Senate Standing Committee on Labor and Technology

To order the joint Committee on ways and means and labor and technology. So this morning we're going to hear from Department of Human Resources Development who will present their supplemental budget requests. Good morning.

Good morning. Aloha and Happy new year Chairs Dela Cruz and Elefante, vice chairs Moriwaki, Lamosao, and Members of the committees. My name is Brenna Hashimoto and I'm the Director of the Department of Human Resources Development. Before I proceed with our budget presentation, I'd like to introduce the Members of the D herd team that are here with me today.

When I call you, please raise your hand. First of all, I'd like to introduce our deputy Director, Brian furuto. Also here with me today is Travis Palmeira, our newly appointed labor relations division administrator. Jennifer Mori-Kilbey from our claims division. Ratnell Yee from employee relations. Signe Nakamura-Dureza, our EEO officer. Patti Taketa, our lead recruiter.

Mark Togashi, our administrative services officer. Joy Inouye, compensation manager. Patti McDonald, our training manager. Malia De Leon, our classification branch chief. Pritham Parumalapalli is our personnel transactions manager. And Erin Jerome-Connor. Sorry, Connor-Jerome. Got that mixed up. My Executive assistant and the author of our annual vacancy report and also from our benefits section is Fanny Takaha.

Okay, before I talk about our budget requests, if I may, I'd just like to give you a few- take a few moments to provide an update on our department's accomplishments over the the past year. I'll be brief.

First of all, I'd like to talk about our annual vacancy report, which was submitted to the Legislature at the end of December.

We the takeaways from that report are essentially that we've added 300 more civil service employees over the last fiscal year, which means we were not only able to replace the 1,169 employees who either retired or resigned from state service, but we were able to add an additional 297.

And if not for the additional 485 new positions that were authorized by the Legislature, our vacancy rate overall would have dropped from 24% to 22%. Unfortunately, when we added in the new positions, we basically remained flat at 24%.

The fact that we're not losing ground can be attributed to several things, including our recruitment staff, the ARBA project recruitment team, our marketing and outreach efforts, and the efforts of many departments to make recruitment a top priority. In FY25, we saw more interest in state jobs than we've seen in the last five years.

Our staffing team received over 41,500 applications, including over 8,000 applications submitted in response to Governor Green's Executive Order 2502, which was launched as Operation Hire Hawaii in February 2025. This past year, we also began accepting applications from soon to be college graduates by allowing them to apply for civil service jobs up to three months prior to graduation.

Most importantly, our staffing team has made tremendous progress ensuring that recruitments are posted timely. And we're nearly caught up on the backlog of screening. These positive gains are a direct result of the additional resources provided to D herd to promote the state as an employer of choice and positions that enable us to screen applications faster.

And for that, we are enormously grateful. In terms of our own vacancy rate. Three years ago, when I addressed your committees, I noted that D herd had 90 FTE but only 60 positions, meaning we had a vacancy rate of about 30%. Today we have a workforce of 96. I checked this morning.

So we went from 60 to 96 in the past three years, and our vacancy rate is closer to about 12%.

But still only 20. So you went up 30% staffing?

Yes, from 60 to 96.

But we're flat at overall vacancy statewide.

That's right.

So you went up 30% and we're still flat at. Okay, well, we're small.

We have 102 FTE, so we're a small drop in the big.

But just to put it in perspective, because you can't be celebrating the inches statewide when you've grown 30%.

Okay. And we still have some staffing challenges, which we're continuing to actively recruit all of our vacancies.

And finally, last year, the Legislature appropriated $1.75 million for D Herd to hire a consultant to work with us on reviewing the entire structure of civil service, the civil service system, including classification, compensation, minimum qualification requirements, job titles, and technological solutions, essentially the works.

There's nothing that's not on the table for us to consider to modernize the state's workforce infrastructure. I'm happy to report that we've selected a vendor and we're currently working through the contract to execute a contract. And we owe the Legislature a report next month on our progress.

Now, I'd like to just take a minute to go over our two budget requests for this year. The first one is in program ID HRD102. We are requesting three FTE and $306,144 per year to add three positions and funds to our staffing division.

This is essentially to operationalize ARPA project team that I've been talking about for the last three years. This team are the individuals who do the marketing and the outreach and all of the events that promote state jobs in our community. These are the boots on the ground, the folks who put the events together.

They also have done a tremendous job in promoting the state through our advertising on things like the bus, in the malls, at UH sporting events. They've also managed our LinkedIn contract. We get a lot of recruitment, a lot of applications through LinkedIn. They're also working on our..-

We just recently signed a contract with NeoGov to use their attract feature, which is very similar to LinkedIn, but it requires constant engagement with applicants. We can reach out to applicants who have a profile in neogov, which is the recruiting software that we use in all other government jurisdictions in the state of Hawaii use.

So if somebody is looking for a state job or a government job in the state of Hawaii, we can communicate with them, we can tell them about our jobs. But it, it's very labor intensive because if somebody reaches out to us, we need to be responsive. We need to be engaging with them.

So why don't, why don't you just use your vacancies?

We do not have... We'll talk about our vacancies, but we have just a handful of vacancies and they are needed. Where those vacancies are, we only have basically the division chief and our staffing division at the moment.

If you look at table 11, you have enough to cover those five positions you're asking for. You asked for those before and we denied them. So those were created. Those are special project positions using federal funds.

And the budget guidelines already say it should not be assumed that the state funding will automatically replace federal funding in situations where federal funding is disrupted or discontinued. So... No, it's three positions that are exempt.

Yes. Right now we have a project team of five positions that do all of the outreach and marketing-

The process of redescribing, and all of that same stuff that we ask other departments to do. So you take the vacancies, you do what you have to do, and those people can apply for those new positions. But you're not getting these three. You're not going to get the next two either.

You asked for them before, we denied them. And it shouldn't be assumed just because there's no longer federal funds that you're going to replace them with General funds.

We recognize that funds are tight, and that's why we pared down our request. So our request last session was for five.

We did not give them to you.

That's right.

So go through the process like every other Department and do whatever redescription you have to do with your vacancies if you want, and have those people apply for those positions.

In the vacancies.Yep. Question, where are these three positions? Oahu only or.

Okay, thank you.

Yes, all of, all of D Herd's operations are out of Oahu. Right. We don't have any positions on the neighbor islands.

Okay, next.

Okay, so our next request is for two FTE and $217,372 for two positions in our personnel transactions office. And again, these are positions that are currently existing. They're exempt. They're ARPA funded.

And these positions were established about three years ago to help us with essentially working to review our legacy processes and provide recommendations for maximizing the efficiency and effectiveness of our human resources information system. So you can imagine we have all of the records for every state employee and every civil service and exempt job electronically.

But whether that data is clean, whether it's accurate, whether it's current, all of that requires eyes on it continuously to make sure that we are monitoring what the departments are putting in and that it's accurate.

And also using the software that we a lot of money to for PeopleSoft, that's our system of record and making sure that we're using all the functionality that's available to us. And we also envision that moving forward with the enterprise financial system, EFS that we are going to be...-

There are a tremendous amount of resources from D-Herd are going to be needed to make sure that our systems talk with EFS and that good data is going into EFS.

