HomeMy WebLinkAboutBudget Deliberations & Preliminary Decision-Making, FY 2014-15 • •
5/12/2014 - 5/13/2014
DELIBERATION AND PRELIMINARY DECISION-MAKING FY 2014-15
COMMITTEE OF THE WHOLE
DELIBERATION AND PRELIMINARY DECISION-MAKING
FY 2014-2015 ANNUAL BUDGET
MAY 12, 2014
A Deliberation and Preliminary Decision-Making Meeting on the FY 2014-2015
Annual Budget of the County of Kaua`i was called to order by Jay Furfaro, Chair,
Committee of the Whole, on Monday, May 12, 2014, at 9:29 a.m. at the Council Chambers,
4396 Rice Street, Room 201 Lihu`e, Kauai, Hawai`i and the presence of the following was
noted:
Honorable Tim Bynum
Honorable Mason K. Chock, Sr.
Honorable Gary L. Hooser
Honorable Ross Kagawa
Honorable Mel Rapozo
Honorable JoAnn A. Yukimura
Honorable Jay Furfaro
The meeting proceeded as follows:
Chair Furfaro: Aloha, good morning. I would like to welcome all
of you to the Deliberation and Preliminary Decision-Making of the County Council on the
upcoming Operating Budget. I do want to touch on a few comments before we go forward
and at the same time I want to thank everyone and the staff who made this weekend so
successful for the 100th Anniversary of the building. We had a number of blessings, the food
was tasty, the music was excellent, and we had over a hundred and seventy-two (172)
people that came for the presentation of the actual history of the building. It was a very
successful anniversary. We kept a guest book, so we have something to share with the next
100 years. On that note, I want to say thank you to everyone. Before we begin, I want to
remind everybody that I will be making a small introductory presentation and turning the
meeting over during the presentation to Mr. Rapozo, the Vice Chair of the Committee of the
Whole. I will be giving the Mayor some time to speak as well but today is really the start of
decision-making on the Annual Operating and CIP budget for the County of Kauai. The
second and final reading of the budget will be held in just over two (2) weeks on May 28 but
the Council should be able to come up with an understanding of the budget agreement. If
not, the Mayor's March 14 budget submittal will go into effect. It is our responsibility as
Councilmembers to finalize the budget and negotiate a conclusion that both works for the
County of Kauai for the people as well as for the Administration. However, due to the
changes in the revenue from the Transient Accommodations Tax (TAT) and depending on
the Council actions regarding the revenue proposal, the March submittal would not
accurately reflect the balances and the budget if we do not reach an agreement.
I do not want to spend July and August with a flood of money bills if we cannot come
to an agreement today and that is exactly what will happen. I am saying to all who are
here as well as the Council, this is our duty and responsibility to come up with the
responsible financial figures for our Operating and have an accurately reflected budget for
this County. There are some challenges facing us and I want to be sure that
Councilmembers are aware of those items and the different potential scenarios especially
when it comes to revenue. I do understand that in the Mayor's presentation we will have a
better picture of the trends that were indicated to us as it deals with the allocations.
Perhaps Steve will bring us as current as he possibly can but that in fact is the decisions
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DECISION-MAKING 2 MAY 12, 2014
and presentation that need to be made at the start of the meeting so that you are all well
informed as it relates to our retirement system. Again, that is not the perfect timing but
that is the timing that we have. They change from a trends analysis to an actual. To the
Mayor and Steve, we are anxious to hear your final conclusion on that as it relates to
retirement system and our Other Post Employee Benefits (OPEB). Again, I just want to
reiterate, it is important that everything we discussed over the next two (2) days; it gives us
some realistic numbers that they are in fact obtainable to commitment and dedication for
the Operating Divisions here. The proposed cuts, should they exist in the next two (2) days,
should also reflect items that are realistic and obtainable. On that note, Mr. Rapozo, I
would like to make a presentation on the opening again. I will turn the floor over to you.
Chair Furfaro, the presiding officer, relinquished Chairmanship to Mr. Rapozo.
Mr. Rapozo: Thank you, Mr. Chair. The floor is yours.
Chair Furfaro: The first one is self explanatory. The first sheet
as it relates to Real Property Taxes, I would like to make note that in comparison and
comparison, the County has had a reduction in property loss of revenue to the tune of seven
point eight million dollars ($7,800,000) as it relates to comparisons through the period of
2008 and 2013. 2008 as you all know is where we peaked, but at the same time I would like
to provide an acknowledgment to the whole Council for the period of 2008 — 2013, we did
during that period, cap primary residents owner-occupied property which gave about fifty-
one million nine hundred thousand dollars ($51,900,000) of Real Property Tax relief to the
taxpayers over the period of time. Next slide. We also reacted to three (3) Charter
Amendments and I want to point out to you again, the Charter Amendments are mandated
to us by the voters, these are the items that the Charter Amendments created. A stand-
alone Parks and Recreation Department in the 2006 Charter Amendment that also over
that period of time has actually increased the expenditures for the County of Kaua`i by
about fifty-six million dollars ($56,000,000). We also by Charter Amendment, prepared by
the voters, added the Office of Boards and Commissions in 2006. That added four point
eight million dollars ($4,800,000) in costs through those periods. Finally, the Office of the
County Attorney in the Charter Amendment of 2008, which added four point one million
dollars ($4,100,000). As you can look at the last year on the chart there for 2013, you can
see those Charter Amendments that mandated changes through our County operation as
the corporation of the County of Kauai on the yearly averages of those increases.
By action of joint efforts by both the Administration as well as the Council, the
Transportation Agency, which draws from the General Fund, extended bus services around
the island, and these increases compared to the 2008 budget, added about two million five
dollars hundred thousand dollars ($2,500,000) annually. Next, there were large non-bond
fund capital improvement projects that were identified and I have listed those here as they
are direct benefits to the community, and added to our assets for projects that were greater
than five hundred thousand dollars ($500,000). This included Cultural Works from the
Heiau in Po`ipu to the ongoing projects with Kekaha landfill expansion, Kilauea Bridge, and
the Piikoi Building renovations. Next slide. Gentlemen, I think these numbers are pretty
small but you can see over this period of time from 2008 the growth, and this is in your
worksheets, you can see the growth by the individual Departments across the board for this
last six (6) year period. This is for your comparison and it covers all of the general
operating Departments. There are some additional explanations as it relates to the
Transient Accommodation Tax amounts that we have lobbied for with the State. The losses
in the three (3) years... that we agreed to the cap for three (3) years thinking that this year
we would get back to our original allocated amount was substantial each year. From seven
point five million dollars ($7,500,000) in year 2012 to ten point four million dollars
DELIBERATION & PRELIMINARY
•
DECISION-MAKING 3 MAY 12, 2014
($10,400,00) in year 2013, and an estimated nine million dollars ($9,000,000) for 2014. We
have well over twenty-seven million dollars ($27,000,000) of decreases and anticipated
revenue and hopefully we need to just continue to lobby for our fair share of these TAT
costs.
On Real Property taxes I want to point out to you and it should be known, there had
been no changes to the Real Property Taxes between Fiscal Year 2009 — 2012. I want to
repeat that with all of the reductions and revenue and the Charter Amendments that added
operational functions to the County there has been no real change in Real Property taxes
from 2009 — 20012. I want to compliment you because I think that is quite an
accomplishment during that period of time. I would also like to point out in Fiscal Year
2013, the Council decreased the homeowners tax class by thirty-five cents ($0.35) on
building and we decreased ninety-five cents ($0.95) on land and that was in the homestead
category which is the primary category for owner-occupied property. We increased only the
single-family residential tax class and only on land by ninety cents ($0.90) and these are for
homes that are not owner-occupied or sometimes secondary homes owned by mainland
seasonal visitors and rentals. We have in the past year increased the hotel and resort tax
by thirty cents ($0.30) on building and twenty-four cents ($0.24) on land and that was in
2013. There were no real changes during the period of 2009 and 2012. Again, this is just
some history, but we do know at this point that we do have a proposed two dollars ($2)
increase on the hotel and resort categories. A very important piece in FY 2014, we
transitioned to a single value tax rate structure. So we no longer calculate the taxes on land
and building separately. From 2009 to 2012 there have been no changes in Real Property
taxes however the Administration and the Council continued to add projects that were done
without raising taxes. I think that is something we do not say enough about. At the same
time we gave substantial breaks on property owned by owner-occupants.
As we go to the decision-making schedule, and I want to make sure again that we
give the Mayor and Steve appropriate time to comment on their supplemental
communication which came to us over the last week and I would allow time for that today.
We also agreed to use the Mayor's supplemental budget as a starting point and except all
changes between March and May before decision-making begins. I want to make sure I say
that again, we are going to operate over the Mayor's supplemental budget as it was
submitted this time and the changes that were reflected between the March and the May
schedule. Five (5) votes are needed to add and four (4) votes are needed to delete.
Pursuant to the Kauai County Charter, the Council must pass the budget on final reading
on June 7 otherwise the Mayor's initial budget submitted on March 14 goes into effect.
Decision-making schedule. We have to take these into consideration upfront and I
want to share that with you because we have to have an understanding at the workshop
about these particular revenue opportunities even though they will be voted on later in the
week. The revenue areas that are important have discussion and have an understanding of
where the votes are going and that is just the way the schedule worked out here; Motor
Vehicle Weight Tax, Solid Waste Tipping Fees, the Public Access Open Space Natural
Resource Preservation Fund, planning for the TVR certificates, which is a proposal going to
the Planning Commission, and Real Property Taxes. I do not plan to revisit all of these
particular parts too often today but I want an indication. Yes, Mr. Bynum.
Mr. Bynum: Just a process question. I believe that it is
essential that we discuss Real Property Taxes after decision-making on cuts and adds.
That is how we can balance the budget at the end. These other ones, I agree, we can deal
with upfront but I strongly urge that we save property tax decision-making for after we
know what the budget is and what the expenditures are.
DELIBERATION & PRELIMINARY •
DECISION-MAKING 4 MAY 12, 2014
Chair Furfaro: JoAnn. See if you have the same question as
Mr. Bynum, I will answer it with one answer. Go ahead.
Ms. Yukimura: I just wanted to say that when we come to the
Public Access Fund, I will be talking about property tax rates just under necessity. As long
as we understand that and I presume that is okay because...
Chair Furfaro: I presume both of you just said exactly what I
intend to happen during this decision-making. There are no reservations here. Property
taxes, revenues, and so forth —what I am pointing out on the board here is these bills are
not in their final reading until Wednesday, but if you make a commitment here to me right
now, a Nana koko lele if you change your mind because we are going backwards.
Ms. Yukimura: Totally. I understand.
Chair Furfaro: That is what I want you to understand. Because
if we do not have an understanding here and we get to Wednesday and your vote is
different, this whole budget no can. Tim.
Mr. Bynum: Thank you for the dialogue and we are going to
probably have a very different spending picture at the end of decision-making and when we
know what the decision-making...what is about expenditures then my position on Real
Property Tax will probably change based on that outcome. I just strongly request we save
that decision-making for the final. The rest of these revenues, and I agree with you, the
commitments we make here we need to be prepared to vote for it when we officially put it
on record. But the real deadline decision (inaudible). I am just requesting that one portion
of revenue be saved to the end.
Chair Furfaro: Again, all I want to say is we have to have an
understanding and then please if you commit to an understanding I expect you to commit
your vote accordingly. Mr. Kagawa, did you have a question?
Mr. Kagawa: I just wanted to reiterate what you just said, let
us go through the process as we intend with our cuts and adds and if we want to have that
discussion about revenues now that we see all the cuts and adds then I guess we can have
it. But it may not be set in stone because people do change their minds. They can come up
with amendments on Wednesday on Real Property Taxes, but for now, let us just stick to
the plan and see how far we get. Hopefully, I would like to see us wrap it up in a day— all
of this. But we will see. Thank you.
Chair Furfaro: Mr. Hooser.
Mr. Hooser: I just want to be clear on the process because
there are a lot of conversations going. So, we are not going to be asked to vote on tax rates
until after we know what the expenditures are, is that correct?
Chair Furfaro: I am going to basically say again through the day
we will be asking to have some commitments about the Operating costs, but to get us to
start at the beginning I would like to know the status of where I think these bills are going.
What I am saying is if we have this kind of idea of where these bills are going but then on
Wednesday, we change our vote on them, it is kind of hard and we wasted two (2) days if
there are major changes.
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DECISION-MAKING 5 MAY 12, 2014
Mr. Hooser: I agree with all of them. The are pretty straight
forward except the property taxes because there are a lot more moving parts in the property
tax discussion then there are on the other bills.
Chair Furfaro: I would agree but I will be very honest with you
right now, as I just painted for the members that have been on this Council, there is a lot of
dialogue that seems to recognize that since 2009 this Council has not raised a lot of taxes
since these periods and not understanding what has happened to the TAT until we have a
clear picture right now. There are these financial pieces that have changed as to the
contribution of what is going into the General Fund. But there is no problem of basically
reminding ourselves that maybe it is in the situation that we have to visit some revenues
that we have not visited for several years.
Mr. Hooser: If I could respond?
Chair Furfaro: Please, go right ahead.
Mr. looser: I agree that at the end of the day there will have
to be some revenue increases in the property tax but it is the amount and the various
categories and it deserves a robust discussion and we only know what the target is after we
do the expenses. I was going to ask you on your presentation, you said between 2009 and
2012 there were no property tax increase.
Chair Furfaro: On certain classifications.
Mr. Hooser: Right. Though you are speaking on rate
increases and not net property tax increases to residents because...
Chair Furfaro: Yes, you are correct.
Mr. Hooser: So values did go up and property owners did pay
more taxes during those periods.
Chair Furfaro: What I did say Mr. Hooser, and I want to get this
straight, the property tax assessments peeked about 2008 and then in fact property values
went down no matter what happened with the rates. So, the values went down, the price
assessments stayed the same, and in reality, taxes did not go up.
Mr. Hooser: Okay. I wanted to be clear on that.
Chair Furfaro: And that was the first part of my presentation on
the net difference of those five (5) is about seven point seven million dollars ($7,700,000),
values going down and rates staying the same. Now we are going the other way where
values are finally recovering but our proposal has rates pretty much staying where they are
except the hotel and resort.
Mr. looser: Thank you for clarifying that because I think it is
important.
Mr. Rapozo: Mr. Chair, I am going to ask that you finish your
presentation because we are starting to get into the dialogue of the decision-making. Can
you finish the presentation and then we can come on back.
DELIBERATION & PRELIMINARY
DECISION-MAKING 6 MAY 12, 2014
Chair Furfaro: I have no problem agreeing with you.
Mr. Rapozo: You only have a page or two left.
Chair Furfaro: I did not want to ignore questions being asked. A
couple of pages left here and to reiterate if you indicate to us where your decision-making is
going to be on these revenue bills, it would be appropriate that you understand I expect you
to be in the same place when we actually vote on the bill. As a reminder not supporting
this revenue measures will mean that we will somehow need to identify other funds which
really the only part we have would be the real property, and that was the comment that I
was not able to complete before the questions and answers (Q&A). I want to say that all in
all please consider again the proposed cuts, let them be realistic if you have cuts proposed,
and at the same time if you are going to make a commitment about a revenue piece, but to
add revenue I would expect that we have your vote during this workshop, and is the same
vote that we are looking for when the bill actually comes in front of us. Just in closing
again, the Administration will have to deliver some news to us as it deals with the
actuarial. Steve had a very important meeting in Honolulu and he has to deliver that news
to us. Those are trends if they adjusted the trends downward that would be favorable to us
and again as it comes to some answers for some of these other particular parts, I have some
worksheets for you — ten cents ($0.10) on all categories means adding about a million six
dollars ($1,600,000) in revenue, twenty cents ($0.20) of course then means we are adding
three million two dollars ($3,200,000) in round numbers. That is the amounts across the
board on all categories including hotels again. Mr. Rapozo, I am done with my presentation.
Mr. Rapozo: Thank you. Did you want to come back?
Chair Furfaro: Yes. If you can invite up the Mayor and Steve.
We have a question.
Mr. Rapozo: Mr. Bynum.
Mr. Bynum: I would like an opportunity to make some
opening comments and how I am going to approach it and I think it would be very useful to
hear from other Councilmembers as well.
Chair Furfaro: It is your call.
Mr. Rapozo: Let us do the...when we come back in session we
can do the discussion part. For right now, I would like to stick with the schedule and when
we reconvene as a full Council, we can then have that discussion. I do not have a problem
with that at all, just that I want to stick to the schedule otherwise we will be here all night.
Mr. Chair, I will turn it back over to you at this point.
Mr. Rapozo returned chairmanship to Chair Furfaro.
Chair Furfaro: Welcome Mr. Mayor.
There being no objections, the rules were suspended.
BERNARD P. CARVALHO, JR., Mayor: Aloha and good morning.
DELIBERATION & PRELIMINARY
DECISION-MAKING 7 MAY 12, 2014
Chair Furfaro: I am delighted to have you and your staff here as
we begin the deliberation period. As promised in our correspondence, I will give you fifteen
(15) to twenty (20) minutes or so to make some commentary. I would like to hear from the
Finance Director on the outcome on the trends analysis as it relates to the actuals.
Mayor Carvalho: First of all, good morning Chair and members of
the Council. Mahalo for the opportunity to speak. I appreciate the presentation that you
presented Chair on some of the areas that we all talk about numerous times over and over
again. Now we are here to look at our supplemental budget and get into the details of it. I
wanted to have a chance to just give an overview, and then of course our fiscal, along with
Steve and Ernie who will give us in depth information. I also wanted to thank Chair and
the Council for a wonderful event this past weekend. I got to attend and it was a really nice
celebration — 100 years...very successful. I understand the tours went well. So, that was
really good. Anyway, several significant things have happen that influence our decision-
making while developing the supplemental proposal and believe me, we have rolled up our
sleeves like I said and we are going to try to figure out how to address the issues before us,
received and used with our bond rating from Fitch has been downgraded. There were
several reasons why this happened but the basic underlying problem is that our revenues
and our expenses are just not in line at this time but we foresee us working together and
making it better for all of us. And of course our annual operating budget is not sustainable.
We are trying to see how we can make it sustainable. Second, our share of the TAT
obviously was not restored to the extent that we thought it would be, so that put another
big wedge into what we had to do to discuss the issues. This leaves us little room to add
new expenses or reduce the proposed revenue enhancements. So more than ever, we feel
that the basic premise of our March 15 proposal was prudent and necessary; however, I
would like to go over just two (2) major changes and then turn it over to Steve folks to go
into the specifics. In our supplemental proposal, we reduced our operating expenses by an
additional one million dollars ($1,000,000) including dollar funding seven (7) positions that
are currently vacant. Based on above cuts and recent EUTF estimate cost, the amount we
budgeted in the May submittal for employee health benefits will now fully fund our
obligations. While you have very tough decisions to make, we stand ready. Our whole
cabinet is right behind me ready and willing to answer any questions and concerns you may
have. We have gone there, met with you one by one, we have come across to give you
information as much as we could, we submitted our budget on May 7 to give you time to
look at it as well, and so I am very ready to talk and see how we can move forward. I know
you folks have your sessions and information to do but just know that we are ready to assist
in any way we can. With that, that gives a brief overview, I will turn it over to Steve to get
into the specific areas. Steve.
STEVEN A. HUNT, Director of Finance: Thank you, Mayor. Council Chair, Vice
Chair, and members of the Council, Steve Hunt, Director of Finance for the record. The
primary goal that we set for ourselves at the Administration was to fully fund our OPEB
requirements. At the time we submitted our March submittal, that unfunded balance was
about four point five million dollars ($4,500,000), we were only funding about seventy-three
percent (73%) of our obligation. Naturally we were a bit disappointed at the amount of the
TAT revenue that was allocated to the Counties during the Legislative session. Kaua`i
County had been hoping for an increase of about ten million dollars ($10,000,000) which
would have been removing the collective County's cap of about ninety-three million dollars
($93,000,000) and restoring it to...currently it is at about a hundred and sixty-five million
dollars ($165,000,000) would have been the total share of which Kauai County would have
been approximately twenty-three million dollars ($23,000,000) of that. However, the
fallback that we had anticipated was at about seven and a quarter percent (7.25%) of the
TAT revenue as opposed to nine and a quarter percent (9.25%) which would still resulted in
DELIBERATION & PRELIMINARY
DECISION-MAKING 8 MAY 12, 2014
about five million dollars ($5,000,000) in additional revenue for the County of Kauai. The
primary reason the March 2015 submittal was underfunded, the OPEB, was that it seemed
like a reasonable assurance that we would be made whole with the bottom of five million
dollars ($5,000,000) and a ceiling of ten million dollars ($10,000,000) from the TAT. Again,
we were somewhat shocked at the decision to allocate only one point four five million
dollars ($1,450,000) and the Mayor and Councilmember Rapozo was there. I think
Councilmember Rapozo and I are probably still have some rug burns on our chin from our
jaws dropping so far. But it is what it is. So we had to come back with the continued goal
of trying to fund OPEB. The tax increases that have already been proposed, the vehicle
weight, solid waste tipping, TVR registration, properties classified as hotel having an
increase with the tax rate combined with the underfunding of the Public Access Open Space
to make up the four point five million dollars ($4,500,000) OPEB difference, we really were
looking at budget cuts from operations as well as relooking at some fund balances that still
were available. In our May 7 submittal this year, the additional net revenue was about
eight hundred and fifty-five thousand dollars ($855,000). Of that, the TAT was one point
four five million dollars ($1,450,000) plus our revised projections on transportation on the
bus based on how they are trending currently, added another hundred thousand dollars
($100,000) but we also realize that in our March submittal we had a million one thirty-eight
thousand dollars ($1,138,000) in the bond subsidy which is a fund balance and we actually
did not have that fund balance available. It was anticipated fund balance which is again
writing a check that we do not have the funds to cash. Based on the revised estimates we
had to draw that down from our revenue projection by six hundred and ninety-five
thousand dollars ($695,000), so the combination of that really gives us only eight hundred
and fifty-five thousand dollars ($855,000) in new revenues between the March submittal
and the May submittal. To achieve, again, trying to fully fund our OPEB, we went back to
the budget. We looked at unassigned fund balances. There were about a million fifty-four
thousand dollars ($1,054,000) that was transferred from unassigned fund balance to get us
closer to budgeting. We did have a reduction of about a hundred and ninety-two thousand
dollars ($192,000) from other fund balances. There were over a million dollars ($1,000,000)
in net reduction from operational expenses. In fact it was closer to one point three four
million dollars ($1,340,000) in cuts but we did have some adds to net out. So, over a million
dollars ($1,000,000) in operational expenditure cuts and the overall result is a budget that
is approximately six hundred and sixty-three thousand dollars ($663,000) higher than our
March submittal. But that also includes an additional two point seven two million dollars
($7,200,000) in OPEB funding. The May submittal as we knew prior to Friday was going to
fund nearly ninety percent (90%) of our OPEB obligations still leaving us about one point
seven million dollars ($1,700,000) short. As Chair mentioned I attended a meeting on
Friday with the EUTF Administrator and our actuary's from Dallas Texas. We went
through each Counties reports looking at the funding that is going to be required. Again,
we started funding it in 2007. It is essentially a thirty (30) year mortgage to get us whole to
build that endowment that will cover our unfunded liability. Based on several factors
which included a lower than anticipated Rx drug costs, continued high levels of Federal
subsidy for the medicare part "B" and a strong equities market, the OPEB payment for
what we call an Arc both consists of two (2) parts, a pay as you go which covers your current
employees plus their portion on the future liability, as well as the current retirees that were
funding the unfunded portion. That was reduced based on performance going from about
twenty-three percent (23%) of our fringe and salary cost down to twenty point three percent
(20.3%). Again, that savings was about a million seven hundred thousand dollars
($1,700,000) which now brings us to a fully...with the submittal we submit with no changes,
we are now based on the actuary report fully funded in OPEB.
I feel that continuing to fully fund OPEB is critical to achieving another objective
which is developing an operational budget that is structural balanced and sustainable over
DELIBERATION & PRELIMINARY
DECISION-MAKING 9 MAY 12, 2014
time. In getting into the details of our cuts, the cuts to the operating expenditures, the
largest amounts were in vacation payout of about four hundred and fifty-four thousand
dollars ($454,000). About three hundred and seventy-seven thousand dollars ($377,000) in
regular salaries, a hundred and seven thousand dollars ($107,000) in overtime and about
eighty-five thousand dollars ($85,000) in leased vehicles. These cuts include, as the Mayor
mentioned, seven (7) more dollar funded positions since our March 15 submittal bringing
the total dollar funded count to nineteen (19) dollar funded positions. Also, six (6) more
short funded positions bringing the total of short funded count to eleven (11) positions.
Again, speaking about the vacation payout this essentially creates a moratorium because
the funding for vacation payout will no longer be a budgeted line item in terms of a specific
line item but will actually be funded by the retiring or departing employees annual
appropriation for their salaries and benefits. So if they have accumulated vacation or comp-
time payout, it will be funded from their positions which mandate you cannot fill that
position until you make whole the obligation for vacation payout. Regular overtime was
another area that was cut primarily by the Fire Department and I guess as the Director of
Finance, I oversee the overall County budget, of course along with the Budget and
Purchasing Director Ernie Barreira, and our two (2) superb budget analysts Anne Wooten
and Ken Shimonishi, but I also prepare and implement the budget for the Department of
Finance. I am aware that an updated vacancy report has been provided to Council for your
review and that positions that remain vacant but funded could very well be on the chopping
block. Speaking in my capacity as the Department Head and probably for the Department
Heads behind me this morning, the goals and objectives that were presented during our
April budget presentations are dependent on having adequate staffing. Similarly, providing
customer service to the public, answering Council's inquiries, completing scheduled
projects, maintaining regular business hours, and keeping overtime to a minimum are all
predicated on a level of staffing that is being budgeted currently. If certain positions are
not filled, I can assure you that there are pockets of work that simply probably will not get
done in FY 2015. This does not include any future work or requirements that may arise
from Ordinances that may have yet to be enacted. As you review the Countywide position
vacancies, I urge Council to be careful in considering the potential ramifications of these
cuts. While I fully understand that increased taxes and fees do not sit well with our
constituents, I also feel that we need to adequately fund the costs of government services to
avoid these increases. Council within their discretion certainly can reduce the OPEB
contributions, raid what is left in our (inaudible) fund balance, dollar fund remaining
vacancies, to get a balanced. Budget but it does not provide us a means of getting towards a
structurally balanced budget. If we do not position ourselves with rates and fees that are
commencer with our peers, making it more difficult and costly to fund a project such as the
lateral expansion of the landfill and the Material Recycling Facility (MRF) and other
infrastructure costs, I feel that we will have a very long road ahead of us.
Mayor Carvalho: Also Chair, just using your word, "a hang koko
lele," I never heard that for a long time but that kind of reminds me of some of the
decisions we got to make. I just wanted to be sure that if there are any major types of cuts
or decisions that have to be made that you give us a chance to explain the services that
could be impacted. I know you know that so thank you for the time.
Chair Furfaro: Thank you. Just a couple questions for you.
First of all on OPEB, I want to make sure what I am understanding here, on the March
submittal we were funding it seventy-three percent (73%) and we were short four point
seven million dollars ($4,700,000). Then after the submittal that you had given to us, we
were still short two point seven million dollars ($2,700,000) but we were now funding
eighty-nine point nine percent (89.9%) and with the recent trends analysis and the Arc
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reports, we are going to get that million seven covered so we are going to be one hundred
percent (100%) funding again our employee retirement system?
Mr. Hunt: That is correct.
Chair Furfaro: I just wanted to say congratulations. I know it is
a Friday going over there and spending time in Honolulu to go through our county
personnel but thank you so much. The TAT I want to say, nobody is more disappointed
than myself because I thought we had an understanding from the House, but we need to be
lobbying every day so we can go forward to make sure that the State understands the
importance of our fair share. We have funded on my time an additional seventeen (17)
lifeguards for the beaches. We have done a lot of things and need to do even more with
public safety which is related to also our visitor responses, and we need to be very constant
on that message. Thank you for the current staffing reductions and we do have the May 9
report and I am also proud to say that the Council sacrificed a position as well to get you
there with a fulltime position. I am wanting to make sure we clearly understand the
vacation payout that you taken off the credit of the payroll liability. You are basically
saying to us that when someone is planning to retire and if they got nine hundred and sixty
(960) hours in the bank or seven hundred and twenty (720) hours, you are sending them on
vacation before the conclusion of their employment and there is no real money left or
carryover for cross training that persons replacement?
Mr. Hunt: That would be an accurate statement although it
could also work that they could leave with vacation and then we cannot fill with the length
that they...
Chair Furfaro: Understood. I want to make sure that there is a
little issue with continuity there. What is our current position with our actual reserve?
Mr. Hunt: We have two (2) reserves. The first is the
unassigned fund balance.
Chair Furfaro: Yes.
Mr. Hunt: We will be leaving approximately, I believe, it is
four hundred and thirteen thousand dollars ($413,000) in there.
Chair Furfaro: Four hundred and thirteen thousand dollars
($413,000)?
Mr. Hunt: Correct.
Chair Furfaro: Okay.
Mr. Hunt: And then the committed reserve with the
appropriations that are in the current submittal, we will be funding a total of about three
point six million dollars ($3,600,000).
Chair Furfaro: Okay. I want to thank you very much for the
very comprehensive review. Let me see if I have other comments from other members. I
also want to say with the bond rating we still only heard from Fitch. We have not heard
from Standards & Poor in writing in a document, am I correct?
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Mr. Hunt: Moody actually did their review in the summer.
So, I do not think we are having a secondary review within the year, so there has been no
movement. I do not anticipate a movement until the next review potentially. Standards &
Poor recently got a questionnaire filled out and there has not been any follow-up but they
are certainly aware of the Fitch rating. So whether there is going to be follow-up or a
reduction in the rating downgrade is yet to be seen.
Chair Furfaro: And then the last one before I open it up to the
other members, I do want to...if there is an incremental increase and we replenish the
Open Space Fund, I do want to say that I think that goes towards our bond rating as well
because they see this money there for acquisition of land which then leads them to
determine that we either have money or we have enlarged our asset holding and that
should go to our favor.
Mr. Hunt: On the first part of that question, no, they
actually do not look at that as available funding because it is a specific use fund. It cannot
be for other obligations. But on the second part, yes, it is an increase to our asset based on
the fixed asset side so it does expand the value of our holding as a County.
Chair Furfaro: So it would increase our review of our total
assets but they do not look at that account as being cash available?
Mr. Hunt: Correct. It is not a positive influence on our
Fund Balance.
Chair Furfaro: Even though it would go towards acquisitions of
assets?
Mr. Hunt: Correct.
Chair Furfaro: Okay. Thank you very much. I will go around
the table. Mr. Bynum.
Mr. Bynum: Hopefully, we are all going to get five (5) minutes
to talk about our approach to the budget.
Chair Furfaro: You are all going to get five (5) minutes.
Mr. Bynum: So, I will just say that Mayor, I have not objected
to your spending proposals since you have been Mayor. I think they have been prudent and
reasonable. I believe they are, this year, as well. It is always been your approach to
revenues that I disagree with, respectfully. This time your priorities about what we do with
any additional revenues, I hear very strong priority to fully fund OPEB and pride in that. I
hope during this discussion we talk about what the impacts of all of the cuts both short-
term and long-term. I will just say that my first look at OPEB, I had the same reaction
that everybody else did. I was like, `oh my gosh, if we come to that..." right, but now I feel
differently about that and I hope we have some time to discuss some specific questions. The
Chair answered one that this new approach to overtime. I understand it from a budgetary
position but from an administrative position, or vacation pay, I am sorry, can results in
whole positions on hold and no...I thought we were going to try to move to the other way
where we can have continuity and training and actually fill positions while the current
position is in place for training purposes. This is going for...in terms of being able to
efficiently administer the County in the wrong direction I believe. I understand that is part
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DECISION-MAKING 12 MAY 12, 2014
of the budget proposal now but I hope it does not stay that way. I just wanted to make
those comments. You said we needed to charge rates and fees commencer it with our peers.
I agree with that but this year is the Mayor's first ever property tax revenue proposal in the
entire time that he has been Mayor, I believe that is true. It comes kind of late in the
game, Mayor. The public record will demonstrate that revenue proposals to stem the loss
of revenue were not forthcoming, right, but I understand that and it is good. That is your
position and I think that will be part of the discussion this year. Last thing I want to say is,
I will make some comments about the reality and history as the Chair has of how we got in
this hole but I want to move forward. That is water under the bridge. We are where we are
at now. I want to make sure that when that information is put out, that it is accurate. So I
can see me interjecting if people want to rewrite history that is not consistent with the
public record and what actually occurred — the CAFR, for instance. Again, I said your
spending proposals, I think, since the day you have been Mayor have been really good ones
and I will largely support it and I intend to do that this year. Thank you very much.
Chair Furfaro: I want this time for questions. I am going to give
you your five (5) minutes for comments. Questions?
Ms. Yukimura: Good morning. Thank you for all your hard work
because it has been a hard budget. My question is about your vacation pay policy. It seems
very counterproductive especially as Councilmember Bynum has said that we have been
looking to smooth the transition between retiring employees and incoming replacements.
Then again, Mayor, your priority is consumer service and it is going to affect consumer
service when we have these huge gaps in service and availability of County personnel. I am
wondering if...what that seems to be doing is pushing the priority of customer service and
succession planning to a much lower priority then say OPEB funding or raising taxes. Is
that a wise decision? How can you justify that?
Mr. Hunt: Councilmember Yukimura, I think one of the
challenges is not necessarily the funding but the structure of civil service. Unless you
actually have two (2) positions of the same title available, you need to do the recruitment.
You cannot hand select your incumbent. So you would have to be able to have a position
available and pay them at the level it is even during the training process. So, that is
something that is inherently difficult in civil service to begin with. So, if you have a
manager that is retiring, you cannot just look at your staff below you and say, "I am going
to select that person as a manager," until the position is available. Even if we had the
funding still in there, we still have some challenges just based on how civil service works.
Ms. Yukimura: That is exactly my point. You already have that
challenge, why are you making it harder? What are we doing to change the civil service
system because we have to keep improving a system if it is outdated and it is not working
for better succession and better customer servicing? Who do we not change it?
Mr. Hunt: And that is a much larger question then the
County of Kauai.
Ms. Yukimura: I know but we are about making the change that
makes the difference, right?
Mr. Hunt: Let me first answer your first portion of your
question. You talked about the gap between someone who is departing. That is making the
assumption that there is a lot of vacation payout left. Some people do decide to use them
throughout the year when they are retiring that year so there may not be from the time the
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position opens, they may have already taken their vacation or have a smaller payout then it
would be at the full seven hundred twenty (720) hours that is allowable.
Ms. Yukimura: What is the percentage of those cases?
Mr. Hunt: I do not have that figure available.
Ms. Yukimura: I do not think that they are common.
Mr. Hunt: But I sign off on a lot of...my Department of
Finance employees in terms of their approved vacation right now, the higher ones are
definitely not the norm. Most people are using vacations.
Ms. Yukimura: Okay. So, that is going to make it a shorter
period, I mean...
Mr. Hunt: To rehire.
Ms. Yukimura: How long of periods will it be? I thought we were
trying to close the gap.
Mr. Rapozo: Let me just say that I do not believe there is any
impact on the time to refill the position. What it does is it takes the salaries that would
normally be in the line item for salaries and would end in the surplus and now you are
using it for General Fund expenditures for this current year. I think it has nothing to do
with... it does not change the effect of the hiring date. It is the same. The body leaves when
the body leaves. In the old system that money, let us say it takes six (6) months to hire
someone, we had a budget item for vacation and we had a budget item for fully year
funding. That is six (6) months that you did not have a person would go into the surplus.
So what they are saying now is that they are transferring that money into a vacation
payout line which freezes out that money for us to use. I think it is a fabulous idea. I think
it is the right way and it takes away from our surplus at the end of the year but if we were
trying to get to accurate budgeting, that is the way to do it. Thank you for thinking that
and making that happen but it has no impact on the hiring fund at all.
Ms. Yukimura: Okay, then I stand corrected if that is the case. I
am not...
Mr. Rapozo: Well, that is what I was told. I am hoping that is
what is happening because that is what I was assured and if it is not, please correct me
right now.
ERNIE W. BARREIRA, Budget & Purchasing Director: Good morning. That is
correct, sir. Also what should be considered is that we have left over two hundred thousand
dollars ($200,000) within the Department of Personnel Services for this very purpose. So, if
we had a critical situation where we needed to fill immediately and had to utilize the money
elsewhere to fund the vacation payout, we still have that flexibility within the budget.
Ms. Yukimura: Thank you for explaining that. I was not aware
of that. Basically the main impact is decreasing the fund balance at the end of the Fiscal
Year? I mean you do not have as much lapsing at the end of the Fiscal Year?
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DECISION-MAKING 14 MAY 12, 2014
Mr. Hunt: Potentially. Because if you are now using the
salaries and fringe to pay off...instead of having two (2) line items, you are using one (1) to
pay off that same expenses accrued to the County which then reduces the lapse of funds
that would have been in fringe and salaries for that employee when you rehire.
Ms. Yukimura: And there is the case that if there is a huge
vacation payout that you would go beyond the period that it takes to recruit. No?
Mr. Barreira: That is possible. The ability to recruit and fill
that vacancy could be longer than normal but generally speaking as DPS has made
tremendous strides in more expeditiously filling positions and they shown that as evidence
this year especially the Police Department. But essentially you could have with large seven
hundred and twenty (720) hours plus twenty-one (21) days to be carried over if you retire at
the end of the year, the payout could be extensive but once again we have that two hundred
somewhat thousand dollars still available to us for those certain situations.
Ms. Yukimura: So it will be your policy then to use that money to
ensure that there will not be any additional delay beyond that recruitment time?
Mr. Barreira: One of the things that the Managing Director
talked about during her budget presentation is the creation of this Vacancy Review
Committee. We are going to diligently commit to this process so that we can conduct
analysis about positions that vacate to determine alternatives of what can be done; filling,
re-describing, or perhaps making a decision that we can leverage other resources and not
have to fill every position. It is about the sustainability. We have been talking about
revenue and expenditures. I think that evaluation process will help us determine in what
direction we go, but in order to be sustainable we not only need to look at revenue
enhancement, we need to look at our cost situation and make prudent decisions where that
could be adjusted as well.
Ms. Yukimura: I totally understand that and I think the vacancy
review process would be very helpful because if you see the position is very critical to
customer servicing that you cannot...the County would not be advised to just let that
position stay open for a long time. You could use that two hundred thousand dollars
($200,000) fund or do whatever it takes to accelerate a quick hiring.
Mayor Carvalho: Let me just say overall, with the Human
Resource Department moving in the direction that we are going, the people there are trying
their very best to look at it and focus on moving the process quickly in a very efficient and
timely manner. I think that is the biggest part there. The commitment, I want to make sure
is still there to of course look at the customer service report and we have shown you folks in
many different instances where our Departments have brought in new people. We were
able to work closely with Human Resources, and we work very hard on getting those
recruitments pieces out and moving. So, with this whole new Department structure and the
people there, the commitment is there and we are going to keep moving. We have to look at
every single way possible and this is just another opportunity for us to look at how to meet
the need of this budget.
Ms. Yukimura: Well the expeditious filling of vacant positions
has been long awaited and we are really glad to see that happen because it is one of the
most important ways you can support all the different Departments in their work. We
appreciate that. My other question then is, this issue of keeping an adequate reserve and
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also getting a good rating from the Bonding companies, how do you weigh that against a
full OPEB? Or is there any real distinction between the two (2)?
Mr. Hunt: There is. I think you have to consider this in all
terms because we do as a budget serve multiple masters here. An obligation is much like if
you had the choice of paying your rent or in this case an obligation would be a mortgage. If
you had a mortgage but then you also have utilities. Your obligation is the mortgage first,
because without that you are evicted. So you do not have the funding to pay everything, you
have to make those tough decisions which utilities you may not be able to do without. I view
OPEB as an obligation— this is something we have to pay. Maintaining fund balances and
a good bond rating, credit rating for the bond certainly is a goal that we want to strive to,
but it is not an obligation. There are costs associated with not doing that and certainly
going from an AA rating to an AA minus is probably going to cost us ten (10) basis points on
any new feature leveraging for bond. Is it a deal breaker ten (10) basis points? Not that
much relatively but on a large offering it could be in the hundreds of thousands of savings
by having a better rating. One, we need to find out first when we are going out for a new
bond issuance. We do not want to go out early because right now we will have to show
where our repayment sources are going to be. We need revenue to pay for that bond so it is
something we want to strive to certainly do before we do another bond issuance. How long
it's going to take to build those adequate reserves is in question. Really it is getting to a
structurally sound budget where at least not drawing anymore fund balances down first
before we can move towards building that reserve.
Ms. Yukimura: Okay. Thank you for a very clear answer. So
what you are saying is the issue of reserve is not as pressing or eminent unless we are
thinking of floating a bond this year or something that we have time to build our reserve
and perhaps what is most important rather than actually building it right now to the
sacrifice of other things is a plan that will get us overtime to a good reserve?
Mr. Hunt: I think that is the more critical issue is getting a
plan that gets us to building a reserve.
Ms. Yukimura: Right.
Mr. Hunt: Ideally I would like us to have a reserve but I do
not think we are going to do that in any one (1) given year.
Ms. Yukimura: Okay.
Mr. Hunt: And if given the choice of sacrificing OPEB to
build the reserve, at this point, I view OPEB as the more important obligation because
every year we make that payment, we are getting closer and closer to reducing our balance
of payments. At some point it is like having a home where you no longer have a mortgage
on, and at that point we are going to have funding that is going to be available for a reserve.
Ms. Yukimura: With one exception that is we are part of a bigger
fund and if the other parties are not properly funding...
Mr. Hunt: That is actually not correct. On OPEB we have
our individual trust fund for OPEB. Kauai County is separate and we are actually with the
exception of I believe the Department of Water that is actually funded a little bit ahead of
us. We are the highest funded ratio of all the Counties.
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Ms. Yukimura: Thank you for correcting that. So it is on our
pension fund and not OPEB that we are in jeopardy?
Mr. Hunt: Yes.
Ms. Yukimura: Because of other government entities not keeping
their obligations.
Mr. Hunt: Correct.
Ms. Yukimura: So OPEB, we are firmly and legally safe?
Mr. Hunt: Yes.
Ms. Yukimura: So that makes more reason to fund it currently?
Mr. Hunt: Yes and just to embellish a little bit on Friday's
meeting, one of the questions that I raised because we had our Investments Strategist there
as well is that if one (1) County reaches its goal faster than the other Counties, does the
investment strategy change? Are we getting out of growth equities and more into stable
funds because now that we achieved it, does the County of Kauai get treated separately.
The reality is no because you still have future retirees coming on and it is always the
number that is adjusted. But that was something I raised because they are individual trust
funds Kauai County is treated as separately. Although they are invested in a pool, the
actual accounting of it is separate.
Ms. Yukimura: So we could work for a change to make the
pension fund like that too? Because we are so vulnerable based on other jurisdictions lack
of funding, I mean that is something that we can look into because we need to protect
ourselves.
Chair Furfaro: Excuse me, if I may? We have looked into that
before, Steve.
Mr. Hunt: Yes.
Chair Furfaro: We have the documents that says, "they will not
pool our pension fund," that is a very big concern. I shared that letter with Wally Rezentes
and his response, "I will make sure I will get you a copy of that." Very, very important.
Mayor Carvalho: Chair, I just wanted to say, both sides, we said
we made a commitment to fund OPEB and I know we both said that from the beginning,
right? And whatever way possible and we found a way and we are going with it.
Ms. Yukimura: Yes, I appreciate that very much. Last question.
Mr. Rapozo: I thought the last one was your last question,
JoAnn?
Ms. Yukimura: I did not say that.
Mr. Rapozo: You did and I want to respect everybody's time
as well.
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Ms. Yukimura: Okay.
Mr. Rapozo: You said that was your last question...is it
related in any way?
Ms. Yukimura: Just a question on Moody's...
Mr. Rapozo: Go ahead.
Ms. Yukimura: Is Moody's timing such that it is based on old
data that they did not have the current data that Fitch had?
Mr. Hunt: No the CAFR was not released so it was on older
data. I think they were prodding as to what our estimates were going to be but the CAFR
had not been released at the time we did the Moody survey.
Ms. Yukimura: So it is possible that Moody's...when time comes
around for Moody's evaluation that they could downgrade us to...
Mr. Hunt: Correct.
Ms. Yukimura: Thank you.
Mr. Rapozo: Thank you. I think the scenario is like credit
reports—Experian...you know you got three (3) credit bureaus. Today you might check your
credit bureaus and two might be stellar and one might be bad. It is just a matter of time.
Steve, you and I both know that. It is just a matter of time before the other review boards
make the same decision. It is what it is and we just got to deal with that realty.
Chair Furfaro: Before I go to Mr. Hooser, I just want to say that
I would have appreciated when I asked the question and you went silent without the
vacation fund, what would you be doing for training money and you did not answer me on
that two hundred thousand dollars ($200,000) line. But you know what, when I opened the
door for you to give us an explanation, welcome, give us the information. Mr. Hooser.
Mr. Hooser: Thank you everyone for being here. I know the
budget is important to you. The most important thing we do probably during the course of
our work. I am going to follow on the bond rating a little bit and I thank Councilmember
Rapozo for using that example of credit report. Part of the discussion is for us to make good
decision-making and I think a big part of it is for the public to understand how this decision
is made and why we are in this situation where there are property taxes and other fees that
will likely go up. So much of this is Greek, if you would, for many people. We talked about
bond rating and Fitch and so using it as an example for a credit report, I think, is a good
one. If you miss a mortgage payment then it is harder. It costs you more money when you
go out to refinance and that is the situation we are in now. In looking at Fitch remarks, one
of the drivers they say is, "persistent operating imbalance." I asked this question before
and I would like to ask it again just to get it on the record, so what Fitch is saying, one of
these bonds rating company is saying, is that we persistently do not have a balanced
budget. When was the last time the County of Kaua`i, the Administration presented us
with a balanced budget?
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Mr. Hunt: Just to answer the question, we present every
year a balanced budget, now, structurally balance where you are not drawing down fund
balances and reserves to make a whole your balance budget. I believe 2008 or 2009, was the
last structurally balanced budget where we had sufficient revenues to cover our
expenditures including transfers out to our enterprise accounts which is one of the larger
draws.
Mr. Hooser: So 2008 to 2009 and I believe Fitch, our bond
rating agency would say that a balance budget is money coming on and operating
funds...revenue equals expenses and does not include drawing down fund balances. I think
that is the underlying key issue here.
Mr. Hunt: They are looking at stability of revenues and
expenditures with maintaining a stable level of fund balance. That would be their
definition of structural balance.
Mr. Hooser: So the County of Kauai since 2008 or 2009 has
every year spent more money than they brought in through traditional revenue like
property taxes as opposed to taking money out of your savings?
Mr. Hunt: From operational revenue, that is a correct
statement.
Mr. Hooser: And we made up that difference from taking out
of our balances.
Mr. Hunt: Which is our savings.
Mr. Hooser: I think is it important for the public to
understand that, I really do. We talk about cuts and we talk this foreign language
sometimes and I think that it is important that they understand that the County has done
this. The Administration and members of the Council will justify that as to why that had to
happen. But in fact, the County has spent more money than it has brought in since 2008 or
2009. We have our unassigned balance which is essentially our savings account, is that
correct? Just correct me if I am wrong. That it is not dedicated to some other purpose.
Mr. Hunt: Correct. There would be two (2). The other one
would be committed reserve as well. Those would be the two (2) that would be more less
unassigned balances. They are committed a little more stringent in that there has to be a
purpose that is noted whether emergency or the stated purposes for that fund.
Mr. Hooser: So, for emergencies, for example, if we had a
hurricane and our economy was broken like it has happened in the past; for emergencies
how much do we have now in the savings account that we could spend for emergencies?
Mr. Hunt: In those two (2) accounts, yes, we would have
based on the balance as presented in the May submittal, we would have approximately four
hundred and thirteen thousand dollars ($413,000) in unassigned, and we would have
approximately three point six million dollars ($3,600,000) in the committed.
Mr. Hooser: Okay, so the unassigned is four hundred and
thirteen thousand dollars ($413,000), we would have and we could use in a moment notice
for emergency.
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Mr. Hunt: Correct. That would be moneys that would be
made available prior to any lapse funds from the current operational FY 2014
December/January assessable, for the lapse funds that would go into unassigned fund
balance.
Mr. looser: And approximately in 2008-2009 what was that
balance?
Mr. Hunt: In all funds, I believe it was sixty-eight million
dollars ($68,000,000) in all funds.
Mr. Hooser: So unassigned funds...
Mr. Hunt: In terms of unassigned and committed, I do not
have those figures readily available.
Mr. looser: Would it be ten million dollars ($10,000,000)?
Mr. Hunt: I would have to research that.
Mr. looser: So sixty-eight million dollars ($68,000,000).
Mr. Hunt: I know the current CAFR says we have thirty-
three million dollars ($33,000,000), but as you know only twelve point seven, eight (12.78)
was actually available as unassigned of the thirty-three million dollars ($33,000,000) in
fund balance.
Mr. Hooser: Okay.
Mr. Hunt: The last two (2) years eating at about eleven
million dollars ($11,000,000) a year into our fund balance.
Mr. Hooser: So if we had an emergency today, we would have
four hundred and thirteen dollars ($413,000) to spend on plus we have the three point six
million dollars ($3,600,000)?
Mr. Hunt: Correct.
Mr. Hooser: And you said that is committed fund balance.
Mr. Hunt: Committed reserve which is actually for
disasters.
Chair Furfaro: Thank you for finally saying that. The three
point six million dollars ($3,600,000) is committed by policy and ordinance for emergencies.
Mayor Carvalho: Right.
Mr. Hooser: So that is for savings account for emergencies,
those two (2) figures right now?
Mr. Hunt: Correct.
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Mr. Hooser: One of the reasons I bring this up is because I
think there is more reasons to have a fund balance and savings then just the very
important reason of our credit ratings, because even four million dollars ($4,000,000) is not
going a long way if we had an extended downturn in our economy. It is just evidenced by
the last five (5) years.
Mr. Hunt: Yes.
Mr. Hooser: So we had not had a structurally balanced
budget according to Fitch's definition, and according to my definition since 2008-2009, is the
budget the Administration is proposing today meet that criteria?
Mr. Hunt: No.
Mr. Hooser: Why not?
Mr. Hunt: You are still drawing fund balance to balance the
budget.
Mr. Hooser: Why are you not submitting a balanced budget
according to Fitch's definition and my definition? Why are you not balancing income and
expenditures?
Mr. Hunt: It would require incredible sacrifices and
dramatic rate changes to get to that picture. We are slowly getting there but we are not
there today.
Mr. Hooser: And when will you be there?
Mr. Hunt: Future budgets that we are looking at in five (5)
year increments at a time, so we are looking to project out where we need to be. And there
is also some of the revenue enhancements in terms of potentially even new class
classifications that have yet to be delivered, so we are working on that as well. We
anticipate having another movement in that direction with potentially additional tax
classes coming forward.
Mr. Hooser: Okay, so Fitch in their report also says, "an
inability to restore General fund structural balance will likely add further downward rating
pressure." So what we are saying is that our credit report is going to continue to get worst
in terms of the bond rating, so we are in this downward spiral in terms of our credit rating
and bond rating and we do not know when we will have a balanced budget. You said five
(5) years?
Mr. Hunt: No, we are looking at a five (5) year period for
projecting out what our budget needs are going to be. Incorporated in that we also have to
look at some of the six (6) year CIP projects and timing it to the financial needs for those.
So as we go forward we will have to know when funds will be available, what types of funds
will be needed, and associate the debt service with those funds that are going to be needed.
So, we are not just doing an annual budget anymore but more of a budget projection for
sustainability. Part of that will include again, additional revenue classifications for taxes,
as well as what our needs are going to be.
DELIBERATION & PRELIMINARY
DECISION-MAKING 21 MAY 12, 2014
Mr. Hooser: I think it is important. This is the key element
here. We have not had a structurally balanced budget since 2008-2009. We do not have one
presented to us today, and so my question is when does the Administration expect to have
one? Is it next year? Is it the year after that? Is it four (4) years from now? What is the
plan?
Mr. Hunt: I am not prepared to answer that because I do
not have all the information as to what the next five (5) years ahead are going to look like.
Mayor Carvalho: I think that question is good for both sides, both
of us to understand. We are trying to find all different ways to manage this budget process
from 2008 till today.
Mr. Hooser: Right.
Mayor Carvalho: And we share with you all the different ways
that we try to be creative, and understand to the people watching that we done as much as
we could and touched on very open areas as well. We are getting there. We have a strategy
piece in place. We want to look at different areas. I remember in 2008 we were hoping that
it would get better. We did what we needed to do and we tried to do what we could. But
now we are here with the facts and figures before you and we are just hoping that it gets
better.
Mr. Hooser; So, we are hoping that it will get better and I
hope that it gets better too. Thank you.
Chair Furfaro: Excuse me just a second here. Can I have that
Resolution please? Steve, this is the document here and I want to make sure we all
understand. It is easy to forget what happens in the past but you made no reference to this
Resolution. This Resolution is about spending down on some of the fund balances but it is
also about building a reserve, am I right?
Mr. Hunt: Yes, it is.
Chair Furfaro: Okay. Basically it says that we would be at the
point that Mr. Hooser is asking for when we have a reserve of about ten million dollars
($10,000,000), of which fifty million dollars ($50,000,000)... fifty percent (50%) of that would
be set aside for the emergency account which would be given money accordingly for any
kind of emergency. We are not there yet but this is the document that basically says as we
move to build a reserve, we would keep fifty percent (50%) of it for operating cash flow and
working capital. We will keep twenty-five percent (25%) of it for economic fluctuation and
for budget stabilization. We keep fifteen percent (15%) of it for extreme events including
disasters, and another ten percent (10%) as it relates to risk management. Is this the
policy that we are trying to pursue?
Mr. Hunt: It is very similar. I think the GFOA standards
are even a little higher in terms of the revenue. We will probably be looking at about
eighteen to twenty million which will be two (2) months of operational expenditures as the
goal.
Chair Furfaro: That is the GFOA standard, right?
Mr. Hunt: Right.
DELIBERATION & PRELIMINARY
DECISION-MAKING 22 MAY 12, 2014
Chair Furfaro: And it would be a percentage of our operating
budget, right?
Mr. Hunt: Correct.
Chair Furfaro: And it is also right here in this section of past
budgets, it has a definition here as to what the current terms are to get us to that place. It
is in the Ordinance. I cannot believe that you did not refer back to what is some of the
policy grades that we wanted to have. Nadine.
NADINE K. NAKAMURA, Managing Director: I just wanted to follow-up on
Councilmember Hooser's comments. During our budget discussion and the Mayor's Office
presentation, and you may have been out of the room at that time, but we did talk about
the need to develop a five (5) year financial plan for the County. That is something we do
not have in place but is something that we believe is necessary to articulate what are some
of the needs in the future over the next five (5) years, what are some of the requirements
based on collective bargaining, what are some of the assumptions about a rate of growth
but also looking at where we need to make the cuts of what are the potential revenue
opportunities. I think in the context of the Chair's Resolution and budget provisos, pull it
all together so that there is a plan and a clear line of action or intent for the County on how
we will balance this budget. It will take structural changes in every category you
mentioned. I think we are going to need to collaborate with the Council in order to get a
plan that we can all agree upon going into the next budget.
Mr. Hooser: Thank you very much for that further
explanation. I appreciate the fact that the Administration understands the value of having
a five (5) year plan. It is just very frustrating to be at this point where we are at now with
no reserves and no plan. So that is the frustrating from my position, but I am happy to hear
that we are going to be working on a five (5) year plan. I would be happy to work on that
with all of you. What the Chair brought up about the Resolution, I think is important. The
two (2) most important elements it seems like our...the reserves but also to have a balanced
budget in the way that our bond rating agencies and I defined it, the income and expenses
is equal as can be and those are the two (2) things. I appreciate that we have a plan. I
appreciate the commitment that you are making for this. Thank you.
Ms. Nakamura: I just want to add one (1) more part and that is
that Chair Furfaro pointed out that certain decisions were made about taxes and whether
we were going to tax the public during a recession period. I think the decision was made to
minimize those taxes to hopefully come out of the difficult financial times and we were
hoping that with the lifting of the TAT, with better economic growth on the island that we
would not have to increase the taxes during those hard times. Anyway, I just wanted to put
that all in perspective as well.
Chair Furfaro: Again pointing out there is a Resolution which I
introduced, and that Resolution was incorporated in the proviso, which is the budget
Ordinance. So, you folks should be following those pieces as well. Also, I think that this is
very revealing on what happened to us to the TAT because we should have also received... I
mean if we had the ten point eight million dollars ($10,800,000) that we thought we were
going to have after we agreed to a three (3) year deferral, we would have a substantial
amount of money to address public safety as well as rebuilding the reserve. We do have the
policy in the Resolution and we do have the adopting of that policy in the budget proviso.
Mr. Bynum, you have the floor.
DELIBERATION & PRELIMINARY
DECISION-MAKING 23 MAY 12, 2014
Mr. Bynum: I said earlier that I was not going to talk about
the past unless it was to be corrected. These are facts that are in the CAFR and in the
public record. The Council did not adopt a reserve fund when they had the opportunity.
Taxes did go up during the entire period almost for resident homeowners, and they went
down for everyone else during the recession. That is a fact. Fitch says that this is about
erosion about our fund balances. OPEB is a concern, but when I met with the Mayor, I
said, "no further erosion in our fund balances," and the submittal had further erosion in
fund balances. No new revenue proposals. So you did get the message from some of us that
further erosion in the fund balances was the top priority. Fitch has now agreed with us a
hundred percent (100%). Those are facts. Currently, if I got this right, the Mayor's
proposal if we adopted it would take our fund balances to about three and a half percent
(3.50%). When your Administration argued for a fifteen percent to twenty percent (15% -
20%) reserve just a few years ago and when we had the opportunity to put that in place, we
did this Resolution instead and this is my memory and this Resolution does not set a policy
goal, right? But this is basically taking us to flat broke fund balance.
Chair Furfaro: We need to move on from this. I want you to
understand a Resolution is a Resolution. But that policy was put in as a proviso in the
budget ordinance. Mr. Kagawa, you have the floor.
Mr. Rapozo: Mr. Chair, I just want to make a point of order
before Mr. Kagawa.
Chair Furfaro: Yes.
Mr. Rapozo: If we are going to use this time for discussion or
commentary then I would ask the Clerk to run the timer because I do not think it is fair
that some members are going around using this opportunity to make comments and
philosophical points when it is supposed to be for questions.
Chair Furfaro: I will say it again, Mr. Rapozo, and members,
you have a question or you respond to a question, you will get your five (5) minutes. Keep it
at that. Mr. Kagawa, you have the floor.
Mr. Kagawa: Just to reiterate, I was hoping that we get done
in one (1) day because I think it is a thin budget and you know if we just keep going round
and round and do not stick to a plan then we will take more than two (2) days, actually. If
we can all focus and work together and try and I think the ultimate objective is that we get
through our plus and minus's at some point instead of discussing what our personal beliefs
are. First of all, I want to thank you guys for finding the one point seven million dollars
($1,700,000) or getting the one point seven million dollars ($1,700,000) of OPEB resolved. I
came in feeling happy actually because I heard that this morning and it was great news. It
is one point seven million dollars (1,700,000) of cuts that we got before we even started
cutting. I want to thank you for that. The vacation payout issue, and even if as
Councilmember Yukimura said we do not have a successor coming in immediately, does
that provide an opportunity for our County to look at possibly downsizing that area?
Because if we are looking at being sustainable and balancing our income and expenses, I
mean, it is Human Resources that needs to at some point be more efficient, smaller if
possible, unless it means taxing more. Does that provide an opportunity to look at
downsizing?
DELIBERATION & PRELIMINARY
DECISION-MAKING 24 MAY 12, 2014
Mr. Hunt: In fact there is a Committee now that is looking
at all vacancies as they come up. That does provide us a window of opportunity to not only
look at the vacancy in terms of its current function but whether it is going to be used in
future functions as well. The fact that we do not have to budget vacation payout is a bonus
on top of that because we are using the salary and fringe to pay that former person their
vacation payout while we are looking at that position to see whether it is still needed in the
current structure.
Mr. Kagawa: Because the fact of the matter is a hundred
percent (100%) of the people that retire maybe are not model workers, right? I know a lot of
times they say, "big loss to the County," that certain person but on the same hand
sometimes I hear, "thank you, he is gone," right? I mean that is not a hundred percent
(100%) of our managers or even workers are modeled employees, right?
Mr. Hunt: Again, I tend to look at it more on a position
basis then a personal basis. But the reality is whether the work can get done with the
personnel assigned and needed for that responsibility or whether that responsibility can be
redefined in a way that technology can be used and not an individual.
Mr. Kagawa: Exactly. I was thinking that even in the areas
of... you may have a position such as a Planner that maybe we have caught up...we had the
Planner and we planned it all out and you know at some point the Planner may be able to
do the Manager job when it becomes vacant so it does provide opportunities of movement
and possibly reducing workforce, right?
Mr. Hunt: Yes.
Mr. Kagawa: That is what I hope we work to because in our
budget now that we are proposing, basically if I can summarize it, four point four million
dollars ($4,400,000) will be coming from our visitors and tourist, right, with the real
property taxes and the TVR fee?
Mr. Hunt: It is actually quite a bit more than that. We are
talking about the increases, the four point three million dollars ($4,300,000) plus the TVR
fee and that is in the increase not the actual revenue. All the property taxes are still much
higher if you look at what they are paying as a resort class or a vacation rental.
Mr. Kagawa: Yes, that is what I meant in the increase, yes,
and in the increase to the general public if everything passes, we are looking at the vehicle
weight tax and the tipping fee. So, there are some increases that will be happening in this
FY and that would be two point three million dollars ($2,300,000), right?
Mr. Hunt: That is about right, I think.
Mr. Kagawa: I just want Councilmembers to be aware that if
you want to look at options to increase the visitors and the residents, they are already being
asked to help with increases to our County budget. I think the way we have to look at
matching our revenues and expenses is actually in areas of cuts and that is proven to be
very difficult. That is why we are here and we are still not yet balance right?
Mr. Hunt: Right. Just to add a little bit to...what we would
probably more described as a user fee for some of the vehicle weight and tipping fee, that
does go into again the strategic plan of how are we going to continue to maintain our road,
DELIBERATION & PRELIMINARY
DECISION-MAKING 25 MAY 12, 2014
paving, knowing we cannot use bond moneys that is R&M. We need to find the funding for
that and it is either General Fund which is taxing and then moving it over to cover that or
you are having a user fee saying we are going to increase or commit to increasing those
sources that can get us moneys to do that specific task.
