By Star-Bulletin Staff

Tuesday, February 10, 1998

Sour economy, budget shortfall
may cost city workers their jobs

Mayor Jeremy Harris says poor fiscal times and a $75 million budget shortfall will force him to lay off a portion of the city's 9,100-person work force.

And the situation will worsen, he said, if the state Legislature increases general excise taxes and reduces the amount of hotel room tax received by the counties.

Neither Harris nor his Cabinet members would say how many people will be laid off, nor would they divulge where the cuts will be made.

Harris said specifics will be provided when his administration releases the fiscal 1998 budget on March 1.

The mayor and Managing Director Bob Fishman made two general statements, however: Cuts will come primarily from nonservice areas that do not have direct contact with the public, and cuts will be related, in part, to a plan to overhaul the city organizational structure.

"This is the biggest fiscal crisis the city's ever faced, with an enormous drop in property values, the increase in collective bargaining and all the rest," Harris said yesterday.

Fishman said city budget workers are "finding the process to be particularly onerous because we were going into it with probably the most significant drop in property tax revenues that we've ever had."

Harris said the layoffs will be part of a major reorganization of city government. "It's going to involve coming up with a city plan with a smaller budget, few departments and fewer people."

Harris said the state Economic Revitalization Task Force plan to increase excise taxes and reduce the counties' share of hotel room taxes will cost the city about $25 million.

The impact of such a loss in revenue on the city's $1 billion budget "would be devastating," Harris said. "It would have a direct impact on closing down city services."

The city budget has shrunk, factoring in inflation, during the last five years, he said, and the city workforce has been reduced by 500 through attrition. "We've used up so much attrition, we've had decrease after decrease. There's nothing else left to cut. We've done all the creative financing, refinancing the debt ... "

Fishman said it should be stressed that the level of service has not decreased in recent years despite the shrunken budgets and won't be decreasing next year. "We believe the public is looking for greater value from its tax dollar," he said.

That will involve "cutting the cost of overhead, those functions and services that don't relate to the direct delivery of services to the public."

Isle family planning group gets heave ho

Planned Parenthood of Hawaii, which operates three clinics on Oahu, Maui and the Big Island, has lost its national affiliation.

Gloria Feldt, Planned Parenthood Federation of America president, said disaffiliation has occurred only twice in the organization's 80 years.

She said Planned Parenthood of Hawaii had failed to meet affiliation standards "after years of tireless attempts to remedy serious financial and administrative issues."

The federation board made the decision at a meeting Saturday.

Officials of the local organization couldn't be reached immediately for comment.

The federation started a three-year review process in 1995 when the Hawaii affiliate failed to meet financial and governance standards during an accreditation review.

Feldt said Planned Parenthood "is committed to serving the people of Hawaii" and will explore other avenues of providing family planning and reproductive health care services in Hawaii.

Marine unit drops plans to train at Hawaii base

A contingent of California Marines will skip a planned visit to the islands this month on its way to the Persian Gulf.

Some 2,000 Marines from the 11th Marine Expeditionary Unit based at Camp Pendleton, Calif., were supposed to train in Hawaii from Feb. 19-22 en route to a six-month deployment in the Western Pacific.

The Marines were not planning to conduct amphibious training at Makua Beach, where thousands of Leeward Oahu residents demonstrated last year. The protest led to a meeting with military officials and a shift in the landing site from Makua to Bellows Air Force Station in Waimanalo.

Training decisions during a mission are what determine whether or not to land from the water, said Lt. William Mitchell of the 11th Marine Expeditionary Unit.

"Public protest did not influence our decision," Mitchell said.

Navy accepts ruling that aviator drowned

The Navy says there will be no criminal investigation into the death of naval aviator John A. Hess, 30, because the medical examiner's officer has ruled his death an accidental drowning.

Honolulu police also said the death appears accidental and there are no signs of foul play.

Hess was found Saturday with severe head injuries, wedged between coral surrounding Mokulua Island in Windward Oahu. His rental kayak was found on a beach on the island Friday.

Cmdr. Kevin Wensing, Pacific Fleet spokesman, said Navy criminal investigators were initially called in when there was a possibility of foul play.

Fire Commission unanimous in
picking Leonardi as next chief

Honolulu will have a new fire chief this April, its fourth in just over four years.

The newly selected chief, Attilio Leonardi, and some supporters hope the appointment will put an end to the Fire Department's reputation of being among the most politically manipulated of city departments.

The five-member city Fire Commission yesterday voted unanimously to appoint Deputy Fire Chief Leonardi to the post after deliberating in closed session for less than half an hour.

Leonardi will replace Fire Chief Anthony Lopez Jr., who announced last year that he would be resigning.

Leonardi is the first chief in decades to be appointed by a commission. Previously, the mayor appointed the chief and the City Council held confirmation hearings.

