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HomeMy WebLinkAboutHousing FY2013-2014 DEPARTMENTAL BUDGET REVIEWS 04-15-2013 Housing (aa) Page 1 The departmental budget review reconvened on April 15, 2013 at 11:04 a.m., and proceeded as follows: Housing Honorable Gary L. Hooser Honorable Nadine Nakamura Honorable JoAnn A. Yukimura Honorable Jay Furfaro, Council Chair Excused: Honorable Tim Bynum Honorable Ross Kagawa Honorable Mel Rapozo Chair Furfaro: Aloha, I am going to call back from recess our Budget meetings and today we have a relatively shorter day because we only have two (2) Offices scheduled. We will start the morning with Housing from 11:00 to 2:30 and a reminder in the revenue cycle, we went through the revenues. Also, when we come up in Capital Improvement Plan (CIP), Housing willing also has an opportunity to talk about Capital Improvement numbers. We are also doing the County Clerk and Elections today. I have three (3) members with excused absences for today. But we do have a quorum. I would just like to say welcome to the Housing Department and if you would like to come up and introduce yourself, we will start with your presentation. KAMUELA COBB-ADAMS, Housing Director: Good morning Council Chair. Chair Furfaro: Welcome, good morning, we have a fine day with the rain tightening up and we are ready to hear from you on your presentation. Are you ready to start? Mr. Cobb-Adams: Yes, we are. We actually, I think we had a PowerPoint presentation planned, if that is okay with you folks. Chair Furfaro: We have a quorum. We are going recess for a minute. Their presentation may not be loaded. So, we are on recess. There being no objections, the Committee recessed at 11:08 a.m. There being no objections, the Committee reconvened at 11:11 a.m., and proceeded as follows: Chair Furfaro: We are back from our short recess. Sir, you have the floor. Mr. Cobb-Adams: Thank you, Council. I wanted to start by thanking you all for having us here for this year's budget. It is an exciting time, budgets. Well, because I see it as that funds are progress out here on Kaua`i and progress is what I like and I am sure you agree with that. With that we are going to start. We have a short presentation. It talks a little bit about what we do, how we are doing it, and where we are going. Then we well end it off with some questions, I am sure by Council and hopefully we will have all the answers for you folks. With that, of course, we are the Housing Agency. We are basically organized in three (3) — I consider us three (3) separate Divisions, our 04-15-2013 Housing (aa) Page 2 Rental Assistance Division, our Housing & Community Development Division, and our Administration Division. Basically, I am at the Head of the Administration, we have Gary Mackler at the Head of Housing & Community Development, and Sandy is in charge of our Rental Assistance. So, they will talk did about their respective disciplines or areas. With that, I will turn the next one over to Sandy. SANDY KA`AUWAI, Section 8 Planning Manager: Our Division, as you know, provides rental subsidies for extremely low and very low income households, helps them pay their rent. There are also two (2) subprograms to the Section 8 Program and that is the Family Self Sufficiency Program, which is like a career counseling type budgeting. It helps them become more self sufficient with the ultimate goal of hopefully, eventually transitioning off the program. The Section 8 Homeownership Program is a sub of the Family Self Sufficiency Program now and that is basically a program that allows participants who have completed the Family Self Sufficiency Program to use their rental assistance towards mortgages opposed to rent. GARY MACKLER, Housing Development Coordinator: The Housing & Community Development Division is responsible for administrating a host of programs. The first program, our oldest program, is the Community Development Block Grant (CDBG) Program. This is a thirty-nine (39) year old Federal grant which provides a direct allocation there the Federal Government to the County of Kaua`i. CDBG, as you know, is used for a whole range of activities here. It can be used for public services, public facility improvements, economic development activities, and also for housing. We also receive, a pass through from the State of Hawai`i, the HOME Investment Partnership Program (HOME) funding. This is an annual recurring allocation of funds that we have been able to utilize here for housing activities. This program was initiated and funded in 1992 and we have been utilizing it since then. HOME can be used primarily for rental housing and homeownership activities. We also administer the Residential Rehabilitation Loan Program. This is a CDBG funded revolving loan program which can assist families who are low income households who need assistance to alleviate overcrowding in their homes, or to make their homes more energy efficient, or if they need accessibility improvements. These are very low cost, low interest loans that could be made available. We have another program called the Neighborhood Stabilization Program (NSP). This is part of the Recovery Act, one of the programs that came through that Act. The Neighborhood Stabilization Program was used initially for acquiring properties, foreclosed properties, and we have been able to acquire six (6) properties through this grant. We have also constructed three (3) homes on vacant lots and we are continuing to go forward with this grant because we generated program income and we will be utilizing it for future acquisitions and also for providing mortgage financing as well. We also administer the Economic Development Initiative (EDI) Grant. Up until 2010, the County of Kaua`i received a number of EDI grants. These are special project funds that come usually through our Senators in Washington, D.C. EDI has been used on many worthy projects including the Waimea Dispensary Project and the Young Men's Christian Association (YMCA). We are utilizing some of those funds right now for Kaua`i Habitat for their `Ele`ele I`Luna Project. Those funds have been suspended for the last few years because of the budget constraints. But we hope they will come back again because they really do help assist good projects on the island. Other services that are provided through the Housing & Development Division, we have Fair Housing advocate that is Faye Rapozo, I think, as you know. It is a very busy position because we provide assistance to tenants and landlords and referrals and a long with the responsibilities of our Fair Housing Officer, there are workshops and training that are offered. There will be, in fact, a training later this month, in the month of April to help educate landlords and tenants on various fair housing issues. 04-15-2013 Housing (aa) Page 3 We also have staff in our Division that administers our Home Buyer Loan Program. This is a program that we have had since 1996 and through this program, through our Agency, we have been able to process over two hundred forty (240) Home Buyer Loans to-date. It has been very successful. It provides mortgage financing at what used to be compared to the rest of the industry very competitive, although that industry is closer now to where we are. But it is an excellent way for us to promote homeownership, especially for households who are below eighty percent (80%) of the median income. Our Division also is responsible for managing the County-owned rental assets and that includes currently one hundred (100) Ii units at Kalepa Village and sixty (60) units in Pa'anau Village Phase 1. We also plan and finance affordable housing projects with private developers. For projects that have been completed that have long-term affordable housing restrictions, we provide monitoring form our Office to make sure that income compliance and rent compliance are preserved throughout the affordability period. We also conduct research and education through various studies, in particular, housing studies that we conduct every few years. Lastly, utilized grants and loans for affordable housing and community development activities. Aging, those come through various sources as I have mentioned, CDBG, HOME, EDI. Ms. Ka'auwai: For Rental Housing Division, we processed about sixty-seven (67) new participants last year. What that was basically to replace people that were transitioning off the program. We have not, because of the anticipated funding cuts due to sequestration, we were not able to place a whole lot of new participants on the program because we are still unsure exactly how those cuts are going to affect us. It does look like we are going to be able to maintain the current participants on our program even with the five percent (5%) sequestration. Then once we find out what our actual funding and the funding formula will be, we will make a decision as to whether we can pull some people off of our waiting list, and hopefully bring on even have even more people. In anticipation of doing that, our waiting list is closed right now. We have about five hundred fifty (550) people still on our waiting list. But we have hoped, before the sequestration came down, to be re-opening that list sometime later this year. But because of sequestration we have put that on hold. But in the meantime, we