Tag: state budget

Broken Promises by the Legislature

By: OHA TRUSTEE ROWENA AKANA

Source: April 2010 Ka Wai Ola o OHA Column

There is no question that from the Territorial Government to the present, the state has consistently mismanaged our ceded lands.  Politicians have leased thousands of acres to their friends for as little as a dollar a year through insider deals.  A previous Governor even suspended landing fees at the airport, which sits on ceded lands, for two years to allow airlines to bring in more tourists.  We all know that didn’t happen.  And they wonder why they don’t have any money!

These same politicians are now forced to come up with “creative” ways to supplement their shortfalls during these tight economic times such as legalized gambling, raising taxes and, worst of all, selling ceded lands.  They wouldn’t have to look far if they simply managed our ceded lands properly.

The state’s failure to manage ceded lands should not be used as an excuse to sell a resource that is so critical to the future success of our future nation.  Just a year ago, state legislators agreed with us and voted to preserve ceded lands.  Act 176, 2009, established that the state cannot sell any ceded lands unless they get a two-thirds majority vote in both the State House and State Senate.  Now they’re going back on their word and trying to sell ceded lands.  How can we trust these people?

This election year, let’s elect responsible leaders who will make the tough decisions needed to get our economy out of the toilet.  We do not need more politicians to think of even more creative ways to tax us or squander our resources.

ON ANOTHER NOTE:

On February 10, 2010, OHA’s money committee decided to stop investigating whether we should keep or replace our investment managers.  According to the minutes of the meeting, after considering all factors involved, all trustees present at the meeting came to a consensus that our staff would “cease all due diligence efforts at this time and retain the current investment advisors.”

The decision to postpone the evaluation of our investment managers is very shortsighted [I was not at the meeting and did not join the discussion].  It disregards the criticisms that the State Auditor had in her recent audit regarding OHA’s management of the trust.  It also disregards what Trustees Lindsey, Mossman, Heen, Stender and I learned from the Mercer Investment Forum on January 28-29, 2010 in San Francisco. 

The Forum stressed the need for investors to look for managers who are specialized in each field of investment.  More importantly, they recommended that we evaluate whether our managers are able to handle the new requirements of “opportunistic” investing.

Trustee Stender later informed the trustees that our fiscal staff would continue to monitor the top five money managers we are considering and bring this matter back to the committee within a year. 

One year is long time to wait.  At the very least, our staff should report to the committee on a quarterly basis to keep us informed.  In these volatile times, we do not have the luxury to “take our eyes off the ball” for such an extended length of time.

Until the next time.  Aloha pumehana.

Layoffs vs. furloughs

By: OHA Trustee Rowena Akana

Source: Ka Wai Ola o OHA, August 2009

Everyone knows our state economy is suffering. Despite this fact, the Governor plans to lay off as many as 2,500 state employees to try and balance the state budget. Although OHA is autonomous from the Governor’s control, OHA still plans to lay off as many as 24 employees. In order for our economy to recover, it is important for people to have jobs.

MORE OHA NEWS

* Thirty Meter Telescope on Sacred Mauna Kea

On June 30, 2009, our Administrator sent a letter to the Thirty Meter Telescope (TMT) Observatory Project at the University of Hawaii (UH) at Hilo regarding their Draft Environmental Impact Statement (EIS). Here are some of his many concerns:

(1) The TMT would be the largest telescope on Mauna Kea. It will be 180 feet high and take up 5 acres. They also need to build an access way to the observatory and major renovations to the Hale Pohaku Mid-Level Facility.

(2) OHA believes the Draft EIS is premature because the state Board of Land and Natural Resources (BLNR) has not yet received or approved the following four sub-plans it required of UH in April of 2009: a Cultural Resources Management Plan, a Natural Resources Management Plan, a Decommissioning Plan, and a Public Access Plan.

(3) Past subleases for other Mauna Kea observatories have been issued at a reduced rate of $1 per year with UH getting “in-kind” viewing time at the observatories. This only benefits UH and prevents both the state Department of Land and Natural Resources and OHA from receiving substantial amounts of money that is sorely needed during these difficult times. Public Education is only one of the five purposes of Ceded Lands established by the Hawaii Admission Act.

(4) The Draft EIS needs to stress that there are alternative sites available, such as the Chilean site at Cerro Armazones.

