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HomeMy WebLinkAboutMIN GOEAC 2026/06/16 (2024-2026)Committee on Governmental Operations and External Affairs 3611 Session West Hawaii Civic Center 74-5044 Ane Keohokalole Highway, Building A Kailua-Kona, Hawaii June 16, 2026 CALL TO The regular meeting of the Committee on Governmental Operations and ORDER: External Affairs was called to order at 9:01 a.m., in the Council Chambers, Kailua-Kona, by Ms. Jenn Kagiwada, Chair. ROLL CALL: Present: Ms. Jenn Kagiwada, Chair Mr. Matt Kdneali`i-Kleinfelder, Vice Chair Ms. Michelle M. Galimba, Member Mr. James E. Hustace, Member Mr. Holeka Goro Inaba, Member Ms. Ashley L. Kierkiewicz, Member Ms. Heather L. Kimball, Member (via videoconference from Hilo) Mr. Dennis "Fresh" Onishi, Member Absent & Excused: Ms. Rebecca Villegas, Member STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: The following individual registered to speak and came forward when called by the Chair: Cherie Giffore: Res. 592-26 (Comm. 935); and Res. 593-26 (Comm. 936), support and comment. CHR. KAGIWADA: Thank you, Mr. Clerk. Could you please start off and read in Communication 932, please. GOEAC-36 June 16, 2026 COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. Comm. 932: NOMINATION OF ERIC INOUYE TO THE FIRE COMMISSION From Mayor C. Kimo Alameda, dated May 28, 2026, requesting the Council's review and confirmation. Requires Council Confirmation by: July 11, 2026 (Section 134(k), Hawaii County Charter) (Note: At this time, Executive Assistant to the Mayor Micah Alameda and the nominee came forward to address the members of the Committee.) Vote on Comm. 932: Mr. Inaba moved to recommend confirmation of the nomination (Approved) of Mr. Eric Inouye to the Fire Commission. Seconded by Mr. Hustace and carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kaneali`i-Kleinfelder, Kierkiewicz, Kimball, Onishi, and Chair Kagiwada — 8. Noes: None. Absent: Committee Member Villegas — 1. Excused: 1 None. Mr. Alameda provided a brief narrative of the nominee's background and experience. Committee Members spoke in favor of the Thank you. Please go on to Resolution 592. ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Res. 592-26: AUTHORIZES THE MAYOR TO ENTER INTO AN AMENDED ADMINISTRATIVE ORDER ON CONSENT AGREEMENT WITH THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY (EPA) UNDER SECTION 309 OF THE CLEAN WATER ACT Authorizes the Mayor to enter into an agreement with the EPA for a five-year extension for the Kula`imano Waste Water Treatment Plan Rehabilitation and Replacement Project and a three-year extension for the Papa`ikou. Waste Water Treatment Plan Rehabilitation and Replacement Project. Reference: Comm.935 Intr. by: Council Member Kagiwada (B/R) Page 2 GOEAC-36 June 16, 2026 (Note: Comm. 935.1 from Deputy Corporation Counsel dated June 15, 2026 transmitting a Power Point Presentation to Res. 592-26, was circulated.) Motion to Approve: Mr. Hustace moved to recommend adoption of Res. 592-26. Seconded by Ms. Kierkiewicz. CHR. KAGIWADA: We have Corporation Counsel Diana Mellon -Lacey, to do a presentation this morning. So, I'd like to invite her up to give us an overview and present the slides that you submitted. (Note: At this time, Deputy Corporation Counsel Diana Mellon -Lacey came forward to address the members of the Committee.) MS. MELLON-LACEY: Good morning, Committee members. Deputy Corporation Counsel, Diana Mellon -Lacey. And I'm here just to provide a brief overview on Resolution 592-26. Hawai`i Revised Statutes 46-7 requires Council approval of Intergovernmental agreements. This resolution addresses an amendment to a previously existing Administrative Order on consent dating back to 2022 with the United States Environmental Protection Agency under Section 309 of the Clean Water Act, which is governing all of the upgrades and changes being made to our facilities throughout the County. (Note: At this time, Ms. Mellon -Lacey, came forward to address the members of the Committee and provided a PowerPoint presentation to the members of the Committee. For viewing of the presentation, see the DVD copy of the proceedings on file in the Clerk's Office, or online at http://hawaiicounty.granicus.com. A copy of the presentation is made part of the record, see Comm. 935.1.) CHR. KAGIWADA: Yes, please go ahead, and whoever wants to speak to the slides that are in front of us. (Note: At this time, Finance Director Diane Nakagawa came forward to address the members of the Committee.) MS. NAKAGAWA: Good morning members of the Council. Diane Nakagawa, Finance Department. Thank you for having us here today. These two items in front of us today has been months in the making. So we have been working through this with the Finance Department, as well as Environmental Management, on a schedule that both minimizes any future risks, but also allows the County to better plan financially for these projects. Page 3 GOEAC-36 June 16, 2026 (Note: At this time, Ms. Nakagawa continued with the PowerPoint presentation. For viewing of the presentation, see the DVD copy of the proceedings on file in the Clerk's Office, or online at htp://hawaiicounty.granicus.com. A copy of the presentation is made part of the record, see Comm. 935.1.) CHR. KAGIWADA: Thank you, Director. I'm going to open it up to the Committee to ask questions, but before I do, just one clarifying question. These two slides are inclusive of all three projects that you're presenting today, or only the two that we are discussing right now? MS. NAKAGAWA: Thank you for the clarification. I apologize for not making that sooner. These two slides are the same for both items. When we did present this proposal, we presented it as a whole although they are two different agreements. We did want them to see the entire kind of County's financial picture and a proposal that handles all of it, not just piece mailed. So, these will be the same for both items. CHR. KAGIWADA: Okay, so they are inclusive of all three time extensions. MS. NAKAGAWA: Of both agreements, yes. CHR. KAGIWADA: Okay. Thank you so much, opening it up to the committee, Council Member Hustace. MR. HUSTACE: Thank you, Chair. Just a quick question, Director Nakagawa. The scale on these is in the thousands of dollars? MS. NAKAGAWA: So, this is millions. So, $84 and $74 million would be the first two bars. MR. HUSTACE: Okay, thank you. The why access there is' not indicative of that, so just wanted to be clear. CHR. KAGIWADA: Thank you, Council Member Hustace. Council Member Onishi. MR. ONISHI: Thank you, Chair. My question is, is therein this budget that you folks have anticipated change orders? MS. NAKAGAWA: So for future projects what we did look at is inflation, an increase in cost. If there's a certain amount for change orders, I don't believe necessarily we have an amount for that, but we did look for escalation of cost overall in the project over the next ten years. MR. ONISHI: Okay. So this question is for the Deputy Director in Hilo. Page 4 GOEAC-36 June 16, 2026 (Note: At this time, Environmental Management Deputy Director Craig Kawaguchi came forward to address the members of the Committee.) MR. KAWAGUCHI: Craig Kawaguchi, Deputy Director DEM (Department of Environmental Management), in Hilo. (Note: At this time, Environmental Management Director Daniel Girvan came forward to address the members of the Committee.) MR. GIRVAN: Dan Girvan, Director of DEM in Hilo. MR. ONISHI: Okay, so with this project moving forward with the extensions; now, to me, there's enough time for your office or the consultants that you folks are hiring to making sure that this project doesn't go over budget or any change orders. Because in the past, County projects always had change orders which are sometimes very expensive. Can you guarantee us that this will not happen in these projects? MR. GIRVAN: Yes, I believe we can do that. We have plenty of time to plan for putting those proposals out. MR. ONISHI: Okay. So, are you having in-house reviews, or you're having also your consultants doing this? And will they be held accountable in case something happens? MR. GIRVAN: Well, actually, something a little different than neither or those options. We have identified money in our current or upcoming budget. The budget becomes active on the 11' of July, which is in Repair Budgets. We are planning to actually start some work at both of these plants, and funding that work out of our Repair Budgets. MR. ONISHI: Okay. And then, because this is happening in 2031, sometimes technology changes. So, is there any anticipation of that? MR. GIRVAN: No, I don't believe that we anticipate changing the technology that is used at either one of these plants. The way they are; the way they're built, they were built around a specific technology for wastewater treatment. I don't anticipate that we're going to change that at these locations. MR. ONISHI: This proposal that you are looking at, is the technology is now or was it like five years ago, or what kind of system are you folks looking at; or most updated system that you folks going to be using? MR. GIRVAN: Both of these plants date back 48 plus years. The technology that they utilize, the activated slug technology; it's still a common technology. Page 5 GOEAC-36 June 16,2026 And in order to change the technology, it would require major changes in the structure of the plant. MR. ONISHI: So, that's not going to be done? MR. GIRVAN: No, we do not plan to do so at this time. MR. ONISHI: So by not doing that, will that affect in the long term, 20-30 years from now, that we'll have to go back again? MR. GIRVAN: No, the only thing that could change that would be if in the future, either the Federal Government or the State of Hawaii, changes of various parameters on our NPDS (National Pollutant Discharge Elimination System) Discharge permit; then that might require a change in technology to meet any new standards that they might impose. MR. ONISHI: Okay. And do you have someone within the department that will be monitoring all of these legislations that might be coming up? MR. GIRVAN: Absolutely. We have Kelly Hartman who keeps track of all of that for us. MR. ONISHI: Okay, great. Thank you, Chair. I yield. CHR. KAGIWADA: Thank you, Council Member. Council Member Galimba. MS. GALIMBA: Thank you. I just wanted to thank DEM, Finance, and Corporation Counsel's office for getting this done. This is a very important step in making sure, and it's great to help very much in our finances going forward in the next 10 years; and also, the feasibility of completing these projects in a timely way. I know we don't want to delay, but this definitely really is an important step to make the spend more even as we can see in the crafts. I also want to especially commend our new Director Girvan for coming in and picking through the knots and stoppage points; and all of the difficulties of coming in a department with so many projects under multiple AOC (Administrative Orders on Consent) orders. It's not an easy thing. Also, into a new culture, even; both the Hawaiian culture and the County culture. And I know it's not easy to do that. So, I really want to commend you for your steady work on this. It's really showing results. So, thank you to the team for this is really, really important. CHR. KAGIWADA: Thank you, Council Member. Checking in over in Hilo before I go back to Council Member Hustace. Page 6 GOEAC-36 June 16, 2026 MR. KIMBALL: Thank you, Chair. I'm pleased to say that the Director reached out to me, and we had a brief conversation yesterday about these two facilities since they are in my district. I did want to give the department an opportunity to share both with you folks and the public some of the mitigation efforts that the department plans to engage in, in the interim since we're pushing this out a little bit to protect public safety, environment, staff and personnel. So, Director or Deputy, if you wouldn't mind sharing with the body what you shared with me yesterday about the plans to proceed in these interim years. MR. GIRVAN: To start with, some of the most simple things; the vegetation around both of those plants is encroaching on not only on the plants themselves, but on the driveways that lead to and from the plants and are endangering the electrical power supplies that supply both of those plants. So, one of the things we're doing this year is to cut all that vegetation back and clear some trees. We've already had a tree fall on our power supply just in the last month. So, we need to do a lot of tree and vegetation removal to clear back the plant and just give us more room to operate and give the plants safe from falling trees when we have stormy weather. In addition to that, both of the plants