set up an online waiting list system so that when we do open the list, we will be able to accept applications online. So, that is going to really help us be more efficient with our application process. Veteran's Assisted Supported Housing (VASH) Program vouchers started last year. We had about fourteen (14) and now we are up to about twenty-five (25). VASH is the Veteran's Assisted Supported Housing Program. We work with VASH social workers to help house chronically homeless people. Then our Family Self Sufficiency Program assisted about eighty-six (86) participants with twelve (12) of them transitioning into new non-subsidized housing, two (2) of them purchased homes. Mr. Cobb-Adams: If I could, it is not up there. But it is an important thing I wanted to point. Section 8, under Sandy's leadership and the Section 8 team, the sequestration is an issue. But they have also used — it is basically a tool that Housing and Urban Development (HUD) gave to us to use that is a pretty complex spreadsheet that allows you to manage your money, your lease ups on a monthly basis and track that. Why that is so important because it helps you to project out what you are going to lose, when you lease up. It is not only important to project the five percent (5%) loss so that we do not have to take away any. We are able to not take away anybody's vouchers because we are kind of prepared for that with this tool. What is also allows to us to do is keep our lease up at a maximum because if you do not use all your money in this program, you will get cut and we did very well at that this past year and that is something that I want point out, their team was successful. I want to show you what that represents later in dollars. 04-15-2013 Housing (aa) Page 4 Mr. Mackler: Some of the successes and achievements for the Development Division, first we would like to talk about Kaua`i Habitat for Humanity and they are `Ele`ele I`Luna Project. They are about to reach a milestone, which for Kaua`i Habitat is to move forward with development of land that they own in `Ele`ele on a twenty-four (24) acre site. The County is providing close to two million dollars ($2,000,000) in HOME program funds to assist Kaua`i Habitat to construct infrastructure improvements which will help them create forty-eight (48) buildable lots, lots that are desperately needed to support their program. We are expecting Kaua`i Habitat to issue out their competitive bid next month for those improvements. Next we would like to mention that the Pa'anau Village Phase 2 project which was completed and dedicated in July of 2012, is fully occupied and is just doing great. It leased up very quickly and very pleased to have been part of that project. I did see today coincidentally that in the Garden Island`Newspaper that the contractor, Shioi Construction, who built this project, was recognized for their good work. We are really pleased to see that Conrad Murashige and his team are being recognized because they did an outstanding job on this project. Mr. Cobb-Adams: I wanted to point out one other thing that I thought was — it is not really our main focus. But ninety-eight percent (98%) of the jobs created by this project were Kaua`i jobs. So, that was cool, too. I appreciated that. It was pointed out in the Garden Island. Mr. Mackler: This was from July of last year, a photo taken at the dedication. We were very pleased to report that we are moving forward with the Rice Camp Senior House project. We were able to complete the acquisition of two (2) parcels here in Lihu`e in October of last year and we issued out a Request for Proposal to select a development team to develop this project for us. This past March, we awarded development rights to Vitas Group as the developer. I should also mention that two (2) members of their development team include those who worked on the Pa'anau Village Project as well which is Shioi Construction and Design Partners, their project architects. So, we are really happy to see they are working with us to do another quality project. Rice Camp Senior Housing initially will provide initially sixty (60) units of affordable rental housing for our seniors. This is the conceptual site plan of that sixty (60) unit initial phase. These are rendering, conceptual renderings of elevation. Most structures will be single storied. Mr. Cobb-Adams: Also, I wanted to thank the Council because we would not having able to even purchase this land if you folks did not approved our budget last year, I think it was two million four hundred thousand dollars ($2,400,000) to purchase this land. So, thank you, folks. Mr. Mackler: This is a rendering of building that would be placed on the smaller of the two (2) lots close to Rice Street. These are two (2) story elevatored structures. All units will be accessible, all units will promote the concept of "aging in place." Another project we are pleased to be involved is the Kolopua Project. This is the affordable rental project slated for development in Princeville. This is to meet an affordable housing requirement that relates to the expansion of the Princeville Shopping Center. We were able to be of assistance to help resolve of the permanent affordability component of this project and the future land dedication to the County from the developer to insure it is perpetual affordable. There is the concept site plan. It is a little small to see. These are conceptual renderings of elevations, these buildings will be unique. They will incorporate green concepts and energy efficiency throughout. 04-15-2013 Housing (aa) Page 5 Mr. Cobb-Adams: I think this is a great project in the sense that it is shows how the Administration and Council work together to amend the policy that kind of did not work for a while. But we amended to successfully generate a project, just by making the right decisions. I think it gave birth to a project that is going to, I feel, break ground next year and working with the private sector, I think all together it really works. So, I wanted to acknowledge the Council for helping on that and especially Housing Chair Yukimura for working diligently with us to make this project, I guess, kind of gives birth to it. That is awesome. I am going to continue on with another project, Lima Ola Master Plan. We received the 2012 Outstanding Planning Award for the Hawai`i Chapter of the American Planning Association which we are very proud of. That is our `Ele`ele project. We are happy about that success. This project is about seventy-five (75) acres right off of Kaumuali`i Highway and next to the Habitat for Humanity `Ele`ele I`luna project. The Master Plan community has all types of housing from single family homes to elderly housing to multi-family housing to duplexes. So, it has a myriad of different products for different types of lifestyles. It does have, within the project, great amount of walkability, green energy development concepts. One of the last things done by our Development Division, that we are really proud of, we actually amended our Homebuyer Loan Program. As lending has changed over the last three (3) or four (4) years, we found that we have had to adapt to it. We did an Administration rule amendment a couple of months ago and with that, we think we will have a much more competitive product out there that is going to help people into homeownership. We basically are going to be going out and marketing this new loan program, which goes down to two percent (2%) Home Buyer Loans, both permanent financing, primarily financing and gap financing for first time home buyer. So, we are very proud of this and we will be, like I said, we are going to do a marketing blitz probably at the end of this month and May. Some upcoming initiatives. Well, we met last week about this in front of the Council and thank you folks for approving our Implementation of our 2013 CDBG and HOME Action Plan. We appreciated you folks approving that. So, we are moving forward on that action plan. We also intend to complete our Lima Ola environmental studies, water master plan, entitlements. So, we basically moved to the next phase after planning for Lima Ola project. Rice Camp Senior Housing, also another one of our top priorities. We are looking at moving through the design and obtaining financing with our partner, Vitas Group. Kolopua Project is in the same phase as Rice Camp and we are hoping that Rice Camp and Kolopua can break ground next year, 2014. Hopefully first or second quarter of next year. Again, it talked about a marketing blitz for our Homebuyer Loan Program which will be coming out at the end of this month. We also have an initiative and we are getting close to wrapping up our internal draft at the Housing Department for adopting of policies and procedures for housing project of Section 201H-038 of the Hawai`i Revised Statutes (HRS). We are intending to assist affordable housing development with this policy. So, hoping by having this policy and making it open to invite development of affordable housing on this island. Also, we are implementing other strategic plan initiatives, which I will be talking about. Some of our challenges, of course, you folks have been in budget meetings the last couple of weeks. So, you know folks know there are challenges, not just here in County, but at the Federal