House Standing Committee on Finance

Aloha, all. We are reconvening the House Committee on Finance for the purpose of a budget briefing from the Hawaii Health Systems Corporation. Thank you very much for joining us today. It's roughly 9:00 AM on January 15th. We're in room 308. After HHSC, you will be joined by the Department of Human Services.

So, whenever you'd like to proceed, go on ahead.

Good morning, everyone. Good morning, Chair Todd. Good morning, Vice Chair Takenouchi and Members of the Committee. My name is Edward Chu. I'm the President and CEO of HHSC. I appreciate the new setup here. I don't see any like the big mics that we used to have before. So, this is great.

With me, I have representatives from all of our region. Noticeably, you'll notice none of them liked me because they left me sitting here by myself in the front row. They're all behind me. So, I lost all my offensive linemen pretty much. But I'll introduce some of the key members from our regions.

We have Dan Brakeman, who is our CEO of our East Hawaii region. We have Kurt Akamini and Christina Sato from our Kauai region. That's...but he couldn't make it to this briefing. We have Stephen Nawahine from Kahuka Medical Center. He's the CEO of that facility.

Sean Sonata, he is our newly appointed Oahu region CEO, effective January 1st of this year. So, he's here with us. Clayton McGann should be joining us shortly. He's our West Hawaii region CEO. He's probably stuck in traffic because the plane got delayed. So, anyway, just thank you for the time to provide a budget briefing on HHSC.

You have in front of you our briefing packet. I won't go over everything because it is quite voluminous. So, I will just kind of focus on a few key points. As you know, healthcare is going through quite a turbulent time. You know, we have pressures on the federal level. Here in the state, we also have pressures in terms of finding personnel for our facilities.

You know, cost of living and everything does factor into affordability for personnel that we need to staff our hospitals and our clinics and our other operations. Tracking doctors as well, that's a big component.

So, you know, we've done our best to try to be a good steward of state resources, knowing all those things and also try to provide the care that our rural communities really need.

So, as you can see in our mission, our mission is to provide accessible, high quality, cost effective services to address the healthcare needs of Hawaii's unique island communities. And as you folks know, we pretty much are the rural safety net for this for the state of Hawaii.

We have significant historical challenges that you, you know, you folks have heard before if you've listened to our budget briefings, one of the major ones of which we are heavily reliant on government type payers, based on our payer mix where about 74% of our patients are either Medicare or Medicaid. So, you know, those are the worst payers.

And you know, because of that, you know, that's why we, a lot of the reasons why we need subsidy every year is because, you know, our, our costs are higher than what those reimbursements are able to cover. Also, because of our status as a state agency, we are bound by state collective bargaining agreements.

And part of that, part of the, part of the difficulty being part of the state is the fringe benefit rate is very high compared to other private hospitals. Other private hospitals, fringe rates are around 30%, give or take, give or take a few percentage points.

HHSC's fringe benefit rate is the same as other departments in the state, about 64%. So, if you take the delta between the 64% and the 30%, that's about $90 million of our need for general funds. So, it's a huge chunk of that.

And again, we are subject to, we are one of the more heavily regulated industries in the country and we are very much impacted by changes in federal policy, federal actions, as you probably know from the OBBBA or HI 1, whatever you want to call that Bill, we are heavily impacted by that, although a lot of the impacts for HHSC probably will come in future years.

But we try to do our best to provide the best services we can, quality care to our communities. We also do our best to try to grow revenues where we can. So, our operating revenues for fiscal year 2025 actually represent a 10% increase over the prior fiscal year.

And from fiscal year 2023, it's about 22 and a half percent increase. So, we've done our best to try to negotiate parent contracts to be at least on par with private hospitals, if not better. And we also try to maximize the federal funding opportunities. So, that's the reason for a lot of reason for our operating revenue growth.

The other thing we've been doing is seeking philanthropy. You folks have heard in the past about the East Hawaii region and their generous gift from the Benioffs of $50 million to help fund the ICU and other projects.

Last session, you folks help put up funds for the KL Outpatient Center, about $25 million in state money, but that being matched by $25 million in Benioff donations. It's going to be a huge benefit to the residents of that district in the Pona area.

And Kauai region just recently received $11 million from the Healthy Charitable Trust to build out MRI imaging suite and also to expand the learning lab, KVMH facility. And Representative Morikawa was there with us, and it was a great day for the Kaui, Kaui regions.

Also, in terms of budget requests, just wanted to let you know the emergency appropriations. We are not asking for an emergency appropriation this year, assuming we can get our restrictions released that the Governor has imposed. It's a 10% restriction he's imposed across all agencies.

We are in the process of putting in a request to get those restrictions released and there hasn't been a problem in the past and I don't anticipate it being a problem this year. But if that doesn't come through, we may have to come back to in this during the session and ask for funds to replace those funds.

In terms of our supplemental budget request, we did get funds in last session for the biennium budget. We are not, at this point, not asking for anything more than what was in the biennium budget and the Governor has agreed with that.

We know that there is uncertainty regarding the federal actions, but we feel it's more responsible for us to maybe wait to define what those actions are, see what the impact is to HHSC, and maybe come back down not in this session, but the next session, to see if there's any need for additional funding at that point in time.

So, at this point, we're not asking for anything more in operating funds for the regions and for corporate, which is HTH 210 and HTH 212. But you will see a significant CIP request, which we have detailed in our table, so you can see that.

The biggest one, obviously, which you've all been probably heard about, is the West Hawaii region on the new Kona Hospital campus that Queen's is proposing to build. We are looking to build a medical office building or operations service center on that property.

The Governor is supportive of this project and the request is for $50 million for planning, design, and construction on that, on that facility.

East Hawaii region also has some infrastructure requests that are detailed in our packet and I think in, in your tables, they also we also show the two large reps for Kauai region, one $3 million for front lobby renovation for KVMH and $3 million for Samuel Makalona Memorial Hospital for their affordable housing to start off that project as part of their master plan.

Oahu region is not asking for additional CIP projects but, as working with the budget of Finance and the Governor's Office, we know the state was looking to try to take back some of the general funded CIP appropriations that were given in 2022 and 2023.

So, we were able to work with them to identify some projects that were not able to be—that we hadn't fully started yet and we were able to defer.

So, we are letting those—working with BNF, we're following their guidance to let those projects lapse those appropriate lapse and then ask for those funds in CIP funds or C funds in the '27 supplemental budget. So, that's the Oahu region request.

Oahu region, HH 215, you'll see in the charts in our testimony no additional general Fund request but the increase in the CIP appropriations is those laps funds and A funds that were that the Governor is asking us to resubmit as seed funds. And later on, we'll have Kahuku Medical Center give their request.

But they're basically—they've been getting about a little over $2 million a year in General Fund appropriations and that's been pretty constant over several years. Their costs have risen quite a bit during that time. So, they're asking—they had requested about $5.2 million in General Funds. The government's recommending a little under 3.5 million General Funds, but it's much needed by that community to help pay for things like you know, the emergency physician costs, lab services, contracted costs, wage increases for the employees that are being negotiated.

So, that's what those funds are for. They also have some CFP requests as well. Maui Health System. Don't see them here but I'm sure they'll be briefing you post on their request at some point in time.

You know, because of the agreement that we have with Maui Health Systems and Kaiser, you know, HHSC doesn't necessarily get involved with their operations because the change of ownership we need to be pretty separate in terms of you know how we, we don't, we—how we don't get involved in the operation and we don't get involved in their finances.

So, they'll present—they'll have to present on their budget separately. You folks may know that with that HR 1, in fact, there are several things that are coming up for the state. Medicaid eligibility is a big one. Depending on which area of Medicaid Eligibility is impacted, there are—seem to be an impact to HHSC as well because again, a large part of our payer mix is Medicaid.

But one of the ones that directly is staring us in the face is a cap on our uncompensated care payments.

So, this program has been in effect for over 10 years and it's a program where we get additional federal funds for our losses that we—that we absorb from performing services for Medicaid uninsured patients. So, this amount of funds that you can imagine goes up every year as our losses to serve those patients increase.

It went up a lot during the Pandemic because there was an increase in the federal matching percentage, and it's kind of come down slowly since then, but that's been critical for us to help reduce our reliance on state General Funds.

So, in the HR 1, the method that's being used to give us those funds, that we worked with Med Quest to develop, is being capped right now. So, in the fiscal year 2025, we're getting—2026, I should say—we're getting towards $70 million on that on those funds. It's going to be capped at that level going forward.

And starting January 1st, 2028, is if the HR 1 isn't amended, that amount will go down 10% per year until those that bucket goes down to define as the Medicare rate for HHSC. So, we're working with Medicare to try to determine what that amount is at this time. I'm sure they'll be there. At this point, they're more focused on the Medicaid eligibility issues because those come up sooner.

But the impact could be quite large to HHSC. We have projected in 2027 that that uncompensated care money will go up to $83 million, but that's not going to happen at this point. So, that's a difference of $13 million from what we're getting now.

So, there's various other impacts on uninterested from the HR 1, which is delineating our testimony. You know, in terms of some of the impacts, it's really disproportionate in terms of how it's spread across the islands in the states.

So, if you look at Hawaii, even though it's the largest number, in terms of gross number because we have a larger population, when you look at the neighbor islands, the share of people on Medicaid and in the exchange, healthcare exchange, are much higher. So, it's a higher impact on Nibira than it is on Oahu.

So, we're looking at from some reports we got from MedQuest and the Healthcare Association, it's about 47,748 Medicaid beneficiaries and members of the Health Insurance Exchange will be impacted by loss of coverage from the HR 1. So, Oahu's level of—about 2.8% of Oahu's population will be impacted by this.

But if you look at the neighbor islands, it ranges between 3.8 to 4.7%. So, neighborhood islands have a much bigger brunt of that impact. And one of the things that has impacted by the federal shutdown, you know that Federal Government is going to be in operation until January 30th. There's another federal shutdown.

There are impacts to HHSC. The Medicare telehealth waivers may be impacted again. And the Medicare low volume adjustment, which is about a million—worth probably around a million dollars to Kona Community Hospital. That program is funded through January 30th, unless—and it needs to be extended further.

So, they only receive a portion of that money up until January 30th. So, that does have some impact to HHSC. For Oahu region, Sean Sonata is here and he can answer any question you may have about Oahu region.

But I think the main thing to point out for Oahu region is that they're doing a lot of things to help other state agencies and help the healthcare infrastructure using the parcels of property that they have at Leahi Malahia. You know that last year they opened the Daniel Kahikina Akaka State Veterans Home, about 120 beds there.

That's going to be a great benefit to the veterans in the community and their gold star families and their spouses. So, that's a brand new facility. They also are continuing to work with Department of Health to fund some of their programs for substance abuse patients.

And they also have a program with the City and County Court Program at Leahi, in partnership with Queen's to do some type of medical respite facility there and Malahia, they also continue to work with Queen's to help take wait list patients from them where they can.

So, and they're also currently working a project with the Children's Justice Center to use some of the space at Leahi to house some of the operations. So, they'll be moving from where they're currently at to the Leahi campus. So, they're working with partnership and community to try to help benefit the overall state of Hawaii.

So, with that, that's all I had to present. I'd be happy to answer any questions, any of the, any of the members have.

Great, thank you. Members, do we have questions? Actually, I start with Chair.

Oh, okay. Okay. Go ahead. Get us started. Go ahead.

I didn't have a question.

Oh, you were just trying.

I was just breathing because that was a lot of information. Trying to read through the paragraphs.

Okay, who's gonna break the ice? Rep. Morikawa, go ahead.

