OFFICE OF THE MAYOR
CITY AND COUNTY OF HONOLULU
530 SOUTH KING STREET, ROOM 300 • HONOLULU, HAWAII 96813
PHONE: (808) 768-4141 • FAX: (808) 768-4242 • INTERNET: www.honolulu.gov
MICHAEL D. FORMBYMANAGING DIRECTORRICK BLANGIARDI
MAYOR

KRISHNA F. JAYARAM
DEPUTY MANAGING DIRECTOR

April 4, 2022

The Honorable Tommy Waters, Chair
Honolulu City Council
530 South King Street, Room 202
Honolulu, Hawaii 96813
Dear Chair Waters:
SUBJECT: Clarifying the State and Local Fiscal Recovery Funds (SLFRF) Committeeand First Tranche of ARPA Monies
This responds to your March 23, 2022 letter referenced above.
As advised by Corporation Counsel, the Administration has proper and legal authority
over the $1 93M State and Local Fiscal Recovery Fund (“SLFRF”) monies received by the City
and County of Honolulu (“City”) on June 7, 2021 (“First Tranche”). Accordingly, we reject yourlegal arguments and your unilateral request to disband, repurpose or cease the critical work
being performed to address public health needs, modernize government operations and, mostrecently, address business and community needs.
When this Administration came into office, we repeatedly heard directly from you
regarding the anger and dissatisfaction you had with the CaIdwell administration regarding theirprocessing and handling of CARES Act funds. We knew the Honolulu City Council (“Council”)
had established a subcommittee to monitor CARES Act funds distribution and, in fact, MikeFormby, sat on that subcommittee for Councilmember Ann Kobayashi. As a result, very early
on, we assured you and Council that our Administration would work collaboratively with Council.
Consistent with that commitment, we asked Council to provide the Administration with prioritiesof Councilmembers for our consideration and information as we looked to stand up the ARPASLFRF process. In response, Budget Chair Say provided the Administration with a “list ofgeneral priorities of council members.” He also stated “[w]e look forward to a collaborative
process and working together.” See Council Corn. 190 Budget, BUDGET COMMUNICATION
NO. #14.

MAYOR’S MESSAGE 49

The Honorable Tommy Waters, ChairApril 4, 2022
Page 2
Our unwavering commitment to collaborate with Council in establishing a process that isU.S. Treasury compliant, flexible, equitable, efficient, and transparent in the distribution of ARPASLFRF funds continues to this day. Our primary focus and goal has been to serve ourresidents, businesses and communities-in-need across O’ahu and, as we have said on manyoccasions, these are not our (Administration) funds or your (Council) funds, they are thepeople’s funds.
We began by researching models used by other municipalities around the nation anddecided that a flexible approach, the predominant model nationwide, would work best for O’ahu
in light of all the other federal funding opportunities and the requirement to comply with U.S.
Treasury guidelines.
It’s also clear that cities like Atlanta, Detroit, and New York City where theMayor and the City Council have fully appropriated all SLFR flex funds are theexception, rather than the norm, among major cities. Very few cities haveallocated all of their flexible funds, and as they move to allocate the remainder orstart allocating in the first place, they can look to models established by Detroit,
Baltimore, Macon and other cities to manage the funds.1——

With the first tranche received on June 7, 2021 and a mandatory filing date of August 31,
2021 for the Initial Recovery Plan, the Administration established a working group that included
staff designated by Council Chair’s office, to review Administration and Council funding priorities
for alignment with U.S. Treasury federal expenditure categories:
1.
2.
3.
4.
5.
6.
7.

Public Health
Negative Economic Impacts
Services to Disproportionately Impacted Communities
Premium Pay
Water, sewer, and broadband infrastructure
Revenue Replacement
AdministrativeThe working group, after much discussion and deliberation, ultimately organized SLFRF
funding opportunities into four large categories, informed by prior experience from CARES Act
funding, Administration priorities, community needs and perspectives shared in City Council
hearings, Council initiatives as communicated in the FY21 budget process and Councilmember
priorities as set forth in Budget Communication No. 14. The Administration also included input
from the O’ahu Resilience Strategy and community needs and recommendations identified

1
Local Fiscal Relief: Emerging Models and Next Steps for an Inclusive Local Recovery, The New Localism,
September 1, 2021, https://www.thenewlocalism.com/newsletter/local-fiscal-reliefl

The Honorable Tommy Waters, Chair
April 4, 2022
Page 3through the 2020 Select Committee on Economic Assistance and Revitalization Stakeholder
Advisory Group (EAR-SAG) report. The four priority categories for the City’s 2021 Initial
Recovery Plan were:
1.
2.
3.
4.

Provide community support and address economic impacts:
Support equitable economic recovery:
Modernize City operations:
Invest in critical island infrastructure:$110,000,000$156,252,141$ 70,000,000$ 50,000,000

