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HomeMy WebLinkAboutEconomic Development, FY 2014-15 DEPARTMENTAL BUDGET REVIEWS 4/11/2014 DEPARTMENTAL BUDGET REVIEWS 2014-15 OFFICE OF ECONOMIC DEVELOPMENT April 11, 2014 Office of Economic Development (ss) Page 1 There being no objections, the Committee was called back to order at 1:46 p.m., and proceeded as follows: • Office of Economic Development Honorable Jay Furfaro, Council Chair Honorable Mason K. Chock, Sr. Honorable Gary L. Hooser Honorable JoAnn A. Yukimura Honorable Mel Rapozo Honorable Ross Kagawa Excused: Honorable Tim Bynum Chair Furfaro: Okay at 1:45 p.m. we are back from our recess. George, I will give you the opportunity to tell us what sequence you want to go through your Divisions and the show is yours. You have two hours. GEORGE K. COSTA, Director of Economic Development: Mahalo. Aloha, Chair Furfaro, Vice Chair Chock and Honorable Councilmembers for the record, George Costa, Director of the Office of Economic Development. We are honored to be here today and have opportunity to present our 2014-2015 Fiscal Year budget, but more importantly share with you the Office of Economic Development mission statement, OED's role in the County government and the community, and the great opportunity to affect our residents and visitors in a positive way. For today's presentation, we have a couple of guests with us. One of them is Mia Ako, who is to my right. She represents the Kauai Economic Development Board and in a few minutes will be providing an update on the Creative Technology Center what started out as the Digital Media Center. Later in our presentation, Sue Kanoho will make her presentation along with Nalani Brun, our Tourism Specialist. So in the order, I will start, I will summarize our Department and some of our goals and objectives and accomplishments. Mia will present her section. After we are done with the OED summary, I will go right into the Agricultural Specialist portion. Our Agricultural Specialist Bill Spitz is unable to attend so I will be doing his portion. Right after that, Glenn Sato will be presenting the Sustainability portion and right after Glenn is done then both Nalani and Sue will come up and give their presentation on the Tourism sector. As soon as Nalani and Sue are done, then both Art Umezu who is representing the Film Industry and Kaeo Bradford will provide her update on Workforce Development. We are going to try and go through this as quickly as possible and afford the last two speakers more time. That is basically Kaeo Bradford, based on our representation here just a few days ago, there was a request to provide a brief summary on what Kaeo does with Workforce Development and the important role that the Workforce Investment Board and Youth Council does. So Kaeo will do that. Then we will finish up with Ben Sullivan on the Energy piece. We have been watching almost every Department's presentations and a lot of reference to energy, so we are going to afford Ben more time to make his presentation and then I will summarize the budget portion of the Office of Economic Development and then go right into questions and answers. If that is okay with you, then I will move forward. As I had mentioned, our mission station is the Office of Economic Development (OED) works in partnership with the community, business, and government sectors to create economic opportunities towards the development of a healthy, stable, and balanced economy of the County of Kaua`i. OED promotes and nurtures sustainable economic April 11, 2014 Office of Economic Development (ss) Page 2 development within Kaua`i County, that is consistent with the community's needs and priorities. We take this very seriously. The key word here is "partnership." Like the County Attorney's Office we are a very small Office and our Specialists work pretty much alone with the assistance of our OED Specialist, who is Melissia Sugai. We really rely on our partnerships, our relationships with various community and business organizations to help us achieve some of these goals, projects, and initiatives that are so important to our community. As the County continues to face financial and staffing challenge it is imperative that we be as efficient as possible with our limited resources. With that in mind we rely on our partnerships and collaboration with many organizations on a daily, weekly, and monthly basis to provide not only job opportunities, but job preservation. I will go right into our guiding principles. Economic diversification, economic self- sufficiency, and economic opportunity for all. Within our Department we have both the Agricultural and Energy sectors and Sustainability as well. For all of those we try to focus on to not only diversify our economy, but also the self-sufficiency portion to help this island become more self-sustaining. I just wanted to mention in our Fiscal Year 2013-2014 goals, objectives, and accomplishments, I feel that one of the major accomplishments is the hiring of the OED Specialist II. It was a position that we have been lobbying for and working on for several years. We finally hired Melissia Sugai who came to us from Unlimited Construction. Not only does she have a diverse background but is very good in organizational skills. Melissia basically assists our Specialists and with Energy, she is working together with Ben Sullivan on the monitoring system that you will hear Ben talk about later. She also assists Bill Spitz in the Agricultural portion in helping with our Sunshine Market Administrative Rules monitoring and assists Art Umezu with Film permitting and compliance by our film producers. She also is responsible for providing oversight and update of the Kaua`i Made, Kaua`i Festivals and event, Film Commission, Facebook, and websites. She is also working on several initiatives that will help make the Office of Economic Development more efficient. We have gone from a hard copy library where we had a lot of periodicals and magazines and reference books on our shelves and we have gone to a more digital set-up where anyone interested in starting a company or anyone needing economic data and information, we can lead them to websites as opposed to hard copy material. At this time, another project that we have embarked on two years ago is the Creative Technology Center. It started out as the Digital Media Center, but in our collaboration with the arts and culture focus groups, as well as sports and recreation groups, that initiative has changed and now we are looking at a center that is more inclusive of the media, not just film, but also in the music and other respects. At this time I would like to have Mia Ako present an update on the Creative Technology Center. MIA AKO, Vice President, Kaua`i Economic Development Board: Thank you. Thanks, Chair Furfaro and Vice Chair Chock and the rest of the Council. As George said I am Mia Ako, the Vice President of Kaua`i Economic Development Board. In Fiscal Year 2013-2014 the Council funded the implementation phase for this Creative Technology Center. The implementation phase had five priorities that were set to be worked on. One was the formation of a Charter Board. Formation of a new non-profit organization. Site selection. Fundraising. To-date our consultant Alan Tang of Olomana Loomis, ISC has been working with the O`ahu law firm in the formation of this 501(C)3 non-profit. This non-profit will become the entity that will own and operate the Center. The Board governance and the formation of a Charter Board is also being worked on by this law firm. Site selection has been moving forward very smoothly. We have explored numerous site possibilities and have identified a property within the Lihu`e Town Core. The site is County of Kaua`i-owned and viewed as the most appropriate for the center. So discussions with the Administration is ongoing and we have met with County officials for traffic, April 11, 2014 Office of Economic Development (ss) Page 3 parking, and utilization impacts. Now once the site has been identified and approved, property assessment will be conducted just to ascertain whether the condition of the property and the construction readiness of the property. Fund development has begun. A large grant-in-aid was submitted to the Legislature in January for capital construction costs and our consultant has worked on numerous private fund foundation grants in this implementation phase. The County of Kaua`i has done its due diligence in vetting the need and sustainability of a Creative Technology Center for the island of Kaua`i. Now after two years of meeting with a diverse range of Kaua`i's community, the Center has received overwhelming support from Kaua`i's film, business, education, technology, and cultural communities, as well as our local and State government officials. Kauai Economic Development Board is taking this Creative Technology Center to the next steps with plans for the constructions of the Center. As shared earlier a State GIA grant request for $3.75 million was submitted to support capital construction costs for the Center. The estimated total construction budget for this 32,000 square foot facility is estimated at around $15 million. Kauai Economic Development Board humbly asks the Kaua`i County Council for consideration to fund the next phase which is the pre-development phase. The budget request is for $150,000 and this is for pre-development costs associated with construction planning. Pre-development funding is needed to move this project forward. Funds will be used for fees associated with architecture and design costs, engineering and design fees, environmental impact studies, some surveying, and site prep fees. So the big money that was asked of our State Legislature is for capital construction. The moneys that we are asking from the Council is that pre-development. That is it. Chair Furfaro: We are going to stop there for some quick questions. Mr. Hooser you have the floor. Mr. Hooser: Thank you for being here. I know we are probably not going to take the time for a complete briefing on this. Chair Furfaro: May I just answer the question, George some of these items you can come back, right? In Committee Meetings. This is a budget review, not so much a project by project review. Go ahead, Mr. Hooser. Mr. Hooser: $150,000 before