Mr. Kagawa: Steve, if today I came up with more cuts then
adds and I said OPEB is already taken care of, I want to put it into our reserve or savings,
is that an option? Is that a good option for us?
Mr. Hunt: It is an option but remember when you are doing
the cuts, you have to look at which fund they are being cut from. They may not all be
General Fund cuts so when you are looking at reserves specially if you want to cut out
money that you want to earmark to put into reserves, make sure you are using the
appropriate funds that those cuts are coming from.
Mr. Kagawa: Okay.
Chair Furfaro: And I want to remind us also, Mayor, the next
time I give you the brief about fifteen (15) minutes or so, it is intended for you. If you are
going to bring your staff up, I want to make sure you know you are subject to questions like
this, okay?
Mayor Carvalho: Yes.
Chair Furfaro: Just so we understand if you choose to bring
them up, you choose to answer the questions as directed. Mr. Rapozo.
Mr. Rapozo: Total OPEB liability to the County is about
fifteen million dollars ($15,000,000)?
Mr. Hunt: I believe it is reduced to about fifteen million
dollars ($15,000,000) now. It is fourteen point nine, five (14.95) or something like that...
Mr. Rapozo: I know the Mayor talked about the commitment
to refund OPEB but I believe that was because of the anticipation of getting the TAT. I
guess my question is, and you touched on it earlier, about how important or how you believe
that OPEB should be the mortgage or should be treated like the mortgage... but let us just
say fifty million dollars ($50,000,000) for discussion purposes. A ten percent
(10%)...because the State requires us to fund how many? How much percent?
Mr. Hunt: Twenty percent (20%) of the "catch-up" payment,
if you will. It was redefined as of Friday. I thought it was of the total because how they
defined Arc, but actually it is the normalize cost that is not part of it. It is the pay as you go
plus the catch-up, and that portion you are allowed to fund twenty percent (20%) of your
catch-up payment.
Mr. Rapozo: Okay.
Mr. Hunt: So roughly if you took rough numbers seven and
a half million dollars ($7,500,000), you could only...you could afford to go to twenty percent
(20%) of that seven and a half million dollars ($7,500,000) by law but then you are just
deferring that...
DELIBERATION & PRELIMINARY
DECISION-MAKING 26 MAY 12, 2014
Mr. Rapozo: Right, right.
Mr. Hunt: You get behind on your mortgage payment
basically is what it is.
Mr. Rapozo: Right. And basically you are just paying the
interest.
Mr. Hunt: Not even.
Mr. Rapozo: How damaging...because we are comparing
increasing taxes which the public will obviously pay versus deferring payment on OPEB
and let us just use a small amount of ten percent (10%) and so forth, saving a million or
two here and there. But what is the damage of doing that? I guess my concern is that
when you raise the tax, you reset the baseline for the taxpayer, so any future tax increases
will be based on a higher baseline, that is just how it works versus total payment or
repayment of OPEB next year. Say we went with ten percent (10%), we funded ninety
percent (90%), and that would give us one point five million dollars ($1,500,000) to offset
some increases. I know I requested a breakdown of all the hotel properties that would be
impact with the two dollars ($2) per thousand increase and I am not sure if we got that
back but...did we look at what was the range? I asked for the range of the lowest impacted
hotel and the highest impacted?
Mr. Hunt: I do not think one completed that assignment.
Mr. Rapozo: Because I think that is information that I need
anyway because I think if it is an impractical increase to a property then I think it is
counterproductive to the community. I guess my question is, how serious is it to not fund
OPEB at a hundred percent (100%), let us just say ninety percent (90%) or eighty-five
percent (85%)?
Mr. Hunt: I guess philosophically it comes down to how
committed are we to getting to a structurally balanced budget as defined by a rating
agency. If we are taking a step backwards saying we are going to take away an obligation
and fund less of it and the exchange of that is reducing rate to lower impact, we kind of
gotten away from where we need to go. We are taking a step backwards.
Mr. Rapozo: Right but arguably are you not basically saying,
we are funding OPEB but to sustain this budget, we are going to have to raise taxes again
next year as well and the year after that, right?
Mr. Hunt: If there is not substantial growth in the base, you
probably are looking at that and potentially again different rate classes if we carve out
potential areas within classes that currently exist that pay more.
Mr. Rapozo: If we reduce OPEB or the contribution to OPEB
then the burden falls on the County to repay next year, correct? Because we got to figure
out a way on how we are going to catch up.
Mr. Hunt: At some point we are going to have to catch it up,
yes.
DELIBERATION & PRELIMINARY
DECISION-MAKING 27 MAY 12, 2014
Mr. Rapozo: And if we just increase the tax then we put the
burden on the taxpayer who needs to make up the losses or the difference to balance the
budget. So I am not sure what...
Mr. Hunt: OPEB again is a percentage of salaries as well.
So as salaries increase, and again it is one of the things that if we start falling behind, the
catch-up is going to be even harder because as the continued raises start kicking in the
OPEB is a percentage of that.
Mr. Rapozo: I guess this coming FY would be the largest
impact in the increases from collective bargaining or is it just going to be the same for the
next four (4) years?
Mr. Hunt: I think in Unit 13 they are because of the
shredding and the multiple steps but some of the other ones are back and loaded still I
think.
Mr. Rapozo: Okay. Thank you.
Chair Furfaro: Go right ahead, Mr. Hooser.
Mr. Hooser: Just a quick follow-up on what Councilmember
Rapozo and the OPEB discussion because I think this is really the key to the big part of the
whole debate about where we are going the rest of these two (2) days. When I first heard
the concept of not funding OPEB, I was shocked. I am sure it was not an easy decision to
make.
Mr. Hunt: It was not easy.
Mr. Hooser: However as we look at it and look at all the
various challenges we have, it is moving funds around basically, so if we went back for
example to the original proposal that was how many million was that?
Mr. Hunt: We added two point seven, two million dollars
($2,720,000).
Mr. Hooser: So the two point seven million dollars
($2,720,000) figure if that amount was either put into reserve, then it is like borrowed
money but there is no interest we are paying on that, is that correct?
Mr. Hunt: Yes, on the OPEB there is no direct interest that
we are paying. It is not an obligation in a sense that there is a percent mortgage on it.
Mr. Hooser: So in theory we could borrow that money from
OPEB, put it in the reserves which might make Fitch and the other people more happy and
provide us more stability in case of emergency and/or it might decrease the pressure of
raising taxes. So that is a component that can be placed...that amount of money in either
one of those categories as part of the process, right?
Mr. Hunt: Yes, like I said the only obligation is to pay
twenty percent (20%) of the catch-up, so anything above I do not have the direct number
but I could calculate that out. But I mean there is a number that you have as an obligation
which is probably somewhere in the neighborhood of eleven million dollars ($11,000,000)
DELIBERATION & PRELIMINARY
DECISION-MAKING 28 MAY 12, 2014
that you would have to pay in (inaudible) is voluntary but again whatever we cut out is just
...we are probably chasing half a million to a million next year on top of whatever we short
fund next year.
Mr. Hooser: Right. But in terms of the financial stability from
Fitch's perspective, for example, it would seem and correct me if I am wrong that they
would look more favorably on those funds being in our reserve then not.
Mr. Hunt: From a just purely reading agency, you are
probably correct that they would like to see fund balance over paying your OPEB
obligation.
Mr. Hooser: Okay. Thank you, Chair.
Chair Furfaro: I am going to make a short announcement here.
We beat this OPEB thing quite a bit and we still have to get to a portion that we have to
have a motion on what line item we going to use. I am also surprise that if anything you
defer in that liability as their increases go up and it is not paid, that is like interest, Steve,
because that increases the amount of what you thought it was at the time if you had paid
the liability.
Mayor Carvalho: Right.
Chair Furfaro: Mr. Bynum.
Mr. Bynum: Fitch obviously would be much happier with that
decision but they are just one (1) of many factors that we have to determine. They, for
instance, are going to love that we take money from Open Space, they do not care about...
they much rather have that into... so, that is just one but here is my question...we
currently have no liability in this OPEB, right? Because we have been paying all along,
correct?
Mr. Hunt: We do not have any back accrued liability. If we
are not paying it, we still have a lot of future liability that we are paying.
Mr. Bynum: Right, so every year the County and State has
the option of paying their current obligations and they have until the State law obligation
to not pay any of the future liabilities, correct?
Mr. Hunt: Correct.
Mr. Bynum: And what did Hawai`i County do?
Mr. Hunt: Hawai`i County did not pay their OPEB and they
actually have a similar bond rating as us as a AA minus.
Mr. Bynum: And the State did not pay their OPEB, did they?
So they are going to carry huge liabilities, correct, for years to come?
Mr. Hunt: Their liabilities will be extended beyond our
liabilities because we are ahead.
DELIBERATION & PRELIMINARY
DECISION-MAKING 29 MAY 12, 2014
Mr. Bynum: So currently we have none of those liabilities if
we accrued some for a few years or for one (1) year, what is the real world impact in the
short run? Very little, correct?
Mr. Hunt: In the short run, very little. It just adds both to
the backend plus the amount that you are going to catch-up in the...
Mr. Bynum: Right, so now if we carry that liability for twenty
(20) years, right, and it was like a couple of years say eight to ten million dollars, what
would the real world impact be in thirty (30) years?
Mr. Hunt: Again, my concern is if you are carrying that
short funded amount for any period of time, every year is growing, not just your percentage.
We only have five (5) years to fully fund. It is twenty percent (20%) this year required,
forty next, sixty, eighty, and then by the fifth year you have to be at the hundred percent
(100%). So the further you get away from the hundred percent (100%) goal, which again is
on an increasing slope because it is based on salaries which are tied to collective
bargaining, the further you get the more dramatic your steps are going to have to be to
raising those funds by the fifth year to be in compliance with State law.
Mr. Bynum: Right. I agree with everything you said, but
Kaua`i County carried that liability and I am not suggesting that we will, when we get into
a better space we are going to meet that obligation because we always have. But even if we
did carry that liability out forever, it would be minor compared to what Hawai`i County is
carrying. The State is going to carry and the State now has passed the law that requires
those Counties to do what we did all along, correct?
Mr. Hunt: Correct.
Mr. Bynum: And so for all of those reasons if we have to
choose between further erosion of fund balance in the short run and using these funds for a
couple of three (3) years and then getting back...I mean do a further analysis. I mean, I did
not know we were going to get into this now but it is key to this budget. Thank you.
Mayor Carvalho: If I can just add that we submitted our version of
a balanced budget, you have that before you. We have gone through the same discussions
should we do OPEB or not, and how do we...if we had the TAT, guess what, maybe we
would not have to do this. We do not have the TAT so now we have to look at other
versions. We are all trying to figure this out and I think the people watching really want to
get good direction. We are trying our best to sort through some of these discussions but be
assured that we vetted out many scenarios here and I just wanted to be clear on that. I
want the people to know that we also had opportunity to speak with each and every one of
you to explain to you what we are doing, how we are doing, and what we are looking at. So
now I think it is good that we can move to the next step and look into some of the other
issues that we need to talk about. I just wanted to say that. Thank you.
Mr. Bynum: I agree Mayor that your budget has seven point
seven million dollars ($7,700,000) in further erosion in fund balance that is your proposal to
take us down to almost nothing in real world terms. Thank you.
Mayor Carvalho: Just look at that and we will see what the
balance is. We are more than willing to talk.
DELIBERATION & PRELIMINARY
DECISION-MAKING 30 MAY 12, 2014
Mr. Bynum: Thank you.
Chair Furfaro: Anymore questions on bond rating, OPEB, TAT?
There are some people here that do not maybe quite understand that fact of the matter is
when we allow the State to take our share of the TAT which was a substantial amount and
we agreed, okay. Quite frankly if we ever get it back, that is the State's liability to us. That
money should be earmarking some kind of building of a reserve. On the flipside, the OPEB
is a liability to us and it does grow if we under pay it. Anymore questions on these items?
Thank you. Now we are going to have to take a couple motions here and then take a break.
I guess really I would like to start by having an understanding and discussion that the
motion that I am looking for and I need a vote on it is to start this budget section with an
understanding that we are going to work off the May supplemental as a starting point.
Mr. Chock moved to work off of the Mayor's Supplemental Budget Submittal,
seconded by Mr. Bynum.
Chair Furfaro: Discussion? Voice vote, please.
The motion to adopt the Mayor's Supplemental Budget Submittal was then put and
unanimously carried.
Chair Furfaro: It is agreed to the Administration that is where
we are going to start from. We are now going to take a caption break which we are required
to do and when we come back we are going back to talk about the revenue bills which was
part of my presentation, to have an understanding where those votes might fall. The
Administration, you are certainly welcome to stay for that but we need to take a ten (10)
minute caption break.
There being no objections, the Committee recessed at 10:52 a.m.
The Committee reconvened at 11:09 a.m., and proceeded as follows:
Chair Furfaro: We are back from our recess. As I made the
presentation this is where I want to go. I am looking for a mock vote on the revenue bills
only and then we are going to plus and minus's as it relates to reductions first. Again, I am
going to the bills that we know are pending for Wednesday and I want to have a mock vote
so we know where we are or are not when it comes to revenue. Jade, I am going to ask you
to just highlight again the motor vehicle weight tax bill because I would like to get an
indication. That indication is...I would just like you to say if you support it or you do not
support it. Jade, go ahead.
JADE K. FOUNTAIN-TANIGAWA, Deputy County Clerk: This is the motor
vehicle weight tax; did you want to go around the table?
The vote to support Bill No. 2543 Relating to Motor Vehicle Weight Tax carried by a
vote of:
FOR SUPPORT: Bynum, Chock, Kagawa, Yukimura,
Furfaro TOTAL—5,
AGAINST SUPPORT: Hooser, Rapozo TOTAL—2,
EXCUSED & NOT VOTING: None TOTAL—0,
RECUSED & NOT VOTING: None TOTAL—0.
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Chair Furfaro: 5:2. Again, I just want to go around the table
here and then we are going to give everybody five (5) minutes to talk and then we are going
to go into reductions. By our rules, the next is the Solid Waste Tipping Fee.
The vote to support Bill No. 2542 Relating to Integrated Solid Waste Management
carried by a vote of:
FOR SUPPORT: Bynum, Chock, Hooser, Kagawa,
Yukimura, Furfaro TOTAL— 6*,
AGAINST SUPPORT: Rapozo TOTAL— 1,
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL— 0.
(*Pursuant to Council Rule No. 5(b) of the Rules of the Council of the County of Kauai,
Councilmember Yukimura is noted as voting silent but shall be recorded as an affirmative
for the motion.)
Chair Furfaro: Now the Public Access, Open Space, and Natural
Resources Preservation Fund.
Ms. Tanigawa: This is the current proposal by the
Administration...
The vote to support Bill No. 2541 Relating to the Public Access, Open Space, And
Natural Resources Preservation Fund failed by a vote of:
FOR SUPPORT: Kagawa, Rapozo TOTAL— 2,
AGAINST SUPPORT: Bynum, Chock, Hooser, Yukimura,
Furfaro TOTAL—5*,
EXCUSED & NOT VOTING: None TOTAL—0,
RECUSED & NOT VOTING: None TOTAL— 0.
(*Pursuant to Council Rule No. 5(b) of the Rules of the Council of the County of Kauai,
Councilmember Chock is noted as voting silent but shall be recorded as an opposition for the
motion.)
Chair Furfaro: So we have 4 no's, 1 silent, and 2 yes's. So that
would be a 2:5 vote. The next.
Ms. Tanigawa: Yes, against.
Chair Furfaro: The next one is the Planning Department TVR
certificates that are currently at the Planning Commission.
The vote to support an increase to the TVR certificate fees carried by a vote of:
FOR SUPPORT: Bynum, Chock, Hooser, Kagawa, Rapozo
Yukimura, Furfaro TOTAL— 7,
AGAINST SUPPORT: None TOTAL— 0,
EXCUSED & NOT VOTING: None TOTAL—0,
RECUSED & NOT VOTING: None TOTAL—0.
DELIBERATION & PRELIMINARY
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Chair Furfaro: 7:0. The real property tax as it is proposed. I am
just asking for an indication as proposed.
The vote to support Resolution No. 2014-11 failed by a vote of:
FOR SUPPORT: Chock, Kagawa TOTAL—2,
AGAINST SUPPORT: Bynum, Hooser, Rapozo, Yukimura,
Furfaro TOTAL—5,
EXCUSED & NOT VOTING: None TOTAL—0,
RECUSED & NOT VOTING: None TOTAL—0.
Chair Furfaro: 2:5 no. Yes, Mr. Hooser.
Mr. Hooser: I want to comment.
Chair Furfaro: I am going to give everybody five (5) minutes
around the table.
Mr. Hooser: This is a process comment.
Chair Furfaro: Yes, go ahead.
Mr. Hooser: I understand what we just did was a more or less
a straw vote.
Chair Furfaro: Yes.
Mr. Hooser: Okay, I just want to point out and I understand
the need for good planning for us to be consistent; however, from the public's perspective,
the public is still allowed to engage in these issues up until our final vote. And so the public
may or may not be submitting testimony and I think it is important that the public know
that we are still listening and that this was not a final vote. This was just an indication of
how we are thinking at this particular moment in time.
Chair Furfaro: Yes.
Mr. Hooser: And that when the actual vote is taken, we will
take whatever information is given, I will speak for myself, I will take whatever
information that has been presented between now and then and make that final decision.
Chair Furfaro: I too believe in the democratic process that is
why it is on the schedule for Wednesday, so we can take public testimony and we can get to
our final vote. As I announced this was an indication.
Mr. Hooser: Right.
Chair Furfaro: Because we have to have an indication so that we
understand where we are going with the plus and minus side.
Mr. Hooser: I understand.
Chair Furfaro: Mr. Bynum.
DELIBERATION & PRELIMINARY
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Mr. Bynum: I appreciate that process that by the end of
decision-making, as you mentioned earlier whatever commitments I make at that point will
be reflected in the official vote. So whenever that end comes I just want to say I agree with
you that commitment will be more solid.
Chair Furfaro: Mr. Kagawa.
Mr. Kagawa: I think because it is such a big amount — four
point three million dollars ($4,300,000) for the Real Property Tax increase to the hotel
class, I think this straw vote does not really complete the task. Some members may want
amendments that may raise perhaps instead of four point three (4.3), we may raise two
point three (2.3) or what have you but I think we need to have an indication as to maybe
not specific tax areas where it is going to be plus and minus. But just overall, what kind of
ballpark figure the members are looking at from that area. If you are going to cut four
million, you better have the cuts of four million because...then you are not really being
honest with yourself or with the public. For myself, I do not have four million dollars
($4,000,000) of cuts which is why I supported the increase but I think all members do have
specific increases but just not supporting the four point three million dollars ($4,300,000)
all to the hotel class.
Chair Furfaro: Understood. Well said. Anymore dialogue on
this straw vote? Mr. Rapozo.
Mr. Rapozo: It is difficult. I am starting off obviously with
trying to get through this budget without any increases. I have no idea what other members
are proposing as far as adds, and what they are proposing as far as cuts. I am hoping to be
enlightened in the next day and a half and if I believe at that point that the revenues
(inaudible) is necessary then obviously I will support it but at this point I do not feel that as
this body has had the opportunity to have the dialogue amongst ourselves to determine
what is actually essential and none essential. I reserve that right for a later time. Thank
you.
Chair Furfaro: I certainly recognize that and that is one of the
reason we are publicly and openly here at the table for two (2) days to have the dialogue
amongst ourselves and to discuss various point of views from the various Councilmembers.
On that note, I am now going to allow each of you five (5) minutes of comment time. You
will be timed and we will allow you to have some dialogue about overall comments at the
starting of and please refer to the May revised budget as it is. Mr. Bynum, I could start
with you, if you would like?
Mr. Bynum: Can you give me a one (1) minute warning,
please? This is a really difficult budget year as have been all of the ones recently, but this
one more than ever. This is the reset year and let me be clear the crisis in our budget is
caused almost entirely by the Legislators assault on County finances over the last five (5)
years. The Legislature has given the neighbor islands a lot of neglect and fiscal problems.
The approach to the budget, it is always about opinions about what priorities are. I am
going to tell you that I believe as I said that our Mayor has given us really good revenue...I
mean spending proposals ever since he has been the Mayor. I am sorry to see a second
round of cuts that eliminates positions that you were counting on because our government
in many ways is performing much better than it ever has since I have been involved for
fifteen (15) or twenty (20) years and I credit the Mayor with that. I do not have a lot of
proposals for cuts, very few, but I know other Councilmembers do and so I am going to be
very thoughtful and listen to those proposals and vote accordingly. Review needs to be
DELIBERATION & PRELIMINARY
DECISION-MAKING 34 MAY 12, 2014
balanced. The Mayor, as I mentioned, has not made a property tax proposal in his entire
term until this year and it is twenty-three percent (23%) all at once on one (1) category.
That is not a balanced approach at revenue and so I am going to be looking at more
balanced way to collect revenue. When it comes to adds, we are in a really tight year and so
I have very few of those to propose. A few but a very few that I think are critical priorities.
At the end of the day though, I am committed to funding the budget at a sustainable
budget. My top priority and I communicated this pretty much all along is no further erosion
in fund balance. It is fiscally irresponsible to erode our fund balance lower than it is. The
big numbers are...you look at the General Fund plus transfers out combined a hundred and
twenty-eight million dollars ($128,000,000). The Mayor's proposal will leave us just with
four million dollars ($4,000,000) in both committed and uncommitted reserve of right
around three percent (3%). This Resolution that the Chair said, sets a twenty to twenty-
five percent (20% — 25%) standard. GFOA says five to fifteen percent (5% - 15%) and Wally
Rezentes argued very strongly for fifteen to twenty percent (15% - 20%) saying that we
needed to be on the upper hand of that. To go to three percent (3%) is fiscally irresponsible
according to the Government Finance Officers Association. Is that easy to do? No, it is not
but it is actually doable and I think we will show that at the end. I am looking at no further
erosion in the fund balance as the primary goal which means...let us say that we identify
more cuts — say a million more on top of the Mayor's million. Well then our revenue...you
know what we need to do to get revenue sustainable but the Mayor's proposal is to take
seven point seven million dollars ($7,700,000) additional from fund balances when they are
already at a minimum we should let them go in my opinion. Of course Fitch is going to
agree with that. I am glad we had the OPEB discussion that we had today because I believe
that will be a part of my proposal, is to use similar savings to what the Mayor suggested. At
first I was appalled but when you do the full analysis, it makes sense to use that
mechanism for a couple of years and then get back because we have revenue coming. We
are in a good revenue picture for the future. I and the Administration will have tax
revenue proposals before the Council soon that will impact the next FY.
Ms. Tanigawa: One (1) minute.
Mr. Bynum: Valuations are going up and so our fund picture
looks good. If we borrow, and that is a good term from OPEB, for a few years during this
critical crunch that was imposed on us by the Legislature, I believe that a logical conclusion
will be that it is prudent and that fuller version of fund balances is a big mistake. I respect
the Mayor's proposal, since Steve, Ernie, Ken and Anne have come on the Budget Team. We
have structurally got the County correct. I got to finish in thirty (30) seconds. This is the
reset year. Four thousand (4,000) people under the Mayor's proposal is going to have...local
residents are going to have increase property taxes next year. Some of them five, six, seven
hundred dollars and more. Five thousand (5,000) are going to have decreases because the
reality of the cap is it protected some homeowners at the expense of others but the class
went up. We structured at a great place this year, thank you Mayor and the budget team...
Ms. Tanigawa: Five (5) minutes.
Mr. Bynum: ... and this Council for squeezing down the
variances and doing all the structural changes that put us in the right structural position.
Now, if we get the revenues matching expenditures, Fitch will be happy. I will be happy
and I think a lot of other people will to. Thank you very much.
Chair Furfaro: Would anyone want to go next? Okay, I am
going down the row, JoAnn...
DELIBERATION & PRELIMINARY
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Ms. Yukimura: Chair, I do not have anything to say at this point
but I would like to reserve my five (5) minutes to the closing when we adopt the budget.
Chair Furfaro: I do plan to give everybody another five (5)
minutes then.
Ms. Yukimura: Yes but I may need a little bit more than five (5),
but I will not take any right now.
Chair Furfaro: She is a none taker, okay, got it.
Mr. Bynum: That is a first.
Chair Furfaro: Can we report that in the (inaudible)... Mr.
Hooser, you have the floor.
Mr. Hooser: My comments will be very brief and actually
Councilmember Bynum said much of what I wanted to say. I think that it is actually an
opportunity for the Council to exert some leadership and I am hopeful that we will pass a
budget that does not further deplete our fund balances and actually increases fund balances
and is more balanced if not in balanced then has been since 2008/2009. Whether funds
coming in and the funds going out — operating funds, revenue and expenses are balanced
and I am hopeful and confident that we can between the cuts and the revenue increases, we
can come to that conclusion. Again, pass a balanced budget that is sustainably balanced
budget and that it begins again to rebuild our fund balances instead of depleting it. Thank
you.
Chair Furfaro: Coming around the table here, Mr. Kagawa, I
will go to you first.
Mr. Kagawa: We are in this predicament a lot because the
failure of the State Legislator to give us more of the TAT like what we used to have. One of
the options of not getting that is taxing the hotel even more and it concerns me. It is taxing
our biggest producer on the island. It is taxing something that is always been there for the
island — has been a strong point of our island and I am worried about the consequences of
passing on this tax while we look at it as four point three million dollars ($4,300,000) it will
be spread out, who knows how much it will affect. The prices are one of the main problems
of why visitors are choosing other destinations. They say coming to Hawai`i is very
expensive. It concerns me however it is tough to see where else do we tax. We are already
taxing...well indirectly we are taxing the people with the vehicle weight tax, tipping fees
but you know I have some aggressive cuts this year. I think it is our job to get a budget that
is sustainable and one that we can support. I am putting the (inaudible) on the
management of each individual Department as I make my propose cuts. I will be very frank
it will be to the overtime budgets of everyone. I believe overtime can be managed through
better management. I think overtime is an area that a lot of the public looks at and says,
"what is the reason for overtime?" I think management can deal with overtime the way
private sector does. In the private sector when business is struggling, the primary objective
is to cut overtime. It is looked at by profitable businesses as a waste of money. We need our
management to step up and make the right decisions. We need to see how we can eliminate
it. Right now we are just saying if we do not do it then people will suffer and services will
suffer, no, with better management you can still accomplish the same level of services by
being more efficient in the office, having people cover those periods and those additional
work that used to be cause for overtime could be paid for by people working with their
DELIBERATION & PRELIMINARY
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normal hours. I really believe that this can be achieved and if not achieve, like
Councilmember Hooser said, there is another option. If overtime cannot be achieved then
you can draw from other funds that are lapsing each year. I think the Departments are
unwilling to cough up those amounts just for the fear that they will run short but we have
seen historically every year that there are balances that are lapsing and we are relying on
the Administration to tighten our belts, be more accountable, and try to stick to our budget.
I think that is how we finally can cut down on our budget. I think we need to tighten the
belt and we have to let managers get more involved in cost savings and cost cutting. I think
that can be done. I think that leads us to a better road down the future. It will be very
interesting. Having that said I think if my cost cutting measures get approved, the
additions I have proposed are much less than the total amount. My plan is to...now that
OPEB is paid out, my proposal is to push my reserve balance to the reserve account or
savings account, whatever you call it, and when Departments do see mid-year or what have
you, they can come up to us and that would be the time when we see how Councilmembers
felt about adding more money's back to the overtime or whatever running short in the
Fiscal Year. That is my proposal and I am confident that together we can get a sustainable
budget going forward and we can work together and make sure that we do not tax our
businesses and our citizens anymore than we have to. Hopefully we will have some types of
savings at the end of this budget process. Thank you.
Chair Furfaro: Mr. Rapozo.
Mr. Rapozo: I think Councilmembers bring up some valid
points. Ross talked about the reason we are in the position is because of the State's failure
to adequately fund TAT and you know we can cry over spilt milk all we want but at the end
of the day it is what it is. Unfortunately we got dealt that rotten hand. The newspaper came
out with a "County hits the jackpot" the other day, big eighty million dollars ($80,000,000)
CIP and everybody was like "hurray, thank you very much." When you do a closer analysis
of the projects, thirteen (13) of those projects were already funded in the prior year that
were never released and never completed. There are eleven (11) new projects in the CIP
budget and I thank the Legislature for that but it is almost like...I hope it is not like a
pacifier like we are going to take your TAT because I do think we are entitled to that TAT
money and because of that we are forced to take some drastic measures. It is almost like
déjà vu, it seems like we have had these discussions year after year. The difference is that
every year the passes we just have less money and less reserve. In FY 2012-2013 I voted
against the budget and a lot of people said, "Mel, you soured grapes, you loss the Mayor's
election, you just...no matter what you just..." that is not true. I am not a financial guy like
Steve and Ross and all these accountants but I am a business man that could see what was
coming down the pipe. I saw it coming because I knew we just could not sustain that. I was
assured that there were different mechanisms in place and strategies that we could use.
TAT was always one of those things that we felt that we would never get taken away but it
did and now we are in a bind and I really do not know how we get out of. I honestly cannot
sit here today and tell you, "if we do this, we will achieve that." I cannot see that because of
collective bargaining, rising costs, and property values...we do not know. Somebody sells a
twelve million dollars ($12,000,000) home in the North Shore and the real estate people
sends out the press release saying, "the boom is coming back" because it skews the numbers
because they sold one (1) or two (2) big properties and yet how many of the properties here
are heading to foreclosure? How many of the people are facing short-selling their homes or
losing their homes because they just cannot make ends meet? That is the reality. If you
read the Pacific Business News it is quite telling how many bankruptcies and foreclosures
right in our own backyard. I think we need to pay attention to those kinds of...those are
•
real as far as I am concern, those are the real indicators. Not the press releases from First
DELIBERATION & PRELIMINARY
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Hawaiian Bank Economist and Bank of Hawaii Economist — you know they all want to
paint a better picture but when you look at the people that are losing their homes, getting
sued, cannot pay their credit card bills and that is the business I am in with serving these
poor people. That is the true indicator. Not the stuff that we read in some of the
publications out there. Back in 2008-2009 prior to that my business was very successful; I
had a lot of clients. We did extremely well with six (6) employees at one (1) time and then
the economy started to turn. What happened? I had to start letting people go. I had to start
laying people off. I was down to my last employee which was the lifeline for my business
was my receptionist/secretary/investigator/server she was doing it all because she had to
and then I can never forget the day I had to call her and say, "we cannot anymore. I am
sorry we do not have the revenue." I had to move my office to a cheaper location, cut
services, and most importantly I had to cut expenses. The things I was subscribed to, the
services that I could buy off of the internet to make my work easier, I could not afford it
anymore. The publications of newspapers, certain publications that I use on a weekly basis
to make my job easier, I could not afford it anymore. I had to let it go. I think my message
to my colleagues is that as we go through this next two (2) days, that is what we have to
start looking at. What are essential and what are none essential? What can we do without
and what can we not do without? That is why I voted against any of the increases because I
think there is a way we can get through this by reducing some of the none essential
services. At that point if we are absolute ground zero there is no more places to cut then we
look at the revenue enhancements but to start off with revenue enhancements and then try
to...I am having a difficult time with that. I just look at the budget and I am not going to
use my time to go over some of the positions that I believe are none essential but there are
positions. I would venture to say in Council Services there are some positions that we may
not need and in every Department. I think we can do more with less and I think we just got
to figure out how we can do that. Is that five (5) minutes? Okay. So, I look forward to a very
colorful animated two (2) days, thank you.
Chair Furfaro: Mr. Chock.
Mr. Chock: I will keep it really simple and short here. I am
really excited because it is not only my first time going through budget and this process
here but I am learning so much in it. It has been said that in the face of adversity is when
leadership and leaders emerge and especially when you do not have too many options. The
opportunity there for a small wind would be that we look towards stronger collaboration
and look for some agreements, shared agreements and that is what I am excited about.
Maybe a reset, is what I heard someone say, for us to get a little bit closer together and
have a plan. The outcome here for me is balancing this budget but also the beginning of us
seeking opportunities to restructuring that five (5) year business plan that I am looking at.
That is where my money is and that is what I want to focus on. I have had my meetings
with the Director of Finance and everyone else regarding the budget and so this is how I am
moving into these two (2) days, it will be to support the revenue enhancements as you seen
us in our mock vote here. I want to support. I think there is a need and I think we need to
step up to it. Including the property taxes that were mentioned, I know that they are up in
the air and I am looking to see what kind of options we have in (inaudible) and we are
spreading it amongst other classes. I fully support the vacation pay that was talked about
earlier and how we would restructure that out of one (1) account. My only request would be
that we look at how it is we are incentivizing to decrease those hours of vacation pay within
our individual Departments so that we do not even have to get to that point of that payout.
I think that is what I would like to see and I know some Departments, they require that
they use this time and also in terms of the customer service or balancing it, it would be
important that we offer that vacation time so that we do not use traction of how it is we are
conducting our business. The other area that I am interested in hearing about is from
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Councilmember Yukimura's suggestions that she will be presenting and how they might be
directly connected to the Open Space, something that I think we are all agree that is very
important arena to look at. In terms of expenditures, I am open. I am not proposing a whole
bunch of cuts here but as Councilmember Kagawa is suggesting in overtime, I am...I would
look at that intently as well as other areas that are prudent, effective, but do not take the
ability to serve the community because I have seen a lot of us go after Departments and
say, "this is not working," but if we are cutting their legs off from them, it would be difficult
for them to do that job. The balance of that would be that...yes, we want to build capacity
and competency so there are obvious areas that we can do some cuts as Councilmember
Rapozo said. I will be looking at that more intently. The priority would be to fund OPEB
fund reserves balance, any additional funds in Open Space. I think that is it. Thank you,
Chair.
Chair Furfaro: So the year starts out headlines, "State of
Hawaii reforecast revenue eight hundred and twenty-two million dollars ($822,000,000)
additional revenue..." that was in February. Then we come along and it is April and we get
this revised statement of, "oh, it is not eight hundred twenty-two million dollars
($822,000,000), it is only six hundred thirteen million dollars ($613,000,000)." We still kept
our hopes up for the TAT and the fact of the matter is that I submitted testimony in a Bill
to see if they could at least reinstate our inspectors in the Ag Department, five hundred and
ten thousand dollars ($510,000) and we read the Garden Island headlines and it is like,
okay, we are going to move forward on this and take good care of it — we did not get any
new Ag inspectors. Unbelievable. It is getting tougher and tougher to do business
especially when the new revenues are being found and they are just being used to fund
shortfalls from the past. I am sure that some of the money that the State had used was also
to catch-up on their delinquency of OPEB. Remember that they are delinquent; we are not.
More importantly here, one of the things I want to make sure you all understand is that in
the new general, finance, and accounting systems next time around when we do our CAFR,
they are going to require us to list the unfunded liabilities. So, if you decide that this new
plan that the Administration has given to us that maybe we can play with some of that
money and so forth. Also, it is good for you to know that you are going to have to identify
that liability that you created for yourself and that is not going to be excepted well on the
Big Island. That is not going to be excepted well in the State. And then also I want to let
you know that where we are at with our TAT, the fact of the matter is that they are going to
revisit it in two (2) years, and when that gets disclosed on their CAFR, I have to tell you
that I am very concerned about the future of the TAT and us ever finding ourselves getting
our fair share to do it. I just want to put that out on the radar screen to you to understand
what some of those liability requirements are. Now, along the ratings of bond rating and so
forth, I think it is important that we look at this OPEB funding and from the standpoint. I
do believe that part of it anyway, and Steve confirmed, will affect us in our future
borrowing part. I think thinking that if we do get any kokua on the TAT, it in fact will find
us in a situation where we can help to build our reserves —if that relief comes. I also want
to say that I am a little disappointed here. I help create the building report and we still
have not gotten a report for nine (9) months and if I was able to go to a document to
indicate what kind of building activities was happening on this island, especially since we
were convinced to split the tax rate on land from the building rate, I do not have anything
that I can look at and say, "we have accomplished an increase of four million dollars
($4,000,000) in assets in building and if I put some formula that is there, I would know
what we are growing in the way of revenue." We need to get back on track with that. That
is not part of today's formula. Some of the other things we all got our fingers crossed, you
know, Coco Palms get rebuilt, Coco Palms will add some tax base for us, and we are all
waiting for our next upgrade report on what is happening there.
DELIBERATION & PRELIMINARY
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As it relates to operating goals, I think we got to ask the Administration to hold
our...along with what Councilmember Kagawa is saying on the overtime. The fact of the
matter we have to remember the difference on the overtime...
Ms. Tanigawa: One (1) minute.
Chair Furfaro: ...is only the premium pay. But it is premium
pay that we already are staffing for and so we need to make sure that if we talk about
overtime, we understand that it is necessary at times. When it is not necessary, it should
not be used. Also, we talk about all the things happening with the Green Action here.
Well, I will be proposing in one (1) of my cuts, a cut of a hundred and eighty-six thousand
(186,000) kilowatt hours because there is no energy reductions in the budget here. Yes, it
may only be a hundred thousand dollars ($100,000) but it is a goal and if we do not have
goals in our budget, we cannot hold people accountable. So, I will be proposing some
reduction overall especially on the good news that we hear from KIUC and the changing of
light fixtures for our roadways. I mean, we should be experiencing some revisiting on that.
That is my last minute here. In the visitor industry I have to tell you, watch what is going
on, please. Kaua`i will not see a share in the Asian market, the Thai market, the Philippine
market. In fact these are flights Hawaiian Airlines is either reduced or canceled. These
were recent routes they have gotten approved. I think that is easily could be overstated.
Watch the market as it comes through. In 2008, the market dropped all the way to eleven
thousand (11,000) and it is back up to sixteen, five (16,500) and when it comes to travel
people like the islands in the U.S. and the North American continent because it is under
U.S. law, it is under U.S. dollars and in fact that is an area that touches on our public
safety. I want to share with you a little bit of the good news but we also have to push to the
Administration on some of these items and expect some savings reducing overtime, and
managing energy. That is what we set up these teams for. On that note, I am really able to
start the dialogue and I want to thank everybody if we can be real focused, we can do this in
two (2) days easily. Thank you very much. Now, to the staff, I guess I want to go around
the table first time and we have an indication on these revenue Bills on where we are at. I
want to go around the table first time entertaining one at a time if anybody has something
to suggest in a way of savings, first. Does anyone want to go first? Mr. Kagawa, I will give
you the floor.
Mr. Kagawa: One of my easiest cuts that I made was the
Health Fund reduction. What I am proposing is a five percent (5%) cut to the Health Fund
reduction. It will save us three hundred and twelve thousand four hundred and nine dollars
($312,409). Basically the way they budget is they add five percent (5%) to the actuals of the
previous year and we are just...we are going to be budgeting with actuals and like I said
there is always a little fat in any budget. If you come upon a case where your health fund is
more than the actuals of the prior year then you can use it from other accounts in your
budget. That would be my first cut. Thank you.
Chair Furfaro: Questions for Mr. Kagawa? Discussion?
Mr. Hooser: I had a question, Chair.
Chair Furfaro: Go right ahead.
Mr. Hooser: I like the general direction but how is this
different from the OPEB?
Mr. Kagawa: It is for the current employees on our payroll.
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Ms. Yukimura: Is that not OPEB?
Mr. Rapozo: OPEB is post-employment for the retirees.
Ms. Yukimura: Okay.
Mr. Hooser: OPEB is obligation for retirees and this is for
active and this is based on actuals, okay.
Mr. Kagawa: Well the budgeted amounts that we see in our
budgets is five percent (5%) that is added to the actuals of the prior year. So, the actuals of
this year...
Mr. Hooser: So, you are taking that out?
Mr. Kagawa: Yes, we are taking out the fat, basically.
Mr. Hooser: Okay.
Mr. Kagawa: And we are saying that you budget with your
prior years amount hoping that it will not go up significant.
Mr. Hooser: Okay.
Mr. Kagawa: It raises three hundred and twelve thousand
dollars ($312,000) of projected moneys, I guess, and keeping it with actuals.
Mr. Hooser: If I could follow-up, Chair?
Chair Furfaro: Go right ahead.
Mr. Hooser: So you are saying that the Mayor's budget
proposes to increase it by five percent (5%) and your proposal is to keep it flat?
Mr. Kagawa: Yes.
Mr. Hooser: Based on last year? And then similar to your
discussion on the overtime, if in fact they run short, they can appropriate from other parts
in the budget to do that.
Mr. Kagawa: Yes.
Mr. Hooser: Okay. Great. Thank you.
Mr. Kagawa: You are welcome.
Chair Furfaro: Mr. Bynum, you have a question.
Mr. Bynum: Just a question to the Administration.
Chair Furfaro: Ernie, could you come up, please?
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There being no objections, the rules were suspended.
Mr. Bynum: This is part of union contact, right? Can we do
this? Are these funds not contractually obligated?
Mr. Hunt: The Health Fund is where the medical premium
co-pays that the County pays for medical insurance for current employees comes from. It is
very difficult to estimate because each employee could either rely on insurance from their
spouse, take a single party plan, a two-party plan, family plan, so we try to use the
historical to come up with where we anticipate that fund going. The other component to
that is the actual premiums that are changed year to year when HMSA, Kaiser, all the
providers present what those premiums are. The recent round of collective bargaining use
either a seventy-five/twenty-five (75/25) or eighty/twenty (80/20) plan to establish what the
County pays based on each of those types of plans. It is a fixed amount but what we do not
know...and it has increased based on the new rates that were set in the new collective
bargaining but what we do not know is what each employee will choose as a plan. That is
somewhat a guestimation process. If a new employee comes in and the person who left was
on a single party plan and they come in with a family plan, it costs the County more. If
they come in and do not elect it because their spouse has a better program, it costs us less.
Again, it is somewhat of a guessing game in terms of what that amount is going to be.
Mr. Bynum: I do not want this to happen over and over again
where we have big discussion. I mean, I am very interested in all of these proposals...what
is the Administrations take on it? It is like, oh, we can live with this or this is going to kill
us and here is why and try to get some answers to those questions because I announced
that I want to support your budget if there are cuts proposed here that are going to cause
grief and make the difficulties that the Chair talked about last year where we are
constantly moving funds around and there is no flexibility then I am not going to support it.
I need guidance from you about what is acceptable, and what is something we can work
with. Like in this case, your short answer is no, it is not contractually obligated. We are
estimating future costs.
Mr. Hunt: Well it is contractually obligated once the
employee chooses the plan, we have to pay the fixed dollar amount associated with that.
Mr. Bynum: Right. So, this amount was based on your...
Mr. Hunt: On the last round of collective bargaining. They
established the rates by each of the plans and each of the providers what that fixed amount
will be.
Mr. Bynum: Well it is not an arbitrary number.
Mr. Hunt: No, it is not.
Mr. Bynum: It is a number based on years of experience.
Mr. Hunt: And it did increase. In fact some of the
premiums now have gone up even higher than...I think the highest was twenty-two percent
(22%) but our amount that we pay is fixed. I do not know what the actual increase was.
Mr. Bynum: Thank you.
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Mr. Barreira: Just one (1) item Councilmember Bynum, we
also with the new collective bargaining agreement, we are at sixty/forty (60/40) again as
opposed to fifty/fifty (50/50).
Mr. Bynum: I am well aware of that. That why I raised the
question — is this money we absolutely have to spend and you are saying most likely we
will.
Mr. Hunt: I believe that the five percent (5%) increase that
Councilmember Kagawa is referring to is a conservative number conservatively low, I do
not know if we have a lot of fat to burn on that.
Mr. Bynum: Thank you very much.
Chair Furfaro: Do we have two and a half percent (2.5%)?
Mr. Hunt: Again, it is an estimate till we know what our
actual base employees will be for FY 2015.
Chair Furfaro: Was this estimate made on all positions being
filled?
Mr. Hunt: Yes.
Chair Furfaro: Okay so you just shared with us the importance
also that if these are vacancies, we did not account for the savings in those vacancies. Do
you get my point?
Mr. Hunt: Right, the funded vacancy would be accounted
for and the dollar funded, I believe we reduced based on the total fridge that is associated
with health being one of that, I believe.
Chair Furfaro: Okay, there is a difference between "I believe"
and "we did." Did you reduce this for all the dollar funded positions based on their actual
salary and earnings, and the PT&E benefits associated with it?
Mr. Hunt: I am going to leave it with Ernie to confirm but I
cannot one hundred percent (100%) confirm without discussing with Budget Analysts.
Chair Furfaro: Let us see if Ernie has a response. Are you
getting us a response?
Mr. Barreira: Working on it.
Chair Furfaro: Okay, I am going to turn the floor over to Mr.
Kagawa then.
Mr. Kagawa: Historically the Health Fund account based their
amounts on employees selecting family plans, right?
Mr. Hunt: It is actually based on actuals.
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Mr. Kagawa: Now, it is based on actuals but historically it was
based on family plans?
Mr. Hunt: Historically.
Mr. Kagawa: Now we are using actuals and we are adding five
percent (5%) just as a buffer, right?
Mr. Hunt: I believe the increase includes both the collective
bargaining increase as well as what we anticipate the current pool of employees and their
current plans plus again those vacant positions with some assumptions about what they
would elect as a plan.
Mr. Kagawa: We do not know whether that five percent (5%) is
needed or not, right? Of course from a budgetary standpoint your answer would seem safer
if you said you need it but it is a legitimate based on actuals, right?
Mr. Hunt: Again the only caution is in prior budgets we
were not doing actual to actual. We are in a current FY 2014 that would have better data
when it closes but we do not have that figure or even estimated if we are going to be lapsing
this year. If we were lapsing this year then I would feel a lot more comfortable saying, "yes,
there is some fat," but without FY 2014 numbers where we are on actuals, I am a little
concerned about making assumptions that we are going to have lapse again.
Mr. Kagawa: Thank you.
Mr. Barreira: Chair Furfaro, when I get the response I will
route it to your support staff, if that is okay sir?
Chair Furfaro: I would also like to know if this range could also
be looked at a reasonable two and a half percent (2.5%) in other words taking the three,
twelve, four, zero, nine (312,409) that is here and looking. at one, fifty-six, two, zero, four
(156,204) —half of that.
Mr. Barreira: Chair, I will do that. I do have a response that it
was based on actuals and if the position was vacant then that would have been in fact
excluded. It would not have been in the budget. In fact the time that the budget is put
together, the position was vacant. Dollar funded—excuse me.
Chair Furfaro: Which plan they took and use to calculate these
benefits were based on who selected the actual plans?
Mr. Barreira: It was based on the actual expenses of the
previous year, yes sir.
Chair Furfaro: We will look into that number.
Mr. Barreira: Two point five (2.5).
Chair Furfaro: But we will put it on the side for now.
Mr. Barreira: Very good sir.
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Chair Furfaro: JoAnn, you have the floor.
Ms. Yukimura: I am sorry, I did not get clear on whether vacant
positions were included or not.
Mr. Barreira: They were not included if the positions were
vacant.
Ms. Yukimura: Okay so no money attributed to vacant positions
were included in this five percent (5%)?
Mr. Barreira: And as Steve had pointed out the concern there
that scenario may change in the future FY 2015 —that position could be filled.
Ms. Yukimura: Okay. Thank you.
Mr. Barreira: But I will get an analysis on the two point five
percent (2.5%).
Chair Furfaro: Based on the information you gave us, so when
the fat going forward if that is not the case that these positions were not counted and
someone comes to us and wants to activate a dollar funded position, you are going to then
'show us... say a fifty-two thousand dollars ($52,000) along with a twenty-six thousand
dollars ($26,000) benefit package, you are going to be asking us to be funding a seventy-
eight thousand dollars ($78,000) position? Because you do not have the PT&E included.
Mr. Hunt: Correct. When it is a dollar fund the fringe and
apparently the health is part of that has been removed from that calculation.
Chair Furfaro: Okay, let us make a footnote for that, Jade, that
we are starting after July 1. Further discussion? Mr. Hooser.
Mr. Hooser: I want to speak generally in support of
Councilmember Kagawa's suggestion. I think reality is that we have to find the money
somewhere and it is through tax increases or cuts. In my opinion the least disruptive we
can be to the Administration, the better. So we are not taking away people. We are cutting
in an area or proposing to cut in an area that would have very little disruption and leave
the Administration still the option of looking within its existing finances — it is the whole
tough love thing. It forces them to operate more efficiently to come up with the money
internally. I think the nature of these types of cuts are the very cuts that we should be
looking for, again, because they are least disruptive to the process. Thank you.
Chair Furfaro: Okay. Mr. Bynum.
Mr. Bynum: So we do not need to have this discussion again,
we do not know what the final outcome is going to be but your proposal is to have four
hundred thousand dollars ($400,000) unassigned fund balance so should your estimates
that you say are conservative...you will have to come back with a money bill and the only
place to get that money is that four hundred thousand dollars ($400,000), am I correct?
Mr. Hunt: That would be correct unless I am interrupting
also Councilmember Hooser's statement that you are going to have find it within your
operating budget elsewhere first.
DELIBERATION & PRELIMINARY
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Mr. Bynum: Okay.
Mr. Hunt: Closer to the end of the FY we still do not have
adequate funding then we are going to have to be here asking for funding.
Mr. Bynum: I just want to be clear for this and other similar
types of cuts — I am not going to support them because...in other years I would. When your
proposal is to leave us with a fund balance that two or three of these bad predictions can
gobble it up. What are we going to do mid-year if we do not have fund balance and we have
a critical emergency need? What are we going to do?
Mr. Hunt: Will not have many.
Mr. Bynum: Will not have any other option than to borrow
money. Can we borrow money short-term for emergencies?The Charter allows us to do that
but I do not know if we ever done it.
Chair Furfaro: It is never a good plan to borrow money to pay
operating bills.
Mr. Bynum: Normally I would...in this tight fiscal situation I
would support these kind of...what I consider maneuvers to save money short-term
hopefully and that is okay when you got a fund balance to back stock you but we are not
perhaps. I do not want to have this dialogue every time a similar cut comes up like this so I
just want to say it now but I am not going to support this cut or similar ones. In other
years I would. Thank you.
Chair Furfaro: Okay. Now, what I would like to do is the
Administration is going to actually give us information — I would like to vote on this item
and at the same time if we can have some better information after lunch time, I would
appreciate it. I think there should be some reach in this. I will not support the five percent
(5%). I might support two and a half percent (2.5%) but I want to hold my comments until
you are able to get back some information after lunch. If this vote fails at the five percent
(5%) as Mr. Kagawa is saying and I get the information after lunch, I will be prepared to
support him on the two and a half percent (2.5%) item. That is where I am at. I do not want
to have a lot more dialogue on this suggestion unless the introducer would like to have
some time?
Mr. Kagawa: No.
Chair Furfaro: Go ahead, you have the floor.
Mr. Kagawa: Can we vote?
Chair Furfaro: We can vote but we are voting on the five percent
(5%). I do not know where you are at with the vote but I plan after lunch to come back with
the two and a half(2.5%).
Mr. Kagawa: Do you need a motion?
Chair Furfaro: Yes, we would need a motion.
DELIBERATION & PRELIMINARY
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Mr. Kagawa moved to reduce General, Highway, Solid Waste, Sewer, and Golf Fund
Health Fund contributions by five percent (5%), seconded by Mr. Hooser.
Chair Furfaro: Further discussion? If not, I guess I should do a
roll call.
The motion to reduce General, Highway, Solid Waste, Sewer, and Golf Fund Health
Fund contributions by five percent (5%) was then put, and carried by the following
vote:
FOR REDUCTION: Hooser, Kagawa, Rapozo, Yukimura TOTAL—4,
AGAINST REDUCTION: Bynum, Chock, Furfaro TOTAL— 3,
EXCUSED & NOT VOTING: None TOTAL—0.
Ms. Tanigawa: 4:3 motion passes.
Chair Furfaro: It passes.
Mr. Kagawa: Thank you.
Chair Furfaro: I still want the information because I was
prepared to support it at two and a half(2.5) but it would be good for us to have something
for us to measure there. Okay to the staff, 4:3 at this point. Reductions, next one please.
Does anyone have one to introduce?
Mr. Rapozo: Mr. Chair, are you going to have that thing on
the...
Chair Furfaro: Yes, they are going to do it right now. They are
working on it.
Mr. Rapozo: Okay.
Chair Furfaro: It is on the screen and they are working on it. I
think it is just warming up. Okay, next one.
Mr. Kagawa: My second cut is proposing to dollar fund the
new Deputy County Attorney position — the six (6) month position. The reason I am dollar
funding is because I want to give the County Attorney the option of taking moneys out of
his Special Counsel account and using that to hire the person that would allow Mauna Kea
or Steve Hall to do litigation full-time. I have heard it from the County Attorney that
having that litigation position open...positions filled by Mauna Kea and Steve Hall will
reduce the amount of moneys needed for outside Counsel. I am saying, if that works then
why do you not just take that money in the amount of seventy-two thousand two hundred
and twenty-five dollars ($72,225) and take that out of your Special Counsel account and you
can go ahead and hire that position. When we see how it works in next year's budget if I
am still here, I would be more incline to maybe even add another on that. Thank you.
Chair Furfaro: Mr. Rapozo and then Mr. Hooser.
Mr. Rapozo: I just want my colleagues to know that I also
have a proposal but mine is a little bit different. It is to remove the position altogether. I
think over the last year or so, I think we all share the concern with the accountability of the
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Office of the County Attorney. I do not believe that in fact adding one more position, one
more Attorney creates a litigation team. I just do not believe that. I have been around
attorney's long enough to know that if you are going to have a litigation team, it is a team.
It comes with a package and just simply one more attorney is not going to do that. It is not
going to meet the goals and objectives that I believe was presented to us. I will not be
supporting the dollar funded. I want my colleagues again to understand that if they agree
with me then they can vote your support on the removal of the position. I think it is based
on accountability. I think a good manager in that office can make that office run more
efficient. I want to give that a shot first before we just keep rewarding, in my opinion is the
bad behavior with more positions. I am going to be support very few of the new positions
proposed by the Administration this year and this is one of the positions that I simply
cannot support. Thank you.
•
Mr. Hooser: I had to actually look at my own proposal which
is real similar to what was brought up earlier and initially I was thinking that
Councilmember Kagawa is right on. I looked at my proposal and it is also to delete and not
to dollar fund. I would support the deletion and then let the County Attorney's Office prove
itself and then come back and ask later. Thank you.
Mr. Bynum: There has been a lot of discussion about
accountability of the County Attorney's Office lately on Council that I have not been able to
participate in. There is also the accountability of the Council's decisions and how it
impacts this issue. For all the controversy of the County Attorney, we avoid looking at the
successes of that team over the last couple of years. I am not going to support cutting this.
Ms. Yukimura: I like the creativity of Councilmember Kagawa's
suggestion. I was just wondering why we would not just reduce...transfer the money from
the Special Counsel accounts and just fund the Deputy County Attorney?
Mr. Kagawa: I just figured that dollar funding it means that
we support it but the money would have to come at your discretion and if you want to fill it,
you can go ahead and take it out of the Special Counsel account as you told us that the
Special Counsel need would go down if we can have Mauna Kea or Steve Hall to do the
position. I am confident in those two (2) and that is why I am choosing to dollar fund it. We
can have that County Attorney come in...the new County Attorney come in and pick up
some of the work that they are working on and free them up totally to work on litigation.
But I think us funding it and taking it out of Special Counsel would not be giving Al the
direction. This way, he can do basically what he wants with the Special Counsel money.
Ms. Yukimura: The actual amount needed for this year was over
a million, I think, right? I am trying to remember.
Chair Furfaro: Let me recap, I think it would help with the
discussion. Two (2) years ago the County Attorney's Office operated on a million dollars
budget and that was for Special Counsel. After one (1) year, they reduced it to seven, fifty
($750,000) against some of our recommendations but that is what they submitted and that
is what they have to live with. Then last year they reduced it to five hundred and twenty-
eight ($528,000). We recently and I want to thank Mr. Hooser for voting silent on that but
we recently gave them another half a million so it bought up their whole budget to one
million twenty-eight thousand dollars ($1,028,000) for this year. You will see in contrary to
what Walter Lewis letter implied this weekend, I do not know how he knows that I am
disgruntled with the County Attorney's Office or lack the faith in it but he says that in his
article but the reality is that there is basically, I did the math real quick, there is only three
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hundred and twenty-six dollars ($326,000) left in that account. He now has a system that
he reports back to us where his pending is. Ten (10) of those nineteen (19) accounts he has
hit the sixty-five percent (65%) spending criteria already. That is why we had ten (10)
Executive Sessions on Wednesday. I am say to you right now whether you give them that
Attorney or not, reality is that we should have known in cases and he will be alright, there
will be nothing to carryover. I hope that helps you understand.
Ms. Yukimura: It does and so I am seeing that in the Special
Counsel in the Supplemental Budget, it shows six hundred fifty thousand dollars ($650,000)
which is already a big drop from the two (2) previous years. Given that we do not have very
big reserves, I think I will have to vote against this proposal to cut out. I think there is a
great potential to reduce Special Counsel costs both through a litigation team or a focus
anyway on litigation from the inside and also by better management of Special Counsel. I
think by the reduced amount already we are asking for some of that kind of efficiency and I
would like to give the litigation focus a chance so I guess I am not going to vote for it.
Thank you.
Chair Furfaro: Mr. Hooser, you have the floor.
Mr. Hooser: I would like to say that if we hear the same
information and come to different conclusions and that is kind of what happened here
because another reason not to fund it, I think, is because their entire budget is short-
funded. They are going to spend over a million dollars in their budget or six hundred and
fifty and there is only four hundred in their...so they are already way too short so I would
say we take out this additional money — the seventy-two thousand dollars ($72,000) or
eliminate the position. Thank you.
Mr. Rapozo: I just asked Mr. Kagawa if we could go with my
proposal first and see how that does before we go to his at the time of the motion. I do want
to say that this Council and prior Councils has offered very strong recommendations to the
County Attorney's Office over the last many years, going back to the six-five percent (65%)
threshold going back to the form of how to assess the case that we wanted to see this
assessment form. The fact that we wanted to be briefed more often and I guess the
frustration is none of those were acted upon by the County Attorney — none. Until it was
becoming publicly known that this Council was getting really frustrated with this County
Attorney, all of a sudden we have ten (10) Executive Sessions now. My point is, let us try
the accountability mode first. Let us try to hold him accountable to that Office before we
start rewarding him with more positions. This Council at any time can create a position for
that Office if they want or feel they need to but I am saying let us try the avenues that we
have been asking for years, let him implement that, and see where we go. I would guess, in
fact, I am almost positive that if in fact what we have asked for the last several years are
implemented, the costs to run that Office will drop. I believe that in all my heart and I
think to give more positions, that is not how you hold Offices accountable. So, I would seek
your support on my proposal. Thank you.
Chair Furfaro: Anybody else have anything to share? Again, I
was just referencing this comment made in Sunday's paper that, "the Chairman has no
confidence," I do not know where that came from but here is the reality folks, he put in the
Special Counsel because he reduced his Special Counsel fund by two hundred thousand
dollars ($200,000). I would just caution you and you saw those in my notes going about, if
you do not go with the additional Attorney the know that we should put money back in the
Special Counsel because if not, we are going to be reliving the same thing that we are living
DELIBERATION & PRELIMINARY
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right now. Mr. Kagawa, did you yield to letting us vote on Mr. Rapozo's item first? Okay,
Mr. Rapozo, I will give you the floor.
Mr. Rapozo moved to remove funding for the New Deputy County Attorney for the
Litigation Team (6-Month Funding), seconded by Mr. Hooser.
Mr. Rapozo: That is only six (6) months so if you put this in,
that becomes pretty close to a hundred and fifty thousand dollars ($150,000) expenditure
going forward.
Chair Furfaro: This is Mr. Rapozo's piece?
Mr. Rapozo: Yes.
Chair Furfaro: Further discussion? If not, roll call vote.
The motion to remove funding for the New Deputy County Attorney for the
Litigation Team (6-Month Funding), was then put and failed by the following vote:
FOR REMOVAL: Hooser, Kagawa, Rapozo TOTAL— 3,
AGAINST REMOVAL: Bynum, Chock, Yukimura, Furfaro TOTAL—4,
EXCUSED & NOT VOTING: None TOTAL—0.
Chair Furfaro: 4:3.
Ms. Fountain-Tanigawa: It does not pass.
Chair Furfaro: I guess we will go to Mr. Kagawa's piece now.
Mr. Kagawa moved to Dollar Fund New Deputy County Attorney for the Litigation
Team (6-Month Funding), seconded by Mr. Hooser.
Chair Furfaro: Further dialogue, Mr. Kagawa, I will give you
the floor? No? Roll call vote, please.
The motion to Dollar Fund New Deputy County Attorney for the Litigation Team
(6-Month Funding), was then put and carried by the following vote:
FOR MOTION: Chock, Hooser, Kagawa, Rapozo TOTAL— 4,
AGAINST MOTION: Bynum, Yukimura, Furfaro TOTAL— 3,
EXCUSED & NOT VOTING: None TOTAL—0.
Ms. Fountain-Tanigawa: 4:3, motion passes.
Chair Furfaro: Councilmember Kagawa's piece passes. Staff, can
you put the appropriate number on the board. Do we have any new cuts? Mr. Kagawa.
Mr. Kagawa: I am going for the hat-trick — I got two for two so
far. Thank you, members. My last one is the toughest one because I know it will be hard to
bite but again this falls in line exactly with my colleague Councilmember Hooser said at
some point we must do and we must tighten the belts of each Department and the
management has the ability, I believe, with the amounts that has been lapsing each year in
each Department. If they do not want to give up the cuts then we as the Council need to be
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the strong ones and tighten the belts ourselves. This will be an overtime reduction of
twenty percent (20%) to every overtime line item saving the County eight hundred and
ninety-nine thousand four hundred forty-one dollars ($899,441). Can I make a short
comment, Mr. Chair?
Chair Furfaro: Yes.
Mr. Kagawa: When I look at the direction of the County in the
next four (4) years or so especially...I am not picking out any Department but just looking
at Police and Fire the operations, salaries are thirteen million dollars ($13,000,000) in the
Police Department and two million dollars ($2,000,000) overtime for those operations of
Police. The Fire Department, they came under the Cost Control Commission because it
came up as a concern — eight point eight million dollars ($8,800,000) operations in salaries
and overtime, if you add up regular overtime of seven hundred thousand dollars ($700,000),
you add the rank for rank of eight hundred and fifty-nine thousand ($859,000), you add the
premium pay of four hundred and fifty-eight thousand dollars ($458,000), for eight point
eight million dollars ($8,800,000) of normal salaries, over two million dollars overtime pay.