need work with what's known as the headworks. The headworks are the parts of the plant that process the water when it first comes on site, and it removes large objects like rags and children's toys. But headworks also removes finer things like gravel and sand and grit in both of those plants. So, the headworks are in serious need of repair. We are currently out searching for bids for these headworks there. One of the items that we would like to do as a repair item this fiscal year. And then, we'll be moving on into the plants. So, once you go into the plants, their needs start to be a little different. At the one plant, we have air lines that transport pressurized air to the treatment tanks. They've done some repair work on those air lines in the past, but some of them still need repair work. We hope to do that yet this year. We have work just as simple as repairing handrails around the tanks. Handrails that were damaged by surrounding trees falling on them. We're going to get those handrails repaired. Then we'll continue to pick away at the items that we can manage and do and house and have sufficient funding for. MS. KIMBALL: Thank you, Director. I'll reiterate what Council Member Galimba said, which is just that I appreciate the creativity and new perspective on how to address this and get some of the more immediate concerns addressed rather than waiting until the full-scale capital improvement. Page 7 GOEAC-36 June 16, 2026 Director Nakagawa, on the capital improvement side, if you wouldn't mind just refreshing my memory, what were we estimating for the full-scale improvements for both of these facilities? MS. NAKAGAWA: Council Member Kimball, are you asking about the estimated cost? MS. KIMBALL: Yeah, I'm looking at the graft that you provided; the first one that shows the spending by fiscal year and trying to kind of discern what amount of the shifted capital spend is for these two projects? Because you said that this graft includes both of these projects and Pahala, Nd'alehu, right? MS. NAKAGAWA: Yeah, so, one of the things we've talked about is for the integrity of the future solicitation process. These are preliminary estimates that we'd like to keep in-house before we do any release of it. But happy to talk with the Council Members individually on the scale of these projects at another time. MS. KIMBALL: Okay, we'll do that. Some of the math is not mapping to me. So, I'm going to have to check in with you. Maybe this is a simpler answer or simpler question. With respect to this particular chart, are there increased costs over the long-term for these three projects than were originally projected? MS. NAKAGAWA: Yes. When —the projects out, we did assume there would be an increase in cost. MS. KIMBALL: Okay, that makes sense in terms of how I am interpreting this. So, thank you. I will follow up with more questions, privately. Alright, I yield Chair. Thank you. CHR. KAGIWADA: Thank you, Council Member Kimball. Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. Thank you so much for the presentation. Is it possible to get a corrected version uploaded into Laserfiche, so that the public can see accurate information? MS. MELLON-LACEY: Yes. MS. KIERKIEWICZ: Thank you, Deputy, appreciate that. Director Nakagawa, you know, you've been with the Finance Department for a number of years now; couple of Administrations. I'm wondering, what was the prevailing thought at the time to frontload the costs in fiscal year 2027 and 2028. Because now we're spreading the costs out over a longer term, which I think is smart. I had reservations. Page 8 GOEAC-36 June 16, 2026 I'm just thinking about when we had this initial resolution, about how aggressive the timeline was and the County's ability in just taking an honest assessment of our personnel and our resources. Just didn't feel like we could meet those very aggressive timelines. And here we are looking at an extension. But I'm curious, what was the wisdom at the time to frontload the costs of the projects? MS. NAKAGAWA: So, you know, I apologize. I personally was not in those conversations at the time. I think the County had this aggressive program in front of them, and these are things that absolutely we want to do and are committed to. But as you've mentioned, for resources to be able to get these done and our financial plan, it just needed to be adjusted. So, I apologize, I can't answer what I wasn't a part of. But I can say that, you know, from the time we looked at it here, we just realized that some adjustments need to be made in order for one to have the resources to complete these projects appropriately; and also, the financial plan that better allows the County to be able to do these projects along with other projects that need to get done. MS. KIERKIEWICZ: Thank you for that. Does this in any way free up our County's bond capacity on an annual basis to do more projects beyond the mandated wastewater facility updates? MS. NAKAGAWA: Short answer, "yes." Longer answer is, by how much? We would need a little bit more time to go through. As you can see in the debt service model, while we push some of these out for five years, the debt service is still relatively higher than it has been in the past. It's a $10 million decrease but provides a little bit of breathing room, but not in comparison to where the debt service actually is, which is over $100 million. I think we need to continue to take a look at the model and see how much exactly more we can do. But I have mentioned before is that we've taken this debt service out 10 years and we've looked at —to make one, is to make sure we're not over the 15 percent of our debt capacity and we are not. It does bring it down a percentage by year, like one percent. But I'm happy to go through that as we revise this and continually update Council on where we're at what that means to how much more bond capacity we have and what we can issue in the future. And that may just fluctuate based on the projects and the timing of when we're answering to additional contracts. MS. KIERKIEWICZ: Are we limited in the number of extensions we can the Federal Government for these projects? MS. MELLON-LACEY: Are we limited? MS. KIERKIEWICZ: Yes. Page 9 GOEAC-36 June 16, 2026 MS. MELLON-LACEY: We can always ask them for a reconsideration of the date for a good reason. And we can have discussions with them. I think one thing