Senate Standing Committee on Commerce and Consumer Protection

Okay. Calling to to order the Joint Committee on Ways and Means and Commerce and Consumer Protection. This afternoon, we'll hear from the Department of Commerce and Consumer Affairs who will present their biennium budget. Good afternoon. Happy New Year.

Aloha. Happy New Year, Chairs Dela Cruz and Keohokalole, Vice Chairs Moriwaki, who will be here, and Fukunaga and members of the Senate Committees on Ways and Means and Commerce and Consumer Protection. I'm Nadine Ando, the Director of the DCCA. I'm here with members of the department to discuss the DCCA's budget request for the fiscal biennium 2025 to 2027.

We appreciate this opportunity to come before you as you consider our budget request, and thank you for taking the time to review our requests and related submissions. We're here to briefly summarize what we are seeking in our current budget request and to answer any questions members may have for us.

So in that regard, I'd like to start by introducing members of the department who are here today: first, Dean Hazama, Deputy Director, Will Nhieu, Communications Officer, Kyle Ladal, our Legislative Coordinator, Mike Wan, Officer, Jayson Horiuchi, Program and Administrator for the Hawaii PostSecondary Education Authorization Program, Ty Nohara, Commissioner of Securities in the Business Registration Division.

Randy Leong, Administrator for Cable Television Division, Mike Angelo, Consumer Advocate with the Division of Consumer Advocacy, Dwight Young, our Financial Institutions Commissioner, Brian Padama, Information Systems Manager of the Information Systems for the department. I have Jerry Bump here, who is the Chief Deputy Insurance Commissioner for the Insurance Division.

Denise Balanay, Senior Hearings Officer in the Office of Administrative Hearings, Thomas Mana Moriarty, Executive Director of the Office of Consumer Protection, Esther Brown, our Compliance and Enforcement Officer with the Regulated Industries Complaints Office, Leo Asuncion, Chair of the PUC, and Jodi Endo Chai, Executive Officer of the Public Utilities Commission.

So just really quickly, I just want to go into a summary--or brief summaries of our budget requests. And as noted in our submission, all the requests this year are ceiling increases, use of special funds. So, as we noted in our written testimony, the DCCA's funding source is unique among departments as its programs and operations are specially funded by its own revenue generation.

That said, the DCCA is mindful of the Legislature's fiscal oversight of the DCCA's funding and seeks to request increases in its ceilings to expend special funds to meet its operational needs and to make improvements in support of its mission to provide important commerce and consumer-related services to the public. So if you turn to--the requests are out in Table Six of our submission, and I'm just going to really briefly go over it quickly.

The first one is a ceiling increase of $12M to complete the King Kalakaua Building Roof Project due to additional structural deterioration and exterior damage to areas causing water intrusion that we discovered once construction began to replace the roof. We actually commenced construction in the beginning of, well, a year ago, beginning of 2024.

As mentioned in previous budget requests, this building was constructed in 1913. It's a historic property. In order to get the roof repaired properly in accordance with the historic preservation requirements, we had to locate the right kinds of roof tiles and expend the money to be able to replace it with comparable roof tiles.

So this is--a couple years ago when I first came here, the budget request then was for our, the roof project. Just under 21 million is what we had estimated as our budget for this roof project, but as we begun the project--and I think, probably as people know what happens sometimes, especially with an older building, once you start in, you'll find other things that need to be fixed in order to complete it properly. So that's a $12M increase in our ceiling to be able to finish.

So the total cost of the roof is going to--?

Well, that would be our portion of it. So if, if you estimate 21 +12 is another 30--oh, with the post office. So this, as you know, this building, we, we are--about roughly 75% of the building is owned or by DCCA or the state. Roughly 25% is the U.S. Postal Service.

And so the ownership of the building is done through an Association of Apartment Owners and AOAO, so we split the cost of any repairs, and so yeah. I guess the total would be, in rough apportionment, 43 million total to do the work, but this is our portion, which we are asking for another 12 million to increase our ceiling.

That's a known figure. It's not going to escalate again.

25 was the original number? Is that--

Just under 21.

More than double?

That's about, well, I guess two years ago when this came up.

Cheaper to move into a different building. We could have bought another building.

This is everybody now. DCCA is in that building?

No, two of our divisions are housed in the State Office Tower. So everybody--and we have one, we have captive insurance is a captive insurance branch of the Insurance Division is across the street. City Financial Tower--they're there, and--but everybody else, all the other divisions and branches are housed in the King David Kalakaua Building. So that is our primary home.

Several years ago we came and visited and you folks were having remote workers. Is that still something that you're doing and have you restructured your living arrangements due to the remote work?

I think that might have been probably before my time and during the time of the pandemic still, where a lot of workers were working remotely, but last year we instituted a department wide telework policy--I believe it was July of last year--where, you know, employees are allowed to telework up to two days a week and they submit a request for that and then there's a specific requirement that they put in their work performance and so that we can see what they're doing when they're teleworking.

And so that's been running pretty smoothly since July of last year. So, yeah, it's, it won't look at all like it looked when you came through during the time of the pandemic and most people weren't there.

So you--

So it was a ghost town?

Yeah. Okay. So, it won't be--won't be--yeah, it doesn't look anything like that. No.

So everybody's accounted for in terms of--now, I guess we were looking at space allocations--

Hoteling. Because if you're going to--you shouldn't have both.

I understand. I mean, I think that--but not--well, so that was what, at that point in time we were trying to make some--balance off some of the, I guess, the concerns about people not coming in and, you know, maybe, and also--

No, but if you, if you telework, does your workspace shrink? Because that was the whole--if you're going to do two days telework, then that should be a hoteling arrangement. That shouldn't be you get your same big office and then you're out two days a week.

Well, I, I guess I hear what you're saying. I mean, I think for the most part, I mean, maybe we're talking about a desk or a cubicle or something, but, you know, the, the way the telework arrangements work within the different divisions is, you know, they have it so that they understand--people are dedicated days.

Like if this is when you're going to take your two days and you're going to telework and work from home, you know, those are the days that, you know, you--on the schedule--

That's fine, but you shouldn't get the same arrangement as a full-time person. They're coming in five days a week.

Well, I think the expectation is, I mean, I understand what you're saying.

Yeah, I think.

Well, okay, I, I hear you--

Either know or you don't know. Not I think.

I'm hearing you that telework does not mean you're not working and it doesn't mean that you're not working full-time. The expectation is you will be doing your work.

No one's--no one's debating that.

Right.

A full-time employee that comes in five days a week, whatever space they have is their space. If you're only going to come in three days a week, you shouldn't be having the same space as the person coming in five days a week because you should be having a hoteling arrangement.

Well, I guess--

It's not about the work component, it's about the space component.

I understand. I understand. I--

Well, you want additional monies for that roof, but you should really think about it and figure out how you're going to deal with that.

Here, can I follow up? What percentage of the staff is all taking two days off, two days a week out of work? Is that everybody?

No, we're not. We're not. That's not--

What percentage is that?

A little less than 70%.

70% of the whole department is taking two days out of work?

And you didn't do any space reorganization at all?

I mean, it seems like it's almost automatic. Should it be almost automatic? Everybody can get two days.

That's assuming that they're not working on those two days, which I think is an assumption.

Well, but when you call and when I call the department and nobody's answering the phone on a regular basis, then it may leads me to think that what's going on?

