Honolulu Council eyes $27M for city worker hazard pay

The Honolulu City Council plans to earmark $27 million in federal funds to repay eligible, unionized city workers employed during the COVID-19 pandemic.

In recent years Hawaii’s government worker unions, including the Hawaii Government Employees Association, United Public Workers and the State of Hawaii Organization of Police Officers, have pressured the state and its four major counties to pay back their respective memberships for pandemic- era work.

Under Resolution 119 the Council, via a formal request by Mayor Rick Blangiardi’s administration, seeks to reprogram remaining American Rescue Plan Act State and Local Fiscal Recovery funds toward that unpaid hazard pay.

The city’s ARPA money includes at least two portions — or tranches — of remaining funds, amounting to $80 million, according to city Managing Director Mike Formby.

In an April 18 letter to Council Chair Tommy Waters, Formby said the “administration respectfully requested the Council reallocate $7 million in Tranche 2 funds to the city’s Rental and Utility Relief Program to assist eligible households with rent payments, rent arrears, utility payments, and utility arrears.”

“Via this letter, I am requesting the Council consider reallocating $20 million to further reduce the other post employment benefits (OPEB) provisional and increase the hazard pay provisional, both of which require a Council amendment to Bill 12 (2024) … relating to the executive operating budget and program for the fiscal year July 1, 2024 to June 30, 2025,” Formby wrote.

“U.S. Treasury guidelines allow the city to claim revenue replacement for revenue lost during COVID-19 and the total loss incurred by the City, as calculated by the Department of Budget and Finance in accordance with U.S. Treasury guidelines, vastly exceeds the number contemplated by this proposed reallocation of $20 million, in addition to the $80,000,000 previously reallocated to OPEB,” Formby wrote.

During the Council’s Committee on Planning and the Economy on Thursday, Vice Chair Esther Kia‘aina offered her committee draft of Resolution 119, which plans to draw $7 million from the city’s rent relief program and $20 million from funding dedicated toward affordable housing projects.

She said the $27 million will be “used as advance payment to the city’s other post-employment benefit activity to, among other things, support hazard pay” for eligible essential workers.

“While the rental and utility relief program was a hugely successful program aimed at providing financial support to households at risk of becoming homeless during the COVID-19 pandemic, when the Council last supported reprogramming ARPA moneys for this purpose, it was anticipated to be the final one,” Kia‘aina said. “With the program wrapping up as the COVID- 19 crisis ended, one of the city’s key priorities right now is ensuring we’re able to find sufficient funds to compensate our staff for hazard pay.”

At the meeting, Formby said the city was in support of Resolution 119 and accompanying drafts.

Later, Council member Calvin Say called for the item to be conducted in a nonpublic executive session for details over negotiations with city labor unions.

Formby agreed, noting, “Because we’re still in arbitration with SHOPO and UPW.”

Following that executive session, Kia‘aina’s draft of Resolution 119 was approved for full Council review.

In April, arbitration proceedings on “temporary hazard pay” — compensation to employees who are temporarily exposed to unusually hazardous working conditions — concluded between the City and County of Honolulu and UPW, which represents about 2,300 city employees, according to UPW spokesperson Maleko McDonnell.

“It’s basically the blue- collar workers for the county,” he told the Honolulu Star-Advertiser. “These are the guys that make the city run so that everybody can enjoy it.”

He noted that during the pandemic emergency then-Gov. David Ige “suspended” Chapter 89 — a Hawaii law that protects collective bargaining rights for state and county employees.

“Our workers are guaranteed hazard pay under their collective bargaining agreements,” McDonnell said, adding the union’s existing contract was never fulfilled. “That was something that was secured to them before anybody knew that a pandemic would happen.”

Since the pandemic emergency has subsided, he said, “we’re going back to the employer and saying, ‘OK, now it’s time to recognize the work that they did, to recognize the hazard they faced, to honor the contract that is still in place … and now it’s time to make them whole.’”

UPW seeks a 25% pay differential based on individual workers’ minimum pay grades, he said.

“It’s 25% of their pay, and they get that on top of their (base) pay,” he said. “And the way that works is it would get added into their compensation for the work performed while they were at risk.”

UPW awaits a decision from a third-party arbitrator to resolve the issue toward a possible settlement. “Barring unforeseen circumstances, we expect a decision to happen very soon, like sometime this summer,” he added.

After the meeting, Scott Humber, the mayor’s communications director, clarified that “the city and county is not using ARPA funds for hazard pay.”

“The funds are being reallocated from other ARPA projects to prepayment of (other post-employment benefit) expenses under the U.S. Treasury’s revenue reduction provision, not hazard pay,” Humber told the Star-Advertiser via email.

He added that “the city does not currently have an appropriation for hazard pay and has not negotiated the terms of a payout as of this date.”

Humber said the city will determine hazard payment amounts per employee “by arbitration and/or negotiation, neither of which have been completed as of this date.”

Moreover, he noted the city is required to file regular compliance and data reports with the U.S. Treasury.

“There has been no federal audit to date,” Humber said, but added that “the City Auditor is currently auditing the city’s ARPA program.”

According to the U.S. Department of Treasury, ARPA funds must be obligated for new, eligible uses by Dec. 31. Jurisdictions have until Dec. 31, 2026, to fully use those funds — money meant for costs incurred after March 3, 2021.