2021-10-27 EMC testimony (10-19) Holmes, Stephen - Sewer improvement districts

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From: Stephen Holmes Date: Tue, Oct 19, 2021 at 3:07 PM Subject: Sewer improvement districts To: Cc: Dee Fulton, Cindi Punihaole, Jon Olson, Rick Gaffney, Heather Kimball Georjean: One of the chronic issues related to wastewater is the basic lack of paying customers to meet the needs of operations and maintenance. The Hilo WWTP is an example. They built it to 5 MGD capacity when federal construction grants were available, but then failed to connect much of Hilo town using sewer improvement districts. The same was true in Honokaa where the County built a facility only for homes on the old gang cesspools rather than extending service to the broader community. That mistake is being repeated with Naalehu and Pahala. This is nuts. Sewer improvement districts self-finance over the 20 year period of a traditional bond float. Because they generate revenue, bond investors treat them differently. They don’t hurt your bond rating. If the County leverages USDA RUS funds, these are government guaranteed loans. Low risk to no risk. County Finance really needs to treat these projects differently than non-revenue producing ones. Also, USDA sweetens the deal with grants for income qualified families. The Lono Kona Sewer ID brought in millions in grant monies. So, what does DEM need to make more of these projects happen while interest rates are incredibly low? Is it a staffing issue? Could the work be contracted out? What can Director Mansour’s experience in Honolulu tell us about how they successfully kick these out the door. He was the Wastewater Chief. If he doesn’t understand exactly all the details, he certainly knows who to call and ask. The EMC has passed support for a wastewater enterprise fund which is sorely needed, but part of that is increasing the customer base. If EPA steps in with an enforcement action against all the known non- compliant facilities, it would be crazy to throw money at upgrades and not provide expanded service, too. It would be a viscous cycle of failure. Not enough funding to properly operate and maintain, so they go downhill fast. While the State deadline for cesspool closures is a ways off, government really can’t just put it off. You need to start expanding now. The other part of this is environmental degradation caused by cesspools. Government has a Public Trust responsibility to protect coastal water quality under the State Constitution. It doesn’t have a clause saying wait till 2050. We know today that cesspools are a problem. It isn’t okay to keep letting our coral reef ecosystems decline further or to risk public health by allowing raw sewage to be carried by groundwater to recreational waters. The Kohala Center has advocated to connect a large subdivision in Kona just mauka of popular Kahaluu Bay Park. A public treasure. Hawaii Water has taken over the Keauhou Resort Treatment Plant nearby and is interested in adding the homes to its system. The County could establish a sewer ID to facilitate this. Hotels next the Bay closed, so there is capacity. All the elements are there. What resources are needed? What is the bottleneck and how can it be solved?