Well, I'm not aware of when you say you're calling and there's nobody answering the phone. I'm not aware of specifically what the, you know, when that was and which department, which division, but I believe that the way this is all set up within each division is to make sure that there's coverage.

But what about like the landlord tenant code line that you have? Nobody answers the phone. You get a recording. Get a recording; it tells you they're there from 8 to 12. You get a recording and they'll call you back within 24 hours. You know, I called today, this morning. I have constituents who call me to tell me they've called, call. Nobody answers. You just get a, you just get a recording.

Well, I think--

Yeah, it's 8 to 12. It says 8 to 12. When you call there, it says 8 to 12. But we've been calling consistently 8 to 12 any day of the week.

Good afternoon, Senators. How can I address your question in a way that we didn't talk about last year, because this subject came up last year where we had a similar question from one of the legislators, and at that time I explained that if you listen to the message, it asks you to leave a message. That is so that our person staffing the line on that particular line knows the issue that the person is calling about and then the call will be returned. So if you leave the message, the call is returned, and I'm confident in my staff returning those calls regularly. And that is what our message says.

And the call that was returned, what they told us was that, oh, you have to look up the HRS. They don't even help you. They tell you to look up the HRS. I've called. Okay, I don't really ask the questions unless I do the research. And I've--and the reason I called is because other constituents call me to tell me that, and if this came up last year and we're still getting the same result this year, then something is wrong.

You have a tracking system?

We have a system. They have the tracking and we maintain those numbers. I report them out on a weekly basis. I have them collected by one of our investigators--

When the call was received and when it was returned?

It's a, it's a tracking system. In terms of the timing, I would have to check on that, but in terms of the volume, we have the volume for the calls coming.

What she's talking about is the immediacy. So if you can start tracking what time the call comes in and then what time you get a response.

But if nobody ever answers the phone, ever, it's all left a message and it needs to be done about that--

It's not an issue of nobody answering the phone. We do have different calls numbers set up for the different islands. So we have an Oahu number. As you can imagine, the Oahu call volume is bigger than the other islands. So the Oahu number has the message.

This is Landlord-Tenant Code, so--and then when you, when you finally get a call back, even when you leave a message, they tell you to look it up on HRS. They don't really call--

I'm confident that that is not the case in 100% of the responses because our investigators are trained--like when they come on board, they're trained. We have investigators who have been doing this for ten years. They know the Landlord-Tenant Code as well as, I would say, any attorney in the State of Hawaii.

Constituents have been lied to.

I'm saying that there's been some confusion about the process.

But you don't track?

We track volume.

No, I'm talking about time.

In terms of time, our investigator, who's responsible for the line is diligent and at the end of the day, they've returned every call every day.

Can you start to implement some kind of system where they can track the time? Because it's supposed to be customer service oriented. You should know that, if- especially if they're saying they're going to get back to you within 24 hours. There should be some tracking.

And they did get a call back--

Look at, Director, you got to get a hold of this.

I appreciate, I appreciate what you're saying, Senator, and we will, we will discuss coming back--

Just for the record, they did get called back within 24 hours, but they were told they have go look it up on HRS. They give them the HRS number.

So, so can we clarify, because, Mona, I thought I heard you say that you have some mechanism in your protocol to ensure that whoever is staffing the line at the end of the day has returned all of those calls?

That's correct. That's the expectation for that position on Oahu, that--and the neighbor islands as well, is that they get calls from 8 to 12. Those callers on Oahu, they're not answered live. The callers leave a message, those messages are returned by the person assigned by the end of the day.

Okay, so they're not answering live?

Because you're led to believe if you call that number you're going to be able to talk to somebody and then you have to leave a message. And then some people feel like they don't want to leave a message, they want to talk to a liveline. But they're not told that nobody's going to answer this phone unless you leave a message. So how many people are actually on this calls? How many people devoted to--

Correct.

In terms of our staffing numbers for this particular area, we have one full-time staff on Oahu who's dedicated to the number--to the calls. That staff is backed up by two to three investigators who have prior experience doing that position.

So if we have somebody out, then the next person up steps into the role to take over the call duties for the day. On the island of Maui, we have one investigator whose roles include both investigations and answering the calls as they come in. Those calls may be answered live.

He mans both the investigation side and the landlord-tenant side. On the Big Island, we have one investigator who's in the same position as the person on the island of Maui. That person may answer the calls live on the Big Island, and his roles and responsibilities include not only the Landlord-Tenant Line, but also his own cases.

But these people can telework?

These people cannot telework. None of these people. That's our decision. We certainly have the mechanism in place where they could answer remotely from a remote location. However, we require these people to be in office and that's so that we can service the public when they come into our office.

Because occasionally we have members of the public who walk in and we have to have somebody present to service them, and that's why we do it. We require those positions to be in office and service the public when they show up to our offices.

Thank you.

Chair, just one follow-up. So they call you, they give an urgency, they call you, leave a message, you guys call within 24 hours. So--and you had this complaint last year that you addressed the same concern last year.

So what is the urgency to change you guys' policy or how you guys are doing things now? I understand you saying you guys have more volume than the other neighbor islands, but what are you guys going to put in place because, like they says, she's the one getting the calls.

You're not getting the calls because you don't answer the phone. She getting the complaints because that's what's the complaints going to her. But your answer is that at the end of the day, those calls are going to be made because your investigator is going to look in the incoming call or making sure everybody was--etcetera. But again, that's--how is that helping the consumer?

So one of the things that we're doing this year is we're asking for the transfer of an additional position from a sister agency in the department so that we can have one additional staff person take the calls on the island of Oahu. So that new person would be able to assist with the additional call volume on the island of Oahu.

Now we heard last year that--and that's what our first response is to ask for the resources so that we can help out the consumers and the constituents--if approved, we'll go ahead and we'll implement, and that person will be of assistance to the public.

Well, you never just say that to Senator Kim.

Apologize if I didn't say it quickly enough.

How long does it take to get that first--that thing transferred? That position transferred?

I would defer to the personnel side for our department, but we've put in that request.

When did you put that in?

It's in--our current request is the--it's described as a funding for salary differential.

But you have a position already. You can just transfer more, right?

But it's just a differential in the salary.

But you guys have moved monies around before.

We cannot move between programs anymore. Yeah, different appropriations apply.

So you're making that correct--the request this year?

To answer your question about traffic and data, part of the funding that you gave us last year was to modernize our website. That also includes a call center. So you have a live person answering a call. You'll record the time, date--

So that's not up yet?

It's not up yet. We expect that to be up this summer, early summer.

Because that, I think, will solve a lot of these issues. If you just have documentation of when--when you receive the call and when it was responded, when you responded to it, at least we have some kind of record. Right now it's only volume, so you can't--it's apples and oranges here.

I think I can get a little more volume that way. I cannot guarantee, obviously, that we're not going to get swamped at a particular time.

No, but as long as you have a tracking mechanism.

Yeah, that's the intent of it is to track everything and more importantly, to track when we got it all, that question or that issue. So we have the date. We'll have the date.

So why is it going to take till summer?

Well, we have the RFP going out the middle of January to have the developer brought on board.

This is an added thing to what you already talked--

No, no, this is from the last--

No, yeah, yeah. This is--money is their guy, which is why it's out for the RFP. Yeah.

The phone center--

So we tried to fix this last year.

