HomeMy WebLinkAbout01/23/2019 Council minutes COUNCIL MEETING
JANUARY 23, 2019
The Council Meeting of the Council of the County of Kaua`i was called to order
by Council Chair Arryl Kaneshiro at the Council Chambers, 4396 Rice Street,
Suite 201, Lihu`e, Kaua`i, on Wednesday, January 23, 2019 at 8:31 a.m., after which
the following Members answered the call of the roll:
Honorable Arthur Brun
Honorable Mason K. Chock (excused at 11:27 a.m.)
Honorable Felicia Cowden
Honorable Luke A. Evslin
Honorable Ross Kagawa
Honorable KipuKai Kuali`i
Honorable Arryl Kaneshiro
APPROVAL OF AGENDA.
Councilmember Chock moved for approval of the agenda, as circulated,
seconded by Councilmember Kuali`i.
Council Chair Kaneshiro: Is there anyone in the public wishing to testify
on this?
There being no objections, the rules were suspended to take public testimony.
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
Council Chair Kaneshiro: Seeing none, members, is there any
discussion?
The motion for approval of the agenda, as circulated, was then put, and
unanimously carried.
Council Chair Kaneshiro: Motion carried. Next item is the Minutes.
MINUTES of the following meetings of the Council:
November 28, 2018 Council Meeting
January 9, 2019 Council Meeting
Councilmember Chock moved to approve the Minutes as circulated, seconded
by Councilmember Kuali`i.
COUNCIL MEETING 2 JANUARY 23, 2019
Council Chair Kaneshiro: Is there anyone in the audience wishing to
testify on the Minutes?
There being no objections, the rules were suspended to take public testimony.
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
Council Chair Kaneshiro: Seeing none, is there any discussion from the
members?
The motion to approve the Minutes, as circulated, was then put, and
unanimously carried.
Council Chair Kaneshiro: The motion is carried. As far as the
Communications go, the auditors do not come in until 8:30 a.m., so I am going to try
and see if we can get through as many items as we can now on the frontend, so I may
be skipping around a little bit.
JADE K. FOUNTAIN-TANIGAWA, County Clerk: Council Chair Kaneshiro,
9:00 a.m.
Council Chair Kaneshiro: Oh, 9:00 a.m. I am sorry. It is 8:30 a.m. right
now. We will take C 2019-25, then we are going to skip the next two (2)
Communications, move on to Claims, and try to get through our Bills for Second and
Final Reading. That is the plan and see where we are from there. Clerk, can you
please read C 2019-25?
COMMUNICATIONS:
C 2019-25 Communication (01/02/2019) from Ka`aina S. Hull, Clerk of the
Planning Commission, transmitting the Planning Commission's recommendation to
amend the Zoning Designation of a portion of Tax Map Key (TMK) (4) 4-4-013:002,
Kapahi, Kaua`i, from "Open District (0)" to "Agriculture District (A)" subject to the
condition stated in the bill.
Council Chair Kaneshiro: Can I get a motion?
Councilmember Kuali`i moved to receive C 2019-25 for the record, seconded by
Councilmember Brun.
Council Chair Kaneshiro: The plan is not to have the discussion on this
Communication and just have it on the Bill for First Reading. Is there anyone in the
audience wishing to testify on this Communication?
There being no objections, the rules were suspended to take public testimony.
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
COUNCIL MEETING 3 JANUARY 23, 2019
The motion to receive C 2019-25 for the record was then put, and unanimously
carried.
Council Chair Kaneshiro: Motion carried. Clerk, we will skip to Claims.
There being no objections, the Claims were taken out of order.
CLAIMS:
C 2019-28 Communication (01/02/2019) from the County Clerk, transmitting
a claim filed against the County of Kaua`i by Clinton C. St. Classis Brown, for damages
to his vehicle, personal injury, medical bills, and loss of income, pursuant to
Section 23.06, Charter of the County of Kaua`i.
C 2019-29 Communication (01/02/2019) from the County Clerk, transmitting
a claim filed against the County of Kaua`i by Joan Aanavi, for damages to her vehicle,
pursuant to Section 23.06, Charter of the County of Kaua`i.
Councilmember Kuali`i moved to refer C 2019-28 and C 2019-29 to the Office
of the County Attorney for disposition and/or report back to the Council,
seconded by Councilmember Chock.
Council Chair Kaneshiro: Is there anyone in the audience wishing to
testify on the Claims?
There being no objections, the rules were suspended to take public testimony.
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
Council Chair Kaneshiro: Seeing none, is there any discussion from the
members?
The motion to refer C 2019-28 and C 2019-29 to the Office of the County
Attorney for disposition and/or report back to the Council was then put, and
unanimously carried.
Council Chair Kaneshiro: Motion carried.
COMMITTEE REPORTS:
COMMITTEE OF THE WHOLE:
A report (No. CR-COW 2019-01) submitted by the Committee of the Whole,
recommending that the following be Approved on second and final reading:
"Bill No. 2726 — A BILL FOR AN ORDINANCE TO AMEND
ORDINANCE NO. B-2018-842, AS AMENDED, RELATING TO THE
CAPITAL BUDGET OF THE COUNTY OF KAUAI, STATE OF HAWAII,
COUNCIL MEETING 4 JANUARY 23, 2019
FOR THE FISCAL YEAR JULY 1, 2018 THROUGH JUNE 30, 2019, BY
REVISING THE AMOUNTS ESTIMATED IN THE SPECIAL STATE CIP
FUND (Special State CIP Fund, Lima Ola Affordable Housing Project -
$13,000,000.00),"
A report (No. CR-COW 2019-02) submitted by the Committee of the Whole,
recommending that the following be Approved on second and final reading:
"Bill No. 2727 — A BILL FOR AN ORDINANCE AMENDING
ORDINANCE NO. B-2018-842, AS AMENDED, RELATING TO THE
CAPITAL BUDGET OF THE COUNTY OF KAUAI, STATE OF HAWAII,
FOR THE FISCAL YEAR JULY 1, 2018 THROUGH JUNE 30, 2019, BY
REVISING THE AMOUNTS ESTIMATED IN THE BOND FUND (Various
Wastewater Improvements - $1,000,000.00),"
A report (No. CR-COW 2019-03) submitted by the Committee of the Whole,
recommending that the following be Approved on second and final reading:
"Bill No. 2728 — A BILL FOR AN ORDINANCE AMENDING
ORDINANCE NO. B-2018-842, AS AMENDED, RELATING TO THE
CAPITAL BUDGET OF THE COUNTY OF KAUAI, STATE OF HAWAII,
FOR THE FISCAL YEAR JULY 1, 2018 THROUGH JUNE 30, 2019, BY
REVISING THE AMOUNTS ESTIMATED IN THE BOND FUND AND
GENERAL FUND-CIP (Helicopter Hangar and Kilauea/Kolo Road
Improvements - $995,000.00),"
A report (No. CR-COW 2019-04) submitted by the Committee of the Whole,
recommending that the following be Approved on second and final reading:
"Bill No. 2729 — A BILL FOR AN ORDINANCE AMENDING
ORDINANCE NO. B-2018-841, AS AMENDED, RELATING TO THE
OPERATING BUDGET OF THE COUNTY OF KAUAI, STATE OF HAWAII,
FOR THE FISCAL YEAR JULY 1, 2018 THROUGH JUNE 30, 2019, BY
REVISING THE AMOUNTS ESTIMATED IN THE SEWER FUND (Wailua
Wastewater Treatment Plant Improvements (Operating Budget) -
$530,000.00),"
A report (No. CR-COW 2019-05) submitted by the Committee of the Whole,
recommending that the following be Approved on second and final reading:
"Bill No. 2730 — A BILL FOR AN ORDINANCE AMENDING
ORDINANCE NO. B-2018-842, AS AMENDED, RELATING TO THE
CAPITAL BUDGET OF THE COUNTY OF KAUAI, STATE OF HAWAII,
FOR THE FISCAL YEAR JULY 1, 2018 THROUGH JUNE 30, 2019, BY
REVISING THE AMOUNTS ESTIMATED IN THE SEWER TRUST FUND
(Wailua Wastewater Treatment Plant Improvements (CIP Budget) -
$530,000.00),"
COUNCIL MEETING 5 JANUARY 23, 2019
A report (No. CR-COW 2019-06) submitted by the Committee of the Whole,
recommending that the following be Approved on second and final reading:
"Bill No. 2731 — A BILL FOR AN ORDINANCE AMENDING
ORDINANCE NO. B-2018-841, AS AMENDED, RELATING TO THE
OPERATING BUDGET OF THE COUNTY OF KAUAI, STATE OF HAWAII,
FOR THE FISCAL YEAR JULY 1, 2018 THROUGH JUNE 30, 2019, BY
REVISING THE AMOUNTS ESTIMATED IN THE GENERAL FUND (Kaua`i
Fire Department— Two (2)Full-Time Ocean Safety Officer Hand One (1) Ocean
Safety Officer I Positions),"
Councilmember Kuali`i moved for approval of the reports, seconded by
Councilmember Evslin.
Council Chair Kaneshiro: Is there anyone in the audience wishing to
testify on this?
There being no objections, the rules were suspended to take public testimony.
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
Council Chair Kaneshiro: Seeing none, is there any discussion from the
members?
The motion for approval of the reports was then put, and unanimously carried.
Council Chair Kaneshiro: Motion passes.
Ms. Fountain-Tanigawa: Council Chair Kaneshiro, do you want to skip
to Bills for Second Reading?
Council Chair Kaneshiro: Clerk, we are going to skip the Bill for First
Reading for the Planning item, we will go to Bills for Second Reading, and we will go
through each Bill for second reading.
Ms. Fountain-Tanigawa: Okay.
BILLS FOR SECOND READING:
Bill No. 2726 — A BILL FOR AN ORDINANCE TO AMEND ORDINANCE
NO. B-2018-842, AS AMENDED, RELATING TO THE CAPITAL BUDGET OF THE
COUNTY OF KAUAI, STATE OF HAWAII, FOR THE FISCAL YEAR JULY 1, 2018
THROUGH JUNE 30, 2019, BY REVISING THE AMOUNTS ESTIMATED IN THE
SPECIAL STATE CIP FUND (Special State CIP Fund, Lima Ola Affordable Housing
Project - $13,000,000.00): Councilmember Chock moved to approve Bill No. 2726, on
second and final reading, and that it be transmitted to the Mayor for his approval,
seconded by Councilmember Kuali`i.
COUNCIL MEETING 6 JANUARY 23, 2019
Council Chair Kaneshiro: Are there any questions for the
Administration on Lima Ola? Is there anyone in the audience wishing to testify?
There being no objections, the rules were suspended to take public testimony.
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
Council Chair Kaneshiro: Seeing none, is there any final discussion
from the members? If not, roll call vote.
The motion to approve Bill No. 2726, on second and final reading, and that it
be transmitted to the Mayor for his approval was then put, and carried by the
following vote:
FOR APPROVAL: Brun, Chock, Cowden, Evslin, Kagawa,
Kuali`i, Kaneshiro TOTAL— 7,
AGAINST APPROVAL: None TOTAL— 0,
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL— 0.
Ms. Fountain-Tanigawa: Seven (7) ayes.
Bill No. 2727 — A BILL FOR AN ORDINANCE AMENDING ORDINANCE
NO. B-2018-842, AS AMENDED, RELATING TO THE CAPITAL BUDGET OF THE
COUNTY OF KAUAI, STATE OF HAWAII, FOR THE FISCAL YEAR JULY 1, 2018
THROUGH JUNE 30, 2019, BY REVISING THE AMOUNTS ESTIMATED IN THE
BOND FUND (Various Wastewater Improvements - $1,000,000.00): Councilmember
Kuali`i moved approve Bill No. 2727, on second and final reading, and that it be
transmitted to the Mayor for his approval, seconded by Councilmember Brun.
Council Chair Kaneshiro: Is there anyone in the audience wishing to
testify on the wastewater improvements?
There being no objections, the rules were suspended to take public testimony.
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
Council Chair Kaneshiro: Seeing none, is there any discussion from the
members? Roll call vote.
The motion to approve Bill No. 2727, on second and final reading, and that it
be transmitted to the Mayor for his approval was then put, and carried by the
following vote:
FOR APPROVAL: Brun, Chock, Cowden, Evslin, Kagawa,
Kuali`i, Kaneshiro TOTAL— 7,
AGAINST APPROVAL: None TOTAL— 0,
COUNCIL MEETING 7 JANUARY 23, 2019
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL— 0.
Ms. Fountain-Tanigawa: Seven (7) ayes.
Bill No. 2728 — A BILL FOR AN ORDINANCE AMENDING ORDINANCE
NO. B-2018-842, AS AMENDED, RELATING TO THE CAPITAL BUDGET OF THE
COUNTY OF KAUAI, STATE OF HAWAII, FOR THE FISCAL YEAR JULY 1, 2018
THROUGH JUNE 30, 2019, BY REVISING THE AMOUNTS ESTIMATED IN THE
BOND FUND AND GENERAL FUND-CIP (Helicopter Hangar and Kilauea/Kolo
Road Improvements - $995,000.00): Councilmember Chock moved to approve Bill
No. 2728, on second and final reading, and that it be transmitted to the Mayor for his
approval, seconded by Councilmember Kuali`i.
Council Chair Kaneshiro: Is there anyone in the audience wishing to
testify on Bill No. 2728?
There being no objections, the rules were suspended to take public testimony.
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
Council Chair Kaneshiro: Seeing none, is there any discussion from the
members? If not, roll call vote.
The motion to approve Bill No. 2728, on second and final reading, and that it
be transmitted to the Mayor for his approval was then put, and carried by the
following vote:
FOR APPROVAL: Brun, Chock, Cowden, Evslin, Kagawa,
Kuali`i, Kaneshiro TOTAL— 7,
AGAINST APPROVAL: None TOTAL— 0,
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL— 0.
Ms. Fountain-Tanigawa: Seven (7) ayes.
Council Chair Kaneshiro: Clerk, can we take both Bill No. 2729 and Bill
No. 2730 at the same time?
Ms. Fountain-Tanigawa: Okay.
Bill No. 2729 — A BILL FOR AN ORDINANCE AMENDING ORDINANCE
NO. B-2018-841, AS AMENDED, RELATING TO THE OPERATING BUDGET OF
THE COUNTY OF KAUAI, STATE OF HAWAII, FOR THE FISCAL YEAR
JULY 1, 2018 THROUGH JUNE 30, 2019, BY REVISING THE AMOUNTS
ESTIMATED IN THE SEWER FUND (Wailua Wastewater Treatment Plant
Improvements (Operating Budget) - $530,000.00)
COUNCIL MEETING 8 JANUARY 23, 2019
Bill No. 2730 — A BILL FOR AN ORDINANCE AMENDING ORDINANCE
NO. B-2018-842, AS AMENDED, RELATING TO THE CAPITAL BUDGET OF THE
COUNTY OF KAUAI, STATE OF HAWAII, FOR THE FISCAL YEAR JULY 1, 2018
THROUGH JUNE 30, 2019, BY REVISING THE AMOUNTS ESTIMATED IN THE
SEWER TRUST FUND (Wailua Wastewater Treatment Plant Improvements (CIP
Budget) - $530,000.00)
Councilmember Chock moved to approve Bill No. 2729 and Bill No. 2730, on
second and final reading, and that it be transmitted to the Mayor for his
approval, seconded by Councilmember Brun.
Council Chair Kaneshiro: Is there anyone in the audience wishing to
testify on this?
There being no objections, the rules were suspended to take public testimony.
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
Council Chair Kaneshiro: Seeing none, is there any discussion from the
members? If not, roll call vote on Bill No. 2729 and Bill No. 2730.
The motion to approve Bill No. 2729 and Bill No. 2730, on second and final
reading, and that it be transmitted to the Mayor for his approval was then put,
and carried by the following vote:
FOR APPROVAL: Brun, Chock, Cowden, Evslin, Kagawa,
Kuali`i, Kaneshiro TOTAL— 7,
AGAINST APPROVAL: None TOTAL— 0,
EXCUSED & NOT VOTING: None TOTAL— 0,
RECUSED & NOT VOTING: None TOTAL— 0.
Ms. Fountain-Tanigawa: Seven (7) ayes.
Bill No. 2731 — A BILL FOR AN ORDINANCE AMENDING ORDINANCE
NO. B-2018-841, AS AMENDED, RELATING TO THE OPERATING BUDGET OF
THE COUNTY OF KAUAI, STATE OF HAWAII, FOR THE FISCAL YEAR
JULY 1, 2018 THROUGH JUNE 30, 2019, BY REVISING THE AMOUNTS
ESTIMATED IN THE GENERAL FUND (Kaua`i Fire Department — Two (2)
Full-Time Ocean Safety Officer II and One (1) Ocean Safety Officer I Positions)
Council Chair Kaneshiro: Can I get a motion?
Councilmember Brun moved to approve Bill No. 2731, on second and final
reading, and that it be transmitted to the Mayor for his approval, seconded by
Councilmember Cowden.
Council Chair Kaneshiro: Are there any questions on this Bill?
COUNCIL MEETING 9 JANUARY 23, 2019
Councilmember Kuali`i: Can I make a comment?
Council Chair Kaneshiro: We will hold it for discussion. Is there anyone
in the audience wishing to testify? This is on the additional positions for Ocean Safety
Officers. Do we have anyone signed up? I will suspend the rules.
There being no objections, the rules were suspended to take public testimony.
MONTY DOWNS: Good morning. Monty Downs, President of
the Kaua`i Lifeguard Association. I really do not want to take your time today. We
had a lively discussion last week. Everyone was here except Councilmember Brun.
If you do not have any questions, Councilmember Brun, then we will go with the
discussion we had last week. Thank you.
Council Chair Kaneshiro: Thank you. Anyone else in the audience
wishing to testify?
There being no further testimony, the meeting was called back to order, and
proceeded as follows:
Council Chair Kaneshiro: Seeing none, is there any discussion from the
members? Councilmember Kuali`i.
Councilmember Kuali`i: I just wanted to state again as I did last week
and I am pretty sure this will pass without my support, but as far as creating new
positions for the remainder of the fiscal year, even in this instance where I feel it is
justifiable that they are saying that they have a public safety need, I would rather
have seen this be for this fiscal year be either part-time positions or some kind of
temporary positions, and that new positions that are costing to the tune of nearly two
hundred thousand dollars ($200,000) should be a part of the budget process where we
delve into it more deeply and where we compare it to our other expenses and make
that bigger decision of if we can really afford this. I know many would argue that we
cannot not do it, but it should be a part of the bigger discussion on the budget. At
this time, I am going to vote "no."
Council Chair Kaneshiro: Councilmember Cowden.
Councilmember Cowden: I just want to really respect Councilmember
Kuali`i's fiscal responsibility. I am still very supportive of this because we have spring
break left and the rest of the season where, I think, many people could still be hurt.
Ultimately, I would always pass this. I would rather keep people safe right now.
Thank you.
Council Chair Kaneshiro: Thank you. Councilmember Kagawa.
