Shared kuleana

On behalf of the County Council, I would like to commend Mayor Carvalho for his signing of the FY 11-12 Budget on June 9, 2011 and once again extend our appreciation to Mayor Carvalho and his Administration for dedicating many hours to providing as much information as possible for the Council to make an informed decision during this year’s budget session. I believe the Council worked hard at attaining a budget that was balanced, fair and the result of a true collaborative effort between the body and the Administration.

To provide a true “check and balance” in government, the Council is charged with appropriating funding for operating expenses and capital projects for each fiscal year, while the Administration is responsible for implementation of this funding. Pursuant to Section 3.10 of the Charter of the County of Kaua‘i, the Council is required to enact an annual budget ordinance which includes both the operational and capital expenditures for the fiscal year and the method of financing for these expenditures. Further, the Council shall provide for sufficient revenues to assure that the budget is balanced.

Common interpretation of the Charter is that it is a strong Charter for the Mayor; however, it is actually a strong Charter for the Mayor and Council with an equal division of influence when it comes to the annual budget, and it behooves the Mayor and Council to work together to carry out the intention of the Charter.

There has been much attention given to the County’s growing “unappropriated surplus” and how this surplus could be used to fund other services and programs within the County. The County currently carries a debt of $198 million that should be paid down without the need to raise taxes and incur more costs for our people before pursuing use of this money for additional expenditures.

There are several areas of Mayor Carvalho’s statement regarding the fiscal year 2012 budget released on June 9, 2011 that require further comment and clarification as discussed below:

Comprehensive Economic Development Strategy

The Kaua‘i Comprehensive Economic Development Strategy, which began in 2004 as a partnership with the Kaua‘i Economic Development Board, is a community-based effort to create an economic development plan to take us to the year 2014. The plan is focused on diversifying the island’s economy beyond tourism, while also playing to the strengths of our tourism-based economy and the values our community has embraced through the County’s General Plan Update of 2000. The CEDS also serves to access grant funding through the U.S. Department of Commerce Economic Development Administration.

This focus was recently reinforced by the County’s trip to San Francisco to meet with several financial houses on the County’s bond rating in which all three expressed interest in how the County plans to diversify the island’s economy. A report from Fitch Ratings, released June 9, 2011, identified an “AA” rating for the County. Of note, the report stated that “the local economy’s dependence on tourism renders it susceptible to economic downturn, disruption of air travel, and natural disasters. Domestic and international visits dropped sharply during the recent recession, but have shown steady improvement since mid-2010.” Department of Business, Economic Development and Tourism Director Richard Lim also painted a similar economic picture in his report to the Hawai‘i Economic Association on June 2, 2011 by stating to the Honolulu Star Advertiser that tourism has remained stagnant for the last 20 years and can no longer be relied on to move the economy into a prosperous future.

At a time when the island economy is still in recovery from the recession, it was felt that this is also the ideal time to continue to implement the County’s CEDS plans, which covers six island industry clusters identified in the CEDS: Food and Agriculture; Health and Wellness; Sports and Recreation; Arts and Culture; Science and Technology; Sustainable Technologies and Practices.

It is true that the Mayor included funding for two of the six CEDS areas in his May 5th supplemental budget submittal. During budget discussions, it was made clear that the idea behind funding the six CEDS areas was based on the fact that management of the implementation of these studies was to be carried out in partnership with organizations like the Kaua‘i Economic Development Board and the Kaua‘i Planning and Action Alliance who have had the benefit and experience of working with the County Office of Economic Development on formation of our island CEDS.

We remain more than willing to discuss workforce needs and timing of completing the CEDS with the Administration.

Conflict Resolution Pilot Program Fund for Energy Projects

At the time the Council was in its decision-making meetings for the Fiscal Year 2011-2012 budget, the issue of Kaua‘i Island Utility Cooperative’s alternative energy strategy was in full debate within the Kaua‘i community. Concerns were specifically being raised about whether or not KIUC consultant Free Flow Power’s proposal to explore hydroelectric power on Kaua‘i via the Federal Energy Regulatory Commission process was the most beneficial route to pursue a more sustainable energy while safeguarding our unique Statewide regulatory framework for in-flow stream standards.