I would be able to make a decision on that I would need to know the...is it a County...who owns the land and the building and who manages it and all of that kind of stuff? So that could be briefed later? Chair Furfaro: Yes. Mr. Hooser: So you will talk about it later? Mr. Costa: It is a matter of timing and right now we are presenting the budget, but a lot of these projects that we are engaged this Fiscal Year, the studies are being finalized now. So within the next month or so, we will be coming forward and asking for agenda time to present those. Mr. Hooser: Before we vote on a $150,000 budget for this project we will be briefed on details of this project? Ms. Ako: Correct. Mr. Hooser: Thank you. April 11, 2014 Office of Economic Development (ss) Page 4 Chair Furfaro: Real quick follow-up, George, does that $150,000 show up in anything that is in the 2014-2015 budget? Mr. Costa: Yes, it is in our budget. Chair Furfaro: It is in your operating budget? Mr. Costa: Operating budget. Chair Furfaro: Okay. Mr. Kagawa, you have the floor. Mr. Kagawa: Thank you, Chair. Not a question, but a request. It is a question, I guess, if the group can...or the County can consider naming this Creative Technology Center after Mattie Yoshioka. I would really appreciate that. I appreciate that consideration. I know there are a lot of names out there, but I know Mattie was the spearhead behind this project and I think gratefully I would ask for that consideration. Chair Furfaro: Excellent recommendation. You can do that in the event of something we put on the table and send to KEDB. Excellent. Mr. Costa: Thank you. Moving right along. I want to acknowledge as I mentioned earlier, we partner with a lot of organizations and businesses and these are just a few like the Chamber, Kaua`i Planning and Action Alliance, Visitors Bureau, Royal Coconut Coast Association, and we cover a large gamut of organizations that really help us to achieve a lot of these projects. As far as our Fiscal Year 2014-2015 goals, some of them are already in place and we are looking to continue those. I chair the Mayor's Crime Task Force. We have been meeting for four years now. It involves the Police Department, the Prosecuting Attorney's Office, the Visitors Bureau, and many business organizations. We meet every month and I am proud to say that this past Legislative Session we introduced a Bill, a live video testimony Bill 2475. It was deferred, but we are very...we are going to be very proactive in trying to achieve that. That Bill, what that does is that it helps with our visitors. They are targeted and they are victims of crime and all too often, they return home on the mainland and are unable to come back to testify against perpetrators. So I know we have a tough road ahead, but we are hoping to pursue this video testimony that hopefully can be done and help prosecute some of these criminals. Also I work closely with the Hanapepe Town and marketing with their Friday night event. I have been working on that for a few years now. We did provide some funds to the Hanapepe Economic Alliance to help market not just the core area where the galleries are, but the entire town. The group has been slowly bringing more businesses into the fold, and including businesses that are west of the Hanapepe River. So we are very thankful for that. Also working with the Hanapepe Salt Pond Paakai Farmers Hui. We have been meeting with the traditional families that have been farming paakai or salt for generations and we want to work with them to see how we can maintain that area and protect them from outside influences like the homeless people and some of the feral cat populations, and really promote that cultural aspect of our island that is so important. We continue to support for the Kaua`i Marathon and the County Aid Station at that Marathon. We also implement the Ordinance No. 960, pesticide use and GMO crop enforcement is something that we are also working on as well. The Mayor's Holo Holo 2020 Plan, what I have done was the Mayor started out with 18 initiatives. They have now grown to 38. Of the 38, the Office of Economic Development has about 20 of them. I will go quickly through them. April 11, 2014 Office of Economic Development (ss) Page 5 Many of these will be covered by either Ben Sullivan or Nalani Brun. Electrical Vehicle charging stations, the alternate energy...Kaua`i Energy Sustainability Plan. With Kaeo Bradford and Workforce Development, we work closely with the Kaua`i Community College and educational activities, Kaeo is a member of the Kaua`i Economic Development Board Educational Committee which works closely on STEM initiatives, which is Science, Technology, Engineering, and Mathematics. On the Agricultural front, the Islandwide Agricultural Park System, again we thank you for helping to support the Kilauea community with the Kilauea Ag Park, and we are looking at possible sites in Anahola, Kalepa, Koloa, and Kekaha. Papaya Disinfestation Facility, again that initiative, we tried to...not every project that we undertake will turn out as a success. In this case, we did not have the papaya farmers that we thought we had. So now we are looking at this facility being utilized for another purpose. In Tourism, Nalani will go through these initiatives, which are part of her program and a lot of them have to do with restoring and preserving cultural sites and stewardship programs to preserve these cultural sites. Also, I mentioned Hanapepe Friday Art Night, that I have been involved with. Nalani has been involved with the Kapa`a First Saturday. We are starting to see other towns in our community creating events to spurn interest not only in the town but create economic development. We are also looking at area shuttles in the North Shore, Po`ipu, and the Royal Coconut Coast. We have been working with some of the resort destinations as well as with the Transportation Department and with Lee Steinmetz who is our Transportation Planner and coordinating the North and South Shore Transportation study. I will go right into the Agricultural piece. Kaua`i Food Hub, you know, we had talked about combining several of our initiatives, one was the Multi-Species Processing Facility that started out as a slaughter...looking at a new slaughterhouse and morphed into a multi-specs species processing facility and then it partnered up with the commercial kitchen and then we started looking at a Kaua`i Food Hub. Unfortunately, what we found over the last year as a blessing in disguise is that part of our feasibility study, both slaughterhouse operations, Andrade and Sanchez have embraced those studies and have now advised us that they want to pursue on their own an expansion of their operations which took the need of the County initiative out of the picture. That is what we like to see which is the private sector develop these initiatives. The Kilauea Ag Park again, mahalo to the Council for your support. Feral Cat Study that was just concluded. The final report has been sent to both the Council here and to the Mayor for review. Peter Adler, who was contracted over a year-ago convened several members of our community and met, I believe about seven times throughout the last six months. They came up with recommendations, which is part of that final report. One of the recommendations was to have an Ordinance licensing cats and again, thank you to this body, who actually achieved that goal. Continuing on for next year, Kilauea Ag Park, I will be working very closely with the Kilauea Neighborhood Association and that entity on completing their...helping them to complete their organizational structure, and the next steps of developing that agricultural park. Chair Furfaro: George, excuse me, I want to make sure that the time from now until August as it relates to the Ag Park, you are focused on the details of the Stewardship Agreement and the insurance, naming the County as co-insured. So I wanted to be very clear and clean when we get to the August update. Mr. Costa: Yes. Chair Furfaro: Thank you. April 11, 2014 Office of Economic Development (ss) Page 6 Mr. Costa: To that note Malama Kaua`i has submitted their certificate of insurance naming the County as co-insured. That part has been completed. They are working on their governance and by-laws. Chair Furfaro: I want to make sure that their certificate of insurance, the amount, naming the co-insured for the County of Kaua`i, and the amount is equal to of at least $2 million. I want to make sure it is reviewed by the County Attorney's Office. Mr. Costa: Okay. Chair Furfaro: Then we can move right along. We are looking for that. We are looking for that in August. Mr. Costa: Again, working with the Sunshine Markets, we passed the amended Administrative Rules for the Sunshine Markets. Again, it is a matter of utilizing our resources, both Bill Spitz and myself and now we have incorporated Melissia Sugai. What we have been doing...I have already started inspecting questionable farmers or vendors in the market. So we are proceeding with that. We believe we are going to create some opportunity for real farmers to be in the market by eliminating the non- farmers. As I mentioned, we will continue working on Ordinance No. 960. With that, I will turn it over to Glenn Sato to present the Sustainability portion of our presentation. Mr. Hooser: Chair, again, process are we going to do questions at the end or should we interrupt as we go forward? Chair Furfaro: This is what we are going to do. We are going to ask very specific questions and not talk about philosophy at the presentations and now we have now rescheduled three Departments already and we are going to be running out of time. So specific questions, let me know and I will recognize you. But if we go on with philosophical pieces we will not make it because we have Civil Defense coming up. Mr. Hooser: It might well be philosophical talking about Agriculture and seeing two pages, duplications that could probably be on one page including the Feral Cat Study. That is disappointing. I understand the resources and the limited availability. I do not see Mr. Spitz here. Mr. Costa: No, he was not able to attend. I am presenting the Agricultural piece for him. Mr. Hooser: You look at the Tourism presentation and pages and I know Tourism is very, very important and we