OHA Budget | Rowena Akana

Looking back at 2015 and welcoming the New Year

`Ano`ai kakou… Happy Year of the Monkey! I began 2015 on a high note as the new Chairperson of the Asset & Resource Management (ARM) Committee and oversaw OHA’s budget, fiscal operations and Trust Fund.

From January to July, the ARM Committee was incredibly productive. We had a total eleven (11) ARM meetings; two (2) joint meetings with the Beneficiary Advocacy and Empowerment Committee; and passed a total of seven (7) ARM Action Items, which included authorizing funds to help support our kupuna at Lunalilo Home.

Despite my ARM committee’s high output, on July 30, 2015, the Trustees voted to consolidate the ARM committee with the Land and Property (LAP) Committee to form a new super-committee called the Committee on Resource Management (RM).

OHA leadership believed that consolidating the committees would lead to greater efficiency in the Board of Trustees, but I was not supportive of the consolidation because the RM committee is simply too broad in scope. I am still hopeful that the Trustees can go back to our previous system of five committees. It worked so well to engage the Trustees and allowed us to deal with issues proactively.

FISCAL RESPONSIBILITY

I will continue to push for more fiscal responsibility within OHA on issues such as:

Changing our spending policy limit to 4 ½ percent of the Trust Fund given the state of the current economy;

Conducting a full forensic audit of how every penny is spent at OHA; and

Making sure the Administration keeps its promise to get rid of the “Fiscal Reserve” slush fund.

EMBRACING TRANSPARENCY

If you haven’t already heard, you may now go to OHA’s website at http://www.oha.org/about/board-trustees to watch live meetings of the OHA Board of Trustees. Be sure to tune in on the days we have our meetings. For a meeting schedule, please call me at (808) 594-0204.

NEW LEGISLATIVE SESSION

OHA is currently working on plans to develop its Kaka‘ako Makai properties with a truly Hawaiian sense of place that allows for open space and ease of community access to the waterfront.

For the upcoming legislative session, I will be focusing on legislation that will allow OHA to use its Kakaako properties provide our beneficiaries and the community as a whole with affordable housing.

OHA should be allowed to increase its building height limit in order to allow for more middle income condos. Everyone agrees that Hawaii’s homeless problem is caused in large part due to the lack of truly affordable housing. Luxury high rises that only millionaire mainlanders can afford are sprouting up all around the Kakaako area. OHA is one of the few entities that can develop affordable living spaces in the area that specifically targets local buyers.

The lack of affordable housing is not just a Native Hawaiian issues, it’s an issue that affects us all. This is why we will be counting on the support of the broader community to get this legislation passed. I have high hopes that, working together, we will all have a successful session.

Hau’oli Makahiki Hou and God bless.

The tail is wagging the dog at OHA

`Ano`ai kakou… If you need something done, don’t bother talking to the Trustees anymore. The Administration is running the show now. We’re just rubber stamps that sign whatever is put in front of us.

When the year began I had high hope that OHA would finally become open and transparent. Instead, it took just a half a year for the new Board Chair to take OHA a big leap backwards to the ultra-secret and consolidated power structure of the previous two Board Chairs.

PASSIVE TRUSTEES

I’ve always argued that being a Trustee is not about simply showing up at a few monthly meetings. The people of Hawaii elected us in the hope that we would make their lives better. Unfortunately, the current Board Leadership is more interested in tying our hands and muffling our voice.

LESS COMMITTEES = MORE PROBLEMS

It was bad enough that there were only three Trustee committees, but now we’re back to just two. The current Chair might argue that it will improve efficiency but the truth is it leaves one more Trustee with much less to do.

For many years OHA operated effectively with five committees. All of us worked hard and we were deeply involved in Hawaiian issues. Five Trustees had the opportunity to be a committee chair and could focus on a specific issue and become experts in that field. The five-committee system produced better Trustees.

The current two-committee system takes all the policy development out of our hands. It encourages us to just show up for meetings every other week. While we don’t really get to develop policy anymore, we certainly get all the blame when things don’t work out.

The Trustees are now dependent on the Administration to spoon feed us everything. None of us ran for office just to keep some seats warm. Good Trustees should be driven to find solutions to problems that are plaguing our people.