Question, just short question. These positions are civil service?

No, they're exempt. They're all Exempt. They're all exempt. They're all federally funded.

So it's, it's faster for you to hire.

Right, but those-

ARPA's not getting those. Those are special project positions the previous Governor had created during COVID. And so they're used with their ARPA funds.

Right. So they, they started when I started. So this was in January of 2023.

But she has all these Vacancies. She should go through the same process like every other Department so that D-Herd can understand what it takes so that they can improve the system to make it faster. So you had over a year to do that. You could have did that last year, but you didn't even start.

Well, we're Hopeful that we would get these positions as part of our.

I told you that last year question.

Yeah. As a follow up to that. So based on the chair's instructions, is the intent long term if you were to get funding to convert this from exempt to civil?

Yes. So the ARPA funds will run out in September. They expire. So we won't have any access to those funds. We have right now only 5 vacancies on this report that have not been already filled.

Yeah, but I had to do this last year.

Right, but we still had funds at that point in time to.

Yeah, but you could have started the process to transfer to redescribe some of the vacancies.

All of the vacancies that we filled are needed in the areas where we have them. We only have 102 positions.

Some of them have been vacant, like here's one since 2022.

That position is funded as part of our deferred program. I cannot. That one is part of. It's assigned specifically.

Will you figure it out? You're the D-Herd Director. Okay. So you have other departments jump through hoops. So those very same hoops you ask everybody else to jump through, you should try jumping through yourself. And then if that way, if they need reform, then you can make those changes. Any other questions?

Okay, I had a question on contracts. So other than contracts relating to the Office of Modernization, the Department has an outstanding balance of about 38,000 to HSI Workplace Compliance Solutions. So despite its end date, what's the reason the balance remains open after the contract expiration?

I believe that's for our learning management system.

Why is it still open if it was supposed to be ended?

I believe that there were issues with the contractor getting into compliance with the requirements, and so the payment was delayed. So we had to wait for them to be in compliance with our procurement requirements and then before we could cut them the check.

Okay, so what are those issues?

I believe they've been resolved. Yeah, it's been resolved.

Okay, so then why is it still open?

I believe as of this date it was not resolved. But since then it has been resolved.

It was recently resolved. Chair. Okay, so you. If you guys can send an updated table.

I have a question on your classification study. I know this is not on your addition, the 1.75 million. You selected a vendor. Are you going to anticipate you're going to need more money? And will you consult with the different agencies and also with the labor trades as you go through reclassification and study on that?

We're Uncertain at this point whether we'll need additional funds. We're hopeful that we'll be able to accomplish a review of all of the classes within the amount that has been allocated. If we're unsuccessful, then we will come back to you next session. In terms of consulting. Yes. Whatever the recommendations, obviously we would need to consult with both HCA and UPW as it may impact their members.

And that would be my hope. That you would consult with all the Department agencies. And the labor unions.

Yes. So anytime we're looking at a specific class of work that is, for example, situated in a particular Department, like, for example, adult corrections officers, we'll be talking very closely with DCR about how any changes to that class of work may impact them.

Thank you, Director. Thank you, Chair.

So, just to follow on, in the classification combination study, we have had a number of concerns coming from the departments as to high demand vacant positions.

Can you work with the vendor so that these kinds of positions that are really needed by the departments can be put, you know, at the top of your list or I don't know how your scope of work is, but you really start looking at these where they're really needed now?

And I don't know what the timeline is for this study.

That's a difficult question to answer simply because part of what Civil service requires is that we maintain internal alignment, internally within the bargaining unit. So what I anticipate is that we will probably look at specific bargaining units first.

So that we can ensure that we're looking and comparing jobs within a particular group, and we'll be in close discussions with the vendor on how to tackle that.

There probably will be simultaneous groups looking at different bargaining units at the same time, but in terms of coming back with a recommendation, I believe you'll get the entire recommendation at one time.

And what is the timeline for you?

Next session.

So there are a number of departments also with exempt positions, and they seem to be following the same procedure and timing for your classification compensation with civil service positions. How can we expedite that part of it?

Because there are a number of departments that have exempt positions that are not in the study.

So exempt positions are not part of our study. So departments establish exempt positions, they determine what job title they want to use, they determine the minimum qualification requirements, and they also determine what they're going to pay as long as it's consistent with our policy, meaning that we try to ensure fairness across all employees within a particular agency.

So it's not something that we're going to be studying in terms of this study.

So they can do it without coming to you for any approvals?

Yes, it's completely delegated. They establish the positions, they fill them. It's completely delegated.

So departments don't have to wait for you if it's exempt?

Yes, that's correct.

Okay.

They don't come to D- Herd at all. The only, the only small portion that may come to D- Herd is if they want to exclude a position from collective bargaining. Then that comes through us because we are required to consult with the union. That's the only piece. So they do the classification, they do the job posting, they do the selection.

Even the applications don't come to you?

They do not come to us.

Well, what I'm trying to figure out is because we're trying to fill these ship D positions and they say D Herd is the problem. Right? And we've been waiting since the beginning of this governor's term to fill these positions.

And so I think what I told them is just take everything and hire, which I think they're going to do. But they said they were waiting for D- Herd for a while, Right? These are exempt positions we gave them, I don't know when.

They don't have to come to D- Herd. I've been hearing that for three years as well.

And, and they're totally out of it?

We're totally out of it. Yes.

So if it does come to you, what is your level of review though? Like how long does it, what is your average time? Are you tracking that data of how, what's, what's the in time and what is the out time for reviews of positions?

It depends on what the request is. We've started. We actually implemented a system whereby we intake classification requests because we really rely on the departments.

If they see that there's a disconnect between the minimum qualification requirements for a job and what they think they need and what they want, then they can come to us and say, hey, this minimum qualification requirement is no longer relevant. We prefer that it say this. We entertain those requests.

And so how long?

So they submit a request to D- Herd. We've changed the process. What we were finding before is they would just send a request, but they wouldn't provide sufficient detail as to what they wanted. So we've moved to a SharePoint site.

And it kind of walks them through the process. If you're asking for a particular type of request, we need these types of documents. We need your org chart, we need a position description, we need what your minimum qualification requirements are.

So essentially we're getting what we used to get in piecemeal, which was part of the delay. We're now getting a complete request up front so we can work on it more efficiently. And so that's been helpful. Oftentimes when we go back and ask questions, we don't get a response right away.

I think some of the requests we get months we wait for a simple response to a question, and yet we get blamed because we're not taking action when we're waiting for the Department.

Right, but are you not tracking the time yet?

So we started.

So what, what is it?

Yes, so it depends. It depends on the nature of the request. If we're starting from scratch, and they want a whole new job that we've never had before, that takes longer.

For what are we talking?A month, two months, three months?

It takes a few months. And part of that we also have to consult with the other jurisdictions. So try to maintain parity with the other government jurisdictions.

Well, I think what would be helpful is whatever the metrics are, that's up to you, but we need to see metrics and we need to see a decrease in the metrics. Right? And so if you're not tracking it, like, I was looking for it, but I don't know. You know?