level. Sequestration, they talk about a five percent (5%) reduction. So, what that can cost us, basically if you look up there from six million dollars ($6,000,000) to five million seven hundred thousand dollars ($5,700,000) of Section 8 funding, CDBG being cut from seven hundred nine thousand dollars ($709,000) to six hundred seventy-four thousand 04-15-2013 Housing (aa) Page 6 dollars ($674,000), and HOME funding from three million dollars ($3,000,000) to two million eight hundred fifty dollars ($2,850,000). So, some substantial cuts. We are trying to weather these cuts. The State of Hawai`i, they are feeling the squeeze also. In a nutshell, we get our HOME funding through the State and previous to this year, they were taking equal shares of Administration. Basically increased their share from, I think it was seventy-five thousand dollars ($75,000) a year to one hundred fifty-thousand dollars ($150,000) a year. So, they doubled their share and cut ours by thirty-three percent (33%). We are getting less Administration for our HOME funding, which is a bummer, basically. On the other side, we all know costs continue to go up. Just Administration, rents, overall development costs, and need based on our SMS Housing Study are obviously increasing. We are going to need about one thousand one hundred (1,100) units by 2016 according to what they projected in the 2011 SMS study. So, how do we get through this? We put together a five (5) year Strategic Plan which was accompanying this year's budget. Then in a nutshell our mission is to— this our mission, to provide greater opportunities for affordable, safety, sanitary housing, and to promote and sustain community development for the people of Kaua`i. Our objectives in this, or our goals, are to preserve Section 8 housing, increase affordable housing inventory, increase financial stability and staff capacity to support the goals and objectives, promote efficient, consistent, and quality delivery of services, and sustain the community development activities. In a nutshell, no matter where I work, whether it is private or public, I feel that we need to try to treat our company or our organization like it is a private business and it is our own money. So, we are looking at how can we do more with less? That is basically the theme of our Strategic Plan. The objectives, I will not go into detail here. But the objectives are all located in our Strategic Plan which is attached to our budget. If anyone needs to hear more about that, I welcome that conversation and we will sit down and discuss those with you. To end our presentation, we have a couple of comparative charts that I think add value. I am a visual person and these do an excellent job of telling you where our money is going. If you look at those, majority of our money goes to our programs. Eighty-eight percent (88%) of our money goes to programs, seven percent (7%) to,salary, four percent (4%) to benefits, one percent (1%) to other expenses. I think we are running a pretty good ship and we intend to hopefully improve on that. When you look at it from General Funds, this year's budget, most of it is on salaries, obviously. Sixty percent (60%) salaries, but a huge amount is still going to benefits and about four percent (4%) goes to other things. The bottom talks about grants and where our grants go. It is basically similar to the first chart. A couple other comparative graphs talks about programs from 2013 and gives you a comparison between 2014. We are actually decreasing our Administration costs. I think that is just part of our Strategic Plan. We are trying to become more efficient and budget tighter. So, our Administration costs are actually going down from three million dollars ($3,000,000) to two million seven hundred thousand dollars ($2,700,000), but we are trying to increase our programs. Basically the reason why we are able to increase our programs with the sequestration is program income. Program income has been vital to keeping us alive and even carrying our Administration costs. Hurricane Iniki was 1992 and although it was a travesty, it also helped our Department because we had a huge influx of money. Thankfully the Housing Agency did an excellent job at using that money and balancing it with production of housing and putting in resolving loan programs. Those revolving loans are essential to keeping our Housing Agency alive and keeping us functional. So, that money is helping us even until today. A couple of comparative graphs that shows Section 8 as to the other grant and funding types. Section 8 is our biggest with thirty-four percent (34%) of our funding coming from there. Next year it is going to be thirty-one percent (31%), I should say this coming fiscal year. This is an interesting graph where we are showing, from an Administrative standpoint, the breakdown between General Fund, 04-15-2013 Housing (aa) Page 7 meaning County funds are what I call program income, our resolving funds or our program income is in the green and in the red is the Federal money that we receive from the Housing Agency, just for Administration costs meaning not all Administration costs. But salaries and benefits which is the majority of our Administration costs. We are decreasing the overall amount, but if you look, we are trying to balance out. Last year thirty-four percent (34%) of the funding was from the Feds. We are trying to do forty-nine percent (49%) next year. Part of is that is due to becoming more efficient of how we use our money and strategic on how we budget. I spoke to earlier, Section 8 did a really good job in leasing up and balancing out our use and because of that, we are hoping, like I said it is a projection, to get more Federal funding even with the five percent (5%) cut Administration costs. So, thank you to Sandy and her crew to helping on that. In dollars and cents, that helps us tremendously so it is very important to manage that and use these new technologies that we have. With that, that ends our presentation. I guess we are open for any questions. Chair Furfaro: Thank you for a very nice presentation. Members? JoAnn, questions? Ms. Yukimura: I am fine with others starting first, if you want. Chair Furfaro: Why do I not start? We do have some inconsistencies in all Divisions when it comes to recognizing benefits compared to actual payroll and it is even true at the Council. For example, we have not had increases for six (6) years for our staff. But we actually forecasted a potential increase for this time around. In your comparative graphs for payroll and benefits, right under your objectives slide, you show two hundred sixty thousand seven hundred sixty-four dollars ($260,764) for your benefits against four hundred forty-three thousand eight hundred forty-nine dollars ($443,849) and yet your benefits really show thirty-six percent (36%). Thirty-six percent (36%), it is actually fifty-eight percent (58%) when you compare it against pure payroll. But you have thrown in a couple other things here making up four percent (4%) for programs and two percent (2%) for other expenses. Are those other expenses and other programs payroll related? Mr. Cobb-Adams: My understanding and I can clarify this with staff, is our other expenses are other Administration costs, printers, computers, supplies in Administration, other Administration associated costs, vehicles,those types of things. Chair Furfaro: Why do we have that in a payroll graph? Mr. Cobb-Adams: This right now, is just show ing Administration ll . costs. Sorry, not just payroll. J p Y ro Chair Furfaro: Okay. Mr. Cobb-Adams: So, it is showing whatever our Administration costs. We take Administration from different grants and it includes not just payroll, it includes these other types of costs associated with Administration. Chair Furfaro: Just a note for Ernie Barreira and Ken, we have these inconsistencies across Departments as to what is "payroll benefits" versus what is the terminology here is "administrative costs." These are costs then associated with the Housing Department getting from project to project by a carpool, computers, keeping track 04-15-2013 Housing (aa) Page 8 of rents and so forth. So, there is a definition I understand it now. But there is a definition that we need to refine here, Ernie. Medical, dental, life insurances and those are employee benefits related to payroll. This one is now comparing Administrative costs. So, your Department is running fifty-eight point seven percent (58.7%), which is more consistent with the rest of the County as far as payroll benefits. But the chart I have here is all costs related to the Administration functioning, got it. Mr. Cobb-Adams: Yes. Chair Furfaro: If you folks do not mind, I will continue with a few of my questions. How did the State justify going from seventy-five thousand dollars ($75,000) to one hundred fifty thousand dollars ($150,000) for their fee? What more am I for my fee? Mr. Cobb-Adams: They basically said that they have been taking a loss and we have program income, so we should use our program income. Chair Furfaro: That was their explanation? Mr. Cobb-Adams: In a nutshell. Chair Furfaro: Seriously, is there a piece of correspondence that says that? Mr. Cobb-Adams: No, not that I know of. Mr. Mackler: With respect to the HOME program, the State of Hawai`i could actually retain the entire allocation if they choose to. They are not required to pass it through to outer island Counties although since inception of the program, that is exactly what they have done. In past years they divided it equally among the three (3) outer island Counties. Until recently, last year, where they decided to go on a rotation where they now make the entire allocation available to each County on a rotation basis. But it is their discretion on what to pass through to the Counties. Chair Furfaro: Okay. So, they have a license to then take more money from us, is what you are saying? Mr. Mackler: We can think of it as the golden rule, he who holds the gold makes the rules. Chair Furfaro: But you would think if they went to a rotating schedule from a focus that they had to keep track of three (3) neighbor islands for their distribution. You would think that that would centralize only dealing with Kaua`i County and would be a savings to us, not an additional cost. If you find anything that talks about their rationale, I would certainly like to see it. Yes? Ms. Yukimura: I just have a follow-up. Chair Furfaro: Sure, go ahead. 