Instead, the Administration is taking advantage of the Board’s weakness to push their own agendas, such as producing strange cartoons and travelling all over the world (more on this in my next article).

You’ll probably hear the term “Ad Hoc” sub-committees as a way of trying to get more of us involved, but don’t be fooled. They only make suggestions and are easy to ignore. If you don’t believe me, I can show you a list of requests that the Board Chair and Administration ignored when I was the powerful ARM committee chair. What results could a weaker sub-committee possibly produce?

FISCAL RESPONSIBILITY

Despite the recent changes to the committee structure, I will continue to push for more fiscal responsibility within OHA such as:

Limiting the Administration’s excessive international travel;

Encouraging Board Leadership to give Trustees meaningful work and allowing them to gain further financial experience;

Changing our spending policy limit to 4 ½ percent of the Trust Fund given the state of the current economy;

Conducting a full forensic audit of how every penny is spent at OHA; and

Making sure the Administration keeps its promise to get rid of the “Fiscal Reserve” slush fund.

These changes won’t come easy and I am sure to meet heavy resistance. But like I said, I didn’t become a Trustee just to attend a bunch of meetings every month. Aloha Ke Akua.

Fiscal Responsibility: Make a budget & stick to it

`Ano`ai kakou… As part of my fiduciary duties as a Trustee of OHA, I attended a forum conducted by one of OHA’s money managers. The Commonfund Forum 2015: Converging Ideas – Creative Answers was held from March 14 17, 2015, is one of the preeminent annual conference for institutional investors.

The forum examined the many challenges endowments, foundations, charities, pension funds and other long-term investors are currently facing. I had a productive and informative discussion with Commonfund regarding OHA’s spending policy and budget process.

Commonfund had several recommendations:

The Board of Trustees should have a clear understanding of their role as fiduciaries to the Native Hawaiian Trust Fund. Trustees must be disciplined enough to hold the line on budgets and expenditures, otherwise OHA’s budget will continue to swell to unsustainable levels.
Trustees should broaden their knowledge regarding budgeting and investments by regularly attending informative conferences such as the ones presented by our money managers. I have attended several forums by Goldman Sachs, JP Morgan, and Commonfund that have providing me with invaluable information and a world view on market trends.
Board Leadership can also engage all of its members by giving Trustees meaningful work and allowing them to gain further financial experience;
Board and Committee meetings could be improved by focusing agendas on specific themes and similar issues. This would allow Trustees to express their opinions while keeping the meeting on topic.
The Board of Trustees should consider conducting role playing exercises. For example, how would we react to worse case scenarios, such as catastrophic terrorist attacks or natural disasters? This would prepare us for the worst and it would also allow Trustees to understand the choices and processes that may be necessary in a market crash or some other catastrophic event.
OHA should learn from the past as it plans for the future. The Trustees can easily analyze past asset allocations and determine what worked and what didn’t work.
When considering new spending everyone at OHA, whether they are staff or Trustees, we must always consider: (a) Whose money we are spending and investing; (b) Whether we are being prudent; (c) Whether we have we developed priorities and timelines for spending; and (d) Whether we have clarified our short term and long term goals.
Changing our spending policy limit to 4-½ percent of the Trust Fund would be a wise move in the current economy.

Prudent spending, sticking to budgets and getting rid of the Fiscal Reserve slush fund are all much needed changes that were recommended by Commonfund. Commonfund has also agreed to look at our spending policy and make recommendations for the future.

After attending another workshop with our two money managers, it appears clear that the stock market will not be a place for OHA to look for great returns on our investment over the next few years. The predictors are very gloomy; all the more reason to be cautious and prudent with spending.

Legislative Update (May 2013)

`Ano`ai kakou… The legislature is about ready to wrap things up. Here are some important legislation affecting Native Hawaiians that are still alive:

KULEANA LANDS

OHA submitted House and Senate concurrent resolutions to recognize kuleana lands as historical lands and urge the counties to support efforts to promote continued ancestral ownership of kuleana lands.

The House version (HCR5) passed out of its first committee hearing and is waiting to be heard in the House Finance committee. The Senate version (SCR1) has not been scheduled for a hearing yet. Both need to be heard before an April 12^th deadline. Last year, Senator Malama Solomon introduced this resolution as a personal favor to me. This year, her Senate committee has killed the resolution by declining to schedule a hearing for it. One has to wonder why someone who supported the resolution last year would now refuse to hear it.