Yes, there's some metrics, but I want to know the review time metrics. Because when you go talk to a Department and then they blame you, if you don't have any metrics that to show... Right.?

We have a new branch chief and she's put into place a tracking. So we are moving forward.

When are we going to get that?

Then we are going to be tracking it. We don't have any historical data, but moving forward, we intend to track it. So when we get something and then we ask a question, we're going to be logging that.

So each request that we get, we can show how long it sat with D- Herd versus with the Department.

So we have never tracked that before?

We have not, no.

But can you provide the Committee a list of all the departments that ask for this assistance? [Sure.] And the date that they actually asked for it?

Yes, we can, we can tell you the pending actions.

From what Senator Hashimoto is asking, some kind of track record to see when the departments ask and how long it takes D- Herd to turn it around.

I can tell you that there's probably, maybe less, than 20 requests total across the entire state of any kind of amendment. So it's not a huge volume.

So we should be quick then? But I think, you know, when you did a previous presentation to us, I think what bothered me a little bit is what you didn't look at the most common positions that should be reclassified and work with those departments to say, 'hey, do you want to classify?'

You're taking the position that they got to come to you, right? Versus then being more proactive and being like, 'hey, you have a lot of vacancies in this category. Do you want to try and reclassify?' Right?

Fair. I think when we were here last year, I had one person in our classification team and two clerical folks. So we were barely treading water. Just in the last few months, our classification team is nearly full. We still have one clerical vacancy because we had an individual retire in December.

But we are completely staffed up now. So I anticipate that we will be able to be much more responsive to departments when they request.

Last point, so I'm looking at your data, right? As of December 1, 2025, that your operation hire resulted in over 7,700 applications, right? But you only filled 183 positions.

I think we're close to 8,000 applications and 200 hires. We don't record the hires until they actually take place. I know there are a bunch in the pipeline. But it's available to departments who want to use it. At any given time, there's about 50 jobs that are posted on the operation hire Hawaii.

And do you think 200 is a lot? Versus the 8,000 applications that we're getting?

It's not a lot, but it is available as a tool to departments who want to use it.

Are we not dissecting on why the hire rate is so low?

It's really the departments, you know, they can move as quickly or not as quickly as they want. It provides a framework for them to use it if they like to.

No, if you can answer his question, he's not asking you to hypothesize why you think. He's asking why aren't you tracking it and coming up with an analysis to come up with ways we can improve the system.

I could tell you, for example, I don't know why there's only been 200 hires.

So exactly. Look at it, analyze it, and come up with data so we can improve the system.

Okay.

I think it's... You're right, it's a tool, but we need to understand, if you have a tool and it's not working, what's the problem with the tool? Right?

I think it is working.

Yeah, 200, though? Out of 8,000?

The percentage is small.

It is small. But, for example, we posted IT specialist as one of the first jobs that went up. And we had only a couple of departments that had positions that were wanting to use Operation Hire Hawaii, but we got like 300 applications in the first couple of weeks. So there was a disconnect.

We've gotten smarter about how we're recruiting, but there was a disconnect initially, in terms of the volume that we were taking in relation to the number of positions that we were trying to fill.

And so we've tried to be a little bit smarter about how we recruit and how many applications we accept for any one vacancy, but it was a learning curve. We had never done it before. We didn't know how many applications we were going to get. We were inundated initially.

So we do have a lot of applications, but there weren't necessarily a lot of jobs departments using them. What we did do is take all of those applications, we screened them, make sure that we had qualified applicants, and then we started referring them to departments that weren't using Operation Hire Hawaii but also had vacancies.

And we're just using the traditional method. We referred them to those agencies as well. So maybe the hires weren't under the Operation Hire Hawaii, but we still did utilize those applications and referred them to other agencies.

Okay, well, I think. I think we really need to take a deeper dive, you know, maybe see what else is there? I think maybe get the conversions up higher.

The last thing that did alarm me when I was reading through your testimony is there's no mention of any of the movement from Hele Imua. Like, what are you doing with all of these interns? Right? We have these state interns, and you have no data on if you hired any of them in here.

So Hele Imua is a Department of Labor program...-

But you should have some. Some statistics of: 'Are you hiring from that pool' as the human resources agency. You should kind of know, right? Like, should we not even have this program because we're not hiring, or is it an untapped resource?

There's been challenges getting data on the interns themselves.

But if you're hiring them in state government, wouldn't you have that data?

Not necessarily. Not necessarily.

Was there a Hele Imua intern Check?

Not necessarily. We don't have a box for that in our system. But we have talked internally about how we could try to decipher whether they've become a state employee. And internally we have a plan moving forward on how we're going to figure that out.

Yeah. So can you give us a detailed memo as to describe what those challenges are? Because you can just say it anecdotally. But if you don't have like an outline as to what, we can't fix it.

Sure.

Because if not, it just sounds like you're just saying that. Other questions?

Just one quick question. No lines of Senator De Cruz. So everything last year when you came here and all, because you get plenty guys in a room. Yeah? So I didn't know if you actually took notes because he's asking you the same questions and asking you.

And we're getting the same results, not just with you though, with a lot of the different departments. But again, every single Department, if you've been watching, blames you, whether it's true or not. So he asked you last year these questions. So I'm just like, no.

Did you take any notes last year to implicate, to do these things, before you come to the hearing today? Because right now you're being kind of defensive. And I'm not saying you shouldn't be, but you're being defensive when my colleagues are asking you questions instead of coming up with the answers.

And if you don't have the answers, just tell my colleagues you don't have the answers and you can come back to them. Or like Senator Dela Cruz said, just write a memo. Because it seemed like you didn't do nothing for what Senator Dela Cruz and the body had asked you last year.

So if you did that, can you explain your accomplishments that you had actually, since the last time you had this hearing last year?

I believe that we've had a lot of accomplishments, in terms of, across the board. All of our divisions are working hard to make the state responsive to the workforce, to provide good benefits to our employees, to be responsive across the board.

So you have 600 vacancies. That's the number that we've been hearing. One of them is the worst is like 600 vacancies. Then they're trying to get more and more positions. And they're working with you guys to get more employees.

But if you guys are asking them as a state human resources, aren't you asking them the question that they're asking you? If you're tracking, wait a minute, you're asking for new positions but you have 600 vacancies.

Is anybody actually relaying that back to the departments and saying before you can ask, 'why don't we work together to reclassify these positions so that we can probably double them up for the salary that they're talking about that they don't have'. Because 600 vacancies and not being able to do anything.

And then you come to over here to ask for new positions, but then the vacancies are not filled. So anyway, that somebody's tracking seeing the consolidation of these departments and saying, 'hey, you know, we looked at you guys stuff, you guys have a lot of vacancies.

Why don't we work together and reclassify some of them so that we can kind of, you know, minimize the amount that you guys are asking for.' Especially when you want new vacancies, new positions. Excuse me.

So D- Herd is not part of that budget review process. It doesn't come through D- Herd. We don't have an opportunity to review their request for new positions. It goes through the budget and finance Department and then through the governor's office.

