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HomeMy WebLinkAbout04/24/2024 Council minutes , COUNCIL MEETING APRIL 24, 2024 The Council Meeting of the Council of the County of Kaua`i was called to order by Council Chair Mel Rapozo at the Council Chambers, 4396 Rice Street, Suite 201, Lihu`e, Kaua`i, on Wednesday, April 24, 2024, at 8:50 a.m., after which the following Members answered the call of the roll: Honorable Bernard P. Carvalho, Jr. Honorable Felicia Cowden Honorable Bill DeCosta Honorable Ross Kagawa (Excused at 1:47p.m.) Honorable KipuKai Kuali`i Honorable Mel Rapozo Excused: Honorable Addison Bulosan (Note: No one from the public provided oral testimony via the Zoom remote technology platform on any agenda item.) APPROVAL OF AGENDA. Councilmember Carvalho moved for approval of the agenda, as circulated, seconded by Councilmember Kuali`i. Council Chair Rapozo: Is there any discussion or public testimony? There being no one present to provide testimony, the meeting proceeded as follows: The motion for approval of the agenda, as circulated, was then put, and carried by a vote of 6:0:1 (Councilmember Bulosan was excused). Council Chair Rapozo: The motion is carried. Next item, please. MINUTES of the following meetings of the Council: March 13, 2024 Council Meeting March 27, 2024 Council Meeting Councilmember Kuali`i moved to approve the Minutes, as circulated, seconded by Councilmember DeCosta. Council Chair Rapozo: Thank you. Is there anyone wishing to testify or provide testimony? Anyone in the audience? COUNCIL MEETING 2 APRIL 24, 2024 There being no one present to provide testimony, the meeting proceeded as follows: The motion to approve the Minutes, as circulated, was then put, and carried by a vote of 6:0:1 (Councilmember Bulosan was excused). Council Chair Rapozo: Motion carries. Clerk, our next item, please. CONSENT CALENDAR: C 2024-85 Communication (04/01/2024) from the Mayor, transmitting for Council consideration and confirmation, Mayoral appointee La`akea Chun to the Charter Review Commission—Term ending 12/31/2026. C 2024-86 Communication (04/04/2024) from Kimberly Torigoe, Deputy County Attorney, transmitting for Council information, the Quarterly Report on Settled Claims filed against the County of Kauai from January 1, 2024 through March 31, 2024. C 2024-87 Communication (04/10/2024) from the Hawai`i State Association of Counties (HSAC) President, transmitting for Council consideration, HSAC's Fiscal Year 2025 Proposed Operating Budget, pursuant to Section 18 of the Bylaws of the Hawai`i State Association of Counties, Inc. Councilmember Kuali`i moved to receive C 2024-85, C 2024-86, and C 2024-87 for the record, seconded by Councilmember DeCosta. Council Chair Rapozo: Is there any discussion or public testimony? There being no one present to provide testimony, the meeting proceeded as follows: The motion to receive C 2024-85, C 2024-86, and C 2024-87 for the record was then put, and carried by a vote of 6:0:1 (Councilmember Bulosan was excused). Council Chair Rapozo: Motion carried. With that, can we go to page 4, Resolution No. 2024-17, please? RESOLUTIONS: Resolution No. 2024-17 — RESOLUTION CONFIRMING MAYORAL APPOINTMENT TO THE CHARTER REVIEW COMMISSION (La akea Chun) Councilmember Kuali`i moved for adoption of Resolution No. 2024-17, seconded by Councilmember DeCosta. Council Chair Rapozo: Is there any discussion or public testimony? Seeing none, is there any discussion? COUNCIL MEETING 3 APRIL 24, 2024 Councilmember Kagawa: I want to offer my strong support for La`akea. This is a historic opportunity being not only a female, but the youngest ever on such a high quality volunteer board on Kaua`i. That cannot be more important for us to have La`akea step up and be the first. There are always interest in what our charter amendments offer to the voters, ones that are perhaps overlooked by sitting elected officials, and I think the Charter Review Commission offers opportunities where the public can determine through their board what goes on the ballot that can change lives and opportunities for the County of Kaua`i. La`akea brings a fresh, new opportunity for the youth of Kaua`i and offers opinions that would otherwise not be made. This is just a historic opportunity and when we interviewed La`akea, you could see that her cultural values, just her demeanor being so humble, I think she makes the perfect fit for the Charter Review Commission. She is going to make a great difference and inspire others going forward to say, "Hey, maybe we can offer better, we may be younger but maybe we can offer better to the status quo and bring good change for the island." How they say, "old boy network," where you have the same things, same people, same results. What the youth offer is they offer change and a new perspective, and I think it is time for change. I am really excited and proud of you. You are an inspiration to all of us. We appreciate you. Council Chair Rapozo: I should have asked, I know, because this is so different, I should have asked you to come up. Councilmember Cowden. Councilmember Cowden: La`akea, I want to thank you for taking the initiative in your school program to look at a need that has long been overlooked, and that is how important our youth voices are. How important it is for them to have civic literacy and how important it is for the community to be able to hear them, and so as teenagers to be on...if this passes, because this is a ballot amendment, I mean, a charter amendment on the ballot, if this passes, this would put a non-voting youth on every one of our commissions, if they so volunteer to do it. I think it will make a tremendous difference for how our Boards and Commissions functions moving forward, for how, I think there are more "senior" people that are on the boards, I see have one from the Charter Review Commission. It gives purpose and meaning and a deeper sense of kuleana of looking at truly the next generation and hearing what they have to say. So, thank you to your teachers. You come from a family that knows what they are doing on this, so when I saw you in there at the Charter Review Commission, I was not surprised. You are coming from a lineage of knowledge, but good job. Thank you. Councilmember De Costa: You impressed me, you impressed all of us. You come from the heritage that belongs sitting on a commission or board. As a Portuguese/Spaniard, I am not part of this deep lineage that you come from, but my wife is, your teacher is, I see former Councilmember Chock back there, your parents are, you make every Hawaiian proud, especially the last Queen that reigned in Hawai`i, you make her very proud. We are going to follow you, La`akea. Councilmember Carvalho: Congratulations to you for stepping up and just being an example, because do you know how many other young boys and girls coming up, and yet, you are setting an example now for stepping up to the plate in the world of government and the future. I appreciate you and your family, you have COUNCIL MEETING 4 APRIL 24, 2024 a solid representation for Hawaiian culture, and just your presence will make a big difference. Mahalo to you and your family. Councilmember Kuali`i: Aloha, La`akea. Congratulations and mahalo nui loa for stepping up, for serving, and for being the best example to our young people. Not just our young people, but for all of us. I hope you will continue to support us even after you go on to college, and help Ellen recruit others like you, maybe your friends, hula siblings, ohana, etcetera. All the best to you as you accelerate in these few months that you have while you are with us and all the best when you go onto college. We will be there with you and cheering you on. Council Chair Rapozo: What an inspiration. I just wrote down, "Trailblazer, pioneer," or, "pioneeress," I do not know if that is a word. Councilmember Kuali`i: Just pioneer. Council Chair Rapozo: He is our "thesaurusian." I have been on this Council so long, we have confirmed so many people, and I have never had one who had to go back to high school, but that is the beauty of this thing, its uniqueness. This has never happened before. I hope that this is just the start. Many have said about the importance of hearing...I was once young too, and now that I am old, I realize there is so much to learn regardless of your age and what better place to learn than from the new generation. I just came back from Texas visiting my daughter and grandson and the sad reality is that this entire place has becoming, our local kids cannot stay here anymore. All the old people who are in our positions at the State and County levels, we think we are doing the right things there, but it is not working. There was a time when I would try to convince my kids to come back home, but now as I sat with them for a couple of weeks, the life up there for them now, it is very hard to bring them back here, because there is nothing here. I think the change has to come from that new generation. You folks think differently. There was a time when I thought you were all crazy, but as I got older and wiser, I realized that you folks know and we have to start listening, and what better way to do it than sitting on a policy commission like the Charter Review Commission, the Planning Commission, or the County Council. I hope that this is just the start, I hope you inspire others. Ellen does a good job recruiting commissioners, but the reality is that most kids your age have absolutely no interest in doing this. We rely on you to be that inspiration and to get people to say, "Wow, I want to be like here, that was cool," and get that new generation involved because things have to change. I know I asked you during your interview to please consider staying on, I know your goal is to attend college, you will do good things in college, but I am hoping there is a possibility that you could stay on and continue your work her. If not, of course we understand, but I think you need to know how important you are to this place, and that position is to this place. It is vital. I know mom and dad are listening, families are listening, and maybe we can figure out a way to keep you on. With that, we do not normally do this but I will suspend the rules, because I want to see if you want to say anything before we take the vote. Right now, the vote is very close, so be cautious of what you say. There being no objections, the rules were suspended. COUNCIL MEETING 5 APRIL 24, 2024 LA`AKEA CHUN: I was actually thinking about what I would say today if I were asked to speak, and something that has been brought up a lot these past few weeks is the saying, "Mai kali a haule kou mau niho"—"Do not wait until your teeth fall out." Basically, trying to get opio to step out, make the change you want to see, and yes, do not wait until our teeth fall out to start stepping out. That is what I have to say. Council Chair Rapozo: I heard this quote several months ago, "Leaders will decide where to plant a tree that they will not be around to sit under," which is profound. In other words, we will make decisions today that will impact people forever, and that seed we plant today may not turn out to be the tree until after we have been long gone. The Charter Review Commission is the perfect example of that, because your decisions on that commission that maybe eventually turn into a charter change will impact generations to follow. Powerful. There being no public testimony, the meeting was called back to order, and proceeded as follows: Councilmember DeCosta: I have a final thought. I want to address her peers that came from her school. I noticed some of your classmates out there. Council Chair Rapozo made a very important point, the tree that provides shade in the decades after we leave, also the same tree can provide fruit, fruit that we can eat and yield. Your classmates are the fruits of a generation that came before them. A lot of you out there do not stop wanting something in life. Do not stop at protesting for something in life. Be the lawyer, doctor, entrepreneur, come back and get what you folks believe is yours. You cannot do it just by protesting. You have to do it in the court of law. Be the lawyer, be the judge, and make things happen for your island and your State, that is how you move mountains, and you will lead them. Thank you. Council Chair Rapozo: I hope she still wants to be a commissioner after that. With that, roll call. The motion for adoption of Resolution No. 2024-17 was then put, and carried by the following vote: FOR ADOPTION: Carvalho, Cowden, DeCosta, Kagawa, Kuali`i, Rapozo TOTAL— 6, AGAINST ADOPTION: None TOTAL — 0, EXCUSED & NOT VOTING: Bulosan TOTAL — 1, RECUSED & NOT VOTING: None TOTAL — O. Ms. Fountain-Tanigawa: Six (6) ayes, one (1) excused. Council Chair Rapozo: Thank you. Next item, please. Let us have a caption break. There being no objections, the Council recessed at 9:05 a.m. The meeting was called back to order at 9:20 a.m., and proceeded as follows: COUNCIL MEETING 6 APRIL 24, 2024 Council Chair Rapozo: Next item, please. COMMUNICATIONS: C 2024-88 Communication (04/02/2024) from the Emergency Management Administrator, requesting Council approval to dispose of various records, pursuant to Hawai`i Revised Statutes (HRS) Section 46-43 and Resolution No. 2021-48 (2021), which have been kept for over seven (7) years and are no longer of use or value. Councilmember Kagawa moved to approve C 2024-88, seconded by Councilmember Carvalho. Council Chair Rapozo: Is there any discussion or public testimony? Councilmember Cowden: I would like to talk to the Director. Council Chair Rapozo: Okay. There being no objections, the rules were suspended. ELTON USHIO, Emergency Management Agency Administrator: Aloha and good morning. Elton Ushio, Emergency Management Administrator. Councilmember Cowden: I want to thank you for having had six (6) runs, giving you the credit of one (1) emergency after another, so I get that you folks are very busy doing your job. Is the recordkeeping we are doing currently electronic or are we still keeping multi-paper trails? Mr. Ushio: We have a combination. The records we are talking about here are hard copies that have been on file for a while. We keep certain records electronically scanned in our drives as well. Councilmember Cowden: So, we are doing both, it is still paper. What does "AP" stand for? Mr. Ushio: Accounts Payable. Councilmember Cowden: What does LEPC stand for? Mr. Ushio: Local Emergency Planning Committee. A group we convene relating to hazardous materials. Councilmember Cowden: Okay, that sounds important. I was looking at the after-action report from the Maui fires, because that was super important. I am not familiar with getting after-action reports from our departments, do we do after-action reports here? COUNCIL MEETING 7 APRIL 24, 2024 Mr. Ushio: We do for major incidents, but thankfully those are few and far between, hopefully. For smaller incidents, a lot of times it is a short version called "hot washed." Councilmember Cowden: Okay, thank you. Council Chair Rapozo: Are there any further questions? Seeing none, thank you. Is there anyone in the audience wishing to testify? Seeing none, I will call the meeting back to order. There being no one present to provide testimony, the meeting was called back to order, and proceeded as follows: Councilmember Cowden: I completely appreciate all the work that is done. There is no complaint, but I am going to be voting no on this because when I look at, even just these past couple of weeks, we had yet another flood. A lot of it is things that have to do with land management and issues like that. I worked hard yesterday creating a testimony for the Board of Land and Natural Resources (BLNR) meeting on Friday. When there are not things like after-action reports that I can reference or look at, it is a lot of work. Who am I to know what happened when I look at an increasing pattern of these flood conditions that are said to be one-hundred-year or five hundred (500)years, but if we have three (3)in six (6)years, and they are deeply impactful, when you folks are gone, those records will be gone with you too. We have a pattern of losing institutional memory. What did you say "AP" was again? Council Chair Rapozo: Accounts Payable. Councilmember Cowden: I am probably less worried about that one, but there are some that I am worried about, but when this is a collective, I will be voting no because the work that you do is too important to throw away the pathway from the amazing and important knowledge that goes forward. LEPC, can you say what that means again? Council Chair Rapozo: We are back to order. Councilmember Cowden: Oh, okay, I am sorry. So, the LEPC that has something to do with hazardous waste or something like that, I do not like acronyms, because it really slows me down. That is something that I think we should never get rid of. I am voting no, but with maximum respect to the department. Council Chair Rapozo: Councilmember Kagawa. Councilmember Kagawa: I am going to be supporting it. I do not have similar problems or concerns. I trust the judgment of the Kaua`i Emergency Management Agency (KEMA). When I look at these records and the ones that we are disposing of, they are really old, 2016, I do not lose sleep over something that long ago. Finding a document from 2016, I do not think it is a concern. Like they said, the old records before 2016 that they feel is important, they are keeping, so I am not going to sit here and micromanage every document that they are throwing away from this list. COUNCIL MEETING 8 APRIL 24, 2024 I will be supporting and have no problem with it, and hope the rest of the Council will support it as well. Council Chair Rapozo: Is there any further discussion? Seeing none. The motion to approve C 2024-88 was then put, and carried by a vote of 5:1:1 (Councilmember Cowden voting no; Councilmember Bulosan was excused). Council Chair Rapozo: Motion carried. Next item. C 2024-89 Communication (04/02/2024) from the Emergency Management Administrator, requesting Council approval to accept a donation from the Hawai`i Emergency Management Agency (HI-EMA), of four (4) 5500W, one (1) 6200W, and twenty-three (23) 3500W generators, valued at $22,213.47, to be distributed to various County of Kauai Departments to include the Kauai Fire Department (KFD), the Kaua`i Police Department (KPD), the Housing Agency, the Department of Parks & Recreation, and various other departments as available. Councilmember Kuali`i moved to approve C 2024-89, seconded by Councilmember Carvalho. Council Chair Rapozo: I have a question on the second paragraph from the transmittal. "The total value of the donation is twenty-two thousand two hundred thirteen dollars and forty-seven cents ($22,213.47), however due to the cost per unit, this will not require a County of Kaua`i Asset Addition process," what does that mean? Mr. Ushio: Normally the way the County's inventory is managed is that they put an asset tag on equipment items of a certain value. Council Chair Rapozo: Right. Mr. Ushio: And this is below that threshold. In place of that, though, we will be doing a KEMA tag, and we will create our own internal tracking for those generators and how we distribute them. Council Chair Rapozo: Our laptops do not hit the threshold, but all have the County tag on them. Why would you not track these assets, because they are generators, and I am worried because those are easily "borrowed." I just do not understand why some...what is the threshold? ROBYN NAKATA, Accountant III: Robyn Nakata, Accountant for KEMA. The current asset threshold is five thousand dollars ($5,000), and so the laptops that you mentioned with the asset tags on them, I believe those are Information Technology (IT) generated, not necessarily the County of Kauai fixed asset tags. We will be looking into doing something similar, but with KEMA asset tags, so that we can still track that. Council Chair Rapozo: I have a "finance" question and we can send that over, but if it is not added to our County's assets, and when we do our annual audit, is it tracked? COUNCIL MEETING 9 APRIL 24, 2024 Ms. Nakata: That is correct. Council Chair Rapozo: That is something we must bring up to the Finance Department. To me, that makes no sense, especially when you are talking about tangible items that can be taken. I am just being real. These generators, you are talking about twenty-eight (28) generators that could disappear, and the audit would never pick it up, so that is what we have to look at with the Finance Department. Councilmember Kagawa. Councilmember Kagawa: I think what you are saying is that KEMA will have an inventory tracking and if it disappears, KEMA will know, and they can track and do an investigative process afterwards, right? Council Chair Rapozo: But when we are looking at our financials at the end of the year, these do not show up in the books as our assets. You are an accountant, you would know, if you want to track your assets, especially with the County...remember, this is just one (1) request for twenty-two thousand dollars ($22,000). When you add them all up together in the County throughout the year, it is a significant amount of money that is not showing up on the audit books. Councilmember Kagawa: To clarify again what they said, they said that IT does not report it as a fixed asset in a manner that you folks are asking. IT has for items under five thousand dollars ($5,000), they have their own tracking system, that if my laptop disappears, it will not be the Finance Department looking for my laptop under the fixed asset, it will be IT. Council Chair Rapozo: Right. Councilmember Kagawa: The department is taking responsibility for anything missing and there is already accounting under the branch of KEMA, not under the branch of overall Finance. That is what I understand. Council Chair Rapozo: I can follow up with the Finance Department. I just want to know how it is tracked in the audit. When we look at assets, when you are looking at physical assets within the County, my opinion, and maybe it is...whether it is not added to the County asset process. I cannot believe that we would have all these physical assets laying around, especially like laptops, there are a lot of laptops in this County that amounts to a lot of money. To me, as a businessperson, when you look at the audit at the end of the year,you want to know how much you have in physical assets, and maybe it is not necessary, maybe it is not required under the Governmental Accounting Standards Board (GASB), but we will find out. Councilmember Cowden: I have a question on asset tracking, less about the money and more about the position. First, I am happy that we are getting all these generators. I think every one of us here was here for the hurricane or most of us were here, how important it is to have a generator. I get twenty-two thousand dollars ($22,000) is not a lot of money, but does the fire department put tracking so we know which station has which generators,which neighborhood center has a generator?I know the neighborhood center next to my house, I am not sure if that generator gets tested. COUNCIL MEETING 10 APRIL 24, 2024 "Facilities designated as shelters," excellent that you are doing this, thank you. Where do we make sure no one ever goes empty? Mr. Ushio: For the purposes of this request, we will be meeting with our various partners, some of the ones listed there, like the Kaua`i Fire Department, Kaua`i Police Department, the Department of Parks & Recreation, the Housing Agency, etcetera. We will determine what we feel is an equitable distribution and an effective distribution, we will track that with our internal asset tags and on our fiscal side, we will maintain a list, a spreadsheet of what is where. We were also intending to give them guidance on maintenance and testing. We can do regular, annual checkups on them to make sure the status of the inventory is good. Council Chair Rapozo: Are there any further questions?If not, is there anyone in the audience wishing to testify? MATT BERNABE: Matt Bernabe, for the record. I am glad you folks are discussing it because as I read it, I was just going to sit here, yawn myself onto to the next agenda item, and then I was listening to you, and it was a good discussion. I understand all points of the discussion, but I want to state my own question. Do other departments with other equipment also itemize their own or is this unique to them, because if you folks are just itemizing this in your own tags and the other departments are putting it into the County, I have a problem with that. I think we should be unified, homogenous, one thing, not to mention, where the maintenance schedule plan is, who is working on these things. I was a mechanic in the Army. We signed off on all types of things. I had an issue with the Solid Waste Division and how they fixed the transfer stations. I own generators and small equipment. Who is the mechanic for this? If we have twenty-eight (28) generators, I would like to see it a little bit...I was not going to say anything, but listening to you folks talk, this is piecemeal. I just see how it is breaking down, I think there should be a better HR...HR should be involved with this. I am sorry. You folks need to get all the units; if there is a backhoe in the Solid Waste Division, do they itemize their own tags or does the County tag that as an asset? This is big for me. I was not even thinking about this. I was half asleep thinking where my coffee was, and then I heard the robust discussion, and it woke my brain up. Thank you for having a good discussion. Thank you, KEMA, for doing a good job. I think you folks have to manage our tax dollars, even though it is donated tax dollars, better. Council Chair Rapozo: Is there any further public testimony? BRUCE HART: For the record, Bruce Hart. I am curious...it is a lack of knowledge on my part, but I understand that these generators come from the Hawai`i Emergency Management Agency (HI-EMA), but what I am wondering is why and where did they come from? In other words, the money...is this a grant? Was this a grant given to the (inaudible). The money had to come from somewhere and I am curious if someone could answer that for me, please. Thank you. Council Chair Rapozo: Ms. Parker. COUNCIL MEETING 11 APRIL 24, 2024 ALICE PARKER: Alice Parker, for the record. I am curious, how about double tagging? KEMA puts their tag on, and the County puts their tag on, or would that be too confusing? Thank you. Council Chair Rapozo: Is there anyone else wishing to testify? Real quick to Matt's question. These go to the inventories of the different fire stations and the small engine mechanics we have will maintain them. Where did the money come from? It came from HI-EMA. It is a donation, and if I am misspeaking, Elton can correct me, but it is saying a donation of these generators, not a grant, the physical generators will be donated. Again, that is how I read it. If I am wrong, Elton can speak up. The double tagging would be probably unnecessary to do it twice. Councilmember Kagawa. Councilmember Kagawa: I just want to clarify that I think the County of Kaua`i, all of the audits I have been on, there has not been a problem with a fixed asset inventory, because we follow GASB rules. GASB rules state that anything over five thousand dollars ($5,000) goes on a fixed asset list, and these generators are under that threshold. The choice is made similar to IT that the accounting for the fixed assets stay under KEMA. KEMA is the branch that works under the State HI-EMA and coming from HI-EMA, I guess what they are doing is giving these generators to the counties, so the counties can use as deemed necessary rather than HI-EMA try to micromanage how Kaua`i deals with having generators to deal with emergencies on the island. We are kind of actually making more of it than it should be, but thank you HI-EMA for giving it to us, because for us to wait for HI-EMA to tell us where to give the generators when our local folks know where the generators would best serve the island totally makes sense. I am hoping that more of these donations are made from HI-EMA to KEMA, so that when the disaster strikes, we do not get criticized for not having resources when it is actually a thing where HI-EMA needs to give it to us to be used to help. This is the way to go. Give it to KEMA and when it happens, KEMA has the right people with the right equipment to do the job. Pointing to past audits, I think we are following generally accepted accounting principles and there are safeguards to make sure that these generators do not have "legs," and if they do have legs, we will track them down annually. I hope that is what is happening and the clean audits that we have been having annually for all of these years, I have never seen anything about having a fixed asset problem where items are walking away, and we have no accounting whatsoever. Until I see that, I place my confidence in the process we have going on now. Thank you. Council Chair Rapozo: Councilmember Cowden. Councilmember Cowden: I have a process question on the main agenda item, it says we are moving to approve a request to accept a donation, well, I accept it with open arms. Great. Thank you, HI-EMA. It seems appropriate that...I am assuming these are all brand new equipment, because this is not used equipment. When we are accepting quality equipment, I am very grateful to get that. I have faith that KEMA knows where we need that equipment, so I thank you for your expertise on that. I want to absolutely say"yes" to approving this, because it is a great donation, I do not want to say no for something so important like this. I do trust that you folks can figure it out, but I was curious where it is listed so we know that there is something like the neighborhood associations, we are able to look when we have an emergency. My process COUNCIL MEETING 12 APRIL 24, 2024 question to you, Council Chair Rapozo, is all we are doing is receiving and approving it, right? We are not going to somehow say no because we do not like GASB process. Council Chair Rapozo: Yes, all donations to the County have to be approved by the Council. Councilmember Cowden: So, we are just approving it? Council Chair Rapozo: Yes. Councilmember Cowden: Okay. I will approve it. Council Chair Rapozo: My question is for the Finance Department, not for KEMA. Obviously, I am not going to say no to free generators. Councilmember Kagawa is probably correct about the five-thousand-dollar is the recommendation from GASB, it is a little concerning because Countywide there are quite a bit of assets under one thousand dollars ($1,000), but if that is what GASB recommends, that is what we do. The motion to approve C 2024-89 was then put, and carried by a vote of 6:0:1 (Councilmember Bulosan was excused). Council Chair Rapozo: Motion carried. Next item, please. C 2024-90 Communication (04/02/2024) from the Emergency Management Administrator, requesting Council approval to receive and expend recurring Federal funds, in the amount of$4,000.00, from the Fiscal Year 2023 Emergency Management Performance Grant Supplemental award (EMPG-S), which will support procurement of Adobe software or similar licenses for the Kaua`i Emergency Management Agency, and strengthens capabilities to address all hazards. Councilmember Kuali`i moved to approve C 2024-90, seconded by Councilmember Carvalho. Council Chair Rapozo: Is there any discussion or public testimony? There being no one present to provide testimony, the meeting proceeded as follows: The motion to approve C 2024-90 was then put, and carried by a vote of 6:0:1 (Councilmember Bulosan was excused). Council Chair Rapozo: Motion carried. Next item, please. C 2024-91 Communication (04/08/2024) from the County Attorney, requesting Council approval of the indemnification provision in the CBIZ Valuation Group proposal for appraisal services, in preparation for the next insurance renewal period, to allow the Risk Management Section to appraise forty-five (45) County of Kaua`i facilities valued ti COUNCIL MEETING 13 APRIL 24, 2024 at $1,000,000.00 or more to update replacement costs for these facilities, securing better insurance premium costs. Councilmember Kuali`i moved to approve C 2024-91, seconded by Councilmember Carvalho. Council Chair Rapozo: Is there any discussion or public testimony? Councilmember Cowden: I want to talk to them if I can. Council Chair Rapozo: Is the County Attorney present? There being no objections, the rules were suspended. MARK BRADBURY, Deputy County Attorney: Deputy County Attorney Mark Bradbury, for the record. (Councilmember Kagawa was noted as not present.) Councilmember Cowden: Thank you so much. One thing that came to my attention in the couple meetings I have attended is that when we had this flood in the past couple of weeks, the equipment that was damaged, like the equipment insurance does not cover the damage to the equipment. When we are saying, "Appraise forty-five (45) County of Kauaci facilities valued at one million dollars ($1,000,000) or more to update replacement costs," can you tell me more about that? Is this the risk management section, right, so what does it cover when we get these better insurance premiums, if it is like a parks facility and we buy all these new heavy equipment that we are looking at buying, it floods, and we do not get it moved out, do we have flood insurance to cover shorting out new equipment? Am I understanding this policy? I asked and was told it is all under risk management. Mr. Bradbury: Well, it is property damage. Council Chair Rapozo: Can you state your name for the captioner. Councilmember Cowden: He did. Council Chair Rapozo: Oh, you did? Councilmember Cowden: Yes. Mr. Bradbury: Yes. Council Chair Rapozo: I am sorry. Mr. Bradbury: No problem. It is a property damage coverage for the facilities that the County owns. There are forty-five (45) facilities which are valued in excess of one million dollars ($1,000,000), and that is what this particular insurance policy covers. See what has happened here is every fall we go into COUNCIL MEETING 14 APRIL 24, 2024 negotiations with the insurance company, and last fall, and we do it through our insurance broker at Atlas. Last fall, the insurance companies indicated to us that the insurance industry itself was in a state of disarray. Councilmember Cowden: Correct. Mr. Bradbury: And so what has happened now is the insurance companies have become rather conservative. They do not want to outlay (inaudible) much money. Instead of us being able to get one (1) or two (2) insurance companies to cover the twenty-five million dollars ($25,000,000) of insurance that we want, the insurance companies are now starting at three million dollars ($3,000,000) to five million dollars ($5,000,000), so instead of just getting two (2) insurance companies, we have to now get five (5), six (6), maybe seven (7) insurance companies. Councilmember Cowden: That is my understanding with what was happening with multi-family dwellings, any building that is one hundred million dollars ($100,000,000), they have to get all these...I know my own home is no longer, they did not renew me, because it is an old house. I am highly concerned, and we are in our budget session and that is why I want to really look at this. I felt like we handled this last flood quite well, yet, I have been in different buildings and looking at all the damage that has happened, whether it is the air conditioners (ac), any equipment, stoves, etcetera, just trying to understand if we have a good coverage, which is probably not. The reinsurance company is "shot," they are not doing it anymore. I guess I am just trying to understand. Council Chair Rapozo: Let me help you. In preparation for going out for solicitation for insurance, we have to get