Councilmember Kagawa: For me, it bothers me a little bit about the
timing like Councilmember Kuali`i has stated. To say, "Well, we have a public safety
problem and that is why we need to break away from our traditional habits of
approving these positions during the budget," where does it stop? What if Police
COUNCIL MEETING 10 JANUARY 23, 2019
comes up and tells us, "Well, we need these three (3) positions because this beat is
getting more crime than the past. We should do it now?" It is better done at the
budget because in that way, you see the overall financial picture, you see what your
funding source is, you see the other impacts that it has against other items that are
said to be in dire need, and to have it mid-year kind of breaks away from tradition.
What I would like to see going forward is something like Councilmember Chock had
talked about where we have cross-training of firemen that perhaps if we see a
shortage and a dire need, that we can move internally. Management-wise, we can
move Fire personnel there to cover areas that we see are in dire need immediately
and perhaps cut off from maybe installing fire alarm systems; those types of things
that I feel are extravagant or unnecessary. For example, for fire permits, we could
maybe have the Building Division do those. For me, if we have those things like
cross-training, we have methods of moving around personnel so we can cover areas
that we see within the Department that are an immediate need rather than break
away from budget traditions and funding things where the taxpayers are stuck with
funding these forever. There is no funding source identified for the future and to me,
that makes it fiscally irresponsible. Thank you, Council Chair Kaneshiro.
Council Chair Kaneshiro: Councilmember Chock.
Councilmember Chock: Thank you, Council Chair Kaneshiro. I
appreciate the conversation around the need and how it is we can move forward given
the fact that we will continue to see the needs increase on this island. I just wanted
to mention that I have started that conversation in terms of that dual positions and
how we might best utilize our personnel. Obviously, there are some union
implications that I think need to be addressed. But in speaking with Hawai`i
Government Employees Association (HGEA), at least the initial feedback is that
there is some willingness to discuss how we might be able to make that happen. I
look forward to that discussion. I will be supporting this as public safety, for me, is
something that I cannot overlook at this point. I will be supporting it today. Thank
you.
Council Chair Kaneshiro: Councilmember Brun.
Councilmember Brun: Thank you. Bringing this up in the middle is
kind of—I know that we had something that we all were looking...we cut something
out of the budget with Fire and somehow, they found the money to buy that one (1)
thing that we cut out. Now, we are looking for this money for these positions and it
is public safety, I am not going to deny this. I am going to vote for it, but hopefully,
it is a new regime going forward and hopefully they can be a little more responsible
with their money. If they do not need something, do not go and buy it because I think
it made a lot of us mad that they bought something that we took out of the budget. It
was just twelve thousand dollars ($12,000), but still, it was not worth it. It was
bought. I do not think it is the Ocean Safety Bureau's fault that it happened. I will
be supporting this, but I just hope Fire is going to look at their budget a little better
next year and budget a little better. Thank you.
Council Chair Kaneshiro: Councilmember Kuali`i.
COUNCIL MEETING 11 JANUARY 23, 2019
Councilmember Kuali`i: I will just add that during the presentation,
they talked about how they consolidated four (4) part-time positions to two (2)
full-time positions, so I see that they can address the emergency need for the
remaining five (5) months of this current year with part-time positions and maybe
even a temporary position. I am not saying they should not have addressed the safety
issue, I am just saying that a full-time position that is costing eighty-eight thousand
dollars ($88,000) and there are two (2) of those positions, so one hundred sixty
thousand dollars ($166,000) total, not during the budget that will...there is
continuing expenses. This will be in next year's budget and the following year's
budget without having been part of the budget process. The prior Administration, as
you know, had the Vacancy Review Committee for many years. The County's largest
expense is obviously labor and staffing. It is overwhelmingly the largest expense.
Each year when we find difficulties with budget, that is where we have to look first
and foremost to make sure we are being as efficient as possible. Even though this
year is a zero (0) expense because of budget savings, those budget savings every year
become part of the surplus and help us with the next year's budget. We should not
be just spending any savings in the current year. We should allow them to be surplus
to help us with the next year because obviously in the long run with positions, we
want to avoid any layoffs or furloughs as a way of making the budget work and
avoiding that kind of hardship that we might put on our workers and their families,
just like the hardship federal workers are going through now with the shutdown. For
me, this is very serious and is a principle. I wish they did it a different way. Thank
you.
Council Chair Kaneshiro: Councilmember Evslin.
Councilmember Evslin: We had a good discussion the last time, so I do
not want to really rehash it all. I just want to say again, that I think Anini in 2017
is an entirely different place than `Anini in later 2018 and 2019 going forward. I
think it is important for us, given the flood and our massive increase in tourist
numbers last year, that we remain nimble in that if we can prevent a drowning or
even if there is a twenty-five percent (25%) chance of us preventing a drowning by
funding this or by staffing this now, then it is vitally important. I appreciate you
folks being proactive here. I appreciate everything that Dr. Downs is doing to make
sure that he is not seeing this person in the emergency room (ER) down the road. I
am in full support of this going forward. Thank you.
Council Chair Kaneshiro: I am in support of this Bill. I understand the
concerns regarding timing and waiting for the budget, but I do understand that we
went through some extraordinary circumstances last year with all of the flooding and
road closures. We did see an overspill of visitors go into different beaches and areas,
which I think that is what really sparked this Bill and this conversation. I think they
came out with this probably last year sometime in November or December. Knowing
all of that spillover and the circumstances that happened last year, if we waited until
budget, they would not be seeing this until another five (5) months or so when we
know that the need is now. That is the consideration that I went through. With that,
I am not a fan of perpetual expenses, which these are more lifeguards and this is
going to be a perpetual expense for the rest of the County, but considering the
COUNCIL MEETING 12 JANUARY 23, 2019
circumstances and the need, I think it is necessary. I will be voting for it. Is there
any further discussion from the members? If not, roll call vote.
The motion to approve Bill No. 2731, on second and final reading, and that it
be transmitted to the Mayor for his approval was then put, and carried by the
following vote:
FOR APPROVAL: Brun, Chock, Cowden, Evslin, Kagawa,
Kaneshiro TOTAL— 6*,
AGAINST APPROVAL: Kuali`i 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 Kagawa was noted as silent, but shall be recorded as an affirmative
for the motion).
Ms. Fountain-Tanigawa: Six (6) ayes, one (1) no.
Council Chair Kaneshiro: Thank you. With that, we will go to our audit,
C 2019-26.
C 2019-26 Communication (01/02/2019) from Council Chair Kaneshiro,
requesting the presence of the Managing Director, Director of Finance, and
representatives from N&K CPAs, Inc., to discuss the Comprehensive Annual
Financial Report (CAFR), Single Audit Reports, and Management Advisory Report
for the Fiscal Year-ended June 30, 2018.
(Councilmember Brun was noted as not present.)
Councilmember Chock moved to receive C 2019-26 for the record, seconded by
Councilmember Kuali`i.
Council Chair Kaneshiro: With that, we will let the auditors do their
presentation and then we will take any questions on the presentation and questions
that we have with the audit. So, I will suspend the rules. You folks have the floor.
There being no objections, the rules were suspended.
(Councilmember Brun as noted as present.)
BLAKE S. ISOBE, Managing Principal, N&K CPAs, Inc.: Good
morning. Thank you for giving us time on your agenda to present the results of the
audit. I am Blake Isobe, Principal at N&K CPAs, Inc. I am in charge of the audit of
the County's Comprehensive Annual Financial Report (CAFR) and Single Audit.
This is John Bautista. He is the Senior Manager in charge of the audit and will be
helping me out on this presentation. A summary of the audit. From the audit, we
issued three (3) different reports. The first report is the Comprehensive Annual
Financial Report or what we call the CAFR. It is the financial statements of the
COUNCIL MEETING 13 JANUARY 23, 2019
County. The second report is the Single Audit Report. The Single Audit Report is a
required report because the County receives Federal funds and expends Federal
funds. The third report is an additional report that is not required by the audit, but
we do provide additional comments for consideration that we note during the audit,
which is the Management Advisory Report. We will start with the CAFR or the
Comprehensive Annual Financial Report. It is the fat report. To start off, on page 11
is the Certificate of Achievement for Excellence in Financial Reporting. The County
received for the twenty-fifth (25th) consecutive year, the certificate for presenting the
CAFR in compliance with financial reporting standards and submitting the CAFR on
time. In order to get the certificate, you need to complete and submit the CAFR by
December 31st or six (6) months after fiscal year-end. So, receiving the certificate for
the twenty-fifth (25th) consecutive year shows the County's commitment to excellence
in financial reporting. The CAFR is broken up into different sections. The first
section is the introductory section, which you can find the transmittal letter from the
County and the second section is the management discussion and analysis. This is
the management's discussion about different topics through the CAFR and highlights
of different financial information. Our report actually appears on pages 14 to 16. On
page 15, you will find our opinions on the financial statement. Here, we issue an
unmodified opinion or a clean opinion, on the financial statement saying that they
are presented in conformity with Generally Accepted Accounting Principles (GAAP).
We also have an emphasis of matter or I guess this is something else to note in the
audit report, which is an adoption of a new accounting principle. The County was
required to adopt Governmental Accounting Standards Board (GASB) Statement
No. 75, which requires the County to record Other Post-Employment Benefits
liability or OPEB. A couple of years ago, the County was required to record the
pension liability and this year, which the County has recorded, is the OPEB liability
or other post-employment benefits other than pensions. We will cover that later in
the CAFR.
The financial statements start on page 30. The government-wide financial
statements or the Statement of Net Position, which is the balance sheet of the County,
starts on page 30. The one major change from the prior year is that there is an
increase in the deficit, so the net position decreased by one hundred sixty million
dollars ($160,000,000). But one hundred sixty-eight million seven hundred thousand
dollars ($168,700,000) of that is related to the recording of—I am sorry. One hundred
forty-nine million five hundred thousand dollars ($149,500,000) of that is due to
recording of the opening balance of the OPEB liability. With the adoption of that new
accounting principle, the County was required to record that liability, record
additional disclosures in the CAFR, and also provide additional supplementary
information, which is found in the back of the CAFR. Other notable fluctuations in
the Statement of Net Position is cash and investments increased about forty-nine
million three hundred thousand dollars ($49,300,000). A lot of that increase is due to
the new bond float, which is about twenty-four million dollars ($24,000,000) and the
receipt of the State assistance for the floods, which is about another twenty-three
million dollars ($23,000,000). Capital assets decreased about one million seven
hundred thousand dollars ($1,700,000), but majority of that is depreciation, which is
about twenty-four million dollars ($24,000,000). There was still an increase in capital
assets, but that was offset by about twenty-four million dollars ($24,000,000) in
depreciation. Moving down the Statement of Net Position is the deferred outflows of
COUNCIL MEETING 14 JANUARY 23, 2019
resources. There is a new item there, which is related to the OPEB, which is about
sixteen million three hundred thousand dollars ($16,300,000) in deferred outflows
related to OPEB. We will cover that a little bit later. Moving down to your liabilities,
one of the large increases there is the new OPEB liability, which right now at
year-end, is about one hundred forty-seven million dollars ($147,000,000). Pension
liabilities stayed relatively flat, decreasing about four hundred thousand
dollars ($400,000). In your other long-term non-current liabilities or the long-term
debt, it increased about twenty-seven million one hundred thousand
dollars ($27,100,000). A lot of that increase was due to the issuance of the new bonds
for about twenty-four million dollars ($24,000,000), and there was also an increase in
the landfill liability about nine million four hundred thousand dollars ($9,400,000). I
will cover it in a slide in a few. Moving on to the next page, on page 31, is your
Statement of Activities. This is the overall...almost like your income statement for
the County. Overall, government-wide revenues increased about seven million seven
hundred thousand dollars ($7,700,000). A large portion of that increase or eight
million one hundred thousand dollars ($8,100,000) is due to your real property taxes.
There was also a slight increase of three million eight hundred thousand
dollars ($3,800,000) in operating grants and contributions, however, a decrease in
your capital grants and contributions by about five million three hundred thousand
dollars ($5,300,000). Although you had an increase in overall revenues of about seven
million seven hundred thousand dollars ($7,700,000), this is offset by increase in
government-wide expenses by about thirty-five million one hundred thousand
dollars ($35,100,000). Some of these increases and expenses were attributed to an
increase in pension expense of about six million four hundred thousand
dollars ($6,400,000) to thirty-nine million dollars ($39,000,000) for the year. The
increase in the landfill liability of nine million four hundred thousand
dollars ($9,400,000) increases your expenses there, too, and increases in repairs,
maintenance, and personnel cost also attributed to the remaining increases in costs.
If you look at the bottom of the page where we have that prior year adjustment,
that is the recording of the opening OPEB liability, so the total of one hundred
thirty-three million seven hundred thousand dollars ($133,700,000).
Councilmember Cowden: Can you say what OPEB stands for?
Mr. Isobe: It stands for Other Post-Employment
Benefits, so that is your funding for our Employers Union Trust Fund (EUTF).
Councilmember Cowden: EUTF?
Mr. Isobe: Employers Union Trust Fund or your
post-employment health benefits. Under Fund Financial Statements on page 33, is
the different funds of the County and your major funds are represented here. One
new change from the prior year is that you have a new major fund. The new major
fund is State Grants Fund. This became a major fund because of its size. Depending
on the size of assets and revenues requires by GASB, to report it as a major fund.
Prior to year-end, you folks received moneys from the State, which is sitting in that
fund and therefore, it increased its size and caused it to have to be reported
separately. In the past, it was reported as an "other governmental fund" grouped on
COUNCIL MEETING 15 JANUARY 23, 2019
the second to the far right column. Some of the increases/decreases in your fund
balance is the General Fund had an increase of two million five hundred thousand
dollars ($2,500,000). This is generally attributed to the increase in revenues of about
seven million two hundred thousand dollars ($7,200,000), of which real property taxes
accounted for six million five hundred thousand dollars ($6,500,000) of that increase.
Expenditures also increased about six million five hundred thousand
dollars ($6,500,000) and this is mainly due to your personnel costs. If you look in
your Bond Fund, you will notice that your fund balance increased there, too, and that
is primarily due to the issuance of the new bond issuance. So that is the highlight of
the major fluctuations in the financial statement, the statements themselves. But
within the financial statements, you will find a lot of different disclosures. One of the
significant disclosures to the financial statements is a large liability of the County, is
your pension liability. On the slide here, I have the increasing pension liability. At
the end of last year, it was about two hundred seventy-two million seven hundred
sixty thousand dollars ($272,760,000). At the end of the year, the pension liability
ended at two hundred seventy-two million four hundred thirty thousand
dollars ($272,430,000). The new liability that was recorded for the year ending
June 30, 2018 is that Other Post-Employment Benefits, which is your OPEB. The
gross liability here is two hundred forty-five million four hundred ten thousand
dollars ($245,410,000), but you do have funded plan assets or assets that you have
been putting away or cash that you have been putting away to satisfy some of this
debt. At year-end, the net liability is one hundred forty-seven million thirty thousand
dollars ($147,030,000).
Historically, we also provide a little information on how much you folks have
been funding to OPEB funding EUTF. This past year, you funded sixteen million
three hundred thousand dollars ($16,300,000) and part of that did help decrease the
liability by about two million five hundred thousand dollars ($2,500,000). Another
significant liability of the County is the landfill liability. At year-end, June 30, 2018,
the landfill liability is about thirty-nine million seven hundred thousand
dollars ($39,700,000). There was an increase this past year primarily due to the
increase of the estimated annual post-closure costs for Kekaha Phase II. In the prior
year, there was a decrease in the liability that was primarily due to the completion of
the gas collection system. So, that is the major highlights of the CAFR itself. I am
not sure, Council Chair Kaneshiro, if you want us to stop here for questions.
Council Chair Kaneshiro: Do we have any questions on the CAFR?
Councilmember Cowden.
Councilmember Cowden: I am new at this. I understand accounting,
but not necessarily government accounting. I do not really understand what a
deferred outflow is. Can you simply tell me an example of what a deferred outflow
is?
Mr. Isobe: Okay. Let me get an example. GASB created
this terminology a few years back. They wanted to get away from "deferred expense"
and "deferred revenue" and they created this terminology which is deferred...an
expense that you are not...on the deferred outflow side, it is an expense that you are
not currently recognizing, but you will incur it in future.
COUNCIL MEETING 16 JANUARY 23, 2019
Councilmember Cowden: Okay. Then, I have one other very basic
question. When I was looking through this, I actually read it. Thank you for your
work. Somehow, I might have missed it, if you mentioned in here that we had a
significant storm. Is that written in here? I did not see it. Maybe it is not normally
part of a financial report, but I was kind of thinking it would be in the summary
somehow so that we would see that maybe we had a little bit of an outlier year. The
twenty-five million dollars ($25,000,000) that we see in the State assistance, is that
for our flood?
Mr. Isobe: Correct. The money sitting in the State
Grants Fund represents the amounts that you folks received prior to fiscal year-end
for the State assistance for the flood.
Councilmember Cowden: Okay. Since this ends in June, we might be
seeing more than that. I was just trying to be clear and I know in the future, we will
probably see some blip in this year because for Kaua`i, this has been an extraordinary
year. I was just kind of curious why that did not make it in the synopsis. Is that not
normal to put something like that in there that just says that this was a little bit of
an extraordinary year because...I think we are going to see some real changes in our
real property taxes and in how at least the economy is going to be able to function
well in those storm damaged areas, some of which are still damaged. I am just trying
to understand why that does not get reflected, something that significant for us is not
worth a sentence or two in the report. Is that unusual? On Hawai`i Island, did they
say there was a lava flow?
Mr. Isobe: I am sorry, on the Hawai`i Island one, I did
not get to read their CAFR.
Councilmember Cowden: Okay.
Mr. Isobe: I understand where you are coming from on
that kind of disclosure. I read the CAFR, too, and I am pretty sure we do not mention
it within notes itself.
Councilmember Cowden: Because a lot of times we are looking for
historic anomalies. I put a lot of attention on how things change from year-to-year
because the trend lines really matter. Are we doing better? Are we doing worse? Is
it skyrocketing? I think this has been a really unusual year. We have had a crazy
amount of influx of visitors at the same time that we have had this challenge. So that
might actually make those things become a little more even, but I was just curious.
So, if that is not normal. Okay.
Council Chair Kaneshiro: Councilmember Kuali`i.
Councilmember Kuali`i: On page 3 of your slide, the bottom slide,
which is referring to page 31, Statement of Activities. Near the bottom, the third
bullet from the bottom says "pension expense increased six million four hundred
thousand dollars ($6,400,000) to thirty-nine million dollars ($39,000,000)," is that an
annual amount? It is so large. How is that compared to prior years? Does that have
COUNCIL MEETING 17 JANUARY 23, 2019
something to do with ten (10) years of the Carvalho Administration has ended and
there was a huge spike in number of retirements? Is this unusual?
Mr. Isobe: The pension cost is a shared pension cost with
the State. The amount that is allocated to the County is based on annual
contributions. Unlike the EUTF, the County actually has its own bucket of funding
that offsets its own liability for its employees that retire and have the different tiers
of health benefits and other post-employment benefits. The pension is a shared cost
with the whole State and all of the different other Counties. The more employees you
have and the more funding that you are required to make, changes your allocation of
pension cost and your pension liability itself. In the disclosure of the pension, which
starts on page 86, the disclosure is really long.
Councilmember Kuali`i: Yes.
