The Honolulu Police Department will ask the City Council to approve a $250,000 payment to outgoing Police Chief Louis Kealoha as well as reimbursement of those funds, HPD brass told the Police Commission on Wednesday.

The retirement agreement struck by the seven-member commission and the chief’s attorneys calls for Kealoha to be paid $250,000 in severance and fees. Commission Chairman Max Sword said that money is to be paid out of HPD’s salaries and wages account but Acting Police Chief Cary Okimoto has made it clear that while he is taking no position on the agreement itself, he’s bothered that the severance is to come out of HPD’s coffers.

Okimoto reiterated those comments at Wednesday’s commission meeting when asked by commission member Loretta Sheehan if he believes the panel has the authority to use HPD money.

“I don’t know what kind of legal action I could really take,” Okimoto said. “Our budget is really tight and we can’t afford to use that money to pay any severance. … It’s already spoken for as far as salaries and equipment.”

City ordinances require him to seek Council approval whenever he uses more than $100,000 for a purpose other than originally designated, Okimoto said, so he intends to seek that approval.

Acting Deputy Chief William Axt said any agreement that’s been reached is between the commission and Kealoha. “We’re not saying you shouldn’t have reached the agreement,” Axt said. “All we’re saying is that we are bound by … procurement rules and the Revised Ordinances (of Honolulu) dictates how we can move money around and what we can use money for.”

The agreement calls for Kealoha to be paid within 15 days of signing the document that’s dated Jan. 18. HPD officials on Wednesday said no police personnel had processed any such payment.

“We’re already projecting a shortfall” for the account from which the money is to come, Axt told the commission. “So there’s going to be not enough money to pay (the severance). So yes, we will have to go to Council, and yes, we will have to ask permission to add money to that account, whether that comes from current expense by cutting something … and we don’t know what that is. … Do we stop testing some sex assault kits? Do we stop buying some Tasers or body cameras? We don’t know what that is. We’ll get to that point once we reach it.”

Commission Chairman Max Sword said he respects the concerns raised by Okimoto. “But we as a commission are responsible for the chief and hence the direction that we moved in in coming to a settlement,” Sword added.

Sword previously had said the commission did not need Council approval of the settlement.

While there is nothing in either the City Charter or the Revised Ordinances that specifically authorizes the commission to spend HPD money, Sword told the Honolulu Star-Advertiser on Tuesday that he believes it is OK to do so because it is part of the commission’s duty in removing the chief.

Also Wednesday, the commission was told by Dan Lawrence, its executive officer, that it likely would take six months to replace Kealoha.

Sword told his colleagues that he wants them to think about whether the commission forms its own subcommittee, formally known as a permitted interaction group, to process the applicants, or to bring in a separate group of volunteers to form a selection committee to sift through them.

In 2004, the commission formed a subcommittee among its own members, while in 2009 it tapped a separate group of community leaders to come up with a finalist list.

Commission member Steven Levinson said he’s inclined to have the commission itself be involved from the beginning.

Sword said he expects a final decision on which process to use would be made at the commission’s Feb. 15 meeting. “The appointment of the chief is probably our most important duty,” he said.

In either scenario, a consultant would be hired to assist, and the commission voted to direct Lawrence to begin the steps to hiring a consultant.