appraisals. They want to enter into an agreement with an appraisal company to appraise our structures, our buildings, and to get that they need the indemnification agreement, which is what this is. This has nothing to do with the insurance, this is the appraisal. We want to hire an appraiser to appraise our properties before we go out and seek insurance. Councilmember Cowden: Thank you. Will that appraisal company look to see if it is a property that typically has a lot of equipment in it? Will it appraise and be able to know when we are looking for what these insurance policies are, that is only going to be the concrete structure, the contents, does that appraisal include content and does it help position us to make sure that we are going to be covered appropriately? Mr. Bradbury: My understanding is this particular insurance covers replacement and refurbishing of the facility that is being insured. Councilmember Cowden: Okay. Mr. Bradbury: The smaller aspects of that like air conditioning, that would fall under another insurance policy. Councilmember Cowden: If I can just put it out to you folks, if you can look, what about big things like tractors, excavators, new mowers, if it goes under...if it somehow goes into that risk management insurance because what I have been learning COUNCIL MEETING 15 APRIL 24, 2024 is equipment flooding has to go under flood insurance, it will not be covered under something like auto insurance. (Councilmember Kagawa was noted as present.) Councilmember Cowden: So, everyone is going like this with insurance, so if we could just know that. I would like to be able to know that, but I will be approving the indemnification. Council Chair Rapozo: Again, this is for the appraisal, so it is like getting your house appraisal. It does not matter what vehicles you have or what type of stove you have, the appraisal is on the structure, you get other insurances to cover your contents, vehicles, equipment, etcetera. It would be a good idea to understand where all of our insurances lie and what covers what, but we can do it at a later time. Councilmember Cowden: My business insurance that I used to get would cover the interior, would cover the contents, so I am coming from my background. When I get an appraisal for what my business was worth... Council Chair Rapozo: This is not the business; this is not on the County appraisal. It is an appraisal of the structure. Councilmember Cowden: Okay. I am just trying to learn and understand. Council Chair Rapozo: Yes. Mr. Bradbury: The reason why we need appraisals of the structures is because they have not been done for a while, is to make ourselves more attractive. The insurance will be able to rely upon new third-party appraisals. The more attractive we get, it will make it easier to find insurance companies, and also quite possibly get a lower fee. That is why we are doing the appraisal, to make ourselves more attractive. Council Chair Rapozo: Perfect. Are there any further questions? If not, thank you. Mr. Bradbury: Thank you. Council Chair Rapozo: Is there any public testimony? Is there any further discussion? There being no one present to provide testimony, the meeting was called back to order, and proceeded as follows: Councilmember Cowden: Thank you for allowing me to clarify some of that, because I think as we are doing our budget and we are in the middle of budget session, it is critically important. Council Chair Rapozo: Thank you. Is there anyone else? COUNCIL MEETING 16 APRIL 24, 2024 Councilmember Kagawa: I have an item coming up in the future about insurance and everyone can see there are many issues with insurance that are going on where our values are going up and then whether you need more coverage, I just really think the State Legislature needs to do a better job with their insurance commission to try to regulate these folks. It just does not make sense to me what is happening nationwide with insurance companies bailing out or gouging with new rates that are being required. I just see it as a big Ponzi Scheme. I am skeptical about what these insurance companies are doing and are being allowed to do. Thank you. Council Chair Rapozo: With that, the motion is to approve. The motion to approve C 2024-91 was then put, and carried by a vote of 6:0:1 (Councilmember Bulosan was excused). Council Chair Rapozo: Motion carried. Next item, please. C 2024-92 Communication (04/09/2024) from the Chief of Police, requesting Council approval of the indemnification provisions in the Power Document Management System (DMS) service agreement, to utilize essential functions such as training, policy review, and accreditation. PowerDMS is the exclusive provider for the Commission on Accreditation for Law Enforcement Agencies (CALEA) accreditation management. Councilmember Kuali`i moved to receive C 2024-92 for the record, seconded by Councilmember DeCosta. Council Chair Rapozo: Is there any discussion or public testimony? Seeing none. The motion to receive C 2024-92 for the record was then put, and carried by a vote of 6:0:1 (Councilmember Bulosan was excused). C 2024-93 Communication (04/09/2024) from the Housing Director, requesting Council approval to perform the following: ' a. Acquire under the County's Community Development Block Grant (CDBG) Program a residential unit at 3034 Po`ipu Road, Koloa, Hawai`i, 96756, Tax Map Key (TMK): (4) 2-6-004-051-0000, for a purchase price of not more than $775,000.00, based on the fee simple market appraisal, which will be obtained through this transaction; b. Resale by leasehold of 3034 Po`ipu Road, K6loa, Hawai`i, 96756, for not more than the leasehold market appraisal, which will be obtained as part of this transaction; and c. Authorize the County Clerk to sign legal documents related to the acquisition and resale transactions. Councilmember Kuali`i moved to approve C 2024-93, seconded by Councilmember Carvalho. COUNCIL MEETING 17 APRIL 24, 2024 Council Chair Rapozo: Can we have the Housing Agency up, please? There being no objections, the rules were suspended. KOA DUNCAN, Assistant Housing Director: Aloha, Council. My name is Koa Duncan, Assistant Housing Director. With me is Kerri Barros, our Community Development Block Grant (CDBG) Coordinator. In front of you is a request to purchase a home in Koloa as part of our Homebuyer Program, which we have currently between thirty (30) and thirty-five (35) homes that are a part of that program, which we essentially go out and purchase fee simple property and then turnaround and resell it leasehold to folks off our Home-Buyer List. Essentially, the County owns the dirt and then we sell the vertical home improvements via a leasehold 99-year lease, and in many cases we have done this program with different types of moneys, and federal moneys, General funds, but for this case, it is the CDBG Federal Revolving Loan fund, which we are using to purchase and that fund comes with an eighty percent (80%) area median income (AMI) and below requirement on the resale. A little bit about the property, it is along Po`ipu Road, I think you folks have the map. It is walking distance from Koloa Elementary School and just about mauka from our Koa`e Makana affordable housing project. We feel that it is a central location, close to school, Koloa Town services, and of course close to the hotel employment centers nearby. One other thing I wanted to mention is that the seller, we are fortunate that the seller reached out to us through a realtor to sell the home to the County. They did not put the home on the market. They wanted to ensure that through the County that they would be selling the home to a local family at an affordable price. We are fortunate about that. On the leasehold side, when a homebuyer gets the home, like I said, it is a 99-year lease, and the home can be transferred or willed to immediate family members. In the case if they decided to sell the property down the road, it is a fifty percent (50%) shared appreciation with the County. For example, if they bought the home at four hundred thousand dollars ($400,000) and then in ten (10) years, they decided to sell for five hundred thousand dollars ($500,000), they would be able to keep that fifty thousand dollars ($50,000), fifty percent (50%) of that gain would be...so, this program does offer the chance to build some equity where you can pull that money and put it into some other home in the future. With that, do you have any questions? Council Chair Rapozo: Do we do this often?I do not remember. I pulled up the tax record and this house is nine hundred sixty (960) square feet, a very small house. Bigger than mine, but you are asking for up to seven hundred seventy-five thousand dollars ($775,000), so what does that mean? What is the offer? How much are they asking for? Mr. Duncan: The price is seven hundred seventy-five thousand dollars ($775,000), right, Kerri? KERRILYN BARROS, CDBG Coordinator: Yes. Council Chair Rapozo: We are going to pay seven hundred seventy- five thousand dollars ($775,000) for a 960-square foot house, and then what happens? Are you going to lease it to someone from our list? COUNCIL MEETING 18 APRIL 24, 2024 Mr. Duncan: Correct. Once we purchase, we work through our Home-Buyer List, prioritized by a homebuyer number. The lowest number gets a chance and we work down. Council Chair Rapozo: How do they get equity if they are leasing? Mr. Duncan: They own the vertical building portion of the leasehold. Council Chair Rapozo: Is the leasehold only for the land? Mr. Duncan: The leasehold is for the home and the land. Council Chair Rapozo: I am trying to understand. Can you help educate me on that? They are leasing, basically renting. Mr. Duncan: It is a leasehold sale. Council Chair Rapozo: We are selling the lease to this person? Mr. Duncan: Yes. Council Chair Rapozo: Got it. Councilmember DeCosta: The appraised value and the price you folks are asking for, is that comparable? Is the appraised value higher or lower or is it at market rate? Ms. Barros: Kerri Barros, CDBG Coordinator. We are currently going through the appraisal to get an appraisal on the market value, so the request for the seven hundred seventy-five thousand dollars ($775,000) is what the seller is offering the County to buy it for. We expect it to be higher, but because the seller likes the program, which is for low and moderate income families to be able to have secured home ownership, and call it their home, being able to live in the home for the rest of their lives. Councilmember DeCosta: I understand that. I just wanted to know if it comes in higher, then right from the start, the buyer at eighty percent (80%) AMI has equity. Let us say it comes in at one million dollars ($1,000,000) and we buy it for seven hundred seventy-five thousand dollars ($775,000), fifty percent (50%) of the equity goes to the new buyer and fifty percent (50%) of the equity goes to the County. Ms. Barros: No. There are two (2) parts, the County will acquire the property and then we will resell it to a eligible low to moderate family. Councilmember DeCosta: What will we resell it for? Ms. Barros: We are going to get another leasehold appraisal and we will be selling it at the leasehold value. COUNCIL MEETING 19 APRIL 24, 2024 Councilmember DeCosta: Would it be approximately seven hundred seventy-five thousand dollars ($775,000) or much lower? Ms. Barros: Much lower because the County will always own the property. This is to be able to keep the property so it would not be resold. Councilmember DeCosta: The way I look at it is that one (1) family will benefit from quite a bit of money from the County. Ms. Barros: Well, the goal is for them to live in the house for the rest of their lives. Councilmember DeCosta: I understand that, but the reality is, as Mr. Duncan said, that they can sell it in ten (10)years, and they can retain fifty percent (50%) of that equity. Ms. Barros: In the leasehold, the County has the first right to buyback, should there be any reason why they need to sell it...and that does not happen too often, we have seen it once where a family had to move to the mainland to take care of family, parents. Therefore, the first right is for the County to buyback the property. Councilmember DeCosta: Do we buy it back at the market value appraisal or what the people paid for it? Ms. Barros: Not the market. There is a formula for the leasehold sale. I am not sure about the fifty percent/fifty percent (50%/50%). Mr. Duncan: The Ordinance outlines that the County has the first right to buyback, and it will be fifty percent/fifty percent (50%/50%). If they decide to sell in five (5) to ten (10) years, we will go out and get another leasehold appraisal and that would dictate what price they could sell it for. Council Chair Rapozo: Councilmember Cowden. Councilmember Cowden: I want to thank you for the projects you do and I hope that we are able to extend gratitude to the sellers. I appreciate that you folks have explained this to different layers of the Council over the years in different terms. Yes, it is very rare that the seller does this, because I think the last two (2), that is how we got them, it was again, the seller. Ms. Barros: Yes. Councilmember Cowden: The seller was trying to help the local community? Ms. Barros: Yes. COUNCIL MEETING 20 APRIL 24, 2024 Councilmember Cowden: When we put out seven hundred seventy-five thousand dollars ($775,000), these people paid four hundred fifty thousand dollars ($450,000), so it pushes right back into this revolving fund, as soon as the buyer goes out to get a loan, right?We will have invested maybe two hundred twenty-five thousand dollars ($225,000), but that is cheaper than building an apartment for five hundred thousand dollars ($500,000)—do I have that right? Ms. Barros: Yes, so if I understand correctly...I am sorry... Councilmember Cowden: It has been explained to us many times that when we are putting out seven hundred seventy-five thousand dollars ($775,000), as soon as they pick a buyer, they are going to get a loan from the credit union and usually buy it for five hundred thousand dollars ($500,000), so we get that back. Ms. Barros: Exactly. Councilmember Cowden: We are just basically "shouting" them the two hundred fifty thousand dollars ($250,000), so that is a lot cheaper than building an apartment for them to rent. Because it is a revolving fund, you both are getting a CDBG grant, but it works out and it is a lot cheaper than building an apartment to rent. If we did not have willing sellers to do this with us, we would not be able to pull this off. Ms. Barros: Yes, and I want to go back to the CDBG grant, this particular program, the Home Purchase Program, when I first started, we requested a grant for about three hundred thousand dollars ($300,000)to start this type of program or fund this program. All of the money is revolving, so we are buying, and we are reselling and we are getting homebuyer loan repayments, which are all going in a separate designated CDBG Revolving Loan fund pot. It may be sort of slow, but our goal is for every year to purchase one (1) home that is out in the market and be able to resell it, so there is a low- to moderate-income family who can achieve homeownership here on Kaua`i. The property is leasehold, so it is owned by the County and we have the first right to buy back. We continually have one (1) home a year and are seeing a local family have homeownership. Councilmember Cowden: How long will it be before it goes on the market if we approve this? Ms. Barros: The process is to purchase the home. We invest money if there are any safety issues with the home, old electrical, etcetera. We will take care of that, so it is not left for the family to take care of the larger ticket items, and then we go out and send out a flyer to everyone on the Home-Buyer Wait List. They have x amount of time to respond to us with an interest in the property. At that point we gather all of that and give them a timeframe to provide income verification, just to be sure they are still eligible to purchase the home at eighty percent (80%) and below. From there, we use our compliance officer. We have a team that is part of the selection process. At that point, we verify income eligibility and then we start with the one who has the lowest homebuyer number and work from there. We may have a pot of twenty- five (25) people who are interested in the property, and maybe not all will turn in their COUNCIL MEETING 21 APRIL 24, 2024 income verifications, but we will work with those who do. The lowest number is what we work from, income verified. Council Chair Rapozo: Councilmember DeCosta. Councilmember DeCosta: I appreciate what you folks do, the intent is great. I just have quite a bit of critical numbers I am trying to run in my head. I am looking at this, and you made a really good point about how they would buy it for five hundred thousand dollars ($500,000), and the County would pay seven hundred seventy-five thousand dollars ($775,000), so right from the start we put in two hundred seventy-five thousand dollars ($275,000) into this family. Now, that family is at eighty percent (80%) AMI or lower. At eighty percent (80%) AMI, that family cannot borrow five hundred thousand dollars ($500,000), their income does not match. That means that their mortgage will be much cheaper so they can afford to pay it. Do we kick in the extra mortgage payment? How would a bank let this family borrow money, when the bank keeps the home as collateral? When we buy in the private sector and cannot make a payment, the bank can take our house. Would the County take back the house from this family who cannot make the payment? I want to know how the number pencils out. When we built `Ele`ele Nani, currently, the Kaua`i Habitat for Humanity does a two-hundred-thousand-dollar or two-hundred-fifty-thousand-dollar home and those people are in the eighty percent (80%) AMI, and that is all they can qualify