HomeMy WebLinkAbout11-10-2010 Council Meeting Minutes
COUNCIL MEETING
November 10, 2010
The Council Meeting of the Council of the County of Kauai was called to
order by the Council Chair at the Council Chambers, 3371-A Wilcox Road, Lihu`e,
Kauai, on Wednesday, November 10, 2010 at 9:34 a.m., after which the following
members answered the call of the roll.
Honorable Tim Bynum
Honorable Dickie Chang
Honorable Jay Furfaro
Honorable Daryl W Kaneshiro
Honorable Lam T Kawahara
Honorable Derek S.K. Kawakami
Honorable Bill "Kaipo" Asing, Council Chair
Chair Asing: First item please.
Mr Nakamura. First item is a communication, oh I'm
sorry . approval of the agenda.
APPROVAL OF AGENDA.
Mr Kaneshiro moved for approval of the agenda as circulated, seconded by
Mr Chang, and unanimously carried.
Chair Asing: Next item please.
Mr Nakamura. Next matter if approval of the minutes of the
following meetings of the Council.
MINUTES of the following meetings of the Council.
Council Meeting of October 27, 2010
Special Council Meeting of November 4, 2010
Mr Kaneshiro moved for approval of the minutes as circulated, seconded by
Mr Chang, and unanimously carried.
Chair Asing: Next item please.
Mr Nakamura. Next matter is a communication,
communication C 2010-267
COMMUNICATIONS:
C 2010-267 Communication (10/13/2010) from the Mayor, transmitting for
Council information, the Fiscal Year 2010 Fourth Quarter Report for the Kauai
Humane Society, pursuant to Contract #6787 Item (5) Also included is a copy of
the Field Services Statistics and Animal Statistics.
Chair Asing: With that, I would like to suspend the rules.
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COUNCIL MEETING November 10, 2010
There being no objections, the rules were suspended.
Chair Asing: Good morning.
LAURA WILEY Aloha, kakahiaka. Thank you so much for
inviting us to be here, we love coming to see you and I am Laura Wiley, I am the
President of the Kauai Humane Society and I am very happy to introduce you to
Ori (checking on the spelling of her last name) who is our fabulous interim
executive director
ORI SKOMOROCH. Good morning.
Councilmembers: Good morning.
Ms. Skomoroch: It's my honor to be here today Also on a
different front representing the shelter and all of the things that we do.. (sorry I'm
a little short). and all of the things we do for the animal care on this island and if
there are any questions, please feel free to ask and we'll respond.
Chair Asing: Thank you. Councilmembers any questions?
Councilmember Furfaro.
Mr Furfaro: First of all it's very nice to have you here and
the Humane Society has a great, a really great record in helping us in our
community here but I do want to ask if someone can give me a little bit of an update
regarding the feral cats that seem to be gathering at the airport, Salt Pond, you
know I've worked closely with the Humane Society in the past with you know those
kinds of challenges within the hotels but is there any special plans or additional
things that can be done and even addressing that with the great park we have there
at the airport, you know so it's workable for everybody for picnics and so on.
Ms. Wiley Yes, thank you very much. I'm going to let
Ori talk about a particular situation where we're working with some feral cats at
Salt Pond but before I turn the microphone over to her, we were very grateful and
appreciative to have received two hundred thousand dollars ($200,000 00) right at
the end of our last fiscal year (we received it on June 29, 2010) that is specifically
earmarked for spay and neuter and we are.
Mr Furfaro: Congratulations.
Ms. Wiley Thank you. And that's due to the generosity
of the lovely Manette Bock who passed away and gave us that very generous gift.
So we were actually in the process of revisiting some of our programs, many of our
programs of course are strong and vital and everything is functioning smoothly We
are fairly new to the SOS program which is the Save Our Shearwater program, it's
a terrific program that we work with the island and the community with
endangered birds and so we are revisiting the issue of feral cats as it pertains to the
SOS program and also because we have this additional funding we are looking at
ways where we can really make an impact on the feral cat population particularly
So that's a very general statement and I don't know if it's helpful to you but I will
let Ori talk about a situation that we have been working on at Salt Pond and I
apologize I don't know anything about the airport or other areas but we're here to
help and we love to do everything that we can.
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COUNCIL MEETING November 10, 2010
Mr Furfaro: Well thank you for that quick briefing and I
do want to say that the grant that you were generously given, I'm sure will help in
that challenges of having you know a downed bird and a predator type cat that
could change the outcome of an injured bird but also with our picnic grounds and so
forth, it's something that we just need to have a management plan for it and I
would love to hear from your new director Thank you for that information though.
Ms. Ori. Good morning again. We are taking a new
approach at the shelter and reaching out. We heard that there were some concerns
at Hanapepe and it was escalating and what we've done was our humane officer and
our operations, our interim operating officer contacted the individuals involved and
we had a big meeting with them on Friday afternoon. And we're looking at
resolutions with them as they bring in the cats for spaying and neutering and then
also how we're going to remove them from the Salt Pond areas and they're trying to
locate a new area for them outside of Salt Pond and they want to complete that
opportunity by January and so instead of us sitting. well not sitting. but instead
of waiting until we hear a lot of complaints, we are moving out and outreaching to
the people where the problems are to ensure that we're taking care of these cats. In
addition, what is happening is. is our van. We are looking at advertising more
now and making sure that we let the communities know that we are coming with
our van and that we will be spaying and neutering the cats so that the population
hopefully starts decreasing. But the image in what WE really want to do is
outreach and help and bring in our communities so that we can help them both at
the shelter and outside of our shelter with our vans. And we're going to love to keep
you updated on that. Thank you.
Mr Furfaro• Thank you for that briefing and some of the
proposed actions. obviously members in the community that are concerned with
this population explosion also know that you know the Council does fund for the
Humane Society and they have reached out to us to say that you know is there any
additional things that can be done to control the explosion of the population of those
wild cats. Secondly, as it relates to our effort with the shearwater and as predators
on the ground when they're hurt and then of course you know their enjoyment of the
public facilities and parks so. it sounds like you have an action plan. Maybe in the
next quarter meeting you can give us an update, would that be fair enough?
Ms. Wiley Absolutely
Mr Furfaro: Thank you so much. Thank you Mr Chair
Chair Asing: Thank you. Any other questions?
Councilmember Kawahara.
Ms. Kawahara. Thank you. It's good to see you here Laura
and Orianna. Thank you for all the services you do provide for the county and I
know that you actually pick up a lot of the funding that we don't give you to
complete your services so thank you very much. My question I was interested in
last time you were here, there was a food company that had donated money every
year or food to you and then they stopped, I wanted to know how that happened and
worked out.
Ms. Wiley Well we were very fortunate to receive free
food for the shelter animals for all these years from Nutro and unfortunately with
the change in the economy they had to make a hard decision and we no longer have
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COUNCIL MEETING November 10, 2010
that benefit. We knocked on every door that we could knock on and picked up
every phone we could pick up and we were not able to find anything for free What
we were able to do was the group banned together with the other Humane Societies
in the State to combine our purchasing power so we're purchasing together at a
lower rate but unfortunately the free days are pau.
Ms. Kawahara. Oh okay I remember that was a big, big hit
and I'm glad to see that you guys are pulling together and I'm hoping that's going to
work out.
Ms. Wiley- Thank you.
Ms. Kawahara. The other one thing I wanted to ask about
was the veterinarian fees where it says you made a large order of vaccines in
preparation for a possible storm.
Ms. Wiley- Oh yeah.
Ms. Kawahara. I just want to know if those vaccines they'll
be. they don't expire, they're good.
Ms. Wiley- Correct.
Ms. Kawahara. Okay
Ms. Wiley- Right.
Ms. Kawahara. Alright, great. That's all I wanted to know
and thank you again for all your services.
Ms. Wiley- Thanks.
Chair Asing: Councilmember Chang.
Mr Chang: Thank you Chair Laura thank you for
coming in and Orianna thank you for stepping up to be our Acting Executive
Director Do you have a quarterly Humane Society newsletter that comes out?
Ms. Wiley- Yes we do.
Mr Chang: So the discussions that we had in regards to
the stray cats or the things that we're trying to do, that all gets conveyed through
this newsletter?
Ms. Wiley- Yes. And in our last newsletter we featured
our mobile spay/neuter van and we host these feline fix days and so once a month
we go to different locations on the island. We have helped some great feral cat
organizations that canvas the neighborhood and help people get cats together so
that our mobile spay/neuter van can go out, park, and fix as many cats as we can in
the day That's what Ori was talking about us really wanting to focus more on that,
publish it and get more labor and things like that. But yes that was featured in the
newsletter, just the last newsletter that came out and we're.. you know any animal
management, caring control program is really got to have spay/neuter at the base of
it and we really appreciate all the support you've given us over the years through
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COUNCIL MEETING November 10, 2010
your funding and otherwise. Especially here in the tropics where we have feral cats
and feral dogs for that matter and where it's. we do have that bitter cold winter,
on the mainland we have our cats that can go into heat three (3) times a year, so
that's three (3) litters of cats in a year and then those litters starts and its. yes it's
scary So spay/neuter has to be an important part of any kind of management
program and we're devoted to it.
Mr Chang: I just feel that it's so important to get the
message out there, in fact when I look at you the former Laura Golandski, you were
the original remember when you used to do the program for the animal with
Patrick.
Ms. Wiley Yes I do remember
Mr Chang: I hope something like that can you know
through Hoike or what have you because when you look at the positive side that you
know the percentage of adoptions for dogs and for cats from last year to this year,
you know there was an increase so at least people are finding good pets that can
become pets but equally you know for myself on a sadder note when you see those
that unfortunately needed to be euthanized, you know that goes with the business
but it's pretty sad to think that a pet can make a family Yesterday in the paper,
I'm not sure if you saw that in the Honolulu Star Advertiser, there was a big section
in the paper coping with a loss of a pet. And I know in many cases pets are family
and you know I speak on behalf of being a cat owner of three (3) cats and I see Heidi
here that probably adopted five (5) dogs or more at your Humane Society, so I hope
that whatever we can do to help out and especially get that message out on a
positive note that we can be a big part of that and I would highly encourage that the
more content your newsletter has, the better it is for all of our community
Ms. Wiley I agree and thank you and we, Ron and I
adopted a new cat, which is just what we needed and he's at the Vet being fixed
today We also have a terrific humane education program that reaches something
like three thousand (3,000) kids a year I might be wrong with that. I've just been
working on the statistics for our Form 990, the tax return that has to be filed with
the IRS but that humane education program is so important because we teach the
kids young that you know if you're going to be a responsible pet owner, you really
need to have it spayed or neutered so it doesn't become part of the problem.
