A $250,000 severance check was delivered to Honolulu Police Chief Louis Kealoha and his attorneys sometime in the last week, as stipulated in Kealoha’s retirement agreement with the Police Commission, Commission Chairman Max Sword told the Honolulu Star-Advertiser on Thursday.

The money came from the Honolulu Police Department’s payroll budget, Max Sword said. The Jan. 18 agreement stipulated that the payment was to be made within 15 days, which would have been Thursday. Sword said he believes “the check was cut” Jan. 27 but added he did not know when it was delivered to the downtown office of Kevin Sumida, one of Kealoha’s attorneys.

The payment was not mentioned during a commission meeting Wednesday, although HPD Acting Chief Cary Okimoto and Deputy Chief William Axt raised concerns that the money is being taken from funding sources already dedicated to department operations.

The two men said they thought the City Council needed to approve the budget transfer, and added that they were considering asking the Council to reimburse the lost funds.

In response to their concerns, Sword said the commission’s authority to make expenditures tied to any settlement involving the police chief derives from the fact that it’s the commission’s duty to hire and fire the chief.

“Based on the Honolulu Police Commission’s sole authority to hire, fire and discipline the chief, the salary of the chief, including other benefits and the retirement provision, would necessarily come out of the Police Department’s budget,” Sword reiterated Thursday to the Star-Advertiser.

Sword noted that the Police Commission staff and associated costs are also paid out of the HPD budget. “The commission is therefore part of the Honolulu Police Department,” he said.

No language in either the Honolulu City Charter or the Revised Ordinances of Honolulu specifically authorizes the commission to allocate HPD money, but, as Sword noted, funding for commission staff and administrative expenses is attached to the HPD budget. The chief’s salary, however, is determined annually by the Honolulu Charter Commission, as is the pay for all other city department heads.

City Councilman Ernie Martin, who previously had opposed the payout to Kealoha, criticized the way the seven-member Police Commission handled the situation.

“The commission should fully disclose the source of funds and the authority that was exercised to comply with the $250,000 severance,” Martin said. “From the inception with its premature ‘retirement’ announcement to the details it agreed to in the separation/severance agreement, the commission has engaged in a ‘smoke and mirrors’ process that led to loss of public confidence. It is critical that the commission be forthright, transparent and accountable for its actions, especially as we move towards the selection of a new chief to lead the Honolulu Police Department.”

Earlier Thursday, prior to learning that the payment had been made, Martin wrote a letter to Okimoto urging him to deny the payment if he felt strongly against making it.

Okimoto declined to comment Thursday. He and other HPD officials said earlier in the week that department personnel had not processed any payments tied to the settlement.

Neither Sumida nor Myles Breiner, another Kealoha attorney, returned calls Thursday.

City Council Chairman Ron Menor said he understands Martin’s frustration, as many constituents have voiced similar objections. Menor said he also appreciates the concerns Okimoto and other HPD leaders have raised.

“However, my analysis of the city budget indicates that there are millions of dollars in unspent funds that lapse every year in the HPD budget, meaning that the department has ample cushion in its budget to cover essential law enforcement programs, services and the severance agreement,” Menor said.

If HPD needs additional funding, it should make a request during annual budget sessions, he said. Those sessions begin next month.

Kealoha placed himself on paid leave Dec. 20 after the FBI sent him a letter informing him that he is the target of a criminal investigation. Kealoha had said for months that he would not step down because he had done nothing wrong.

Okimoto, one of Kealoha’s deputies, has been acting chief since.