The letter from the City and County of Honolulu Managing Director responds to the U.S. Department of Housing and Urban Development's proposal to resolve findings from an audit of the City's Community Development Block Grant program. It acknowledges HUD's willingness to work with the City and ORIAH to ensure future compliance, and agrees the proposal could lead to a beneficial resolution. However, the City has not yet reached an agreement with ORIAH and needs more time to obtain their agreement before confirming repayment terms. The City pledges to continue working diligently with ORIAH towards an acceptable agreement.

1. OFFICE OF THE MAYOR
CITY AND COUNTY OF HONOLULU
530 SOUTH KING STREET. ROOM 300 * HONCLUtU, hAWAII 96813
PHONE: I808i 768-4141 * FAX: 1808) 768-4242 • NTERAET: wwvshonoiulu9pv
KIRK CALDWELL
MAYOR
EMBER LEE SHINN
MANAGING D)REOTOR
GEORGETTE T. DEEMER
DEPUTY MANAGING DIRECTOR
October 18, 2013
VIA HAND DELIVERY AND EMAIL
Mr. Mark A. Chandler, Director
U. S. Department of Housing and Urban Development
Honolulu Field Office Region IX
1132 Bishop Street, Suite 1400
Honolulu, Hawaii 96813-4918
—
Dear Mr. Chandler
SUBJECT:
On-Site Program Monitoring
Community Development Block Grant (CDBG) Program
April 11-25, 2011 and May2013 and September 27, 2013 Follow-ups
This responds to your September 27, 2013, letter addressed to Mayor Kirk CaIdwell,
regarding the City’s proposals to resolve open monitoring findings and concerns relating to the
Community Development Block Grant (“CDBG”) program of the City and County of Honolulu (the
“City”) and the City’s oversight of ORI Anuenue Hale, Inc. (“ORIAH”) and ORIAH’s Aloha
Gardens Project.
Your letter asked that the City respond in writing regarding HUD’s proposed repayment
date for the amounts of $2,883,426 to resolve Findings No. 1 through 4, and $26,000 to resolve
Finding No. 5.
First, I would like to express appreciation on behalf of the City of your willingness to
consider our responses and proposals. We are especially appreciative of your proposal to work
with the City and ORIAH to ensure CDBG program compliance on the Wellness Center and the
Access LotiParking, while offering a way for the City and ORIAH to develop their own solution for
Camp Pineapple.
In order to achieve the foregoing, you have proposed a reimbursement figure of
$2,883,426 in non4ederal funds to the City’s CDBG account. While this amount is significantly
higher than what the City had proposed in its July 18, 2013 letter, we are cognizant of the
corresponding increase in your proposal regarding the acreage of land from which CDBG
restrictions would be removed. Based on recent discussions that we have had with counsel for
ORIAH, we believe that this consideration significantly enhances the prospects for a resolution

2. Mr. Mark A. Chandler
October 18, 2013
Page 2
with ORIAH. We strongly believe that such a resolution would be beneficial not only to ORIAH,
the City and HUD, but more importantly, it would be in the best interests of the taxpayers and the
citizens of Honolulu.
While the City finds your proposals to be reasonable, the City has not yet reached the
point in our negotiations with ORIAH to be able to confirm to you that the resolution along the
lines you propose is achievable. Since subdivision of the property and removal of the Camp
Pineapple component requires the cooperation of ORIAH, it is essential that the City first obtain
ORIAH’s definitive agreement. Deputies in the Department of the Corporation Counsel met with
counsel for ORIAH just yesterday, the results of which were promising. Significantly, ORIAH
Counsel acknowledged that any resolution would entail a new written commitment from his client
to comply with CDBG obligations with respect to the Wellness Center for an agreed upon period.
While we regret that the City is unable to state today that both the City and ORIAH can
agree to the terms proposed in your September 27, 2013 letter, the City affirms our willingness
to pursue a resolution on these terms with HUD and ORIAH. We are optimistic that we will soon
be able to come to terms with ORIAH; if so, we could then provide you with a definitive date for
reimbursement payments.
We appreciate the patience that HUD has shown in this matter, and we continue to urge
that it is better for all concerned to fully exhaust all possibilities for an agreed-upon resolution
before proceeding to an enforcement proceeding.
The City intends to continue to work diligently with ORIAH and its counsel towards an
acceptable agreement along the lines you have proposed.
Should you have any questions or require additional information, please contact
Corporation Counsel Donna Y. L. Leong.
Very truly yours,
Ember Lee Shinn
Managing Director
cc:
Nelson Koyanagi, Jr., Director, Department of Budget and Fiscal Services
Pamela Witty-Oakland, Director, Department of Community Services
Donna Y. L. Leong, Corporation Counsel, Department of the Corporation Counsel