OHA BUDGET

On March 8^th, the Senate Committee on Ways and Means asked OHA to comment on the cuts to our budget bill (HB 222) by the House Finance Committee. We let them know that we understand today’s economic situation doesn’t make it easy to decide how to the fund every State agencies. Therefore, we didn’t oppose the proposed decreases at this time but we did urge the committee to restore OHA’s original request.

Some of the more serious decreases include cutting $268,860 over two years for educational enrichment programs. This will probably mean that 269 less Native Hawaiian students will be receiving educational services. Health improvement programs were cut $1,100,000, which may mean 960 less Native Hawaiians receiving Health obesity services and 1,030 less pregnant Native Hawaiian women receiving prenatal services.

HB 222 passed the Senate Ways and Means committee with amendments on April 1^st, and all of the funds that were cut were restored. The House now has to decide if they agree or disagree with the Senate amendments.

OHA PRIMARY

SB 3 proposes to establish a nonpartisan primary and general elections for OHA Trustees beginning with the 2014 elections. On March 27^th, OHA Trustees took a position opposing this measure. On March 28^th, the House Judiciary Committee passed the bill with technical amendments. The Senate now has to decide if they agree or disagree with the House amendments.

NATIVE HAWAIIAN ROLL COMMISSION

HB 252 would require the Native Hawaiian Roll Commission, in cooperation with OHA, to submit annual reports to the Governor and the Legislature on the status of the preparation of a roll, expenditures, and any other concerns or recommendations. It amends the definition of “qualified Native Hawaiian” to include individuals who meet the ancestry requirements of Kamehameha Schools and OHA. It also repeals the directive in Act 195 to amend the Hawaiian Homes Commission Act. Senate Committee Chairs Clayton Hee and Brickwood Galuteria amended the bill by:

(1) Deleting the requirement that the Native Hawaiian Roll remain confidential;

(2) Clarifying that all individuals already registered with the State as verified Hawaiians or Native Hawaiians through OHA are included in the Native Hawaiian Roll and extending to those individuals all rights and recognitions conferred upon other members of the roll;

(3) Inserting language to promote renewable energy in Hawaii; and

(4) Inserting an effective date of July 1, 2013;

Aloha Ke Akua.

Fiscal issues Trustees need to discuss

`Ano`ai kakou… Back in July (2012), I travelled to New Haven, Connecticut, to attend the Commonfund Endowment Institute, Level II, at the Yale School of Management.

The Institute provides in-depth courses on how nonprofit organizations such as OHA should invest their funds in the stock market and in other asset classes such as emerging markets, natural recourses, and commodities, etc., in order to secure funds in perpetuity for future generations.

In these very uncertain times, it is important for trustees of endowment funds and nonprofits to be well educated on the details of how money-mangers are investing their funds.

The following are my recommendations for OHA based on what I learned at the Institute:

(1) Trustee Training – OHA should invite organizations such as Grant Thornton to conduct educational workshops for the board, such as one on Governance. My feeling is that if all trustees attended seminars, like those offered by Commonfund, we would have a more active and informed board who would be able to make good decisions for our beneficiaries.

(2) Split the Money Committee – OHA’s Asset & Resource Management (Money) Committee should be separated into two committees: (1) Budgeting; and (2) Investments. Volunteers should be asked to serve on the investment Committee. I have made this suggestion in the past, but the response has always been, “That ain’t gonna happen, Rowena.”

(3) Trustee Involvement – Trustee engagement must be improved. Some Trustees are passive, nonfunctioning, or afraid of speaking up for fear of being called a “troublemaker,” “micro-manager,” or “hard to get along with.” All Trustees should be allowed to have meaningful participation in planning and not just leave everything for the Administration to decide, as has been the practice for the last ten years until 2012.

(4) Low Risk Investments – OHA should look at investing in U.S. Treasuries, Commodities, and Natural Resources as they are considered low-risk.

(5) Money Manager Contracts – The Trustees should re-examine all contracts with money managers.