have page after page and the same with Energy and I would like at some point in the future for you to come back with Mr. Spitz and talk really about Agriculture and fill in the blanks. It is kind of thin. If you could add in the Hawaii Farmers Union into your list of resources also. Ray Maki that is the organization that is now active and should be on that list. Thank you. Thank you Chair. Mr. Costa: Okay. Just to address your questions. We were asked last year, we took five hours and two days to do our presentation that was a lot more detailed and so we have really streamlined that information. I am more inclined to do more than less but it is what it is. April 11, 2014 Office of Economic Development (ss) Page 7 Mr. Hooser: Perhaps we will schedule something like that in the Committee in general about that. Chair Furfaro: I am going to say it again. We did not have to wait until the budget to get an update on the Feral Cats. We did not have to wait until the budget to get an update on Agriculture. Please understand, we are here every day for three weeks, touching on the numbers of a budget that needs to be sustainable. We cannot go in and give each Department a half a day or a day to discuss philosophies. I am telling this not just to you George, but to all Departments, if you have major philosophical changes you have to let us know and I will make calendar time for you. Fair enough? Mr. Costa: That is fair. Chair Furfaro: Okay. Joann? Ms. Yukimura: I too am looking for more substance in the description of the programs so we can understand what we are asked to fund. I see these as budget questions and I did think this week as I looked at what we were going to cover that we probably did not give you enough time. We will probably do a follow-up, because I understand the scope of your Department's work or your Office's work is huge and very critical and important. So we can understand what we are funding. Chair Furfaro: George, I want to make sure that everybody understands I circulated this calendar a month and a half ago and got no feedback from anybody. Let us move and I will give you some more time here, but this is a budget review and we have every week time to put things in Committee as we build up to this. Kaeo was coming by today and we had an hour with her. Is this a follow-up to the budget or follow-up to questions that were posed on Workforce Investment? Mr. Costa: Actually both. There was a request to provide a little bit more information on what she does, but she is prepared to talk about the budget. Chair Furfaro: Maybe we are not is what I am saying on the other things. Maybe we are only prepared to talk about budget okay? Mr. Costa: Okay. Chair Furfaro: Continue. GLENN SATO, Sustainability Manager: Good afternoon, Glenn Sato, Sustainability Manager. Let me go quickly through my program. If you look at slide 26, those are the 2013-2014 goals and objectives that we accomplished. We completed the County operations sustainability plan. It is an administrative internal document and it is being kept as a working draft so we can continuously update and improve it. It is posted on the Office of Economic Development website. If you go to that website, you can call it up under "sustainability" under "programs." The County Green Team has been very active, Staff Level Green Team we have done a bunch of projects. Just to highlight, we had some residual grant funding and we replaced 21 refrigerators, saving estimated annual savings of $7,459 a year. So we are looking at roughly a 1.67 per year payback. We created disposables to reusables and we have these loaner kits with dishes, cups, forks, utensils, and napkins. With those three kits each kit services 25 people. So if you put them together, you can service a group of 75 people. Boards and Commissions has used that for April 11, 2014 Office of Economic Development (ss) Page 8 some of their gatherings. Workshops, conferences, we have loaned them out to various Offices. The Green Motor Pool we have three Nissan Leafs and one Prius available, so about 85 County employees and out of those 85 employees, admittedly about a dozen consistently use the cars. I think as we progress forward with the bigger Motor Pool concept, and we start to shrink the fleet, we will have more users. The people that have been using the cars have really come through that it is a very unique experience and they like it. The Virtual Reuse Room. This is basically a Craigslist, an ability to post slightly used items on the website with a picture and description so other Offices that might have use for those items can make contact with the owner of the items, and basically trade. A Virtual Reuse Room versus the physical reuse room. The Virtual Reuse Room allows us to have desks, chairs, file cabinets, as long as the poster is willing to hold those items for a while. It has been working. Our Office has moved some file cabinets, padlocks, file folders, index cards, so it is working and it is saving funding, County funds. We also work to make the two major County employee functions Spooktacular and Holly Jolly to be zero waste events using compostable plates and forks and what not. A lot of my time is also working with the OED Energy Specialist, because Energy is such an important component of Sustainability. If you look at the next 2014-2015 what is coming up it is pretty much a repeat of the County Operations Sustainability Plan. There are 42 initiatives listed that came from the different Offices and Agencies. Right now we are working on 25 of those. Anywhere from the energy initiatives that Ben will be speaking about, to having recycling bins in all Offices that can handle more than just the regular things that have been recycled. The County Green Team, we hope to continue building the Green Team. Right now we have 15 members. We hope to increase that, by two, three, or four every year. County sustainability metrics, that has always been a challenge and we hope to continue to improve the metrics. Ben when he come up will explain a lot of initiatives that he is starting that will help to improve the data collection. Gasboy was phased out and Fuel Master kicked in May 2013, so we are just waiting for the data to be collected to the point where we can use like an annual amount and look at it that way. At the same time on the island and State-level, there have been a lot of initiatives happening. The State just hired a State Sustainability Coordinator, Jackie Kozak Thiels who works out of the Department of Land and Natural Resources (DLNR) Office. Hawai`i Green Growth has started a measures project which we are participating in. Maui County is forming actually a Sustainability Division. City and County of Honolulu has a Sustainability Coordinator. The Big Island is also filling...they are going to dedicate an Economic Development Specialist to also handle Sustainability. At the same time, we feel comfortable enough that we would start to seek grant funds for sustainability projects. Mr. Costa: Thank you Glenn. Next we will have Nalani Brun. Chair Furfaro: We are going to ask some questions. George, I want to tell you, you are on page 26 out of a presentation that is 85 pages. We have not even gone through the other narrative. You are going to get the last two hours on the schedule which is going to be from 2:30 p.m. — 4:30 p.m. on April 22nd. At this rate, do I really want to know when Maui is going to hire somebody? Is that really part of our budget review? Very questionable to me. We need to stay very focused. To the members, I am also going to say to you, in the new format and this has been evolving many times. I set-up the 24th and the 25th so that you have individual time to meet with our Staff so you can be briefed on certain numbers, questions that you have, and so forth. We are now going to leak into those two dates. Who has those two dates cleared in your schedules? If you do or do not right now, because I am running out of dates. You have both days cleared on your April 11, 2014 Office of Economic Development (ss) Page 9 schedule JoAnn? Not both? Well this was the intent. Does anybody else...I just want to ask that question. You were not told, but you could have read, it is in my memorandum. Ms. Yukimura: Sorry. Chair Furfaro: George, we are going to go forth. You have it clear? Ms. Yukimura: I have it listed as a budget call-back. Chair Furfaro: George, we are going to go to Q&A on everything, but if you need to send Sue Kanoho away and reschedule her for 2:30 p.m., because you are not going to make it here. 26 pages...we are on page 26 of 85 and we have not gone to our other narrative. Let us stay to pertinent operational issues that deal with the operating cost related to the County budget. Mr. Costa: Okay. Chair Furfaro: You have two more hours however you want to use it on the 22nd is fine. Questions, JoAnn, you have the floor. Ms. Yukimura: I just want to share that in Finance, the IT people, they had really detailed, written descriptions of their programs and their pieces and they actually read the whole thing to us, but it was extremely informative. So if you have a PowerPoint, but can back it up with some detailed programmatic explanations and so forth, it really helps us. These are real generalities here, and it is hard to understand what is going on. But for the Sustainability section, I wanted to know what metrics are we using both County and island wide? Not just County operations, but island wide metrics for sustainability? And County operation metrics for sustainability? Let me just preface that by saying that I do commend you on your Green Team. I really feel like you are beginning to change the internal culture of the County with people reusing...using reusable dishes, there are some real great detailed ways that you are shifting how people operate in the County. So I really appreciate that. I think we need to measure. Just like the United Way billboards on the highways that tells us how much we are doing or not doing? Because otherwise we do not know if we are progressing at all? Mr. Sato: If you look at this narrative, not the PowerPoint, but the budget narrative. It talks about the Hawai`i Green Growth measures project. The reason why I pointed out that last bullet island wide and Statewide initiatives is to let you know that some of