The City and County of Honolulu will likely tap about $5 million in federal COVID-19 money to help pay the estimated tens of millions of dollars in temporary hazard pay to city workers employed during the pandemic.
That action comes as United Public Workers in Kauai County voted last week to accept 15% of their base hourly pay for all the hours worked during the pandemic’s first two years.
On Oahu the City Council recently voted to adopt a city-initiated resolution that 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.
Resolution 235 urges the Council to reprogram approximately $5 million for “revenue replacement” and “to further advance payments to the city’s OPEB activity,” according to a Sept. 17 city memorandum.
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 expend those funds — money meant for costs incurred after March 3, 2021.
“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,” city Managing Director Mike Formby wrote in the memo to the Council. “The city currently anticipates approximately $5,000,000 in unobligated funds from the various pre-approved projects.”
Resolution 235 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.”
The Council’s Oct. 9 vote on this resolution was conducted without comment.
Still, the vote comes after the Council and city officials have for months pledged to repay eligible, unionized city workers employed during the pandemic “temporary hazard pay” in order to avoid legal entanglements.
Hawaii’s government worker unions, including the Hawaii Government Employees Association, UPW and the State of Hawaii Organization of Police Officers, pressured the state and its four major counties to pay back their respective memberships for 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 via 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, 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.”
Originally, UPW sought a 25% pay differential based on individual workers’ minimum pay grades, according to UPW spokesperson Maleko McDonnell.
According to Formby, the city is “working with UPW” on this two-year hazard pay period.
He estimated hazard pay amounts of about $28 million to $30 million.
“If we include the Board of Water Supply, I think it goes up to about $32 million,” Formby told the Council’s Budget Committee on Sept. 24. “And so once we make those payouts, then we know what’s left out of the $115 million, and then we’re negotiating with SHOPO and HGEA.”
He said, “We’re proposing to SHOPO and HGEA is that payments not be 100% cash.”
“So what we’re negotiating is that a portion, perhaps 80% of their hazard pay, (will) be by cash and 20% be by comp time,” Formby said.
He said compensatory time off — which typically offers employees paid time off in exchange for working extra hours — “goes on their account, and they can take that over their life in the city.”
Formby said, “For us it distributes that cash obligation over time versus having to make that payment next year, because we don’t want to go into next year’s budget with a $40 (million) or $50 million deficit.”
Hazard pay negotiations regarding UPW “will probably be concluded within the next month and a half to two months,” he added.
Formby said the city will know by early March — around the time the administration submits 2025’s city budget for the Council’s review — “what money is not available this fiscal year.”
Settlements could also be reached soon as well.
“We’re looking at a negotiated settlement with SHOPO, and the same is true of HGEA,” Formby told the Council. “HGEA has not filed arbitration against the city yet, and we’re negotiating with HGEA, and the goal is to come to an agreement so we can have those funds allocated by March of 2025 as well.”
Meanwhile, the Kauai County UPW’s Oct. 11 ratification vote to accept its temporary hazard pay offer affects that county’s nearly 400 UPW, AFSCME, Local 646, AFL-CIO members.