Mr Chang: Thank you.
Chair Asing: Thank you. Any other questions
Councilmembers? Councilmember Kawahara.
Ms. Kawahara. You mentioned you're just starting up
helping with the SOS program?
Ms. Wiley It's our second year
Ms. Kawahara. Oh second year
Ms. Wiley Sorry
Ms. Kawahara. Okay thank you.
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COUNCIL MEETING November 10, 2010
Chair Asing: Thank you. Any other questions?
Councilmember Kawakami.
Mr Kawakami. I want to thank Ms. Mannette Bock, I knew
her, she was a great artist. I think she did a lot of work with Disney yeah before as
a background artist. Some of the old school films like Bambi and she was an
amazing lady who lived an amazing life but she donated a significant amount of
money We allocate sixty thousand ($60,000) right, for your spay and neuter
program and I'm just looking at it and this two hundred thousand dollar
($200,000 00) plus gift is restricted to spay and neuter
Ms. Wiley Yes.
Mr Kawakami. So the funds just remains in this account and
they roll over to the next year And I'm looking at your expanses and the subtotal
for the spay and neuter expenses is about $22,605 00 a year
Ms. Wiley Yeah, we're going to change the format of the
report and I'm glad you brought that up Our spay and neuter expenses were much
more than two hundred thousand, this is a combined report and if you can bear
with me for a minute. our total spay/neuter for this. for that fiscal year we're
talking about were a hundred eighty-three thousand (183,000) so I apologize for the
format of this report, we're going to change it for the next quarter Why it... we
have spay/neuter expenses separate up there that you're looking at Councilmember
Kawakami, down below we have payroll and other items that are allocated to
spay/neuter but they're not included in that category up above where you see the
expenses of 22,605, that's why it looks strange. So if we hadn't received that two
hundred thousand dollars right at the end of that fiscal year, our deficit would've
been more along the line of three hundred thousand instead of seventy-three
thousand.
Mr Kawakami. So?
Ms. Wiley Does that make sense or I confused you
more?
Mr Kawakami: It raises some concern because how do we
compare last year expenses to this year if the numbers are.
Ms. Wiley Oh, that's a good point.
Mr Kawakami. Yeah.
Ms. Wiley We'll provide that information. that's a
really good point, thank you.
Mr Kawakami. Okay Thank you.
Chair Asing: Any other questions Councilmembers? If
not, thank you very much and thank you very much for the good job that you've
done
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COUNCIL MEETING November 10, 2010
Ms. Wiley Well thank you for having us here, thank you
for all your support, we appreciate our partnership and we'll see you for the next
quarter report and if anything comes up in the mean time please give us a call.
Mr Furfaro: Thank you very much.
Chair Asing: With that, is there anyone in the audience
who wants to speak on this item? If not, I'd like to call the meeting back to order
and have a motion to receive
There being no one else to speak on this matter, the meeting was called back to
order, and proceeded as follows:
Mr Chang moved to receive C 2010-267 for the record, seconded by Mr Furfaro,
and unanimously carried.
Chair Asing: Next item please.
Mr Nakamura. Next matter for receipt is communication
C 2010-268 and at the bottom of page one (1), communication C 2010-270, these are
for receipt.
C 2010-268 Communication (10/12/2010) from the Director of Parks and
Recreation, informing the Council that the Department of Parks and Recreation will
be transferring funds from the Truck Driver Position #1345 to the vacant Park
Caretaker I Position #1962 for the Kapa`a New Park, and will dollar fund the truck
driver position. Mr Kaneshiro moved to receive C 2010-268 for the record,
seconded by Mr Furfaro, and unanimously carried.
C 2010-270 Communication (10/15/2010) from the Chief of Engineering,
transmitting for Council consideration a resolution for the closure of Hala Road
at its intersection with Kaumuali`i Highway Mr Kaneshiro moved to receive
C 2010-270 for the record, seconded by Mr Furfaro, and unanimously carried.
Chair Asing: Next item please
Mr Nakamura. Next matter on page one (1) is a
communication for approval communication C 2010-269
C 2010-269 Communication (10/13/2010) from the Chief of Police, requesting
Council approval to indemnify Medical Priority Consultants, Inc., DBA Priority
Dispatch Corp., for an Annual Client License and Service Agreement for Priority
Dispatch Systems Licensed Products ProQA Medical Version Number 3.4.3.14 or
latest, MPDS Cards Version Number 12.0 or latest, and AQUA Version Number 5.1.
or latest and product service and customer support. Mr Chang moved to approve
C 2010-269, seconded by Mr Kaneshiro, and unanimously carried.
Chair Asing: Next item please.
Mr Nakamura. Next matter for approval at the top of page
two (2) is communication C 2010-271.
C 2010-271 Communication (10/25/2010) from the Director of Economic
Development, requesting Council approval of the indemnification provision
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COUNCIL MEETING November 10, 2010
contained in the Kauai Island Utility Cooperative (KIUC) Interconnection
Agreement, Schedule Q Modified Agreement and Rider S Contract for Standby
Sales for County renewable energy projects. Mr Kaneshiro moved to approve
C 2010-271, seconded by Mr Kaneshiro, and unanimously carried.
Chair Asing: Next item please.
Mr Nakamura. Next matter for approval is communication
C 2010-272.
C 2010-272 Communication (11/01/2010) from the HSAC President,
transmitting for Council consideration for inclusion in the 2011 HSAC Legislative
Package:
• House Resolution, URGING THE GOVERNOR AND THE
LEGISLATURE OF THE STATE OF HAWAII TO PRESERVE
THE COUNTIES' SHARE OF THE TRANSIENT
ACCOMMODATIONS TAX.
• House Concurrent Resolution, URGING THE GOVERNOR AND
THE LEGISLATURE OF THE STATE OF HAWAII TO
PRESERVE THE COUNTIES' SHARE OF THE TRANSIENT
ACCOMMODATIONS TAX.
• Senate Resolution, URGING THE GOVERNOR AND THE
LEGISLATURE OF THE STATE OF HAWAII TO PRESERVE
THE COUNTIES' SHARE OF THE TRANSIENT
ACCOMMODATIONS TAX.
• Senate Concurrent Resolution, URGING THE GOVERNOR
AND THE LEGISLATURE OF THE STATE OF HAWAII TO
PRESERVE THE COUNTIES' SHARE OF THE TRANSIENT
ACCOMMODATIONS TAX
Mr Kawakami moved to approve C 2010-272, seconded by Mr Kaneshiro, and
unanimously carried.
Chair Asing: Next item please. Oh I'm sorry, go ahead.
Mr Chang: Mr. Chair, I'm sorry did I miss page one (1),
2010-270, did we go over that, I'm sorry
Mr Nakamura. There was a motion to receive that
Councilmember
Mr Chang: Okay, thank you.
Chair Asing: Next item please.
Mr. Nakamura. Next matter on page two (2) of the Council's
agenda is a legal document attached to communication C 2010-273.
LEGAL DOCUMENT:
C 2010-273 Communication (11/03/2010) from the Mayor, recommending for
Council approval a Fifth Amendment to Housing Agreement (Kaua`i Lagoons), the
purpose is to release certain units at the Courtyards at Waipouli Project (which are
being held for higher income families but which are currently vacant) from the
requirements of the original Kauai Lagoons Affordable Housing Agreement.
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COUNCIL MEETING November 10, 2010
Mr Kawakami moved to approve C 2010-273, seconded by Mr Kaneshiro
Chair Asing: Any discussion? Councilmember Kawahara.
Ms. Kawahara. Can I get a quick recess?
Chair Asing: Pardon me?
Ms. Kawahara. Can I get a quick recess?
Chair Asing: Sure.
Ms. Kawahara. Thanks.
Chair Asing: Short recess.
There being no objections, the Council recessed at 9:55 a.m.
The Council reconvened at 1040 a.m., and proceeded as follows:
Chair Asing: This meeting is now called back to order, we
are on Legal Document communication 2010-273, we have a motion to approve and
we have a seconded. With that I'm going to suspend the rules, do we have anyone
in the public who wants to speak please? JoAnn?
There being no objections, the rules were suspended.
JOANN YUKIMURA. Council Chair, Councilmembers, good
morning.
Councilmembers: Good morning.
Ms. Yukimura. I did not know of this item until yesterday so
I have not really been able to research it but from what I've. I'm speaking based on
what I know
Mr Chang: JoAnn, I think you got to state your name for
the record.
Ms. Yukimura. Ali, thank you. Forgot about that, JoAnn
Yukimura. Thank you Councilmember Chang. I want to say at the outset that I
have the highest respect for developers Kevin and Hugh Showe, I've worked with
them personally and I know their integrity and I think some relief is in order during
these economic times. But I think the Council and the County has the
responsibility to ensure that whatever agreement has come to is in the best interest
of the public as well and we cannot sacrifice the public interest out of sympathy for
the developer I think the relief has to be carefully crafted to be a win-win. And I
think you have to really look carefully at the details of the situation in order to craft
a win-win. So before I heard about this, I was concerned about another related
matter, a friend of mine had come to me, she has a HUD voucher and applied for
this, for, to rent in this development and was told that they were not accepting
HUD fund vouchers. So of course you won't have applicants if HUD vouchers are
not accepted. From what I can learn, it's not just the developer that's involved in
this, our County Housing Agency decisions or positions have resulted in not
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COUNCIL MEETING November 10, 2010
allowing the developer to use realistic energy allowances from what I can tell but
what this all means is of course you won't have applicants and they're saying we
need to rent these units out on the market without. because we don't have
applicants but if you're not taking HUD, then that will really limit the amount of
applicants you have. So I think this issue has to be understood and dealt with, we
shouldn't be giving a developer relief if they don't have to take HUD But their not
taking HUD is not only their doing, it's something in terms of our County Housing
policy and I think the Council really needs to investigate, understand, and make
sure that's in order before passing this agreement in any form.
This woman, in the meantime I also think from what I understand there s no
real chance of having the units go out to sale unit by unit which means the only
Chair Asing: JoAnn? You're through with your three (3)
minutes, go ahead on your second three (3) minutes.
