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HomeMy WebLinkAboutRES 542 Draft 01 2022-2024A RESOLUTION OF DETERMINATION TO PROCEED TO CREATE AND DEFINE A WATER SYSTEM IMPROVEMENT DISTRICT FOR IKI PLACE, KOHANAIKI HOMESTEADS. WHEREAS, on October 5, 2016, the Council of the County of Hawai‘i (the “Council”) adopted Resolution No. 634-16, to Initiate an Improvement District to Facilitate Construction of Permanent Improvements to Iki Place, Kohanaiki Homesteads (the “Subdivision”) in North Kona, including Improvement of a Water Distribution System (the “Improvement District”) to County Standards, in accordance with Chapter 12 of the Hawai‘i County Code 1983 (2005 Edition, as amended) relating to Improvements by Assessments; and WHEREAS, Resolution No. 634-16, a copy of which is attached hereto and incorporated herein as Exhibit “A”, directed the Manager-Chief Engineer of the Department of Water Supply (the “Manager”) to prepare and submit a report on the proposed Improvement District in accordance with Section 12-10(a) of the Hawai‘i County Code (2005 Edition, as amended); and WHEREAS, on June 21, 2023, the Council adopted Resolution No. 164-23, a copy of which is attached hereto and incorporated herein as Exhibit “B”, to Propose the Establishment of a Water System Improvement District for Iki Place, Kohanaiki Homesteads, and thereby approved and adopted the findings, conclusions, and recommendations specified within its exhibits identified therein as: Exhibit A, containing the Iki Place Water Improvement District – Manager-Chief Engineer’s Report (the “Manager’s Report”), dated March 10, 2017, transmitted via Communication No. 187, and prepared by the Manager with respect to the proposed water system improvement district for the Kohanaiki Homesteads; and Exhibit B, containing a Preliminary Engineering Report for the Iki Place Water System Improvements (the “Preliminary Engineering Report”), dated July 26, 2022, and prepared by Foresight Engineering & Design, LLC; and Exhibit C, containing a Letter of Conditions from the United States Department of Agriculture (the “USDA Letter of Conditions”), dated August 25, 2022, and received by the Department of Water Supply (“DWS”); and WHEREAS, in adopting Resolution No. 164-23, the Council concurred with the conclusion of the Preliminary Engineering Report that “the establishment of the Improvement District will provide significant benefits to the health, safety, and welfare of the residents of the Subdivision,” and found that, in accordance with Section 12-10(i) of the Hawai‘i County Code 1983 (2016 Edition, as amended) (the “Code”), the creation of the proposed Improvement District and the construction, acquisition, and installation of a water system for the Improvement District was in the public interest; and WHEREAS, the involvement of the Department of Public Works is not required because the proposed improvement is a water system within a private subdivision and the subdivision roads are privately owned; and WHEREAS, pursuant to Section 12-10(c) of the Code, Resolution No. 164-23 provided for a public hearing on the proposed improvements, to be held within sixty (60) days after its adoption; and WHEREAS, said Public Hearing was scheduled for August 15, 2023, at 5:00 p.m. in the Council Chambers at the West Hawai‘i Civic Center in Kailua-Kona, Hawai‘i, and in accordance with the requirements of public notice set forth in Section 12-10(e) of the Code, the County Clerk issued a Notice of Public Hearing, a copy of which is attached hereto and incorporated herein as Exhibit “C”, and which was: Mailed by regular mail to each of the eighteen (18) owners of assessment units, comprising Tax Map Key Nos. 7-3-019:002 through 020, excluding 011, which is the road lot, on July 24, 2023; Published in the West Hawai‘i Today, a newspaper of general circulation in the County, on July 29, August 5, August 8, and August 11, 2023, with notarized affidavits of publication having been received from West Hawai‘i Today and duly filed; and Posted on July 31, 2023, at four (4) locations in Kailua-Kona, Hawai‘i as follows: Matsuyama Food Mart at 73-4354 Māmalahoa Highway, Suite B; Matsuyama Market at 73-4040 Hulikoa Drive; Kona Police Station at 74-611 Hale Māka‘i Place; and Kealakehe Solid Waste Recycling and Transfer Station at 74-598 Hale Māka‘i Place, as evidenced by the County Clerk’s Affidavit of Publication, Posting, and Mailings, a copy of which is attached hereto and incorporated herein as Exhibit “D”; and WHEREAS, the Notice of Public Hearing stated, among other things, that copies of Resolution No. 164-23, which included all associated reports and data, were available for public inspection during regular business hours at the Office of the County Clerk, 25 Aupuni Street, Room 1402, Hilo, and at the Kona Council District Offices, 74-5044 Ane Keohokālole Highway, Building A, Kailua-Kona, and that Resolution No. 164-23 may also be viewed via the County’s website at https://records.hawaiicounty.gov/weblink/0/doc/1056516/Page1.aspx; and