Mr. Isobe: But in general what it is kind of trying to say
is what your allocated liability is between the two (2) years, between measurement
day 2016 and 2017, there was a slight increase in your share of the liability of the
overall Employee Retirement System (ERS) liability itself. The retirees themselves
and I guess the cost of that, it does not really directly affect the County. The major
things that affect it is how the ERS investments do, how much they can control the
pension costs itself, and spiking. A lot of different things that affect it, but the amount
of retirees does not really affect the liability itself.
Councilmember Kuali`i: But they must take into account, I think you
said it earlier, the number of staff and the future expectation. But what is happening
right now has already been accounted for in the past and what they are doing now
with their estimations of these things now, is for the future based on new hires and
the number of staff growing?
Mr. Isobe: Correct.
Councilmember Kuali`i: Possibly, statewide?
Mr. Isobe: Correct. Statewide, it really depends on the
number of employees and the estimated cost. They use mortality tables to determine
all of these projections of how much longer is the average workforce going to be. Right
now, it is pretty short for the State. I think the overall ERS is somewhere around
five (5) years. That is the average for the employees, so that is a short time.
Councilmember Kuali`i: On the bottom, the last bullet where you say
"increases in repairs and maintenance costs and personnel costs," but there is no
dollar figure. Why? Most of them kind of have dollar figures. Was it insignificant
and if so, why did you list the bullet?
Mr. Isobe: I listed the bullet primarily to say that was
the last significant increase to account for the remaining expenditures. The amount
itself I do not have offhand.
COUNCIL MEETING 18 JANUARY 23, 2019
Councilmember Kuali`i: So if I totaled that and all of that, it is the
difference?
Mr. Isobe: No. There are other smaller items that
increased and caused changes, but that was the last significant...what is it...amount
that took up the change in increase in the expense itself.
Councilmember Kuali`i: I would like the amount. That is it for now.
Council Chair Kaneshiro: Councilmember Kagawa.
Councilmember Kagawa: I am trying to figure out the OPEB liability
that we had to book this year. I am looking at the prior year's on page 28 of last year's
and I am comparing it with page 30 of this year's, and I am trying to see. Where was
the OPEB liability? Under what line item in the Statement of Net Position was the
OPEB liability in last year?
Mr. Isobe: Last year, it did not have to be recorded on the
Statement of Net Position.
Councilmember Kagawa: Okay.
Mr. Isobe: Starting Fiscal Year 2018, it had to come on.
Councilmember Kagawa: Alright. I thought it was maybe inside some
account in the prior year.
Mr. Isobe: No. In the past, GASB only required
disclosures about this liability out there, the funding, the amount of funding in
comparison to your annual required contribution (ARC), or what was the annual
required contribution that was computed. I guess what GASB kind of wanted to do
was slowly get the governments to record these liabilities, but they did not want to
do it all at once. They brought in the pensions in 2015 or 2016, but they had already
kind of put it out there that the Other Post-Employment Benefits, which is both a
significant liability to a lot of governments, was coming, and that liability for a lot of
governments is huge. They wanted it to be reflected in the financial statements and
so this is the first year that the OPEB came onto the books.
Councilmember Kagawa: How did we get that number?
Mr. Isobe: The Employers Union Trust Fund hires an
actuary that takes all of the employees and the retiree counts and does some kind of
projection. An actuarial does that and comes up with the projection for that amount.
Councilmember Kagawa: So, a lot of that relies on the projections then?
Mr. Isobe: Yes. If you look in the disclosure to the OPEB,
it is required to disclose a lot of assumptions that they do use to come up with these
COUNCIL MEETING 19 JANUARY 23, 2019
assumptions. On page 97 of the current year CAFR, you will see all of these different
actuarial assumptions that they used and that they are required to disclose. Usually
the financial knows that they are using this discount rate of seven percent (7%) and
inflation rate of two point five percent (2.5%), which is just the basis of them coming
up with this liability. Whether or not they are going to hit these, I mean, maybe we
will see in five (5) or ten (10) years how accurate they were. But any time they do
change one of these actuarial assumptions significantly, that is another disclosure
issue in the future. I think a few years back, they changed the discount rate, I think
on the pensions. If you look back on the pensions liability, there was a significant
increase to the liabilities in that year because of that actuarial assumption change.
Councilmember Kagawa: Because I guess the pension and retirement is
the ERS side and the EUTF is the OPEB health side. Those are two (2) of our major
concerns that we have and large liability items. I am trying to understand which...I
am looking at page 30 of the Statement of Net Positions. The two hundred seventy-
two thousand dollars ($272,000) is the net pension liability and did we get that from
ERS?
Mr. Isobe: Correct.
Councilmember Kagawa: That it is kind of funny because they were
here about six (6) months ago. I think the Head was Thomas Williams. We were
asking them what was Kaua`i's portion and he said, "Well, we do not account like
that. It is all in one (1) big pot." It is kind of funny that he said for our purpose, he
could not tell the County what was our portion, but then yet for audit purposes, he
has that answer.
Mr. Isobe: He is from ERS, correct?
Councilmember Kagawa: Yes.
Mr. Isobe: What he is kind of trying to say is they
account for it at ERS as one (1) pension liability for all employees that fit into the
ERS. I guess what the State is required to do and what all of the Counties are
required to do is hire this actuarial that comes in and not only comes up with the
unfunded pension liability, but also then breaks it down by employer group. Based
on that, they have their auditor come in and also then audit that breakout based on
pension contributions, and that allocation amount is then recorded by each employer
group. We review and take a look at their audit evidence that they come up with for
that pension allocation and that is then recorded by Finance as your share of the
pension liability.
Councilmember Kagawa: So that also is audited, like ERS. Is the
actuarial work audited as well because I think it is important because the actuary's
work would determine how much is Kaua`i's projected liability, right?
Mr. Isobe: Correct.
COUNCIL MEETING 20 JANUARY 23, 2019
Councilmember Kagawa: But then what gets confusing is when they
say "it is all-in-one pot" so they just pay out as we go. At the end of the day, how do
we find out whether our portion is too little or too much if it is based on projections?
Mr. Isobe: ERS and EUTF are two (2) different types of
funded benefits. The ERS, as I mentioned, is a shared liability with the whole State
and all employer groups are required to make contributions based on specific rates
stated by ERS depending on what bucket they fall into or whether they are hired
before a certain time. Those contributions are based on your current employees and
your retirees. You are going to share in that liability no matter what. EUTF or Other
Post-Employment Benefits, the County has been funding one hundred percent (100%)
of that annual required contribution, which has been paying down your own County's
liability. That County liability is computed specifically for the County based on the
employees of the County. Your funding to that directly affects your OPEB liability
there. It is not a shared bucket of assets for the OPEB, so the more you fund, the
more it could bring down your liability as long as your own OPEB costs are not going
up.
Councilmember Kagawa: Okay. Thank you.
Council Chair Kaneshiro: I think for us, it is always difficult to try and
justify.
(Councilmember Brun was noted as not present.)
Council Chair Kaneshiro: With EUTF, we know that if we put the
money, we know that it is going to reduce our liability and that it is specific to the
County. With ERS, it is like, if we put money in, we have no clue what is going to
happen because it is in a huge bucket with the State. I think we have always had a
difficult time with it. How do we know we are getting the "bang for our buck" on our
pension? We really do not. Councilmember Cowden.
Councilmember Cowden: I have another question that I just am not
clear on. Under liabilities it calls it "unearned revenue." That is forty-seven million
dollars ($47,000,000) and some change. Can you help me understand what"unearned
revenue" is? That is a big number. That is on page 30 under liabilities.
Mr. Isobe: With that change from the recognition of
deferred inflows and deferred outflows, GASB got away from "deferred revenue." So
"unearned revenue" is receipt of moneys that you received that you have not quite
earned. In the State Grants Fund, you have a large twenty-three million
dollars ($23,000,000) there, that is a lot of the moneys that got received that were not
expended or reported as use of grant moneys. On the Federal fund, you also have
some grants that you might receive that you did not meet the requirements to expend
for Federal grant reporting purposes, but you received the money in advance.
Councilmember Cowden: We have received in advance, does that mean
there is forty-seven million dollars ($47,000,000) in there available for us that we
have not actually expressed yet? I am still not very clear.
COUNCIL MEETING 21 JANUARY 23, 2019
Mr. Isobe: Correct.
Councilmember Cowden: Is that something that we, in the end, still
have capacity to utilize?
Mr. Isobe: At June 30th.
Councilmember Cowden: Okay.
Mr. Isobe: June 30th, you had about forty-seven million
dollars ($47,000,000) worth of moneys that you received. A large portion of that,
twenty-three million dollars ($23,000,000), was the flood moneys that came in right
before fiscal year-end.
Councilmember Cowden: Okay. Alright. This back appendices, it looks
like you folks are not responsible for what is in there. As I was looking through it
and trying to get a good understanding of where we are at, I found it curious that
there is no visitor data for 2017 or 2018, and that is on page 170. Whose responsibility
is to have that? It seems like that information is out almost on a monthly basis, so I
was unclear why there would not have been at least data from 2017 in there.
Mr. Isobe: When Finance puts together the CAFR, they
use available data at that time. I mean, apparently at this point, the 2017 data was
not available.
Council Chair Kaneshiro: Councilmember Kagawa.
Councilmember Kagawa: Just one follow-up on the one hundred
forty-seven thousand dollars ($147,000) for the OPEB. Where is the debit side? Is
that in unrestricted for that entry?
Mr. Isobe: Correct. The opening balance of that Other
Post-Employment Benefits amount hit your opening net position, unrestricted net
position.
Councilmember Kagawa: So you just booked it right into the opening
balance of the unrestricted?
Mr. Isobe: No. If you look on page 31 at the bottom, you
see the prior period adjustment for one hundred thirty-three million
dollars ($133,000,000), so that is the opening net adjustment to your unrestricted net
position. But there is a disclosure that will break this down a little bit better on the
last page of the notes, on page 109.
Councilmember Kagawa: Okay.
Mr. Isobe: There is also a timing difference that GASB
does for the contributions made during Fiscal Year 2018 that will be applied to the
liability in Fiscal Year 2019. Due to the complexity of the calculations and the
COUNCIL MEETING 22 JANUARY 23, 2019
actuarial work that needs to be done, GASB allows this one (1) lag in the
measurement of your pension liability and your OPEB liability. Although we report
as of June 30, 2018, this is a measurement date of June 30, 2017. Those contributions
are actually going to be applied in the future.
Councilmember Kagawa: Okay.
Mr. Isobe: That net amount is shown here. It is your
opening liability and that employer-paid contributions made after. That is your
opening adjustment to the deficit in net position.
Councilmember Kagawa: Okay. I understand now. Thank you.
Council Chair Kaneshiro: Councilmember Chock.
Councilmember Chock: Thank you, Council Chair Kaneshiro. First
slide, page 4, I just wanted to get a sense of...there are a couple of questions that I
have. The new major funds, State Grants Fund due to receipt of twenty-five million
dollars ($25,000,000) in State assistance, can you explain this fund or when the
timing of this as it relates to twenty-five million dollars ($25,000,0000) in State
assistance?
Mr. Isobe: Okay. Although the assistance comes in,
there are still reporting requirements to the State to properly earn that money. You
may have incurred expenditures, but there are still requirements that need to be met
to earn that money, so it is just going to sit in the State Grants Fund until it is
reported, earned, and approved.
Councilmember Chock: Okay. The second to the last, you talk about
the six million five hundred thousand dollars ($6,500,000). I just want to confirm,
are those personnel costs due to pay raises and collective bargaining? It is on the
same slide. Six million five hundred thousand dollars ($6,500,000).
Mr. Isobe: What slide are you on?
Council Chair Kaneshiro: Page 4.
Councilmember Chock: Page 4, first slide.
Mr. Isobe: Okay.
Councilmember Chock: It is the same slide as the State Grants Fund.
It is the second to the last bullet. It talks about the fund balance fluctuations. Under
General Fund, there is expenditures of six million five hundred thousand
dollars ($6,500,000). I thought the six million five hundred thousand
dollars ($6,500,000) was due to collective bargaining, but I wanted to confirm that.
COUNCIL MEETING 23 JANUARY 23, 2019
Mr. Isobe: The six million five hundred thousand
dollars ($6,500,000) is just mainly personnel costs, payroll costs, and related payroll
costs such as payroll taxes and personnel costs.
Councilmember Chock: So it is taxes on the increases?
Mr. Isobe: Salaries, payroll taxes, your health, and
everything that is related to personnel costs.
Councilmember Chock: Okay.
Council Chair Kaneshiro: Are there any further questions on the CAFR
from members? Councilmember Evslin.
(Councilmember Brun was noted as present.)
Councilmember Evslin: I just have one question. For Councilmember
Chock, it does say "collective bargaining" in the report.
Councilmember Chock: Oh, it does?
Councilmember Evslin: It does have collective bargaining as that
reason.
Councilmember Chock: Thank you.
Councilmember Evslin: The discount rate of seven percent (7%), is
that standard across State and has that changed over time?
(Councilmember Chock was noted as not present.)
Councilmember Evslin: It said that for pension liability and I think
you were using the discount rate of seven percent (7%).
Mr. Isobe: For the pension?
Councilmember Evslin: Yes.
Mr. Isobe: Correct. If you notice, Fiscal Year 2015 and
2016 and then there is a big jump in 2017. They changed the discount rate that year.
They had changed it that year and that is why there was a significant change in that
discount rate. Sorry, I do not have that off the top of my head. It was eight
percent (8%) and then they dropped in 2017 to seven percent (7%), and that caused
that huge increase in the pension liability. There is also a sensitivity disclosure in
the notes to the pension. I think if you look on page 94, they show what happens
when you move that discount rate from seven percent (7%) to six percent (6%) or
seven percent (7%) to eight percent (8%).
(Councilmember Kagawa was noted as not present.)
COUNCIL MEETING 24 JANUARY 23, 2019
Mr. Isobe: They kind of show you your exposure, just
with a one percent (1%) move on each side. On EUTF or OPEB, they also do that
same thing with the change in your discount rate, but also a change in your health
care costs. An increase or decrease in those, how it will affect your ultimate liability
there.
Councilmember Evslin: I guess the discount rate is that coming from
the Office of Management and Budget (OMB) in some fashion, or is the State just
coming up with it? Does each State come up with their own discount rate for their
own pension every year?
(Councilmember Chock was noted as present.)
Mr. Isobe: Correct, the State comes up with it.
Council Chair Kaneshiro: Are there any further questions from the
members? If not, we will move on to the Single Audit Report.
Mr. Isobe: Moving on to the Single Audit Report.
Because the County receives over seven hundred fifty thousand dollars ($750,000) in
Federal funds, it is required to have what is called a Single Audit, which is a report
on its major Federal programs or I guess testing of its Federal awards. Part of the
required reporting is also what we call the Report on Internal Control Over Financial
Reporting and Compliance and Other Matters, which is found on pages 6 to 7. This
report is on internal control over financial reporting and compliance and other
matters. On page 7, we do note that we did note a material weakness, which is finding
2018-001. The following paragraph says we also noted a significant deficiency, which
is finding 2018-002, which we will cover in a little while. The second report we issue
is a report on Compliance with Each Major Federal Program, which starts on page 9
and goes to page 12. This is where we look at your Federal programs and determine
whether or not there is any compliance issues or internal controls issues over your
Federal programs. On page 10, we issue an opinion on each major Federal program,
which we disclosed in a few pages that the County, in our opinion, complied in all
material respects with the types of compliance requirements for those Federal major
programs. We did note other matters that are still required to be reported in
compliance with the Uniform Guidance as findings 2018-003, which is a material
weakness on the HOME Investment Partnerships Program (HOME), and 2018-004,
which is another finding on that program. We also issued a report on your Schedule
of Expenditures of Federal Awards, which is also referred to as your SEFA. We
opined that the Schedule of Expenditures of Federal Awards is fairly stated in all
material respects or properly stated and your SEFA is found on page 13 to 21. Part
of the Single Audit Report, is the required Schedule of Findings and Questioned
Costs, which summarizes the audit itself.
On page 24, there is a summary of the audit on the financial statements and
also a summary on the audit of Federal awards. Starting at the top, we disclose that
there was an unmodified or a clean opinion issued on the financial statements
COUNCIL MEETING 25 JANUARY 23, 2019
themselves. As mentioned before, there was a material weakness and a significant
deficiency identified being reported in the report and no non-compliance material to
the financial statements noted. On the Federal awards, we did note a material
weakness, but no significant deficiencies being reported. We also issued an
unmodified or clean opinion on compliance with the major Federal programs and also
noted that there are findings that are required to be recorded in conformance with
the Uniform Guidance. We identified your Federal major programs that were audited
part of the current year's Single Audit, which is your Community Development Block
Grant (CDBG), your HOME Investment Partnership Program, and then last one is
your highway planning and construction grant. The dollar threshold to distinguish
between Type A and Type B programs is seven hundred fifty thousand
dollars ($750,000), and you did qualify as a low-risk auditee. That low-risk auditee
is based on historic findings or no findings in your Single Audit Report. So you folks
did qualify. Moving on to page 25, which is our first internal control finding on
financial reporting.
(Councilmember Kagawa was noted as present.)
Mr. Isobe: During our audit, we noted that bank
reconciliations (recs) for December 2017 was not completed until June 2018.
Subsequently, the January 2018 through June 2018 bank reconciliations were not
completed until September 2018. Performing timely reconciliations is a strong
internal control process that will ensure that all transactions are recorded, and it is
effective when it is performed timely, meaning monthly and close to, I guess, every
month, yes. Finding 2018-002, page 26. This is a new finding. We noted during the
audit that in December 2017, the County implemented a new iNovah cashiering
program. However, the procedures related to, I guess, the changed management or
getting that system up were not formally documented. After implementing this
iNovah cashiering system, the exports of data that are captured by the iNovah system
to be then recorded to the County's general ledger occasionally resulted in export
failures or incomplete exports. These failures kind of caused some of the delays in
the monthly reconciliations that were reported in the prior finding. The next finding
is 2018-003, unallowable costs. This is on your HOME Investment Partnerships
Program. This is a new finding this year. During the audit, we noted that three
hundred eighty-one thousand dollars ($381,000) in unallowable costs were requested
the Housing Agency for reimbursement from the Hawai`i Housing Finance and
Development Corporation (HHFDC). This was requested for a sub-recipient.
HHFDC later denied that reimbursement to the County because within that request
for reimbursement were costs that HHFDC determined to be unallowable to the
HOME program. The County had already reimbursed the sub-recipient and later
offset future reimbursement to the sub-recipient. At year-end, there is a receivable
recorded from that sub-recipient. 2018-004 is another finding on the HOME program,
which is related to sub-recipient monitoring. During the audit, we noted that the
County did not request and review the audit report from one (1) sub-recipient that
expended over seven hundred fifty thousand dollars ($750,000). The County should
have monitoring procedures in place for any Federal program to ensure that any
sub-recipients that receive Federal funds are either monitored by obtaining their
Single Audit Report, which the County gets and review that Single Audit Report for
any findings related to funding provided by the County to the sub-recipient and
COUNCIL MEETING 26 JANUARY 23, 2019
whether or not management has taken appropriate action to address any finding
noted in the sub-recipient's report. During the audit, we noted that one (1) of the
sub-recipients did not submit their report to the County and the County had not
followed up or gotten anything from them. Also, we do issue a status of the prior
year's findings. There was one on the financial statement side, which was related to
accrued liability that had not been adjusted for that we needed to make a prior period
adjustment for. That finding is closed and accomplished. There were no issues noted
in the current year. There were no Single Audit findings either.
