City Council dispute puts hold on grants to nonprofit groups

Millions of dollars in city funding for nonprofits is in limbo due to squabbling between Mayor Kirk Caldwell and some City Council members over the release of Grants in Aid funds.

The money includes $5.1 million that was approved by taxpayers in a 2012 City Charter amendment, and $8 million that council members earmarked for their districts. After a lengthy debate Wednesday, the Council budget committee approved a list of 41 Oahu nonprofits that were chosen in August by the Grants in Aid Advisory Commission.

The GIA fund, established by voters in 2012, requires that half of 1 percent of city revenues be distributed to nonprofits and that an advisory commission be established to help the Council choose which groups receive funding. However, an existing budget ordinance proviso gives the Council the right to amend recommendations, and it appears that Council Chairman Ernie Martin will be exercising that prerogative at the Oct. 9 meeting.

This latest clash, which comes on the heels of an earlier firestorm over the city’s nonprofit funding, could mean more uncertainty for a host of Oahu nonprofits, which depend on grant money to serve the community.

Earlier this year, the City Council approved $8 million in nonprofit funding as part of its fiscal year 2014 budget. But Caldwell refused to sign the budget, citing concerns that the earmarks weren’t properly vetted and were too costly.

Pamela Witty-Oakland, director of the city Department of Community Services, informed Council grant recipients in late May not to count on the money and instead encouraged them to apply for funding from the GIA fund.

"The members put in money for what was needed in their districts and that money won’t be released; yet, the (Mayor’s Office of Culture and Arts and the Office of Economic Development) gives money," said Councilwoman Ann Kobayashi. "It doesn’t seem fair that the city administration will release money (for these programs), but not for things like Weed and Seed, Hawaii Theatre and Adult Friends for Youth."

The power struggle between Caldwell and councilmembers already had left funding in limbo for the agencies Kobayashi cited, as well as others that were part of the city’s fiscal year 2014 budget, including the Hauula Community Association, Hono­lulu Community Police Foundation, Hawaii Meals on Wheels, Honolulu Family Justice Center, and Farrington, Campbell, Kapolei and Leilehua high schools.

Now, Martin said he’s likely to propose adding more groups to the GIA pot and giving less money to some on the commission’s list. Kobayashi, who with Councilmen Ron Menor and Ikaika Anderson was critical of the commission’s picks, said she would support Martin’s move.

She and several council­members said the commission unfairly favored larger organizations and included few agencies dealing with arts and culture.

While it looks like some of the agencies on the GIA list will have to fight to keep their funds, Councilman Breene Harimoto said Friday he wouldn’t support veering from commission recommendations.

"I’ve always said that we have a process established and that we need to abide by it, despite the fact that my district came out last," Harimoto said. "You can’t fairly amend the list because no matter where you draw the line, you’ll have people that didn’t make the cut."

Maile Kanemaru, executive director of Weed and Seed, said her agency is hopeful Martin’s proposal will succeed. The nonprofit lost $400,000 in Council earmarks over the budget stalemate and its proposal to secure $200,000 from the commission was unsuccessful.

"We had been looking at expanding our programs," said Kanemaru, who presented the Council budget committee with a 1,500-signature petition advocating support for Weed and Seed. "If we don’t get any city money, we’ll definitely have to cut back. It would truly bring us to dire straits."

Some of the other 92 agencies that did not secure commission recommendations also are likely to lobby the Council for a second chance at the pot. However, other nonprofits, who were informed of their GIA selection in August, fear that a reduction may hurt their plans.

Kelly Joseph, chief marketing and development officer for Waikiki Health, said the nonprofit is eagerly awaiting its $300,000 award, which will assist in creating a new medical and dental clinic targeting the medically underserved, uninsured and homeless.

"This expansion is timely as the demand for our services will continue to increase, as both our existing clients and a host of new ones will gain access to insurance through the Hawaii Health Connector," Joseph said. "In addition, this project will create many new jobs in our community and we have already employed members from our homeless shelter to provide maintenance and janitorial services."

Since many funding sources are contingent on others, Joseph said timely appropriation of the GIA fund is crucial.

Waikiki Community Center, which the commission recommended receive $75,000, also is counting on the money for its senior program, which serves more than 15,000 people a year, said Executive Director Caroline Hayashi. She said the group has other sources of funding besides the city, but those sources have been cut by 50 percent.

Witty-Oakland said the administration urges the Council to "respect the integrity of the process and hard work of the commission and do what is necessary to ensure the success of these worthy programs." While it’s the Council’s prerogative to fund the grants and determine the exact amounts, Witty-Oakland said if funding levels are changed, recipients will need to make up lost funding or decrease program objectives.

"Those programs that needed to fund salaries of key employees may lose such staffing altogether," she said. "If changes are made, we hope the Council will work with the grant awardees to ensure they are able to meet their goals."

Martin said part of his proposal would include a provision in fiscal year 2015 to make whole those nonprofits whose recommended GIA funds were held back.

"It would not really be a reduction in funding, it would be more of a postponement," he said.

His proposal aims to help nonprofits that were denied funding by Caldwell or weren’t selected by the commission to continue. He also said he would continue to seek funding for groups that serve disadvantaged populations.

However, Caldwell stated repeatedly during the budget process that he would not release funds for earmarked grants, and has maintained that position. His administration and other proponents, including Harimoto, say his cautionary stance is fiscally responsible given the budget shortfall.

Harimoto, who was the only councilmember to vote against the $8 million in earmarks, said he’ll work with nonprofits in his district to ensure that next time they secure more than the $281,000 that they did during this inaugural GIA process.

But Kobayashi still is looking for a way to fund more nonprofits this year.

"Life is about more than simply fixing potholes," she said. "We are concerned about how sequestration and other cutbacks have affected (nonprofits). Some may be able to survive until next year, but some may not."