Ms. Yukimura. Okay thank you. Which means that what
we're really looking at is sale or purchase of the whole property and I would like to
know if that has been investigated in terms of what the fair market value is because
it could be very much cheaper than the county embarking on a development
themselves. A bird in hand is worth a few in the bush. That needs to be looked at
and perhaps that is the real solution rather than this agreement. I'm not sure if
this agreement will also increase the market value of this property, I think it could
and at least in the agreement you should say that this agreement should not be
considered in the assessing on fair market. The really drastic solution is to allow it
to go into foreclosure if the developer is having a hard time and for the County then
to buy it but I don't really think we really want to go there but I also don't think we
want to sacrifice forty-one (41) units, (I think that's my phone, I apologize). So
there's a lot of due diligence to do here and for this reason I would recommend that
the Council not pass this agreement today but defer it to settle on a lot of the issues
that I've raised here and there's probably more before passing this agreement.
Chair Asing: Thank you. Is there anyone else who wants
to speak on this item? If not, I'd like to call the meeting back to order
There being no one else to speak on this matter, the meeting was called back to
order, and proceeded as follows:
Chair Asing: We have a motion to approve, we have a
seconded. Any further discussion? Councilmember Furfaro
Mr Furfaro: Yes thank you. I do concur I would like
the Housing Department to hear a message about perhaps getting a hold of the
Hastings Group to do an assessed value on this project as it stands now I think
that s a very, very important piece from us. I also want to suggest to the County
Attorney that we had an allocation about the use of vouchers here perhaps if you
can make a note with the Housing Department and have a separate discussion on
that, I think that would be very helpful. I am more convinced than ever that
perhaps that we should pursue the due diligence associated with purchase of this
property since we do have that option and for those of you here, I'm going to ask
Jade to pass out a investment interest pay calculation for you so that you can see at
the current interest rates and at the current housing rates that we're able to
generate for a one (1) bedroom, a two (2) bedroom and a three (3) bedroom unit. It
also carries the fact with debt service that we could have additional carrying cost of
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COUNCIL MEETING November 10, 2010
up to two hundred and seventeen thousand dollars ($217,000 00) a year based on
the HUD voucher rates in a mix of twenty-one (21) bedrooms, forty-two (42) two (2)
bedrooms and twenty-three (23) bedrooms, I don't that exact mix. It's difficult for
us to look at purchasing any particular part of this project right now because this
project although we are the first in line and we are in line at the appraised value,
perhaps we could start some dialog on the purchase of this project. But in the spirit
of working together, perhaps we should also consider loosening up the rental
parameters as being proposed to us from the Administration. I do think that we
could in fact with some HOME funds available to us and even with HOME funds
coming to us next August, we could start with about a three million dollar amount
and then look at expanding a bond for the project for about eight million and then
mortgage the balance so that we have a fifty percent (50%) mortgage debt on the
property, going forward. We need to make sure that we keep everything intact as it
is now the project will have to be condominiumized so that there is individual units,
and that's the thing that protects us from the applicant you know selling individual
units at present because they're not subdivided as individual condominium units.
But the terms here indicate that during the ten (10) year period and before its
expiration of the affordability, the developer shall first offer Waipouli Affordable
Housing site to the County, we're first in line so I wanted to know in some
discussion that I've had with the Housing Agency about the potential revenue
income stream that we get if we own the project. I would like to pursue more
urgently the acquisition of this project and so therefore I will most likely support
the temporary relief offered on the agenda item today
Chair Asing: Thank you. Any further discussion?
Councilmember Kawahara.
Ms. Kawahara. Temporary Temporary what, I'm sorry I
didn't hear what you said.
Mr Furfaro• Temporary relief, this agreement today
allows him to rent in those unit interest that are eighty percent (80%) to a hundred
twenty (120) and what has happened is because of the transient vacation rental bill,
we have over three hundred and fifty (350) units actually fall out of the TVR
category so now there's a (inaudible) of affordable rentals that are home type that
I'm sure contribute to part of the difficulty along with the economy for them to find
some relief. As I pointed out to you, even if we had a hundred percent (100%)
potential occupancy on the project, they'll still be about a quarter of a million
dollars of carrying of debt service per year We have a target of fifty percent (50%)
income value right now, that's ranges of incomes of thirty-six (36) to forty thousand
(40,000), we have the eighty percent (80%) category which is fifty-eight thousand
(58,000) and sixty-four thousand (64,000), and the balance is in this category of you
know eighty (80) to one twenty (120), and they're exactly where the vacancies exist
and the cash flow problem exist. But again I want to reinstate my position to move
quickly on the acquisition on the project.
Chair Asing: Thank you. Any further discussion?
Ms. Kawahara. So for clarification.
Chair Asing: Go ahead.
Ms. Kawahara. For clarification purposes. you support
the you support approving.
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COUNCIL MEETING November 10, 2010
Mr Furfaro: For the term I use. allowing him temporary
relief. It would probably take us about eight (8) months to do the due diligence, do
the appraisal, negotiate a project value and for us also to line up a bond in some
kind of a mortgage if necessary
Ms. Kawahara. And. I just I guess I would like to discuss
that more. So if they
Mr Furfaro: I'm just basically saying.
Ms. Kawahara. Okay
Mr Furfaro: You know we need to position ourselves with
the due diligence. I don't mean to be not pleasant when I say this but we don't
dare have the developer fall into a default situation because then only forty-one (41)
units are available to us, the other forty-one (41) because that ordinance came
before the zoning, you know the bank may actually have a say on that outcome.
Ms. Kawahara. Okay I'll have other questions.
Chair Asing: Thank you. Any further discussion?
Councilmember Bynum.
Mr Bynum. I guess I want to start by saying I agree with
almost everything Mr Furfaro has said. I also believe that my due diligence thus
far that the County acquiring these units is probably in the community's best
interest and could be the best win-win outcome here in terms of you know, well win-
win outcome for everyone. However, this is a very complex issue and that these are
affordable housing requirements that were part of the Kauai Lagoons Project that
now has separate owners and different units and different housing agreements in
different areas. And this Council has dealt with relief for those housing agreements
in other instances and it's appropriate that we do with this one as well. If you read
the agreement, it says at one (1) point and this is the key line, the only way for the
developer to meet its financial obligations is have the ability to rent the remaining
forty-one (41) units at market rental rates without income restrictions on the
renters. When I first heard about relief coming forward, that's what I heard that
this was going to happen. So let's just look at this, we have forty-one (41) units that
are currently being rented at eighty percent (80%) and below, those units don't fully
recoup the developers cost because they're being rented at very low rates and there's
a market for that and they're rented. The other forty-one (41) units that are in
question here today were set to be rented by gap housing, or people who are
working making eighty (80) to a hundred twenty percent (120) median income, a
hundred twenty percent (120%) has the family making around eighty-five thousand
(85,000) although Housing could give us the exact amount. And because of the
current economic condition that Mr Furfaro correctly points out, they're not
choosing to rent those units even though they're great units, they're very nice,
because we have a low rent period right now people can rent what they consider
better accommodations for that amount. So the relief I thought was to say okay
say to the developer you can rent these to anybody at whatever the market will
bear, right now the market won't get a big return for them but it's better than the
unit sitting empty It will generate revenue, it will help cut their losses and that's
one (1) form of relief and in fact that is what this rental agreement says, that to
have the ability to rent the forty-one (41) units at market rental rates. So I
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COUNCIL MEETING November 10, 2010
expected to see an agreement to say that, here you can rent these to anybody for the
term of the ten (10) years and right now it's going to help you cut your losses, you'll
probably still be taking a loss but we live in a environment where many investors
are taking losses, many homeowners are taking losses but over the eight (8) year
period or eight and a half (8 %2) years that are left in this term, we all hope the
economy will rebound and we may be able to recoup that earlier loss.
When you read this agreement it doesn't just allow renting at market rentals
because if you go a few more paragraphs down it says this amendment shall be
deemed to comply with the affordable housing obligations required by the zoning
ordinance. This amendment ends any housing requirements for these forty-one (41)
units other than the county having the first right of refusal should the developer
choose to sell. So based on my read of that and we've only had a couple of days
because this came from the Administration, it came from the Mayor's Office, not the
Housing Administration, so I've and I've distributed this to some people and.
including the owner of this project, I've had these questions and I want to go down
these questions and answer them to the best of my ability now The change in the
agreement was described as allowing the developer to rent forty-one (41) of the
units without income restrictions or in other words at market rate. Yet the
agreement does not appear to require that the units remain in the rental market at
all. So some of these questions: does the agreement require the units to be rental
to Kauai residents as market rate for the original agreed ten (10) year period? The
answer is no, it doesn't require that they continue to be rental to Kauai residents.
Does the agreement allow the developer to sell the units? Yes it does. If the
developer chooses to exercise that right, the County has the first right of refusal or
we can choose to purchase the forty-one (41) units. Other than giving the County
first right of refusal are there any restrictions on sales? Like for Kauai residents,
first time home buyers, or income brackets. Well no because they'd be sold as a
unit, right? So could the units be sold to an out of state? Yes. Could the units be
used for transient vacation rentals by the current owner or by any other owner?
And the answer to that is yes. If we adopt this agreement today, it doesn't require
that the units be continue to be rented and it would allow the owner to do whatever
they want with the units including renting them to visitors, so units that were
intended for Kaua`i residents under this agreement can be used for vacation rentals.
That may not be the intent but it would be allowable and possible because this unit
doesn't just lift the market rate, this agreement says you can do what you want.
And then we get into where Councilmember Furfaro is coming from, is the County
ready to purchase these units? I believe the County should exercise due diligence to
purchase these units. And are federal funds potentially available to purchase the
units? I believe to the best of my knowledge at this point that potentially there are
federal HOME funds that the county receives that could be used towards the
purchase, not enough to buy them right but towards the purchase But these are
the kinds of questions we need to flush out and agree with. A really important
question is how would the purchase price compare to the cost of development by the
County for new affordable units? Our county is engaged in creating affordable
rental units. We've done that at Kalepa, we've done that at Paanau, we're about to
do it again and we should do it because right now the market is low When we hire
contractors, we get good bids. When we purchase things, we get it at an affordable
price. But for these units, these are built, they re in a great place, they're built
really well. they have nearby buses, they're close to the ocean, close to jobs and in
the current market if the county purchases these units, it would probably will be a
good cost benefit analysis compared to doing new units. So I don't know why the
development, why this. but my fear is they're only a requirement to sell the units
to the county if the owner chooses to do that. The owner could choose not to Right?