Thank you. Thank you. For Kauai, I think KBMH is a facility that we're all very proud of and I'm just glad that you guys have your antennas out to get these donations coming to our hospitals. Thank you very much. My question is about that, the proposed HMSA HPH affiliation. How would that affect you guys?

It's—picture, it's a little cloudy on that because we don't have a lot of details on what that proposed, that proposed affiliation or merger, whatever, whatever you want to call it is. There's been a lot of promises made by HMSA and HPH regarding that affiliation, the benefits of it. I know there's been—Senate Consumer Protection Committee had a hearing on it.

I think it was Wednesday or Tuesday, maybe not Tuesday. Regarding that affiliation, you heard from a lot of the healthcare providers that there's concerns regarding that affiliation. I think for hhsc, the major concern is that access to rural health care is maintained, whether that be.

I think it was Wednesday or Tuesday, maybe not—Tuesday, regarding that, that affiliation, and you heard from a lot of the healthcare providers that there's concerns regarding that affiliation. I think for HHSC, the major concern is that, you know, access to rural health care is maintained, whether that be—and for us, that probably means keeping care local to the extent possible.

You know, there is some concern that from an overall statewide perspective, if you have a system in place where patients that are able to access HPH facilities get a better deal than, let's say, those that are not, that don't have HP provider in the community, is that fair across the state, statewide, equitably? Right?

Like if you look at county of Hawaii, county of, county of Maui, they don't have any HP provider in their community. So, yes, they will have choice.

They may be able to have a choice, but at what cost? Is there going to be a higher price they have to pay for that, for that ability to choose on their island? So, is that fair across the, across the state?

You know, and also, you know, when you look at how the relationship is, you know, you tend to, if you look at an individual, you tend to treat your family members a lot better than you treat your acquaintances. Right? Or at least I would hope so.

So, and that says, you know, if you look at HPH and HMSA as, you know, probably like a family, right. They're kind of joining together and you look at the rest of the healthcare community as maybe the acquaintances, you know, is it going to make it harder for us to negotiate fair rates?

Is it going to make it harder for us to maintain the services that we have across the system? I think those are the concerns we have about that, you know, in general. I think, you know, as more details come out, we'll have a better picture of what that looks like.

But I think right now, the picture still looks pretty murky and as we get more details—you know, HMSA has talked to us and said they were willing to continue discussions with us going forward as more details are available. So, we'll learn more later.

But I think at this point, it's really hard to say there, there are concerns about market shifts in terms of, you know, where the patients go. You know, HHSC, HMSA reimbursement has about $90 million of our revenue. So, it's quite a big challenge.

Rep. Perruso.

It seems that, you know, we have patients stuck in acute beds and those—the cost for that kind of treatment, even if they should be actually stepping down and transferring out because we don't have any facilities to transfer them into, it's costing us an additional like $2,000 to $3,000 per day, per patient.

And I'm wondering, number one, how many beds statewide are actually occupied in that way by patients who would be better served in another kind of setting? What's the annualized cost for that and how does that cost compare to the cost per patient per day in a step-down facility or a long-term treatment facility? If you know.

There hasn't been a lot of data on the overall, what the overall weighted picture is.

I know they're trying—the Healthcare Association is trying to get a lot of that data put into what they call the healthcare capacity system, which, you know, if you guys don't know what that is, it's a website where the hospitals feed data daily. Actually, every five minutes, they draw data from the hospital.

So, you know exactly what the emergency room occupancy is, you know exactly what the inpatient is—even down, you can drill down by unit, but the waitlist information is harder data to pull up for that resource. So, we don't have, I haven't seen a study yet in terms of the overall number across the hospitals across the state.

Last studies I've seen were way back in the early, early 2000s. They've done a statewide study on the waitlist, waitlist issue. So, it's been a while. But again, we're trying to get the data for that. I think we have Dan and Clayton. Oh, there he is. Okay.

They can speak to their individual hospital in terms of what the waitlist numbers are for them, but it is a big problem. Queen's has a huge one. Molly Moore also had a pretty huge waitlist issue. But if you want to hear from them, they can give you the numbers for their particular facilities.

I guess my question—I'm more interested in a system level kind of analysis. So, I'm just curious, I mean, I guess I am curious about how do we then plan for and advocate for the development of more of these long-term care beds and step down facilities if we don't know how?

Like we don't have any data to support that advocacy.

That's actually why we're trying to get the healthcare associate, trying to get that data, but then it's, it's not as simple as like the mission is trying to pull down from electronic health records. So, it's a little more complicated process. So, that's why the data hasn't been pulled together for quite a while.

But it is something that's on top of mind for a lot of our hospital members and the Healthcare Association because it does eat up a lot of resources. And we don't give you a verse for that.

Like do you need the Legislature to request a study or something like, would that be helpful?

No, I don't think that's really necessary at this point in time. Like I said, we're working on it as a healthcare system.

But your data won't necessarily include the whole universe. Right?

We're working on the healthcare system.

Right, just for the system. But I'm saying it won't include—this is a statewide problem.

When I say the system, I talk about all the hospitals in the state.

Oh, okay. Okay. Okay, great. Thank you. Thank you, Chair.

No problem. Members, additional questions? Go for it.

Hey, thanks for being here everybody. Good to see you. Actually, some quick questions for Oahu region. Congratulations on the new role. I just want to check in on some of the things that I usually do. Is there an updated timeline for the publishing of this strategic plan for Oahu region?

So, we're currently in the process of revamping it. So, during the transition, we've analyzed the things that we have accomplished. Our original plan dated back to pre-2019, but because of the transition from Derek to myself, we're going to develop a new plan starting next month's board meeting.

So, I mean, we're in the process of keeping some things but adding new strategies. The reason for that is we recently received the Executive summary from our project with the University of Hawaii School of Architecture, the Community Design Center.

They did a full analysis of the...campus, all the spaces that we had remaining, and they proposed a couple good ideas that we probably will incorporate into our strategic plan. But we just received the Executive summary this week.

So, upon review of that, our plan is to develop and propose for review with our board a new plan. It will be Strategic Plan Oahu Region 2026 and that will project over the next three to five years, with, most likely, a one year working plan to be incorporated into the three-to-five-year strategic plan.

So, stuff available for us, when to look at, I guess, in your timeline, right now?

I think we would have a pretty solid draft and direction later on this, this year.

End of '26?

Definitely by the end of this year.

Okay, and you—so, the UH, okay, so the UH, the UH work is going to be incorporated into the strategic plan at this point when you get the full data?

So, the UH work has been completed. It's just that we need to now review everything and assess what's actually realistic and what might be a little idealistic. And then, once we sit between the two, then, you know, our plan would materialize a little bit more clearly.

Okay, great. Looking forward to it. I know, I know there's been a lot of starts and stops on that one. So. Yeah, looking forward to that. And then, I know you mentioned, again, the space that we're renting out to some of the other facilities. So, just a couple quick updates on that.

So, you know the core, the core section that the beds that core is using for their program, is that the city's core program or is that a Kauhali project?

It's part of the city's core program.

Okay. Because I've seen it in some of the Kauhali documents, I want to say. So, I just wasn't sure about where the—so, all the, all the work you're doing is directly with the city and.

That's it, okay.

So, unless there was something, some changes that were made on the city side, because we don't get directly involved in their operations and their framework. We more provide ancillary services for them and provide the space. But originally, it started off as a move. They were situated in the Eva Lei Facility and then DOH needed it.

So, then they moved into our facility. But then, they changed I guess the dynamics of the program by bringing in North Shore Mental Health to make it a medical respite. So, that's how it started and that's how it's been maintained to my knowledge. But if it's changed since then, I'm unaware of it.

Okay. And then, okay, since it's the cities program—I know last year, I brought this up. Are we charging them rent for the space?

We are not. We charge them, Cam. So, you know, for whatever utilities and whatnot that they utilize, plus any maintenance services that other ancillary services we provide, we charge them for that. We're not trying to make money off of the use of the space just because it's a public—important public benefit that's being provided.

If it was something revenue generating or whatnot, then definitely we would be charging their market rent.

I still think, again, even in Maluhi for Queen's, we think we could be charging them a little bit more just for the benefit of the health system. Sorry, a couple more quick ones. Sure. And then, sorry, speaking of...I drove by the other day.

Okay.

Any update on the parking lot that's been kind of influx for what, like 8, 9 years now?

My understanding is that it's highly likely that the project will commence soon. I mean there were no direct dates that were given, but the contractor is ready to go, I think. I think all the permitting and everything is completed or close to completed. And so, we're hopeful that it'll—they'll actually break ground very soon.

But I don't have any dates right now. I understand it has been a project in limbo for a long time, but a lot of that was related to neighborhood concerns about the construction in the first place. Particular individuals who initially opposed and then decided to, I wouldn't say support, but be neutral about it.

And then...has been so long. Funding for that is okay though, because I mean we haven't talked about funding for that, like ever.

I think there is a request for some escalation, but that part is being negotiated right now.

Okay. Oh, and then, sorry, one last one. And then, the move from the, the for the request this year, the CAP, the 1.72, that's partially for the move of the kitchen. Is that because CJRI is moving into that other space or is it just because you guys are going to move them anyway?

No, it's been a project that's important to us for a long time, but it's piecemeal. Right? It's moving dietary into the Young building.

If you look at the framework of the Leahi campus, the Young building, where all of our long term care operations are situated, is on one part of campus and the kitchen is on the bottom side of campus. And then, the way that the meals get transported is they're completed and then they get loaded into a cart.

The cart comes all the way up to the elevators in an open air, you know, walk pathway and then, they get delivered to all the different floors. But, you know, the idea is it's important to have it in the same building. One, because temperatures are important.

It's easier to just go straight from the kitchen up to the floors. Another thing is access. I mean, if there's a natural disaster that happens and closes off the walkway, it's going to be very difficult to get the meals from bottom of campus to the top.

Is the CGRI rental space going to include the old kitchen space too then?

Not, not in phase one. Their phase one would just be the entire second floor of the...building.

Okay. Okay, thank you.

Thank you, Chair.

Additional questions?

I have this one. I wanted to ask for the Rural Health Transformation Program, that federal funding, I was wondering how that impacts you folks, hopefully positively, and when that might kick in.

Well, let me start off with the status of the program. So, you know how I got awarded about $189 million overall at the state of the program. The request is much larger, obviously. So, I think right now, the state is going back to CMS or Center for Medicare Services to get the revised budget approved.

And I think CMS needs to approve that applicant, that Revised budget by January 30th, I believe.

So, once that's happened, then they can have to set up a process for people that want to access the funds to apply for those funds, kind of like a grant, similar process, similar to—probably similar to what they did during COVID for the ARPA money.

So, at this point in time, there's several buckets, as you know, in the, in the Rural Health Transformation Program. A lot of it is more general, like statewide benefits for the rural communities. But you know, there are provisions in there for electronic health records transformation.

For those schools that are not yet on the EPIC electronic health record system, there is some money to help implement that for hospitals that are not on EPIC and for federal qualified health centers not on EPIC. So, we have two facilities right now in Kauai region that are not on EPIC.

So, they could potentially access some of that money to help defray some of the cost of that. Obviously, it's going to be a small portion of what the total cost is. But EPIC is a very expensive system. But every little bit helps.

And there's also part of that electronic health systems funds are funds available for enhancements to current electronic health records. So, there's money available for that as well, so we may be able to access that.

Exact dollar amounts will depend on, you know, our application, how good it is to the state and, you know, whether they accept it or not. So, I can't give you a total dollar amount that HHS is going to get at this point, but that's primarily where the more direct benefits will be.