(6) Control Spending – The higher OHA’s operating expenses (commitments, salaries, etc.) the more we need to concentrate on how well we do with our investments. The trust fund will suffer if we continue to spend at the rate we are spending now. Intergenerational funds are needed to ensure perpetual funds for the future.

(7) Inflation Funds – These funds reduce the risk of losing your investments in a down market.

(8) Surplus Funds – We should set aside funds for long term, perpetual use. Being a quasi-governmental trust allows us to be more creative in growing a perpetual fund.

(9) Spending Policy – OHA needs to revisit the spending policy and lower its spending rate to 4%. OHA also needs to prioritize its spending and consider separate spending policy for different types of investments. Not prioritizing allows Trustees to fund anything or anyone they favor.

SUMMARY

In summary, the Commonfund Endowment Institute provided me with an excellent investment education. The information shared by Yale and Harvard professors, as well as top economists and other experienced investors and money managers, continues to be very valuable to me as a Trustee. Aloha Ke Akua.

The need for fiscal responsibility

`Ano`ai kakou… On May, 30, 2012, the Star Advertiser reported that the state Council on Revenues lowered the revenue projection for next fiscal year, which prompted Governor Abercrombie’s administration to cut back the state’s spending.

This is not surprising. When revenues are down, everyone cuts back on spending. Everyone except OHA.

Trustees Keep on Spending

Our new CEO, Ka Pouhana Kamana’opono Crabbe, has been working diligently to cut our budget wherever possible and to streamline operations to save money, but there are still Trustees who insist on spending more.

This extra spending puts enormous pressure on our dwindling resources at a time when OHA has already accepted major financial commitments such as Waimea Valley, ownership of the Kaka’ako Makai Settlement Properties, and other commitments such as the $3 million/per year for 30-years debt service for the Department of Hawaiian Home Lands and funding for organizations such as Alu Like, Inc. and the Native Hawaiian Legal Corporation that have made their way into our annual budget. These are huge amounts of revenues being contracted to these entities. Add to this the grants and annual operational expenses and we are maxed out.

A Constant Issue

Overspending has been a longstanding problem at OHA. In April of 2004, our money committee chair asked for a legal opinion that would allow OHA to spend more of the Native Hawaiian Trust Fund. He even questioned whether it’s even appropriate to build the Trust at all.

I have consistently argued against OHA’s 5% spending policy and strongly recommended that it be reduce instead to 4%, at least until the economy fully recovers again. Even Kamehameha Schools operates at a lower spending rate than 5%.

Fiscal Restraint

In these tough economic times, there are nearly a hundred nonprofit organizations asking for OHA grants each year. While giving the money away will make OHA very popular in the short-term, we should be focusing on the long-term health of the Native Hawaiian Trust Fund.

We have worked carefully for two decades to build the Trust to over $300 million. I would hate to see this relatively modest amount shrink down to nothing in shortsighted spending sprees that forces us to realign our budget several times a year and draw more money from our corpus (trust). What other organization does this?

Greater Transparency

State law (Hawaii Revised Statutes §10-14.5 on budget preparation and submission; auditing, Section b) requires that: “The (OHA) board shall provide opportunities for beneficiaries in every county to participate in the preparation of each biennial and supplemental budget of the office of Hawaiian affairs. These opportunities shall include an accounting by trustees of the funds expended and of the effectiveness of programs undertaken.”

I have recommended time and time again that OHA needs to take its proposed budget out to the community so that our beneficiaries can give us their input as well as tell us what their needs are.

This was the common practice of OHA in the past and I believe it helped OHA to develop a budget that was more in-sync with our beneficiaries’ concerns.

I will continue to press OHA’s money committee chair to take our next proposed budget out to the community, as required by law, including the neighbor islands.

So which path will OHA’s leadership take?

It has long been understood that OHA is a “temporary” organization that will someday be dissolved and its assets transferred over to the new Hawaiian Nation.

So the critical policy question is: “Will OHA continue to be a ‘temporary’ organization that will give the Hawaiian Nation the assets it needs to survive or will OHA continue to spend freely and shrink the Trust Fund?”

OHA desperately needs Trustees who will make the tough decision to focus on building towards a more permanent, long-term goal instead of taking the easy and popular path of short-sighted spending.

