Hawaii County finance committee hears timeline to catch up on delayed budget reports, approves police transfer and forwards Ulupono services MOU

HILO — At a Feb. 14, 2025 meeting of the Hawaii County Council Committee on Finance, Finance Director Diane Nakagawa told council members the department is behind on monthly budget-status reports and expects about a year to complete a financial-system implementation and staffing changes needed to get current. The committee also heard from a police department accountant about a roughly $500,000 transfer to cover recruit training for the Kau district and voted to forward Resolution 92-25 — accepting donated grant-application services from Ulupono LLC valued at $90,000 — to the full council with a favorable recommendation.

The delay in monthly reports matters because council members rely on them to monitor county finances and make budget decisions. Nakagawa, who introduced Acting Controller Wilson Kreider to the committee, said the county is finishing the annual audit and reconciling accounts — work that has slowed routine monthly closings. "We are in the middle of our audit, tail end of our audit, wrapping things up," Nakagawa said. She said August had been closed and those reports would be provided shortly, but added that full catch-up tied to system implementation and staffing will likely take about a year.

"It takes about a week once we actually close the filing period to actually process all the information," Nakagawa said, adding that only two staff members are currently working on the report processing. She said the county is investing in technology and implementing a new financial system to automate manual work and improve reporting. Nakagawa warned that biannual reconciliations — notably real property tax (RPT) billings in February and August — require more time to close than a typical month.

Council Member Mark Inaba asked when reports would be no more than a month behind; Nakagawa replied that system implementation, controller recruitment and training make a faster timeline unlikely and that a year is a realistic estimate to restore regular monthly reporting cadence. "I wish it was sooner. And if it can be, we'll push, but I think it's gonna take that long to put some of these processes in place," Nakagawa said.

The committee voted 7-0 to close file on Communication 73.1, the monthly budget status report for the month ended July 31, 2024 (motion by Inaba; second by Kagiwara). Later in the meeting the committee also closed file on Communication 143, the annual revenue report for July 1, 2023–June 30, 2024, after discussion about transient accommodations tax (TAT) collections and fee schedules.

On TAT and department fees, Council Member Kimball asked how TAT collections compared with the prior year and whether the administration plans to update long-standing fees. Nakagawa said departments — particularly vehicle registration and licensing — are reviewing fee structures and plan to propose increases where fees do not cover costs, and that the finance office will provide comparative data when proposals come forward.

The committee also considered routine communications and transfers. Hau'oli Aiona, an accountant with the Hawaii County Police Department, explained a transfer noted in Communication 23.6 that covers salary and wages for recruits during academy and field-training periods. Aiona said the $500,000 transfer largely reflects vacant-position budgeting and the need to charge recruit-class pay to administration accounts until recruits complete field training and are assigned to districts. "When we run the recruit classes, the recruit classes' salary and wages come out of our administration, until they are finished their FTO or field training, then they get assigned to the different districts," Aiona said.

The committee voted to close file on Communication 23.6 (motion by Inaba; second by Kaguwada) by a 7-0 tally after the police department account representative answered council questions.

On Resolution 92-25, the committee heard from Laura Ocasio of the Office of Sustainability, Climate, Equity and Resilience (OSCER), who described Ulupono LLC's offer of consultative and technical services to help the county pursue federal awards and capacity for grant applications in areas including locally produced food, renewable energy, transportation, and water management. Ocasio said the $90,000 estimate is intended to support work on a larger grant and one or more smaller grants; specifics of which grants will be supported were not finalized in the meeting. "This is an opportunity ... to build capacity within our county working with different departments on specifically ... coordinating," Ocasio said.

Committee members asked whether Ulupono would help with existing grants awaiting funding; Ocasio said she would confirm that detail separately. The committee voted 7-0 to forward Resolution 92-25 to the full council with a favorable recommendation (motion by Inaba; second by Kaguwada).

Votes at a glance: - Communication 23.5 (report of fund transfer authorized Jan. 2025): motion to close file approved 6–0 then recorded as 7 ayes after attendance change; details not discussed on record (mover: Inaba; seconder: Galimba). - Communication 23.6 (report of fund transfers authorized Jan. 16–31, 2025): motion to close file approved 7–0 (mover: Inaba; seconder: Kaguwada). Discussion included Kau district recruit salary transfers (approx. $500,000) explained by Hawaii County Police Department accountant Hau'oli Aiona. - Communication 23.7 (report of fund transfers authorized Jan. 30–Feb. 12, 2025): motion to close file approved 7–0 (mover: Inaba; seconder: Kaguwada); no substantive discussion recorded. - Communication 24.4 (report of change orders authorized Dec. 2024; transmitted pursuant to Hawaii County Code sec. 2-12.3): motion to close file approved 7–0 (mover: Inaba; seconder: Kaguwada); no substantive discussion recorded. - Communication 73.1 (monthly budget status report, month ended July 31, 2024; transmitted pursuant to Hawaii County Charter sec. 6-6.3): motion to close file approved 7–0 (mover: Inaba; seconder: Kagiwara). Substantive discussion on delays and system implementation by Finance Director Diane Nakagawa and Acting Controller Wilson Kreider. - Communication 143 (annual revenue report July 1, 2023–June 30, 2024; transmitted pursuant to Hawaii County Code sec. 2-12.6): motion to close file approved 7–0 (mover: Inaba; seconder: Onishi); discussion included TAT comparisons and fee structure review. - Resolution 92-25 (authorize acceptance of donation of services from Ulupono LLC, est. value $90,000): forwarded to council with favorable recommendation, 7–0 (mover: Inaba; seconder: Kaguwada). OOSC ER staff described how the donation would be used to build grant-application capacity; specific grant targets to be determined.

What the committee did not decide: No final awards or contract approvals were made at this meeting; the Ulupono item was forwarded to the full council for final action. Several questions raised at the dais — including which specific grants Ulupono would work on and whether Ulupono would assist with grants already applied for but not yet funded — were noted for follow up.

The committee convened at 2:24 p.m. and adjourned at 2:48 p.m.