04-15-2013 Housing (aa) Page 9 Mr. Yukimura: The State could keep all the moneys, but what record of performance do they have in terms of creating housing units or even taking care of their housing units, right? Mr. Mackler: Well, it was a policy decision that was made very early on with this grant program. Because the City and County of Honolulu receives their own direct allocation of home funds. The State felt in order to provide benefit throughout the State, they needed to pass money through to each of the islands and quite frankly, we bear the lion's share of the work because we are implementing projects at the local level. They are doing their Administrative work but it is much less, I believe, than what we do here. Ms. Yukimura: Right. So, the City gets its own allocation that does not go through the State? Mr. Mackler: That is correct. Given their population, they are eligible to receive a direct allocation. Ms. Yukimura: They are a different category than we are? Mr. Mackler: Yes. The State receives, by comparison, the statutory minimum. There are a handful of States throughout the Country that receive the minimum. Ms. Yukimura: So, it is the three (3) neighbor island Counties that get their moneys through the State? Mr. Mackler: That is correct, yes. Ms. Yukimura: And tell me again, what was the cut that they are taking? Mr. Mackler: Well, they went from taking annually seventy-five thousand dollars'($75,000) in Administration to one hundred fifty thousand dollars ($150,000) in Administration. Ms. Yukimura: The State is who exactly, which Agency? Mr. Mackler: It is administered through the Hawai`i Housing Finance and Development Corporation, HHFDC. Ms. Yukimura: Housing Finance and Development. Is that the one Paul Kino sits on the Board representing Kaua`i? Mr. Mackler: He does, yes. Mr. Cobb-Adams: If I may, one other thing that I wanted to mention because I think it is important. We receive, every three (3) years between us, Maui County, and the Big Island or Hawai`i County, we receive the same amount as every County. Just something to remember because they give us all the same amount regardless of the size of County or population or anything. So, that is something to be thankful for, I think. 04-15-2013 Housing (aa) Page 10 Ms. Yukimura: That is. Although you could also judge by performance and I do not know how we stand in terms of number of units we produce annually or biannually. Mr. Cobb-Adams: I am not sure. But I am very proud of Kaua`i and I have only been here for a year. But the Housing Agency has done an excellent job. So, I would say we are pretty good. Ms. Yukimura: Right, which means logically, more Administrative work. Okay, thank you. Chair Furfaro: Any more questions on this? If you can just follow-up for me, any kind of communication that they gave to you because I would give our Agency an (A). You folks leverage things to the maximum. I think the inventory we have shows it. I am not sure that they understand if they took a bigger share, well maybe they could indicate there is a State project in our County doing that. But there are no new State projects in our County? Okay. Vice Chair, I will give you the floor. I will have questions later. Go right ahead. Ms. Nakamura: Thank you for your presentation. A lot of successes and achievements in all of your Divisions and you are really to be commended for that. Especially, when you looking at Federal funds for this year and Federal funds for next year, given what is going on at the Federal level that you are increasing the amount of Federal funding by fifteen percent (15%), is pretty astounding. Mr. Cobb-Adams: That is what we project. Anything can change, these are all projections. But I think it is a huge thing. Ms. Nakamura: Also, the Family Self Sufficiency Program that is actually getting our families from rental to permanent housing and off subsidized housing. That work is so important and I really want to congratulate you for those achievements. I wanted to ask you about the Home Buyer Program on page 4 of your report, relating to the General Accepted Principles (GAP) Mortgage Program. Gary, you said that is was going to be two percent (2%) financing, is that a thirty (30) year term? Mr. Mackler: Two percent (2%) or three percent (3%) and in past we have been using our Federal grants to make mortgage financing GAP loans available up to ninety thousand dollars ($90,000). This is money that helps fill that gap of financing that people need to acquire existing homes. Ms. Nakamura: If it is up to ninety thousand dollars ($90,000), how many homebuyers can you assist in the coming year? Mr. Cobb-Adams: It all depends. Right now, it all depends on the top of loan and how many loans. We are actually in the process of trying to get more money approved for the programs. One thing, if you look closely at our Strategic Plan, our program income, we have a big influx of money. But we have been using it faster than we have been creating income because we are giving such good rates, you know what I mean? We are looking at other ways to get money into program income and balance it out with development moneys. So, it is hard to say how many. We are not like a bank, we do not have tons of money. 04-15-2013 Housing (aa) Page 11 Ms. Nakamura: In the past year, how many families? Mr. Mackler: Well, most of loans we processed are GAP loans. We prefer that it stretches the dollars. I think with the resources that we have on hand right now, and I am speaking of HOME, CDBG and NSP, I think we could do ten (10) to fifteen (15) GAP loans, if they were all GAPs. We also do primarily loans on occasion. Mr. Cobb-Adams: One thing that drove us to actually change the Administration rules is our Home-Buyer Program has slowly declined in participation and I think that is because the interest rates used go as low as three percent (3%). Now you can get three percent (3%) loans from private. The mortgage rules have changed so some of our requirements in our Administration rule the banks did not want to do GAP loans with us. So, that is part of the other reason why we redid our rules to have a better product and a product that is in line that can be GAP and marriage to primary financing by private lenders. Now, we think we made the appropriate changes. We vetted through HHFDC, they approved it and we are ready to roll it out and we are very excited about it because now we think we can leverage it with private financing a lot better and compete with some primary. So, part of it was just the rules, we had to make those changes because the private guys all made their changes already and move like that, so we had to make ours. Ms. Nakamura: Thank you. Chair Furfaro: Questions? Go ahead. Ms. Yukimura: How many employees do you have? Mr. Cobb-Adams: We have twenty-eight (28) including myself. Ms. Yukimura: Okay. That is a relatively small office, if you look at our County Offices. But you have huge successes and achievements that are having very significant impacts on the community in a positive way. I too, want to just commend you for the way you are able to leverage the moneys. I think your graph on slide 28, the circle on the left which is mainly blue. So, that is your total Housing funding and you are showing that County funding or General Fund moneys are a small amount and you are leveraging all of that program moneys. To me, that is very telling in terms of the really fine work that you are doing. My question is about what are the numbers—well, slide 4 and 3, when you are talking about Rental Assistance Division and Housing & Community Development Division, can you or maybe you have and I have not seen it, your numbers for what have you done annually? For example, your Section 8 vouchers, how many people are we serving? You said that maybe it is sixty-seven (67)? No, that is new. Ms. Ka'auwai: That is just new. Ms. Yukimura: What is the total number that we are supporting with Section 8 vouchers? Ms. Ka'auwai: We average about six hundred seventy-five (675) families in 2012. Ms. Yukimura: Okay, and you have a waiting list of five hundred fifty (550)? 