In this election year, OHA beneficiaries should look carefully at the candidates running for OHA Trustee and choose individuals who will take OHA in a more fiscally responsible direction.

What has been sorely lacking is for Trustees to prioritize our spending and focus on the things that our beneficiaries need and NOT use OHA’s “Strategic Plan,” which is at best a wish list of too many things and does not focus on the top priorities of our people.

NOT listing priorities leaves the door wide open for certain Trustees to continue to fund anything and everything while neglecting meaningful programs in healthcare and housing.

As long as trustees keep drawing money out of our corpus, or trust fund, we are taking money away from future generations of Hawaiians. After all, what is a nation without assets? Aloha Ke Akua.

The State’s obligation to all Hawaiians

By: TRUSTEE ROWENA AKANA

Source: June 2009 Ka Wai Ola Column

Towards the end of this past legislative session, the OHA general funds budget was completely cut by the Senate Ways and Means (WAM) committee chair Senator Donna Mercado Kim. While it is still possible that the funding will be at least partially restored (the legislative session will not be over at the time of this writing), I was disappointed to hear the reasons why the WAM Chair felt the cuts could be justified.

The WAM Chair argued that: (1) OHA has $300 million in its trust fund; (2) OHA has $15 million in its fiscal reserve fund; (3) OHA receives $15.1 million a year in ceded lands payments; and (4) OHA received $2.03 million for a legal settlement from the Hokulia case from the Native Hawaiian Legal Corporation (NHLC). However, the WAM Chair did not take into consideration other circumstances such as:

OHA’s trust fund has lost almost $150 million, or 30% of its value, from its peak in late 2007.
OHA’s Spending Policy puts an annual cap of 5% on withdrawals from our trust fund, so there can be no further withdrawals.
OHA had already agreed to reduce its budget by 20%, like all other state agencies, at the legislature’s request. Now they are proposing to cut 100% of our budget. Where is the fairness in that?
The OHA Fiscal Reserve Fund is not a “rainy day” fund and is actually part of our trust fund. It was never meant to be used to make-up budget shortfalls.
OHA’s matching funds for the Native Hawaiian Legal Corporation only entitles us to about half of the total $2.03 million the NHLC received for the Hokulia settlement. Therefore, OHA will only receive about $1 million.

In addition, the $15.1 million ceded land payments that OHA receives annually are part of the state’s legal obligation to pay OHA for its 20% pro rata share of income from ceded lands. The Attorney General has made it clear that the Hawaii Constitution makes OHA trustees, not the legislature, responsible for determining how the Native Hawaiians’ portion of ceded land revenues is spent. The Attorney General has also stated that OHA’s share of ceded land revenues belongs to Hawaiians and is not “public money.”

The WAM Chair also ignores the fact that the OHA budget was designed more than 16-years ago by the Governor and the State Legislature to contain both general funds and trustee approved matching trust funds so that it can better the condition of all classifications of Hawaiians: (1) those with at least 50% blood quantum under the Hawaiian Homes Commission Act of 1920 and (2) any descendants of the aboriginal peoples inhabiting the Hawaiian Islands in 1778. This blending of funds was thought to be the most effective way to allow OHA to serve the entire Hawaiian population, estimated at the last census to be 400,000 nation-wide. OHA will not be able to provide the same level of services to such a large population without the assistance of additional general funds from the state.

The WAM Chair needs to realize that OHA funds a wide range of programs relating to Education, Health, Human Services, Housing, and Economic Development, just to name a few. For the sake of comparison, while OHA may have $300 million in its trust fund, Kamehameha Schools spend more than that in just one year — only on education!

OHA has also subsidized the loss of legislative funds to the Department of Hawaiian Homelands, which by law must be funded by the Governor’s budget. Other state departments that have been funded by OHA include the state departments of Education and Health.

Finally, cutting the funding to Na Pua No’eau is simply cruel and would destroy a leader in Hawaiian culture-based education. The WAM Chair needs to think about the 1,500 Hawaiian students, their families, 80 teachers that will be adversely affected.

The actions by the WAM Chair shows why OHA needs to constantly educate the legislature on Hawaiian history and culture and Hawaiian rights. But it wasn’t always this way — There was time when legislators made it a point to be educated on Hawaiian issues and were all well aware of why OHA was created during the 1978 Constitutional Convention.