Senator, part of it, we're going to stand up a little earlier, but we still need that integration with the website and all of that because people will contact you many, many different ways, right? They send you an email, try and call you or do whatever. So we gotta have our system handle all the different types of ways that people are gonna contact us and be able to track all of those ways too, right.

Does it say on the website that you might have to leave a message?

Thanks, Senator, for the question. Yes.

And also, this first day back, yeah, the mics are sensitive, so you gotta give a little space, Buddy. You gotta aim them at your face, though. You're coming in muzzled on the feed.

Oh, okay.

So just in response to your question about whether the public is advised on the website, we have a notary, a notice on our website saying that you'll be prompted to--

And how are you tracking the calls daily? Just like on a piece of paper or on one of those little tabs on a spindle?

I'd have to check with my staff. From what I recall, they're--they're keeping--they--we use our--we use two systems, actually. Our staff is working with Excel on certain stuff, but in terms of our call volume, we're working with our, what's called our case management system, investigations, management.

So you are tracking whether there's resolution on these calls if you're using a case management system?

We are tracking. We're tracking whether we connect with the person or not. We're tracking calls, incoming calls, outgoing messages left by our staff and by others, and we're tracking when we connect with a person and have a live conversation.

So that is what you should have told us right at the--you have a case management system that you're utilizing to monitor your call volume.

We do have a case management system. I didn't want to misrepresent, though, that we're called--we're, we're tracking the actual time of each particular call. What we're tracking is what I represented to you, which is calls in, calls out.

But how hard would that be to just add one more column?

We have a great relationship with our developer for the case management system. They've been super responsive, and we're constantly working on upgrades to that case management system. I think that's something we could go over with them.

Oh, they're not going to change order you for something that they're probably already measuring?

We're very pleased with this particular contractor. They're excellent.

Okay, can I talk to--have someone that handles the professional licensing agency? Nobody's here. Okay. Okay. Let me just send--okay, why don't I just say what I need to say then? This is in regards to the phone services. I want to create a bill. Until today, I haven't gotten respond--let me tell you what it is--and this has to do with the Pearson VUE testing program.

Nurses graduate from UH Hilo, and I'm sure from Maui and different islands. Once they graduate, they cannot work until they're certified. This is only done currently on Oahu, and only one person does it. So we talked to the Director at Manoa, but my understanding is Manoa's nursing program is not affiliated with your testing program.

So we got in touch with Chelsea Fukunaga--she's the Executive Officer from DCCA-- their whole time to connect with anyone is also over an hour. I got after my staff in October, on November 18, because I wanted to create a bill to allow nurses to be certified either on their island or if they can somehow manage a system on doing Zoom or whatever. The graduates I attended, Senator San Buenaventura attended their graduation. We're graduating nurses 22 a year.

And do you know that they have to come to Honolulu for a test for one hour, then they got to go back to Hilo and they're spending monies. These students, I have not worked yet. So we started this communication. We got reply. I got another one. No responses. Automated messages sent us in circles.

Whole time, always one hour plus. Then we got--yeah, we got all these things documented. The last response to, actually, this person, the last response was December 18th. We continue to send messages. The phone, nobody answers until today.

So I'm going to just do a bill and then you guys can make comments on it. Either increase your staff, because I understand this particular position--only one person does the test. Can you imagine, our nurses, we're doing so well with Big Island and the healthcare, we're creating new hospital beds, we're building new buildings for our hospitals.

We need nurses, and they can get certified. Okay, so I'll leave it with that. Please--so since I don't have a figure what it's going to cost for your personnel, I'll just create a bill and we can discuss it during the time. Okay.

I appreciate what you--

Thank you.

Okay, so besides the, the request for the roof, what else do you have?

For our captive insurance branch, we're looking for additional monies.

Yes, 901. Is it 901?

IT enhancement.

Oh, okay. I was just looking down Table Four for your decisions.

Oh.

So a table. It should be on table six. Okay. For CCA 106, it says captive insurance. IT project. It's about.

No, you don't want to go down the list, though.

Zero, I can go down. Yeah. Then it's easier. Okay. I'm sorry, I must have had it in a different order. But if I go down the list in table six, the next thing under. There is actually a PUC budget request.

No, this is for an additional Auditor five Auditor five position, which I think is explained why they need that. And Leo Sunshine and Jody Chai are here in order if you have any specific questions about the need for that position. The next item is also another PUC request for $1.0 million for other current expenses.

Basically Maui Wildfire consultant costs related to things that are coming up before the PUC where they need to get some outside additional help to be able to address these. So similarly, that would be another specific item for the PUC to address. Next related.

Although it's not PUC, it's driven by a ceiling increase for our consumer advocacy division to hire consultants. This is $900,000 to hire consultants to help acquire additional expertise and supplemental resources to review, analyze and make recommendations on filings and plans submitt bi regulated utilities related to the Maui Wildfire. So I guess there are a lot of.

So how much of this is ongoing and how much of it is for time certain?

I'm sorry?

How much of this is going to be for ongoing and how much of it is going to be for time certain?

Yeah, yeah. So because this would just be what they need, right. One time to be able to hire.

Zero, one only. One year only.

Yes, yes. Correct.

What? For what?

Well, I mean, Mike Angelo is here and he can maybe describe in more detail why this is needed.

Afternoon, Senators. Just to provide a little. Write a little more context. It's one time ceiling increase request. There's filings that we're expecting through orders. That the PC has made related to the Wildfire. So like their Wildfire safety mitigation strategy. In addition to hazard mitigation plans, these. Require outside expertise with very specialized expertise.

And that's what we're asking for the plumbing for.

And is it fair to assume that the budget requests for the PUC are comparable for comparable expertise to deal with these safety plans? Okay, thank you.

Okay, so that's. And then I guess because the way that the funding works for our consumer advocacy division, we are including a $900,000 matching expense to increase the PUC special Fund ceiling.

But this is all for existing contracts or this is for new contracts.

Yeah, these are, these are new contracts.

For one year only but after executing my dear.

So those. Deal with those. And then the next one is a salary differential for an Investigator 3 position. This is what we were discussing earlier with Mana Moriarty and consumer protection about he needs to cover a salary differential for someone a position that's being transferred to assist with the landlord tenant call center.

So that's what that is for. There's another, the next one on table six is another PUC request. This is for an engineer Engineer five position. And you want more detail on exactly what that's for. Leo is here to explain that if you need more background on that one.

And then after that is what I was referring to earlier which is the captive insurance IT project within our insurance division. Basically it's a.

To be able to improve as it's described here to meet the requirements and tasks for development of a cloud based web hosting solution including additional content management document and workflow systems as well as associated professional IT services and subscriptions and licenses to improve efficiency and processes presently being performed manually and being use of multiple Ms.

Excel spreadsheets which are kind of archaic. And so this is captive insurance branch within our insurance division. And just to kind of give a little background on that. I mean the captive insurance captive insurance companies now have over 2 billion in assets that must be held in the State of Hawaii.

And you know those, those companies provide local jobs. And so this is really to kind of modernize the environment, the captive insurance business environment to make it so that we can continue to attract more captive insurers into the state.

So it's kind of trying to bring it up to some level that you know, would I think, you know, justify what, what potential there is to, to expand captive insurance market. So that's what that request is for. And then the rest of the.

There is one item before fringe benefits for the medical compact which is going to be going live and getting implemented. But it is to defray some anticipated program costs $25,1 time for that as they set up the program. So that is one item after that on the table. The rest of them are fringe benefits.