that is very clear is that the EPA (Environmental Protection Agency) is regarding our efforts very highly, and we have, I think, a good track record with them at this point. So, I think that it's possible, but it's always, you know, has a risk, I guess. And the longer you push dates out, the longer you remain under their AOC. So, that's a factor as well. MS. KIERKIEWICZ: Okay, but in your professional opinion, we can meet this revised deadline? MS. MELLON-LACEY: I believe that based on the analysis that we've conducted, that this appears to be a realistic path for the County. I can't predict the future but when you don't have a bid out, you don't know what it's going to come back at; you don't know other factors might enter in. But this is our best guess at a professional level from my understanding. I don't know if the Director has anything he'd care to add. MS. KIERKIEWICZ: How are we going to ensure that we stay on schedule? What is the strategy for that. I know we talked about internal personnel being assigned, but how are we actually going to make sure that the timeline we as the County have proposed, that we can actually hold ourselves accountable to that timeline? MS. MELLON-LACEY: I think that sounds like a question for Director Girvan. MR. GIRVAN: Holding ourselves to the schedule; the department has been more successful at that, recently. And that's part of why the EPA was receptive to our request for these extensions. We were in good standing with the EPA, which gave them some flexibility to help us here. The primary person in our department that is responsible for that is Kelly Hartman who keeps us on a very short leash, I guess, I would say with respect to our commitments to all our regulators including the EPA. But the next person responsible for that is myself. That's up to Kelly to point out what our responsibilities and commitments are. And it's up to the Director, myself, to immobilize the department and meet those commitments. MS. KIERKIEWICZ: Director Nakagawa, in looking at the original resolution, I recall a very specific amendment that I requested to be included. And that was updates to the Council concurrent to mandatory reporting to the EPA. I don't recall this body ever receiving them outside of Council Members requesting updates from the department. How will we rectify that going forward? MS. NAKAGAWA: We're happy to, provide updates, I'm sure, along with the department, both on the financial implications of these projects related to the Page 10 GOEAC-36 June 16, 2026 AOC as well as the project's status. So, I would be happy to provide regular updates to Council. MS. KIERKIEWICZ: Okay. And then, as far as tracking the budget and deliverables, I know that we've invested in a lot of software and systems on the finance and capital side. When can the public and the Council expect that information? I'm sorry if it's already online. But is it online? Can we track progress that's being made? MS. NAKAGAWA: Not yet. So, with our new financial system, there are still some changes and tweaks that are needed to be made for the day-to-day fiscal responsibilities. And then the next step is really to look at the easier to read graphic information that we'd like to post on both our project status and financials. Now, with our CIP manager, we talked about needing to maybe get ahead of some of these CoHnect, which is our financial system's abilities, and to be able to post information on the status of projects. So, we've started that. We haven't added the financial information yet, but that would be the next step. So, we have two different alternatives. We can go ahead and through our internal resources post it. And then once we get with CoHnect to do the graphic information and the more up-to-date public timelines, then we can do that as well. MS. KIERKIEWICZ: Do you have a timeline for that? MS. NAKAGAWA: I think for the CoHnect system, we are a bit away, we're probably a year out for that one because we need to focus on making sure all the accounting parts work first. The other part of it, I would say within the next year as well that our CIP (Capital Improvement Projects) manager can start adding a little more information to the CIP website that we just launched. More of the financial status as well. That is more inhouse and doable, so I's say, that could come first. Then we could step towards CoHnect. MS. KIERKIEWICZ: If it's a year out, I think, the reports to Council are going to be very important. So, the public can continue to have information as the projects progress. I want us to be successful at this. I want us to meet all of our benchmarks, because if not, time is money. Projects are going to cost more, and then that's less money that is available to do other important projects within the County. So, please let us know if there's anything that you need us to do to support you. But I'll be in support of today's resolution. Thank you. MS. NAKAGAWA: We appreciate it. Thank you. Page 11 GOEAC-36 June 16,2026 CHR. KAGIWADA: Thank you, Council Member. Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you, Chair. When did the discussions for these requests for delay begin? MS. MELLON-LACEY: I'm sorry, I didn't understand your question. MR. KANEALI`I-KLEINFELDER: When did we begin discussing these resolutions with the EPA? MS. MELLON-LACEY: Well, we're regularly in discussion with EPA, but are you referring strictly to the finance changes? MR. KANEALI`I-KLEINFELDER: To the extensions. MS. NAKAGAWA: So, over the last, I would say, year, we have been working on with DEM, Finance, and Corporation Counsel on a model that would work. So, looking at the different projects, figuring out what repairs can be done; what can be held off, what we can do in the meantime. Once we got that done with each project, then we would adjust it with the financial model and timeline to see if it works for both. So, it took a bit of adjusting and working through to make sure these are things that we can both get done from a resource standpoint and a financial standpoint over the last year. I would say that the department has regular meetings with the EPA, and to kind of comment on some of the other Council Member questions on, you know, can we guarantee things? I think the most important thing is that, you know, we do our best to stay on schedule, but if there are things that are out of the County's