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MEMORANDUM
T0: The Board of Directors of the
Queen Liliuokalani Village Community Association
FROM: Dennis A. Krueger, Esq. 1~/~K
DATE: September 10, 1999
RE: Queen Liliuokalani Village Community Association --Legal Approach
Challenging Sewer Assessments
At the last Board of Director's meeting, Matt Jewell and I were asked to review several
approaches for resolving the sewer assessment issue. This Memorandum deals with the legal
approach.
I. HAWATI COUNTY CODE
Chapter 21 of the Hawaii County Code ("the Code") establishes the basis for and the amount
of residential sewer service charges. Chapter 21 does not provide an administrative remedy for the
appeal of a residential sewer service charge. The Code establishes various other rights to appeal
administrative decisions dealing with real property taxes, sign regulations, electrical code appeals,
flood control requirements, plumbing code variances, park dedication code appeals and zoning code
appeals. None of these apply to the appeal of sewer service charges. Y1~~ ~ O0~
Comm. N0.
Frie No. 5 V B
II I-IAWAIIREVISEDSTATUTE~S PfeSM~ ~olA/PG
Ref. To:
A. APPEAI, OF DECTSTON 6YWASTEWATER CHIEF Q~I 1 3 1998,
Ref. Date
Chapter 91 of the Hawaii Revised Statutes ("HRS") provides an administrative
procedure for appealing the decision of an "Agency" of the County as that term is defined in Chapter
91. HR$ § 91-1(I) states in relevant part that "Agency means each ...County...depariment...
NONCLULU DFFICE $Irbl AOOteSG: TCIEpnend'. KAILUA-KONA OFFICE TCIYpeenl:
Maihnp AEaross, Ahf PIGGe. Suitt ta00 (8081539.0400 Kuakini 7ovnr. SuUe 208 (8081329.7706
Pest Olliaa Box 131 1099 Alakea Street FdcGlmlla. 75-5722 Kuakini Hary, FacsimUa~
Monelulu, K196810 Honolulu, F1196B13 (8081533-4945 Kallua•KOny X196740 (8061329-1529 L[L/ 7 ~ /
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10;'10%99 08:52 $808 029 1528 _ _ _ _ _ _ _ J
Memo to The Board of Directors of the
Queen Liliuokalani Village Community Association
September 10, 1999
Page 2
Re: Leeal Approach Challen ing Sewer Asses ments
authorized by law to ...adjudicate contested cases... The Wastewater Division is a division of the
Department of Public Works and would clearly be an Agency of the County. They are not, however,
authorized by law to adjudicate contested cases. Hawaii case law makes it cleaz that the Association
cannot ask the Court for ajudicial review ofa decision ofan administrative agency unless the
agency's decision results from a contested case hearing which the agency is required by law to
conduct. In Bush v. HawJian Homes Com'n, 7b Haw. 128, 870 P.2d 1272 (1994), the court stated
that, "If the statute or rule governing the activity in question does not mandate a hearing prior to the
administrative agency's decision-making, the actions of the administrative agency are not "required
by law" and do not amount to a "final decision or order in a contested case" from which a direct
appeal to Circuit Court is possible." The decision of Peter Boucher as the Division Chief of the
Wastewater Division to begin assessing sewer charges upon the Association would not be a final
decision or order in s contested case hearing from which a direct appeal would lie to the Circuit
Court, either.
B. DECLARATORY RULING BY THE DEPARTMENT OF PUBLIC WORKS
HRS § 91-8 allows any interested person to petition an Agency for a declaratory order
as to the applicability of any statutory provision or of any rule or order of the Agency. The
Association may petition the Department of Publ is Works for a declaratory ruling on the "order'' of
the Wastewater Division to assess sewer charges upon the Association. If the Department ofPublic
Works finds against the Association, it's Order in that regard would be appealable to the Board of
Appeals. An adverse decision from the Board of Appeals would be a final decision from which a
direct appeal to the Circuit Court would lie, as discussed above.
10%13%99 08:52 $808 328 1528 ASHFORD&~I'RISTOn Cm 005
Memo to The Board of Directors of the
Queen Liliuokalani Village Community Association
September 10, 1999
Page 3
s: Leal Aoyroach Challenging cr..,Pr
Agents
C EXHAUSTION OF ADMINISTRATIVE REMEDIES
Under HRS § 91-7, the Association could file an action with the Circuit Court asking
the Circuit Court for a declaration as to the validity of the rules of the Department of Public Works
that allow for the assessment of sewer charges upon the Association. The Court can only review the
Agency Rules for constitutionality and statutory authority. Under HRS § 91-7, the Courc will not
address the question Of whether or not the Department of Public Works was correct in assessing the
Association for sewer charges pursuant to those Agency Rules until the Association has exhausted
its administrative remedies. That means that the Association must first ask the Department ofPublic
Works for a declaratory ruling, and then appeal any adverse ruling to the Board of Appeals before
challenging the action in Court.
III. ATTORNEY'S FEES AND COSTS
If Ashford &Wriston does the work for the Association, we would charge you on an hourly
basis. My normal hourly rate is $180.00/hour. T would be willing to reduce that to $I50.00/hour to
represent you in this matter. Any costs involved wou]d be reimbursed to Ashford &Wriston by the
Association. We would reserve the right to ask the Association to pay for any costs up front,
depending upon the amount ofthe cost. A formal retainer agreement would need to be signed by the
Association if one has not already been signed.
Either Matt or I will be available to discuss these options with you in greater detail if you feel
the need to do so. Please let us know as soon as possible how you would like to proceed.
/dak
cc: '/Manhew G. Jewell, Esq.