Increase our ceiling to pay for increased fringe costs for these various divisions.

And the last three items listed are to be able to increase our ceiling to make our central services assessment payments so that we have some room in case there's more revenue that comes in and percentage of that that needs to be paid over into the General Fund is greater than what we had a ceiling provided for so that's somewhat housekeeping, but it's based on the idea that we need to increase our ceiling to be able to make that payment.

And that's it on Table 6. Any questions about any of the other items?

Questions?

I have a follow up question on that cloud based web hosting solution. How do other insur. How are other insurance providers, I guess regulated? Do we have a system that we use for the providers that are currently operating in Hawaii? Is the captive insurance market very different from the rest of the providers that we regulate?

Yeah, the market is different, but the regular insurance companies use a system called sps. It's a nationwide system, but it doesn't accommodate the captive process.

Okay, so this is sort of a specialized feature that would allow for greater flexibility on the captives end, on the.

Department's end, more efficiently and handle the captive process as well as possibly attract more captives into the state.

Okay, if it looks as though, you know, the state is really interested in moving more into perhaps standing up a state sponsored captive type of arrangement, could this type of IT solution also help the state in identifying perhaps greater detail as far as the kinds of coverage that we would want to offer?

So the system is going to be designed to handle all captives? All different types of captives.

Okay, is, is there any, I guess example of this particular system that is currently being used elsewhere?

As far as I know I'm very. As far as I know, I don't think there's an automated captive system.

Yeah, I mean so. Good afternoon. Currently. Yeah.

As the director detailed, currently internally most of this stuff is being done manually because you know, initially when the captives was formed, it just grew and grew and now it's gotten to the point where specifically we're one of the few, if not the only states that like still require, require payments to come in via check, whereas most state captive programs have ways to, you know, electronically receive those.

To get to your earlier question, the division itself and all the licensed insurance companies, whether it be health insurance, homeowners insurance and things of that nature, they are handled by a different system. The captive system was looking to be more specialized because they have a lot of filings and different, different needs than what the traditional industry requires.

There are other states that have systems in place. Usually they are kind of homegrown. We are in the process of looking at different options. So providing this budget request then gives us that flexibility then to go out with an rfp once we've determined exactly what we want.

If we can't make the SBS solution also work for captive branch.

So Would you envision that it would take a relatively short time if you have other state jurisdictions, models to draw from and even parts of the existing, I guess, current industry software to develop as? Absolutely. Yeah.

We wouldn't try to reinvent the wheel if it's already existing and doing well in another place. We could look to piggyback off of that as well. But to get to your kind of your earlier question too, about whether or not you had mentioned, like the state perhaps getting into the captive business.

I know that it's been mentioned a lot. That wouldn't necessarily fall within the captive insurance branch. They wouldn't. They would regulate that entity that gets created by the state, but they wouldn't.

That IT system wouldn't be used to, you know, administer a captive insurance program that the state sets up, but it would benefit the state if the captive regulator has, you know, better IT infrastructure to accept electronic filings and to accept, you know, electronic payments.

What would your time frame be for implementation?

I mean, it. Right now it's uncertain. I don't know if you've had. I know you've had discussions with the captive administrator. Six to eight months once we have the funding.

Okay, thank you. Senator Elephante, followed by.

Senator, good afternoon on Table 11. On your vacancy report, I know you have it listed as priorities and some of your priorities for some of the vacancies are in the program ID for professional vocation licensing, and a lot of them are the admin assistants.

So is the intent to fill those positions to provide more meetings for professional vocational licensing or just to fill these positions for the current status of meetings that we currently have now?

Yeah, right now this is just for current staffing level. So their vacancies, is there any intent to increase?

I know there is sometimes can be a demand with not enough meetings in this field.

Yeah, we want to look into that. Obviously we want to support the boards and the commissions and have meetings as much as possible. But to answer your question, these vacancies are for existing positions.

Okay. Thank you, Deputy Director. Thanks, Chair. Any other. Senator Kim.

Well, as a General question, I see you have a vacancy for business registration assistant, but what is the whole purpose of registering a business with DCCA?

Good afternoon, Senators. The purpose is really just to have it registered in the state's database. So we are the official record keeper of all businesses that are registered.

So when a business is registered and constituent looks them up and find out that they're not in good standing, there's been complaints. What does DCCA do well for us.

If an entity is not in good standing. That means they haven't filed their annual renewals for two years plus. And then after three years, that entity gets administratively dissolved. But we have no enforcement. So we are a ministerial agency.

Yes. So that's why I asked the purpose, because the public seems to think that they look up a business that they've had problems with and they find that the business is not in good standing and they call DCA and then you folks tell them you guys can't do anything.

So what's the purpose of having them register or be in good standing if nothing happens to them?

And the other question is, do you folks coordinate with the city to see that some of these businesses, if they're operating out of their home, that they're allowed to operate because there's complaints in the community that businesses are being run out of the home that really shouldn't be.

They cause noises, all kinds of parking problems and so forth. So again, they go to DCCA because you folks are the ones get the business license, but then there's no enforcement, no action, no nothing. So then what's the purpose? You collect fees.

So for us, I mean, I don't know if I have the correct answer for you.

We do coordinate with other agencies, but coordinate meaning that those agencies generally come to us to ask for any documentation that we may have for a business, whether it's investigators from the Tax Department, land use, all different other agencies, as they do their own investigation. So all we do is provide whatever we have on record.

But I understand the frustration with regards to what you're saying, but, you know, we get, I think currently we have about 190,000 active entities, and with our staff and with the statute, it really is a ministerial agency.

So what we can really do is just provide assistance to any other agency that's doing enforcement for those particular business types. Meaning, like if they have a license to do something and they're not supposed to, then if that other agency enforces that, then we would assist in that however we can.

So technically there is no penalty or nothing for people not registering with you or registering and they're not being in good standing. There's no.

So again, if they aren't in good standing for about three years, we give them an extra year to file any delinquent filings and any delinquent fees, and after that we provide written notice that they will be administratively dissolved.

Well, this entity has been delinquent since 2022.

So then in 2025, depending on that particular quarter, is when they would be administratively dissolved. So up until then, they have the ability to make any delinquent filings to get back up to good standing. So the good standing is just whether they complied with the filing requirements for us.

But there's really no like Better Business Bureau in the sense that people can judge whether or not this business is legitimate business or a business that is.

Not for our particular agency.

I think that needs to be made clear to the public, thinks that if they're registered, it should be in good standing. If they're not, then get reported to you guys and then something's done, but apparently nothing.

I have questions for the PUC. Happy New Year, Leo.

Happy New Year.

I just see that your agency is going to have huge, huge responsibilities over the next few years, particularly on the energy front. And, you know, I've had discussions where you have so much on your plate. Waste water, cesspools, maritime, ground transportation. I talked to Ed Sniffin.

He says he's willing to take on the regulatory oversight of maritime and ground transportation. So if he were to take that and we move your bodies and your funding over to Department of Transportation, is that something you would be receptive to?

I will say, as part of the bodies. Right. Our, our staff. Right. The. We don't have dedicated staff for just maritime or just ground transportation. Right. Or motor carriers. Right. It's a pool of people and as things come in, that's where they get assigned. So they could spend in a given day, 10% of their time on.

