Posted on: Friday, October 1, 2004
OHA developing plan to spend $9.5M
By Vicki Viotti
Advertiser Staff Writer
Office of Hawaiian Affairs trustees will decide in the next few weeks how to spend nearly $9.5 million in trust funds for the next year. The money is available because of a recent change in their spending policy.
A preliminary plan proposes that most of the windfall, nearly $5.8 million, be set aside for additional initiatives for Hawaiians, including $4.2 million for unspecified program grants.
The move, said trustee Oswald "Oz" Stender, is to place a little more emphasis on serving the current Hawaiian population and a little less on socking away money for future generations.
The board of trustees on Sept. 15 approved a new policy governing how much can be spent from the Native Hawaiian Trust Fund that it manages. In the past, the operating budget has been set by averaging the value of the trust fund over three years and then withdrawing 5 percent of that average, said Jim Sharp, OHA chief financial officer.
Unused money from previous years can be rolled over into the spending budget, too, he said.
The change in policy allows the board to add a new source of spending money: revenue from ceded lands, which are the former crown and government lands under the Hawaiian kingdom that ultimately came under control of the state. OHA receives 20 percent of the revenues from ceded lands and, under the old spending policy, that revenue was reinvested in the trust fund, Sharp said.
The trust fund was worth about $323 million as of mid-August, according to an essay by Trustee Rowena Akana published in the OHA newspaper.
The board has decided the trust fund can be sustained by reinvesting the money it gains in financial markets, said Stender, who chairs the board's committee on asset and resource management. Now, ceded lands money will be used for programs aimed at improving the lives of today's Hawaiians, he said.
"You need to balance the needs of current beneficiaries and future beneficiaries," Stender said. "Up to now we haven't paid enough attention to the current beneficiaries."
Not everyone feels comfortable with this decision. Akana, in her essay, suggested that this policy leaves the trust fund vulnerable to market forces.
"Let's pray there isn't another crash in the stock market," she wrote. "(OHA) lost about $100 million when the Internet stock 'bubble' burst a few years ago."
The OHA committee reviewed the spending proposal on Wednesday but decided to postpone a decision until examining the items in detail at a workshop in about two weeks. The final OHA meeting before the general election is set for Oct. 21, and Stender said he wants the spending mapped out by the current board.
Under the proposal, about $3.3 million would be spent on OHA operations that are already budgeted but likely to cost more than expected. The biggest item is legal costs, including fees for a dispute over state payments of ceded land revenues and the campaign for federal recognition legislation in Congress.
More than $326,000 is set aside for new personnel. In addition, the new initiatives include $750,000 to assist with building the Punana Leo O Maui Hawaiian language preschool and family resource center.
Reach Vicki Viotti at vviotti@honoluluadvertiser.com or 525-8053.
