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HomeMy WebLinkAboutRES 164 Draft 01 2022-2024A RESOLUTION PROPOSING THE ESTABLISHMENT OF A WATER SYSTEM IMPROVEMENT DISTRICT FOR IKI PLACE, KOHANAIKI HOMESTEADS. WHEREAS, it has been brought to the attention of the Council of the County of Hawai‘i (the “Council”) that the water distribution system for Iki Place, Kohanaiki Homesteads (the “Subdivision”), located at Kohanaiki, North Kona, Hawai‘i, is not built to County standards; and WHEREAS, on October 5, 2016, pursuant to Section 12-10(a), Hawai‘i County Code, the Council adopted Resolution No. 634-16, directing the Manager-Chief Engineer of the Department of Water Supply “DWS”, to prepare and submit the Manager’s Report on the proposed establishment of a water system improvement district, known as the “Iki Place Water System Improvements” and the costs of design and installation of a public water delivery system for the Improvement District; and WHEREAS, Communication No. 187, as issued by the Manager-Chief Engineer, submitted for the Council’s consideration the Manager’s Report dated March 10, 2017, a copy of which is attached hereto and incorporated herein as Exhibit A; and WHEREAS, DWS initiated an application to the United States Department of Agriculture (the “USDA”) for grant and loan funding by the USDA Rural Utilities Service (“RUS”); and WHEREAS, DWS caused to be prepared a Preliminary Engineering Report for the Iki Place Water System Improvements dated July 26, 2022, and prepared by Foresight Engineering & Design, LLC., a copy of which is attached hereto and incorporated herein as Exhibit B; and WHEREAS, a Letter of Conditions from the USDA Department of Agriculture dated August 25, 2022, was received by DWS, a copy of which is attached hereto and incorporated herein as Exhibit C; and WHEREAS, the Letter of Conditions states that the Iki Place Water System Improvements will provide significant benefits to the health, safety, and welfare of the residents of the Subdivision and that the estimated construction, acquisition, and installation costs of the Improvement District (collectively, the “Project Costs”) are $1,100,000; and WHEREAS, the Letter of Conditions includes verification that DWS’s application for up to $825,000 of RUS grant funds and $275,000 of RUS loan funds for the Improvement District is being considered by the USDA, subject to the conditions specified therein; and WHEREAS, the total amount of RUS grant and loan funds, is sufficient to pay the estimated cost of the proposed Improvement District (as further discussed herein) and, in view of the potential benefits of such funding, DWS is proceeding with the actions necessary to satisfy the conditions specified in the USDA Letter of Conditions in order to obtain a firm commitment of the RUS grant and loan funds for the Improvement District; and WHEREAS, public meetings were held with respect to initiation of the proposed Improvement District at Council Chambers on September 20, 2016 and October 5, 2016, which meetings were attended by residents of the Subdivision; and WHEREAS, upon consideration of the community interest expressed for the proposed Iki Place Water System Improvements, the findings, conclusions, and recommendations set forth in the Preliminary Engineering Report and the potential benefits of the available RUS grant and loan funds, the Council has determined to proceed with further actions regarding the potential establishment and funding of the Iki Place Water System Improvements; now, therefore, BE IT RESOLVED BY THE COUNCIL OF THE COUNTY OF HAWAI‘I that pursuant to Section 12-10, Subsection (c) of the Hawai‘i County Code, it proposes the making of the improvement described herein based on the following: 1. Certain Findings and Determinations. The Council hereby ratifies and confirms Resolution No. 634-16, and approves and adopts the findings, conclusions, and recommendations specified in the Preliminary Engineering Report dated July 26, 2022. Without limiting the generality of the foregoing, the Council concurs with the findings and conclusions specified in the Preliminary Engineering Report to the effect that the establishment of the Improvement District will provide significant benefits to the health, safety, and welfare of the residents of the Subdivision, including: a. The installation of underground waterlines, constructed and installed in accordance with DWS standards, will eliminate the need for private catchment systems, alleviate potential leakage problems associated with long overland pipes currently serving a portion of the Subdivision, and provide residents with a reliable water supply and regular water pressure; and b. The installation of fire hydrants will afford a greater measure of public safety and homeowner security in the Subdivision, and may potentially result in lower fire insurance premiums for owners within the Subdivision. In consideration of the foregoing, the Council further finds, in accordance with Section 12-10(i), Hawai‘i County Code, that the creation of the Improvement District encompassing the Subdivision, and the construction, acquisition, and installation of a water system for the Improvement District, all as contemplated in this Resolution, is in the public interest. 