Council Chair Kaneshiro: With that, we will open up for questions. I am
assuming most of the questions will come from the audit findings. If that is, let us
just go through each audit finding. We will start with the first one and if we have
questions, we will ask on that, unless someone has a question that is not an audit
finding. We will start with the first audit finding. Do we have any questions on the
internal controls regarding reconciling of bank accounts? Councilmember Kagawa.
Councilmember Kagawa: Besides being late, did we find any other
problems? Knowing that it was done late, did it require you folks to look deeper as
far as...was it done properly even though it was done late?
Mr. Isobe: It was done late. When we looked at them
before, it was pretty straightforward bank reconciliations. The ones that we looked
at, I recall there are a lot of reconciling items on the bank reconciliation. Primarily,
I think it is due to the delay in doing the reconciliations, but maybe they can answer.
Councilmember Kagawa: Okay. You folks do a lot of government
audits. Is this unusual? It seems like it would lead to problems. You can have money
missing with large agencies including government. One of the major problems as an
accountant that I know is that if you have these timely bank reconciliations, it is
preventative, yes. You can find out what is going on. It is very dangerous when you
fall behind in performing these basic tasks of accounting.
Mr. Isobe: Correct. Your bank reconciliation is one of
the, I guess, really strong control to identify any discrepancies on your cash inflows
and cash outflows because everything that flows through your primary bank account
or checking account is recorded through there and making sure that everything got
recorded as a disbursement properly and everything that got recorded as a receipt
properly all hit that bank account and all hits the general ledger (GL). Any
discrepancy noted whether it be a difference in what you recorded as a receipt of one
hundred dollars ($100), but it posted to the bank as ninety-five dollars ($95).
Investigating those differences and keeping up with that is always a good detective
control to identify issues timely. If you are not looking at it timely, you could be
looking two (2) to three (3) months and letting something continually happen.
Councilmember Kagawa: Is it troubling that this large County did not
have a backup plan? It seems that the reason they gave was that we had our
retirement and a vacancy. But in the County, we have twenty-one (21) days sick
leave and twenty-one (21) days of vacation per year per employee, so you are going to
have people missing at times. Is it wrong that we do not have a backup for the main
COUNCIL MEETING 27 JANUARY 23, 2019
person and then another backup for the backup just in case something happens, to
perform these basic accounting tasks timely?
Mr. Isobe: Correct. Retirements, being sick, and
vacations are inevitable. It is going to happen and having a plan to make sure that
some of your key controls are being taken care of is probably something that should
happen.
Councilmember Kagawa: Thank you.
Council Chair Kaneshiro: Councilmember Chock.
Councilmember Chock: Thank you, Council Chair Kaneshiro. The
seven (7) month gap in terms of reconciliation, did it all happened at the end of
seven (7) months or was it every couple of months that they went and addressed it
and reconciled, or was all seven (7) months done at once?
Mr. Isobe: I believe they started completing them in
April/May, and to catch it all up, it takes a while. Once you hit a snag on one (1), you
are going to have to address those issues there until you can actually get to the next
month. Until you, let us say, do December and figure out everything there, if you
have issues, you are not going to be able to go to the next month. With that backlog,
it is going to take a little while to catchup.
Councilmember Chock: So it was done all at once? It sounds like kind
of the majority of the message that I am getting here today is this lack of continuity,
a plan for transition as we have gotten a new Administration and new positions
on-board. Would you concur that is something that we need to be looking at in
general?
Councilmember Brun: You can be honest.
Mr. Isobe: I do not know if I can comment that it is a
trend.
Councilmember Chock: When we talked about...sorry, Council Chair
Kaneshiro. When I hear "change management policies," I am just trying to
understand it. What I am hearing and reading is that where we should be looking. I
am just trying to problem solve here in terms of how it is we can prepare for
transition.
Mr. Isobe: The next finding on change management
is...that is almost like a system-based process that should be in place. Any time you
are going to transition from one type of system to another type of system, making
sure that the documentation is there, that everyone who is going to use that system
is aware of this change, and make sure that what I need from this system is going to
be provided by this new system whether it be reporting or all of that kind of thing.
That documentation and that testing needs to have been done, documented, and
prepared for.
COUNCIL MEETING 28 JANUARY 23, 2019
Councilmember Chock: Thank you.
Council Chair Kaneshiro: I have a question for Administration and I am
not sure who is going to come up and answer it. My question is, are we current on
our reconciliations? Have we caught up?
REIKO MATSUYAMA, Director of Finance: Reiko Matsuyama, Director of
Finance. The simple answer is no. We have these surprise quarterly cash counts due
to you folks and is run by Council Services and Accounting. This is a separate finding,
right? This is the one in the actual management report. It kind of ties into the bank
recs, but no. We are not up to it, it is a violation of the Charter, and we are aware of
it.
Council Chair Kaneshiro: Councilmember Kagawa.
Councilmember Kagawa: I have a follow-up. What month are we at
right now where we are all clean?
Ms. Matsuyama: November 2017.
Councilmember Kagawa: November 2017? Wow.
Ms. Matsuyama: The bank recs, we are current. We are
compliant with the bank recs now.
Councilmember Kagawa: Oh, the bank reconciliations are all current?
Ms. Matsuyama: Yes. The bank reconciliations since...what
year are we in now? October of 2018...I am getting mixed up with my years. Since
October of last year, we are compliant, so we are completing them every month as
required.
Councilmember Kagawa: Good.
Council Chair Kaneshiro: Okay.
Councilmember Kagawa: Thank you.
Council Chair Kaneshiro: Thank you. Are there any further questions
on the reconciling of bank accounts on a timely basis finding?
Councilmember Evslin: Is this the first time that this County has had
this issue? I mean, with our past Treasurer, were we always timely?
Mr. Isobe: Since we have been doing the audit from a
couple years back, we had not run into this issue.
Council Chair Kaneshiro: Are there any questions on this item? If not,
we will move on to the next. Are there any questions on the iNovah program and
COUNCIL MEETING 29 JANUARY 23, 2019
implementation? I have a question for Administration and it is just a confirmation.
Have we implemented the changes we were going to do and is it currently working?
Ms. Matsuyama: Yes. The iNovah system actually provides
more controls than the prior system, but it did at take a process to implement it. The
process has been documented and we will adhere to that in future implementations
of software.
Council Chair Kaneshiro: Okay. Are there any further questions on
iNovah? Councilmember Kagawa.
Councilmember Kagawa: Just for clarity, I want to make sure that the
public knows that Reiko came in way after all of these things happened. Reiko, I do
not want you and sit there looking too stressed. Thank you for trying to work with
the auditors and clean up some of our past mistakes. The public likes to jump to
conclusions. They watch Channel 53 and start harping on the wrong people
sometimes.
Ms. Matsuyama: Thank you.
Councilmember Kagawa: Thank you.
Council Chair Kaneshiro: If there are no further questions on that,
thank you, Reiko. You are twenty-three (23) days in so far. Next one, 2018-003. Are
there any questions on unallowable costs? I have a question. Are we going to be able
to get that money back, and that is probably for the Administration?
KANANI FU, Housing Director: Good morning, Kanani Fu, Housing
Director. The money is in the process of being returned, yes. We will cover that.
Council Chair Kaneshiro: Okay. Was this just something that has never
happened before so it kind of caught us by surprise?
Ms. Fu: The HOME program, you are given a
guidance of eligible costs. As the sub-recipient, the County is a sub-recipient of that.
It is in our kuleana to work with our contractors to review their payments and then
based upon the guidance that is provided, and I can show you, our HOME Coordinator
then determines whether if that is an eligible cost or not. In this particular case, our
HOME Coordinator determined this finding as an eligible cost based upon the rules.
It is very vague, so if you folks would like to see what eligible costs are, the
sub-recipient is then left to determine whether it qualifies. We qualified it as a
sub-recipient.
(Councilmember Kagawa was noted as not present.)
Ms. Fu: We paid the contractors. Then, we go back to
our pass-through entity, which is HHFDC, and we submit for reimbursements. When
HHFDC looked at it on the second pass-through, they determined it as an ineligible
cost, but more so I believe they determined it ineligible because they understood what
COUNCIL MEETING 30 JANUARY 23, 2019
that fee was for. We are looking at the invoices, but HHFDC had determined that
was a banking fee and they deemed it ineligible. Usually, what would happen was
HHFDC would deem that an unallowable cost and we would reverse it or credit back
us or the contractor. That happened, but it happened...the ineligible cost incurred in
Fiscal Year 2018, in May and then when we passed it over to HHFDC, that ineligible
cost came after the fiscal ending of June 30th. One procedure that other Counties
practice and we may follow suit, is we do not process Federal payments after
April 30th so we do not run into this fiscal error of eligible costs and it would clean the
books up, but we tend not do that or to hold developers back. We try to process
payments all the way up to June 15th and then not have a finding, but in this case, it
was different.
Council Chair Kaneshiro: Okay. Are there any other questions
members? Councilmember Evslin.
Councilmember Evslin: The subcontractor made the expense under
the impression that they were getting it entirely covered?
Ms. Fu: That is was an eligible cost, yes. We accepted
it, reviewed the invoices, and deemed it eligible. But the pass-through agency,
HHFDC, did not and I can explain their reasoning was to deny it and why we did it.
At the end of the day, what we can do is we can challenge HHFDC and do coding.
But because there was a lot of financing, the developer decided to back that cost and
repay that from another eligible funding source and we then utilized this left money
for eligible costs. It is a "Peter-Paul" kind of thing.
Councilmember Evslin: Okay.
Ms. Fu: For the financing.
Councilmember Evslin: That is an important part of it.
Ms. Fu: Yes. So it did not prevent financing or delay
project movements. It was just an internal accounting process.
Councilmember Evslin: In theory, if they had not been able to get it
covered elsewhere, is there a potential of an appeal process to go through?
Ms. Fu: Yes, we could. We could appeal it. We could.
Councilmember Evslin: Has this ever happened with the HOME
program?
Ms. Fu: Yes.
Councilmember Evslin: Okay.
Ms. Fu: I wanted to just share with you to make it
clear, the guidance provided in Code of Federal Regulations (CFRs) are very vague.
COUNCIL MEETING 31 JANUARY 23, 2019
It really is. Fortunately and unfortunately, sub-recipient agencies such as the
County, are left to determine, read through on our own, call our own shots, and then
document those reasons of why they are eligible or not. We are correct ninety-five
percent (95%) of the time, but someone sitting in an office in Honolulu just reading
papers, sees a paper and interprets it their way and without research, will deem it
ineligible. The easy way is to just reverse it and say, "Yes, we can cover it with
another pot and we resubmit," and we did in this case. But we have never been in a
scenario where funding was an issue, so we had to argue the finding. Normally, it is
a communication that can clarify why the call was made and why the ineligible call
was made, for example, why we deemed it ineligible, why they deemed it eligible, and
then and we talk through and gets resolved. This is one of the first instances where
it passed through two (2) separate fiscals.
Councilmember Evslin: Okay.
Ms. Fu: That is kind of the concern.
Councilmember Evslin: Is there a line of communication with HHFDC
that we can preemptively discuss things that are occurring?
Ms. Fu: Every day, yes. Open communication. They
are available E-mail. This is an ongoing thing with us. They work with the Counties,
but again, these calls are often made in a Honolulu office and they sometimes are
incorrect, and vice versa.
Council Chair Kaneshiro: Councilmember Kuali`i.
Councilmember Kuali`i: Just a quick follow-up. Kanani, are you
saying that this could happen throughout the year and it has happened, and it is not
a problem because you do the fix before you cross over from one fiscal year to the
other? This one instance happened in the period where now it is shown up as a
weakness, but it still got resolved in the following year or is being resolved.
Ms. Fu: Yes.
Councilmember Kuali`i: Now, you talked about the payments and
maybe moving it back to April, but that would mean that you are moving along
throughout the year, getting projects moving, trying to get more housing, and you
would procedurally stop that or slow down at a certain period just to meet this?
Ms. Fu: That is a suggestion.
Councilmember Kuali`i: But as long as you can explain this, does it not
make more sense to just keep doing more housing and not let this kind of
procedural...this seems very procedural and yes, someone made the call, but you do
that all year long and then you correct it when HHFDC does it. But to change that
because of this when it is a timing thing, and that would mean slowing down the
housing that happens between April and June, I do not know if we should.
COUNCIL MEETING 32 JANUARY 23, 2019
Ms. Fu: Thank you for that. That is a consideration
being made. It might not be followed. We, the County, can do better with our
invoicing checks as well. Like I said, I want to just...it is very vague. As we have
been going through this and as things come up that are not eligible, we are notetaking
it. Again, this particular ineligible cost was the first time that we were noted that it
was ineligible, and I can explain it. We are allowed to cover finance fees, deposits,
and those things. As part of a financing cost, the developer was required to put a
down payment, they utilized the HOME funds to do that down payment, and that
would be eligible under a financing cost if you were to vaguely read it. However,
according to HHFDC, their down payment is reimbursable once the project is done.
Only HHFDC would have known that. So, when they saw think own invoices being
paid, they triggered it and then said, "County moving forward, good faith deposits
will not be reimbursable by HOME funds because it is kind of like a double-dipping
kind of thing." We were the first County to get that notification and moving forward,
HHFDC will not allow HOME moneys to be used as good faith deposits for low-income
housing tax credit projects. There are several projects in State that utilize HOME
and Low Income Housing Tax Credit (LIHTC), so it is going to be a general rule for
all HOME sub-recipients.
Councilmember Kuali`i: Mahalo.
Ms. Fu: We just got to test it first and go through the
audit first, so other Counties will be aware of this moving forward.
Council Chair Kaneshiro: Is it something that happens all the time?
Ms. Fu: It happens, yes, but we resolve it usually
immediately.
Councilmember Kuali`i: I was thinking on the other hand, if it slows
down the process too much, you send it to HHFDC on the front-end, have them
approve it, and then you do not have to do...
Ms. Fu: To be honest, when we go through the HOME
Investment Program and eligible costs, our staff, I believe is the best and they are
making the best decision calls they can given the information. You are talking about
at any given month, fifty-seven (57)invoices or eighty (80) invoices, so they go through
it. There is labor compliance, wage compliance, and things of that nature. It really
takes skillset. The County of Kaua`i has been in the position where because our
HOME funds can sustain a mistake like this, we can front it. Our practice has been
to process payments up to June 1st when the County ends our payments because
should we not be able to recuperate the money, we can sustain it with other moneys
until we work out that payment process. We just kind of float as long as we float
within the program for it.
Council Chair Kaneshiro: Councilmember Chock.
COUNCIL MEETING 33 JANUARY 23, 2019
Councilmember Chock: Kanani, what Federal office is the CFR run
through or regulated by? It is the United States Department of Housing and Urban
Develop (HUD)?
Ms. Fu: Yes. It is interesting that the HOME program
has...this is their CFRs for the HOME program and the eligible costs are listed. I
gave you a portion. You have the HOME program, but then above the HOME
program, you have to follow the overall Federal Guidance of the CFR that is quoted
here.
Councilmember Chock: It is confusing.
Ms. Fu: It is very technical to manage Federal
funding.
Councilmember Chock: Thank you.
Council Chair Kaneshiro: I could see how you are doing a whole bunch
of transactions and if you have to get the approval on the front-end, it may slow down
your progress the whole time. I think this is a lesson learned and this is one that we
cannot submit now.
Ms. Fu: Yes. Financing deposits will not be allowed
moving forward, yes. That is an easy one.
Council Chair Kaneshiro: Okay. Are there any further questions from
the members? Councilmember Evslin.
Councilmember Evslin: Sorry, just one quick question. I appreciate
that you folks are approving and reimbursing them quickly to get things moving. Is
that something that all of the Counties in Hawai`i are doing, reimbursing with their
own funds and then getting reimbursement from HHFDC?
Ms. Fu: Not necessarily. HOME programs are based
on the Coordinator's ability and how to set up their contracts with the contractors,
that determines how payments are disbursed. Some Counties will not cut payments
until HHFDC clears it and that can take sixty (60) to ninety (90) days. We do not do
that. We do not do that practice. We pay and then we work on the reimbursements.
Council Chair Kaneshiro: Are there any further questions? If not, we
will move on to the next finding. Are there any questions on the next finding?
Councilmember Evslin.
Councilmember Evslin: So not requiring an audit finding, is this the
first time it has happened?
Mr. Isobe: Correct.
COUNCIL MEETING 34 JANUARY 23, 2019
Councilmember Evslin: Is it that we just do not have a policy in place
to require that and is that because we have not had very many subcontractors doing
that high dollar figures and have not had anyone going over the threshold?
Mr. Isobe: I believe the County has had sub-recipients in
the past. Now, whether or not they did not get these reports...the way the Single
Audit works is we do a risk assessment on the programs and these major programs,
depending on their size, get audited. If they are always over a certain threshold, they
must be audited every third year. In the past, we have never noted this. Now,
whether or not they did not have...when we looked at it this year and we asked for
the audit report from the sub-recipient, it was not available. We asked, "What is the
policies and procedures related to it," and we did not get the right answer and
therefore because it was not there, there was not the report. It has to be reported in
accordance with the Uniform Guidance, we had to report this as a finding.
Councilmember Evslin: Is there a potential for Federal penalties
relating to this and what is the risk here?
Mr. Isobe: The risk here is that the sub-recipient, their
auditors came through and found a finding on this HOME program itself. Now, as
the grantor, the County is responsible for that oversight. Similar to HHFDC
providing oversight on their funds to the County, they are required to get this from
the County and look for any findings on it and see if they are aware and whether
management's actions or resolutions to the findings are addressed, and what they
feel is satisfactory. The County was required to get their audit report from the
sub-recipient to see whether or not they had any findings on the HOME program from
their audit. If they did, whether or not management was responsible for those
findings properly that satisfactorily addressed those issues.
Council Chair Kaneshiro: Are there any further questions?
Councilmember Cowden.
Councilmember Cowden: Yes. Director Fu, do you have any feedback
on this? I just wanted to hear what your clarification might be.
Ms. Fu: To clarify the finding, I am going to have to do
some attorney review with you folks.
Councilmember Cowden: Oh, okay.
Ms. Fu: In this particular finding, upon further review
and research, we are going to probably going to disagree with it. I am sorry, we are
going to put you on the spot. I had a discussion with our Director of Finance and let
me be clear what the disagreement is. The County of Kaua`i, by Federal rules, is the
only sub-recipient according to the Federal registry. The pass-through entity is
HHFDC. The pass-through entity is required to have sub-recipients over seven
hundred fifty thousand dollars ($750,000) do the single audit. The County of Kaua`i
is considered the sub-recipient, so we are the only agency required to do the Single
Audit, which we do and provide yearly for HHFDC. I believe when the contract was
COUNCIL MEETING 35 JANUARY 23, 2019
pulled for this particular audit of our...they are contractors, they are not considered
sub-recipients according to the CFRs. We procured these contractors through a
Request for Procurement (RFP) process and therefore, they are considered
contractors and are not subject to this Federal Code, and that is the reading we are
going to verify with HHFDC. Historically, we have never been required to do Single
Audits on our contractors and I think there is just a miscommunication here.