my travel funding is tied to that. On a Statewide basis the Hawai`i Green Growth group and the neighbor islands are trying to come together with the State Sustainability Coordinator, to develop Statewide metrics. We want everybody to be on the same page. It is going to take some time, but we just started the project. We just started and, in fact we have had two meetings so far. It is on page 13. Chair Furfaro: I commend you on that. That is better luck than we have to even talk to the State about Transportation. They will not even talk to us. Mr. Sato: The State Coordinator is really exceptional Jackie Thiel. Ms. Yukimura: I am glad to hear that. April 11, 2014 Office of Economic Development (ss) Page 10 Mr. Sato: She is based in DLNR, but as I started in Economic Development on grant funding, she is on a temporary funding. We are kind of fighting to get her established. But even with that over her head, she is coordinating all of the efforts. She is putting a lot of work into it. Ms. Yukimura: Well, I am glad for that, but I do not think we should wait for the State. I mean we must have at least three to five basic indicators and certainly electrical kilowatt usage is one that I expect Ben will address. Are there not some other basic indicators that we can track and start looking at our performance? Mr. Sato: We are in terms of vehicle miles traveled. We are using...we are working...the initial consultant assistance to develop operations plan, we worked with Kaua`i Planning and Action Alliance and Diane Zachary as you know has a lot of experience with indicators. So for saying that, as you mentioned for energy, kilowatt hours used, for vehicles it would be vehicle miles traveled. Ms. Yukimura: Why are we not seeing a graph up here that shows the last...I do not know two years or five years? Mr. Sato: Ben is going to show you some graphics on County energy use. Unfortunately I have had a hard time with the fuel usage because of the gap with Gasboy and Fuel Master. Ms. Yukimura: That is it understandable. Vehicle miles traveled that is a good indicator and kilowatt hours you used as an island and County. What else do you have as a good indicator? Mr. Sato: It depends on what section, what area you want to concentrate on? Ms. Yukimura: May I ask that next year you have two to five main sustainability indicators and give us a report on it? Mr. Sato: Sure. Ms. Yukimura: Thank you. Chair Furfaro: Will you yield the floor to Mr. Kagawa. He has been waiting for questions for Glenn, JoAnn? Ms. Yukimura: Yes. Chair Furfaro: Go ahead, Mr. Kagawa. Mr. Kagawa: Thank you, Chair, I heard what you were saying, we would like to get that long presentation, but perhaps during budget we want to get into the numbers and when I look at their budget, the total budget goes up $415,000 over last year. The area that it goes up is this account called "other services" and so I think they briefly could explain what is the justification for spending $400,000 more in other services? Just quickly a few, just to get maybe some suggestions perhaps for the call-back is that we have...I cannot really count how much it is, 50-60 of these in "other services" and April 11, 2014 Office of Economic Development (ss) Page 11 perhaps one way you could do it for the call-back is to put an asterisk next to each one that is a new grant. What you have in the prior year and in the current year. So you have this compared to last year's. So we can see which ones went up or down? I think for most of them we just look at them and we are kind of familiar with those and most of them are small. But I think for me, I just want to ask one specific in regards to KVB, Sue. We have $275,000 and this is the largest grant that we give. I understand that this is our bread and butter, tourism. What is last year's appropriation for KVB? Mr. Costa: $110,000. That is what Sue is here for, the last slide is summarizing what the difference is. Our overall budget is over by $444,000. Part of it is the Visitor Industry marketing piece and the other piece is $100,000 for the Ag Park. Chair Furfaro: So your variances are reported on page 82 of the packet of 85 pages. Mr. Costa: Right. Mr. Kagawa: Scott just showed me. We have the sheets. So I will analyze these and end my questioning. So the reason why we need to spend more is that we feel like we need to attack that market more in this year? Or is it lack of funding from the State? Mr. Costa: Well, both. We are looking at a softening of the visitor industry market, and also there are several needs to promote the culture and some of the infrastructure projects that we want to help support. Mr. Kagawa: I certainly saw the report from...what did we project...I certainly agree the way you attack a down-market is with good marketing. Good luck. There are a lot of areas fighting for tourists, but Kaua`i is a beautiful place and with a good attack strategy I think we can bring them here. Mr. Costa: Thank you. Mr. Kagawa: Thank you, Chair. Chair Furfaro: We are in Glenn's area. Ms. Yukimura: I am not finished. Chair Furfaro: Let me finish what I was saying. Are you going to bring up individuals? Is Glenn staying up here and Ben coming up next? Mr. Costa: The plan is for Glenn to finish up his Sustainability and next is Sue and Nalani to talk about the visitor industry because most of the variance is there. Chair Furfaro: Anything that Glenn is talking about is not overlaid with Ben's role? Mr. Costa: No. Ben is specifically Energy and he is prepared to discuss that. April 11, 2014 Office of Economic Development (ss) Page 12 Chair Furfaro: Continue with your questions with Glenn. Ms. Yukimura: Thank you. I want to know what our learning is from the electric car project? Do we have any report on that? That is Ben's area? Okay, I will wait for Ben. Chair Furfaro: Mr. Hooser, question? Any more questions for Glenn? Okay. So George, you want to bring up KVB? Mr. Costa: Nalani and Sue Kanoho. NALANI BRUN, Tourism Specialist: Aloha, Nalani Brun from the Office of Economic Development. Tourism Specialist and my sister from another mother, Sue Kanoho, Executive Director of Kaua`i Visitors Bureau. I am going to take heed your advice and really quickly go through our accomplishments. Probably the biggest one because we have been up here before with our different projects. Our biggest one really is in our Office. We have great staff members support. Now having our Economic Development Specialist II and our Administrative Specialist, and also our County Accountant has just been great because we have just been thrown so many projects in different ways and all kinds of projects that we have kind of juggling constantly. I am constantly dropping balls and these guys are so good, they pick those balls right up and they help us re-juggle them back in there. Having a team like that, and I feel like I am Sue Kanoho with a really great team. Chair Furfaro: Nalani are we starting on page 29? Ms. Brun: Yes we are going to start on page 29. Chair Furfaro: Is it the PowerPoint or the narrative? Ms. Brun: I am going with the narrative. Mr. Costa: It should be reflecting the same thing. Chair Furfaro: We just want to know which we are following. Ms. Brun: Okay. Chair Furfaro: You want us to follow your Economic Development package? Ms. Brun: Yes. Chair Furfaro: Okay. Ms. Brun: So in the narrative on page 26 is our goals and objectives for next year. Basically pertaining to the budget and this year we kind of really went to...because we do a lot of surveys to really try to make things measurable. There are objectives and what I will try to accomplish and they are tied to the different line items in the budget. Basically we have the Kaua`i Festivals and events website. That is really important for us, because we have used that pretty much to try to help all of the different events and festivals and projects out there to gauge each other and stay away from each other or work with each other. So it has kind of been a big communication effort for all of April 11, 2014 Office of Economic Development (ss) Page 13 us. Those are the three objectives that we will do with the money, including getting that website used by more of the kamaaina. Also in our County CPEP and HTA grant program. We do that every year and we are happy to say that we got the go ahead for 2015. So for another year, we are going to have funding. So we are going to go out for another round of grant requests and we want to make sure that we hit at least 35 new events for the year. Of that, our second objective is to make sure that five of them are product-oriented, not just festivals or events which are kind of one day or one week, but there are things that last throughout the year. The new part of this over in the budget, you will see that we have money for Hawaiian culture, a chunk there for "other projects." We are hoping not only to go out for RFP for festivals and events, but also for our Hawaiian culture projects. We have had a lot of opportunities with HTA to go after their money, but so many people apply that Kaua`i just does not get a lot of money. So if we are able to put a little money in the pot to fund some of those great projects that are not funded by the Hawai`i Tourism Authority. Same thing that we do with CPEP, we can also do with that money. Chair Furfaro: Am I reading that on page 14? Ms. Brun: Page 26 HTA and CPEP training. Chair Furfaro: I went to your Tourism page that starts on page 13. But you want me to go to Page 26. Ms. Brun: I went right to the budget. Chair Furfaro: Got it. Mr. Costa: What we did, we did goals, objectives, and accomplishments for this year and goals, objectives, and accomplishments for next year. So what we are on is goals, objectives, and accomplishments for next year. Chair Furfaro: You have two Tourism sections. Ms. Brun: Yes, one is what I did last year and one is what we are planning to do next year. We have the CPEP training programs and we put those on every year. We watch what is going wrong or what people need more help in and then gear our programs towards that. This year was a lot of social media and again, we drilled in zero waste programs. So we kept bringing people in and training them and giving them tools how to implement that and we measure it when we go out to the events to see how they are doing and if they