2. Proposal to Establish Improvement District. The Council proposes the creation of the Improvement District, which shall encompass the Subdivision, and the construction, acquisition, and installation of a water system for the Improvement District, upon the terms and conditions set forth in the Manager’s Report, including the following terms and conditions: a. Special Improvements to be Opened, Constructed, or Improved. The special improvements shall be for the design, construction, acquisition, and installation of a public water system for the Improvement District consistent with applicable DWS standards, which shall be owned, operated, and maintained by DWS. The special improvements shall include the removal of all existing meters and laterals within the Improvement District, and the installation of meters for each currently existing assessment unit within the Improvement District. b. No Acquisition of Land Required; Required Easements. The construction and installation of the water system for the Improvement District will not require the acquisition of land. However, an easement over the privately-owned subdivision roads will be required for maintenance and operation of the water system. In addition, an easement or other agreement to use and occupy an area within the existing roadway right-of-way will also be required for a portion of the water system. c. Material to be Used. The materials to be used in the construction and installation of the special improvements are set forth in the Preliminary Engineering Report, and include, without limitation, the following: Approximately 1,150 linear feet of 8 inch ductile iron waterline Two fire hydrants Two Type “A” laterals Eight Type “C” laterals Removal of existing service laterals Pavement restoration d. Proposed Assessment Unit; Method of Assessment; Minimum Number of Installments. i. Assessment Unit. “Assessment unit” for purposes of the Improvement District shall mean a duly subdivided parcel of land or condominium unit bearing a unique tax map key number. ii. Method of Assessment. (1) As used in this Resolution, “Net Project Costs” means the Project Costs, less any amounts which reduce the actual costs of the special improvements to the County. By way of example, assuming the Project Costs to be $1,100,000 as set forth in the Manager’s Report, and further assuming an RUS grant of $825,000 to be applied against the Project Costs, the Net Project Costs would be $275,000. (2) Each assessment unit existing as of the date that assessments begin to accrue on assessment units within the Improvement District (the “Commencement Date”) shall be subject to an assessment calculated by dividing the Net Project Costs by the number of assessment units within the Improvement District as of the Commencement Date. iii. Minimum Number- of Assessments. The minimum number of assessments shall be five (5) annual, or sixty (60) monthly installments of principal. e. Maximum Term. The maximum term of the bonds to be issued to represent unpaid installments (the “Bonds”) shall be as the Director of Finance shall determine in the Director of Finance’s reasonable judgment; however, such term shall not exceed thirty-five years (35) years following the date of issuance thereof. f. Maximum Rate of Interest. The rate of interest to be borne by the Bonds shall be as the Director of Finance shall determine in the Director of Finance’s reasonable discretion; provided, however, that such interest shall not exceed three and twenty-five one hundredths percent (3.25%). g. Maximum Premium. The premium to be paid on the advance payment of installments or the call and redemption of any Bond prior to its maturity shall be as the Director of Finance shall determine in the Director of Finance’s reasonable judgment; provided, however, that such premium shall not exceed three percent (3%). h. Maximum Amount of Reserve Fund. The Director of Finance may establish a reserve fund for the Bonds; provided, however, that the amount of such reserve fund shall not exceed the maximum annual debt service requirements on the Bonds. i. General Boundaries of Improvement District. The Improvement District shall be comprised of all assessment units located within the Subdivision, comprised of TMKs 7-3-019-002 through 020, excluding 7-3-19-11 which is the road lot, and includes 7-3-19-37, which is not part of the Subdivision. j. Maximum Estimated Units of Assessment. The current estimated maximum number of assessment units within the Improvement District is eighteen (18). Assuming Net Project Costs of $115,905, the anticipated assessment per assessment unit will be $6,439. 