REP FC 022 2017/06/06 (2016-2018)

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REPORT OF THE COMMITTEE ON FINANCE DATE: June 22, 2017 Re: Comm. No. 315/Res. No. 227-17 PLACE: Council Chambers Kailua-Kona, Hawai`i TIME: 2:02 p.m. Council Chair and Members Hawai`i County Council Hilo, Hawai`i 96720 Your Committee on Finance, to which was referred Resolution No. 227-17 reports as follows: Resolution No. 227-17, transmitted by Council Member Valerie Poindexter, via Communication No. 315 dated June 1, 2017, authorizes the Finance Director to invite proposals for lease by negotiation of 900 acres of agricultural County-owned lease lands,being Tax Map Key: 4-2-005:001, Koholalele, Hamakua, Hawai`i, pursuant to Chapter 2, Article 19, Section 2-114 of the Hawai`i County Code 1983 (2016 edition, as amended). All or a portion of this 900-acre parcel would be leased through negotiation for the purpose of diversified agriculture, eco-tourism, and pastoral uses. Ms. Poindexter stated that the lands became available because of unpaid real property taxes, and added that leasing the property affords the County a method of generating revenue. Property Manager Hamana Ventura provided a brief background, noting that in 1994 the County acquired approximately 3,500 acres as part of a settlement agreement, and he identified potential revenue sources for the County through leasing of the properties. He estimated that potentially $40,000 per year could be generated as lease income, and said the funds would go into the General Fund. In response to an inquiry from Councilmember Chung, Mr. Ventura stated it is the department's intention to come up with a proposal and go out to bid for leasing the property for cattle. Based on the size of parcel, Mr. Ventura anticipates that it would be large ranch entities and not a smaller mom-and-pop operation that would be targeted, unless a smaller family-type business would be willing to invest time and money to install fencing and infrastructure. In answer to Mr. Chung's inquiry, as to the purpose of leasing the land, Mr. Ventura stated it would be to generate income for the County, with an estimated range of$20,000 to $30,000, and on the high end, up to $40,000 a year. Council Member Sue Lee Loy stated her concerns relating to the location and identity of owners of neighboring lands, and whether these neighbors would be competing for watersheds or putting a strain on existing streams, to which Mr. Ventura responded that neighboring lands belong to Kamehameha Schools. He further stated that water is not available in the area, and that the lessee would need to bring in their own water or construct a catchment or reservoir system. FC Report No. 22