Councilmember Cowden: Okay.
Ms. Fu: Sub-recipients, which is the County, is
required to do the Single Audit, which is what we perform for our pass-through entity.
Councilmember Cowden: Okay. My concern was and it sounds like
things will be fine. When seven hundred fifty thousand dollars ($750,000) seems a
significant number to me, I just want to make sure that we have not somehow created
a consequence for ourselves where we could not get that money again.
Ms. Fu: I do not believe we did.
Councilmember Cowden: Okay.
Ms. Fu: This particular rule applies to for-profit
developers. For-profit, they are not required to produce a Single Audit for Federal
funds over seven hundred fifty thousand dollars ($750,000). I believe the project that
was tested, there were a for-profit developer under a contract procured though an
RFP. They do not meet the qualifications of a sub-recipient. We are the sub-recipient,
therefore, the finding is erred and that just came to light in the last week. Moving
forward, nonprofits have Single Audits that are required of them. We will put that
request in just for our records, and if it is decided by our County application process
for the HOME program to require Single Audits of all projects in excess of seven
hundred fifty thousand dollars ($750,000), we need to go back to the application
process and make that clear because that will be an added cost we will put on our
recipients to perform that Single Audit. At this time, I do not believe that is
necessary. That will be required further discussion with my HOME team.
Councilmember Cowden: Okay. Thank you so much. I am sure that we
will get an update in the future on whether that is something that ends up being a
part of the process. Thank you. Thank you very much.
Ms. Fu: Thank you.
Council Chair Kaneshiro: Councilmember Evslin.
Councilmember Evslin: That is very interesting. On the bottom of this
finding it says, "Views of Responsible Officials" and it says, "The County agrees with
the finding." Is this going to be amended for future reference to reflect that?
Ms. Fu: Can you please give me the page number that
you are on?
COUNCIL MEETING 36 JANUARY 23, 2019
Councilmember Evslin: Page 28.
Ms. Fu: Again, there are parts of the...exactly. We
would like to adhere to some of this and we can collect the...the nonprofits conduct
Single Audits. So having that we information for record keeping is plausible. We can
follow through. Again, our concern was if we require it for awardees just as an
accounting practice, there will be added costs for that, that is not required by a
for-profit developer. We want to be considerate and mindful. If we are going to
require that now in our contracts for the HOME recipients, there is a process that we
go through with our HOME Committee and then a State and County to facilitate
those requirements. That is why this is the first time we have had this finding. I
believe it was misinterpreted.
Councilmember Evslin: The question was, on this report that we had,
will this end up being amended and so that there is a disagreement between the
Counties and then next year on our follow-up? How do we address it?
Ms. Fu: To be forthcoming, I dropped this bomb this
morning on the Administration.
Councilmember Evslin: Okay.
Ms. Fu: And right now on the Certified Public
Accountants (CPAs), so I want to just clarify that. This came out of right field. There
she goes coming in at the nth hour. But it is important. This information was
developing from last week until today, so it is just important to tell you, "Hey, this is
the information that we have, we are going to work to discuss how we are going to
handle this, and that decision will be made, I would assume, quickly this week."
Council Chair Kaneshiro: Thank you. Did you want to say something?
Mr. Isobe: The Single Audit rules are required to be
submitted within thirty (30) days of issuance to the Federal Audit Clearinghouse.
This is there, which includes the response. We can talk about this with...we did not
know about this until now.
Ms. Fu: Yes.
Mr. Isobe: So it would probably best that we talk about
this after if it is a follow-up to you folks. Once we do discuss it, we can come back to
you folks.
Council Chair Kaneshiro: That sounds good. Are there any further
questions? Councilmember Cowden.
Councilmember Cowden: I just have a very simple question. My
presumption is that this is the completed project. Is that correct? So, we do not ask
for an extra paragraph in any of this. Is this a done job?
COUNCIL MEETING 37 JANUARY 23, 2019
Mr. Isobe: Correct.
Councilmember Cowden: Okay. That is all that I needed to know.
Council Chair Kaneshiro: Okay. If there are no further questions, we
will go to the Management Advisory Report.
Mr. Isobe: As I mentioned before, this Management
Advisory Report is just additional issues that we noted through the audit, but nothing
that we felt needs to make the Single Audit Report. These are just considerations for
management that we wanted to bring to their attention. The first finding, 2018-001,
improve internal controls over pCard purchases. This is a repeat finding from the
prior year. We did note one (1) instance out of the forty (40) where approval was
obtained after the purchase was made. It may seem to be one (1) out of forty (40), but
the County does conduct random testing and we looked at what they do for their
random testing. They tested sixty (60) pCard transactions throughout the year and
themselves noted about five (5) instances of non-compliance with the pCard
purchasing policies and procedures. The next finding, 2018-002 on page 6, remove
terminated employees from authorized check signers. During the audit, we noted
that part of our confirmation procedures, we confirmed signatories on the bank
accounts. We noted that an employee who terminated employment during the year
was not removed as a check signer. The employee left the County in March and the
County failed to notify the banks that there is a change to the signatories on the
account. 2018-003, perform quarterly cash counts. I think as mentioned before,
during the audit, we noted that the quarterly cash counts for February was not
completely until September 2018 and May 2018 was not completed as of when we left
the field in October. 2018-004, this is just to improve internal controls over these
treasury adjustments. Part of the reconciliation process is researching and proposing
adjustments to be posted to iNovah, the cashiering system. When we looked at these
adjustments, they are properly supported with documentation on the research as to
why an adjustment should be made, but the documentation of the review process
should be also noted that someone else approved that adjustment be made. It is not
that it was not happening. It was just there was no evidence of that review being
done. Our finding is that there should be documentation of the secondary review
because when we look at it, we could not tell whether or not someone reviewed and
approved those adjustments. 2018-005 is the Real Property Trust Account. During
our audit, we noted that the County did not transfer amounts related to real property
tax appeals from the Real Property Tax Trust Account to General Fund timely. The
amount that should have been transferred was the amounts that upon appeal, the
County won the appeal and therefore, should leave the Real Property Tax Trust
Account and be transferred timely to the General Fund. We do have a status on
page 12 of the prior Management Advisory Report comments, which is 2017-001,
improve internal controls over pCard purchases. We put it as partially accomplished.
They began documenting their review of random p Card transactions, however, we
did still note an issue in the current year testing that we did.
Council Chair Kaneshiro: Okay. Thank you. Again, we will go through
each finding and if anyone has a question on a finding, we can stop on that. We have
five (5) minutes left, so we will go through the first finding and then if we reach our
COUNCIL MEETING 38 JANUARY 23, 2019
break time, we will take a caption break and come back. Are there any questions on
the internal controls over the p Card purchases from the members? I have a question
and this may be for the Administration. As far as pCard purchases, I know a lot of
times we will see that we get approval after-the-fact. I can see if it is a legitimate
purchase and I do not know what the process is as far as getting the approval on the
front-end. Is there a way to document why the approval was done after the purchase
and would that help satisfy maybe some of the findings as far as approvals after
purchase?
Ms. Matsuyama: It is actually the County's policy that the
preapproval needs to occur, so we just need to follow our own policy, basically.
Council Chair Kaneshiro: Okay. Then, as far as our self-random
testing, I wanted to know how that is going. What are the repercussions when we
find people that have not used the card correctly?
Ms. Matsuyama: We do random testing. We choose five (5)
transactions per month to randomly test. We get all of the documentation from the
respective Departments. We have found exceptions already this fiscal year and we
are going to implement subsequent testing on the culprits, if you will, so that will no
longer be random, but it will be specific to an individual that did not follow the laws.
We will be more forceful in our punishments, including potential revocation of the
card.
Council Chair Kaneshiro: How many pCards do we have?
Ms. Matsuyama: About one hundred twenty (120) issued.
Council Chair Kaneshiro: Okay. That is fine as long as they follow the
policy. I would think if you have a pCard, then you follow the policy. If not, then you
will not get it taken away and then it will be more difficult to do what you need to do
as far as purchasing items. Councilmember Brun.
Councilmember Brun: I feel like we had this conversation. I thought
you folks took back pCards. I thought only Department Heads had pCards?
Ms. Matsuyama: No.
Councilmember Brun: I thought we had this conversation last year
because we had this same issue.
Ms. Matsuyama: I think it would basically render the program
useless if only Department Heads had pCards.
Councilmember Brun: I swear I heard that the last time we were up
here for this audit. We had someone abusing it, so we took back pCards. That is
what was told to us. Thank you.
COUNCIL MEETING 39 JANUARY 23, 2019
Council Chair Kaneshiro: Are there any further questions on pCard
transactions? Councilmember Evslin.
Councilmember Evslin: It is slowly developing it in my head. I am
sorry, I do not have a question. I am just formulating it and it is not fully there yet.
Council Chair Kaneshiro: Okay. So no getting around purchases prior
to approval, which I am fine with that. I just was not sure if there was exceptional
situations where someone needs to purchase something right away, cannot get the
approval at the time, the make a note of it or something, and then we would be able
do it. We see it every year. There is always findings on getting approval after a
purchase. I think there was one with no approval, which I think those are the ones
that are the scariest for me, that it is not a purchase that is approved. I am glad you
are folks are looking at it closer. If someone does not use the card correctly, you will
look at their transactions closer and take the card away. I do not know if it is a
widespread issue or if it is just certain employees that are just not following the policy
all the time, which are creating the findings.
Ms. Matsuyama: I think I can say in confidence that no one is
abusing it and no one is using it unethically. It is just the approval process that is a
problem.
Council Chair Kaneshiro: Okay. Are there any other questions? If not,
we will move on to the next one, which I think has been accomplished already,
removing terminated employees as an authorized check signer. Are there any
questions on that? We will move on to the next one, performing quarterly cash counts.
I had the same question that I had on the bank reconciliations. Where are we as far
as how up-to-date we are on quarterly cash counts?
Ms. Matsuyama: This is the one that I thought you were
talking about earlier. We have not submitted one to you folks since November of
2017, and this is a violation of the Charter and we are aware of it. Right now, I have
the November 2018 one sitting on my desk, but there are some issues with it, so I
have not transmitted it. We hope that the February one, which is coming up...so this
is every quarter and we usually have it to you within forty-five (45) days of the
surprise cash count. If the next one comes up in February, that leaves us some time
in April that we will need to get it to you. That is going to be the goal.
Council Chair Kaneshiro: As far as the quarterly cash counts, is there a
problem not getting the information in a timely manner or transition in staff and not
being able to get it in the proper format? What is the delay?
Ms. Matsuyama: Right now, it stems from the whole transition
period when we had the retirements and also changing over to the cashiering system,
which happened simultaneously, unfortunately. The problem stems back from that
long ago and that is why you have not received a reconciled once since
November 2017.
Council Chair Kaneshiro: Is the plan to get them up-to-date and sent in?
COUNCIL MEETING 40 JANUARY 23, 2019
Ms. Matsuyama: Yes. We currently have an additional 89-day
hire that is capable of going back and doing the research. We are hoping that we can
identify the discrepancies from back then and be able to roll it going forward.
Council Chair Kaneshiro: Okay. The longer it takes, the harder it is
going to be to find the information as it gets further away. Are there any other
questions from the members? Okay. Are you folks ready to move on? Next one—
actually, let us stop here. We will take a caption break. Ten-minute caption break
and we will come back.
There being no objections, the meeting recessed at 10:30 a.m.
The meeting reconvened at 10:44 a.m., and proceeded as follows:
(Councilmember Kagawa was noted as not present.)
Council Chair Kaneshiro: Welcome back. We are on audit finding
2018-004, internal controls over treasury adjustment. Do we have any questions on
this? I have a question for the Administration. Has our corrective action plan been
implemented and is it working?
There being no objections, the rules were suspended.
Ms. Matsuyama: Yes. Like Mr. Isobe was saying, the
procedures were actually being done at the time, but it just was not initialed off, so it
has been taken care of.
Council Chair Kaneshiro: Okay. Councilmember Cowden.
Councilmember Cowden: Just a clarification question. My
understanding is that there were three (3) key members of the Treasury team that
all retired actually on the same day. I would think that is really unusual. Maybe
they were all rehired on the same day. Do we have the staffing or is there a process
in place so that we will be able to catch-up and stay caught up?
Ms. Matsuyama: Yes. We really need to work on our succession
planning especially in Department being there are so few people to spread the work
to. We definitely need to figure out a way to succession plan. You are right. There
were three (3) key members that left. One, there was a slight overlap, two, there was
a three-month gap, basically.
Councilmember Cowden: We were just without?
Ms. Matsuyama: Yes.
Councilmember Cowden: It is like this is a habitual pattern. Those
people who were in place were relatively responsible. All of that experience left and
now, do we have all three (3) of them replaced?
COUNCIL MEETING 41 JANUARY 23, 2019
Ms. Matsuyama: Good question. Yes, currently, but one (1) is
vacating at the end of January.
Councilmember Cowden: In a couple of weeks?
Ms. Matsuyama: Like, next week.
Councilmember Cowden: Is that person...
Ms. Matsuyama: It is imminent.
Councilmember Cowden: Okay.
Ms. Matsuyama: That is why we have the 89-day hire, to do the
transition from current person to future person.
Councilmember Cowden: If what we are looking to be resolved in
February is not totally resolved in February, that might in part be because we again,
have a change. I am just curious, you might not have the history to know that and if
someone else can better answer it, is there a problem with that job that there is
movement like that or is it just how things rolled?
Ms. Matsuyama: I think the previous people had everything in
their minds. A lot of things were manual and they had knowledge of the prior
cashiering system. I cannot speak for them, but maybe that is why they retired, is
this new cashiering system and they did not want to learn it.
Councilmember Cowden: Okay.
Ms. Matsuyama: That is presumptuous.
Council Chair Kaneshiro: I can speak for it.
Councilmember Cowden: Okay.
Council Chair Kaneshiro: I think we have had budget meetings on it the
last three (3) years. Three (3) years in a row, they said, "We will be retiring soon, the
entire Department. What are you folks going to do?" We always asked, "What is the
succession plan?"
Councilmember Cowden: And there was not one?
Council Chair Kaneshiro: There was no succession plan. I think the
hiring came on at the very end of their retirement. They gave us fair warning. It
may have been four (4) years. It might have been from the very first time I was on
Council. We knew the Treasury Department was made up of three (3) and they said
that there was going to be retirements soon, which meant within four (4) years. That
happened and we had no succession plan. That is what I saw being on Council.
COUNCIL MEETING 42 JANUARY 23, 2019
Councilmember Cowden: Okay. I am sure the current Mayor is aware
of that really critical need and will not go unaddressed. Does that sound correct?
Ms. Matsuyama: The Treasury Department needs more
oversight and we are looking into that.
Council Chair Kaneshiro: Going along Councilmember Cowden's
question, do you see the Treasury Department maybe needing more people or
reorganizing the workload back into the Department of Finance to kind of get
everything moving?
Ms. Matsuyama: We would have to see. We are looking into it.
We would have to see if there are control procedures that we would run into in terms
of collaborating and making sure that our segregation of duties is intact.
Council Chair Kaneshiro: I do not know if there is cross-training on
certain tasks. I know there was a mass exodus on them. They did give us fair
warning, but if there is any cross-training that can go on. If someone does leave, that
it is not just a black box where no one really knows how to reconcile or what to do.
Ms. Matsuyama: That will be a priority.
Council Chair Kaneshiro: Councilmember Cowden.
Councilmember Cowden: Just as a last thought on that having been an
employer for many years of many people, not recently. But I would make sure that
we take good care of those people who are in there, that they get what they need
because if we are having another turnover in a couple of weeks. What is really
important is that we make sure that we nourish that Department because being able
to manage our finances is a critical piece of the bloodline of the organization. Thank
you so much.
Ms. Matsuyama: Understood.
Council Chair Kaneshiro: Councilmember Kuali`i.
Councilmember Kuali`i: Just one (1) quick thing. You did mention, I
think I heard you say "the need for oversight." As we are getting everything back
going with the new system and all, is there any consideration for Treasury to come
under Finance in any way or be more connected because it is sort of like a standalone,
right?
Ms. Matsuyama: Right. Right now, Treasury is separate from
accounting in terms of they do the cash receipts and everything in terms of the Trust
Fund. Accounting is really responsible for the GMBA, the accounting system, and
the CAFR. It is separate in that sense. Again, we would have to check with auditors
and make sure we would still be in compliance with our internal controls.
COUNCIL MEETING 43 JANUARY 23, 2019
Councilmember Kuali`i: As the Director of Finance, is the treasury
function answerable to the Director of Finance?
Ms. Matsuyama: Yes.
Council Chair Kaneshiro: Councilmember Evslin.
Councilmember Evslin: It is not really a question. I just wanted to say
that it is somewhat disturbing, I guess, to see this. When I was in high school, I
shadowed the Treasurer for the summer for fun. At the time, it seemed like even
though it had been years before, we were still sort of reeling from our previous
Treasurer. I believe, and someone can correct me if I am wrong, but I believe stole it
from the County of Kaua`i. This was twenty (20) years ago. It was the Treasurer
before the last one. Our last Treasurer did an amazing job for a very long time. But
just sort of the reason for all of these internal controls is just to ensure nothing like
that could happen again, so it seems like hopefully we hang on to those lessons of the
past going forward and make sure that there is not even any room for malfeasance.
Anyway, I just want to note my disturbance.
Council Chair Kaneshiro: Are there any further questions for internal
controls over treasury adjustments? If not, are there any questions on the Real
Property Tax Trust Account?
Councilmember Chock: I just have a quick question.
Council Chair Kaneshiro: Councilmember Chock.
Councilmember Chock: I am just curious as to how much was held
over of that fund.
Mr. Isobe: In November, they transferred the
eighty-seven thousand two hundred sixty-eight dollars ($87,268) related to the
purchase orders (POs) that were actually satisfied as of June 30th. It is not a large
amount, but it should be transferred timely.
Councilmember Chock: Okay. Thank you.
Council Chair Kaneshiro: Are there any other questions? Are there any
other questions for the auditors? Councilmember Cowden.
Councilmember Cowden: I just want to say thank you.
Councilmember Evslin: Sorry. I do have one (1) sort of general
question. It is a good thing to achieve an excellence in financial reporting. I want to
say a good job to the County for doing that twenty-five (25) years in a row, but it is
my understanding that seems more of a pass-fail thing. It is like if we did a decent
job, we would that. Is there any way that you can give us a grade? Maybe you do not
want to do it, but I do not really have a frame of reference to compare how this
compares to other similar sized municipalities.
•
COUNCIL MEETING 44 JANUARY 23, 2019
Mr. Isobe: Personally as a firm, we have done the audits
for a couple years now and we have come to Council and reported on the CAFR and
findings. Last year was pretty clean and this year we had a bunch of findings. A lot
of credit goes to your Accounting Division. They put together all of these numbers.
