Recently, the OHA Board of Trustees approved a budget to spend nearly $93 million over the next two years. Although I have some serious concerns over this budget, I voted to approve it in order to Kū Kanaka (stand tall) for our beneficiaries who are in urgent need of housing, jobs, education, and health care. The approved budget will empower OHA and many community organizations to serve the needs of the Hawaiian people. When George Kanahele wrote his important treatise, Kū Kanaka, he described the values I am confident the new OHA budget will help empower for Hawaiians: Aloha, sharing, cooperation, and stewardship. That is good!
At the same time, I found it necessary to Kū Kanaka specifically for stewardship. Trustees are charged with a solemn kuleana to protect, build and properly use the vast financial resources of the Native Hawaiian Trust Fund. When these resources are stewarded well, OHA’s beneficiaries and all people of Hawaiʻi thrive.
When I was elected an OHA Trustee-at-Large, I produced and submitted to the Board a report entitled “Crucial Recommendations for Achieving Fiscal Sustainability.” Based on rigorous research by my staff, this report made recommendations to assist OHA in its implementation of a fiscal sustainability plan. Recently, when I cast my vote to approve the budget, I again made these recommendations to the Board, urging that they be incorporated into future budgets. I am even more confident now that these recommendations are essential to protect and grow the finances of OHA in order to meet the needs of future generations of beneficiaries. Here is a summary of the crucial recommendations:
1. Change OHA’s Current Spending Policy
The current Spending Policy allows for 5 percent annual withdrawals and an additional $3 million of Fiscal Reserve Authorizations from the Native Hawaiian Trust Fund (NHTF). To preserve the intergenerational equity of the NHTF, the annual Fiscal Reserve Authorizations should be eliminated and the Spending Policy should be reduced to a sustainable annual withdrawal rate of 4.5 percent.
Moreover, to offset a reduction in spending, OHA needs to increase revenues by at least $4.8 million. The current efforts towards the revival of OHA’s “fair share” of Public Land Trust Revenues along with the best strategic decision regarding Kakaʻako Makai could potentially raise the additional revenues needed to implement the reduced Spending Policy in the long run.
2. Adopt a Planning, Programming and Budgeting System (PPBS)
In contrast to OHA’s current budgeting process, a Planning, Programming and Budgeting System provides a detailed cost and performance accounting of every program. This detailed level of transparency, which is a best practice of other agencies, is needed for the Board of Trustees to fulfill its fiduciary duties. In addition, a PPBS also promotes accountability within the organization.
3. Reinstate the Budget and Finance Committee
The inclusion of both budgetary matters and real estate portfolio management makes the oversight responsibilities of the Committee on Resource Management overly broad. An additional layer of oversight is needed to watch our budget and to develop and implement a Fiscal Sustainability Plan. This responsibility is more suitable for a separate standing committee with a narrow, specific focus on budget and fiscal matters.
OHA is doing good work for its beneficiaries and can do much more good work with fiscal sustainability. Let’s all join together to Kū Kanaka and build a strong OHA for a strong people
Note: Trustee columns represent the views of individual trustees and may not reflect the official positions adopted by the Office of Hawaiian Affairs Board of Trustees.