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COUNCIL MEETING November 10, 2010
And if we pass this amendment, we don't know what the outcome will be. I think
the county loses some of its leverage and the county loses some of its ability to enter
into negotiations from a strong position and so I very much hope that there is a.
and I think it's very possible to have a positive win-win outcome of this situation.
But my responsibility is to the citizens of Kauai and as a business decision, I don't
see you giving up your advantage and giving the other person in negotiation an
advantage and I think that's what this does. But I think we need to have more time
to talk out loud of this. We need to have more due diligence. My suggestion would
be that this be deferred to the Housing Committee so we'll have additional time to
engage with the Housing Department, to flush out these questions that Mr Furfaro
and myself and others I know have put forward to really seek a win-win situation
and not do this today because I've got many answers to many of these questions
over the last two (2) days but as I said this is a complex issue. All of the other
housing agreements that we've had modified because of the changing economic
situation, created an opportunity where we try to get the units to the intended
recipients. The other Kauai Lagoons, the fourth (4th) amendment I believe to this,
we went for sales here in Lihu`e, only two (2) people exercised that. We amended
the agreement, changed them from lease-hold to fee simple, now five (5) or six (6)
more units have been purchased. We're just about to enter into a ninety (90) day
period I believe it is, where anyone on Kauai, a Kauai resident can purchase very
affordable units and I'm hopeful and I think we all are that at the end of that ninety
(90) day period, Kauai residents will have affordable housing in Lihu`e. But this
agreement doesn't kind of go and say let's try this, let's go to market rate, it leaves
the potential where they just go out of the affordable housing inventory completely
And they never potentially go to the intended recipients. I don't think that will
happen, I hope that doesn't happen, I don't think that's anybody's intention but if
we pass this agreement in its current form, the housing that was developed in
Waipouli for working families on Kauai could never be used for that purpose and be
used instead for visitors and become part of the visitor inventory I don't think
we're in the position where we need to increase the visitor inventory right now but
we do need to continue to increase. so I would ask for referring this to the Housing
Committee where we can flush out these issues further
Chair Asing: Thank you. Any further discussion?
Councilmember Kawahara.
Ms. Kawahara. Yes. I wanted to thank Councilmember
Furfaro and Councilmember Bynum for following up more closely on this request
from the Mayor's Office. From my understanding and what I'm seeing in the
amended agreement, I have several concerns and they all relate to yanking these
forty-one (41) units out of the affordable housing market permanently To me it
seems like we're basically giving up forty-one (41) units of affordable public housing
for ten (10) years on the fact that right now there's an economic problem. Again I
see this as very shortsighted. We all know economy goes up and economy goes
down. Leaping to making these into affordable. into private market units at the
very first drop of a hat, it seems to me again very shortsighted and not in the best
interest of the county One of the main things that's crossed out in this document
that's no longer the developer's responsibility is that whoever takes over those units
has to be domiciled in the Kauai County and would physically reside in the
leasehold units being purchased, that is now crossed out. There is no residency
requirements, anybody can purchase those, and that's what's going to happen. The
basis of the housing ordinance is to be sure that we try to give the people, our people
as much chance as possible to get affordable housing and to yank it out and just
ignore ten (10) years like we're going to either predict that the economy is going to
15
COUNCIL MEETING November 10, 2010
go down for ten (10) years continuous or it's going to get better Nobody's a market
analyst right so either way, you could say it's going to get worse, it's going to get
better But why do we have to sacrifice those forty-one (41) units right now at this
moment, in this extreme level. There has to be a middle ground and I'm liking what
Mr Furfaro says, I'm not sure how it's going to work out if these are sold and if we
would have to buy them back and I have a question for the County Attorney
actually about the agreement and the market value if this agreement is approved
now in relation to what Mr Furfaro wants to try to do.
Mr. Furfaro: I do want to clarify one (1) of your questions
while the County Attorney is coming up First of all, we have to remember in the
agreement there is no offer to anyone else without going to us first.
Ms. Kawahara. The County?
Mr Furfaro: And that's what I'm saying we have to move
on the financing as quickly as possible, especially with the rates at four and a half
percent (4 1/2%) and our new and improved bond rating so that's why I'm saying
there's urgency here and we have to move quickly The second piece is, we do it
through a negotiation and appraised value and I know Mr Hastings Group does
both residential, condominium, and hotel which this is sitting on resort zoned land
but more importantly this project is under a general partnership, it's not
condominiumized right now, and to sell interval ownerships or ownership by deed,
they would have to condominiumize the project first, and secondly they would have
to make the offer to us first. So time is of the essence but I did want to, I did want
to point out without this condominiumizing of the project as well as offering, having
us making the first offer We're in a little bit of a stronger position and his
challenge is he's got forty-one (41) of the eighty-one (81) units at the high end with
zero occupancy, zero revenue, and all the debt service. So I just wanted to help
clarify that that sequence of priorities because the county
Ms. Kawahara. I have a question for the County Attorney
Mr Furfaro Is the County Attorney coming up?
Ms. Kawahara. I hope I can make it.
ALFRED B. CASTILLO, COUNTY ATTORNEY Council Chair
Chair Asing: Yes, go ahead.
Mr Castillo- County Attorney, Alfred Castillo. I don't
want to be blindsided by multiple questions by the Councilmember, I would prefer
that she gives me her questions and give me some time to answer them so I don't
know if that calls for a recess or what but?
Chair Asing: Thank you.
Mr Castillo: I don't want to presume that I would be able
to answer that question.
Mr Furfaro: Quick recess then?
Ms. Kawahara. Yes, can I have a quick recess?
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COUNCIL MEETING November 10, 2010
Chair Asing: Wait, let's not take a recess, let's put that in
writing.
Ms. Kawahara. I'm requesting a recess.
Chair Asing: Do you prefer it in writing? What is your
preference County Attorney?
Mr Castillo: She could tell me what the question is.
Chair Asing: Okay, do you want to prepare the question
now for the County Attorney?
Could you prepare the question now for the County Attorney?
Ms. Kawahara. In writing?
Chair Asing: Yes.
Ms. Kawahara. Okay
Chair Asing: With that, is there any further discussion
Councilmembers?
Mr Furfaro: Mr Chair, I don't mean to disagree with you
on this but if we had a recess I think we're all entitled to ask specific questions to
the County Attorney
Chair Asing: Sure
Mr Furfaro: And then if he then requires those questions
to be in writing, at least give the members an opportunity
Chair Asing: Okay Well with that said I don't have any
problem with that either Councilmember Kawahara do you want to repeat the
question to the County Attorney?
Ms. Kawahara. I guess I would like to recess to ask him
questions.
Mr Furfaro: That should be fair
Chair Asing: Okay Let's take a short recess.
There being no objections, the Council recessed at 11.10 a.m.
The Council reconvened at 11.11 a.m., and proceeded as follows.
Chair Asing: I would like to call the meeting back to order
Let me make some clarification, the reason I did what I did earlier is because I have
two (2) communications here one (1) from Vice Chair Jay Furfaro and the other one
(1) from Councilmember Tim Bynum and I have here the communication re:
absence from November 10 today meeting from approximately 11.15 a.m. to 1:00
17
COUNCIL MEETING November 10, 2010
p.m., and if I'm looking at the watch and pretty soon you're done, you're not going to
be here and that's why I wanted to get it done before you leave otherwise you're
going to leave and you're not going to participate in the discussion and action.
Mr Furfaro: I appreciate your concern.
Chair Asing: So with that, that is just a clarification on
why I did what I did.
Mr Furfaro: I appreciate your concern.
Chair Asing: With that, recess is still in order
There being no objections, the Council recessed at 11.12 a.m.
The Council reconvened at 11.15 a.m., and proceeded as follows:
Chair Asing: Are we okay? The meeting is now called back
to order, we have the County Attorney up With that, County Attorney
There being no objections, the rules were suspended.
Mr Castillo: Council Chair, Councilmembers, County
Attorney Al Castillo The question that Councilmember Kawahara had was really
not a legal question, it would be more of an economist, somebody that projects or
can assess values in the market place and that would be outside of the scope of what
I would be telling you.
Chair Asing: Thank you.
Mr Castillo: You're welcome.
Chair Asing: With that. I'd like to call the meeting back
to order
There being no more questions for the County Attorney, the meeting was called
back to order, and proceeded as follows:
Ms. Kawahara. Thank you Al.
Chair Asing: Any further discussion? Councilmember
Bynum.
Mr Bynum. I just wanted to clarify, I every much would
like to modify this agreement to allow the units to be rented at market rate and
explore the possibility of the County's purchase. But as I said earlier this
amendment doesn't just do that, it doesn't just allow the units to be rented at
market rate, it just basically removes them completely for affordable housing
obligations completely so even if the county wanted to purchase it the owner would
have the ability to say no thanks, I'm going to rent it in a different manner and I'm
going to hang on to it. So I would like to make a motion to refer this to the Housing
Committee so we can discuss this further and get more information from Housing
along the lines that I said.
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COUNCIL MEETING November 10, 2010
Ms. Kawahara. Seconded.
Mr Bynum moved to refer C 2010-273 to the Housing Committee, seconded by
Ms. Kawahara.
Chair Asing: We have an amendment, is there any further
discussion on the amendment? Yes, go ahead.
Mr Furfaro: Yes. I'm wondering if possible if Mr. Showe
would be willing to come up before I take my vote on that. I can ask him pointblank
direct is he interested in negotiating with the County for us to buy the project.
Chair Asing: Okay, with that, I'd like to suspend the rules.
There being no objections, the rules were suspended.
Chair Asing: Kevin.
KEVIN SHOWS. Council Chair Asing and members of the
County, I'm Kevin Showe, I'm the manager of KD Waipouli LLC
Chair Asing: Thank you. With that, Councilmember
Furfaro
Mr Furfaro: Kevin thank you for coming up I want to
pose that question to you, although we have first right of refusal and we have a ten
(10) year agreement here, I think you heard me earlier if this Council does give you
some temporary relief while we urgently collectively find moneys to buy the project
so that we have a permanent inventory of housing for our Housing Division, are you
willing for us to begin those negotiations as early as possible?
Mr Showe. Yes we are.