for. I am just running the numbers. What if we took this seven hundred seventy-five thousand dollars ($775,000) and gave it to the Kaua`i Habitat for Humanity? Could they build three (3) houses for our families? I am just looking at the picture, help me understand. Mr. Duncan: That is a good question. As the market continues to increase and get higher every year, it is hard to chew spending that much money for one (1) house. Like Councilmember Cowden mentioned, we get money back with the resale, but I think we are constrained by some of the CDBG requirements as far as what we can actually use the money towards. I know we can purchase new homes, we can loan that money, and we can put it towards projects in low to moderate areas. Ms. Barros: I would like to add to that. CDBG has a lot of requirements on how the moneys can be spent. It cannot be spent on new housing, so just as an example, the Kaua`i Habitat for Humanity, CDBG cannot fund new housing, so we look at other ways, the regular CDBG grant funds can...the Housing Agency tries to layer and figure out how all of these federal programs and grants funds can be invested into a property. Going back to CDBG, the Kaua`i Habitat for Humanity, because CDBG cannot be invested into new housing, we look at infrastructure, so CDBG can be used for infrastructure. For `Ele`ele Iluna Affordable Housing Project, CDBG funds were used to improve the sewer system, the water line, and even the turn into the subdivision, so that is how we use CDBG for that. HOME Investment Partnerships Program (HOME) on the other hand, we can use those federal funds to a larger housing project, and so that is what we do. For CDBG Revolving Loan funds, aside from the grant funds, because we are just revolving these funds, this is what we choose to do, to be able to buy one (1) home at a time and see one (1) family in a home, hopefully every year. Councilmember DeCosta: Thank you. COUNCIL MEETING 22 APRIL 24, 2024 Council Chair Rapozo: I have a follow-up on the eighty percent (80%). What happens...because he makes a good point, for someone in the eighty percent (80%)—what is the maximum for eighty percent (80%) AMI for a leasehold purchase? Mr. Duncan: I do not have that with me. We do have that available, we just updated the numbers. Council Chair Rapozo: Is it capable with what we will be asking for this place? It seems high. Mr. Duncan: Hard to say, but I believe so. I believe it is in that range. Council Chair Rapozo: If it is not, what happens? What if you cannot find a qualified buyer in the eighty percent (80%) AMI list, because I think CDBG requires that, correct? Ms. Barros: Yes. Council Chair Rapozo: What will happen to the house? Does it sit vacant? Ms. Barros: That has never happened. We work with different banks. There are certain banks that will work with our Home-Buyer List participants. Participants who are on the Home-Buyer List have to go through the Home-Buyer education and counseling, so they are already preparing themselves to lower their debt, if possible set aside funds for downpayment. They could also be gifted downpayment... Councilmember Cowden: I have a follow-up. Council Chair Rapozo: Can we let them finish, first? Go ahead. Ms. Barros: We have been able to see that happen, participants get financing from... Council Chair Rapozo: I am just trying to think what the...you know when you look at the chart and it tells you what the rentals or what the purchase is, I am just trying to see with an eighty percent (80%) AMI, I find it hard that they would be able to qualify for a five-hundred-thousand-dollar loan. Councilmember Cowden: Can I follow-up? Council Chair Rapozo: Go ahead. Councilmember Cowden: Just for clarification. When people are in the Home-Buyer Program, they get requalified for a loan and for an amount. If someone is qualified for three hundred seventy-five thousand dollars ($375,000), that is where they are at on the list, and so if that amount does not work, they would not be called in, but COUNCIL MEETING 23 APRIL 24, 2024 it is not like there is a flat rate that we resell the house for. It is adapted to who it becomes the choice for, right? We pick them according to...if they are in that range, but they all have to get prequalified in the Home-Buyer List. Ms. Barros: Yes. Councilmember Cowden: So, they are not going to get the opportunity unless they can handle. That is what the Home-Buyer Readiness Program is about. This is one (1) little pot of money, it is not General Fund money, and it is a separate little account that you have worked on, you do so much, and you made a difference... Councilmember Kagawa: Is there a question or discussion? Councilmember Cowden: Yes, I am asking, do I understand that correct? Councilmember Kagawa: Because I have a question. Ms. Barros: Yes. Councilmember Cowden: That is what it is, correct? Ms. Barros: Yes. Mr. Duncan: You are correct, yes. Council Chair Rapozo: Councilmember Kagawa. Councilmember Kagawa: How many are eighty percent (80%) AMI and under on the list? Mr. Duncan: We have six hundred thirty (630). Councilmember Kagawa: About six hundred thirty (630) that are active that are at eighty percent (80%) or below? Ms. Barros: At the time of them getting their certificate. Councilmember Kagawa: Right now, about six hundred thirty (630). Ms. Barros: Yes. Councilmember Kagawa: Wow. I am concerned, similar to what Councilmember DeCosta brought up, I do not know if we should "shoot" for something a little better. If I look at the market value, it is seven hundred seventy-two thousand dollars ($772,000) based on the County's tax map key (TMK). Mr. Duncan: Yes. COUNCIL MEETING 24 APRIL 24, 2024 Councilmember Kagawa: So, it is not like we are getting a steal, right? Because the County tends to be quite high on their...because the County uses ad valorem market sales in the areas to keep raising the market value, because the County wants more money all the time. If it is seven hundred seventy-five thousand dollars ($775,000) minus seven hundred seventy-two thousand dollars ($772,000), and you can disagree Councilmember Cowden, but it is my turn right now...it equates to three thousand dollars ($3,000). I do not feel like writing a thank-you letter to the seller. Am I missing something? Seriously, I feel like our County...when it is nine thousand(9,000) square feet, yes, sales are ridiculous, but that is high to me. Ms. Barros: Last year, we did not purchase a home because of the prices. We could not find anything, barely eight hundred thousand dollars ($800,000), everything was nine hundred thousand dollars ($900,000), and we did not purchase a home because of that. As we see some of the homes come down and this one...the other goal that we look at when we are purchasing is where are we buying. We try to buy different places on the island, so we will buy Waimea, and then buy something in Kapa`a. I do not know that we bought a house in Koloa for many years now and seeing something with that price in the area of Koloa, close to schools and shopping, etcetera, we wanted to purchase in that area. Councilmember Kagawa: I appreciate the work and opportunity in Koloa, but if we have six hundred thirty (630) on the eighty percent (80%) AMI and under that we are trying to help, and if we are going to spend almost one million dollars ($1,000,000) for one (1), I do not know how we going get to the six hundred twenty-nine (629). I am assuming that list will just get higher. I feel like we going to fall farther and farther behind for helping the majority of people rather than one (1) family. Councilmember Kuali`i: This has been a successful program for the County over the years? Ms. Barros: Yes. Councilmember Kuali`i: How many years has the County been doing this? Ms. Barros: Fifteen (15) years. Councilmember Kuali`i: Koa,when you said something about thirty (30) to thirty-five (35) homes, what did you mean? Mr. Duncan: That is about how many we have in the pool of the Homebuyer Program that have taken advantage... Councilmember Kuali`i: That we have purchased one-by-one and families are now in these homes and what they pay goes into the Revolving Fund and it allows us to build up, hopefully to one million dollars ($1,000,000) every year, so we can afford something every year? Ms. Barros: Yes. COUNCIL MEETING 25 APRIL 24, 2024 Councilmember Kuali`i: The program is possible because of CDBG funds, specifically for that purpose? Ms. Barros: Correct. Councilmember Kuali`i: Therefore, if we wanted money used elsewhere, we would have to find other money? This money cannot be used for that. Ms. Barros: Yes. Councilmember Kuali`i: I think this is wonderful and I am glad we are taking advantage of it. I bet it has been in place for more than fifteen (15) years, but at least we started fifteen (15) years ago. I think if we are successful, we could get even more money from CDBG, right, but it takes a lot of money, even to buy that second house? Ms. Barros: Yes. Council Chair Rapozo: The prior purchases, have we purchased something similar to this, at that level, at that rate, at that cost of seven hundred seventy-five thousand dollars ($775,000)? Ms. Barros: This has been the first one that has been at that amount. Council Chair Rapozo: I am not questioning the program. The program works if you are buying the house at four hundred thousand dollars ($400,000) or at five hundred thousand dollars ($500,000), and then you are lease-holding it, and then eighty percent (80%) and below can qualify. We are not talking about that today. We are talking about seven hundred seventy-five thousand dollars ($775,000), which we are going to have to get someone from the eighty percent (80%) AMI or below to go to a bank or credit union and qualify. That is my concern. Yes, it is CDBG money, but I do not want that house to sit vacant. The fund is not really revolving, because you are only getting that money of the sale of the leasehold, correct? You are not generating a lease payment every month. Ms. Barros: There is a small amount for a ground lease fee. Council Chair Rapozo: Right. Ms. Barros: But also CDBG is Homebuyer Loan Program, the loan repayments, so we also have a Homebuyer Loan Program, if it was funded with CDBG funds going to that revolving loan fund...and I did also want to mention that I think is important, which is part of the program that is the federal requirement that the United States Department of Housing and Urban Development (HUD) puts on us for timeliness. We cannot have more than one and one-half times of our annual allocation in our line of credit and HUD does a test for us. If we do not pass the test, if we have more than one and one-half times, we are at-risk of losing funds, so every year we are struggling to hurry up and spend the money, meet the test, and resell, and get COUNCIL MEETING 26 APRIL 24, 2024 moneys back. Back in 2014, HUD used to test us on a two-tier level, so they would test us only on the grant funds and then they would test us on the revolving loan funds separately. If the County passes the first tier test on the grant funds, then we were good, but in 2014, they changed that and they included that revolving loan funds as part of the overall pot, so now we are tasked with what we have in our revolving loan funds as, I see, as the Housing's program and we have been successfully able to revolve it. Now, if we do not spend it at the one-year annual test, then we are at risk of losing funds, but is a federal requirement and that is something we have to address every year. Council Chair Rapozo: But if we cannot put a family in that home, then it is a waste of the money. That is my concern. Ms. Barros: Yes. Council Chair Rapozo: I know there is a formula, but I am not prepared to vote right now, and I would like to see if we can move this later on the agenda to get that chart. I want to see if eighty percent (80%)AMI and below can qualify for a three-hundred-thousand-dollar mortgage, I do not know what it is, I am just saying, then how do you (inaudible .281 01:01:45)? Mr. Duncan: For a three-bedroom eighty percent (80%) AMI at a six percent (6%) interest rate, I am not sure what the rates are right now, is about three hundred seventy thousand dollars ($370,000). Council Chair Rapozo: That is exactly my point. How are we going to get the family in that house? That is the maximum you can sell the house. Mr. Duncan: I think that is the maximum that we can sell, but I would have to go back. Council Chair Rapozo: Yes, that is what the AMI is for, that is how you determine what your sales or your rents will be using that chart. That is my concern. I do not know what the leasehold sale price would be. I do not know what the formula looks like, but at five hundred thousand dollars ($500,000), no one on that list will qualify. Correct me if I am wrong, because I only know what I know, and there is a lot that I do not. I just do not want to see us, "We have to buy the house or else we are going to lose the money." I also do not want to spend the money and not be able to put a family in a house, because it may as well go to another place, someone else who can. I do not know. I am just a little concerned, that price is high. Councilmember Carvalho. Councilmember Carvalho: Overall, the CDBG program is successful, but the question, depends on the location of the island, because this is a first time in Koloa, you were saying, and other parts as well, I am trying to recall, but we did a good cross- section of opportunities islandwide. Ms. Barros: Yes. Councilmember Carvalho: This is the first time in Koloa? COUNCIL MEETING 27 APRIL 24, 2024 Ms. Barros: Yes. Councilmember Carvalho: As we continue because the CDBG program has been very successful, but at the same time assuming more numbers and understanding for today's situation, we have to look at more opportunities. Councilmember Cowden: I have a question. Council Chair Rapozo: Go ahead. Councilmember Cowden: If we move this out for two (2) weeks, four (4) weeks to have this acceptance, is it your experience that a house at this level in Koloa would probably sell within a week or two or a month? I mean, it would sell fast. Ms. Barros: Yes. Councilmember Cowden: Is it correct, I am remembering the ones that have come up in the past before and they sell before we can actually make the purchase, we get like a one-time opportunity...you have to say "yes," not just nod your head, so it goes on the minutes. Ms. Barros: Yes. Councilmember Cowden: When we push it out, we lose that opportunity? Ms. Barros: We could. Councilmember Cowden: But maybe they are friendly enough that they are willing to wait. Council Chair Rapozo: I am just saying seven hundred seventy-five thousand dollars ($775,000), and if we sell it at three hundred sixty thousand dollars ($360,000), the subsidy is four hundred fifteen thousand dollars ($415,000). That is what the subsidy would be to one (1) family on this island. Councilmember DeCosta. Councilmember DeCosta: Gosh, I want to bow and tell you folks "thank you," for the fifteen (15) years you have done this. Our job up here is to be fiscally responsible and the only reason why this program was successful is because we were buying homes around the price that our eighty percent (80%) AMI people can qualify for. It would not be successful if we would have prices like this, where we would have to put in three hundred thousand dollars ($300,000) or four hundred thousand dollars ($400,000) per family. That revolving fund would never work and would never be successful. I feel like my dad's and my mom's checkbook, my dad would spend and say, "Hey, we do not have this in the checkbook," I feel like we do not have this in our checkbook. This is a Koloa home that is just around three quarters of one million dollars and we going put one (1) eighty percent (80%) AMI family in this home. I do not understand about the CDBG grant and the funding, but my brain tells me a lot of local families have a hard time with the down payment. Would it be wiser to divide this pot COUNCIL MEETING 28 APRIL 24, 2024 of money up by fifteen (15) families and give each of them forty thousand dollars ($40,000) to put a down payment or fifty thousand dollars ($50,000)? I am thinking how we can stretch the County's money. I am not saying that the County would not love to have a home in Koloa but remember that one (1) home will go to one (1) family, and we are going to subsidize four hundred fifteen thousand dollars ($415,000). We have multiple families in K6loa, I believe with a cesspool conversion problem that could benefit from each of them receiving thirty thousand dollars ($30,000) to fix that problem and remain in their homes. I am sorry to be the "Debbie Downer" but it is a lot to think about. Council Chair Rapozo: Are there any further questions for the Housing Agency? What is the Housing Agency's time, how much time do you have for this? I am not prepared to vote today. Mr. Duncan: I think we would have to check with the seller and see what the process looks like on their end. They have not listed the property on the market, so I do not know if they are in a rush to sell, we would have to double check and see what the timing is for their needs. We could get you folks more information to reach a better informed decision. Councilmember Kuali`i: Chair, I think we should move as expeditiously as possible. If perhaps they need a few hours to get the information, why do we not give them the time? Council Chair Rapozo: I am okay with that. I am okay with moving it to the end of the agenda. I do not know what more questions... Councilmember Kuali`i: Just need to get numbers, right? Councilmember Kagawa: They gave us the numbers. Council Chair Rapozo: I think the number was three hundred sixteen thousand dollars ($316,000). Councilmember Kuali`i: I think there is something more. Councilmember Cowden: I have a question. Council Chair Rapozo: Go ahead. Councilmember Cowden: Just to check, are