I am just looking forward now. These are when the lowest paid salaries of each Department
is at fifty-five thousand dollars ($55,000) approximately. In three (3) years the lowest paid
Police Office and Fire man will be up to seventy-one thousand dollars ($71,000). If we do
not start controlling overtime now, it will break the camel's back. I am very afraid for the
future of our island and our status and how the regular middle class and poor person will
be able to afford surviving on this island. I urge Councilmembers, this is the year that we
can take that strong stance for the future and I believe management can do it. It is always
been...they have been trying but they have not been trying hard enough in scrutinizing
approvals of overtime. Again, I believe it will not impact the services that are out there. I
think tough choices need to be made and if it cannot be made, I believe there is fat. If I just
talk about Police and Fire, those are the two (2) largest budgets in the County if you say
that everybody has fat, the largest budgets will have the most fat. This certainly goes for
every account in the County and I think it is all about kOkua, Mr. Chair, and everybody
needs to kokua including our own overtime budget. Thank you.
Mr. Bynum: I do not know where to start with this...but let
me start with Police and Fire. I have been here a long time and the Police and Fire have
come here and have given us very detailed analysis of their overtime. These Departments
use overtime structurally to run at the most efficiency. I will not be supporting this by any
way shape or form. I think if we vote for this without calling the Police Chief and Fire
Chief up here and asking them what impact this will have and have us remind them in
their Departments overtime is used structurally for efficiencies, the Police Department has
to use overtime because they have to serve the public and they have not been able to be
fully staffed until recently. This is just untenable this kind of twenty percent (20%) across
the board, in my opinion. Thank you.
Ms. Yukimura: I appreciate Councilmember Kagawa's look at
these issues but I am deeply concerned about the small Departments that are doing a huge
work on behalf of the public — Transportation used all of its overtime, it is part of the bus
system as it works and I think they are already struggling with a small budget that is very,
very lean. So to cut twenty percent (20%) across the board, to me, is untenable with the
small Departments. I look at Housing too and they are struggling just to survive in terms
of their positions, their federal funding is being cut, it is down to the bone and I do not
think we can do that to them. It would be really hurting their operations and the people
that they serve. I would be open to a more focused kind of cut but not across the board.
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Mr. Kagawa: Can I respond?
Chair Furfaro: Sure.
Mr. Kagawa: We are ignoring the fact that we always hear
that there is a lot of money that are lapsing each year in every Department, so your
comments fine however you are assuming that every Department is spending every dollar
and that is not happening. That has never happened. We are always lapsing money and
Transportation is not a small budget. It is a big budget. Just like every other Department
that is being asked, I think, if you remember what I said earlier, all of my savings will go
into our savings or reserve account and if there is a need mid-year, they can come before
the Council and we can put it right back so that those that are seriously effecting services
and what have you will have that savings. This is a way to tighten the belt and we will
have that savings. If we do not make any cuts, we will not have any savings and we will not
be able to give anything upon emergency. I just think it is a big step. It is a tough step but
we are certainly elected to do. We need to serve the general public and we need to try to do
what we can to control our spending going forward. Thank you.
Mr. Hooser: Again, I support Councilmember Kagawa's
initiative on this and it does not eliminate or prevent these services from being provided. It
just holds the Departments far more accountable and it makes it far more difficult for the
money to be spent. As they move forward and if the reality of their budgets are as such
that they absolutely have to have more funds for more overtime, they cannot live within
their budget then they come back and they justify that request to the Council. It makes
everybody work much harder to spend the money. It is not so easy just to go run through
their budgets. I believe this is the budget year, if any year, that we need to tighten up the
process as much as we can. Again, if there are legitimate needs, come before the Council or
work within your own budgets but if need be come before the Council and ask for additional
funds but it will definitely increase accountability, increase efficiency, and help us balance
the budget. Thank you.
Mr. Rapozo: If Mr. Kagawa was asking for the eight hundred
and ninety-nine thousand dollars ($899,000) to build the sports complex or a project that he
would like to see done then I can tell you that I would not support this but right now there
is really no incentive or pressure for any Department to really scrutinize overtime. Last
week here I asked Solid Waste if they had changed the schedule which had been an issue
for a couple budgets now of the green waste hauling, if they had changed the schedule of
the hauling to move it from a weekend to a weekday — that they had the overlap. The
acknowledgment I got or the response I got from Solid Waste was that they did not. Until
the well is dry, nothing is going to change. The behavior is not going to change. That is one
(1) area that could drastically cut overtime. I share the concerns of the public safety and the
fact that the Police and Fire rely a lot on their overtime but I also believe that forcing all
Departments to be more accountable, to actually sit down and figure out a way in their staff
meetings how we can cut overtime, nothing is going to change. Until that happens, nothing
is going to change. We just look at it as a given and we got to work around this and do not
worry about it because the taxpayers will pay. We will just raise the taxes to meet these
demands of expenditures when we are not, I do not think we are doing our fair share. We
are not sharing with the public saying that we are cutting and we are asking you to help
out. I will feel more comfortable when we asking the taxpayers to step up when we,
ourselves are stepping up and not just cutting dollar funding positions or moving money
from one account to another. I am talking about real cuts. I would definitely agree with Mr.
Kagawa that these funds need to go into the emergency fund/surplus fund so that it is
available should the Department, regardless of which Department it is, can justify the need
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for more overtime that we will have it available. I think the exercise need to get started and
I think this is the year to do it. I am going to support the proposal. Thank you.
Chair Furfaro: I want to caution all of you and I want you to
know that I said this purposely this morning. I am talking to right now with several years
of management experience. I know we got to propose cuts but I have to tell you that these
cuts need to be realistic and they need to be documented in a sense the those people
managing those areas need to have a chance to tell us what kind of goals they can set and
so forth. That is where we should deliver the message. We should not do this by force and
just saying that is what it is, so I would like to postpone the on this until after lunch, and
then after lunch have the Police and Fire Chiefs here. Also, if you read my notes, I already
tapped the Fire Department in my comments and they followed through, am I correct
Steve, and I just need a shake of the head.
Ms. Yukimura: Yes.
Chair Furfaro: So it is not necessarily something across the
board and that was based on the fact that we had this very unfair overtime handed to us in
the rank for rank that they have been working on. I would hope that you would allow me to
take this item after we have the Police Chief and Fire Chief here just to hear from them. Is
that acceptable? Okay, we are going to do that and we are...did you want to comment?
Mr. Bynum: JoAnn brought up another Department where
overtime is not a luxury, it is part of the structure of the Department, I believe, so I
definitely encourage us to do that. I need we need to hear from the Police and Fire but I do
not think they can function with this cut as intended. My final point is that this budget
happens in the context of years of structural change. This Council that I am very proud of
because we addressed this variance issue very assertively and the Administration
responded. We have tightened up all of those places very considerably to the point where
some of these cuts, I said no can...I do not see how these Departments could function if we
took this out. They would be coming back here for certain. It is not, maybe they will come
back and we even talked about hope today, "I hope this..." we cannot talk about "hope," we
have to do something we know will work next year.
Chair Furfaro: So, if you folks do not mind, Mr. Rapozo, you
have the floor real quick.
Mr. Rapozo: I know it is coming up on lunch, so I just wanted
to try to get one that we could probably do relatively quickly.
Chair Furfaro: I think it is lunch time now. Again my comments
here is from a standpoint of being a senior manager, I have read operating budgets since
(inaudible) and I think if we are going to hold a reduction like this to these Department
Heads, it would be good to hear from them. Also, in my earlier go about, I did make a
reduction in the Fire Department, so I am•not sure if it can be across the board but I
appreciate what you are doing here Mr. Kagawa, please do not get me wrong but I would
like to hear from these two (2) public safety Department Heads. We will recess for lunch on
this note. We will be back at 1:30 p.m.
There being no objections, the Committee recessed at 12:31 p.m.
The Committee was called back to order at 1:37 p.m., and proceeded as follows:
DELIBERATION & PRELIMINARY
DECISION-MAKING 53 MAY 12, 2014
Chair Furfaro: We are back from lunch and we will continue on
our decision-making process here. I see Nadine just explained to me that the Department
Heads here were here for the opening comments but they were scheduled to be back as we
go into decision-making process. I just want to point out that I had only asked for the
Police Chief and the Fire Chief. Coming back from lunch, we had an item that was proposed
on the floor. We do not have a seconded and it deals with overtime. The proposal on
overtime was to reduce overtime by twenty percent (20%). Before we go any further, I want
to get some clarification and I do not care if it is from Steve or Ernie, but I would like to get
one (1) of you. I would like to get a definition of something. Could one (1) of you come up to
the table?
There being no objections, the rules were suspended.
Chair Furfaro: In the hotel and resort business we define
overtime as an issue that deals with call-backs for filling in vacancies, additional staffing
requirements because changes in the house count or the forecast of the restaurant and so
forth, and other particular overtime is often referenced as premium pay. Premium pay is
pay that is given for contractual agreements — holidays, mandated requirements to fill in
for supervisors that are off and so forth. We have overtime here defined as any one and a
half times of pay regardless of it being in a contract or not, you do not...there is no
differential in the line item or the terminology. So, when we say overtime, it is all overtime
including that is in the bargaining unit agreements, can you help us understand before I
give the floor to Mr. Kagawa?
Mr. Barreira: This came up during the budget deliberations
and hearing earlier this year. All overtime for County and State employees are all driven
by that which is defined in our collective bargaining unit agreements.
Chair Furfaro: But what I am saying is if you have an
bargaining agreement that specifies who needs to be used or who is called back when there
is a filling for a vacancy, some of those are done by contract and that is not referred to as
premium pay or is referred to as premium pay? Then there are other demands that occur
that are pure overtime for operational issues but here it is one line item.
Mr. Barreira: This issues with respect to premium pay, I would
like to get you an accurate information so when we are pursuing other business, I am going
to ask Human Resources (HR) to speak to that issue and get you through Council staff a
specific answer in terms of premium pay. I can tell you that in terms of overtime Chair
when you talked about a specific order, that also especially in the UPW and all unions are
defined by seniority.
Chair Furfaro: That I understand but there is no definition
when we have a bill being introduced to reduce overtime by twenty percent (20%) across the
board, you are basically telling me that there is no way that I can decipher which are by
contract, transfers, and so forth versus operational issues. You cannot define that to me.
You do not have two (2) separate line items in the budget.
Mr. Barreira: I will get you a response to answer your question,
sir.
The meeting was called back to order, and proceeded as follows:
DELIBERATION & PRELIMINARY
DECISION-MAKING 54 MAY 12, 2014
Chair Furfaro: Okay. That is the best we can do for now. I want
to keep the questions limited because we do not have a second on this motion yet. I would
like to get a seconded before we go any further.
Mr. Hooser: I actually did not hear the motion but I am
prepared to second.
Mr. Kagawa moved to Reduce Overtime by 20% (General Fund, Highway Fund,
Solid Waste Fund, Sewer Fund, and Golf Fund), seconded by Mr. Hooser.
Chair Furfaro: Now I will take discussion.
Mr. Kagawa: I think you called the Police Department and the
Fire Department here to come and tell us by cutting twenty percent (20%), what are going
to lose? Let me tell you what my justification for saying that we do have money in there as
Councilmember Hooser said to move around within the Department. I am looking at page
34 of the CAFR, you all have that. In FY 2013 the Police Department lapsed nine hundred
and one thousand dollars ($901,000), the Fire Department lapsed one point six million
dollars ($1,600,000). That is money that was in the budget that was not spent. For the
Police Department, they have the most to lose. They have two million dollars ($2,000,000)
in their overtime budget — twenty percent (20%) of two million dollars ($2,000,000) is four
hundred thousand ($400,000). For the Fire Department, their overtime budget only has
about seven hundred thousand dollars ($700,000) in there because I do not believe the
overtime cut will affect premium and rank for rank because that is all contractual
obligated. But seven hundred thousand dollars ($700,000) take twenty percent (20%) is a
hundred and forty thousand dollars ($140,000) so the Police Department is the one that will
be most affected but they have like I said if you look at the last lapsed amount in the CAFR,
I believe that they may have enough money in there and like I said the reason that we are
going to try and reduce overtime County-wide and we will have those money in fund
balance so that if the need arises and they do not have money that are extra or lapsing,
they can come back to the Council, and they can have exactly what they asked for in the
•
budget or even more if the need arises. At some point we need to tighten the belt across the
board in the County and there is money that is lapsing. I can look at every Department,
almost and they have it but as Steve pointed out we are getting closer to actuals. The
lapsing amounts are reducing. Those are the two (2) big ones. For example, Transportation
only lapsed ninety-one thousand dollars ($91,000) that is not a lot of play and they are
pretty close to actual. Like I said it is a fair... "across the board means every Department
giving up something." What are we achieving? We are achieving a savings instead of
achieving zero or just a balanced budget where we have no savings. I feel like this is a way
to go to achieving our chances for bond rating and I do not know really what is the big fuss
because I believe that it can be done it you just look at page 34 of the CAFR. Thank you.
Chair Furfaro: Just for clarification so we all know especially
you in the audience; that is the carryover of the whole Department. That is the carryover of
the pay roll line. That is for the whole Department.
Mr. Bynum: Like I said I have been here for a while. We have
been discussing and scrubbing overtime for a number of years, the variances that
Councilmember Kagawa talks about have been reduced substantially over the last few
years with collaborative work between the Administration and the Council. We have
already a tight budget. I believe Fire just cut overtime recently. I believe not overtime is
created equal. Sometimes overtime used judiciously saves money and is structural and in
some Departments like Police and Fire, I think it is structural to their operations. I do not
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believe that some of these Departments...and that is my question, can operate with this big
of a cut — four hundred thousand dollars ($400,000) additional from the Police Department
right now. They are counting on this. They already scrubbed and we dealt with the
variances and the positions. This budget is happened in a context of a lot of work that
brought us to this point. I really want to hear from those Departments in particular but
there may be others where overtime is not a bad thing. It is something that is part of the
structure of the Department and necessary. I do not support this kind of very large cut
without thoughtful consideration of its impact on each Department. Thank you.
Mr. Hooser: Chair, if the Department Head is going to speak,
I will listen to them first and then speak.
Chair Furfaro: Fair enough. We will likely hear from the Police
Chief and the Fire Chief first from public safety to talk in terms of the budgeted overtime.
There being no objections, the rules were suspended.
DARRYL D. PERRY, Chief of Police: Good afternoon. With respect to the economic
situation...I really appreciate having the time to explain... in terms of the CAFR the nine
hundred and so thousand dollars, I would have to look at each line item but in regarding to
overtime, again, you have to realize that we are filling all of our positions. We did use the
three (3) year actuals and came out with a baseline number and of that we cut another two
hundred and fifty thousand dollars ($250,000). In terms of our assessment of our needs,
we felt that we are as low as we can go. Now the CAFR indicates that there is about nine
hundred thousand dollars that we returned and those were based on the status of the
Department from last year and equipment purposes that we were not able to make. But
these situations are going to be changed in the very near future not to mention the
collective bargaining agreements that were reached recently. Those are financial
liabilities...well I should not call it liabilities...obligations that we need to honor because it
is collective bargaining. In terms of our overtime expenditures, there are aside from
personnel changes and the TA and the rest, there also unanticipated events that take place.
These are the anticipated events that we cannot predict and that is why we use our actuals.
For example, recent hostage situation in Iuilauea, recent traffic fatalities, the GMO of
course we all know about that, and the amount of money that we spent there, tsunami
warnings...I am cautiously saying that these events will continue to escalate. In Civil
Defense, we continue to check what is happening in the world and the areas such as South
America and our other neighbors and there is an increase of number of earthquakes that
have been going on. Now, we have not received any tsunami alerts yet but it is only a
matter of time. These are events that are unanticipated that will cause overtime for our
officers to respond. Deputy, is there anything else you would like to say?
MICHAEL M. CONTRADES, Deputy Chief of Police: Good afternoon. I just
wanted to add and reiterate what the Chief said. The outlook this year is going to be a little
different than in the past. We are very close to filling all those vacancies. I think you got
the report and current status of each position. We will not have unexpended salaries to rely
on anymore. I listened earlier about how the plan was to utilize peoples positions that retire
and utilize the money that was in that position to pay for vacation payouts and whatnot,
that is going to be another area where we will not be able to tap into if we needed the funds.
I think another thing that needs to be recognized is that because of the raises, we are going
to be paying higher overtime rates when people make overtime. We have done a
tremendous amount to reduce overtime as much as we can. We are going to continue to
keep clamps on it and watch it very closely but as the Chief said there will be things that
occur that we cannot anticipate. We did budget as close to reality as possible. We were
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using and we think it is a great idea with the three (3) year averages and like the Chief
mentioned, we budgeted based on our three (3) year average and then reduced another two
hundred fifty thousand dollars ($250,000) from that. And so another four hundred
thousand dollars ($400,000) will be a tough hit for us to take. Our alternative is that we
are going to have to look at different ways to reduce overtime which includes services. So at
some point we may have to make difficult decisions that we prefer of course not to make.
We have tried this past year very, very hard to reduce that amount of overtime.
Chair Furfaro: As to the two (2) gentlemen the same question I
am going to ask the Chief, as it relates to the CAFR and it relates to your total budget
versus what is perceived as the payroll. For the whole Department this year you have a
budget of twenty-eight million nine ($28,900,000). When the CAFR was concluded in June
2013, your Department spent twenty-five one, so those are actuals against your new
forecast. The difference is two million seven, what are the substantial differences in your
Department starting first with the payroll increases that happen through bargaining unit?
We are all thinking there is nine hundred thousand dollars left over but when you compare
with actual ending last year to what is in the books now, you have to add back in some of
the big costs and I am going to be asking the Fire Department the same thing. There is a
perception there is nine hundred thousand dollars worth of wiggle room but in reality there
is two point eight million dollars difference. How much of that is in bargaining unit
agreement?
Chief Perry: Chair, I do have that information for you today
but I can get it for you.
Chair Furfaro: Okay, we need to have that. You need to know
the difference between the 2013 actual, we do not have an ending for 2014 but there have
been a lot of things happening from the CAFR till now. Pretty much that nine hundred
thousand is not available whether it is coming from the payroll line or not, that is not what
your operating budget is reflecting. I would think that the Administration, Finance, and the
Budget people are prepared to answer that question for me, Ernie? Okay? I am asking you
right now we have a CAFR of twenty-five million one in FY 2013, we have a budget now of
twenty-eight nine, the difference is three million eight, how much of that is payroll, new
leases, operating costs for utilities and so forth. That is the only way we can make a true
comparison. Gentlemen, if you can help them with that, I would appreciate it. Questions for
the Police Department? No. Thank you. Can we have Fire up?
ROBERT F. WESTERMAN, Fire Chief: Good afternoon.
JOHN T. BLALOCK, Deputy Fire Chief: Good afternoon.
Chair Furfaro: Gentlemen, same question comparing the FY
2013 CAFR ending and the new FY 2015 budget. Your CAFR went from twenty-one million
nine to twenty-five nine with a difference of almost four million dollars ($4,000,000). How
much of that in two (2) years is bargaining unit agreements, new equipment, and other
operating cost as it relates to especially with the fire houses, energy increases and cost
associated with the new equipment, do you folks know?
Chief Westerman: We can get that for you, Chair, but I can tell you
that ninety percent (90%) of that was negotiated in the new bargaining unit because we
actually reduced our operating funds by almost five hundred thousand dollars.
Chair Furfaro: So, Chief, you are following my question here.
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Chief Westerman: Yes, sir.
Chair Furfaro: Because you cannot take the 2013 CAFR and in
between two (2) years you have had bargaining unit increases, utility changes, and
equipment additions and say that is going to be a carryover.
Chief Westerman: Yes, sir.
Chair Furfaro: So same question I have for you folks is the same
question I have for Police. Go ahead, JoAnn.
Ms. Yukimura: Chief, you said that ninety percent (90%) of that
four million difference in this year's budget versus next year budget is due to collective
bargaining increases?
Chief Westerman: Yes, and I can get you the exact figures on that. I
am speaking off the top of my head but I know what I budgeted I did not budget any
increases that I absolutely did not have to.
Ms. Yukimura: Yes, okay.
Chair Furfaro: Was she just sweater to ask the question so you
will get it back to her or will tend to get it back to me?
Chief Westerman: Yes, sir. I am sorry.
Chair Furfaro: Oh thank you. Just thought I would get that
clarified.
Chief Westerman: Sorry, Councilmember, I will get that answer
back to the Chair.
Ms. Yukimura: I understand that is what you were going to do.
In other words you actually reduced your operating, you said, by five million to try to stay
within the budgetary guidelines?
Chief Westerman: No. I did not say that I reduced my operating
budget by five million. I reduced my operating budget, if I remember right, by about five
hundred thousand.
Ms. Yukimura: Five hundred thousand dollars ($500,000), okay,
thank you for the correction. Thank you for the recent cuts in your overtime that have
already been made in the supplemental, right?
Chief Westerman: Yes, and we appreciate the Administration
coming to us and saying, "where is it that you can cut," instead of taking a broad slash of
twenty percent (20%) off anything.
Ms. Yukimura: Right.
Chief Westerman: This is a good example, I agree there is seven
hundred thousand dollars in overtime, if we just talk the overtime section of the operating
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DECISION-MAKING 58 MAY 12, 2014
budget but in that category are two (2) different categories, one is overtime and that is for
when people who do not show up and we got to pay for it or we are doing fires and we got
people... that is only seventy-seven thousand dollars ($77,000). The other six hundred and
eighty thousand dollars ($680,000) in that line item is for holiday pay. Now we did reduce
that by some already because holiday pay even though it is negotiated needs to be paid,
they do not all take holiday the same way. Some guys might actually take the day off, some
firefighters might actually take the day off and take their holiday pay, other may work it
and we will have to pay them overtime for working the holiday. The majority do that.
Again, that is one of those line items that is a best guess. We could budget a little either
way and we already reduced some of that early estimates. The other line items and it is
kind of the same in each of the Divisions except for Admin—for the most part. It is only the
BC's but the rest of us on the forty (40) hour week we take the time off the same way with
training and prevention. Ocean Safety and operations which are two (2) biggest budget
items, they have to work the holiday.
Ms. Yukimura: Thank you for having that breakdown. That is
very helpful.
Chair Furfaro: Mr. Bynum.
Mr. Bynum: Would it be accurate to say over the years you
presented us pretty tight budgets and had maybe the least amount of variance of any
Department, would that be accurate?
Chief Westerman: Well we tried to and I agree there are years that
we lapsed more money than others and in those years, a good example, three (3) CAFRs
before that we lapse ninety-three thousand dollars ($93,000). At twenty-two million dollars
budget, believe me that my cheeks were tight as we were coming up the end of the year
because if I would have over spent, we would have really been in a predicament. The next
year we plus up something's and did not cut down some others so we lapsed a little more. In
the last one also as we were moving through and brining on the full cost of the safer — the
fifteen (15) safer and that is kind of why our budget line items have changed. What might
seem drastically too is we have finally brought the full cost of the fifteen (15) safer
firefighters. So, that incrementally has increased our budget over the last five (5) years.
Mr. Bynum: I think you are kind of making my point that not
all overtime is created equal. We had a cut earlier today that was five percent (5%) of the
health fund contribution. Five percent (5%) I do not think that is a wise kind of thing to do
but in this instance it is twenty percent (20%) of overtime when you just said that the vast
majority is just about a circumstance you meet to the Fire Department that you do not take
holiday's off—the firefighters do not anyway. Thank you.
Mr. Kagawa: I am just looking at this CAFR page 34 and it
shows that for FY ending June 30, 2013 you lapsed one point six million.
Chief Westerman: Yes, sir.
Mr. Kagawa: Which was by far the largest in any Department
in the County. Would it be fair to say that in that year you did not do such a good job in
projecting your budget? You actually asked for one point six million more than you needed.
Chief Westerman: I guess you can make that assumption.
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Mr. Kagawa: Is there a particular reason why that happened?
Chief Westerman: No, I thought as we went through the budget
process and actually we cut back significantly as we went through the budget process that
that is what we would need to expend through the year. Again, a lot of things that
happened in the budget; how much overtime we used, shortage of Water Safety Officers,
shortage of Firefighters, salary items that...and I look at it this way, I did a very good job of
not spending my entire budget because I did not use personnel and took a risk on any one
(1) day versus another and did not use overtime or salary for a particular day. Now, I agree
that is significant and a lot of it was OPEB. OPEB was one of those ones we guessed at
through the years and we try to fund it as much as we possibly can but I do not want to
misspeak for Finance but we budget for twenty-four or twenty-five percent (25%) and we
ended up... the actuary only charges us twenty-two or twenty-three percent (23%) and on
an eighteen million dollars worth of salaries, that is pretty huge.
Mr. Kagawa: I appreciate that, Chief because I know some
manager, the Department Heads will make it a point to spend all of their money whether
they need it or not just to show a small variance.
Chief Westerman: Right.
Mr. Kagawa: And by showing a large variance that means you
pretty much...you bought what was necessary and you did not overspend in areas that you
did not need to. I am not saying that it is a bad thing to lapse a lot of money. What I am
saying is in doing our cuts this year, I just thought of it as a fair way to tighten everybody's
belt and this is where you could take some of those moneys if you are short a hundred and
forty thousand after I make my cut, if you are short even two hundred thousand, you could
take it from other accounts which you may foresee as being more than needed, more than
the actuals are going to end up and do whatever you need to do as a manager and provide
the same services that you would be providing anyway. I think every budget has some that
lapse and I am saying that there is a little room for everybody but it is just our way on the
Council of trying to set a tone where managers will try and get that overtime numbers
down. I do feel that although, I know some points it is inevitable that we need to spend
overtime whether it be two million a year or what have you but I am just afraid for the
future. How long can we continue to increase overtime and just say, "we cannot do
anything about it?" I am troubled that if we do not at least try to do as much as we can
internally that we are heading for a very dark future. That is all my reasons. It is not to
pick on any Manager or Department. I think it is trying to do a good thing actually in
trying to make sure that we set a better tone going forward because we are not at the point
where we have that big savings anymore.
Mr. Rapozo: Chief, I just went through the budget real quick
and basically what I saw from each Division, I am showing a non-contractual overtime
amount of about two hundred and five thousand. Does that sound right?
Chief Westerman: I would say that sounds about right. That would
include some...you must have gotten a good chunk of that out of prevention also?
Mr. Rapozo: Yes.
Chief Westerman: And we use that for our education program but
yes, that (inaudible).
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Mr. Rapozo: Anything that was not contract mandated I just
put it on. I think the training section or prevention section was somewhere like ten
thousand or something like that.
Chief Westerman: Yes.
Mr. Rapozo: It was very small.
Chief Westerman: With recruit class.
Mr. Rapozo: But we actually have control over that is not
required by contract is about two hundred grand. I am not sure what number our staff
used when they calculated the General Fund overtime, I am not sure how they allocated if
it was total because obviously we cannot touch the collective bargaining required for Fire
and Police on overtime, I mean holiday, night differential, all of these things that get
premium pay. Obviously we cannot touch that. I did not do the Police Department because
it is a much larger budget to go through but I would assume it is similar that majority of
the overtime goes towards the contract mandates. My question is as you sit here today and
you plot out your trends for the reminder of this FY what is your anticipated lapse or what
will your anticipated lapse be without any rush to spend? Let us just say if you stay on
track as you are right now, borrowing any natural disasters or anything like that, what do
you anticipate your lapse or your...
Chief Westerman: On the current year that we are in right now?
Mr. Rapozo: Yes. Because I think that is the point that Mr.
Kagawa is trying to make using the CAFR numbers.
Chief Westerman: Right.
Mr. Rapozo: And sometimes the CAFR numbers can be
deceiving as well because there are some funds that were approved for the current budget
that had not been encumbered and for whatever reason we talked about the Police car,
eighteen (18) months they get a Police car delivered. I would assume that there is some of
that in there but it is very difficult to tell. But using the real numbers today...
Chief Westerman: I must apologize I can give you that exact
amount only I do not have that document with me right now. I carry it with me on a daily
basis and I track where our spending is going but if I remember the last time I looked at it,
we are right now on track for turning over five hundred and twenty thousand dollars
($520,000).
Mr. Rapozo: Lapsing about five hundred twenty thousand?
Chief Westerman: Lapsing about five hundred twenty thousand
dollars ($520,000) but again since we are not near the end of the year, we have salaries now
that we did not have in the past and so we are going to start slowing that trend down
because now we have the full hires on, their overtime will go down, and a lot of other things
will affect that but right now if I remember the last time I looked at it a couple days ago, it
was about five hundred and twenty thousand dollars ($520,000).
Mr. Rapozo: I do not need to Chief to come up but if you can
provide that to us as well, what you anticipated... what did you just call it?
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Mr. Blalock: Lapse.
Mr. Rapozo: No, you called it something else. Turn back or
turn in...whatever you not going spend. I would appreciate that if we could get that at
some point today, maybe staff can go run over there and see if they have it.
Chair Furfaro: So to the two (2) Chiefs, I hope you guys
understood the differences I was pointing out in comparing the CAFR and I think Mr.
Rapozo summed it up very well too because there is money you may have gotten towards
the end of the year in 2013 that did not actually be tapped when the CAFR closed. Also, you
have a situation here where you have... I think you probably with your own accounting
people have a better number then us because we only have until the end of February in
front of us to know what those lapses would be. Here is the other problem; we do not have
all the data entry people here that can categorize every line item we have here for overtime.
We do not know how much is premium by contract, how many is overtime for call back sick,
but yet it is provided to us but it is not categorized for us. I still want you do the exercise I
asked along with Finance. I want you to take the numbers that I read to you as it relates to
2013 CAFR, all the bargaining unit increase that you had, you had new electric equipment
that came onboard to the fire houses, all of those things. So, that is where you can explain
the variances especially for this line item which was overtime. I will close by asking you
because I think Mr. Kagawa is on to something but let me ask you, on pure overtime, what
if you felt the amendment was asking for a five percent (5%) reduction in your overtime,
how do you feel about that?
Chief Westerman: Again Chair it depends on which line items you
want to classify as overtime.
Chair Furfaro: We are going to do operating overtime.
Chief Westerman: Just on operating overtime.
Chair Furfaro: Yes.
Chief Westerman: The five percent (5%) is fine.
Chair Furfaro: Okay. Questions? Mr. Bynum.
Mr. Bynum: Two hundred thousand dollars ($200,000) is
contractually and we want to cut that one forty, what is that going to do? And if five
percent (5%) of two hundred...what is five percent of that?
Chief Westerman: Ten thousand dollars ($10,000).
Mr. Bynum: That is a big difference between that and a
hundred and forty.
Chief Westerman: Yes.
Mr. Bynum: And if all you have is sixty thousand for the
whole year, are you going to make it through the year realistically?
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Chief Westerman: Well we will just have to transfer funds from
somewhere else, watch what we are doing, and transfer funds. We do that in our routine
basis now so as we run ourselves short somewhere, we transfer funds somewhere else. The
difference again being that we can only move salary to salary items and so we are just
talking salary items here.
Mr. Bynum: Okay. Thank you.
Chair Furfaro: In all fairness you could at least attempt to reach
five percent (5%) if Mr. Kagawa came back with another offer here?
Chief Westerman: Yes, sir.
Chair Furfaro: It is reasonable reach.
Chief Westerman: Yes.
Chair Furfaro: Anymore questions for the Fire Department?
Ernie, did you want to add anything before we move on? Okay. I will call the meeting back
to order.
The meeting was called back to order, and proceeded as follows:
Chair Furfaro: Mr. Kagawa, we would take a vote here and
whatever the outcome is if it does not pass, would you consider reintroducing at five percent
(5%)?
Mr. Kagawa: Five percent (5%) is better than zero. At least it
is...we are not tightening our belt four notches, we will be tightening it one (1) notch.
Chair Furfaro: And I appreciate what you are attempting to do
in your motion.
Mr. Hooser: Chair, I appreciate the discussion and from
Police and Fire especially and Councilmember Kagawa for making this all happen in terms
of the conversation and discussion that we are having today. It is important to put this in a
context and we did that a little bit in the beginning of the meeting but I think it is
important to remind the public and ourselves that we have four hundred thousand dollars
($400,000) in unrestricted funds in the budget leftover. We just had our bonds
downgraded...our bond rating downgraded and we really are in very, very bad shape.
Someone say could easily be in bankruptcy if something bad happen in terms of an
economic downfall other kind of disaster so we have to remember that and remember that
we cannot just have taxpayers picking up the dime on everything. There are people out
there on fixed incomes, businesses are struggling, and to them just like it is difficult for the
Police and Fire to make their budgets work with overtime, it is very difficult for many
people in the community to make their budgets work as well. I think we should tighten this
belt just as tight as we can and I would much rather see a ten percent (10%) reduction and
just go halfway on Councilmembers proposal and again if we get to the last three quarters
of the next year and they are having trouble, they can come in and validate to show
legitimately where that money was spend and the condition of the budget, they can ask for
additional funds. At the end of the day the taxpayers will have to make up the difference
and when we have to rebuild our surpluses and we have to have in my opinion a
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sustainable budget and it is our responsibility to do so and I think this is a good step in the
right direction. I would encourage people to think about ten percent (10%). Thank you.
Ms. Yukimura: Yes, I still have my concerns about the small
Departments. I think they are much more impacted by what seems to be like small cuts and
I would be willing to consider five percent (5%) to the larger Departments but I am not clear
yet that smaller Departments can really handle it. If they have to come back again, if that
becomes a given, that does not help either—just the time and effort and paperwork to come
back. That does not make sense either. If it is a more "if y" question about whether that is
going to happen, I can see the value of that but not to just make extra work and extra time
to come back. It does not make sense to me.
Mr. Rapozo: I would ask Mr. Kagawa to hold off on the vote
right now. I am concerned because we are talking about two (2) different numbers. We are
talking about mandatory overtime which we have no control of and then we have the...as
you call it the operating overtime which is for the day to day unexpected —people that call
in sick or whatever and you got to call in sick. We are talking about two (2) different
numbers and it is significant. Twenty percent (20%) of the total number that Mr. Kagawa
proposed versus five percent (5%) is substantial but what I would like to see as described
the fire none required overtime is two hundred five thousand dollars ($205,000), that is
what I would call a discretionary overtime where the Chief actually has the discretion and
the ability to control through shift changes, through certain different things that he could
use within his power and authority to correct the excessive use overtime. I guess what I am
asking is that we have staff and with the help of the Administration separate those
numbers and I think this only applies, I would assume it would only applies to Solid Waste,
I would guess. Solid Waste might have some...because they work on holiday's right? I
think that even extends to that Department as well but what are the true numbers that we
are talking about that I would call the discretionary overtime and if Scott could work with
the Administration and get that numbers. I think then we can make up a more educated
and informed decision on how much we believe can be reduced. I appreciate the Fire Chief
saying five percent (5%) would be okay but I mean I would kind of like for all of us be on the
same page as what are we really talking about. What number are we really talking about?
If Mr. Kagawa does not mind, I would ask if we hold off on that. I do not know how long it
would take to get those numbers. That would be my request Mr. Chair.
Chair Furfaro: To the big Departments — Chief, Fire, Public
Works, I am going to ask you to provide my staff with that number as I showed you in this
document. It is not broken down that we have an understanding. Now we understand that
we are dealing with two hundred five thousand dollars ($205,000) for the Fire Department
and at five percent (5%) it is a savings of ten thousand two fifty dollars ($10,250) but I am
asking those big Departments on the operating overtime to give those numbers to my staff
so we can revisit this. So we are all on the same page, okay. Mr. Bynum, you wanted the
floor?
Mr. Bynum: Every budget happens in the context of this FY
and this one more than ever because we have eliminated the cap, we have so many moving
parts, and we have no revenue proposals from the Administration for this entire economic
downturn. The kind of cuts we are talking about now, I think, if we are going to entertain
them at all the Chair is moving in the right direction what is discretionary and what is a
small percentage of that where you can move around but we have been through this. This
Council with the Administration for the last four (4) to five (5) budgets has looked at the
overtime at length. We had lengthy discussions with the Fire and Police Chief about
overtime and their efforts. We are in this structure we are in now...we always make a
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commitment to public safety, number 1, five hundred and seventy thousand dollars
($570,000) cut in overtime proposed to public safety. If that is not a (inaudible) on the
commitment to public safety, I do not know what is. I am a former civil servant, and I
worked as a mid-level County Manager for many years. We have been through this
process. There is not twenty percent (20%) of overall in there. I am not going to support_
anything that is this kind of thing that does not honor all of the work that this body has
done and the Administration has done. It does not make sense. Mr. Rapozo said make a
thoughtful consideration, well you need data and information to do that. I am making a
very thoughtful consideration in the context of my role on this Council that we have
scrubbed these budgets of these things. There is not big twenty percent (20%) moves in
these budgets that makes sense for the County and efficient running of the government and
honoring the work of all of our wonderful civil servants. We are doing a better job than ever
since I have been on the Council. I am not going to support it. Now, if we get down to where
we actually know the discretionary spending and it is going to be a small percentage like
the Chair is suggesting, I might be open to that but even that it is not going to be
significant enough savings for us to do this. That is the last time that I am going to say this
and I am just going to vote from now on.
Chair Furfaro: Well first of all I appreciate the public safety
people coming over as well as we are looking for the number from Public Works. Again, I
want to say that this is my constant theme here, if we had proposals on reducing operation
costs which I think we have complete jurisdiction over to look at these things, my comments
have always been to make sure that the proposed cuts are realistic and obtainable and we
are still digging to find the kind of information we need to come to those right conclusions.
On that note, I am actually going to take a ten (10) minute break because we are required
to have a tape change and we might as well take our first break of this afternoon right now.
We are on a ten (10) minute recess.
There being no objections, the Committee recessed at 2:24 p.m.
The Committee reconvened at 2:38 p.m., and proceeded as follows:
Chair Furfaro: The Decision-Making is called back to order. I
wanted to get some clarification on the earlier business today. I do plan to leave at 4:30
p.m. today because I have my beautiful bride at home of forty-one (41) years and today is
our anniversary. Thank you very much. We do want to close, but to do that, I want to get
some clarification on the straw poll one more time as it relates to the hotel resort tax that is
proposed.
Ms. Fountain-Tanigawa: Chair, you are going to retake the vote on the
Real Property Tax...
Chair Furfaro: The straw poll, yes.
Ms. Fountain-Tanigawa: This would be to approve the two dollars ($2) as
proposed by the Administration on the Hotel and Resort class...
Chair Furfaro: As submitted in their Budget.
Ms. Yukimura: Mr. Chair?
Chair Furfaro: Yes?
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Ms. Yukimura: I am thinking that it is not a vote on that if you
are voting on all of the resolution. People may be voting against it not because they are
against the hotel room tax, but because they want to amend other pieces of it.
Chair Furfaro: That is where the confusion is. You will get five
(5) minutes tomorrow if you want to get room tax proposals, but to start our sheet, we need
to have an indication of who will support... you may want to introduce something for more,
but who is going to support what they originally submitted without it... right now, we are
standing at four million nine hundred and something thousand dollars short and I will not
be able to go home and open some sparkling wine and things of that nature with my wife
this evening.
Ms. Yukimura: Chair, it is really great that your anniversary
comes at the time of Budget.
Chair Furfaro: I will not be able to use that as an excuse of why
I did not get home.
Ms. Yukimura: I think what you want is a vote on the hotel rate
increase.
Chair Furfaro: That is what she is going to do, as it stands right
now.
Ms. Yukimura: Okay.
Chair Furfaro: That will substantially change where we are at.
If you want to introduce something that adds the next time around, we are open to that. I
will you the time or another five (5) minutes tomorrow to talk about tax rates and so forth.
Right now, before the day ends, I want to make sure we understand where we are at. Mr.
Hooser.
Mr. Hooser: Earlier, I voted no because I want to look at the
whole property tax offering. What do we have... like half a dozen or whatever categories—
the rate... if we are talking about the rate, it depends on what the other rates are.
Chair Furfaro: I understand that.
Mr. Hooser: I understand for the record that in order to close
the gap at the end of the day, property taxes will need to be increased and I understand
that the hotel sector will be carrying a significant portion of that in my opinion.
Chair Furfaro: As proposed by the Mayor, yes.
Mr. Hooser: Right. I have a difficult time saying "yes" or "no"
and that is why I said "no" before because I am not happy with that package, so I do not
want to support that package. I anticipate... I can say "no" again, but just for the record so
you know, that is where I am coming from.
Chair Furfaro: I have gone through a day here that talks about
people being responsible and so forth. I am very responsible— I want you to know that. I
just want to make sure we all clearly understand what it takes because there seems to be
some confusion on this. Your vote is your vote; my vote is my vote. I want to make sure we
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understand that what deficit is as it stands right now. That is what I want to get clarified.
JoAnn.
Ms. Yukimura: I actually feel the same way Councilmember
Hooser does and I would like to say that I am going to vote for this for the hotel room tax at
this time as an indication that I am committed to providing that amount of money that it
will provide the exact allocation amongst the tax rates may change a bit, but I would not
vote to reduce the proposed increase unless I had something else to make up those moneys.
Chair Furfaro: Okay. Wear your deep pockets when you come in
because we may be reaching, but I understand what you are saying. Mr. Hooser.
Mr. Hooser: Just a brief follow-up. I do not want to over
speak my time, but there are other factors also that there is the OPEB discussion that we
kind of talked about. I think five (5) minutes may not be enough, quite frankly, in terms of
a proper proposal on property taxes. It might take a little bit more. I will just ask for your
discretion with that.
Chair Furfaro: What would you think is fair and reasonable? I
want to handle it with equity for everybody.
Mr. Hooser: Right.
Chair Furfaro: How much time for each Councilmember?
Mr. Hooser: I do have a property tax proposal, but I imagine
that others who have spoken are going to have more, so maybe ten (10) minutes might be
sufficient. I do not imagine that all of us are going to want ten (10) minutes to do it, but I
would think that perhaps ten (10) minutes might be sufficient.
Chair Furfaro: Okay.
Mr. Hooser: Thank you.
Chair Furfaro: JoAnn, I am going to go to Mr. Bynum first
because he had his hand up. Mr. Bynum.
Mr. Bynum: Just for the record, this is the second time we
took this vote today. This is a straw poll. I voted "no." I feel the same way as
Councilmember Hooser. I know the resort sector is going to have to contribute, but I do not
believe that hitting just one... just think hotels and not vacation rentals for instance... they
are both from the resort sector is a balanced approach. I am voting "no." I will definitely
have proposals that give sufficient revenue to fund our government. Thank you.
Chair Furfaro: I will not even bother to revisit the straw poll
based on what the three (3) of you said. We are four million nine hundred thousand dollars
($4,900,000) short, right? Is that it in round numbers? I cannot see the screen. Mr.
Kagawa.
Mr. Kagawa: I think what I would like to see is a vote on not
who we are taxing, but I think Councilmembers may have other proposals to raise the
money. I would like to see a vote on raising real property taxes in general to get to the four
point three million dollars ($4,300,000). I think that is a worthwhile vote. I think we are in
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disagreement as how to get there. I am the most reluctant to vote on that. As I said
earlier, the worst thing is to bite the hand that is feeding you and this is what this proposal
does. It is taxing our main thrust of our economy, the hotel industry, but I am going along
with the Administration on this. I do not want to tax our residents anymore because we are
already taxing them in other ways. I would like to see a vote to see if we can close that four
point three million dollars ($4,300,000) because like I said, if you do not vote for the
revenue proposal, then where is your cuts? So far, our proposed cuts and looks like my cuts
are going down... well, one of my cuts is going down. Thank you.
Chair Furfaro: Mr. Rapozo.
Mr. Rapozo: I would just say, Mr. Chair, that we can continue
with the proposed cuts. Hopefully we can finish everyone's proposed cuts today, and then
we have a better understanding of where we need to be. I think we are putting the cart
before the horse, talking tax revenue when we still have a bunch of cuts that we have not
even talked about yet.
Chair Furfaro: Okay. I want to make sure it is not the cart
before the horse. We voted on the May submittal from the Mayor. In the May submittal
from the Mayor is the property tax from the hotels. When we went around and voted on
that in particular, it is just an item that is showing us four point nine million dollars
($4,900,000). If you kind of want to know where everybody thinks they are at right now, I
will tell you where I think I am at. I have no problem with the two dollars ($2) on the
resorts. In fact, to build a reserve, I have no problem on ten cents ($0.10) for everybody else
because they will benefit from having the Open Space thing completely funded. That is ten
cents ($0.10). That also gives us credibility in the bond market, but I am not going to have
anymore dialogue about that. We are going to end the day and it is going to be negative.
That is all I wanted to find out if we all understood. We are going to leave the day. I am
going to run and get some (inaudible) and it is going to be negative, whatever that number
is at that point. End of story. You can propose your taxes across the board or reductions,
but the goal is for a balanced budget. I do not think the two dollars ($2) as proposed from
the Mayor is something that the resorts cannot live with. Anyway, let us go back to where
we were. We will leave it at what clarity there is here if there is any clarity. It is like a
pasta dish where the noodles are all over the place, but everybody knows how serious that
category is. Jade, where are we at now when we took the break?
Ms. Fountain-Tanigawa: So we are not going to redo the tax vote?
Chair Furfaro: No. We did it. We will stay with that straw poll
only showing the four point plus negative.
Ms. Fountain-Tanigawa: Okay. We are still on the twenty percent (20%)
overtime issue as proposed by Councilmember Kagawa.
Chair Furfaro: Okay. Has the different departments submitted
a number over here? Not yet? Okay. I am going to defer Mr. Kagawa's motion for now.
We will move onto a next cut. Does anybody else have a next cut?
Mr. Rapozo: I have another one if you do not mind.
Chair Furfaro: Go ahead.
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Mr. Rapozo moved to reduce the Tourism Kaua`i Visitor's Bureau - Consumer
Promotion for the Kaua`i Marathon by fifty thousand dollars ($50,000), seconded by
Mr. Kagawa.
Chair Furfaro: Thank you.
Mr. Rapozo: That is self-explanatory, Mr. Chair. I think we
have beaten this horse several times over the years. We had commitments from the Kauai
Marathon. I believe we fulfilled them. In fact, we went one (1) year beyond the
commitment. I think at some point, what I talked about earlier, what is essential and non-
essential... this definitely falls into the category of"non-essential." Thank you.
Chair Furfaro: Okay. Let me just get a minute. I am going to
pull mine out. I have the same proposal. JoAnn.
Ms. Yukimura: I have that cut as well, but it is proposed as a
way to fund what I feel is a very important initiative. I just want to make that known now
if now is the time to speak about that initiative, I would like to do that.
Chair Furfaro: You can do that as well because I had hoped that
half of that money would go to support something for culture and the arts.
Ms. Yukimura: Great minds think alike.
Mr. Rapozo: Mr. Chair, if I may.
Chair Furfaro: We are not on the additions right now.
Mr. Rapozo: Thank you.
Ms. Yukimura: Okay. I will reserve it, but I just want you to
know that in voting to cut it, I have a proposal.
Mr. Rapozo: I want you to know that I am voting to cut it to
save the increase in taxes from the public. That is why I am cutting. I do not have any
adds.
Chair Furfaro: The item on the agenda right now is the cuts.
You can speak for me later on the additions.
Ms. Yukimura: I wanted to explain my vote on the cut just so it
would be fully...
Chair Furfaro: I will give you a moment, but we are not going to
go into dialogue about adding right now.
Ms. Yukimura: Thank you.
Mr. Rapozo called for the question, seconded by Mr. Kagawa.
Chair Furfaro: Okay. The question is to reduce the Kauai
Marathon in its fifth year and removing that money towards a savings.
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Ms. Yukimura: May I say one thing before we vote?
Chair Furfaro: Go ahead.
Ms. Yukimura: I am a strong supporter of the Kauai Marathon.
I think it is a wonderful event. I have supported it in the past, but I believe that the
Council had an agreement that we would fund it for three (3) years. In fact, I believe the
commitment from the promoters from it, as well as Economic Development, was that it
would then develop its own sustainable sources of funding. I believe that we need to use
our Economic Development budget, especially in these tight times, to seed, not to subsidize.
We want to get programs on their feet or to get something very good completed. We cannot,
as much as possible, continue to support something ongoing when there are so many other
needs and sectors of our economy that we have to promote and encourage. I feel like we
have fulfilled our commitment to the Kauai Marathon and we did not only three (3) years,
but we did a fourth year beyond our original commitment. That is why I am voting to
remove it from the budget.
Chair Furfaro: Okay. Any further dialogue? I want to make a
comment as well. When we do a promotion like that, and this is for Economic
Development— we need to have a point in time where these things are sustainable in
themselves to continue to use tax money to subsidize them over a period of time is not what
the plan should be. The original plan was for three (3) years. We have gone four (4), as
both JoAnn and Mel have pointed out, and I will be supporting this as well. Any further
dialogue? If not, I am going to just call for a voice vote.
The motion to reduce the Tourism Kaua`i Visitor's Bureau - Consumer Promotion for
the Kauai Marathon by fifty thousand dollars ($50,000) was then put, and
unanimously carried.
Chair Furfaro: Okay, that is done. 7:0. Any additional cuts?
We can continue with you, Councilmember Rapozo.
Mr. Rapozo: I proposed this last year as well. It did not pass.
I do not expect it to pass again, but again, it goes back to the theory of what is essential and
what is not. The airport greetings, fifty thousand dollars ($50,000)— that is another fifty
thousand dollars ($50,000). Many say that is vital and that is important and if we do not
have that, then people will not come; people will not get an experience. Although I agree to
some extent, I think at some point, the County has to start pulling back the non-essential
spending and get the industry themselves... as I spoke about the other day with the tech
center, at some point, the people that are using the resources to generate revenue— the
State and the hotels that benefit from this, they need to come in and start contributing as
well.
Mr. Rapozo moved to remove the fifty thousand dollars ($50,000) from the airport
greetings tourism budget, seconded by Mr. Kagawa.
Chair Furfaro: JoAnn, you have the floor, followed by
Mr. Bynum.
Ms. Yukimura: I wonder if the Council would be willing to
consider an amendment. I understand Councilmember Rapozo's point. During our budget
hearings, I suggested that we propose to the Airports Division of the State that we do a one-
to-one match, so we keep twenty-five thousand dollars ($25,000) in, but on the condition
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that the Airport come forward to do their part to support what is essentially an airport
function because I think it is wonderful to have music there and to feature our musicians. I
have been in several other international airports where this happens in a very beautiful
way. It has the effect of promoting our musicians, promoting Hawaiian music, and creating
a very pleasant environment in the airport. I really think that the Airport needs to rise to
the occasion. I was going to approach the Manager about this, but have not had the time.
We can still structure it in our budget just as a match, so the twenty-five thousand dollars
($25,000) does not get expended unless the Airport steps forward. I would like to throw
that out as an idea.
Chair Furfaro: Mr. Bynum.
Mr. Bynum: Last year's proposal was to cut the fifty thousand
dollars ($50,000). I do not remember how it happened, but it was twenty-five thousand
dollars ($25,000). It is back in there at fifty thousand dollars ($50,000). Of all the cuts we
have made in ten (10) years, this one bugs me the most. It really does. I feel pretty
emotional about it. This is a long tradition on Kauai. Our musicians are the most giving
group of people. They do millions of things in our community almost always pro bono. I
wanted to have a list of the musicians, just their first names, that are doing the airport
greetings over the year. Is this essential County service? No. But in a one hundred forty
million dollar ($140,000,000)— to take out fifty thousand dollars ($50,000) for this long,
Hawai`i tradition that supports these musicians, they are so giving in our community and
makes Kaua`i special. I would like to increase this to one hundred thousand dollars
($100,000), but fifty thousand dollars ($50,000) is what we have had. It works. I cannot
support cutting this.
Mr. Hooser: I would like to propose a blend of the ideas that
have been discussed. I have a proposal also for a cut around twenty-four thousand dollars
($24,000) from the Consumer Promotions Grant from KEDB. I was hoping to shift that
money to Agriculture. That cut combined with a twenty-five thousand dollar ($25,000) cut
to the airport greeting program, the net amount would be around fifty thousand dollars
($50,000). I think that would be a suggestion I would like to make, to make this cut twenty-
five thousand dollars ($25,000) and then I would propose an additional cut to just around
twenty-four thousand dollars ($24,000) so the net would be real similar. Thank you.
Chair Furfaro: I am not going to hold anybody back from
initiating their proposed cuts, but right now, Mr. Rapozo's item is on the floor with a
second. Mr. Chock.
Mr. Chock: I just have a point of clarification. Mr. Hooser,
where is that twenty-four thousand dollars ($24,000) that you were suggesting?
Mr. Hooser: It says twenty-three thousand nine hundred
twenty-five dollars ($23,925), just under twenty-four thousand dollars ($24,000), and it is
out of the Tourism / Kaua`i Visitor's Bureau Consumer Promotion Grant. They get existing
at two hundred seventy-five thousand dollars ($275,000) is in the budget, so this takes out
twenty-three thousand nine hundred twenty-five dollars ($23,925) out of that. As a
footnote, the entire Visitor Industry in the Economic Development budget gets six hundred
ninety thousand dollars ($690,000), so they get a pretty healthy chunk of money, six
hundred ninety thousand dollars ($690,000) that we are discussing here. Again, it is not
about adds, but Agriculture for example gets three hundred twenty-three thousand dollars
($323,000) versus almost seven hundred thousand dollars ($700,000) for tourism.
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Mr. Chock: I am open to the amendment that
Councilmember Yukimura has on the table.
Chair Furfaro: Okay. Mr. Kagawa.
Mr. Kagawa: Thank you, Chair. This is one of the items when
I look at the State, last year, they had a surplus of eight hundred million dollars
($800,000,000) or something and six hundred million dollars ($600,000,000) went to the
Hawaii Tourism Authority (HTA). Much of the six hundred million dollars ($6,000,000)
was spent on developing new markets in the orient like China and Korea to develop new
markets. If this is such an important item, maybe new Senate Vice President Kouchi can
fill that gap of fifty thousand dollars ($50,000). I realize that the budget process... there is
no reward for being on the short end of the vote. I can count. I would be willing to support
Councilmember Hooser's amendment. We will get the same net result. I will make a
motion to amend if...
Chair Furfaro: Let me recognize the introducer of the
amendment. Mr. Rapozo.
Mr. Rapozo: Mr. Chair, I would just ask that we vote as is and
when it fails... I think it is just cleaner that way. I just want to say that this Council, this
County, funds the Economic Development Office under tourism also one hundred thousand
dollars ($100,000) for special programs and special projects. If the State wants this, have
them apply for a grant. I guess I am just getting frustrating sitting here about how broke
we are, yet we even entertain something like this. When we start looking at "what do we
really need to do this year..." We know we are going to raise taxes. I would not want my
taxes to go up because we are funding something that we keep saying is the State's
responsibility. Let us stop funding and let the State pick up the ball. It just makes sense.
That is responsible. I like it to. I can tell you. When I go to Los Angeles International
Airport (LAX), I get greeted with people begging me for money. Does that stop me from
going to LAX? No. I have to go to LAX. I have been to Korea and Japan, but I was never
entertained by any Korean and Japanese entertainers in those terminals. I do not know
where you went, JoAnn, but I am sure it exists. I have been through airports throughout
this Country and I have not been serenaded by the culture. I have not. I still go back. This
is not ordinary times, I guess is my point. These are times where we are telling the people,
"We are going to raise your taxes. We are going to raise your fees." At the same time, we
think this is so important that we are going to keep it in. I would ask that we take the vote
on this, Mr. Chair, and if anyone else has proposals, that is fine.
Chair Furfaro: Okay. I will be intending to follow through on
voting on Mr. Rapozo's proposal, and then you can introduce options later. Mr. Bynum, you
have the floor.
Mr. Bynum: The County of Kaua`i decided to do this. We said
we want to do this because we are Kauai. We are special. We want to treat visitors
differently. It just happens to happen in a State airport. It is a tradition in this County
that we have had for many years. It supports the musicians who support our community
and are nonprofits in so many ways. The KEDB funds— I do not support cutting either.
They have demonstrated repeatedly that they give us value for every dollar we spend and
promote Kaua`i as a visitor destination. The hotels can handle a little bit more. It is not
going to impact their employment. It is a small part of their overall budget. KEDB— we
give them twenty-five thousand dollars ($25,000) and they turn it into more visitors every
time. I do not support these cuts to KEDB or especially the airport greeters.
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Chair Furfaro: Is there any further dialogue? JoAnn.
Ms. Yukimura: I do not see the airport greeting as the means for
having a visitor whether to come or not; I see it as creating the ambiance for this island of
welcoming them and exposing our musicians, giving our musicians some exposure and
getting money into the economy directly to our people.
Chair Furfaro: Okay. On that note, I am going to call for the
vote. Let us do a roll call vote, please.
Ms. Fountain-Tanigawa: This is a roll call vote to reduce fifty thousand
dollars ($50,000) for airport greetings.
The motion to reduce fifty thousand dollars ($50,000) from the airport greetings
tourism budget was then put, and failed by the following vote:
FOR REDUCTION: Kagawa, Rapozo TOTAL— 2,
AGAINST REDUCTION: Bynum, Chock, Hooser, Yukimura,
Furfaro TOTAL— 5,
EXCUSED & NOT VOTING: None TOTAL—0,
RECUSED & NOT VOTING: None TOTAL—0.
Chair Furfaro: Mr. Hooser, I will give you the floor.
Mr. Hooser: I would like to introduce a cut. Staff can pass
out the cuts. I spoke about it earlier. We will talk about the adds when the adds come, but
the intent is to support Agriculture with this amount. Twenty-three thousand nine
hundred twenty-five dollars ($23,925) from the Tourism / KEDB Consumer Promotion
Grant. This is a relatively modest cut, I believe that the emphasis given on the budget on
tourism is significant and deserved to large extent, but we need to support Agriculture to a
greater extent and I will be talking about that during the adds. I will make a motion to do
that.
Mr. Hooser moved to reduce twenty-three thousand nine hundred twenty-five
dollars ($23,925) from the Tourism / KEDB Consumer Promotion Grant,
seconded by Ms. Yukimura.
Chair Furfaro: Discussion on the floor, please. JoAnn, do you
want the floor?
Ms. Yukimura: Yes. Is this what is called an MCI program?
Mr. Hooser: No, it is not.
Ms. Yukimura: Okay. I do not want to cut that, but a
generalized cut... I guess I need to look at the itemization.
Chair Furfaro: Okay. Mr. Bynum.
Mr. Bynum: I just want to clarify one thing. This is from the
same line item that we just cut the marathon from, right? This is an additional cut for the
same line item?
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Ms. Yukimura: Yes.
Mr. Bynum: I already said that I am not going to support
those cuts because I have lobbied for years with the Mayor to give KEDB a sustainable
budget for Kaua`i based promotions like Maui has two million dollars ($2,000,000) to three
million dollars ($3,000,000). This year, I thought his budget proposal was modest for them
and I want to support it. Thank you.
Chair Furfaro: Further discussion? I will do a roll call vote on
this one, please.
The motion to reduce twenty-three thousand nine hundred twenty-five dollars
($23,925) from the Tourism / KEDB Consumer Promotion Grant was then put, and
carried by the following vote:
FOR REDUCTION: Chock, Hooser, Kagawa TOTAL— 3,
AGAINST REDUCTION: Bynum, Rapozo, Yukimura, Furfaro TOTAL—4,
EXCUSED & NOT VOTING: None TOTAL—0,
RECUSED & NOT VOTING: None TOTAL— 0.
Chair Furfaro: The motion fails. Let us go to additional cuts
still. Mr. Kagawa, you have an item.
Mr. Kagawa: Yes. I have a cut from all of the Miscellaneous
Funds Account regarding travel. The total cut, if Staff could pass around, would be three
hundred forty-four thousand nine hundred fifty-nine dollars ($344,959) and it will reduce
our travel to the 2013 actual cost levels. I believe we are in tough times. I believe that I
have seen the travel budgets grow more and more. I believe that if the travel is really
important, it could be used from other funds within their account. This is just another
means of tightening our belts and trying to deal with decreasing expenditures to meet our
goal of having sustainable budgets.
Mr. Kagawa moved to reduce the miscellaneous travel budget accounts in various
funds budget by three hundred forty-four thousand nine hundred fifty-nine dollars
($344,959), seconded by Mr. Hooser.
Chair Furfaro: Mr. Kagawa, may I ask what this percentage of
the reduction is?
Mr. Kagawa: I believe we are going from our... we are
reducing it to our 2013 actual amounts.
Chair Furfaro: Considering all things equal, we do not have a
number in here for the County Council. I think if we are going to reduce the
Administration, we should reduce the County Council.
Mr. Kagawa: We are.
•
Chair Furfaro: Where is it?
Mr. Kagawa: We are reducing it all. Every General Fund
Account for Travel would be reduced.
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Chair Furfaro: Is it in there?
Mr. Kagawa: Yes, Sir.
Chair Furfaro: Does everybody have a backside like I do? Thank
you, Scott, for pointing it out for me. Everything is fair and equal there.
Mr. Kagawa: Yes.
Chair Furfaro: Do I have a second?
Ms. Yukimura: Yes.
Chair Furfaro: Okay. Go ahead, JoAnn.
Ms. Yukimura: I am looking at the small departments again.
Are you interpreting in terms of Housing? The proposed cut is what?
Mr. Kagawa: If I can answer, Mr. Chair. The Housing will go
from five thousand nine hundred ninety dollars ($5,990) to three thousand nine hundred
thirty-eight dollars ($3,938). Like I said, if they need to spend five thousand nine hundred
ninety dollars ($5,990), they can look for two thousand dollars ($2,000) within their budget
that they can foresee that maybe actually I guess over-budgeted.
Ms. Yukimura: Can I get some Staff help here? What is the one
we are cutting? In Transportation, what is the cut?
Mr. Kagawa: Transportation does not really have travel
budgets in their General Fund Account. They have only eight hundred fifty-six dollars
($856) and they will go down to three hundred thirteen dollars ($313), so maybe one (1)
person can fly to Oahu.
Mr. Rapozo: One-way.
Chair Furfaro: I have paddles in my office.
Ms. Yukimura: I just want to say that during this past
Legislative Session, Housing and the Administration, and myself as Housing Committee
Chair, had to lobby strenuously against the effort of Department of Hawaiian Homelands
(DHHL) to take Housing Credits and we got in at the last minute, but what they chided us
for was to not come. Even though we had submitted testimony at every Committee
Meeting, they said, "Why were you not there?" This is a critical thing that would have
affected their budget tremendously. I am sorry. I cannot vote to cut any more from a
department that is already bleeding.
Mr. Kagawa: Can I ask you a question?
Ms. Yukimura: Yes.
Mr. Kagawa: In 2013, were we not lobbying the Legislature?
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Ms. Yukimura: Yes. But the three hundred dollars ($300) to five
hundred dollars ($500)... one or two trips really make a difference.
Mr. Kagawa: Like I said, that five hundred dollars ($500)—
they can look for it within their budget and as I told you last time, Transportation lapsed
ninety-one thousand dollars ($91,000) in the last budget and perhaps five hundred dollars
($500) can be taken out of their future lapse amount.