It is coordination with all of the different Departments making sure that they get the
information timely; keep up with all of the changing GASBs, postings of OPEB, and
potential pension liabilities; and closing the funds. You folks have a lot of funds that
are in the County's CAFR. Putting together the disclosures, making sure all of these
numbers are reconciled and tied out, which in a short timeframe, we need to come in
and be able to then complete the audit, issue the report, and it needs to get to the
people who review the CAFR and issue this certificate. Like the reconciliations being
done timely, closing the CAFR, putting it together, and getting it done is a huge
achievement. I do not know if you look back on the State side, I want to say a few
years back, they never had issued the audit by December 31st. Recently in the past
couple of years, they have been able to. Some of the other Counties are also able to
also meet the reporting requirements by December 31St. I guess in summary, the
County does a really good job. It shows by the experience you have in the Accounting
Division and the pride and dedication they put into putting together this report.
Every year, it gets longer and longer and more and more paper, but it is a lot of work.
I think they do a good job and I personally want to thank them for their help and
support to our audit team. They have their daily work that they do that they need to
do, but at the same time, we come in and we ask them for all of this documentation,
all of this test work that we need to do. Some of the different Federal programs that
when we come into their office, we are asking them outside of their normal scope of
work time to pull this information. They make the time, they make the space, and
they are very cooperative. I want to thank them, too.
Councilmember Evslin: Would you would give them an "A?"
Councilmember Chock: "A-."
Mr. Isobe: Except for these findings.
Council Chair Kaneshiro: Are there any other questions for our
auditors? If not, thank you. We will take public testimony. Anyone in the audience
wishing to testify on the audits?
There being on one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
Council Chair Kaneshiro: Is there any final discussion from the
members? Councilmember Chock.
Councilmember Chock: I also want to thank our auditors. Over the
few years that I have been on Council, I have learned a lot from them. They have
also been very helpful whenever I reached out to offer additional information as it is
relates to other municipalities as well in the past. I think everyone gets a little tense
when this happens every year. Obviously, we got more findings this year than we
have in the past and I want to say perhaps to some degree, it is expected with some
COUNCIL MEETING 45 JANUARY 23, 2019
of the transition that we have experienced. However, I agree with Councilmember
Evslin that there are measures in place that I think we need to adhere to in the
internal policies to ensure that kind of transition occurs properly. The flipside of that,
for three (3) CAFRs, we have seen the pCard issue, I think was up to sixteen (16)
violations and it come down to one (1). I think that we are making progress. I want
to thank the Administration for keeping eyes on...there is always a response. There
is always some action to all of these findings, and I think that is the main thing, that
we are seeing those. There were great responses to questions that we had in regards
to what has happened. Yes, that is it. Thank you so much.
Council Chair Kaneshiro: Anyone else? Councilmember Kuali`i.
Councilmember Kuali`i: I, too, want to say mahalo nui loa to the
auditors and to everyone in Finance, Accounting, and to the Administration. I want
to say, yes, getting this done every year by the 31St of December for twenty-five (25)
years is pretty incredible. It means that we are doing it, being transparent, putting
it out there, showing what the findings are, not hiding it, dealing with it, and
hopefully year after year, improving upon it. I would imagine that everyone that is
working in Finance is working really hard. Mahalo nui loa.
Council Chair Kaneshiro: Councilmember Chock.
Councilmember Chock: Just one more thought, too. The conversation
about the Treasurer's position, the office, and trying to fill that. I know how difficult
it is. Even on our end, we have been trying to fill the Auditor's position. We are asked
by the community to make sure that audits are done and often times, people are
unclear what the CAFR really is. It is our audit for the County and can be found
online on our County Auditor's site. I would encourage the public to take a look at it
because it is very comprehensive in nature and you can find a lot of information that
are necessary to make the changes here. Thank you.
Council Chair Kaneshiro: Anyone else? Councilmember Cowden.
Councilmember Cowden: I just also want to acknowledge and for me
going through it and reading through it as a new Councilmember, it was actually
really helpful because I was able to see, for example, that the Committee that I Chair,
that is a good twenty-five percent (25%) of the whole budget and how important that
is. I am seeing where the trend lines are. I really appreciate it. In my mind, this
was a significant year both for the flood and for the flood of visitors, some of which
really was an outcome of the weather catastrophes that happened in the Caribbean.
I learned that from the airlines. When I was sort of surprised that those big elements
of impact for change that created turbulence from the norm, I want to honor that. I
hope that ends up written down somewhere somehow as we pay attention to it. I
thank you and I think that we need to be braced as we move forward for more both
economic turbulence and probably weather turbulence in the world because as these
fires and problems happen in different places, it really does impact our economy
because our economy is externally dependent. Thank you for giving us a good
baseline and I appreciate the education I got by reading through this report.
COUNCIL MEETING 46 JANUARY 23, 2019
Council Chair Kaneshiro: Thank you. With that, the motion on the floor
is to receive.
The motion to receive C 2019-26 for the record was then put, and unanimously
carried (Pursuant to Rule No. 5(b) of the Rules of the Council of the County of
Kauai, Councilmember Kagawa was noted as silent (not present), but shall be
recorded as an affirmative for the motion).
Council Chair Kaneshiro: Motion carried. Next item, C 2019-27, Weke
Road.
C 2019-27 Communication (01/10/2019) from Councilmember Cowden,
requesting the presence of the Deputy County Engineer, for a briefing on the Weke
Road Reconstruction project to discuss the status of the project, including but not
limited to, parking concerns during the reconstruction project, project coordination
with the removal and re-building of damaged homes in this area, and concerns
regarding ponding of bacteria-infested water: Councilmember Kuali`i moved to
receive C 2019-27 for the record, seconded by Councilmember Chock.
Council Chair Kaneshiro: The Administration has a presentation on
this, so will let them do the presentation first, we will ask any questions, and then
open it up for public testimony. With that, I will suspend the rules.
There being no objections, the rules were suspended.
LYLE TABATA, Deputy County Engineer: Good morning, Council Chair
Kaneshiro and members of the Council. Lyle Tabata, Deputy County Engineer. I
will be presenting an update per a request of Councilmember Cowden. In general,
major damages, erosion of Black Pot Beach and the parklands, and the erosion on
Weke Road. The erosion repair work included the United States Army Corps of
Engineering permit, which was applied for in May and issued in August. The Notice
to Proceed issued to the contractor for debris removal was in mid-August and then
the Notice to Proceed for the dredging to repair the eroded areas was on August 27th.
The debris removal and construction access improvements was completed in
September. Dredging and site restoration work was substantially completed at the
end of October. The shaded areas are the areas of the erosion repairs. Here is the
landmark of the Hanalei Pier. There was a lot of debris in this location that was
removed. Weke Road, specifically. A damage assessment concluded with
approximately thirty (30) feet of right-of-way and erosion destroyed approximately
three hundred forty (340) linear feet of Weke Road that was four (4) to ten (10) feet
deep in areas. Other areas of Weke Road just experienced pavement erosion.
Utilities impacted were the service water mains and their associated laterals.
Objectives for Public Works was to restore Weke Road to prior elevations. After much
discussion, searching, and also looking at some mitigation measures, we came up
with a structure because most of the road was sand filled. We looked at what we call
a mechanically stabilized earth (MSE) structure walls adjacent or parallel to property
lines. This will allow us full reconstruction within the thirty (30) foot right-of-way
and as I mentioned earlier, will act as a mitigation to reduce further erosion. The
backfill of the eroded areas was partially done with the initial project of the dredging
COUNCIL MEETING 47 JANUARY 23, 2019
and then the Department of Water will install a new eight (8) inch polyvinyl
chloride (PVC) water line to replace the existing, restore hydrant services, and then
connect water laterals if they are ready. I will turn the detailed scope of work over
to Michael Moule to continue.
MICHAEL MOULE, Chief, Engineering Division: Good morning, Council
Chair Kaneshiro and members of the Council. I am Michael Moule, Chief of the
Engineering Division, for the record. The scope of work for the project is to provide
Portland Cement Concrete (PCC) as opposed to asphalt pavement. The proposal was
to use concrete pavement, which is similar to what we have installed on Puhi Road
and what the State has installed on the Kaumuali`i Highway in the Lihu`e area. The
reason for that is to provide mitigation to reduce the likelihood of future erosion. If
a similar event occurs in the future, what would happen with asphalt pavement as it
breaks off in small pieces with water rushing over the road as it erodes back from the
beach. With concrete pavement, it will not break off as small pieces and so is a
stronger element for the road surface. We would have traffic safety barriers along
the side of the road or in any areas of the road where there would be no backfill on
the adjacent private property. We will talk more about sort of how that timing works
with the private property work occurring there in the moment. There might be a
drop-off hazard behind the wall, essentially, there would be a barrier to the top of the
wall. There is the one (1) speed table and we plan to replace that with a speed
cushion, which as opposed to the speed hump or table that was all the way across the
road, it is two (2) small items in the middle of each lane so the fire truck wheels can
pass by that and reduces the impact on fire vehicles. It is something that we want to
work with the County Council to use on other roadways in the future as well. Then,
repair the boat ramp parking area is part of that project as well. Here is the typical
cross-section.
(Councilmember Kagawa was noted as present.)
Mr. Moule: You can see in the image, the mechanically
stabilized earth wall with a guardrail on top. Details of that are...it does not look like
bricks shown here. It is a different type of wall. It is fabric and gabion baskets, which
hold rock and the backfill material. Then, you see the six (6) inch base course with
eight (8) inches of the PCC on top of that. As of right now, they are starting to place
the MSE walls on the outside of the road there. The working platform that you see
at the bottom of that, they have already installed that and are getting ready to start
the MSE wall placement. Here is more detail on the MSE wall. I will not go into it
because there is not a whole lot of detail, but MSE stands for Mechanically Stabilized
Earth. The wall is essentially made of soil or rock backfill, but with either a mesh,
welded wire baskets, and geofabric to retain that soil and rock to make it a structure
essentially. I will not go into details of what is in this detail for the wall, but that is
the idea for that.
(Councilmember Kagawa was noted as not present.)
Mr. Moule: You would not see most of that once it is
constructed. As far as our schedule goes, we had the bid out in October, construction
started this month, and they are underway at this time. We anticipate construction
COUNCIL MEETING 48 JANUARY 23, 2019
of the road repair ending in May. They are having good success working and there is
good weather right now, so that is a good thing. We could beat that somewhat if it
continues to be well, but we anticipate May at this point. Then, Fall of this year
through a separate project, the comfort station would be completed.
Mr. Tabata: I wanted to pause here if there were any
questions for Michael and specifically for the road work and then, the additional
questions that were asked of us, Leo and I will continue.
Council Chair Kaneshiro: Councilmember Cowden.
Councilmember Cowden: Thank you so much. A question that I have
with the MSE wall, it looks like a good concept. What is the difference in porosity
between when it was sand-based versus this? It sounds like the water would still be
able to somewhat percolate through that base. Is that correct?
Mr. Moule: That is correct. It is not a solid wall, so to
speak. It is rock and sand backfill that water can percolate through, so how it affects
groundwater should not change in any significant way.
Councilmember Cowden: Okay, because that has been a concern that I
have heard, that is this like an underground dike, a levee? But it sounds like water
still will be able to at least some slow level, percolate through if so needed.
Mr. Moule: That is right.
Councilmember Cowden: So it is not a largely substantive change
between what was to what will be?
Mr. Moule: Not it is not like installing a solid concrete
retaining wall like you might use in some places. It is much different than that and
honestly, that is one of the advantages of a MSE wall, that it does allow water to
continue through it.
Councilmember Cowden: Then, I will ask this other question and Lyle,
you can say if this is something that is going to be better addressed in a minute.
When I looked at the budget for it, a concern I have is relative to the traffic
management. That is not a question for...
Mr. Tabata: No. The contractor is responsible for traffic
management in the project area, specifically.
Councilmember Cowden: Is that a "Mike" question?
Mr. Tabata: Yes, he can answer.
Councilmember Cowden: Okay. We might get a little bit more of it, but
one of the most key reasons why I asked for this presentation is hearing really ardent
concern from the community relative to the traffic because between both what has
COUNCIL MEETING 49 JANUARY 23, 2019
happened at Ke`e and Ha`ena and all of the beaches beyond the broken roads as well
as Black Pot, we do not have that parking and we do not have that area, so it is
concentrating on Weke Road. Somehow it seems that Kuhio Highway is staying
pretty open, but when I have gone down there, it has been either just crazy packed
with cars or just somewhat packed with cars. I invited and he can come up later, the
contractor for the house removal that is happening concurrently. When I was looking
at this road repair going in, the houses getting removed that were damaged...I am
just looking at how much traffic that was going in there and it would seem to me and
it has certainly been asked by residents of the community, that there could be
something like a traffic employee who is directing people so as they come to park,
they know to go maybe where we have expanded in the park down the way. I have
heard from visitors who are kind of stunned who come every year, that they have no
place to park and are getting ticketed. They probably need to be ticketed because it
is in the wrong place. A big concern for me was the congestion relative to, we really
basically have three (3) concurrent projects. We have Weke Road, your repair; we
have the housing; and then there is still the bridge work going on; the Weke Road
work where there are a lot of big trucks on Kuhio Highway coming down that way
and in town there with a lot of foot traffic and things like that. Is it possible to have
a traffic person redirecting it, signs, or anything like that? Is that partly your thing,
that if we put signs that say, "No parking in this area, you will be ticketed. Go on to
Pine Trees?"
Council Chair Kaneshiro: A lot of these questions, it looks like you are
going to try to address them with the rest of the presentation. I would say...
Councilmember Cowden: That is what I am asking is it them or is it
him?
Council Chair Kaneshiro: Maybe go through the presentation and then
we will come back with any further questions. I think many of the questions
Councilmember Cowden just asked is what you are going to cover.
Mr. Tabata: Yes.
Council Chair Kaneshiro: I would say just cover it now and then we will
ask any follow-up questions on it.
Mr. Tabata: Okay.
Councilmember Cowden: Okay.
Mr. Tabata: For parking concerns, I would defer to
Managing Director Dahilig, who was immersed in the community during the storms
and recently revisited. He has some information.
Councilmember Cowden: If it is later, later. I just did not want Mike to
leave if it was the time to talk to him.
COUNCIL MEETING 50 JANUARY 23, 2019
MICHAEL A. DAHILIG, Managing Director: Good morning, Council
Chair Kaneshiro and members of the Council. Mike Dahilig, Managing Director.
Last night, we actually did meet with the Hanalei to Ha'ena Community Association.
What we had to remind everyone is that we are right now, in the midst of an
emergency reconstruction period. This is still a disaster. The normal course of how
we communicate with the public, how we go through permitting, and get approvals is
still not applicable during this even though it has been nine (9) months since the
events. That is what we have to kind of remind the public, that a lot of what we are
trying to do is meet the objective of completing Weke Road as quickly as possible, as
safely as possible. I think the concerns that you raised here on the floor,
Councilmember Cowden, are the exact concerns that we share concerning that
expediency, but also safety, keeping safety in mind because there is very large
community desire to just want to have a return to a new normal out there. Having
the infrastructure as the Engineering Chief has laid out, be completed so that we can
re-open Black Pot. What we had anticipated was concerns that will domino because
we know that the closure of Black Pot has already created an influx of
oversubscription of parking in the Hanalei area as well as pushing the demand for
beach usage out into the `Anini area. Understanding that right now, some of the
overflow parking that has been normally meant for Black Pot has gone to pavilion
usage and the parking along Weke Road, we did observe that it was going to be a
problem that once you start trucking in thousands and thousands and thousands of
yards of fill using very heavy machinery, that the narrow width of that road along
with pedestrians using the pavilion side of the bay were going to become a safety
obstacle for to us expediently do the work. One of the options that we had tossed out
was whether we would look at the Pine Trees area as potential overflow parking, but
that, of course, came up with some consternation with other people in the community
and that was some of the things we had to hash out last night. At this point in time,
Councilmember Cowden, we know it is an issue, the community understands it is an
issue, but the community's overall concern is that we complete the road as
expediently and as safely as possible. We are going back to our team to see whether
their message last night of"just finish the road already and do not worry about the
overflow parking. If it is just three (3) months of construction, we can deal with it.
Just get it done already." That is the impression that we are getting from the
community association, but like anything, we want to make sure that our experts
who are the licensed engineers and the contractors are all on the same page when it
comes to what is our traffic mitigation plan? One thing that did come up also was as
you mentioned, that issue concerning proper signage. Are we directing people
properly? We have committed to having a flag person at the Pilikoa Street checkpoint
so that they are able to either turn around the cars or tell cars and pedestrians that
they are not supposed to go up and down that road. That will be someone that is
there that is going to be handled to flag people during those construction periods to
not go in there. As many members of the public did point out at last night's meeting,
it was very clear that the problem starts before the cars get to that Pilikoa Street
checkpoint, so we are going to have to work on looking at proper signage to have
people to turn at the Kuhio Highway intersection before they even start hitting that
point of Weke Road and going down that way. We do understand from the community
members, that there are spaces around the bay that are easily usable and are only
two (2) or three (3)blocks away by foot. That is not an unreasonable length of walking
distance for people that want to use the bay. We just want to get them to the right
COUNCIL MEETING 51 JANUARY 23, 2019
place and the right area. We are taking that back to the drawing board. Our message
was very clear last night, just please do not delay construction as a consequence of
trying to implement some type of mitigation plans, so that is what we are trying to
do.
Council Chair Kaneshiro: Let us just have them finish the presentation
and then we will ask you all of the questions that you have.
Councilmember Cowden: Yes.
Council Chair Kaneshiro: I think some of the questions that we have
may get answered in the next few pages and whatever does not, then we will continue
to ask questions.
Mr. Tabata: The second question was project coordination
with removal and reconstruction of damaged homes. A building permit is required.
When they come into for a permit, we direct them to the Planning Department to
make sure that they have had their zoning permit applications reviewed. That needs
to be completed before we begin the review of building permits. The zoning permit
applications are subject to, as noted above, the Flood Plain Management, Special
Management Area (SMA), and Shoreline Setback requirements. All of the work must
be completed in compliance with the current Building, Plumbing, and Electrical
Codes. I will let Leo go further into the permitting.
LEOLYNNE ESCALONA, Supervising Building Inspector: Good
morning Council Chair Kaneshiro and members of the Council. For the record,
Leolynne Escalona. I am the Code Enforcement Officer. I will continue where Lyle
left off. The Department of Health (DOH) Wastewater Branch waived its review of
the Rain18 building permits in conjunction with the Governor's proclamation
extension. Applicants should contact the DOH Wastewater Branch if new or modified
wastewater systems are to be constructed. Just to let you know, today, we have had
four (4) grading permits issued by the Engineering Division and for properties on
Weke Road, we have had six (6) building permit applications and two (2) demolition
permits.
Mr. Tabata: I contacted the Department of Health
regarding the ponding and "bacteria-infested water" question. Their response was
that the homes are on private property and the private landowners are responsible
for dealing with the water as long as there is no discharge into the ocean. The
damaged wastewater systems, per what they responded to me was, to their
knowledge have been pumped out and homes are not being occupied. The damaged
wastewater systems, except for cesspools, should be replaced and/or repaired as
necessary. Damaged cesspools will be required to be replaced with a septic or aerobic
treatment system. Then, they told me to advertise this, that these homes may qualify
for State income tax credit for the cesspool upgrade. Also, the last part is if there is
an existing cesspool located within five hundred (500) feet of the shoreline or stream,
the income tax credit will apply. So that concludes our presentation and we are
available for questions.