So that doesn't equate to exposition. Right. Because they're also working on the other things that you mentioned that we, that we regulate so we could give you that information. And we're pulling that information because you made that request this morning to me in an email.

So we're pulling that information together, but it also requires them to take other things that kind. So in other words, like we also take care of the tariff, the certification of these entities. So is that part also going over to dot, or is it now going to be split? Right.

So that, that those are the things that we need to, that everyone should consider if we're going to do this and really realize. And I know Ed, right. We, we worked on something as far as enforcement of motor carriers last session. Right.

But when he took, when I said, you know, we also do the tariffs, are you going to take that? And he said they're not set up for that. Right. They only have enforcement officers. So what part are we talking about, Right.

Moving over to dot, is it just enforcement of or Are you going to set up like a maritime Commission to take care of young brothers and Honoheke, who's the other water carrier? Right. The ferry that goes between Maui and Molokai. Right. What, what exactly are we trying to do?

And I understand from a basic standpoint, but I think we need to answer those questions first. And Karn, but we are pulling that information for you that you requested this.

Morning because part of me thinks that, you know, having skill sets that are all over the place. Right. I think that, you know, regulating the tugboats and the electric company as well as ground truck, those are very different skill sets.

So if you have people that are doing all three, maybe we should have them very well versed in one out of those three. I really want to see the PUC focus on energy. That is going to be a serious issue as a community that we're going to have to face. Right.

Making sure it's reliable, making sure it's renewable and making sure it's affordable, all of which we honestly not doing a good job on providing confidence for the community on all three of those fronts.

And perhaps if you had people that were dedicated specifically to energy under your direction, that might help us get to better permitting, better accountability, better sense of responsibility of the utility.

Yeah.

Understand that.

I have questions to add to the discussion since we're on. And having been with the Chair of Transportation and now Vice Chair, we've worked on this for years now. The law requires that the PUC regulate all utilities. Public utilities. Yes, the public utilities, which includes maritime. I can see the discussion, the concerns that chair approaches.

But I can see the issue with the mandate that's in statute. So, you know, how do you refrain from or make an adjustment to the law existing that gives the utilities, which includes the maritime, an opportunity to be split. But you know, the regulation part, I can see rate increases. I mean, you talk about the tariffs.

So that's going to be a lot of discussion.

That's part of.

That's the issue that we come up.

Yeah. Is DOT going to now take care.

Of and I can start working with transportation.

But you know, all of this needs to be worked on in a Bill. Yes. Because it's not a. That's this. Yeah. It wouldn't be through a budget. So, yes, those discussions would happen in subject matter Committee as they revise the statute.

Thank you. Thank you, Chair.

Questions. So I have a question, Director, you know, most of the questions in this briefing today centered around either professional, vocational licensing, the PUC or the insurance division. And when I look at your vacancy report, most actually, probably the overwhelming majority of your vacancies are in those three divisions. And 105106 and 901.

Almost all, I mean, most of them are from one of those three divisions. And as Senator Wakai just brought up, I mean, these are all big issues that are being discussed here that are confronting these divisions. And when I look at your overtime report, $31 million last year, half of it came from these three divisions.

And your projected overtime increase for the next biennium is 25%. So I know. Professional vocational licensing, for example. The division administrator is now gone. So you are looking for a new administrator. We don't even have someone to talk to. She advocated year after year for more positions for the division, and they were granted.

And they're sitting in the vacancy table and you're burning overtime. And we're peppering you with questions that you cannot answer from these divisions. So the question is, what is your plan to address the vacancies in these divisions? Because it's obvious that your divisions are running hot in these critical areas. Unless I'm reading these tables wrong.

I'm sure you're. You're correct. But if you look at the type of positions, and I think systemically throughout the state, we have challenges with those type of positions. So they're entry level office or their office assistants and some legal clerks, things like that. So we just, I mean, we continue to get search, we continue to contact people.

They're just not interested. And even if we bring them on board, they don't, they don't stay around for very long because of the. The pay. They're civil service jobs. But we're gonna have to figure out something and work with.

Definitely work with d her to figure out because I don't think we're the only Department that has this issue.

You're not. And this is the same answer from every Department every year. Yeah. The difference here is that in terms of requests for new positions that are, I guess, more appropriately classified, you have one request for an engineer from the Puc, and you have three requests for consultants to provide expertise around the wildfire.

So you're running vacancies that you're saying you can't staff, you're running overtime, and you're projecting it to go up. And you're not asking us for new positions that can actually be hired out. So that puts us at a real tough position in terms of a solution. So what's your plan to figure this out?

We recognize that it is something. I mean, I understand printing positions are very difficult sort of across departments for some reason whether it's the pay scale or it's the requirements for the job because they're civil service. And then, you know, I don't know that it's necessarily what hangs things up and wait until this can be heard.

By the time you get the list, it's a long time and not many people are responding. So there is a frustration I think we have to the extent there are positions that we can.

But I thought, I thought we passed the bill so the departments could look at the list earlier.

Yeah, we're getting. We're getting the list. It's just that, you know, we have 30 people on the list. We contact all of them. Either don't get back with you.

What was the piece of legislation we passed last year so departments could do it before D heard and then they could start gathering their own lists.

Zero, that's. Yeah, we have that for a certain position but they won't give it to us for common positions across the state.

Even though we passed the law.

Yeah. So we don't. We have delegated authority or positions that are more or less unique to our Department but for positions that are like common across all the departments. So if we.

I suppose it's like if we've come up with a particular description that makes it like only someone who works in this division is going to have a position description like that. Maybe that something we have to work around so that men get that delegate authority.

But you're right, I mean we have to find ways to be able to speed up the process. Yeah. Getting the list or whether it's getting. Yeah.

So chair for the entry level positions. Not a. You guys also passed that law about changing or looking at the MRQ for the position but in this case for the entry level positions, the MRQs are Low already. So it's not a. It's not a question of them qualifying for the position.

It's just finding applicants that are willing to work.

What about the Heli MOA program?

Did we use that too?

And how many have you recruited from.

I think we have. I think we totally. We got so far about six to.

Eight of them that ended up. You ended up hiring.

We actually hired. We hired a couple of them and then, you know, some of them just decide not to stay.

They can go on and do other stuff. Couple is better than nothing. Yeah. Because before we didn't have anything.

They were.

Yeah.

My only, I guess issue with Helemu is we can only keep them for two periods. If I'm looking at.

That's because you're looking for. Yeah, but it's not supposed to be permanent. You have permanent positions you gotta fill.

Right.

The Heli Moore is an internship program. 12 weeks that you can extend to 24. Right. So that should give you enough time to figure out, okay, is this person somebody we want to hire? So it's not meant to be added permanently to your books. It's meant to be as a. As an entryway. Yeah.

So you can fill positions. Yeah.

But some of these. Some of these interns are in. Are in school. Right. So if they're not. If they're not juniors or, you know, hitting their seat.

But it doesn't have to be anybody in school either. Right. The position is for anybody. It doesn't matter the age. It allows them to have an internship in the state. And you can determine if. Okay, this is somebody who we. We match with. Yeah.

My. I guess, Director, my concern is that, you know, I acknowledge that this is a problem across state government, but we're just talking about your agency and the divisions that get the most attention, I would say, by our constituents, but also, you know, internally are the ones where you're carrying all these vacancies.

And so you cannot just keep coming back to us and saying you're short 20 office assistants. There are investigators in here, there are engineers in here.