are progressing. We have little steps. They start with the blue recycle bins and taking steps to get more and more to the zero waste end of the line. That is our goal. We are working on new surveys. A lot of our programs cross into the business world like first Saturdays and we want to take a look at what economically is happening in the towns. So we not only do visitor satisfaction, and those important things where they come from? How much they enjoyed the event? But we also want to look at the economics of it. How much are they spending and are they going into the businesses? This year we are going make a big effort to take the surveys well in an event that is happening in the middle of a town. So we have a few of those that do that. So we are planning to implement that as part of one of our objectives. I also support the Kekaha Host Community Benefit program which are different grants that they give to the community. I am their grant person for the paperwork. The paperwork goes in and out of my office and if something goes wrong I birddog it so it is fixed. We have the Kahua 0 Kaneiolouma and right now they are work through their two grants they have. They are closing up one and working April 11, 2014 Office of Economic Development (ss) Page 14 with the other. They actually should be done with everything by the end of this summer. They have taken on the worst part which is the cactus area. So they avoid that, like I would, so they will be doing that last, but they have feverishly working at it since the end of February. Kaua`i Nui Kua Papa which we are planning to launch on May 30, where we are going to be putting up the moku signs up. We are moving from the research phase into the actual signage phase. We have some money that we have in there to finish that up. They are kind of behind closed doors right now, the whole team, writing grants and they have something like $4 million of grants that they are writing at this moment that is due on April 26th and they are going to be going after the funds that they promised to go after. You will see that that is in the budget, the Kaua`i Nui Kua Papa money. Hanapepe Salt Ponds, that is one of our Holo Holo 2020 projects. Luckily George has been managing that for now, thank goodness. We are planning to look at the visitor industry plan again. It is until 2015 so we are going to be bringing someone in to help us re-look at it. Not to do the whole thing but to pull out what we have accomplished and what we need to accomplish further. We always have other OED grant projects that are kind of line itemed in. One is the big Halauola Conference which is coming in July and is very important to all of us. We are actually getting a chance to host it and we want to show off. We have the Kauai Tahiti Fete, that is coming in and that was ours a long time ago. Big Island took it and now we are kind of just borrowing it back for a while. They are going to come back and do some educational programs this year. So we are hoping to help support them bringing that back every so often so we can enjoy that. The other big project that we are going to be doing is kind of identifying all of the projects that we wanted to do in each of the mokus. We have some of them identified like in Puna, we want to support the work in Huleia and look at having a better plan for Wailuaahoano in Wailua. We have Kaneiolouma and Hanapepe Salt Pans out in Kona. We are feverishly looking at other projects in the other mokus and our goal this year is to come up with best probable projects that we can do in the next four years and get them done. Last, but not least our happy airport greeting program. We did put money back in there to get that going again. It is a headache. I mean it is a headache with the badging, but we are definitely constantly getting kudos for the program. So we just cannot deny that. People do love it and it is a great way to keep the people calm when they are in the airport. Last, but not least I turn it over to my sister for our Kaua`i Visitors Bureau piece which is a big chunk. Chair Furfaro: Is there any money from last year, page 14, over to this year, page 28? Ending on page 28? Is there any money...grant money that you have in there that fell through or you will not be spending or needs to be redirected somewhere? Ms. Brun: We have some from HTA, but we redirected to first Saturday because they were having the worst program and I had to get agreement from the selection committee to do that. Other than that, I am pretty much out. Chair Furfaro: I am just raising that because I do not see any money for the hula festival. Mr. Costa: I carved out $5,000 from our emerging industries for that and I have conveyed that to Kehau for the application form to apply for that grant. Chair Furfaro: Nalani, thank you very much. I just wanted to ask that question. SUE KANOHO, Executive Director, Kaua`i Visitors Bureau: I will go at lightning speed. I want to review the line items in the budget for us. April 11, 2014 Office of Economic Development (ss) Page 15 Chair Furfaro: Which page? Do I go to the PowerPoint? Ms. Kanoho: The PowerPoint, 39? Ms. Brun: PowerPoint 39 and narrative 28. Ms. Kanoho: So for the kamaaina marketing we want to keep kamaaina marketing in our sights as opposed to just waiting for the downturn in the economy and based on what Ross Kagawa said, definitely we are starting to eek in to some that. That is going to be needed. So we have that at $30,000. MCI support is up to $50,000 and I want to point out the reason why that is. One is that I noted before the Hawai`i Tourism Authority funding has dropped off with the marketing side of it and each island is doing more incentive type of opportunities with the businesses coming in. So we have not done that and would like to do that, so we have upped that from last year. Maui, Big Island and Oahu are all look at giving incentives to the groups that come in and we have not been doing that. We would like to get banners and try to do some things if you book so many room nights that we will do a hula halau or something like that. KVB Road Show is focused on our gateway cities and more support for our gateway cities and marketing. Bridal show, $20,000, with the romance, we have two shows that we do in Los Angeles, keeping the romance side of life going. Kaua`i Marathon at $50,000 for this year's race, which would be in September. Yes, meetings convention and incentives (MCI), that is the meetings market. So when I say MCI, I mean the meetings market. The Iwaki Marathon money at $5,000. We have an exchange program with our Sister City Iwaki in Japan. We send our winner of the Kaua`i Marathon to Japan and Japan sends their winner to the Kaua`i Marathon. We both have an exchange program. That is $5,000 to cover their air, transportation, and lodging. Then something new for us, and we have not done in probably over ten years, is the AVP Volleyball Tournament and looking at the possibility of securing that with the professional volleyball at Kalapaki. I have been on the phone with them and they very interested and it would be something that has not been done in a long time. The Aloha Video is a project that we are trying to get back to some of the values, what is great about Kaua`i besides the natural beauty is the people and we were thinking if we could do a series of videos that would really touch back to people's core values of who we are as an island and really try to share that more. It is kind of beyond brand marketing, but more about the people of Kaua`i. I think it would help not just for the visitor industry, but the community as well. Photography, and that is being used in the WIR and NACo Conference coming up that we have secured and we have a requirement of a 10% Admin fee that gets us to $275. Any questions? Chair Furfaro: Mr. Rapozo? Mr. Rapozo: The sports marketing, Kaua`i Marathon we had last year? Ms. Kanoho: Not in my budget. Mr. Costa: It is in our Office of Economic Development budget. April 11, 2014 Office of Economic Development (ss) Page 16 Mr. Rapozo: It was and then it was moved over to your budget? Mr. Costa: Yes. Mr. Rapozo: I thought we were done with the Marathon funding already. I thought they had outlived our commitment for the Marathon? I see it here again. Mr. Costa: Well, it is an event and I realize that was one of the goals to have that event become self-sustaining. Mr. Rapozo: It was their commitment, their promise it would be self-sustaining and their promise that they needed"X" amount of years. I think that had been a pretty controversial issue. I mean is that something that we are going to continue to fund? I have a problem with that. Mr. Costa: Well, we would like to continue supporting that event, but at the same time, we are working with them, so that they look for other funding sources like HTA. Unfortunately, HTA, like with some other requests that we have applied, has not come through. Mr. Rapozo: Like HTA, the County of Kaua`i is struggling as well. Again, most of us here know the history of that funding and the whole discussion we had and the assurances that this was going to be the last one. I realize the importance of that, but it is hard to justify those kind of events. We are telling people that we have to raise their taxes. So I am just saying it is going to be rough. For me, anyway. Thank you. Chair Furfaro: Before I recognize Mr. Kagawa, let me ask you something, what are the moneys in your budget transferred over to Sue's budget, which is money that came from us? What was the original commitment? Mr. Costa: The original commitment was three years. Chair Furfaro: Three years and this is year what? Mr. Costa: This is the 5th year. Chair Furfaro: I almost could tell you that I indicated that I am okay with it if we had to give them one more year and I met with them and told them at some point you need to hustle for another sponsor. So we have gone from three years and extended it to four and now you are telling us it is maybe five. Mr. Costa: Five, right. Chair Furfaro: I just wanted to get that picture in my mind here. Mr. Kagawa. Mr. Kagawa: Thank you, Chair. So the Kaua`i Marathon, has the numbers been going up or going down from off-island? April 11, 2014 Office of Economic Development (ss) Page 17 Mr. Costa: It has steadily been increasing. The overall