04-15-2013 Housing (aa) Page 12 Ms. Ka'auwai: Correct. Ms. Yukimura: But it is closed now, so there may be a pent-up demand that we are not seeing because we have closed the list? Ms. Ka'auwai: Correct, yes. Ms. Yukimura: But you have an online system that is going to allow people not to get on the list, but to say they want to get on the list so we can measure or was I wrong in understanding? Ms. Ka'auwai: No. It is an online application system is what it is. So, it will allow us to accept applications for a certain amount of time. Then what we are going to do is we are going to do similar to the way Kalepa does it, which is collect as much application we can, determine how much funding it can support, and then we will do a lottery to get the next list in place. We are hoping to do that, depending on funding, hopefully late next year sometime. Ms. Yukimura: Is there a way to analyze the nature of people on the waiting list in terms of whether they are elderly or disabled? Ms. Ka'auwai: Yes, I have that data. Ms. Yukimura: Would you be able to send us that information? Ms. Ka'auwai: Sure. Ms. Yukimura: Because that would be helpful. How accurate do you think the list is in terms of how often do you check it? Sometimes it is a waiting list that existed for ten (10) years, or five (5) years, even three (3) years, people actually leave the list without telling you and things like that. Ms. Ka'auwai: They require us to purge the list once a year, so it is pretty accurate. Ms. Yukimura: So it is pretty accurate? Ms. Ka'auwai: Yes. Ms. Yukimura: That would be very helpful. On the Family Self Sufficiency Program, which I think is a stellar program in terms of purpose, how many do you help there? Ms. Ka'auwai: Last year we assisted about eighty-six (86) of our participants. Ms. Yukimura: That is great. Ms. Ka'auwai: At any given time we have about one hundred (100) people participating in the program and we have two (2) coordinators helping about fifty (50) /fifty (50). 04-15-2013 Housing (aa) Page 13 Ms. Yukimura: Okay. Mr. Cobb-Adams: I wanted to point out it to that Family Self Sufficiency (FSS), it is a grant and the grant funds the positions. What is the percentage of funding? How much does the FSS grant fund in positions? Ms. Ka'auwai: The FSS funds the two (2) positions. I believe the grant right now is about one hundred thirty-three thousand dollars ($133,000) per year. Ms. Yukimura: And that is Federal moneys? Ms. Ka'auwai: Yes. Mr. Cobb-Adams: And it has to be written—is it annually? Ms. Ka'auwai: Annually. Mr. Cobb-Adams: So, the coordinators also write the grant every year and so that is a great program also because it is kind of self-sustaining. Ms. Yukimura: Right. Maybe that was the philosophy. It really works to counter the Section 8 Housing Voucher Program in that you have this increasing number of families who need the Voucher Program. If you could get a lot of them off the Voucher Program, that is actually what is called prevention or long-term solutions like teaching a person to fish instead of just giving them fish, that whole idea. Ms. Ka'auwai: Yes, absolutely. Ms. Yukimura: Have you given thought how we might increase the impact of this program or even say if we had this many money or these positions, we could get these many off because Section 8 is like year after year, after year, after year funding one (1) person, or one (1) family, or one (1) household theoretically unless you get them off? If you get them off, then you could go to the next round, you know what I mean? Ms. Ka'auwai: Right. Just to clarify one thing. Graduation from the FSS Program does not necessarily mean that they go off. Ms. Yukimura: Yes. Ms. Ka'auwai: They just graduate from the program. It is not like the participants that graduate, actually go off the program. Ms. Yukimura: That is correct. Ms. Ka'auwai: I see probably maybe fifty percent (50%) of the people that actually gradate transition off the program at some point. Ms.Yukimura: Well, yes, and you said this past year maybe, twelve (12) families transitioned into non-subsidized housing and two (2) families purchased homes. So, those would be the indicator of the actual long-term effect you want from the program? 04-15-2013 Housing (aa) Page 14 Ms. Ka'auwai: Yes. Ms. Yukimura: So, of eighty-six (86), there were fourteen (14) that kind of really made it out of cycle, right? Ms. Ka'auwai: Right, correct. Ms. Yukimura: So, it is not an easy task. Ms. Ka'auwai: No, it is not. Mr. Cobb-Adams: To answer your question, I think about have we given thought to it, we have given a lot of thought. It comes down to the bottom line. Section 8 is a Federal program and they have their type of rules and the people who do succeed I have seen in FSS are those with individual drive or pride and that is basically, they drive because they have to work. They work to improve themselves and that is how they get off of it. It is a difficult thing especially when you folks know how jobs are. It is a hard thing to do, so people really have to work hard, go to school, or find another job and move up really hard. The bottom line is people are driven by different things and different types of incentives. I hate to say it but, the "carrot and stick" and there are not a lot of carrots or sticks in the Section 8 Program to incentivize them to leave it. Ms. Yukimura: I think I understand what you are saying. There are some people who will say that just the Section 8, even if people are on it all of their lives, especially people who may be disabled or even elderly who are poor on very fixed incomes, because otherwise it turns into homelessness and a lot of other problems for society that it is worth it. I do not know that this program, FSS, would be reasonable to ask for one hundred percent (100%). Mr. Cobb-Adams: Right. It is a great program. It gives an opportunity for those who want to take on that challenge, the ability to get it and the tools to get there. Ms. Yukimura: Right. Mr. Cobb-Adams: I would love to be able to expand it, but we are limited by the resources provided. Ms. Yukimura: Yes, okay. Thank you. Chair Furfaro: Mr. Hooser. Mr. Hooser: Good morning. Mr. Cobb-Adams: Good morning. Mr. Hooser: Just some follow-up questions on the Section 8 Program. What is the value of a voucher? Is it a dollar value? Ms. Ka'auwai: We analyze the cost per unit. Right now, it is about maybe seven hundred seventy dollars ($770) a month per unit cost. 04-15-2013 Housing (aa) Page 15 Mr. Hooser: Seven hundred seventy dollars ($770) per month? Ms. Ka'auwai: What we pay out in assistance every month is five hundred thousand dollars ($500,000) that goes straight into the economy, straight to landlords. Mr. Hooser: If somebody got a voucher, the voucher is worth seven hundred seventy dollars ($770)? Ms. Ka'auwai: Well, it is based on family and bedroom size. Mr. Hooser: Okay. Ms. Ka'auwai: So, depending on what their income is, what the bedroom size is, and what the family size, it all comes into play. Mr. Hooser: Okay. I guess the underlying question was whether the vouchers subsidize the housing cost or do they actually provide people housing? Is it by expanding the number of vouchers you actually put more people into homes or just put more money into the people's pockets who are already in the homes? Ms. Ka'auwai: Well, I mean, the cost per unit fluctuates basically and it is based on participant income. Basically, what we do is we calculate what their income will be and they pay thirty percent (30%) out of pocket for their portion and then we pay the rest. Mr. Hooser: So, new people using the vouchers would generally be going out and getting a new home, a new residence? Ms. Ka'auwai: Correct. Mr. Hooser: They would be in a multi-family or homeless situation and use the vouchers to go out and find one? Ms. Ka'auwai: That is correct. Mr. Hooser: Okay. So, about seven hundred seventy dollars ($770)? Are there any Counties in Hawai`i that provide vouchers from County funds? Ms. Ka'auwai: Not that I am aware of. There was, I think, a point that the Big Island was subsidizing some shortfall that they had. But they are not doing that anymore. Mr. Hooser: Okay. Mr. Cobb-Adams: As parts of our Strategic Plan we are looking for other funding sources. The Mayor and I did meet with Office of Hawaiian Affairs (OHA) to see if they could — not to provide a program similar to Section 8 and let us run it, mirror it and that thought was for them to I guess, fund those number and that would hopefully open up some on our Section 8 for Native Hawaiians. What they needed was data. So, a month or two (2) months ago OHA did put out a survey which actually came from our Housing 04-15-2013 Housing (aa) Page 16 Agency because we had to sign off of it because we did not want to share peoples' information so we sent it out. But they did all the work and that was about a month or two (2) ago by our organization. Then the process of collecting that data and we are hoping, of course, that the data shows there is a need and demand and that they could share. But it is in its infancy stage so that is why we have not showed it. But we are looking at different ways and that is the only one that so far, that we talked to that has moved forward and doing something. So, we are thankful for them taking that first step. Mr. Hooser: The five hundred fifty (550) people, in round numbers on the list, would those generally be speaking be five hundred fifty (550) people who are either living in a multiple family situation, or homeless, or may be paying rent and just struggling with money kind of thing? Ms. Ka'auwai: All different situations. Mr. Hooser: So, five hundred fifty (550), for half a million dollars. Theoretically you could have enough money to — I am not suggesting that the County fund this. But in round numbers, if those vouchers were provided, is there housing available? Mr. Cobb-Adams: I think. Ms. Ka'auwai: I have seen been a little bit of a tightening in the rental market, definitely a raise in rents starting now. Mr. Cobb-Adams: I mean, we just had a meeting this morning with someone who studies housing with our Planning Department and in our type of economy, it is tourism based. The single-family homes or some units tend to — when the tourism goes up, they fluctuate back. I have heard— I mean it is hard. These private people - they say can I get one thousand dollars ($1,000) or six thousand dollars ($6,000) a month. The decision—it becomes pretty tempting so we lose a lot of units to that. Like I said right now, I am guessing, but I think it is a pretty good guess, that when tourism goes up and market demand is high for space, we lose our rental market. Mr. Hooser: I think that is very true. Thank you very much. Thank you, Chair. Chair Furfaro: I have one as well, but you go first. Go ahead. Ms. Nakamura: Just to follow-up on that. With the Real Property Tax changes that were approved recently, is it a tax-exemption if you have a long-term affordable rental? Has that information gone out? Have we publicized that so landowners might take advantage of that and hopefully help the Section 8 families looking for rentals? Ms. Yukimura: Do you know about it? Ms. Ka'auwai: I know about it. But that is for Real Property Tax. 04-15-2013 Housing (aa) Page 17 Ms. Nakamura: It just seems like something that would directly benefit the Section 8 families or holders. But I do not know. Maybe that is something we might want to follow-up with Real Property Tax about publicizing that. Mr. Cobb-Adams: Thank you very much. Whether they do it or we do it, that is a great initiative and I appreciate that recommendation. It is kind of good because Steve Hunt knows Real Property very well. I can go talk to him. Ms. Nakamura: I just wanted to follow-up with Councilmember Yukimura's questioning about how we could have more success with this program. I know that one (1) of the issues that you raised is motivation. Those families really need to be motivated to want to become a homeowner and there is a lot of work involved with that. What could be done to try to increase either with carrots or sticks to incentivize families to move into that direction, just to get off of public housing or subsidized housing? Mr. Cobb-Adams: I truly believe the start would be education and providing that opportunity. Just knowing how to budget your money. Those small little things can help you a long way, knowing where resources are. Some people are frustrated because they work so hard and they do not feel any progress. So, the education or tools are providing them opportunities. We have our FSS program, but that is not for everyone. If there are other types of programs that could help with people in those areas. I think that would be a good start. Of course, there is a myriad of ways you could promote it. We need to get more inventory for them, also. I think when it comes to just housing, inventory is a huge thing, from a no-cost standpoint, working with you folks on policies that promote either affordable housing development. It takes a lot of thought process, but they could cost us nothing and just promote a certain type of product out there that helps our people of Kaua`i and you marry with that some other type of financial incentivize and you are leveraging your money a lot more just because of a policy. I think those are other things that... Ms. Nakamura: Do you feel that given the families who are probably in this program, using Section 8, who are not elderly and not disabled, so those are the families who may have the potential of moving out of there, that the need is more Pa'anau-type housing or is it something in between? Is it transitional? Mr. Cobb-Adams: I would think it is a combination. You want to provide opportunities not just in housing, I think, in job skills and it is hard, housing is just one thing. But you are dealing with multi-faceted issues. But raising income, becoming more efficient, all of those type of things and decreasing costs, of course, all of those are different things. So, we could talk for days about this. Our focus, we try to stay focused on doing housing and that is why if we could provide more inventory that gives them a head start. Now, they do not have to worry about their housing cost or struggle about food, so they can get more education and hopefully get more opportunities. We tend to try to focus on housing. We use our CDBG money to help programs, work with another non-profit to provide these types of educations, but even they are struggling. Our CDBG has gone down. I think, I just read the Federal Administration Report and it looks like CDBG and HOME are things that are going to be shrinking in the budget, even after sequestration. So, it is becoming more challenging and I think that is why, like I said, our Strategic Plan is leveraging and being more efficient and those type of things. Ms. Nakamura: Thank you. 04-15-2013 Housing (aa) Page 18 Chair Furfaro: Let me ask you, you just made an example there of people in the long-term rental and then they drop out for a while when the Visitor Industry gets goo and so forth and then they drop back in. You do know, unless they have an approved Transient Vacations Rental (TVR) Permit they are illegal and you should be working with the Planning Department to turn those people in. Okay? When you use an example, that is the teamwork we need on this thing. Somebody is taking advantage of difficulties in the Visitor Industry and wants to rent long-term and they take it and then when the occupancy is demanding, they jump out to rent the house for full weeks. Please do us that favor. This is a very important topic for us. Let me ask you, what do you owe the success of having more vouchers available to Veterans this year compared to last? I mean it is not much, but it doubled. Is there something happening there that we should know about? Ms. Ka'auwai: The VASH case workers deserve all of the credit. They are on it. They work with them day in and day out. They are on-call twenty-four (24) hours. They are huge advocates. They take them out. They talk to the landlords. They convince them, give us a try. They are on full-time case management. We will work really closely with these. Barbara Johnson and Renee Rousseau from the Veteran's Affair (VA) really deserve all of the credit for that. Chair Furfaro: Right, tell them thank you for the good work from our part. Then we talked earlier about the sequester and you are not knowing yet. When will we know "yet"? Is that June? When do we know for sure the impact will be clear to us on what portion, what amount we would lose? Do you think it would be before the end of this year, this fiscal year? Ms. Ka'auwai: Yes. I am hoping so. Usually we find out about May. Chair Furfaro: Okay. Mr. Mackler: I may add, just for the CDBG grant, although it looks like the five percent (5%) worst case, it will probably end up to be a one half percent (%%) because there are recovered funds that HUD takes back from disaster allocations of CDBG that go used. So, the Director in Honolulu, Mark Chandler, has advised us that the impact for next year will be closer to half a percent. With the HOME program, we are expecting five percent (5%) but we do not know yet because of the State receiving the statutory minimum, the lawyers from HUD and Office of Management and Budget (OMB) are talking to try to resolve that issue. It is uncertain at this time. Chair Furfaro: But it could be better? Mr. Mackler: It may end up to be not cut. It depends on what the lawyers cash out. Chair Furfaro: How will you actually hear? Mr. Mackler: As soon as the information is available, we receive notification usually through E-mails from the HUD Honolulu Field Office. They keep us in the loop and provide us with very current information. Chair Furfaro: Okay. Councilmember Yukimura. 