Mr Furfaro: Okay And we do. are you familiar with
the, as part of the due diligence, are you familiar with the Real Estate Group
headed by Mr Hastings?
Mr Shows. Yes. They're a very reputable appraising
firm.
Mr Furfaro: And you would be open to us beginning that
discussion about first purchase in the very near future, maybe in the next few
months?
Mr Showe. Yes. As you know there's actually about
eight and a half (8 ''/2) years left under the restricted period, you know we haven't
been successful in renting the units since it was completed. Approximately forty
percent (40%) of the units are vacant and have been vacant for that entire term
which really was the reason why we're asking for amendments so we can go to other
markets that have come by and have been interested in renting but were over
income. It's important to note that the market rents on Kauai are lower than what
the thirty percent (30%) of the HUD or twenty percent (20%) levels are because of
the availability of single families and other competitive choices. And so this request
for the agreement really was the ability if some. if we have some nurses at the
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COUNCIL MEETING November 10, 2010
hospital that are coming and wanting to live together, they are over the income of
what we're able to satisfy and so this would allow us to accommodate their need.
Our expectation is that in today's economics, we would not be able to charge even
the hundred and twenty percent (120%) level because the rents are not at that level
yet. So we just want to be able to reach out to other constituent groups with the
understanding we probably will still be taking a short in terms of the rent.
Mr Furfaro• You may have remembered during the
earlier evaluation of this I put together a projection. Our current housing income
levels eliminated nurses, firemen, police, school teachers, people that are very
important to our community but exceed the housing levels. Now let me ask one (1)
more question, are you or your development group at any present time right now
going through the process to subdivide your property? Or is it still under one (1)
partnership?
Mr Showe: Absolutely we're not. It's complicated
because we have a loan with First Hawaiian Bank on the property and that loan is
for the fixed term of eight and a half (8 i/2) years left. At the time when we placed
the loan several years ago, we actually locked the rate and everyone knows what
happened to mortgage interest rates over the past two (2) years. Our permanent
rate on this loan is actually six point three nine percent (6.39%) interest. Today's
mortgage financing you'll be able to get the same term for about four and a half
percent (4 %2%)
Mr Furfaro: Yes.
Mr Showe. So we are actually paying far and excessive
interest compared to today's market rate which further irritates the economic or our
economic reality So we have the high level of vacancies, we have higher interest
than what the current market is, so we're hemorrhaging right now from an
operational standpoint.
Mr Furfaro: But it is one partnership, there is no
subdivision process or condominiumizing that would allow you to sell an individual
unit at this time because they couldn't show individual ownership?
Mr Showe. That's correct.
Mr Furfaro: Thank you.
Mr Showe. We're restricted by our mortgage loan
document that we have no ability to condominiumize presently, that would have to
be further negotiated with the bank. There's yield maintenance provision within
our loan document that requires the bank would be made whole on the prepayment
of any kind of partial payment or full payment on a loan.
Mr Furfaro• Thank you very much. Thank you
Mr Chair
Chair Asing: Thank you. Councilmember Bynum.
Mr Bynum. Hi Kevin, let me just start by saying how
much I appreciate the integrity and flexibility you and your family and company
has showed in dealings with the County of Kauai over a long period of time and I
20
COUNCIL MEETING November 10, 2010
recognize that this is a very difficult situation for your company But the agreement
says in order to meet your financial obligation is to have the ability to rent the
remaining forty-one (41) units at market rates without income restrictions and I
would very much like you know that relief be given to you probably sooner than
now, maybe should've done that a lot sooner But the agreement also says that if
we pass this one you complied with all the affordable housing obligations required
in the zoning ordinance, so it does much more than allow you potentially. that's
where I'm getting stuck and so if we had a legal document that just allowed you to
mark to rent at market rent immediately and we entered into these negotiations
that Mr Furfaro is suggesting, isn't that a potential win-win and isn't that a way
we could go where the county would kind of keep its responsibility to see that these
units are or go to house Kauai residents. Would that be acceptable if we gave you
an agreement that has you can go to market immediately (inaudible) into
negotiations?
Mr Showe- Yeah, we've expressed our willingness to
enter into negotiations with the County on the sale of the project in its entirety I
think we would be very reluctant to sell a partial number of units to anyone
(inaudible) because it would involve condominiumization of the property, it would
involve a different level of management, and which you know the control of
management is very important to us as in terms of maintenance and control. And I
think clearly when you look at the value of the property today versus what the
value might be years when the economy is improving and as it gets closer to a
unrestricted, any kind of unrestricted units, it's probably better for the County to
talk about negotiating value earlier than later And so we've expressed our
willingness to enter into those discussions for the sale of the entire project.
Mr Bynum. So if this legal agreement just allowed you to
go to market right now, wouldn't that be sufficient to meet your current needs and
for us to.
Mr Showe. It would allow us to be. have some other
tools to rent the forty percent (40%) of the project that has been sitting vacant for
the past you know fifteen (15) months and that's what's important to us. And in a
mixed income community like the Courtyards at Waipouli, we actually have filled
our fifty percent (50%) of the fifty percent (50%) of the units to people or households
with eighty percent (80%) and below In fact we have twenty-nine (29) versus
twenty-one (21) units at the sixty-five percent (65%) level because we did not have
adequate applicants at the eighty percent (80%), sixty-five (65) to eighty percent
(80%) level, so we even reached down further to provide for affordable housing at
the below eighty percent (80%) levels. What's required is the ability to have higher
income households and families offset the rents we give away at the lower income
and that's where even though we're forty percent (40%) vacant, it has greater than
fifty percent (50%) effect to us in terms of the economics because they're supposed to
be paying a lot higher rents than the ones at the lower level. So it's been
particularly painful on an operational standpoint, you know every month we're
going under in terms of meeting our operational needs. You know it's not
sustainable if you know if the market persists and continues to have this level of
vacancy, that's why we're asking for the ability to reach out to other household
within Kauai that allow us to fill those units. So that's very important that we
don't have units sitting there vacant that are not contributing to subsidizing the
lower income households.
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COUNCIL MEETING November 10, 2010
Mr Bynum. And I understand that and I appreciate that
and I think what you just said that you're renting more at sixty-five (65) and below
than you're required to, illustrates what I said earlier about you know your history
of being very reasonable and doing the best and I want to provide a legal thing
immediately that allows you to recoup those rents the way you just described. My
surprise was that this agreement goes beyond that, way beyond that and maybe
that's not anybody's intention but that's what the agreement says. So I guess my
question is if we had a legal document that just allowed you to do the rent, right
that didn't remove the requirement that it remain rental, you know would that be
sufficient for you?
Mr Showe: Yeah. You know our intention is to maintain
it as rental, yes.
Mr Bynum. So then I don't know why the Administration
has given us a document that goes beyond that, that's where I'm coming from.
Mr Showe: Well the provisions of first right of refusal
have been within the document from the very first agreement.
Mr Bynum. Right.
Mr Showe. There's nothing that has changed or
(inaudible) exercise by the County of a first right of refusal should we decide to sell
the project, that was an important element in the early discussions with Kauai
Lagoons agreement, there was discussion about perpetual affordability and that
was a clause that was inserted to allow the county if they wanted to own the project
to maintain perpetual affordability, they would have the ability to exercise that
right and that has not changed throughout the body of the document.
Mr Bynum. Well I heard that answer and thank you.
Chair Asing: Thank you. With that.
Ms. Kawahara. I have a question?
Chair Asing: Go ahead Councilmember Kawahara.
Ms. Kawahara. It's good to see you and thank you for all of
the things you're done for the island. I'm quite aware of how generous you've been
and how honest you've been in your dealings and keeping everything, whatever you
promised and following through especially with the Lagoons. The thing I was
wondering about is, it's asking. the agreement that you no longer need to have the
people be from Kauai County and physically reside in the leasehold units, is that
right?
Mr Showe I think the agreement that you're reading is
a. it's a three (3) party agreement, it's an agreement that refers to the for sale
housing on the Marriott Resort, I think that may be the provision that you're
referring to is a excerpt from that provision, not from the rental, not from our
obligation and if you maybe look up in terms of it probably talks about for sale units
referring to the Marriott Resort units, not the Waipouh Rental units.
22
COUNCIL MEETING November 10, 2010
Ms. Kawahara. It says KD Waipouh is presently obligated to
rent affordable housing units at the Waipouli site, forty-one (41) units to eighty
percent (80%) or under, twenty-one (21) to under one hundred percent (100%),
twenty (20) units to under one twenty (120), crossed out there is. under domiciled,
were domiciled in Kauai County would be physically reside in the leasehold units
being purchased.
Mr Showe. Okay, are we.
Ms. Kawahara. Under eleven (11)
Mr Showe. Under eleven (11)? Okay, are you looking
at the red line or the. I guess I need to look at what you're referring to maybe
Ms. Kawahara. Can you. wait one (1) second. I've got two
(2) different formats.
Mr Showe. Yeah, that's what I was trying.
Mr Furfaro: I think there was a comparative document,
that's what you might have.
Ms. Kawahara. Yeah.
Mr Showe. Okay, I'll read this. I think it's provision six
(6) I believe. pursuant to the agreement KD Waipouli is presently obligated to rent
the affordable housing units at the Waipouh affordable sites as follows. forty-one
(41) units to eighty percent (80%) or under Kauai median household income, okay
which is determined by HUD of course Twenty-one (21) units to a hundred percent
(100%) KMHI households and twenty percent (20%) to under a hundred and twenty
percent (120%) KMHI households. That only refers to a income level that is
determined by HUD, it does not state that we have to rent to Kauai households, in
terms of that provision, if there's another provision.
Ms. Kawahara. Yeah.
Mr Showe. That you're referring to, I don't know
Ms. Kawahara. So you don't have any requirements in this
agreement right now to rent?
Mr Showe No.
Ms. Kawahara. To rent to residents?
Mr Showe: No, no we do not. The section that was
required to rent to or to sell was. with the Marriott Resort agreement and that
had a provision that you had to offer to resort Marriott Resort employees or you
know and then the Marriott Hotel employees, then the County of Kauai residents
prior to offering it to other constituents. The rental project had no restriction on
who we could rent units to, it was never targeted that it would be only available to
rent to Kauai residents.
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COUNCIL MEETING November 10, 2010
Ms. Kawahara. Just. okay so just by income? So it's just by
income?