there houses available in `Ele`ele, Hanamd'ulu, houses that have been overlooked that we could be purchasing for four hundred thousand dollars ($400,000) or five hundred thousand dollars ($500,000) where it would work in a way that is comfortable for them? Are we looking at a seven hundred seventy-five thousand dollars ($775,000) house in KOloa, simply because we have not represented Koloa or is this the only one that is on the market on the island that seems like it could be applicable? COUNCIL MEETING 29 APRIL 24, 2024 Ms. Barros: We are constantly looking at homes, constantly going for inspections, we have looked at `Ele`ele, Hanapepe, I mean it is almost weekly that we get listings and ones that we are interested in that meet the requirements for purchasing not in the flood zone, not older than seventy-eight (78), those all have been in the eight hundred thousand dollars ($800,000) to nine hundred thousand dollars ($900,000) range. Councilmember Cowden: If I am understanding correctly, while this is a lot of money if we put up four hundred forty thousand dollars ($440,000) for this people, it is money we are likely to lose because we are not able to effectively fund it as HUD requires? Ms. Barros: Yes. Councilmember Cowden: Okay, thank you. Councilmember Kuali`i: In essence, is this a program where the County is actually subsidizing that house so that the family can afford it at the level that they afford it, and that we actually guarantee that it stays in affordability because we own the land under the house? When that family comes and goes, it will still stay in the County to hopefully another family off the list. But, whatever the numbers are, the family will...I cannot believe you would be pursuing something that would sit vacant. Like you said you have never had an issue, thirty-five (35) homes and maybe it happened once...that you even had to sell it, so the family stays in the home, this is like a life-changing thing, so it works for someone each time. Now, we may be living in a different world because of COVID but we are estill trying to help one (1) family. If we had to do a bigger subsidy, it is all being absorbed by this revolving fund entity, right? You are not asking us for any General Fund money, you are trying to spend the CDBG money, so that you can get more CDBG money the following year. Whatever you end up with this family, whether the family can afford less and the County subsidy has to be more, it is working out within the program, correct? Ms. Barros: Correct. Councilmember Kuali`i: Therefore, you would not be before us trying to pursue a deal if you did not think you were not going to be able to help one (1) family out of six hundred thirty (630)? Ms. Barros: Yes, thank you. Councilmember Kuali`i: So, someone will qualify at the level they need to and if your subsidy needs to be greater, you will do that, right? Ms. Barros: Yes. Councilmember Kuali`i: Thank you. Council Chair Rapozo: Councilmember DeCosta. COUNCIL MEETING 30 APRIL 24, 2024 Councilmember DeCosta: I am lost now, because of the point Councilmember Kuali`i brought up. So, we are going to subsidize four hundred something thousand dollars... Councilmember Kuali`i: They are, with their CDBG moneys. Councilmember DeCosta: They are, but how do you replace that money with the next purchase of the home, or the next CDBG grant money?How do we replace that four hundred forty thousand dollars ($440,000)?Who is responsible for paying back that money?Does the Housing Agency take the loss on that four hundred forty thousand dollars ($440,000)? Does the next homebuyer pay a little more per month to put the funding back? That money has to go someplace to be replaced, so how do we replace that four hundred forty thousand dollars ($440,000) from this Koloa home when we put one (1) lucky family that...I like helping families, but that one (1) family in, how do we replace the money? Mr. Duncan: Like you said, we would get the sale, the resale, that amount, say it is three hundred seventy-five thousand dollars ($375,000), that would go back into that bucket that Kerri was mentioning. She also mentioned earlier, we have CDBG loans that we have done in the past back fifteen (15) years ago. Councilmember DeCosta: Who pays back that loan? Mr. Duncan: These are for other... Councilmember DeCosta: Who pays back that loan amount per month? Ms. Barros: Participants. Mr. Duncan: Individuals. Other individuals who have a CDBG loan... Councilmember DeCosta: They are going to pay back a portion of the four hundred forty thousand dollars ($440,000)? Mr. Duncan: No, not originated to the four hundred forty thousand dollars ($440,000). Councilmember DeCosta: I want to know how we are going pay back the four hundred forty thousand dollars ($440,000), I am making it simple for you. How do we plan to pay that back? We do not, right? Council Chair Rapozo: It is a subsidy. Mr. Duncan: It is a subsidy. Councilmember DeCosta: No, I understand. It is what I am trying to say. It is our County money. COUNCIL MEETING 31 APRIL 24, 2024 Councilmember Kuali`i: Grant. Ms. Barros: Federal funds. CDBG federal funds from HUD. Councilmember DeCosta: That goes to you, the County, which is in your account, and then you folks are going to subsidize the four hundred forty thousand dollars ($440,000). The Housing Agency will subsidize it? Ms. Barros: The CDBG federal funds. Mr. Duncan: But that bucket continues to grow because of previous loans that we have made through the CDBG program, in the tune of about two hundred thousand dollars ($200,000) to two hundred fifty thousand dollars ($250,000) year in loan repayments or mortgages that we put into that bucket, so that continues to grow annually. Then, we have the resales when we sell that adds to that bucket. Council Chair Rapozo: So, you basically make this money...when this house sells down the road, ten (10) years down the road, the people resell it back, the County, you could recoup your money, only if the value went up significantly. It will always be a wash, right? Basically, right here with the three-hundred-seventy-five- scenario, the CDBG subsidy is four hundred thousand dollars ($400,000). Ms. Barros: Correct. Council Chair Rapozo: That is what this County is saying is acceptable to put a family in a home. That is what it is. That is what Councilmember Kuali`i just said, and that is true. Because if we do not use the CDBG money, we lose it. Councilmember Kuali`i: We are not trying to recoup the money, because every year we go back to CDBG and they give us more funding, because they want to at least help us do one (1) home per year, probably. Ms. Barros: But we have not asked for funding. We have been able to just use the pot, the revolving loan funds. Councilmember Kuali`i: But if we needed to we could? Ms. Barros: We could. Councilmember Kuali`i: If we wanted to grow the program to two (2) homes per year. Ms. Barros: We have not requested funding for this program from HUD... Councilmember Kuali`i: So, it is working. Council Chair Rapozo: Is the seven hundred seventy-five thousand dollars ($775,000) not new CDBG money? How much do we have in that pot? COUNCIL MEETING 32 APRIL 24, 2024 Ms. Barros: Currently, we have one million three hundred thousand dollars ($1,300,000). Council Chair Rapozo: Okay, got it. (Councilmember Kuali i was noted as not present.) Councilmember DeCosta: I am missing the piece of the puzzle. The federal government gives us a grant. Is it grant money that they give us or is it money that we have to pay back? The CDBG funding, is it money that we have to pay back or is it grant money that we do not pay back? Ms. Barros: We have two (2) pots, essentially. CDBG has two (2) pots. One is grant funds that we get an annual allocation every year. Councilmember DeCosta: How much is that allocation? Ms. Barros: About seven hundred thousand dollars ($700,000). Councilmember DeCosta: Okay. Ms. Barros: And then we have a separate revolving loan fund pot, which is...we have not asked for grant funds for that for the last fifteen (15) years. We started, I believe, with four hundred thousand dollars ($400,000) asking for grant funds. We have been able to revolve funds for the last ten (10) to fifteen (15) years, not using grant funds, so this is revolving loan funds. We are issuing loans through our Homebuyer Loan Program, and we are acquiring and reselling homes through the HOME Purchase Program.Any resales from the leasehold program goes in there, any loan repayments, any ground lease fees go into the designated revolving loan fund pot, and this is how we purchase and get money back when we resell. Councilmember DeCosta: Did you folks get the seven hundred thousand dollars ($700,000) this year from the grant? Ms. Barros: Yes. Councilmember DeCosta: And all we have to kick in is seventy-five thousand dollars ($75,000) from your pot of money that you have in the other account? (Councilmember Kuali i was noted as present.) Ms. Barros: No, so the seven-hundred-thousand-dollar annual allocation is for community development projects. Councilmember DeCosta: Oh, so the entire lump sum has to come out of your account, then? COUNCIL MEETING 33 - APRIL 24, 2024 Ms. Barros: It will get issued to subrecipients who have applied and who have been awarded those funds, those are the separate grant funds, and what we are talking about for the home purchase program is revolving loan funds. Councilmember DeCosta: How much do they give us for the home purchase per year? Ms. Barros: Zero. Councilmember DeCosta: They give us zero for that? Ms. Barros: Yes. Councilmember DeCosta: As a County agency, we want to buy that house for that one (1) family out of your funding? Ms. Barros: Out of the revolving... Councilmember DeCosta: Because the grant funding goes to infrastructure and for other projects, not for buying a home? Ms. Barros: That is correct.The revolving loan funds are for the HOME Purchase Program and the Homebuyer Loan Program. Councilmember DeCosta: Okay. I wish you had been here for the entire song and dance, because we asked a lot of crucial questions. Council Chair Rapozo: I am sure he was watching, that is why he ran across the street. Councilmember Kagawa, did you have a question? Councilmember Kagawa: Would you say that at seven hundred seventy- five thousand dollars ($775,000) that it would not be able to go on the market and help house a local family that is working and looking for a home? If they listed it at seven hundred seventy-five thousand dollars ($775,000),would you say that it would be a good opportunity for other local families, not eighty percent (80%) AMI and below, but regular working families that are looking for a home, looking to remain on Kaua`i that it would be a good opportunity for them to buy a house off the market, without the County of Kaua`i Housing Agency getting involved? Ms. Barros: If the seller chooses to sell it on the market for seven hundred seventy-five thousand dollars ($775,000), and I think not. Councilmember Kagawa: If they do it themselves, they would rather sell it at the highest price? Ms. Barros: The seller wanted eight hundred seventy-five thousand dollars ($875,000). COUNCIL MEETING 34 APRIL 24, 2024 Councilmember Kagawa: Oh, so, he wanted eight hundred seventy-five thousand dollars ($875,000) without going on the market? Ms. Barros: Correct. Councilmember Kagawa: Normally, that is the way it is going. People are getting a lot more than...because even if you say eight hundred seventy-five thousand dollars ($875,000), someone might offer you one million dollars ($1,000,000). What are the other strategies for using CDBG funds besides buying houses that we feel are good deals in areas in need? What are the other methods of effectively helping affordable housing for Kaua`i people? Ms. Barros: The revolving loan fund is designated for the Homebuyer Loan Program and the HOME Purchase Program, so those are the two (2) programs that HUD has approved that we could use revolving loan funds for. With prior approval from HUD, we could say we had a project using regular grant funds that were awarded and needed extra funding because some safety issue or something came up, with HUD's approval we could ask to use some of our revolving loan funds to add to an existing open project in our action plan, we could. Those are the only examples of where we could use the revolving loan fund. Councilmember Kagawa: Is there a federal adjustment calculation that goes into our use of CDBG home purchase or HOME Loan programs in comparison to other states? Council Chair Rapozo just came back from Texas and he said in Austin, you can buy a three-bedroom for two hundred eighty-nine thousand dollars ($289,000). That would be perfect for us for eighty percent (80%)AMI and below. A beautiful, huge house. Is there an adjustment, because if you are going dollar-for-dollar, how can our deal at seven hundred seventy-five thousand dollars ($775,000), be three or four times the amount of the house Council Chair Rapozo just looked at in Texas, with the federal government acknowledging no difference and saying "dollar-for-dollar Hawaii, you meet our deadlines or we are going to cut your programs," when our prices are astronomical compared to Austin? Council Chair Rapozo: To many places. ADAM P. ROVERSI, Housing Director: I am going to jump in. Adam Roversi, Housing Director. Councilmember Kagawa: Is there a federal adjustment? Mr. Roversi: No. To be blunt, no. The CDBG program has a nationwide limit based on eighty percent (80%) AMI, which means two (2) things. One, we can provide assistance to our programs or make a home available to someone who makes eighty percent (80%) AMI or below, and it also sets the cap of what we can resell the home for. They do not care that eighty percent (80%)AMI on Kaua`i is one (1) thing and the house cost one million dollars ($1,000,000) compared to Idaho. They have a national standard for the country. COUNCIL MEETING 35 APRIL 24, 2024 Councilmember Kagawa: I hope you folks understand why Kauai...we are asking some serious questions right now on what may seem a"slam dunk" to others. Mr. Roversi: I want to also... Councilmember Kagawa: ...not a slam dunk for me, seriously. Mr. Roversi: ...respond to your prior question. If we do not use these funds, we have to give them back. Either we use it or we lose it. We can use it for two (2) things. We can give out loans, or we can purchase homes. We have been purchasing homes for decades now under this program. Council Chair Rapozo: But, Adam, not at seven hundred seventy-five thousand dollars ($775,000). Councilmember Kagawa: Decades ago, it was not at this price, Adam. That is what I am saying—slam dunk, maybe for some, but not for all. Mr. Roversi: Well, the last time I looked, there were five (5) houses on Kauai for under eight hundred thousand dollars ($800,000) and several of them were the Department of Hawaiian Home Lands (DHHL) leaseholds. Five (5) years ago when homes were actually five hundred thousand dollars ($500,000), it was easier for us in this program to purchase homes, fix them up, resell them to qualified Kauai households. It is much more difficult now obviously, for us to find a home to purchase. We do not like buying homes for seven hundred seventy-five thousand dollars ($775,000). It uses up the entire annual budget of the Homebuyer Program for one (1) home, but if we are not going to use the money, we are just going to give the money back to the federal government. We only have enough money, maybe, to buy one (1) home per year. Us being involved in the market in buying a single home, we are not taking away, sucking the air out of the room for local Kauai homebuyers. We are going to buy one (1) home, we are going to fix it up, and we are going to resell it at a dramatically reduced price to a qualified Kauai family who is going to get a house for three hundred eighty thousand dollars ($380,000) or something like that, because that is the CDBG limit. If we buy this house, we are going to resell it to a Kauai family, after we put money into it to fix it up, and they will get an affordable home that they otherwise never would have done. The household, who is going to buy this house from us, cannot buy a seven-hundred-seventy-five-thousand-dollar house, this is the only way they are going to get into a house, through this sort of program. Councilmember Kagawa: And everyone else will get nothing under this, so that is what sucks for me. Council Chair Rapozo: Councilmember DeCosta. Councilmember DeCosta: Adam,you made a point about, "The money has to be used for purchasing a home and/or a loan." Mr. Roversi: Correct. COUNCIL MEETING 36 APRIL 24, 2024 Councilmember DeCosta: Correct. That loan would go to that eighty percent (80%) AMI family to buy something out there in the market? Mr. Roversi: Correct,which basically means they are buying nothing, because an eighty percent (80%) AMI family...to answer your question, where might we use those loan funds? We have occasionally in the past purchased homes using County funds, not CDBG funds. If we purchase homes using County funds, we have not done it in a long time, because houses have been so expensive, but this happened in the past. If we buy a home using our Housing Development Revolving Fund, which is one of the authorized uses of that fund, we could then sell the home to someone and we could provide a loan through the CDBG program. Those are the sort of situations where the CDBG funds are used as a home loan. Councilmember DeCosta: Adam, the program has been successful because we have purchased a home and sold the home to the eighty percent (80%) AMI pretty close to what the price was, give or take fifty thousand dollars ($50,000) to one hundred thousand dollars ($100,000). Is that why it was successful? Because you would buy a home, then sell it, they would qualify for that home. Is that correct? You just told me that last couple of years, the prices have