I think there will be a lot of indirect benefits that will come to HHSC and the rural communities just because of the other pockets of money, primarily workforce training programs. Those kinds of things will be very helpful.

Thank you, Chair.

Go ahead.

Thanks, Chair. Building off of Rep. Marten's question, has HHSC been identified as one of the program for one of the programs? And I'm only asking because Department of Health was driving one of the initiatives.

For the rural health transformation?

Yeah. Yes. Sorry.

Oh, okay. Well, the good thing is we were involved in the electronic health record subgroup that was working on the application. So, we had, we did have input into that, into that portion of it. So, that's been something that we've been involved in throughout the whole time.

As I mentioned, you know, Hilton Raithel of the Healthcare Association of Hawaii has been pretty much the representative for the hospitals, the hospitals across the state in terms of input into the Rural Health Transformation Fund Grant.

So, again, at this point in time, we don't know exactly how much it's going to be, but we did have input into a lot of the electronic health record side of it.

Okay, perfect. And within those six pillars or categories, I'm recognizing that medical systems would actually touch three of those six buckets, as everybody's calling it. Has there been any further conversations between you, Governor's Office?

I'm only asking because, you know, we have a huge hole in our budget and we're trying to understand if these funds will help kind of offset some of the programs that we have, especially in health care. Or is someone, is it Hilton, like, who's going to be taking the lead for HHSC in those conversations?

We'll definitely have input through the Governor's Office. I've been in contact with Will Kane, his Senior Advisor, about a lot of things in terms of, you know, can it be used to offset some of the losses? It's not intended to be used as an offset to operating deficits, unfortunately.

So, you know, but like I said, it does help the infrastructure to put in place so that, you know, it may help us in our searching areas like recruitment, you know, workforce development down the line.

Yeah. And I hate using this word, but it's a planting, right? We can't. We can't unring the bell, but for future programming, we can try it off. Okay, thank you so much. Thank you.

Members, additional questions?

Chair, I just want to clarify, is Kahuku coming up or do we ask questions about that now?

...Is available to come up. You have no further questions for me.

And I'm interested because Kahuku is where I went to school and my family's there. So, I'm kind of watching what goes on there because the health of that facility is very important to me. I know the importance of it. Last year, you came in with a whole bunch of CIP issues that needed to be addressed.

Did some of that get taken care of?

It did. We have been grateful. We received a good portion of CIP and one of the challenges we have is we always try to attack which, which ones do we want to, which are most critical.

One of the things that have been most critical for our operations, besides just the maintenance and the fixing of some of the plumbing or the generator that we just replaced, looking at our, like our EHR getting to EPIC, because that, that just is the foundation of everything we've done. So, we have been grateful in the past few years.

We have received more funding than we received in the past. And I feel that we've been really good stewards of what we've received is something that, as we go through and look at the needs that we have, what are the most critical and what do we attack?

And we are in the middle of a number of projects right now. Part of it is the renovation and fixing of a building that hasn't been touched for 100 years. So, giving it a little bit of TLC, a beautiful hospital will bring more people, and it equates to the beautiful care that we offer.

So, we have received some funding and we've been grateful for that.

Thank you. Thank you so much for that.

Thank you. Additional questions? I have a quick one. Maybe not specific to—well, definitely not for Kahuku specifically, but, you know, I think over the, my time here, there's been a lot of talk over kind of free frequent visitors, frequent flyers in emergency rooms. Has there been any progress?

I know at the time, you know, there was a lot of talk over the community paramedicine program as a way to kind of intervene prior to having that great need.

But are we tracking those folks and kind of how they're going through the system and whether there's actually been any progress in preventing those folks who are in the ER 50 to 100 times a year in some cases?

Yeah, that is a great question. I think that a lot of it takes place in the community and trying to hit a lot of things off in the past, you know, with our, I'm not going to say old timers, because I'm one of those now, but you know, just educating, trying to help our younger generation.

I think the younger generation gets a healthier living, but trying to change that lifestyle, all of a sudden. With our kupuna, they're going to do what they want to do and so, you'll still get those. But I do see a community that's more aware of their health.

The ones that we see come through and through again, they struggle with behavioral health, with maybe drug addiction, and they keep hitting the system. The unfortunate thing is we, you know, for some of these patients where we can't keep them for ourselves, they might, too acute, they might have to be transported to maybe Queen's or another hospital that can, can handle that.

We just don't have the facilities for that at this time. We probably get—we get over 800 visits in our Emergency Department a month. So, it's a pretty heavy place with a very limited amount of space.

And then, with the housing projects and the development projects that are happening on the North Shore, we get hundreds of thousands of visitors. Of course, we know, and on any holiday, we'll see everybody from town coming down to our side.

You'll see all of us going up to town because we're so excited to get to the other side of the mountain. But we have a lot of visitors and so, we see that traffic going.

But as far as the repeaters, you know, it's always a challenge because they're the hardest to place and then it just costs our system so much. And I think that that's going to be an ongoing challenge until we can hit our younger generations with healthier living.

And does HHSE track anything like that kind of aggregate data, system wide?

I think with electro—with the EPIC system, I think it'll be a little easier to get that data. But I think right now, because we are operating on several different platforms, we don't have any system wide form.

Yeah, because my memory, serving under Chair Morikawa, my first couple terms in health and human services bracket, is we had like a homeless individual who had cost us, state, about a million dollars in one year in ER visits. Right?

So, I was just kind of curious like if we have anything but that would be helpful and hopefully kind of going forward, you know, something maybe can track and make progress on, but Rep. Perusso, did you have a question?

That was my question.

Oh, okay. Nice. Anyone else? Okay. Well, thank you very much for your time, for making the trip, especially for those of you who didn't have the opportunity to speak. We'll call it an opportunity. Thank you very much. Nice for Amy. Yeah. Yeah, yeah, yeah.

We're going to recess briefly, and then we're going to reconvene with the Department of Human Services. This afternoon, we'll have Judiciary, Department of Budget and Finance, and DLNR. So, recess until we have Human Services ready to go. Recess.

Aloha. We are reconvening the House Committee on Finance for budget briefing from the Department of Human Services. Whenever you're ready, go for it.

Okay, thank you. Chair, Vice Chair, Members of the Committee, Chair Martin Ryan Yoani on behalf of the Department of Human Services, again, thank want to thank all of you for the ongoing partnership and working together.

So today we'll just briefly go over the Department, some short accomplishments and then go into Q and A before you know, people like Kyle who's coming runs down here and asks questions. Right. So just let you know the Department our vision is the people of Hawaii are thriving.

Our mission is to encourage self sufficiency and support the well being of individuals, families and communities in Hawaii. Just wanted to highlight. We provide the vital benefits and services that act as building blocks for individuals and families in need to support self sufficiency on their own terms.

So our Department, we have six staff offices, four divisions, four administratively attached agencies and four commissions. So our staff offices are Fiscal Management Office, Office of Enterprise Technology, Human Resources, Budget Planning Management Office, Administrative Appeals Office, and Audit Quality Control and Research Office. I'll introduce some key Members later. We have four divisions.

Benefit Employment Support Services Division or known as BESSD. Division of Vocational Rehabilitation, MedQuest Division, Social Services Division or SSD. We have administratively attached agencies, Hawaii Public Housing Authority, Office of Youth Services, State Office of Homelessness, Housing Solutions and Office of Wellness and Resilience.

And the commissions that are with us are the Hawaii State Commission on the Status of Women, Commission on Fatherhood, Hawaii State Youth Commission, Lesbian, Gay, Bisexual, Transgender Queer Plus Commission, also known as LGBTQ plus. And then we have councils, State Rehabilitation Council, Hawaii Interagency Council on Homelessness, Financial Assistance Advisory Council, and the Wellness and Resilience Advisory Board.

Just want you guys, you know, to highlight that Armenia financing for FY26 is $4.7 billion. In A funds it's 1.4 and in N funds it is 2.989. So three roundup. Right.

Okay.

Just to highlight, we have 2,323 and a half positions. 98 of them are temp and we expect to reduce that to 89 in the following fiscal year. We currently have 663 vacancies. Last year when we came before you guys, we reported that our vacancy percentage was about 33%. This year we are about 27%.

Our leadership, myself, as you hear, we have to my left, Deputy Director Joe Campos. We also he'll be able to answer questions regarding Kalaio Ola Po' O Nene and the Hawaii Emergency Food Assistance Program, as well as other programs that he's involved with. We also have Deputy Director Trista Spear.

She could talk about the Disaster Case Management Program, the Rental Assistance Program, and her leadership if need be on areas like SSD. We also for staff offices, we have Carolina Agran, who's our BPMO, our Budget Planning Management Lead. We have Sheila Joy Olapani, who is our Fiscal Manager, Jennifer Marooka, who is our HR Manager.

We do have Trisha. She's working remotely currently. We have others from the Director's Office. For the Benefits, Employment and Support Services Division BD, we have the two Scots, Morishigi and Nakasone. For Social Services Division, we have Acting Administrator Aladdin Olavao and her team. For MedQuest, we have acting Administrator Meredith Nichols and her team. Okay, and then.

Sorry. And then the Division of Vocational Rehabilitation, we have Leo Diaz and her team. For Hawaii Public Housing Authority, Hakeem could not make it here for medical reasons. So we have Ben Park here to answer any of your questions. Office of Youth Services, we have Leanne Gillespie or her team.

I think she might be out as well. So Derek Mari is covering for State Office of Homelessness and Housing. We have June Yang, Office of Wellness Resilience. We have Tia Hartsock and her team, and then Commission the Status of Women, Yasmin Cheney. And then again, we have our commission.

So just real quick, before we go into qa, you know, one of the things we did want to highlight, we had some successes throughout the Department. In 2025, we started the Kako program at SSD, which provided unannounced visits with food boxes for food security. We've done it on all islands.

We have the Hawaii Emergency Food Assistance Program, which was started due to the shutdown with the $250 per person. We have the Hawaii Child Wellness Incentive Pilot Program that was actually started by the Legislature, teamed up and supported by the Governor, which was implemented to encourage wellness checks with $50.

So thank you to both Chairs for your support on this. We have the Sunbox Program or Summer EBT. First lady was, you know, very instrumental in, you know, pushing food security. So that. That has been ongoing. And another thing that was led by your partnership with you, with our Lieutenant Governor was the preschool Open Doors program.

So we would like to hide it.

Okay.

And I know there might be a couple of questions, so Chair you. Okay. I can. We can move into Q&A. Sure. Or we can adjourn and call it.

I mean, I'm tempted. Honestly, nothing interesting going on this year. DHS. Right. I have a couple small questions and then we can move on to the Committee. Maybe we can speak on the SNAP error rate and just kind of give us an update.

I know you guys are making just phenomenal progress, but I think it's been a few months since we've checked in, so wondering if we can get a brief update on that and maybe because I don't think you quite touched on it, but I know it's in your packet, maybe touch on some of the potential fiscal implications if things get out of hand.

Thank you. Chair My name is Scott Morishige. I'm the Administrator for the Benefit Employment and Support Services Division. So you know, our staff have continued to make great progress in bringing down the payment error rate the last year that we have full, complete finalized numbers for fiscal year 24.

And in that year our payment error rate was 6.86%, which was brought down significantly from the prior to fiscal years where it was over 20%. The way that the error rate works is FNS doesn't typically finalize those numbers until June. So we won't get the numbers for Federal fiscal year 2025 until probably June of this year.

And so for the error rate there is an impact because the One Big Beautiful Bill act or HR1, we're starting in federal fiscal year 28, that's starting October 2027.

Based on what our payment error rate is, the state may have to pay a portion of of the federal benefit that currently is 100% federally covered for SNAP that goes out to clients and community based on, you know, what it has been for prior years, that amount would be anywhere from about roughly 690 million a year total.