control, that we continue to communicate with the community, with the Council, with the EPA right away to make, if there's adjustments or other solutions that need to happen that we do that immediately. And I think that's one of the things the EPA has recognized that we brought forward, a proposal with a lot of discussion and analysis for them to consider. So, the long, short answer is, it's been about a year and a couple months ago is when we did a more in-depth presentation with the EPA on our financials. But it took a bit to build a model and get a proposal done. MR. KANEALI`I-KLEINFELDER: The reason I asked is the original resolution said, April 17, 2026. The County requested a five-year deadline extension for the Kula'imano Waste Water Treatment Plant. Does that hold the same for the other resolution as well? MS. MELLON-LACEY: That is when we, I guess, asked and sent to the letter to the EPA. Page 12 GOEAC-36 June 16, 2026 MS. NAKAGAWA: So, as I mentioned, we've been meeting with the EPA, discussing some of these hurtles. We had a meeting with March with the EPA to talk about it. Per that discussion and overview, they requested an official request, which was then done in the next month. MR. KANEALI`I-KLEINFELDER: Good, that was smart. So, thank you for doing that, because they picture -painted during the budget hearings was one that was going to put the County and the taxpayers in a hard place for the next five years. So, in providing this resolution and getting an extension, you've given us the ability to work through debt servicing at a reasonable rate. Maybe something again to having a 15 or 30-year mortgage versus having a 10-year mortgage. And I think that was fairly brilliant and gives us a little bit of breathing room to get these projects done, in my opinion. So, thank you for making these steps to help taxpayers in the future when some of us may or may not be here. So, well done, thank you. I yield Chair. CHR. KAGIWADA: Thank you. Council Member Hustace. MR. HUSTACE: Thank you, Chair. First of all, I appreciate the advice and input from Council Member Kierkiewicz on the language in the resolution; that palmitate language, `Be it further resolved," about regular updates. But Director Nakagawa, I appreciate your input and wanting to provide those updates to Council, but it really pushes on DEM to provide those updates. So, I guess the request would be that DEM follow that, `Be it resolved," further clause there about those regular updates. Secondly, Director Nakgawa, percent of the budget for our debt service, going back a little bit, we've spent about $62 million a year? Is that about correct, and it's kind of remained in that range? MS. NAKAGAWA: That is correct. MR. HUSTACE: Okay, so, it will nearly double and go beyond in the next five plus years then? MS. NAKAGAWA: Yes. MR. HUSTACE: So even with the new revised schedule, and I appreciate the attempt to make these adjustments and provide us some cushion and leeway in the space, for sure, but it remains in a space where we've never been as a County. Page 13 GOEAC-36 June 163 2026 MS. NAKAGAWA: That is correct. I mean it does extend our capacity a little bit, it does allow us to with the resources we have to better complete the projects; but our debt service is still at a very high limit where we have not been in the past. MR. HUSTACE: So, it'll go to a point where it exceeds 10 percent of our Operating Budget then, correct? MS. NAKAGAWA: Exceeds 10 percent? Yes. So, as I mentioned before, we have taken a look at that percentage out through fiscal year 2036; it does stay below 15 percent and these proposed changes brings it down slightly as well. MR. HUSTACE: What is the typical kind of spend in percentage of a municipality at our scale kind of operate at? MS. NAKAGAWA: So, the best practice is to stay below the 15 percent. MR. HUSTACE: Below 15 percent. Okay, and I think Council Member Onishi asked about accounting for future costs. And I think you just mentioned, Director, about that inflationary cost. Are there other sort of things that we are trying to plan and predict for or can even? MS. NAKAGAWA: So with these projects, we did build in inflation costs. I. believe with the project themselves, for those that we have not bid out, there is a conservative approach to the estimates that we've used with the knowledge we have today, right? I think looking at where bids are coming in at this point, looking at the cost of materials, there was that taking into consideration for future costs. It could change in the next year and we'll adjust as we need to, but some of that was taken into account. MR. HUSTACE: Definitely have concerns about any market disruption and those sort of pipeline for materials that will affect these projects down the road and the impact we have yet to see on some of these things for sure. Appreciate the time here. Thank you, Chair. CHR. KAGIWADA: Thank you, Council Member Hustace. Anyone else before we go back to Council Member Kaneali`i-Kleinfelder? Go ahead Council Member. MR. KANEALI`I-KLEINFELDER: Thank you. Just reading through the attachments to the resolutions, and seeing names like, Harry Kim 2017, Bill Kucharski; I mean when you hear all these beautiful metaphors that get kicked around a lot. Like kicking the can down the road. This is the result of kicking the can down the road for about 20 years: Page 14 GOEAC-36 June 16, 2026 I was reading through the different issues addressed in the EPA documents. Multiple failures across the board, temporary solutions, failing equipment being noted from 2014; 2017; 2020; 2021; 2022, but no administration addressed it. So we're going to be at a tight spot, and you've made that pretty clear, Ms. Nakagawa. And it's going to cost the County/taxpayers a lot of money to fix this; we're going to be tight. And the future Council and anyone watching this should be very aware that taxes may need to go up. And if real property taxes decline for any reason and appraisal values go down or assessments go down, the County is going to be in tight spot. So, we will see what happens in the future. MS. NAKAGAWA: Just to comment on that, you know, one of the discussion points with the EPA is the progress to date. And that is, while a lot of the construction is just beginning, these are contracts that are executed. So, the County has executed contracts $415 million. So that commitment