gone really high. Mr. Roversi: Sure, I think the gap between the eighty percent (80%) AMI household and market prices... Councilmember DeCosta: So, maybe this program has"gapped out," right now if you ask me, because it was working when you can buy and sell and we have to subsidize between fifty thousand dollars ($50,000) and one hundred thousand dollars ($100,000). Now, we are going to subsidize four hundred thousand dollars ($400,000), so within two (2) years, your account is going be zero (0) and you folks will not be able to buy anything. In two (2)years, eight hundred thousand dollars ($800,000) is going be out of your account, if you buy two (2) homes at seven hundred seventy-five thousand dollars ($775,000). Mr. Roversi: The success of the program is putting qualified people... Councilmember DeCosta: I understand the success of everything, but we still need to write the check, and you still have to pay money for that home... Mr. Roversi: Federal funds that we either need to use or lose, so if we do not use it, we are going to give it back to the federal government. Council Chair Rapozo: Councilmember Cowden. Councilmember Cowden: I believe you said we have roughly six hundred (600) people on the list at that eighty percent (80%) AMI? Mr. Duncan: Six hundred thirty (630) people on our list. COUNCIL MEETING 37 APRIL 24, 2024 Councilmember Cowden: When one (1) family is lucky enough to get stellar location in a beautiful town, simple home, those other six hundred twenty-nine (629) are still on the list for Lima Ola, for Waimea 400, Kilauea. It is not like they rest on the list for this one (1) house or this one (1) program, this is just one (1) tiny little cul-de-sac on our whole strategy where every once in a while we are able to help people. Am I understanding that right? Mr. Roversi: Exactly. Councilmember Cowden: Okay. So, we are not"shunning"the rest of the list. It is just that someone is lucky enough to end up on Po`ipu Road, perhaps across the street from their kid's school. Mr. Roversi: And we will have another home for sale in Kilauea in the near future, that someone from that list will be able to buy, that was part of our repurchase program. It is our right of first refusal to buyback a home, so we are going to have another home for sale for people on the list, not too long from now. Council Chair Rapozo: Councilmember Carvalho. Councilmember Carvalho: The CDBG program has its limitations, they have what they offer on the table. Is there flexibility in...because I am trying to recall that...and if there are other options, we have to look at other pots of funding to address what we are talking about, instead of what is on the table?As far as the program itself, is there flexibility with the funding? I remember on the government side, federal funds are very limited in flexibility. I am just asking. Mr. Roversi: Like Kerri mentioned, if you recall the Council approved the annual CDBG Resolution maybe three (3) weeks ago, that outlined the projects that would receive CDBG grant funds this year. Councilmember Carvalho: Right. Mr. Roversi: As Kerri mentioned, the only thing we are allowed to use the CDBG money for are those projects approved in that Resolution, and that is usually funded by the annual grant allotment and the Homebuyer Loan Program or the HOME Purchase Program, that is what we can do. We can repurpose, as Kerri mentioned, some of our homebuyer loan funds and our HOME Purchase funds into those approved grants. It is a fairly lengthy process, we had to amend our Annual Action Plan, we had to send our request off to HUD, wait for them to approve that, they most likely would, if we did that. If we wanted to put more money into one (1) of the projects on the list. It is not a simple phone call... Council Chair Rapozo: Right, you mentioned that we have not applied for CDBG in a while? Ms. Barros: For funding of the HOME Purchase Program and for the Homebuyer Loan Program. COUNCIL MEETING 38 APRIL 24, 2024 Council Chair Rapozo: Why have we not done that? Ms. Barros: Because we have been able to revolve the funds. Council Chair Rapozo: But we could do more, right, with the grant funding? Right? Councilmember Kuali`i: If more were available. Ms. Barros: If more grant funds were available? Council Chair Rapozo: Yes, you said there are two (2)programs, right, the Revolving Fund and the grant fund, which is available, but we have not applied in a long time. Ms. Barros: For the HOME Purchase Program funding. Council Chair Rapozo: Right. Ms. Barros: And the Homebuyer Loan funding, correct. Council Chair Rapozo: And I guess my question was why not? Because you said we had about one million two hundred thousand dollars ($1,200,000), this will take out seven hundred seventy-five thousand dollars ($775,000), and then put back the three hundred seventy-five thousand dollars ($375,000), but we could get more if we had...what is stopping us from applying for more? Is it the fact that we do not have inventory that we could...we would be heavily subsidizing these purchases if... Ms. Barros: If I am understanding you correctly, the annual allocation has always been through an application process and going to the community for projects and the needs in the community. Council Chair Rapozo: Yes. Ms. Barros: And then the revolving loan fund is just a separate pot that is revolving funds that... Council Chair Rapozo: Okay, so you have decided just to use the revolving fund, and then all the other money goes to the community? Ms. Barros: Correct. Council Chair Rapozo: Are there any further questions for the Housing Agency? Councilmember Kuali`i: Adam, I appreciated it when you said that the goal is to help put families in homes, and so in essence HUD evaluates our success of the program by the number of families we actually put in homes. COUNCIL MEETING 39 APRIL 24, 2024 Mr. Roversi: HUD for better or worse judges our success by how fast we spend money. They unfortunately do not measure how many people go into homes. If we end up hitting a certain date in the year, and we have too much money in our account, they "ding" us for being untimely, regardless of the good that we are doing for the community or not. They simply want the money to be spent. Councilmember Kuali`i: Kerni was explaining a little bit about how that works, the measurement, but in this new reality of much higher prices, if we diminish this particular fund, but because the program is having to give larger subsidies to help those families, we are able to go back and get more funding just for this program. Mr. Roversi: That is what I was asking Kerri about off the record. There is not a separate application program to HUD to get specific Homebuyer Loan funds separate from our annual grant allocation. There is a process where we, and Kerni chime in if I am misstating this, there are processes by which we request approval from HUD to allocate portions of the money we are already getting, the seven hundred something thousand dollars each year to our Homebuyer Program, is that right? Ms. Barros: Yes. Mr. Roversi: So, we would be asking HUD to forgo a portion of our usual project grants to the community groups and asking them to let us put a little bit of that money away into this Homebuyer Program, but that would mean less money to our grant recipients because our pool,of money of roughly seven hundred thousand dollars ($700,000), that is fixed, there is not a process to ask for more money from HUD under CDBG just for the Homebuyer Purchase Program. The moneys are flowing into that program, and we have been having more inflow into that program, because of past loans that we have given out, it is slowing down a little bit now, but when the interest rates were really low, a lot of people who had gotten CDBG loans in the past were paying off their loans. What is the annual date by which we have to test our expenditures? Ms. Barros: May 1st. Council Chair Rapozo, the presiding officer, relinquished Chairmanship to Councilmember Kuali`i. (Council Chair Rapozo was noted as not present.) Mr. Roversi: HUD measures our success, May 1st, how much money do you have in the bank on May 1st, are you meeting your targets, so if someone pays off their loan on April 15th, we are going to get judged on May 1st. We have gotten a couple of weeks to deal with...HUD does not care, really, they just want us to spend the money we just go. We are all in this race to try to meet this arbitrary HUD deadline to expend these funds on a very narrow pool of allowable programs. Councilmember Kuali`i: So basically you are saying the pool of money for CDBG is established by a formula by the federal grant, so it's x amount and then how we prioritize it for the different programs is our decision? COUNCIL MEETING 40 APRIL 24, 2024 Mr. Roversi: That is set up by an action plan that we submit for approval. Councilmember Kuali`i: And we are not able to go back to CDBG and say, "Because of these circumstances beyond our control, the only way we can continue to be successful in our buyback program and getting one (1) family per year, that we have been trying to do, is to increase that, so can you increase the pool?" They have to figure out a different way to measure it in order for us to get a larger pool? Mr. Roversi: I do not believe there is a way to get a larger pool because it is a formula allocation based on population. Councilmember Kuali`i: Okay. Mr. Roversi: It is similar to the way our Section 8 Rental Assistance Program operates. Councilmember Kuali`i: Right. Mr. Roversi: You get x number of dollars based on your population and statutory rules that were set decades ago, there is no option to get more money. It is "this is what you get every year, do your best to use it." Councilmember Kuali`i: Okay. Councilmember DeCosta. Councilmember DeCosta: Adam, the seven hundred thousand dollars ($700,000) allocated per year from the federal government, it does not matter what the assessment value across the United States are, that is all each county gets? Is that correct? Mr. Roversi: There is a formula that determines it. Kerri might be able to say more about it. Ms. Barros: Out of that entire pot, CDBG funds that come to Hawaii, seventy percent (70%) is for the City & County of Honolulu, the remaining thirty percent (30%), it is split between Hawai`i Island, Maui County, and the County of Kaua`i based on population. Councilmember DeCosta: I understand that. The pot that you got,Adam, can only be used for purchasing the house, you cannot put that pot into another area of... (Council Chair Rapozo was noted as present.) Councilmember DeCosta: ...affordable housing within your agency, or are we able to do that? Mr. Roversi: That pot of money that we get annually each year goes to the grants that we give out, that the County Council approved several COUNCIL MEETING 41 APRIL 24, 2024 weeks ago. The seven hundred thousand dollars ($700,000) that we received from HUD this year is going to Kaua`i non-profit groups. That has nothing to do with the moneys that we are using for this home purchase. Councilmember DeCosta: I know that, but the money you would use to purchase a new home in the future under this program would come from that pot from the government, correct? I am just trying to find out if you can use this funding for those other non-profit groups like Habitat or whoever else is building affordable homes. Can we use that money in another area or is this strictly for the buyback program? Mr. Roversi: Strictly speaking, we could amend our Action Plan to delete our home purchase program, if we wanted to, as a matter of policy, and tell HUD that we are not going to buy homes anymore with CDBG money, and that we want all of our income to flow, and you tell me if I am misspeaking, you want all of our program income, the revolving fund, to go into the annual projects. Then, we would amend our Action Plan to say that. Councilmember DeCosta: Currently, is it feasible or more "bang for the buck" to put our funding into these projects instead of buying one (1) house per year? Mr. Roversi: Not right now, because we have a deadline coming up, by which HUD is going to judge our program, and we have a pool of money that needs to be expended by that deadline. This is one of the few things that can be feasibly done by that deadline, that provides benefit to the community. Councilmember DeCosta: Maybe moving forward, for next year, would that be an option to look at? Considering the housing market prices not going down, it will only escalate, and we probably will be buying homes for this price or even higher, so would it not be better in the future to put the funding in our affordable housing project funds? Mr. Roversi: That is a policy discussion we can certainly have and we would be offering, as opposed to doing one (1) or two (2) homes per year to Kaua`i families, at least under this program, we would be doing none, so that would be cut down and no real affordable homes that we are able to offer to Kaua`i families. Councilmember DeCosta: No, you said "do none," but then you still will have the money in other accounts to do other projects with the non-profit groups that are doing projects, right? Mr. Roversi: Sure, but that would not be to provide homes. Those funds cannot be used for home purchase, it cannot be used for... Councilmember DeCosta: What can those funds be for then? Mr. Roversi: Well, some of the projects that were approved just recently were like the Americans with Disabilities Act (ADA) approved next to the...what was the name of the entity in Kapa`a? COUNCIL MEETING 42 APRIL 24, 2024 Ms. Barros: Hale Ho`omalu was one. Councilmember Kuali`i returned Chairmanship duties to Council Chair Rapozo. Council Chair Rapozo: So, we would not be able to, going forward, I understand the deadline, but going forward if you take the seven...you said we have not purchased a home for a while, right? Ms. Barros: Last year we did not. Council Chair Rapozo: When was the last time we purchased a home? Ms. Barros: 2022 was our last home purchase. Council Chair Rapozo: So, two (2) years ago. Ms. Barros: Yes. Council Chair Rapozo: And we purchased with the revolving fund money? Ms. Barros: Correct. Council Chair Rapozo: Did we get"dinged"by HUD because we did not buy a house? Ms. Barros: No. Council Chair Rapozo: Let us just say this goes through and we purchase this house, resell the house, and next year, will you get another allocation from HUD, or are you just relying on what is in your revolving fund? Ms. Barros: We are just relying on what is in the revolving loan fund. Council Chair Rapozo: Got it. Mr. Roversi: Which fluctuates if John Doe pays off the loan, we do not know that is going to happen. We would get an infusion of money into the... Council Chair Rapozo: Yes. Mr. Roversi: ...we often cannot predict how that is going to... Council Chair Rapozo: They might refinance, right? If they refinance, then the CDBG loan gets paid off, and then you get the influx of cash that you can reuse to purchase another house. COUNCIL MEETING 43 APRIL 24, 2024 Mr. Roversi: That is one of the things that makes it difficult to have a long-term plan for using these moneys because it comes and goes like a roller coaster ride. Council Chair Rapozo: Are there any further questions? If not, thank you. Is there anyone in the audience wishing to testify? Mr. Matt. Mr. Bernabe: Matt Bernabe, for the record. I have a couple things to say and then I want to end with one (1) question. The first thing I want to say is, we are kind of in this situation today because the County decided to listen to the lobbyist from the real estate market as sugar left Kauai. That is why we have all these property taxes, because they have convinced us, and by the way that is the same plan that collapsed the economy in 2008. The realtors that sold the plan to the world, that collapsed in 2008 is the same model that we used to make our money through property tax. That is why we are dealing with such inflated property values now. That is one (1) thing I wanted to say. The other thing I wanted to say is that ironically, this is a "have your cake and eat it," moment, too, because I am a homeowner. My wife and I have discussed relocating because our granddaughter lives in the mainland, but we want to sell it to someone that we know or just to"top dollar." None of our friends could actually afford our property value, so we would lose three hundred thousand dollars ($300,000) to four hundred thousand dollars ($400,000) if I wanted to sell it to my friend, which I do. That is what this is right here. This is someone who wants to help, but they want to have their maximum profits or somewhat near the max profits. Obviously, this is going to continue on, so I am not going to"nitty-gritty"the arguments, because you folks are actually doing it very well. I am at the edge of my seat here, with high blood pressure. That question that I have not heard today, because I do believe if we purchase this house, because it is a use it or lose it situation, because the government loves to operate their finances that way. Let us say we acquire the home and yet no bank gives any of the six hundred and twenty (620) people or so on this list a loan. Now, we have an empty house. What happens then? Is the County going to get fined from HUD? I did not hear this particular question arise today. If we go with the sale, I heard you folks skirt around it, but I never heard the actual question of, if we do purchase the home and yet not a single member of the list qualifies, because it is too high, then what happens? That was never asked. I was waiting for that question. If there is no penalty, then buy the house. Right? If you are going to lose the money...no one wants to lose the money,but it is like Homeland Security money,just because they are giving it free, does not always mean it is good. Council Chair Rapozo: We did ask that question. The bottom line is that they will