That's paid out by the Federal Government for SNAP benefits annually. And if our error rate is above 6%, we would have to pay a certain percentage of that based on how high it is. For Federal fiscal year 25, I think before adjustment and finalization of the Federal Government, I think our error rate was about 10%.

But I do want to caution that that number can be adjusted down. So even in the prior fiscal year where the final number ended up being 6.8, it was a little bit higher than that before the adjustment. So I just want to provide that caution.

The other thing to keep in mind is despite our staff's efforts, there have been a number of changes that have made it challenging for our staff to move forward. And that's partly implementation of the provisions of the OABBA impacting snap, because unlike in some other areas where there's a ramp up time to implement for snap.

USDA has notified us that the changes resulting from the OAA BA were effective as the date of the signing of that Bill, which was on July 42025.

So, you know, I think that has impacted the error rate initially what the numbers were for Federal Officer 25, and likely that combined with the impacts of federal shutdown, might have an impact for Federal Fiscal Year 26.

One things to keep in mind is for that first year where the error rate could impact the amount we pay for benefits, the state has the option of choosing between the error rate for federal fiscal year 25 or 26.

So we have to look at those numbers and we can make a decision at that time, you know, what year we want to be the reference year for that.

Okay. And then kind of, you know, given what's at stake and how this thing can escalate so quickly, do you have, you know, resource wise, please reach out if there are things you need to kind of meet that mission, continue your good work.

You know, it seems like kind of a drop in the bucket given this could easily cost the state tens of millions of dollars on an annual basis. So feel free to just kind of double or triple down on that as we get through our budgeting process. That'd be helpful. Okay, thank you.

And then another small one, I guess there's no such thing as a small one, actually. Does anyone else have questions specific to SNAP while everyone's seated? No. Okay. I have a brief question around MedQuest and eligibility verification and I was kind of curious, I think, when we last spoke.

I guess the big concern was the department's ability to really scale up hiring for positions that may. May not pay very well. And, you know, maybe it's a mix of that plus contract hires. But how's. How's progress been given the increased workload that's been kind of placed in our laps by the Feds.

Thank you very much for the question. In terms of hiring, it is difficult to hire into these positions, especially as the work increases. You've all seen the exponential growth sort of in MedQuest membership during COVID and we've been slowly unwinding since then.

We grew by about 140,000 Members during COVID We've come down now by about 81,000, so not quite at pre-Covid level. So still a lot more Members, which is good. A lot of people getting covered. But having enough staff to really work alongside these Members to help them maintain their applications is a challenge.

So we have been interviewing hiring but then once you hire, we also have the happy challenge of training our new workforce to make sure they're up to speed and especially to handle the new requirements with HR1.

Yeah. So, so we have made a coordinated effort through our HR Department. So we've been participating in a number of job fairs. We've been looking at working with continue to work with D Herd on looking at our position descriptions. We're also looking at different avenue. We've been working closely with gov's office.

Okay.

So the budget in the governor's package reflects the added increases that we need both for BESSD and for MQD actually for our whole department regarding participation, anticipating potential changes.

So our budget, even though it is increasing, it's clean in the sense that we're not just adding on to add on but it's doing that in preparation to address the influx of additional warm bodies that we will need additional training to do that to support the whole Department.

And so the budget that's before you reflects the fact the needs that we anticipate going forward especially for the next two years with the impacts from the federalists.

Okay, thank you Members. Questions? Rep. Perruso.

I think it's for the Director. So given that we.

She said Director, I'm sure there'll be more. I'm sure there'll be more questions.

Given the new Medicaid eligibility rules and the expectation that about 19 to 38,000 adults will lose coverage as a result, has the Department done any modeling around. How that shift, that loss of coverage. Will affect hospitals, emergency rooms, maybe uncompensated care? And if you have done modeling, when.

Could we expect you or ask you to share it with the Legislature?

So I don't know the specifics regarding what you mean, you know, like the modeling. If we ran numbers, you know, we're still at influx waiting for the feds to come up with promulgating the rules, all of that with the potential impacts. We just you know, lived through a shutdown that impact everything.

So we are, our people are constantly monitoring what's happening with the feds if the portals are open, those impacts.

We've been working closely with the gov's office at budget and Finance on potential impacts regarding, you know, liabilities, our ability, our team, both deputies and our fiscal FMO and BPMO offices, you know, have to on a dime, you know, be able to move money around to prepare right with the delays with SNAP and all this stuff.

So we are looking at that. However, because of some of this uncertainty from the feds it's, we're, you know, we are at the whim of these updates, right. Even with these, you know, demands for access to data, what's happening in some of the other states.

So we can, you know, we're more than willing to meet with you to share with what potentialities. But again, we're, we don't like to just, you know, put out all these various scenarios until we get a clearer idea what the effects would be.

I, I really appreciate that because we're living in an age of such uncertainty, but I do think that there would be value to doing some proactive work. And I feel like we're in a very reactive kind of space right now, and I would really like us to get ahead of it in a way.

I get our arms around what's happening, if we can start to see the patterns.

And I guess my question was really just asking if that work is best situated in your Department or if that's something that we should be asking about, you know, maybe SHIPD or I don't actually know, like who is best positioned to do that kind of analysis and thinking.

So our budget requests reflect what we predict we will need in order to. With the various scenarios. Right. And so the position, you know, counts and all of that, the money we're moving, you know, some of that was in response, but also in preparation. So that's our best guess on what to expect.

So we're trying to get that now so we can, you know, ramp up. Regarding other things we've been working through Gov's office, you know, because some of those things, as you mentioned, go over multiple departments. Right. Even though we're partnership with, let's say, Department of Health, as you know, this impacting DOE and various things.

And so I guess it kind of depends on how wide breadth you want that modeling. We can meet with you, you know, to go over the specific program impacts. You know, we've met with Chair on that regarding specific impacts on, let's say, divisions, she's called beings with multiple divisions to see how that overlays.

But right now, because of how things are so fluid, we are doing, they're doing their best with working all around the clock, trying to prepare for.

And I appreciate that. I really. And I appreciate the work of the whole department. So you are doing work right now.

Thank you. Thank you. Members, additional questions. Thank you, Chair. Maybe this question is for Deputy Director Campos regarding the Maui recovery. First of all, first off, thank you. Deputy Director, for all your assistance with Maui County and the recovery efforts with. The Behind a wildfire. Do you have any update or like with the FEMA funding? Possibly.

So.

I know the county asked for an extension, but any plan or challenges that if it doesn't get extended, like what's the fiscal impact for the state?

Sure. And actually I'll ask. I'll step off the table and then bring up.

Deputy Director Trista Spear is working very closely with the county as well as the Office of Recovery and Resiliency. It might be resiliency recovery. I never remember which R goes first, but she's probably best to answer that question.

Good morning. For the record, Trista Spear, Deputy Director for the Department of Human Services. Thank you very much Representative for the question. We're happy to have been able to play the small part that we did in assisting the community in response to those unprecedented wildfires.

We are working in conjunction with the Governor's office, the Hawaii Office of Recovery and Resiliency as well as Hyema alongside with the county. The request for the 12 month extension for the FEMA direct lease and other FEMA interim housing programs was from HYEMA to Female. We are still as of last night in close communication with Fema.

We are told that their decision as to whether or not to grant that 12 month extension for those multiple housing programs is currently resting with Secretary of Department of Homeland Security Secretary Christine No.

If Secretary Noem does not grant the extension, what's the plan?

So we've been working closely with the county to identify what that plan is, what that would look like learning from all the various work that we've done since August of 2023. At this time, we have not identified exactly what that response would be.

That's hard to sit here today as a type A planner and not be able to roll out an answer. But that is where we are at.

But the state and county, the Governor, the Department of Human Services and the county of Maui, we are all committed to working with the critical programs to continue to support these needs of the survivors and I. So for housing we don't know what the answer is. We are really thankful though.

However, the county has indicated that they are. They recognize the importance of the disaster case management program that the Department of Human Services stood up with a FEMA grant and the county has indicated their commitment to Fund that program started in August of 2026.

So they have identified fiscal ability to do that program in August of 2026, which as you know, currently there's over 4000 individuals, over 1600 cases that are currently active by that program. That program has matched survivors.

The nearly 7,000 survivors served total since the fires or since the program launched in November of 2023 with over $160 million worth of resources. Non federal resources I should say. And so right now that program is slated to end federal February 10th of this year.

So in just less than a month's time we have asked for a six month extension from FEMA for that grant. It's a no cost extension. That is the maximum amount of time that a period of performance under this DCMP grant could go for.

And we're very thankful to the county for their recognition of the importance of this program and continued fiscal support of it with continued DHS technical assistance and support so that that program will continue.

And There was a two week extension. From February 10th through February 20th.

For the housing program?

For the housing program, yes. So that will give us an additional. Two weeks to work on planning.

And I just want to be clear because I know there's more people watching this hearing than just this room. We do not have a funding source identified for the disaster case management program between February 10 and August when the county is able to begin, when they would have funds available to begin funding.

So we are hopeful that we would receive that extension. Again, that extension is pending FEMA's decision. And right now our DCMP team is currently, I believe on a call with our assigned FEMA grants team. So we're constantly hopeful that we'll see receive a positive answer on that.

Is that included? Is that potential fiscal impact included in this budget? Now.

We have not included any fiscal requests for the disaster case management program in the department's request. We to date that program has almost completely been funded by the federal grant or private donations. We have only in the two and a half years since the program's launched.

I believe it's less than $5,000 of state General funds that have been needed for this disaster case management program. State funds, excuse me. $3,021.54.

Thank you Deputy Directors. Thank you Chair. Chair Marten, any questions?

Yes, please. I. I guess more of just. First of all, I really appreciate seeing all of you here and the incredible hard work and resourcefulness of this Department. Really challenging times. I wanted to ask a bit. As you know, we have an initiative to increase the contracts for direct service providers across the board.

The TRUCOST coalition has been advocating for this and we did have a Bill last session which this Committee passed but didn't quite make it into the budget at the end of the session.

And so I wanted to ask a little bit Maybe bring up the Office of Youth Services as an example to ask a bit about what the situation is with those service contracts. I know how important they are.

On the way here, I had a constituent call me while I was driving who called his IHS case manager, an angel who had showed up 12 hours before he was to be evicted. And he's right now in a transitional contact situation.

But he is Kupuna and he has never been homeless, and he is not homeless thanks to the hard work of our direct service providers. So I know how important they are to do the work of the state.

So I just wanted to hear a little bit about the budgeting process and what the situation is, just so that our finance Committee, which will have to consider these kinds of measures, understands what's going on.

Thank you, Representative and Chairman. My name is Mari Hall. I'm the Program Development Officer at the Office of Youth Services. I'm here on behalf of Executive Director Leanne Gillespie, who is away today on business as it relates to contract services.

Office of Youth Services overall has not gained or recovered some of the lost funding in the past. So we're in some ways stagnant in terms of the budget.

So while our responsibilities to improve, enhance and expand in community services, to keep youth in the community as much as we can instead of bringing them into the facility and touch the further deeper into juvenile justice system has been challenging in the budget process that we implement, really look at what are the service needs, what are the gaps, and also looking at the service numbers for the past contract years and allocate to maintain the service in the community and continue rather than reducing or eliminating certain services.

And that also goes through the procurement process to start the contract. So there are some challenging processes on our end as well. Instead of just simply contracting, we have to go through that state procurement process for services.

And I guess what I was getting at was whether you have been able to increase the amount paid with those contracts to keep up with the rising costs that nonprofits incur to deliver the services, whether you have in fact reduced. The amount of your contracts. So thank you for the thoughtful question.