Ms. Yukimura: That is not true. I was talking about Housing.
Even in Transportation, I guess we would have to analyze what caused that balance, but
ninety-one thousand dollars ($91,000) out of five million dollar ($5,000,000) or six million
dollar ($6,000,000) budget was not much and it could have been positions that were vacant
because of transitions and so forth. They are still on a very tight budget. I am sorry.
Mr. Kagawa: If I can respond. I am trying to find a fair way to
let every department feel the pain of this budget. The taxpayers out there are feeling the
biggest pain and they are asking us to try and tighten up. To take out a single department
and say that you are not going to be hit by my cut is really being prejudiced, so let us vote it
up or down.
Ms. Yukimura: Right. I agree with you. I think you are making
valiant attempts. I am not trying to denigrate that. I do want to say that not every
department feels the same kind of pain. Some are so tightly budgeted that every bit affects
them. That is one of the disadvantages of across the board cuts.
Chair Furfaro: Mr. Bynum.
Mr. Bynum: I just have a question. Ross, is the proposal to go
department by department back to their 2013 allocations?
Mr. Kagawa: Yes.
Mr. Bynum: Okay. I have been clear on not being really
supportive of these kinds of cuts, but this in particular because there has been so many
changes since 2013. Those departments have different personnel and personnel have
moved around. They have different needs. The Administration has given us an overtime
budget based on each departments' needs, which may be very different than 2013. Thank
you.
Chair Furfaro: Mr. Kagawa, I have my own amendment that
goes forward and across the board, just reduces travel by ten percent (10%), which is an
amount of about seventy-nine thousand dollars ($79,000) altogether. That includes the
Council and so forth. I will not be supporting yours, although I appreciate it. I think one of
the things you realize too is that our travel year is not over here and our travel budget has
changed substantially because it is an election year too. We have accounts that include
going over Elections and so forth as well. I just want to let you know that I am very
appreciative of what you are doing, but I will be proposing the seventy-eight thousand
dollar ($78,000) reductions at ten percent (10%) for all the travel departments.
Mr. Kagawa: I want to just say that I am really making our
Office feel the biggest pain because if this passes, Councilmembers will be hurting
themselves the most.
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Chair Furfaro: Yes.
Mr. Kagawa: I think that is leading by example and saying
that instead of going to everything that we think can help, we will be selective and go to the
real high priority events that we think we can help the County. It is just a way of leading
by example. Thank you.
Chair Furfaro: Again, I appreciate what you are attempting to
do. This year, our travel budget is not finished and I think Ricky traveled three times this
week alone for Elections with the changes coming up. Mr. Bynum.
Mr. Bynum: It is election year and 2013 was not. You are
comparing apples and oranges. If we are going to cut at this, I suggest that we do it as a
percentage from the Mayor's Budget because they made that thoughtful analysis from each
department.
Chair Furfaro: Okay, there is not more discussion. Again, I
want to say that I plan to vote in reduction in travel, but I have my own amendment to
introduce which is a percentage and will be circulating that soon. I want to call for a roll
call vote.
Ms. Fountain-Tanigawa: Okay. This is a roll call vote on Councilmember
Kagawa's proposal to reduce travel to the 2013 levels.
The motion reduce the miscellaneous travel budget accounts in various funds budget
by three hundred forty-four thousand nine hundred fifty-nine dollars ($344,959),
was then put, and carried by the following vote:
FOR REDUCTION: Chock, Hooser, Kagawa, Rapozo, TOTAL— 4,
AGAINST REDUCTION: Bynum, Yukimura, Furfaro TOTAL— 3,
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL— 0.
Chair Furfaro: I do not plan to introduce my amendment since it
passed. I want to remind all of you that the Council will take a very substantial hit here.
Please understand that when I reject your travel for future years, but you will be allocated
your appropriate amount. That will be the fact of the matter. Go ahead and put that full
amount up on the board right now. Scott, please scratch my amendment.
Mr. Rapozo: Mr. Chair?
Chair Furfaro: Go ahead.
Mr. Rapozo: I know this probably is going to cause a lot of
dialogue, but I think we can save the philosophical disagreements because I think this
could in fact take a lot of time, which is not the intent. This is regarding the funding for the
Enforcement Specialist for Ordinance No. 960 for salary, fringe, and all related office costs.
This is one hundred twelve thousand six hundred fifteen dollars ($112,615). This is
supposedly for the Enforcement Office to enact or enforce Ordinance No. 960. As I stated,
this law is in limbo in court. This law is one that the County has disagreed with. Some of
us were saying that it was going to cost money to have this bill but, I think for what is
required of this Ordinance, as I read the Ordinance...
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Chair Furfaro: You will get a briefing this Wednesday from our
attorneys as to those particulars. I also believe that there is an attempt by the
Administration to demonstrate to you what that particular scope and job description would
be for this individual on the enforcement portion. If they have not caught up to you yet...
Mr. Rapozo: In fact, I have spoken with Nadine, the
Managing Director.
Chair Furfaro: Okay. Those were the answers to the questions.
Mr. Rapozo: Again, I understand, agree, and believe that this
County is mandated and obligated to enforce the Ordinance as it was passed. I do not have
a problem with that because that is the law. My problem is that based on what the law
requires this County to do, I believe we can do it with the existing resources. I believe we
can do it with existing Inspectors that we already have on Staff. To go out and retain or
hire a brand new person— I think it is not necessary at this time. I understand that there
is a temporary... an eighty-nine (89) day contact position that was already hired for this to
put the structure together, but this is not a very difficult Ordinance to enforce based on how
it is written today... as Ordinance No. 960 is written. I do not believe that we need to go
out and hire a brand new person to do what is required. I would ask and highly recommend
that the Administration look within... whether it is the Planning Department or Economic
Development utilizing the existing Agricultural Specialist that is in there. I believe we
have the resources in-house right now to accomplish the enforcement of that Ordinance.
Mr. Rapozo moved to remove the funding for the Enforcement Specialist for
Ordinance No. 960 for salary, fringe, and all related office costs with a total of one
hundred twelve thousand six hundred fifteen dollars ($112,615), seconded by
Mr. Kagawa.
Chair Furfaro: I just want to remind all of you, as I did at the
very beginning, I put in a request for the State to reinstate the positions that they cut back
during the Lingle Administration. We had narrative from the State and from the
Governor's Office that they were going to do just that during budget time and they did
nothing. We got no new Inspectors. Mr. Hooser, you have the floor, followed by Mr.
Bynum.
Mr. Hooser: I appreciate the discussion actually. I had
similar thoughts, however did not want to take away the resources of the Administration.
I do not want to give any excuses or reasons why it is not being enforced, if that in fact
happens in the future. So I hesitated to offer budget reductions. I believe it does take some
resources to enforce it. When I first heard there was a full-time position, I thought that
was overkill myself and thought that there were different ways to do it for a significant
amount of less money or if we were going to fund a full-time position like this, have the
person do half of his or her responsibilities of the enforcement and the other half be some
agricultural related support position. I want to make it clear that as a result of the actions
of implementing or passing Bill No. 2491, there is an additional fifty-five thousand dollars
($55,000) per year coming in from tax revenue from these companies that would not have
happened without this. For what it is worth, that helps subsidize this cost. These were
property taxes that were not being paid. As we dug into it, they are now paying these taxes
and I want to say that it is fifty-seven thousand dollars ($57,000) a year or slightly less
than that. Perhaps, almost half of this amount is being funded from those property taxes
that were not being paid. Honestly, I hesitate or cannot support cutting the full amount. I
want to be able to give the Administration the tools they need to do proper enforcement. I
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do not believe that it deserves this much money a year for a full-time position, so perhaps
half of it... I might find acceptable, but not to remove the full amount. I want to make sure
the Administration has the resources and I do not want it to be used where we cut the
budget, so therefore it is not being enforced and that kind of thing. I want to give them the
tools they need. Thank you.
Chair Furfaro: Mr. Bynum.
Mr. Bynum: I just want to say that during the discussion for
this Ordinance... and I believe the way it is in its current form, that the enforcement issues
are not going to be monumental. However, since we settled on the Ordinance, the
Administration has been very diligent in responding to their responsibilities to enforce it.
We have had meetings. It will be emergent, I am sure, but it is much better to be cautious
and have enough staffing. The Ordinance put it in the Office of Economic Development
(OED). There are some advantages for it being there and OED has other enforcement
issues. I hope that this position is generic and if you find that the needs are not that great,
they can be used in other enforcement areas in OED like the farmers market and other
things. That would be my only input. I think the Administration has not given us... they
have not said, "Oh my goodness, this is so awful that it is going to cost us millions." Their
response has been prudent and appropriate and part of it is this position and I am going to
support it.
Chair Furfaro: Okay. Anybody else wants to speak before I
recognize Mr. Hooser again? Mr. Rapozo.
Mr. Rapozo: Thank you, Mr. Chair. Again, in this budget
includes twenty-five thousand dollars ($25,000) for a Consultant. I have trouble with that.
I think Mr. Hooser made a good point. Is this a full-time position? The difference between
a full-time position including OPEB and the Consultant and all of that is one hundred
twelve thousand dollars ($112,000) versus a part-time employee. I cannot imagine that it
would take forty (40) hours a week to enforce the Ordinance. It just will not. Again, that is
the difference because now you add on the additional fringes, which takes it from a fifty
thousand dollar ($50,000) position... fifty thousand dollars ($50,000) a year including the
consulting expense to one hundred twelve thousand dollars ($112,000). I just cannot
support that. Again, I would like to see the vote on this, but Mr. Hooser would introduce an
amendment for part-time so we alleviate the benefits. Remember, employees are the gifts
that keep on giving. I understand it is a temporary position in the budget, but I cannot
imagine it being taken away. It would have to remain. Especially now as this thing goes
through court, I do not think it is wise to bring in a full-time employee at this point. I think
a part-time employee without the benefits would be sufficient. Thank you.
Chair Furfaro: JoAnn, you have the floor.
Ms. Yukimura: I feel that the Administration has been very
diligent in trying to anticipate what it is going to take to enforce this. Even though the
Mayor was not in support of the Bill itself, he and his Administration have taken on the
responsibility of trying to responsibly enforce it. I feel like there has been a lot of detail
thinking about it. Not all of this is... it is not possible to predict everything to complete
accuracy because we are threading new ground, but to want to put in place machinery that
will responsibly enforce Ordinance No. 960 is something for us to be grateful for. I believe
the Consultant Services are in case there needs to be contested cases. It is not an
automatic expenditure. It was something that was put there in anticipation of some
possible appeals. I think we need to view that as something that may not be fully
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expended. I think if we want to go part-time, we need to discuss this with the
Administration before just cutting it out. I certainly am not in favor of just eliminating the
position. I think this discussion is worthwhile in terms of us being real clear what we are
trying to do here and what it is going to take.
Chair Furfaro: Mr. Bynum.
Mr. Bynum: I just want to stick with this idea of enforcement
for a minute because I learned so much about enforcement from Councilmember Rapozo
from the time I have been on this Council. It has been a frequent topic of his initiatives,
many of which I have supported. We need to get it started and do it right. Councilmember
Hooser just said that lack of enforcement on tax ordinances... when we looked into it, we
got fifty-five thousand dollars ($55,000). I will tell you that lack of enforcement of other tax
ordinances is going to show a huge potential increase in revenue coming up shortly. We
have (inaudible) ordinances that we do not enforce. If we did, we would save energy and
thousands of dollars in Solid Waste. We have a sign ordinance that is enforced only by
complaint and it causes all kinds of tension in the business community. When we do not
get enforcement right, we pay dire consequences. I agree with the premise that I do not
believe this law, as currently written, is going to be that cumbersome. That is why I am
talking about more generic enforcement so we can address some of these other issues that
we find. Let us not start off from the beginning of not having the proper tools in place.
Thank you.
Chair Furfaro: Mr. Hooser.
Mr. Hooser: I started the conversation following up on
Councilmember Rapozo's thought and agreeing basically with him that my first impression
was likewise that it is not that complicated and should not take that much work; therefore,
we may not need this much money. Because of the sensitive nature of the topic, it is new,
and the Administration is stepping up, I will support the full amount, but I would hope that
the Administration will report to us promptly as how these funds are being spent and
would consider shifting or adding on to the responsibilities of this, whoever the person is, to
provide a support role in agriculture. I do think that we need to do a lot more than what we
are doing with agriculture and this perhaps can be a person that could evolve into that
position where you do enforcement, but you also maybe provide other services. Because of
the nature of the Ordinance and the sensitivity and amount of energy that has gone into it,
so far, I do not think we should err on the side of shorting it at the Administrative level. I
will be supporting the full amount that is in the budget. Thank you.
Chair Furfaro: Anymore?
Mr. Rapozo: I call for the question.
Chair Furfaro: Fine, but may I have the privilege of speaking? I
want to tell you folks that from the briefing that I received, I think there is a lot to this
position that we need to recognize. We are either going to bake bread with all the
ingredients in it or we are not going to bake bread. If you are not going to fund this fully,
then your recipe does not work. There is a lot to this piece and we owe it to ourselves to
deliver a fully baked loaf of bread when we address this. May I have roll call vote, please?
Ms. Fountain-Tanigawa: This is a roll call to remove the funding for the
Enforcement Specialist as proposed by Councilmember Rapozo.
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The motion to remove the funding for the Enforcement Specialist for Ordinance No.
960 for salary, fringe, and all related office costs with a total of one hundred twelve
thousand six hundred fifteen dollars ($112,615) was then put, and failed by the
following vote:
FOR REDUCTION: Kagawa, Rapozo TOTAL—2,
AGAINST REDUCTION: Bynum, Chock, Hooser, Yukimura,
Furfaro TOTAL— 5,
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL— 0.
Chair Furfaro: We are still on the area for items that are going
to be reduced. Do you have one? Mr. Bynum has one. You have the floor.
Mr. Bynum: I think I maybe only have one. I lost the paper
already but it is in the Mayor's Office, Facilitator for Host Community Benefits (HCB). Let
me say why. Like I said, public record has a history of everybody's position on Host
Community Benefits. The record will support that I supported establishing Host
Community Benefits. I supported expanding it. I supported putting in the funds and tying
them to the tipping fees, so there was a formula. I supported making sure they got interest
on the funds that were put because that was request from the community. I did not
support this Facilitator position because our contribution to Host Community Benefits this
year is one million two hundred thousand dollars ($1,200,000). We have sacred cows, and
this is one of them. Politically, it is a sacred cow, as is the Open Space Fund, but we can
consider asking for one million ($1,000,000) contribution. We did not ask Host Community
Benefits for any contribution in this one million two hundred thousand dollars ($1,200,000)
that we send them roughly this year. They wanted to not even pay any administrative
costs, not even one (1) penny, so we put an additional body in to facilitate their meetings. I
think that those administrative costs for any funds that ever went are reasonable to come
out of that fund. I think it is sixty thousand dollars ($60,000) plus benefits. I do not know
what the total amount is. It is a contract, right? I fully expect that contract will continue.
They have access to one million five hundred thousand dollars ($1,500,000). I do not know
what their current balance is. We have one million nine hundred thousand dollars
($1,900,000). I think they can take the Facilitator out of that.
Mr. Bynum moved to remove funding for the Host Community Benefits (HCB)
facilitator from the Office of the Mayor in the amount of $60,000, seconded by
Ms. Yukimura.
Chair Furfaro: Mr. Rapozo, you have the floor.
Mr. Rapozo: Thank you, Mr. Chair. I have been following this
for several years and as far as I understand it, those funds cannot be used for the
Consultant. That is just the way that is drafted and it is crafted, so the only way for the
funding is through the General Fund. I will tell you... I think many of us who have
participated in the Host Community Benefit meetings over the years will tell you that I
think a lot of progress was made with this Facilitator. I have seen it develop with my own
eyes. I have seen the whole tone of that body change with this Facilitator. I was there
from when we had the mainland Facilitator. I do not know where he came from. He had no
local knowledge or no cultural knowledge and that was a mess. Then we had another
Facilitator and that did not work too well. This one here... I believe it was a competitive
bid, if I am not mistaken. It went out for everyone to apply. This person won it. Number
one, I believe we need the Facilitator; no doubt about it. That group will not function
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without a trained Facilitator. Number two, it cannot be funded by the HCB moneys, so we
need to fund it with the County funds. I will not be supporting this. Thank you.
Chair Furfaro: Okay. Other dialogue? Mr. Bynum.
Mr. Bynum: I am just making it clear that I am not making
any judgment about the Facilitator or the need for a Facilitator. I agree with
Councilmember Rapozo that that has helped the process. We certainly did not want our
Solid Waste and the Mayor's Administrative people facilitating like they did at one time.
That was above and beyond. I do not know that that is the case. I have not heard about a
restriction about how we can spend those funds. If that is the case, I will modify this to
take sixty thousand dollars ($60,000) of the one million nine hundred thousand dollars
($1,900,000) or one million one hundred ninety thousand four hundred seventy-nine dollars
($1,190,479). If there is a restriction from us taking sixty thousand dollars ($60,000) from
there, then I would like somebody to tell me where that restriction comes from, then I will
modify it. I think it is important to... it probably stupid and it is not going to... if there is
no votes for it, then I will just drop it. "Do not touch that sacred cow. Go ahead and hit
Open Space." Anyway, can somebody from the Administration answer that question?
Chair Furfaro: Is someone coming up?
There being no objections, the rules were suspended.
Mr. Barreira: Good morning, Chair. We are working to see if
there is any restriction. We are not aware offhand that a restriction exists. The current
funding is in the General Fund CIP. You are correct, Mr. Rapozo, that this fund is in the
General Fund as well. We are researching and hopefully can get an answer to you shortly,
Sir.
Mr. Bynum: Mr. Chair, I think I have a pretty clear view from
when JoAnn says for discussion purposes only. I do not want to belabor this. If there is no
support for this, I will just drop it and we can move on.
Chair Furfaro: Okay. Mr. Rapozo.
Mr. Rapozo: I believe that it was a decision... the action was
made by the HCB themselves that they would not utilize the HCB funds, that in fact, aside
from the Administrative costs, that all the funds for that will be specifically used for the
projects and the grants.
BETH TOKIOKA, Director of Communications: Yes. Basically, we do not spend
that money unless it is upon recommendation of the Citizens' Advisory Committee (CAC).
If this money was eliminated, there would be no guarantee that the CAC would agree to
appropriate the money for a Facilitator. I believe there is about a little over three hundred
thousand dollars ($300,000) right now that is liquid in that account and the rest is tied up
with various grants that were approved. There are in the process of doing another round of
grants. They have about three hundred thousand dollars ($300,000) and some change to
spend and they have grant proposals that are double the amount. I have every expectation
that they will grant out all of those... all the funds that are currently liquid.
Chair Furfaro: Thank you. Beth, I want to take a moment to
thank you. JoAnn, Mr. Hooser, and I were out on the west side this week and I had an
opportunity to talk to some west side people about this project and so forth and they had
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high praise for the progress that is being made and I guess for the lack of a better word,
"the waitlist" and that people were going to benefit from that. I was flabbergasted by the
number of people who had qualified for their years and ownership of a home out on the west
side and I think the Facilitator had a lot to do with the successes they are experiencing
right now. That would not have been possible without me also thanking you. I was very
pleased with the feedback that I got.
Ms. Tokioka: Thank you. Yes. She has done an incredible job
of getting that process well-established and the Committee moving together very well. We
are in a really, really good place. As it has been stated, I do not think it could move forward
as it is without having a Facilitator. The person who is under the contract has done a
fantastic job.
Chair Furfaro: Thank you, Beth. Mr. Bynum.
Mr. Bynum: Thank you, Beth. I think the CAC could fund
this Facilitator and they have three hundred thousand dollars ($300,000) of liquid funds. I
know how great this is going down there. I am sure that the facilitator has a lot to do with
it but it is not about that. It is about the funding and...so they could do that...they could
allocate that?
Ms. Tokioka: Yes, they could. There is no guarantee that they
would actually agree to do that but...and if not then...
Mr. Bynum: No, they were clear. They came here and said,
"no, we want every single penny to go to our projects, we want you to find the facilitator,"
and we agreed. I did not personally because I thought that was real stretch and I still do.
Like I said if there is no support for it then we will just move on. But I know how
important this is that is why I am not proposing taking anything from the principle, sort to
speak.
Chair Furfaro: Thank you to the Administration. We had a
motion and second for discussion but I did hear the introducer indicate that he is prepared
to withdraw. Any further discussion before Mr. Bynum withdraws his piece? No? Okay.
Mr. Bynum withdrew his motion to remove funding for the Host Community
Benefits (HCB) facilitator from the Office of the Mayor in the amount of$60,000,
Ms. Yukimura withdrew the second.
Mr. Bynum: Thank you for the dialogue.
Chair Furfaro: Any additional reductions to be introduced? I
have a couple myself but I will let you folks go first.
Mr. Rapozo: One last one.
Chair Furfaro: I am never going to catch up with you and
Councilmember Kagawa.
Mr. Rapozo: Well, I mean it is either cuts or increase revenue
and I think we are just trying to do our best to try to cut as much as we can.
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DECISION-MAKING 83 MAY 12, 2014
Chair Furfaro: Mine was reduced by two (2) because you guys
duplicated what I had. Go ahead.
Mr. Rapozo: I will just make the motion, this would be to
reduce the OPEB by ten percent (10%) to fund OPEB at ninety percent (90%) which would
generate a...basically it is a loan. We are borrowing against OPEB for one million four
hundred thirty-six thousand and two hundred forty-three dollars ($1,436,243).
Mr. Rapozo moved to Reduce OPEB by ten percent (10%) in all Funds except Liquor
and Misc. Housing Funds, seconded by Ms. Yukimura.
Chair Furfaro: I just feel compelled to share with you what I
shared earlier that the GFOA will in future start to earmark in our CAFR the amounts that
were short if you so plan to go there. It will actually show that in our financial as being a
unfunded liability under the new standard accounting system. So, I said what I needed to
say. I will not be supporting this now that we finally got back up to a hundred but for those
exact reasons. Mr. Rapozo.
Mr. Rapozo: I do want to remind my colleagues that with the
recent visit to Honolulu and the actuarial that we found out that we had over paid OPEB
by...what was the number?
Chair Furfaro: It is one point seven million.
Mr. Rapozo: That happens every year. We go to Honolulu and
we... so we can very well based on...depends what happens in the next year with retirees
but we could very well be over paying OPEB. Although it just maybe an overfund today, it
could be like what happened this year— an overfunding. This could do the correction on the
amount. Again, it is a temporary thing and I am expecting we will have the same results
and we will find out that we were on track with our payments. This does infuse another
one point four million back into the budget at what I believe a very low risk or low liability
— ten percent (10%). If you just look at all the projects in our budget if we had to find one
point four million next year, I think it would not be a problem. I hate doing this because it
is like kicking a can down the road but...
Chair Furfaro: That is what it is.
Mr. Rapozo: It is and that is what we are all doing. We are
kicking this can down the road in all areas of this budget unless we stop the bleeding —we
cut. I do not think anyone has proposed cutting any warm bodies but until we do that, we
are just kicking the can down the road because the cost just continues. This infuses one
point four, three, six back into the budget and I would ask for your support. Thank you.
Chair Furfaro: JoAnn, you had your hand up first and then Mr.
Bynum.
Ms. Yukimura: Just a question, Councilmember Rapozo, so I
understand this clearly. Cut OPEB by one point four million and put it in the reserve, is
that your proposal?
Mr. Rapozo: No, it just reduces the deficit.
Chair Furfaro: We are looking for a pot of money.
•
•
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Mr. Rapozo: Right.
Chair Furfaro: Where they go will come from the revenue cycle.
Mr. Rapozo: I have not decided to allocate...we are only doing
cuts. I am not doing adds but since you talked about your add, I am contemplating getting a
helicopter for the Council so we can go to Honolulu for a lot less.
Chair Furfaro: Great way to carry our travel expenses.
Mr. Rapozo: A nice one.
Ms. Yukimura: Actually under these circumstances that is not
even funny.
Mr. Rapozo: This is just a cut. Basically we are chasing
money. We are chasing a deficit that we got to bring down. This decreases the deficit by one
point four million.
Ms. Yukimura: I see.
Chair Furfaro: Are you finished, JoAnn?
Ms. Yukimura: I am just wanting to say, I guess, that if it would
go to the reserve and strengthen our financial standing with the bond companies, that
would be one thing but just cutting is not good because as you said yourself it is kicking the
can down the road.
Mr. Rapozo: May I respond to that?
Chair Furfaro: You may respond since you are the introducer.
Mr. Rapozo: As long as you do not spend the one point four,
six million, JoAnn, it will go into the reserve. I do not have a use for it. I do not have any
adds, so for me that is where it is going to go. I am getting really concerned because it
seems like only Ross, and I, and the Chair maybe, have put in cuts. So to balance this
budget, I do not know where else to...
Ms. Yukimura: Well the other use for it is to offset some of the
revenue proposals.
Mr. Rapozo: That is what this does.
Chair Furfaro: That is what it does by going in the pot.
Ms. Yukimura: But it does not go to the reserve then...
Mr. Bynum: We decide that later.
Ms. Yukimura: I know we decide that later.
Mr. Bynum: This is about cuts.
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Ms. Yukimura: I am just sharing my thought process which is
part of what underlies my vote. Thank you.
Chair Furfaro: That only reinforces why I wanted to have a
straw poll so that we understand what we are chasing versus what we are building. Mr.
Bynum has the floor.
Mr. Bynum: Sticking to just the cut portion of this...I am not
going to repeat the earlier OPEB discussion. The Mayor proposed initially four point four
million from this source and then said well I was hoping to put it back when we get the
TAT, we did not get the TAT and the Mayor is not going to source anymore in his proposal.
This is a long way of saying I support Councilmembers. I am going to vote for this and we
may choose to do even more because you are right, this is a cut, it is kicking the can down
the road, that is true but that is opposed to taking cuts the is going to impact services and
employees next year. Thank you.
Mr. Hooser: I also am supporting this but in the context of
the entire package also. I share Councilmember Yukimura's desire that at the end of the
day to have these cuts result in a larger fund balance at the end. So not to offset tax
increases necessarily, it could offset some of them but it is going to take a combination. At
the end of the day I would like to see our fund balances increase and then we have a
sustainable budget. This is a tool that takes us down that path. Hopefully, we can go all
the way down the path and we do not stop when it comes to the revenue side but I do
support this and I want to thank Councilmember Rapozo for putting it forward. Just to
clarify that there is no stronger supporter at this table for Councilmember Kagawa's tax
cuts then Councilmember Hooser. He offered all the cuts that I was going to make. I really
want to commend Councilmember Kagawa for taking the initiative on those cuts and I
know he is not quite done. He is still looking at one or at least it is hanging up there.
Thank you.
Chair Furfaro: We will refer to you as the "dynamic duo" then?
Mr. Hooser: That is right.
Chair Furfaro: Very good. Mr. Kagawa.
Mr. Kagawa: I was very hesitant about supporting this but
when you, yourself need support of fellow colleagues and a colleague comes up with a brave
measure...that is not going to get a lot of praise but it is going to put the County in the
better position, I believe us having some kind of reserve in the end and the larger the better
is going to put us in a better position. We do not know what the true amount of the
underfunding is going to be at the end because as Steve found out today, sometimes we are
in better shape than we actually thought we were when the actual results come out. I will
be supporting this as well in this tough budget. Thank you.
Chair Furfaro: Further discussion? Okay. I will not be
supporting this. I want to give thanks to the Administration for going and spending time
with the actuarian that brought us back to being able to fully fund the OPEB. I think that
we are in a better position than really taking this contingency, this is a contingency right
now because it does not end the liability, it just defers it. So talking about merits of courage
and so forth, I do want to pass around a few at the table but I believe this should be more of
a last resort thing then to defer OPEB. May I have a roll call on Mr. Rapozo's motion.
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DECISION-MAKING 86 MAY 12, 2014
The motion to Reduce OPEB by ten percent (10%) in all Funds except Liquor and
Misc. Housing Funds, was then put and carried by the following vote:
FOR REDUCTION: Bynum, Hooser, Kagawa, Rapozo,
Yukimura TOTAL— 5*,
AGAINST REDUCTION: Chock, Furfaro TOTAL—2,
EXCUSED & NOT VOTING: None TOTAL—0,
RECUSED & NOT VOTING: None TOTAL—0.
(*Pursuant to Council Rule No. 5(b) of the Rules of the Council of the County of Kauai,
Councilmember Yukimura is noted as voting silent but shall be recorded as an affirmative
for the motion.)
Chair Furfaro: We have 4 yes, 2 no, and 1 silent with Yukimura
which will go to the positive. That passes. I do want to remind everybody anticipate the
line item in the next CAFR that indicates that liability stands. Moving to additional cuts,
does anybody have anymore? I know you guys touched on two (2) of mine, if not, I will be
glad to start introducing a few. Can we start with the energy piece please?
We are hearing some good things about the Green Team. We even had Ben tell us
that we should shoot for a goal of maybe three percent (3%) in managing our energy
reductions. I am circulating one that talks about reducing kilowatt hours and then the
kilowatt hours are converted into actual dollars. A two percent (2%) reduction on nine
million two hundred and sixty thousand kilowatts is a hundred and eighty-five thousand
kilowatt hours. A hundred and eighty-five thousand kilowatt hours at forty-eight cents
would save us over all Departments; General Fund, Highway, Solid Waste, Sewer, and Golf
would save us eighty-eight thousand dollars. I think that is a reasonable reach. I think we
have to have some goal setting here. Again, as you remember Ben Sullivan felt that moving
forward we could reach for three percent (3%) and this is two percent (2%) and also
hopefully we could see something happen with the streetlight changes that have been
launched but KIUC. That would be my motion.
Chair Furfaro moved to Reduce Electricity of two percent (2%) across General Fund,
Highway Fund, Solid Waste, Sewer Fund, and Golf Fund, seconded by Mr. Kagawa.
Chair Furfaro: Further discussion? Seeing none. Roll call.
The motion to Reduce Electricity of two percent (2%) across General Fund, Highway
Fund, Solid Waste, Sewer Fund, and Golf Fund, was then put and carried by the
following vote:
FOR REDUCTION: Bynum, Chock, Hooser, Kagawa, Rapozo,
Yukimura, Furfaro TOTAL— 7,
AGAINST REDUCTION: None TOTAL— 0,
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL— 0.
Chair Furfaro: The next one is...and I do not want to get it
confused with a revenue forecasting because this adds income without adding expenses and
the next one I would like to pass around is about the number 9 booth at Spouting Horn
which is reflected in the budget as being vacant. I am indicating that even if it went out to
fill the last one because it is the least desirable, it should be able to add twenty-four
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DECISION-MAKING 87 MAY 12, 2014
thousand dollars ($24,000) in rent. That is only sixty-six percent (66%) of what the current
rates are but I do want to send a message to Economic Development and the
Administration that we should not have a booth that sits empty in the forecast.
Ms. Yukimura moved to Account for filing vacant Spouting Horn Concession and
increase amount in Parks & Recreation Improvement Fund, seconded by Mr.
Kagawa.
Chair Furfaro: Again, it is not the full amount that I am putting
there but it is a necessity to add this revenue.
Mr. Rapozo: So, Mr. Chair, this is not a cut?
Chair Furfaro: No. This is adding thirty thousand dollars worth
of rent with no additional expenses.
Mr. Rapozo: Yes, okay.
Chair Furfaro: So, it adds revenue. It becomes positive on the
savings. Further discussion? I think I said twenty-four but it is thirty for a reduction. Roll
call.
The motion to Account for filing vacant Spouting Horn Concession and increase
amount in Parks & Recreation Improvement Fund, was then put and carried by
the following vote:
FOR REDUCTION: Bynum, Chock, Hooser, Kagawa, Rapozo,
Yukimura, Furfaro TOTAL– 7,
AGAINST REDUCTION: None TOTAL– 0,
EXCUSED & NOT VOTING: None TOTAL–0,
RECUSED & NOT VOTING: None TOTAL–0.
Chair Furfaro: Could I take a short recess to get my pieces in
order?
There being no objections, the Committee recessed at 3:58 p.m.
The Committee reconvened at 4:10 p.m., and proceeded as follows:
Chair Furfaro: We are back from the break. Thank you for
allowing that time. I just have two more items. Under the duplication, we found that the
Building Fund for the public restroom facilities— there was about forty thousand dollars
($40,000) in duplicate design fees. I want to share with you that I would like to get some
acknowledgement that that duplicate could be earmarked in CIP for the purposes of Parks
designing expanded skateboard facilities. That was the duplicate that we found on the two
(2) parks for design element only. I would like to get some acknowledgement on that. If
somebody would make the motion for me, I would appreciate it.
Ms. Yukimura moved to cut the duplicate amount of forty thousand dollars ($40,000)
for the comfort station design in the Bond Fund - CIP and apply it to design of an
Islandwide Skateboard park, seconded by Mr. Chock.
Chair Furfaro: Further discussion?
•
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Ms. Yukimura: Chair, is it your intention that it focuses on a
particular park in a particular area?
Chair Furfaro: I am just basically saying that at this point, we
will leave it to the Parks Department, but the money would be available that way because
this was designed money for building.
Ms. Yukimura: Okay. I am in support of this. The way I
understand the basic approach is that there is going to be an effort to redesign and
reconstruct the skateboard park in Kapa'a as sort of the main skateboard park, and then
we are looking at smaller designs in other communities, which I support. I recently spoke
to people in Waimea and Kekaha who want to see a park there and previously have been
working with the kids in Lihu`e. I am just saying that we need sort of an overall plan and I
see two different kinds of parks; one, a major place where major tournaments can be held if
there is such a thing, and then smaller neighborhood parks, which would be less elaborate
skateboard parks but still serve a need for kids on a daily basis. I am hoping that the
Parks Department will give some direction in plan. I know they are working with the
private sector and...
Chair Furfaro: We know what you are referring to... the world
famous...
Ms. Yukimura: What is his name?
Chair Furfaro: Way.
Ms. Yukimura: Yes, Dan Way. Thank you. It would be great to
bring that kind of public/private partnership to it, but we need some kind of a plan and I
hope that is forthcoming soon because the kids have been waiting for a long, long time.
Some of them have already graduated from high school and gone off to college.
Chair Furfaro: Mr. Hooser.
Mr. Hooser: I have more of a process question. Are we going
to be doing ads now?
Chair Furfaro: No, we are not doing ads. We have an item that
I sent over to them that said, "What happened to the forty thousand dollars ($40,000) in
design?" It is in the CIP Budget, so it is also part of the CIP Budget. I am really just
talking about the CIP Budget right now. If you folks would want to prefer to it for another
day, that is fine with me. I just want to point out that it is there. Right now, it is sitting
there in the process. It is CIP money that needs to stay in CIP. We can scratch that for
another day.
•
Mr. Hooser: No, I am just trying to figure out what the
process is. Are we doing CIP and Operating separate or it does not matter?
Chair Furfaro: However you guys want to do it. We can just
drop the topic for now.
Mr. Hooser: I do not want to rain on your parade though.
You are the Chair.
DELIBERATION & PRELIMINARY
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Chair Furfaro: At least last time I checked I was, but if you have
a difficult time with the process, this can wait another day.
Mr. Hooser: I am just asking the question, Chair.
Chair Furfaro: Okay. Mr. Rapozo.
Mr. Rapozo: Thank you. I had a similar question. The Bond
Fund CIP— I am assuming we can make amendments to that here. Does it have to go
through the...
Chair Furfaro: Actually, I think this is where the discussion
should be. Since we only have another fifteen (15) minutes for today, maybe we should take
that up tomorrow.
Mr. Rapozo: Obviously, I would support the removal of the
forty thousand dollars ($40,000) because I thought that was supposed to be done by the
Administration. We had that agreement that they would...
Chair Furfaro: I thought we had that agreement, but it did not
show up.
Mr. Rapozo: I do support the forty thousand dollar ($40,000)
removal. I am not ready to support the add, simply because I want to hear what everything
else is on the table by other Councilmembers as well, and then prioritize that as we go
forward. I guess I would prefer seeing the reduction and vote on that today, and then do
the add when we get to the adds tomorrow, if that is not a problem.
Chair Furfaro: I have no problem with that. We can vote on
that. Like other things, I too, would like to have my share of contributions on cuts, but I
would also like to have my share of comments tomorrow for adds. That can wait for
tomorrow. Are we all in agreement that the adjustment should be made on the design fee
of forty thousand dollars ($40,000)?
Ms. Yukimura: Yes. As the maker of the motion, I will accept
this friendly amendment to just make it a motion to cut the forty thousand dollars ($40,000)
from the comfort station improvements.
Ms. Yukimura moved to cut the forty thousand dollars ($40,000) from the
Comfort Station Improvements in the Bond Fund - CIP, seconded by Mr. Kagawa.
Chair Furfaro: Thank you so much. May I have a roll call please
on cutting the duplication?
The motion to cut the forty thousand dollars ($40,000) from the Comfort Station
Improvements in the Bond Fund – CIP was then put, and carried by the following
vote:
FOR MOTION: Bynum, Chock, Hooser, Kagawa, Rapozo,
Yukimura, Furfaro TOTAL– 7,
AGAINST MOTION: None TOTAL– 0,
EXCUSED & NOT VOTING: None TOTAL– 0,
DELIBERATION & PRELIMINARY
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RECUSED & NOT VOTING: None TOTAL— 0.
Chair Furfaro: Thank you. We will save that when we look for
other items, but the forty thousand dollars ($40,000) is floating in the CIP Budget. The last
item I have... I think Mr. Chock has one before we end the day as well, but after looking at
the forecasted improvements and the golf course without changing rates, which is a
separate item in a different meeting, I believe that the golf course revenue can grow in a
twelve (12) month period by about eighty thousand dollars ($80,000). Again, this is added
revenue without adding any expenses and that is based on my projections. It does not take
rates; this is just a reflection of adding additional paid rounds for one (1) year.
Mr. Bynum moved for the addition revenue of eighty thousand dollars ($80,000)
to the Golf Fund for additional paid rounds for one (1) year, seconded by
Ms. Yukimura.
Chair Furfaro: Is there any further discussion? If not, roll call
vote, please.
Ms. Fountain-Tanigawa: Eighty thousand dollars ($80,000) to the Golf
Fund.
The motion for the addition revenue of eighty thousand dollars ($80,000) to the
Golf Fund for additional paid rounds for one (1) year was then put, and carried
by the following vote:
FOR REDUCTION: Bynum, Chock, Hooser, Kagawa, Rapozo,
Yukimura, Furfaro TOTAL— 7,
AGAINST REDUCTION: None TOTAL—0,
EXCUSED & NOT VOTING: None TOTAL—0,
RECUSED & NOT VOTING: None TOTAL—0.
Chair Furfaro: Just as a preview, I added about one hundred
ninety thousand dollars ($190,000) of cuts and tomorrow, I only have thirty-seven thousand
dollars ($37,000) of additions. I contributed one hundred fifty thousand dollars ($150,000)
to the cuts. Mr. Kagawa, you have the floor.
Mr. Kagawa: I was just wondering as to when we would be
ready to address the overtime cuts that I proposed in a vote. I think the Staff was not clear
on the direction. We wanted to make sure that the percentage taken was not out of
contract-obligated items in the Police or Fire, and that it just dealt with the normal
overtime. I do not know if Staff is ready today with those cuts or not, so maybe we can
perhaps address them first thing tomorrow.
Chair Furfaro: No, let us ask the question because I asked them
earlier if they were ready and did not indicate that they were, but let us ask them now. Are
they ready? Did you get numbers from the Administration on Mr. Kagawa's... no? You did
not? When can we expect that?
Mr. Kagawa: Chair, it looks like twenty (20) is kind of out of
the question, so maybe we can get two estimates; one at ten percent (10%) and one at five
percent (5%).
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DECISION-MAKING 91 MAY 12, 2014
Chair Furfaro: Okay. Ernie, the question is from the introducer,
Mr. Kagawa on the overtime, when are we going to see a number for ten percent (10%) and
a number for five percent (5%) reducing operational overtime?
Mr. Barreira: Chair, once again, my understanding was that
there was some discussion about Countywide and there was discussion about large
departments. Are we now looking at Countywide?
Chair Furfaro: I asked for Fire, Police, and Public Works at five
percent (5%). The others should be reported to us as well, but at the five percent (5%) and
at the ten percent (10%).
Mr. Barreira: Very good. I provided the Analysts here two of
the three larger departments. There are some issues that are more complex with Public
Works that I will work out and get to the Council. We will give the numbers that you are
requesting, but it will most likely have to be tomorrow, Sir.
Chair Furfaro: Can you give us an idea of when we can have our
orange juice on this in the morning? Is it late? Is it early?
Mr. Barreira: We will shoot for opening session so that you can
work on that.
Chair Furfaro: Does that satisfy you, Mr. Kagawa?
Mr. Kagawa: Yes. I think if workers have to go overtime, I
could perhaps wait until after lunch. I think we have had a lot of cuts. We can go into the
adds maybe in the morning, unless we have further cuts. Certainly, I would like to have a
vote on just that generally, I think we should look at having managers get deeper into their
overtime issues and any cut I think will force them to do that.
Chair Furfaro: Okay. We will hope to get that before lunch. Let
us shoot for 12:00 p.m.
Mr. Barreira: Chair, may I make one minor request? While we
have heard from the Police Department and the Fire Department in terms of the overtime
implications, I think it would be fair to hear from Public Works because I cannot speak
accurately to the impacts of the various overtime challenges. That would be my request,
Sir.
Chair Furfaro: Have you had that discussion with them? If you
did not hear what I said on the floor, I will send an E-mail. I said Police, Fire, and Public
Works— the three big ones. They should start working on it. Will you have something for
us by12:00 p.m.?
Mr. Barreira: Yes, Sir. I guess I am not being clear. Forgive
me. The Council has heard from the Police and the Fire Department about the implications
of overtime. My suggestion is that the Public Works be allowed to speak to that issue as
well.
Chair Furfaro: Maybe you did not hear it from me. I said Fire,
Public Works, and Police. If you could give my Staff that number. Have you given them
that number?
DELIBERATION & PRELIMINARY
DECISION-MAKING 92 MAY 12, 2014
Mr. Barreira: I have given Police and Fire, yes.
Chair Furfaro: Okay. You are due for Public Works and then
the rest of the County for the smaller departments, but I want to see them as separate
numbers.
Mr. Barreira: Five percent (5%) and twenty percent (20%)...
sorry, five percent (5%) and ten percent (10%).
Chair Furfaro: Yes. The twenty percent (20%) is off the table to
the credit of Mr. Kagawa.
Mr. Barreira: Five percent (5%) and ten percent (10%). Very
good.
Chair Furfaro: Mr. Bynum.
Mr. Bynum: I am just a little confused. I kind of liked where
Councilmember Rapozo was going with this discussion earlier about what is contractually
obligated and what is not. Like in Police, like Fire, it was two hundred thousand (200,000)
that was "discretionary" was the word I think we used and the proposals to cut one forty
thousand (140,000) of that. It is different in every department. Are we doing an analysis of
that? What is discretionary versus what is contractually obligated? The Chair was coming
from five percent (5%) to ten percent (10%) of discretionary versus five (5) or ten (10) across
the board.
Chair Furfaro: That is where I believe we are at, right?
Mr. Barreira: Yes.
Chair Furfaro: Ten percent (10%) on the discretionary overtime
and five percent (5%) on the discretionary overtime, especially from those three big
departments.
Mr. Bynum: Okay. Thank you for the clarification.
Chair Furfaro: Mr. Chock has an item.
Mr. Chock: I have a small item from the Office of the County
Auditor. Earlier in the year, we had a discussion on an agreement made upon an
independent computer network. This is a small amount moving into the next fiscal period.
It does not seem necessary looking at a cut of twelve thousand dollars ($12,000).
Mr. Chock moved to reduce the Computer and Accessories line item for the
"Independent Compute Network and Telephone System" in the amount of twelve
thousand dollars ($12,000) seconded by Mr. Kagawa.
Chair Furfaro: Discussion?
Mr. Kagawa: Councilmember Chock, if you can kind of
reiterate... the County of the Auditor was asked about if this would be implemented and
the answer was not in this fiscal?
DELIBERATION & PRELIMINARY
DECISION-MAKING 93 MAY 12, 2014
Mr. Chock: The discussion that appeared earlier on the
Council floor was about whether or not he would have an independent network or an
internal network, which the cost was attributed to. Going forward, the agreement is that it
be internal, instead of with our IT.
Mr. Kagawa: Thank you.
Chair Furfaro: Further discussion? Mr. Rapozo.
Mr. Rapozo: That was agreed upon by the Auditor himself?
The last discussion we had, the meeting with you and myself downstairs, it appeared that
the agreement from the Administration was that they were going to pursue this
independent network.
Mr. Chock: IT and Steve was a part of that conversation.
They all met. We were briefed on it prior to us.
Mr. Rapozo: The Auditor was part of that discussion?
Mr. Chock: That is correct.
Mr. Rapozo: And he was okay with it?
Mr. Chock: Yes.
Mr. Rapozo: Okay. Thank you.
Chair Furfaro: Okay. We are going to need to vote on that item.
May I get a roll call, please?
The motion to reduce the Computer and Accessories line item for the "Independent
Compute Network and Telephone System" in the amount of twelve thousand dollars
($12,000) was then put, and carried by the following vote:
FOR REDUCTION: Bynum, Chock, Hooser, Kagawa, Rapozo,
Yukimura, Furfaro TOTAL— 7,
AGAINST REDUCTION: None TOTAL— 0,
EXCUSED & NOT VOTING: None TOTAL—0,
RECUSED & NOT VOTING: None TOTAL—0.
Chair Furfaro: Thank you very much. I have a couple of
announcements here for you folks as we go forward. I want to acknowledge that tomorrow,
Mr. Kagawa has agreed after we talked about our travel pieces and I indicated again that
the Council travel budget was subject to the cuts, but I want to point out again that 2014 is
an Election year, so they need to go back and look at the cost as it deals with our Staff
dealing with the State Office and running the Election. I believe he will be introducing an
amendment to that. Can I say that is correct, Mr. Kagawa?
Mr. Kagawa: Yes.
Chair Furfaro: Okay. JoAnn, do you have a question? Go
ahead.
DELIBERATION & PRELIMINARY
DECISION-MAKING 94 MAY 12, 2014
Ms. Yukimura: I have a proposed revenue increase, so should I
do that tomorrow?
Chair Furfaro: This is how I am going to do it. If you have
proposals on revenues in the beginning, I am going to give everybody who wants to speak
ten (10) minutes to talk about items that may have come to their attention after our first
day here and that might be a good time for you to make your presentation.
Ms. Yukimura: It would be a motion too, right?
Chair Furfaro: Yes.
Ms. Yukimura: Very good.
Chair Furfaro: A presentation and a motion. I will give
everybody ten (10) minutes tomorrow. Is that acceptable?
Ms. Yukimura: Yes. As long as I have some time because this is
in the same light of the revenue proposal.
Chair Furfaro: We will do that tomorrow morning in the
beginning. Mr. Hooser.
Mr. Hooser: I had a question on the CIP, but it may relate to
the Operating Budget. Is this the time to bring it up? I notice that the CIP Manager is
here.
Chair Furfaro: Yes. It might be a good time to bring it up so
that they are aware of the discussion tomorrow.
Mr. Hooser: Okay.
Chair Furfaro: Do you want the CIP Manager up?
Mr. Hooser: Yes.
Chair Furfaro: Keith.
Mr. Hooser: The answer to the question will tell me whether I
have work to do tonight on this. Thank you. In looking at the first page of this that you
gave us, it says, "General Fund — Kamala Bridge, Stream Erosion." If I am reading it
correctly, the proposed Budget Ordinance has a total of one hundred two thousand nine
hundred twenty-nine dollars ($102,929) in General Funds as opposed to Bond Funds. Is
that correct?
There being no objections, the rules were suspended.
Mr. Suga: Can you repeat that one more time, please?
Mr. Hooser: Okay. The breakdown that I have here, it looks
like the proposed Budget Ordinance has one hundred two thousand nine hundred twenty-
nine dollars ($102,929) in General Funds, I think. I can show you this. This shows that
DELIBERATION & PRELIMINARY
DECISION-MAKING 95 MAY 12, 2014
one hundred two thousand nine hundred twenty-nine dollars ($102,929) of General Funds
are being used for these Capital Improvement Projects.
Mr. Suga: That is correct.
Mr. Hooser: My question is if we were able to locate other
Capital Improvement Projects that were being funded by Bond Funds— could those Bond
Funds supplant this one hundred two thousand dollars ($102,000) and then this one
hundred two thousand dollars ($102,000) go back into the General Fund?
Mr. Suga: Yes.
Mr. Hooser: Okay. My final question is— it is for the
Administration in general. If we were looking for a bond funded project that we can shave
one hundred two thousand dollars ($102,000) off of, would you have any suggestions for
what that might be? You can tell me tomorrow if you would like to think about that.
Mr. Suga: Sure. I would like to have some time.
Mr. Hooser: Okay. Do you understand where I am trying to
go?
Mr. Suga: Yes.
Mr. Hooser: That would achieve a savings to the General
Fund of one hundred two thousand dollars ($102,000) if we were to do that. Thank you. In
the morning, you can talk perhaps?
Mr. Suga: Sure.
Mr. Hooser: Okay. Thank you.
Chair Furfaro: Please be familiar with those conditions, Keith,
as it relates to moving Bond Fund moneys for projects that need to qualify as Bond Projects.
Mr. Suga: Yes, Sir.
Chair Furfaro: Thank you. Are there any more questions for
today? It is my desire to be finished tomorrow at 4:30 p.m. It is my desire to remind you
that Wednesday, we have revenue votes during the Council. Also, I want to point out again
that on Wednesday, we will be starting the Council by going into a number of Executive
Sessions as it relates to those ten updates. Now that they are using our new forms, we will
get updates on our financial status of a number of the lawsuits. Until tomorrow at 9:00
a.m., may I say a big mahalo to everyone. We are recessed for today.
There being no objections, the meeting was called back to order, and proceeded as
follows:
There being no objections, the Departmental Budget Decision-Making was
recessed at 4:32 p.m.
The Deliberation and Preliminary Decision Making reconvened on May 13, 2014 at 9:08
a.m., and proceeded as follows:
Deliberation and Preliminary Decision-Making:
Honorable Tim Bynum
Honorable Mason K. Chock, Sr.
Honorable Gary L. Hooser
Honorable Ross Kagawa
Honorable Mel Rapozo
Honorable JoAnn A. Yukimura
Honorable Jay Furfaro, Council Chair
Chair Furfaro: Aloha and good morning. I would like to call
back our session that went into recess yesterday. I would like to go around the table giving
each member five (5) minutes to make comments or suggestions as a review of yesterday's
work that ended last evening. Then we will be talking today about Capital Improvement
Projects (CIP). We will be talking about revenues as it relates to the property tax piece.
During the property tax piece, I will give each member ten (10) minutes for their comments
as well. So, we will start around the table and Mr. Kagawa, we will give you the first five
(5) minutes here to recap anything you wanted to say about yesterday's work.
Mr. Kagawa: Thank you, Chair. First of all, we are going to be
proposing instead of twenty percent (20%) reduction in overtime, I am going to be proposing
just a five percent (5%) reduction and the five percent (5%) for Fire would only come from
restricted funds. Well, I guess, funds that are not contractually obligated. From the Police,
they said none of the overtime is unrestricted. So, they said that they could live with the
five percent (5%) and specifiy specific line items that would be taken out.
As far as the travel account, there were several accounts that, and I will just name
them: Prosecuting Attorney, Personnel, Planning, and Economic Development, that went
the other way by reverting to 2013. They actually got more money than they asked for in
this fiscal year which is of course, we are adding to their budget when they are not even
asking for it. So, those are just corrections to restore their 2015 request. For Council
Services, we are adding eighteen thousand five hundred dollars ($18,500) to the travel
budget because this year is an Election Year and in 2013, there was not an election. So,
Elections Division needs those moneys restored to account for it being an Election Year. As
far as the Finance Department, I had a lengthy discussion with Mr. Hunt and they are
going to be severely affected. The cut to Finance was going from fifty-five thousand dollars
($55,000) back to fifteen thousand dollars ($15,000), a reduction of forty thousand dollars
($40,000). That was the largest percentage among all cut Departments. He said that
things that would be affected would include the audit, the Comprehensive Annual Financial
Report (CAFR), et cetera, and we definitely do not want to affect those timings being late
because those are necessities. So, being that he took the time to contact us about it and
saying specifically what would be affected, I am proposing that we restore thirty-four
thousand four hundred six dollars ($34,406) and that would get them back up to their
request.
The last item, well, I would just like to end by saying that we receive a lot of
comments from Departments, from the public as well, and one of the things that the public
is still concerned about is, I think, the vehicle weight tax and asking me how much it is
going up. So, your bill is going to go up again to reiterate, from one hundred ninety-five
dollars ($195) to possibly two hundred twenty dollars ($220) or two hundred fifteen dollars
($215). So, you would basically be paying about twenty-five dollars ($25) more per vehicle
DELIBERATION AND 2 MAY 13, 2014
PRELIMINARY DECISION-MAKING
that you own. If you own two (2) cars it would be fifty dollars ($50) a year more, and they
expressed concern. I think one of the things that they said was that if they are going to be
taxed more for their car, then let us do a better job on taking care of the roads. One of the
roads that I just drove by yesterday that is in really bad shape is Nawiliwili Road. We
talked about Puhi Road being bad, but Nawiliwili, right in front of our shopping center is
just so highly traveled. I mean, that road is just horrible. So, I think we can justify
charging more for vehicles, but I think in the end we need to see some improvement on the
way we take care of our main thoroughfares. Hopefully, that will happen. So, I would say
that I would be still supporting the vehicle weight tax and I will be working together with
Public Works and let us start working on that priority list and seeing what we can do to get
some of these roads done. That way we can justify to the public that hey, we are charging
you more, but you are getting better service and we are trying to put that increase to work.
So, with that, thank you Chair, and I look forward to a quick day. I know the adds always
take faster than the cuts.
Chair Furfaro: Yes. Mr. Rapozo, you have time to discuss
yesterday's events or anything new you would like. Five (5) minutes.
Mr. Rapozo: I will just be brief. I think I said most of my
comments yesterday. My position has not changed at all. I think in football if you are
playing the season, you have to win the game, but you also have to think about next week,
the week after it, and if you are into the playoffs. You have to strategize your game plan to
make sure that you have enough oomph to finish out and win the championship. I think
that is critical. Similarly here at the budget, we have to make sure that when we are
discussing costs, adds, and cuts we cannot just be thinking about this year's budget. We
have to be thinking about next year and the year after. I mean, I have professed that every
year, that we cannot look at it as a one (1) year budget. Mr. Hooser yesterday in his
opening remarks kind of put everything in perspective as to where we are at and why.
Now, if today is the starting point, I mean, I have heard several Councilmembers say, "This
is the correction year." Well, let us think about that. Let us think about going down next
year, the year after. The State does a biannual budget. We do a two (2) year budget.
Maybe that is something that we have to look at because we cannot just do things today to
get through this year and then be in a worse position next year. So, we have to tell out
taxpayers, "Sorry, we tried, but we still need more." I think that is just the mindset that I
am setting myself in today as we go through the discussions. I just ask that the rest of us
think about next year and the year after and the year after because that is what we are
here for. It is not just to get out of the hole we are in, but to make sure that we set
ourselves up in a good way for next year and the year after that. Thank you, Mr. Chair.
Chair Furfaro: Okay. Thank you.
Mr. Chock: Thank you, Chair. I just wanted to first thank
some of my colleagues for the great work that they did and Councilmember Kagawa, for the
introduction of some cuts that we can consider and talk about because if it was not there
then it would not exist. We would not have this chance to just talk about it. While we have
had to make decisions, what I like to think is that this is a process. The process is that we
present these thing and we get to talk about them and where there needs to be changes or
adjustments, that is what we can move towards. So, again, I am thankful for the
opportunity to look at everything that is being shared and that we can come towards
resolutions to come to some sort of balance. I kind of see, just like life, an overcompensation
of needing to act on certain things and then when we can find the middle road, just like in
dealing with people's perspectives, then we can have some balance.
DELIBERATION AND 3 MAY 13, 2014
PRELIMINARY DECISION-MAKING
There is just one (1) area that I wanted to bring up since I had a discussion with the
Managing Director and Director of Finance on the travel. I would ask that they continue to
do their work. They have a presentation on the travel. By lunch, I think, is when they will
have it. It leads towards their accounting of the County structure that they had within the
years that we looked to change. So, to help them along that road would be to reconsider
how it is we are adjusting it. Right now, the proposal is to look at a twenty percent (20%)
cut of the total travel. However, there are a few classes or Departments that have been
conservative while others have probably been a little bit...could use some trimming on their
end. So, I would like to look at what they have to say. Chair, if we could look at that at
lunch. Other than that, I am looking forward, again, to seeing where else we might be able
to trim and then look at our enhancements. Thank you.
Chair Furfaro: Okay. Continuing going around the table.
Mr. Bynum.
Mr. Bynum: Thank you. I thought it was a good and spirited
day. There were surprises. I surprised myself by voting for cuts that I did not probably
initially come in intending to vote for, but I understood the rationale, particularly those
proposed by the Chair who was kind of a master at finding places where we can trim that
do not have a huge impact on the operations. I am very pleased to hear Councilmember
Kagawa and an effort to relook at the travel cuts because the way it happened, I do not
think gives the flexibility. So, wherever that was, I was considering saying, "Let us just go
the same dollar amount, but cut it from the existing budget." I hear that there is an effort
in way to help accommodate the Administration, how they distribute those cuts, is what I
am hearing. I really applaud that.
I just want to put this in context. This year is the reset year. This is the year that
the cap is no longer a part of the equation and what that means is that there is a lot of reset
happening among resident homeowners. People who have been paying very low taxes for
ten (10) to fifteen (15) years, many are going to have significant increases. Other citizens
that are among our taxpayers in the upper side that were paying very high taxes, sometime
three (3) or four (4)...two (2) or three (3) times what their neighbors were paying for the
same value home are going to have tax decreases. Currently, under the Mayor's proposal,
that is...where is the account? Scroll over. Four thousand six hundred (4,600) resident
homeowners that have exemptions that will have tax increases this year and five thousand
six hundred sixty-six (5,666) that will go down if we leave the homestead rate unchanged.
If we raise the rate up, then there will be more people paying increased taxes at a higher
rate. If we lower the homestead rate at all fewer people will be paying increases and the
increases they would be paying will be smaller. So, the decisions we made about revenues
and what came clear yesterday, that equally strong commitment and upset at some of the
measures we have to take and we are debating which of the egregious ones is the one that
we should do. That outcome will come today. But what we decide today on tax rates and on
this bigger issues is going to set...the dye will be cast because most of our structural
changes are done this year. We have put in increased exemptions for homeowners. We
have put in long term rental incentives that landlords who choose to rent their rentals at a
lower price can be in the homestead rate that I hope to keep low and if we lower that rate,
we give our landlords who are keeping their rentals. Greater incentive to keep affordable
housing available for working people as opposed to that housing going up, market rate, or
into vacation rental. We structurally have made wonderful changes over five (5) years, but
this year, we reset and believe me, those folks that get a six hundred dollars ($600) or seven
hundred dollars ($700) increase in their taxes, when they go from...some of them like four
hundred dollars ($400) to nine hundred fifty dollars ($950) all in one (1) year, they are not
going to be happy. The choices that we make here will decide the fate of those individuals,
DELIBERATION AND 4 MAY 13, 2014
PRELIMINARY DECISION-MAKING
our friends and neighbors. Again, those people are paying big increases. They have
enjoyed tax rates well below most of their neighbors for ten (10) or twelve (12) years. So,
this readjustment is just. It is appropriate. So, this is the reset year. Yesterday we did
good work here. I really appreciate looking at some of the cuts that I voted against, but I
lost. That is democracy. Now to be able to reprogram those a little bit that make more
sense for our workers out there so it does not hit the Departments as strong. I still have
huge concerns about an across the board cut in overtime. Anything that is across the board
is going to cause these anomalies and we have like just a few hours for the Administration
stand up and say, "Wait, wait. Did you think of this?" I expected the cuts from all of things
that people said, the big cuts, not be that kind of across the board let us cut this and you
folks figure it out, but what I heard was people saying, "Hey, there are things that we just
have to quit doing." I expected there to be cuts in Departments that says this service, we
cannot just do it anymore. There kind of cuts that are across the board...
ALLISON S. AR.AKAKI, Council Services Assistant I: Five (5) minutes.
Mr. Bynum: ...and an already trimmed budget, make it really
difficult to administer our government and we should think about that too because part of
that difficulty will be perhaps a flood of Money Bills coming over because we cut it so tight
that they have to come back to us when reality strikes, but overall, this is democracy in
action and it happens pretty good here on Kauai. Thank you.
Chair Furfaro: Okay. JoAnn.
Ms. Yukimura: Thank you. I thought we did good work
yesterday, hard work, not easy at all, but I appreciate the thinking and offerings of my
colleagues and also the discussion that we had around the table. I continue to be concerned
about the across the board cuts as I have mentioned before about the smaller Departments
and Divisions. As I gave an example about Housing, it was very critical that Housing be at
the Legislature this year to talk about a very important issue where the Department of
Hawaiian Homelands (DHHL) is taking away the housing zoning credits that we have
where we require developers to build affordable housing. DHHL is able to just take all of
those credits and use it instead of the County using it for our constituency, which is the
people of Kaua`i. So, I would be in favor of the cuts if they are the...only for the
discretionary cuts and only for the larger Departments.
I agree with Councilmember Rapozo that we need to be thinking about the years
ahead and not just this year, and that is why I will be proposing an Arts & Culture
Comprehensive Economic Development Strategy (CEDS) implementation program to work
with the artists in the community on a project that can bring together arts and economic
development. We have been having some hard time getting that Arts & Culture piece of
our economic plan launched and young entrepreneurial artists have stepped forward to
work with the County on this proposal. I think that there is all of the elements for a very
successful way to build arts into the economy and service our young people, our residents,
and our visitors in a way that will make this economy prosper.
I also thought the newspaper article in today's front page of the Garden Island,
about the United States Department of Agriculture (USDA) report that farmlands are
increasing in the State, but decreasing on Kaua`i to be very timely. We have to begin to
look at how to increase food production on our island, both for self-sufficiency terms and
also for economic diversification. We have the potential for some...I mean, the basic
essential for food production is long term tenure for farmers. We have several agricultural
park proposals which will require a lot of investment of time and money, and we need to
DELIBERATION AND 5 MAY 13, 2014
PRELIMINARY DECISION-MAKING
make sure that these proposals are successful. So, I am proposing, for a very small amount,
an Agricultural Workshop where we can bring together those who have been working on
this issue for a long time. Farmers who have been very successful over the years like
Richard Ha who is a banana farmer on the Big Island, and because of his work Hawaii is
fifty percent (50%) self-sufficient in bananas. Larry Jeffs because of his work, we are thirty
percent (30%) self-sufficient in melons. To tap the brains of these people, Neil Hannahs, my
college classmate, Kamehameha Land Assets Manager, who is looking carefully at how to
give Kamehameha's Bishop Estates lands to farmers for farming and how to do that in an
effective way. I would like to bring them all together in an Agricultural Workshop where
we can meet with our farmers and our policy makers like this Council, like ADC, the
Agribusiness Development Corporation, like the Farm Bureau, and others and work
together to move toward a vision of greater agricultural production. So, my time is up. I
want to say we are doing very important work not only to stabilize the budget, but also to
prepare for the future. So, I look forward to the work that we are going to do today.