participation. Mr. Kagawa: How much came from off-island last year? Mr. Costa: Let us see? Ms. Kanoho: I would say almost probably 75% is off-island, when you say off-island you mean off Kaua`i? Mr. Kagawa: Yes, off Kaua`i. Mr. Costa: Kaua`i actually set a record last year with 600 participants from Kaua`i and the rest, 1,100 came from off-island, either outer islands or out of state. Mr. Kagawa: The numbers are steady you said or going up a little? Mr. Costa: Slowly going up. The total participants have been increasing each year. Mr. Kagawa: Well, I think if we can maybe garner some of what has succeeded with the Honolulu Marathon, I think for that one, that is a money- maker for them. I certainly would love to support even more, but the numbers have to justify and if the amounts of the increase is small, perhaps they need to have some input from you. What month is it? Mr. Costa: Usually Labor Day weekend. Ms. Brun: August 31. Mr. Kagawa: One of the things that we could think about is have a special bon dance around that marathon date that could possibly bring in some of the Japanese runners, making one big one, like all the Hongwanjis together with the Okinawan Festival does once every two years. That could be an annual one. I know for me, I think that bon dance can be tapped a little more. There are all nationalities that love dancing and jumping in the ring and the more we can, I guess, use that as a marketing tool, I think it can help. I am not saying it will help in the thousands, but everything helps in the competing markets. Mr. Costa: Right. Ms. Kanoho: Thank you. Mr. Costa: Thank you that is a great suggestion. Chair Furfaro: I want you to know that Mr. Kagawa is a pretty good marketeer. It is a brilliant idea. Brilliant. Let me ask one question before I turn it over to Mr. Hooser. The Marathon is there and MCI? MCI is targeted for only three hotels on this island. April 11, 2014 Office of Economic Development (ss) Page 18 Ms. Kanoho: Maybe 5? Chair Furfaro: No, three. It follows on the fact that the Federal government has taken so many tax credits away from companies, to promote conference and incentive work that it is no longer a deductible from their travels. I am just saying, I want to be real about that shrinking to a few room inventories of only a few hotels. You have $50,000 and I am just saying is that earmarked for us as a destination? It does maybe include a couple of the smaller hotels because the St. Regis, they do not even have a Banquet and Catering Manager anymore. They are just purely high-end FIT, they are not MCI anymore. We have got Hyatt, Marriott, and maybe the Sheraton Kaua`i. Ms. Kanoho: Kaua`i Beach Resort and Waimea Plantation Cottages from an association standpoint do... Chair Furfaro: When Kaua`i Beach Resort finally fixes their meeting facilities, there will be an opportunity to throw them in that pack. This is the upper end of corporate incentives. Mr. Hooser. Mr. Hooser: Hi. Ms. Kanoho: Hi. Mr. Hooser: Nalani you did a great job. So you are the sole Tourism Specialist in the Office, is that your job? Ms. Brun: That's me. Mr. Hooser: And you get seven pages, quite a bit of details and charts and graphs and good information and we have one page, seven bullet points on Agriculture, including Feral Cats is one of the bullet points. You have kind of skimmed past the Agriculture and I have a Tourism question, but I would ask you Director to talk to our Agriculturalist Specialist between now and the time you come back and meet with the Farm Bureau and Farmers United and come up with something, in terms of plans for the future. It is a little troubling to see so little emphasis on Agriculture, just physical here today, paper, and money. I really want to send that strong message. I see Diane Zachary back there and I know she has been working on it. So if you could do that, I would appreciate that a lot. The Tourism is showing increase of $485,000, right? That is what you are saying? What is the existing? What is the total Tourism budget? Mr. Costa: Right now for Sue's portion as she mentioned $110,000. This year, and we are looking to increase that to $275,000, which she just presented. There are other initiatives that we look at, which are matching funds for our CPEP/HTA grants. Mr. Hooser: Year-to-year in round numbers how much is the increase?The total? Mr. Costa: Well, I had it broken down on that last slide, $485,000 was the increase in that section. Mr. Hooser: That is above and beyond how much? April 11, 2014 Office of Economic Development (ss) Page 19 Mr. Costa: Above and beyond...excuse me... Mr. Hooser: What would be the base amount? If it is increasing by $485,000? Mr. Costa: It is usually about $400,000. Mr. Hooser: So it is going from $400,000 round numbers to $485,000 so it is more than doubling? Mr. Costa: Right. Mr. Hooser: The same question for Agriculture, what is the base? Going from...so the increase is $100, what is the starting point? Mr. Costa: Let us see, it is about $200,000 is the base. Mr. Hooser: So going from $200,000 to $300,000? Mr. Costa: Right. Mr. Hooser: Thank you. If I remember correctly during this budget year, we transferred several hundred thousand out of Kilauea Ag Park to cultural? Mr. Costa: Right. Mr. Hooser: I supported that. But it is further indications that we need to support agriculture more, I think and that it deserves it, given that we have taken several hundred thousand already. I would like to see this budget put some money back into agriculture above and beyond what is there, if you could possibly think about that and talk to Mr. Spitz and again Ray Maki of the Farmers Union or Jerry Ornellas to try to move that forward. Thank you both of you for your presentation. You do a fabulous job on Tourism, and my concern is that we have to...there are other areas that we are not doing such a good job and we need to push those a little bit. Thank you. Mr. Costa: Thank you. Mr. Hooser: Thank you, Chair. Ms. Yukimura: So on the airport greetings program, I asked that we ask the State airport system if they could handle that? Did we make the request? Mr. Costa: Yes, we did. Ms. Yukimura: What was their answer? Mr. Costa: They could not afford it at the time, but they are putting $8 million into the Lihu`e Airport. Ms. Brun: They made a stage. That is what they did. They made a stage and moved all of our equipment. I am hoping that is a sign that they are moving there. I have asked him several times can you put it in your budget? He said if I April 11, 2014 Office of Economic Development (ss) Page 20 put money in to put your entertainers on a stage. I said they could be your entertainers. So hopefully that is where we are going. It has been planted. Ms. Yukimura: I would like to see the Lihu`e Airport budget, because they spend a lot of money and it seems to me this is part of the whole atmosphere of the airport and the building of culture, the cultural introduction, if you will. So it just seems like a really logical thing for them to put on and maybe we should just say we will do a match, with dollar for dollar. We will put $1.00 for every $1.00 that they put in because I see it as their responsibility primarily and they have an income source that we do not have. Then I just want to say we hear outside, Nalani, about the excellent work that you are doing and people are so thankful that you are there to help them navigate through the grants. What you bring then to us is really excellent. So this Kaua`i Nui Kua Papa and Salt Ponds are both right on in terms of how you can protect and enhance the Salt Ponds. The Kaneiolouma Heiau is closing two open grants of over a million dollars. Those are not County moneys per se...are those the County's moneys that we allocated? Chair Furfaro: Those are County moneys. Ms. Yukimura: Oh, okay. I thought they were getting other grants in addition to that. Ms. Brun: They are applying. Ms. Yukimura: I have been very reassured by how they are using the moneys. So I am not at all concerned about those moneys and I am very excited about what is coming forth. I have to say that I am concerned about the Kaua`i Marathon, because I think we did say we are not making any more commitments of County money. So you know, it is a good program, but we did...I thought, do our part. I like the Aloha Video idea, Sue. Where will this be shown or how are you planning to use it? Ms. Kanoho: The thought is and if you would like I would send you a couple of examples of what I am thinking. It would be in partnership with a non- profit on the island and Nalani and I have talked about this quite a bit...I do not know if you have seen a couple of the videos that talk about core values and it is just through like a little vignette. But I saw them and they made me cry. Ms. Yukimura: That is good. Ms. Kanoho: It takes a moment in your busy schedule and it just...if we could do a few of those with a spin on Kaua`i and the people and culture, I just think we are starting to lose what is special about Kaua`i. I know this is not 100% marketing per se, but in a way it is. Because a lot of why people come here is not only for the beauty, but the people and we have so much to share. I can give you examples of what we are trying to do. Ms. Yukimura: I love that you are refocused on the values, because it is real here and underlies what attracts people to this island. So I think it is authentic marketing in the sense that you are taking what really is here, and sharing that in a way that people will brand Kaua`i, if you will. April 11, 2014 Office of Economic Development (ss) Page 21 Ms. Kanoho: I think it is a reminder for some of those who might have...either have not experienced it, the younger generation, perhaps, none of us here, of course. Ms. Yukimura: I feel like The Garden Island is trying to do some of that by their features. Ms. Kanoho: Right. Ms. Yukimura: Ordinary local people who are so extraordinary. Ms. Kanoho: Exactly, but like a step further. Ms. Yukimura: The challenges are in short moments of it. Where are you going to use this? Ms. Kanoho: You Tube as you know and Vimeo and all the other things. As you know, we could do presentations at marketing events and trade shows. There are all kinds of things we could use it for. Chair Furfaro: I am going to take over at this point, good ideas. I would