make it work, the price is going down to where it works, and then the County's subsidy goes up. It will get filled. Mr. Bernabe: So, guaranteed that someone on the list will qualify? Council Chair Rapozo: Yes. It is just that the sale price will have to be set up at a... COUNCIL MEETING 44 APRIL 24, 2024 Mr. Bernabe: For how much we need on our county end or not, yes. Council Chair Rapozo: Mr. Hart. Mr. Hart: For the record, Bruce Hart. This is not personal to anyone employed by HUD. I would like to say that, because I am not for this program. The concerns that Council Chair Rapozo, Councilmember DeCosta, and Councilmember Kagawa raised have been my concerns. Anyway you "toss the salad," the people of this County end up paying and I just do not think that the return is great enough. It is just not cost-effective. You get one (1) family into a house. I tell you, four hundred fifty thousand dollars ($450,000), why do you not just give it to me, and I will go out and find housing?At my age, I am going to use that money to pay the rent and I will be dead before I use it up. If I understand it correctly, you do not really own the house. They keep talking about the purchasing, this family is going to purchase, but you do not really. I am confused. I would have to work at HUD and this would have to be my job, and I would have to do this every day in order to understand all the complications and the ins and outs of this program, and how to get the money, where to use the money, and the restrictions of using the money. My position at this point is pretty much the same as Councilmember DeCosta's, which is going forward I think that these funds, I do not want to just give them up, but let us be real, these funds do not come out of thin air. Even if they come back to us from the federal government, it is redistribution of wealth. Someone is paying this money and then it is coming back, so that is a subsidy too. I wonder, as Councilmember Kagawa said that we are broke. How long can we keep doing these types of programs? Thank you. Council Chair Rapozo: Ms. Parker. Ms. Parker: Alice Parker, for the record. First of all, I am swimming in acronym soup, but what I see is the price of housing is just too high. I think we are going to be a leasehold country in the future. Thank you. Council Chair Rapozo: Is there anyone else? Councilmember Kagawa. There being no further testimony, the meeting was called back to order, and proceeded as follows: Councilmember Kagawa: I would like to thank Kerri and Koa because I think they did a good job identifying this property. I understand the concerns about if we do not take advantage of these opportunities, that we lose it. I just hope in the future the Council can be given some options on whether or not...today is April 24th and May 1st, the funds are gone. If something like this where you are subsidizing...we will be subsidizing with federal government...and I hate the term, "It is not County money, it is federal," but I look at tax money and I think from all levels, and the best way to look at it is if you had to make the decision for your struggling family. Is five hundred thousand dollars ($500,000) subsidy per house, when we have six hundred twenty (620) on the list for the eighty percent (80%) and under. Affordable housing needs on Kauai is like nine thousand (9,000) and I do not look only the most poor, but even just regular families who are working. They are working hard, they have kids, and I call that COUNCIL MEETING 45 APRIL 24, 2024 affordable housing too. If we gobble up with CDBG then they might sell it for one hundred thousand dollars ($100,000) more, but what about the regular working people that do not qualify for our county program. Do they not deserve one chance to buy a market house? I think about the situation like what Council Chair Rapozo said, a beautiful house in Austin is two hundred twenty-nine thousand dollars ($229,000). You can buy the house today. We do not have those opportunities on Kaua`i. Next year, they might tell us that one million dollars ($1,000,000) is a good deal and then CDBG's subsidy is going to be seven hundred thousand dollars ($700,000). Like what Councilmember DeCosta said, the money is going to be gone. This program will not work. It will not pencil out for Kaua`i, but they are doing what needs to be done or the money will be gone. I look at it, I hear that this is only one (1)piece, but at five hundred thousand dollars ($500,000), how are you going to help eight thousand nine hundred ninety-nine (8,999) more? You have to look for different methods, like we have to get bigger bang. We always talk about this affordable housing crisis. Unless we stop these same methods of being acceptable when we help one (1) family at five hundred thousand dollars ($500,000). That is unacceptable. If we are trying to solve the affordable housing crisis, you cannot say that one (1) is good. One (1) is failure to me. Adam, I hope you are going to have some better options for us in the future, otherwise this County will never catch up to the needs on Kaua`i. At five hundred thousand dollars ($500,000) a pop, to me is not...it is great job on their part with utilizing what going expire. If we do not utilize it, the money will expire and we are going to lose it, but it all matters. A lot of my concerns for all of you is just looking at the federal government and the direction we go. When I came into office in 2012, the deficit was twenty trillion dollars ($20,000,000,000,000), now, it is like thirty-five trillion dollars ($35,000,000,000,000). In twelve (12) years, it is scary. Where are our spending priorities? Is it taking care of other countries?Yes, things we need to do,but what about the people that are paying the tax?How come we have to struggle? We have to do things like this where we have to satisfy the CDBG folks, HUD, or they are going to frown upon us, when we have to use the federal money, one (1) family five hundred thousand dollars ($500,000), and we are supposed to say"thank you" and feel successful. I do not feel that way. Maybe others do, but I am sorry, I need to be realistic. Otherwise, I do not deserve to be here if I think like that, because I am not solving the affordable housing crisis subsidizing one (1) family for five hundred thousand dollars ($500,000). I will be voting yes, because I appreciate the work that Koa and Kerri did. Thank you. Council Chair Rapozo: Councilmember Cowden. Councilmember Cowden: I will be voting yes and I appreciate the work going through the Community Development Block Grant (CDBG). This is a little pocket, it is complicated, but it will provide permanent support and stability to a very blessed family. From the best I understand where we really put all our efforts and the Housing Agency has been the main (inaudible .281 :01:55:04) on the island, so when we look at what is planned for Lima Ola, Waimea 400, Kilauea, we have other little projects that we help with too. All those living units by the time you put in the infrastructure is costing us about five hundred thousand dollars ($500,000), so whether we rent to them or we subsidize a constrained ownership, we are still spending four hundred thousand dollars ($400,000) or five hundred thousand dollars ($500,000). I believe with the Kealaula, we spent about one hundred thousand dollars ($100,000)per unit. There are a few that we have been able to do better, but I agree that it is crazy COUNCIL MEETING 46 APRIL 24, 2024 expensive and I know when we had the first one that came before me, it was like five hundred fifty thousand dollars ($550,000) in Kapahi, I could not wrap my head around that at all. It was very difficult. At least I have been able to listen to a handful of these, I sort of get it, and crazy expensive—seven hundred seventy-five thousand dollars ($775,000), but better to put a family in it, then to throw it out the window because we cannot apply it somewhere else. I am thankful that we have it and I thank that family for being willing to give us the first chance. I am going to support it, but I am in agreement with everyone, it is unbelievable how much we have lost the buying power of the dollar, and that is,exactly what Councilmember Kagawa was talking about when he talks about the thirty-three trillion dollars ($33,000,000,000,000). That is why we have houses that are so expensive here. Council Chair Rapozo: Is there anyone else? Councilmember Kuali`i: I am happy to support this, I think this is important. I think this is just one (1) small program that has a proven successful track record utilizing federal dollars, CDBG dollars successfully. If we do not use those federal dollars, it will still be spent, it will just go to some other county doing their programs. To me the value is priceless and it is life-changing where each of those families, if we do one (1) family per year, it is priceless and life-changing. Any time you see a family achieve that lifetime goal of a place where they call home for the rest of their lives, and especially if it is a family that can remain on Kauai and not have to go away. If there are six hundred thirty (630) families waiting on the list, we are attacking it from a lot of different ways, but this is just one (1) program, with CDBG. I think it is important, even for that one (1) family each year. Thank you. Council Chair Rapozo: Councilmember Carvalho. Councilmember Carvalho: I totally support the CDBG program. I know if there are limitations, we would like to offer more opportunities, but there are restrictions within this pot of money, if you will. But, if we need to look at re-evaluating and changing, we can look at it like Adam said, but for this discussion, I would like to offer it to ten (10) families, not only one (1), but if it is one (1), it is one (1), based on this program. Knowing that we could lose the funds if we do not use it, so we have to make the decision collectively. I understand my fellow councilmembers, we are all on the same page, the more housing we can get, the better. In this particular discussion and my understanding of the CDBG program and the federal funding that is coming our way, we need to use it within that realm, and then we need to look at changing later, we can, maybe, how Adam was saying. Supportive, as we move forward, like I said I would like to offer opportunities to more families in all parts of our island. If it is one (1) home for now, then it is one (1) house that will go to one (1) family, who is off the list. On the Hawaiian homes, there was a list forever, my mom is on the list yet. If it is one (1), two (2), or five (5), then great. Let us move based upon the funding that is available. I support the request. Council Chair Rapozo: Councilmember DeCosta. Councilmember DeCosta: Very robust discussion. I feel like I must apologize one more time, because not only myself, but also Councilmember Kagawa, as COUNCIL MEETING 47 APRIL 24, 2024 well as Council Chair Rapozo have asked tough questions. We ask tough questions because we understand financing. We went to college for these numbers. Accountant, Councilmember Kagawa. Economics, myself. It does not pencil out right now at the market that are we in. It has been successful for the past fifteen (15) years. The County has multiple homes. I was hoping that one of you would tell me that when the homes are paid off, that we can use that as collateral to borrow money on those homes, but apparently the homebuyer becomes the owner of that home, therefore, he or she has that collateral now. What scares me is we all talk the story, "If we do not spend it, we are going to lose it, and might as well take a piece of the pie." That is why our federal government has thirty-five trillion dollars ($35,000,000,000,000) in the hole, because no one wants to be fiscally responsible, and it starts at the County-level. When we take our trips to Washington D.C. and we hear our Congress and Senators speak, everyone wants to grab the biggest piece of the pie and that is why our government is broke today, because we are spending money where we should not. Sorry. I am telling you folks some good economic figures that do not pencil out. I know that if you need to spend the money this year and we are going to buy that one (1) house, that is great, I am going to support this, but it is not going to happen in the next two (2) or three (3) years. I am thinking when I spoke to Mr. Roversi, he said we can change the language on where the funds would go, possibly these federal moneys could be put towards improving other areas of HUD recipients. I would like to look at that conversation. It is hard for me to go out to the community and say we supported one (1) family with a four-hundred-thousand- dollar subsidy. That is quite a bit of money. I think the years when this program was successful, I do not think we subsidized that much. I believe the price was much lower. Again, thank you Kerri, Adam, and Koa. I know you sit up here and take our constructive information, but when people pay their taxes, it is like they put all of their money into a checkbook. Do you know who writes the check? We do. When we do not understand how to balance the checkbook, it is easy to say, "I support this, let us go and sign the check," but the money we spend is our taxpayers out there, whether they come from Hawai`i, Texas, etcetera, they are part of our tax paying pot throughout the United States. Thank you. Council Chair Rapozo: Councilmember Kuali`i. Councilmember Kuali`i: Nine hundred sixty (960) square feet, walking distance from Koloa Elementary School, close to many jobs including hotels. I think that is really wonderful and I think if you can keep us posted when it happens and you find that family, they move in, we want to be part of the celebration. Thank you. Council Chair Rapozo: Is there anyone else? First of all, Kerri, thank you for educating us. It is refreshing when we have the Administration here and they can educate us.You have been with that program for a while now. Koa and Adam, thank you also. I was inclined to not support it earlier, but with the information you folks provided, I do not think it leaves us any choice. I am not happy about it, but it is what it is. This is a matter that we need to take to our congressional delegation and they have to equalize the formulas for Hawai`i, period. I got to tell you, as mentioned by Councilmember Kagawa, I was in Texas for almost two (2) weeks looking at homes, not to buy, but just because I was niele. It is like you are in a different time. I just could not believe some of the prices that I saw, and that our kids can go up there and work one (1) job and be able to afford a home. That is just like I was taken back thirty (30) COUNCIL MEETING 48 APRIL 24, 2024 years and placed in this place. It was just really hard to grasp. I have to be honest. Councilmember Kagawa was right, two hundred eighty-nine thousand dollars ($289,000) for a three-bedroom, two and one-half bathroom, one thousand eight hundred (1,800) square feet. That is the price of a downpayment over here. That is what you need for a down payment. How can that be? I wrote in my notes, "We will not have to worry about finding housing for locals in the future, because we are not going to have any locals left," but that is not a housing issue, that is our congressional issue. Congress has to understand and recognize that seven hundred seventy-five thousand dollars ($775,000) in Hawai`i is not even going to get one (1) house, when you can buy three (3) homes in the mainland for that. You can help so many more people. If you put in the eighty percent(80%)AMI and even at three hundred thousand dollars ($300,000), you have enough funds to help a lot of people, but that does not work here, and it is not fair. There is a council in Texas, Iowa, Idaho, somewhere right now having this discussion but they are looking at products that will come out of this discussion that will help several families, and we are over here adding CDBG subsidies to one (1) deal, because the market here is just out of control. It is frustrating. After today, I believe this with all my heart, that owner is probably going to get a call from a realtor saying, "Hey, I got someone here wanting to give you one million two hundred thousand dollars ($1,200,000) for that house." It is not listed, so no one knows about it, but after today, someone is going to give them a call. Are they from Kaua`i? Yes. Again, it leaves us no choice. I am a little frustrated because when we talk about seven hundred seventy-five thousand dollars ($775,000), we are buying one (1) house, one (1) house and it is going to help one (1) family. Councilmember Kuali`i is correct, it will change someone's life. If we can do it once per year, it would be great if we can do more. We had a discussion with the Administration months ago about Waipouli Courtyards, with eighty-two (82) units, at a price of two hundred sixty-eight thousand dollars ($268,000) per unit, and that was too high. It frustrates me when we look at today,we are talking seven hundred seventy-five thousand dollars ($775,000). Yes, it is CDBG money, but as Councilmember Kagawa said, we all pay federal tax. This is still our tax money. It is not County or State or...CDBG is a product of our federal tax dollars that we pay every year that goes into these funds and get allocated. We must do better. We must be creative with how we can do better and provide more of these opportunities for families. I think today, we really do not have a choice. We are either going to help one (1) family or we are not helping any. It is a tough one for me. We just do not have any other choices. The motion to approve C 2024-93 was then put, and carried by a vote of 6:0:1 (Councilmember Bulosan was excused). Council Chair Rapozo: The motion carried. With that, we have to take a caption break. Ten (10) minutes. There being no objections, the Council recessed at 11:28 