county. To be able to discuss it with you on the administration side to f'ind out how you're looking at
it and what kind of rationale went into going into thinking that we need to do furloughs has been
informative. I think it is important for us as legislators to be able to ask you those questions, and for
you to be able to reply, and I thank you for your candid remarks.
Again, this is...we're discussing and talking about the economic faith of many of the people in
our community and all of our hardworking union members. And I did have Mr. Fernandez confirm
whether those numbers came from the county, and it is about 988, and thank you for that. I was
able today, I was able to find out if the financial impact of furloughs was part of the decision making
process to decide to do furloughs. The impact on the local economy, if that was part of the decision to
do furloughs. I found out that there are 75 percent, based on the administration, of employees that
they believe that there aren't going to be much difficulty in doing furloughs, but then there's
another 5 percent that are sticking points, and I think they are going to be discussing that. I'm glad
to hear that they're working on that and they are aware of that. I was able to find out if we actually
had a completed and fully visualized furlough plan for the county. In fairness to our administration,
none of the counties in the State have a completed visual and fully visualized furlough plan because
of the nature of what we're doing with the State. I found out that there is a recognition that
furloughs may tend to have us have an outfliux of experience and knowledgeable employees that
would have...that know and have an institutional memory of what has gone on in the county for a
long time. So meaningful, yes. Useful, yes. Time wasted; no. We're talking about the economics of
daily lives of many of our people in the community. So budget chair, I'd like to thank you for giving
us this opportunity to have this discussion. This is of course, as everybody knows, one of the major
things that we do, we do look at the budget. And I recognize what Council Chair has said, and he
talks about the process, and this is the process. We have people we need to think about and care
.
APRIL 20, 2010
CALL-BACK (Mayor's Office) (Pg. 39)
about and be concerned about, and to find out as much as we can about what might happen. Not
discussing it and pretending like well you know, we don't know what's going to happen, so let's not
discuss it yet, I think does a great disservice to the fact that people are working, people have
obviously been notified that there is going to be a possibility of furloughs. That in itself makes it a
requirement that we discuss it and not have to wait for all the answers or even assume that we're
going to have all the answers to discuss it. To not discuss it would be a disservice. To do discussion
as we have here, budget chair, is something that I believe is a requirement once that word is out that
that stress is placed on people that they know that furloughs might be coming. It's a responsibility
for us as their elected officials to be able to address that and ask questions. So thank you.
Mr. Kaneshiro: Okay, with that, seeing no other comments, I want to thank
the administration for being here. Gary, Malcolm, Wally, and Marc, you know, you being here have
been real helpful for us to understand the process. As stated before when I started this session,
we're in the process. I believe that we are working to address what the administration has brought
before us, and as already been informative to, I feel, to the employees and letting them know from
the front that there is a possibility. There is a great possibility that the furlough of two days would
have to take effect. How do we put it together? How do we achieve all of that? You know, in the
next coming weeks I think we'll be able to get more insight into that, and I believe it's an ongoing
work in progress. To think that only from February the UPW got to agree on it, you know. It's
unfair to say that because of November we gave you guys, you should... everybody should be looking
at it, you know. And I also saw that HGEA was only till last October before they agreed. And you
know, we've made that statements before the senate ways and means committee. We stated to them
and told them, look, for us was really hard to even try to implement that in the last budget, because
both unions, none of them even agreed. And by the time they were taking some TAT money, we also
had the budget already submitted and balanced to the council. So I mean you know, but we plead
our case. I believe we still are pleading. Tim was there several times. I went down several times.
Mr. Kawakami is going there...has been there quite often. We have a lobbyist there continuously
doing it. Derek has been...I mean we've all been and we've all sent testimonies. So let's see by
tonight, hopefully if they make a decision. And I think, you know, for us, the sad part is that we're
stuck until the Leg really let's us know what they're going to do. We can plan for it like how we
planned for it. We planned the 12 million or so. It's the exact amount that we had last year. We
planned some stuff, but nobody's going to know until the Leg is over. And let me tell you, committee
members, if we got to go f"ind $6 million starting tomorrow if the Leg says they're taking all of that
away, you better be prepared to work, because we ain't going to be able to do that only on post
decision making time. Let me tell you that. And as the chair of this committee, if we need to
conduct our meetings all day, all night for the two days to reach some decisions on post decision
making or whatever we need to do, that's fine with me. We've had committee meetings that ran till
five o'clock the next day. We've had it, so... Let's all be prepared to do that, and hopefully we have
all the information we need previous to that so we can start reviewing it, and let's all, you know,
hope for the best that the Leg will still grant us what we have in our TAT. With that, this meeting is
adjourned.
The departmental call-backs and additional departmental budget reviews concluded at 4:02 p.m.,
and there being no objections, the meeting was adjourned.
Respectfully submitted,
4OkAidaasaki