like say we have half an hour left today and I am making some decisions about the schedule, which is my authority to do so. Okay? On the 22nd, I want to give an hour's time to Ben and Energy. I want to give half an hour to Workforce Investment then. Okay? When is KPAA going to talk to us? Are they here to help make a presentation? Or enhance somebody else's presentation? What is the answer there? Mr. Costa: Diane is here in support. Chair Furfaro: It is your call, your Department and your budget. Is she going to make a presentation? Mr. Costa: I would like to make a call and say basically our budget, every Department, every sector, OED, Administration, Energy, Sustainability and Film and Workforce all showed reductions from 2-10% this year. The only two Departments that showed an increase which was Tourism, which Sue just did and the Ag portion, the $100,000. Chair Furfaro: I am not asking you for a recap now you can give me the recap on the 22nd. Mr. Costa: I would like to do is use this remaining time for Ben Sullivan, which I believe a lot of the Energy questions have come up. Chair Furfaro: You are not going to do Ben in 20 minutes. You could do the Film people for 20 minutes, but I want to give Energy at least an hour. I want the staff to make a note, next year you get half a day. I want the flag raised early, the schedule went over weeks ago and next year we are going to plan on half a day. You have two hours now and two hours on the 22nd. Ben I hate to do that to you. You are on-island on the 22nd, but I want at least an hour on Energy. BEN SULLIVAN, Energy Coordinator: Yes, sir. April 11, 2014 Office of Economic Development (ss) Page 22 Ms. Yukimura: Procedural question. Chair Furfaro: I am not quite ready to take your questions, I am on procedural. Is that acceptable, the 22nd? Mr. Costa: Yes. Chair Furfaro: Okay. We can talk about Film now. Now JoAnn has a procedural question for me. Ms. Yukimura: I am sorry, when are we taking up the Creative Technology Center? Pardon me? I heard that we were going to have a more extensive briefing. Chair Furfaro: I want the consultant back, a date, very soon on a scheduled Committee or Council Meeting. George, I am going send this over in a memorandum to you and I want to say that Mr. Hooser on the 7th of May, I want to hear from the Ag people and I would like Bill Spitz here. Mr. Costa: Okay. Chair Furfaro: Because that will be a public hearing day on the evening of the 7th. Is that acceptable to you, Mr. Hooser? Mr. Hooser: Yes, Chair. Thank you. Chair Furfaro: Okay. So we will follow-up with Mr. Hooser on the agricultural activities. JoAnn, question for the Chair? Ms. Yukimura: So I am fine with the Creative Technology Center being in a Committee, but I want to make sure that it will be before budget decision- making? Chair Furfaro: Yes. Ms. Yukimura: Okay, because it is a hefty budget item. So it is a budget issue. Chair Furfaro: So I just want to make sure when you leave, you are prepared to understand that I want to have Ag scheduled for the 7th in the earlier part because we get into public hearing and decision-making that evening. If I cannot fit it in on the regular schedule, be prepared for the Technology Center on the 7th as well. Okay? But I am going to try to squeeze it in during a Council Meeting. Ben thank you for your understanding. Ladies, thank you for your presentation. I want to hear from the Film Commission for the rest of your time today. Mr. Costa: Okay. Chair Furfaro: You did understand I am moving Workforce Investment to the 22°d? April 11, 2014 Office of Economic Development (ss) Page 23 Mr. Costa: Yes. Chair Furfaro: Okay. Welcome Art. ART UMEZU, Film Commissioner: Thank you. Aloha, Chairman Furfaro, Councilmembers, thank you for taking the time to listen to my presentation. First of all my presentation is based on page 37-39. On the budget narrative, which is on the screen. Page 37. Thank you. Chair Furfaro: So back to the short book...which book? Mr. Umezu: PowerPoint. Chair Furfaro: PowerPoint. Mr. Umezu: It is on the PowerPoint. Before I start, I had the latest issue of the Hawaii Film and Video magazine which should be on your desk. It came out about 12 days ago while I was in L.A. So I decided to bring that and it has a really nice feature, a story about the pending Jurassic Park, which is still called "ebb tide" what the industry wants to call it, but I guess it is all over the media so it is alright to say that the official title of this fourth segment is Jurassic World. So I just wanted to preface that and there is also a nice story following my article about Jurassic Park and the film industry about this particular Japanese production. We did a promotion for the Japanese Ultraman which is an animated super hero from Japan, which Sue spearheaded. There is a nice article about that, which is in the current issue that is before you. The goals and objectives and accomplishments for last year, it was a very trying year, but the first and foremost goal of this particular Office is to market Kauai as Mr. Kagawa said this is a beautiful island and my job is to promote this to the world and filmmakers as a premiere film location. With the 5% boost in the tax incentive, which kicked in last year it is very imperative that we market this and one way to market it is through the kauaifilm.com website. That is our key piece that keeps us together to market our beauty to the world. We are constantly and always trying to find ways to improve the website as we did recently with the help of Sue Kanoho, who has inputted some of our new film locations and movies that were filmed in the last 5-6 years. Including "Pirates of the Caribbean," "Soul Surfer," the Bethany Hamilton movie, "The Descendants," "Just Go With It," and the upcoming "Jurassic World," which is the fourth installment of the series Jurassic Park. Number two on the PowerPoint is that we do have a number of professionals on Kauai, the number has really not increased. But we have a solid team and these are the production and location managers that I work constantly with. I depend on them. But they also depend on this Office so I do the best I can to find opportunities for these people to find work. Number three, to work with organizers of the Hawaii International Film Festival. As you know last year, after seven years of hiatus, I decided to bring it back, and it worked. It was an overwhelming success. It happened in October and November at three of our venues on Kauai. St. Regis, Kukui Grove Cinema and the Historic Waimea Theater and we do plan to bring it back this year again. Without the support of the volunteers and two of the event co-coordinators, or organizers, we would have never done this, but we are moving forward to having another Film Festival this year. As far as the Hawaii Film and Entertainment Board, we used to have a monthly meeting. They still do. I am not able to participate as much essentially because we can do this on the phone as far as phone call-ins. We also have E-mails, texts, whatever it takes to cut down on expenses, but they have the HFBE Meetings that I attended last year and this year I April 11, 2014 Office of Economic Development (ss) Page 24 have not attended, but I plan to at least attend one or two again this year. The sales and marketing trip in Los Angeles happens every year at the AFCI which stands for the Association of Film Commissioners International which takes place in Los Angeles. Last year the numbers were not up, meaning that we have a booth that we collaborate with our four County Commissioners in Hawaii. That includes the Big Island, Maui, Kauai, and Honolulu. We also have the presence of the Hawaii State Film Commissioner Donne Dawson who is always there to support this endeavor to market at this particular event. Last year's number was not up as far as the filmmakers coming to the event, unlike this year's one, that I just returned from. However, last year, what was the key point about being at that particular sales and marketing trip through this AFCI was that I got to meet with people with the Universal Pictures who is producing Jurassic World. One person that I met at the marketing trip last year was, in fact, the production and location manager. He is now the location manager for Jurassic Park. She happens to have family on Kauai, and that does help. When she was supporting this particular movie eighteen months ago. I was able to meet with her and she assured that Kauai, after...if you remember in April of last year, with all the big buzz as far as having the movie filmed on Kauai, it was abruptly cancelled due to the re-scripting, which are was re-scripted back in September last year. And now after six months, they are back on Kauai. So the market, Kauai is also part of the sales and marketing to Los Angeles. Last one is the Hawaii International Film Association. That is predominantly producers and production companies on Oahu that deals with Japanese film productions, television, shows, and commercials. Because of the support that I received especially from Sue's Office, she does pretty much all of the groundwork to get a lot of these productions here. I handle all of the permitting on the island. If you look at the stats here, last year we had 32 productions. If you look at the fiscal stats, which is this one here we are looking at 28 productions, which is not reflected up there. However, if you look at the total, that is the expenditures, film expenditures on Kauai for the fiscal year. That is up through the current. However, with the pending Jurassic World production, which starts in the second week of May, that will be boosted up significantly. I am sure that Kauai crew meaning local people hired will increase dramatically. So this is the update to April 1st. But the numbers that you see up there, especially on the budget, if you go down, that is actually the expenditures of film and that will increase dramatically due to the one film production that is slated for next month on Kauai for at least 3-4 weeks. That is Fiscal 2013-2014. We will move over to... Chair Furfaro: I want to clarify some terminology. George, this number represents the forecasted income to the island of Kauai? Mr. Costa: No, this is the film budget that the productions that were actually here. That is what they presented