We have not been able to increase the cost or the budget for services. And again, looking at the overall budget and certain funding that we receive from the state Legislature may be dedicated to certain services. So while overall OIs may have had increase in overall budget, but that may not be allocated across all contracts.

So the answer to your question is we haven't been unable to increase contract budget.

Okay. Thank you, Chair.

Thank you, Vice Chair.

Can I ask a follow up on this, I guess, kind of conversation around the True Cause Coalition or the conglomerates of, you know, non profits have been asking us, and not specifically to your branch, maybe, just maybe, sorry. To the Director or to everybody in the room who does contract out services.

I've gotten a sense in my conversations, you know, that I'm not sure if there's a disconnect happening between the conversations everyone is having with the service providers and what's necessary for them.

I mean, I hope you guys are having those conversations because we are hearing from these groups that, you know, some of them are on the verge of like not being able to still continue at all because of largely the level of money giving to the contract.

But I don't know if I felt the same kind of direction or pressure from the Department to let us know that we are on the verge of losing critical services in the community. So maybe more of a statement or are those conversations happening and is the.

What is the Department doing to renegotiate those contracts to make sure that we are able to keep our service providers, you know, in community to do this work? What, what's. Is there a disconnect happening between what we're hearing from them and the Department? Or is.

Are you guys in the process of retooling this given, like the level of, I guess, publicity that's been happening with these questions in the last couple years?

Okay, so regarding we, first I would like to say we value our partners, our community partners, our vendors. You know, we can't do everything. So having these contracts and scopes of service to be able to service people throughout the state is vital.

So when they are suffering or hurting, and we are aware it does impact our ability to do service.

Chair Marten, I think we briefed a little bit for Finn, but we encountered a situation with child welfare a few months ago where significant cost impacts potentially could require thousands of kids to come back and us to have to deal with that.

So we are in contact with our providers, but there's a process and a lifespan for these ongoing contracts. Right. So we go out to bid, we're following the procurement rules.

And so even if we are able to say, add a scope or expand the costing of a project, if it goes at a too high a limit, it would require us to rebid and open that process. And many times our partners don't want to do that. Right.

Because it's a process to have to resubmit everything, posting and all of that. So I would like to tell you that we have Very good relationships with our vendors. We are aware that, you know, we would love to pay them so that they are sustainable because they do the service.

Fact, we would love, you know, to have more services out there in our community, but we are facing some budget restrictions and we don't have all those resources. So if we have a limited resource, if we pay more in one area, that means another area will have to change.

And so it is that I can attest that our divisions and our attached are very keenly aware of their fiscal responsibilities and trying to balance. Many of them have asked for budget increases, you know, to, to address this. But it requires also that relationship with our vendors to explain to us what they're facing.

What is a true unit cost? If there's a need to relook at the scope for the expanding thing that requires a discussion and if it is now with the changing environment, it might need to be then reopened as a competitive reopen process. So there are those ongoing things, you know, so we have responded for certain key areas.

When we have, we are working, we have, you know, vital person that works very hard, Donna, working with all of our divisions regarding contracting, working with our SPO and doing that. So I would tell you, if vendors are facing that, please reach out to our divisions to expect to them, you know, what they're facing.

So that way if we do need to reopen it or re rank the scope, you know, that we have more knowledge on that. So that way we can better address the population in need.

Thank you, Members.

Yes, please.

So I understand from conversations that you folks did the research with your AG person that a new RFP would not be triggered unless there was a contract increase of 25% or over.

I think it's actually lower than 25%.

That's what I was given in writing.

Well, we'll check into that number.

Yeah, so that is what you folks provided me in writing from the AT's office. And so I just wanted to clarify that we're probably not talking about triggering any new RFPs with the types of increases that might be discussed.

So I think when the Ledge did provide more money for contracts, the Department did implement those increases. Right. That we could. So again, if that does come to play, we will do our best.

Again, if our providers are able to, you know, have those resources so they can ensure that the people of Hawaii are serviced, that's in our benefit. Right? That helps them, helps us. We look at it as a partnership. We want our, our vendor, you know, our partners to thrive as well.

However, you know, we also have that very tight responsibility fiscally to report how we have our money, what we're reporting to, and then also that you guys are aware. So feel free. If you want to increase my budget by 25% more, I'll take it. I won't turn it away. But.

I got you Members. Anything additional for the Department.

Okay.

That would be done before he talks.

He came down just for you.

Yeah. So just a couple of things real quick, I think just so that we have the same information. I monitored your hearing with the Wham and they did request some information. You could send the Committee some way, whatever you're sending, then they'll be very helpful.

Sure.

The other thing that is, you know, and. And this is, you know, I'm not saying it. It doesn't happen, but it's not normal. Where. Because we. We do that to you. Also where your CIP request is, doesn't have the Kahalics and the governors does.

And so I want to know what the thought process of adding that in is. And then also that is there going to be operational cost increases to add more for.

Specifically for the cahot.

Good morning, Jared. Good morning, Representatives. June Yang with the Office Statewide Office on Homelessness and Housing Solutions. The CIP request that is coming through, the governor's Administration package includes $10 million. It is monies for some of the building of Kauhale or Kauhali like projects in a number of areas.

It does not include operations funds for that yet because those are still. Since the cipher budgets allow for planning and building and it may take a little bit of time at the time. Once the buildings are facilitated. Do you have projected amounts of how much it's going to cost? We still are working with the different counties.

I think that'd be helpful for us. To know before we appropriate money with the operation.

We'll make sure that we bring that to you.

Okay, Absolutely.

Thank you. And then in previous there were some discrepancies as far as operational cost and what was in the operating.

Is there still the discrepancies on the operations? We do have a request for $8 million that includes. For. What was that again? For the current one? Yes, for the current ones. Yes. For. For whole new. And for the. The medical respite. Allah. Okay, thank you.

No Members, additional questions. Okay.

First of all, I respect the Department and everything you do for the community. My question comes as an attorney. So I'm hoping that the Department is prepared for any type of possible expenses related to settlements, litigation, awards to plaintiffs, fines, or any type of Monetary sanctions for non compliance.

Because I know if you don't prepare for that, it could skew a budget. So I just want to make sure you guys are okay and I think taking that into consideration.

So I would tell you. Yes. So again, congratulations. It was a nice event on Monday for your appointment. So, yes, we are aware of pending. We've been working very closely with our Attorney General.

So in regards to that, it's difficult because, you know, again, going through the process, there's different stages of lawsuits, litigation, some get settled, some, you know, get dragged out for a number of years. And when those come in, we work with our Attorney General and our budget people to submit it for consideration.

So we are aware of those that have been formally filed and we plan for that in our overall budget. But until those issues go through that process, I think it's, you know, those amounts can be accounted for.

But we are doing our best to, you know, prepare one to try to eliminate and reduce those kind of situations, but also working in partnership with our attorneys.

Thank you.

Thank you.

Thank you, Chair. Thank you everyone for being here today. My question is on public housing. Back in September 2025, there was four gun violence incidents at and around KPT. And as you know in the news, the safety around public housing, I guess. Mainly the urban core areas, ongoing.

So my question is how is your Department and HPHA and the city Administration and our governor's Administration doing to address immediate safety concerns and the causes that is causing this?

Thank you, Representative, for the question. My name is Ben Park with the Hawaii Public Housing Authority, Director, INSOFI Census. Apologies for not being here today. So how are we working to prevent and to address violence at our public health? I'll say this that it's a pretty big effort.

We are working with a governor's office, we're working with the FBI, we're working with Department of Law Enforcement and HPD Crime Reduction Unit. We're working with anybody and everybody is offering help. And so when it comes to some of the things that we're going to do to address these issues, we've been in talks about getting more cameras.

I know there's drones for fireworks, so there may be some other uses for those drones as well. There's also potential software to triangulate gunshots through the sounds that they make. Also increased patrols. Also cooperating with our Department of Attorney General's office and the prosecutor's office. It's all hands on deck when it comes to violence.

And it's not just endemic to public housing communities. Crime is happening everywhere, but we're focused on addressing those issues. Hopefully, we'll get back to you with some updates.

Is there any underlying causes that are driving these incidents?

Well, I think when we met with your staff, we had a meeting at kpt and I think at the time, the community policing officer, his name is Brian Oato.

There is a bunch of gang violence going on, and we're trying our best to address it and working with our families and the parents to try to see if they can also help.

And sorry, can I continue? And is there a coordinated efforts with Kamehameha Valley Homes and Mayor Rights? Yeah, they're all with our staff offices. And so I don't, I don't know if I can't go into the, you know, in the weeds on what we're doing, but I'd be happy to talk to you about it.

I would appreciate an update. Thank you. You're welcome. Thank you, Chair. Thank you, Rep. Perruso.

Thank you. I have a question for Mr. Yang. And it's been a pleasure working with you and thank you for coming to our community events and talking about community wellness with us. My question is about the contracts with Keala Ho and in General, the service provision around our unhoused community.

I'm only really familiar with Oahu, but Kealahou has two service providers in our community once a week. And it seems to me to be really thin coverage given the amount of people who are struggling with housing insecurity right now. So. And they're also managing a couple of shelters.

And I'm wondering if you can share with this body a map of the number of specific providers that are allocated for each community. Because I only know because I was asking, trying to figure out exactly how much support on how it's getting in our community.

Absolutely, I believe so. Let me first start by saying that the contracts for our outreach service providers does not come out of my office, but it can work together with our Department Homeless programs office and make sure that we have this information for the Committee and for them.

Anything additional?

Sorry, June, sorry. A couple follow up questions about the budget request for the Kalhale. That is in DHSF section. So the $8 million that's requested, that's only for the 2 sites listed in testimony. Only for the medical respite and the whole new program. That is correct. How much is there a breakdown? How much for each?

It's about 2.2.6. Almost $3 million for Honu and then the remainder for the Alla Medical.

And what's the current allocation? That has already been provided in the budget for each of those states.

For the HonU program, it is 2.62 $5 million, if my recollection is correct. And for the medical respite, it's an ongoing operations of about five and a half million dollars. I think we. Our last contract with them was for about $6 million.

Okay. And is this because of the operating cost? I mean, I know the medical respite operates at a higher level because of the level of care being given. Is it Just the cost to bring the medical services in.

So it is currently there's about 62, I believe 62 spaces at the medical respite. These are individuals that would most likely be in our emergency rooms. And so this is an actual a reduction in cost for services for emergency visits compared comparatively.

So what we're doing, it's bringing people into the medical record facilities, being able to triage and work with the issues, their health issues and connecting to healthcare and insurance as well. From there they're able to transition to Kohala units and other placements as well.

From that point for HONU in about a six month, seven month, just a snapshot, they've served over a thousand people at any given time.

And so what we have seen is that HONU as a triage service for our Oahu communities, it's done a great job of connecting individuals from encampments and places on the beach and other places into our emergency shelters, into our Kauahales, into our homeless, homeless inter permanent housing.

From that point on, these both have been very, very successful and we hope to be able to continue them.

How many patients have we or individuals, I guess have we cycled through the medical respite?

I can get that information to you. And just as clarification, these are all. These two programs specifically are in partnership with the city and county of Honolulu. They are the operators of these two. The contracts are coming out of their office.

And actually since we have you up here, this question came up. I asked hhsc, the site that core is running out of Leahi, is that a kauhale or is that a core program?

So I did get a chance to speak with the gentleman afterwards. The Leahi facility is. It is a city contract that has been funded by the state through my office. So he may not have been aware that our funding was a part of the. One of our contracts to serve for medical respite in the Lehigh facilities.