It was very clear to the legislators and the governors who served from 1978 to 2000 that the legislative funds that OHA was to receive were to serve the Hawaiian population with less than 50% blood quantum. This promise was made because the law, Chapter 10 of the Hawaii Revised Statues, made it clear that the ceded land revenues are to serve Hawaiians with a 50% blood quantum. The law ended up creating two classifications of OHA beneficiaries, but funded only one of those beneficiaries. This is why legislative funds have been sought since 1980.

It is clear that the across the board “slash & burn” of OHA’s budget by Senator Donna Mercado Kim is without conscious or careful thought regarding the special circumstances that governs the Office of Hawaiian Affairs. If you are outraged by this action, please write to Senate President Colleen Hanabusa and your state senators and representatives. Aloha Ke Akua.

OHA Budget: It’s time to bite the bullet

By: TRUSTEE ROWENA AKANA

Source: February 2009 Ka Wai Ola o OHA Column

`Ano`ai kakou… On January 6^th, OHA’s administration briefed the State House and Senate’s money committees about OHA’s budget and funding needs for fiscal years 2010 and 2011. After listening to the questions that the legislators asked our administrator, I couldn’t help but feel like I’ve heard them all before.

Back in August of 2008, I wrote about my concerns regarding the health of OHA’s portfolio and our out-of-control spending. At the time, our Native Hawaiian Trust Fund portfolio had lost 10% of its value (approximately $39 million) and national consumer and prognostic indicators were saying that investors should have at least 20% of their investments in cash that can be liquidated and moved quickly. Unfortunately OHA had less than 10% or $25 million of its portfolio in cash at the time.

I also wrote that according to a June 2008 report from one of our money managers, global equity markets had fallen by more than 8%, with US and European equity markets returning -8.4% and -11.7% respectively. As of July 9, 2008, the estimated preliminary return for their share of OHA’s portfolio in the month of June was –4.95% compared to benchmark performance of –4.48%.

They also stated that the growth outlook for the US economy remains weak, as increased unemployment, a weak dollar, and further pressure on the financial markets contribute to expectations of higher inflation over the next year, with expectations beyond that more restrained. In other words, we were warned. Given all of the bad news, it was more important than ever to bring our spending under control.

On October 16, 2008, right before the November election, the board approved a $40,682,161 budget for Fiscal Year 2010 and a $39, 675,268 budget for Fiscal Year 2011, with no reductions. The board also supported an increase in spending all the way through 2012. In other words, these realigned budgets are being approved using money that we have yet to receive and probably will not receive given that our spending policy is tied to our three-year return on investments. Since that time, our Native Hawaiian Trust Fund has fallen from $430 million to $312 million. It is very difficult to defend and justify a budget that has expanded by over $20 million over the past six years to the legislature or anyone else.

At present, our budget is approximately $41 million. Add to that all of the recent budget realignments and commitments made well into the future and the budget will probably climb to well over $50 million a year.

It appears that the whole world is caught up or affected in some negative way by America’s recession. Economists say this recession will probably last through 2010. That said, I found it embarrassing to sit through OHA’s budget briefing to the state legislature and listen to Senators and Representatives ask why OHA had not made any cuts to its budget.

Here are some of the suggestions and questions asked of us:

Are you willing to cut salaries if necessary?
Will you be able to make the necessary reductions to your budget if needed?
Where are OHA’s priorities for spending?
How much of OHA’s budget is committed to housing and health?
What did the Administrator mean when he said that he had spent the last seven years cleaning up OHA programs?
How much was being spent on Kau Inoa registrations and OHA’s Washington D.C. office?

There were many more questions but I have not included them because of space limitations.

In this New Year of 2009, I still have great hopes that our board will come together and do what is best for our beneficiaries despite the fact that we may all differ in our opinion as to what must be done and how. This can only occur if ALL of us look at the reality of the situation that confronts us. We cannot, in this economy, continue to spend the way we have in past years. We must also convey this message to our beneficiaries.

When one of our money managers late last year cautioned us about the stock market volatility, they suggested that we should consider reducing our spending policy from 5% to 3% during these uncertain times, until things get better. I think it’s obvious that the time has come for us to take the advice of the professionals that we hired and “bite the bullet.”