Mr. Showe: Just by income exactly
Ms. Kawahara. Okay, okay
Mr Showe: That's determined by HUD
Ms. Kawahara. So Mr. Bynum was asking questions about
why it went beyond just the market rate rentals, this agreement.. why is it going
beyond just the market rate rentals? The agreement, to sell. to actually take them
out of the ten (10) year agreement for the rentals?
Mr Showe. Well again it just allows us to you know,
where we have a situation of where you have a fireman that's married to.
Ms. Kawahara. Right.
Mr Showe. A nurse, they're over income.
Ms. Kawahara. Right, so if we take out the income.
Mr. Showe. And we've had that situation, we've had
applications that come through and we do the prequalification in terms of what is
their household income and then they're interested in renting there but their
combined household income exceeds our hundred twenty percent (120%) level so
we're not able to serve them. So in a situation like that we would like to be able to
with this amendment of the agreement to satisfy their needs to rent at the property
So that's all we're asking for in this body of the agreement is the ability to reach out
to interested parties that exceed the hundred and twenty percent (120%) level in
that case Today probably you know if you're looking at what are the market rates
because we've been asked that question by Housing Agency and you know today
probably the market rate for one (1) bedroom is twelve hundred (1,200) for a two (2)
bedroom, ifs fifteen hundred (1,500), and maybe for a three (3) bedroom its
seventeen hundred (1,700) which is less than what we're allowed to charge so we're
asking to be able to rent to higher income people with the understanding that we're
probably going to be getting less rent than we can get at the hundred (100) or
hundred and twenty percent (120%)
Ms. Kawahara. That's good.
Mr Showe. Yes.
Ms. Kawahara. But what about the ten (10) years? What
about the ten (10) years agreement?
Mr Showe Well.
Ms. Kawahara. That at be rented for ten (10) years.
Mr. Showe: And again.
24
COUNCIL MEETING November 10, 2010
Ms. Kawahara. Are you asking to take out the ten (10)
years?
Mr Showe: Yes. Well it's eight and a half (8 %2) left
okay
Ms. Kawahara. Eight and a half (8 1/z) years.
Mr Showe: But again it allows us to be able to rent the
units to whatever market rate is available. Now the question is, is anyone
expecting in 2011 the economy is going to get substantially better? Of course not.
Everyone's expecting we'll be lucky to have moderate improvement, at best. I think
that absent. increase of employment on the islands, it's probably likely that it's
going to be difficult in the rental market for quite some time and again this just
allows us the flexibility to establish rents to the market levels and also to rent to
anyone that's interested and leasing units there in regardless of what income
levels. and it could be that we might decide to rent to more people at eighty
percent (80%) if they come through the door
Ms. Kawahara. I do understand the situation that you're
actually renting to more at the lower level and that actually makes it harder
Mr Showe: Right.
Ms. Kawahara. For you guys to meet your responsibilities.
So I guess I want, I want you to be able to rent to the teachers and the firemen and
all of that, yes. definitely but my understanding is that if you're also asking not to
have to keep it in the rental market for eight and a half (8 years that's required
by the contract and that's also part of the thing that you want to change. Is that
correct?
Mr Showe. Again our expectation is to continue in rental
form through the balance of the term of the agreement.
Ms. Kawahara. Yeah, you're intent.
Mr Showe: So we have about eight and a half (8 1/2)
years left and we anticipate be renting for eight and a half (8 %2) years.
Ms. Kawahara. But it allows you the ability not to have to
keep it in the ten (10) years rental if you can't get.
Mr Showe We would be willing to modify to maintain it
as a rental through the balance of the term. We're just asking people to rent it to
whatever constituents are interested in renting, serving the parties that have
expressed interest and again achieving the rent levels that are available in the
market place.
Ms. Kawahara. I just have a question that came up when
Councilwoman Yukimura was here about the energy, energy charge and fees on
that?
Mr Showe: The utility allowance?
25
COUNCIL MEETING November 10, 2010
Ms. Kawahara. Yeah because I know I had a friend that
wanted to rent.
Mr Showe: Right.
Ms. Kawahara. And the rent was okay, she could afford it
but then on top of that was something else and I'm wondering how much of a
problem that is with people trying to rent.
Mr Showe: Well the units are individually metered for
electricity, okay? And we have a master meter for the water and sewer which
obviously we pay, there's no submeter on the water/sewer utility You probably
remember there was requirement in the agreement that required that we provide
solar hot water as example and some other energy saving features have been placed
in the unit, compact fluorescent and LED lighting and we have LED site lighting
and so forth. And so what happens is that under the agreement it provides for the
computation of utility allowance and to that end we went on to the HUD websxte
where there was a form that you fill out by the square footage of the units, what the
utility rates are, it's being charged by the utility company, what appliances are
powered by what utility electric or gas or what have you and so we did that
computation and we were able to get approval from the Housing Agency for our
project specific utility allowance. Probably a year and a half (1 1/2) ago we had a
meeting with the Housing Agency and the Section eight (8) Department and it was
explained that the County of Kauai has a utility allowance that is determined for
the County at large and not for the specific project and there was a substantial
difference in terms of the utility allowance between our individual projects specific
form that was computed in the HUD form versus the County position that they
have a utility allowance whether you have zero energy saver features or hot water
that's solar and so it was to our detriment at that time. Also when we met
(inaudible) there was no Section eight (8) certificates that were available you know
like there had been in past times and so it's important also that you understand all
of the units at eighty percent (80%) and below have been rented so it's not like there
are units sitting vacant at that levels. So there was just an issue about the
computation and the allowance of what utility would be provided under the utility
laws.
Ms. Kawahara. Whoever was taking the applications were
you able to tell why if that was part of the reasons why they weren't able to rent or
the actual energy utility thing?
Mr Showe No.
Ms. Kawahara. On top of the rent.
Mr Showe. We do not say, we can't rent to you because
we have a dispute about the utility allowance between the county and it's not
appropriate for us to. you know we had a meeting, we made our request, our
request was denied that they were not willing to provide a project specific utility
allowance and that was just. we made a policy decision well there's nowhere to go,
so.
Ms. Kawahara. Okay Thank you. I appreciate it.
26
COUNCIL MEETING November 10, 2010
Chair Asing: Thank you. Any other questions? If not,
thank you Mr Showe and I would like to call the meeting back to order
There being no other questions for Mr Showe, the meeting was called back to order,
and proceeded as follows:
Chair Asing: I believe there is a motion by Councilmember
Bynum.
Ms. Yukimura: (Mr Chair, Mr Chaar )
Chair Asing: We're in discussions.
Ms. Yukimura. Yes I know but you had the minutes
suspended.
Chair Asing: No.
Ms. Yukimura. I just have some really important
information.
Chair Asing: No, no
Ms. Yukimura. Alright, thank you.
Chair Asing: No, we're in discussion, thank you. With
that, Councilmembers, we have a motion to amend and any further discussion on
that motion. that's the motion you made and you.
Mr Bynum. To refer to the Housing Committee.
Chair Asing: Yes.
Mr. Bynum. I have one.
Chair Asing: Yeah, go ahead.
Mr Bynum. So I appreciate Mr. Showe's testimony
What I heard him say twice is what they want is the ability to rent the units at
market rate, that's what I want as well and I think we all do. But the agreement as
written goes beyond that and so I just think we should refer this to Committee,
modify the agreement to give Mr Showe exactly he said he wanted or even modify
today if we can. maybe I have a question for the County Attorney, may I?
Chair Asing: Sure. go ahead.
There being no objections, the rules were suspended.
Mr Castillo: Council Chair, Councilmembers, County
Attorney Al Castillo.
Mr Bynum. Al these I think are straight forward legal
questions. We can craft a legal document that allows Mr Showe to rent these units
at market rate, is that correct?
27
COUNCIL MEETING November 10, 2010
Mr Castillo Yeah, my answer to that question in regard
to that document or the matter at hand which is the fifth (51h) amendment,
whatever you craft would be an amendment. Of course you could craft any
amendment.
Mr Bynum: Okay so the. but the amendment as written
right now would allow him to rent the units at market rate correct?
Mr Castillo: Yes.
Mr Bynum. But it also would allow, it would in essence
terminate all requirements which would allow the things I talked about earlier
potentially market rental to transient rentals.
Mr. Castillo: Well you use the word terminate, you know
it has been said by former Mayor JoAnn Yukimura regarding the credibility of the
Showe's here and they've stuck to the housing agreement and they've abided by the
law and coming to the Council each time, so I don't. terminate? I think what
they're doing is in spirit of this agreement.
Mr Bynum. The current agreement potentially would
allow these units to be rented as transient vacation rental, correct?
Mr Castillo: Yes transient vacation rental, however, there
is a process and if you talk about the transient vacation rental in the manner in
which this project is, we're talking about a number of units. The TVR's would be
guided by the Charter amendment too so
Mr Bynum. It's in the VDA.
Mr Castillo: Yeah, but.
Mr Bynum. So? This current agreement, the forty-one
(41) units that are currently being rented.
Mr Castillo: Yes.
Mr Bynum. Continue to be covered by the housing
agreement and to be rented at eighty percent (80%) and below as they are being
done?
Mr Castillo: Yes.
Mr Bynum. And this current agreement would allow the
remaining forty-one (41) units to be rented at the market rate?
Mr Castillo- Yes.
Mr Bynum. But it would also allow in essence no other
restrictions on those forty-one (41) units, they could be used for any other purposes
as well?
Mr. Castillo: Yes.
28
COUNCIL MEETING November 10, 2010
Mr Bynum. Okay So we could craft an amendment that
gave Mr Showe what he wanted to rent the units at market rate but not allow the
other potential alternatives, correct?
Mr Castillo- Well this Council could craft any
amendment, yes.
Mr Bynum. Thank you. Thank you.
Mr Castillo- You're welcome.
Chair Asing: Thank you.
There being no more questions for the County Attorney, the meeting was called
back to order, and proceeded as follows:
Mr Bynum. So with that (inaudible) clarified for me, I
think we should refer go with the motion refer it to Housing Committee so we can
make that amendment.
Chair Asing: Thank you. Any further discussion on the
amendment?
Ms. Kawahara. Based on?