You know what, we can give you a list of vacancies from all the departments that we get, which you could simply ask for too. And then you can look at which ones they took a long time to hire. You could look at how long there's an 89 day hire.

You could analyze the data the same way we do when we look at the vacancy reports. And then you can come up with ways that you can help the departments. Because I hear what you're saying and I'm glad everyone's working hard. I appreciate their hard work. But the percentage of 24% is still the same.

And your, your Department has increased hiring by 30% but the whole statewide is still at 24.

So each state agency has a departmental human resources officer whose job it is, is to work with their managers to redescribe their position.

So you're saying you have nothing to do with that?

We don't have any authority over their HR.

So why not delegate almost everything to The Department?

It is delegated to them, they're delegated responsibility.

They still got to come to you to. For reclassification. They got to get to-

It's delegated. The only thing that comes to us is new classes of work.

Okay, to actually legitimize the decentralization of D Herd. You're okay?

It's already decentralized.

Then why do you need that many people?

Because we, through our staffing division-

If it's decentralized, why do you need these five new people?

Because there are certain things that are centralized.

Okay.

Classification is decentralized.

Then don't try to play cute about 'it's all decentralized'. And now when I ask for this, oh no, now it's not all decentralized.

There are certain functions that are centralized and certain that are not.

You should have said that from the beginning.

Classification are decentralized.

Can you just send us some information on what is centralized, what is decentralized, what you do, and what you can help oversee? Because the departments really need help in terms of filling the vacancies. And what role can you play in terms of helping them?

So we've coordinated and participated in over 40 recruitment events over the last year. The recruitment team has the benefit of being able to coordinate this for the entire state.

She's not asking for a verbal response now, because you're going to give us anecdotes. What she's asking for is a legitimate list of what's centralized and what's decentralized.

Okay, I can do that.

And how can you help departments with their huge vacancies? And what can your centralized function do to help analyze and assist the departments? Because they're all coming in concerned about not being able to fill.

So Department of Health has the highest number of long term vacancies. And its total vacancy rate remains the same since 2023. Given these stagnant outcomes, how does your Department justify its claim that delegated hiring authority has been effective?

Which you opposed. Yes, I did oppose.

So last session the Department of Health was granted authority at their request to take on the responsibility.

Yeah and that's unclear when you say, 'it's centralized, It's not decentralized.' But then you oppose when they try to actually get authority to do it.

It's not the delegation itself that I opposed. It was the compensation of being able to pay the same class of work different rates.

Then it's not decentralized. You still want to hold on to certain powers and not delegate them to the Department.

I believe that consistency requires that we maintain certain controls.

Yeah, you were trying to play cute earlier and say, 'it's all decentralized'. And then now when we try to authorize the departments to do that, you don't want to go with that?

I'm not opposed to delegation. We have many, many forms of delegation that we've had for a long time.

Why did you oppose the Department of Health's Bill.

Because there were certain elements of that Bill that I found-

It sounds hypocritical. Some of the departments came in and they were still unaware of Wikiwiki.

So I'm not sure how often your Department meets with all the other HR staff within the various departments to at least update them on all the trends information programs so that they're up to date and that they have consistent ways of processing.

We meet with them monthly. I believe if you are speaking with the HR officers, they're aware of Wikiwiki. Perhaps not.

We had one hearing where they were unaware.

How often do you meet?

We have a lot of new DHROs as well, so maybe it's time to revisit those.

Monthly.

So you don't know who comes to the meeting that's new?

Oh, I do, yes.

Okay. So why aren't you updating them right away?

We are. We can. They come and meet with our managers and they get an overview of D- Herd and the different programs that are available.

That's not getting through. Question?

Thank you. My question is when there are vacancies and people apply for those who are not accepted, are they referred to a list of vacancies in other departments?

No, no. When an applicant applies, they apply for a specific class of work.

I understand that but when they don't get it, they're still looking for a job; so is that something you guys can consider? To let them know that here is a vacancy list where you can go to online to see all the other vacancies.

Perhaps, but it's very labor intensive reviewing applications and screening.

Yes, they are notified.

At the same time, can you notify them of a link to other state jobs available? That's all I'm asking.

Okay

I'm not asking you to review applications. What I'm asking you is when they go to apply for a position and are not accepted, are they not notified that they're not accepted?

Thank you Senator Kidani.

Do you have a track of how many applicants are being denied, and on basis of which their qualifications is not meeting the requirements? So when they apply, they get denied for whatever reason, do you have those numbers?

No, I don't have those numbers.

Okay. The reason that I think it'd be good to have those numbers is because we're finding it to be consistent that the process with D- herd is just too difficult.

So earlier in your testimony today, you had shared that when there's a request that comes through, you submit the SharePoint and then they have to watch that, follow it, and then respond back with a checklist of what it is that you folks require.

What we're finding to be consistent with all of the departments is that the buck stops with you folks. So there's a bottleneck situation that's happening and I'm trying to... The process with D Herd is just too difficult and we're talking about basic contracts assistance positions that are getting paid $38,000.

So the reason that I ask, and I think that this data is important is to find out just how much applicants are coming through the system, and how much are getting denied. And that's really important too. So if you could share that with the Committee on how many applicants are actually getting denied.

Okay, any, any idea?

We can try to gather that data.

I think probably roughly about half of applicants who apply don't meet the minimum qualification requirements.

Okay, that's a lot. 50% is a lot. Because you have people that are coming through the system daily and we have thousands of positions that are vacant. So I think with those kinds of numbers, 50%, you guys got to look at your own internal system because you're just making it very hard. You're talking about minimum requirements.

These are people without college degrees, people that are just looking for low level positions. And I would like to see not only that 50% number, but what is the breakdown of those positions and how difficult is the process?

Because if we're just asking for a high school equivalent and these people are getting denied, it comes down to you guys. You guys are making it too difficult. Thank you.

So how many MQs have you looked at changing the Bachelor's to something else like a CTE or AA certificate?

I don't believe we've reviewed any recently.

I've been asking for that for years. Other states have done it. We're stuck at that 24%. The Bachelor's is not necessary for quite a bit of jobs when a CTE or AA could be very specific in the field that they're applying for.

It could be. We're hopeful that working with the vendor-

You've got to do something about it, because 24 percent is not acceptable, especially since your Department has increased by 30.

So part of the classification and compensation study will help us review the minimum qualification requirements and make changes.

So what's your timeline? So we can get this going.

So right now we're working on the contract with the vendor and the whole-

What's your timeline? So we can actually do MQs to change to substitute the Bachelor's for AA or CTE.

So our whole study is supposed to take place between essentially February-

I just want to get to the date of when that-

-and November, around November.

So by this November you're going to be able to look at the MQs and change them to CTE certificate or AA?

Where it's appropriate. Right.

Chair, the draft recommendations are due in November of this year and the final report. Is due approximately February of next year.

So when are you going to take action? So that's great that you're going to get the data, but when are you going to do something about it?

Fully when we have the data in November. In November. I don't know if it'll exactly take place in November because we typically have a-

-So what's the timeline?

It's too early for me to commit, but hopefully, you know, by early next year. I think the final report during session.

