Private organizations will get city funds because of new ordinance

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Honolulu City Hall – Photo by Mel Ah Ching

BY NATALIE IWASA – Earlier this year, the Honolulu City Council put into place an ordinance and policies to implement the new grants-in-aid (GIA) charter amendment that was passed by voters in 2012.

That amendment requires the city spend at least 0.5% of its annual general fund on the GIA program.  Approximately $5.2 million was put into the budget for this year to cover this mandate.


Tomorrow councilmembers will vote on a resolution, #13-173, that lists the organizations that will receive a piece of the pie under this program.  They will also consider a floor draft amendment, FD1.

The amendment is not a surprise, as during the September 25 Budget Committee meeting, Chair Ernie Martin indicated he wanted to see more nonprofits receive funding and would therefore introduce an amendment which would reduce funding for awardees.  Minutes of the meeting are not yet out, but my recollection is that he mentioned a 3% to 5% cut.

The proposed FD1, however, reduces funding for each project by a whopping 25%.  Most organizations can live with a small cut in funding.  A 25% cut, however, raises serious questions.

Will some organizations simply decline the award given the significant cut?  Of those that accept funding, will they be given an opportunity to amend their proposals?  The contract terms require that the organization show evidence that its projected results were achieved.

If contract terms are not met, will the organizations lose the city funding entirely?   And what about future GIA applications?  Will organizations pad their budgets, in anticipation of having reduced awards?

Perhaps most troubling about the FD1 is that a councilmember is on the board of an organization that would now receive two grants under the program.  At the very least, this raises questions of conflict of interest.

The GIA Commission worked very hard to review and evaluate the applications it received and came up with the recommendations in Resolution 13-173.  Those recommendations allowed for the selected organizations to receive full funding they requested.

Even though allowed by law, councilmembers should not be tampering with the selections, especially when questions of conflict of interest are apparent.  In addition, the law should be revised so that councilmembers approve the awardees, not select them.


Natalie Iwasa is a CPA and a candidate for Honolulu City Council