Kauai County Council Meeting Summary - January 14, 2026
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Kauai County Council Meeting Summary - January 14, 2026
The Kauai County Council convened on January 14, 2026, for its regular monthly session, beginning with a blessing and message of servant leadership from Pastor Anwar Ali of the Kawhi Baptist Church. The primary substantive agenda focused on addressing material weaknesses identified in the annual comprehensive financial report (ACFR) for the fiscal year ended June 30, 2024, involving detailed testimony from the Finance and Treasury departments. Additionally, the Council received a briefing on the CashVest program's success in maximizing public funds and held a special recognition for Patrick Ono, the retiring District Manager for Matson Hawaii, before welcoming his successor.
Consent Calendar
- Approved the minutes of the December 10, 2025, Public Safety and Human Services Committee meeting.
- Approved the minutes of the December 10, 2025, Finance and Economic Development Committee meeting.
- Received the communication (Item C 2026-03) requesting the presence of the Managing Director, Director of Finance, and representatives from NNK, CPAs Incorporated, to discuss the annual comprehensive financial report, single audit reports, and management advisory report.
- Received the communication (Item FED 2026-01) requesting a briefing from the Director of Finance on the CashVest program.
Public Comments & Testimony
- Pastor Anwar Ali: Delivered an opening prayer and encouragement centered on "consent leadership" (Servant Leadership), referencing the biblical example of Jesus washing feet and the Book of James. Pastor Ali expressed positions emphasizing that leadership should be characterized by meekness, wisdom, and the absence of "bitter envying and strife." He advocated for council members to exercise authority with restraint, care, and integrity, urging unity beyond petty differences to foster community flourishing.
- Council Member Cowden: Stated a position of strong support for the CashVest program, describing it as a "high point" of the finance department's work. He expressed pride in Kauai's recognition as a successful case study by the program's provider (3 Plus One) and emphasized the program's value in negotiating higher interest rates with financial institutions.
- Council Member Quillie: Expressed strong approval for the 3 Plus One program, noting it is one of ten programs promoted by the National Association of Counties. He positioned the program as a critical mechanism for saving county money through efficiency and recommended that other such programs be brought to the Council's attention for review.
- Council Member Hallman: Acknowledged Patrick Ono's humility and accessibility, expressing a position that Matson's partnership with the community relies heavily on leaders who demonstrate "leadership with the heart." He thanked Ono for his service to the Food Bank and the Carpenter's Apprentice program.
- Council Member Conashiro: Expressed deep personal gratitude and friendship toward Patrick Ono, highlighting Ono's role in revitalizing community involvement in Kiwanis and other local organizations. He positioned Ono's contributions as essential to the island's development and expressed sadness at his departure while acknowledging his return to mainland retirement.
- Council Member Bulasan: Voice was noted as impaired due to allergies; however, spoken words expressed a position of profound admiration for Patrick Ono as a mentor and a source of hope during difficult times. He advocated for the idea that Ono's positive presence is a vital asset to the community.
Discussion Items
Review of Material Weaknesses in the Annual Comprehensive Financial Report (ACFR)
- Council Chair Folsom: Expressed strong concern regarding the four material weaknesses identified by auditors, emphasizing that while they do not indicate fraud, they represent serious deficiencies in internal controls. He positioned the Council as unwilling to accept "repeat findings" as acceptable outcomes and requested a clear corrective action plan and necessary resources from the administration. Chair Folsom reiterated that the Council's goal is stewardship and public trust, not assigning blame, but insisted on immediate legislative and budgetary support to resolve the issues.
- Director of Finance Chelsea Sakai: Explained the root causes of the findings. She positioned the recent turnover in the Accounting Department (four members leaving) as a significant factor, noting her own late start in September 2023 created a "catch-up" situation. Regarding Finding #1 and #2 (Financial Reporting and Investments), she admitted that prior procedures based on past practices (e.g., SRF loan reconciliation) were incorrect under current GASB standards, leading to a restatement of fiscal year 2023 data. She acknowledged that while the auditors (NNK) were delayed in providing feedback, the County failed to provide timely information or correct the accounting methods.
- County Treasurer Nancy Rowlis: Clarified that the investment recording weakness (Finding #2) occurred because the County did not reconcile investments to fair market value and did not fully complete the reconciliation process. She expressed disagreement with the auditors' classification of this as a distinct "second finding" alongside the first, arguing that the lack of communication from the auditors regarding the initial finding until after the fiscal year closed made correction impossible within the timeframe.
- Public Works Director Michael Trustler: Clarified that the issue regarding unrecorded expenditures (Finding #3, $622,000) was historically due to prior Administrator instructions against booking accruals for construction projects. He stated that under the current administration, Public Works is now permitted and actively booking accruals to prevent this issue, attributing the finding to a "historic problem" that is now being remediated through procedural changes.
- Council Member Conashiro: Suggested that the lack of a County Auditor (an independent internal office) contributes to the volume of findings compared to other counties like Maui, which have internal audit departments. She argued that while the County has external auditors, an internal presence could catch errors before the annual audit.
- Council Member Hallman: Proposed the creation of a dedicated "Compliance Officer" position to proactively inspect departments and ensure financial reporting standards are met throughout the year, rather than waiting for the audit season. She emphasized the need for proactive surveys and softer boundaries in Human Resources to anticipate departmental friction before it leads to mass resignations.
- Human Resources Director: Responded to questions regarding staff turnover, stating that while exit interviews are conducted, many former employees do not share constructive criticism regarding procedures. She noted that there is no absolute requirement for advance notice and that the County's policy generally discourages negative references due to liability concerns, though laws have shifted regarding permissible statements.