Execution. You know you can get a study, right?

Why don't you... and actually give us something that's that we can count on.

I think the final report is due...

No, that's fine. I want to know... I'm not concerned about when the final report is due. I'm concerned about when you're going to take action based on what the final report says.

So if it's in November, how many months is it going to take you to actually start going through the process to look at changing Bachelor's to other things like AA or CT certificate?

I would anticipate that we'll probably start making those changes sometime next spring. Realistically.

Okay. If you can go back and actually come up with a real timeline that we can hold you accountable for.

Okay.

Any other questions? Okay. We're going to recess for Department of Labor.

Reconvening. Next, we're going to hear from the Department of Labor who will present their supplemental budget requests. Good morning.

Good morning. Chair De La Cruz, Vice Chair Moriwaki, and honorable Members of the Committee, thank you for this opportunity to provide you with updates on the department's budget and operations. With the Chair's indulgence, may I introduce the Members of the Department in attendance.

Well, that's the only report you got because they didn't give you any additions.

No, there's none.

We don't have.

We just have a tap water request. So let me introduce the people that are in attendance. Please wave or stand as I call you, or stand as I call your name. Bill Kunstman. Deputy Director, Lynn Araki Reagan. She's our Administrative Services Officer. Francis Kagawa, Fiscal Officer Kim Nguyen.

HR Officer Bennett Yab, IT Manager Administrator for our Disability Compensation Division, Joanne Biddenhar. Royden Coto is a Program Support Chief for DCD. For our Haige, Administrator Arthur Roy Talei. For our UI, Administrator N. Pereira Eustachio. And R.T. Barba, Program Development Officer for our Wage Standards Division, Administrator Sherry Lee. For our Workforce Development Division, Administrator Maricarpilatin Predis.

Jay Ishibashi. Program Specialist David Rodrigues. Our Legislative Coordinator. Our Workforce Development Council Executive Director, Bennett Misalucha. Our Hawaii Civil Rights Commission Executive Director, Marcus Kawatachi. Our Hawaii Labor Relations Board Chairman, Dwight Takamini. And our Hawaii Retirement Savings Board Executive Director, Alani Kyogi. And our Labor Industrial Relations Appeals Board Chairperson, Damian Elefante.

And our Office of Community Services Executive Director, Ray Domingo. As you noted, Chair, you know, we're submitting no new funding requests or emergency appropriations, and only two minor budget adjustments. Like I mentioned, you know, we're not here with champagne taste. Uh, you know, this is very much a tap water requests, you know.

Our first request is a transfer of $318,000 to effectuate the budgetary transfer of the State Fire Council and State Fire Marshal to the Department of Law Enforcement pursuant to Act 302 of 2025.

Second is a transfer of $134,350 from the personal services category to the other current expenses category to pay for current and ongoing expenses for Unemployment Insurance Division program operations. If it would please the chair, I would like to continue with a few highlights.

Considering our modest budget requests, our Office of Community Services has worked diligently to facilitate the Legislature's award of 49.5 million to 95 Hawaii nonprofits impacted by the federal delays and funding reductions in partnership with Aloha United Way OCS is ensuring these funds are deployed quickly and efficiently so that vital community services can continue without interruption.

On December 23, a $25 million check was delivered to AUW. The Hui Hua Kai Project. Our unemployment modernization project remains on track and scheduled to go live in March of 2027. Recently, the UI team has been refining the Claimant Portal through focus groups with claimants and community organizations.

These interactive sessions have been highly productive and the feedback is helping fine tune the portal. The focus is on plain language and ensuring it's clear, accessible and easy to understand for all claimants.

In October, the Hawaii Retirement Savings Board approved an RFI for an interstate partnership and in December evaluated responses from consortiums led by Colorado and Connecticut to ensure due diligence and make an informed decision. The Board has requested additional information from both partnerships, which will be considered at the February board meeting.

We remain hopeful that Retirement Savings Program will be implemented this year and we've been actively participating in the Paid Family and Medical Leave Working Group chaired by Representative Sayama.

We recently procured a consultant with legal and labor law expertise to help develop a request for proposals to use the 750,000 appropriation for an RISA legal analysis and an actorial study. Act 251 2025 formally established both the Public Sector Internship and Workforce Development Program in the private sector, on-the-Job, Training Work Experience Program.

We've initiated a pilot project in the AG sector to strengthen the ag workforce and guide expansion into key industries. Our focus is on creating pathways to careers for Hawaii Hawaii youth that do not rely on traditional pathways like apprenticeship. Thank you again for your continued support of the Department of Labor Industrial Relations.

We look forward to working with you on a fiscal year 2026 budget that advances the mission of the Department.

Office of Community Services.

Yeah, Ray is here.

Can you come?

Hi. Good morning, Ray. Could you announce your name too?

Ray Domingo, Executive Director, Office of Community Services.

Yes, so I'm looking at table 15 and 16, but especially table 16 with all the lapses for the CIP, the GIA CIP is your office doing anything to look at this? I know that we had talked about having more information, but a lot of this is a lot of money left on the table on your CIP requests. Is your office doing anything about that?

So each guarantee that we work with have very different situations. Sometimes they do not have all the.

Okay, wait, just to put it in perspective then, a lot of nonprofits who apply for GIA, they may not have the same capacity or know how of how to work with the state in dealing with CIP or even when they even apply for the CIP amount, it might be a guess, they're not sure.

So trying to be ahead of it, knowing that this seems to be a trend year after year. Is there anything that your Department is doing proactively to come up with a seminar?

FYI, this is how if you want to apply for a GIA CIP, these are things you should know, these are things you should be ready when you actually get CIP amount. This is how you make sure that you stay on deadline so you can get the fines.

I think that's what she's asking because if not, we're just going to continue to see non profits come in. They're going to get awarded, you know, they're going to be happy that they got the award. We tell our communities they got the award and then the monies end up lapsing because of capacity.

So once we figure out or once the budget is approved, we do communicate already with the grantee that got the grants. So we send them a letter, we let them know what they need to do and that a specialist is going to be in touch with them.

We also refer them to our website, which has a lot of information about what they should be doing and what to expect. So we.

Ray, this is before they actually apply. Because once we award them, it's based on this whole like a million dollars, in some cases 120,000, and then you have to lapse it. You only can give them $200, but that's not going to help them. So I think it's the, you know, what we're talking about before.

What is the problem of how we can correct it. So when they come in for their request, it's what they need to get the project going. Like if it's planning or it's permitting versus construction, which is very expensive, and then it's left on the table.

Yes, I think what we'll do is we'll need to do a better job of doing orientation. Before we can do that. Yes, before they apply with you folks, because they apply in the legislative website so we can provide the orientation to them, those that are interested in pursuing a grant.

So have, have you done it this session?

I think what we might have to do though is so that you, Lisa and Ray do a joint thing because you guys, you guys award and then they.

We pick it up after they're awarded. Yeah, so we don't get involved actually in the application process.

Yeah, because it's our application. Yes, it's your application. I think Maybe it might have to be a joint effort between us and them.

But we can certainly work together with your. Your group, your staff, and the orientation.