04-15-2013 Housing (aa) Page 19 Ms. Yukimura: A follow-up on that question about five percent (5%) versus one percent (1%) or one point five percent (1.5%). Is that very smart budgeting happening at the Regional level or National level, this idea of taking unused emergency funds? Mr. Mackler: Well, I do not think it is because they intentionally tried to recapture emergency funds. I think these are funds that just go unused and return back to the pool. Ms. Yukimura: Okay. Well, that is good. Mr. Mackler: So, what we have been advised is plan on five percent (5%), when the grant agreements are sent to the County of Kaua`i, it may end up to be closer to a half percent ('A%) in reduction. Ms. Yukimura: Thank you. May I ask another question? Chair Furfaro: Yes, continue. Go ahead. Ms. Yukimura: You cite on slide 24 the SMS Housing Study that projects a need of one thousand one hundred twenty-three (1,123) affordable housing units needed by 2016, two (2) questions about this. How does our Strategic Plan attempt to meet this need, how will it meet the need? Number two question is this need - how do you update it from year-to-year because it somewhat depends as you have indicated on state of the economy of Kaua`i, right? If tourism is up and there is a lot of economic activity, the need goes up because some of the units that used to be available for affordable housing are now either vacation rentals units or they are just long-term rentals priced higher than the need group can afford? So, those are my two (2) questions. Mr. Cobb-Adams: I think I can answer both of them. Our Strategic Plan aims basically at becoming more efficient. So, doing more with less. From a development standpoint, how do we develop more units with less money, leveraging our money? I can give you an example. Rice Camp. Our intent is to do sixty (60) units and the County is going to be putting in about two million four hundred thousand dollars ($2,400,000) for the land and one million two hundred fifty thousand dollars ($1,250,000) HOME funds totaling to just over three million six hundred thousand dollars ($3,600,000) and we are leveraging that to seventeen million dollars ($17,000,000) total. So, we are paying three million six hundred thousand dollars ($3,600,000) for had a seventeen million dollars ($17,000,000) project to get sixty (60) units. That comes out to about sixty thousand dollars ($60,000) per unit that w are just paying and we are having the private developer go out and get those other resources. So, that is one (1) way. We are also looking at policy changes. Our Section 201(H), our belief is if you set structure and policies that people know what they have to do, like developers come here. If they know what they have to do to get the project done and it is kind if concrete for them, give them the path. Part of it is that they do not know how government will respond. But if we tell them this is what you need to do and this is what can you get out of it, we make that path clear. We believe by leveraging — we are just leveraging our efforts and coordination, that we want them to develop and bring their resources here. Whether it is making polices like we sent testimony for the Water Board about giving credits or, I guess, incentives to decrease the cost to develop water for projects, or various things, like that. Then it makes it a little more cost effective to do affordable housing. That is another way. A third way is that we are looking at how we can get money? Gary and I have met with non-profits. The Mayor and I have 04-15-2013 Housing (aa) Page 20 met with other State entities. The Mayor and I have met with, I cannot recall her name, but she is from Obama's Staff and she is basically in charge of a lot these, or she knows where the resources are when it comes to the Kellogg Foundation, all of these huge foundations that can donate money. I think we are looking at how to try to dip into the resources, invite participation. So, with our Strategic Plan, it does not just give us direction and focus, it allows us to share those visions with other entities and say which part do you want to be partner with because we are doing a lot of nice things and hopefully we can share in these good things. A lot of foundations are looking for opportunities and we believe we have opportunities. I think we just need to go out there and advocate for participation in our County. It is a wonderful County, we have wonderful projects. Getting more money, becoming more efficient, and making better policy decision, I think that Chair just came up with an excellent one. Working more closely with our Planning Agency to make sure that we do not lose our units illegally to the tourism industry. So, those are the types of things we need to be doing and those are the initiatives that we have. Our Strategic Policy has goals, objectives, and projects and every month our leadership team sits down and we look at every single project and we have a status report as to where it moves. Not every project moves every month. But it is a five (5) year plan so we intend to move everything within the next five (5) years and we just added one (1). The Chair added one (1) as a great idea about policy. Ms. Yukimura: Actually, Vice Chair added another one, which is to publicize the low-income tax exemptions as well. Mr. Cobb-Adams: Oh, yes. Ms. Yukimura: Thank you for being open to that and seeing how they could all fit together to move you towards your goal. That is an excellent answer, Kamuela. Thank you very much. It shows that you folks are being strategic and given the demand, the problems, and resources that we have you have to be strategic. If there is a need for one thousand one hundred twenty-three (1,123) affordable housing units by 2016, that is three (3) years away, divided by three (3), that is three hundred seventy-four (374) units a year that we have to build or make available. Have you folks tried to put some numbers to your legals? Mr. Cobb-Adams: Dollars and cents? Looking at the numbers, it is so overwhelming. Ms. Yukimura: Yes, it is. Mr. Cobb-Adams: I think what we are trying to do is just do as much as we can, given the resources. I want to set realistic type of goals. Another intent in our efficiencies is we always want to have a project in planning, a project in design, and a project in construction so there is no lag between projects. That also takes funding, that takes coordination. Another initiative is to come up with a five (5) year plan because we do not just need to know this year's budget, we need to know the next four (4) years' budget as far as schedules. We have not quite come to that. But we are getting closer. We have at least the format for the five (5) year budget. So, to accomplish that is very difficult. I think with Iniki we did not come close to that amount of units and we had forty million dollars ($40,000,000). Ms. Yukimura: We built, supported, or incentivized about one thousand five hundred (1,500) units. 04-15-2013 Housing (aa) Page 21 Mr. Cobb-Adams: Oh, really? Ms. Yukimura: Over the last twenty (20) years. Mr. Mackler: Just to add to your comment. We are trying to leverage our money to the extent that we can. I think our 2013 HOME Action Plan, which you approved last week is a very good example of that. That Action Plan will alone through new construction and rehabilitation assists over one hundred seventy (170) housing units. We think we can make quite an impact. We have been running a deficit ever since we have been doing housing studies anywhere from one thousand (1,000) to one thousand five hundred (1,500) or more units. But we focus on increasing inventory and we focus on leveraging our dollars to maximize them. Ms. Yukimura: Yes, you have all done an amazing job and because of it our homelessness is not what it could be and our families are much better off and there are children that have safe, secure housing where they can do their homework. There are just a lot of implications of this and it is not always apparent. But if you think about it, it is quite remarkable and wonderful what you have done. I will see if there are other questions from others. Thank you. Chair Furfaro: Members, I am going to go around the table one (1) more time so we can stay on our calendar for the day. Is there anyone who has questions directed at Housing at the moment? Vice Chair, you have the floor. Ms. Nakamura: In a typical year, the Housing Agency creates, would you say between sixty (60) and one hundred (100) in a good year because last year was a good year? We have Pa'anau coming online. What would you say has been the average? Mr. Mackler: I would say if you go back and look at the production, the output historically it is around fifty (50) a year. Ms. Nakamura: Fifty(50) a year? Mr. Mackler: Average, yes. Of course, we had that large infusion of disaster grant allocation, which helped us tremendously. But I think in a normal cycle, funding resources and projects that we can put in the pipeline to push out is about fifty (50). Ms. Nakamura: At the State level it is about two thousand (2,000) and that has to go to all the Counties, just to do affordable rentals with Rent Housing Trust Fund and low-income tax credits. It is limiting what can be produced with those funds... Ms. Yukimura: Is the State doing that? Ms. Nakamura: Yes, they are, they actually are. We have received funding to do some our projects through the State. But unless we ramp it up and decide we want to increase, we are going to have to put the funding in place through our CIP Budget. If we want to make it more than fifty (50) units per year of affordable rental housing. That is just the reality. We can only leverage so much from the State. 