So it is a joint. Again, this one is another joint project together with the city and county of Honolulu.

Okay.

Okay, thank you. Yes. I just wanted to ask a follow up. So how did we get the numbers wrong on the city contracts for the medical respite and honu? When we did the budget last year.

I think as a part in the transition, there might have been some things that may have. We may have been a little bit off on the numbers for this. Working with the city and county wanted to make sure that we got everything right this time. So we appreciate the opportunity to, to make this request.

Okay. Any other questions for the Department.

It's real simple. So the Maui Wildfire, Right. All. All the unit. Prefab units and all the things. Some were placed, some were stored, stuff like that. Can you just send the Committee an inventory of where everything's at? You don't have to answer right now.

Just send us the inventor. I can answer right now if you want. Well, yeah, okay, but I wanted it right where. You just send us where everything is and where it's placed and how who's using it and. Yeah. Okay. Thank you. Director will send it to you.

Thank you. Okay.

Any final questions? Do you have a question, Reverend? You're good. All right. Thank you. Okay, so the plan is we are going to adjourn and we will be reconvening at 1 pm in room 308 with the Judiciary, Department of Budget and Finance, and the Department of Land and Natural Resources.

Thank you for all your hard work and thank you for your time.

We are adjourned.

Aloha. We are convening the House Committee on Finance for budget briefing. It's one o'clock, January 15th in room 308. And we are joined today by the Judiciary and they'll be followed up by the Department of Budget and Finance and Department of Land and Natural Resources.

Please proceed. Good afternoon. Happy New Year, Chair Todd, Vice Chair Takenuchi, Members of the Committee, my name is Brandon Kimura, Administrative Director of the Courts. With me today is Deputy Administrative Director of the Courts Dalen Heather and other administrators of the Judiciary across Oahu and several from the Big island as well.

So thank you very much for having us and the opportunity to present today on an overview of Judiciary's supplemental budget request. As you are aware, the mission of the judiciary as an independent branch of government is to administer justice in an impartial, efficient and accessible manner in accordance with the law.

We do that in a number of ways through our courts of appeal, circuit, district and family courts, which includes our specialty courts that are listed on this slide or several of which are listed on this slide that are more focused on assessing and addressing the underlying issues that brought folks into the justice system.

We also address access to justice, which is an enormous priority of the judiciary. Through Self Help Centers is one example where we through the collaborations with the Hawaii State Bar Association have been able to serve upwards of 40,000 individuals since they opened in 2011 at virtually no cost to the state.

This involved over 20,000 pro bono hours of work. We also have an E-reminder system which provides for system for upcoming hearings that anyone can sign up for, whether you are a party, a family Member, a lawyer, the media or anyone else interested in a particular case.

We also have a number of offices that are public facing and our administrative departments. I'll just highlight one of those today, including the Children's Justice Center. This develops an interagency multidisciplinary approach to investigate cases involving suspected or confirmed victims of child sex abuse, serious physical abuse, child sex trafficking or other things impacting children.

Since the pandemic began, the serious physical abuse and the children witnessing crime, specifically domestic violence has been significant increase in that area that we've seen at the Children's Justice Center. So I want to highlight those things for you as a little bit of background on the institution. And we'll now get to the biennium supplemental budget request.

We're certainly mindful of the relative economic uncertainty that the state and the country are facing. We've carefully considered that context in making our requests and crafting them and actually been reducing them in Recent months.

At this point we are firm in these as our overall requests, which will have 7 for approximately 6.44 million in General funds in FY27, conversion of 3 General funded temporary positions to permanent and a means of financing conversion of one position special Fund to General funds.

Go over each of the seven requests and our CIP request over the next several slides. The first request is a supplemental armed private security for 3.25 million. This is more than half in dollar amounts of our supplemental request.

This represents a significant, hopefully temporary shift in approach to protect and provide physical security for the judiciary and all the folks who enter our facilities. For decades we have relied exclusively on the Department of Law Enforcement and their predecessor agency.

And in recent years we've added contract security that provide the wands and magnetometers that you folks are familiar with here at the Capitol as well.

But in recent years, in particular, the number of deputy sheriffs that have been able to be on site in our buildings has dropped and it's at this point inadequate to protect the not only the judges and employees, we're also really concerned about the tens of thousands of people that we are compelling to be in our buildings every year.

So this request would provide, again, it's supplemental, so it's not in lieu of dle, it would be armed private security. This is similar to the federal courts model where they have the federal marshals and then also contracted security that are armed as well. The next request is cybersecurity. This would be funding for two positions.

And one of the two positions we would do a means of financing conversion from our special Fund to a General Fund. Over the last 45 days since December 1, we have experienced as an institution over 625,000 high risk security events on our judiciary systems. Of those, nearly 56,000 were classified as critical.

Unfortunately, they were actively blocked and classification as critical means that if they had gotten through, that would have been significant damage to either our systems or continuity of services. The next request here is restoring funding for our POS contracts for substance use disorder treatments on Oahu.

Early in the pandemic, when the state was going through financial challenges and we along with others, reduced our budgets, the POS contracts on Oahu took a significant hit. Since then we have been hobbling along with less funding and we've been able to serve folks, but that's just at this point completely unsustainable.

And so that's why we make this request to have those funds restored. The Legislature did provide some fundings, some funding in recent years to restore the domestic violence portion of those contracts. So this request is to address the remainder for these contracts that are focused on substance use.

The next request is restored funding for the Office of Public Guardians sole staff position on Kauai. Last session the position happened to be vacant at the time and the Legislature defunded the position. This is a halftime position, but it is the only position for that office on Kauai.

And so since then we have had guardians initially from Oahu and then the Big island, and currently a guardian from Maui flies over to service the Kauai clientele.

Although the Kauai clientele is understandably a smaller in volume than the other islands, we absolutely want to provide them the best service, just as we do everywhere else in the state.

And when our guardians fly over, in addition to the less than optimal service that we're providing the Kauai guardians, it impacts the wards on the neighbor islands where they leave because they have a caseload to attend to that day. Next request is funding to implement the recommendations of the Commission on salaries.

This is the exact amount that the commission had recommended and Legislature funded the amounts for FY26 for the first year of the biennium. This is just the second year of the biennium amount. The next request is to restore funding for and convert a temporary position to permanent and redescribe it as a court op specialist in Kona.

Court-op. specialists are more or less utility positions that can bounce around as needs may change over the years. In particular, right now in Kona, the urgent need is in our fiscal office.

And so this person would assist with those challenges, possibly assist us with grants going forward as we're working on grants and in particular reimbursement of court appointed attorneys fees. There's also been a significant increase in the request for court interpreters and this person could help in the logistics of that.

I will say that this cordop specialist in Kona and the cybersecurity positions mentioned earlier are just a couple of examples of how we are taking older positions that were perhaps defunded early in the pandemic and redescribing them to modern uses. That's what we're trying to do.

We're coming back slowly and we believe modestly and prudently to request restoration of funding when we need it for a modern need and not just what it was before. The Last of our 7 operating requests is a no cost conversion of 2 temp to perm positions in our court appointed special advocate program on Oahu.

These are folks who serve children who are Extraordinarily vulnerable in foster care. And although temporary positions in any part of state government makes it more prone to higher turnover and instability, that is especially damaging in this particular program where those children and family meet the stability perhaps more than anyone else. So those are our seven operating requests.

And I can continue to CIP or. Please, Jon, go for it. Thank you. We have several CIP requests. Our first and primary is a new construction funds for new district South District Court in South Kohala. That courthouse is quaint, but quite outdated. We have significant concerns for safety, space, noise, temperature.

The Legislature provided last session $4 million for design funds. We deeply appreciate that and we're moving forward with DAAGS. And at this point, we are ready for construction funds. This courthouse serves constituents from Waikoloa over on the west side, if you will, west side, northwest side of the island, over to the old Ocala Dairy. So in the.

On the, I guess, northeast side of the island, this facility. And I appreciate Members of the Committee that visited over the, I guess a few weeks ago or a couple of months ago. It appears to me like a converted district park pavilion.

It's, you know, really challenging for the individuals and the staff with significant safety concerns with wooden jealousies, no cell block. And so the individuals, the defendants who are brought in custody, remain in a van outside where public defenders speak to their client in a through the van window among the other custody defendants who are there that day.

So that's our significant CIP request. The next two are to replace AC equipment on Kauai and Hilo that are near the end of life at this point. They are near the end of the useful life, not beyond it, which is. Which is good. And they are admittedly still working.

But we are already experiencing extremely long lead times in other facilities. We've ordered AC equipment for a facility on Oahu, and it's been already over a year and we haven't received it. So we'd like to get ahead of it for these facilities and request this funding at this time.

Next is the Kahumanu Hale Elevators, which is a project at our circuit court building on Punchbowl street on Oahu. We appreciate the legislature's significant funding to date. This request is hopefully to finish the job. We have learned from DAAGS that the project will require this amount of money to get it done.

We have been working on this and seeking folks consideration and working with the Legislature and again, fortunately receiving funding for going on nearly 13 years now. And so we would just really appreciate continued consideration to get it done. And the last would be lump sum bond funds to address various issues for our facilities across the state.

With that, I'm happy to answer any questions and I appreciate the opportunity.

Great. Thank you. Members. Questions for the Judiciary Rep. Perruso.

So. You'Re requesting, I think, 3.2 million for the security, private security for the courts. And we actually heard also from DLA that there was, it was a challenge for them because of their vacancies to adequately support you folks.

So I understand that request and we are actually hearing from multiple departments and agencies about a need for more security. And it seems to me, and. So. I guess I'm asking if this is a temporary bridge or if you folks are thinking that this is the path you'd like to go down.

I mean, I see it as kind of normalizing, privatizing safety and security. And I'm not sure. I think there might be a lot of questions around training. There might be a lot of questions around the authority. I'm not sure how much success we've seen in other jurisdictions of using private security in our court systems.

So maybe if you could expand on the proposal a little bit more.

Thank you very much, Representative. We very much hope that it's temporary. We have appreciated our work with the Department and its predecessor over the years and we appreciate working with Director Lambert now.

But we, so we very much hope that it's temporary and that their staffing can get back up to speed and they can get back in our buildings. So that's, that's first in terms of the training and authority. These folks would not have law enforcement authority.

And we are working very thoroughly to make sure that when, if and when we do bring them private armed folks into our building, that we will have a significant amount of training requirements, not only for the individuals, but protocols in place for how they work with and defer to deputy sheriffs and, you know, our court administrators and other things, just so we make sure that there are no communication lines crossed or things like that.

We are working now with a national consultant that has significant experience nationally and internationally on these kinds of matters to make sure that if and when we are able to put them in place, that we've got all our protocols straight and we'll be able to put out an rfp.

You know, again, fortunately, summertime, that would have all of these details lined up so the company would be straight as to where they, where they go and how they, how they're doing their work.

In terms of other jurisdictions, we've seen a variety and I think in other jurisdictions, there's a there's a really broad variety because there's a mix in terms of funding sources. But I think the primary issue that other jurisdictions have faced on this issue is whether the private folks have law enforcement authority.

And that's something that we're going to address head on. I'll just circle back as I close again, we hope that it's temporary, not long term. We are very mindful and are not at all intending to replace public servants who do this work.

We've been, you know, sharing with HDA and again with Director Lambert that we want to be fully transparent and as soon as they're able to be back in our buildings, we'll be happy to have them.

Thank you. Thank you.

Thank you, Vice Chair.

Actually, a follow up to the security question, I guess. How short are you across the facilities? What is this like, how many facilities or bodies are we looking to cover with this? 3.25.