Yeah. So maybe in November. Or early December, we do a seminar or a briefing. Okay. Yeah, not necessarily a briefing, but, you know, like information. Yeah. So that you guys. We can.

And I think we were trying to change the form so that it can be something that we can see clearly when they come in and be more prepared when they come in for their.

Yes.

Grant application.

So is there any follow up as. To how, once the grant is received. How it was used and if it was used

Or the tracking and monitoring?

Yes, we do. They do provide us a quarterly report, their finances, what they spent it on, as well as information on each of the items that they spent the money on. So we do keep a good track record of making sure that they spent the money appropriately.

So we do look at the receipts that they provide before we do a reimbursement.

Yeah. So some of these guys, I mean, I'm not sure, it doesn't say the applicant, but there's a few that say that the grantee actually completed the project under budget. So that's why you guys are lapsing the money. Yeah. So we might want to have some of them. I don't know who they are.

You probably know who they are. But they could be part of the seminar because that would be, I think, positive for us to show nonprofits that are able to really work within the budget and lapse and then work within that timeline. So I would almost.

Almost assume with the information in front of me that, you know, those are our successes.

Yes. Because they're under budget.

And then they actually. And they actually finish the project. Yeah. Yeah.

I have a question on contract costs.

So the reason why we are. Yes. As a question. So it's like some of the non profits, they've been getting the grants and stuff every. Pretty much every year. But then the people in your office. It's a repetition for some of the organizations. Yeah. They buy the same things, they do the same thing every year after year.

And then I was getting calls that they, they certified and sent in the request of the funds, and then they get denied saying that you guys don't accept that anymore. But three years before that, everything was okay. And then we find out there's a new person in the office that never look at the previous reimbursements.

So that's something on the delays too, because most of these ones that I know, they're not asking for big money, it's very small money, but they don't have the capital to get the reimbursements in a timely manner if they keep getting denied. And it's a difficult process.

And then the other one is like they get the letter said they have it, you give them the requirements to receive it, but they have not received it due to whatever reason with the Department. So a lot of them that also is the reason why the money laps.

So is there any data that you guys can help us with making sure that when they, they get the letter and they put in a application that they actually get the money? Because some of them is big money.

So first of all, Senator, we really try hard to make sure that, you know, the amount that was approved for the grantee that they're going to achieve that. So we're not in really in trying to deny anybody.

So we try to work with the, each of the grantees to make sure that they get what they're supposed to get. I need some more specific on the particular situation you're talking about. Is there a particular grantee that might have this one?

Could you guys.

Yeah, we can do that.

I don't know what's proprietary and what's.

Yeah, just generalization that they get difficult time putting in the paperwork because it's the same thing they did the previous year and they're getting denied for the same products that they made. Okay, thank you, Chair.

Yeah. A question on contract cost. Not so much for OCS. Table 14, two questions first on page 26. So the question I have is how is the Department addressing the 1.662 outstanding balance for contracts that have ended?

When are you talking about?

No, in General there's about a million point six that still have to be paid out even though the contracts ended. That's based on this chart that you guys filled out.

When they say outstanding balance, does that mean that it is going out or this just extra money that's going to lapse back? That's the other question.

Oh, that. Yeah, it could be that too. Yeah. So that means you guys, you guys actually completed the contract with less money.

Maybe there needs to be another column on this. What?

No. Yeah.

Yeah, you can get back to us on that. Director, I have a follow up question on page 21 on table 14. This is for UI, your modernization project. I know that's a big, big amount.

Could you, I mean, I know you're working through that process, so could, could you provide sort of, I mean it's what is it here? 50. I have 58 on the bottom like the fourth line. Third and fourth line to the bottom right. Is that your overall contract for that in terms of the phases for your modernization?

Hi, good morning. Anne Eustaquio, Unemployment Insurance Administrator so yes, it's a huge project. We have eight contractors on this project. That 54 is for the vendor who is the main application vendor.

That's one contractor.

That's one out of eight. Correct.

And then where you are timeline wise with

Making payment?

Or just in General of completing your whole overall modernization. So halfway through or more than half.

A little over halfway through. March 2027 is our launch date. It's a three year project.

Okay, thank you.

Thank you.

Thank you. Senator Kim.

Still on contracts, Jade, I'm on page 20. So you have this AI Kahu Culinary Solutions EIA Community College. Purpose of this to enhance business growth, improve long term temp employment ability Hawaii people through employment training and existing short term non credit training courses. Can you explain what exactly you accomplish with this? And it ended.

Well, it's ending end of this month and there's an outstanding balance of 3/4 of it because nobody else. Million dollars.

Maricar Pilotin-Freitas, Administrator of the Workforce Development Division. Senator, that relates to our employment and training Fund. So we contract, we do an RFP so that companies can send incumbent worker to training to upgrade their skills and the state pays for the tuition of those courses. So that's what's left of the contract.

And another RFP has gone out and we're in the process of contracting with the next set of training providers.

Okay, but the contract ends in a week or so.

Yes, so that's that.

So we only. You only spent 300 something thousand dollars.

Yes. So we, we budget for a million so that companies have up to that amount to request for training and that's what's the utilization rate is. So whatever left over will go back, revert back to the next year. RFP for usage.

So the money, is this a line item, budget amount or is this just out of your budget? Million dollars?

The million dollars is a collection of what employers from the tax Fund. So they contribute a percentage to do that program. And that's what we budget when we do the RFP. And that's the max amount that the contract is allotted for.

Well, it just, I guess I'm not real familiar on this, but you, you budget a million, you only use 214 and the contract ends this month. So are we just not having enough people? Are you Just budgeting too much or. And then the money. We. Because you only used of that. Use one fourth of that amount.

So we do outreach and recruitment for companies to be aware of that they can take advantage to training their incumbent worker. I guess I'm not sure what, what the. Why they're not taking advantage, but we do offer them so that the intent really is so that the incumbent worker can get the skills.

Yeah, but if we're not utilizing it, I'm not saying just go out and spend it, but maybe there's not that great a need or maybe the businesses are doing it on their own. But are you evaluating this program as to the effectiveness? How many people actually participated and what did we get out of it?

Yeah, but you're talking a million dollars. You have $785,000 there. And now you're gonna, I mean, how, how often have you been rotating this or continuing it on?

Yeah, we do the contract every two years, Senator. So we'll get the numbers to you.

It says Kaho Culinary Solutions, that we have a culinary program with KCC. So I'm not in other, other colleges, so I'm not sure. Again, are you folks evaluating these contracts to see the effectiveness of whether or not we should be spending this money? Or maybe we need to put it in something else.

Yeah, so those are the training providers that applied, but we'll get the numbers to you. And the report is also part of the department's report on the number of incumbent workers.

Yeah, but are you evaluating it? Are you, you have a scale of how effective this program is and is it worthwhile for us to continue or maybe do something different? Okay.

Yeah. Was that state funds, federal funds?

This is special funds.

So the money goes back to the Special Fund.

Okay, on the next page, the third one. Provide job readiness training and job development services for participant receiving training from the University of Hawaii. They're receiving training from the University of Hawaii already? What are we providing there?

