City Council to review $5M toward potential hazard pay

COURTESY PHOTOS /STAR-ADVERTISER (L-R ) Simeon R. Acoba Jr, Mike Formby, Tommy Waters.

COURTESY PHOTOS /STAR-ADVERTISER (L-R ) Simeon R. Acoba Jr, Mike Formby, Tommy Waters.

A city-initiated resolution that urges the Honolulu City Council to reprogram about $5 million in federal COVID-19 pandemic funds for “revenue replacement ” is under review this week.

The Council’s Budget Committee today is expected to scrutinize Res ­olution 235, which seeks to put reprogrammed American Rescue Plan Act of 2021, State and Local Fiscal Recovery funds toward the city’s other post-employment benefit, or OPEB, activity.

In a Sept. 17 letter to Council Chair Tommy Waters, city Managing Director Mike Formby wrote on behalf of the city that roughly $5 million was “in support of revenue replacement to further advance payments to the city’s (OPEB ) activity.”

“As the Dec. 31, 2024 deadline to encumber SLFRF monies approaches, the departments are finalizing their obligations on various pre-approved projects, and have or are actively preparing to return any unobligated funds, ” Formby wrote. “The city currently anticipates approximately $5, 000, 000 in unobligated funds from the various pre-approved projects.”

“The exact amount will not be determined until December 2024 ; therefore, we are seeking Council’s approval to reprogram these funds to the city’s OPEB activity, ” Formby wrote. “This will ensure that the city is able to fully utilize these funds, consistent with U.S. Treasury rules and established city policies, when the projects are closed out and the remaining funds become available.”

According to the U.S. Treasury Department, 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.

On Sept. 18, Waters introduced Resolution 235, which says that “to date, $115 million in ARPA funds have been reprogrammed for this purpose and there are currently no additional sources of funding available.”

According to the state’s SLFRF 2022 recovery report, those funds, in part, were to “provide premium pay for essential workers, offering additional support to those who have and will bear the greatest health risks because of their serv ­ice in critical sectors.”

Meanwhile, Honolulu Council and city officials have for months pledged to repay eligible, unionized city workers employed during the pandemic “temporary hazard pay ”—compensation to employees who were temporarily exposed to unusually hazardous working conditions—in order to avoid legal entanglements.

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

Earlier this year UPW Local 646—among other city unions—worked to gain COVID-19-related hazard pay from the city for its membership.

UPW did so through arbitration.

On July 30, arbitrator and former Hawaii Supreme Court Justice Simeon R. Acoba Jr. issued a decision on UPW’s hazard pay grievance against the city.

According to UPW documents filed Aug. 17 with the 1st Circuit Court, “UPW brought a class grievance on behalf of UPW members in Bargaining Units 1 and 10 against the Employer City and County of Honolulu for denial of temporary hazard pay during the COVID-19 pandemic.”

“The stipulated grievance period was from March 5, 2020 to March 5, 2022, ” UPW’s court filings state.

In arbitrating the case, Acoba ordered that “the employees so identified are awarded (temporary hazard pay ) for exposure to unusually hazardous conditions that might cause incapacitation, considered as ‘severe’ under hazard pay differentials.”

According to UPW filings, the award is for a hazard pay differential of 15 % for the period March 5, 2020, to March 5, 2022.

“Individual employee payments shall be adjusted for changes in working conditions and employee duties during the (grievance period ), ” the filings state. “The UPW and the city shall act in cooperation and consultation with each other in administering the individual employee payments.”

But the mayor’s office claims that no payments to UPW or any other city union have occurred.

“With regard to the UPW hazard pay grievance, the city is still calculating the amounts due to UPW employees and has to consult with the union, ” Ian Scheuring, the mayor’s deputy communications director, told the Honolulu Star-Advertiser. “Any hazard pay that will be paid to city employees who are UPW members will be consistent with the arbitrator’s decision and award.”

He said that “the city remains in negotiations with other labor unions on hazard pay.”

Scheuring noted the $5 million comes from “unobligated funds ” from pre-approved projects.

“Some of the projects were initially approved for one amount, but actual expenses ended up being less than the budgeted amount, ” he said.

The city has used ARPA money to fund “139 discrete projects ” throughout the organization, he added.

“Currently, there is approximately $8 million in unobligated ARPA funds, ” he said. “We anticipate roughly $3 million of these funds to be applied to (city Department of Planning and Permitting ) modernization efforts, (and ) two critical assessment programs to be undertaken by (the city Department of Parks and Recreation ), ” among other projects.

UPW had little comment on the arbitrator’s decision.

“We’re still in discussions with the city on the payment, and we hope to have a more accurate timeline on the payment schedule by the end of this month, so by the end of September, ” the UPW told the Star-Advertiser.

In April, arbitration proceedings on “temporary hazard pay ” concluded between the city and UPW, which represents about 2, 300 largely blue-collar city employees, according to UPW spokesperson Maleko McDonnell.

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 told the Star-Advertiser previously, adding that the union’s existing contract was never fulfilled. “That was something that was secured to them before anybody knew that a pandemic would happen.”

At the time, UPW sought a 25 % pay differential based on individual workers’ minimum pay grades, according to McDonnell.

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

Still, Scott Humber, the mayor’s communications director, previously told the Star-Advertiser that “the city and county is not using ARPA funds for hazard pay.”

“The funds are being re ­allocated 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 clarified.

Meanwhile, the Office of the City Auditor is working to complete its review of the city’s overall use of ARPA funding.

Troy Shimasaki, acting city auditor, told the Star-Advertiser his office plans to publicly release its findings “either by late February or early March.”

The Budget Committee meeting begins at 9 a.m. inside City Council chambers.