a.m. for a caption break. The meeting was called back to order at 11:42 a.m., and proceeded as follows: Council Chair Rapozo: Next item, please. COUNCIL MEETING 49 APRIL 24, 2024 C 2024-94 Communication (04/12/2024) from the Director of Economic Development, requesting Council approval to apply for, receive, and expend United States Department of Energy Office of State and Community Energy Block Grant (EECBG) Formula Funds Program, in the amount of $77,540.00, to be used for the program's voucher route and to apply for an Equipment Rebate to install Level 2 Electric Vehicle (EV) charging stations at the new Lima Ola Affordable Housing site in `Ele`ele. Remaining funds will be used to install County fleet Level 2 charging stations, replacing broken units and expanding fleet charging to meet newly purchased electric vehicle needs and for energy efficient upgrades in County facilities. Councilmember Kuali`i moved to approve C 2024-94, seconded by Councilmember Cowden. Council Chair Rapozo: Is there any discussion or public testimony? Councilmember Cowden: I have a quick question for them. Council Chair Rapozo: Okay. Is someone from the Office of Economic Development (OED) here? Okay. There being no objections, the rules were suspended. CHRISTINA KASER, Specialist III —Energy: Christina Kaser, Energy Coordinator. Councilmember Cowden: This seventy-seven thousand dollars ($77,000) is a grant...this is just for two (2) EV chargers, they cost like thirty-eight thousand dollars ($38,000) a piece? Is that what it is? Ms. Kaser: We would be using the money to cover the conduit, any electrical work that is associated with the chargers, just try to cover as much of the cost of that project, and then if there are leftover funds, we would put it to those two (2) other things. Councilmember Cowden: Is this going down at the lower area where we have the multifamily and senior housing? Ms. Kaser: Yes. It would be on the County side, the County project. Councilmember Cowden: Do we have broken units down there already? Ms. Kaser: No. This is for the new parking lot for Lima Ola, so this is a brand new project, no existing chargers there. Councilmember Cowden: Okay. It just said, "Both replacing broken units," so I did not know if it was brand new. Thank you. COUNCIL MEETING 50 APRIL 24, 2024 Ms. Kaser: The "replacing broken units," would be for at the Civic Center. The leftover funds would be to replace broken units at the Civic Center. Councilmember Cowden: Okay, thank you. Council Chair Rapozo: Councilmember DeCosta. Councilmember DeCosta: Thank you for all the work you do. This is for new units in Lima Ola? Ms. Kaser: Yes. Councilmember DeCosta: When I went out to the project phase, I saw that concrete sidewalks and roadway were all put in, but we did not have electrical conduits to run the EV chargers. Are we putting it in the new section of Lima Ola or are the chargers not going to be in the first phase of our work, this would be for the second phase? Ms. Kaser: The Housing Agency is going to send an invitation for bid in the next few months, and then we would include this in the scope of work for the parking lot construction. Councilmember DeCosta: Right, but what I am telling you is the existing parking lot and existing infrastructure there now, we did not put an EV conduit in the first infrastructure phase. I visited the site with the County Engineer, so is this for the new phase or this is just the small pot of the money that they will use to reconstruct the EV conduit? Ms. Kaser: I do not have the details on the Lima Ola phases, so we would have to get clarification from the Housing Agency. Councilmember DeCosta: Can you get me that report? Because I know that right now the sidewalks are paved, the roads went in, they have all the conduit to run cable, electrical, and the water underground, but they did not put in for EV cables to be underground. You cannot run that with another...it has to have its own conduit. Can you find out for me where we are on that? Ms. Kaser: My understanding is that in whatever phase of the project the Housing Agency is going to release the IFB on, they had already planned to have two (2) stalls be EV ready. We are just helping push it all the way and the chargers themselves installed. Councilmember DeCosta: Thank you for that. Ms. Kaser: We will get clarification from the Housing Agency. Council Chair Rapozo: Is there anyone else? Councilmember Kagawa. COUNCIL MEETING 51 APRIL 24, 2024 Councilmember Kagawa: Are there any EV cars currently in the old phase? Ms. Kaser: EV cars currently? Councilmember Kagawa: Yes. Ms. Kaser: In where? Councilmember Kagawa: In the current phases that are lived in? Ms. Kaser: I am not sure. Councilmember Kagawa: I am just wondering if we are putting it in for something that is going to be...I grew up on the Westside and I have not seen too many people with electric cars. The cost of an EV is a little bit high too, so, if we are doing it to be affordable, I am wondering if there is the demand for it. Ms. Kaser: We always have the conversation on the "chicken or the egg" with EV charging. It is like you put in the infrastructure and hope the cars will come, because you do not want to get a car if you do not have reliable access to charging. Councilmember Kagawa: Yes. Ms. Kaser: One of the biggest stressors for adoption is for a multi-family residence because there is often not dependable public charging there. A lot of folks who are in a single-family residence can get an EV. Just to make a point that it is seventy percent (70%) cheaper to put in chargers during construction versus retrofitting, so because we know there is going to be future adoption of EVs, it is a good time to put in the chargers now. Councilmember Kagawa: Help educate me. Homes cannot be modified after being built to charge their car? Ms. Kaser: No, they can. Councilmember Kagawa: They can. But we want to have a County charging facility that the County will pay for the electricity. Is that the movement? Ms. Kaser: I do not know exactly if they are going to plan to have people pay for charging if they installed the chargers at Lima Ola or if it is going to be County subsidized, I do not know the details of that, but we would definitely work it out. The current County chargers that we provide are free public charging, but we definitely have plans to eventually charge the public for them, which we would come to you folks to request to do so. Councilmember Kagawa: Thank you. Again, for my personal thought, if you plan to buy an EV, then you should have a charger at your house. Do not expect the COUNCIL MEETING 52 APRIL 24, 2024 government to put the charger up and then that will dictate whether you will get an EV, right? Ms. Kaser: Yes, well... Councilmember Kagawa: I do not expect the government to pay for my gas, I buy my own gas. Ms. Kaser: It is the house that we are putting them at, they are just multi-family. Councilmember Kagawa: Okay, thank you. Council Chair Rapozo: Are there further questions? If not, thank you. Is there anyone in the audience wishing to testify? Ms. Parker. Ms. Parker: Alice Parker, for the record. I think it is an important place to put electrical chargers. I remember former Councilmember JoAnn Yukimura saying going out west with an electric car was very difficult, because you need charge stations. We have workers on the project who would need to charge an electric vehicle, and I think it would be good for the public too, as well as the people who live there, and it is mainly convenient for everyone. Thank you. Council Chair Rapozo: Is there anyone else? Councilmember Cowden. There being no further public testimony, the meeting was called back to order, and proceeded as follows: Councilmember Cowden: I voted against an action, a bill that Council passed a couple years ago that required fifteen percent (15%) of new parking lots to have the EV conduit put underneath it, so it may very well be that a conduit is under it, because the parking lots were put in since then and it was a County Ordinance, so if we can have that asked to find out if Lima Ola already have conduits in there. I always appreciate the work where they do go out and find solutions, so two (2) parking stalls is not a whole lot. Fifteen percent (15%) can be an overwhelming amount in my view. Council Chair Rapozo: Councilmember Kagawa. Councilmember Kagawa: This discussion brings me back to a few years ago when had our Buildings Superintendent trying to make it mandatory for every new subdivision or every new house on Kaua`i to have a charger in their house, as part of the Building Code. This is an area that myself, Council Chair Rapozo opposed, and we took out, because we did not want to drive the cost of housing further higher. To me, you should make it optional and if you are an EV person, then you put it in your house, but not to make it...again, while you always want to be and think green, you do not want to mandate it on someplace on Kaua`i where we are already way too expensive. We have gone over the cost of a simple one thousand two hundred (1,200) square foot house now costing about four hundred fifty thousand dollars ($450,000) to build. This is just a simple house, with the materials so high. Had a piece of legislation like COUNCIL MEETING 53 APRIL 24, 2024 that passed, it would have driven the cost up even higher than that. Being cautious of building requirements is very important for the Council and I would like to think back at that time that our decision was very important and that we foresaw not pushing off regulations that would just drive costs even higher. Council Chair Rapozo: Is there anyone else? The motion to approve C 2024-94 was then put, and carried by a vote of 6:0:1 (Councilmember Bulosan was excused). Council Chair Rapozo: Motion carried. Next item, please. CLAIM: C 2024-95 Communication (04/09/2024) from the County Clerk, transmitting a claim filed against the County of Kaua`i by Jaime Kain, for vehicle damage, pursuant to Section 23.06, Charter of the County of Kaua`i. Councilmember Kuali`i moved to refer C 2024-95 to the Office of the County Attorney for disposition and/or report back to the Council, seconded by Councilmember Cowden. Council Chair Rapozo: Is there any discussion or public testimony? Councilmember Kagawa. Councilmember Kagawa: I think we should celebrate with a good lunch or something today, because this is the least vehicle damage we have seen in awhile on our Council agenda. Thank you. Council Chair Rapozo: Is there any further discussion? There being no one present to provide testimony, the meeting proceeded as follows: The motion to refer C 2024-94 to the Office of the County Attorney for disposition and/or report back to the Council was then put, and carried by a vote of 6:0:1 (Councilmember Bulosan was excused). Council Chair Rapozo: Motion carried. Next item, please. COMMITTEE REPORT: PUBLIC WORKS & VETERANS SERVICES COMMITTEE: A report (No. CR-PWVS 2024-06) submitted by the Public Works & Veterans Services Committee, recommending that the following be Received for the Record: COUNCIL MEETING 54 APRIL 24, 2024 "PWVS 2024-05 Communication (03/11/2024) from Council Chair Rapozo, requesting the presence of the County Engineer to provide a briefing regarding plans to implement sewer service to Kaua`i communities.," Councilmember Kuali`i moved for approval of the report, seconded by Councilmember Carvalho. Council Chair Rapozo: Is there anyone in the audience wishing to testify on this item or any discussion? Seeing none. There being no one present to provide testimony, the meeting proceeded as follows: The motion for approval of the report was then put, and carried be a vote of 6:0:1 (Councilmember Bulosan was excused). Council Chair Rapozo: The motion is carried. Next item. Resolution No. 2024-18 — RESOLUTION APPROVING THE PROPOSED FISCAL YEAR 2024-2025 OPERATING BUDGET FOR THE HAWAII STATE ASSOCIATION OF COUNTIES Councilmember Kuali`i moved for adoption of Resolution No. 2024-18, seconded by Councilmember DeCosta. Council Chair Rapozo: Is there any discussion or public testimony? The motion for adoption of Resolution No. 2024-18 was then put, and carried by the following vote: FOR ADOPTION: Carvalho, Cowden, DeCosta, Kagawa, Kuali`i, Rapozo TOTAL — 6, AGAINST ADOPTION: None TOTAL — 0, EXCUSED & NOT VOTING: Bulosan TOTAL — 1, RECUSED & NOT VOTING: None TOTAL — O. Ms. Fountain-Tanigawa: Six (6) ayes and one (1) excused. Council Chair Rapozo: Next item, please. Can you read us into Executive Session? EXECUTIVE SESSION: ES-1121 Pursuant to Hawai`i Revised Statutes (HRS) Sections 92-4 and 92-5(a)(4), and Kaua`i County Charter Section 3.07(E), on behalf of the Council, the Office of the County Attorney requests an Executive Session with the Council to COUNCIL MEETING 55 APRIL 24, 2024 provide the Council with a briefing, discussion, and consultation regarding the Quarterly Report on Pending and Denied Claims. This briefing and consultation involves consideration of the powers, duties, privileges, immunities, and/or liabilities of the Council and the County as they relate to this agenda item. ES-1122 Pursuant to Hawai`i Revised Statutes (HRS) Sections 92-4 and 92-5(a)(4), and Kauaci County Charter Section 3.07(E), the Office of the County Attorney requests an Executive Session with the Council, to provide the Council with a briefing and request authority for a possible settlement proposal in a claim filed by Madolyn Davis. This briefing and consultation involves consideration of the powers, duties, privileges, immunities and/or liabilities of the Council and the County as they relate to this agenda item. ES-1123 Pursuant to Hawaii Revised Statutes (HRS) Sections 92-4 and 92-5(a)(4), and Kauai County Charter Section 3.07(E), the Office of the County Attorney requests an Executive Session with the Council, to provide the Council with a briefing and request authority for a possible settlement proposal in a claim filed by Tyler Carr. This briefing and consultation involves consideration of the powers, duties, privileges, immunities and/or liabilities of the Council and the County as they relate to this agenda item. ES-1124 Pursuant to Hawaii Revised Statutes (HRS) Sections 92-4, and 92-5(a)(4), and Kaua`i County Charter Section 3.07(E), the Office of the County Attorney requests an Executive Session with the Council to provide the Council with a briefing and request for settlement authority regarding Victorino Gano's real property tax claim and related matters. This briefing and consultation involves consideration of the powers, duties, privileges, immunities and/or liabilities of the Council and the County as they relate to this agenda item. Councilmember Kagawa moved to convene in Executive Session for ES-1121, ES-1122, ES-1123, and ES-1124, seconded by Councilmember Carvalho. Council Chair Rapozo: Is there any discussion or public testimony? Councilmember Kagawa. Councilmember Kagawa: I have a question for the County Attorney. Can you provide the Council with a brief description on the items, so the public gets a little more than what is just listed, as far as what the Council will be giving authority for possible settlement—for ES-1122, ES-1123, and ES-1124? I know what you folks can disclose and I do not think any councilmember would want to risk disclosing anything that is listed as an Executive Session. There being no objections, the rules were suspended. MARK BRADBURY, Deputy County Attorney: I understand. Deputy County Attorney Mark Bradbury, with Deputy County Attorney Hugo Cabrera. Mr. Cabrera was going to be the individual that was going to go into Executive Session and give COUNCIL MEETING 56 APRIL 24, 2024 you a breakdown on those three (3) items, so I will let him take the seat and he can explain it, without disclosing any confidential information. HUGO CABRERA, Deputy County Attorney: With regards to the Madolyn Davis claim and the Tyler Carr claim, those claims are connected, they are related to an injury that occurred, a public accident related to mowing. With respect to the last claim on the agenda, that is a claim for a retroactive tax exemption, which is a process that is permitted under the code that allows relatives of a deceased person who was entitled to a Homestead exemption to claim an exemption retroactively. Councilmember Kagawa: Regarding mowing? Mr. Cabrera: Yes. Councilmember Kagawa: So, the County mowing... Mr. Cabrera: Yes, a mowing accident. Councilmember Kagawa: Okay. Council Chair Rapozo: Are there any further questions for the attorneys? If not, thank you. The meeting was called back to order, and proceeded as follows: Council Chair Rapozo: Is there any further discussion? The motion to convene in Executive Session for ES-1121, ES-1122, ES-1123, and ES-1124 was then put, and carried by the following vote: FOR EXECUTIVE SESSION: Carvalho, Cowden, DeCosta, Kagawa, Kuali`i, Rapozo TOTAL— 6, AGAINST EXECUTIVE SESSION: None TOTAL — 0, EXCUSED & NOT VOTING: Bulosan TOTAL — 1, RECUSED & NOT VOTING: None TOTAL — O. Ms. Fountain-Tanigawa: Six (6) ayes and one (1) excused. Council Chair Rapozo: Thank you. With that, we will take our lunch break and reconvene in Executive Session at 1:00 p.m. There being no objections, the meeting recessed at 12:00 p.m., to convene in Executive Session. COUNCIL MEETING 57 APRIL 24, 2024 The meeting reconvened at 1:47 p.m., and proceeded as follows: (Councilmember Kagawa was noted as not present.) Council Chair Rapozo: Mr. Bradbury. There being no objections, the rules were suspended. Mr. Bradbury: Deputy County Attorney Mark Bradbury, for the record. We discussed the various settlements during Executive Session, but there is nothing to disclose to the public at this time. Council Chair Rapozo: Thank you, sir. With that, this meeting is adjourned. ADJOURNMENT. There being no further business, the Council Meeting adjourned at 1:47 p.m. R ully submitted, JADE K. UNTAIN-TANIGAWA County Clerk dmc