It is understandable that the legislature is critical of OHA’s lack of spending restraint. They basically as much as told us that, if you haven’t made any sacrifices and we have, why should we give you any more money? At least that was my impression of their message to us. Criticism like, “You obviously have enough to get by” only makes us appear arrogant.

Neither the legislature nor anyone else should have to tell us that belt tightening is necessary. This is the responsibility of our board. It is important to note that OHA pointed out to the legislature that the $3 million that we receive from the state helps to serve the less than 50% Hawaiian beneficiaries that we are also mandated to serve. Aloha Ke Akua.

OHA’s spending is out-of-control

By: TRUSTEE ROWENA AKANA

Source: January 2008 Ka Wai Ola o OHA Column

`Ano`ai kakou… In the last 5 years, OHA’s total operating budget has doubled to $41,094,798 million (Fiscal Year 2008). Since 2006, the $15.1 million OHA gets from the state for our share of the ceded land revenues goes directly into our operating budget instead of being invested in the Native Hawaiian Trust Fund. With the crisis situation our people face regarding health, education and housing, the trustees felt that more resources need to be put to use now to help our beneficiaries.

Doubling our budget has meant that OHA has much more money to spend on grants to aid our beneficiaries. However, the trustees have been irresponsible for continuing to approve grants that should be called into question. For example, trustees approved a grant to support the state Department of Education (DOE). On November 1, 2007, an $88,584 grant was approved to support Pauoa Elementary School’s program to improve literacy, critical thinking and comprehensive skills for grades K-5. This may sound all well and good, but isn’t it the DOE’s kuleana to fund the program? The same could be said of the $66,334 grant to the University of Hawaii at Hilo to support the expansion of their astronomy center. Shouldn’t the state be funding this? The state already receives 20% of the ceded land revenues for public schools and public educational institutions, as described in section 5(f) of the Admissions Act. Shouldn’t that be enough of a contribution to education by our people? Maybe what OHA should be doing is to consider a lawsuit against the DOE for not carrying out their responsibilities. After all, there should be some accountability for all of the funds that they receive. The state should not be taking another bite at our apple. Our mission is clear – we are here to serve our beneficiaries.

Even the federal government is coming to OHA for money. The trustees recently approved a $100,000 grant to help the Kaloko-Honokohau National Historic Park restore its fishpond. Shouldn’t the National Parks Service by paying for this?

Having more grant money has also attracted some slick nonprofits to come to OHA and suck our grant funds with a big straw. These professional organizations know how to fill out forms quickly and have the staff workers needed to make application deadlines. I believe they are preventing truly needy, but less technically savvy, Hawaiian organizations from receiving their fair share of assistance. For example, OHA gave the nonprofit Partners in Development Foundation $100,000 on November 1, 2007 to assist homeless children and another $99,968 on December 6, 2007 to help foster families. This nonprofit knows how to sell their programs. For example, they stressed that they were the only nonprofit organization that specifically targets Native Hawaiian foster children. How could the trustees possibly turn them down at the board table?

The blame for this rests partially with OHA’s administrative staff. The trustees depend on our administrative staff to do the leg work to make sure that the nonprofits are truly worthy of our beneficiaries’ money, but they keep dropping the ball. For example, I keep seeing the same organizations coming back to OHA for grant funding year after year, even though our grant policy is to fund programs that are self-sufficient and projects that are “one-shot” proposals. Our grants are not supposed to be used to keep organizations going.

Our grants department has constantly promised to fix our grant policy, but nothing is ever done. In the past, OHA required all nonprofits to provide matching funds from other organization. OHA would then match other contributions dollar-for-dollar. Now our administration is breaking its own rules by allowing “in-kind” matches with no dollar matches. Nonprofits are now saying their own staff workers’ salaries are part of the matching funds. For example, the Alaka’ina Foundation’s $58,067 grant and Street Beat, Inc.’s $100,000 grant were both approved with in-kind matches of their own workers’ salaries – they didn’t get any matching money from other organizations!

