Hawaii County Committee on Finance Special Budget Hearing – April 14, 2026

The Committee on Finance held a special meeting on April 14, 2026, to review the proposed operating and capital budgets for Fiscal Year 2026-2027. The meeting featured presentations from the Mayor's Office, Office of Management, Planning and Finance (on the Capital Improvement Program), Finance Department, Office of Housing and Community Development, Civil Defense, and Human Resources. Key themes included a $966.9 million operating budget (1.4% increase), a $358.74 million capital budget emphasizing wastewater mandates, and a focus on fiscal caution due to projected deficits. Council members approved forwarding Bills 135 and 136 to the full Council, and numerous council questions and public testimony highlighted infrastructure needs, housing strategies, and administrative transparency.

Consent Calendar

• The council forwarded Bill 135 (operating budget) and Bill 136 (capital budget) with favorable recommendations.

Public Comments & Testimony

• Bob Yerkey and Matt Shocker (Waikoloa Village residents and members of Wildfire Safety Advocates) testified on Bill 136. They urged the council to coordinate the development of workforce housing at Kamakoa Nui with the construction of a second emergency access road for the village. They expressed that a 2.5 million appropriation for the road's engineering and design had not been used, and that the road must be in place before additional residents are added via new housing projects.

Discussion Items

Mayor's Budget Presentation

• Mayor Kimo Alameda (appearing via Zoom from Korea) presented the framework for the FY 2026-2027 budget. He emphasized public safety investments ($4 million+ for radio upgrades to police/fire/civil defense, police laptops, prosecutor phone systems), quality-of-life projects (parks, gyms, fields, roads), and financial stability. He noted the operating budget is balanced at $966,891,661 (a 1.4% increase) and the capital budget at $358.74 million. Key challenges cited include a $251 million wastewater spend in FY27, projected to rise, and a total of approximately $1 billion in wastewater infrastructure over 10 years. The transfer to capital is $15 million.
• Councilmembers thanked the mayor for transparency and listed specific projects (e.g., Hilo Skate Park, Isaac Hale Park, Honokaʻa Park bathrooms). Councilmember Kajiwana suggested revisiting residential tax classes for additional revenue.

Office of Management Presentation

• Managing Director William Burkhart elaborated on the administration's priorities, including disaster readiness, civic participation, transparent communication, financial stability, and preserving natural/cultural heritage. He highlighted increased community outreach via the Pūnā program and social media, and continued work on a voluntary quarantine for coconut rhinoceros beetle. He noted the office has 23 positions with 2 vacancies.
• Councilmembers discussed the Cesspool Conversion Task Force report (available on DEM's website), homelessness, and Albizia tree mitigation. Councilmember Kirkewitz noted that Puna is not well represented in the task force, despite containing nearly half the island's cesspools.

Capital Improvement Program (CIP) Overview

• Planning Director Jeff Darrell and Finance Director Diane Nakagawa, along with new CIP Manager Laura Derenfeld, presented a comprehensive overhaul of the CIP. They introduced a new public-facing CIP story map (HawaiiCounty.gov/CIP) showing 162 active projects across the island. They emphasized the need to match spending with realistic capacity, noting that the legal wastewater mandates (EPA) create a compressed timeline. They discussed exploring alternative wastewater technologies and a possible extension of the EPA consent decree.
• Councilmembers asked about prioritization, asset management, and the gap between the CIP wish list and funded projects. Director Nakagawa stated that no project in the proposed CIP is fully funded; each is an appropriation awaiting funding via bonds, grants, or transfers. Councilmember Kimball stressed the importance of maintaining accurate, real-time data behind the map.

Finance Department Presentation

• Director Nakagawa and Deputy Director Malia Kai reported on major system upgrades: the Connect ERP (financial and payroll), OpenGov procurement, a new investment management system (3+1), and an upcoming online grants management system. They highlighted the hiring of a CIP Manager, achieving a certificate of excellence for the 2024 financial audit, and a 97% compliance with high-yield investment designation. The department has 172 positions, 29 vacancies (primarily in Vehicle Registration and Licensing).
• Councilmembers praised the modernizations and asked about property management consolidation, the space study (expected early summer 2026), and the City of Financial Empowerment partnership. Councilmember Kimball expressed concern about the large "miscellaneous" expenditure category. Director Nakagawa clarified that the 15 million decrease in projected miscellaneous spending is largely due to moving known salary increases from a provision into departmental budgets.

Office of Housing and Community Development

• Housing Administrator Kehau Costa presented a $52 million budget, primarily funded by federal grants (84%). Highlights include a 2025 HUD High Performer designation, near-completion of the Kukuiʻōla emergency shelter (16 units), and new units at Nā Hale Mākua (142 units in Waikoloa). The office manages a wide portfolio of assets (1,129 multifamily units, 2,385 Section 8 vouchers, etc.).
• Councilmembers discussed workforce development, the need for permanent supportive housing, and the pending audit of the Homelessness and Housing Fund. Councilmember Inaba noted that the fund may need to be renewed or wound down, and that careful planning is needed to avoid abrupt service closures. Councilmember Kimball urged caution with the new online grants portal, stressing that eligibility should not be determined solely by portal proficiency. Councilmember Kimball asked about county-wide building ownership versus leasing; Director Nakagawa stated that a comprehensive space study is being finalized.

Civil Defense

• Administrator Talmadge Magnolia and Administrative Officer Barry Perriot presented the budget. Major items: a $2.5 million increase for the Land Mobile Radio (LMR) maintenance contract, and highlights of the new Everbridge mass notification system (including police, saving $200,000/year). The office has 12 filled positions. The multi-hazard mitigation plan is completed, and the department is working on a rural emergency communications grant.
• Councilmembers asked about community resilience, defining it as starting with individual household preparedness. Administrator Magnolia noted the department is shifting from large-scale drills to targeted outreach in remote areas. Councilmember Kirkewitz asked about the Conalo storm after-action review; Magnolia stated it has not yet been completed but that social services coordination, damage assessment processes, and messaging are key areas for improvement.

Human Resources

• Director Summer Tokihiro reported 4,023 recruitments completed, 9,182 applications reviewed, and 543 lists of qualified applicants referred. Highlights include amending minimum qualifications for 250+ job classes to remove overly specific degree requirements, and launching a new human capital management module in the Connect system. The department has 39 positions (9 vacancies).
• Councilmembers discussed the worker's compensation budget ($6 million) and the employee scholarship program (budgeted at $500,000, actual use $81,000 in FY25). Councilmember Inaba asked about trainee positions for lifeguards and animal control. Director Tokihiro noted a new pool lifeguard trainee class has been created. On retention bonuses, she said new union agreements can be developed if departments secure funding. Councilmember Kimball urged HR to be seen as a strategic partner, not just an administrative function, especially regarding future workforce needs like AI and technology changes.

Key Outcomes

• The committee voted unanimously to forward Bills 135 and 136 to the full County Council with favorable recommendations.
• Finance committed to a quarterly update cadence for the CIP public dashboard and to continue working on a comprehensive database of all county leased and owned properties.
• Office of Housing will continue planning for a potential winding-down of the Homelessness and Housing Fund, coordinating with the upcoming county auditor’s report.
• Civil defense will conduct an after-action review of the Conalo storms and schedule an annual review of the multi-hazard mitigation plan projects before the council’s August update.
• HR will develop the employee scholarship program further and explore options for retention bonuses with departments that request them.
• The next budget hearing is scheduled for April 15, 2026, at 9:00 a.m.