3. Assessed Tax Valuation. The Real Property Tax Division of the Department of Finance has confirmed that the current assessed tax valuation of the assessment units is $2,471,200 in total 2022-23 land value and $4,546,600 in 2022-23 building value, which is at least twice the estimated Net Project Costs of the water system for the proposed Improvement District. Accordingly, the proposed Improvement District meets the qualifying criteria specified in Section 12-10(h), Hawai‘i County Code. 4. Facilities Connection Charge. Owners of assessment units who are not presently customers of DWS shall pay the applicable facilities connection charge upon connection to the completed special improvements. This charge will not apply to owners who already have service from DWS or have made prior payments of the charge to DWS. 5. Future Increase in Assessment Units. In accordance with the provisions of Section 12-30(c), Hawai‘i County Code, in the event of an increase in the number of assessment units in the Improvement District resulting from subdivision, annexation, conversion to condominium property regime or otherwise, the Department of Finance shall reallocate the outstanding assessments within the Improvement District among the assessment units subject to such outstanding assessments, including the resulting new assessment units. 6. Provisions Regarding Combination Hearings. a. The Council determines that the public hearings relating to the special improvements and the establishment of the Improvement District provided for under Sections 12-10 and 12-27 of the Hawai‘i County Code shall be combined, as permitted under Section 12-28 of the Hawai‘i County Code. b. The Council finds that although Section 12-28 of the Hawai‘i County Code contemplates that the Council, in its resolution proposing to make the improvements shall direct the Manager-Chief Engineer to prepare documents and data as provided in Sections 12-18, 12-19, and 12-27 of the Hawai‘i County Code, and further contemplates that the Council shall request the Manager-Chief Engineer to furnish final detail plans and specifications for the proposed improvements as provided in Section 1220 of the Hawai‘i County Code, the Manager’s Report already contains such documents, data, and detailed plans and specifications. c. The Council further finds that the Manager’s Report, together with the Preliminary Engineering Report dated July 26, 2022, as prepared by Foresight Engineering & Design, LLC provide sufficient and comprehensive documentation relating to the plans and specifications for adequate and appropriate conduits, pipes, service laterals, fire hydrants and other appurtenances necessary for the water supply and distribution of the proposed special improvements. d. In light of the findings set forth in Paragraphs 6.b and 6.c above, the Council determines that, as provided by Section 12-28 of the Hawai‘i County Code: i. The direction by the Council to the Manager-Chief Engineer for the preparation of the documents and data as provided in Sections 12-18, 12-19, and 12-27 of the Hawai‘i County Code, and the request by the Council that the Manager-Chief Engineer furnish detailed plans and specifications for the proposed special improvements as provided in Section 12-20 of the Hawai‘i County Code, shall be deemed to have been made; and ii. The delivery of the Manager’s Report shall be deemed to have complied with such directions and fulfilled such requests. e. The Council hereby preliminarily approves the aforementioned documents, data, and detail plans and specifications. f. A public hearing on the proposed improvements shall be held not more than sixty (60) days after the adoption of this resolution and not less than fifteen (15) days after the first publication thereof in at least one newspaper of general circulation in the County of Hawai‘i. Copies of the notice shall also be posted at a public place in the district in which the proposed Improvement District is located at least ten (10) days prior to the public hearing. The County Clerk shall assure that affidavits of publication and posting of the notice shall be filed with the Council on or before the date of the hearing. BE IT FINALLY RESOLVED that the Clerk of the County of Hawai‘i shall transmit copies of this resolution to the Honorable Mayor Mitchell D. Roth; Finance Director Deanna Sako; Corporation Counsel Elizabeth Strance; Real Property Tax Division Tax Administrator Lisa Miura; Department of Water Supply Manager-Chief Engineer Keith Okamoto; Water Board Chair Dwayne Mukai; Hawai‘i State Director Chris Kanazawa, USDA Rural Development; Bond Counsel Brian T. Hirai, McCorriston Miller Mukai MacKinnon LLP; and County Clerk Jon Henricks. Dated at _____________, Hawai‘i, this ______ day of ___________________, 20___. INTRODUCED BY: _______________________________________ COUNCIL MEMBER, COUNTY OF HAWAI‘I COUNTY COUNCIL County of Hawai‘i Hilo, Hawai‘i ROLL CALL VOTE    AYES NOES ABS EX   EVANS       GALIMBA       I hereby certify that the foregoing RESOLUTION was by the vote indicated to the right hereof adopted by the COUNCIL of the County of Hawai‘i on _____________________________________. INABA       KAGIWADA       KĀNEALI‘I-KLEINFELDER       KIERKIEWICZ      ATTEST: KIMBALL       LEE LOY       VILLEGAS              Reference:  COUNTY CLERK CHAIRPERSON & PRESIDING OFFICER RESOLUTION NO.