21.

Yeah, page 21, third from the top.

Okay, so that is the federal grant, Senator, that we have the eligible training provider list. And so each vulnerable population, the low income adult, low income youth, as well as the dislocated worker population, can select from those lists of approved training. And that's the contract that we have for the WIOA program.

Okay, so you have a person that comes. They're already at the university or not?

No. So the process normally is they go to the American Job center on each island. We have an American Job center on every island.

And if they're meeting the eligibility criteria for the low income adult population as well as the dislocated worker population, and based on their individual assessment, that is a training that will get them to that career goal, then we pay for the tuition for those in every island. The cap is different.

Okay, so do you have a record of who went and what happened and did they go on, did they get a job or whatever? Do you have that? Because it seems like a small amount that you're using. We have standing balance of almost half of little less than half of what you started out with.

You have $116,000 bet from a 321,000.

Correct.

Okay, so both of these things that I asked, can you guys provide us with a, you know, what happened to these participants or is the training, is the training work working? Is this doing this job what it's supposed to be doing?

Because it seems like we get onto these contracts, we provide these services, but we don't know the outcomes. We don't know if it's effective if you're not evaluating it. So. And it should be ongoing evaluations and not just after the fact. Right, evaluations.

Any other questions?

Senator wants to break down on the different islands. Can we go breakdown of the island? How many participants? How many participants?

We'll get that to you, Senator.

Any other questions on travel? Oh, go ahead. Okay.

Yeah. Can we go to travel? Table 23? Couple of questions there on page 47.

And I know these are federal funds, but you know, as the Fed starts cutting out funds, I'm not sure if you're asking going to ask us to place this, but there's that trip to attend 10 steps to federal Resume Updates and Transforming to Civilian Resume Training. And there's 123 people attended that last year.

What exactly is that? What kind of 10 steps to transforming civilian Resume Training?

Let me ask Maricar to move up.

Maricar Lioton Freitas, Workforce Development Division Administrator so Senator, we have, we operate the job jobs for JVSG Job for Veteran Service Program. It's targeted to help that were honorably discharged.

And so we send those counselors to training to make sure that they're able to serve the veterans satisfactory and get them from military to back to the civilian workforce. So that's what we paid for. In addition, we brought counselors from the neighbor islands to also attend that.

So we brought someone from Texas to conduct on site training for our veterans as well as our case workers.

Okay. And then going further down, there's a lot of to attend training. Where are these? Are these all off site or even on the next page? Perform on site monitoring of WIOA grants. So if it's on site, what are the costs that's associated with it? Is it mileage? Is it.

That's for. Okay. Annually our federal grants must be reviewed on site to evaluate whether or not those expenses are valid. And we do have participants in those programs. So we have staff from Oahu that spends maybe three days to monitor those programs that's fairly funded on each island.

Okay, so you don't have people on that island to do it. Everybody comes from Oahu. Yes. This is neighbor island travel. Yes. Seem kind of low though. Some of the amounts.

Yeah, some is just we can do it overnight, some takes longer. So there's several monitoring that we do under the federal grant. One is to review the data and one is to make sure that there's actual participants being served.

Can you do some of this via zoom?

We review. We have a federal reporting system so we do a lot of the work before we go. But sometimes it's necessary to do on site visit to make sure where the participants are placed are, you know, valid and some of the participants are interviewed on site.

There's, there's a number of them that go to the same training. You know 2, 4, 6, 8, 10, 12. I don't know, 20 at one time. So I'm just wondering the numerous amount of people that is the training or the monitoring? Both.

Okay, yes.

So yeah, if you can get back to us on that. Thank you, Mark.

I stay there. I have a question with regards to HELE IMUA program. Are you folks working with DOE to put some kind of like marketing pieces or materials up at the schools to let the schools know that HELENOA program is available? Recently I facilitated a zoom with your staff and with Waianae High School.

They didn't know the program existed, but as soon as they found out then their definitely they're actively recruiting for the program. So in my school I have two high schools and a community college. So if there's any way that you folks could have some printed materials and getting the word out to the school.

I know there's a demand there. So if there's any way that I can help you. But right now, do you folks have any marketing strategies?

There's a, this is, there's not an awkward, but there's, there is an agreement between Department of Labor and DOE. So there's 300, there's 330 positions right now for HELEMO. 300 are delegate are assigned to DLIR. The other 30 are assigned to DLIR, but they're almost delegated to DOE.

And then what DOE does is they take those positions, the 30 positions and they make them, they turn them into 90 because of the fact that it's not year round, they're able to make 90 internships out of the 30 positions. And so the, the person that's in charge of it at DOE is Whannell. Yeah.

Yes.

Yeah. So then we. I don't know. You can still answer her question. But I think part of that is we also have to ask Whannell.

Yes. So Whannell was part of that meeting that we had with Waianae High School. So they are working collaboratively to make sure that it's cohesive in the outreach for to those schools.

Yeah, thanks. I just want to ensure this program works because it is a solution for my community. So. Yeah. If there's a way that I can. Yeah.

That's what we talked about with DHRD Right. So because if you have a CTE or AA and you get the heli more then you get the work experience, which means you should, you should be able to get the job. But unless they end up really looking at incorporating heli, imo going back to center Hashimoto's question.

And if they don't look at changing the MQs and getting rid of the bachelors on at least some jobs, you know, how do you, how do you really help articulate a pipeline with early college? Yeah.

Dual credit so that the student can actually see the, the light at the end of the tunnel that they're going to get a job, a state job and they could get it as soon as they graduate.

From high school. But the pipeline is not as concrete as we would like.

Yeah.

Yeah. And I think your staff that was on that call experienced firsthand that this was something that Waianae was excited about. So we want to make sure to keep the momentum on that. Quick question kind of pivoting a little bit, but not really with regards to your folks vacancies.

I'm just curious if any of those vacancies are being held up because if any of your vacancy positions are being held up at DHRD.

No, they're not being held up. I mean our vacancies, if you remove a lot of the unfunded federal positions, I mean our vacancy is really just like around 10%. I mean, I mean we're you know I think we have a good vacancy rate.

Yeah some of because I noticed on yours it says pending federal funds.

Yes those are unfunded federal position because it doesn't make I mean even if we were to fill it I mean.

Where would we well and they could have thousands of vacancies actually because the the internship itself the internship program that has about 2000 right and 2000 positions yeah so then but we own and that was all federally funded so what we did was we funded 330 but and believe DHRD wants those positions but in the case that the feds ever start funding it again then they're going to go through Department of Labor not necessarily DHRD so long term it's better to keep it here to leverage federal funds at some point when they start re starting this program again any other go ahead do you have a question okay adjourn thank you.

This informational briefing to order. Next we're going to hear from Department of Budget and Finance who will present their supplemental budget report. Good afternoon.

Good afternoon. My name is Seth Colby. I'm an acting Director of Finance. It's a pleasure to be here. Chair De la Cruz, Members of the Ways and Means Committee. The Department of Budget and Finance develops the Governor's budget and multi year financial plan and manages the state's finances.

BNF is a service agency which means 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 the state's priorities are affordable, its obligations are met and its resources are deployed efficiently and transparently.