3.25. Thank you. Thank you, Representative. 3.25 would cover about 18 or so individuals. That would be enough, we believe to be a significant increase from where we are today. It's not. It would not take us up to an optimal ideal level.

We settled on this amount and 18 individuals as we're contemplating again the requests and realizing the context of the state's fiscal circumstances. But we believe 18 would allow us to be able to flexibly move folks around. So we anticipate having individuals assign a certain number for each of the circuits, if you will, or each of the counties.

And then depending on the day, whether DLE has other demands that day of serving warrants or a high profile case in our building or they have trainings, then we could flexibly move individuals around. So 18 would not bring us up to optimal levels, but it would be a significant increase in.

As just one real quick example, you know, we've got our, and I think I shared before individuals, the main courthouse on Maui has not had an armed deputy at the front door for a while now. And that's something that we would like to remedy.

So is the current situation more like we're just doing base services with what we have with the DLE and law enforcement officers available. And this kind of gets us closer to like the level that you'd like to see or.

Okay, so no, I mean, so it's right now we're not at the point where we're cutting access or, you know, cutting court hours because of the shortage. This would just kind of keep us where we are and raise the level of security to kind of where it would optimize or not optimally, but closer to where generally.

Generally, yes, this would allow us to. It's just focused on. Still focused on the perimeter. We have other concerns, you know, up and down inside the building. As, you know, folks are.

Maybe they get in a scuffle on the floor or something like that on a floor, you know, as families are kind of getting into it with each other and where those are of deep concern as well. But this would just really focus on the perimeter.

We have had to close courthouses before with the lack of deputies, and then hopefully this would help with that. But we're not closing them, I would say, on a regular basis. So that's not primary.

And as Repusso mentioned, when DLA did come before the Committee, they, you know, they also talked about their issue with manpower and ability to get people in. Where is the conversation, though? Are they going to prioritize you?

Because I know, like their main focus, right, is judiciary and then around the Capital District, but also, you know, in recent years where they're talking about starting up a lot of other things, right, The AG Police, DOT is talking to them about highway patrol, which they said they're using existing personnel to do just with like supplemented funds.

So are, I hope the conversation still with Director Lambert that, you know, these shortages, knowing that we're going to be supplementing with private services, is the intent to still prioritize getting the. Any new positions? They are funneled into these spaces that they, they're not able to fill right now.

That's certainly our hope that new positions are. That we are prioritized. But I, you know, I defer to Director Lambard and Director Lambert on his priorities. I know that they're. He's working on increasing the size and the frequency the recruit classes. And so we're, we're hopeful on that end.

I think in the last recruit class we've gotten one, but we're, we're hopeful. And I'll keep talking with Director Lambert. Thanks.

You know, for the South Kohala CIP request, can you remind me, because it's escaping me, what options are on the table for converting the existing facility? Should we approve funding for the new facility?

Thank you, Chair. The existing facility is a DAAGS facility, so in some sense we would, we would defer to them as we vacated it would, it would revert to them. It's not, it's not our property. We'd certainly be very happy to have it be a DL office. That would be, that would be wonderful for us.

But we, I Think we don't have the authority to make that kind of decision. Gotcha.

Okay. Additional questions for the judiciary.

Sorry, I have one. Yeah, actually could. Sorry, this is a question for. Is Dr. Harmonizing here?

Yeah.

Criminal Justice Research Institute. So this Committee, you know, talked extensively again with Department of Corrections and Rehabilitation about the jails and doh. About the Hawaii State Hospital, just to like, about the decompression that's necessary from a lot of the individuals coming through our criminal justice system.

So just wanted to see if we could get an update on your work that, you know, was.

Is going to, I hope, really help inform the decisions that we can make about how are the entire health of our criminal justice system is working to kind of help with some of these other issues that are, you know, leading to some really big costs for the state. So just, if I could just get a quick update.

Anything since we talked last time.

Sure. Erin Harbinson, Director of the Criminal Justice Research Institute. Thank you, Representative, for the question. So we last year created the data warehouse that essentially brings together data from the Department of Corrections, the judiciary and arrest data from the Department of Attorney General.

And with that data we can report report out on a lot of the metrics that are under our statute for pretrial at this time. Most of them are more tied to court decisions and pretrial, like things like pre trial release, bail, things like that. Excuse me, my throat's a bit dry.

We, we are also, and I should say that was in the first round of our annual report this year. It with our project, it is kind of an iterative project that we're working on. So we do have some data from the jails that we have integrated into our data warehouse.

But as we were working with it, there's kind of some limitations with where it's at now and especially as they're building a new database, kind of from a cost efficiency and process efficiency standpoint, we've kind of delayed integrating some of the jail data that you might be kind of more interested in.

And then in terms of, I know you also mentioned, I think the Wye State Hospital. Correct. Yeah. So we are not bringing in any data from them. However, through some kind of court and jail information, sometimes we can answer some of those questions like that.

So I guess I would say to some extent it might depend on the specific question or topic of interest in terms of, you know, where we're at in terms of would it be something we could report on next year or something more long term? It kind of depends a little bit on the specific data. I'll stop there.

I don't, I don't know if that's a good starting point or if you have follow up questions or if there's maybe something more specific I can address too.

No, just, I mean, it's just my hope that, you know, you can continue forward in this work to like, again, give us that kind of real. Actual. Picture on what the system looks like and what some of our policies might do based on what's happened historically. I mean, I guess.

Is there any kind of update you need to maybe your mandate in the statute or anything or access, you know, to update so that you can get access to some of this other information? Would that be helpful?

Yeah, thank you. Thank you for asking that too. I. Since we just created the system, it was completed last summer, and so in the fall we really prioritized targeting the metrics that we knew we could report out very efficiently.

And so now we're at the phase that we're targeting some other metrics that are a little more complex in terms of how we work with the different data sources.

So at this time, where as we do that, I think we, I think we are kind of mapping out what are some of the gaps that we have which might be just due to data entry, what are some of the gaps that might be more technical and what are some of the gaps due to lack of data that we didn't get through this process.

And from there we can kind of lay out some different options and kind of present those because some may be tied to additional data sources and agencies we haven't even brought in yet. And some might be, you know, due to statute changes. It's pretty complex.

So we kind of wanted to, in this first year really understand some different options so we could present some kind of pros and cons to different approaches and if they're resource driven or not and be able to lay that out so that that's the plan for this year to get a better handle on.

Some of that as well. Thank you. Thank you.

I have a question about the request for the 574,000 for the substance abuse or substance use contracts for probationary adults.

And I'm wondering, you know, just because we are seeing that struggle really evident in our community and it is in some part clear in folks who are exiting criminal justice system and because they're not getting adequate treatment, then they're also cycling back into criminal justice system.

So I'm wondering if this, it seems like such a small amount for those contracts and I'm wondering if that is, if we are just doing the bare minimum and if you could speak to that.

Thank you, Representative. In terms of amount, this amount would bring us back up to the baseline that we had pre pandemic. We're certainly mindful and we've spoken with folks in the True Cost Coalition, understand the concerns.

But at this point, in light of the state's financial challenges, we come to you with the amount to bring us back up to the pre pandemic amount. That's in terms of amount, in terms of the, you know, impact on the individuals in the community.

This is we believe that this that said, we believe that this would help us secure the type and volume of services needed for our probationers. So we do believe this would be adequate.

Just 11 other note in that the instability that we've had to sort of juggle recently in recent years with this decreased amount available has had an impact on probationers, has had an impact on the community.

Because even though when a judge orders a defendant to probation, at that point it's between our probation officer and the probationer and the provider to try to get together and get things started. And when delays happen, then in some instances the probationer has, without that treatment, they've reoffended or done something else. So that delay does actually matter.

And I'm just thinking of the costs that are visible in the other parts of the system. Like when that person does go back in the prison system, it is actually very expensive. So preventative action, I think, is really important. Thank you. Thank you. Sam, can you chat?

Thank you. Any other questions? Seeing none. What we're going to do is we're going to recess briefly to allow for the transition for the Department of Budget and Finance. Thank you very much for your time and all the good work you folks are doing. Feel free to keep in touch.

All right. Recession.

Aloha. We are reconvening the House Committee on Finance. We have a budget briefing now from the Department of Budget and Finance. Welcome and proceed with your meeting.

Aloha and good afternoon. Chair, Vice Chair, Members of the Finance Committee. My name is Seth Colby. I'm the Acting Director of Budget Finance. Just to give you a brief background, one paragraph background of what the Department of Budget Finance does is we develop the governor's budget, multi-year financial plan and manages the state finances.

BNF is a service agency which means that we do not provide public services directly to residents. Rather we work with other departments to translate policy into financially sound, executable budget. Our role is to ensure that state priorities are affordable, obligations are met and the resources are deployed efficiently and transparently.

I've been, you know, I, I assumed this role several weeks ago and one of the great. I just felt super lucky that we. Have an excellent management team that is like dedicated and extremely talented. And I'd like permission to introduce them today.

Of course. Thank you.

So to my right we have Deputy Director Nasir, we have Rod Becker, the Financial Administrator and Acting Budget Administrator Mark Anderson, Administrator of Office of Federal Awards Management. Tracy Ban, Administrative Services Officer. And then of course we have the leads of our attached agencies.

So we have Calvert Young, who is the Executive Director of the ers, Donna Tanaki who is Assistant Administrator of the ETF and John Ikanaga, the State Public Defender. So our requests are very limited. Just our budget request is officially 4.3 billion. 98% of that is associated with fixed costs. Again, we are service agencies.

So those are us providing financial support to our sister agencies. 2% of our budget is related with actually direct departmental operations. In terms of specific budget requests we have. I'll go over the fixed cost first, which is we have for the fiscal year 26 we are requesting a decrease of 149 million.

And in fiscal year 2737 for General funds for debt service financing we're requesting a decrease of 2.98 million for General funds. For health premium payments. In fiscal year 27 we're requesting 1.8 million in General funds and 320,000 for special funds. For the Commission on salaries and adjustments.

And we're requesting 3.5 million in fiscal year 27 for fringe benefit costs needed for the ERS. This is non General funded positions. We are requesting one full time position at the ERS as a budget analyst and, and one full time position at EUTF as an investment officer.

Lastly, we have a request associated with the Green Fee Act 96 for $43.5 million. That is it for the budget and finance. We look forward to any questions you may have.

Nice and short. Thank you. Maybe for the edification of the Committee and for anyone watching, it's probably like 10 people. Can you walk through that proposed decrease? Why and what the implications are?

Yeah. Okay, so we. If you go back, in fact, just for our Members point. If you actually look at the. Look in our table under form A and you look at the. On the third page you see justification of request. This is for the title of the request is debt service funding for the state. We go three.

There's a. We have an equation that we used to calculate debt service financing that changes from year to year. And the decrease represents adjustments to that equation.

Okay, that makes sense. Good. Okay, I got a small one too. So I think we, we'd already reached out about the pay raises that were funded for the public defenders. And you folks are handling it? Yes. Okay.

Yeah, just, I. Okay, so first of all, this is clearly all your fault. Yeah, yeah, yeah, yeah. We're taking this seriously. Like I just want to share my experience. I spent most of my time as professional civil service here and being paid on time is like really important to people who spend their time.

And you know, especially for our public defenders who are doing God's work and are being paid less than what they normally would be able to do. We take this absolutely seriously. Just to make sure that we're all on the same page. BNF came in with this request last year. Right. It was granted on July 1.

It took some time for it to. It was always going to take some. Time for us to process those payments. It took longer than what we wanted and that was because we were low staffed. So our HR staff went from four down to one. We're rebuilding that.