Chair Furfaro: Mr. Hooser.
Mr. Hooser: Yes, thank you, Chair. I also think we did great
work yesterday and I want to commend Councilmember Kagawa, especially for being
willing to put forth some strong measures of budget cuts. I want to reassure the people
watching on television, the millions, that none of these cuts will impact any contractual
obligations whether it is for overtime, or health care, or whatever. It is not going to
increase costs to any individuals in terms of the health care or diminish any contractual
obligations that might occur in overtime and others. I agree that these cuts are better
made by the Administration and that broad-based cuts are not the most efficient way to do
it. We asked the Administration to make those cuts and they made some, but they did not
make enough. So, we have to then go back and do the best we can. I would encourage the
Administration and the Council, the Administration, if they think they can restructure
some of these cuts better, to put those proposals forward and as long as for me personally,
the net amount does not change. Let us say for the travel for example. It is x amount of
dollars that we put up there on the table. If they want to rearrange things within their
Departments and come up with the same amount of savings, I am okay with that whether
it is in all categories, but I do not want to see those numbers increase. I want them to
decrease in terms of the savings. I believe we need to stay focused on the ball, keep our eye
on the ball and for me, the ball is that we need to increase our reserves. This budget
started out as a hallow budget with, I want to say four hundred thousand something in
uncommitted reserves and that is with...just for one (1) example. The County Attorney's
Office has a budget that was unrealistic. They are going to spend over one million dollars
($1,000,000). I believe it was budgeted much less. So, at the end of the day, I would like to
wind up with increase reserves and a budget that for once in the past six (6) years or so, is
balanced with the income coming in from tax revenue and fees equals the expenses that are
going out in operating expenses. Yes, we have to kick the can down the road a little bit
maybe in some of these areas over others, but I would like to see this Council come up with
a budget at the end of the day that increase reserves which will increase and help our bond
rating, and balances income and expenses. I think that is a responsible thing to do and I
would only put two (2) caveats on that for myself personally. I cannot support an increase
in vehicle weight tax and I would like to see a reduction in owner occupied real property tax
rates, certainly no increase. Other categories can be increased, but my main priority in
terms of the people is to protect people who are on fixed incomes. People in fixed incomes
cannot afford twenty dollars ($20) or thirty dollars ($30) or forty dollars ($40) more on their
car. They just do not have it. All of the other...their expenses are going up. The same with
their property taxes. They do not have any method of increasing their revenue to pay for
that. So, those would be my caveats as we move forward, but at the end of the day I want
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to wind up with increased reserves and a balanced budget. I also encourage the
Administration to help us here. I am looking...we ended yesterday's conversation, I did
anyway, with looking for one hundred thousand dollars ($100,000). We are looking at the
CIP budget. There is one hundred thousand dollars ($100,000) in round numbers of
Operating Funds that could be replaced by Bond Funds. So, we just need to find a project
that is not going to be funded or it is unlikely to be spent this year. We know there is tens
of millions of dollars for projects that, if they follow history, will not happen. So, we could
either look into those CIP projects and pick one (1) and take one hundred thousand dollars
($100,000) off it or we could, the Administration could offer up one (1) or offer up ten (10)
ten thousand dollars ($10,000) on ten (10) different projects, but wherever. That is a more
efficient way to do that budget cutting. Not for me or for any of us just to reach in there
and do things, but to ask them to work with us on this. I am pleased with the way the
direction is going and hope that we could have the same success if you would, as we go
through the revenue increases that are going to be difficult for us to make as well. So,
thank you all. Thank you, Chair. Thank you, to the Administration. Aloha.
Chair Furfaro: Okay. Before my time, I have a few
announcements here. So, I sense after what I have heard around the table, that between
Mr. Kagawa and Vice Chair Chock, maybe there will be a revisit of the travel pieces. So,
before we do that, and we can do it a little later today, I want you to know because we took
a vote on that, I am going to ask is it Mr. Chock's position that you would like to reconsider
that vote and we can do that later on?
Mr. Chock: Sure. Chair, the request is for us to amend that
current proposal.
Chair Furfaro: Okay.
Mr. Chock: If it takes us...it is easier to look at the best
options and consider Councilmember Kagawa as a combination, I am happy to start again
and rescind my vote.
Chair Furfaro: Okay. Why do we not plan to look at an
amendment then and we will do that a little later after you folks have had time to talk at
the break? Mr. Kagawa.
Mr. Kagawa: Well, actually I do have an amendment. I think
the fact of the matter is even with my amendment the Council will still be, second to the
Mayor's Office, the largest Department hit by this cut. So, we are actually...we are cutting
ourselves the most, but again, I think Councilmember Hooser hit the nail right on the head
in that we had large variances or lapses for Fiscal Year 2013, the CAFR. This is fact. We
had in public safety....
Chair Furfaro: Excuse me. I was just asking if you were going
to reconsider. I still have not been able to have my time. So, go ahead.
Mr. Kagawa: Yes. I am just saying that they do have moneys
in their accounts. It is just if they do not give it to us as far as where to cut, this is the only,
I think, fair way to cut every Department is to look for an account that everybody has and
reduce it. Especially the travel account, which has really blown up. If you look at the
history from 2012 to 2015, oh my goodness. I mean, I do not think it is inflation, but
anyway.
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Chair Furfaro: Okay. So, we will be shooting for an amendment
then after you folks talk.
Mr. Kagawa: Okay.
Chair Furfaro: Rather than a reconsideration. That is what I
wanted to hear from the two (2) of you.
Mr. Kagawa: Thank you, Chair. I have my amendment, but if
he wants the Managing Director to propose the amendment and we get to the same point,
then I am happy with that.
Chair Furfaro: I want to leave the discussion between the two
(2) of you.
Mr. Kagawa: Thank you.
Chair Furfaro: And we will do that before lunch.
Mr. Kagawa: Okay. Thank you.
Chair Furfaro: How is that? Now, along the way I want to make
sure I thank Mr. Bynum for the comment that he made that he said I am pretty good at
this. I think I do know some of the moving parts. You can start my time, please. I
proposed yesterday my changes. My reductions came to one hundred sixty-eight thousand
nine hundred dollars ($168,900). I do want you to know that I do plan to look at a couple
things with my savings. One (1) of them is I would like to pass out this article from
Kamehameha Schools as it relates to the agricultural community and the need to have a
system to manage our bee harvests here on the island (Attachment 1). So, I do not want to
go into discussion. I just wanted to let you know that I am looking for about twelve
thousand dollars ($12,000) here for the beekeepers. I will also be supporting with my cuts,
the idea about cultural and the arts and twenty-five thousand dollars ($25,000). I piggy-
backed on that with Councilmember Yukimura.
Next, I want to talk a little...talk about terminology here. If I can, it is really
important. I noticed that the Garden Island, and JoAnn referred to it. The Garden Island
referred to two million four hundred thousand dollars ($2,400,000) worth of cuts today, but
the reality is they are not cuts. They are IOUs. Okay? One million five hundred thousand
dollars ($1,500,000) in deferring of Other Post-Employment Benefits (OPEB) is an IOU. It
is not a cut. Please, we need to make sure we use the right terminology because yesterday
was very critical for the Council as we used Fund Balances for taxes we collected on
projects that we need and so forth. Well, that is duplicating the same thing. That is a
liability. That is a liability that we need to be aware of and that is why if at last resort we
have to go there, then we will, but I did not vote to defer that one million seven hundred
thousand dollars ($1,700,000). It is a future debt service.
So, along those lines, I also want to touch on the fact that in the revenue side that I
proposed, there was thirty-six thousand dollars ($36,000) for the Spouting Horn vendors
and that is handled as a Parks repair & maintenance (R&M) item, but I wanted to say to
the Administration, I am looking for how we are spending two hundred eighty-four
thousand dollars ($284,000) that is currently in that account? Where is the plan for that
R&M? That should be happening twice a year, that we get updated on it. So, please
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understand. So, that money of rent added actually goes and is added to the two hundred
eighty-four thousand dollars ($284,000) that is there.
I am pleased to hear from Mr. Kagawa and Mr. Chock that they will be working on a
relook at the travel. That is really important. On the staffing guides, I want to remind us
also when we talk about the positions as being half-time and so forth. Unless they are less
then nineteen (19) hours they are in reality, still entitled to benefits by Federal law. So,
please make a note of that. Nineteen (19) hours and less, people do not collect any overtime
benefits and/or medical and other retirement benefits. Twenty (20) hours starts that clock
ticking. So, please understand I think this is really important for us to recognize. Then on
the revenue cycle, I want you to know that the hotels and resort business, I know pretty
well. I do not think that the attempt to get us to the same value as hotel and resorts on
other islands is difficult and here is what I am trying to share with you. I will ask this to be
circulated if I can to the members (Attachment 2), but this is the growth on the Transient
Accommodation Tax in revenue, but the revenue is tied to the growth and average daily
rate. The average daily rate on Kaua`i is tied to the fact that the Grand Hyatt is now the
Grand Hyatt because of renovations. The Sheraton Princeville is now the St. Regis. The
Sheraton Kauai entered into a twenty-seven million dollars ($27,000,000) repositioning of
their project. Even Sue Rizzle came to us four (4) years ago, who is the Asset Manger for Le
Sera. The owners of Sheraton Princeville said, "We are prepared to revisit our tax base, but
let us get through our renovations first." These hotels are repositioned and the other hotels
that we are dealing with now are either in time share inventory and/or shared ownership.
So, there is room, but at the two dollars ($2) rate, it is probably at the top of the line. So, on
that note I would ask this be passed out and I would ask to consider my comments on this
deferral as being a future payment, but it is owed and we will start to talk a little bit about
CIP, which is where we left off yesterday. Yes, JoAnn.
Ms. Yukimura: Mr. Chair, just a process question. I did want to
propose some increases like you did on the Golf Course and there is this Park Fund issue in
terms of potential savings to the General Fund if we can use the Special Fund for some
repair & maintenance. So, I was wondering when we would be able to discuss it.
Chair Furfaro: I think we can discuss that as we are going
around thorough the CIP because some of the things that we are spending repair &
maintenance on are confusing at times under the terminology of the Principles of
Accounting. For example, the sprinkler system that was put in the at the Wailua Golf
Course is being charged to the operation as if it is an R&M item, but in reality the sprinkler
system is a capital improvement. I have always had that position because it added value to
the whole golf course. Unfortunately, that is one of the reasons we have a one million
dollars ($1,000,000) lawsuit with the Golf Course because we are carrying the debt service
of a CIP item, but we kind of ended yesterday, Mr. Hooser wanted to chat in terms of CIP.
We left Keith with some questions along with Ernie, and I would like to kind of start from
there.
Ms. Yukimura: Okay.
Chair Furfaro: I will be open to it. Yes, Mr. Kagawa.
Mr. Kagawa: Thank you, Chair. Are we going to deal with the
overtime budget cut prior or after?
Chair Furfaro: No, I heard that they also wanted to consider
that before lunch.
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Mr. Kagawa: Oh, okay.
Chair Furfaro: Okay. So, we are going to do that travel and the
overtime before we get to lunch.
Mr. Kagawa: I thought that Councilmember Nakamura just
wanted...I mean Managing Director Nakamura just wanted to address the travel. I
thought the overtime, we were getting responses from Public Works, Police, and Fire. We
got those responses. So...
Chair Furfaro: Oh, did we get them all?
Mr. Kagawa: Yes.
Chair Furfaro: Okay. So, maybe we will go there first.
Mr. Kagawa: That piece is ready. We just vote it up or down
and we will see.
Chair Furfaro: Fine. I have no problem with that. I did not
realize that. Yesterday they only finished Fire, I think, but if they got everything, we are
ready to deal with it.
Mr. Kagawa: Yes. Thank you, Chair.
Mr. Kagawa moved to Reduce Regular Overtime by 5% across all Departments,
except Public Works ($2,500 reduction in General Fund, Highway Fund, Sewer
Fund, and Solid Waste Fund) in the amount of one hundred fifty thousand three
hundred seven dollars ($150,307), seconded by Mr. Hooser.
Chair Furfaro: Okay. We have a motion and a second.
Discussion?
Ms. Yukimura: Question.
Chair Furfaro: Yes.
Ms. Yukimura: Of course I am interested in the Transportation
Agency and I am just looking at this material for the first time. What is the proposal
exactly with respect to Transportation because in speaking with the Executive yesterday,
the cuts as I understand them would result in cuts to services?
Mr. Kagawa: So, the cut to Transportation would be five
thousand one hundred thirty-three dollars and seventy cents ($5,133.70).
Ms. Yukimura: Where is that?
Mr. Kagawa: It is on the third page. Well, the comma is at the
wrong place. From one hundred two thousand dollars ($102,000), we will be cutting five
thousand dollars ($5,000). Like I said, Transportation, I can read the CAFR again, but I
have done it several times. They lapsed in 2013, I think, ninety thousand dollars ($90,000)
or something. So, they know where ninety thousand dollars ($90,000) they lapsed. They
know where those moneys are in their budgets that they have a little more than they need.
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What I am saying is that if it really crucial that they have that additional five thousand
dollars ($5,000), which I am pretty sure they do, they can pull that five thousand dollars
($5,000) out of whatever lapses. If they are getting better at tightening their budget, they
will still have seventy thousand dollars ($70,000) or fifty thousand dollars ($50,000) or
whatever left in some type of budget account. They can pull it from there. So, it is a very
small cut.
Ms. Yukimura: So, has the Administration quarried their Heads
to see whether they can live with this without cutting services?
Mr. Kagawa: I believe so.
Ms. Yukimura: I need some acknowledgment from the
Administration.
Chair Furfaro: Please come up.
There being no objections, the rules were suspended.
ERNEST W. BARREIRA, Budget & Purchasing Director: Good morning, Chair
Furfaro and members of the Council. Ernie Barreira, Budget & Purchasing Director. My
apologies for a couple of the errors. This was done very late last night and we were able to
get that transmitted to Scott this morning. This communication was sent to all County
Departments and obviously, while there are concerns about reduction in overtime,
particularly with Police, Fire, and in Public Works. They have had an opportunity to check
the numbers and because of the lack of time, I did not have the chance to speak to them on
critical issues about impacts to each Department, but they have qualified that the numbers
that were provided were correct. Beyond that, there simply was not ample time to talk
about what the impacts would be, especially Public Works continues to have some concerns
particularly because the cut last year was about two hundred forty thousand dollars
($240,000) in overtime as a result of significant shift changes and negotiations with United
Public Workers (UPW). So, I apologize Councilmember Yukimura. I cannot tell you that
we have had time in the late last night discussions to get the impact from individual
Departments. I can tell you that there are concerns. Whether they are going to be
debilitating to each Department, I cannot speak to that, but the Department Heads are
here if some commentary would be desired from them.
Mr. Kagawa: Thank you.
Chair Furfaro: Okay. I am not sure that...I am just going to ask
the question. This has now gone from twenty percent (20%) reduction to five percent (5%).
Are we accepting that?
Mr. Barreira: Much appreciated at the five percent (5%), sir.
Chair Furfaro: And we are accepting that?
Mr. Barreira: Yes, sir.
Chair Furfaro: Thank you. Mr. Bynum.
Mr. Bynum: So, some Departments were able to respond and
share their concerns and other Departments were not?
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Mr. Barreira: Mostly just to qualify that the late night
mathematics were correct, sir.
Mr. Bynum: So, I just want to make sure I heard you clearly,
Ernie. You have not had enough time to analyze this to know that true impact on all
Departments and whether there might be debilitating circumstance? Is that what I heard
you just say?
Mr. Barreira: That would be an accurate statement. Yes, sir.
Mr. Bynum: Okay. Thank you very much.
Chair Furfaro: JoAnn.
Ms. Yukimura: I think this is a question more for the introducer
of the motion. In our discussion yesterday we were talking about discretionary overtime
and overtime required by contract. The motion does not specify. So, I would like to
know...because I think if it is clear that it is overtime that does not affect services, which
means that is why we would have to cut services. The money would be required by contract
and we could not do it without cutting services. So, can we get a clarification?
Mr. Kagawa: Yes. That is why Public Works, we had that
exemption for them...
Ms. Yukimura: So...
Mr. Kagawa: And for Police, all of their overtime is
non-discretionary.
Ms. Yukimura: Well...
Mr. Kagawa: And for...
Ms. Yukimura: Okay. So, can we say that non-discretionary for
all Departments?
Mr. Kagawa: Yes.
Ms. Yukimura: Because otherwise...okay.
Mr. Kagawa: The staff took out those that could not be
touched, basically.
Ms. Yukimura: Well, is Transportation non-discretionary?
Mr. Kagawa: Well, we just feel like there is no, I guess, the law
says that the bus needs to function on overtime. However, it is five thousand dollars
($5,000) and it is in my view, a small measly amount that can be covered with their amount
that they have been lapsing every year.
Ms. Yukimura: Small measly amount for...
Mr. Kagawa: Five thousand dollars ($5,000).
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Ms. Yukimura: For...
Mr. Kagawa: I would say that is pretty small.
Ms. Yukimura: For operations that are very, very tight may not
be small, but perhaps we can ask our Executive on Transportation.
Mr. Kagawa: If the Transportation Manger wants to come up,
she can answer.
Ms. Yukimura: Okay. Thank you.
Mr. Kagawa: If it would make this...
Chair Furfaro: Wait a minute. That is my decision. I am
not...we are in decision-making. I am going to call up someone from the Administration. If
you want to consult with the Transportation people, fine, but for every decision to be calling
up Department Heads, we have a deadline. Now, have you folks been able to discuss this?
Mr. Mayor, if you want to add to the...yes.
BERNARD P. CARVALHO, JR., Mayor: First of all, thank you so much for
reconsidering this particular discussion. We have talked with all of our Department Heads
and everybody at five percent (5%) is very clear and understands that this is okay. •
Ms. Yukimura: Alright.
Mayor Carvalho: We are very appreciative of rethinking and
looking at this. So, thank you so much.
Chair Furfaro: Thank you for coming up, Mayor.
Ms. Yukimura: That is all we needed to hear.
Mayor Carvalho: Thank you.
Ms. Yukimura: Thank you.
Chair Furfaro: So, did you have additional questions for
Mr. Barreira from the Budget Team? No?
Mr. Rapozo: I have. I just had one (1) real quick.
Chair Furfaro: Go right ahead.
Mr. Rapozo: Thank you, Mr. Chair. The Police Department,
you said all of the overtime is discretionary? That is not correct, right? I heard
Mr. Kagawa say it. I am not sure if...I just want to make sure the number for the Police
Department is, the two million one hundred thousand dollars ($2,100,000), is the
discretionary overtime.
Mr. Barreira: The information that is provided came directly
from the Deputy Police Chief.
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Mr. Rapozo: Okay.
Mr. Barreira: And all of the information that was provided was
verbatim and I received his permission to provide that to all of you.
Mr. Rapozo: Okay. So, the non-discretionary overtime,
meaning the Collective Bargaining, the Holiday Pay, the Standby Pay, and all of that
overtime pay, premium pay, is not in this number?
Mr. Barreira: I believe that is, but let me get a nod from the
Deputy.
Mr. Rapozo: That is fine. I think...because the Police
overtime budget is much more than two million one hundred thousand dollars ($2,100,000),
the total overtime.
Chair Furfaro: Steve, would you come up?
Mr. Rapozo: That is a critical number because if you are
cutting into the Collective Bargaining non-discretionary overtime, then I do have a problem
with that.
STEVEN A. HUNT, Director of Finance: Steve Hunt, Director of
Finance, for the record. I believe in the sheet that you have on the front page, there is
actually a breakdown of the two million one hundred thousand dollars ($2,100,000). Of
those items, you have one million one hundred sixty-five thousand dollars ($1,650,000) at
regular sort of overtime that is discretionary. A portion of that is designated for the Field
Training, one hundred seventy-two thousand dollars ($172,000). Special Events, that
would be discretionary, fifty-five thousand dollars ($55,000). Holiday Pay would not be
discretionary. That is three hundred eighty-five thousand dollars ($385,000). Standby Pay,
again, through Collective Bargaining, not discretionary. Kauai Police Activities League
(KPAL) fifty thousand dollars ($50,000) would be. IA Investigations, I am not sure on that
one.
Mr. Rapozo: So, that number is not correct?
Mr. Hunt: Non-discretionary. Okay.
Mr. Rapozo: That number needs to be changed. The two
million one hundred thousand dollars ($2,100,000) needs to reflect the removal of the three
hundred eighty five thousand dollars ($385,000) plus the one hundred fifty thousand dollars
($150,000) because that is non-discretionary.
Mr. Hunt: Right, and if you were to base it on the total
overtime including the non-discretionary, these figures, it shows what would be the
sacrifices to hit that figure.
Chair Furfaro: Okay, let us stay with the subject matter. The
subject matter, and I asked that you folks are ready, and obviously you are not. The subject
matter was five percent (5%) on the operational items that are non-discretionary, okay? So,
if you have what Mr. Rapozo is pointing out, the three hundred eighty-five thousand dollars
($385,000) and the one hundred fifty thousand dollars ($150,000) is included in this total,
the number you gave us is wrong. Okay? Let us go back and fix it.
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Mr. Kagawa: Okay.
Chair Furfaro: Okay? We will have you come back later today.
Hold on, Steve. Question from Mr. Bynum.
Mr. Bynum: I am sorry. I will try to go down this as quick as
possible. The one million one hundred sixty-five thousand dollars ($1,165,000) is regular
overtime, right? That is...
Mr. Hunt: Correct.
Mr. Bynum: That is not...so that is discretionary? Just tell
me what the non-discretionary items are.
Mr. Hunt: The non-discretionary ...
Chair Furfaro: The non-discretionary items are the three
hundred eighty-five thousand dollars ($385,000) and the one hundred fifty thousand dollars
($150,000).
Mr. Hunt: And I would likely say the Field Training
Officers. I mean, that is overtime that would be associated with training the new recruits.
Chair Furfaro: The one hundred seventy-two thousand dollars
($172,000)?
Mr. Hunt: Yes.
Chair Furfaro: So, we have three (3) numbers there, Tim.
Mr. Bynum: Okay.
Mr. Hunt: Four (4). The one hundred seventy-two thousand
eight hundred dollars ($172,800) for the...
Chair Furfaro: Please go back and fix it.
Mr. Hunt: I will.
Chair Furfaro: Go ahead.
Mr. Bynum: I just want to say that I really expected
aggressive cuts to come consistent with that I heard is, there is this fat and things that the
County does not need to do and these cuts now has gone from hundreds of thousands of
dollars to now going to be revised again, less than one hundred dollars ($100). It is still
going to take one hundred thousand dollars ($100,000). I want to hear from the Police
Department if this is so, does that mean KPAL is going to get cut and Citizens Police
Academy instructors and staff is going to get cut, and Underage Activity Investigations are
going to get cut? These are what? We are cutting. I want to know. Are we going to cut
these things because of this provision?
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Chair Furfaro: First of all, let us make sure we understand. You
are not cutting the fifty thousand dollars ($50,000) from KPAL. You have this on the list as
a five percent (5%) of that is going to be reduced, right?
Mr. Hunt: Yes.
Chair Furfaro: So, clarify that for Mr. Bynum, okay?
Mr. Bynum: So, five percent (5%) of regular overtime, five
percent (5%) of one million one hundred thousand dollars ($1,100,000), somebody help me.
How much is that?
Mr. Barreira: I think if you look at the narrative that is
provided by the Deputy Chief, he looked at the likely potential impacts on services should
the different percentages be applied, and that is what the disclosure was that was provide
to the Council this morning. So, we are going to go back and recount the numbers. It might
have an impact.
Mr. Bynum: I am sorry. What was this disclosure that
was...this is just saying where the overtime time is distributed. It does not say where the
Police Department is going to choose what activities are currently involved in that they are
going to cease. That is what I want to know.
Mr. Hunt: Okay.
Mr. Bynum: Because of this cut.
Mr. Hunt: If I can, the number that would be considered
discretionary would be one million three hundred...
Chair Furfaro: Steve, go back and fix it. We are not going to sit
here. You go back and fix it. We left it yesterday as the discretionary amounts. What is on
this does not cover that, okay? Go back and fix it. We have a lot of business to cover today.
I will bring it back when we have an agreement and the answers to Mr. Bynum's questions,
okay?
Mr. Bynum: Do I still have the floor, Chair?
Chair Furfaro: Yes, go ahead.
Mr. Bynum: So, I read further in the document. They are
saying that they are going to take fifty thousand dollars ($50,000) from Underage Activities
Investigations. So, we are going to stop doing Underage Activities Investigations at the
Police Department because of this cut. Is that correct?
Mr. Hunt: You are going to have to ask the Police how they
intend to manage it. The cuts are up to you in terms of controlling the purse strings. How
they manage the budget is up to the Police.
Mr. Bynum: Okay. I would like those answers and I would
like them...I would like every Department to be able to do that analysis when we do these
across the board cuts. I will not support any cuts in overtime. This is not down to less than
one hundred fifty thousand dollars ($150,000) and we are going to stop doing things like
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this and create these anomalies what Mr. Barreira just said, unknown. There may be
critical problems that are going to arise. I mean, the Mayor, I understand his statement
saying we are grateful it is not hundreds of thousands and now it is down to one hundred
fifty thousand dollars ($150,000). So, we will accept that. That is a big picture look at it,
but the small picture look is this is...to save one hundred fifty thousand dollars ($150,000)
and one hundred eighty-five million dollars ($185,000,000) budget, we are creating all of
these turmoil. It is not worth it anymore. I beg our colleagues, just call for the question
and vote these cuts and overtime down.
Mr. Kagawa: Let us do it.
Mr. Bynum: They are not meaningful anymore. They are not
meaningful in terms of the whole context and they are going to create problems. The Police
just told us in writing that they are going to stop doing Underage Activities Investigations
because of this cut. That, I just...I cannot see how that is a wise decision to save one
hundred fifty thousand dollars ($150,000).
Chair Furfaro: You got the instructions from the Chair.
Mr. Barreira: Yes.
Chair Furfaro: Go back and fix it.
Mr. Hunt: Will do.
Chair Furfaro: You are not ready to make this presentation.
Okay, we will probably hope to see you at mid-day. Let us come back and talk about the
CIP areas. If we could have Keith back up, I would appreciate it.
KEITH SUGA, CIP Manager: Good morning Chair, Vice Chair, and
Councilmembers.
Chair Furfaro: Good morning.
Mr. Suga: Keith Suga, County CIP Manager.
Chair Furfaro: Yes, and actually, I am going to give Mr. Hooser
the floor. Mr. Hooser, as we ended the day yesterday you had some specific questions.
Mr. Hooser: I did.
Chair Furfaro: About CIP. So, let us take care of that this
morning.
Mr. Hooser: Thank you. There was approximately one
hundred two thousand dollars ($102,000) of CIP projects that were General Fund funded.
So, my question to the CIP Manager was what Bond Fund projects could we identify to
transfer that one hundred two thousand dollars ($102,000) out of the Bond Fund into the
General Fund and therefore put that General Fund money back into our reserve? So, that
was my question and whether it was one (1) project or whether it was multiple projects. We
spoke earlier. Do you want to restate your position?
•
DELIBERATION AND 17 MAY 13, 2014
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Mr. Suga: Sure. First of all, I do want to say I do
appreciate Councilmember Hooser's creativity because that...I similarly did an exercise for
the March submittal. So, as you requested yesterday, I went back and I looked through the
Bond funded projects that we currently have, and what I found was a lot of the projects that
we have Bond funded are projects that are in motion in terms of either they are in the
design phase, or the design is completed, and we are at the construction phase. A lot of the
projects that we have proposed for the Fiscal Year 2015 budget, majority of them are the
lighting projects at the park facilities for which the designs are complete. So, we are
proposing to move those moneys towards construction. So, as I scanned through all of the
Bond funded projects, I see a lot of projects that are committed and in motion as well as the
new projects that are being proposed for construction. We discussed several projects,
Councilmember Hooser and I, such as Aliomanu Road that budgeted for about just under
three million dollars ($3,000,000), and that is a project that we are currently awaiting
agreements with Department of Hawaiian Homelands to be finalized so that we can
advertise and go out for construction for that project, as well as the Moana Kai project
which is about one million five hundred thousand dollars ($1,500,000) worth of construction
funds that we are waiting U.S. Army Corps of Engineers' approval to move forward with
that project for construction. So, what I would fear is if funding was removed from some of
these Bond funded projects, that at the time of construction advertisement or design
advertisement, that we would not have sufficient funds to award. So, at this time, I was
not able to identify Bond funded projects that could supplant the one hundred two thousand
dollars ($102,000).
Mr. Hooser: Questions?
Chair Furfaro: You have the floor.
Mr. Hooser: Okay. Thank you. So, what is the total amount
of Bond funded projects nonetheless, round numbers?
Mr. Suga: About twenty-three million dollars ($23,000,000).
Mr. Hooser: About twenty-three million dollars ($23,000,000).
So, how long has the `Aliomanu project been on the books?
Mr. Suga: I am not sure. It was on the books prior to me
coming.
Mr. Hooser: For years?
Mr. Suga: Yes.
Mr. Hooser: For years, I think. As we forecast looking at next
year, we are sitting here next year doing the budgets if we are still around, what percentage
of these projects will be complete?
Mr. Suga: That is a fair question. A couple years ago, our
percentage of expenditure and encumbrance of CIP funds was about twenty-three percent
(23%). This year, we reported through April it was about forty percent (40%). So, I am
encouraged that we will...I am confident that we will continue to make improvements with
that percentage. With the capacity in the Department of Public Works Engineering
Division under the leadership of Michael Moule, I am even more excited at the efforts that
are going to be happening there. Just as an example, we are currently, or I just recently
DELIBERATION AND 18 MAY 13, 2014
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saw Puhi Road plans that were close to being one hundred percent (100%) complete, which
would allow us to submit that to Hawai`i Department of Transportation (HDOT) to be able
to have Federal Highways obligate their Federal moneys for us so we can go out to
advertise for that project. Similarly, Engineering has been working on the various collector
roads design work in-house. I just saw ninety percent (90%) plans for those as well. So, I
see the change in the Engineering Division and I am excited about the possibilities that are
ahead for this upcoming year.
Mr. Hooser: I think the reality though is, I appreciate your
optimism. I think the reality of it is a year from now there will be a significant amount of
money that has been unencumbered or unspent. I mean, I think if you look at history every
year it is like that. Every year these projects move forward and we do the best we can, but
every year there is money unspent. So, that is my frustration. I would think that we could
fine one hundred thousand dollars ($100,000) that will not keep any of these projects from
moving forward. The Aliomanu project is just under three million dollars ($3,000,000) and
it has been on the books for a long, long time. If one hundred thousand dollars ($100,000)
was taken off of those Bond Funds and it goes out to bid and so we do not know what the
bids would be. So, we do not know if we need that three million dollars ($3,000,000) or not,
right, because we will not know until the bids come in?
Mr. Suga: Based on our latest estimates from the
consultants, they have indicated that is the projected estimate that we would need. Now,
again, until the bids come in, we will not know for sure.
Mr. Hooser: When will the bids come in?
Mr. Suga: As soon as we resolve some items with
Department of Hawaiian Homelands, we will be able to go out and advertise the project.
Mr. Hooser: How long have we been negotiating with
Department of Hawaiian Homelands?
Mr. Suga: I do not have a date for you right now.
Mr. Hooser: Okay. So, what would be the worst case
situation if we transferred one hundred thousand dollars ($100,000) off of the Aliomanu
project and then went out to bid and the bids came in above what moneys is there?
Mr. Suga: We would not be able to aware the construction
contract and we would either have to potentially modify the scope, reduce scope, or we
would have to come forward with a Money Bill.
Mr. Hooser: So, you would have to value engineer it,
reengineer it, or come back and ask the Council for one hundred thousand dollars
($100,000)?
Mr. Suga: Possibly, yes.
Mr. Hooser: Okay. So, it would not stop the project though?
LYLE TABATA, Deputy County Engineer: Chair, Lyle Tabata, Deputy
County Engineer, if I may.
DELIBERATION AND 19 MAY 13, 2014
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Chair Furfaro Okay. You may, but keep it very short because I
am not going to parade Department Heads up here. We had three (3) weeks of it.
Mr. Tabata: I understand. This project is on the verge of
being launched. Our County Attorneys are working on a right-of-way agreement. Instead
of doing an easement, which we originally planned with Department of Hawaiian
Homelands, they suggested we go the route of a right-of-way. As soon as we get that, we
are going to launch this project.
Mr. Hooser: Okay.
Mr. Tabata: So, it is eminent at this point in time. We feel
that if we touch this project in particular, we risk quite a bit. As you mentioned, it has been
a long time. This is before I came aboard.
Mr. Hooser: Okay. So, just one (1) final question, Chair, and
then I am done.
Chair Furfaro: You still have the floor.
Mr. Hooser: So, what would be your preference? I mean, we
had the discussion earlier, you were in the audience, and we are talking about doing across
the board cuts, and we would much prefer to have the Administration suggest where these
funds be taken from. So, do you have any suggestions?
Mr. Tabata: I do not at this time because I went back to work
on overtime with Ernie, that was my charge last night.
Mr. Hooser: Okay.
Mr. Tabata: I honestly cannot say right now. I have to really
sit down and go through it. I would not want to jeopardize other projects. As Keith
mentioned, we are really making strides right now and I feel it would better than forty
percent (40%) that we are going to encumber. So, I mean, we have been climbing this hill.
That is all I want to say, and we are on the verge that great things are going to start
happening. So, I cannot, unless I really sit down and go through with a fine tooth comb.
Mr. Hooser: I understand and I appreciate the time you are
putting in with the overtime issues and everything else.
Mr. Tabata: Thank you.
Mr. Hooser: So, thank you. Thank you, Chair.
Chair Furfaro: Okay. Any further discussion, and I think just
for the general thought of this, I want people to understand that funding for the General
Fund as Mr. looser is trying to pursue the question, there is one hundred two thousand
dollars ($102,000) that he is trying to see if these pieces could be done within the Bond
Fund so that the one hundred five thousand dollars ($105,000) or the one hundred two
thousand dollars ($102,000) becomes available for this budget series if you are not following
the discipline there. Do you have anything to add, Keith? Okay. Mr. Rapozo? No? No?
Mr. Hooser, thank you for your questions.
DELIBERATION AND 20 MAY 13, 2014
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There being no objections, the meeting was called back to order, and proceeded as
follows:
Chair Furfaro: Now what I am going to do is I am going to take
a ten (10) minutes recess now, okay? I want you folks to have an opportunity to talk about
your ten (10) minutes as it related to the revenue cycle. So, if you can have your thoughts
together. So, we are going to take a ten (10) minute recess now and come back and talk
about revenues.
There being no objections, the Committee recessed at 10:12 a.m.
There being no objections, the Committee reconvened at 10:28 a.m., and proceeded
as follows:
Chair Furfaro: Ernie, may I have you up for a moment?
There being no objections, the rules were suspended.
Chair Furfaro: How long before we can revisit the subject?
Mr. Barreira: I would say, Chair, within the hour.
Chair Furfaro: Okay, within an hour.
Mr. Barreira: Yes, sir.
Chair Furfaro: So, we will come back to that and then I will go
into the revenue cycle now then. With the revenue cycle, I am going to let each
Councilmember have time for ten (10) minutes for them to have a presentation.
Mr. Barreira: Very good, sir. Thank you.
Chair Furfaro: Yes?
Mr. Bynum: As I said when we started this process, I do not
want to put forward any revenue proposals until we finish the cuts and additions so we
know what the target is. To do it short of that...
Chair Furfaro: Okay. Do you have some more cuts?
Mr. Bynum: I am sorry.
Chair Furfaro: Do you have some more cuts?
Mr. Bynum: I do not think we are done with cuts and
additions.
Chair Furfaro: Members?
Mr. Bynum: I did not even do any additions, right?
Chair Furfaro: No, we did not do that. Any more cuts?
Mr. Kagawa: We have two (2).
DELIBERATION AND 21 MAY 13, 2014
PRELIMINARY DECISION-MAKING
Chair Furfaro: But they are both not ready.
Mr. Kagawa: Both not ready.
Mr. Rapozo: I am done.
Chair Furfaro: JoAnn.
Ms. Yukimura: Shall I make a proposal about freeing up some
General Fund money?
Chair Furfaro: Is that what you want to do?
Ms. Yukimura: Yes, which is like a cut.
Chair Furfaro: And how that is like a cut?
Ms. Yukimura: Yes.
Chair Furfaro: Okay, well let us hear from you then.
Ms.Yukimura: Okay. Well, I mean we are still...I do not have a
paper to circulate, but I want to propose that one hundred thousand dollars ($100,000) or
less of repair & maintenance projects in Parks be placed under the 209 Fund which has two
hundred eighty-four thousand dollars ($284,000) in it unspecified.
Chair Furfaro: That was my question earlier. Parks does not
have and has not made a proposal to us on what they are spending the two hundred
eighty-four thousand dollars ($284,000). That is what I opened this morning with. So, why
would we add and not know what the proposal of what the two hundred eighty-four
thousand dollars ($284,000) is for?
Ms. Yukimura: Sorry.
Chair Furfaro: I said, we do not know what the two hundred
eighty-four thousand dollars ($284,000) is going to be used for, so why would we add money
to an account we do not know what is already earmarked for?
Ms.Yukimura: No, we are not adding money. We are cutting
from the General Fund moneys that...
Chair Furfaro: You want to take out one hundred thousand
dollars ($100,000)?
Ms. Yukimura: Take out one hundred thousand dollars
($100,000) from the Parks moneys that are...and use the two hundred ninety thousand
dollars ($290,000)...is that it? 209 Fund, to fund those repair & maintenance items in the
Parks budget.
Chair Furfaro: Okay. Can I have both Ernie and Steve up?
DELIBERATION AND 22 MAY 13, 2014
PRELIMINARY DECISION-MAKING
Mr. Rapozo: Mr. Chair, the 209 Fund, is that the Spouting
Horn?
Chair Furfaro: That is the vendors...
Ms. Yukimura: Yes.
Chair Furfaro: ...money that earlier this morning I spoke about
that that account has two hundred eighty-four thousand dollars ($284,000) in it.
Ms. Yukimura: And here is the Ordinance that governs that
fund.
Chair Furfaro: I understand how it works so I do not need a
copy.
Mr. Rapozo: It was my amendment that put the money in the
fund.
Chair Furfaro: I think so, yes.
Mr. Rapozo: But they could not use it for anything else. I am
very familiar with it.
Chair Furfaro: Okay.
Ms. Yukimura: But it does say, "The Council shall appropriate
any fees paid in." That is our job.
Chair Furfaro: Okay, hold on. Steve, you both understand the
two hundred eighty-four thousand dollars ($284,000) that is in the 209 account is what we
are talking about?
There being no objections, the rules were suspended.
Mr. Hunt: Yes.
Chair Furfaro: And the Council has the power to make
adjustments to that account, probably not necessarily in this format. I am not sure. I
would have to revisit the Ordinance, but do you have any commentary about any conditions
already committed to on that two hundred eighty-four thousand dollars ($284,000)?
Mr. Hunt: The current budget before you on page 268 of the
budget proposal actually identifies where the 209 Funds are being budgeted for, repair &
maintenance and contingency for facilities. Those are spelled out. What is not spelled out
is what those funds are going to be used for.
Chair Furfaro: Yes, that is what I am saying. We were supposed
to get a report on a pretty regular basis, but we have not gotten a report. We do
understand it is for R&M as it relates to Parks.
Mr. Hunt: And I believe when Director Lenny Rapozo was
up here speaking about the funds from the 209 Fund, that a portion of that, in fact a large
DELIBERATION AND 23 MAY 13, 2014
PRELIMINARY DECISION-MAKING
four hundred thousand dollars ($400,000), I believe, which included some of the fund
balance was going to be used on renovations for the facilities at Spouting Horn itself. He
said it was time that we put money back into the bathrooms and renovate the Spouting
Horn area which is the economic driver that provides funding for that.
Chair Furfaro: Okay.
Mr. Hunt: How much of the operating will go in versus how
much fund balance will go in, I cannot speak to that. I think I would prefer that the Parks
Director speak to that.
Chair Furfaro: Okay. Well, what we are here to do is we are
here to hear from a Councilmember on what her desires are for that money. So, just so we
are all on the same page and where we are at on that money, I am going to give the floor to
JoAnn. JoAnn.
Ms. Yukimura: So, the Council is owed a detailed plan for how
these moneys are going to be used. That is part of the budget process and we have not
gotten that and to put most of those moneys back into Spouting Horn does not make sense
to me. I mean, those moneys are really to be used for Parks and Recreation's at-large. That
is the intention of the law. The law says that they shall be used for repair, maintenance,
and improvement projects. So, to me, that is CIP, for Parks and Recreation facilities. They
shall not be used for salaries and other personnel expenses, but it does say, "The Council
shall appropriate any fees." So, what I would like to propose is that one hundred thousand
dollars ($100,000), unless we see what the plans are and approve those plans for
expenditure, we take one hundred thousand dollars ($100,000) out of this fund, give the
Administration the discretion to use that moneys, and replace the General Fund moneys
that are being used for the Parks Department in repair & maintenance. I have identified
about two hundred thousand dollars ($200,000) of my own, and I can propose those. R&M
buildings on page 200, repair & maintenance supplies like sprinkler systems one hundred
fifty-five thousand dollars ($155,000). Let us see...R&M building again on page 210, R&M
equipment twenty-four thousand dollars ($24,000), sixteen thousand dollars ($16,000), and
then make General Fund moneys available either for the reserve or for the additions that
we have.
Chair Furfaro: Do you have any comments?
Mr. Hunt: Yes.
Chair Furfaro: If not, I want to dismiss you.
Mr. Hunt: Okay. I do see Director Rapozo if they...he has
some specificity as to the use of the 209 Fund that is in the current Operating Budget.
That would be my only concern, that we have not consulted with the Director for Parks &
Recreation, but in terms of the appropriation just basically moving. Currently, items that
are general funded within Parks that are R&M in nature into this account to identify how
this two hundred eighty-four thousand dollars ($284,000) will be used, that seems...it is not
any kind of supplanting that would be an inappropriate use of the funds. So, I do not see a
problem with that.
Mr. Barreira: Chair?
Chair Furfaro: Yes.
DELIBERATION AND 24 MAY 13, 2014
PRELIMINARY DECISION-MAKING
Mr. Barreira: May I make a comment, sir? The only thing that
we would vet, and you are looking at one hundred thousand dollars ($100,000) which is a
conservative amount, which is good. One of the things...historically the fund has been used
for, as you are all well aware, is unexpected repair & maintenance requirements that may
come up during the course of the year and we understand now that the law mandates that
we come to the Council even if those situations arise, to expend any money. So, we would
like to hopefully keep some resources available in that fund to continue to be able to tend
those unexpected repair and maintenance items.
Ms. Yukimura: I am not planning to touch the contingency which
you already have in the fund.
Chair Furfaro: Excuse me. Mr. Kagawa has a question.
Mr. Kagawa: Thank you, Chair. Just process question. I
thought this decision-making is about plus/minuses (+/-) that will affect either...add to our
surplus or reduce our surplus. It seems like something that could perhaps be done at a
Council Meeting or a Committee Meeting where...
Ms. Yukimura: This will add to our surplus.
Mr. Kagawa: This is just a wash in my view. We are taking
from one account and putting it in another account. We are not adding or subtracting to
our overall surplus of deficit.
Ms. Yukimura: We are because by freeing up the General Fund
moneys it is like cutting them.
Chair Furfaro: You need to...
Ms. Yukimura: Cutting them out of the budget.
Chair Furfaro: You need to put this in a proposal to us.
Ms. Yukimura: Yes.
Chair Furfaro: You want to take one hundred thousand dollars
($100,000) out of that account. You have to earmark where it is going, which will then
loosen up the money.
Ms. Yukimura: Okay.
Chair Furfaro: You need to put that in proposal.
Ms. Yukimura: Alright. Thank you. We will get that.
Chair Furfaro: That is on that item where we need to be.
Mr. Rapozo.
Mr. Rapozo: I appreciate that. I was just going to say,
Mr. Chair, proposals should be done in writing.
Chair Furfaro: Yes.
DELIBERATION AND 25 MAY 13, 2014
PRELIMINARY DECISION-MAKING
Mr. Rapozo: I need to not (inaudible). I think it has to be here
so we can...and just like your proposal yesterday for the forty thousand dollars ($40,000),
the one...
Chair Furfaro: Yes, yes. The forty thousand dollars ($40,000) on
the duplication.
Mr. Rapozo: In my opinion is not fair to do that cut and the
addition in one (1) motion, and I would expect all of us to follow that same rule.
Chair Furfaro: Yes. So, we did my reduction, we will leave it at
that, and JoAnn, if you would like to make this as a proposal go right ahead. Put it in
writing for us.
Ms. Yukimura: Okay. Thank you. I did say yesterday that I had
a proposal to increase revenues as well.
Chair Furfaro: Okay. Let us make sure we understand that
pace here. Are we finished with cuts?
Mr. Kagawa: For now.
Ms. Yukimura: Except for the pending.
Chair Furfaro: The two (2) pending items.
Ms. Yukimura: Two (2) are with Ross.
Chair Furfaro: Are there anymore reductions proposals? None?
Okay. Now, is there anymore dialogue on CIP? None? Then I said before the break when
we come back we are going to be addressing revenues. I said I was going to give everybody
ten (10) minutes if they have something. Yes, Mr. Bynum.
Mr. Bynum: Sorry. I do not mean to belabor it, but if we still
have additions and we vote for them, then it changes the revenue target. So, I will just
repeat my request from the beginning that after we know what the target is and we are
done with both take away and additions, we take a break so we know what the target is and
then make it then.
Chair Furfaro: Okay. This is my beginning statement for you
folks. When nobody would let us take the straw vote on the revenues it is kind of that kind
of proposal as that revenue is a moving target that is in the budget, but you want to go to
additions, and we do not know what we are going to actually have for revenues, that is
good. I have no problem doing that discussion now. I would prefer that we are doing and
know what pot we have before we do any additions, but if you want to do the additions first,
I am okay with that. JoAnn.
Ms. Yukimura: I think it could be useful to have a discussion on
the revenues without making firm decisions because it gives us an indication of how tight
or how much leeway we have. I do not know what my other colleagues think. I can go
either way.
DELIBERATION AND 26 MAY 13, 2014
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Chair Furfaro: Okay. To the Clerk, I want to work on Provisos
now. We are going to do revenues after lunch, okay? Let us work on Provisos for the
budget. We have some. These are housekeeping items. Do we have those Provisos to
introduce? Looking to the staff, do we have Provisos?
Mr. Kagawa: I have one (1).
Chair Furfaro: You are introducing a Proviso?
Mr. Chock: Housekeeping.
Chair Furfaro: Housekeeping.
Mr. Chock: Chair, we have on the Operating Budget Provisos
housekeeping amendments. Chair, if we could circulate those and have a motion for that.
Mr. Chock moved to approve Housekeeping Amendments to Operating Provisos,
seconded by Mr. Kagawa.
Mr. Chock: Thank you.
Chair Furfaro: Okay. You can have the floor to talk about these
Provisos that...
Mr. Chock: Thank you, Chair. They are pretty
self-explanatory. You are looking at just sentence structure and some grammar changes. If
you go through it, they are highlighted in your packet.
Chair Furfaro: They are highlighted in yellow?
Mr. Chock: That is correct. Nothing of substance in terms of
the content.
Mr. Bynum: Housekeeping.
Mr. Chock: Any questions?
Mr. Rapozo: Yes, I have a question, Mr. Chair.
Chair Furfaro: Go right ahead.
Mr. Rapozo: I just...I mean, am I missing something? The
Kauai and the Hawai`i? We are taking out Hawaii and adding Hawai`i, we are taking out
Kauai and adding Kaua`i?
Mr. Chock: Where is that? What page is that?
Mr. Rapozo: Section 15. I mean, is there like a trick question?
You are testing us?
Mr. Chock: That is the new Kaua`i.
DELIBERATION AND 27 MAY 13, 2014
PRELIMINARY DECISION-MAKING
Mr. Rapozo: Oh, I see. Is there an explanation for that? I am
just curious.
Chair Furfaro: Excuse me, you are going to have to go on the
microphone if you are going to get an explanation from the staff.
Mr. Chock: So,.just clarification. It is to stay the same just
on those two (2), correct.
Mr. Bynum: Good catch.
Chair Furfaro: That is under Section 15.
Mr. Chock: Section 15.
Chair Furfaro: Stay the same. Okay.
Mr. Rapozo: I know I am tired, but...
Mr. Chock: You are seeing double.
Mr. Rapozo: Yes, okay, and it happens again. I mean, it is
like it is all. All of the Kauai. So, maybe we have to housekeep the housekeeping.
Chair Furfaro: Okay.
Mr. Rapozo: It really has no effect. It just...
Mr. Bynum: If it is good, we can pass it...
Chair Furfaro: Excuse me let me ask, are there any more
Provisos?
Mr. Kagawa: Yes.
Chair Furfaro: There are? Okay, I am not going to act on this
until after lunch. Everybody gets a chance to work through it. Mr. Kagawa.
Mr. Kagawa: Yes, I have a Proviso amending the way we, well,
currently we do not post any signage when we have large construction contracts and my
Proviso is going to say that for every contract over two hundred fifty thousand dollars
($250,000) that they will have to put up a sign similar to what the State puts up as to who
is the contractor, what is the cost, what work is being done, and this is recommended by
former Councilmember Bob Yotsuda. He said that they had a recent project, Department of
Water project that lasted long. It impacted the community terribly with dust and noise. He
said it looked like the County was not even really inspecting that project and he said calls
were made by himself to Public Works and they did not know who the contractor was. I
think he just said that if the taxpayers are paying for the bill, then we should know who is
working on the contract, what is being done, who can we call if we are inconvenienced, and
in the response we got from Public Works, it will cost six hundred dollars ($600) to put up a
sign to put up a sign. My feeling is that if the taxpayers are the one footing the bill then
they should know without having to search and be frustrated with knowing who is doing
the work and who can they call if they feel like they are being inconvenienced. I think it
DELIBERATION AND 28 MAY 13, 2014
PRELIMINARY DECISION-MAKING
just brings accountability to our contracts that we contract out. So, I do not know if
members feel comfortable about that amendment, but I think it is a reasonable request.
Those of you who lived in Wailua Houselots, I think, know about that project.
Ms. Yukimura: Is that being passed out?
Chair Furfaro: Is that being passed out or is it being worked on?
Mr. Kagawa: Do you folks have it? I know I saw a draft
earlier.
Mr. Chock: Chair, if I can make a clarification too. I think
what occurred in the process here for the Kauai and Hawai`i's were just automatic correct
happened on the revision. So, it is in reference to the okinas that were added and it is in
two (2) Sections, Section 24 and Section 15 as noted by Councilmember Rapozo.
Chair Furfaro: So, will you say that one (1) more time please,
very clear to everybody so we know?
Mr. Chock: Very good.
Chair Furfaro: There was some talking going on at the time. Go
ahead.
Mr. Chock: So, the housekeeping measure here would be for
adding okina to Kauai and Hawaii. In the process of the change, automatic correction
changed all of them so they are all showing up as correct at this moment. So, those are the
two (2) Sections, Section 24 and Seton 15, in question.
Mr. Rapozo: So, there is no change. It is just because the
automatic correction, when you put in the new language?
Mr. Chock: It corrected the old one as well. Thank you.
Mr. Rapozo: Okay.
Chair Furfaro: Great observation. Mr. Kagawa, you still have
the floor. Your piece has been passed out.
Mr. Kagawa moved to add a new proviso to the CIP Budget proviso to read: For all
Capital Improvement Projects that utilize $250,000 or more of County funds,
construction signage indicating the name of the project, estimated cost of the project,
project description, estimated start and completion date, name of contractor, and
contractor contact information shall be posted for public information purposes,
seconded by Ms. Yukimura.
Chair Furfaro: We have a second and now discussion, please.
Mr. Kagawa: And if I can just clarify again, with a personal
request that we made to Public Works, they said the cost would be approximately six
hundred dollars ($600) per sign.
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Mr. Bynum: I just want to know, is there any provisions about
what type of signage we are talking about, like you mentioned the State? I know generally
those signs are up there for political reasons. It is like, look what your Governor did for
you, right? I like your idea though for the reason. So, I would hope that sign would be this
big on the construction site so people could get that, but not the big highway sign that stays
up often way too long. So, I think it is a really good idea that would make people informed
and I support it. I just would...I would have difficulty supporting it if it is going to be these
big signs like the State does.
Mr. Kagawa: I would say, if I can, Mr. Chair, respond?
Chair Furfaro: Yes, you have the floor.
Mr. Kagawa: I would say that if we pass the Proviso we could
work with Public Works and make sure that they are going to do it appropriately and like
you said, not use it as it is for political reasons or what have you, that is just goes up at the
construction site and it comes down when then construction is completed.
Mr. Bynum: Right. Thank you.
Mr. Kagawa: Thank you.
Mr. Hooser: Another question.
Chair Furfaro: So, yes. Let me just say, so, this is basically
what we have right now which indicates the name of the project, the estimated cost of the
project, the project description, the estimated start date, the estimated completion date, the
name of the contractor, and the contractor's contact information shall be posted on this
public sign. That is what it reads, and the refinements will come later, I think, is what you
are saying? Mr. Hooser, you have the floor.
Mr. Hooser: Yes, just a clarification. Who pays for the sign?
The contractor of the County?
Mr. Kagawa: I would hope the contractor, but I assume the
County.
Mr. Hooser: So, I think you can make this a part of the
contract, right?
Chair Furfaro: Yes, I would think part of the contract issue
awarded would require them to put this sign up at their cost.
Mr. Kagawa: I stand corrected. I believe the contractor.
Mr. Hooser: Okay. Thank you.
Chair Furfaro: Okay. Further discussions? I think as
Mr. Kagawa said, it can be further refined in other words here, but the cost is by the
winning contractor. Mr. Bynum.
Mr. Bynum: I will just take a minute for one (1) question.
This is all public record I assume. Is there an easy way for citizens to access this
DELIBERATION AND 30 MAY 13, 2014
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information on the web and is that something we could move towards, but do not answer
that question now. This is all public information I assume. There is no legal restriction to
this?
Chair Furfaro: No, it should be. There is no legal restriction.
Mr. Bynum: Okay. Thank you.
Chair Furfaro: So, any further discussion on this first Proviso, or
this is the second Proviso? I am sorry.
Mr. Rapozo: Call for the question.
Chair Furfaro: Okay. We have a motion and a second. Do we
have that second, Jade?
Ms. Yukimura: Yes.
Chair Furfaro: Yes, we do. Okay. Roll call vote, please.
The motion to add a new proviso to the CIP Budget proviso to read: For all Capital
Improvement Projects that utilize $250,000 or more of County funds, construction
signage indicating the name of the project, estimated cost of the project, project
description, estimated start and completion date, name of contractor, and contractor
contact information shall be posted for public information purposes was the put, and
carried by the following vote:
FOR ADDITION: Bynum, Chock, Hooser, Kagawa,
Rapozo, Yukimura, Furfaro TOTAL— 7,
AGAINST ADDITION: None TOTAL— 0,
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL— 0.
JADE K. FOUNTAIN-TANIGAWA, Deputy County Clerk: Seven (7)
ayes.
Chair Furfaro: 7:0. Can we go back to the original Proviso that
was put in there? Is there additional work that needs to be done there now that we
understand what happened with the electronic? It is pau? It is pau, right? So, I will give
you the floor and then I will ask for a motion and a second.
Mr. Chock: I think we might have a motion and a second
already.
Chair Furfaro: Oh, do we already have a motion and a second?
Okay. Thank you. Anything more you want to say? If not, roll call vote, on Mr. Chock's
Operating Budget statement.
The motion to approve Housekeeping Amendments to the Operating Budget
Provisos was then put, and carried by the following vote:
FOR AMENDMENT: Bynum, Chock, Hooser, Kagawa,
Rapozo, Yukimura, Furfaro TOTAL— 7,
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AGAINST AMENDMENT: None TOTAL— 0,
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL— 0.
Ms. Fountain-Tanigawa: Seven (7) ayes.
Chair Furfaro: I was reading something. I am sorry.
Ms. Fountain-Tanigawa: Seven (7) ayes. We have one (1) more.
Mr. Chock: Chair, I have one (1) more CIP Proviso
amendment.
Chair Furfaro: I am going to recognize Vice Chair Chock. We
have one (1) more CIP amendment.
Mr. Chock: Yes. Circulated is just another housekeeping,
just some small changes again, but this would be to the CIP Budget Provisos. So, if we
could have a motion to receive those...I mean, accept those.
Mr. Bynum moved to approve the Housekeeping Amendments to the CIP Budget
Provisos, Section 3-12, seconded by Mr. Rapozo.
Mr. Chock: Thank you.
Chair Furfaro: Discussion?
Mr. Chock: Seeing none.
Chair Furfaro: Okay, do a roll call vote on this Proviso.
The motion to approve Housekeeping Amendments to the CIP Budget Provisos,
Section 3-12 was then put, and carried by the following vote:
FOR AMENDMENT: Bynum, Chock, Hooser, Kagawa,
Rapozo, Yukimura, Furfaro TOTAL— 7,
AGAINST AMENDMENT: None TOTAL— 0,
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL—0.
Ms. Fountain-Tanigawa: Seven (7) ayes.
Chair Furfaro: Seven (7) ayes. So, we are taking of there. Is
any more housekeeping items? Okay. If not, the question now is we are at...Ashley, are we
at negative two million nine hundred forty-three thousand dollars (-$2,943,000)? Did she
hear me? I cannot see it. This is the worst place to be. Negative three million two hundred
twenty-four thousand dollars (-$3,224,000) at this point. Now, if I am understanding,
people want to have a discussion about additions when our checkbook is negative. So, we
can start...oh, you have another Proviso?
Ms. Yukimura: Inaudible.
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Chair Furfaro: Oh, we are ready for the cuts? I am ready to take
it. We are not ready? We are not ready on the other two (2) cuts yet? Discussion about
additions at this point? Mr. Hooser.
Mr. Hooser: Yes. I have a small addition under Economic
Development. It will be passed it. It is for agriculture and I had tried to propose some cuts,
and the cut I had to match this specific one unfortunately did not make it through.
However, let the record reflect of my enthusiasm to support other people's cuts. Hopefully,
it warrants the twenty-three thousand dollars ($23,000) addition. This is for agriculture. It
is being passed out. The Hawai`i Farmers Union United is proposing to train forty (40)
farmers in Korean style farming, which well, takes into consideration the condition of the
land and the soil. I think as I go around the community talking to different people in
agriculture the repeated theme is that there are not enough farmers. We need to train
farmers, we need to engage more people, and we...relatively speaking, we support
agriculture very modestly. So, I would hope that I could have support for this addition.
Mr. Hooser moved to add funding to the Office of Economic Development in the
amount of twenty-three thousand nine hundred twenty-five dollars ($23,925) for
"Agriculture —Agriculture Grants," seconded by Ms. Yukimura.
Mr. Hooser: Thank you.
Chair Furfaro: Okay. There is a motion and a second.
Discussion? Mr. Hooser has given us an overview. JoAnn, if you want to post your
questions to Mr. Hooser, that is fine.
Ms. Yukimura: Oh, it is not a question. I am in strong support of
this. The proposal that I have seen is very exciting in that it is not just training...I mean it
is training farmers in a method of enriching the soil that has been extremely productive. It
comes out of Korea, but the proposal is to use local inputs or things that are here and find
out how to enrich the soil. In talking to a lot of the farmers...Kaua`i's soils sometimes needs
replenishment and to do it without importing expensive oil based fertilizers, but instead
using things from here would be a very important way to help our farmers survive and
thrive. So, I think it is well worth the moneys that we would be putting here.
Chair Furfaro: Question, Mr. Chock.
Mr. Chock: Thank you. So, what I heard was forty (40)? It
will fund forty (40) farmers, is that right?
Mr. Hooser: The proposal is for forty (40).
Mr. Chock: For forty (40). So, that is about six hundred
dollars ($600) per person for the course, at least is that what our contribution is or is it
matched?
Mr. Hooser: There is an application fee.
Mr. Chock: Okay.
Mr. Hooser: That they would pay a portion of. I think both of
them is a modest fee.
DELIBERATION AND 33 MAY 13, 2014
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Mr. Chock: I see. Yes, I am familiar with the methods and it
is a good program. So, I appreciate it. Thank you.
Chair Furfaro: Okay.
Ms. Yukimura: May I say something too?
Chair Furfaro: I will give it to Mr. Bynum next.
Ms. Yukimura: Okay.
Mr. Bynum: Just real briefly. I am in support of this. The
Hawai`i Farmers Union is doing a lot of interesting work about sustainability and different
options for farming. This is consistent with our goals that we have set in CEDS and our
Mayor's Holo Holo goals. So, thank you.
Chair Furfaro: JoAnn.
Ms. Yukimura: Yes. As I understand it, they are going to be
doing some soil tests to actually see the evidence in terms of the improvement in soil
quality. So, that is going to be a part of the cost. It is not just the training, but also a
testing and a validation. I just want to say that this kind of information and expertise
would be very important in successful farming. Our efforts to build agriculture are really
important and the article in today's paper made that very clear. So, trained farmers who
are committed to farming on this island are part of the essential elements for food
production.
Mr. Chock: I just have a follow-up question.
Chair Furfaro: Go right ahead.
Mr. Chock: I am sorry. I do not have the application or
anything about it, but so my question is, does the application process ensure that it goes to
Kaua`i residents or it is open? Who can apply it the tuition?
Ms. Yukimura: I think it is open to all farmers, but it is designed
for Kaua`i and I heard that it is not just for growing food, but actually related to livestock
production as well.
Mr. Chock: Understood.
Ms. Yukimura: Because livestock production has some of the
inputs into soil replenishment, but I have a copy here.
Mr. Chock: Thank you. Thank you, Chair.
Chair Furfaro: Mr. Rapozo.
Mr. Rapozo: Thank you, Mr. Chair. Is this an earmarked
grant for that? I mean, your text just says adding twenty-three thousand nine hundred
twenty-five dollars ($23,925) for Agricultural Grants. I do not know if Economic
Development is committed to...