(5) Finally, the Administrator wrote that the cultural resource analysis of the Draft EIS is “wholly flawed” and does not properly examine the impacts of siting what would be the largest telescope on Mauna Kea.

Despite these serious concerns, instead of OHA suing the University of Hawaii for mismanagement of sacred ceded lands, on July 2, 2009, the board of trustees voted in favor of an OHA resolution supporting the selection of Mauna Kea as the site for the proposed TMT project. The question is why?

Trustees Cataluna, Waihee and I were excused from the meeting and did not vote for the measure.

* Quid pro quo for San Diego Charter School?

On May 27, 2009, a proposal to give a San Diego Charter School, Pacific American Academy (PA’A), $100,000 as a pilot project for supporting mainland charter schools with Hawaiian students was included on page 12 of the OHA Fiscal Biennium 2010-2011 Budget Realignment #1 action item. I found this deceptive since there was no way for the trustees to know from reading the board agenda that this proposal would be considered.

The whole idea of trying to sneak what should have gone through OHA’s grant program into our budget was totally inappropriate. One of OHA’s deputy administrators explained that they recommended giving assistance to the Charter School since the group had helped the administration when they traveled to San Diego for Kau Inoa sign-ups. This explanation was defended by the Chairperson, Haunani Apoliona.

Due to serious concerns from trustees, including the fact that the grant request did not go through proper procedures for consideration and the fact that too many critical details were missing from the proposal, the trustees removed it from consideration. I was personally assured that this $100,000 grant would not find its way back to the board.

However, less than a month later on June 24, 2009, the grant was listed on the board agenda as one of the Fiscal Year 2009 Grant Recommendations. The trustees approved giving the San Diego-based Pacific American Academy a $100,000 grant. Trustees Cataluna and I were excused from the vote. Trustee Mossman voted against the proposal.

There are a hundred reasons why this grant should have been deferred indefinitely. This is a pilot program. It was never clearly identified as to how many Hawaiian children would be enrolled. No itemized budget was submitted. This was certainly not a prudent decision to make in these tough economic times. Grants should be judged on its sustainability. This grant had none.

This San Diego grant was able to rush through the grants process, within 30 days while other local grant applicants are sometimes forced to wait for years due to “lack of funds.” Fast-tracking the grant is especially baffling to me since there wasn’t $100,000 left in the grants budget at the time. Trustees need to be concerned that this sends a very misleading message to future grant applicants – That a grant application can be fast-tracked if you have helped certain OHA personnel or trustees in the past.

* The Native Hawaiian Legal Corp. Giveaway

Without regard to Trust Assets, OHA transferred $863,361.77 from OHA’s Fiscal Reserve Account to the Native Hawaiian Legal Corp. (NHLC) for the balance of attorney’s fees collected, including interest, originally paid to OHA regarding the Hokulia case.

Trustees voted to approve this at our June 24, 2009, board meeting. Trustees Cataluna and I were excused from the vote. In a written memo to the BOT, I opposed the transfer for the following reasons:

(1) The NHLC is not entitled to the $863,361.77 since OHA is not a client of the NHLC and therefore should not have to pay “attorney’s fees.”

(2) A large portion of the NHLC’s operating budget comes from OHA. For many years, NHLC was actually listed by name within OHA’s budget bill passed by the Legislature. Currently, the OHA budget bill that was recently singed by Governor Lingle includes $491,981 in general funds and $491,981 in OHA trust funds for fiscal year 2009-2010 that can be used by NHLC to provide legal services for our beneficiaries. For fiscal year 2010-2011, the amount is $473,080 in general funds and $473,080 in OHA trust funds. In other words, we pay their salaries. If they win a case, then we are entitled to half of the award.

(3) The NHLC has not paid their share of funds from the Hokulia case to the State of Hawaii, which claims they were entitled to half of the award. Instead, OHA paid over $1 million to the state, which included NHLC’s portion.

(4) Unlike other organizations that OHA funds, the NHLC was never forced to make any sacrifices to their budget, unlike other nonprofits that had to suffer a 20 percent budget reduction.

(5) The OHA Fiscal Reserve is to be used for unforeseen emergencies ONLY and not to “seed an endowment,” as NHLC plans to do with the money. I am certain our investment policy has no such provision for that kind of expenditure.

Finally, it makes little sense to release employees because of budget cuts and yet be able to give $100,000 to a group in San Diego, and another three-quarters of a million dollars to another organization at the same time.  Until the next time.  Aloha pumehana.