Council Budget Committee questions unspent appropriations from Affordable Housing Fund

The Maui County Council’s Budget and Finance Committee has questions about nearly $12 million in unspent and unencumbered funds in the County’s Affordable Housing Fund.

According to a March 3 letter from Budget Director Lesley Milner, additional funds are now available for a 120-unit apartment rental project on nearly 15 acres of County-owned land in Nāpili. The Kaiaulu o Nāpili affordable housing project is for Maui County residents earning up to 60% of the area median income.

A proposed bill would set aside $650,000 from the Affordable Housing Fund as a grant to A0746 Lahaina L.P. for project pre-development costs for the Nāpili project. The measure also would return $11.89 million to the fund’s estimated balance as of June 30, 2024.

The Kaiaulu o Nāpili project pre-development costs will include a traffic impact analysis report, cultural impact assessment, flora and fauna survey, district boundary amendment, and a market study for the application, Milner said.

She reported that funding is available because the County has not encumbered or only partially encumbered the following projects before June 30, 2024. Those are:

• Kuikahi Village workforce housing ($6 million). (The County reported previously that the project has not moved forward as planned.)
• Feasibility analysis and planning for development of affordable housing on a County-owned parcel in Waikapū ($1 million).
• Master plan and feasibility study for 5th Street in Uina’i ($250,000).
• Haggai Institute ($3,935,000) ($1,565,000 was encumbered for this project)
• Hawaii Community Development Board for Hale o Pi’ikea II ($637,593)($1,512,407 was encumbered for this project)
• Administrative expenses ($70,000)

In government budgeting, “encumbered” funds are distinct from “expenditures,” or spent funds. Encumbered money has been set aside or reserved for a specific purpose, such as after the County makes a commitment by signing a contract. Encumbering funds signals an intention to spend them. Expenditures are funds that have been paid out for goods or services.

During a Budget Committee meeting Tuesday, panel members turned to Department of Housing Deputy Director Saumalu Mataafa after 11:30 a.m. for answers about the unspent money from the Affordable Housing Fund.

Mataafa said he would be doing interviews for the department’s housing community development administrators at noon Tuesday and would need to leave the meeting no later than 11:45 a.m. “I’m more than willing to come back at another committee meeting to answer those questions,” he said.

He said the job interview he would be conducting is for “one of our key positions in the department.” Mataafa said he could explain the unspent funds right away, but would likely not be available for follow-up questions because he had a “really tight” timeframe to get to the interview.

Council Chair Alice Lee said: “You know what? We have a really tight deadline for our budget, too. So I’d hate to use up a whole other meeting for something like this, which probably has, you know, an explanation that would be suitable to us.”

Later, she asked if the Housing Department has the authority to lapse or cancel the Council’s budget allocations, which were specific and spelled out.

“My feeling is that once we designate a certain recipient or grantee to receive affordable housing funds it shouldn’t change unless the Council changes it,” Lee said.

Budget Committee Chair Yuki Lei Sugimura said the committee could get its answers in writing from the department.

Later, on agenda item beginning discussions about the planning for the upcoming fiscal 2026 budget deliberations, Sugimura told committee members that the calendar that went out would need to be revised because county department directors were not available to come before the panel.

“We just found out yesterday,” she said. “And I think we had asked, like January, if we could find out, you know, but we had to redo the calendar just to accommodate for those changes in the administration’s calendar.”