WHEREAS, in accordance with section 12-10(e)(3) of the Code, the copy of the Notice of Public Hearing was mailed to each of the eighteen (18) of assessment units within the Improvement District and explicitly advised all said owners that a “protest against making all or part of the proposed improvements, or against the methods by which such assessments are to be made, or the inclusion of certain costs therein… must be submitted in writing, in accordance with Section 12-12 of the Hawai‘i County Code, to be considered by the Council,” and further directed that such written protests or objections be mailed to the County Clerk prior to the Public Hearing and postmarked no later than August 15, 2023, or hand delivered to the Hilo or Kona Office, or hand delivered at the time of the Public Hearing scheduled on August 15, 2023; and WHEREAS, the Public Hearing commenced as scheduled and all persons in attendance were invited to offer verbal testimony relating to the Improvement District and to submit written testimony to the Office of the County Clerk for purposes of recordation and further consideration by the Council; and WHEREAS, to answer questions relating to the Improvement District proposed in Resolution No. 164-23, the following were present: Deanna Sako, Director of Finance; Ryan Quitoriano, Civil Engineer, DWS; Jon Henricks, County Clerk; Chris Nakano, Treasurer; and Palani Greenwell, Civil Engineer, Foresight Engineering & Design, LLC; and WHEREAS, testimony for the proposed Improvement District was heard by the Council at the Public Hearing on August 15, 2023, the minutes of which proceedings are attached hereto and incorporated herein as Exhibit “E”; and WHEREAS, the County Clerk advised the Council that all testifiers were in support of the proposed improvement district and that there were no written protests or requests for modifications, as attested to in the County Clerk’s Affidavit of Public Hearing and Protest Procedures, a copy of which is attached hereto and incorporated herein as Exhibit “F”; and WHEREAS, as no written protests were received from the eighteen (18) owners of the assessment units, and pursuant to Sections 12-17 and 12-18 of the Code, the Council may proceed to determine that the proposed improvement shall be made as hereinafter proposed; now, therefore, BE IT RESOLVED BY THE COUNCIL OF THE COUNTY OF HAWAI‘I that: 1. Certain Determinations and Findings. In accordance with the provisions of Sections 12-17 and 12-18 of the Code, the Council hereby determines to proceed with the improvements proposed in Resolution No. 164-23, as described in the Manager’s Report and further specified in the Preliminary Engineering Report and the USDA Letter of Conditions, which are attached to Resolution No. 164-23 as Exhibits A, B, and C, respectively. The Council finds that the establishment of the proposed Improvement District will be in the public interest and will provide significant benefits to the health, safety, and welfare of the residents of the Subdivision, to wit: a. The installation of underground waterlines, constructed and installed in accordance with DWS standards, which 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 in the Subdivision, which will afford a greater measure of public safety and homeowner security in the Subdivision and may result in lower fire insurance premiums for owners within the Subdivision. 2. Creation, Definition and Establishment of the Extent of the Improvement District. The Council hereby creates, defines, and establishes a Water System Improvement District, which shall be known as “Improvement District No. 21 – Iki Place Water System Improvements,” consisting of all “assessment units” (as such term is defined below) located within the Subdivision, comprising Tax Map Key Nos. 7-3-019:002 through 020, excluding 011, which is the road lot, and including 037, which is a County road and not part of the Subdivision. The owners of assessment units within the Improvement District are identified in the “Proposed Assessment Roll” contained within the Manager’s Report. The Council acknowledges that changes in property ownership and the recordation of ownership of assessment units by the Department of Finance Real Property Tax Division may be subject to change and/or revision prior to the passage of a bond ordinance to finance the Improvement District, at which time, a final Assessment Roll of owners of assessment units within the Improvement District shall be compiled by DWS. 3. Kind, Extent and General Details of the Proposed Improvements. The improvements shall consist of a public water system (the “Water System”) consistent with applicable DWS standards, which shall be owned, operated, and maintained by DWS. The construction and installation of the Water System shall include the removal of all existing meters and laterals servicing residents of the Improvement District, and the installation of meters for each currently existing assessment unit within the Improvement District. 