- Director of Finance (on IT): Confirmed that the current legacy system (Navaline AS400, described as "green screen" technology from the 1980s) lacks interface capabilities with modern HR systems like Workday, necessitating manual data entry. She confirmed that the new Enterprise Resource Planning (ERP) system, currently selected for implementation over the next few years, will include funding to ensure seamless interfaces with Workday and real property tax systems (Tyler technologies).
CashVest Program Briefing
- Council Chair Folsom: Questioned the mechanism of the CashVest program. Director of Finance and Treasurer Rowlis explained that the program, managed by 3 Plus One, acts as an advisor to analyze cash flow peaks (such as semi-annual property tax payments) and optimize banking relationships.
- Treasurer Nancy Rowlis: Stated that the program has successfully generated approximately $1.1 million in additional interest revenue by negotiating higher rates with banks and implementing sweep accounts. She clarified that the County retains all investment decision-making authority.
Recognition of Patrick Ono and Introduction of Successor
- Council Chair Folsom: Presented a certificate of appreciation to Patrick Ono for his retirement and dedicated service to Matson and the Kauai community, noting the certificate had been delayed since September 2025. She highlighted his roles in the Kauai Economic Development Board, the Food Bank, and Kiwanis Club.
- Patrick Ono: Expressed gratitude and humility, framing his service as a benefit of being a local returning home. He emphasized the importance of leadership with a "heart" for the community.
- Shannon McCannless (Incoming District Manager): Introduced as Ono's successor. She expressed humility and excitement to return to Hawaii, highlighting her background on Hawaii Island and her seven years with Matson's customer service centers. She committed to maintaining the strong partnership between Matson and the community.
Key Outcomes
- Vote to Receive Findings: The Council voted to receive the communication regarding the 2024 ACFR material weaknesses. The motion carried with all members present voting in favor.
- Directive to Administration: The Council directed the administration, specifically the Mayor's Office, to provide a detailed plan for addressing the material weaknesses prior to the next budget cycle. The Chair explicitly stated that allocating necessary resources (including potential temporary 89-day contracts or permanent hires for compliance staff) to resolve these issues is a priority.
- Motion Carried for CashVest: The Council voted to receive the briefing on the CashVest program. The motion carried.
- Formal Recognition: The Council formally recognized Patrick Ono for his service with a signed certificate, despite his initial absence, and welcomed Shannon McCannless as the new District Manager for Matson Hawaii in Kauai.
- Ongoing Oversight: The Council resolved to request quarterly updates on the progress of the corrective action plan regarding the financial weaknesses.
Meeting Transcript
Good morning, everyone, and welcome to the council meeting. Today is January 14th. Before we start our agenda, we would like to call up Pastor Anwar Ali from the Kawhi Baptist Church. As we do the first council meeting of every month. Welcome, Pastor. Good morning. It's great to be with you guys. And it's a joy for me to be here and pray over you and give you my love, my aloha, and just thank you guys for serving. As we start this new year, I'd like to just encourage you guys on the topic of leadership. You guys are our chosen representatives, our leaders, and God's blessed you with this opportunity to serve. And when I think of leadership, I of course admire the leadership of the Lord Jesus Christ. And I was thinking about his leadership style, and he's the consummate servant leader. On the night that he was to be arrested, uh tried and then crucified, instead of running hunkering down or finding an escape, he decided to meet with his future leaders. And he told them to take off their sandals, and he girded himself with a towel and bowed down before them and decided to wash their feet. That was the last thing he did before that night. And uh they took that leadership example with them, and that ragtag of uneducated fishermen changed the world forever. And James, his half-brother, spoke about Jesus' leadership when he wrote this passage in James chapter three. He said, Who is a wise man and endued with knowledge among you? Let him show it out of a good conversation or lifestyle, his works with meekness of wisdom. And he goes on to say but if you have bitter envying and strife in your hearts, hearts, which is selfish ambition, glory not and lie not against the truth. This wisdom descends not from above, but is earthly, sensual, and devilish. For where envying and strife is, and we pray that that's not going to be here in this year's council meetings, there is confusion in every evil work. But the wisdom, I love this clarity here, but the wisdom that is from above is first pure, then peaceable, gentle, and easy to be entreated. That was the Lord Jesus, full of mercy and good fruits, without partiality and without hypocrisy. And so let's bow our hearts this morning in prayer. Dear Jesus, you are the giver of wisdom and the judge of all the earth. And we pause before the work of this new year's governance to acknowledge that authority itself is not an accident. You created it and you gave it purpose. It solely rests in you. And so for anyone else to have any authority, any part, any share of that authority is a gift from you. And it's also a stewardship. And as is true for all your gifts, Lord, that you have given to mankind. Leadership and governance is to be a blessing. Lord, I pray that you'd make these leaders before me a blessing. Fill them with great wisdom, knowledge, understanding, and discernment. Father, we recognize that you are the source of order, justice, and truth, and that you call these before me with great responsibility to serve not themselves, but the good of the people placed in their care. God, we thank you for them. You remind me that I'm to be subject unto them. For there is no power but of God, and the powers that be are ordained of God. So, Father, I pray that you would give those underneath them humility. And Jesus, in this new year, would you please grant these council members clarity of mind and steadiness of heart as they work together? Lord, this is a new year. I pray it'd be the best year of their lives. Father, I pray that you'd remind them of the purpose of civil authority. As Paul the Apostle wrote, for rulers are not a terror to good works, but to the evil. And again, you remind us about your leaders, that they are ministers of God to thee for good. So, Lord, we ask that you'd use these council members for good. And may this truth guide every decision that they make, that government exists to restrain what harms, to protect and uphold what is right and to encourage what benefits the community. Lord, I ask you that you would give courage where decisions are difficult, wisdom and discernment where the path is unclear, and integrity where pressure abounds. Lord, help them to find confidence in this truth, that those you have appointed and you have appointed them.
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