COUNCIL MEETING 52 JANUARY 23, 2019
Council Chair Kaneshiro: We will open it up for questions.
Councilmember Cowden.
Councilmember Cowden: The reason I called attention to the
wastewater or the bacterial count in the water is I go down there pretty regularly and
just try to keep an eye on it. In the area between the sandbags that to my
understanding is County property where Weke Road is really low, I always wear my
rubber boots and it is usually above my ankles as I walk through it. I cannot think
of a time I have been there that there has not been other people walking through it,
plenty of barefoot people with surfboards and everything else. When it is thousands
of bacterial count per milliliter, I would think, sometimes I want to tell them, "Hey,
it is like you are walking through a toilet bowl. Why do you not wear some boots?"
Mr. Tabata: They informed me that all septic systems
have been pumped and I believe there is no new usage being done. Their explanation
to me of why they are really not concerned is because of the ultraviolet (UV)treatment
by the sun rays into these pond areas that pretty much, unless it is really deep,
effectively destroys all of the bacteria growth.
Councilmember Cowden: The toxicity?
Mr. Tabata: Yes.
Councilmember Cowden: Okay. What had occurred to me is that it
might be worth having a sign there that says, "The water is not clean"just so that as
people are walking through it, it just seems like maybe people might want to be
aware. I am hearing you that it is fine, but if you walk through it, you can smell it,
right?
Mr. Tabata: I have not been there.
Councilmember Cowden: Well, I walked through it and I am not
concerned that it is. The cesspools are still visible. I am sure they have been pumped,
but it is just that you can smell it.
Mr. Tabata: Okay. I will relay that to them.
Councilmember Cowden: I would just think...
Mr. Tabata: They further mentioned to me that the
concern, say for vector control for mosquitoes, because it is saltwater, it would not
promote mosquitoes.
Councilmember Cowden: Yes. When I had called it to attention, it was
just so when we have people working...Council Chair Kaneshiro, is it okay if I call
forward Jeff Guest, who is the Project Manager for the other work that is going on
concurrently because they are filling in the land right around the road?
COUNCIL MEETING 53 JANUARY 23, 2019
Mr. Tabata: Not to cut you off, excuse me. Just to confirm
though, all County-owned properties have been filled.
Councilmember Cowden: Okay.
Mr. Tabata: So whatever is open right now and pond with
water is private property. I believe several of the landowners, as you mentioned, are
backfilling. We have been notified. There are rules for backfilling also, so they have
been asked to contact the Engineering Division. As long as it is not going to be a
bearing carrying load area, they can use the backfill that they are bringing in.
Councilmember Cowden: Okay.
Mr. Tabata: If there are people who are planning, we
advise them to come into the Engineering Division to confer with our Engineering
Division.
(Councilmember Chock was noted as excused.)
Councilmember Cowden: Okay. The reason why I was wanting to ask
together is I believe that has happened. I asked for this meeting a couple of weeks
ago. There is a delay in time. It was before the work actually began and I suppose
part of me was concerned about change orders. If we have a lot of conflict over the
different trucks trying to come in at the same time and different things like that, my
understanding is they bring in all of this backfill and these houses would be coming
out. I do not know if it is okay to bring both up at the same time. Is that not
appropriate?
Council Chair Kaneshiro: I think we will try and get our questions to the
Administration first.
Councilmember Cowden: Okay.
Council Chair Kaneshiro: If Jeff wants to come up and speak during the
public testimony area and he brings up questions, we can address those with the
Administration also and then he can also talk to them regarding scheduling and any
conflicts.
Mr. Tabata: Maybe Michael can explain a little bit more on
the coordinating between the private landowner work and our construction.
Mr. Moule: As Leo mentioned, we do have four (4) grading
permits that we have issued. I believe those are mostly or entirely on the makai side
of the road. There might be one (1) on the mauka side. Our contractor is actively
working with the folks who are working to do that fill work and any building work,
which Mr. Dahilig can address that would occur on the private lots and coordinating
their access as needed. We are working with them on that. We are working with our
contractor, but they are in direct contact to make sure that work can happen. There
is a stable entry road now. Our Project Manager was out there this morning. I got
COUNCIL MEETING 54 JANUARY 23, 2019
pictures back from him and you can see a stable road all the way through now and is
being maintained as they build the MSE walls up. That is where things stand. We
are coordinating so that work can happen because it is important. If that is going to
be filled, we need to coordinate because we are going to be filling right next. It is
important that it is coordinated and we are doing that. Our contractor is aware of
those activities going on.
Council Chair Kaneshiro: Are there any further questions for the
Administration regarding the presentation? Councilmember Evslin.
Councilmember Evslin: If this happens again with a similar storm
would the road be able to withstand it?
Mr. Moule: The way we believe that this occurred is that
the erosion started at the beach and worked its way back as water spilled out. I have
testified about that here at Council before, actually. The water spilled out of the
whole floodplain, essentially, it starts eroding it. As it goes down the beach
essentially, it erodes there and works its way back, and that is what happened. It
gets to the road and the road is harder than the sand, so it slows it down a little bit,
but in this case, it kept going through the entire road. With the MSE wall and the
concrete roadway being even stronger than the old asphalt roadway on sand,
essentially, that erosion will be slowed down even more. Would it stop it completely?
It depends on the severity of the storm, how much water is flowing out, and the
condition. Certainly, it is possible that a storm can be big enough that it might wash
the road as it is being built today, but we do believe that this design and the Federal
Emergency Management Agency (FEMA) agrees, helps mitigate the flood. It helps
reduce the potential for the same kind of damage occurring in the future. That is why
we talked about mitigation in the presentation. That is what that is, to mitigate that
damage and reduce the likelihood of it. But preventing it, we cannot say for sure.
But reducing the likelihood, yes, for sure.
Councilmember Evslin: How many houses are serviced by the water
line and how many meters are getting replaced?
Mr. Moule: I do not have the answer to that question. It
is not many. It is something on the order of ten (10) or a dozen, something like that.
Councilmember Evslin: Hypothetically or theoretically, if there was
no water lines under the road and you are doing replacement, would you have just
added asphalt on the top again instead of doing this?
Mr. Moule: No. The plan for the concrete is not
specifically with respect to protect the water lines, but rather protect the road and
just in general, to reduce the likelihood of that erosion continuing and spreading to
larger areas in future storm events.
Councilmember Evslin: Do you have an estimate of the cost, who pays
for it, and the breakdown and reimbursement?
COUNCIL MEETING 55 JANUARY 23, 2019
Mr. Moule: This project has been approved by FEMA. I
do not have the break down exactly on what the total cost is with me here. It is eighty
percent (80%) of FEMA and twenty percent (20%)...
Mr. Tabata: Seventy-five percent (75%).
Mr. Moule: Seventy-five percent (75%) FEMA and
twenty-five percent (25%), I believe, is largely going to be State funds that will provide
for the emergency.
Councilmember Evslin: So things like the water line though, is the
funds for that coming from the Board of Water Supply and the individual? It said
"meter replacement," so is that coming from insurance from the homeowners? Do you
know?
Mr. Moule: I am not sure on the water services. I am
sorry. We are running the project, but Water is involved and we are going the work
with them. But I do not know how their funds come into this. I do not know the
details on that. I am sorry.
Councilmember Evslin: Okay. Can we ask parking questions? I was
a little confused. Is the parking that you set up at Waioli Beach Park not going to be
utilized?
Mr. Dahilig: Well, that was a working theory, but like
anything as I mentioned, normally we would go through a public process and go
through the permitting and whatever. What we had to do is lean forward a bit of our
assets to try to anticipate and keeping the construction schedule intact, but we were
not able to schedule a meeting until last night with the community association. So
that finally determination on whether we are going actually utilize that space or not
is somewhat up in the air, given the input from the community yesterday.
Councilmember Evslin: My only hope with that is if we do utilize it,
that we do have a very firm closure date when Weke Road reopens.
Mr. Dahilig: Yes, absolutely. We clearly emphasized the
working theory was under the word "temporary." I think there was community
concern that something like this could set precedent or be temporary permanent.
There a lot of cases where we have temporary bridges and never get replaced. We
understand. Temporary, portables, and portable classrooms, there are many
examples of that and we understand the skepticism that when people use the
temporary moniker for something like this, that there is not a lot of trust there.
Nevertheless, we have conveyed our intention is that if we need to utilize a site, that
we are not going to leave it as a permanent fixture in the Pine Trees area and, in fact,
would have to restore the area back to what it was if we decide to use it.
Councilmember Evslin: Is the County currently enforcing no parking
restricts along Weke Road?
COUNCIL MEETING 56 JANUARY 23, 2019
Mr. Moule: The current situation right now is that one (1)
side of Weke Road has parking prohibited. I believe it is the mauka side. We have
signs and cones put up by the contractor. For the purposes of getting vehicles in and
out and the equipment that they need, that is sufficient. Parking is allowed on the
other side. I have pictures of that from this morning. There was one (1) vehicle
parked on the wrong side and there were multiple cars lined up on the makai side.
That is sufficient for what is being brought onto the site right now. As Managing
Director Dahilig said, we are still working with it and that could change over time if
it becomes problematic with the operations or safety. That is something that we may
change, but for now, parking is prohibited on one (1) side and that is functioning with
the work that is continuing today.
Councilmember Evslin: Is the expectation that when the road
re-opens, that mauka side parking restriction will remain?
Mr. Moule: The anticipation would go back to the existing
situation. Parking restrictions during construction are things that we can do just
part of traffic control.
(Councilmember Kagawa was noted as present.)
Mr. Moule: Parking restrictions long-term are actually
under the purview of this body. So unless we proposed or you proposed and you all
approved, the parking restriction would go back to the way that is had been, which is
parking is allowed on both sides, except sometimes, the intersection will not have
parking for safety reasons and there are some of those restrictions in place today.
Councilmember Evslin: Okay. Is emergency vehicle access okay right
now?
Mr. Moule: Yes. There is plenty of width with parking on
just the one (1) side, that vehicles can get down the road without difficulty.
Councilmember Evslin: My final question on the new homes or the
existing homes being demolished and applying for permits to rebuild, has the
shoreline shifted if they are rebuilding according to our Shoreline Setbacks, if that is
saltwater under their homes? Is that the new shoreline?
Mr. Dahilig: The Department of Land and Natural
Resources (DLNR) is the agency that makes that determination and because this was
not a wave event, this was an erosional event, they have already made the
determination that the shoreline was not considered altered as a consequence of the
April flood storms, so whatever certified shoreline would be intact would be
something prior to April of 2018.
Council Chair Kaneshiro: Are there any further questions for
Administration and then we will bring Jeff up. Councilmember Cowden.
COUNCIL MEETING 57 JANUARY 23, 2019
Councilmember Cowden: I first of all want to thank you for the work
that you are doing. I did not bring everyone in to create trouble. I am bringing
everyone in to make sure that we avoid any challenges that come up. I want to
apologize for not being well for the past four (4) days, otherwise, I certainly would
have been at the meeting yesterday and I would have been down there daily in the
past four (4) days looking at it before coming here. Having saying that, I do
understand that there is a pretty good relationship going on with Earthworks Pacific
Inc. and the other contractors, which is your contractor. I want to thank you on that.
I have a procedural question. I actually asked the Project Manager to come down as
basically an expert person to be a part of this whole item, can he at least speak for
six (6) minutes and then we can ask some questions? Okay.
Council Chair Kaneshiro: Are there any further questions for the
Administration while they are up? Councilmember Evslin.
Councilmember Evslin: I just want to thank you again. Also, thank
you for doing your outreach to the community. From what I hear, it is appreciated.
Council Chair Kaneshiro: Thank you. While the rules are still
suspended, Jeff.
Councilmember Cowden: State your name and your role.
JEFF GUEST: Jeff Guest with JG Consulting. I am the
Project Manager for the private side on the Weke Road demolition and backfill for the
homes. First of all, I wanted to kind of just talk and jump in on the water issue. With
the septic tanks that were either destroyed, moved, pumped out, and cleaned, there
is no active sewage in those abandoned homes or anything like that. Just to say to
you, Councilmember Cowden, you have ebb and flow of water there. There are live
organisms in the water. The fish are very healthy in those ponds. I am not sure.
Sometimes, you might get some smell down there, but I am down there quite often
and I am not getting a really bad odor there. Like they mentioned, the UV is helping
to clean that water. If you are down there and observe, you will see literally the ebb
and flow of tide in that groundwater. It is a brackish water. It is not a big concern.
I think moving forward, getting things backfilled as quickly as possible is our best
line of defense. Scope of work, the County has their work, a lot of yardage, and the
gabion basket walls. The private sector, we have currently have three (3) homes that
I am representing, which is the Meyercords, James, and the Wilcoxs. Then across
the road, Leah Sheehan. She is going in for her permits now. Hammer is doing his
own thing. He is the house closest to the pier. We have approximately eight
thousand (8,000) yards of sand to import from Mana to bring in as coastal plain sand
to backfill where we demolition the homes. We have had very good cooperation with
Earthworks Pacific Inc. Estrella Enterprises is our general contractor that is doing
the work on the makai homes. The traffic control is starting to get sorted out.
Estrella Enterprises put our own flag person last week to help with the trucking
issues. We had six (6) trucks hauling for Estrella Enterprises, two (2) trucks hauling
for Earthworks Pacific Inc., I believe, and there was another truck for Mike Faye,
Kikiaola Construction Company Inc., to bring in some fill for their work at Hammers.
There is a lot of trucking going on. We had some instances the first week of
COUNCIL MEETING 58 JANUARY 23, 2019
construction with the road just being completely clogged. We had that meeting last
week with the Mayor and Mike Dahilig was very pointed yesterday with the Hanalei
Community Association to try and find the best and fastest way to complete this work.
That is coming from my perspective being a resident on the north shore. I think it is
really important that we move as quickly as possible because that will ultimately
alleviate the congestion if we can get Black Pot open. Does that mean I am done?
Council Chair Kaneshiro: You can do another three (3) minutes.
Mr. Guest: Just really quickly, I think that it is
important that, and this was talked about in our meeting with the Mayor, and I was
with a lot of the property owners that are from end of the road. While we are going
through the process, we have one hundred twenty (120) days on our contracts to get
done both the County work and the private side is given one hundred twenty (120)
days to get the work done. It seems like a great opportunity to make sure that plan
is in effect for parking at Black Pot for parking. When we had the discussion with
the County last week, it was a little bit unclear what the parking was planned out to
be and Doug Haigh was still working on that plan. I just want to urge the Council to
kind of push that along because we have a great opportunity. We have one hundred
twenty (120) days to make sure the parking is sort of sorted out. If it is not, we are
going to open that road and it is going to be chaos down there because no one is
parking on the beach anymore, they are going to put boulders at the "boat ramp,"
which is now going to just be a kayak launch. So, there is no way to get around to the
beach. Parking should be sorted out by the time we open that road. There should be
a pretty good plan in place for where we are going to park all of those vehicles,
otherwise, we are just going to be stuck with another logjam of cars. That is all I
really had just in general to kind of start things off. I am open to any questions that
you might have.
Council Chair Kaneshiro: Councilmember Cowden.
Councilmember Cowden: For clarity, three (3) houses are going to be
completely removed. Is that correct?
Mr. Guest: Correct. Two (2) on the makai side and Leah
Sheehan's on mauka side.
Councilmember Cowden: When those three (3) houses get removed,
what kind of road capacity does that require? Is that maybe three (3) or four (4)
trucks? I have no idea. They look like big houses to me. Where do you throw that
away?
Mr. Guest: Kekaha. Everything goes to the dump. It is
like taking teacups of sand in and then teacups of material away and then loading it
in the bigger trucks to haul it to Kekaha.
Councilmember Cowden: Is there any recycling process in the plan for
throwing away three (3) big houses? I do not know if there is.
COUNCIL MEETING 59 JANUARY 23, 2019
Mr. Guest: There is concrete that is being....we are
separating it in to metal, concrete, and other debris. There is some wood product that
can be saved. Metal is difficult to save, some of it is being. Then, the concrete is
definitely saved for structural backfill.
Councilmember Cowden: Do you have a timeline of when you think
these houses would be...you said it is one hundred twenty (120) days. Will those
three (3) houses will be gone in one hundred twenty (120) days?
Mr. Guest: Yes.
Councilmember Cowden: Are those houses moving out before there is a
reconstruction on the remaining houses, or do they happen concurrently?
Mr. Guest: I think we will be done pretty rapidly ahead
of these people. Like the fear of the possibility of...if you look at that detail of the
cross-section of the wall, it looks like there is a big vertical falling off where there is
going to be a void between the private property and a void between the edge of work
of the County work. We are going to be working kind of...what has been really
cooperative is Jordan and Jeff Fisher from Earthworks Pacific Inc. has been great.
We kind of are working with each other to see how we bridge that gap. If you can
visualize it, we have to kind of fill from the roadway towards the houses and actually
start filling in order to just rip and tear the houses down. So, we are kind of bridging
ourselves out there with some fill, taking the houses down, and then continuing our
fill. There are sandbags that are between the County's work and our work, and we
will start kind of filling to that toe and removing those sandbags. I think it is going
to kind of happen fairly cooperatively. There will be a void there as we kind of get
ourselves moving forward and then it will all come together. I think it is going to be
just fine.
Councilmember Cowden: The James' house that is being removed is the
up that looks like it is cantilevered over the estuary right now that sitting over the
water. Is that one that is getting repaired or is that getting removed?
Mr. Guest: I should have brought a map for you. If we
went from the pier, if you go on the makai side of the road and we work our way from
the pier towards the pavilion, the first house is the kind of copper-orangish colored
house.
Councilmember Cowden: Yes.
Mr. Guest: That is the Hammer's. It is being restored.
Councilmember Cowden: Okay.
Mr. Guest: The next house over is the Meyercords. We
have our grading permits. I believe the demolition permits are final now, to demolish
the main house and there is a carriage house/garage that is close to the roadway,
which is going to be retained and restored. We are just working on the footings on
COUNCIL MEETING 60 JANUARY 23, 2019
that now. The next house over, so the third one in from the pier, is the James' and it
is a cottage property that is being completely demolished and backfilled. The next
big house had some scouring and gouging. That is the James' main house.
Councilmember Cowden: Okay.
Mr. Guest: There is very little yardage that needs to be
imported into that. The next house is the Wilcox's and we are ninety-five
percent (95%) done with the backfill. There is no real structural damage to Wilcox
house, just a little bit of erosion under a patio slab. We are ninety-five percent (95%)
done with the fill. We literally had about eight hundred (800) yards to backfill in
there and we put in seven hundred (700) in the last three (3) days. The next step is
we are going to finish that up and then move towards the James' next. So, kind of
moving the other direction, we are starting at the James' and move towards the
Meyercord's. I believe Hammer is going to follow us because his access is now going
to kind of be from our side since the County work has started.