So, you know, it really would help us if you can come and present at least new requests that you're going to swap out, you know, so that you can actually hire these people. The next. Besides the three, the next one below that is Rico, which is what everybody wants to have happen. Enforcement against bad business actors.

And that's another $4 million. So that's. That's two thirds of your overtime. Right. There is licensing enforcement, PUC and insurance. So I would hope next time. Well, I mean, we still have time. We just started today. I mean, there's 50 positions on this list of vacants.

These numbers may not indicate it, but we are constantly looking at what we can do. In particular, I mean, I'm very. We are very, very concerned about. About pvl. I mean, you know, it's a. It's a critical time and, you know, it is a division that has a lot of demands on it. I mean, the.

The positions there all for a lot of, you know, we. I mean, sometimes it's a vicious cycle because it's like sometimes you have to work so hard in these positions. They require so much more Than, you know, somebody working in another Department getting paid the same amount of money for half the amount of work.

This is what happens. I mean, we are constantly dealing with people who come in and then because we're already short staff, they're inundated with a lot of work from the, from day one. And after a month or two months, you might see somebody deciding, well, they found something else. And then it, it's.

I'm not saying that's an excuse. I'm very concerned about how we can figure out how to stop this cycle.

Because whenever you have this kind of level of vacancy, you know, the people who are left, I mean, overtime is overtime, but the people who are left are just drowning, you know, and it makes it much harder to retain those people when someone else down the road is saying, zero, you can come and work for me, you make more money and you can work half amount of time.

So we are trying to look at it and trying to think in terms of what we might need to do organizationally, structurally, you know, to look at how these positions, how we have these positions and what they're doing to determine whether or not there's really some systemic things we need to do to improve it.

Because otherwise we are in a, just a vicious cycle of people leaving. And, you know, I just, the other week, you know, we lost someone else who was going to go out on leave, maybe for paternity, and then just decided, well, maybe I should just quit.

I mean, but that's another Executive officer, you know, who is in charge of how many boards and commissions we have to look and we have to find more people to fill those positions, which are not, I mean, we're not talking about sort of the entry level positions at that point, but we are talking about positions that require a certain amount of qualification, skill, educational background in order to be able to manage what the position requires.

And when we're talking about people complaining about how long it takes to get their applications approved, when the boards are going to be meeting, to be able to consider those applications and pass them and the backup created because you don't have the Executive officers in place to be able to schedule the meetings, to be able to conduct the meetings from which decisions can be made on those applications.

I mean, this is why it's a, it's a cycle and trying to look at how we can maybe restructure things to make it so that we can find a more efficient way to be able to recruit and keep people.

That's how we're situated with the leadership on that, Can I ask a follow up question? So based on the divisions that we talked about, what percentage of those divisions are doing the telework and of the ones that are doing telework, how much overtime is occur?

Well, we don't control the Puc. PUC has its own.

No, I'm not saying. But the ones that you. Okay, so like in the business registration.

I heard PVL and insurance, was that PVL insurance.

Okay, business, business licensing, all of those areas. I mean, I, I, I just want to correlate whether or not the fact that people are on remote, remote work and if there's one area in which they seems to be a lot more vacancies in that area and whether or not those areas in fact positions are having overtime.

Because then it makes you wonder whether or not they actually aren't as productive being on remote, whether it would be more productive in the office, maybe gonna.

Offer a more telework so that they. Come and pick the job.

Zero, you see now I've had, I've had people say who have left their positions complaining that we didn't offer enough telework and it was because they went to work somewhere else where they could telework, you know, four to five days a week.

Meaning Office of Energy.

No, but I, I don't know. I've had that five days a week. People tell me, this is why I'm leaving, you know, because, you know, you only, your Department only provides and offers two days a week telework versus somewhere else where they can get paid. If not comparable, perhaps more where they telework almost every day.

And how this person made a point of talking to me about it in.

A weird sort of way, that's the problem that D HERD has created because it's just, I guess I'll just use pigeon. It's just all hammerjang as far as all the different telework policies within the whole state.

And so you're creating this competition now just based on telework between departments because D HERD refuses to have a more holistic approach.

I guess it's sort of, I see both sides clearly of, you know, this discussion and the sense that, I mean, for example, in my office we offer anyone who works under the director's office up to only one day a week of telework. And during session No.1 teleworks. I mean we make that a point to.

And of course Deputy Director and I never telework. I mean, we're in there of Course, every, every day. And I come from a background where when I was in private practice, I never teleworked. I was always in every day.

But I have to adapt to, you know, what, you know, what, what's in place and what people have come to be, you know, expect in some way, in some ways from their work environment. And this is how we ended up with a two day a week policy.

But to get your point, I mean, whether or not we were to cross reference those positions, those people who are teleworking two days a week, and whether or not that means somehow we have overload in those particular positions of people getting backed up and not getting enough stuff done and then that ends up with more vacancies because people feel like they have too much on their plate and they quit and they go somewhere else.

I mean, it would be interesting for us to take a look at that, to really spend some time to understand whether that might be part of the problem. I'm certainly not adverse to taking a harder look at that because I do think we have some structural, organizational problems that really need to.

We need to take a hard look.

Now, if every phone call is being answered, if the efficiency is going on, is there not a lot of complaints about, you know, customer service, then there's no reason for us to ask this.

But when these kinds of questions come up and you know, and you call and nobody's there, and I call director's office to find somebody within that certain division and they can't, I mean, that's when the questions come up. Well, where is everybody? Why isn't people answering the phone?

Sure, I understand.

Any other questions?

Yeah, just one question. How is the Department addressing the increase on the insurance policy for the Condominium Association?

It's really.

I don't know if you guys have an answering service, but I know we've been getting choke calls on that, so.

Well, that's a pretty big question. I mean, it's just specifically on inquiries. We do field a lot of inquiries. We get back to each person who reaches out to us. We try to provide them the update of what's been going on in the state.

So back in June, the Governor formed the Executive and legislative task force to look at this condominium property insurance crisis. It was chaired by the insurance Commissioner, Senator Keo Hokolole, and at the time, Speaker Sky. And it was comprised of different people from different industries, real estate and insurance and banking.

And, and so they wrapped up kind of their work. They met quite frequently, made some recommendations in a white paper as various options that could be explored as well as developed a draft Bill that will get introduced by the Administration.

Specifically that draft Bill will make some legislative changes that will allow HPIA and Hhrf, Hawaii Hurricane Relief Fund, Hawaii Property Insurance Association additional flexibility and capacity to perhaps enter into those markets and help stabilize prices. Specifically what we're seeing right now is in the hurricane component, hurricane cost component in the condominium associations.

So the hurricane Fund board was just recently reconstituted. So there's basically six brand new Members and then seventh with the insurance Commissioner. They've been meeting since they got new Members and they just recently got under.

Well, we're working to get under contract but they recently selected a vendor that's going to assist with the HHRF becoming, moving out of dormancy and restarting. And once that happens, there's a couple of things that vendor is looking at doing an assessment of the entire market. What, what solutions can the HHRF offer that will help?

Right, because that's ultimately the bottom line is we need to help those associations who are getting hit with massive increases. So ideally they're looking at trying to get operational and start issuing policies by the summer at the latest. It does take time. The, the Fund itself, Hurricane Fund, it's been dormant for 25 years.