I have been working here for a couple weeks and one of the great pleasures is I've come to know that we have a talented management team and it was very dedicated. I'd like to present them today with your permission. So to my right we have Deputy Director Nasir.

We have Rod Becker who is a Finance administrator and Acting Budget Administrator Mark Anderson who is the Administrator for Office of Federal Award Management. And Tracy Bond, Administrative Services Officer. We also have the heads of our attached agencies. For ers we have the Executive Director Calbert Young.

For EUTF we have the Assistant Administrator Donna Tanaki and as the State Public Defender John Ikanaga.

Why does the ERS Director look younger than he did when he was at UH?

So please note that you know we have a budget request of $4.3 billion for 2027 98% of which is fixed costs and those are non discretionary expenses like debt service, retirement, health system, health fund, things of that nature. That's just a reminder that we are a service agency primarily.

Only 2% or 86.8 million is for expenses associated with direct departmental operations. We have very few requests for the supplemental budget, but I want to highlight a couple. So in terms of the fixed cost category, we have a decrease of 150 million in 2026 and 137 million in 2027.

For debt service cost payments we have a decrease of 3 million for fiscal year 27 for 20 General. In General funds for health premium payments we have requesting an additional 1.8 million in General funds and 320,000 special funds for the commission on salaries and adjustments.

And we are requesting 3.5 million in fiscal year 27 for fringe benefits cost requirements needed. For the ERS, we are requesting two full time positions. One is 100 business analyst for ERS and another one is an investment officer for the EUTF. Additionally, we're requesting, and it's important to note neither of those positions are general funded positions.

Can you go back to table five on your reductions? The debt service reductions? What can you explain that and whether we're not going to feel any impact from those kinds of reductions.

Yeah. So the debt service reductions is. We use a formula to calculate our debt service. Right. If you look at the form A on the third page in justification of requests, you can see the formula that we use to calculate our death service. And so every year. Sorry, so if we go to form A in the.

The first title. Right. First page, second page. On the third page under Section four, justification of request.

I don't think they have the form.

Oh, they don't have that form. Okay, then I'll.

Yeah. So the debt service, the savings is, is due to two factors. So one is that we didn't have a bond sale last year, so our bond issuance schedule changed. And then the second is that we changed our assumptions around bond maturities.

So this won't impact how we go forward?

No.

Thank you.

Okay, great. And so I'll just finish up. We are requesting $43.5 million in General funds for the green fee. That is Act 96 that passed last year. And with that I'll stop and open it up to questions on the green fees.

I see that in table 6 in your green fees you have requests from A funds. And then if you go to your CIP request and it notes Act 96, when you go to CIP request, you have requests there. Is that also Green Fee Act 96 seed funds?

That's correct. So originally all of the green fee funds were going to be coming from the General Fund. As part of our financial plan, we split that amount. So half is coming from CIP and half of that is coming from the General Fund.

The A funds, I mean. But the Act 96 funds are all General funds. How do you get to see funds?

So we're splitting it half, half. So for FY26, we're doing all go bonds. And the reason for that is that the funds would have lapsed June 30. So by the time the budget was enacted, there wouldn't have been enough time for the departments to actually spend the General funds for FY26.

And then going forward for 27 and later years, we do split it because we imagine that several of the projects are CIP in nature and it does give the departments more time to expend those funds.

But how do you pay the C Fund?

Yeah, we would use debt service.

So the, the General funds are still.

Yeah, so the General funds would still pay for the G Fund

Green fee it.

So the way that we're, you know, we're open to budget. Right. So we're splitting it half CIP and half General funds going forward.

The GEO bond is paid for by the General.

Correct. Yeah.

That means these are not green fee bonds.

They're not green fee bonds. They're regular geo bonds.

You're just using CIP, but you're not using Act 9. So Act 9, you see, authorized green.

Well, do you have the projects for this?

We do, we do have the list of projects and we are planning to transmit that to you folks shortly.

Okay, how did you guys come up with the. Because you're using 14. You're putting in 14 million for fiscal year 26.

Right. So the three categories or the three buckets that are stipulated in the act were just 33%. And then for FY26, it's the revenue estimates from DOE tax. Then for FY27, it's half geo and half General funds.

But that's kind of in disingenuous though because it's not really green fee funds that are paying the bonds.

It is. It's not green fee funds that are paying the bonds. So why call it that then? Yeah, so we do intend to use it for green fee projects, but it is paid with GEO bonds.

Okay. But the project title says green fee.

Yeah.

So that's not accurate then.

Yeah, so those are just, that's just a placeholder title.

So how are you coordinating this with the departments that may have needs so you are funding with the GEO bonds, the C funds. Right. There are projects that they need to have which happen to be climate related or tourist enhancement related.

Right. So those departments were given instructions to submit their projects and the green fee Advisory Council is reviewing those and separating those into the necessary buckets that are listed here.

The C funds would come from would, would be addressing needs that the departments say they need. And that's not going to.

Not necessarily. No, not necessarily. That's not the real process though, because the Committee could just add what they want too.

The Committee could modify if needed. That's true. Yeah. So the departments do submit their requests and the Committee does review the Department request. But the Committee can modify. Correct.

That's why it's not necessary.

Yeah. So the Committee can modify and then those requests will be sent to the Legislature and the Legislature can ultimately decide, you know, what to fund.

And I think the Committee already had done their overview and then they asked the agencies for their requests.

The agency requests. I can look back at the timing, but the agency requests I think were in maybe October. Yeah.

Yeah. So I guess those questions go to you too. How are you looking at the green fees and how. How are you looking the CIP for projects?

So the CIP is for, for building, for construction costs, things like that. And the only way that certainty. We believe that certain green fee projects will conform to the requirements of CIP funded projects.

So you are reviewing all of the requests?

We will review all the requests. Correct.

So you haven't previewed yet?

No, my understand. Or it goes through a process. Right. So it goes through the FCAS and then they review those projects and they come to us and we. So when is that going to happen?

So the Green Fee Advisory Council has reviewed the projects and they are putting together their curated list and I do believe the timeline is actually coming up quite quickly that it'll be transmitted to the Legislature.

So you're not reviewing it before it comes.

But why wouldn't it just be put directly in your CIP budget?

All 43.5 million or. Well, we have to review the projects first.

Well, because it's really risky, right? I mean you're going to be pulling from CIP funds with the intention that the green fee funds can pay it back. But you folks are facing a lawsuit right now. So what happens if it never comes to fruition? Then we're just negative $43 million.

That's a good question. So you know, the CIP budget will come from the General Fund. No, no. Yeah, yeah. On the General bond.

So all the CIP is not green fee money, Correct?

Correct.

It will be a portion. Another thing.

No, there's no, there's no portion. It's all just General bonds.

That's true. And on top of that with a list that we haven't seen yet that we're also is supposed to approve what happens with an infrastructure or CFP project that goes beyond the quotation from contracts once they start, who's going to continue to pay the balance on all the extras?

So it's going to be interesting when it comes to this Committee again. Anyway.

So do you have. You don't know the breakdown for the A funds either then.