that the County has demonstrated was recognized by the EPA, both from just an overall commitment standpoint as well as financial as well. So, we are trying to get it done in the best way that allows our County to continue to be financially responsible to be able to do all the things we need to do. And at this point, this was the best solution that we've had. MR. KANEALI`I-KLEINFELDER: In my recollection, when were all of these executed? Not all of them, but for the majority; has it been the last year, the last two years, the last four years? MS. MELLON-LACEY: Well I think, you know, if you go back to the projects in Pahala and Na`alehu, you're looking at going back to maybe 2006, when those discussions first started. Because the large capacity cesspools weren't legal. The other projects throughout the County, I think, have largely been discussions with the State for quite a while. And EPA's involvement is not just, I think, aimed at failures of the County, but also, viewed as the State not being aggressive enough with the County in compliance or keeping the infrastructure in a proper capacity for facilities. MR. KANEALI`I-KLEINFELDER: Thank you for that. When were the agreements executed; was my question. Not when the discussions started. We know that started a long time ago and nothing's being done. But when did we execute it for the majority of all these green waste? When did it happen? MS. MELLON-LACEY: Okay, so the AOC for countywide, the initial one would be called the Countywide; it's all the sites except Pahala and Nd'dlehu. That was executed in 2022. And then Pahala and Nd'dlehu was in 2017. MR. KANEALI`I-KLEINFELDER: Okay. And then construction agreements, when was that? Page 15 GOEAC-36 June 16, 2026 MS. MELLON-LACEY: Well, for which project, I'm sorry. MR. KANEALI`I-KLEINFELDER: Pm just trying to get to grasp the timeline of when these started to happen. Because we've been talking about this for a long time, but I've only seen action in the past two years. MS. MELLON-LACEY: Well, I think the Hilo Waste Water Treatment Plant was just last year, 2025. MS. NAKAGAWA: So, there are a couple of projects that are under construction. Maybe DEM could provide some dates for the Pahala collections, Hale Halawai, and our Hilo Waste Water Treatment Plant if you have them available. MR. GIRVAN: I'm sorry, I don't have exact dates, but probably from a construction standpoint, Hilo is the oldest. I believe that went in place sometime in mid to late 2024. And then all the other projects, their contracts are let out in 2025. MR. KANEALI`I-KLEINFELDER: Well, that speaks highly of itself. MS. MELLON-LACEY: But it's a lengthy process because we had to go through, you know, the community input; a decision on the best way to go. And then there's different environmental studies; things that have to be done. So, actually getting to the construction phase takes quite a bit of time. MR. KANEALI`I-KLEINFELDER: Thank you. Okay, thank you, Chair, I yield. CHR. KAGIWADA: Okay. Anybody else. Okay, seeing no other lights, just a couple comments here. Director Nakagawa, you've spoken about the $44 million dollar deficit by 2029 that we'd be looking at. Can you talk about how, if both of these go through, that would change. MS. NAKAGAWA: I apologize, can you say the beginning part? CHR. KAGIWADA: I remember you talking about a $44 million dollar deficit by 2029. Could you talk about in 2029, if that number would change. MS. NAKAGAWA: So, what's included in that number would be the dept service in the debt service model that you see in green in the current bar. So, $113 million. Now, as I said, we're going to update this and see where that takes us, but it's projected at $85 million. So, this does alleviate some of that deficit in future years if all other factors remain the same as they are today. So, I think these are just going to be continual conversations based on conditions as they occur and as we update this model. But we are very well aware that this is Page 16 GOEAC-36 June 16, 2026 something we need to be on top of more than just a once -a -year timeframe. This is something as Finance we will keep -on top of in terms of these projects and timelines. You know, as Finance has been more involved on project updates than we've ever been. We are trying to get a handle more precisely by month and quarter, what our expense is going to be, and we will continue to do that. And these may change. This is what we have today. But we will be happy to provide those update as we make them. CHR. KAGIWADA: Thank you so much. I'm just wondering if by the next meeting, we could get the chart that includes the current spending, so we could see. Because I think this paints a pretty rosy picture in some ways, like that's great. But I think we still need to look at it as a whole. So, I'm wondering if we could get that information included by the next meeting. MS. NAKAGAWA: That might be a bit aggressive. I'll say, we're trying. We have been asking; we're trying to get this information, and it really is on the spend of current projects. We're working on it. CHR. KAGIWADA: Okay, but at some point, we're going to see that? MS. NAKAGAWA: Absolutely. Like I said, we're actively working on it. We have some updates. We're waiting on others now. When we present this information, we want to make sure we're as precise as possible, which is why I don't want to rush. I want to make sure the information we are getting from our consultants and our contractors are as timely and accurate as they can be. So, that is the reason I want to make sure that we get it. We can do our analysis and present it to you in the most accurate way possible. CHR. KAGIWADA: Okay, thank you so much for that. I want to second or third; just kudos to the three departments that really pulled together to get to this point. DEM, Corporation Counsel, and Finance; really appreciate you all pulling together and working so hard to get us to a place to see something that, you know, will still be very hard, is a little more workable. So, appreciate that very much. Alright with that, all those in favor of sending Resolution 592 to the full Council with a favorable recommendation, please say "aye." Any opposed? Vote on Res. 592-26: The motion to recommend adoption of Res. 592-26 was (Approved) carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kaneali`i-Kleinfelder, Kimball, Kierkiewicz , Onishi, and Chair Kagiwada — 8. Noes: None. Absent: Committee Member Villegas —1. Excused: None. Page 17 GOEAC-36 June 16, 2026 CHR. KAGIWADA: Thank you so much, and we'll go on to Resolution 593, please. Res. 593-26: AUTHORIZES THE MAYOR TO ENTER INTO AN AMENDED ADMINISTRATIVE ORDER ON CONSENT AGREEMENT WITH THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY (EPA) UNDER SECTION 1423 OF THE SAFE DRINKING WATER ACT Authorizes the Mayor to enter into an agreement with the EPA for a two-year extension for the Pahala Large -Capacity Cesspools Closure Project and a five-year extension for the Na`alehu Large -Capacity Cesspools Closure Project. Reference: Comm.936 Intr. by: Council Member Kagiwada (B/R) Motion to Approve: Mr. Hustace moved to recommend adoption of Res. 593-26. Seconded by Mr. Onishi. CHR. KAGIWADA: Back to you, Ms. Mellon -Lacey. Thank you so much. MS. MELLON-LACEY: Good morning, Committee members. Diana Mellon - Lacey, Deputy Corporation Counsel. This concerns Resolution 593-26, which is another Administrative Order on Consent that has been amended. And this one is related to Section 1423 of the Safe Drinking Water Act. So we have again, requested under this separate AOC, amendments that revised deadlines. And the first is related to the Pahala project where we have requested a two-year extension on closing the large -capacity cesspool. The original deadline was January 22, 2027, and the revised deadline is now January 31, 2029. The collection system contract and the construction contract for this project have both been executed, and both projects are underway. However, once we got the construction contractor on board, the time it takes to obtain equipment for the package plant and all of the work involved is going to take longer than it was originally estimated. And this is the revised deadline we requested that the EPA has approved. Moving on to the Nd'51ehu project, we have requested a five-year extension to close the large -capacity cesspool from December 31, 2027 to December 31, 2032. This project is really still very much in the planning phases. So, it is in need of a longer time extension. And the EPA has agreed to this extension as well. So, I've included the same financial information in this report, simply because I didn't know what questions would be asked relevant to that. But those are the only two changes in that AOC as well that we're seeking the approval of Page 18 GOEAC-36 June 16, 2026 Council starting with the Committee here to take forward. So, thank you very much. If there's any questions, DEM is standing by and we're here as well. Thank you. CHR. KAGIWADA: Thank you, Ms. Mellon -Lacey. Council Member Galimba. MS. GALIMBA: Again, thanks to DEM for moving forward and making good progress on this. We did have a discussion last week together, and that was very useful to get more of the details on this. And I do see the progress in Pahala happening. And I know you're also making strides on getting the Nd'dlehu plan and easements started. Thank you for that work. CHR. KAGIWADA: Thank you, Council Member. Anyone else from the Committee? Alright, seeing none, seems like we've covered most of the financial issues around these already. So, we'll go ahead and take a vote. All those in favor on sending a favorable recommendation for Resolution 593 to the full Council, please say "aye." Any opposed? Vote on Res. 593-26: The motion to recommend adoption of Res. 593-26 was (Approved) carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kaneali`i-Kleinfelder, Kimball, Kierkiewicz , Onishi, and Chair Kagiwada — 8. Noes: None. Absent: Committee Member Villegas —1. Excused: None. CHR. KAGIWADA: Thank you so much. Please go to Bill 164. BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. Bill 164: AMENDS CHAPTER 2, ARTICLE 13, DIVISION 2, SECTION 2-69, OF THE HAWAI`I COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO THE HOUSING ADMINISTRATOR Requires Council confirmation for the Housing Administrator. Reference: Comm.914 Intr. by: Council Member Onishi Postponed: June 2, 2026 (Note: There is a motion by Council Member Hustace, seconded by Council Member Kierkiewicz, to recommend passage of Bill 164 on first reading.) Page 19 GOEAC-36 i June 16, 2026 ; and Comm. 914.1: From Council Member Dennis "Fresh" Onishi, dated May 22, 2026, transmitting proposed amendments to Bill 164 CHR. KAGIWADA: Council Member Onishi. MR. ONISHI: I put this in regard to when I got back on the Council. I didn't realize how much funds were going through the Housing Agency. And the Administrator like in other different departments, they are confirmed by the Council. So, I felt that the Council should have a say, or at least have a say on who might be that person to be the Administrator because of the amount of money that is going through that certain agency. So, I'm opening it up for a discussion to see how members feel, and if they feel the same as I do. And if we can pass this; this will take effect in the neat term of the Mayor, and not happening as soon as this is passed. And the thing is, this is in the Code and it's not in the Charter. So, I'm just leaning that we should have some discussion on this issue. I yield. CHR. KAGIWADA: Thank you. Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you, Vice Chair, for the opportunity to have this conversation. Corporation Counsel Schoen, I had a question about this particular piece of legislation, and if the Council does have the authority through Hawaii Revised Statutes (HRS) to approve a Housing Administrator. You know, I think about the Civil Defense Administrator, and it's very clear that this individual is appointed by the Mayor. There is no Council confirmation. And I wonder if statute is silent or provides any direction on the Council's role here. (Note: At this time, Corporation Counsel Renee Schoen came forward to address the members of the Committee.) MS. SCHOEN: Good morning, Renee Schoen, Corporation Counsel. I did take a look at this earlier, and I didn't see anything in HRS suggesting, like you're speaking of, a Civil Service type position, in which case, the Council could not confirm. So, I didn't see any legal impediment to this. MS. KIERKIEWICZ: Thank you. And are you able to speak for the Administration on their position on this bill? MS. SCHOEN: No, I'm not. MS. KIERKIEWICZ: Okay. Council Member, I'm