Councilmember Cowden: Okay. My main and final question is, are you
satisfied with the collaboration that you are getting from Earthworks Pacific Inc.,
that the traffic is being managed in a way that you are going to be able to hit your
deadlines, that you feel like you have good relationship with the County contractor
and the County and how things are working, and you are confident rather than
concerned as you are moving into this project, or do you have any other major
concerns that you think might be an impediment to being able to clean up this whole
area, which is absolutely adjacent to the park? It feels like part and parcel of the
park, that we clean up this area. It is all related. Do you feel fine?
Mr. Guest: I feel good about what we are doing.
Councilmember Cowden: Okay.
Mr. Guest: I think it is a really good effort. I think the
communications that we have had with the County, Mr. Dahilig, and also the Mayor
that our traffic control issues are being addressed. If we can do that plan from Pilikoa
Road down and block the mauka side, not only is it a good idea to block the mauka
side with cones, in my opinion, it is too narrow to park anyways. The people are
getting tickets along there because their wheels are on the road. Taking away the
parking on the mauka side of the road, to me, has been a huge relief for us. The
private contractor installed a flag person at the barricade where it is kind of down by
the big house, the Sheehan's big house is best way to describe it. If we can move that
barricade back to just the pier side of Pilikoa Road and then have some signage and
a flag person there, that would be a huge step because it then give the opportunity
for people to turn around because you have the other road there. But there has to be
more directional signs or some thought given to how we are going to handle the traffic
control at the highway and Aku Road, and Aku Road and Weke Road. That is my
only real concern. I think they are addressing that, but I think if we can get that
addressed, I think we can smoothly continue our work and hit our schedules. Again
just to emphasize, I think it is going to be a real cluster if we cannot move
systematically and get done on-schedule. If we hit June and we are still working on
COUNCIL MEETING 61 JANUARY 23, 2019
that down there, it is a mess because December was a nightmare. December and the
first weekend in January was an absolute nightmare on that road. We could not
bring anything in or out. Does that answer your questions?
Councilmember Cowden: Yes, thank you. We probably have another
little window at spring break. Thank you so much. It sounds like we are on a good
direction.
Council Chair Kaneshiro: Are there any other questions? If not, thank
you.
Mr. Guest: Thank you.
Council Chair Kaneshiro: Anyone in the audience wishing to testify on
this? Seeing none, I will call the meeting back to order.
There being no further testimony, the meeting was called back to order, and
proceeded as followed:
Council Chair Kaneshiro: Is there any final discussion? Councilmember
Cowden.
Councilmember Cowden: Thank you all for being a part of listening to
this. I think it is a really important aspect. I think in the outcome of the flood, this
whole area has gone through a lot of trauma and business trauma. The emotional
trauma of the residents is important, but businesses are really struggling. Being able
to make sure that we are not going to have this repair and the housing and all of that
pushed deeply into the summertime is really important when we have the heavy flow
of visitors, which is really imp actful. Thank you.
Council Chair Kaneshiro: Anyone else? I just want to thank the
Administration and Jeff for coming out and just the cooperation that has gone on. A
lot of times there is a lot of fear about what is going to happen and how things are
going to work. I see the Administration very proactive in us working things out and
trying to get things as smooth as possible. I think in an area like that where it is
already affected by the storms, I think it is even more necessary to get their
communication out on the front-end, which is done. We see it in the testimony and
the speakers here, that it is not frantic. What are we going to do and how are we
going to handle it? We have talked about it, we have a pretty good plan in place, and
will go from there. I really appreciate that communication from everyone. Anyone
else? If not, the motion on the floor is to receive.
The motion to receive C 2019-27 for the record was then put, and carried by a
vote of 6:0:1 (Councilmember Chock was excused).
Council Chair Kaneshiro: Motion carried. Clerk, can you please read
our last item, Bills For First Reading, page 4?
COUNCIL MEETING 62 JANUARY 23, 2019
BILLS FOR FIRST READING:
Proposed Draft Bill (No. 2733) — A BILL FOR AN ORDINANCE AMENDING
ZONING DESIGNATION IN KAPAHI, KAUAI (Baird Family Limited Partnership,
Applicant) (ZA-2018-1): Councilmember Kuali`i moved for passage of Proposed Draft
Bill (No. 2733) on first reading, that it be ordered to print, that a public hearing
thereon be scheduled for February 20, 2019, and referred to the Planning Committee,
seconded by Councilmember Brun.
Council Chair Kaneshiro: Are there any questions for Ka`aina on this? I
will suspend the rules. Councilmember Kagawa.
There being no objections, the rules were suspended.
Councilmember Kagawa: Ka`aina, in a nutshell, if you can say a brief
overview of what this Bill is about. What does it accomplish?
KA`AINA S. HULL, Planning Director: Definitely. Good afternoon,
Council Chair Kaneshiro, Council Vice Chair Kagawa, and members of the Council.
Ka`aina Hull on behalf the Planning Department. The proposal is looking at taking
what is roughly a three point four (3.4) acre parcel located in Kapahi, it is split-zoned
Agriculture and Open, and it is looking at designating the one point nine (1.9) acres
of Open District into the Agriculture Zoning District. The proposal was found to
comport with the General Plan. It was also done in a time when the Open zoning
designation was used in the 1970s as somewhat of a catch-all for what is generally
considered for open space designation for open land also to recognize constraint
districts, those that have vulnerable slopes, prone to flooding, and that are in some
coastal areas. Since the 1970s when that zoning district was adopted, we have gotten
a slew of other overlays that more carefully look at those constrained districts, i.e.,
we have a Flood Ordinance, the Shoreline Setback Ordinance, or the Special
Management Area. So, this Bill was just kind of looking at saying, "We understand
what the flood issues are with this area, but could we perhaps put it into the full
Agriculture Zoning District to take advantage of some agricultural incentives for the
property?"
Councilmember Kagawa: Are the owners requesting this change?
Mr. Hull: Yes, this came from the applicant. This did
not come from the Department.
Councilmember Kagawa: The Open designation from the 1970s, sounds
like kind of a question mark kind of zoning. It is not clearly Agriculture because of
the topography or whatever and not clearly anything else, so basically they used to
use that Open as a question mark.
Mr. Hull: To a certain degree in areas that they wanted
to, I would say overall, the policymakers would recognize that there may be an issue
with this property. The Open designation like I said, has a multitude of the issues
that may arise. Some may be scenic, some may be shoreline, and some may be slope
COUNCIL MEETING 63 JANUARY 23, 2019
and topography. This one looks like it may have been designated that area because
there may be some flood issues that the property experiences. The property owner
did actually go through a process of doing a comprehensive flood study of the property
and has identified essentially where that flood zone is and proposed as if the
policymakers would be supporting the proposed amendment, that within the
Ordinance, they keep any built structures out of that flood area.
Councilmember Kagawa: Is this in Kapahi?
Mr. Hull: Correct.
Councilmember Kagawa: It is way up in Kapahi?
Mr. Hull: It is up a fair distance. It is somewhat not too
far from the Waipouli Road and Kawaihau Road intersection.
Councilmember Kagawa: Is there any reason to believe that neighbors
may oppose?
Mr. Hull: Yes. There were some neighbors that did
submit letters of opposition and to be quite frank, those letters of opposition did spell
out that with the proposed zoning amendment, this property would now qualify for
the potential for subdivision. Right now, it does not have enough acreage within their
Agriculture district designation to submit for subdivision, so the property qualifies
for one (1) house. If the submittal is approved as proposed, they could subject the
property to a subdivision because—well, to take a step back, within Kaua`i's Zoning
Ordinance and the vast majority of Agriculture zoned lands cannot do subdivisions
or are close to not coming in anytime soon because there is a one-time subdivision
requirement on agriculture lands. Once you subdivide a parcel into multiple lots, you
can never re-subdivide again. That is common knowledge within the zoning industry.
This is a property that has not subject to subdivision since its original creation, so
they have the ability to do it. If adopted to have a full Agriculture zoning designation,
they could subdivide the property into three (3) distinct units and each of those
three (3) distinct units would indeed qualify for one (1) dwelling unit. There was
some opposition from neighbors concerning the proposal because they did not want
to see further development in that area. The proposal does layout the fact that much
of it is intended for the purpose to facilitate further agricultural production of this
property, but it does recognize in the application that subdivision is a new possibility
should they get approval of the full Agriculture zoning designation.
Councilmember Kagawa: Okay. Let me reverse it a little bit. The total
parcel is three point four (3.4) acres?
Mr. Hull: Correct.
Councilmember Kagawa: And the amount out of three point four (3.4)
acres that is Open is one point nine (1.9) acres?
Mr. Hull: Correct.
COUNCIL MEETING 64 JANUARY 23, 2019
Councilmember Kagawa: So one point five (1.5) acres is already
Agriculture?
Mr. Hull: Correct.
Councilmember Kagawa: And at one point five (1.5) acres, they do not
qualify for the subdivision?
Mr. Hull: No.
Councilmember Kagawa: Do they need at least three (3) acres?
Mr. Hull: They need at least two (2) acres to subdivide
into what would be two (2) lots. But if they get the whole three (3) plus acres into
Agriculture...
Councilmember Kagawa: Oh, it has to be an acre?
Mr. Hull: It has to be at least two (2) acres to subdivide
it.
Councilmember Kagawa: And then you could subdivide it to one (1) acre
parcels?
Mr. Hull: Acre parcels, correct.
Councilmember Kagawa: Do the people that oppose know that the
Council has to approve it as well as the Planning Commission?
Mr. Hull: It is part of the process. I can say that I did
not speak personally with any of the people that wrote letters, but I can check with
our Planner to see if he did.
Councilmember Kagawa: What is the recommendation of the Planning
Department?
Mr. Hull: The Planning Department did recommend
approval and the Planning Commission ultimately adopted that approval. I will say
with a caveat, there is always concern when looking in the Agriculture district about
further development of it. There is always going to be that concern. In looking at
this particular petition, the original intent was to propose the ability to do a little bit
more agriculture on the property with this proposal as well as to be quite honest, the
Department does take into a weight and account of some of the testimony given.
While we do recognize that fragmentation of agricultural lands through either
Condominium Property Regime (CPR) or subdivision can be detrimental to
agriculture, we also do look to our agricultural experts, if you will, to see what they
are saying. There were two (2) individuals that did, not with our reaching out to
them, did automatically submit letters of support in here, and that was Jerry
COUNCIL MEETING 65 JANUARY 23, 2019
Ornellas and Jerry Gardenias. Those are two (2) individuals that we do say give
certain weight to proposals of what may or may not negatively affect agricultural
lands. Seeing that we did, like I said, it does lend some weight to the veracity of the
proposal.
Councilmember Kagawa: Was there commitment from the applicant
that their intention is not to subdivide and, in fact, to farm?
Mr. Hull: In the proposal, it does state that there is an
intent to farm. They do not go as far as to say they will not ever subdivide.
Councilmember Kagawa: I am not asking for that. Do we have any idea
offhand via inspection or from their side as to what they grow?
Mr. Hull: There are fruit plants and ornamental plants.
There are also testimony from various businesses that are provided agricultural
products from the property, but the vast majority appears to be ornamentals in the
sense of they are working with various flower shops and whatnot to provide, but there
is also fruit.
Councilmember Kagawa: Fruit and flowers currently grow?
Mr. Hull: Correct.
Councilmember Kagawa: And the intention is possibly to expand?
Mr. Hull: Correct.
Councilmember Kagawa: Alright. Thank you. I am good.
Council Chair Kaneshiro: Councilmember Cowden.
Councilmember Cowden: I have a simple question. You are not
prohibited from doing agriculture on open land, right?
Mr. Hull: There are some provisions that you are not
outright permitted to do. The first one that comes to mind, and I will have to recheck,
but the first one that comes to mind is you are not allowed to outright monocrop on
the Open zoned district. You are allowed to do diversified agriculture, but you are
not allowed to monocrop outright on the Open zoning designation.
Councilmember Cowden: But that amount that we are adding is just
about an acre, right? Is that correct?
Mr. Hull: Just under two (2) acres.
Councilmember Cowden: Okay. Under two (2) acres.
COUNCIL MEETING 66 JANUARY 23, 2019
Mr. Hull: Excuse me. I apologize, one point nine (1.9)
acres is the Open section that they are looking at.
Councilmember Cowden: Okay. If they wanted to be doing a single
crop, they would need to make a change away from being Open zoned?
Mr. Hull: Correct, or they could apply for a use permit
as well.
Councilmember Cowden: Okay.
Mr. Hull: But a use permit has to go through
discretionary review and is also subject to intervention by the neighbors.
Councilmember Cowden: Okay. This is first reading, right?
Mr. Hull: Yes.
Councilmember Cowden: We will be hearing more about it later. Thank
you.
Council Chair Kaneshiro: Are there any other questions?
Councilmember Evslin.
Councilmember Evslin: My family owns property in that area. I just
want to state that for the record that I have asked the Board of Ethics for an opinion
on whether I should be recused or not. We have a similar situation with Agriculture
and Open zoning on our property. I do have questions, but I am going to save it for
later to just see what the result of that process it. But I have been advised in the
meantime, that I should be voting on this until we get that opinion.
Council Chair Kaneshiro: If you want to ask the question, you can or it
can wait. It is going to Planning anyways. Are there any further questions from the
members on this?
Mr. Hull: I will just ask, too, if there are questions, since
Councilmember Evslin brought it up about surrounding properties that we have not
fully vetted or investigated, if you could get those questions to us ahead of time so
that in case we are put on the spot and we do not have that information, then we can
at least have the information. If you are intending so say, "Look at surrounding
properties," which surrounding properties are done through a brief analysis, but not
a thorough vetting when doing a zoning amendment. We will look very deeply and
specifically at the individual property proposed, but if there are desires for us to look
at other properties surrounding, I would just request if we could get it in a little bit
in advance so we can fully vet those properties as well.
Council Chair Kaneshiro: Councilmember Evslin.
COUNCIL MEETING 67 JANUARY 23, 2019
Councilmember Evslin: Could we get the testimony that was
submitted to the Planning Commission?
Mr. Hull: It was in the packet that was sent, but we can
send it over. It is a thick packet. We can send over the very specific testimony
certainly, called out for you folks.
Council Chair Kaneshiro: It is probably one hundred (100) pages or so,
but we can get it. Councilmember Cowden.
Councilmember Cowden: To me, like even it was just a summary. For
two (2) acres, I am surprised it would be Open to Agriculture. It must be something
that I do not know that is involved in there. Is it a crop that the neighbors are fighting
or anything like that?
Mr. Hull: No. For the most part, a brief summary of the
opposition testimony I can say is some of the opposition was that they did not want
the ability to have this property subdivided.
Councilmember Cowden: They do not want houses on it?
Mr. Hull: They do not want further house to be done
there.
Councilmember Cowden: Okay.
Mr. Hull: As well as, I believe there was at least one (1)
that stated no farming at all was occurring on the property. At least from our review
of what is on site as well as the several pictures that were provided to the Department
and ultimately have been transmitted up to you folks, it does appear that there is a
fair amount of agriculture going on and that is also inclusive of the testimony from
vendors that utilize products from this property.
Council Chair Kaneshiro: Are there any further questions?
Councilmember Kagawa: I have one.
Council Chair Kaneshiro: Councilmember Kagawa.
Councilmember Kagawa: It may not be for today's meeting, but possibly
at Committee, if we can have some type of analysis of how many properties may be
in the past twenty (20) years or so in that area have undergone CPR subdivision that
are Agriculture parcels? I am just curious. I feel like that number is quite high. I do
not know if Planning really keeps track of it until it becomes a tax issue.
Mr. Hull: We do definitely keep track of the subdivision
and how many have been subjected to CPRs. It could be a little trickier, but we can
try and pull that data.
COUNCIL MEETING 68 JANUARY 23, 2019
Councilmember Kagawa: Yes. I would just appreciate having some
kind of numbers of what we are dealing with. My gut tells me that this has a high
probability of being subdivided in the near future, but I realize it is a local problem
that we have. We are not going solve our housing issues with saying "no" to
everything.
Council Chair Kaneshiro: I have a similar question. How many would
be in general and you can bring this later, but how many opportunities or how many
other people do you see would be coming in with a similar proposal like this? I think
once we do one (1), it kind of sets a precedent for people to say, "Hey, they just rezoned
Open land to Agriculture land and gave someone more density,"we may have a bigger
influx. I do understand in reading the Planning Commission's notes that yes, he does
have a lot of agriculture on the property and that may have been one of the reasons
that Commissioners were more apt to say, "Yes, he is going to do agriculture, they
are continuing to do it, and they want their kids to be able to live there and continue
to do agriculture," compared to someone that is not doing anything and just says, "I
want to change my zoning from Open to Agriculture." There are some considerations
there.
Mr. Hull: Okay.
Council Chair Kaneshiro: Are there any other questions from the
members?
Councilmember Kagawa: If I can harp on what you said. It could be just
providing this person with options. This person may continue to keep it and farm,
but it may not be as profitable as he thinks. So maybe having the ability to split it
up a little bit would allow him to maybe have family members live there as well. It
is complex. It is hard to have a one-size-fits-all for each side.
Mr. Hull: Yes.
Councilmember Kagawa: I know your job is tough on the Planning side.
Mr. Hull: Yes, and to that, Council Vice Chair Kagawa,
the only thing I can say is that we have had this discussion a fair amount up here as
far as farmers and working and living on the land, and the Farmworker Housing
Ordinance was somewhat brought because that. So there was some discussion to a
certain level of being able to further farm the land and how much having that farm
dwelling possibility from people to live on the land and continue or to further intensify
the farming. Like you said and like Council Chair Kaneshiro was getting to, if it was
straight up, "We just want to do this to subdivide it," the Department would have a
hard time stomaching that quite honestly, with the policies that have been set. But
looking at the connection that the subdivision would accommodate perhaps one (1) or
two (2) more farm dwellings and that would be in conjunction with what appears to
be a bona fide farm from all of our analysis of the property, that is why the
Department could feel comfortable moving forward. But like I said earlier, there will
always been some leeriness and caution whenever looking at proposals to further
subdivide and fragment of agriculture lands.
COUNCIL MEETING 69 JANUARY 23, 2019
Council Chair Kaneshiro: Okay. Thank you.
Mr. Hull: Thank you, all.
Council Chair Kaneshiro: Anyone wishing to testify on this?
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
Council Chair Kaneshiro: Seeing none, is there any further discussion?
If not, we will take a roll call vote.
The motion for adoption of Proposed Draft Bill (No. 2733) on first reading, that
it be ordered to print, that a public hearing thereon be scheduled for
February 20, 2019, and referred to the Planning Committee was then put, and
carried by the following vote:
FOR PASSAGE: Brun, Cowden, Evslin, Kagawa, Kuali`i,
Kaneshiro TOTAL — 6,
AGAINST PASSAGE: None TOTAL — 0,
EXCUSED & NOT VOTING: Chock TOTAL — 1,
RECUSED & NOT VOTING: None TOTAL — 0.
Ms. Fountain-Tanigawa: Six (6) ayes, one (1) excused.
Council Chair Kaneshiro: That concludes the business on our agenda.
Not seeing or hearing any objections, this meeting is now adjourned.
ADJOURNMENT.
There being no further business, the Council Meeting adjourned at 12:11 p.m.
Respectfully submitted,
CAI LA
JAD : . FOUNTAIN-TANIGAWA
County Clerk
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