04-15-2013 Housing (aa) Page 22 Ms. Yukimura: It is a follow-up. Chair Furfaro: Go ahead. Ms. Yukimura: Of the one thousand five hundred (1,500) or so that were done with Iniki money or with incentives and requirements like our Affordable Housing Ordinance, the question that have I never gotten answered is, how many are still affordable because if you have affordable housing that the County has built that is going out of affordability faster than we have putting in, we are not growing at all. I want to remind you that the project by the Golf Course, the Kaua`i Lagoons contribution, went out really fast. It was supposed to last for ten (10) years at Waipouli and it did not even last that long and we did not get to adjust it as we should have. The twenty-four (24) units by the Golf Course went out. It was supposed to be forever. It is no longer available. So, the sixty (60), you have to minus what fell out, then the sixty (60)— I do not know how many we did the year before. The sixty (60) might be a two (2) year quota rather than a one (1) year quota if we did not do sixty (60) the year before and sixty (60) the year before that. It is a moving target and it is really difficult. But I commend you folks to move towards that leasehold system because that is going to keep units affordable, hopefully forever. But my question is, you have to ramp up your ability to follow those leasehold projects and to properly manage and enforce it. So, right now the numbers are not that big, but they will get bigger and do you have plans for—it is just like I have been stressing to solid waste, the issue of contract management. For you folks it is going to be the lease management or whatever. Mr. Mackler: To answer your question, in Ordinance 860 there are provisions for creating a Community Land Trust to handle that portfolio in the future. We are not close to the threshold yet when that needs to be done. But it was something that was contemplated as part of Ordinance 860. Ms. Yukimura: I think I have a resource person that I met at the Smart Growth Conference who has been running community housing land trusts. I think in New Mexico, and they probably would be a wealth of knowledge in terms of setting it up. But that is a very thoughtful idea about how we would manage our leaseholds. We are managing some of our housing projects with a private non-profit. So, the model is there. Thank you. Chair Furfaro: Mr. Hooser and then I just want to say I would like to wrap up Housing here. Mr. Hooser, you have the floor. Mr. Hooser: Sure. I just wanted to raise another element of housing formula that we have been focusing on the subsidized and getting people off of Section 8 and how do we move forward units. I would like to ask how do we provide a "carrot or stick" to the developers who are sitting on zoned lands that was entitled for years and years and year and whether it is a Water of whether it is just to motivate developers who could develop in Lihu`e. Clearly there is Molokoa, there is a triangle. We talked about this outside of this meeting. But all of the conversation has been focusing on that element, which is a relatively small element, I think, of subsidized housing that only the County can do. But there is a much bigger element of housing for local people that is not the County's responsibility to do that. We provide entitlements, we work with developers. So, is there any hope on the horizon for any of these projects or anything that we can do to motivate some of these developers who again, are sitting on zoned land entitled, that could be developed into the affordable housing pool of people? 04-15-2013 Housing (aa) Page 23 Mr. Cobb-Adams: That is a very good question. I think we have a number. Right now just from our Agency, we lead an Affordable Housing Task Force and so we try to work with other County Agencies. It is not quite policy, but we try to coordinate efforts especially on projects like the triangle project. So, we have been meeting with Water. We met with a number of different Agencies to coordinate an advocate for a project that is providing product for the people of Kauai and affordable housing projects. That is a forty percent (40%) of the project is supposed to be affordable housing. That is one (1) initiative. It is not quite making policy, but it is coordinating efforts and driving that. From a policy standpoint, I think we really need to look at the areas that we want to have more development, like in Lihu`e and provide incentives. Basically developers are pretty simple. It is decreased time or decrease cost. You give them those types of incentives, it happens. If you want to go higher density there is nothing that I have seen other than—or do infill. A lot of times it is more difficult to do infill because you are set by the infrastructure and then to change the infrastructure is much more costly than building new Infrastructure. So, if we want to see more infill, I think we have to create different types of incentives. Maybe, since we have an existing distribution system of water, maybe we should maximize the distribution by creating incentives that decrease facility charges or something. But the Water Department is semiautonomous and they have their own financial problems. It is not a very simple solution thing. But those are the types of incentives that we have to really work together on. It is not going to take one (1) Agency or one (1) Councilmember, or one (1) Administration. It takes everybody cumulatively working together to figure out a number of policies that are going to open some of these doors or incentivize development. Mr. Hooser: Think about Molokoa over there because there is just a lot of land, it is in an urban area. Do you know, off the top of your head, how many units could be developed that right now? Ms. Yukimura: How many vacant lots? Mr. Hooser: Yes, could be. Not how many vacant lots exist, but how many vacant lots can be developed? Mr. Cobb-Adams: I would not have that off the top of my head. Mr. Hooser: That area, possibly it could be a tax incentive. If they are zoned but not developed, then perhaps there could be a tax incentive so you could pay for the value which right now, I do not think is happening. Mr. Cobb-Adams: I think that one is an interesting one. It would not end here. I think that State has some. DOT surrounds that parcel and DOT has some requirements also. So, it would not be just us working, it would be us working with the State. It has to be broader than just the County because we have to work with the State to push those types of projects. So, each project has its own issues. Molokoa I know has some issues that we could try to help with. Mr. Hooser: In the triangle parcel, how many units? Mr. Cobb-Adams: I think it is a little over four hundred (400), if not higher than that. It is a pretty decent size and they are just trying to get Phase 1 off the ground which is what we want also. 04-15-2013 Housing (aa) Page 24 Mr. Hooser: That is a water issue? Mr. Cobb-Adams: I think there are couple issues. They are almost finding permitting, but it is a water issue. It is a little more complicated than that because they are part of a huge Water Master Plan. I think we want to treat that project separately and ask the Water Department to do that also. But it is up to them. It is up to D.R. Horton. It is up to us. It is up to the Water Department. There are a lot of facets, but water is an issue, yes. Chair Furfaro: Let us keep those kinds of questions of development to the CIP meeting. Mr. Cobb-Adams: Okay. Mr. Hooser: Actually, I think I am done, Chair. Thank you. Chair Furfaro: Okay. But I think the questions that Mr. Hooser has raised are worth you looking into and plan to talk about it in CIP. Mr. Cobb-Adams; Okay. Chair Furfaro: Go ahead. Ms. Yukimura: Just to clarify. I have not asked any questions on Lima Ola, but that is my assumption that we will discuss that in CIP? Chair Furfaro: You were given that assurance from me. We would do that in CIP for Housing. Ms. Yukimura: Thank you. Chair Furfaro: I would think these upcoming possibilities could be part of that discussion on Thursday as well. Do we have any questions about operations related to Housing? If not, I just want to ask you at this point, Kolopua, congratulations on that project. Is that project out of Community Association Design approvals as well? It has the snow roof on Hanalei. Has the design community signed off on it? Do you know? Mr. Cobb-Adams: I do not know. Chair Furfaro: It is something that is subject to the protective covalence that is in that area. Mr. Cobb-Adams: I think the design of the roof was to maximize photovoltaic. But we will check with the developer to make sure. Chair Furfaro: Those snow roofs have not been successful within the community design elements in the past. Then I just want to say thank you very much for all of your work. I think there is a query here to the new numbers. We need to be realistic but with some reach and I want to thank you for your fine job. I am sorry, Housing CIP is tomorrow, not Thursday. So, you have the afternoon. 04-15-2013 Housing (aa) Page 25 Ms. Yukimura: I realize that my second question was about the Strategic Plan and one thousand one hundred (1,100) plus housing needed by 2016 was not answered, which is how do you update your database? But I will put that question in writing. Chair Furfaro: We will be sending that over. Much appreciated, ladies and gentlemen, thank you very much. We are going to break for lunch. When we come back, we are going to talk about Elections and then the County Council. We will be back at 1:45. There being no objections, the Committee recessed at 12:40 p.m.