So there's not a lot of, there's no existing infrastructure. So part of that contracting with the vendor is looking for a turnkey solution again so that it can get operational right away. Another component to this is because we don't see it because most of these associations are getting their insurance by companies that are not licensed with us.

There's, there's sort of, there's the, there's a handful of three companies that are licensed with us, which we call the admitted market and buildings and associations are getting their coverage partially through them. The majority of their coverage is coming from what's called a surplus lines carrier and they can charge whatever they want to charge.

There's a lot of them out there. So there is some competition and what we're hearing now is that for upcoming renewals those rates are starting to come back down. So that's, that's the good news. We don't know by how much Will it ever get back to 20212022? Unlikely.

But, but the, the fact that the market is hopefully starting to self correct, that's good news. But in the event that it doesn't correct enough, HHRF is still moving forward to see if they can assist, you know, lowering that cost, taking a layer away from those surplus lines insurers and providing some relief to those associates.

I have a follow up question you're.

Anxious to like jump into this.

Well, okay.

When you know, the emergency proclamation was first issued, some of the condominiums in urban Honolulu also inquired to see if they would become eligible for assistance in some form or fashion because many of the older condominium properties also have a large percentage of elderly residents and they were told that unless they were totally denied coverage, they would not be eligible from the hurricane relief or HPI type of model.

So is the legislation that is being proposed intended to overcome that issue?

So the legislation that might be proposed, that is going to be proposed, there is some requirements about the condition of the building, the Reserve requirements that, so there, it's not going to be a take all comers.

In other words, if they're not doing a good job of, of maintaining their building, the Hurricane Fund is not going to be required to take on this, you know, risk that. So that would be more on the HPIA side because hp, a hurricane is only going to cover the hurricane coverage if the building has bad water pipes.

That doesn't necessarily affect the hurricane coverage, but if HPIA starts to issue coverage in that area, that, that would be the case. And those buildings need to be in somewhat good standing. It's more about providing more availability of coverage because right now there's really a lack of availability.

So part of working with that vendor too is they're also going to look and speak with other carriers who are riding in, you know, hurricane insurance in Florida or Louisiana and perhaps they can look to attract some of those carriers to come to Hawaii and start writing coverage because that'll diversify their risk. Right.

Hurricane that hits Florida is not going to hit Hawaii. But as far as an emergency proclamation, there was some misinterpretation on that because it laid out different things. And part of that it used the word loan. So but that was more of a potential loans that the HHRF or HPIA could access perhaps.

But a lot of the associations thought maybe they can get a loan to then pay their insurance premium and that wasn't the case.

So the ones that have reached out to us directly, we've explained that to them and clarified that essentially the creation, the proclamation itself was just to create the task force to look for solutions to help stabilize the market.

Okay, so it sounds as though there still needs to be some additional alternatives for those buildings who have been trying to survive. And I think for, you know, many residents, we're getting calls all the Time. And the City Council just passed a resolution directing or asking the Legislature to hurry up and solve this problem.

So I'm eagerly awaiting whatever legislation comes forward from the task force. Thank you. Okay, well, then there's no solution.

You know, but I know lot of the. We had this discussion last year when it came to the condo insurance. So where other sections of DCCA need to be a lot more involved in ensuring that the maintenance is being done on an annual basis. Because if the Legislature is going to get involved and start funding insure.

But then people don't fix the elevators, put in the fire sprinklers, do the maintenance. I don't understand. So how is that, sir? There doesn't seem to be. At least last year it wasn't a holistic approach. Gordon would come to talk about his section, but then there was nothing to do, nothing on the enforcement.

Condo. Yeah.

So how are you guys making sure?

Because who is them? Well, we have. We have a condo specialist who work under the pvl. PVL umbrella, but it's the real estate branch and so they do.

Yeah, but we brought this up last year, so I'm surprised there's nothing that's moved since then.

I had the impression that.

Are they. Is something happening?

I had the impression that Neil was going to some of the meetings.

He was providing information at request. But regardless of. But he's indicated that they have no enforcement component. They have there. They don't have investigators, they don't have any of the staff that could perform those types of investigations. It's always. I mean, their regulations under 514b is. Yeah.

So why wouldn't. If we brought this up last year, you had the whole interim, yet there's no. You have any legislation that will at least attempt to solve what we're trying to solve in making sure that condos are upkeeping with the maintenance schedule.

If not that we're going to be bailing quite a bit of people out and then they're not going to maintain the building.

No, they're not going to be eligible for the program.

Yeah, but who does that? Who determines that?

The insurer.

Will determine that. But you still have to make sure. That amount of time that they can have that coverage.

Yeah, but that's where DCCA needs to be a lot more proactive.

Because if you're an apartment owner versus the board and the board doesn't make the investment, I mean, don't you think that before it gets totally bad, somebody has a regulator needs to go over there and say, hey, we're Going to fine you now because you're not maintaining, like try to be proactive about it instead of wait till it gets worse and worse.

I don't you have the capability of doing that.

So to clarify, so just to clarify, this is similar to the business registration issue that was just brought up earlier. The, the real estate Commission does record keeping of where condo associations are and nothing else. And so to do. The Administration is not proposing to do what is being discussed right now in Wham. Correct.

And that would be adding a whole new section to the code, standing up an enforcement authority, staffing it and implementing a penalty regime. Yeah. And an enforcement authority. Yeah. The Administration is not proposing that. Correct.

No. But that doesn't mean you can't propose it.

I think, you know, we will try to see what, what can be done. Just provide some additional resource. How you know, of course what we're talking about is something that requires much more expansive hours in order to have kind of.

No, I agree with you but we've had the discussion last year and doesn't seem like there's anything that materialized since then. We had the whole interim for somebody to come and say, okay, this is what we heard.

If they're going to Fund some of these things and bailouts, then we want to make sure that the enforcement is there.

And I do remember that discussion about the deferred rent. We need to do a more discussion what at least to push whatever limits we do have in terms of what can be done, what kind of work.

So even if you guys like what we're trying to get this thing done, what I try to make you guys understand, people are selling, cannot afford to live there. They live there all their life. They probably retired. But electric sale and guess what? Cannot sell because the stuff is not up to par.

So now they stuck on pension that they cannot afford even to move.

Yeah.

Out of the OR to sell. So I'll ignore not me because I, I'm not the professional. But we're asking whoever is the professional I want with a better plan. These guys are losing their homes. Not only that, if. I mean these guys, majority of them is seniors calling me up.

They're just blown away that they all in life they live there. And now you know, in the senior years where they go home, they can't even go to a retirement home because they can't even pay the amount to cost to go into a senior living.

So how are we justifying taking care of these people who basically worked all their life and now they're going to live like that we got to come up with some comprehensive plan to change them. We need suggestions from you for anybody come up with a Bill.

I mean, we got to figure out something to help them because they're going to be out. If we get Hostess seniors on the street, that's going to be a pandemic, going to be an issue. I just got to figure out something. That's all I asked. Thank you, Chair. Senator McKelvey, thank you.

Just a couple questions I may just on that one right there. You know, normally in the past it was the insurance market that provided the incentive for people to do for deferred maintenance. Right.

Because if the deferred maintenance accrues and accrues and accrues now your vulnerability and the likely of disaster and major catastrophe is going to cause your rates to skyrocket. So people didn't do deferred maintenance and kind of paved their way into this newer nation.

