Council advances budget after adding contingency funds

  • Rebecca Villegas

  • Holeka Inaba

  • LEE LOY

  • Heather Kimball

  • Matt Kanealii-Kleinfelder

  • Tim Richards

  • Aaron Chung

  • Council Chairwoman Maile David

  • Finance Director Deanna Sako addresses the County Council budget session Thursday in Hilo. (Nancy Cook Lauer/West Hawaii Today)

Stark philosophical differences among County Council members, coupled with limited funds and a lot of funding requests, led to some tense moments Thursday that threatened to blow up a special session on the budget but ultimately culminated in compromise.

The council unanimously passed Bill 21, the $609.1 million operating budget proposed by Mayor Mitch Roth, on first reading after amending it to draw $315,000 from the fund balance — money not spent in the previous year carried over to the new budget year that begins July 1 — and put it into contingency accounts, giving each council member $35,000.

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Contingency accounts give each council member their own little pot of money to give nonprofits and county agencies in a noncompetitive process after council approval. The money is in addition to $2.5 million distributed competitively to 184 nonprofits.

Proponents of contingency accounts say the council member representing the district is closer to the community and more in touch with the needs of the district. Contingency funds are also more flexible and can be awarded more quickly when a need arises, they say.

“The value in them is that they’re flexible,” Hamakua Councilwoman Heather Kimball said. “We do need a small pot that is easily accessible and flexible.”

Opponents say money in a budget, especially in a tight budget, should be focused to make a difference. A large amount targeted to a specific improvement can do more for the county than numerous smaller amounts spread piecemeal over a large number of efforts, they said.

Kohala Councilman Tim Richards, who voted no on all contingency account amendments, said he thought Roth has done a good job with a cautious approach in his budget proposal. The economy is down 25%, he reminded council members.

“I’m still concerned with the budget going forward,” Richards said. “I’m just wondering if there’s a better way to spend some of this money.”

And then, there’s the political aspect. The contingency funds are awarded at a council member’s discretion, rather than through a set system.

“We’ve got to get these into a process that’s objective, that’s fair,” said Hilo Councilwoman Sue Lee Loy.

And, Hilo Councilman Aaron Chung noted, the funds give incumbent council members a huge advantage during election years, compared to challengers who don’t have taxpayer money at their fingertips to please constituents. Chung said the county last year imposed a second tier of property taxes on the wealthiest homeowners on the island, which likely cut into their own discretionary donation efforts.

“Now we’re going to use our judgment to use their money to … feather our nests,” Chung said. “This really is a self-serving measure. No offense.”

That inspired a response from Puna Councilman Matt Kaneali‘i-Kleinfelder.

“We know the uses of these funds. It’s more than political,” Kaneali‘i-Kleinfelder said. “It’s how we take care of our community. … These funds can not be better put to use than through each council member.”

Further comments by Kaneali‘i-Kleinfelder on Chung’s own use of his contingency account drew a swift backlash from Chung, who uttered an oath and said he didn’t like the “hidden innuendos” being made by his fellow councilman.

A break was hastily gaveled by Council Chairwoman Maile David, leading to a long recess off-camera while tempers were soothed, and David later apologized to constituents, saying she is requiring debate to be “professional and respectful.”

The successful amendment, sponsored by Kona Councilwoman Rebecca Villegas, was approved 8-1, with Richards voting no. The $35,000 each council member gets under that amendment is the same as they received for the current budget year.

“The discussion we have had, I think we have all compromised and come to an amount that I think is a fair amount,” David said.

An attempt earlier in the meeting by David, representing South Kona/Ka‘u, to take $675,000 from the fund balance to give each council member $75,000 died on a 4-4 deadlock, with Chung absent. Villegas, North Kona Councilman Holeka Inaba and Kaneali‘i-Kleinfelder voted in favor, along with David.

Inaba’s proposal to take $359,000 from the Department of Research and Development’s $459,000 line item for tourism promotion contract services and put $225,000 into contingency accounts, giving each council member $25,000 drew support from David and Kaneali‘i-Kleinfelder before dying on a 3-6 vote.

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Inaba wanted to put $84,000 of the remainder into a Parks and Recreation maintenance account for building and construction materials, and $50,000 into fire station equipment for the Hawaii Fire Department.

More amendments are expected to be proposed for the budget’s final reading next month.

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