2001-07-19 Enviromental Management Commission Minutes

Home

Minutes for Thursday, July 19, 2001Page 2 of 4 expenses and elderly who are on fixed income. We also have preferred terms for elderly person 62 years or older or handicapped person. They receive a 30% out right grant. As long as they remain in the home at least a year and comply with the rules and regulations of the program for that one-year period, they don’t have to pay back the 30%. The program has been in existence only for about 3 or 4 years. We had number of people pay back their loan. It’s like any mortgage loan program where we place a lien on the property. We do a title search. The title search would indicate who is on title and it’s that person or persons that’s required to sign the mortgage document. th After the 15 year if a homeowner can demonstrate that they are still low income, the loan could go on forever until it’s paid off. Deferred forever or until the property is sold, title is changed, or they refinance. The interest could exceed the principal at some th point unless we cap it up at a particular year. If a homeowner were to borrow $20,000 at the end of the 15 year he would be th required to pay back $29,000.00. $9,000 simply interest, not compounded. But at the end of the 15 year, it’s actually at the discretion of the administrator at that time what he would want to do. It’s not really spelled out in the rules but we are looking at amending the rules to increase $20,000.00 up to $25,000.00. The reason why we cannot exceed $25,000.00 is because of the new Federal rule regarding lead base paint. If you go above $25,000.00 then abatement of all the lead in the home is required. That is the new rule that would take effect as of September 15, 2001. When a homeowner wants to refinance their home, if the refinancing is to lower the interest rate or to take out funds to do additional repairs, we’ll allow that. But if it’s for a home equity loan and they want us to take second or third position, we won’t allow on a home equity loan because home equity loan you could use the monies to buy a car or do anything you want. We would determine eligibility provided that all the documents are in within a day or two. Title search has average any where from two to three weeks. What we’re finding within the past year that a lot of the smaller contractors are very busy. Homeowners are finding it very difficult to find contractors and we recommend that they get three quotes just so that they have a means of comparison. But even getting three quotes in Hilo has been very difficult. I would say anywhere from a month to two months provided that the homeowner can find a qualified general contractor. The contractor has to be licensed and we call DCCA to be sure that he has the proper insurance and proper license. We are looking at amending our rules to include a fully amortized program. The draw back with that is that our office does not have adequate staff to handle a monthly payment collection. We have talked to some of the banks and only Bank of Hawai`i was interested in servicing the loan. But the servicing of the loan would come at a cost a few years ago about $2,500 per loan, but that’s for the life of the loan. What they would do is treat our loan as if like any other loan providing year end statements, all the letters regarding delinquent payment and so on. That’s the primary reason why the program is a deferred loan. We just don’t have the staffing to do the monthly collection. We have had request from the younger families that they want to pay down the loan. Right now we cannot accommodate them presently. We just don’t have the staff to do that. Right now the rules doesn’t call for even partial payment. Presently we have approximately $400,000.00 that we can lend out. On an average we do around 20 to 25 loans a year. The average loan amount is about $12,000.00. We send out over a 100 plus applications a year. So it’s about 1/4 of what we send out that actually applied. The primary reason why a homeowner would not qualify besides income is that they do not have enough equity. For example, some homeowners in Hilo, their real property tax assessment has dropped and some of their mortgage is higher than the value of the home. We base it on the real property tax assessment. By doing the credit check at least you have some idea as to their credit worthiness but we have not disqualified any families because of bad credit. The Building Loan Program. The program is Federally funded so there are a lot of people who may not qualify because of their income. It’s set by Federal regulations. If the intent is to allow all families who need to connect, make the program available, then we may if we get County funds, then we could actually look at providing loans to a greater number of people for those people who cannot qualify because of their income. If we do take the next step and provide a fully amortized program that means that we have to send out monthly notices and collect monthly payments. We really haven’t looked at what kind of staffing we would need to do that. Kauai and Honolulu have similar programs. Maui does not have any kind of loan programs for rehab. UPDATE FROM WASTEWATER DIVISION Peter Boucher, Wastewater Division Chief, handed out maps that were color coded to note what properties are sewered, planned to be sewered within 2 years and within 10 years. Peter gave a power point presentation that consultants presented to Hawai`i County Council a couple months ago. Scope of Services - determine capacity assessment fees, commonly known as impact fees. Wastewater treatment plants - Hilo, Kealakehe, Kulaimano, Papaikou, and Kapehu. Serve approximately 6,000 residential customers, about 600 non-residential customers. Current monthly rate is $26.00, with no capacity assessment fees and connection charges. Capacity Assessment Fee. It is a one-time up-front charge paid by new customers connecting to the wastewater system. Typically paid prior to receipt of building permit. The amount of the capacity assessment fee is based on the capital cost necessary to provide the sewer system itself. file://C:\Test1\minutes071901.htm6/22/2011