to us. We have not confirmed the actual expenditure, but this is what on their film permit have indicated that they would spend here on the island. Chair Furfaro: So what do we call that? It is their operating budget, but it is our forecasted income? Mr. Costa: Income. Mr. Umezu: Film expenditures. Chair Furfaro: It is their film expenditures, but it is our income? April 11, 2014 Office of Economic Development (ss) Page 25 Mr. Umezu: Yes, it is. Thank you. Moving over to the goals and objectives. Mr. Rapozo: I am not sure if that is our income. Chair Furfaro: The island income. Mr. Rapozo: Even that, we do not know. Because are they advertising in our magazines? Are they advertising on our TV stations or radio stations? I think what would be more... Chair Furfaro: I see it now. Mr. Rapozo: I think what would be more helpful for us and I think the Tourism Agency in Honolulu, I do not know what you call it, when it is one point something. Mr. Costa: The multiplier. Mr. Rapozo: Yes. There has to be a way that we justify what they are spending here because I am sure it is a lot of money. Mr. Costa: This is expenditure that they claimed this they spent on the island. Chair Furfaro: Mel is correct. That is what I said the first time. The fact that this TV series, reality shows, and so forth, that could be promotional stuff on other channels to promote the series itself? Mr. Costa: Right. Chair Furfaro: The other portion is the overnight and room nights and index spending on retail and so forth. So you need to clean that slide up a bit. JoAnn? Ms. Yukimura: So this is their total budget for the films or is the budget for Kaua`i? Mr. Umezu: For Kaua`i. Mr. Costa: Just to give you an example. Clovis, the clothing company that you get the catalog, they spend $150,000 to be here for a few days to photograph. Ms. Yukimura: That is their hotel rooms, their cars, their food... Mr. Costa: Right. Ms. Yukimura: So it could be the next...next question would be of their budget how much did they actually spend here? Which might have been more or less of what they budgeted at the time that they applied for the permit, right? If you know April 11, 2014 Office of Economic Development (ss) Page 26 the categories you can figure out the multiplier effect. If you know how much they actually dropped on the island and for what purposes, you can figure out the multiplier effect. Mr. Costa: Right. Chair Furfaro: So George, we are in agreement, when we say "the budget" it is their expenditures. Ms. Yukimura: On Kaua`i. Chair Furfaro: I want to get clear is what is that as far as a revenue index forecast for us? Mr. Costa: Okay. Chair Furfaro: And we can send that over in a question. Mr. Costa: Thank you. Ms. Yukimura: I have another question. Chair Furfaro: Go ahead. Ms. Yukimura: So the Kaua`i crew, total crew is the people employed? Mr. Costa: By those companies. Ms. Yukimura: From Kaua`i. So it is not the number of productions. It is the number of people employed? Mr. Umezu: Right. Mr. Costa: What Art is saying there are 28 productions when you look between commercials, print ads, etc. 28 in total. So this is a summary as opposed to listing all 28. Ms. Yukimura: Great. Thank you. Chair Furfaro: It is a summary that leaves some additional need for information, George. If you could clean it up for us, with some definitions, we would appreciate it. Thank you. Go ahead, continue, Art. Mr. Umezu: Thank you, skipping over to page 39. If you will, that is the goals and objectives for 2015. We will continue going back to trying to market our beautiful film locations. We will continue to monitor. We will improve our website, which is done by Tsunami Marketing on Kaua`i. As far as working with the film production and location managers, we have maybe half a dozen people that I count on and of course, there are a lot more specialists and professionals, but the key to any film production is initially you need location managers, who understand the island, where you can film? Whose jurisdiction it is. The film production handles more of the ground work once the production comes. So I do plan to implement what we did back maybe ten years ago, to April 11, 2014 Office of Economic Development (ss) Page 27 actually meet with these people to address challenges and trends and great, new ideas that we may need or that I may need to get their input in trying to market this beautiful island as a film location. The Film Festival, the number three, Mr. Lambert who was the Assistant Director when I worked with him nearly a year and a half ago is now the Director. He has been promoted and appointed the Director, a former Kaua`i resident. He is very, very supportive of Kaua`i and he is moving forward to get the films to Kaua`i through the International Film Festival. It usually happens in the Fall. So we are looking at September/October. Chair Furfaro: You need to wrap it up. Mr. Umezu: I will wrap it up with this. I just returned from the AFCI location for the first time it happened in March. This is one of the reasons I am scrambling because usually it is mid-April or June, this year it was March. I just returned from there. One of the things that I really learned from this particular trip whether you are at executives or not, they are looking forward to coming to Kaua`i. To film something, but of course, the script, without the script, they cannot come here. So I identified one person who scouted on Kauai last year, his name is Shannon Akegarasu, he is with Philote Factory. He actually came to the booth to mention that he is going apprise me that there is going to be a film called"Hanalei Bay" which is a Japanese feature film. They scouted here last year and they are in the development stage getting the finances together. The script which will be written in English, as opposed to Japanese and looking forward to them coming to Kaua`i next spring is what I understand. Thank you. Chair Furfaro: Any questions for Art? We have about three minutes. Ms. Yukimura: I appreciate how you quantified your goals and objectives, but you say that the Film Festival was successful. How many people were in attendance? That kind of detail would give us a sense of where we have been and where we might be going. Mr. Umezu: Absolutely. Ms. Yukimura: You say, this is great, book at least 12 film productions as a result of your marketing plan. I like the fact that you creating a marketing plan. But you know, how many were booked last year and then it is not even a matter of numbers and you could book one big "Jurassic Park" and make up for 28. So some inputs that could give us better idea of what you are aiming at. Mr. Umezu: Case in point is exactly that. Last year we had pretty much a regular year of having smaller productions. Then in September, we had MTV here for seven weeks and that alone created $3.8 million in revenue. Not revenue, but expenditures, if you will. Ms. Yukimura: Good. Then do you, like Sue, get feedback in terms of how Kaua`i is viewed? What kind of issues people have either positive or negative about filming on Kaua`i? Do you have a formal process like a survey? Mr. Umezu: The State Office, because in light of the bird issue in September, we had some issues with the new law implemented two years ago, regarding the lighting at night-time. We did have some issues. However, when that April 11, 2014 Office of Economic Development (ss) Page 28 happened, because it is new to me, too, I actually went to the location. Six nights in a row to monitor the lighting at night they had some lighting. Ms. Yukimura: Well, I am thinking about a more systematic way. If they had a bad experience, they may just not come back and you will never know why. Mr. Umezu: You are right. Ms. Yukimura: Or if you get a lot of good feedback you could use it in your marketing and I was wondering if there is a systematic way? Mr. Costa: As in an exit interview or survey? Ms. Yukimura: Yes and Sue is an expert in it and maybe she can help. Mr. Umezu: Thank you. Chair Furfaro: Thank you very much. George I am going to make an executive decision and I want you to hear it very clearly. I am going to work with my staff and going forward, we are going to start asking you twice a year for a marketing update. Okay? This marketing update is going to be in February and August, just like you would do in the hotels with a reforecast and I want to hear about marketing ideas and so forth. To tie up our meeting...I like all the things that Art is doing, but when people are thinking about ideas and they might come, we should be hearing that in a report. It might be a real good time to coordinate that with KPAA when they do the economic indicators, the measurement piece. You know, I would like to develop that with you to going forward. We have a couple of discussion items before we actually get in the budget. Then kind of before we end the year, get kind of an update on things that we have learned and things that could change our strategic thinking and so forth. Because I just think we need to do it, if not taking all of this in the scope of thinking it is an operational issue and not giving you the right justification. Things like Transportation, Energy, cost controls, things like that, do not need to be in the marketing and strategic update. But I think a good time to do that is a long with our economic indicator update. I am going to work on that and communicate to you. For right now, we are planning and I want everybody to realize now, May 7th is going to be a very full day if we follow-up on the agricultural piece and specifically the Creative Technology Center. We also have to deal with all the money bills before that night and that night we have the public hearing. We also have you scheduled back on the 22nd at approximately 2:30 p.m. and we are going to allocate an hour for Energy, half an hour for the Workforce Investment, and then follow-up on the visitor question. Are you fine with that? Mr. Costa: Yes. Chair Furfaro: Okay. Now what we need to do is take a caption break and when we come back, we are going to Civil Defense. Economic Development is recessed until the 22nd. Mr. Costa: Thank you. April 11, 2014 Office of Economic Development (ss) Page 29 Chair Furfaro: Thank you, everyone. Caption break 10 minutes. There being no objections, the Committee recessed at 3:34 p.m.