DELIBERATION AND 34 MAY 13, 2014
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Mr. Hooser: The...
Mr. Rapozo: For that specific agency organization or is it just
adding money to the grant fund so that others can apply for Agricultural Grants?
Mr. Hooser: The...do you want me to respond?
Mr. Rapozo: Please.
Chair Furfaro: Yes, go ahead.
Mr. Hooser: The intent is to have the funding go to this
specific proposal, which was submitted to the Office of Economic Development, which we
could circulate. I have copies of it. Yes, so that is the intent. Just like whether it is the
bees or whether it is...
Mr. Rapozo; Yes, just that the text does not reflect that.
Mr. Hooser: Okay.
Mr. Rapozo: In your proposal. So, I just wanted to...
Mr. Hooser: So, if the text needs to be amended, we could
amend the text.
Mr. Rapozo: No, as long as there is an understanding with
Economic Development.
Mr. Hooser: Okay. Thank you.
Chair Furfaro: Question? Go ahead. Directed at Mr. Hooser?
Mr. Kagawa: No, I just...I am in support, but I just need to
know that Economic Development is in support as well. I mean, if we are going to put the
moneys in and there may be problems with them going forward with the grant, then I am
not going to support it. So, if George, if you can...
Chair Furfaro: George.
There being no objections, the rules were suspended.
GEORGE K. COSTA, Director of Economic Development: Aloha Chair
Furfaro and honorable Councilmembers. For the record, George Costa, Director for the
Office of Economic Development. This grant, I was approached by Ray Maki of the Hawai`i
Farmers Union United and as Councilmember Hooser stated, this is a Korean natural
farming method. This was presented to me last week and one of the things that I had
mentioned because of the timing, the Administration has already submitted its grant
proposal. In fact, this along with the Arts & Culture, and there was another one from the
Food Bank were all submitted last Friday. So, basically, I just listened to Ray on the
proposal, but I am not about to make any commitment from the Office of Economic
Development until deliberations are made.
Ms. Yukimura: Question.
DELIBERATION AND 35 MAY 13, 2014
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Chair Furfaro: Questions? JoAnn and then Tim.
Ms. Yukimura: So, George, if there are five (5) or more votes who
put it in the budget, will you do your best to implement it?
Mr. Costa: If that is the desire. I know I would refer to my
boss, the Mayor. Again, I am not familiar with this program, but obviously if it comes into
the Office of Economic Development, we would have to work with the organization and
manage the grant. I know in the write up it says forty (40) farmers, but it is not specific to
if it is...I am pretty sure it is open to anyone as far as my understanding.
Chair Furfaro: Tim.
Mr. Bynum: Without knowing the details of this specific
proposal, I am really familiar with this. Farmers Union work all over the County and all
over the world. This is about education, right, about learning? So, you want some people to
come from elsewhere if you have things to teach them and like out people, go elsewhere to
learn things. Agriculture is in a big transition. We have made a commitment as a County
to look for food sustainability as a...anyway. So, I am in supporting of this and I am just
appreciative of it. To me, totally consistent the Holo Holo and we have earmarked specific
grants many times before. So, your willingness to facilitate, that is appreciated. Thank
you.
Mr. Costa; If I can add. One (1) of the items that was
mentioned as part of this grant is the soils testing, and we briefly covered that. I think
soils testing is good. I am just not sure what laboratory the samples are going to and chain
of custody and all of that. So, we did not have time to review that, but I guess that would
be a part of the grant.
Mr. Bynum: That would be part of it, yes. Thank you.
Chair Furfaro: JoAnn.
Ms. Yukimura: So, George, I mean, I think we understand that
you would do your review, which you are required to do. As Economic Development
Director it is sort of your due diligence, but if the project is found to be aligned with the
County's goals of self-sustainability and our goals for agriculture, you would give it your
favorable consideration I would guess? If it meets those criteria.
Mr. Costa: Right. The Office of Economic Development
would do our best.
Ms. Yukimura: Yes. Thank you.
Chair Furfaro: Thank you, George.
There being no objections, the meeting was called back to order, and proceeded as
follows:
Chair Furfaro: Mr. Hooser.
Mr. Hooser: Yes. I have slightly amended the proposal.
DELIBERATION AND 36 MAY 13, 2014
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Mr. Hooser withdrew his motion to add funding to the Office of Economic
Development in the amount of twenty-three thousand nine hundred twenty-five
dollars ($23,925) for "Agriculture — Agriculture Grants." Ms. Yukimura withdrew
her second.
Mr. Hooser moved to add funding to the Office of Economic Development in the
amount of twenty-three thousand nine hundred twenty-five dollars ($23,925) for
"Agriculture — Korean Natural Farming/IMO Farmer Training and Soil Study,"
seconded by Ms. Yukimura.
Mr. Hooser: The only amendment is it specifics the title/IMO
Farmer Training and Soil Study of the grant, which is Korean Natural Farming. Just the
amount of money is the same. This is the only add that I will be requesting as an
individual Councilmember.
Chair Furfaro: Okay.
Mr. Hooser: It is the only add that I will be suggesting, and
as the Chair of the Agricultural Sustainability Committee, I think it is a very modest
request that will yield potential great benefits to agriculture and sustainability. So, thank
you.
Chair Furfaro: We had a second from JoAnn on the amendment.
Am I right? Just a voice vote before we go any further. Mr. Rapozo, go ahead.
Mr. Rapozo: I actually like the first proposal better,
Mr. Hooser, simply because I think it gives the Office of Economic Development the
opportunity to go through the grant request. I just saw this right now for the first time.
Mr. Chock just passed it over to me. So, I am not familiar at all. I did read real quickly and
obviously, it does seem like a great program. I am looking at the budget and out of the
funding, twenty three thousand nine hundred twenty-five dollars ($23,925). This is the
proposal from this organization, which is twenty-three thousand nine hundred twenty-five
dollars ($23,925) and they are going to add another two thousand dollars ($2,000) by
charging each participant fifty dollars ($50). So, of a total budget of twenty-five thousand
nine hundred twenty-five dollars ($25,925), eleven thousand dollars ($11,000) goes to the
instructor's stipend and Administration. I think I am having a problem with that. Almost
half of the money that the County would provide would go to the instructor and the other
half would be spread up amongst supplies. I am one that does not want to see our County
taxpayer money pay people salaries or stipends or whatever you want to call it. If we give
twenty three thousand dollars ($23,000) then it should go to the training. It should go to
the arming, the operation, the soil testing, and so forth. I do not see any...I mean, I see
seven thousand dollars ($7,000) for soil test, but I just would much rather have the
Economic Development or whoever is going to manage the grant vet out the program to
make sure it is viable and so forth because I do not think we can do that here with this
write up in five (5) minutes. So, I would prefer your first proposal. I can support that and
having the money available, but not earmarked and then give the Economic Development
people the opportunity to go and vet out this grant proposal as you do with the rest, and at
that point, make the determination whether or not. I just...I do not know. I never heard of
this organization to be honest with you. I have not personally. Yes, I have not. I mean,
there are many organizations that I am very familiar with that none of you are and so do
not punish me for not knowing that. I just do not know and if I am going to approve funds
today, obviously, for me personally...so, I would support the first one, Mr. Hooser. That is
DELIBERATION AND 37 MAY 13, 2014
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broad and I think we heard from Mr. Costa that they would take a look at it. I could do
that. Thank you.
Chair Furfaro: JoAnn.
Ms. Yukimura: Okay. I mean, I understand the concern and I
mean, we pay consultants. For training,to happen, there has to be a trainer, but I think
that whatever moneys we put in there Office of Economic Development (OED) goes through
a process of review and can negotiate. Like the Kauai Marathon, they made sure that the
moneys went for advertising and not for personnel because they felt that the contribution to
the County should be in the public relations (PR) part of it. So, they can do that and we can
leave it to them, I mean, in the way that our budget works, they can take that money and
use it for something else actually. So, we are relying on their review process.
Chair Furfaro: Mr. Kagawa.
Mr. Kagawa: I would like to see us growing more of our own
food. I think we need to learn what works elsewhere and from experts. I think education
could go a long way. However, I am just staring at that number there and we are still three
million dollars ($3,000,000) behind and to be adding, kind of troubles me because I had
hoped that we could have maybe a reserve in the end of that kind of amount. That was my
hope, but we are in the opposite direction. I think it is going to be very tough for me to
support any additions going forward until we resolve that deficit. Thank you.
Chair Furfaro: Further discussion? Mr. Hooser.
Mr. Hooser: In the interest of moving this along, if we could
revert to our original proposal and trust that the Office of Economic Development will,
frankly, either one that moves forward, the Economic Development office will make the
final decision to spend the money or to implement the program or not. So, that is not going
to change, but in order to ensure that the votes are here, I would agree to Councilmember
Rapozo's request and generalize the proposal.
Mr. Hooser withdrew his motion to add funding to the Office of Economic
Development in the amount of twenty-three thousand nine hundred twenty-five
dollars ($23,925) for "Agriculture — Korean Natural Farming/IMO Farmer Training
and Soil Study." Ms. Yukimura withdrew her second.
Mr. Hooser moved to add funding to the Office of Economic Development in the
amount of twenty-three thousand nine hundred twenty-five dollars ($23,925) for
"Agriculture —Agriculture Grants," seconded by Ms. Yukimura.
Chair Furfaro: Okay. So, we are back to the original
submission, and on that note, I guess I will call for the vote. Let us do a roll call vote on
this item, please.
The motion to add funding to the Office of Economic Development in the amount of
twenty-three thousand nine hundred twenty-five dollars ($23,925) for "Agriculture —
Agriculture Grants" was then put, and carried by the following vote:
FOR ADDITION: Bynum, Chock, Hooser, Kagawa,
Rapozo, Yukimura, Furfaro TOTAL— 7*,
AGAINST ADDITION: None TOTAL—0,
DELIBERATION AND 38 MAY 13, 2014
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•
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL— 0.
(*Pursuant to Rule No. 5(b) of the Rules of the Council of the County of Kauai, Council
Councilmember Kagawa was noted as voting silent, but shall be recorded as an affirmative
for the motion.)
Ms. Fountain-Tanigawa: Six (6) ayes.
Chair Furfaro: It is six (6) and one (1) silent, which makes it 7:0.
Thank you. Okay. I have one (1) to add and it is in the agricultural area. It is tied to the
narrative that I sent out to you earlier about the value of bees to Hawaii's story and
Hawaii's agricultural activities.
Ms. Yukimura moved to add funding in the amount of twelve thousand dollars
($12,000) for "Other Services - Bee Pollen Testing Grant," seconded by Mr. Kagawa.
Chair Furfaro: The issue here is simply about ten thousand four
hundred dollars ($10,400) for testing our, I think, twenty-seven (27) licensed beekeepers on
the island for the Varroa mite as well as the health of our bees. There is a subsequent
Resolution that is available that touches on that, but we have a strong request from the
State Department of Agriculture on getting rid of the Varroa mite that is in Hawaii and
also hopefully, we can get some Federal help if in fact we had our bees tested. Again, this is
the...have the bee inspector here on two (2) trips. The salary and wages for that are part of
the State Agriculture Department and it is about four hundred dollars ($400) cost to test
the licensed beekeepers here. So, it is a simple add of twelve thousand dollars ($12,000). I
guess as Chair, I need a motion and I need a second.
Ms. Yukimura: I did do a motion and there was a second.
Chair Furfaro: Oh, you did? Very good. This intent is to be
administered under Economic Development as well, but for once and for all, I will find out if
we do have the mite here and how exactly healthy our bees are.
Mr. Kagawa: Question for you.
Chair Furfaro: Yes.
Mr. Kagawa: Thank you, Mr. Chair. I understand the
sentiment. If the job does not get done, then let us do it ourselves, but is this not the State
Department of Agriculture's responsibility to do this?
Chair Furfaro: I felt the same way and the apiarian, which is
the bee inspector, there is only one (1) and they are in fact on the Big Island, part of the
Department of Health. In my dialogue with them, they would be glad to participate with
us, but they too, could not allocate even two (2) trips to Kauai to work with the beekeepers
on the test. So, I am just at the point that I believe for the health of our Agricultural
Department, we need to do this, but it is pitiful at this point.
Mr. Kagawa: Is there any...I mean, I have talked to several
beekeepers and they indicated to me, and I will name one (1). One is Cohn Wilson and the
other is Jan TenBruggencate, and they both said that I guess they have developed a
technique to deal with the mite. I do not know if they had it upside down or...they have
DELIBERATION AND 39 MAY 13, 2014
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some technique where I guess the mite drops. So, I guess their hives have not been affected
by those mites. I do not know if there is others that maybe George can share, that those
mites are in fact, affecting negatively. Regardless, if it is happening I want to help attack it
because I think we have to get rid of the mites, not just find techniques to get around the
mites, I guess.
Chair Furfaro: Well, again, this is testing to first verify that we
do not have the mites and then in fact if we do, the ability to get some extra Federal funds
to help. JoAnn.
Ms. Yukimura: I may be wrong, but I do not think the mites are
here on Kaua`i yet.
Chair Furfaro: At this point, they are not, but we have never
been tested.
Ms. Yukimura: But there is another infestation of some sort that
has come here, but the other thing that these tests show is also pesticide residue. So, that
would be important given all of the issues we have heard about pesticides to keep track of
whether the bees are...whether pesticides are infiltrating into the hives. So, I think it is an
important thing to know and have.
Mr. Kagawa: Yes, I mean, if I can clarify. I think there was
another well, culprit, that I think were affecting the bees. I had asked Jan and Colin if it
was affecting their hives. They had some type of technique, but maybe it was not the mites,
but it was recent that I asked them and they said their hives are actually thriving, and this
was maybe six (6) months ago when I talked to both of them. So, I do not know. Like I
said, if we need to do that mite testing, I will support it.
Chair Furfaro: Thank you. In the Resolution that I am
preparing to introduce, it does reference that second pest. It has a long Latin terminology
to it. Mr. Hooser.
Mr. Hooser: So, these funds go to the Office of Economic
Development?
Chair Furfaro: Economic Development, yes.
Mr. Hooser: And then they implement it, they are the ones
that contract the testers?
Chair Furfaro: They would with working with the State
Agriculture Department from the Big Island, yes.
Mr. Hooser: Okay. Has the Office of Economic Development
agreed to do this?
Chair Furfaro: It has been a while since we have even had a •
conversation about it. If you would like to bring George up again...
Mr. Hooser: I do not need to bring him up.
Chair Furfaro: Okay.
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Mr. Hooser: I just want to make sure that...
Chair Furfaro: It has been a while. It was actually a Big Island
visit with Chairperson Kokubun that I had.
Mr. Hooser: Okay. No, as long as you are confident that they
will do it, it is okay with me.
Chair Furfaro: We are still in touch with, I believe, the inspector
that we are dealing with, Denise on the Big Island is highly recommended for her work.
JoAnn.
Ms. Yukimura: Yes. I just want to say that a logical partner in
this would be the Beekeepers Association too.
Chair Furfaro: Yes.
Ms. Yukimura: So, there would be different ways to work with
those organization.
Chair Furfaro: Yes, and I do want to make note, this is for being
licensed. George, you do not need to come up. This is for licensed beekeepers. Do you want
George to come up?
Ms. Yukimura: No. Let us go on.
Chair Furfaro: Okay. Mr. Bynum.
Mr. Bynum: I just wanted to say that I am one hundred
percent (100%) in support of this. Since my first week on the Council I know that the Chair
has focused on invasive species issues. He has saved our island almost single handedly, in
my opinion, from serious infestation because of his attention and I applaud him. I just so
admire it. So, thank you.
Chair Furfaro: I do want to say though, it was with everybody's
kokua and also I had JoAnn dragging me along. So, I have to share the credit. Okay. So, I
have a motion and a second on this twelve thousand dollars ($12,000). Can I have a roll
call vote?
The motion to add funding in the amount of twelve thousand dollars ($12,000) for
"Other Services - Bee Pollen Testing Grant" was then put, and carried by the
following vote:
FOR ADDITION: Bynum, Chock, Hooser, Kagawa,
Rapozo, Yukimura, Furfaro TOTAL— 7,
AGAINST ADDITION: None TOTAL—0,
EXCUSED & NOT VOTING: None TOTAL—0,
RECUSED & NOT VOTING: None TOTAL—0.
Ms. Fountain-Tanigawa: Seven (7) ayes.
Chair Furfaro: Seven (7) ayes. Thank you very much.
Mr. Kagawa.
DELIBERATION AND 41 MAY 13, 2014
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Mr. Kagawa: We are finally ready to knock off one of the final
cuts, which we want to do all of the cuts before we get to revenues. So, I can circulate it
now if you want, Mr. Chair.
Chair Furfaro: Let us do that.
Mr. Kagawa: It is the piece on overtime reduction. Now,
instead of raising one hundred fifty thousand dollars ($150,000) or so, we are only raising
fifty-four thousand one hundred fifty-seven dollars ($54,157).
Mr. Kagawa moved to reduce Regular Overtime by five percent (5%) with the
exception of Public Works (5% reduction only for discretionary Regular Overtime for
Fire and Police), Public Works to reduce Regular overtime in the amount of two
thousand five hundred dollars ($2,500) in General Fund, Highway Fund, Sewer
Fund, and Solid Waste Fund, seconded by Ms. Yukimura.
Chair Furfaro: Okay. I have a motion and a second. Would you
like Mr. Barreira to come up?
Mr. Kagawa: I believe all Departments have agreed that they
can live with these cuts including our Mayor and we will all try to change the direction. I
guess, and try to get management to try and really focus on trying to cut down whatever
can be avoided.
Chair Furfaro: I would like to say to the Administration, thank
you for going back to the drawing board. I hope you took my direction of going back to work
on this in the spirit that it was given. So, we did not want to overstate that number.
JoAnn.
Ms. Yukimura: I want to thank the Administration for helping
me be reassured that the different, especially small Departments, are not going to be
affected adversely in their work because in my opinion, they do very important work. Even
in the large Departments, this kind of discernment about what we can cut and we cannot is
really important. That is why a broad brush cut really worried me, but with the kind of
work that now has been done on it, I feel okay about voting for it. Thank you,
Councilmember Kagawa, for initiating the thinking about it and then working with the
Administration.
Chair Furfaro: Mr. Bynum.
Mr. Bynum: May I ask some questions of the Police
Department, please? The Deputy Chief is here.
Chair Furfaro: The Deputy Chief is here, but to be consistent
this was an item that I would like to have Mr. Barreira up with the Deputy Chief as well.
So, the Budget Director can come up.
There being no objections, the rules were suspended.
Mr. Bynum: So, Mr. Barreira, under this new proposal, the
reduction to the Police Department would be what?
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Mr. Barreira: I am sorry, sir. I could not hear you. Could you
repeat yourself?
Mr. Bynum: On this new proposal, the reduction of the Police
Department would be how much?
Mr. Barreira: The five percent (5%) of the one hundred eighty-
five thousand dollars ($185,000) identified would be nine thousand two hundred fifty
dollars ($9,250).
Mr. Bynum: So, we went from the original proposal at four
hundred thousand dollars ($4,000) as I recall, to one hundred and whatever it was the last
time, right?
Mr. Barreira: Yes.
Mr. Bynum: What was it last time? One hundred five
thousand dollars ($105,000)?
Mr. Barreira: The cuts, the proposed five percent (5%).
Mr. Bynum: And now we are down to nine thousand two
hundred fifty dollars ($9,250)?
Mr. Barreira: Yes, sir.
Mr. Bynum: Okay.
Chair Furfaro: For Police.
Mr. Bynum: What does that make the total cut in overtime
package now?
Mr. Barreira: I believe Mr. Kagawa reflected. I have not
calculated that. I heard fifty thousand dollars ($50,000) figure.
Chair Furfaro: It is on your worksheet. Fifty-three thousand
dollars ($53,000).
Mr. Bynum: So, we went from eight hundred thousand dollars
($800,000) or nine hundred thousand dollars ($900,000) originally proposed to right, total,
down to fifty thousand dollars ($50,000)? Mr. Contrades, thank you for being here.
MICHAEL M. CONTRADES, Deputy Chief of Police: Thank you, sir.
Mr. Bynum: What programs will have a reduction of what you
are doing because of this nine thousand dollars ($9,000)?
Mr. Contrades: With the nine thousand dollars ($9,000) we are
going to have to look at those programs that are listed. That would include Special Events
Management, KPAL, Citizens Police Academy, and the Underage Drinking and make a
determination in terms of priority where that nine thousand dollars ($9,000) is going to
have to come from.
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Mr. Bynum: So, something you are doing now is going to be
truncated, correct?
Mr. Contrades: In some way, yes.
Mr. Bynum: If we would have stayed at the one hundred
thousand dollars ($100,000) you would have to eliminate some of these things completely,
right?
Mr. Contrades: Absolutely.
Mr. Bynum: Thank you for that. I appreciate it, for those
answers.
Mr. Contrades: Thank you.
Chair Furfaro: JoAnn, and JoAnn, your microphone is not on.
Ms. Yukimura: Yes, thank you. With respect to the Underage
Activates Investigations of fifty thousand dollars ($50,000), may I just suggest that the
Liquor Commission has moneys that are set aside for this purpose? So, it may be possible
to supplement the moneys form that.
Mr. Contrades: We will look into that.
Ms. Yukimura: Yes. Thank you.
Chair Furfaro: Okay, and JoAnn has had a very good suggestion
there because there is a percentage of their fees that can be used for these kinds of special
programs. So, please work closely with them.
Mr. Contrades: Will do.
Chair Furfaro: Thank you. Mr. Bynum again.
Mr. Bynum: Are we still...I am done with questions.
Chair Furfaro: Oh, you are not done with questions? I thought
you were. I am sorry.
Mr. Bynum: No, I am done with questions.
Chair Furfaro: Oh, you are done with questions?
Mr. Bynum: If I have the floor, it would be just for discussion.
Chair Furfaro: Okay, then we are pau with both of you
gentlemen.
There being no objections, the meeting was called back to order, and proceeded as
follows:
Chair Furfaro: Mr. Bynum.
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Mr. Bynum: I am not going to vote for any reductions in
overtime. Look at what we just did in this process today. We asked...you know, I thought
we were going to come in there and say here is what we are currently doing that we can
stop doing to save money. That is what a real cut is. I mean, everybody said that we have
to look at what we can do and what we cannot afford to do any longer, but virtually all of
the cuts have been these broad brush strokes of cut twenty percent (20%) and we almost
called for the question on this twenty percent (20%), nine hundred thousand dollars
($900,000). I am like wait, wait, I want to talk to the Police. Wait I want to talk to Fire. I
want to know how this impacts them. Then in the second integration, oh, some of this is
contractually obligated. Let us figure it out. So, we do an analysis for the Departments
that are hit the worse. Police and Fire, wow. To me, I made a commitment when I got on
this Council, that I would not be an obstacle ever in budget to the Police doing the job they
need to do for our community. If the cut is nine thousand dollars ($9,000) or the cut...he
just said he is going to have to not do some of these things as robustly as they intended,
right? Those are the realities of these cuts that are not targeted. Now, Police and Fire,
because it was...because of our strong commitment to them, supposedly, we did a big
analysis and we have made it not so egregious, right? What about the other small
Departments that did not have time to do this analysis? These are not cuts that say our
government is too big, let us cut it back. It says let us spend too much money so let us
niggle money everywhere we can that is going to create, because I have been a civil servant
for many years. All kinds of grief for all of these Departments because we grabbed fifty
thousand dollars ($50,000) here and forty thousand dollars ($40,000) here without any
really thoughtful analysis of it. I am not going to vote for these cuts in overtime and I am
deeply saddened if we do this. My final closing is when we get to revenue, we have
Residential Class now that has just people who have homes that they use for commercial
purposes. They rent them at market or do other things. If we added one cent ($0.01) to
their tax rate, one cent ($0.01), we could generate fifty thousand dollars ($50,000). So, if we
ask those homeowners that own a five hundred thousand dollars ($500,000) home, "hey,
this year we need you to pay five dollars ($5.00) more," five dollar ($5.00) so we can fully
fund our Police Department and let our Departments run without imposed restrictions
where we are going to have to be running around niggling all year long. Every single dollar
we are going to get all of these moneys transferred around. So, please, I implore my
colleagues not to vote for this type of cut, not this one at all. What difference...we did all of
this work. Fifty thousand dollars ($50,000). We are going to create these issues for the
Administration for fifty thousand dollars ($50,000) of savings. This is not cutting fat and
waste.
Chair Furfaro: Okay, that is your opinion and I have other
opinions on the table. So, Mr. Rapozo and then Mr. Kagawa.
Mr. Rapozo: Thank you, Mr. Chair. I have reserved my
opinions throughout this process thus far because I think everybody has the right to their
opinion, but I do feel compelled to defend my colleague to my left here because when we got
into this budget we saw the number and it was a desire to cut the budget as much as we
can. This overtime cut is not so much a fifty thousand dollars ($50,000) cut. It is a message
that we need to change the way we schedule and we need to change the way we operate.
We talked about Solid Waste and when they do green waste hauling. I mean, all of these
things can be done by the management of the Departments. Now, we make it seem like we
cut fifty thousand dollars ($50,000), the Police is going to shut down KPAL. That is not
true. This Council has never denied any Department, any Department that came up here
for extra money in a Money Bill for overtime for whatever. This Council never did that. I
do not think nine thousand dollars ($9,000) or whatever it is, is going to break the Kauai
Police Department. If you look at the historical CAFRs, you will see that the lapse is quite
DELIBERATION AND 45 MAY 13, 2014
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substantial. This is more of a message to the County Administration saying, hey, we have
to start looking at...and the Department to their credit in the last year or so has done a
remarkable job. I understand, Deputy Chief, that is your doing. That is what I have been
told. Not by you, but by others, that it was Deputy Chief that has...and I know it is
working because the men and women are complaining because they do not have the easy
pot of overtime that they used to. So, I commend the Administration, but I do not think we
deserve comments such as irresponsible or egregious and without thought. We are here to
try to balance this budget with the least impact to the taxpayers. That is my philosophy, I
believe that is Mr. Kagawa's. Because one (1) Councilmember does not agree, I will tell
you. I took notes yesterday. Yesterday we have fourteen (14) or fifteen (15) proposals to
cut, fifteen (15) proposals. Ten (10) of them passed. Ten (10) of them passed, and
Mr. Bynum voted against seven (7) of them. So, I understand that he does not want to cut.
That is his prerogative. I am not going to criticize him for that, but I do not expect to get
criticized because I am supporting the cuts. I mean, we need to balance that budget and I
can tell you right now, I am not going to consider raising anymore taxes. I am not. So, I
just...I feel, Mr. Chair, like I said this morning. I was trying to be very patient, but
sometimes the comments get a little offensive and I felt the need to defend Mr. Kagawa who
I believe, for such a new young Councilmember is doing what I believe is the right thing in
budgets. Thank you.
Chair Furfaro: Mr. Kagawa, you have the floor.
Mr. Kagawa: Thank you, Chair. One of the main directions
that I have given to all of the Department, the Managers, is that there is available moneys
in your accounts if it is really necessary. It exists. I am looking at a fact-based sheet. Page
34 of your CAFR. Mr. Bynum yesterday, said the Fire Department is the thriftiest tight
budgeted Department. They have the biggest variance or lapse in 2013. They lapsed one
million six hundred thousand dollars ($1,600,000). That means one million six hundred
thousand dollars ($1,600,000) was approved in their budget that they did not need that
year, and he calls that responsible budgeting? I call that irresponsible budgeting. So, I am
trying to get down so that we are spending our taxpayer's money wisely, not overtaxing our
citizens, and not restricting certain other Departments. I believe now they have caught
that up. I think now their budget is tight and I think everybody's budget it tight because
we no longer have the money that we used to have, but there is still...everybody is not one
hundred percent (100%) paid for. There is always a little bit of each budget. Maybe the
Police, I do not know. Now that they are filling all of their positions they are pretty tight
and they have been subject to some cuts because they are a huge budget, but when I do
these cuts and it affects areas like the Police and Fire, please do not take it personal. I just
have a concern that you have a thirteen million dollars ($13,000,000) payroll in your
operations and you have overtime. If I add regular overtime of two million one hundred
thousand dollars ($2,100,000) and if I add Premium Pay of one million two hundred
thousand dollars ($1,200,000)...so, for a force of thirteen million dollars ($13,000,000) you
have overtime being paid of another three million dollars ($3,000,000). I am just thinking
to myself, in four (4) years when we have beginning officers getting seventy-one thousand
dollars ($71,000) a year and you are adding another twenty-five percent (25%) of salary, if
twenty-five percent (25%) of their salary is the going rate, you have a beginning officer
making almost one hundred thousand dollars ($100,000) a year. Can our County afford
that or do we have to change our ways of paying officers because at some point, we are
going to break the bank and it is going to be a point of no return? Wisconsin experienced
that recently. I mean, we have to control the overtime somehow. If you are getting paid
seventy-one thousand dollars ($71,000) a year, that is almost fifty thousand dollars
($50,000) more than the starting teacher. That is good money already. If you need
overtime as well or a lot of it, then maybe you are getting overpaid, but I mean, we have to
DELIBERATION AND 46 MAY 13, 2014
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start figuring out this balance of how we are going to set the tone for the future. I just
cannot accept that how we are doing it is good and there is no room for change. To me, that
is unacceptable. We always can improve. Everybody can improve, myself included, but
that is the only way are going to change our ways, is that we always look to improve
because with overtime pay, you are paying time and a half for an hour of work. If we can
cut down on that, fine. If some is unavoidable, fine as well, but let us always try and get
better. That is the way we set that tone for the future. Thank you, Chair.
Chair Furfaro: Okay. Anymore dialogue? I am not going to
recognize anymore dialogue between the people that spoke. I am going to call for the
question. I am not going to turn this into this dialogue going back and forth. A couple
things you need to recognize here, you cannot keep comparing the CAFR to what we are
going now because there have been a lot of increases related to costs, bargaining unit, and
so forth. But the point is, we have to have tangible, measurable outcomes, and I think that
is where Mr. Kagawa is at.
Mr. Bynum: Point of order, Chair.
Chair Furfaro: So, I am calling for the question.
Mr. Bynum: Point of order.
Chair Furfaro: What is your Rule that you are calling point of
order on?
Mr. Bynum: You just said you are not going to allow anymore
dialogue and then you took the floor.
Chair Furfaro: That is true. I apologize for it. I am calling for
the question. I need a motion from somebody on the table.
Mr. Bynum: I am not calling for action on a point of order.
Ms. Fountain-Tanigawa: We have a motion and a second.
Mr. Rapozo: Motion is done. Motion and second is done,
Mr. Chair.
Chair Furfaro: Thank you very much. Roll call vote, please on
the item.
Ms. Fountain-Tanigawa: Councilmember Bynum. Councilmember Chock.
Mr. Bynum: Wait. I made a call for the question.
Chair Furfaro: I heard you. I am calling...
Mr. Bynum: I heard no ruling.
Chair Furfaro: I did not hear the Rule that you referenced. Give
me a number and we will take care of it when we come back.
Ms. Yukimura: Mr. Chair, maybe...
DELIBERATION AND 47 MAY 13, 2014
PRELIMINARY DECISION-MAKING
Mr. Bynum: Call for the question.
Ms. Yukimura: Okay.
Chair Furfaro: Call for the question.
Mr. Bynum: Unequal Rules. One (1) set of Rules for one (1)
Councilmember...
Chair Furfaro: Mr. Bynum, I just told you after...
Mr. Bynum: ...another set of Rules for another...
Chair Furfaro: Mr. Bynum, I just told you...
Ms. Yukimura: Mr. Chair...
Chair Furfaro: ...after the vote we will go to the Rules.
Ms. Yukimura: May I...
Mr. Bynum: No, let us just take the vote.
Ms. Yukimura: May I move to close debate?
Mr. Kagawa: Take the vote.
Ms. Yukimura: And take a vote on that issue, then the body will
decide whether to allow...
Mr. Bynum: I am entitled under the Rules to the floor.
Chair Furfaro: Call for the roll.
Mr. Bynum: And then you say, "No" and then you...
Ms. Fountain-Tanigawa: Councilmember...
Mr. Bynum: And then you take the floor.
Ms. Fountain-Tanigawa: Councilmember Bynum...
Chair Furfaro: I had three (3) seconds of summary. Call for the
question.
The motion to reduce Regular Overtime by five percent (5%) with the exception of
Public Works (5% reduction only for discretionary Regular Overtime for Fire and
Police), Public Works to reduce Regular Overtime in the amount of two thousand
five hundred dollars ($2,500) in General Fund, Highway Fund, Sewer Fund, and
Solid Waste Fund was then put, and carried by the following vote:
FOR REDUCTION: Bynum, Chock, Hooser, Kagawa,
Rapozo, Yukimura, Furfaro TOTAL— 6*,
DELIBERATION AND 48 MAY 13, 2014
PRELIMINARY DECISION-MAKING
AGAINST REDUCTION: Bynum TOTAL— 1,
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL— 0.
(*Pursuant to Rule No. 5(b) of the Rules of the Council of the County of Kauai, Council
Councilmember Hooser was noted as voting silent, but shall be recorded as an affirmative
for the motion.)
Chair Furfaro: Now, give me a Rule number, please.
Mr. Bynum: It is too late. There is no point.
Ms. Fountain-Tanigawa: Six (6) ayes.
Mr. Bynum: I would like the floor.
Chair Furfaro: You have the floor. Put your microphone on if
you want the floor.
Mr. Bynum: I am very passionate about these issues because
I am very passionate about our government. I came into this and Councilmember Rapozo
choose to talk about how many I voted. Turn that into dollars, Councilmember Rapozo.
How many dollars of cuts did people vote for yesterday? We are here to give our mana o.
My mana o is that these are not real cuts. These are niggling cuts that cause real issues for
our Departments. I am entitled to express that opinion. You cannot just take numbers
from this year's budget and make these conclusions that are out of context and I said from
the beginning, I do now want to debate the past because the past is done, but rewriting the
past and making conclusions based on numbers that are out of context, that do not give an
accurate picture, this is the kind of dialogue that is helpful for us. We just spent...we
contemplated and almost voted one nine hundred thousand dollars ($900,000). In some
Departments that would have decimated it. The Police Department...we almost voted on
second round until I said I want more questions and Councilmember Rapozo said oh no, let
us look at what really is discretionary. We almost voted on it. That would have eliminated
KPAL. I mean, that is what they said in the document. So, they came back and they did it
again. What about all of the other Departments? This is not good budget making. These
are not wise decisions that make sense. That is my opinion. I have a right to express it.
Thank you.
Chair Furfaro: Okay. I want to make sure we all understand a
couple things here. Although we were (inaudible), JoAnn, it is the duty of the Chair in
Rule 13(e) to address to speak to any member and those members speak through the Chair.
Any remarks confined to the question or under discussion needs to avoid personalities.
That Rule, 13(a)(3) under the Chair. It is the Chair's duty to maintain that proper order
and decorum. Thank you. Mr. Hooser.
Mr. Hooser: Could I ask for a brief recess?
Chair Furfaro: Sure. Good idea. We are going to go to a recess.
There being no objections, the Committee recessed at 11:41 a.m.
There being no objections, the Committee reconvened at 11:53 a.m., and proceeded
as follows:
DELIBERATION AND 49 MAY 13, 2014
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Chair Furfaro: Okay, we are back from our recess and I would
like to share again, with all members. It is important that we keep the discussion focused
on the item at hand. I would also like to make sure that we should really address each
other as my colleague, the member of the Council, and so forth and try to not find it being
directed personally. It is important. I also want you to know that in our Rules 13(e), the
fact of the matter is if you call for a point of order, you should not call for it when a vote is
being taken. The vote should be done and completed. That is also covered in Section 6(j) of
our Rules. I also want to thank Mr. Hooser for his recommendation to take a break. That
was a good point, but I want to let you know that the decorum is, by our Rules, in the hands
of the Chairman. I do reserve that right to speak on an item to try to temper the issue and
especially get an interpretation only after the vote, and that is in our Rules. So, we have
now traveled to review. I believe that was the next cut item that we have for this review
period. Is the Administration ready? They are not ready? Okay, JoAnn has her ready now.
So, JoAnn, I will recognize you.
Ms. Yukimura: Thank you. If staff could pass it out. So, my
proposal is to cut repair & maintenance expenditures that are in the Parks budget, but it
does not mean they will not get done. Instead, they would be paid for by the repair &
maintenance account, the 209 account. I am proposing one hundred thousand dollars
($100,000) out of the account of two hundred eighty-four thousand dollars ($284,000), and
you will see it on page 200...let me see. Page 268 is the 209 Fund. You will see that there
is already a contingency fund for repair & maintenance of eighty-five thousand dollars
($85,000). I am not touching that. Instead, taking from the one hundred ninety-nine
thousand dollars ($199,000) that says repair & maintenance projects. That is where the
repair projects would be paid for, and that would be freeing up one hundred thousand
dollars ($100,000) in General Fund moneys.
Ms. Yukimura moved to utilize funds in Fund 209 to be used for these repair &
maintenance expenses that are being removed from the General Fund
Chair Furfaro: Before we go further on this discussion. I was
able to look at the Ordinance a little bit and it seemed the Ordinance to me, was very
clearly stating there was a point in time where we would touch money. Prior to that, we
could not address this money. Could I get some interpretation from the Administration?
There being no objections, the rules were suspended.
Mr. Hunt: Steve Hunt, Director of Finance for the record.
There was a point in time which was the passage in May of 2013 that the 209 Fund was no
longer a general ledger balance sheet fund, but moved to the operating and this is the first
fiscal budget since the passage of that. The funds that had been on the balance sheet had
been committed or were available to commit. I believe a breakdown was provide in the
fund balance estimates including a portion since the May to the end of the CAFR, of the
Fiscal Year 2013 CAFR, which would have been available to appropriate by Council for
specific projects or repairs. Since then, we have moved it into the operating budget and
those funds that are shown there on page 268 are funds that are available for Parks &
Recreation to handle maintenance items or improvement items. I do not have a breakdown
of how those funds are intended to be spent.
Chair Furfaro: Okay. JoAnn, do you have questions for Steve?
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Ms. Yukimura: Yes. So, the Ordinance says that the Council
shall appropriate the fees in this budget, right?
Mr. Hunt: Yes.
Ms. Yukimura: And it also says that...so it says improvement.
So, it might potentially be usable for CIP?
Mr. Hunt: I believe that would be the case. Again, the
appropriation is the Budget Ordinance itself. So, it is going to be appropriated through the
Ordinance. Right now on page 268 if you adopt the budget as is, it is appropriated, but it is
just non-specific as to what those funds are...
Ms. Yukimura: Correct.
Mr. Hunt: And you are attempting to add specificity on
that.
Ms. Yukimura: So, my proposal is to cut from the General Fund
moneys and to pay for the repair & maintenance by these 209 funds, which are specifically
for repair & maintenance. So, the cuts are on page 200 and 194 if you want to look at them,
but they specifically say repair & maintenance buildings and repair & maintenance
equipment. Thank you. I am done.
Chair Furfaro: Any further questions for the Finance Director?
Yes, go ahead.
Mr. Rapozo: Oh, it is really not the Finance Director. It is...
Chair Furfaro: Let me just see if there is any for him then. Hang
on. Any questions for the Finance Director? If not, Steve, thank you. You can take a seat.
There being no objections, the meeting was called back to order, and proceeded as
follows:
Chair Furfaro: Mr. Rapozo.
Mr. Rapozo: I think this is more for Lenny, and I would hate
to have a budget discussion here on this decision-making, but I think it goes along with
what you were saying earlier regarding the report or the plan for that fund. I am not sure
if we are taking one hundred thousand dollars ($100,000) to replace some General Fund
projects is going to affect the Parks' plan for the use of that account. I am not sure if you
want to bring him up or not, but because I think in essence what this does, it just takes...it
just cuts one hundred thousand dollars ($100,000) from the General Fund. Because the
existing 209 Fund, they could use that fund for these projects that Councilmember
Yukimura is suggesting in here. So, in reality, we are just taking one hundred thousand
dollars ($100,000) out of the General Fund and allowing the Parks Department to utilize
part of that two hundred forty-eight thousand dollars ($284,000) to accomplish or backfill,
which his almost what Mr. Hooser wanted to do with the CIP budget.
Ms. Yukimura: Right.
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Mr. Rapozo: And then using backfilling. Again, I think that is
the Parks Department's prerogative to use that fund how they want. So, I could definitely
support the cut of one hundred thousand dollars ($100,000) from those General Fund
accounts and then leaving the decision on how they want to use the 209 Fund to the Parks
Department.
Ms. Yukimura: Okay. I am okay with that.
Chair Furfaro: Procedurally, I do need a second for that. I do
not have one.
Mr. Chock seconded the motion.
Chair Furfaro: I have a second now. Good. Lenny, do you want
to come up?
There being no objections, the rules were suspended.
LEONARD A. RAPOZO, JR., Director of Parks & Recreation: For
the record, Director of Parks & Recreation, Lenny Rapozo.
Chair Furfaro: JoAnn, do you have anything specific for Lenny?
Mel?
Ms. Yukimura: Do you have any concerns about this?
Mr. L. Rapozo: Yes. In the past budgets, the last two (2)
budgets, we had done exactly what you have stated or what you want to do. We have used
the 209 Fund to help the General Fund, but with the anticipated...what we have left in the
fund, the moneys that we have collected so far, according to our accounting, it is about two
hundred sixty-four thousand seven hundred sixty-three dollars ($264,763). Finance has
anticipated that whatever rents will be coming in for this fiscal year and added that, and
that is the number that they have put into our budget. Parks, we have always spent what
we had on hand without spending what we do not have. By reducing the 209 by one
hundred forty-two thousand dollars ($142,000), according to my calculations at the accounts
that wants to be removed, based upon how we traditionally operated, would leave us about
one hundred twenty-two thousand dollars ($122,000) left in our account. That is not
withstanding whatever rents that we would be collecting, moving from July forward. So,
any big repair projects, and I am going to use something like Kilauea. We were lucky
enough that the bids were as high as one hundred seventy thousand dollars ($170,000) to
what we were able to get to ninety-six thousand dollars ($96,000). That would put us in a
burden if we do not have the 209 account.
Ms. Yukimura: The whole intention of the budget and this
Ordinance was that you would, like any other Department Head, anticipate what your
projects are going to be for the year and what you would need. So, I mean, we are giving
you pretty much a blank check of two hundred eighty-four thousand dollars ($284,000) or
one hundred sixty-four thousand dollars ($164,000). I mean, no other Department has that
and this is taking out the one hundred thousand dollars ($100,000), but freeing that up for
the General Fund. I mean, it is like Councilmember Hooser was trying to use where there
was...if there was extra money. As it turned out with Keith's report there was not, but in
this case there is. So, it seems to me you need to be able to use whatever resources you
have first in your Department and then go for General Fund moneys.
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Mr. L. Rapozo: Okay. So, what I am hearing from you exactly
two (2) things. One, the intent of the Ordinance.
Ms. Yukimura: Right.
Mr. L. Rapozo: Last year, when we were here, the intent of the
Ordinance, from my understanding sitting here, was that the Council needed the
information as to how we are going to use that money, but you did not want to remove the
latitude that we needed if we needed to make repairs immediately. The way that the
Ordinance got written and the final Ordinance that came out is a little different in terms of
its interpretation. Again, prior to that, we had done that when the fund was over two
million dollars ($2,000,000). We did make that commitment to help the General Fund and
we did fund our R&M projects through it, but I believe now, the fund is down to what I had
stated. So, by depleting it that much we take the risk of anything being more than one
hundred twenty-two thousand dollars ($122,000) that we would not have the moneys there
ready to readily move on fixing emergency repairs.
Ms. Yukimura: And you would come before us then?
Mr. L. Rapozo: Yes.
Ms. Yukimura: But the whole intention of the Ordinance and if
the Administration the Ordinance is not right, then you need to come and propose an
amendment. The whole intention of the Ordinance is the Council shall appropriate. So, we
shall put forth whatever we do with all of our other moneys. We take them from different
funds, but we need to put them out for whatever use and that needs to be clear in the
budget. So, I think what we are doing is we are saying you have one hundred sixty-four
thousand dollars ($164,000) for emergency repairs...
Mr. L. Rapozo: I can disagree with what the intent of the
Ordinance was because we had the discussion, but we will leave it at that.
Ms. Yukimura: Okay.
Mr. L. Rapozo: I am telling you what the effect would be if you
make this decision.
Ms. Yukimura: Okay.
Mr. L. Rapozo: So, I leave it up to you.
Ms. Yukimura: Okay. Thank you.
Chair Furfaro: Any additional questions for Lenny?
Mr. M. Rapozo: He answered it already.
Chair Furfaro: Okay. Thank you.
There being no objections, the meeting was called back to order, and proceeded as
follows:
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Chair Furfaro: Discussion members? Mr. Kagawa.
Mr. Kagawa: You talk about making cuts that is not discussed
with the Administration or not getting their approval, this is one of them. I will not be
supporting it.
Chair Furfaro: Other discussion?
Ms. Yukimura: Yes, Mr. Chair.
Chair Furfaro: Go right ahead.
Ms. Yukimura: In passing this Bill, I think it was very clear to
us that we wanted accountability in terms...and transparency in terms of how there
moneys are being used and that it be part of the budget process. So, that is what I am
doing here. I, actually, this morning I asked staff where is the proposal for the use of these
funds and they...we do not really have a breakdown, but I think my taking one hundred
thousand dollars ($100,000) still leaves a big bulk of money, one hundred sixty-four
thousand dollars ($164,000), which the Parks Department has full use of at their discretion
for emergencies or otherwise. So, I think this is...in terms of every Department using their
resources maximally in a time of tight budget this is no different.
Chair Furfaro: Okay. Any additional discussion? If not, we are
going to go ahead and vote on Councilmember Yukimura's proposal. Let us do a roll call,
please.
The motion to utilize funds in Fund 209 to be used for these repair & maintenance
expenses that are being moved from the General Fund was then put, and carried by
the following vote:
FOR APPROVAL: Bynum, Hooser, Yukimura, Furfaro TOTAL—4*,
AGAINST APPROVAL: Chock, Kagawa, Rapozo TOTAL— 3,
EXCUSED & NOT VOTING: None TOTAL—0,
RECUSED & NOT VOTING: None TOTAL— 0.
(*Pursuant to Rule No. 5(b) of the Rules of the Council of the County of Kauai, Council
Councilmember Bynum and Council Chair Furfaro was noted as voting silent, but shall be
recorded as an affirmative for the motion.)
Ms. Fountain-Tanigawa: So, it goes with the nos.
Chair Furfaro: It passes.
Ms. Fountain-Tanigawa: It goes with the nays.
RICKY WATANABE, County Clerk: No, the nays.
Mr. Hooser: Passes?
Ms. Yukimura: Passes? No, it does not pass.
Ms. Fountain-Tanigawa: It goes with the nays.
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Mr. Watanabe: It goes with the nays.
Mr. Rapozo: It goes with the motion.
Mr. Watanabe: Affirmative of the motion.
Chair Furfaro: The question is it goes with the motion. You
have two (2) silent. What is the outcome?
Mr. Watanabe: Oh, yes.
Mr. Rapozo: It goes with the motion. If the motion is to
remove, then the vote is...in essence it is an aye. It goes with the motion, not with the
majority.
Ms. Yukimura: That is right.
Mr. Rapozo: It is with the motion. So, it would be a 4:3
passage if Roberts is correct.
Chair Furfaro: Because the motion is to approve?
Mr. Rapozo: You know Mr. Robert?
Chair Furfaro: We know him.
Mr. Rapozo: Thank you.
Chair Furfaro: So, you are concurring with both Mr. Rapozo and
I? The silent votes went with the motion?
Mr. Watanabe: Yes. It goes with the affirmative of the motion.
Chair Furfaro: Yes, okay.
Mr. Bynum: Can I just...
Chair Furfaro: Go ahead, Mr. Bynum.
Mr. Bynum: I just wanted to point out, it is one of the
anomalies of always voting first. I really did not know the outcome. I was really torn. So, I
stayed silent because...anyway, but I really did not know what the outcome would be, but
when you vote last you know.
Chair Furfaro: Okay. So, was that something calling for us out
there?
Mr. Rapozo: I do not know.
Chair Furfaro: Can we just take a short recess?
Mr. Rapozo: Somebody very happy or somebody...
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Chair Furfaro: We are on a short recess here, three (3) minutes.
There being no objections, the Committee recessed at 12:10 p.m.
There being no objections, the Committee reconvened at 12:11 p.m., and proceeded
as follows:
Chair Furfaro: Can I get your folks attention here? We have one
(1) more add item. Let me ask, Administration, are we going to come some travel idea
before we go to lunch please?
There being no objections, the rules were suspended.
Mr. Barreira: Chair, we had conveyed the instruction to all of
our Department Heads and our intention is to gather those numbers and collectively have
something prepared for you after the lunch break. If that is okay?
Chair Furfaro: Okay. Will it be right after the lunch break?
Mr. Barreira: We believe so, sir.
Chair Furfaro: Okay, because in the afternoon, I want to work
on real property, okay?
Mr. Barreira: Understood.
There being no objections, the meeting was called back to order, and proceeded as
follows:
Chair Furfaro: So, on the additions we have one (1) here from
Mr. Bynum, and you have another add? Okay. Might as well. We are negative a bunch.
Go ahead, Mr. Bynum, you have the floor.
Mr. Bynum: I appreciate the opportunity. The item is one
hundred twenty-five thousand dollars ($125,000) for, and I forgot how it was framed.
Yvette, if you can...the name of that one. Has this been circulated to Councilmembers? So,
let me just start with the narrative as she is passing that out. I have discussed this several
time that we, in my opinion, have a pretty severe data collection and access crisis our
County. I had a meeting with Jay, Steve, and Brandon a few months ago addressing a
variety of concerns. I met with Planning, and I do not want to belabor this because
unfortunately, we did not get the agenda item, but I have an agenda item coming up to
have a more robust dialogue on these issues, but just a couple of examples. I still do not
know for five (5) years in Planning for instance, of our agriculture parcels, which one have
been subject to a one-time subdivision. I asked that questions five (5) years ago. I still do
not know the answer. We do not know where we have agriculture dedications to whom. We
do not know. We have not been able to compile it in six (6) months since the introduction to
understand exactly where all of our agriculture leases were and what the extent is.
Famously, we have text data that was reported in aggregate to the Council and it turned
out later when we dove down into the detailed analysis that the data had been presented to
the Council was wrong, hugely wrong, for years and we made policy decisions based on
that. I think since Brandon has come in he has done an outstanding job. We are working.
He is working. He has been cautious and slow. He left positions open. I do not mean this
to be criticizing because you have to get the right people in the right place to accomplish
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these very complex tasks, but I could go on and on in these examples. During the
presentation, Mike will come here from the Planning Department and talk about what they
are doing to be ready to deliver the data when we have some place to collect and analyze it.
Enough said about that. The purpose of this is to get a consultant to work with Information
Technology (IT) to identify the scope-of-work and the most critical priorities. I know there
is priorities where I do not have access to data and I consider it critical, but the
Administration is the one who should do an overall analysis of that, not at the Council
level. So, I would like to put this in the budget. IT, for a consultant to begin this data
analysis and look at the scope-of-work about how we get up to speed to meet these critical
needs. That is it.
Chair Furfaro: Discussion members? JoAnn.
Ms. Yukimura: So, have you spoken to IT about the project and
is it something they can do this year or begin to do this year?
Mr. Bynum: I have asked that question for three and a half
(3.5) months from IT and Finance, and I have not got a real specific answer. I think, and
you can call them up and ask them. I think what they would say is, "Yes, we recognize this
is a critical need and we would move some key people into key positions," but hopefully they
will say having resources to really organize and get the scope of the need and get us started
is something that I believe they easily could do, but they have no given me a straight
answer. The answer is I have not gotten a straight answer, but I did pose a question six (6)
months ago about it.
Chair Furfaro: Further discussion? Mr. Kagawa.
Mr. Kagawa: Thank you, Chair. If we are at this point still at
a deficit of three million one hundred thousand dollars ($3,100,000) and it was not
determined important enough by the Administration to put it in at least the supplemental
budget, then I feel that we should not be approving something that is not a green light, a
strong green light, by the Administration. Thank you.
Chair Furfaro: JoAnn.
Ms. Yukimura: One of Councilmember Bynum's greatest
strength is his ability to look at fiscal numbers and Real Property Tax and analyze it. I
have learned so much from him and the analysis software that Steve has worked on is
extremely useful in terms of looking at real property tax scenarios and figuring out to the
person how people would be affected by it. So, I feel like Tim is talking about something
very important here and as someone who back in 1978 went to the Planning Department as
a young Councilmember and tried to figure out how many lots in agriculture we had that
were already one time subdivide and were not, and how many five (5) acre, ten (10) acre,
thirty (30) acre, and one hundred (100) acre agriculture lots we had. I was flipping
thorough the applications and trying to tally it myself. I know how important data is to our
decision-making, but I think this is premature because actually, there needs to be some
kind of scoping before the project is even costed or proposed. I would encourage
Councilmember Bynum to work on that and I am willing to help to scope out...it needs a
scope and I know that you cannot do it alone and that it does involve IT and maybe
Finance. So, I am willing to work on something that will get us to better data. I think we
are crying for Global Information System (GIS) data. I think there is one (1) project that is
already a formulated for that, and so we would have to talk about interfaces and all of that.
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That is why I think we need some more preliminary work done before we fund something
like this.
Chair Furfaro: This is Mr. Bynum's item, and I think he want to
address a question to you, I believe.
Ms. Yukimura: Sure.
Chair Furfaro: I am going to give him the floor again.
Mr. Bynum.
Mr. Bynum: No, actually I want to withdraw this. I wanted
the opportunity to have this discussion. I am requesting of the Chair. We met about these
issues with staff several week ago. I have to concur with JoAnn. Without Steve jumping
up here and saying, "Yes I want this and I can make it," it is premature for a budget
decision. It is not premature in terms of the need and so we will have the agenda item. We
will have a more robust discussion about the need. I will continue to seek to work with
Brandon to scope it better, but it will probably need a Money Bill, and depending on the
outcome of this day, there may not be any money to tap into. So, that was one of the
reasons I wanted to bring it up here. What if we determined in three (3) months that this
really is critical and we cannot wait? We need to put five hundred thousand dollars
($500,000) in to it. Well, the Mayor's proposal leaves us only four hundred thousand dollars
($400,000) for that purpose. So, we could not do it. So, that is why I want to kind of put it
forward. I thought people might say, "Yes, I experienced this too. Let us get this money in
there, frontload it, and get this going," but at this point, I would like to withdraw it and let
the process go a different direction.
Chair Furfaro: Okay. Mr. Rapozo.
Mr. Rapozo: No.
Chair Furfaro: Pass? Okay...
Mr. Bynum: Just one (1) final comment. None of this should
be considered a criticism of Brandon or IT. We all had hoped to have this more flushed out
by now, but it has been kind of a busy year for everybody. So, thank you for the patience.
Chair Furfaro: Okay. We have ten (10) here before lunch. Do
we have anymore items to add? JoAnn.
Mr. Rapozo: Mr. Chair, real quick. I just have a process.
Chair Furfaro: Yes.
Mr. Rapozo: If the additions are coming in, if you could put it
on a paper and let us know if you had gotten concurrence from the Administration. That
would help.
Ms. Yukimura: Okay.
Mr. Rapozo: Thank you.
Chair Furfaro: JoAnn.
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Ms. Yukimura: Yes. I would like to propose an Agricultural
Park Workshop at twenty thousand dollars ($20,000). I started discussing it today, but let
me just say a...
Ms. Yukimura moved to add funding to the Office of Economic Development in the
amount of twenty thousand dollars ($20,000) for "Agriculture: Agricultural Park
Workshop," seconded by Mr. Chock.
Chair Furfaro: Okay. We have a second for discussion on
putting in a twenty thousand dollars ($20,000) Agricultural Workshop. JoAnn, you have
the floor.
Ms. Yukimura: Yes. Do you have the proposal sheet too? I hope
we have one. Oh, wait. That has been passed out. Has...here is a more detailed
description of the workshop. This is a rough scoping. Please do not get tied up in the
details because they are not in stone. So, as I pointed out there was an article in today's
paper, USDA study showing that the number of farms on Kauai has dropped form seven
hundred forty-eight (748) to five hundred ninety-one (591), and that our agricultural
acreages in agriculture have declined by one hundred thousand (100,000) acres. Some of it
is with the plantations going out, but when you look at the farms, the number of farms that
are dropping, you will see that it is not just about big plantations. We are all concerned and
the Mayor's Holo project is about agricultural self-sufficiency. So, we are looking at
increasing agricultural production and increasing food. There are several agricultural
parks that are being proposed. One (1) came before this Council already when we gave the
Stewardship...we approved the Stewardship Agreement to the Kilauea Agricultural
Association and the farmers. There is also one being proposed at Kalepa and one being
proposed on the West Side, and in Anahola. There are big...these would require big
investments of time and money, much of it public money, but what they would give is long-
term leases to farmers so they can make their own investments and grow the crops. Right
now as we heard from Bobby Farias and others in terms of ranchers, they have month-to-
month leases effectively, and for even Rodney Hariguchi and the taro farmers in Hanalei,
they are on very short-term leases as well. They cannot make any kinds of building
investments or soil building investments or anything on that kind of short tenure. We can
look to our private lands and we should do everything we can to encourage the use of
private lands, but we do have the competition of Country estates and out lands being looked
at and used for basically, fancy homes. Farmers cannot compete with those prices. So, to
use our public lands for farmers is the way we need to go and we have some good lands.
But, how we do that, how we manage our lands, how we select our farmers, how we give
them economies of scale in terms of cooling and processing facilities, transportation,
markets, all those kinds of things need to be looked at? So, this Agricultural Workshop, it
would bring people together and discuss these issues, work with experts like...expert farms
like Larry Jeffs and Richard Ha, agricultural park developers like Stevie Waylan who just
finished like a one thousand nine hundred (1,900) acre agriculture park on Oahu. Jimmy
Nakatani from Agribusiness Development Corporation (ADC), Roy Yamakawa from Kaua`i
Extension Agency, and this list is just a beginning list. To talk about all the different
issues that we need to address in the design and planning of agricultural parks. So, I
think...let us see. Let me see the study here. Oh, I am asking for twenty thousand dollars
($20,000). This thing says twenty-five thousand dollars ($25,000), but it is twenty thousand
dollars ($20,000). So, that is the proposal. It is building for the future.
Chair Furfaro: You seconded the motion, did you not? So, I will
give you the floor first and then Mr. Bynum.
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Mr. Chock: Thank you, Chair. Councilmember Yukimura,
can you...do you have somewhat of a breakdown for the twenty thousand dollars ($20,000)?
How much of it is going to Kauai Planning & Action Alliance (KPAA) is what I am
interested in specifically.
Ms. Yukimura: The full amount.
Mr. Chock: Full amount?
Ms. Yukimura: Yes, and in the design of the workshop, they
would work it, but it would be plane fare, ten percent (10%) probably administrative fees,
and the report writing and research probably through a consultant.
Mr. Chock: So, generally, I am supportive of this and I want
to see this kind of work happen. Maybe there is just...if I could just get more confidence in
some specific outcomes that we could look forward to in spending twenty thousand dollars
($20,000) on this initiative I would feel more comfortable. So, I am supportive.
Ms. Yukimura: Okay.
Mr. Chock: I would like to see a little bit more direction on it.
Ms. Yukimura: So, may I try to answer that.
Mr. Chock: Okay.
Chair Furfaro: You have the floor. Go ahead.
Ms. Yukimura: In terms of the report out, it would be
suggestions about what happens from the synergy of other group coming together, listening
to experts, the issues about whether you would allow houses on the land, what the issues
about allowing houses, what kind of competition process there would be for selecting
farmers, who would be a manager and what kind of costs you would look at. There has
been proposals for like small acreages with beginning farmers and then making sure that
they would have larger acreages to move to, to actually develop a farm business. It is those
kinds of very complex issues that have not been thought through in developing an
agricultural park proposal. So, what would come out it hopefully, is some really good
agricultural park proposal with the kind of funding. Now, the report would not do that.
This is mainly a learning process because there are different parties. ADC controls Kekaha
and Kalepa. The IQilauea Agricultural Association is in charge of the Kilauea lands.
DHHL, and I think the Mayor and the Administration have been talking to people. I am not
sure who they are talking about, but it is basically a training process for everybody who is
involved in the design and planning of agricultural parks.
Chair Furfaro: Okay. Mr. Bynum, you have the floor.
Mr. Bynum: Yes, I just have a...again, conceptually very
supportive. Did George Costa know about this proposal prior to toady?
Ms. Yukimura: Yes. He knew about it last night.
Mr. Bynum: And...
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Chair Furfaro: Well, technically that is correct prior to today.
Ms. Yukimura: And...
Mr. Bynum: Well, JoAnn, here...
Ms. Yukimura: No, I am being honest. I could have...I am
just...I had told George about this proposal about six (6) months ago and I shared the first
rough draft with Councilmember Nakamura just before she left of work with the Mayor
because I was the one who put in the line item for last year's budget for an Islandwide
Agricultural Park System. I saw this as the preliminary to the development of an
Islandwide Agricultural Park System. So, it was in rough draft back in summer...last
summer, but to work on...I mean, we had Bill No. 2491. Do I need to say more, shoreline
setback, and some other things? So, it is only now that I was able to work on this proposal,
but I ask you to look at the thinking and the proposal. This has been thought through and
it is logical as the first step for an agricultural park...for agricultural park development on
this island. It is like looking at all of the agricultural parks in the State and some are no
longer in existence. Some have mainly homes on it, not farms. Others have thriving farms
on it. We have to know what works and what...some have mainly landscapers like at
Waimanalo.
Chair Furfaro: JoAnn, you are responding to the question from a
Councilmember.
Ms. Yukimura: I thought I was. Thank you.
Chair Furfaro: He has the floor.
Mr. Bynum: I have been also looking at all of these issues and
this is being worked on all over the place, right? Certainly, Economic Development has
their own agenda here that is well established and Nadine who helped start that over here
is now over there shepherding it. So, I am not clear how this integrates in a way that is
meaningful. So, with all due respect, just like you questioned my about whether my
proposal was premature. I was able to say I would discussed this with Steve Hunt, Mike
Dahilig, the Chair, and had meetings. I think I was a little more prepared than you appear
to be right now. So, if I ask other questions, have you consulted with the Chair of our
Sustainable Agriculture Committee about this proposal?
Ms. Yukimura: I think I mentioned it in passing.
Mr. Hooser: Yesterday.
Mr. Bynum: So, I will just cut to the chase. I believe at the
Council level, bring together all of the players when there is a disjointed thing can be really
valuable and it can also be not valuable. I am not...I do not know enough now to say that
we should go with this visions and how it might compete or contrast or conflict or converge
possibly with all of the other agricultural initiatives that are occurring. So...