After meeting and discussing the process for considering individual projects andprograms for the use of SLFRF funds, with a focus on ensuring alignment with federal
expenditure categories, compliance with U.S. Treasury guidelines, meeting obligation andexpenditure deadlines, eligibility and administrative requirements, compliance with Federal,
State and City procurement codes and other applicable federal, state and City laws, an Exhibit“A” to the 2021 Initial Recovery Plan was prepared for the first tranche of funds.
While we acknowledge you expressed individual displeasure with the Administration’s
proposed deliberative process for the first tranche, at one point unilaterally declaring an“impasse,” the administration was required to file the City’s recovery plan with the U.S. Treasury
by August 31, 2021 and, accordingly, we proceeded in the absence of a Council vote opposing
our efforts. In fact, during the entirety of the FY22 Budget discussions, there was not one voteby the City Council challenging the Administration’s authority over the first tranche or our
proposed process for distributing ARPA SLFRF funds. There were questions, yes, to which wealways responded. We also recall you specifically suggesting, on occasion, that Council mightseek a supplemental budget to appropriate ARPA SLFRF funds from the first tranche, but thatnever happened and the Councilmembers we spoke with did not support a supplemental budget
process after adoption of the FY22 budgets.
Subsequently, by Mayor’s Message dated August 9, 2021, the Administrationtransmitted the City’s proposed 2021 Initial Recovery Plan to Council for consideration andadoption via Resolution 21-244, fully disclosing the Administration “received the first tranche ofARPA funds under Ordinances 20-22 and 20-23” and the Administration would submit the U.S.
Treasury required ARPA Recovery Plan to Council for approval each year before submission tothe U.S. Treasury.
Regrettably, at the hearing on Resolution 21-244 seeking approval of the City’s 2021
Initial Recovery Plan, your Committees on Executive Management and Housing and theEconomy took no action. Up against a deadline of August 31, 2021, the City’s 2021 Initial
Recovery Plan, incorporating Council and Administration priorities in Exhibit “A”, was filed andaccepted by the U.S. Treasury and the Administration turned its attention to designing theprocess for vetting SLFRF projects and programs in accordance with the City’s filed recovery
plan. We also note that, at the time, the City and State were experiencing a surge of the Delta
variant and the Administration needed to establish a flexible process for expediting the approvaland expenditure of SLFRF funds for the purchase of test kits for the City’s testing facility at theDaniel K. Inouye Airport, a testing facility open to all City residents.

The Honorable Tommy Waters, Chair
April 4, 2022
Page 4Since filing the City’s 2021 Initial Recovery Plan, the Administration has spent thousandsof hours researching, implementing and executing a structured and deliberative SLFRF
distribution process, which includes an SLFRF Awards Committee to ensure we are compliant
with US. Treasury guidelines and are honoring the priorities of the Council, the Administration
and Oahu’s residents, businesses and communities. We have also had numerous training
sessions with City departments on the process by which they will execute and implement
Council and Administration SLFRF priorities as set forth in Exhibit “A’.
In addition, the administration set up a public dashboard and documents approvals andexpenditures of SLFRF funds through the preparation of an end-of-month report which is
submitted to Council and available to the public in accordance with Resolution 21-088. Further,in addition to briefing Council on the ARPA SLFRF process in August and October 2021 andJanuary and March 2022, we have repeatedly requested opportunities to brief Council monthly
so that all Councilmembers have the ability to ask questions, get updates, understand theprocess and request new or additional programs in a public forum.
On January 13, 2021, in response to an Administration offer inviting a Councilmember tojoin the SLFRF Awards Committee, you wrote:
I want to extend a warm mahalo for inviting a Councilmember to participate in theState and Local Fiscal Recovery Funds (SLFRF) Awards Committee. On behalfof the Council, I’d like to designate Vice Chair Kia’aina as a member of thecommittee, as well as Council staff to assist the Vice Chair. Mahalo for yourcontinued partnership as we work together to meet the needs of the people ofHonolulu.
Since Vice Chair Kia’ãina joined the SLFRF Awards Committee, the committee has
benefitted from her input and the collaboration she and her staff bring to the process. Vice
Chair Kia’ãina is always rigorous in her examination, yet 100% professional in her discussions.
We thank you for this designation and show of partnership between the Administration andCouncil.
Having approved and expended SLFRF funds to address public health emergencies,
including test kits, Iso/Q facilities, security for morgue trailers, and having transitioned tomodernizing government operations, including programs benefiting DPP, DIT, BFS Purchasing,DPR, and OER, all consistent with the priorities set forth in Exhibit “A”, the Administration
recently announced a shift to community needs including, but not limited to, a $1 0.5M business
relief program and a $30M community needs program, including non-profits and otherorganizations disparately impacted by the COVID-19 pandemic.
It is at this point, 10 months after receiving the first tranche of SLFRF funds andestablishing a compliant, deliberative process that includes an SLFRF Awards Committee of
which the Vice Chair of the Council is a member, 10 months after —$55M in relief has been

The Honorable Tommy Waters, Chair
April 4, 2022
Page 5approved for program implementation and $16M has been expended and one month after
announcing to the public that the City is transitioning to business and community relief, that you
seek to shut down the City’s process. .for what purpose?
.

Once again, your demands are but the demands of one Councilmember, demands
which will negatively impact beneficiaries of critical SLFRF programs assisting residents in otherCouncil districts. You may never have been personally satisfied with how the Administration
thoughtfully decided to execute and implement the first tranche of SLFRF funds, but the truth isyou have allowed the Administration to proceed without a vote of Council in opposition.
Your late unilateral request to shut down the City’s process implementing Council andAdministration SLFRF priorities including, but not limited to, a $10.5M small business recovery
program, a series of multimillion dollar agricultural grant programs, the Department of Parks andRecreation’s support of Summer Fun, a pilot Park Ranger program, a program to revitalize
community gardens and a $30M grant program for community assistance is simplyunreasonable and contrary to the interests of the communities who will benefit from theseprograms.
The Administration and the City Council have a joint responsibility to act in strict
compliance with Federal, State and City laws and in the best interests of our communities. Your
request to claw-back first tranche SLFRF funds and obstruct a process that is delivering muchneeded relief to the people of Honolulu is a non-starter.
If you wish to meet and discuss your concerns and offer constructive ideas on how theprocess might work better with Council, we are open to meeting. We have always been open tonew ideas. We are not, however, the least bit interested in setting back our successful City
process by 10 months or longer. This would only serve to harm the people of Honolulu.
Sincerely,Rick Blangiardi
Mayor

Michael D. Formby
Managing Director