The biggest problem with our current grant policy is that we do not require that a follow-up evaluation be done of each grant we approve. OHA should at least be evaluating the nonprofits who receive massive grants of over $100,000 to make sure our beneficiaries’ money was properly spent, especially for organizations that are repeat requestors. How hard is it to follow-up with the nonprofits to make sure that the Hawaiians they said would be served were actually served? Strict grant control rules should apply for all grantees. At the very least, no grant should be approved that has (1) no real dollar matching fund amounts, (2) no sustainability, and (3) are repeat grant requesters, which obviously proves that they cannot sustain their programs. Again, this problem rests with the trustees and not just the administrative staff. As long as the trustees are comfortable with having no rules – none will be applied. It is just another example of irresponsibility.

I have been assured by our administration that changes will be made and presented to the trustees before the next grant cycle (lets see). I will continue to follow-up with them and keep you informed.

On another note: Thank you for your positive responses regarding my December 2007 column. However, I have received some negative responses from some of my colleagues, which I expected. HAUOLI MAKA HIKI HOU!

2005 OHA legislative package needs your support

By: TRUSTEE ROWENA AKANA

Source: February 2005 Ka Wai Ola Article

`Ano`ai kakou… The State Capitol is buzzing with activity so it must be that time of the year again. Here are some important bills from our 2005 legislative package that really need your support at the legislature:

Ceded Land Revenues. Ever since 2001, we’ve tried unsuccessfully to pass legislation that would reestablish the continued funding of OHA from ceded land revenues.

Act 304, which was passed by the legislature in 1990 to clarify and the State’s obligation to transfer ceded land revenues to OHA, was repealed by the Hawaii Supreme Court in the Office of Hawaiian Affairs vs. State of Hawaii (2001) case involving ceded land revenues derived from the Honolulu International Airport.

We almost got the bill passed in 2003. It passed unamended in the Senate but died in the House Finance committee after the committee changed the bill to leave out money from improvements to the land. In other words, if someone was leasing ceded lands for a dollar, but they built a building on it and was making millions of dollars from it, all OHA would get is 20% of just one dollar (20 cents). In the end, we were forced to oppose our own bill.

The Legislature must define, once and for all, the revenue stream from public trust lands that is to be given to OHA for the benefit of Hawaiians. Only by this action will the State finally move towards fulfilling its constitutional obligation to our people.

Hawaiian Representation on State Boards and Commissions. We have submitted individual bills that would ensure Hawaiian representation on the Board of Land and Natural Resources, the Land Use Commission, the public advisory body for the Coastal Zone Management Program, and the Commission on Water Resource Management by specifying that one member of each body shall be appointed from a list of nominees submitted by OHA.

The board, commission, and advisory body mentioned above regularly make decisions impacting the rights of Hawaiians. These decisions often have immediate and lasting impacts on matters relating to Hawaiian cultural, economic, social, religious, political and historical concerns, all of which State law recognizes as being attached to the use and management of Hawaii’s natural resources.

Despite this recognition under State law, Hawaiians have had no more of a voice on these bodies than any other member of the general public. Our bill addresses this deficiency in the State’s regulatory scheme with respect to issues involving Hawaii’s land and natural resources.

Kuleana Lands. Commercial developments have led to sharp increases in taxes on real property, including Kuleana land, throughout the State. These increases have adversely affected many Hawaiian families who live on kuleana lands because they are unable to pay for the taxes. Hawaiian families living on kuleana land now face the loss of their land and legacy that took generations to establish and must confront the possibility of homelessness.

OHA’s Kuleana land bill proposes to end this injustice by exempting Kuleana lands from real property taxes if the land has been continuously occupied by the original titleholder.

OHA Budget. The following organizations have received significant boosts in their proposed budgets: (1) Na Pua Noeau has gone from $581,948 in fiscal year 2005 to $707,208 in fiscal year 2006 – an increase of $125,360; (2) The Native Hawaiian Legal Corporation’s budget has jumped from $776,603 in fiscal year 2005 to $1,184,604 for fiscal year 2006 – an increase of $408,001; (3) Alu Like, Inc.’s budget has increased from $596,000 in fiscal year 2005 to $730,000 for fiscal year 2006 – an increase of $134,000.

I encourage all of you to call or write your legislators and let them know where you stand on all of the issues near and dear to us. Also, your personal testimony will be very much appreciated when our bills are up for consideration in legislative committee hearings. I look forward to working with all of you during this session of the legislature. Imua e Hawai’i nei…