I'm concerned only because if we punish or enforce somebody for not doing deferred maintenance, we've now worsened their situation because they're not going to have the money to do deferred maintenance and face to hire insurance costs. In California, they're really running up against this.

They have a citizens program which of course everybody's getting into because everybody's pulling out of the high risk areas beyond Hurricane PCI. They've adopted what's called the 85% rule to try to entice the private carriers to Underwrite at least 85% of the high areas who try to mitigate people from coming out of their public program.

The concern of course, has been that the rates of the private carriers is still expensive, but the coverage and the rates of the citizens program was much more limited and higher. Is this something that the insurance Commissioner is going to look at as a potential way to move the needle on this?

I can't speak for the insurance Commissioner himself. It's not something that we're looking at at the time being, I can tell you that much. I think you should.

I mean even United Policies holders said although it's a, it's still rough, it's a much better fairer deal for trying to keep people, the private carriers from pulling out of the overall PCR market, not just hurricanes.

So I mean for Hawaii's market, I mean we, I hate to compare to other markets, California had a very restrictive market as far as allowing certain rates and that's changed. Commissioner Lara there has made tremendous amount of changes. Hawaii's market is never restricted in that regard. So our local Carriers, they can file for their rate creases.

Obviously we still do our due diligence and review them and make sure they're appropriate. But there's never been a restriction in the sense that we don't allow the private carriers to charge what they need for the appropriate risk. California had the opposite where they couldn't charge for the appropriate risk. That's why they were forced to pull out.

But they're pulling out but now.

But we don't have a, like a citizens plan in Lake Florida or you know, a fair plan. We don't have a whole bunch of people receiving their insurance from a government plan.

Not yet.

Not yet, but. And even, even if we, even if the HHRF starts to provide insurance to associations, you're talking about just on the building level, there could be expansion because we don't know what's going to happen in the future. Right. As far as HO6 or homeowners policies, I mean obviously we're seeing large increases in those areas.

Nothing to the, to the level of the condominium associations, but still very large and still hitting people's pocketbooks also.

But the pulling out of the private sector in these high risk areas, you know, and that's happening of course in Maui now. That's why California, I think is at this point ahead of us.

It's happening even on Oahu in like Wood frame townhome structures that are maybe in a wildfire risk area. We're still hearing of that. There's still capacity. In other words, even though maybe a certain carrier is non renewing, other carriers are picking it up, but it's fragile. I mean, so. Yeah, I understand your point.

We always are looking at what we can do to further stabilize Hawaii's marketplace.

Chair, I'd like to add as a condo owner or former. Yeah, former, because I got out of it, but it's not because of the management.

Before insurance went up, she got out.

Yeah. I think I disagree with the word enforcement by your division that pertains to individual apartment owners. We all know that each condominium is operated by the aosaos, their management team. And most of them are under the guise of the Hawaiianas and everybody else that are managing the system. Right.

With an apartment building, they are every apartment building, every aoe, every person in that building pays maintenance fees. And to me I think the argument should be the enforcement not by the individual owners, but because they're paying for it.

Now the system is that all of these companies that manage the apartments are the ones that should be enforced and somehow Give the reporting data to you folks or somehow come up with a mechanism or some statute that requires them to manage to make sure that the reporting system that their particular areas of management, whether they manage 10 apartments or whatever, if those buildings are current and up to speed with the standards.

I do know that the fire departments for each county also gives their reports to all the. All the apartments that they must approve the fire inspection programs. And that includes all your plumbers and everybody else. And I can speak for the condo that I did own. The minimum.

I mean, the maintenance fee was so much reasonable compared to what's going on. It's an older building, but I'll tell you, the improvements that Century west has, all new. We paid for it. Minimum increase. We don't pay $1,000. Never paid. It was way below that. Four new elevators, new car beds. I mean, that building.

That's why you rarely see an apartment going for sale is because it's reasonable. However, it's that all of those companies to me, should be the ones that should be reporting that their standard of apartments, wherever it is in the state, gives a report. But I can see you guys talk. I mean, we can manage everybody's apartments.

That's their puliana. Unless they own the whole building.

I mean, some years ago we did do purposes, I think of that. The city. Right, right. About the fire and whether or not they were passing that instead of doing all the.

And that's why I sold my apartment. It's not because I love my apartment, but because the city and county was going to make sure that we all have sprinklers. And I said, you know what the price is going to. Everybody's going to sell their apartment if they do not have sprinkler systems.

And that's the issue that I guess the city will.

But where would they go to? Yeah, see, that's because we have a housing shortage. So it's.

Yeah, exactly, exactly. No, but I remember when that issue came up and it was a result, I think think of some legislation that was passed or something. Right.

I think part of what was happening was that the life safety evaluation process that condos could use to opt out of installing sprinklers was something that a lot of Condos did. 281 out of 300. And even though they are opting out and pursuing alternative safety improvements, the. The fire Department does not necessarily pass them.

And so the insurance industry has advocated for installing sprinklers, but not every building can afford to install sprinklers. So when the original legislation was adopted. That alternative was what was agreed upon by the council because we knew at that time most buildings could not afford to retrofit with new systems.

I have one instance where the retrofit for a building in Kaheka is estimated at 60,000 per building. So one of homeowners has said that they're going to have to sell, but they can't sell, so they're really trapped.

It's kind of per unit. Per unit per building. I'm like, that's cheap if it's the building.

Exactly. And to address Senator Favela's questions about, you know, those that are kupunas and need to get out with regards to that system. And I checked on. There was a kupuna lived in this condo, not in the building that I had, but she took.

She decided to get an appraisal of putting the, the, the sprinklers in her building. One bedroom was going to cost her. I think it was like 15 to 30 $1000 they quoted her. And so by the time I say that, can you imagine what my price was? I think time to sell. Yeah.

Anyway, where would you go?

Well, I guess the only reason why I brought it up was when you were talking about having some kind of reporting system, then my recollection was we did get real estate branches, the condo condo specialists who work in real estate branch, they did the survey.

And if you remember, we kind of went over the wording of the survey so that we could send it out to all these condo associations and we would be able to ask them questions. And of course it's voluntary, but, you know, we did work on trying to get as many of them as possible to respond.

But it was a way to get some information like, you know, in terms of whether or not, you know, so.

I mean, a Bill where it's mandatory, then they don't. They do the reporting and it's not.

You can do that, but you still need going back to the enforcement to make sure that they do it. You can't mandate it. Yeah. If you don't enforce.

So we evaluate that all those corporations, like Hawaiian, everybody else that wants to manage these buildings, we should tell them and mandate that they do the reporting because they're the ones that have the connections. Yeah. Directly, personally, with all these individual businesses.

Wouldn'T it be better instead of giving these groups money for their insurance, that we give them money to harden and do the deferred maintenance, which allows us to attach these conditions, like reporting requirements to the receipt of these funds.

That way, the deferred maintenance gets done, they're not getting the money unless they're committing to this timetable of current upkeep and. Possibly.

But shouldn't all this be part of the task force? I mean, why are we discussing it like we're Members of that. Okay, so this is for a different task force meeting. Let's kind of stick to the budget.

Yeah. And people are paying the maintenance fee. They should be arguing with their companies why you're not taking care of your buildings.

Okay, if Members have other questions, can you send forward them to the Committee Clerk, and then that way the Department can respond? Because I. I have several, but I know others do, too. Okay. Thank you. Adjust.

Thank you.

Thank you. That was.