Chair Asing: I will not be supporting the amendment to
refer it to the Housing Committee My main reasons for supporting it is a number
of things. One (1) is the possible foreclosure and we lose everything, everything
goes down the drain, if we don't do anything. So that's one (1) possibility Two (2),
they cannot sell it individually Three (3), the Mayor who has presented this to us
is in agreement with this. Four (4) the first right of purchase agreement still
stands. So we can still purchase the entire property and if we do that we save it for
our affordable housing for all Kauai residents. So this is the reason why I will be
'supporting the amendment as proposed and sent to us by the Mayor So with that
we have the motion to move into, to move it to Housing Committee. all those in
favor say aye.
The motion to refer C 2010-273 to the Housing Committee, was then put, and failed
by a 2-5 vote (Councilmembers Asing, Chang, Furfaro, Kaneshiro, and Kawakami
voted no)
Chair Asing: We're back to the main motion as approved.
Any further discussion? Go ahead Councilmember Furfaro.
Mr Furfaro• Yes Mr Chair some of those points that
Mr Bynum made are very much appreciated but I hope to move with a different
urgency on the possibility of acquiring the project and therefore I would like to
create some correspondence on maybe directing the firm of Mr Hastings is
associated with so we can get a fair market value. I do want to find out from that
assessed piece what kind of finance structure we can put together with HOME
funds, with bonds, and actually put a small mortgage on the project and hopefully
we'll get this moving so it'll quickly be in front of the Housing body pretty soon. I
appreciate Kevin's comments to the mic that there is an interest on his part to do it
29
COUNCIL MEETING November 10, 2010
now The benefits for us are the four and a half percent (4 Y2%) interest rate and we
have no idea what actually will, the economy be in a recovery mode eight and a half
(8 Y2) years from now so it might' make sense for us and if they do accelerate in
value, that value is now an essence to the County So I dust want to make sure I'm
going to be sending over that kind of correspondence forward.
Chair Asing: With that, Councilmember Chang.
Mr Chang: Thank you Mr Chair First of all I want to
thank Mr Bynum for putting up these questions; I think it was very, very
informative. I would like to thank Mr Showe for coming out over here, I think it's
very, very clear that when you made note to us that there are nurses at Wilcox very
conveniently located that want to try to get into those units. You mentioned the
teachers, firemen, I mean I feel that's it's fair, they're brand new units, they're very,
very well located. That area is what I'd like to call the food meca, Brick Oven Pizza,
if you want Mexican, Chinese, Japanese, the market place I mean I think it's a very
exciting place. I think it's safe, I think in the future we'll have, I know we have bus
stops, we have walkways, we got the manicured, you know it's right along the ocean
area and I'd like to see more of Kauai residents enjoy that area because I've been in
the units and I just wanted to say and I said it before, I remember going and
walking through the units prior to being a Councilmember and just seeing that the,
many of the units were extended beyond what the units was supposed to be. But
you know I really like the fact that when you designed the units, you used all local
furniture stores, they are all local furniture stores, so if you like the lamp, this is
where you get the lamp If you like the bed, this is where you get the bed. If you
like the mirror this is where you get it. And I like the fact that every single local
store was a part of this local units that were for the benefit of the people. You know
the ground breaking ceremony, I mean who knew that when everybody says oh
don't worry everything's nice around this area, and who knew there would be
twenty thousand (20,000) big boulders directly underneath, so there's a lot of
different things that people don't know about this but you know I'm hoping that in
that perfect win-win situation as everybody here presented, I hope the county can
work out a win-win situation and I hope we can buy it. Because it doesn't make any
sense to buy twenty (20) units or buy you know different management as you said in
different maintenance people, what have you but I'm glad that we had this really,
really good discussion because I think all in all if we can get the right people there,
many of whom have already inquired about the units. I've been in the units, they're
very, very beautiful units, they are very energy efficient units, I think people would
be proud to be here but location, location, location. I think it's a real good location
and I'm glad you all came out here to make that presentation because we need to
help and during that time as you know Mr Furfaro had mentioned you know if we
can get going with an appraisal by the Hasting's Group, I think it would be
beneficial to all of us so I'm really happy to support all of you. Thank you very
much for coming. Mahalo, thank you Chair
Chair Asing: Thank you. Any further discussion?
Councilmember Kawahara.
Ms. Kawahara. Yeah, thank you. Again I want to thank the
Showe's for all the work that they've done in the community and for definitely
developing quality housing. I've been there also on a tour and they're very, very
nice. I am sorry they are not renting at the time, I do want nurses and firemen and
teachers to be able to rent and part of this agreement allows that, that's what I
believe, that part of this agreement allows that to happen but it also allows it to be
30
COUNCIL MEETING November 10, 2010
taken out, out of a ten (10) year promise that was supposed to be affordable
housing That is the issue that I have, that is the issue I have when we talk about
Kauai working families, I'd like to be consistent, this is the second time that a
developer has come up and hands.. with they hat in their hands asking for help
and I agree that the County can do that but I don't agree that through the extent
that we're doing it, I just don't agree that that's what is necessarily needs to be
done. I understand and everybody knows and businessmen knows that the
economy is down, I don't subscribe to the sky is falling forever and that's why we got
to give away ten (10) years, I just don't proscribe to that. You could go either way,
it's going to get better in a year and a half, it's not going to get better in a year and a
half. There's no reason to have to go outside of the affordable housing inventory I
believe the amendment that was requested by Councilmember Bynum would have
helped the nurses, would have helped the firemen, would have helped the teachers,
would have filled some of the units, would have helped the Showe's. but to go even
further than that is what we are voting on now and to me, I don't think that's in the
best interest of the county, I don't think it's in the best interest of the working
families. The portion of it that allows the nurse, firemen and teachers to waive the
income requirements, that is good. The rest of it, not so much and that's what I'm
going to vote on and because I don't believe that it's in the best interest of the
county I believe sometimes and I can say this because I'm going to leave I
believe most of the times. sometimes I feel like I'm sitting in a Chamber of
Commerce meeting and not necessarily the Chamber of the people We skew on
important things like this, we skew a little bit to business and that's fine but I do
want to be able to say that we should be able to stand up for the people and that
this is the Chamber for the people. And lots of times I feel like it's not working that
way and this is one (1) of the cases, we only asking that you take the income
requirements off and allow that to happen and not change the whole agreement
where it doesn't even have to come under an ordinance or affordable housing.
Mr Furfaro: Mr. Chair the meeting's back to you.
Chair Asing: Yeah go ahead Councilmember Bynum.
Mr Bynum. I think this was a healthy discussion and I
think that this amendment will pass today and I think there are many positive
things in that. It will provide immediate relief to allow units to be rented at the
market rate and hopefully we will fill those units with local people that need
housing. And I think that there's an outstanding opportunity for this to be a win-
win solution long term. I am very supportive of the concept that we pursue due
diligence to purchase these units so that they remain in affordable housing not just
for ten (10) years but in perpetuity and be part of our affordable housing inventory
One of the questions I asked is would the purchase price compare. how would the
purchase compare to the cost of development by the county for new affordable rental
units and I think when we answer that question fully we're going to see that this
was a good thing. The Showe Company has done everything they've done with
integrity and they've done it above and beyond in this and other instances. You
know we developed similar units in Lihu`e and if you went and looked at the ones in
Lzhu`e and then go look at the ones in Waipouli, you can see the attention to detail
and the thoughtfulness that went into whether it's solar lighting that keeps utility
cost down, hey that's a great win-win. You have to manage these units, you want to
keep your utility cost down but it helps the environment and there are probably
dozens of those kinds of improvements that were made at these apartments at
Waipouli so when we reach the point where we can add them to the county's
inventory we will. and for future generations be the benefits of that
31
COUNCIL MEETING November 10, 2010
thoughtfulness and that going above and beyond. I am going to vote against this
amendment, I know it's going to pass and I think it's a good thing because I think it
was an overreach, I'm going to hold the Administration responsible for that. You
just heard Mr Showe say eh I just want to be able to rent these units you know and
have the income restrictions. But the reality is, is that this goes way beyond that
and it was unnecessary, Mr Showe said so hopefully it doesn't make a bit of
difference because this all proceeds really well but I think my responsibility is to the
people of Kauai and we kind of gave up some of our, we gave up more than we
needed to, probably going to turn out okay but the responsibility is to the citizens of
Kauai first. So I hope you understand that I'm going to vote no but I understand
it's passing and it's just from my sense of having that responsibility to the people I
answer to mostly (inaudible) the community and we have an honest and
appropriate disagreement on how we should proceed so thank you.
Chair Asing: Thank you. Any further discussion?
Councilmember Kawakami.
Mr Kawakami. Thank you. I will be supporting this
amendment and with reference to this seemingly like its a Chamber of Commerce
meeting, I'm going to take that as a compliment because the Chamber of Commerce
is made up of many small businesses who formed the backbone of our economy and
so, I don't take that necessarily as an insult. What this does is if you are a family of
two (2) and you make more than sixty-seven thousand seven hundred dollars
($67,700 00), you're not eligible for this housing, that's a lot of young local people, a
lot of old local people, a lot of people in general just being cut out of the opportunity
And you know that's what the nature of compromise is, do we always agree on
everything? Absolutely not. But is this a benefit to our county and our people?
Absolutely For our working class people, this is still for them. As far as the
integrity from the developer, there's no doubt in my mind that they're going to hold
up their end of the bargain, they have time and time again. This housing project is
the only thing that they have given up to the county We as government, we
abstract a lot you know, we got a lot of land, coastal land for our bikepath and if
they're here for some relief, I'm willing to grant it to them because that benefit to
our people and our county outweighs any cons that I see. Thank you.
Chair Asing: Thank you.
Mr Chang: Thank you Chair
Chair Asing: Councilmember Chang?
Mr Chang: Yeah I just wanted to add to Councilmember
Kawahara and Councilmember Bynum, you know we all care about our people and
we want a win-wan situation so when you mention we want to act on behalf of
serving the people, I think we are all here to serve the people. I just want to give an
example here Paanau Village, we got fifty (50) units coming on board with the
donated land infrastructure that fifty (50) units cost about sixteen million dollars
($16,000,000 00), I understand that Waipouh project costs about twenty-four million
dollars ($24,000,000 00) maybe unforeseen weather, I mentioned that boulders, I
mean we all know about the boulders. How do you bring in a consultant and say, do
we have any boulders here, no sir no boulders. and then you got the wall, the great
wall of Waipouli you know on the main road.. so I can understand the unbidden
cost and what have you but making reference to the total cost of Paanau located
where we need housing in the K61oa area, you know we need housing in the Kapa`a
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COUNCIL MEETING November 10, 2010
area as well. And we mentioned a little bit about the hundred and thirty-eight
(138) acres of the coastal path that we got for our bikepath, you know the showers,
the many, many things that the. our friends went above and beyond so you know I
think this is going to be good but from what I'm hearing from everyone, from
Housing, from Councilmembers, from the developers. there's an opportunity for us
to purchase outright and I think when we are able to, then we will be keeping
affordable housing forever, in perpetuity and that's something that we need. So
that's what we need to think about one and a half (1 '/2) years hopefully we can get a
deal done within one and a half (1 %2) years and from that point on, those units can
remain affordable as far as rentals are concerned and in my opinion I too don't want
to see any transient vacation rentals, you know it's in the VDA area but I rather see
it for affordability for our residents and I do believe that in the right decision that I
am hoping to be making and I'm proud to be making the approval as that we are
going to be saving these rental units for the residents of Kauai. Thank you very
much for allowing me to express that.