Ms. Yukimura: May I answer that?
Mr. Bynum: Sure.
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Ms. Yukimura: So, if you look at this, it addresses all these
disparate things that are going on, would bring people altogether, and in a shared learning
forum. It does not have a...it is the first step toward a vision. It is not a vision itself. I am
hoping that...this is so preliminary a step compared to a big major study. This is just the
convening of all people around a very critical subject that there is disparate parts to that
could be both a catalyst and a way of bringing together. I did look at the discussion that
Diane Zachary had. I have looked at the minutes and I think this is a nice next step to
what is being suggested. It does not contradict anything or stop or go against anything that
is ongoing right now, but it does address a major piece of land tenure that is going to come
majorly through an agricultural park.
Chair Furfaro: Okay, right there I am going to hold you.
Mr. Hooser.
Mr. Hooser: Yes. I support giving additional funding and
support to promoting agriculture in our community, specifically promoting food
sustainability, but I do not support the prescriptive nature of this particular proposal
focused on just agricultural parks. I would suggest that the...it be reframed as simply food
sustainability support and then we could work with the Department of Economic
Development to see. There is many moving parts. The meeting that was referred to with
Diane Zachary, I attended that meeting. Land availability, marketing, water. I mean,
there is a lot of moving parts, and agricultural parks per se are an important component,
but there may be other ways to more effectively support food sustainability than focusing
on agricultural parks, quite frankly. I believe it is not up to us as a Council who none of us
are real farmers, to decide what the best direction is being. So, I would suggest that we
definitely approve these funds and use them to bring local farmers together to determine
what their priorities are other than assert our priorities on them. Again, there are many
ways I think we could improve and support expanding food sustainability and supporting
local agriculture, but I cannot support the prescriptive nature of this request. So, thank
you.
Chair Furfaro: Okay. Any members? Mr. Rapozo.
Mr. Rapozo: Thank you. Many years ago I learned in the
budget process that we can approve whatever we want here and the money will go get
appropriated at the Administration, but if they are not interested in doing it, it does not get
done. So, it ends up just money that could have been used in the surplus or for some
reason, but sits in there or worse yet, which we have seen as well, used for another purpose.
So, I am looking at that number and the last ten (10) times I looked up it still has not
changed. It is still three million one hundred thousand dollars ($3,100,000). Unless, again,
absolutely necessary, absolutely essential, I am not going to be supporting any more
additions period, plain, and simple. KPAA, I am not sure how much KPAA get from the
County collectively through all of their grants and I believe it is probably upwards fifty
thousand dollars ($50,000), sixty thousand dollars ($60,000), somewhere around there.
Maybe more than that. I am not sure, and I guess I get concerned when we start targeting
the funds to one (1) agency when other agencies can provide that service. That is, I think,
in fairness to a lot of the non-profits out there. With Mr. Hooser's proposal, like I said, have
them apply for the grant. I do not want to earmark, this body, earmarking moneys to any
specific agency unless it is an agency that is the only agency that provides that service like
the Civil Air Patrol or Red Cross or something like that, but I get real uncomfortable when
we start shoving money to a specific non-profit. I do not think that is proper. I think does
not give the community non-profits an equal opportunity to provide a service. I mean, I
would assume that there is some great agricultural farming organizations out there that
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could provide this, some planning organizations out there that could do this. So, this is not
a hit against KPAA. I am just saying that as I look through the budget, every year it seems
like there are just more moneys and I just do not think that is our job here on the Council to
make that decision. So, I will not be supporting it. Thank you.
Chair Furfaro: Okay. I am going to take one (1) more question
and then we are going to call for a vote. We are coming up on lunch. Go ahead, Mr. Chock.
Mr. Chock: Okay. Just two (2) things that I need in order to
support this. One is a nod from our Director at Office of Economic Development that he
will follow through on this or not and then two, I have some issues with paying for lunch for
this as well as venue costs. I mean, I am being nitpicky, but that is what we are doing. I
just think that we need to really...we have to be creative in what to spend our money on or
would spend our money on. Bring people here, the right experts here to be a part of the
program, but I want to relook at the twenty thousand dollars ($20,000) is my second
request. That is all. Thank you.
Chair Furfaro: JoAnn, and then I am going to call for a vote.
Ms. Yukimura: I just wanted to respond to Councilmember
Hooser's concerns. I do not object to making it more general. The reason why I focused on
agricultural parks is because the tenure issue is so important and there is movement in
that direction already in a lot of different places. So, it is a means to getting to all these
others issues because without production the issues of transportation, marketing, and value
added all of this is not much to talk about if you are not first producing the food. So, that is
why I focused on this, but I am open to using this money to move forward. The thing is that
sometimes it has gotten so generalized that it has not manifested in any specific results. To
Councilmember Rapozo's concerns about specifying it to an agency, these are non-profits
that do planning works. I am open if Economic Development would like to go through a
selection process as Councilmember Rapozo himself said. Nothing is set in stone when we
pass this because it is all in the discretion of Economic Development, but I want to point out
that one of the greatest successes using an agency, for example, like Kauai Economic
Development Board (KEDB), has been the Creative Technology Center. We needed it, a
consultant like that, and we needed somebody...we needed an entity like Kaua`i Economic
Development Board who had the expertise to know...reach out and find the right consultant
and to manage the consultant and introduce them to the community. So, we saw the
results of really good work by a non-profit working with a consultant. That has been our
model in several case were we have had success. It has also been places where it is not.
So...
Chair Furfaro: So, on that note, I am going to call for the vote.
We have a motion...
Ms. Yukimura: I would like to amend it to make a generalized
agricultural production or food sustainability support.
Ms. Yukimura moved to amend the motion to add funding in the amount of$20,000
for"Other Services—Agriculture Production/Food Sustainability Support."
Mr. Bynum: I have a question about that.
Chair Furfaro: Go ahead.
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Mr. Bynum: So, that would make this an additional twenty
thousand dollars ($20,000) to Economic Development to support their current agricultural
initiatives in essence?
Ms. Yukimura: With consideration for what has been discussed
here, but they will make the final decision.
Mr. Bynum: Okay. Thank you.
Chair Furfaro: Okay. Do we all understand that the title has
changed?
Mr. Rapozo: You need a second.
Mr. Bynum seconded the motion.
Chair Furfaro: Thank you. All those in favor of the change,
please.
Ms. Yukimura: Of the amendment.
Chair Furfaro: Of the amendment.
The motion to amend the motion to add funding for "Other Services —Agriculture —
Ag Production/Food Sustainability Support was then put, and unanimously carried.
The motion to add funding to the Office of Economic Development in the amount of
twenty thousand dollars ($20,000) for "Other Services —Agriculture Production/Food
Sustainability Support was then put, and carried by the following vote:
FOR ADDITION: Bynum, Chock, Hooser, Yukimura,
Furfaro TOTAL— 5*,
AGAINST ADDITION: Kagawa, Rapozo TOTAL— 2,
EXCUSED & NOT VOTING: None TOTAL—0,
RECUSED & NOT VOTING: None TOTAL—0.
(*Pursuant to Rule No. 5(b) of the Rules of the Council of the County of Kauai, Council
Chair Furfaro was noted as voting silent, but shall be recorded as an affirmative for the
motion.)
Chair Furfaro: Okay. So, we have 4:2, one silent. It is 5:2,
passes. On that note, we are 12:45 p.m. We are back at 1:45 p.m.
There being no objections, the Committee recessed at 12:43 p.m.
There being no objections, the Committee reconvened at 2:00 p.m., and proceeded as
follows:
Chair Furfaro: Okay. I think there is a couple housekeeping
items we still have to review here, and I think that was what we said we would do when we
got back from lunch. That, in fact, will be the travel piece. If it does not bother anybody, I
would like to first address it from the standpoint if it does include the Council rates, I
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would like to start by basically saying there is a reconsideration, just to get the piece
straight. Do we have a motion for a reconsideration of request?
Mr. Rapozo: I am sorry. On what section?
Chair Furfaro: We voted on the travel. Mr. Kagawa has some
changes, but Mr. Chock is the vote that would require a reconsideration.
Mr. Kagawa moved to reconsider the motion to reduce travel to Fiscal Year 2013
actual amount in the amount of$344,959, seconded Mr. Chock.
Chair Furfaro: Got enough to orchestrator here. So, there is a
motion to reconsider...
Ms. Yukimura: I second it or did somebody second it?
Chair Furfaro: We got that.
Ms. Yukimura: Okay.
Chair Furfaro: We have a motion and a second for the
reconsideration. I will let Mr. Chock speak first on his willingness to reconsider and then I
will give the floor to you, Mr. Kagawa.
Mr. Chock: Thank you, Chair. For the record, I think what
the motion here was that Mr. Kagawa will be the reconsideration on the vote. We did have
a discussion on the proposal as it has come together, some of our ideas along with the
Administration. So, that is what you have before you. I will turn the floor over if it is okay
with you, Chair, to him.
Chair Furfaro: That is fine.
Mr. Kagawa: I guess in discussion with the Managing Director
and Steve Hunt, we found out that perhaps reverting back to 2013 would unfairly take
away travel funds when the travel funds were already I guess, discussed, I guess, in detail
as to what Department had plans for the particular travel. Instead, I think we have a
better compromise with this request by Managing Director Nakamura, and thanks to her
she came up with something that came from the Administration that amounts to one
hundred thirteen thousand dollars ($113,000). So, while we would be losing a little over
two hundred thousand dollars ($200,000), these cuts are coming from them and if I stuck to
my guns with the three hundred thirteen thousand dollars ($313,000) I believe we would be
losing a vote and I would have zero (0) instead. So, I will work with Councilmember Chock
and support this new amended version. The two (2) major hits come to the Police and Fire.
So, before we get into a heated battle about that, let me just explain a little bit about where
they went and where maybe perhaps they need to be reigned back in. In 2013, well, the
current request let us say, the Police, is going down to about eighty thousand dollars
($80,000). So, for this current budget they will be getting eighty thousand dollars ($80,000)
when they asked for one hundred thirteen thousand dollars ($113,000). So, their cut is
about thirty-three thousand dollars ($33,000), but the eighty thousand dollars ($80,000) is
still up thirty thousand dollars ($30,000) from last year. Last year they got fifty-one
thousand dollars ($51,000) in travel. So, you could say that they are getting a hefty
increase to their travel budget compared to last year of thirty thousand dollars ($30,000).
So, up from fifty-one thousand dollars ($51,000) to thirty thousand dollars ($30,000) this
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year and we still managed to take away thirty-three thousand dollars ($33,000) from them.
For the Fire Department, their request was for one hundred thirty-six thousand dollars
($136,000) and the Managing Director was able to reduce that budget by forty thousand
dollars ($40,000) and their current...for next fiscal they will be having ninety-six thousand
dollars ($96,000), which is down from the one hundred twenty-five thousand dollars
($125,000) they received in 2013. However...no, from 2014. However, in 2013 their budget
was only seventy-seven thousand dollars ($77,000). So, you could say in two (2) years they
still jumped up about twenty thousand dollars ($20,000). So, it is still, I would say, it is
still an increase and I think this is a good compromise. I hope Councilmembers will
support this version. We had a much more stringent version the first time around, but I
think is something that everybody can certainly live with a lot better than the previously
proposal. So, I will be supporting it.
Chair Furfaro: Okay.
Mr. Kagawa: Thank you, members.
Chair Furfaro: Discussion?
Mr. Rapozo: Mr. Chair, just process. We should probably vote
on the motion to reconsider.
Chair Furfaro: Oh, that is true.
Mr. Rapozo: And then get that so that it is officially on the
floor and then Mr. Kagawa could introduce the...
Chair Furfaro: It was the chicken and the chow fun at lunch
that made my sleepy here for a moment. Yes, very good.
The motion to reconsider the motion to reduce travel to Fiscal Year 2013 actual
amount in the amount of$344,959 was then put, and unanimously carried.
Chair Furfaro: Okay.
Mr. Rapozo: Now you can make your motion.
Chair Furfaro: Now, we need the new motion.
Mr. Kagawa moved to reduce funding for travel in the amount of$113,004, seconded
by Ms. Yukimura.
Chair Furfaro: I have a second from Councilmember Yukimura.
Discussion? JoAnn, you have the floor.
Ms. Yukimura: I really appreciate the work that has gone into
this. So, thank you, Councilmember Kagawa, Councilmember Chock, and Managing
Director because I was really uncomfortable with just a broad brush cut and by really
scrutinizing and trying to understand what is cuttable or reducible and what is not, I think,
we are trying to achieve the goal of reducing the expenditures without unduly and
adversely affecting our operations. So, thank you very much.
Chair Furfaro: Further discussion?
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Ms. Yukimura: Let us see. These are selected Departments,
right?
Mr. Kagawa: Yes. I believe...
Ms. Yukimura: It is not every Department?
Mr. Kagawa: No. It is only Prosecuting Attorney, County
Attorney is giving up six thousand dollars ($6,000), Prosecuting Attorney four thousand
dollars ($4,000), Finance giving up five thousand five hundred dollars ($5,500)...
Ms. Yukimura: I see here.
Mr. Kagawa: Yes, and Civil Defense has indicated that they
will be trying to recover those moneys and perhaps more via grants.
Ms. Yukimura: I appreciate all the work everyone has done.
Thank you.
Chair Furfaro: Okay, I am going to ask Managing Director to
come up since she was a big contributor to this. Nadine, welcome to your old hometown
along with Steve.
There being no objections, the rules were suspended.
NADINE K. NAKAMURA, Managing Director: Thank you. Good
afternoon. Nadine Nakamura, Managing Director.
Mr. Hunt: Steve Hunt, Director of Finance.
Ms. Nakamura: So, I just wanted to mention that we did not
include all of the Departments in this list. Some of the Departments, the 2013 were
actually higher than the 2015 numbers. So, those we took out and then those where they
really budgeted close to actuals would have been unfairly impacted by this approach. Also,
if you look at the second, third, and fourth pages, there is a breakdown by line item. So, I
think that is the information you need for your budgeting purposes. This was generated by
the Department Heads. Also, the only one that does not have the details, but I did receive
it over the phone during lunch time is from the Auditor's Office. So, there is a breakdown
there that I will be giving it to staff. I will add those numbers onto this list and then get
them over to staff. So, that is also part of this...the total budget cuts.
Ms. Yukimura: Thank you.
Chair Furfaro: Fair enough. Mr. Kagawa.
Mr. Kagawa: Thank you. I just wanted to kind of point out
that the County Auditor cut was not asked for by the County Auditor's Department.
Mr. Nakamura: No. We looked at all of the line items and
included that one in the entire discussion.
Mr. Kagawa: Okay, because the one too, I noticed that it kind
of jumped. So, it was ten thousand dollars ($10,000) in 2013. In 2014 it went up to thirty
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thousand dollars ($30,000). So, that is a huge jump. It went up twenty thousand dollars
($20,000). In this year, they are asking for basically the same amount as last year, which is
twenty thousand dollars ($20,000) more. So, I think I would say that if you are looking
percentage wise, that is a very fair cut.
Ms. Nakamura: Okay.
Mr. Kagawa: Thank you.
Chair Furfaro: Further discussion? Mr. Hunt, did you want to
say something?
Mr. Hunt: I wanted to add a point of clarity just because we
are talking about some still major increases from 2013 and more so for the public's benefit
as well. A lot of the travel prior to Fiscal Year 2014 resided in other accounts. It was not in
the five thousand six hundred dollars ($5,600) account. We also have training, a two
thousand four hundred dollars ($2,400) account and in Personnel, a six thousand seven
hundred dollars ($6,700) account. So, when you went back to Fiscal Year 2013 as a starting
point a lot of the funding for travel was actually not included in just looking at the five
thousand six hundred dollars ($5,600) account. So, it is not a true measure of the travel or
the growth, and that was one of concerns, I guess, that was expressed, was it is not really
capturing all the travel in the County, just what was budgeted or spent from the five
thousand six hundred dollars ($5,600) series account. So, I mean, that was a real
important issue for us to compare and I think for the benefit of the public, these increase
that we are showing here are not truly increases because it does not include moneys from
the two thousand four hundred dollars ($2,400) or six thousand seven hundred dollars
,($6,700) series accounts.
Chair Furfaro: Thank you for giving us a briefing on the chart of
accounts.
Mr. Hunt: Thank you.
Chair Furfaro: I appreciate that. Mr. Hooser.
Mr. Hooser: Yes. Since you brought it up, are there other
travel buried in other accounts that we are not aware of?
Mr. Hunt: No. That was actually the budget instructions,
for Fiscal Year 2014, was to consolidate all cost that into the five thousand six hundred
dollars ($5,600), so that we could track it separately because you are absolutely right. In .
the past, they had been in other pockets and they would be using training as travel training
and other areas. So, we had to consolidate that and list it out. There is ten (10) accounts
within the five thousand six hundred dollars ($5,600) series and travel training is now one
of those. So, unless you are using that account you cannot take training money and use it
for travel.
Mr. Hooser: So, all of the travel money is contained within
the account we are taking about?
Mr. Hunt: Beginning in Fiscal Year 2014, yes.
Mr. Hooser: Okay, for every Department?
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Mr. Hunt: Yes.
Mr. Hooser: Okay. Thank you.
Chair Furfaro: • My. Bynum.
Mr. Bynum: So, I understand the governance...just to make
sure I understand the documents that are before me the first two (2)...this is the total cut of
one hundred thirteen thousand dollars ($113,000) and this is the breakdown by
Department. What is this last sheet of paper here?
Ms. Nakamura: The last sheet is the Fire Department's
breakdown.
Mr. Bynum; So, this...if we pass this it will result in a ninety-
five thousand dollars ($95,000) cut for Fire or forty thousand dollars ($40,000) cut?
Ms. Nakamura: Forty thousand dollars ($40,000).
Mr. Bynum: Oh, because this over here says ninety-five
thousand dollars ($95,000) total that will be...
Ms. Nakamura: That is the adjusted account.
Mr. Bynum: I see. •
Ms. Nakamura: And the cuts, it will reflect forty thousand nine
hundred sixty-three dollars ($40,963), which is...sixty-two (62).
Mr. Bynum: So, forty thousand dollars ($40,000) from Fire...
Ms. Nakamura: They must have rounded up.
Mr. Bynum: ...Thirty-three thousand dollars ($33,000) from
Police?
Ms. Nakamura: Yes.
Mr. Bynum: And this is in addition to the overtime cuts we
already approved?
Ms. Nakamura: That is correct.
Mr. Bynum: Thank you.
Chair Furfaro: Any additional questions for the Managing
Director and the Finance Director? If not, thank you very much.
There being on objections, the meeting was called back to order, and proceeded as
follows:
Chair Furfaro: Okay. We have a motion and a second on this.
So, I would like to do a roll call vote.
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The motion to reduce funding for travel in the amount of$113,004 was then put, and
carried by the following vote:
FOR REDUCTION: Chock, Hooser, Kagawa, Rapozo,
Yukimura, Furfaro TOTAL—6,
AGAINST REDUCTION: Bynum TOTAL— 1,
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL— 0.
Chair Furfaro: 6:1.
Ms. Fountain-Tanigawa: Six (6) ayes.
Chair Furfaro: Thank you. Staff will make the appropriate
adjustments here. Now, before we go to JoAnn's last one, I want to submit to you folks
yesterday I had talked about identifying some Bond Fund money that is already there that
was for the duplication of the bathhouses, and then I think we all agreed to put that on
hold, but then Mr. Rapozo asked if I would wait until we go through the other pieces. So,
again, this is Bond Fund money and I am identifying that for the general project for
Islandwide Skate Park design.
Ms. Yukimura moved to add funding in the Bond Fund— CIP for "Islandwide Skate
Park" in the amount of$40,000, seconded by Mr. Rapozo.
Chair Furfaro: Thank you. Discussion? Mr. Rapozo.
Mr. Rapozo: Yes. Just for clarification, this forty thousand
dollars ($40,000) is basically a transfer from the duplicate forty thousand dollars ($40,000)
into a new account?
Chair Furfaro: Yes.
Mr. Rapozo: It is a wash?
Chair Furfaro: It is a wash.
Mr. Rapozo: Thank you.
Chair Furfaro: Okay. JoAnn.
Ms. Yukimura: I want to thank you, Chair, for introducing this.
The request for skateboards has been made many, many times over several years now and I
think the need is great. So, to have this money in there so that we can move toward
actually getting a skate parks in our communities is a wonderful thing.
Chair Furfaro: Any further discussion? If not, roll call vote,
please.
The motion to add funding in the Bond Fund — CIP for "Islandwide Skate Park" in
the amount of$40,000 was then put, and carried by the following vote:
FOR ADDITION: Bynum, Chock, Hooser, Kagawa, Rapozo,
Yukimura, Furfaro TOTAL— 7,
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AGAINST ADDITION: None TOTAL— 0,
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL— 0.
Ms. Fountain-Tanigawa: Seven (7) yes.
Chair Furfaro: Thank you very much ladies and gentlemen. I
believe we have one (1) more addition. It should be our last one. JoAnn, you have the floor.
Ms. Yukimura: Thank you.
Ms. Yukimura moved to add funding to the Office of Economic Development in the
amount of$44,000 for"Other Services - CEDS—Arts & Culture—KEDB".
Ms. Yukimura: Can I get a second?
Mr. Chock seconded the motion.
Ms. Yukimura: Thank you. So, as we know, Kaua`i is rich in
culture and arts and it is one of the clusters that is identified in our CEDS, our
Comprehensive Economic Development Strategy. The question is how to leverage our rich
cluster if you will, of culture and arts into economic development meaning jobs; dollars in
the economy; and prosperity for our community, for artists, and cultural practitioners. At
the public hearing we heard many exciting suggestions about how that could happen. They
came from accomplished artist entrepreneurs who are accomplished artists first of all, but
also have been able to use their art and turn it into a business as well. They testified also
to areas in the United States where art has become an integral part of the economy while
enriching the landscape as well in terms of things for people to do and visitors to see. So,
the key elements of a successful economic development project are local champions, a good
consultant or guide, a well thought out plan, and the seed money to make it happen. An
example of artists stimulating our economy is what is happening in Kapa'a with First
Saturday. Actually, in the room today is Kat Cowen who was the spark for this very
wonderful event that happens once a month. For one of the businesses, it is just an
example, but they make their month's minimum in that one (1) night which shows how
wonderful this kind of stimulus can be. So, the idea with these moneys, it would go to
KEDB to work with the artists in the community, the cultural practitioners, and a
consultant to find the best way to turn arts and culture into successful economic
development. That is it.
Chair Furfaro: Okay, and I had a second?
Ms. Yukimura: Oh, there was a second.
Chair Furfaro: Discussion? Mr. Rapozo.
Ms. Yukimura: Yes, it was you.
Mr. Rapozo: In the Economic Development budget, as I go
through all of the projects. This is the rough part of this job, is when...I am sure we all
have received numerous requests. I mean, the last couple of days I probably had more than
a dozen E-mails pertaining to this item that the public knew about, that I did not know
about and I do not think Economic Development knew about it either, but I have been
asked anyway, by numerous organizations that they want some County help. The hardest
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thing for me is to tell them, "You know what, times are tough." As we look at the number
that was on there, it went up I think since we came back from lunch. Well, the last time I
looked at it anyway. It seems like it keeps going up. In Economic Development budget,
there is for cultural programs right now, there is two hundred thousand dollars ($200,000).
One hundred thousand dollars ($100,000) allocated for other projects. Those are undefined
projects that I would call them "Grants-In-Aid" that organizations can apply for and
compete for, but just in this budget alone, there is two hundred thousand dollars ($200,000)
for cultural programs. There is a lot of programs or items in the Economic Development
budget that I had highlighted because of the tough financial times that I question, but I am
not going to go there. It is programs that are not very expensive, but nonetheless, add to
that number that we see up there, the three million two hundred thousand dollars
($3,200,000). Conceptually, it is great. I think we want to help as many organizations and
concepts we possibly can, but there comes a point where we have to say, "I am sorry, not
this year." At the beginning of the budget session I made the comment that it is really do
we need it this year or can it wait, and this is one that I believe can wait. The testimonies
that I have received or the E-mails that I have received, very compelling, but so are the
twenty (20) or thirty (30) others that I have received for other various community projects
that I think this community would benefit from, but it is like the parent that has to tell the
kid, "Sorry, son we cannot get that right now because we cannot afford it" and that is kind
of where I am at. I am not sure, Councilmember Yukimura, if your reduction...where your
reduction, where you plan on getting the funds, but this has to be tied to some funding,
some money.
Ms. Yukimura: I did propose some cuts that were approved.
Mr. Rapozo: Amway, I cannot support this today. Thank you.
Chair Furfaro: Mr. Bynum.
Mr. Bynum: I am going to give my one hundred twenty-five
percent (125%) support to this. I will have a question in a minute, but just to expand on the
economic development, Kapa'a business town has been a particularly interest mind for a lot
of years since I was on the Business Council there when I had a small business, which I do
not have anymore, but what is happening in Kapa'a is exciting. We waited many years for
this. I learned a lot in the last few days and I am concerned that this proposal did not come
sooner and that it be fully integrated into the CEDS efforts that we are already doing and
that will be the source of my question, but regardless, we have this thing that happened. I
learned interesting things. Carol Yotsuda and Kanikapila and all of that, and her Garden
Island Arts Council, somebody told me that she is not compensated at all. She has been
carrying his ball with almost nothing for years and years and so we know from Kat's
experience and when artists connect with the business community, with the Hawaiian
Church, with the Historical Kauai, synergy happens. If we were on the mainland, I am
supposed to say that, but if we were ion the mainland cities would be bending over
backwards to fund this because the sales tax revenues are going up in Kapa`a, right, and
they are. Oh, those are General Excise (GE) Tax revenues here and we do not see those.
We do not see the competitive nature so I cannot sit here and say this has a direct return on
investment, but it does in terms of our people, our artists, our community, and this vision
that Kapa'a has had in particular. The Hawaiian Church, there by the way, hosts now craft
fair on Saturdays and it had helped revitalize the funds of that Church who gives their
facilities to all kinds of community groups all of the time and all of a sudden by a nominal
little fee there because of this event, their Church finances are in much better shape and
have a future. So, this ancillary affects just are really widespread and big. So, for all of
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those reasons, but I will ask in writing where, for future reference how the Administration
will integrate this into ongoing efforts and not have it be duplicative. Thank you.
Chair Furfaro: Mr. Kagawa, then I will go to Mr. Chock.
Mr. Kagawa: Thank you, Chair. I got to perform an audit of
DAGS, the State Department of Accounting General Services, back when I worked for my
Certified Public Accountant (CPA). It was when Ray Sato was the Head of DAGS, Kauai
boy, but I remember the State Foundation on Culture and Arts having and account. It was
an "S" fund I believe. As I looked on that website I see that they do, do grants and
programs. We could not ask the question at the public hearing because it came up only
during the public hearing that we should be looking at funding this, and normally no
questions & answers (Q&A) is allowed at public hearings. I was just curious as to whether
they had pursued any State funding from the State Foundation on Culture and Arts. I
assumed that if they did it was not successful, but I think perhaps trying to get the grant
from the source that has a knowledge in that area perhaps may be the better route rather
than establish this new office on culture and arts in our Economic Development Office. I
think we have Ordinance No. 960 now we have to get into. I think we are spreading
ourselves so thin that I think we have to stick to what we do best and let the State do what
they do best. If it comes to the pint where like I said, the State does not do the right thing
and they cannot help our community and they will not fund this, then perhaps we should do
it, but I do not know if the effort has been made to try and get the State funding first. So,
for that reason, I will not be supporting this at this time. Thank you.
Chair Furfaro: Mr. Chock.
Mr. Chock: Thank you, Chair. I seconded the motion just for
discussion and there are so many things that are important. Removing Mangrove, acres of
it in order to restore our water system and changing mindsets of leaders so that we can
affect some good social change. This project there that is being proposed is just as
important if not more important, but I have to balance that with the fact that whatever
comes to this...to us in front of us we need to be able to look at it objectively and I do not
have that. When people come up here and boy, we take them apart in terms of grants and
requests. So, I am having a difficult time. I am having a difficult time with all of the
additions, actually, and that is why I do not have any additions. When entertaining these,
one, I do not have anything to really look at. I am fully supportive on this and I would
support it in another way if there was a way to do it or if we can find it or if that number up
here was significantly higher, but right now, I am having a difficult time saying yes to this
just in its current stage. Thank you.
Chair Furfaro: Okay.
Mr. Chock: Oh, sorry. Not higher, lower.
Chair Furfaro: Mr. Hooser, did you want to comment? No?
JoAnn.
Ms. Yukimura: Yes. Oh...
Mr. Hooser: Go ahead.
Ms. Yukimura: I guess the most...the thing I can point to is the
Creative Technology Center, which was first the cluster of...let us see, Science and
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Technology, Sustainable Technology Practices, one of those clusters anyway. It was
convening the local people involved in this cluster and working with them to develop a
concrete plan for how to best leverage this cluster into economic development. So, that is
the model that we are looking at. In fact, we have been in extensive conversation with
KEDB and with some consultants about how this might be done. That is the intention
here. So, that it would be after this phase that you would have some concrete proposals,
but this is the due diligence that a lot of projects do not do because they just go for a concept
and start funding it right away. This is kind of a feasibility exploratory stage to try to
really look at all of the options and with the help of a consultant who knows how to do this,
work on the most viable ideas. Certainly, there is a piece that has been developed, which I
think you were sent, but you can look at it. It is a very general piece, but some of the ideas
that were talked about and the focus for some reason has been on Rice Street, which is
already an Economic Development target with our Planning Department, with our housing
project down there, and with the kinds of walkable smart growth improvements that are
going to be made there. So, that is one of them. There has been talk about a Cultural &
Arts Commissioner that could be a liaison just the same way that our Film Commissioner is
and our Elderly Affairs Executive, and so forth. Then there is...so that idea, but we are not
proposing those ideas. Those are the ideas that are going to be explored. When you talk to
the artists just like we talked to the farmers, they are talking about the need for store
fronts that can have retail, education, and training. So, that is also the ideas. Then there
is an ongoing project now working with young people. It was described at the public
hearing where all these different art groups photographers, designers, marketing, and
creators are coming together training young people just to take thrift shop materials and
turn them into fashion. This proposal had the support of the arts community from the long
time champions like Carol Yotsuda and Carol Davis, to the younger entrepreneurs like Tori
Smart and Denise. So, that is the concept and idea here.
Chair Furfaro: Mr. Hooser.
Mr. Hooser: Yes, Chair, I am supporting this enthusiastically
even though the amount of detail that I think we should have on it, we would normally
have in front of us, but if you look at the...and I think one of the prior speakers had a very
good point. There are lots of worthwhile organizations that do a lot of good things in our
community and I for one, would rather fund and leverage their efforts and cut overtime, cut
travel, and cut a lot of the other things. I think we get a lot more mileage out of our dollars
by giving ten thousand dollars ($10,000), twenty thousand dollars ($20,000), forty thousand
dollars ($40,000) to a community group that has demonstrated over the years what they
can do for your community with no pay at all. The example of the Kapa'a even, First
Saturdays, is a small and recent one. Actually, I should say big one and recent one. It has
tremendous economic impacts to our entire County and would not have happened without
the community dedication and work of Ms. Cowen and many others in the community.
There is a long list of events and activities the art community has put forward and enriched
our community and our County. Again, through pure volunteer effort. A similar rationale
goes to some of the agricultural proposals that were offered earlier. These are community
based events or community based projects with people involved in these projects who have
proven themselves for years and I would like to encourage and support that kind of activity
and if it means cutting out other aspects of our government services, again, like overtime or
services like that, then I am more than happy to do so. It is relatively a small amount of
money in the scope of things and the payoff we get is many times, many, many times the
amount of money we are putting into it. I am hopeful and would request that if we are
fortunate and this goes through, that the Kaua`i Economic Development Board follow the
lead of the art community and listen to them very closely in terms of how they move
forward on this and how these funds are spent. So, the art community has come to request
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it and worked so hard for it, play a meaningful role in its implementation as we go forward.
So, I know it is difficult with tight budget times, but I think the leverage and the "bang for
the buck" that we get out of these kinds of things are tremendous and encourage all my
colleagues to vote in support. Thank you.
Chair Furfaro: Mr. Bynum.
Mr. Bynum: My mentor always tells me, "Just speak your
mind and do not sensor." So, I thought this was really good discussion and I had two (2)
proposals today that I did not have enough time to completely flush.out and I withdrew
them. This has elements of that as well, no doubt. However, the things that are different
about this is this group organized and is petitioning us. They are coming to us and
Councilmember Hooser spoke eloquently to the nature of these individuals and who they
are. These are not some folks we do not know. We are already committed to work on these
things. We have an Office of Economic Development that works with a lot of these people
on other projects and they are emergent issues that we are responding to. Our economic
development is responding to First Saturday what I call pleasant dilemmas. We have
parking issues. We have been talking about Kapa'a parking for four (4) years. There has
been proposals for four (4) years. It is great now that we have a crisis, a parking crisis in
Kapa`a because maybe that will put this to action. So, because these are emergent issues,
because Economic Development is already working on them, we have very competent
people there, and because this group petitioned us. I will never forget it. I think my first
budget this young man came in and said the surface of the skate park in Kapa'a was
causing road rash and all we have to do was put the same surface we put on the tennis
courts. Well, you can bet we came up with that money that day. It is a similar
circumstance. This group is really organized, has petitioned us, it fits, and there is
emergent issues. So, those are the things that make it different for me. Thank you. I am
hopeful we can come up with five (5) for this.
Chair Furfaro: Anybody else wants to speak before I speak?
Mr. Chock: Just one (1) clarification, Mr. Char.
Chair Furfaro: Go right ahead.
Mr. Chock: Is it the intent to have KEDB be the facilitator of
this feasibility study?
Ms. Yukimura: The answer is yes.
Mr. Chock: Okay. Thank. Thank you, Chair. I am just torn
on this one.
Chair Furfaro: Okay.
Mr. Rapozo: Mr. Chair, I had one.
Chair Furfaro: Oh, go right ahead, Mr. Rapozo.
Mr. Rapozo: Thank you. I know the feeling, Mr. Chock, and it
is tough. It is tough, but I think at the end of the day you vote with the philosophy that you
came in with. I mean, it is an emotional issue. I will say that sometimes the community
can do a heck of a better job than County or KEDB or anybody. I think that is proven. I
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think what the Garden Isle Arts Council has done over the last few years, I have personally
witnessed it at the hotel that I work at night when they have their events at the hotel. I
mean, it is packed, standing room only. They generate a lot of interest, but I mean, these
people are doing that because of the passion for the arts. They are doing it because I do not
think they do it with any expectation of compensation at all. I go back to my passion of the
youth sports. I mean, if you look at all the coaches, trainers, and cheerleaders, the coaches,
the board members, football, baseball, and soccer. All of these that we are talking about
leveraging. I mean, these people touch thousands and thousands and thousands of kids'
lives every single year. They do it without any assistance, financial assistance from the
County. Not that they have not tried, believe me, I get a lot of inquiries about, "hey, can
the County help" as I stated earlier? Unfortunately, we cannot. We cannot help every
organization. We cannot solve every problem. We can do it sporadically. As I look through
this budget, we have done more than the County's fair share in assisting in non-profits and
social programs that many jurisdictions will not even touch at the County level, but we do
that because this community is a caring community, but like Mr. Chock said, I think he
said it best. When it gets dropped in our lap here, now, today, I did not get a copy of what
you were looking at, Mr. Chock. I am not sure where you got that from, but I did not have
that. I mean, I have a one (1) page thing that says forty-four thousand dollars ($40,000)
and without an opportunity to vet is out, it is just difficult. It is just very difficult for me to
support, but I do want to remind my colleagues that if in fact we are going to set up...the
other Counties for example, and I think many of you are familiar with this. The Council
sets up funds for projects. So, they allocate and you basically spend the Council's the
County's allocation of projects that they want. It is your allocation. You spend it how you
want. This County is not there. This County is where now we have to get seven (7) people
or five (5) people to agree, but I could think of off the top of my head, I can think of six (6)
right now I could have staff draft up that I think are worthy, that our return of investments
would be great. I just do not think the time is right right now. I just do not think we have
the disposable income or revenue to make that happen. So, I just want to be cautious. My
last point is, JoAnn, you talked about the CEDS programs and I think it is a great thing. I
remember when Councilmember at the time, Nakamura, brought up CEDS. I did not know
what it was and I was thinking to myself, look at this newcomer coming here with some
hifalutin CEDS, more money, blah, blah, blah. Turned out that in fact, it was a great thing
you did, the CEDS studies. It turned out to be very good, but if you look at the budget
today, what started out as the Video Technology Center...it started as a CEDS project,
small. I forget thaw the original funding was and this year we are funding it to the tune of
one hundred fifty thousand dollars ($150,000) because it grows. It takes on a life of its own.
How many of these projects can we sustain going forward? So, I think we have to get good
at what we do and then use the successful as a model for future programs, but I think to
shotgun and just say we are going to do it all, we just cannot afford it. We cannot afford it,
not this year, not next year and the year after. So, thank you, Mr. Chair, for the additional
time.
Ms. Yukimura: Mr. Chair.
Chair Furfaro: JoAnn.
Ms. Yukimura: I want to point out a really important distinction
that this is not about funding non-profit groups. Those issues came up in our last budget in
terms of a youth afterschool program and we developed a process for doing that. This is
about economic development. It is...and that Kanikapila is an incredible economic
development example in terms of people plan their vacations to come back and participate
in those things. It sparked so much interest in Hawaiian music and it gives...it so enriches
the cultural life which spills over into attracting visitors. It has all kinds of aspects and
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what we are trying to do is make these kinds of things sustainable in a sustainable
economic development. So, you cannot just run it on passion. I mean, we have an
extraordinary living treasure in Carol Yotsuda, but if you want to have sustained economic
growth and progress, you need to have a good foundation for that and that is what this
proposal is to do. It is not just to fund a cultural program or an art program. It is to
develop and economic foundation, a diversification, and support of the local arts community
so they can become self-sustainable. It is a seeding, not a subsidy.
Chair Furfaro: Okay. So...
Mr. Rapozo: Mr. Chair, I just have one (1) question for
Ms. Yukimura.
Chair Furfaro: Sure. Go ahead.
Mr. Rapozo: I know Mr. Kagawa kind of talked about the
State Foundation of Culture and Arts. Did anyone apply for that grant?
Ms. Yukimura: I think there is...as I know it, their arts projects
that are funded, but I do not know if any kind of feasibility that is funded. I know that the
artists have been in conversation with the State Culture & Arts Representative, who is Joel
Guy. They have had conversations with him, but I do not know that money is available for
this type of project.
Mr. Rapozo: Well, I do not know, and I think that would be
the place to start because as I look at the website and I looked at it a couple of weeks ago,
that is quite an organization that offers substantial amounts of money. They have a staff of
thirteen (13) people in Honolulu. I mean, it is not a...it is a huge organization that is State,
that I would suggest that they go through it because they have the resources or possibly
have the resources and it is not the legislature. This is an actual entity that awards grants.
Thank you.
Chair Furfaro: Anybody else want to say anything? Mr. Hooser.
Mr. Hooser: Just as a follow-up. I think nothing precludes
the organization from reaching out to other entities for grants and further support. If the
Office of Economic Development or Kaua`i Economic Development Board, whoever was
going to be managing this process could very well request the applicants to do that and
depending on the results, structure the support accordingly. Again, I think it is a very
worthwhile program. I, like all of us, have seen the benefits that have come from the
individuals who are making the request. I think it is deserved. I think the money, well,
financial benefit to the County will come back many times and I think moving forward, we
should encourage in the future budgets, other non-profits so we can leverage their good
work whether it is cleaning Mangrove or whether it is painting parks or whether it is
developing art programs or training farmers. I believe that is some of the best areas that
we can spend the meter dollars that we have available for community projects. So, thank
you.
Chair Furfaro: Mr. Bynum.
Mr. Bynum: I will just try to give a new reason. Youth sports,
I do not think we contribute directly to little league, right, but we do have KPAL that runs
a big sports league and we have baseball fields, tennis courts, and all kinds of facilities for
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expression of athletics and we all support that. They used to be only for men until Title IX
and Patsy Mink changed that in our history. Maybe we need Title IX for artists too because
they are on the sidelines kind of, so to speak, and they come to us, but it truly is framed
properly. This is an economic development that is consistent with the commitments we are
trying to make to the arts community already.
Chair Furfaro: I am going to say what I need to say and then we
are going to have to have a tape change, and then we will vote on the item after the tape
change. I am trying to get us to a point at the end of the day we also know where we are at.
I think there were good point and choice points on both sides here, but with this...adding
this piece we will be at three million three hundred twenty-two thousand dollars
($3,322,000) short. That is by adding the forty-four thousand dollars ($44,000). So, where
does that put us? Well, that puts us at a point that we are going to be reviewing the
property taxes next and it tells me that yes, we are going to have to get the four (4) votes to
put the resort tax back in which will give us four million three hundred thousand dollars
($4,300,000) and that will leave us one million eighty-eight thousand dollars ($1,088,000)
left. Well, from that even if we put another one-half percent of one percent (0.5%) back into
the Open Space Committee, that will take us to about four hundred thousand dollars
($400,000), five hundred thousand dollars ($500,000), which can go into a reserve. I think
that was one of the items that we wanted to do. It is hard to talk about those things based
on the fact that when we did the straw poll, nobody wanted to commit where they were at
on the Resort Tax, and if nobody commits to the Resort Tax, we are three million three
hundred thousand dollars ($3,300,000) short and where we go from here is the Mayor's
choice, not ours. So, I just want to say that. I think there is a possibility that the Tipping
Fee will pass on Wednesday. I do not feel the same about the Motor Vehicle Weight Tax.
So, that will put us another five hundred thousand dollars ($500,000) the other way, and
then there goes the contribution to the Reserve Fund again. So, for the purpose of
supporting this at this point, I will probably go along with it, but I want to tell you, at the
end of the day, I reserve the right if we are negative to find ourselves not able to balance
any kind of budget that this might be an item that I have to come back and revisit. So, on
that note, can we take a roll call vote for the forty-four thousand dollars ($44,000)?
The motion to add funding to the Office of Economic Development in the amount of
$44,000 for "for "Other Services - CEDS —Arts & Culture — KEDB"was the put, and
carried by the following vote:
•
FOR ADDITION: Bynum, Chock, Hooser, Yukimura,
Furfaro TOTAL— 5*,
AGAINST ADDITION: Kagawa, Rapozo TOTAL— 2,
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL—0.
(*Pursuant to Rule No. 5(b) of the Rules of the Council of the County of Kaua'i, Council
Chair Furfaro was noted as voting silent, but shall be recorded as an affirmative for the
motion.)
Chair Furfaro: So, it is four (4), one (1) silent, and two (2) no's.
It passes 5:1. Again, I want to support it. I went silent because we are chasing three
million three hundred twenty-two thousand dollars ($3,322,000). We are going to do a tape
change.
There being no objections, the Committee recessed at 2:52 p.m.
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There being no objections, the Committee reconvened at 3:08 p.m., and proceeded as
follows:
Chair Furfaro: Okay. Here we are at seven (7) minutes past
3:00 p.m. and I want to have a draft budget that gets completed today. We do not have any
more posting time after today with the way our decision-making was setup. So, let us be
prepared to stay very focused and also let us be very sincere about some of the realities
here. I did summarize for you a little bit on my last silent vote that we are chasing three
million three hundred twenty-three thousand dollars ($3,323,000) at this point. We have
the Resort Tax piece that is in the Mayor's budget. I want to also remind you that if we
vote on these tax pieces that are actually in the Mayor's proposal, we will need four (4)
votes. If we have items that go that increase those, by our own Rules, we will need five (5)
votes, okay? So, as I said to everybody when we got to his point I would allow people to
have ten (10) minutes to go around the table, and thank you for Mr. Hooser's comments
who I first said I would give five (5) minutes around the table and he indicated that we
probably should get at least eight (8) minutes, and then we compromised by going with ten
(10) minutes. We are at a point, before we go into the revenue cycle to give each of you the
time for that discussion. Is there anybody who wants to start their ten (10) minutes? You
will start, Gary? Go ahead.
Mr. Hooser: And I do not need the full ten (10) minutes.
Chair Furfaro: Well, we will put you on the timer.
Mr. Hooser: Okay, and any time I have left, I will yield to
Councilmember Bynum.
Chair Furfaro: Okay.
Mr. Hooser: We have been working together on this and I
have to give him, really, the credit in terms of the person who understands the
spreadsheets and puts them all together. He has spent hours and hours and hours on this.
So, I will cover the broad strokes if you would. I have said from the beginning when I first
came in that what was import to me was for this Council to show leadership in the face of
adversity, if you would. The budget that was presented by the Administration had a four
hundred thousand dollars plus ($400,000+), just a small plus, cushion and the Bond Council
has downgraded our bonds and we do not have a sustainable budget as presented. I feel it
is our commitment of our obligation as a Council to turn that around significantly. So, the
budget revenue projections that Mr. Bynum will cover here in a second will increase the
remaining Fund Balance at the end of the day, to around four million five hundred
thousand dollars ($4,500,000) plus or minus. We will get the exact numbers after I am
done talking. I am talking in broad strokes. It will include some modest tax relief for
people that owner-occupy their own homes. I think that is very, very important to me, and
will not quite be a balanced and sustainable budget, but it will be significantly further
along than we have had, in my opinion, in a long time. Certainly, further along. Much
further along that what was presented to us a short time ago by the Administration. I
think we need to send a strong and clear message to the community and to our Bond
Council that we are serious about this. We are serious about rebuilding our reserves. We
are serious about getting close to a sustainable budget that money coming in equals money
going out. I commend my colleagues for making the cuts that were made in the process. I
commend Councilmember Rapozo for the OPEB proposal and if there was will to increase
that even more perhaps to the amount the Mayor had originally proposed, that would give
us that much more reserves even though given that there are obligations that they are still
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in reserves and they would still increase, in my opinion, the fiscal stability of this County.
So, that in a nutshell, is my remarks. Again, broad strokes, about this Council turning the
ship of state around the budget, if you would, and rebuilding some faith and confidence
from the Bond Council and getting us on track. Thank you. Councilmember Bynum...
Chair Furfaro: How much time is that?
Ms. Arakaki: He used three (3) minutes.
Chair Furfaro: Okay. So, we will give seven (7) minutes to
Mr. Bynum at your request.
Mr. Hooser: Okay, and he will complete the proposal.
Chair Furfaro: When the time comes. Who would like to speak
next? Okay. So, I will give you...no?
Mr. Bynum: My laptop battery died and she is helping me.
Chair Furfaro: Okay. We will go to JoAnn. Ten (10) minutes,
set the timer, please.
Ms. Yukimura: Oh, you want to go first?
Mr. Bynum: Please.
Ms. Yukimura: Oh, okay. (Inaudible). It is fine with me if
Mr. Bynum goes first.
Mr. Bynum: I am sorry. I am just a little at a disadvantage
because the laptop battery ran out.
Chair Furfaro: So, let me ask a question. Are you not going
now, JoAnn? Are you going to let Mr. Bynum go now?
Ms. Yukimura: Yes.
Chair Furfaro: Okay.
Mr. Bynum: No, I am...
Ms. Yukimura: Are you ready?
Mr. Bynum: Councilmember Hooser and I are proposing these
rates together so I wanted to follow-up.
Chair Furfaro: Okay. Set the clock for seventeen (17) minutes.
Mr. Bynum: So, what I have heard during the course of this is
a lot and I think Councilmember Hooser and I have tried to incorporate all of the mana`o
we have heard here. The Mayor's proposal was to put OPEB back one hundred percent
(100%). That was a strong effort for...and for other Councilmembers. That was a high
priority. For me and others, a high priority was maintaining Fund Balance, maintaining a
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reasonable Fund Balance. If I had my way we would take the Mayor's proposal about
OPEB and keep the Fund Balances fully intact, but during the course of the discussion, the
Council votes and accepted about one million six hundred thousand dollars ($1,600,000)
contribution from OPEB. So, the proposal we are putting forward does not go any further
with that. It honors that is as far as we are willing to go with it, but it does increase
revenues by about four million four hundred thousand dollars ($4,400,000) above what the
Mayor proposed. It uses that primarily to fund the shortfall and to decrease the draw on
the Fund Balance. So, we are not doing these increased revenues to spend more money.
We are doing it to not draw down on our Fund Balance. So, to me, it is a really good
compromise that hits the place in the middle.
Now, this is also the year we have reset taxes for all the categories. So, I do not
know if the rates have been passed out, but I want to be specific about the rationale for
each rate because this changes all of the rates some. When the Mayor presented his
proposal it was his first rate increase that I recall him ever proposing, and it was forty-
three percent (43%) on hotels, that is a twenty-three percent (23%) increase all at once. It
was a big one. Hotels are ready for it. They have been ready for it since 2008 and I will not
go into all of that, but they have been on notice since 2008 that we were undervalued in the
resort sector and we were going to make this adjustment, but the Mayor did not propose
any rate increase in Vacation Rental class, which we created this year. That has transient
accommodation, Vacation Rentals. It has condominium units that are used for vacation
rental purpose. We created this category for some people that increase their taxes by
moving into the category, but we have been saying here for a long time that we are going to
increase taxes on Vacation Rental category and the hotels. So, this does an increase on the
Vacation Rental category that generates three million eight hundred thousand dollars
($3,800,000) in revenue. It does a small increase on the Residential class, which now the
way we are restructured, has homes that are used for commercial purposes. They are
rented at long-term or they are used for other commercial purposes and rented at market.
If they are rented at affordable, they would not be in this class because we have created this
great incentive for long-term affordable, they would be in the Homestead class. This is a
relatively modest increase in this category along the lines of do we want to keep...do we
want to spend our borrowing down to nothing or do we want to get closer to having the
revenues that equal our obligation? So, Commercial and Industrial only go up ten cent
($0.10). It is very little change because they did not have a big drop in their taxes during
the downfall like Resorts, Agricultural, and other classes did. Industrial, Agricultural, and
Conservation go up thirty-five cents ($0.35). So, all combined, it has increased revenues by
going back to the Mayor's eleven dollars ($11) of eight million seven hundred forty-five
thousand dollars ($8,745,000). That more than makes up our differential and reduces our
draw on the Fund Balance. This does not spend money somewhere else. It reduces the
draw on the Fund Balance.
Now, the last class that I did not discuss is the Homestead class. We now have a
Homestead class that includes all resident homeowners who use that as their primary
residence. It also includes, if you had two (2) homes and one (1) of them was affordable, you
would stay in that class, on your lot. If you are a landlord and you have rental and you
were rented affordable, you are in this class. This is the kama`aina class. This is the class
of the people who live and work here. It is a fact that during the economic downturn hotels,
resorts, out of State landowners, second homes that are in the Residential class got big
decreases in taxes by us not adjusting rates while at the same time resident homeowners
had increases. They did not get the decrease we did. I have been arguing for this kind of
reset for a long time. Last time...anyway. So, this has very modest decrease in taxes for
homeowners by setting the rate at two dollars and fifty-five dollars ($2.55). It is about, and
I do not have the spreadsheet here, but it is about one million four hundred thousand
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dollars ($1,400,000) of additional relief bringing the total relief to this class of like three
million four hundred thousand dollars ($3,400,000) when they were entitled to five million
four hundred thousand dollars ($5,400,000) at least. The last point about that is this is the
reset year and if this laptop comes up I can tell you the numbers. As I mentioned, all of the
people that were in this Homestead class, and I had hoped to show you this chart that is on
this. Some are paying very high taxes, some very low. This year, they are all going to pay
market taxes. We agreed on that. This is a report and structural change, but that means
that people that have been paying low taxes are going to have increases. If we lower this
Homestead rate, the amount of people having increases goes down and the sizes of those
increases go down.
So, I want to put more economic vitality into the hands of the people that live here
so they can spend it in our local businesses, but more importantly, people that have been
around know I have been pursuing this tax relief for five (5) years. I lost. It did not
happen. We could make a little modest adjustment this year, but we cannot make the big
one I had hoped for. We can make a modest one this year and we can move to a very close
sustainable budget. Next year, we can make up that one million six hundred thousand
dollars ($1,600,000) in OPEB, next year. That is about revenue forecasting, but our
revenue outlook is not bleak. It is not great, but it is not bleak. Steve has already
announced that he has proposals to put before the Council for next year that will increase
revenues. I have one (1) that is coming very soon. So, this is the year we have to get
through and do the reset. So, I would love to entertain questions or other ideas about how
we make up this shortfall, but to me, this draws no further down in OPEB, but it leaves
about five million five hundred thousand dollars ($5,500,000) in our Fund Balance. It will
make the Fitch and Moody people happy. Now, that is not my goal, but that also is a
benefit.
Chair Furfaro: You still have eight (8) minutes.
Mr. Bynum: If I can get...
Chair Furfaro: That was the ten (10) minutes line that went
over.
Mr. Bynum: I would love to put this spreadsheet up here so
you can...which is coming up now. It has power.
Chair Furfaro: okay. So, wala'au a little bit more while the
power is coming up.
Ms. Yukimura: Can we ask questions?
Mr. Bynum: Absolutely.
Chair Furfaro: Freeze the time here. It is on his clock time. You
can ask him questions afterwards. I want to give him all of his clock time first.
Ms. Yukimura: Okay.
Mr. Bynum: It is a thirty-eight (38) megabyte spreadsheet.
So...
Ms. Yukimura: Process question while we are waiting.
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Mr. Bynum: Yes.
Ms. Yukimura: Chair.
Chair Furfaro: Okay. We are now...freeze his time. Go ahead.
Ms. Yukimura: So, I guess we could ask him questions or we
could go around making our revenue comments and then have question and answer.
Mr. Bynum: Well now that I have this, I am ready.
Chair Furfaro: Okay.
Ms. Yukimura: Oh, he...
Chair Furfaro: This is what we are doing. There is not changes
to this rule.
Ms. Yukimura: Okay.
Chair Furfaro: Mr. Hooser gave seven (7) of his minutes to
Mr. Bynum.
Ms. Yukimura: Right.
Chair Furfaro: Mr. Bynum has the floor, his ten (1) minutes plus
seven (7). He can talk about his presentation here while his screen gets booted up, okay,
and it seemed to be coming?
Mr. Bynum: Yes, it just does not have...yes.
Mr. looser: There is it.
Mr. Bynum: Very close.
Chair Furfaro: There it is. How much time here is on the clock?
Ms. Arakaki: Eight minutes fifty-one seconds (8:51).
Chair Furfaro: Very good. It is unfrozen at eight minutes
fifty-one seconds (8:51).
Mr. Bynum: If I could get some help just for a second here
while I talk. So, what is up on the screen shows the change in tax rate on the far right and
the tax revenue or minus. So, by moving the tax rate to two dollars fifty-five cents ($2.55)
in Homestead, it generates one million seven hundred thousand dollars ($1,700,000) of tax
relief for that class. So, that is a minus. Then you go to Residential, which are these
second homes, homes rented long-term at market, and out of State homes, those kinds of
folks. That goes up thirty-five cents ($0.35) and it generates one million nine hundred
thousand dollars ($1,900,000) of additional revenue. Vacation Rental is the class that the
Mayor...that is tied to the resort industry. The Mayor went two dollars ($2) on Hotels. We
are suggesting one dollar forty-five cents ($1.45) on Vacation Rental and that is a big hit.
That is what they expected. It is part of the Resort class and those increases in the Resort
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class are still well below our loss from Transient Accommodations Tax (TAT). So, Hotel &
Resort remains at the Mayor's proposal, but in this thing shows a two dollars ($2) increase,
but going to the eleven dollars ($11) that the Mayor proposed. Commercial and Industrial
have these modest increases of ten cents ($0.10) and Agricultural and Conservation
similarly thirty-five cents ($0.35) increase. Commercial and Industrial less. Again, because
during the economic downfall they did not get a big tax break like the Residential class, the
out of State owners, the hotels, resorts, Vacation Rentals, and Agricultural.
During...between 2008 and 2010 had big reductions in taxes. So, altogether this generates
eight million seven hundred thousand dollars ($8,700,000) more filling our gap that was up
there and then reducing our draw on the Fund Balance. As soon as somebody can do that
math, we can have it and then calculate...I did not understand this too well, the second
page.
Ms. Yukimura: Who did it?
Mr. Bynum: Maybe...yes.
Chair Furfaro: While they are talking, just in round numbers
this does not generate eight million seven hundred thousand dollars ($8,700,000) more than
the Mayor's proposal. It generates four million four hundred thousand dollars ($4,400,000)
more.
Mr. Bynum: Right.
Chair Furfaro: Because you already counted the four million
three hundred thousand dollars ($4,300,000) in there.
Mr. Bynum: Did we get these rates? Anyway, yes. So, I can
explain the second page. Of the Real Property Tax (RPT), this has an eight million seven
hundred thousand dollars ($8,700,000) increase to Real Property Tax when it includes the
Mayor's proposal.
Chair Furfaro: That is what I wanted to say.
Mr. Bynum: Right, and so when it does not include it, it is
about four million four hundred thousand dollars ($4,400,000). So, we kind of went with
the Mayor's proposal and then looked for this additional revenue. Then you look down and
it says one million one hundred twenty thousand dollars ($1,120,000). One million one
hundred twenty thousand dollars ($1,120,000) has to go to the Access Fund because we did
not vote to take from there. That makes the shortfall three million two hundred
twenty-nine thousand eight hundred eighty dollars ($3,229,880), right, and then this four
million two hundred ninety dollars ($4,290,000) is revenue above that. So, this four million
two hundred ninety dollars ($4,290,000), by default will go to the General Fund and will
reduce the draw on the Fund Balance. So, we will maintain what Government Finance
Officers Association (GFOA) says is a prudent minimum reserve. Under the proposal we
are draining our Fund Balances almost to zero (0). We go to three percent (3%). GFOA
said, "Five percent (5%) minimum" and Wally Rezentes on behalf of the Administration
stood up here and said, "No, we want fifteen percent (15%) or twenty going to need more
than five percent (5%). We cannot go down to three percent (3%) responsibly in my view
and I think others believe that.
Chair Furfaro: That was three (3) more minutes, Mr. Bynum.
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Mr. Bynum: Oh, okay. So, I am kind of done other than to get
these in here and say...oh. The important one is...let us put this at two point five (2.5).
Ms. Yukimura: It disappeared.
Mr. Bynum: The last piece is the count of increased taxes
under this proposal...
Chair Furfaro: It is aloha.
Mr. Bynum: Under this proposal with the Homestead rate at
two dollars fifty-five cents ($2.55), two thousand five hundred seventy-six (2,576) taxpayers
in the Homestead class are going to have tax increases and...oh, this one does not...I used
to have the average in here. If we stick at three dollars five cents ($3.05)...do that. Then
four thousand six hundred (4,600) local taxpayers are going to have increases and the
average is going to go up about two hundred dollars ($200) to I think it is three hundred
fifty dollars ($350) on average. So, we never did this reset to kind of...that was anticipated
in 2008. In 2008 the Administration proposed a thirty-five percent (35%) reduction in
homeowner's taxes. It did not happen. It went up. Then they have come down depending
where they were. This will bring them down just a little bit. I am kind of pau.
Chair Furfaro: You are finished? You are complete?
Mr. Bynum: I think there are many others ways to analyze
this, but I think this is a really balance approach based on what I think everybody's
priorities were during these last two (2) days.
Chair Furfaro: Thank you. Begin to call the time now. Now let
me ask other members, do other members have presentations at this time inside your ten
(10) minutes? If not, I am going to ask for...
Ms. Yukimura: I do.
Chair Furfaro: You have another presentation? Okay. Get
ready, we are going to give JoAnn the floor, and we are going to count her ten (10) minutes.
Ms. Yukimura: So, I promised that I would have a proposal to
offset my no vote on the Open Space law, which...and that Bill would have taken a way to
the Open Space Fund by about one million dollars plus ($1,000,000+). I wanted to just let
everybody know, and I am open to a lot of other ways to do it. I guess I first looked at
increasing the Hotel rate by another fifty cents ($0.50) to generate one million dollars
($1,000,000) because the visitor industry does greatly impact out open spaces. You can look
at Po`ipii Beach Park, Salt Pond, Hanalei, Black Pot, and the visitor use on those beach
parks are great, but I really hesitated because of the rate increase already proposed by the
Administration. So, I looked instead at the Residential class, which is mainly second
homes. They are not owner-occupied classes and if we increased the rate by twenty cents
($0.20) it would generate one million dollars ($1,000,000). I am thinking that they are also
using our parks and could pay a small bit, per one thousand dollars ($1,000) is twenty cents
($0.20) on one thousand dollars ($1,000) additional to what they are paying. That would
generate one million one hundred fifteen thousand two hundred eighty-seven dollars
($1,115,287) and I think it makes that class bear its share of open space impact and allows
us to keep the Open Space Fund intact so we can accumulate the moneys that we will need
to acquire new open space, public access, any major acquisition to expand our Open Space
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Fund. (See Attachment 4) I also looked at, and this is...increasing all tax classes by ten
cents ($0.10) with the idea of replenishing the reserve Fund by about one million three
hundred thousand dollars ($1,300,000). That means everybody does...every class does its
share on a very small amount, ten cents ($0.10) per one thousand dollars ($1,000)
valuation, but putting all of us back because the reserve is a basic indicator of the health of
our budget, putting all of us back better in some replenishment of the Reserve Fund. (See
Attachment 5) So, those were two (2) ideas that I put forth for consideration. I think this is
a good practice that we are doing right here to look at various alternatives and achieve our
budgetary goals, which is a healthier reserve, not raiding the Open Space Fund, a honed
down budget that tries to cut as much fat or at least take some share for every Department,
every operation which I know the Administration has worked hard on and still fund some of
the initiatives for the future, which we have to keep doing if we are to do our job and
prepare for the future.
Chair Furfaro: Okay. Mr. Kagawa.
Mr. Kagawa: First of all, I would like to say that we, myself
and Councilmember Rapozo, have a third option. (See Attachment 6) First of all, I would
like to thank Councilmember Bynum and Councilmember Yukimura for their proposals. It
is very clear and easy to understand where the proposed increase will take place. I think
myself and Councilmember Rapozo, and I am talking broad, as Councilmember Hooser,
broad strokes. We are looking at splitting the difference between both the Vacation Rental
and Hotel & Resort classes. So, instead of...like Councilmember Yukimura is just sticking
with the Mayor's proposal at raising four million three hundred thousand dollars
($4,300,000), we are looking at raising only one dollar ($1) and getting two million one
hundred fifty thousand dollars ($2,150,000) out of there and we will be getting the rest of
the two million one hundred thousand dollars ($2,100,000) or whatever from the Vacation
Rental. So, that is basically our proposal in a nutshell. I will give the rest of my time to
Councilmember Rapozo, but I just wanted to give my overall view, Mr. Chair, that if I have
to choose between Councilmember Bynum and Councilmember Yukimura's proposal, I will
pick Councilmember Yukimura's, but I had one (1) question for her. Maybe I can ask it
later, but is that the assumption that the Residential class is more non-residents or what is
the rationale for just selecting that one class, the Residential class?