in full support of this proposed amendment. As you mentioned, there is a lot of funding that the Page 20 GOEAC-36 June 16, 2026 Housing Administrator and their team is in charge of getting out into the community through various programs that are funded by State and Federal Government. There's also a couple of County -related programs, Affordable Housing Production Fund, the Homeless and Housing Fund that they do administer. So, I think it would be great for Council Members to weigh in on the Mayor's nominee to lead this particular office. So, I'm in support of the legislation. Thank you for bringing it forward. CHR. KAGIWADA: Thank you, Council Member Kierkiewicz. Over in Hilo? MS. KIMBALL: Thank you, Chair. I'm also in full support. Would echo what Council Member Kierkiewicz just said. I am in full support of more oversight and transparency. So, thank you, Council Member Onishi, for bringing this proposal forward. Aloha. CHR. KAGIWADA: Thank you. Anybody else? Okay, we also have an amendment which has not been discussed yet. But before we get to the amendment, I'll say, I'm also supportive of the bill. But if you want to introduce your amendment so we can talk about that, now would be the time. Motion to Amend: Mr. Onishi moved to amend Bill 164 with the contents of Comm. 914.1. Seconded by Mr. Hustace. CHR. KAGIWADA: Council Member Onishi. MR. ONISHI: Thank you, Madame Chair. As I mentioned earlier, this would take effect in the next term of the Mayor. So, the date would be December 4, 2028. So, I'm asking for your support. Thank you. CHR. KAGIWADA: Committee members, any input? Seeing none, I'll just ask the question, if something were to change with the current Housing Administrator before 2028, you do not want the Council to have the ability to weigh in in that case. MR. ONISHI: Yes, that's correct. We'll wait until the next new term comes up. CHR. KAGIWADA: Okay, I guess I'm not understanding, if we are to weigh in, it seems to make sense if a new person was appointed now or after 2028. To me it seems like it would make sense for us to have say on either one of those. So, I'll just speak for myself, I'm not in favor of this amendment. But I'm in favor of the main motion. MS. KIMBALL: Chair, if I may? Page 21 GOEAC-36 June 16, 2026 CHR. KAGIWADA: Yes, please go ahead. MS. KIMBALL: I'm of a similar position. I'd like to see this be available as an option to us if and when there was a vacancy in the Administrator position. I'm hoping Kehau will stay with us for a long time; I think she's doing great. But in the event that something happens and there is an opening, I think I would like to have this opportunity for the Council sooner rather than later. I don't see any —to delay it to the Mayor's next term. CHR. KAGIWADA: Council Member Onishi. MR. ONISHI: Thank you, Madame Chair. The original was to take effect as soon as this is passed. But then, with discussion with LRB, we all felt that maybe we should have it starting when the new term is coming up and not during the existing years. But if the Council Members feel it should take effect as soon as possible once it's passed, I mean, I'm good with that too, right? But I just thought to give the Administrator that leeway until that new term comes up. And it'll be like confirmed as other department heads at the same time. CHR. KAGIWADA: Thank you. Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you. I'm not super inclined to support this amendment. I do like the bill as is, but I want to just ask Corporation Counsel Schoen, one more question. Thank you, Corporation Counsel. Because I agree with you and everybody else. I think Administrator Costa is doing a really excellent job leading the agency. Corporation Counsel, if we pass the bill as is, there's no retroactive affect here where we would need to bring Ms. Costa to the Council to be confirmed, correct? MS. SCHOEN: Correct. MS. KIERKIEWICZ: Okay, if we pass the bill in its present form without the amendment; let's say for some reason, she does resign. At that point, the Council would have the authority to confirm the Mayor's nominee. If she resigns tomorrow, hypothetically speaking; she won't, I don't want to put out fake news. But at that point, the Council would then have the authority to approve the Mayor's nominee. MS. SCHOEN: So, the other parts of the Charter would come into play. So, you would have 60 days from appointment. MS. KIERKIEWICZ: Okay, that sounds good. Thank you, I yield. CHR. KAGIWADA: Anybody else, before I go back to the author? Council Member Onishi. Page 22 GOEAC-36 Withdraw Motion to Amend: Vote on Bill 164: (Approved) June 16, 2026 Mr. Onishi withdrew his motion to amend Bill 164 with the contents of Comm. 914.1. CHR. KAGIWADA: Alright, any other discussion on the main motion? Council Member Inaba. MR. INABA: I think I just want to confirm. Corporation Counsel, what you just brought up regarding the provisions of the Charter with regards to the timeline of having to appoint within 60 days and having Council confirm within 45 or 60 days. So, I just want to make sure we are not left confused later on. And if that language needs to be specified here in the Code, as well, or reference needs to be made specifically to the Charter's timing provisions. MS. SCHOEN: I don't see a need to reference the Charter provision. My understanding is that the Housing Administrator is indeed a department head. And therefore, the provisions of Section 13-8 would come into play; such that this Council would have the authority to review and approve that appointment within 60 days. MR. INABA: Okay, thank you. CHR. KAGIWADA: Alright. Any other input. Seeing none, all those in favor on forwarding Bill 164 to the full Council with a favorable recommendation, please say "aye." Any opposed? The motion to recommend passage of Bill 164 was carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kaneali`i-Kleinfelder, Kimball, Kierkiewicz , Onishi, and Chair Kagiwada — 8. Noes: None. Absent: Committee Member Villegas — 1. Excused: None. CHR. KAGIWADA: Thank you, we are at the end of our meeting. The time is 10:22 a.m. We are adjourned. Thank you. Page 23 GOEAC-36 ADJOURN- MENT: Approved: Seeing no further business, Chair Kagiwada adjourned the meeting at 10:22 a.m. Ms. Jean Kagiwada, 6hair Committee on Governmental Operations and External Affairs JK/dt June 16, 2026 JUL 2 0 2026 (Date) Page 24