4. No Acquisition of Land Required; Required Easements or Other Use and Occupancy Agreements. 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. 5. Part or Proportion of the Cost of the Improvements to be Borne by the County. The total costs of the design, construction, and installation of the Water System, (collectively, the “Project Costs”), is estimated to be $1,100,000, which is anticipated to be financed by: A grant from the United States Department of Agriculture, Rural Development (“Rural Development”) in the amount of $825,000 to be applied against the Project Costs; and A 35-year loan from Rural Development to the County in the amount of $275,000 which loan shall be evidenced by a bond of the County (the “Improvement District Bond”) and repaid out of the proceeds of assessments to be assessed to the owners of assessment units within the Improvement District; and The County shall bear the customary operating costs of loan management by its Department of Finance Treasury Division for the 35-year duration of the Improvement District Bond. These costs will be partially offset by charging a collection fee as specified in Chapter 12 of the Code. A prepayment penalty for early payoffs and out-of-pocket transaction costs associated with property transfers will also be assessed. 6. Description of the Assessment Unit and Method of Assessment. For purposes of the Improvement District, “Assessment unit” shall mean a duly subdivided parcel of land or condominium unit bearing a unique tax map key number. 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 (as defined below) by the number of assessment units within the Improvement District as of the Commencement Date. As used in this Resolution, “Net Project Costs” means the Project Costs, less any grants which reduce the actual costs of the Water System to the County. By way of example, assuming the Project Costs to be $1,100,000 and further assuming a Rural Development grant of $825,000 to be applied against the Project Costs, the Net Project Costs would be $275,000. The Council finds that, assuming Net Project Costs of $275,000, the anticipated assessment per assessment unit ($275,000 divided by 18) will be $15,278. As provided in Section 12-33 of the Code, assessments may be paid in full to the Director of Finance within 30 days after the date of the last publication of the ordinance fixing the assessments. Unless paid in full, assessments will be payable in monthly installments sufficient to meet the principal and interest requirements on the Improvement District Bond. Owners of assessment units will be permitted to prepay their assessments in full, plus a 3% premium on the amount to be prepaid (unless waived by the Director of Finance) and interest at the rate on the Improvement Bond until it can be redeemed or prepaid with the assessment prepayment. 7. 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 Prior Findings Regarding Required Documents, Data and Detailed Plans and Specifications. As set forth in Resolution No. 164-23, the Council found that the Manager’s Report, together with the Preliminary Engineering Report, contained sufficient documentation, data and detailed plans and specifications to satisfy the requirements of Sections 12-18, 12-19, 12-20, and 12-28 of the Code. Accordingly, the Council hereby finds and determines that such requirements have been satisfied, and hereby directs DWS to initiate obtaining bids. Reimbursement of Project Expenditures. The County expects that the County or DWS may pay certain capital expenditures for the Water System Improvements prior to the issuance of the Improvement District Bond, and reasonably expects to reimburse such expenditures from the proceeds of such Improvement District Bond. The County hereby declares its official intent to use proceeds of the Improvement District Bond to reimburse itself or DWS for such capital expenditures. This Resolution is adopted in part for the purpose of establishing compliance with Section 1.150-2 of Title 26, Code of Federal Regulations. Effective Date. This Resolution shall take effect immediately upon adoption thereof. BE IT FINALLY RESOLVED that the County Clerk shall make this copies of this resolution available for public inspection at the Office of the County Clerk no later than fifteen (15) days after its effective date and shall transmit copies of this resolution to the Honorable Mitchell D. Roth, Mayor of the County of Hawai‘i; the Honorable Elizabeth A. Strance, Corporation Counsel; Diane Nakagawa, Director of Finance; Keith K. Okamoto, Manager-Chief Engineer of the Department of Water Supply; Lisa Miura, Administrator, Real Property Tax Division, Department of Finance; Stephen K. Lopez, Chairman of the Water Board; Chris J. Kanazawa, Hawaii and Western Pacific State Director for Rural Development, U.S. Department of Agriculture; and Brian T. Hirai, Bond Counsel, McCorriston Miller Mukai MacKinnon LLP. 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.