Just as a reminder, when you, the minute you hire somebody, it doesn't solve all of our problems. It actually kind of slows things down because you actually have to train these people. So this is always a high priority. And we've been working on this. We've actually even enrolled the fee herd into this.

So by January, at the end of January, everything will be processed. It will take some payroll, like a couple cycles to get to work through everything. But essentially we feel good and we feel that this issue is going to be resolved.

We're walking, working lockstep with the public defender's office and to educate them and we understand that, you know, for all. Of. Throughout the government, you know, human resources is an issue and this is just a reminder that when you get your HR staff decreases, it really endangers it like puts at risk all of your operational ability.

So, you know, one of the first things our priority is we are still looking for HRO Human Resources Officer. And that's the number one priority for our Department so we can get fully staffed up.

Okay, thank you. Members. Questions? You're good. Okay. Anyone else questions for BNF? Do you have a question I should ask? Nothing. We were hoping to beat the Office of the Governor's budget briefing. Zero, that was. I think he caught me off guard.

They're still in the running movie.

Okay. I'm okay. Does anyone want to just come up and talk? You guys are good. All right. Okay. We're going to recess briefly and then we're going to reconvene with the Department of Land and Natural Resources. Resource Resources. Recess.

Aloha. We are convening the House Committee on Finance. We have the last of our three budget briefings for our 1pm agenda. We're joined today by the Department of Land and Natural Resources. Please proceed.

Good afternoon, Chair, Vice Chair, Members of the Committee. My name is Ryan Kanakwa. I'm the First Deputy for DLNR.

I'm acting on behalf of Chair Don Chang. Mahalo for the opportunity to present. Behind me I have our administrators. From Land Division, Lauren Yasaka. From OCCL, Michael Cain. From Bureau of Conveyances, Mike Imanaka. Engineering Division, Dina Lao and Gason Ching. From the Division of Aquatic Resources, Brian Nielsen. From the Division of Forestry and Wildlife, David Smith.

From the Commission on Water Resource Management, Kirak Kahahane. From the Division of Conservation and Resources and...Jason Radula. From Division of Boating and Ocean Recreation, Megan Staats Antantashima. From State Historic Preservation Division, Jessica Puff. From State Parks, Alan Carpenter.

And we also have our Administrative Services Officer, Cynthia Gomez, our IT Officer, Lila Lopes, Human Resources, Al Shutty, and our Communications Director, Andrew Lawrence. I'd also like to recognize our administratively attached agencies.

So, we have our CCMAC Climate Commission, which is the Climate Commission, Kahualawe Island Reserve Commission, that's Mike Nahaopi, Ahamoku Limana Da Mate, and as well as our Monica Stewardship Oversight Authority representatives, led by Executive Director John... So, our presentation is broken up by program ID.

It's going to be highlighting accomplishments and then, we're going to move on to what we're working on, as well as operating in CIP requests per program ID, if that makes sense and we can move on that. Okay, so for fiscal year '27 supplemental budget request, our operating funds request is 19.4 million. It's $1.7 million request in General Funds.

The remainder of that request is 7.7 in Special Fund ceiling increases, as well as $10 million in federal fund ceiling increases or conversions from federally funded unbudgeted to budget acquisitions. For our CIP, we're also seeking an additional 34.8 million in GO bond funding for CIP.

We're also seeking authorization to use 1.5 million in federal funds towards...for a total of 35.3. On recruitment and retention in fiscal year '25, we conducted 179 recruitments and filled 162 positions.

We are improving timelines for the recruitment by not just using DHRD's process, but also our own internal delegated recruitment process. And then, outside of that alternative process, we also are working with DHRD on using the operation Higher Hawaii, which is their new program that came out last year.

I do want to note that the 25% vacancy rate—that includes positions that have yet to be established or unfunded, so we can't actually fill them. If you were to take that out, it's actually at 16% vacancy rate, which is good. We are at the pre-Covid levels. So, moving on to the programs themselves.

So, LNR 101, that's our Land Division. We're not going to be requesting any operating budget. There's no operating budget request for this fiscal year for additional CIP.

So, as far as accomplishments go, in 2025, the division completed the demo for the vacant Uncle Billy's Hotel in Hilo, as well as secured nine lease extensions that were conditioned on the closing of cesspools located on the lease lands.

Finally, on the Act 90 transfers to the Department of Agriculture and Biosecurity, we got Board of Land and Natural Resources approval for transfer of five leases, totaling 13,000 acres. And that comes out to, in this Administration, we've transferred over about 50,000 acres total under Act 90. CIP that land division is working on.

So, statewide, there's the cesspool closure push. We have $1.5 million already in CIP. There's a breakwater removal that's on Oahu for the Shangri La property. It's elimination of the Diamond Head Breakwater, as seen in the the photo up there. And then, we have a project on Kauai. That's the Lower Kapahi Reservoir removal.

That's to remove an unsafe reservoir to mitigate safety risk—or to mitigate safety risk to downstream communities, as well as a planning effort for East Kapolei Transit Oriented Development out in East Kapolei for our, our DLNR process. Also under LNR 101 is our Office of Conservation and Coastal Lands. They regulate the conservation district land statewide.

That's our watersheds, mountaintops, shorelines. OCCL also does not have a budget request this year. OCCL has been focusing on coastal restoration and resilience. For 2026, the plan—there's a few coastal and beach restoration projects planned totaling about half a million dollars. $150,000 is going towards restoration work on Kaho' olawe. That's in partnership with Kirk. $150,000 on Kauai.

That's in partnership with State Parks. And $200,000 for statewide project development with Maui being the furthest along. That's in partnership with UHC grant. Also in LNR 101 is CCMAC—that's the Climate Commission. And so, their role is to coordinate climate policy across state and county agencies. Accomplishments for this past year was development of Climate Action Pathways.

That's a roadmap for a community-driven roadmap for climate resilience statewide. Also, adoption for climate equity, as well as securing funding for a Solar Energy Program Manager that is housed within the Hawaii State Energy Office. No supplemental request for CCMAC. LNR 111, that's our Bureau of Conveyances. Also, no supplemental budget request for the Bureau.

Bureau is our repository for real estate transactions. So, all deeds, leases, other land conveyances, they all get recorded here. So, it's a high-volume operation, essentially self-funding due to the fees and transaction fees. BOC is continuing their efforts to modernize, so it's a lot of investment in digitization, increases in online services, as well as fraud prevention tools like our Property Watch that we've been rolling out and promoting last year.

So, as far as accomplishments go, in addition to the Property Watch, I would say continued rollout on the digitization that would include digitizing documents all the way back to the 70s, as well as reducing, on the land court side, the backlog for certifications. So, that's been reduced by three years. LNR 141 and LNR 810 are two program IDs under our engineering division.

So, Engineering Division, they support all the other divisions within DLNR on CIP implementation, with exception to...who has their own engineering capacity. So, in 2025, engineering helped implement $32 million in CIP and repair and maintenance projects that would be to park facilities, public safety projects like the—on the picture shown is our rockfall mitigation work that was done at Diamond Head.

Additionally, Engineering hosted the 16th annual Floodplain Manager Conference on Oahu. This is the first time we've done that since COVID. And then, finally, there was—Engineering completed a FEMA sponsored technical assistance grant to improve dam emergency preparedness on Kauai.

Kauai was the only county awarded that CTA grant. In addition to that, there was emergency action plan workshops held on Oahu, Maui, and Hawaii. And other, the Engineering division, there's the dam safety, dam safety and flood control. So, they completed 89 statewide dam safety inspections. So, there's about 123 regulated dams and reservoirs.

They went over their goal of having, you know, inspecting half of the total 123 this past year. So, there are a few requests for LNR 141 and 810, or no requests for 141 operating side, but for, let's see—for 810, there are two operating budget requests.

One is an increase in expenditure to redescribe an office assistant three to a procurement specialist. That would be to support the flood control and dam safety section, as well as a ceiling increase to cover BNF Special Fund assessment, as well as a small buffer to cover some operating expenses.

810 also has a $2 million CIP request for our rockfall and flood mitigation program. That's to focus on work at Kalalau to do rockfall mitigation slope stabilization on Hawaii island for flood mitigation work in the Hilo area. LNR 401 is our Division of Aquatic Resources.

DAR manages aquatic resources through its four pillars: community planning, photo practices, monitoring, and restoration work. Accomplishments for 2025 is advancing sustainable ocean management through establishment of co-management partnerships that would be in the Kipahulu community-based fishing area, as well as the Mauna Loa Bay fishing management area.

In addition to that, it would be continued protection of marine ecosystems. When a boat hits reef, they assess damage. The divers go out there to save and repair damaged coral. That's on a case-by-case event basis and as well as enforcement of against illegal fishing practices.

So, I know it wasn't in 2025, but this past board DLNR meeting, we did assess a $10,000 administrative fine against an illegal long line fisherman that was engaging in illegal long lining in state waters off the coast of...

Additionally, DAR has generated about $3.9 million in 2025 through its programs, such as the Ocean Stewardship Fee, that are assessed on a per person basis for users—against users for commercial ocean activities. These funds are then reinvested towards restoring and protecting acquired resources. So, LNR 401 has a few operating requests.

First one is a reduction in $139,500 in regular federal funds and adding $116,000 in other federal funds to better match the actual mix of grants that are expected. Another, going down the line.

So, there's an $11,367 Special Fund increase and this is tied to a salary upgrade for a staff for an existing office assistant position being reallocated to a higher level office assistant 3 to office assistant 4, due to increased responsibilities, as well as, again, establishing a 1 FTE and a Special Fund increase for another position.

It's a restoration of the Program Specialist 5 position that was previously eliminated. This position is to oversee the non-resident recreational fishing license that was launched last year, as well as oversee the ocean stewardship user fee and manage commercial fishing licenses. Finally, there's a CIP request for DAR in the amount of $550,000.

That's to convert a cesspool system located at the DAR's Anuenue Fisheries Research Center on Sand Island. It's to connect to the municipal sewer. Funds cover design and construct. Up next is multiple LNRs. 102, 172, 402, 407, and 804, all falling under a division of Forestry and Wildlife. So, Division of Forestry and Wildlife programs.

They collectively manage over 1 million acres of state lamps. They support our watershed protection, wildlife wildfire response, endangered species recovery, and public hunting.

Many accomplishments across the LNR programs, including filling a lot of vacancies with only a 58.5 vacancies remaining in the 274 division wide positions, planting hundreds of thousands of native plants across the state, investing in watershed protection by our fencing programs, and getting our volunteers out there to help out.

So, leveraging volunteer resources to—for the mission of the programs. LNR 402. So, we're going to just deep dive into the...programs. LNR 402.

That's our native resources and probably most well known as the Fire Protection Program. That, so, in FY '26, there were 22 new fire positions and we're currently establishing positions and as we establish them going out for recruitment, these are positions that are deployed statewide.

In addition to that, so, there was a community fuels program that was established last year and through that program, there were nine grant awardees from Oahu, Hawaii Island, Maui, and Kohui. LNR 402 has three operating budget requests. First is adding three full time equivalent positions and $135,749 in federal funds to support six positions.

So, and there was confusion about this at the WAM hearing too. LNR 402 is a funding source for half of the position and then LNR—I believe it's 804—is the funding source for the other half of the position, for a total of six positions.

So, two separate program IDs are funding—are both federally funded, but they're feeding towards these six positions. So, the six positions are forester five—or not forester five. Sorry.

So, yeah, two wildlife biologist fours, one natural resources management specialist, three, three Forestry and Wildlife Department funds, and the other budget request is a change of means of financing for 0.5 FTE from other federal funds to a General Funds. And this is for the Forester 5 position.