Chair Asing: Thank you. Any further discussion?
Councilmember Furfaro.
Mr Furfaro• Yes, thank you. I would ask the members to
keep the little worksheet that I passed out. If we had the opportunity to own the
entire project, I just want to point out and we focus the entire project at those types
of rates and/or as we've asked Mr. Mackler before to give us what the average rates
are for rentals on Kauai because they are a bit lower than the HUD rates and it
might be something that we want to discuss in the future about identifying full
occupancy even though the average monthly rental rate might be lower than the
averages. At that scenario as I said any acquisition we would do, would also
probably be, have to be subsidized by another quarter of a million dollars to get
those rental inventories to the right place. So I do think that this will turn out well
if we move urgently with an acquisition and you know we will have by August of
next year almost three point six million dollars in our housing fund specifically for
that reason of acquisition. I think we could get a fifty percent (50%) mortgage going
on from HCPC which is a (inaudible) of all the banks in the State of Hawaii to help
us but also this would also help us talking at the State Legislatures, with the State
Legislatures about our movement towards housing acquisition and rationale to also
say we need to keep our TAT taxes because we're housing the people that need
housing and shelter. So again I think if we move urgently by August of next year
for an actual acquisition, this will turn out good for us. Thank you Mr Chair
Chair Asing: Thank you. Any further discussion? If not,
as I stated earlier my reasons for support, besides that I think as Councilmember
Chang alluded to the developer has done what he has, I guess mandated to do under
the guidance of our policies and our zoning requirements regarding building
affordable units. He did build all the units he was supposed to build, so we need to
give him some credit for that. The hundred and thirty (130) acres for Kauai
residents along the coastline is something that I think is great for Kauai and I
think more than anything else if we don't do it, there could be a possibility of
everybody loses, everybody The developer loses, we lose, everybody loses. Why do
we want to take that chance? So I think Councilmember Kawakami really said it
right, I think he bit the nail on the head, it's a matter of compromise. We need to
compromise and do the best we can, I do not doubt that the issues brought out by
Councilmember Kawahara and Councilmember Bynum is valid, they're good issues
and I agree with those issues also but I think it's a matter of compromising and
trying to do the best we can for the people of Kauai. So with that, roll call please.
33
COUNCIL MEETING November 10, 2010
The motion for approval of C 2010-273 was then put, and carried by the following
vote:
APPROVAL. Chang, Furfaro, Kaneshiro
Kawakami, Asing TOTAL - 5,
AGAINST APPROVAL. Bynum, Kawahara TOTAL - 2,
EXCUSED & NOT VOTING. None TOTAL - 0
Chair Asing: Next item please.
Mr Nakamura. Next item is a resolution, Resolution
No 2010-55
RESOLUTION:
Resolution 2010-55, RESOLUTION AUTHORIZING CLOSURE OF HALA
ROAD AT ITS INTERSECTION WITH KAUMUALI`I HIGHWAY, LIHU`E
DISTRICT- Mr Kaneshiro moved to adopt Resolution No. 2010-55, seconded by
Mr. Chang, and carried by the following vote:
FOR ADOPTION Bynum, Chang, Furfaro, Kaneshiro
Kawahara, Kawakami, Asing TOTAL - 7,
AGAINST ADOPTION None TOTAL - 0,
EXCUSED & NOT VOTING None TOTAL - 0
Chair Asing: Next item please.
Mr Nakamura. Next matter is a deferred bill for first
reading, Propose Draft Reading Bill No 2385.
BILLS FOR FIRST READING.
Proposed Draft Bill (No. 2385) - A BILL FOR AN ORDINANCE TO AMEND
ORDINANCE NO B-2010-705, AS AMENDED, RELATING TO THE OPERATING
BUDGET OF THE COUNTY OF KAUAI, STATE OF HAWAII FOR THE FISCAL
YEAR JULY 1, 2010 THROUGH JUNE 30, 2011, BY REVISING THE SURPLUS
AND APPROPRIATIONS ESTIMATED IN THE GENERAL FUND ($90,211 -
County Auditor)
Chair Asing: I'm sorry, we'll suspend the rules first,
Glenn?
There being no objections, the rules were suspended.
GLENN MICKENS• Thank you Kaipo, for the record Glenn
Mickens, I have a short testimony, you have a copy of it. Please let me read it for
the record. I know this will come up again for second reading but I'll submit this
one. since Ernie was hired to be our first house Auditor, I believe that he has
every right to organize his office in the best manner to do the job he was tasked to
do
He has asked for the funding to hire two (2) more people to get his
department up and running and since the people have spoken and want this new
34
COUNCIL MEETING November 10, 2010
branch of our government, I see no reason to deny passing bill 2385 I trust that
Ernie has done his homework and is not requesting overstaffing or waste in what it
will take to properly do his job.
My main concern with this new audit department and I am sure it is of
concern to Ernie too, is with the enforcement mechanism or lack o£ As with OIP
and with Marion Higa's Office, they have no teeth to correct whatever they feel
needs correcting. And I might add that I believe Higa's Office is the gold standard
by which all auditing departments should set their bar level.
I can only hope that we can, by ordinance, give Ernie enforcement powers to
make his auditing research a true reality and not let it be just a waste of his time
and the tax payers money
How often over the years have we heard Councilmembers emphatically state
that OIP has rules and they must abide by that ruling. Yes, we have heard this
when the ruling was in their favor but when OIP's decision was in the people's favor
ES 144 being the best example then OIP was either sued or just ignored.
This is why Ernie must have complete independence in his auditing and have
enforcement to back up his decisions. Thank you Kaipo.
There being no one else to speak on this matter, the meeting was called back to
order, and proceeded as follows:
Chair Asing: With that, any further discussion?
Mr Furfaro: I just want to make sure, I received a
positive testimony in writing on the computer from Barbara Robeson.
Chair Asing: Yes.
Mr Furfaro: I just want to make sure that it is part of the
record, yes?
Chair Asing: Yes, it is.
Mr Nakamura. Yes Vice Chair, we received written
testimony from Mrs. Barbara Robeson that was circulated.
Mr Furfaro- And I also want to share with other
Councilmembers as today is the 10th of November, this would be considered the first
reading of this staffing change, it would then take us to a public hearing on the 15th
of December roughly because of our holidays with Christmas. I mean
Thanksgiving and by the 15th of December, we would have started the proviso in the
budget where we will review all departments and then I would suspect that this
item after that about the 12th in January, we would be out for a second reading but
we would have understood by then what we're doing with the furloughs in general
and cost containment for the county So I will be supporting this but I also want to
make sure that we understand that the yellow book application in audit process is
really mandated by the Federal Government for federal grants and that we had
budgeted this position with three (3) people in it. So I want to make sure we all
have an understanding and if we need a legal interpretation, federal moneys given
35
COUNCIL MEETING November 10, 2010
to us and are subject to audit, do follow the rules of the yellow book. So on that
note, I just want to say I'll be supporting this going to public hearing.
Chair Asing- Thank you. With that?
Mr Bynum. I'm going to make a motion.
Chair Asing: Go ahead.
Mr Bynum moved for passage of Proposed Draft Bill No. 2385 on first reading, that
it be ordered to print, that a public hearing thereon be scheduled for December 15,
2010, and that it thereafter be referred to the Budget & Finance Committee,
seconded by Ms. Kawahara.
Chair Asing: Any further discussion? If not, roll call
please.
The motion for passage on first reading was then put, and carried by the following
vote.
PASSAGE. Bynum, Chang, Furfaro, Kaneshiro
Kawahara, Kawakami, Asing TOTAL - 7,
AGAINST PASSAGE. None TOTAL - 0,
EXCUSED & NOT VOTING None TOTAL - 0
Chair Asing: Can we have the County Attorney up please?
Mr Bynum. Are you going to do this before lunch
Mr Chair?
Chair Asing: Yes.
There being no objections, the rules were suspended.
Mr Castillo: Council Chair, Councilmembers good
afternoon, Al Castillo County Attorney The next matter for your consideration is
ES -472.
EXECUTIVE SESSION. Pursuant to Haw Rev Stat. ("H.R.S.") §92-7(a), the
Council may, when deemed necessary, hold an executive session on any agenda
item without written public notice if the executive session was not anticipated in
advance Any such executive session shall be held pursuant to H.R.S §92-4 and
shall be limited to those items described in H.R.S §92-5(a) (Confidential reports on
file in the County Attorney's Office and/or the County Clerk's Office Discussions
held in Executive Session are closed to the public.)
ES-472 Pursuant to Haw Rev Stat. sections 92-4 and 92-5(a)(4), and Kauai
County Charter section 3 07(E), the purpose of this executive session is
to provide Council with a briefing and request for authority to settle a
portion of claim pursuant to Section 431.10C-304, Hawaii Revised
Statutes, filed against the County by Shane N Matias on June 2, 2010,
and related matters. This briefing and consultation involves
consideration of the powers, duties, privileges, immunities and/or
36
COUNCIL MEETING November 10, 2010
liabilities of the Council and the County as they relate to this agenda
item.
The meeting was called back to order, and proceeded as follows:
Mr Bynum moved to convene in Executive Session at 12:12 p.m., as recommended
by the County Attorney, seconded by Mr Kaneshiro, and unanimously carried.
There being no objections, the meeting was in recess at 12:12 p.m.
The meeting was called back to order at 12:24 p.m., and there being no further
business, the meeting was adjourned.
Re~ ctfully submitted,
PE 1PER A. AKAMURA g~
County Clerk
/ds