Leonardi was assistant chief in charge of the Administrative Services Bureau, dealing with budgeting, capital improvements and union matters, from June 1992 to April 1995.

He was battalion chief in charge of the bureau from May 1990 to June 1992.

Leonardi said he has not thought about who will be his deputy but added that the selection would come from within department ranks. He says maintaining current fire service levels in the face of city budget cuts is his top priority.

Doctors sue dissolved insurance company

A group of 217 doctors and medical businesses who say they are owed nearly $2 million by the failed Pacific Group Medical Association has filed suit against former officers and directors of the association and an affiliated company.

The legal action comes just six weeks after a similar suit by Insurance Commissioner Rey Graulty, court-appointed liquidator of PGMA, and sets in motion a legal struggle over the disposition of any funds recovered.

Graulty, in other court proceedings, has said recovered funds must be applied fairly among all creditors of PGMA, while the doctors' claim apparently seeks to establish a priority for payment.

PGMA was seized by the state in March 1997 after it became insolvent and stopped paying claims, leaving behind an estimated $18 million in debts.

The suit, filed by Honolulu attorney Robert D. Kawamura, alleges that mismanagement and diversion of funds led to PGMA's downfall. Funds were "intentionally, negligently, wrongfully and maliciously diverted" from PGMA and Pacific Equity Growth & Management Inc., which had a contract to manage the daily affairs of the association, the suit charges.

Officers and directors of the companies failed to carry out their fiduciary duty to PGMA and its members by not exercising "utmost care" in managing PGMA or giving the association "undivided, unselfish, and unqualified loyalty."

The suit asks for triple damages for unfair and deceptive trade practices, because PGMA continued to sell insurance after it had become insolvent and its officers knew they could not provide the promised coverage.

Peter P. Wong, president of PEGM, who has emerged as a central figure in the insurer's collapse, is named as a defendant, along with his wife and mother, who were also corporate officials.

Other defendants are Randy Ko; Byron Graves Jr.; Edwin Ramos; Henry Akiu Jr.; Richard Stiles; Mark Hopkins; William A. Williams, also known as Billy Williams; Harold Y. Kuwahara; Juan Martin Gonzales; and Mike Clear. All served as officers or directors of PGMA or PEGM, according to the suit.

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By Star-Bulletin staff

Suspects in stolen car nearly run down officer

Police are looking for suspects in connection with an attempted murder of an officer in Waikiki this morning.

The suspects, pursued by police for driving a stolen white Honda sedan down Koa Avenue, nearly ran down an officer who had set up a roadblock at Liliuokalani Avenue.

The officer had to jump out of the way when the car swerved toward him at 5:49 a.m., police said. According to witness statements, the officer would have been hit if he had not jumped to safety.

Assailant uses stun gun in Palolo rape-robbery

A Palolo woman was raped yesterday at her home by a man who used a stun gun to subdue her.

The assailant in the 10:40 a.m. assault tied up the victim, searched her bedroom and fled with jewelry, according to a police report.

He was about 5 feet 5 inches tall, thin, with a light tan complexion, police said.

CrimeStoppers is offering a reward for up to $1,000 for information that leads to the arrest of the suspect. Confidential calls may be made to 955-8300.

Police hold Kalihi man charged in knife assault

Police yesterday charged a Kalihi man who allegedly slashed another man above the left eye with a kitchen knife on Sunday.

Utualo Faapouli, 21, was charged with second-degree assault, police said. He is being held on $5,000 bail.

Faapouli, who accused the victim of sexually assaulting his girlfriend, reportedly lunged at the man with the knife, police said.

Kalihi quarrel turns into attack with knife

Police are seeking to charge a man with attempted murder for allegedly trying to stab another man in the Kalihi Valley area yesterday.

At 8 p.m., following an argument at a 1690 Lima Street home, the suspect reportedly grabbed a knife and confronted the victim, police said. The victim suffered minor injuries to his hands during the struggle, police said.

In other news . . .

KAILUA-KONA -- Police are asking anyone who saw a one-car accident near the 77-mile marker on Queen Kaahumanu Highway on Friday, or a three-car accident on the Hawaii Belt Road in front of the Kona Church of God on Feb. 1, to call them at 326-4277 or Crime Stoppers at 329-8181.

HILO -- Fire of unknown origin destroyed a four-bedroom redwood home in rural Leilani Estates subdivision south of Hilo yesterday, the Fire Department said.

The man who died in a hang glider accident on Molokai has been identified as Hawaiian Airlines pilot Duff King.
King, 52, had taken off from an area mauka of Hoolehua when wind pushed him back into a cliff Thursday.

The man who died when the pickup truck he was driving rolled over in west Molokai has been identified as 22-year-old Paul Mamuad of Hoolehua.

He was an employee of Molokai Ranch and was driving the truck on a dirt road on ranch property when the pickup overturned.

The last traffic fatality on Molokai occurred in 1996.

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