Since that time, KIUC has begun to engage the community in this process while moving towards a co-op membership vote on whether or not to support KIUC’s association with FFP and the use of the FERC process.

As one of KIUC’s major customers, we remain vitally concerned with containing energy costs needed to provide vital County services. In this case, we also recognize that moving towards lessening our dependency on fossil fuels must be balanced with being able to address community-based issues such as the impact of hydroelectric projects on Kaua‘i stream flows and native cultural activities and biota reliant on that flow.

We encourage the Administration to remain a part of this critical ongoing dialogue whether these funds are expended or not.

Kapaia Swinging Bridge

Funding for Kapaia Swinging Bridge was provided with an eye towards using County funds for obtaining matching funding from federal and/or non-governmental sources. Through the utilization of federal and/or non-governmental funding sources, the goal is for the County’s portion of funding this project to not exceed 20 percent of the total project costs. The Council has recently initiated discussions with the State Disability and Communication Access Board and the State Department of Land and Natural Resources Historic Preservation Division to explore possible American Disabilities Act exemptions for the restoration of the bridge, which has been registered on the Hawai‘i and National Register of Historic Places. At this time, the Council feels that not all funding options have been pursued and further evaluation of the possibility for phased work or temporary stabilization of the structure prior to deciding ultimate usage of bridge should be explored.

Curbside Recycling

While it was a difficult decision, the Council reduced $175,000 from the “Recycling Programs” appropriation to eliminate the County’s curbside recycling pilot program because costs have jumped from $2,000/month to $14,000/month. These growing costs and personnel needs to implement the program has created a situation in which the County is now paying increased premium pay to current employees. A better temporary approach is to hire regular employees to reduce increased premium pay exposure until we are ready with a Materials Recovery Facility. Without a MRF, a curbside recycling program is not feasible at this time. In the County’s Integrated Solid Waste Management Plan, a MRF was to be established in the first year of implementing the plan, with curbside recycling to follow.

The Council hopes that the Administration will follow the Integrated Solid Waste Management Plan and begin developing a MRF in the near future. This will allow recyclable materials to be appropriately processed and diverted from the landfill.

Eleele Workforce Housing Project

The Council has historically supported this workforce housing project as follows:

Ordinance No. B-2009-697: An ordinance appropriating $1 million dollars for affordable housing was passed by the Council. (December 2009)

C 2009-369: Request for approval of the Disposition Agreement between McBryde Sugar Company, Limited and County of Kaua‘i for purchase of a 75-acre parcel in Eleele and Right-of-Entry Agreement between McBryde Sugar Company, Limited and County of Kaua‘i for a Due Diligence review of the subject parcel. (Nov.  18, 2009)

C 2010-48: Request for approval to close the purchase of a 75-acre parcel in Eleele, pursuant to the Disposition Agreement of November 19, 2009 between McBryde Sugar Company, Limited and County of Kaua‘i. (Feb. 17, 2010)

Further, moving the affordable housing funding to the CIP project contingency does not indicate non-support from the Council as funding can be made available via a budget amendment during the year that allows for public process through hearings and meetings. Section 9 of the CIP budget stated that “Of the $432,556 amount in the General Fund – CIP Project Contingency account, $273,038 is earmarked for Affordable Housing. The Administration is requested to hold a workshop regarding Affordable Housing prior to the expenditure of these funds.” This clearly illustrates the Council’s intent is to create parameters for an open, transparent discussion with the Administration for a better understanding of the Administration’s vision for this area.

In conclusion, administrative staffing issues were recently addressed by Councilmember Kuali‘i’s letter to the editor on June 4, 2011, and the Council would like to continue to have an objective discussion with the Mayor on these staffing issues. The Council has exercised one of its most important and significant legislative responsibilities in adopting the FY 11-12 Budget and remains willing and committed to continue discussion on these issues with the Mayor throughout the year. It is in the best interest of the community that we continue to work together to promote the health, wellness, and safety of our County through our many efforts and endeavors. This is a shared kuleana.

• Jay Furfaro is the chair of the Kaua‘i County Council.