Easy money: Contingency funds give council spending power

HILO — A few thousand dollars here, a few thousand there. Pretty soon it starts to add up.

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HILO — A few thousand dollars here, a few thousand there. Pretty soon it starts to add up.

In the case of a special County Council fund for contingencies, it adds up to $900,000. Each council member at the beginning of the fiscal year received $100,000. The money can be distributed to county departments and nonprofits, but each allocation must be approved by the council.

Contingency funds were resumed in 2013 following a four-year pause because of the economic downturn. Prior to the downturn, each council member got $300,000.

The council so far this year has spent $376,587, leaving a balance of $523,413 to be spent before the fiscal year ends June 30, Deputy Finance Director Lisa Miura said Thursday. Money not spent reverts to the general fund.

The original purpose of the fund was to have money available, so if a scoreboard broke in the middle of the budget year, for example, the county department could go to the council member whose district it was and ask for money to repair it. Because budgets are set once a year, the practice added flexibility for unexpected contingencies.

Council members nowadays don’t wait for county departments to come forward and ask for money. Who knows better than the council member representing the district what needs funding, they say.

The money doesn’t necessarily stay within the individual district. Instead, council members base their spending on needs they see arising in the community, requests from nonprofits and residents and requests from other council members.

“Contingency funds are extremely beneficial for each council district. A lot of unexpected budget items come up that can’t really be put into the system,” said Council Chairman Dru Kanuha. “I really think they’re an integral part of the budget.”

Hilo Councilman Dennis “Fresh” Onishi several years ago tried to change the county code so that money from the contingency funds could go only to county departments for their use rather than go to nonprofits.

There is already a process for nonprofits, he argued, where they have to compete against each other for a share of a pot of money set aside at the beginning of the budget year. The application forms are detailed, and a report is required at the end to show how they spent the money.

Usually, the county appropriates $1.5 million for that purpose. A minimum of $1 million is required in the county code.

This oversight doesn’t happen under the system of contingency funds.

Onishi was unsuccessful in his reforms.

Critics in the past called the contingency relief funds a slush fund that could be used to bolster reelection chances. Council members interviewed generally said they found it a useful way to meet the needs of their constituents.

Onishi said removing the ability to give money to nonprofits would go a long way toward removing that political tinge. Who knows, for example, where the money comes from to put up a traffic signal, he asked.

Puna Councilman Greggor Ilagan said that there are other reasons for an incumbent’s advantage.

“I honestly believe that incumbents will always have an advantage,” said Ilagan. “If the incumbent has an advantage, it’s because the incumbent has been doing a great job in the community.”

Another councilman said if the funds could be seen as a way of buying votes, those on the council haven’t been using it to that degree.

“It certainly can be an advantage to any incumbent council member, but it wasn’t created for that purpose and to the credit of my colleagues, funds allotted by them have not been used toward that end,” said Hilo Councilman Aaron Chung. “Instead, from what I have observed, each of them have been exercising their discretion responsibly and trying to address needs not only within their respective communities, but outside as well.”

South Kona/Ka’u Councilwoman Maile David said her personal experience showed there was no additional incumbent advantage.

“I do not believe contingency funds give an incumbent an unfair advantage, no more than an incumbent who introduces legislation while performing his or her duty on the council during an election year,” David said. “Having run against an incumbent myself and losing by a narrow margin of less than 100 votes, I believe contingency funds did not result in an unfair advantage for the incumbent.”

Chung pointed out that allocations from contingency accounts are more transparent because they have to be voted on by the council and are made available for public inspection on the council’s website.

• Hamakua Councilwoman Valerie Poindexter had spent $36,200 as of Dec. 2, the latest information available from the County Clerk’s Office.

Almost half of that, $14,000, was used for four festivals; two Christmas festivals, a Sakada Day celebration and Filipino heritage month and Barrio Fiesta. Another $7,000 was given to the Department of Parks and Recreation for educational workshops and training clinics for athletes, parents, coaches, officials and volunteers.

• Chung had spent $28,400, with $8,000 given to Hospice of Hilo, $6,000 continuing a coqui frog eradication program started by his predecessor and $5,000 allocated for a July 4 celebration.

• Onishi has spent $15,729. His biggest allocation so far was $7,190 to the Department of Parks and Recreation for a sign-making machine so the department didn’t have to contract out for signs. He also allocated $5,000 to the Department of Liquor Control to provide a grant to the Big Island Lions Foundation for educational projects and events to raise awareness about the effects of alcohol and substance abuse in family life.

• Ilagan has already spent $61,736 of his $100,000. Of his largest contributions, $17,000 went to Kalani Honua, a nonprofit educational retreat center and eco-community, for food sustainability and Puna resiliency. He also allocated $10,000 to the Hawaii Island Economic Development Board for field trips to Imiloa Astronomy Center. Other allocations supported drug treatment, food pantries and other nonprofits.

• Puna Councilman Dan Paleka has spent $56,000. His largest allocation, $15,000, went to the Punana Leo Hawaiian language immersion preschools. Another $10,000 each went to Hope Services for beds for an emergency center and Pahoa Community Center.

• David, whose online report was the most current, had spent $60,550 by Jan. 6. Her largest contributions were $15,000 each to Pahala nonprofit community service organization O Kaʻu Kakou and the Cooper Center community center in Volcano Village. Another $5,850 went to Hawaii Island Economic Development Board for field trips to Imiloa Astronomy Center and $5,000 went to Milolii to fight a dengue fever outbreak.

• Kanuha, who represents Kona, had spent only $9,000 by the end of December. Girls Exploring Math and Science received $4,000 of that. Another $2,500 each went to the Hokupaa youth program and coqui frog control.

• North Kona Councilwoman Karen Eoff had spent $54,800 by the end of December. Restrooms at Ooma Beach took $10,500. Another $15,000 went for equipment at the West Hawaii Veterans Cemetery and $10,000 went to Veteran’s Treatment Court.

• Kohala Councilwoman Margaret Wille had spent $60,000 on three projects. The North Kohala skate park received $3,000; dugouts for Kamakoa Nui Park cost $20,000 and $5,000 went to the North Kohala reunion.

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It’s not yet known how much council members will get in the new budget that starts July 1.

“We’re still working on the budget,” Miura said. “But we’re a little tighter than we were last year.”

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