Chair Furfaro: Go ahead. Do you want to respond?
Ms. Yukimura: May I respond? Yes, these are basically, I think,
second home owners because these units are not their primary home. So, it is a different
situation where it is the sole property and home of a group.
Mr. Kagawa: I guess my next question would be if these are
second homes and they are in the Residential class, are not all of those Residential homes
being rented out to local residents and what would be the effect of them on the rent? I
understand that it is not a really huge increase, but I was just wondering whether we
considered that perhaps may trickle down to the local families.
Ms. Yukimura: That is a consideration. They are renting,
however, those who are renting at low rates, at affordable rates, by our Real Property Tax
laws are not in that category. They are getting the rates of the homeowner occupant rate.
Am I correct? Those who qualify for the long term affordable rentals are not being charged
the rate of the...
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Mr. Kagawa: I understand. If they go out and fill out those
forms from the Real Property Division, right?
Ms. Yukimura: Right. So, they do have to be lower rents, but
they are the ones who are providing affordable rentals to our people.
Mr. Kagawa: So...
Ms. Yukimura: The assumption is that the others are renting,
but at market rates.
Mr. Kagawa: Okay.
Ms. Yukimura: So, it is an investment property in that respect.
Mr. Kagawa: I understand. You are saying that for those that
have affordable rents and for those that need the prices to be the lowest for that class that
needs it the most, they are not going to be affected?
Ms. Yukimura: Those landlords who are renting at the standards
that qualify for a long term affordable rental are not being affected by this rate proposal.
Mr. Kagawa: Thank you.
Chair Furfaro: Did you folks finish your presentation,
Mr. Rapozo? Do you want...
Mr. Kagawa: He has the rest of my time.
Chair Furfaro: Oh, you have the rest of his time? How much
extra time is that?
Ms. Arakaki: Eight (8) minutes.
Chair Furfaro: Okay.
Mr. Rapozo: And I just purchased Councilmember Chock's ten
(10) minutes for one hundred dollars ($100). So, I have like twenty-eight (28).
Chair Furfaro: Very skillful.
Mr. Rapozo: Yes, not bad, right?
Chair Furfaro: Very skillful. Go right ahead.
Mr. Rapozo: I guess I will just, and thank you to
Councilmember Kagawa for bringing up the proposal. We are here today because of the
way we have performed. We meaning collectively, the administration and the Council.
When times were good we did a lot and it has caught up. Now the economy and many other
reasons have caused us to be in this predicament that we are in. This was not the fault of
the public. The public does not vote on this. The public does not spend the money. We do.
They should not be penalized for action that they were not responsible for. I tried to
convince myself not to support any tax increases this year, but after going through this
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process it is inevitable. I mean, there is no doubt that we have to increase revenue at some
point. The proposal that Mr. Kagawa talked about, all it does is it splits up the...I do not
think it is fair to go after the Hotel & Resort for a two dollars ($2) increase. I think that is
just not fair. I think that is not practical. I think for a lot of people to think the hotels and
resorts are doing well, maybe some are, but some are not. That is a hit. That is a huge hit
for one (1) class to take. Vacation Rentals on the other hand, I believe, should also carry
some of the burden because of the extra burden that they put on the communities as well.
So, if we go with a one dollar ($1) on both the Vacation Rental and the Hotel & Resort
classes we almost come to a similar result with Councilmember Yukimura's except we do
not touch the Residential class. I am kind of hesitant to support the Residential class
increase because it does involve a lot of local families that just because they own two (2)
home does not make them rich. There is a lot of fixed income families on Kaua`i that just
happen to have an extra house. It may be an old house. I may be a home that they are just
hanging onto, barely, and could be using it for affordable rental or not, but it does not
matter. It is just that I think at this stage, I believe, that with the increase of one dollar
($1) per thousand d (1,000) in the Vacation Rental and the Hotel & Resort would be
sufficient. Does that get us to where I want to be as far as the Reserve? No, not even close,
but I had hoped that we would have been able to reduce the budget by a substantial
amount. I thank my colleagues that supported my proposal of almost one million five
hundred thousand dollars ($1,500,000) that passed yesterday, and the Chair is right. One
(1) of that, the big one, is not a cut. It is an "I Owe You" (I.O.U.), and I fully recognize that.
I think that this County, we, the government, now needs to basically, and not as a
sexist comment, but to basically say, "We have to man up now." We have to pull us out of
this hole and we have to do it ourselves. We have to do it with the least impact to the
citizens who had no fault in this. We do not predict the economic future. I mean, we can
try, but things happen and many can blame the Mayor, but the Mayor cannot really do
anything without the blessing of this Council. The budgets were all approved by this
Council. So, it is a collective thing. We moved forward and I can relate to this personally
because as a business owner I did the same thing. You take risks. You go and you try to
improve your services and you find out that, for me, you got in over your head and all of
sudden you cannot afford nothing. You do not have the cash flow to maintain the level of
service that you once had. That happens. That is what this is all about. I am trying to
figure out how to get through this with the least impact to the taxpayers and I think the
proposal that we have is a very fair one. We are not going to make the Hotel & Resort and
Vacation Rental communities happy, but I believe that they should pick up the tab on some
of these burdens, and in addition to the cuts that were made. This is just a starting point.
I mean, we have to look forward now, to further make our operations efficient. I mean, we
just have to do it within our individual Departments and hopefully gain some ground, but I
think to tax every class, I definitely cannot support that. The other thing I cannot support
is, this may sound horrible, but to give tax relief at this time. One of the biggest argument,
and I spend a lot of time at the legislature, one of the biggest comments that I heard from
the State Legislature from many of the Representative and Senators was that when we
everyone else was struggling and with this County, because we had the resources we did
not lose certain things. We did not do the furloughs. We gave tax relief when we probably
should not have. They do not forget those kinds of things. The State Legislature does not
forget those kinds of things. The fact that we got our TAT kind of cut, that played a big role
and that is what I hear directly from the Legislators, that we were giving money back and
no we are saying, "State, give us more money." So, I do not think we should be, as much as
I would like to, I do not think we should. You saw the numbers. We are chasing millions of
dollars. Why would we give tax relief? I mean, it is at a stable point right now and that I
think we should maintain that. I think we should tax the classes that can sustain. I think
two dollars ($2) for the hotel is not sustainable. I think it will hurt more than help, and the
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impacts in the Hotel & Resort, believe me. Now that I have participated in that line of
work, they do not have a problem, unlike the County, the State, and government, they do
not have a problem sending people home when revenues drop. I see it every day. The
house count drops, the restaurant is empty, you go home. Just like that. Hours cut. That
is what I am afraid of when we do things that may be counterproductive to what we are
trying to accomplish. So, I believe our proposal is fair. I think one dollar ($1) for Vacation
Rentals, one dollar ($1) for Hotel & Resort would be sufficient. I think, I guess, the lease
impact to our taxpayers and I think that is all I have. I yield the rest of my time to
Mr. Chock and I will ask for my money back.
Chair Furfaro: You have the floor.
Mr. Chock: Thank you, Chair. First, I just wanted to thank
Councilmember Bynum for the cool spreadsheet of being able to take that tool and play
with the numbers. It really has been helpful and I wish I had taken more advantage of it in
the process here. The only thing that I have done is just really listen to what people's
interests are and put together my own here for us to look at, which is a combination of
them. Before I present it, I mostly just had some questions. So, I would not want to
present it until we get some of those questions vetted, if possible.
Chair Furfaro: Okay. Anybody else want to speak? I have not
had my turn now. Okay. First of all, I want to thank all of the members for putting these
three (3) proposals that we have out here. I also think it is appropriate probably at this
time, how quick we forget what happened to us. A big part over here is, everybody quickly
forgets that we yielded twenty-seven million dollars ($27,000,000) over the last three (3)
years to the State. Yielded. The legislative piece said we were entitled to after the
Convention Center, fourteen point five percent (14.5%) of the balance of forty-eight percent
(48%). They capped us. Gentlemen, I want to reiterate that, how quickly we forgot that is
what happened to us as well. Now, granted, we have some other situations here that also
said, "And going forward, do not count on any increase in the TAT." If fact, they gave us
one million four hundred thousand dollars ($1,400,000) more and they said, "That is all you
will get for the next two (2) years, and oh, by the way, in year three (3) we are going back to
the lesser number." Big part of this. Big part of this. So, these pieces are very interesting
and I would probably like to be able to take a recess to study them a little bit because they
put us in a situation that we have to realize two (2) of the proposals still do not quite make
up for the fact that the straw poll that we took indicated that we may not be getting one
million one hundred seventy-eight thousand dollars ($1,178,000) from the vehicle tax that
is coming up on Wednesday. That is what the straw poll indicated. So, we have to take
that into consideration too. The way we count this out is we should take these increases
that are proposed here that reflect our ten million four hundred thousand dollars
($10,400,000) that we are all counting on for the TAT this year and we should start
deducting from the fact that three million three hundred twenty-two thousand dollars
($3,322,000) is the shortfall that is on the board, one million one hundred seventy-eight
thousand eight hundred fifty dollars ($1,178,850) may not pass with the vehicle tax, and
one million eighty-three thousand dollars ($1,083,000), I have not heard from the group.
We have one (1) group that is saying only half percent (0.5%) going back at the Open Space
Fund and if we go back to the one point five percent (1.5%) that is law, that also has to
deduct from there, one million eighty-four thousand dollars ($1,084,000) to replenish the
Open Space. That is what gives us the net. So, I would like to, and I hope Mr. Chock could
take advantage of it, to take a recess here so we can all dialogue a little bit and digest. I
will have no more time. My time is pau. Mr. Bynum, and then I will go to JoAnn.
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Mr. Bynum: I am fine with that. I hope to be able to dialogue
with Steve Hunt about this proposal, but if you want to take a recess first, whatever you
want. I hope to dialogue with Steve and get his input. I am sure there are things in that
the Administration are not that happy with, but...
Chair Furfaro: I do plan to call them up so we can all hear on
your recess.
Mr. Bynum: Good. So, I just want to say that this was an
intent to be comprehensive and address all of the issues we heard during this time and
compromise. Thank you.
Chair Furfaro: JoAnn.
Ms. Yukimura: I was wondering if Councilmember Chock would
share his proposals so we could have all proposals on the table. I do not know, Chair, if you
have any you want to share, but it just would be helpful to hear everybody.
Chair Furfaro: I am just trying to be a good listener and a
facilitator, okay?
Ms. Yukimura: Okay, that is fine.
Chair Furfaro: Mr. Chock, do you want to share anything before
we go on the break?
Mr. Chock: Sure. Thank you. Part of the questions I had
were how we got...Councilmember Bynum came up with the other classes, Commercial and
Industrial for ten cents ($0.10), and the Agriculture and Conservation at thirty-five cents
($0.35) because I kept those in mind here, but I am unclear as to how we came to those or
how he might have come to those. Again, I wanted to kind of get more feedback before I
complete this.
Ms. Yukimura: I see.
Mr. Chock: As I said, so far what I have done is just I have
not gone with the Homestead decrease. I cannot see us cutting or relieving here when we
are asking everyone else to contribute on a higher level. Then splitting out some of...just as
Councilmember Rapozo has done. They split out of Vacation Rental and Hotel & Resort
and kept the Residential at twenty cents ($0.20) as you have. That is what I have. The
only else standing section was the other classes that I did not have an explanation for. (See
Attachment 7)
Ms. Yukimura: Thank you very much.
Chair Furfaro: Mr. Hooser.
Mr. Hooser: Yes. I think it is useful that we have a little bit
of dialogue before we break so we all have a real thorough idea of where we are coming
from. With regards to offering the Homestead a reduction, it is my understanding because
of market conditions, everyone one will be naturally going up anyway. So, even if we do not
change the rate many if not everyone is going to be paying more taxes. Again, we are
raising other, or contemplating raising other fees. Those are the people, as I have said
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often times, those on fixed incomes will be in that class. Those people that are homeowners
on fixed incomes or have affordable housing rentals will be in that class. So, that is the
people in my opinion, that deserve it most. That is one (1) thought. The other thought is
that the OPEB, I supported that earlier, but it was my...the context in which I supported it
was that it would be, at the end of the day, part of the Fund Balance, and I do not see in
some of the proposals...that balance is not there. So, in effect, we are spending the OPEB.
I am okay with parking it in a savings account and understanding that even that is kicking
it down the road to a certain extent, but to actually spend it is another entire new story for
me. The third is that, and Chair, maybe you can answer this or the Finance Director at
some point. If one of our goals is to rebuild Fund Balances toward a level that is looked
favorably upon by the bond rating agencies, what minimum, if you would, level would that
be for us to strive for? Is it four million dollars ($4,000,000), three million dollars
($3,000,000), or two million five hundred thousand dollars ($2,500,000)? Right now, I
believe we are looking at only a four hundred thousand ($400,000) or three hundred dollars
($300,000) carryover. So, I think that would be, at least a goal we should know of what it
is. So, we can have that be a part of the discussion. Thank you.
Chair Furfaro: Thank you for pointing that out because that was
part of my comments at the opening portion. First of all, I think the public should really
realize also, although our bond rating by one (1) bond company was downgraded, the reality
we did hear and we are lagging bit from our Finance Director, that we are still waiting to
hear from the other two (2), but out bond rating is also based on the total restate value of
the island's assets and we do not get really critical on what we can borrow until we exceed
more than about three point five percent (3.5%) of that total value. The bond rating, what
it hurts is not on the amount we borrow if we want to borrow, but it is the rate we pay back.
So, build that credibility I think as I said earlier, we would probably want to get to a
minimum over a few years of about ten million dollars ($10,000,000) in reserves, which
means we should be parking about two million five hundred thousand dollars ($2,500,000)
every year. That is my take on it. Yes, Mr. Kagawa.
Mr. Kagawa: I just wanted to point out that I was kind of
happily surprised with Councilmember Chock's proposal because it is pretty close, I believe,
to our proposal and Councilmember Yukimura's proposal. I think if we can kind of get
some kind of agreement as to what can agree on, then we can kind of get out of here and it
would be a good day.
Chair Furfaro: I do not think we will conclude by 4:30 p.m., but
we will get out of here today, I think, before the sun goes down.
Mr. Kagawa: I hope we can get out by 4:30 p.m., but we will
see.
Chair Furfaro: So, why do we not...JoAnn.
Ms. Yukimura: Yes. I agree with the hesitation about lowering
any rate, but I would like to have Councilmember Bynum maybe answer some questions
about whether the people who will experience rate increases if we did nothing, what kind of
amounts are we looking at on that average? Maybe you know the answer already.
Mr. Bynum: Yes. I mean, I had that spreadsheet calculate it.
I just want to say, I have been dogging the spreadsheets so we could make informed
decisions for two (2) years and it is not done. I have been making modifications. So, that
analysis can happen and I just had it on there, but I wanted more than average because
average numbers get skewed. I wanted a mean, but I just...the numbers that are accurate
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on there is four thousand (4,000) under the Mayor's proposal are going to pay increases that
range...well, the average, I believe, was about three hundred dollars ($300), but the range
is huge because of the anomalies. I have a scattered chart that graphically illustrates this
on that.
Ms. Yukimura: Right.
Mr. Bynum: But I was limited to ten (10) minutes and I did
not have the spreadsheet. We had an agenda item to spend two (2) hours to discuss this,
but the spreadsheet was not ready. That is a separate issue. You can look at every single
taxpayer and what they will pay. Yes or no. It is like...
Ms. Yukimura: Can I ask another question?
Mr. Bynum: Yes.
Ms. Yukimura: I do really honor and commend you for working
on the spreadsheet because I know you have worked for many, many years to get the
software in place and get this instrument, this tool, that is very helpful in place. So, thank
you for that. I guess my question is where there...thank you for the average which you say
is three hundred dollars ($300), and for the ones that are large those are the ones that were
very, very low for many years, right?
Mr. Bynum: If I can show one (1) chart that I have prepared,
that actually Jennifer prepared, it will graphically illustrate what we are talking about.
Ms. Yukimura: Okay, so maybe during the break you can try to
get it on, but thank you for the information that you do have. I appreciate it.
Chair Furfaro: Okay. We are going to take a break for fifteen
(15) minutes and when we come back I am going to allow Mr. Bynum to put up one (1)
sheet, okay? Those are the rules. JoAnn, if you want to know, my increase for my place in
one of the high districts, mine was two hundred seventy-four dollars ($274). So, very close
to what Mr. Bynum just said.
Ms. Yukimura: Thank you.
Chair Furfaro: We are going to take a fifteen (15) minute break.
Let us have everybody be back in fifteen (15) minutes.
There being no objections, the Committee recessed at 4:00 p.m.
There being no objections, the Committee reconvened at 4:31 p.m., and proceeded as
follows:
Chair Furfaro: Okay, we are back from that break. As I said at
the break, Councilmember Yukimura had the floor, she had some questions directed at Mr.
Bynum about specifics as it related to the Homestead category, I believe. Mr. Bynum said
he could demonstrate those variances in a one (1) page piece. So, I am going to give
Mr. Bynum the floor to make his presentation and then JoAnn, I will come back to you for
Q&A on that. You have the floor. You have to turn your microphone on.
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Mr. Bynum: So, Chair, I can show this all really quick. This
is from the spreadsheet I have been working on. We did not complete this part, but this is a
data set that was from median value. Median of homeowners, which is four hundred
eighteen thousand dollars ($418,000). That is a modest home on Kaua`i right now, four
hundred eighteen thousand dollars ($418,000), I think. I do not know many that are for
sale less than that. The blue line is...this is at three point zero five (3.05), right? So, the
blue lines are the...yes, it started at three point zero five (3.05), right there. That, what you
just highlighted, if you could make that three point zero five (3.05). That is the Mayor's
proposal. Now look at the chart. So, the red is what these taxpayers, and this is pretty
random. I did not select this. Actually, Jennifer, the Secretary did. The red dots are what
they paid last year. The blue dots are the new market taxes based on our restructuring of
taxes under the Mayor's proposal. So, everyone with a red dot below that blue is paying an
increase. You can measure the increase. The range varies a lot. That is why averages are
not helpful. The people who have red dots that are above the blue line are going to
pay...are going to have tax decreases. Those folks are the ones who have been paying very
high taxes. I mean, if you just look at the range between under three hundred dollars
($300) to over one thousand dollars ($1,000) for the same valued homes, but that will not be
the case anymore because we are going to go to that blue line.
Now, if you could go put the two hundred fifty-five thousand dollars ($255,000) in
there please. Right there. This is one of the tools that Jennifer Van Gorp, Steve, others,
and I have been working on. It is into done yet, but now what you see is the blue line has
moved down, right? Fewer people are going to pay increases and the increases they pay are
going to be less. Now, that is also going to be bigger tax decreases for those above the line,
but again, those are the people who have been paying exorbitant taxes. How can one
person pay one thousand five hundred dollars ($1,500) and then the person across the
street pay less than three hundred dollars ($300)? We finished that. We are not doing that
anymore. It is just in this reset, just pragmatically, we lower this a little bit. I wanted to
show you one (1) other tool if it is okay with you, Chair.
Chair Furfaro: Go ahead.
Mr. Bynum: This is just a screen shot of the proposal that
Gary and I proposed, but on the spreadsheet it compares it with the Mayor's proposal,
right? So, you see zero (0) in Hotel & Resort because we said we were going to keep it the
same, right, but we know that generates four million four hundred thousand dollars
($4,400,000). So, we have this target of four million four hundred thousand dollars
($4,400,000) in order to accomplish goals we already discussed; keep a substantial or a
prudent fund Reserve and also address it. So, you can see the impact of the tax savings, the
two hundred fifty-five thousand dollars ($255,000), that is one million seven hundred
forty-four dollars ($1,744,000) back to homeowners and reducing taxes for the people who
live and work here, but I do not think the legislature or anybody is going to complain if we
increase revenue overall and show...and demonstrate that we are moving towards a
sustainable budget. This is almost there. We take the OPEB and a little less funding.
That is like four million dollars ($4,000,000) from being sustainable and we can do that
next year and pay the OPEB back. I am done. Did I answer your question?
Ms. Yukimura: Yes. I mean, that is very helpful.
Chair Furfaro: Okay.
Ms. Yukimura: And my main concern would be I saw there some
increase below one hundred (100) or about one hundred (100) paying a tax right now of one
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hundred dollars ($100) to almost six hundred dollars ($600). So, there is a five hundred
dollars ($500)...somebody is going to need a five hundred dollars ($500) increase.
Mr. Bynum: The spreadsheet, you can analyze it. You go
down the list, you see the plus, who is getting an increase, who is getting a decrease...
Ms. Yukimura: Yes, I do not care who is getting...well, I do...
Mr. Bynum: Well, then if I had time I would further analyze
it to say how does this impact people on low income? How does this...I just did not have the
time to complete this tool.
Ms. Yukimura: Well, you do not have income information
though. You are basing it on assumptions by neighborhood or...
Mr. Bynum: It is based on value of homes as all ad valorem
taxation is.
Ms. Yukimura: Right, because...
Mr. Bynum: But in this spreadsheet you can see who has
senior discounts, who has low income discount...
Ms. Yukimura: Right.
Mr. Bynum: And what their taxes are. When you see some of
those changes in the blue line, they are all explained by a tax credit or policy, not by some
random event about where you lived or when you got in the system. So, I am very pleased
regardless of this outcome, that we structurally have fairness.
Ms. Yukimura: I thank you for the work that you have done on
that, educating all of us.
Mr. Bynum: Those are the Mayor's proposal in the long run.
Ms. Yukimura: Yes, and the cooperation you got from the
Mayor's Department. This is a very useful tool. So, my concern again, would be if there is
anybody who is in a low income bracket that has to pay five hundred dollars ($500) all at
once. You are wanting to make it more gradual for everybody to the tune of about one
million something, right?
Mr. Bynum: I said I was not going to talk about the past,
Councilmember Yukimura, but three (3) years ago, I offered a proposal that would have
lowered...
Ms. Yukimura: I...
Mr. Bynum: ...the line and gradually move those people back,
but the Council rejected it. We are going to reset this year. It is just how big the impact
going to be.
Ms. Yukimura: Right. Thank you.
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Chair Furfaro: So, after the recess we now have three (3)
documents in our hands. Again, and I will look to the Clerk to disagree with me if I have
got this wrong. All of these proposals, because they are different form the original, will
require one (1) to pass with five (5) votes. That is yes?
Ms. Fountain-Tanigawa: Yes.
Chair Furfaro: That is yes. Okay, so keep that in mind
everybody. You have a question toward the Clerk? Go right ahead.
Mr. Bynum: Setting tax rates is a four (4) vote...it is a four (4)
votes.
Ms. Yukimura: I think so.
Mr. Bynum: I mean, that is under the Charter. So...
Chair Furfaro: That is why I asked the question, but I...
Mr. Bynum: I just...
Chair Furfaro: I understood, and asked...
Mr. Watanabe: Real Property Tax is part of the budget.
Chair Furfaro: Excuse me, let me clarify this first.
Mr. Watanabe: Okay.
Chair Furfaro: I asked this question this morning and I got the
fact that if the tax rates were different from what was submitted in the budget, it would
require five (5) votes for the change. Could you clarify that for me?
Mr. Watanabe: The reason that it requires five (5) votes is
because it increase the revenues considered under Real Property Tax and an increase over
the Mayor's budget requires five (5) votes.
Chair Furfaro: Okay.
Mr. Bynum: I...
Chair Furfaro: Excuse me, so you folks are not changing the
comments that you made to me this morning? Okay. Mr. Bynum, you have a question for
the Clerks? Go right ahead.
Mr. Bynum: I believe that we went through this about three
(3) or four (4) years ago and the County Attorney offered an opinion. These are tax rates.
They are set. They are not actually set until them. I believe the Clerk is absolutely correct
about any additions to spending. These are tax rates. They are done by simple majority
under the Charter. That is my belief, and so if we have a conflict, let us ask the County
Attorneys.
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Chair Furfaro: County Attorney, would you come up please for
an interpretation?
Ms. Fountain-Tanigawa: Council Chair.
Chair Furfaro: If you need time to consult with the Clerk, we
will take a little time to do some research before we commit to something that is different
than I was informed earlier.
Ms. Fountain-Tanigawa: Council Chair, for clarification just to explain
Councilmember Bynum's point. The Real Property Tax rates are adopted by Resolution.
Chair Furfaro: Yes.
Ms. Fountain-Tanigawa: That is four (4) votes, but the increase in
revenues, which is an addition to the Mayor's March 15th budget takes five (5) votes because
you are adding to it, and that is per the Charter.
Chair Furfaro: And that is the answer you gave me this
morning, per the Charter. Al, do you need time to research that?
There being no objections, the rules were suspended.
ALFRED B. CASTILLO, JR., County Attorney: Council Chair, I do recall...
Chair Furfaro: Al, you need to introduce yourself.
Mr. Castillo: I am sorry. Council Chair, Councilmember, good
afternoon, Al Castillo. I do remember going over this I do not know how many years ago. I
would agree in the budget sense. Since it is an increase, I do agree that in the normal sense
you have because this is taxes, it is a four (4) vote, but because this is an increase and it is
within the realm of the budget, it is five (5) votes instead of four (4).
Chair Furfaro: Okay. Go ahead.
Mr. Bynum: I will accept that interpretation, but I am going
to ask for it in writing with a full analysis. This would be news to me. We set the tax rates
later. This is just a straw vote today about our intention of setting those rates when they
come before the Council.
Mr. Castillo: Then I welcome you to send that question and we
will answer it.
Mr. Bynum: Okay. Thank you.
Mr. Castillo: Thank you.
There being no objections, the meeting was called back to order, and proceeded as
follows:
Chair Furfaro: Now, as we go forward here, JoAnn, we got out
interpretation from the County Attorney. It is going over in writing. Let us kind of move
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no here. We have proposal "A," which I believe came from JoAnn Yukimura. We have
proposal"B" which came from Mr. Rapozo, I believe. Am I correct?
Mr. Rapozo: No, mine is "Rapozo" on the top. JoAnn has two
(2) that is A and B.
Chair Furfaro: Somebody...JoAnn has two (2)?
Ms. Yukimura: Chair, may I explain?
Chair Furfaro: Yes.
Ms. Yukimura: I tried to listen to everybody's goals and
proposals and tried to find a compromise or a...what Steven Covey calls a third alternative.
So, this is the...the "A" is what I am wanting to propose, but I know that there was some
concerns about the Hotel & Resort rate. So, we did another analysis of a Hotel & Resort
rate that is less than the one I am proposing just so people could see, and I am thinking it
may come down to voting on each class one by one or at least on the issue where there is
disagreement. May I explain "A"?
Chair Furfaro: First of all, "B" is the one you introduced then
earlier?
Ms. Yukimura: No, I never introduced any. We all shared our
different proposals. The one...
Chair Furfaro: No, which one was shard with the group? Was it
"A" or "B"?
Ms. Yukimura: It was neither.
Chair Furfaro: It was neither?
Ms. Yukimura: It was only a change to the Residential rate
really, which is what I introduced to offset the Open Space Bill.
Chair Furfaro: I am going to allow you to introduce one (1). You
need to pick which one that you would like to introduce.
Ms. Yukimura: I am introducing "A".
Chair Furfaro: "A" is being introduced. I have Bynum and
Mr. Hooser's and then Mr. Rapozo, you and Mr. Kagawa's one is the one that still has your
name on it?
Mr. Rapozo: Yes.
Chair Furfaro: Okay, got it. I am going to give JoAnn the floor
for A.
Ms. Yukimura: I am sorry. I do not have Mr. Rapozo's. If I could
get a copy, but in the meantime I will be explaining "A". It is based on the theory that
everybody does their share a little bit, some more than the others for a variety of policy
reasons, but "A" would leave the Homestead rate at that proposed by the Mayor. So, it is
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not increase or decrease though. I do acknowledge the result in taxes will both increase
and decrease for different people. For the Residential class, which is basically second
homes, they are not owner-occupied. The rate would be twenty cents ($0.20) for one
thousand dollars ($1,000) assessed value, and that was my first proposal when we were not
making formal proposals, but that would restore...would enable us to restore the Open
Space Fund. Then the others, there is a seventy-five cents ($0.75) increase to the Vacation
Rentals category and a twenty-five cents ($0.25) decrease to Hotel & Resort, twenty-five
cents ($0.25). You are looking at B. I am talking about A. Then for Commercial,
Industrial, Agricultural, and Conservation there is a ten cents ($0.10) on each. The result
on the second page is that it restores the Public Access Fund and then the last figure in the
column, two million six hundred eighty-one thousand dollars ($2,861,000) is the remaining
that would result from these proposed rate increases. If we acknowledge that there is three
hundred thousand plus in the Reserve, Unassigned Fund, and then three million six
hundred thousand dollars ($3,600,000) in the Emergency Reserve for a total of three million
nine hundred thousand dollars ($3,900,000), we would add two million six hundred
eighty-one thousand dollars ($2,861,000) to the total Reserve to get about six million dollars
($6,000,000), six million five hundred thousand dollars ($6,500,000) in our Reserve
assuming that we allocated to the Reserve or we do not spend it on anything else. Now,
this still assumes a one million nine hundred thousand dollars ($1,900,000) of lack in the
OPEB. So, we would be at ninety-eight percent (98%) rather than one hundred percent
(100%). So, those are all of the parameters that result from this proposed rate increases.
Chair Furfaro: So, everybody has "A" in front of them as the
official entry from JoAnn. Mr. Hooser.
Mr. Hooser: I had a question. The other moving part would
be the vehicle weight tax. So, does that assume to pass?
Ms. Yukimura: Pass, that is correct.
Chair Furfaro: Again, the straw poll that I just revisited while
we were on the break, they passed.
Mr. Hooser: Okay.
Chair Furfaro: So, the concern about the vehicle weight tax, the
vote was 5:2.
Mr. Hooser: Okay. Thank you.
Chair Furfaro: Mr. Rapozo, is there anything on your piece that
you want to revisit?
Mr. Rapozo: No, I think I have...they were pretty far apart
though.
Chair Furfaro: Mr. Hooser and Mr. Bynum is there anything on
your piece that you would like to reintroduce?
Mr. Bynum: I just have a process question. We put a lot of
work into it. So, I do not think we are going to make changes, but is this it? We get one (1)
shot up or down on these three (3) proposals and there is no second round?
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Chair Furfaro: Well, here is the piece folks. First of all, I want
to extract from you folks an understanding that whatever the outcome here is we have to
give the staff time to reconcile it. If there is any change in those amounts or different from
what is on your second sheet, any amount, I am just saying they are projected as if it is
going to the Reserve because until they balance, we do not know that the actual number
that we are saying is the real number. It could be a variance of ten thousand dollars
($10,000) or fifteen thousand dollars ($15,000) when the rounding occurs. So, if we can
have the understanding. Is there anyone that is prepared to withdraw their proposal? Did
they see anything that the liked at the twenty (20) minute of so break that I gave? No?
Mr. Rapozo: I am willing to support Mr. Chock's first
suggestion right before the break. He may have changed his position, but if that means
anything I can support that as a deviation from mine. It encompasses what I am most
interested in and it is the big hit to the Hotel & Resort. So, I could really support that first
proposal. Again, I think he may have changed. I do not know, but I will just say right now,
I will not support any proposal that is taxing every class.
Chair Furfaro: Vice Chair, it seems like you have an opportunity
here for some support in your piece and did it change?
Mr.'Chock: I will just speak to it, Chair. What happened
was not an official proposal, but a discussion on a combination of proposals that were looked
at. At the break in the twenty (20) minutes that we had together Councilmember
Yukimura and I, along with everyone else that was involved with it tried to get to
something that was equitable. The result is "A", Exhibit "A" that she has presented of
which I am willing to support at this time in order to get us closer together. Not everyone is
happy. I understand, but it is a compromise by all.
Chair Furfaro: Mr. Kagawa has the floor.
Mr. Kagawa: Well, if I look at "A", I look at Councilmember
Bynum's, and our proposals, "A" certainly looks closer to Councilmember Bynum's proposal
than ours because it primarily, I mean, it still really taxes hard the Hotel & Resort class
just dropping twenty-five cents ($0.25) and it taxes every other class except the Homestead.
I am not comfortable taxing all of the classes besides Vacation Rental and Hotel & Resort.
Chair Furfaro: JoAnn. Microphone please.
Ms. Yukimura: Yes, thank you. I guess we could ask...I mean, if
we just do away with the categories from Commercial to Conservation, which are very small
and for that reason, I do not think they are onerous, spread among many owners, but they
still generate two hundred thousand dollars ($200,000). That is the kind...I mean, we were
trying to plus or minus much smaller amounts than that. The question is whether that
would be acceptable. With respect to Hotel & Resort, I just want to say that our...when we
assessed the visitor related expenses of our budget it added to forty-four million dollars
($44,000,000), and even if you were conservative and cut that in half to twenty million
dollars ($20,000,000) that is a lot of visitor related costs in our budget from parks,
lifeguards, roads, emergency medical services, and police. So, the industry has to pay its
way and if they want to do it through the TAT, they should lobby with us to get TAT
moneys. Otherwise, our taxpayers, our residents are paying for those visitor related costs.
I mean, we are spending money on a shuttle for KOloa-Po`ipu that will relieve some of the
parking problems. Also a shuttle for the North Shore. We are providing lifeguards
everywhere. I mean, there is so many ways that we are supporting the visitor industry. So,
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they need to support our budget, but not them alone. I think everybody is supported by this
budget and we have also asked our Departments to do their share and cut their expenses.
So, to me, because we have such a big problem with our budget and this is going to go into
the Reserve that will allow us to get better rates on our bond rates, it will benefit
everybody. So, everybody doing their share to come to a structurally budget as
Councilmember Hooser said, is what we need in order to do our job here on the Council.
Chair Furfaro: Mr. Rapozo, you have the floor.
Mr. Rapozo: Thank you, Mr. Chair. I think that we should
not undervalue what the visitor industry does for the island in the way of jobs. I mean, if
you add up all employees that these hotels and resorts employ, I think that is a huge
contribution to the community. They do not just take from the community. I think they
give a lot back and to go after them at the highest, I think, it is just not fair, not right. We
never got the information back from the Administration as to what the impact would be to
some of the properties. That was a concern of mine. We do not know what the impact
would be. I do not know. Maybe the Chair has a better understanding, but it is...what is
the typical appraisal of a property of a hotel? I do not know. Do you have any idea,
Mr. Chair?
Chair Furfaro: We have properties that are valued at one
hundred five million dollars ($105,000,000).
Mr. Rapozo: Okay. So, one hundred five million dollars
($105,000,000) times two dollars ($2) per thousand dollars ($1,000) is a substantial impact,
huge impact. The Vacation Rental on the other hand, employs a very small workforce,
many of them for cash. That is the reality of it. So, to not want to charge the Vacation
Rental at least what the resorts charge, I think that, I do not know. I just cannot
understand that. I think the impact to the communities in the Vacation Rentals are much
greater than a hotel and a resort because the hotels and resort are in Hotel/Resort Districts.
Vacation Rentals are in Residential Districts, most of them. So, I think that we can get by
this year with the Vacation Rentals and the Hotel & Resort class. I do not think we should
go beyond what we need to do as it comes down to taxes. I think we should tax to where we
need to tax our citizens so we can get a balanced budget and move forward and again, work
internally within the Departments to become more efficient so we can save that way next
year as we move down the road, but to tax just because we can to generate...I mean
Conservation District, we are going to raise the taxes of ten cents ($0.10) to generate seven
thousand five hundred dollars ($7,500). That is not an impact to the County's budget. I
think if we get away, and again, my proposal was one dollar ($1) for Vacation Rental, a
dollar ($1) for Hotel & Resort and with Mr. Chock's proposal initially with the Residential,
as much as I do not want to tax the Residential, I can actually support that, but anything
beyond that three (3) classes, again, I will just not support.
Chair Furfaro: Before I recognize Mr. Hooser, and I will
recognize you after that, ladies and gentlemen, I just want to tell you here is my
observation. I have three (3) proposal of two (2), two (2), and two (2). That does not win
much in Las Vegas. I got three (3) proposals of two (2), two (2), and two (2), okay? So,
Mr. Hooser.
Mr. Hooser: Yes, I appreciate the work everyone has put into
this process and we are down to the last strokes, if you would. I keep looking at the
carryover balance at the bottom. On proposal A it is two million six hundred thirty-one
thousand dollars ($2,631,000), I believe. The way I look at that, that consists of OPEB,
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which is health payments to retirees and vehicle weight tax, which is everybody. I do not
see the visitor industry carrying any significant portion of that and I certainly do not see
them excessively burdened. I have had numerous calls and E-mails form people, residents,
talking about taxes going up and fees going up as we did last year and encouraging me to
hold the line. I have not had one (1) hotel Executive...I do not remember any testimony for
that matter. The Mayor's proposal was in excess of this, right? They were two dollars ($2)
and we are at one dollar seventy-five cents ($1.75) here. If I remember correctly the
presentation that we were still below, at least some of the other Counties. I believe we are
below O`ahu and maybe Maui or something like that.
Chair Furfaro: I think we are below one (1).
Mr. Hooser: We are below one (1). They do represent a
tremendous asset to our community, but also very significant burden when you look at the
per capita amount of people on the island at any one time that come every year compared to
our small population. So, I am disappointed that we were not able...or that this proposal
does not include relief to those who need it the most, who will be impacted by the vehicle
weight tax as well, people that cannot make it up. Hotels & Resorts can pass it on to
consumers, Commercial can pass it on to their customers, Industrial can pass it on, but
Homestead people cannot pass it on and again, it affects a very lowest people most in need.
I mean, if we are looking for a compromise, "A" is much closer to what I was looking for, but
still is greatly lacking in my opinion in terms of the relief for the Homestead class and the
size of the carryover balance. Thank you.
Chair Furfaro: Okay. So, as I am following the dialogue here I
have a little bit of movement here from Mr. Rapozo as it related to "A". I have a little bit of
movement here from Mr. Hooser as it relates to "A", but nobody is fully, fully committed so
far. Mr. Chock, I will give you the floor.
Mr. Chock: Chair, I know it is late. Well have been talking
about this for a while now, but there may be a few more ideas it seems to me, that we could
talk about. I was wondering if we might take a short recess. If I could request one.
Ms. Yukimura: Before we break, may I ask a question?
Chair Furfaro: Yes. Councilmember Yukimura has a question
before we break, and I will give another fifteen (15) minutes. We took twenty-two (22)
minutes last time. Fifteen (15) minutes, when we are on break. JoAnn.
Ms. Yukimura: Before we break, okay. Thank you.
Chair Furfaro: Yes, before break, but before a fifteen (15)
minute break.
Ms. Yukimura: So, Councilmember Rapozo, if we do away with
the increases in Commercial, Industrial, Agricultural, and Conservation, did you say you
could live with that?
Mr. Rapozo: Not a one dollar seventy-five cents ($1.75). I
can...00ps, sorry. I will think about this on the break, but if you look at your proposal "B"
and you remove the ten cents ($0.10) increases in Commercial, Industrial, Agricultural, and
Conservation and you just are looking at the top three (3), I can consider that. I will
consider that on the break.
DELIBERATION AND 101 MAY 13, 2014
PRELIMINARY DECISION-MAKING
Ms. Yukimura: Alright. Thank you very much.
Chair Furfaro: May I just encourage you folks to give this some
real thought on the break? We will break at nineteen (19) minutes after 5:00 p.m. We will
be back here at this table. We will take a fifteen (15) minute break.
There being no objections, the Committee recessed at 5:21 p.m.
There being no objections, the Committee reconvened at 5:21 p.m., and proceeded as
follows:
(Mr. Kagawa was noted as not present.)
Chair Furfaro: We are back. Now, I want to share with you
folks that we took this recess so that some of you could have some dialogue about Proposal
"A". Proposal "A", okay? I want to let you know, I do and will make a compromise offer if
we cannot get a vote here on this "A" item. I will take some dialogue now and see where
you folks are at. Mr. Hooser.
Mr. Hooser: Yes, Chair. I was focusing on "A." I was going to
suggest a possible compromise so I will throw it out there. I would say we add ten cent
($0.10) to the Residential rate and make it thirty cent ($0.30), we add ten cent ($0.10) to the
Vacation Rental rate. It makes it eight-five cents ($0.85). Ten cents to the Hotel & Resort
rate, which makes it one dollar eighty-five cents ($1.85). We keep Commercial and
Industrial at ten cents ($0.10) a piece, and then we zero Agricultural and Conservation.
That would generate...I have part of the figure there. I do not have the Residential figures
for the extra dime, but the Vacation Rental and Hotel & Resort combined would generate
an additional four hundred eighty thousand dollars ($480,000) which comes close to...well,
just pushes us over the three million one hundred thousand dollars ($3,100,000) mark on
the carryover, which I think adds some meaningful dollars. Not as much as I would like
and does not provide the Homestead break that I was hoping we would get and I think that
homeowners deserve, but it does push us a little bit further towards the direction of
restoring some faith and confidence in our fiscal situation in terms of carryover balance.
Thank you.
Chair Furfaro: Comments on the amended "A"? JoAnn.
Ms. Yukimura: Yes, I mean, I think Councilmember Rapozo has
expressed a concern about the Residential rate. That is the second home he has pointed out
to me that there are local residents who do have rentals and so I have tried to keep it lower.
I guess I am a little concerned to raising it more. Let us see, so removing...so we are really
getting the bulk of it from Vacation Rental. The extra, what are you saying? That the
three (3) increases you are proposing would generate how much do you think?
Mr. Hooser: The Vacation Rental would generate...
Chair Furfaro: Microphone, Gary.
Mr. Hooser: I am sorry.
Chair Furfaro: Microphone.
DELIBERATION AND 102 MAY 13, 2014
PRELIMINARY DECISION-MAKING
Mr. Hooser: The Vacation Rental...while staff looks up the
Residential difference of adding ten cent ($0.10), the Vacation Rental increase would
increase by two hundred sixty-five thousand dollars ($265,000), the Hotel & Resort would
increase by two hundred fifteen thousand dollars ($215,000), and we will wait for the
Residential number, but that would be the two (2) increases.
Chair Furfaro: I think she is putting it on the board right now.
JoAnn has the floor.
Ms. Yukimura: I am not sure how that is going to get us to five
(5) votes.
Chair Furfaro: Do you have a question JoAnn?
Ms. Yukimura: No, that is it. Thank you.
Chair Furfaro: If not, I am going to give it to Mr. Bynum.
Mr. Bynum.
Mr. Bynum: Okay. If you have a five hundred thousand
dollars ($500,000) home that you are renting ten cents ($0.10) is fifty dollars ($50).
Ms. Yukimura: That is true.
Mr. Bynum: Okay? So, if that is your second home and you
live somewhere else or if you are resident and you rented, and we know rents are
escalating, you have chosen to rent it at market. You have the option to get a very
favorable tax rate by renting it affordable as five hundred (500) or six hundred (600) people
are currently doing. I do not know that number exactly, but I just want to put this into
perspective. Ten million dollars ($10,000,000) of value at ten cent ($0.10) is one hundred
dollars ($100), right? So, these...when you look at the hotel cost for instance. So,
Councilmember Yukimura, the amendment moves us in the right direction. I understand
those concerns about increasing anyone's taxes, but when the choice is between having a
reasonable Fund Balance and fifty dollars ($50) on a home that gets rented for profit, I do
not think that is a big reach. So, I support the proposal that Gary Hooser and I put
forward, but this amendment makes it better, clearly, to me. So, I would...if I have to
choose that, I will choose that as opposed to...yes.
Chair Furfaro: Mr. Rapozo, do.you have any comments?
Mr. Rapozo: No, I think I made my comments about taxing
the other classes and I made an offer to stretch and go with the tensely cents ($0.20)
Residential, but that is my limit.
Chair Furfaro: Mr. Chock.
Mr. Chock: Chair, I would like to request a vote on
the...Councilmember Yukimura's Exhibit"A".
DELIBERATION AND 103 MAY 13, 2014
PRELIMINARY DECISION-MAKING
Chair Furfaro: Okay, we first have to do...Exhibit "A" as
amended by Mr. Hooser?
Mr. Chock: Is that what you did? Amend it?
Ms. Yukimura: He was not formally proposing it.
Mr. Hooser: Well, it was not a formal amendment, but it was
proposal that...yes, trying to again, it is a long, long way from what Councilmember Bynum
and I are suggesting, but I am willing to compromise. Yes, so it is intended to be an
amendment.
Chair Furfaro: But my question to you is are you supporting it
without the amendments that you want or are you supporting it with the amendments?
Mr. Hooser: I am supporting it with the amendments that I
proposed.
Chair Furfaro: So, let us make the motion on the amendments
and then see where we go.
Mr. Rapozo: Well, I think, Mr. Chair, you have to make a
motion to get that Exhibit "A". That exhibit was never introduced.
Mr. Bynum moved to increase real property taxes in the following tax classes:
Residential $0.30, Vacation Rental $0.75, Hotel & Resort $1.75, Commercial $0.10,
Industrial $0.10, Agricultural $0.10, Commercial $0.10; appropriate any carryover
funds to the Reserve Fund and/or unappropriated fund balance.
Ms. Yukimura: Moved for the what?
Chair Furfaro: We need the second on "A".
Mr. Chock seconded the motion.
Chair Furfaro: Okay. Now we have the amendments required.
Mr. Hooser moved to amend the motion to increase real property taxes in the
following tax classes: Residential $0.30 from $5.75 to $6.05, Vacation Rental $0.85
from $8.00 to $8.85, Hotel & Resort $1.85 from $9.00 to $10.85, Commercial $0.10
from $8.00 to $8.10, Industrial $0.10 from $8.00 to $8.10. The tax rates for the
Homestead ($3.05), Agricultural ($6.75), and Conservation ($6.75) tax classes
remain unchanged. Appropriate any carryover funds to the Reserve Fund and/or
unappropriated fund balance, seconded by Mr. Bynum.
Chair Furfaro: Further discussion on the amendment? None.
DELIBERATION AND 104 MAY 13, 2014
PRELIMINARY DECISION-MAKING
The motion to amend the motion to increase real property taxes in the following tax
classes: Residential $0.30 from $5.75 to $6.05, Vacation Rental $0.85 from $8.00 to
$8.85, Hotel & Resort $1.85 from $9.00 to $10.85, Commercial $0.10 from $8.00 to
$8.10, Industrial $0.10 from $8.00 to $8.10. The tax rates for the Homestead ($3.05),
Agricultural ($6.75), and Conservation ($6.75) tax classes remain unchanged.
Appropriate any carryover funds to the Reserve Fund and/or unappropriated fund
balance was the put, and carried by a vote of 6*:1 (Councimember Rapozo voting no.)
(*Pursuant to Rule No. 5(b) of the Rules of the Council of the County of Kauai,
Councilmember Kagawa was not present, but shall be recorded as an affirmative for
the motion.)
Chair Furfaro: Now we are at the main motion as amended.
JoAnn, you have the floor.
Ms. Yukimura I do not think I have any more discussion.
Chair Furfaro: Okay. Mr. Hooser, do you have? Okay.
Mr. Bynum, do you have anymore? No? Mr. Chock? Okay, and I have no more. We need
five (5) votes here. Roll call vote, please.
The motion to increase real property taxes in the following tax classes: Residential
$0.30 from $5.75 to $6.05, Vacation Rental $0.85 from $8.00 to $8.85, Hotel & Resort
$1.85 from $9.00 to $10.85, Commercial $0.10 from $8.00 to $8.10, Industrial $0.10
from $8.00 to $8.10. The tax rates for the Homestead ($3.05), Agricultural ($6.75),
and Conservation ($6.75) tax classes repnain unchanged. Appropriate any carryover
funds to the Reserve Fund and/or unappropriated fund balance was then put, and
carried by the following vote:
FOR INCREASE: Bynum, Chock, Hooser, Kagawa,
Yukimura, Furfaro TOTAL—6*,
AGAINST INCREASE: Rapozo TOTAL— 1,
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL—0.
(*Pursuant to Rule No. 5(b) of the Rules of the Council of the County of Kauai,
Councilmember Bynum was noted as voting silent and Councilmember Kagawa was not
present, but shall be recorded as an affirmative for the motion.)
Chair Furfaro: Okay, we have five (5) ayes. It is based on one
(1) nay, one (1) absent, which will go with the majority. We have one (1) silent which will
go with the majority, and we have four (4) votes.
Ms. Fountain-Tanigawa: 6:1.
Ms. Yukimura: 6:1.
Mr. Bynum: 6:1.
DELIBERATION AND 105 MAY 13, 2014
PRELIMINARY DECISION-MAKING
Chair Furfaro: I just said that. Let me say it again, okay? We
have one (1) absent which will go with the majority, okay? I want to explain that. We have
one (1) silent which will go with the majority, and we have four (4) ayes, okay? So, we are
6:1. It was a compromise that came quite a ways. Now, I am going to make a request. Can
I make a motion when we round out these numbers as I said earlier, that we leave in the
staffs hands to appropriately put any balances in the, I guess, the right terminology for
that after we round everything out, it would fall into the Reserve Fund?
Mr. Chock moved to appropriate any carryover funds to the Reserve Fund and/or
unappropriated fund balance, seconded by Ms.Yukimura.
Mr. Bynum: I am sorry. Can you restate the motion again?
Chair Furfaro: Okay. I am asking for the motion again. As they
round out the numbers, I am asking for a motion that it be understood that any rounding
would go into the Reserve Fund. Discussion?
Ms.Yukimura: So, if they find a balance, they would take
from...a negative, they would take from the Reserve Fund and if they find a plus, they
would put it into the Reserve Fund, right?
Chair Furfaro: That is exactly right.
Ms. Yukimura: Okay. Thank you.
Chair Furfaro: We leave it in the staffs hands. Now, Jade,
would you tell us where we need to go from here as far as if we have the understanding, will
we be finished for the day?
Ms. Fountain-Tanigawa: Yes.
Chair Furfaro: Okay, let us record it as such.
The motion to appropriate any carryover funds to the Reserve Fund and/or
Unappropriated Fund Balance was the put, and carried by the following vote:
FOR MOTION: Bynum, Chock, Hooser, Kagawa,
Yukimura, Furfaro TOTAL— 7*,
AGAINST MOTION: Rapozo TOTAL—0,
EXCUSED &NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL— 0.
(*Pursuant to Rule No. 5(b) of the Rules of the Council of the County of Kauai,
Councilmember Kagawa was not present, but shall be recorded as an affirmative for the
motion.)
Chair Furfaro: At this point, we are concluded with this piece
and that is under the understanding that we have the appropriate votes on Wednesday for
DELIBERATION AND 106 MAY 13, 2014
PRELIMINARY DECISION-MAKING
the other matters. We are wanting to say thank you for everyone, and I am sorry I had to
just kind of drag us to the point, but three (3) pairs was not going to get us anywhere. We
are adjourned.
There being no objections, the meeting was adjourned at 5:33 p.m.
Respectfully submitted,
aaci--4c:SCfritatd h--
Allison S. Arakaki
Council Services Assistant I
Darrellyne Caldeira
Council Services Assistant II
Codie K. Yam c i
Council Services Assistant I
APPROVED at the Committee Meeting held on June 4, 2014:
411111 —
JAY F
Chair, C Gv�—
Attachment I.
-----!
The IV essenger
.
. .
The Journal of Bernice Pau,'Ili
Bishop Museum I Spring 2014
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IN NATURAL SCIENCE
A ;li
•
A Story of {-lawai' 's Sees
by Dr. Neal Hawai'i's honey bees have got a problem.Well, many agricultural businesses(such as coffee and
actually more than one—a mysterious thing called macadamia)successful.
Evenhuis Colony Collapse Disorder(CCD)and a disease-causing But all is not well in the bee world.Yes,CCD and
pest called the Varroa mite.Both are triggering severe the Varroa mite(the mite contains a virus that kills)are
problems to bee populations.The last few years have problems for the honey bee,but Hawaii native bees
seen efforts made by both bee growers and state also face dwindling numbers.Various factors,including
agriculture officials to help stem the tide of the ever- being outcompeted by honey bees,have caused the
decreasing numbers of bees that pollinate our crops reduction and even possible extinction of some species
and produce delicious honey.That we have honey of the yellow-faced bees.Bishop Museum's collections
bees here In Hawaii is a well-known fact,but do you are useful in showing the history of our state's plants
know that they are not native?And do you know that and animals,and in this case,it shows that many
Hawai'i does,in fact,have native bees that pollinate Hylaeus bees were much more common in years past.
our flowering plants? Researchers have found that yellow-faced bees are
Our honey bees were purposefully introduced and monophilic'loyal-to-one-species"pollinators(honey
.._''`. Bishop Museum has a connection to this:its founder bees are more general pollinators)and some species
• Charles Reed Bishop.In 1851,the Royal Hawaiian are the major pollinators of the rare and endangered
r1', Agricultural Society decided honey bees should be silversword plants only found here in Hawaii.So,they
", imported to Hawaii to increase crop yields because the ARE necessary to keep our native plants surviving.
')! , f native bees here were not as productive.The native Despite all the bad stuff,hope for both bees exists.
' _• pollinators,the most common of which were the Recent research has found the cause of CCD and the
native yellow-faced bees(Hylaeus bees),pollinated state is on top of getting rid of Varroa mites.Additionally,
plants,but did not pollinate crops of introduced plants. the cute little yellow-faced bees are getting federal
Contrastingly,honey bees are easily domesticated attention as efforts have been made to put some on
in artificial hives,the hives contain honey,and also the Endangered and Threatened lists,which will help
contain hundreds of little bees packed together,eagerly protect them.In a perfect world,we should be able
waiting for the sun to rise so they can zoom out and to both have our honey and watch yellow-faced bees
pollinate flowers. pollinate our native plants.
It actually took three tries to get the bees here.
The first time the bees died in transit.The second time
a few bees survived the trip,but soon died.Mr.Bishop Oahu is often thought of as either so Incredibly
bought the dying hives of the second shipment in urbanized or the land altered so much for agri-
hopes they would survive,but they unfortunately did culture that any surviving native Hawaiian species
not.The third try in 1857 included nine hives sent are rarely seen.A recent happy discovery that
from San Jose,California.They arrived safely and soon goes against that theory was made by Museum
after,more hives arrived and it wasn't long before research affiliate Dr.Karl Magnacca,who found
feral bee colonies started appearing in O'ahu's forests. a new species of native yellow faced bee in the
Growing honey bees in artificial hives quickly intensified WaPanae Mountains and named it Hylaeus makaha
and has led to the bee populations we have today, (see its portrait above).Photo:Karl Magnacca
all critical to pollinating Hawai'i's crops and making
20 KA'ELELE Spring 2014
Attachment 2
TRANSIENT ACCOMMODATIONS TAX
Transient Accommodations Tax (TAT) Collections
Amother measurement of the
HTA's performance is the TAT Distribution FY 2013 ($mil.)
amount of TAT collections that
the state receives each month.The more
TAT collected,the more benefits that Tourism
are accrued to the state as a whole,to - -- Special Fund
the individual counties,and ultimately, General Fund $71.0*
to the benefit of Hawai'i's residents. $171.5
Importantly,this revenue finds its way i Convention Center
into the local community on each island _ Enterprise Special
to support schools,police,infrastructure Fund
and parks,and contributes to an $33.0
improved quality of life for Hawaii
residents.In FY 2013,the state collected
a total of$368.5 million in TAT,which Counties
was a 4.3.IEercent increase from FY $93.0
2012 when t e total collection was
$323.9 million.
Act 103,SLH 2011 was passed *Inclusive of$1 million proviso allocating monies to the State Department of
in the 2011 Hawai`i state legislative Land and Natural Resources.Source:State Department of Taxation
session that capped the TAT revenue to
be deposited in the HTA's fund at$69
million.Act 171,SLH 2012 was passed
in the 2012 Hawaii state legislative TAT Distribution FY 2014 ($mil.)
session that increased the cap on TAT
revenue to be deposited into HTA's fund
to$71 million.Act 161,SLH 2013 was Tourism
passed in the 2013 Hawaii legislative Special Fund
session,setting the annual allocation of General Fund $82.0
TAT to the Tourism Special Fund and $161.0 •
Convention Center Enterprise Special .
Fund at$82 million and$33 million, •
respectively,beginning July 1,2013. Convention Center
Additionally,$3 million is allocated _ Enterprise Special
to the state Department of Land and Fund
Natural Resources(DLNR)with the $33.0
expenditure of funds to be approved
by both the HTA and DLNR Board Department of Land Counties
of Directors.With these additional &Natural Resources $93.0
resources,HTA remains optimistic and $3.0
committed to maintaining the vitality of
Hawai'i's tourism economy.
•-71t -./AX /J' VVA4/
n MW/14 7'17.b).-1' cs, 2013 Any�J/ ✓�31�-
27
Attachment 3
uifyf
EXHIBIT I
NET TAXABLE VALUE
- 100% FMV
- Less Exemptions TAX TAX
- Less 50%Appeals . REVENUE RATE
HOMESTEAD 3,489,094,500 (1,744,547) (0.50)
RESIDENTIAL 5,576,433,050 1,951,752 0.35
VACATION RENTAL 2,626,160,600 3,807,933 1.45
HOTEL& RESORT 2,151,899,200 4,303,798 2.00
COMMERCIAL 984,821,900 98,482 0.10
INDUSTRIAL 343,885,450 34,389 0.10
AGRICULTURAL 763,156,850 267,105 0.35
CONSERVATION 75,366,350 26,378 0.35
Subtotal - 16,010,817,900 8,745,289
Less:
Home Preservation Limit Differential (29,580)
8,715,709
$ 108,058,426 Total RPT
$ 8,715,709 Increase in RPT
$ 8,584,974 Remaining Amount After Public Access Contribution at 1.5%
$ 8,672,131 Remaining Amount After Public Access Contribution at 0.5%
$ 1,620,876.40
$ 518,233.00
$ 1,102,643.40 To Public Access Fund
$ 7,613,066.05
$ 3,322,988.00 Shortfall
$ 4,290,078.05
Attachment 4
EXHIBIT I
A
NET TAXABLE VALUE
- 100% FMV
- Less Exemptions TAX TAX
- Less 50%Appeals REVENUE RATE
HOMESTEAD 3,489,094,500 - 0.00
RESIDENTIAL 5,576,433,050 1,115,287 0.20
VACATION RENTAL 2,626,160,600 1,969,620 0.75
HOTEL &RESORT 2,151,899,200 3,765,824 1.75
COMMERCIAL 984,821,900 98,482 0.10
INDUSTRIAL 343,885,450 34,389 0.10
AGRICULTURAL 763,156,850 76,316 0.10
CONSERVATION 75,366,350 7,537 0.10 ,
Subtotal- 16,010,817,900 7,067,454
Less:
Home Preservation Limit Differential (29,580)
7,037,874
$ 106,380,591 Total RPT
$ 7,037,874 Increase in RPT
$ 1,595,708.86
$ 518,233.00
$ 1,077,475.86 To Public Access Fund
$ 5,960,397.85
$ 3,278,988.00 Shortfall
$ 2,681,409.85
Attachment 5
yu HY\U rr2
EXHIBIT I
NET TAXABLE VALUE
- 100% FMV
-Less Exemptions TAX TAX
- Less 50%Appeals REVENUE RATE
HOMESTEAD 3,489,094,500 - 0.00
RESIDENTIAL 5,576,433,050 1,115,287 0.20
VACATION RENTAL 2,626,160,600 - 0.00
HOTEL& RESORT 2,151,899,200 4,303,798 2.00
COMMERCIAL 984,821,900 - 0.00
INDUSTRIAL 343,885,450 - 0.00
AGRICULTURAL 763,156,850 - 0.00
CONSERVATION 75,366,350 - 0.00
Subtotal - 16,010,817,900 5,419,085
Less:
Home Preservation Limit Differential (29,580)
5,389,505
$ 104,732,222 Total RPT
$ 5,389,505 Increase in RPT
$ 5,308,662 Remaining Amount After Public Access Contribution at 1.5%
$ 5,362,557 Remaining Amount After Public Access Contribution at 0.5%
$ 1,570,983.33
$ 518,233.00
$ 1,052,750.33 To Public Access Fund
$ 4,336,754.68
$ 3,278,988.00 Shortfall
$ 1,057,766.68
•. Attachment 6
Vac 0
EXHIBIT I
NET TAXABLE VALUE
- 100% FMV
- Less Exemptions TAX TAX
- Less 50%Appeals REVENUE RATE
HOMESTEAD 3,489,094,500 - 0.00
RESIDENTIAL 5,576,433,050 - 0.00
VACATION RENTAL 2,626,160,600 2,626,161 1.00
HOTEL&RESORT 2,151,899,200 2,151,899 1.00
COMMERCIAL 984,821,900 - 0.00
INDUSTRIAL 343,885,450 - 0.00
AGRICULTURAL 763,156,850 - 0.00
CONSERVATION 75,366,350 - 0.00
Subtotal- 16,010,817,900 4,778,060
Less:
Home Preservation Limit Differential (29,580)
4,748,480
f
v
■
k
$ 104,091,197 Total RPT
$ 4,748,480 Increase in RPT
$ 1,561,367.95
$ 518,233.00
$ 1,043,134.95 To Public Access Fund
$ 3,705,344.85
$ 3,278,988.00 Shortfall
$ 426,356.85
$ 104,091,197 Total RPT
$ 4,748,480 Increase in RPT
$ 520,455.98
$ 518,233.00
$ 2,222.98 To Public Access Fund
$ 4,746,256.82
$ 3,278,988.00 Shortfall
$ 1,467,268.82
Attactnt 7
EXHIBIT I B i
NET TAXABLE VALUE
- 100% FMV
- Less Exemptions TAX TAX
- Less 50%Appeals REVENUE RATE
HOMESTEAD 3,489,094,500 - 0.00
RESIDENTIAL 5,576,433,050 1,115,287 0.20
VACATION RENTAL 2,626,160,600 1,969,620 0.75
HOTEL & RESORT 2,151,899,200 3,227,849 1.50
COMMERCIAL 984,821,900 98,482 0.10
INDUSTRIAL 343,885,450 34,389 0.10
AGRICULTURAL 763,156,850 76,316 0.10
CONSERVATION 75,366,350 7,537 0.10
Subtotal - 16,010,817,900 6,529,479
Less:
Home Preservation Limit Differential (29,580)
6,499,899
$ 105,842,616 Total RPT
$ 6,499,899 Increase in RPT
$ 1,587,639.24
$ 518,233.00
$ 1,069,406.24 To Public Access Fund
$ 5,430,492.68
$ 3,278,988.00 Shortfall
$ 2,151,504.68